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 October 31, 1997
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 0651
-------------------------------------------------------
(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 DECEMBER 4, 1997
- ----------------------------------- ----------------------------------------
Common Stock, $0.0001 par value 9,545,064
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
INDEX
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of October 31, 1997
and July 31, 1997 3
Statements of Operations for the three months ended
October 31, 1997 and 1996 and for the period from
inception January 28, 1992 to October 31, 1997 4
Statements of Cash Flows for the three months ended
October 31, 1997 and 1996 and for the period from
inception January 28, 1992 to October 31, 1997 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
PART II. OTHER INFORMATION 14
SIGNATURES 15
Page 2 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, 1997 July 31, 1997
---------------- -------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $31,470,141 $16,742,516
Marketable securities 6,005,669 6,006,380
Prepaid expenses 221,365 232,385
----------- -----------
Total current assets 37,697,175 22,981,281
----------- -----------
Equipment, net of accumulated
depreciation and amortization 838,217 786,495
----------- -----------
Other Assets:
License technology rights, net 220,367 242,366
Patent application costs, net 161,320 168,691
Security deposits and other assets 82,095 81,728
----------- -----------
Total other assets 463,782 492,785
----------- -----------
TOTAL ASSETS $38,999,174 $24,260,561
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 52,688 $ 130,000
Obligations under capital leases 3,236 7,768
Accounts payable 1,010,447 727,553
Accrued expenses 1,208,677 1,201,770
Deferred revenue 67,000 347,070
----------- -----------
Total current liabilities 2,342,048 2,414,161
----------- -----------
Stockholders' Equity:
Preferred stock $.0001 par value; 40 0
5,000,000 shares authorized; 400,000
shares Series B convertible
authorized,issued and outstanding at
October 31, 1997
Common stock $.0001 par value; 25,000,000 916 886
shares authorized; 9,167,599
and 8,858,012 shares issued at October
31, 1997 and July 31, 1997
Additional paid-in capital 67,159,883 53,671,867
Deficit accumulated during development (30,503,611) (31,826,251)
stage Treasury stock, at cost; 11,875
shares (102) (102)
----------- -----------
Total stockholders' equity 36,657,126 21,846,400
----------- -----------
TOTAL LIABILITIES AND NET EQUITY $38,999,174 $24,260,561
=========== ===========
</TABLE>
See accompanying notes to financial statements.
Page 3 of 15
<PAGE>
<TABLE>
<CAPTION>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
Statements of Operations
(UNAUDITED)
Three months ended January 28, 1992
October 31 (inception)
----------------------- through
1997 1996 October 31, 1997
---------- ----------- ----------------
<S> <C> <C> <C>
REVENUES $ 4,125,678 810,755 $ 10,712,608
------------ ------------ ------------
OPERATING EXPENSES:
Research and development 2,359,880 1,973,938 32,593,849
General and administrative 587,474 649,055 10,105,123
------------ ------------ ------------
Total Operating expenses 2,947,354 2,622,993 42,698,972
------------ ------------ ------------
OPERATING INCOME (LOSS) 1,178,324 (1,812,238) (31,986,364)
OTHER INCOME, Net 444,317 234,628 1,782,753
------------ ------------ ------------
NET INCOME (LOSS) $ 1,622,641 ($ 1,577,610) ($30,203,611)
============
ACCRETION OF PREFERRED
STOCK DIVIDENDS 300,000 0
--------- ------------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHAREHOLDERS $1,322,641 ($1,577,610)
============ ============
NET INCOME (LOSS) PER
COMMON SHARE (Note 3) $0.13 ($0.22)
============ ===========
SHARES USED IN COMPUTING
NET INCOME (LOSS) PER
COMMON SHARE 9,861,222 7,328,407
============ ===========
</TABLE>
See Accompanying notes to financial statements
Page 4 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
Statements of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
January 28, 1992
Three months ended October 31 (inception)
------------------------------------ through
1997 1996 October 31, 1997
----------------- ---------------- ---------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net Income (loss) $1,622,641 ($1,577,610) ($30,203,611)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 139,465 200,653 3,235,445
Compensation expense related to grant of stock options 0 0 122,500
Net realized loss (gain) on marketable securities 0 0 44,766
Change in assets and liabilities:
Prepaid expenses 11,020 69,963 (221,365)
Accounts payable 282,894 40,731 1,010,447
Accrued expenses (293,093) (46,950) 908,677
Deferred revenue (280,070) (528,700) 67,000
----------------- ---------------- ------------------
Net cash provided by (used in) operating activities 1,482,857 (1,841,913) (25,036,141)
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchases of) proceeds from marketable securities, net 780 (79,223) (5,997,797)
Purchases of equipment (163,092) (203,177) (3,085,049)
Licensed technology costs 0 0 (615,989)
Patent application costs 1,275 (11,631) (357,697)
Organization costs 0 0 (63,530)
----------------- ---------------- ------------------
Net cash (used in) provided by investing activities (161,035) (294,031) (10,120,062)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of preferred and common stock 13,488,016 38,119 65,830,680
Advances from stockholder 0 0 1,200,000
Repayments of capital lease obligations (4,532) (13,752) (374,827)
Borrowings under notes payable 0 0 1,179,135
Repayments of notes payable (77,312) (94,026) (1,126,447)
Security deposits and other assets (367) 2,337 (82,095)
Repurchase of common stock 0 0 (102)
----------------- ---------------- ------------------
Net cash provided by (used in) financing activities 13,405,805 (67,322) 66,626,344
================= ================ ==================
NET INCREASE (DECREASE) IN CASH 14,727,625 (2,203,266) 31,470,141
CASH at beginning of period 16,742,516 9,491,217 0
================= ================ ==================
CASH AT END OF PERIOD $31,470,141 $7,287,951 $31,470,141
================= ================ ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid (refunded) for income taxes $0 ($7,950) $30,684
================= ================ ==================
Cash paid for interest expense $3,669 $21,161 $409,634
================= ================ ==================
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
================= ================ ==================
Preferred stock dividend accretion $300,000 $0 $300,000
================= ================ ==================
</TABLE>
See accompanying notes to financial statements.
Page 5 of 15
<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 cardiovascular disorders
(perioperative bleeding and inflammation associated with cardiopulmonary bypass,
myocardial infarction, and stroke) and autoimmune diseases (lupus nephritis,
rheumatoid arthritis, and multiple sclerosis). As an outgrowth of its core
technologies, the Company is developing, in collaboration with a third party
(see Note 5), non-human UniGraft organ ("xenograft" organs) products designed
for transplantation into humans and, with another third party (see Note 5),
immunprotected retroviral vector particles and producer cells for use in gene
therapy.
The Company is in the development stage and is devoting substantially all of its
efforts toward product research and development. The Company has incurred losses
since inception and has cumulative net losses of approximately $30.2 million
through October 31, 1997. The Company has made no product sales to date and has
recognized cumulative revenue from grant, license, and contract revenues of
$10.7 million through October 31, 1997. During the three months ended October
31, 1997, the Company received approximately $9.5 million in net proceeds from
the issuance of shares of Series B Preferred Stock to a single institutional
investor and received payments of an additional $6.5 million from United States
Surgical Corporation ("US Surgical") for equity, exclusive licensing rights, and
certain manufacturing assets. In addition, the Company has received various
grants to fund certain research activities (see Note 5).
The Company will need additional financing to obtain regulatory approvals, fund
early operating losses, and, if deemed appropriate, establish a manufacturing,
sales, and marketing capability. In addition to normal risks associated with
development stage companies, there can be no assurance that the Company's
research and development will be successfully completed, that adequate patent
protection for the Company's technology will be obtained, that any products
developed will obtain necessary government regulatory approval or that any
approved products will be commercially viable. In addition, the Company operates
in an environment of rapid change in technology, substantial competition from
pharmaceutical and biotechnology companies and is dependent upon the services of
its employees and its consultants.
The Company expects to incur substantial additional costs, including costs
associated with research, preclinical and clinical testing, manufacturing
process development, 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 in addition to those previously described, which it will seek
through public or private equity or debt financings, collaborative or other
arrangements with corporate sources, or through other sources of financing.
Page 6 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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 Form 10-K Annual Report for the fiscal year ended July 31,
1997.
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 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. New accounting pronouncement -
In March 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share", which establishes new standards for computing and
presenting earnings per share. SFAS 128 is effective for financial statements
issued for periods ending after December 15, 1997 and earlier adoption is not
permitted. The Company believes that the impact of adoption of this statement
will not have a material effect on net income (loss) per share as reported in
the accompanying financial statements.
4. Revenue Recognition -
Contract research revenues are recognized as the related work is performed under
the terms of the contracts and expenses for development activities are incurred.
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.
License fee revenues represent non-refundable payments received in accordance to
Page 7 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
contractual agreements for various access and rights to the Company's
technologies, research, potential products and markets.
5. Revenues -
Revenues recorded by the Company consist of license fees and research and
development support under collaborations with US Surgical and GTI/Novartis,
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").
In July 1995, the Company entered into a collaborative research and development
agreement with US Surgical. US Surgical agreed to fund preclinical 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 preclinical development in four semi-annual installments of up to $1.0
million (the first installment of which was paid on July 31, 1995), and (2) $3.5
million upon achieving certain preclinical milestones. In furtherance of this
joint collaboration, US Surgical also purchased $4.0 million of the Company's
common stock. As of October 31, 1997 the Company has recognized the $4.0 million
for the cost of preclinical development. At the end of September 1997, US
Surgical and the Company modified the July 1995 Joint Development Agreement. As
part of the modification, US Surgical made an additional $6.5 million payment to
the Company for equity, exclusive licensing rights, and certain manufacturing
assets. Further, as part of the modified agreement, US Surgical and the Company
agreed that the preclinical milestone payments in the original agreements were
considered to have been satisfied.
In December 1996, Alexion and GTI/Novartis entered into a License and
Collaborative Research Agreement with respect to the Company's gene transfer
technology. Under the Agreement, GTI/Novartis has been granted a worldwide
exclusive license to use the company's technology in its gene therapy products.
GTI/Novartis agreed to pay Alexion an initial upfront payment of $850,000 which
consisted of a one-time license fee of $750,000 and a $100,000 research and
development support payment. GTI/Novartis also agreed to fund a minimum of
$400,000 per year for two years for research and development support by Alexion.
6. Equity Offerings -
In September 1997, the Company completed the private placement of 400,000 shares
of Series B preferred stock for aggregate consideration of $10,000,000 to a
single institutional investor. The net proceeds to the Company were $9.5
million. The Series B preferred stock is automatically convertible into 935,782
shares of the Company's common stock on March 4, 1998 or at anytime prior
thereto at the election of the holder. The investor is entitled to a dividend of
$2.25 per share
Page 8 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
of Series B preferred stock if this stock is held till March 4, 1998. The
dividend, if paid, is payable in cash or the Company's common stock at the
discretion of the Company. In addition, in September 1997, the Company sold
166,945 shares of its common stock to US Surgical for aggregate consideration of
$3,000,000. The sale of common stock was made in connection with the
modification of the joint development agreement between the Company and US
Surgical.
In connection with its private placements in fiscal 1993 and 1994, the Company
had issued warrants to purchase common stock. The warrants were exercisable at
any time prior to the close of business on December 4, 1997. During the quarter
ended October 31, 1997, warrants were exercised for the purchase of 124,213
shares of common stock aggregating approximately $938,000 of proceeds to the
Company.
Page 9 of 15
<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 and uncertainties
which may cause the Company's plans to differ. Factors and uncertainties that
may cause such differences include, but are not limited to, the rate of
progress, if any, 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 and strategic alliances with third parties, the
cost of manufacturing, the Company's ability to obtain additional funds, and
those other risks discussed in the Company's Annual Report on Form 10-K for the
fiscal year ended July 31, 1997.
OVERVIEW
Since its inception in January 1992, Alexion has devoted 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 development and
scale-up. For the period from inception to October 31, 1997, the Company
incurred a cumulative net loss of approximately $30.2 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. Alexion has entered into a strategic alliance
with US Surgical with respect to the Company's UniGraft program, GTI/Novartis
with respect to the Company's gene therapy products, and intends to seek
additional strategic alliances with other major pharmaceutical companies.
The Company recognizes research and development revenues when the development
expenses 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. License fee revenues represent non-refundable payments received in
accordance to contractual agreements for various access and rights to the
Company's technologies, research, potential products and markets.
Page 10 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
RESULTS OF OPERATIONS
Three Months Ended October 31, 1997
Compared with Three Months Ended October 31, 1996
The Company's revenues increased to $4.1 million for the three months ended
October 31, 1997 from $811,000 for the same period ended October 31, 1996. This
increase was due primarily to a one-time license fee of $3.5 million the Company
received from US Surgical in connection with the September 1997 modification of
the companies' collaborative research and development agreement. Contract
research and grant revenues for the three months ended October 31, 1996
consisted principally of $529,000 in revenues recognized from the US Surgical
agreement, and $282,000 in revenues recognized from the SBIR and NIST's ATP
grants.
Research and development expenses increased to $2,360,000 for the three months
ended October 31, 1997 from $1,974,000 for the three months ended October 31,
1996. The increase resulted principally from incurred costs related to clinical
trials of the Company's lead C5 Inhibitor, 5G1.1-SC, and manufacturing process
development and contract manufacturing costs for the Company's recombinant
product candidates.
General and administrative related expenses decreased to $587,000 for the three
months ended October 31, 1997 from $649,000 for the same period ended October
31, 1996. The decrease in general and administrative expenses resulted
principally from lower outside professional services related to patent
activities.
The Company earned other income, net, of $444,000 for the three months ended
October 31, 1997 as compared to other income, net, of $235,000 for the three
months ended October 31, 1996. This other income, net, resulted principally from
greater interest income from higher cash balances available for investment,
decreased interest expense associated with maturing notes payable, and maturing
capital equipment leases used to finance the purchase of certain equipment.
As a result of the above factors, the Company incurred net income of $1,623,000
for the three months ended October 31, 1997 as compared to a net loss of
$1,578,000 for the same three month period in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception thru October 31, 1997, the Company has financed its
operations and capital expenditures primarily through private placements and its
initial public offering of equity securities resulting in aggregate net proceeds
of approximately $65.8 million. 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. As of October 1997, the
Company has also received approximately $8.8 million in license fees and
research and development support under its collaborations with US Surgical and
GTI/Novartis and has received $1.1 million from its SBIR grants from the NIH and
$901,000 under the ATP/NIST grant.
Page 11 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
The proceeds of the Company's initial public offering, private placements, notes
payable and capital leases, and the cash generated from the corporate
collaborations and SBIR and ATP grants have been used to fund operating
activities of approximately $25 million and investments of approximately $3.1
million in equipment and approximately $974,000 in licensed technology rights
and patents through October 31, 1997. During the three months ended October 31,
1997 and October 31, 1996, the Company's capital expenditures totaled $163,000
and $203,000, respectively, primarily for the acquisition of laboratory and
manufacturing scale-up equipment. As of October 31, 1997, the Company had cash,
cash equivalents and marketable securities of approximately $37.5 million.
The Company leases its administrative and research and development facilities
under three operating leases expiring in December 1997, June 1998, and March
1999, respectively, each with a renewal option for up to an additional three
years. The Company anticipates it will renew it's lease that is expiring in
December 1997.
The Company anticipates that its existing available capital resources and
interest earned on available cash and marketable securities should be sufficient
to fund its operating expenses and capital requirements as currently planned for
at least the next eighteen months. The Company is arranging a term loan with a
financial institution for the financing of capital expenditures principally
related to facilities manufacturing scale-up equipment. 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 scale-up.
The Company 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 connection with its private placements in fiscal 1993 and 1994, the Company
had issued warrants to purchase common stock. These warrants were exercisable at
any time prior to the close of business on December 4, 1997. During the quarter
ended October 31, 1997, warrants
Page 12 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
were exercised for the purchase of 124,213 shares of common stock aggregating
approximately $938,000 of proceeds to the Company. Subsequent to October 31,
1997, the Company received approximately $2.92 million in connection with the
exercise of warrants to purchase an additional 389,340 shares of common stock.
In addition to the above referenced warrants, the Company had previously
received $286,000 in connection with the exercise of warrants to purchase 38,166
shares of the Company's common stock.
Page 13 of 15
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
PART II. OTHER INFORMATION
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K
Exhibit 11 - Calculation of earnings per share.
Exhibit 27 - Article 5 Financial Data Schedule for 1st Quarter 10-Q
Form 8-K
Report on Form 8-K filed on September 11, 1997 relating to the
private placement of preferred stock to a single institutional
investor.
Report on Form 8-K filed on October 9, 1997 relating to the
modification of the Company's joint development agreement with
US Surgical.
Page 14 of 15
<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: December 9, 1997 By: /s/ Leonard Bell, M.D.
-------------------------------------
Leonard Bell, M.D.
President and Chief Executive
Officer, Secretary and Treasurer
(principal executive officer)
Date: December 9, 1997 By: /s/ David W. Keiser
-------------------------------------
David W. Keiser
Executive Vice President and Chief
Operating Officer (principal
financial officer)
Date: December 9, 1997 By: /s/ Barry P. Luke
-------------------------------------
Barry P. Luke
Senior Director of Finance and
Administration (principal
accounting officer)
Page 15 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
EXHIBIT 11. - Earnings Per Share
(UNAUDITED)
Three months ended
October 31,
--------------------------
1997 1996
--------------- ---------
Primary:
Average shares outstanding 8,952,434 7,328,407
Net effect of dilutive stock options
and warrants based on the treasury
stock method using average market price 908,788 0
----------- -----------
TOTALS 9,861,222 7,328,407
----------- -----------
Net income (loss) applicable to common stockholders $ 1,322,641 ($1,577,610)
----------- -----------
Net income (loss) per share $ 0.13 ($ 0.22)
----------- -----------
The series B convertible preferred stock has been excluded from the
computation of earnings per share as it does not qualify as a common
stock equivalent and its effects are anti-dilutive.
There is no difference between primary and fully diluted earnings per share
for the periods presented.
<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> 3-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> OCT-31-1997
<CASH> 31,740
<SECURITIES> 6,006
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 37,697
<PP&E> 3085
<DEPRECIATION> (2,247)
<TOTAL-ASSETS> 38,999
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0
0
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</TABLE>
