<PAGE>
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, 2000.
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 (I.R.S. 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 25,979,738 of the Registrant's Common Stock issued and outstanding on
October 31, 2000.
<PAGE>
TITAN PHARMACEUTICALS, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
<S> <C>
Item 1. Condensed Financial Statements (unaudited)
Condensed Consolidated Balance Sheets
September 30, 2000 and December 31, 1999.............................2
Condensed Consolidated Statements of Operations
Three months and nine months ended September 30, 2000 and 1999.......3
Condensed Consolidated Statements of Cash Flows
Nine months ended September 30, 2000 and 1999........................4
Notes to Condensed Consolidated Financial Statements........................5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.........................................8
Item 3. Quantitative and Qualitative Disclosures about Market Risk........10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................10
Item 4. Submission of Matters to a Vote of Security Holders...............11
Item 6. Exhibits and Reports on Form 8-K..................................11
SIGNATURES..........................................................................12
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
TITAN PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
--------- ---------
(unaudited) (Note A)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 6,334 $ 46,454
Short-term investments 73,463 --
Grants receivable -- 150
Prepaid expenses and other current assets 286 327
--------- ---------
Total current assets 80,083 46,931
Furniture and equipment, net 527 415
Other assets 16 16
--------- ---------
$ 80,626 $ 47,362
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,335 $ 849
Accrued clinical trials expenses 593 437
Accrued compensation and related expenses 578 177
Accrued professional fees and other liabilities 439 356
Unearned contract revenue 30 --
--------- ---------
Total current liabilities 2,975 1,819
Minority interest - Series B preferred stock of Ingenex, Inc. 1,241 1,241
Stockholders' Equity
Preferred stock, at amounts paid in -- 5,000
Common stock, at amounts paid in 148,607 98,697
Common stock to be issued (See Note 7) 1,516 --
Additional paid-in capital 6,524 6,524
Deferred compensation (223) (501)
Accumulated deficit (80,200) (65,418)
Accumulated other comprehensive income 186 --
--------- ---------
Total stockholders' equity 76,410 44,302
--------- ---------
$ 80,626 $ 47,362
========= =========
</TABLE>
Note A: The balance sheet 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 presentation.
See Notes to Condensed Consolidated Financial Statements
2
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TITAN PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Contract revenue $ 280 $ -- $ 841 $ --
License revenue 415 -- 415 --
Grant revenue -- 52 55 99
-------- -------- -------- --------
Total revenue 695 52 1,311 99
Operating expenses:
Research and development 4,576 1,748 11,887 6,558
Acquired in-process research and development 4,969 -- 4,969 136
General and administrative 1,247 838 2,808 2,154
-------- -------- -------- --------
Total operating expenses 10,792 2,586 19,664 8,848
-------- -------- -------- --------
Loss from operations (10,097) (2,534) (18,353) (8,749)
Other income (expense):
Interest income, net 1,392 120 3,605 421
Other expense (6) (31) (34) (43)
-------- -------- -------- --------
Other income, net 1,386 89 3,571 378
-------- -------- -------- --------
Net loss $ (8,711) $ (2,445) $(14,782) $ (8,371)
======== ======== ======== ========
Basic and diluted net loss per share $ (0.34) $ (0.16) $ (0.59) $ (0.55)
======== ======== ======== ========
Weighted average shares used in computing
basic and diluted net loss per share 25,872 15,454 25,171 15,180
======== ======== ======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
3
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TITAN PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (14,782) $ (8,371)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 119 244
Stock compensation to consultants 291 --
Issuance of common stock to acquire
minority interest of Theracell, Inc. -- 136
Acquired in-process research and development 4,969 --
Changes in operating assets and liabilities:
Prepaid expenses, other receivables and assets 191 6
Accounts payable and other accrued liabilities (261) (421)
Unearned contract revenue 30 --
--------- ---------
Net cash used in operating activities (9,443) (8,406)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of furniture and equipment, net (245) (120)
Purchases of short-term investments (100,555) --
Proceeds from sales of short-term investments 27,278 --
--------- ---------
Net cash used in investing activities (73,522) (120)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 42,845 6,018
--------- ---------
Net cash provided by financing activities 42,845 6,018
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (40,120) (2,508)
Cash and cash equivalents at beginning of period 46,454 11,655
--------- ---------
Cash and cash equivalents at end of period 6,334 9,147
Short-term investments at end of period 73,463 --
--------- ---------
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
AT END OF PERIOD $ 79,797 $ 9,147
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
4
<PAGE>
TITAN PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY AND ITS SUBSIDIARIES
We are a biopharmaceutical company developing proprietary therapeutics for
the treatment of central nervous system disorders, cancer and other serious and
life threatening diseases. We conduct a portion of our operations through our
two subsidiaries: Ingenex, Inc. and ProNeura, Inc. We operate in one business
segment, the development of biopharmaceutical products.
INGENEX, INC.
Ingenex is engaged in the development of gene-based therapeutics for the
treatment of cancer. At September 30, 2000, we owned 81% of Ingenex, assuming
the conversion of all preferred stock to common stock.
PRONEURA, INC.
ProNeura is engaged in the development of cost effective, long-term
treatment solutions to neurologic and psychiatric disorders through an
implantable drug delivery system. At September 30, 2000, we 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 intercompany 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 adjustments)
considered necessary for a fair presentation have been included. Operating
results for the nine-month period ended September 30, 2000 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2000.
Through December 31, 1999, we were considered to be in the developmental
stage. In January 2000, we entered into a collaborative agreement with Schering
AG (see Note 6), under which we earn research revenue. As a result of this
agreement, and with the potential of other collaborative partnership agreements
in the future, we are no longer considered to be in the developmental stage.
These unaudited condensed consolidated financial statements 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, 1999.
REVENUE RECOGNITION
License revenue is recognized ratably over the terms of the related license
agreements. Nonrefundable license fees, with respect to which we have no future
performance obligations, are recognized upon receipt. Contract revenue related
to research and development activities performed under collaborative agreements
is recognized when project costs are incurred. Milestone payments are
5
<PAGE>
generally recognized as revenue when specified contractual milestones are
achieved. Government grants that support our product development effort in
specific projects generally provide for reimbursement of expenses as defined in
the grant documents, and revenue is recognized when these project expenses are
incurred.
2. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Financial
Instruments and for Hedging Activities" (SFAS 133), which provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. SFAS 133 is effective for fiscal years
beginning after June 15, 2000 and is not anticipated to have an impact on our
results of operations or financial condition when adopted as we hold no
derivative financial instruments and do not currently engage in hedging
activities.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 (SAB 101). SAB 101 summarizes the SEC's views in
applying generally accepted accounting principles to revenue recognition. The
adoption of SAB 101 had no significant impact on our revenue recognition policy
or results of operations.
In March 2000, the FASB issued Interpretation No. 44, (FIN 44), "Accounting
for Certain Transactions Involving Stock Compensation - an Interpretation of APB
25." This interpretation clarifies, among other things, the definition of
employee for purposes of applying APB 25 and the accounting for an exchange of
stock compensation awards in a business combination. This interpretation is
effective July 1, 2000, but certain conclusions in the Interpretation cover
specific events that occur after either December 15, 1998, or January 12, 2000.
To the extent that this interpretation covers events occurring during the period
after December 15, 1998, or January 12, 2000, but before the effective date of
July 1, 2000, the effects of applying this interpretation are recognized on a
prospective basis from July 1, 2000. The adoption of FIN 44 does not have a
material impact on our financial statements.
3. NET LOSS PER SHARE
We calculate basic net loss per share using the weighted average common
shares outstanding for the period. Had we been in a net income position, shares
used in calculating diluted earnings per share for the nine months ended
September 30, 2000, would have included the effect of an additional 5,595,246
shares related to our convertible preferred stock and options, and for the nine
months ended September 30, 1999, we would have included an additional 12,285,488
shares related to our convertible preferred stock, options and warrants.
4. COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss) is comprised of net income (loss) and other
comprehensive income (loss). Other comprehensive income (loss) includes certain
changes in equity that are excluded from net income (loss), such as unrealized
gains and losses on investments. Comprehensive loss for the nine months ended
September 30, 2000, was $14.6 million. Comprehensive loss for the nine months
ended September 30, 1999, was the same as our net loss.
5. STOCKHOLDERS' EQUITY
In March 2000, we completed a private placement of 1,200,000 shares of our
common stock for net proceeds of $38.8 million, after deducting fees and
commissions and other expenses of the offering.
6
<PAGE>
Also in March 2000, upon satisfying the conditions for conversion and at
the request of Novartis Pharma AG, all outstanding shares of Series D
convertible preferred stock were converted into 666,667 shares of our common
stock.
6. LICENSING AND COLLABORATIVE AGREEMENT WITH SCHERING AG
In January 2000, we entered into a licensing and collaborative agreement
with Schering AG, under which we will collaborate with Schering on manufacturing
and clinical development of our cell therapy product, Spheramine(TM), for the
treatment of Parkinson's disease. Under the agreement, we will perform product
development activities for which we will receive funding. As of September 30,
2000, we recognized $0.8 million of revenue under this agreement. Schering will
fully fund, and manage in collaboration with us, all future clinical studies,
and manufacturing and development activities. We are entitled to certain
payments upon the achievement of specific milestones. Schering also retains the
right to make an equity investment in Titan, up to a specified amount, upon
initiation of pivotal clinical studies. The potential economic value of the
agreement, including development funding and an equity investment, but not
including Schering's funding of clinical trials and product royalties, is
approximately $26 million.
7. ACQUISITION OF A NOVEL AND PROPRIETARY AGENT
In July 2000, we announced the acquisition of worldwide rights to a
novel and proprietary agent, gallium maltolate, for the potential treatment
of cancer and other conditions, including HIV infection. We obtained these
rights through the acquisition of GeoMed, Inc., a privately held California
company. We completed the acquisition in August 2000 by assuming
approximately $1.4 million of GeoMed's liabilities and issuing or reserving
for future issuance an aggregate of 93,555 shares of Titan common stock
valued at approximately $3.6 million using the fair market value of our
common stock at the date of the agreement in accordance with generally
accepted accounting principles. The entire purchase price of approximately
$5.0 million was charged to acquired in-process research and development as
the acquired technology is in an early stage of development with significant
risks and uncertainties remaining in the developmental process.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE FOLLOWING DISCUSSION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS,
WITHIN THE MEANING OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
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. OUR 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
PRE-CLINICAL TESTING, THE RESULTS OF CLINICAL TRIALS AND THE AVAILABILITY OF
ADDITIONAL FINANCING THROUGH CORPORATE PARTNERING ARRANGEMENTS OR OTHERWISE.
ADDITIONAL FACTORS INCLUDE OUR ABILITY TO PROTECT OUR PATENTS AND PROPRIETARY
RIGHTS, ABILITY TO COMPLY WITH EXTENSIVE GOVERNMENT REGULATIONS, AND OTHER
FACTORS AND RISKS DETAILED UNDER THE CAPTION "RISK FACTORS" IN THE COMPANY'S
1999 ANNUAL REPORT ON FORM 10-K AND OTHER FILINGS WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION. STOCKHOLDERS AND PROSPECTIVE INVESTORS IN THE COMPANY
SHOULD CAREFULLY CONSIDER THESE RISK FACTORS. THE COMPANY DISCLAIMS ANY
OBLIGATION TO UPDATE THESE STATEMENTS FOR SUBSEQUENT EVENTS.
OVERVIEW
We are a biopharmaceutical company developing proprietary therapeutics for
the treatment of central nervous system disorders, cancer, and other serious and
life threatening diseases. Our product development programs focus on large
pharmaceutical markets with significant unmet medical needs and commercial
potential. We currently have nine products in development, with seven products
in clinical development including two products in Phase III clinical trials and
five products in Phase II and Phase I/II clinical trials. In addition to these
programs, we have two products in preclinical development. We are independently
developing our product candidates as well as utilizing strategic partnerships,
including collaborations with Novartis Pharma AG and Schering AG. These
collaborations help fund product development while we continue to retain
significant economic interest in our products.
OUR CLINICAL DEVELOPMENT PROGRAMS
The following table sets forth our products in clinical development:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
PRODUCT INDICATION(S) STATUS MARKETING RIGHTS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Zomaril Schizophrenia, psychosis Phase III Novartis Pharma AG
(except Japan)
-----------------------------------------------------------------------------------------------------------------
Spheramine Parkinson's disease Phase I/II Schering AG
-----------------------------------------------------------------------------------------------------------------
CeaVac Colorectal, gastrointestinal and Phase III (colorectal Titan Pharmaceuticals
pancreatic cancer cancer)
-----------------------------------------------------------------------------------------------------------------
TriAb Breast and ovarian cancer Phase II (breast Titan Pharmaceuticals
cancer)
-----------------------------------------------------------------------------------------------------------------
TriGem Small cell lung cancer, melanoma Phase II (melanoma) Titan Pharmaceuticals
-----------------------------------------------------------------------------------------------------------------
Pivanex Non-small cell lung cancer Phase II Titan Pharmaceuticals
-----------------------------------------------------------------------------------------------------------------
Gallium Maltolate Myeloma, prostate and bladder cancer, Phase I/II Titan Pharmaceuticals
(1) lymphoma, HIV
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Clinical studies to commence fourth quarter 2000 and first quarter 2001.
8
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RESULTS OF OPERATIONS
Revenue for the third quarter and for the first nine months of 2000 were
$0.7 million and $1.3 million, respectively. These revenues consisted
primarily of contract revenue from Schering AG for the development of
Spheramine, Titan's novel therapy for treatment of Parkinson's disease, and
certain additional licensing fees. In 1999, Titan had revenue from a U.S.
government grant of approximately $50,000 in the third quarter and $100,000
during the first nine months.
Research and development expenses for the third quarter 2000 were $4.6
million, compared to $1.7 million for the same quarter in 1999. For the nine
months ended September 30, 2000, research and development expenses were $11.9
million, compared to $6.6 million for the same period in 1999. This planned
increase in research and development expense was a result of the expansion of
Titan's randomized, placebo-controlled Phase III clinical study of CeaVac in
Dukes D colorectal cancer, commencement of the Phase I/II clinical trial of
Spheramine, and increased manufacturing and development activity for CeaVac
and for our other anti-cancer therapeutic monoclonal antibodies, TriAb and
TriGem, to support the initiation of additional clinical efficacy studies
over the next several months. These additional studies will be conducted by
various government sponsored cooperative groups and funded largely by the
National Cancer Institute.
We recorded a $5.0 million one-time charge to operations in accordance
with generally accepted accounting principles in the third quarter of 2000
for the acquisition of worldwide rights to a novel and proprietary agent,
gallium maltolate, for the potential treatment of cancer and other
conditions, including HIV infection. See Note 7 (page 7) to the unaudited
Condensed Consolidated Financial Statements for the three and nine month
periods ended September 30, 2000.
General and administrative expenses for the third quarter 2000 were $1.2
million compared to $0.8 million for the same quarter in 1999. For the nine
months ended September 30, 2000, general and administrative expenses were
$2.8 million, compared to $2.2 million for the same period in 1999. General
and administrative expenses represent 19% of our total operating expenses for
the nine months ended September 30, 2000, and the modest increase in 2000
reflects our increased support of our expanded clinical activities.
Other income, net of other expenses, for the third quarter 2000 was $1.4
million compared to $0.1 million in the same quarter in 1999. For the nine
months ended September 30, 2000, other income, net of other expenses, was $3.6
million compared to $0.4 million for the same period in 1999. These increases,
primarily in interest income, were a result of our significantly larger cash and
short-term investments position.
Our net loss for the third quarter of 2000 was $0.14 per share, or $3.7
million, excluding the effect of a one-time charge for the acquisition of a
new product platform, gallium maltolate. Our net loss for the same quarter in
1999 was $0.16 per share, or $2.4 million. The one-time effect of the
acquisition was an additional loss of $0.20 per share, or $5.0 million. For
the nine months ended September 30, 2000, our net loss including the one-time
charge was $0.59 per share, or $14.8 million, compared to $0.55 per share, or
$8.4 million for the same period in 1999. Expenses for the fourth quarter are
expected to be similar to the third quarter, with minimally higher net loss
commensurate with the expanding clinical activities.
LIQUIDITY AND CAPITAL RESOURCES
We have funded our operations since inception primarily through our
initial public offering and private placements of our securities, proceeds
from warrant and option exercises, revenues from corporate licensing and
collaborative agreements, and government sponsored research grants.
9
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In March 2000, we completed a private placement of 1.2 million shares of
our common stock for net proceeds of $38.8 million, after deducting fees and
commissions and other expenses of the offering.
In October 1999, we called for the redemption on November 19, 1999 (the
Redemption Date) of our outstanding Class A Warrants for cash at the redemption
price of $0.05 per warrant. Rather than surrendering the warrants for
redemption, warrant holders had the option to purchase our common stock at a
price of $6.02 per share before the Redemption Date. The warrant call resulted
in 7.1 million, or 99.4%, of our outstanding Class A Warrants being exercised
with net proceeds to us of $39.4 million, after deducting advisory fees and
other related expenses.
In January 1999, we completed a private placement of 2.3 million shares of
our common stock for net proceeds of $5.8 million, after deducting fees and
commissions and other expenses of the offering.
We have 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 we have under these agreements, including minimum license
payments, for the next 12 months is approximately $1.5 million. Certain of the
licenses provide for the payment of royalties by us on future product sales, if
any. In addition, in order to maintain license and other rights while products
are under development, we must comply with customary licensee obligations,
including the payment of patent related costs and meeting project-funding
milestones.
We expect to continue to incur substantial additional operating losses from
costs related to continuation and expansion of product and technology
development, clinical trials and administrative activities. We believe that we
currently have sufficient working capital to sustain our planned operations at
least through 2003.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our cash and investment policy emphasizes liquidity and preservation of
principal over other portfolio considerations. We select investments that
maximize interest income to the extent possible given these two constraints. We
satisfy liquidity requirements by investing excess cash in securities with
different maturities to match projected cash needs and limit concentration of
credit risk by diversifying our investments among a variety of high
credit-quality issuers. Our average portfolio duration is 1.1 years and our
weighted average interest rate is 6.94 percent. We do not use derivative
financial instruments in our investment portfolio. Management believes our
exposure to market rate risk is minimal and the risk of loss is remote.
PART II
ITEM 1. LEGAL PROCEEDINGS
In March 2000, a former investor relations consultant commenced an action
in the Supreme Court of the State of New York, New York County, alleging that
Titan purportedly breached an agreement dated February 24, 1997, by failing to
deliver certain warrants to the plaintiffs. We believe there is no merit to the
plaintiff's claim and are vigorously defending the pending action.
10
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On August 28, 2000, the Company held its Annual Meeting of Stockholders.
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. 20,146,035 277,761
Ernst-Gunter Afting, M.D., Ph.D. 20,145,190 278,606
Victor J. Bauer, Ph.D. 20,146,035 277,761
Eurelio M. Cavalier 20,146,035 277,761
Michael K. Hsu 20,146,035 277,761
Hubert Huckel, M.D. 20,145,190 278,606
Ley S. Smith 20,146,035 277,761
Konrad M. Weis, Ph.D. 20,146,035 277,761
</TABLE>
<TABLE>
<CAPTION>
AFFIRMATIVE AGAINST
VOTES VOTES ABSTENTIONS
----- ----- -----------
<S> <C> <C> <C>
2. Approval of the amendments to our 1998
Stock Option Plan to:
(i) increase the number of shares available
from 1,000,000 to 2,500,000
(ii) modify provisions for directors grants 8,654,328 7,063,760 838,118
3. Approval of the appointment of
Ernst & Young LLP as independent auditors 20,223,479 15,465 184,852
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.34 Agreement and Plan of Merger by and among the Registrant, GeoMed
Merger Sub Corp., and GeoMed, Inc. dated as of July 11, 2000.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
We filed a current report on Form 8-K with the Securities Exchange
Commission on July 20, 2000 to announce the acquisition of a novel and
proprietary agent, gallium maltolate.
11
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SIGNATURES
In accordance with the requirments 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 14, 2000 By: /s/ Louis R. Bucalo
-----------------------
Louis R. Bucalo, M.D.
Chairman, President and Chief Executive
Officer
November 14, 2000 By: /s/ Robert E. Farrell
--------------------------
Robert E. Farrell
Executive Vice President and Chief
Financial Officer
12
