UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period to
from
Commission file number 0-28150
NEUROCRINE BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0525145
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3050 Science Park Road
San Diego, California 92121
(Address of principal executive offices)
(619) 658-7600
(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
The number of outstanding shares of the registrant's Common Stock, no
par value, was 16,766,473 as of September 30, 1996
<PAGE>
NEUROCRINE BIOSCIENCES, INC
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
Condensed Balance Sheets as of September 30, 1996 and
December 31, 1995 3
Condensed Statements of Operations for the three months
and nine months ended September 30, 1996 and 1995 4
Condensed Statements of Cash Flows for the nine months
ended September 30, 1996 and 1995 5
Notes to Financial Statements 6
ITEM 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
Overview 7
Results of Operations 9
Liquidity and Capital Resources 9
PART II OTHER INFORMATION
ITEM 6: Exhibits 11
SIGNATURES 12
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
NEUROCRINE BIOSCIENCES, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,159,722 $ 6,392,749
Short-term investments, available for sale 53,450,256 12,303,460
Receivables under collaborative agreements 4,524,723 1,000,000
Other current assets 1,156,838 234,334
Total current asset 66,291,539 19,930,543
Furniture, equipment, and leasehold
improvements, net 3,503,643 2,772,844
Licensed technology and patent application
costs, net 1,314,418 919,049
Other assets 1,131,953 389,296
Total assets $ 72,241,553 $ 24,011,732
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 561,055 $ 820,883
Accrued expenses, other current liabilities, and
current portion of obligations under capital
leases 2,168,331 2,120,581
Total current liabilities 2,729,386 2,941,464
Other long-term liabilities 1,298,864 1,845,329
Stockholders' equity:
Preferred Stock, $0.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding
Common stock, no par value:
Authorized shares - 100,000,000
Issued and outstanding shares - 16,766,473
shares in 1996, 11,723,101 in 1995 82,731,694 35,120,404
Accumulated deficit (14,518,391) (15,895,465)
Total stockholders' equity 68,213,303 19,224,939
Total liabilities and stockholders' equity $ 72,241,553 $ 24,011,732
<FN>
Note The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date, but does not include all of the
disclosures required by generally accepted accounting principles.
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
NEUROCRINE BIOSCIENCES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues under collaborative
research agreements :
Sponsored research $ 1,625,000 $ 750,000 $ 4,875,000 $ 2,250,000
Milestones 3,000,000 750,000
License fees 2,000,000
Other revenue 562,965 73,719 1,983,359 223,522
Total revenues 2,187,965 823,719 9,858,359 5,223,522
Operating expenses
Research and development 3,032,562 1,824,617 8,339,515 5,631,100
General and administration 717,370 713,488 2,012,554 2,152,148
Total operating expenses 3,749,932 2,538,105 10,352,069 7,783,248
Loss from operations (1,561,967) (1,714,386) (493,710) (2,559,726)
Interest income 938,005 296,247 1,686,220 930,205
Interest expense (60,277) (76,850) (198,216) (225,160)
Other income 279,200 103,070 382,781 133,805
Net income (loss) $(405,039) $(1,391,919) $1,377,075 $(1,720,876)
Net income (loss) per share $ (0.02) $ (0.12) $ 0.09 $ (0.14)
Shares used in computing net
income (loss) per share 16,764,209 12,027,446 16,160,506 11,976,152
<FN>
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
NEUROCRINE BIOSCIENCES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Operating activities
Net Income (loss) $ 1,377,075 $ (1,720,876)
Adjustments to reconcile net income
(loss) to cash used in operating activities:
Compensation expense recognized for stock options 56,115 24,263
Write-off of licensed technology and patent
application costs 7,360 -
Depreciation and amortization 697,887 514,199
Deferred revenue 324,065 750,000
Deferred rent 41,457 191,352
Change in operating assets and liabilities:
Other current assets (4,447,227) (1,263,137)
Other assets (742,734) (250,486)
Accounts payable and accrued liabilities (576,433) (382,181)
Net cash flows used in operating activities (3,262,435) (2,136,866)
Investing activities
Purchases of short-term investments (64,454,483) (17,623,995)
Sales/maturities of short-term investments 23,336,486 12,843,042
Purchase of licensed technology and expenditures
for patent application costs (500,564) (206,687)
Purchases of furniture, equipment and
leasehold improvements (1,330,774) (68,066)
Net cash flows used in investing activities (42,949,336) (5,055,706)
Financing acitivities
Issuance of common stock, net 47,518,523 3,730,000
Principal payments on obligations under
capital leases (547,632) (412,671)
Payments received on notes receivable
from stockholders 7,853 7,513
Net cash flows provided by financing activities 46,978,744 3,324,842
Increase (decrease) in cash and cash equivalents 766,973 (3,867,730)
Cash and cash equivalents at beginning of period 6,392,749 4,716,052
Cash and cash equivalents at end of period $ 7,159,722 $ 848,322
Supplemental disclosures of cash flow information
Interest paid $ 198,216 $ 225,160
Supplemental schedule of noncash investing and
financing activities
Furniture and equipment financed with obligations under
capital leases $ $ 494,200
<FN>
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
NEUROCRINE BIOSCIENCES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Basis of presentation
The interim unaudited condensed financial statements contained herein have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The financial statements include all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of the financial position, results of operations, and cash flows
for the periods presented. The results of operations for the interim periods
shown in this report are not necessarily indicative of results expected for
the full year. The financial statements should be read in conjunction with
the audited financial statements and notes for the year ended December 31,
1995, included in the Company's Registration Statement on Form S-1, filed with
the Securities and Exchange Commission and effective on May 23, 1996.
2. Net income (loss) per share
Net income (loss) per share is computed using the weighted average number
of shares of common stock outstanding during each period. Common stock
equivalent shares from stock options, warrants, and convertible preferred
shares are excluded from the computation when their effect is antidilutive,
except that, pursuant to the Securities and Exchange Commission Staff
Accounting Bulletins, common and common equivalent shares issued at prices
substantially below the public price during the 12-month period prior to the
filing of the initial public offering have been included in the calculation as
if they were outstanding for all periods through that date (using the treasury
stock method and the initial public offering price of $10.50 per share). For
the nine month period ended September 30, 1996 shares used in computing net
income per share also includes common equivalent shares arising from dilutive
stock options, warrants, and convertible preferred shares which were issued
more than 12 months immediately preceding the IPO, using the treasury stock
method. Income per share on a fully diluted basis was unchanged.
3. Neuroscience Pharma (NPI) Inc.
In March 1996, the Company established Neuroscience Pharma (NPI) Inc.
("NPI"), a subsidiary of the Company in Canada. The Company owns 49% of the
outstanding shares of NPI's Common Stock. The remaining 51% is owned by a
group of Canadian institutional investors. Since the Company does not have a
majority interest in NPI, NPI is not consolidated. As of September 30, 1996,
NPI had total assets consisting primarily of cash and cash equivalents of $9.4
million, stated in U.S dollars. Such assets are available to fund additional
research and clinical development of certain of the Company's research
programs.
4. Subsequent events
In October of 1996, the Company entered into a Collaborative Research
Agreement with Eli Lilly and Company to discover and develop corticotropin
releasing factor (CRF) - binding protein ligand inhibitors for the treatment
of two critical central-nervous system disorders, obesity and dementia, such
as that associated with Alzheimer's disease. The value of the entire
agreement including license fees, sponsored research and development, and
contingent milestone payments is estimated at up to $74.0 million, $22.0
million of which consists of guaranteed initial license fees and sponsored
research and development funding.
<PAGE>
ITEM 2.
MANAGEMENT DISCUSSION AND ANAYLSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations of Neurocrine Biosciences, Inc. ("Neurocrine" or the
"Company") contain forward-looking statements which involve risks and
uncertainties. Actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including
those set forth below and/or outlined in "Risk Factors" and elsewhere in the
Company's registration statement on Form S-1 and the related prospectus, dated
May 23, 1996, constituting a part thereof.
Overview
Since the founding of the Company in January 1992, Neurocrine has been
engaged in the discovery and development of novel pharmaceutical products for
diseases and disorders of the central nervous and immune systems. To date,
Neurocrine has not generated any revenues from the sale of products, and does
not expect to generate any product revenues for the foreseeable future. The
Company's revenues, if any, are expected to come from its strategic alliances.
Neurocrine has incurred a cumulative deficit of $14.5 million as of September
30, 1996 and expects to incur substantial additional operating losses,
potentially greater than losses in prior years, in the future.
Neurocrine has primarily financed its operations through the sale of
Common Stock. In February 1994, the Company completed the sale of Common
Stock in a private placement offering resulting in gross proceeds of $30.0
million. In connection with the its strategic alliance with Janssen
Pharmaceutica, N.V. ("Janssen"), Johnson and Johnson Development Corporation
("JJDC") purchased $2.5 million of Common Stock in January 1995 and purchased
an additional $2.5 million of Common Stock concurrent with the Company's
initial public offering in May 1996. In January 1996, the Company sold $5.0
million of Common Stock to Ciba-Geigy Limited ("Ciba-Geigy") in connection with
the Ciba-Geigy strategic alliance. Ciba-Geigy also purchased an additional
$5.0 million of Common Stock concurrent with the Company's initial public
offering in May 1996. In addition to the shares sold to JJDC and Ciba-Geigy,
Neurocrine sold 3.5 million shares of common stock pursuant to its initial
public offering in May 1996 resulting in net proceeds to the Company of $34.2
million (net of offering expenses).
In February 1995, the Company entered into a three to five year
strategic alliance with Janssen for the development of CRF receptor
antagonists for the treatment of anxiety, depression and substance abuse.
Pursuant to the agreement, Janssen has paid the Company $5.3 million through
September 30, 1996 and is obligated to pay the Company an additional $4.2
million in sponsored research payments through 1997, as well as $6.0 million
for two additional years should Janssen exercise its option to extend the
collaboration. The Company could also receive milestone payments of up to
$10.0 million for the indications of anxiety, depression and substance abuse,
and up to $9.0 million for other indications, if certain development and
regulatory milestones are achieved. In addition, Janssen paid a $1.0 million
license fee in 1995 and an additional $1.0 million license fee in July of
1996. In return, Janssen received worldwide manufacturing and marketing
rights to the compounds developed during this collaboration, and is required
to pay the Company royalties on net sales and the costs associated with
establishing a North American sales force should Neurocrine exercise its
option to co-promote.
In January 1996, the Company entered into an agreement with Ciba-Geigy
to develop altered peptide ligands for the treatment of multiple sclerosis.
Pursuant to the agreement, Ciba-Geigy is obligated to provide Neurocrine with
$12.0 million in license fees and research and development funding during the
first two years of the agreement, and up to $15.5 million in further research
and development funding thereafter, unless the agreement is sooner terminated.
Ciba-Geigy has the right to terminate the agreement after December 30, 1997.
In addition, the Company could also receive milestone payments if certain
development and regulatory milestones are achieved. In return, Ciba-Geigy
received manufacturing and marketing rights outside of North America and will
receive a percentage of profits on sales in North America. The Company will
receive royalties for all sales outside North America and a percentage of
profits on sales in North America, which the Company may at its option convert
to a right to receive royalties on product sales. Neurocrine is obligated to
repay a portion of the development costs for potential products developed in
such collaboration unless the Company elects to convert to the right to
receive royalty payments.
<PAGE>
ITEM 2:
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In March 1996, the Company completed the formation of a research and
development subsidiary, Neuroscience Pharma (NPI), Inc. ("NPI"), with a group
of Canadian investors. The investors purchased a 51% equity interest of NPI
for approximately $9.5 million. The Company licensed certain technology and
transferred to NPI the Canadian marketing rights related to its Neurosteroid
program and Canadian marketing rights to products developed in the Company's
Neurogenomics program. Along with certain Canadian government incentives,
such funds are expected to fund the early clinical trials of DHEA and research
activities in the Neurogenomics program. At the option of the investors, the
investors may convert and relinquish the marketing rights upon conversion of
NPI Preferred Stock into the Company's Common Stock at a conversion price of
$7.45 per share. In connection with their investment in NPI, such investors
also received warrants exercisable for shares of Common Stock at an exercise
price of the stock sold in the Company's initial public offering ($10.50) and
are eligible to receive additional future warrants exercisable at the then
prevailing market price in the event that NPI receives certain Canadian
government incentives for research activities, if any. The Company may at its
option, repurchase the marketing rights at a predetermined price.
In May 1996, the Company sold 3.5 million shares of Common Stock in an
initial public offering resulting in net proceeds to the Company of $34.2
million (excluding offering expenses). Concurrent with this offering the
Company sold 714,286 shares of Common Stock to JJDC and Ciba-Geigy in
accordance with the provisions of their respective collaboration agreements.
These transactions resulted in aggregate net proceeds to the Company of $7.2
million. In June 1996 the Company sold an additional 180,000 shares of Common
Stock to the underwriters of the initial public offering to cover over-
allotments. This transaction resulted in net proceeds to the Company of $1.8
million.
In October 1996, the Company entered into a Collaborative Research
Agreement with Eli Lilly and Company to discover and develop corticotropin
releasing factor (CRF) - binding protein ligand inhibitors for the treatment
of at least two critical central-nervous system disorders, obesity and
dementia, such as that associated with Alzheimer's disease. Under the terms
of the agreement the Company will receive $22.0 million in fees and research
and development funding and may also realize milestone payments based upon
attainment of certain development and regulatory accomplishments. The Company
will have the option to receive copromotion rights and share profits from
commercial sales of select products which result from the collaboration in the
U.S. or receive royalties on U.S. product sales. The Company will receive
royalties on product sales for the rest of the world. The potential value of
the entire agreement including license fees, sponsored research and
development, and contingent milestone payments is estimated at up to $74.0
million.
There can be no assurance that the Company and its corporate partners
will be successful commercializing any potential products. As a result, there
can be no assurance that any product development milestone, royalties, or
profit sharing payments will be made. The Company is dependent upon its
corporate partners to provide adequate funding for its research and
development programs. Under these arrangements, the Company's corporate
partners are responsible for (i) selecting compounds for subsequent
development as drug candidates, (ii) conducting preclinical testing and
clinical trials and obtaining required regulatory approvals for such drug
candidates, and (iii) manufacturing and commercializing any resulting drugs.
Failure of these partners to select a compound discovered by the Company for
subsequent development into marketable products, gain the requisite regulatory
approvals or successfully commercialize products, would have a material
adverse effect on the Company's business, financial condition and results of
operations. The Company's strategy for development and commercialization of
certain of its products is dependent upon entering into additional
arrangements with research collaborators, corporate partners and others and
upon the subsequent success of these third parties in performing their
obligations. There can be no assurance that the Company will be able to enter
into additional strategic alliances on terms favorable to the Company, or at
all. Failure of the Company to enter into additional strategic alliances
would have a material adverse effect on the Company's business, financial
condition and results of operations. The Company's strategic alliances with
Janssen, Ciba-Geigy and Eli Lilly and Company are subject to termination by
the collaborators. There can be no assurance that Janssen, Ciba Geigy, or Eli
Lilly and Company will not elect to terminate its strategic alliance with the
Company prior to its scheduled expiration.
The Company expects its research and development expenditures to
increase substantially over the next several years as the Company expands its
research and development efforts and undertakes preclinical testing and
clinical trials with respect to certain of its programs. In addition, general
and administrative expenses are expected to increase as the Company expands
its operations, and incurs the additional expenses associated with operating
as a public company.
<PAGE>
ITEM 2:
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's business is subject to significant risks, including but
not limited to, the risks inherent in its research and development activities,
including clinical trials, uncertainties associated both with obtaining and
enforcing its patents and with patent rights of others, the lengthy, expensive
and uncertain process of seeking regulatory approvals, uncertainties regarding
government reforms and of product pricing and reimbursement levels,
technological change and competition, manufacturing uncertainties and
dependence on third parties. Even if the Company's product candidates appear
promising at an early stage of development, they may not reach the market for
numerous reasons. Such reasons include the possibilities that the product
will be ineffective or unsafe during clinical trials, will fail to receive
necessary regulatory approvals, will be difficult to manufacture on large
scale, will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties.
Results of Operations
Revenues increased to $2.2 million for the third quarter and $9.9 million
for the nine month period ended September 30, 1996, compared with $824,000
and $5.2 million, respectively, for the same periods in 1995. These increases
were primarily due to increased sponsored research revenues and milestone
revenues recognized under the collaboration with Ciba-Geigy.
Research and development expenses increased to $3.0 million for the third
quarter and $8.3 million for the nine month period ended September 30, 1996,
compared with $1.8 million and $5.6 million, respectively, for the same
periods in 1995. These increases reflect continued additions to scientific
personnel and related support expenditures as the Company increased its
research activities primarily in the CRF and Altered Peptide Ligand programs.
General and administrative expenses increased slightly to $717,000 for the
third quarter and decreased to $2.0 million for the nine month period ended
September 30, 1996, compared with $713,000 and $2.2 million, respectively, for
the same periods in 1995. The decrease in the nine month period in 1996 was
largely attributable to non-recurring timing differences of certain expenses
which occurred in the first quarter of 1996.
Interest income increased to $938,000 for the third quarter and $1.7
million for the nine month period ended September 30, 1996, compared with
$296,000 and $930,000, respectively, for the same periods in 1995. These
increases were due to increased investment income attributable to increased
cash and short term investments purchased with proceeds from the Company's
initial public offering in May 1996.
Net loss decreased to $405,000 or $.02 per share for the third quarter and
net income increased to $1.4 million or $.09 per share for the nine month
period ended September 30, 1996, compared with a net loss of $1.4 million or
$.12 per share and $1.7 million or $.14 per share, respectively, for the same
periods in 1995. The reduction in the net loss for the three month period and
the increased net income for the nine month period was primarily attributable
to the increased revenues earned under the Ciba-Geigy corporate collaboration.
Net income per share for the nine month period increased also as a result of
these revenues and was partially offset by the inclusion of dilutive common
stock equivalents in the calculation of weighed average shares used in
computing net income per share in accordance with generally accepted
accounting principles.
Liquidity and Capital Resources
On September 30, 1996 the Company's cash, cash equivalents, and short-term
investments totaled $60.6 million. This excludes approximately $9.2 million
held by NPI which is available to fund certain of the Company's research and
development activities and $4.5 million due from corporate collaborators.
In May 1996, the Company sold 3.5 million shares of Common Stock in an
initial public offering resulting in net proceeds to the Company of $34.2
million (excluding offering expenses). Concurrent with this offering the
Company sold 714,286 shares of Common Stock to JJDC and Ciba-Geigy in
accordance with the provisions of their respective collaboration agreements.
These transactions resulted in aggregate net proceeds to the Company of $7.2
million. In June 1996 the Company sold an additional 180,000 shares of Common
Stock to the underwriters of the initial public offering to cover over-
allotments. This transaction resulted in net proceeds to the Company of $1.8
million.
Cash used in operating activities during the nine month period ended
September 30, 1996 increased to $3.3 million compared with $2.1 million for
the same period in 1995. The increase was the result of timing differences
associated with sponsored research, development, and milestone payments under
corporate collaborations and increased cash outflows attributable to increased
research and development expenditures associated with the Company's CRF and
Altered Peptide Ligand programs.
Cash used in investing activities during the nine month period ended
September 30, 1996 increased to $42.9 million compared with $5.1 million for
the same period in 1995. This increase was the result of the purchase of
additional short-term investments with proceeds from the Company's initial
public offering and the sale of Common Stock to corporate collaborators in May
1996.
Cash provided by financing activities during the nine month period ended
September 30, 1996 increased to $47.0 million compared with $3.3 million for
the same period in 1995. This increase was the result of proceeds received
from the Company's initial public offering and the sale of Common Stock to
corporate collaborators in May 1996.
The Company believes that its existing capital resources, together with
interest income and future payments due under the strategic alliances, will be
sufficient to satisfy its current and projected funding requirements at least
through 1998. However, no assurance can be given that such capital resources
and payments will be sufficient to conduct its research and development
programs as planned. The amount and timing of expenditures will vary
depending upon a number of factors, including progress of the Company's
research and development programs, conducting preclinical testing and clinical
trials, developing regulatory submissions, the costs associated with
protecting its patents and other proprietary rights, developing marketing and
sales capabilities, the availability of third-party funding, technological
advances, changing competitive conditions and the commercial potential of the
Company's proposed products, if any.
The Company may seek to access the public or private equity markets
whenever conditions are favorable. The Company may also seek additional
funding through strategic alliances and other financing mechanisms,
potentially including off-balance sheet financing. There can be no assurance
that such funding will be available on terms acceptable to the Company, if at
all. If adequate funds are not available, the Company may be required to
curtail significantly one or more of its research or development programs or
obtain funds through arrangements with collaborative partners or others. This
may require the Company to relinquish rights to certain of its technologies or
product candidates.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27.1 Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEUROCRINE BIOSCIENCES, INC.
Dated: Nov. 5, 1996 Paul W. Hawran
PAUL W. HAWRAN
Senior Vice President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 7,159,722
<SECURITIES> 53,450,256
<RECEIVABLES> 4,524,723
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 66,291,539
<PP&E> 3,503,643
<DEPRECIATION> 0
<TOTAL-ASSETS> 72,241,553
<CURRENT-LIABILITIES> 2,729,386
<BONDS> 0
0
0
<COMMON> 83,228,633
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 72,241,553
<SALES> 0
<TOTAL-REVENUES> 9,858,359
<CGS> 0
<TOTAL-COSTS> 10,352,069
<OTHER-EXPENSES> (382,781)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 198,216
<INCOME-PRETAX> 1,377,075
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,377,075
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
