<PAGE>
U.S. 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 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 0-27436
TITAN PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-3171940
-------- ----------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
400 OYSTER POINT BLVD., SUITE 505, SOUTH SAN FRANCISCO, CALIFORNIA 94080
------------------------------------------------------------------------
(Address of Principal Executive Offices including zip code)
(650) 244-4990
--------------
(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 Exchange Act 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
----- -----
There were 13,123,508 shares of the Registrant's Common Stock issued and
outstanding on November 13, 1998.
<PAGE>
TITAN PHARMACEUTICALS, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
<S> <C>
Item 1. Condensed Consolidated Financial Statements (unaudited)
Condensed Consolidated Balance Sheets
September 30, 1998 and December 31, 1997. . . . . . . . . . . . . .3
Condensed Consolidated Statements of Operations
Three months and nine months ended September 30, 1998
and 1997 and period from commencement of
operations (July 25, 1991) to September 30, 1998 . . . . . . . . .4
Condensed Consolidated Statements of Cash Flows
Nine months ended September 30, 1998 and 1997 and
period from commencement of operations
(July 25, 1991) to September 30, 1998. . . . . . . . . . . . . . .5
Notes to Condensed Consolidated Financial
Statements - September 30, 1998. . . . . . . . . . . . . . . . . .7
Item 2. Management's Discussion and Analysis
or Plan of Operations. . . . . . . . . . . . . . . . . . . . . . .9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securityholders. . . . . 12
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
TITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
(unaudited) (Note A)
----------------- -----------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 14,103,540 $ 24,386,872
Short-term investments 500,000 500,000
Prepaid expenses and other current assets 109,535 58,937
Other receivables - 371,793
----------------- -----------------
Total current assets 14,713,075 25,317,602
Furniture and equipment, net 297,847 253,723
Other assets 15,783 22,898
----------------- -----------------
$ 15,026,705 $ 25,594,223
----------------- -----------------
----------------- -----------------
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 623,592 $ 815,449
Accrued legal fees 189,303 244,486
Accrued sponsored research - 65,500
Accrued payroll and related 171,640 257,751
Accrued professional and accounting fees 75,000 100,000
Other accrued liabilities 127,000 192,487
----------------- -----------------
Total current liabilities 1,186,535 1,675,673
Commitments
Minority interest - Series B preferred stock of Ingenex, Inc. 1,241,032 1,241,032
Guaranteed security value (Note 2) 5,500,000
Stockholders' Equity
Preferred stock, at amounts paid in 5,000,000 5,000,000
Common stock, at amounts paid in 52,294,220 49,622,796
Additional paid-in capital 6,521,353 6,521,353
Deferred compensation (329,520) (458,340)
Deficit accumulated during the development stage (50,886,915) (43,508,291)
----------------- -----------------
Total stockholders' equity 12,599,138 17,177,518
----------------- -----------------
$ 15,026,705 $ 25,594,223
----------------- -----------------
----------------- -----------------
</TABLE>
Note A: The balance sheet at December 31, 1997 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See Notes to Condensed Consolidated Financial Statements
3
<PAGE>
TITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
COMMENCEMENT
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, OF OPERATIONS
-------------------------------- ------------------------------- (JULY 25, 1991) TO
1998 1997 1998 1997 SEPTEMBER 30, 1998
-------------- -------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
License and grant revenue $ - $ - $ - $ 147,745 $ 17,898,281
Costs and expenses:
Research and development 2,138,166 2,375,096 5,289,946 7,193,071 42,180,262
Acquired in-process research and - - 9,500,000 10,186,000
General and administrative 805,214 1,498,576 2,808,743 4,462,467 21,150,692
------------ ------------ ------------ ------------ ------------------
Total costs and expenses 2,943,380 3,873,672 8,098,689 21,155,538 73,516,954
------------ ------------ ------------ ------------ ------------------
Loss from operations (2,943,380) (3,873,672) (8,098,689) (21,007,793) (55,618,673)
Other income (expense):
Equity in loss of ansan pharmaceuticals, (89,029) - (590,853) (2,046,939)
Gain on sale of technology - - 8,513,884 8,361,220
Interest income 189,652 133,574 678,545 452,887 2,515,706
Interest expense - (2,140) (87) (140,881) (4,389,774)
Gain (loss) on sale of fixed assets 415 - (13,016) - (13,016)
Other income (expense) (777) - 54,623 - 259,647
------------ ------------ ------------ ------------ ------------------
Other income (expense) - net 189,290 42,405 720,065 8,235,037 4,686,844
------------ ------------ ------------ ------------ ------------------
Loss before minority interest (2,754,090) (3,831,267) (7,378,624) (12,772,756) (50,931,829)
Minority interest in losses of subsidiaries - - - - 44,914
Net loss $(2,754,090) $(3,831,267) $(7,378,624) $(12,772,756) $ (50,886,915)
Deemed dividend upon conversion
of preferred stock - - - - (5,431,871)
------------ ------------ ------------ ------------ ------------------
Net loss attributable to common stockholders $(2,754,090) $(3,831,267) $(7,378,624) $(12,772,756) (56,318,786)
------------ ------------ ------------ ------------ ------------------
------------ ------------ ------------ ------------ ------------------
Basic and diluted net loss per common share $ (0.21) $ (0.29) $ (0.56) $ (0.98)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Shares used in computing basic and diluted
net loss per share 13,123,508 13,046,102 13,103,513 12,996,635
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
4
<PAGE>
TITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
COMMENCEMENT
NINE MONTHS ENDED SEPTEMBER 30, OF OPERATIONS
------------------------------------- (JULY 25, 1991) TO
1998 1997 SEPTEMBER 30, 1998
------------- ------------- ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (7,378,624) $ (12,772,756) $ (50,886,915)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization expense 220,185 315,818 1,668,879
Issuance of common stock to acquire technology 5,500,000 5,500,000
Payment of guaranteed security value (3,044,409) (3,044,409)
Loss (gain) on sale of assets 13,016 (218,654) 13,016
Accretion of discount on indebebtedness 2,290,910
Equity in loss of Ansan Pharmaceuticals, Inc. 590,854 2,046,940
Other (35,653)
Issuance of common stock to acquire
minority interest of Theracell, Inc. 686,000
Changes in operating assets and liabilities:
Prepaid expenses and other current assets (50,598) (139,632) (109,535)
Receivable from Ansan Pharmaceuticals, Inc. (114,123) -
Other receivables 371,793 -
Other assets 7,115 181,480 (20,748)
Accounts payable (191,857) 863,623 947,782
Accrued license fee (8,000) (8,000)
Other accrued liabilities (289,280) (130,098) 971,360
------------- ------------- ------------------
Net cash used in operating activities (10,350,659) (5,923,488) (39,980,373)
------------- ------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture and equipment (173,179) (80,819) (1,324,402)
Proceeds from sale of furniture and equipment 24,674 24,674
Purchase of short-term investments (100,000) (59,782,493)
Proceeds from sale of short-term investments 12,600,000 59,282,493
Issuance of debenture to Ansan
Pharmaceuticals, Inc. (1,000,000) -
Effect of deconsolidation of
Ansan Pharmaceuticals, Inc. (135,934)
------------- ------------- ------------------
Net cash (used in)/provided by investing activities (148,505) 11,419,181 (1,935,662)
------------- ------------- ------------------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
5
<PAGE>
TITAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
COMMENCEMENT
NINE MONTHS ENDED SEPTEMBER 30, OF OPERATIONS
----------------------------------- (JULY 25, 1991) TO
1998 1997 September 30,1998
------------ ------------ ------------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 215,832 2,998 30,244,606
Deferred financing costs 46,349 (713,899)
Issuance of preferred stock 17,601,443
Issuance of preferred stock - Novartis 5,000,000
Proceeds from notes and advances payable 2,681,500
Repayment of notes payable (1,441,500)
Proceeds from Ansan bridge financing 1,425,000
Proceeds from Titan Pharmaceuticals, Inc. and
Ingenex, Inc. bridge financing 5,250,000
Repayment of Titan Pharmaceuticals, Inc. and
Ingenex, Inc. bridge financing (5,250,000)
Payments of principle under capital lease obligation (127,462) (633,766)
Proceeds from capital lease bridge financing 658,206
Proceeds from Ingenex, Inc. technology financing 2,000,000
Principal payments on Ingenex, Inc. technology financing (1,289,313) (2,000,000)
Increase in minority interest from issuances of
preferred stock by Ingenex, Inc. 1,241,032
Issuance of common stock by subsidiaries 173,652
Loss (gain) on disposal of assets (216,699)
------------ ------------ ------------------
Net cash provided by/(used in) financing activities 215,832 (1,367,428) 56,019,575
------------ ------------ ------------------
Net (decrease)/increase in cash and cash equivalents (10,283,332) 4,128,265 14,103,540
Cash and cash equivalents, beginning of period 24,386,872 1,376,532 -
------------ ------------ ------------------
Cash and cash equivalents, end of period $ 14,103,540 $ 5,504,797 $ 14,103,540
------------ ------------ ------------------
------------ ------------ ------------------
Supplemental cash flow disclosure
Interest paid $ 87 $ 140,881 $ 1,393,396
------------ ------------ ------------------
------------ ------------ ------------------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
6
<PAGE>
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY AND ITS SEVERAL DEVELOPMENT STAGE SUBSIDIARIES
Titan Pharmaceuticals, Inc. (the "Company" or "Titan"), was incorporated
in February 1992 in the State of Delaware. Titan is a biopharmaceutical
company developing proprietary therapeutics for the treatment of central
nervous system disorders, cancer and other serious and life-threatening
diseases. Titan conducts a portion of its operations through three
development stage biotechnology companies: Ingenex, Inc. ("Ingenex"),
Theracell, Inc. ("Theracell") and ProNeura, Inc. ("ProNeura"), collectively,
(the "Operating Companies"). Trilex Pharmaceuticals, Inc. ("Trilex") was
incorporated in May 1996, as a wholly owned subsidiary of the Company, to
engage in the development of cancer therapeutic vaccines utilizing
anti-idiotypic antibody technology. In August 1997, Trilex was merged (the
"Trilex Merger") with and into Titan.
INGENEX, INC.
Ingenex was incorporated in July 1991 and reincorporated in June 1992. It
is engaged in the development of gene-based therapeutics. In June 1997,
Ingenex sold a research technology and certain fixed assets to
Pharmaceutical Product Development, Inc. ("PPD") for $8,722,500 in cash and
the assumption of certain capital lease liabilities and recognized a gain of
$8,361,220. At September 30, 1998, the Company owned 81% of Ingenex.
THERACELL, INC.
Theracell was incorporated in November 1992 to engage in the development of
novel treatments for various neurologic disorders through the transplantation
of neural cells and neuron-like cells directly into the brain. At September
30, 1998, the Company owned 98% of Theracell.
PRONEURA, INC.
ProNeura was incorporated in October 1995 to engage in the development of
cost effective, long term treatment solutions to neurologic and psychiatric
disorders through an implantable drug delivery system. At September 30,
1998, the Company owned 79% of ProNeura.
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of Titan and its majority owned subsidiaries after
elimination of all significant inter-company accounts and transactions.
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine-month period ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998. These financials should be read in conjunction with the
audited consolidated financial statements and footnotes thereto included in
the Titan Pharmaceuticals, Inc. annual report on Form 10-K for the year ended
December 31, 1997.
2. GUARANTEED SECURITY VALUE
In January 1997, the Company entered into an exclusive license agreement with
Hoechst Marion Roussel, Inc. ("HMRI"). The license agreement gave the
Company a worldwide license to HMRI's patent rights and know-how related to
the antipsychotic agent Iloperidone-TM-. Pursuant to the license, the
Company paid, during 1997, an up-front license fee of $9,500,000, consisting
of: (i) $4,000,000 in cash and (ii) $5,500,000 through the issuance 594,595
shares of common stock (the "HMRI Shares".) The Company was obligated to pay
to HMRI the difference between $5,500,000 and the net proceeds received by
HMRI upon sale of the above mentioned
7
<PAGE>
common stock. Accordingly, the Company had classified the entire $5,500,000
as a non-current liability under the heading Guaranteed Security Value in the
accompanying December 31, 1997 balance sheet. In February 1998, HMRI sold the
HMRI Shares for net proceeds of approximately $2,456,000. Accordingly, in
March 1998, the Company paid to HMRI approximately $3,044,000, which was
deducted from Guaranteed Security Value balance. The remaining balance of
$2,456,000 was transferred to stockholders' equity.
3. CHANGES IN ACCOUNTING STANDARDS
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"). SFAS
No. 130 establishes new rules for the reporting and display of comprehensive
income and its components; however, the adoption of this statement has no
impact on the Company's net income/loss or stockholders' equity. During the
three months ended September 30, 1998 and 1997 and the nine months ended
September 30, 1998 and 1997, the Company's comprehensive income/loss was the
same as the Company's net income/loss for such periods.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion contains certain forward-looking statements, within
the meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, the attainment of which involves various risks and
uncertainties. Forward-looking statements may be identified by the use of
forward-looking terminology such as "may", "will", "expect", "believe",
"estimate", "anticipate", "continue" or similar terms, variations of those terms
or the negative of those terms. The Company's actual results may differ
materially from those described in these forward-looking statements due to,
among other factors, the results of ongoing research and development activities
and preclinical testing, the results of clinical trials and the availability of
additional financing through corporate partnering arrangements or otherwise.
RESULTS OF OPERATIONS
Since its inception, the Company's efforts have been principally devoted
to research and development, including human clinical trials, as well as to
acquiring licenses and technologies, raising capital and securing patent
protection. At September 30, 1998, the Company had an accumulated deficit of
approximately $50,887,000 resulting from expenditures for research and
development and general and administrative activities including professional
fees.
There were no revenues for the three months ended September 30, 1998 (the
"1998 quarter") or for the nine months ended September 30, 1998 (the "1998
nine months"). There were no revenues for the three months ended September
30, 1997 (the "1997 quarter.) Total revenues for the nine months ended
September 30, 1997 (the "1997 nine months") were approximately $148,000, and
were earned pursuant to US government grants.
Research and development expenses for the 1998 quarter were approximately
$2,138,000 compared to $2,375,000 for the 1997 quarter, a decrease of 10%.
For the 1998 nine months, research and development expenses were $5,290,000
compared to $7,193,000 for the 1997 nine months, a decrease of 27%. The 1997
nine months include expenditures related to a research technology, which was
subsequently sold by the Company in June 1997. The 1997 nine months and the
1997 quarter also include expenditures related to the development of
Iloperidone, which is now being funded by Novartis Pharma AG pursuant to the
partnering agreement (the "Novartis Sublicense") established by Titan and
Novartis in November 1997.
The results for the 1997 nine months also include a non-recurring,
acquired in-process research and development charge of $9,500,000 related to
the acquisition of Iloperidone.
General and administrative expenses for the 1998 quarter were
approximately $805,000 compared to $1,499,000 for the 1997 quarter, a
decrease of 46%. For the 1998 nine months, general and administrative
expenses were $2,809,000 compared to $4,462,000 for the 1997 nine months, a
decrease of 37%. The 1997 nine months includes expenditures related to a
former subsidiary, which was merged with and into the Company in August 1997
with a subsequent reduction in personnel and other expenses.
Other income for the 1997 nine months includes a gain of approximately
$8,514,000 from the sale of a research technology and certain fixed assets.
Interest income was approximately $190,000 during the 1998 quarter compared
to $134,000 during the 1997 quarter. For the 1998 nine months, interest
income was $679,000 compared to $453,000 for the 1997 nine months. Interest
expense decreased to approximately $100 during the 1998 nine months from
$141,000 during the 1997 nine months. There was no interest expense for the
1998 quarter compared to $2,000 for the 1997 quarter. Other income for the
1997 nine months also includes losses of approximately $591,000 representing
the Company's share of Ansan Pharmaceutical's losses. The Company's share of
Ansan's losses for the 1997 quarter was $89,000.
9
<PAGE>
IMPACT OF YEAR 2000
The year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Computer
programs or hardware that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, or engage in similar normal business activities.
Titan is a relatively young company, incorporated in 1992, and most of
its Information Technology ("IT") and Non-IT systems were Year 2000 compliant
when purchased. The Company believes, therefore, it will not be required to
implement significant modifications or replace significant portions of its
software and hardware in order to be Year 2000 compliant. The Company is,
however, taking steps to ensure that the Year 2000 Issue does not have a
material impact on the operation of the Company.
Significant functions related to the Company's clinical trials are
carried out by contract research organizations ("CRO's"). These functions
include, but are not limited to, clinical study monitoring, biostatistics,
data management and drug manufacturing. The Company is in the process of
contacting its significant suppliers and CRO's. At this time the Company is
not aware of any suppliers or CRO's with a Year 2000 Issue that would
materially impact the Company's results of operations, liquidity, or capital
resources. However, the Company has no means of ensuring that its suppliers
or CRO's will be Year 2000 ready. The inability of its suppliers or CRO's to
complete their Year 2000 resolution process in a timely fashion could
materially impact the Company. The effect of non-compliance by external
agents is not determinable.
LIQUIDITY AND SOURCES OF CAPITAL
The Company has funded its operation from inception primarily through
private placements of its securities, as well as the IPO. During 1997, the
Company also received approximately $25,861,000 from up-front license fees
relating to the Novartis Sublicense and the sale of a research technology.
In March 1998, the Company paid to HMRI approximately $3,044,000 (the
difference between the net proceeds received by HMRI, upon the sale of the
HMRI Shares in February 1998, and the $5,500,000 guaranteed value of the HMRI
Shares when issued.) As the Company classified the $5,500,000 as guaranteed
security value, the HMRI Shares had not been included in stockholders'
equity. Upon the payment to HMRI, approximately $2,456,000 was credited to
stockholders' equity.
In November 1998, the Company agreed to guarantee certain debt
obligations of the Company's Chief Executive Officer. Under said guarantee,
the Company may be obligated to make a payment of up to $400,000. The
Company's Chief Executive Officer has pledged approximately 300,000 shares of
the Company's common stock, owned by the Chief Executive Officer, to secure
the debt.
Titan has entered into various agreements with research institutions,
universities, and other entities for the performance of research and
development activities and for the acquisition of licenses related to those
activities. The aggregate commitments the Company has under these
agreements, including minimum license payments, for the next 12 months is
approximately $3,000,000. Certain of the licenses provide for the payment of
royalties by the Company on future product sales, if any. In addition, in
order to maintain license and other rights while products are under
development, the Company must comply with customary licensee obligations,
including the payment of patent related costs and meeting project-funding
milestones.
The Company expects to continue to incur substantial additional
operating losses from costs related to continuation and expansion of research
and development, clinical trials, and increased administrative and fund
raising activities over at least the next several years. To preserve
operating capital, the Company has chosen to strategically focus on
development of its later stage products in clinical development, and at least
temporarily reduce or eliminate spending on certain preclinical programs.
While the Company has sufficient working capital to sustain planned
operations for a period greater than 12 months, the Company may seek
additional financing sooner, depending on numerous factors including, but not
limited to, the progress of the Company's research and development programs,
the results of clinical studies, technological advances, determinations as to
the commercial potential of the Company's products, and the status of
competitive products. In May 1998, the Company negotiated a $5,000,000 bank
line of credit. In addition, certain expenditures will be dependent on
10
<PAGE>
the establishment of collaborative relationships with other companies, the
availability of financing, and other factors. In any event, the Company
anticipates that it will require substantial additional financing in the
future. There can be no assurance as to the availability or terms of any
required additional financing, when and if needed.
11
<PAGE>
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
On July 24, 1998, the Company held its Annual Meeting of shareholders. Matters
voted upon at the meeting and the number of affirmative votes, negative votes,
withheld votes and abstentions cast with respect to each such matter were as
follows:
<TABLE>
<CAPTION>
AFFIRMATIVE WITHHELD
VOTES VOTES
----- -----
<S> <C> <C>
1. Election of the Company's Directors:
Louis R. Bucalo, M.D. 10,657,982 33,091
Ernst-Gunter Afting, M.D., Ph.D. 10,657,982 33,091
Victor J. Bauer, Ph.D. 10,657,982 33,091
Michael K. Hsu 10,657,982 33,091
Hubert Huckel, M.D. 10,657,982 33,091
Marvin E. Jaffe, M.D. 10,657,982 33,091
Konrad M. Weis, Ph.D. 10,657,982 33,091
Kenneth J. Widder, M.D. 10,657,982 33,091
<CAPTION>
AFFIRMATIVE AGAINST
VOTES VOTES ABSTENTIONS
----------- --------- -----------
<S> <C> <C> <C>
2. Approval and ratification of the adoption
of the Company's 1998 Stock Option: 2,383,882 1,590,492 44,250
3. Approval and ratification of the appointment of
Ernst & Young LLP as independent auditors: 10,669,019 15,754 6,300
</TABLE>
ITEM 5. OTHER INFORMATION
On September 15, 1998, Eurelio Cavalier was appointed to the
registrant's Board of Directors. In connection with such
appointment, he was granted options to purchase 10,000 shares of
Common Stock at an exercise price of $2.47 per share, pursuant to
the Company's 1998 Stock Option Plan.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<S> <C>
27.1 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the nine months ended
September 30, 1998.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
TITAN PHARMACEUTICALS, INC.
November 13, 1998 By: /s/ Louis R. Bucalo
-------------------------------
Louis R. Bucalo, M.D., President and
Chief Executive Officer
November 13, 1998 By: /s/ Robert E. Farrell
-------------------------------
Robert E. Farrell, Chief Financial
Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPERATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 14,103,540
<SECURITIES> 500,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14,713,075
<PP&E> 540,524
<DEPRECIATION> (242,677)
<TOTAL-ASSETS> 15,026,705
<CURRENT-LIABILITIES> 1,186,535
<BONDS> 0
0
5,000,000
<COMMON> 52,294,220
<OTHER-SE> (43,454,050)
<TOTAL-LIABILITY-AND-EQUITY> 15,026,705
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 8,098,689
<OTHER-EXPENSES> 0
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