<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 quarterly period ended June 30, 1998.
_____ 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
0-23160
ANESTA CORP.
(Exact name of registrant as specified in its charter)
Delaware 87-0424798
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4745 Wiley Post Way
Plaza 6, Suite 650
Salt Lake City, UT 84116
(801) 595-1405
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.001 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 _____
-----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock $.001 par value 9,606,510
Class Outstanding at August 14,1998
<PAGE>
ANESTA CORP.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
--------
Balance Sheets -
June 30, 1998 (unaudited) and December 31, 1997 2
Statements of Operations and Comprehensive Loss -
for the three and six months ended June 30, 1998 and
1997 (unaudited) and the period from inception (August 1, 1985)
to June 30, 1998 (unaudited) 3
Statements of Cash Flows -
for the six months ended June 30, 1998 and 1997 (unaudited)
and the period from inception (August 1, 1985) to
June 30, 1998 (unaudited) 4
Notes to Financial Statements (unaudited) 6
Management's Discussion and Analysis of
Financial Condition and Results
of Operations 9
PART II. OTHER INFORMATION 11
SIGNATURES 12
1
<PAGE>
ANESTA CORP.
(A Development Stage Company)
BALANCE SHEETS
___________
June 30, December 31,
ASSETS 1998 1997
------------ ------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 10,411,755 $ 9,760,765
Current portion of certificate of deposit 255,000 255,000
Marketable debt securities,
available-for-sale 11,048,719 17,875,711
Accounts receivable 167,640 82,863
Prepaid expenses and other current assets 630,301 428,490
------------ ------------
Total current assets 22,513,415 28,402,829
------------ ------------
Property and equipment, at cost:
Furniture and equipment 928,008 910,443
Leasehold improvements 2,327,372 2,278,941
Accumulated depreciation (1,008,599) (870,848)
------------ ------------
2,246,781 2,318,536
------------ ------------
Other assets:
Certificate of deposit 1,785,000 1,785,000
Other assets 212,406 205,269
------------ ------------
1,997,406 1,990,269
------------ ------------
Total assets $ 26,757,602 $ 32,711,634
============ ============
June 30, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997
------------ ------------
(Unaudited)
Current liabilities:
Accounts payable $ 230,076 $ 433,666
Accrued liabilities:
Accrued compensation 530,904 477,231
Accrued research and development costs 49,255 200,000
Other 175,268 52,746
Current portion of notes payable 250,000 250,000
------------ ------------
Total current liabilities 1,235,503 1,413,643
Unearned advance royalty obligation 315,000 350,000
Notes payable 1,750,000 1,750,000
------------ ------------
Total liabilities 3,300,503 3,513,643
------------ ------------
Stockholders' equity:
Common stock, par value, $.001 per share;
Authorized:15,000,000 shares; Issued and
outstanding: 9,597,312
in 1998 and 9,551,465 in 1997 9,597 9,551
Additional paid-in capital 62,390,861 62,142,239
Deficit accumulated during the development stage (38,943,066) (32,962,206)
Accumulated other comprehensive income (loss) (293) 8,407
------------ ------------
Total stockholders' equity 23,457,099 29,197,991
------------ ------------
Total liabilities and stockholders' equity $ 26,757,602 $ 32,711,634
============ ============
The accompanying notes are an integral
part of the financial statements
2
<PAGE>
ANESTA CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
---------
<TABLE>
<CAPTION>
Three months ended Six months ended Period from inception
---------------------- ----------------------- ---------------------
June 30, June 30, June 30, June 30, (August 1, 1985) to
1998 1997 1998 1997 June 30, 1998
--------- --------- ---------- -------- ---------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Product sales $ 36,299 $ 34,970 $ 75,085 $ 59,201 $ 449,268
Royalty revenue 1,079 1,036 2,229 1,753 113,269
Revenues from contract research/license agreements 350,000 350,000 10,328,931
--------- -------- --------- -------- ---------------------
Total revenues 387,378 36,006 427,314 60,954 10,891,468
--------- -------- --------- -------- ---------------------
Operating costs and expenses:
Cost of goods sold 9,812 10,122 20,709 17,144 140,480
Royalties 1,121 1,080 2,319 1,829 12,657
Research and development 1,677,150 1,532,848 3,593,201 3,349,299 34,327,984
Depreciation and amortization 76,487 59,628 153,535 119,188 1,250,686
Marketing, general and administrative 1,901,837 1,305,805 3,306,958 2,841,109 19,032,623
--------- -------- --------- -------- ---------------------
Total costs and expenses 3,666,407 2,909,483 7,076,722 6,328,569 54,764,430
--------- -------- --------- -------- ---------------------
Loss from operations (3,279,029) (2,873,477) (6,649,408) (6,267,615) (43,872,962)
Non operating income (expense):
Interest income 336,694 489,514 746,722 1,061,464 7,083,818
Interest expense (38,844) (36,724) (70,300) (55,990) (562,691)
Other (3,192) 3,683 (3,733) 3,708 (51,309)
--------- -------- --------- -------- ---------------------
Loss before provision for income
taxes, extraordinary item and cumulative
effect of change in accounting (2,984,371) (2,417,004) (5,976,719) (5,258,433) (37,403,144)
Provision for income taxes (3,275) (4,141) (810) (29,287)
--------- -------- --------- -------- ---------------------
Loss before extraordinary item and
cumulative effect of change in accounting (2,987,646) (2,417,004) (5,980,860) (5,259,243) (37,432,431)
Extraordinary item - reduction of income
taxes arising from carryforward of prior
years' operating losses 22,296
Cumulative effect of change in accounting (1,041,047)
--------- -------- --------- -------- ---------------------
Net loss (2,987,646) (2,417,004) (5,980,860) (5,259,243) $(38,451,182)
---------------------
Other comprehensive income (loss):
Foreign currency translation adjustment 1,810 1,810
Unrealized gain (loss) on marketable debt
securities, available-for-sale 2,680 41,343 (10,510) 10,596
--------- -------- --------- --------
Total other comprehensive income (loss) 4,490 41,343 (8,700) 10,596
--------- -------- --------- --------
Comprehensive loss $(2,983,156) $(2,375,661) $(5,989,560) $(5,248,647)
--------- -------- --------- --------
Basic and diluted loss per common share--
Net loss per common share $ (0.31) $ (0.25) $ (0.62) $ (0.56)
--------- -------- --------- --------
Weighted average shares outstanding 9,588,558 9,485,378 9,581,348 9,473,810
--------- -------- --------- --------
</TABLE>
The accompanying notes are an integral
part of the financial statements
3
<PAGE>
ANESTA CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
________
<TABLE>
<CAPTION>
Six months ended
------------------------------ Period from inception
June 30, June 30, (August 1, 1985) to
1998 1997 June 30, 1998
------------ ------------ ---------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (5,980,860) $ (5,259,243) $ (38,451,182)
Adjustments to reconcile net loss to net cash
used in operating activities:
Cumulative effect of accounting change 1,041,047
Depreciation and amortization 153,535 119,188 1,250,686
Debt conversion expense 101,330
Interest converted to equity 94,104
Compensatory stock options and stock 3,539
Loss on retirement of assets 3,778 302 78,401
Increase (decrease) due to changes in:
Accounts receivable (84,777) 396,369 (167,640)
Prepaid expenses and other current assets (201,811) (466,184) (630,301)
Other assets (7,137) (390,821) (214,984)
Accounts payable (203,590) (53,225) 230,076
Accrued liabilities 25,450 43,586 755,427
Unearned advance royalty revenues (35,000) 315,000
------------ ------------ --------------
Net cash used in operating activities (6,330,412) (5,610,028) (35,594,497)
------------ ------------ --------------
Cash flows from investing activities:
Capital expenditures (85,608) (24,564) (3,300,987)
Proceeds from sale of assets 50 25 11,896
Costs associated with license agreements (1,109,533)
Advances to employees (1,650)
Purchase of marketable debt securities,
available-for-sale (9,952,176) (6,030,428) (62,333,960)
Maturities of marketable debt
securities, available-for-sale 16,768,658 4,979,783 51,264,734
Purchase of treasury bills (1,174,419)
Proceeds from maturity of treasury bills 1,174,419
Purchase of certificate of deposit (816,000) (2,346,000)
Proceeds from maturity of certificate of deposit 306,000
------------ ------------ --------------
Net cash provided by (used in) investing activities 6,730,924 (1,891,184) (17,509,500)
------------ ------------ --------------
Cash flows from financing activities:
Principal payments on notes payable (337,500)
Proceeds from issuance of notes payable 800,000 3,337,700
Principal payments on obligations under capital leases (194,488)
Proceeds from issuance of common stock 248,668 129,329 60,655,995
Collections on notes receivable from
issuance of common stock 65,000
Proceeds from issuance of preferred stock 756,222
Deferred offering costs (277,103)
Dividends paid on preferred stock (491,884)
------------ ------------ --------------
Net cash provided by financing activities 248,668 929,329 63,513,942
------------ ------------ --------------
Effect of exchange rate changes on cash 1,810 1,810
------------ ------------ --------------
Net increase (decrease) in cash and cash equivalents 650,990 (6,571,883) 10,411,755
Cash and cash equivalents at beginning of period 9,760,765 22,807,608
------------ ------------ --------------
Cash and cash equivalents at end of period $ 10,411,755 $ 16,235,725 $ 10,411,755
============ ============ ==============
</TABLE>
- Continued -
The accompanying notes an integral
part of the financial statements
4
<PAGE>
ANESTA CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS, Continued
(Unaudited)
________
<TABLE>
<CAPTION>
Six months ended
------------------------------ Period from inception
June 30, June 30, (August 1, 1985) to
1998 1997 June 30, 1998
------------- ------------ ---------------------
<S> <C> <C> <C>
Supplemental schedule of noncash activities:
The Company issued stock and stock options for:
Purchase of additional license agreement $ 5,400
Notes receivable 71,000
The Company purchased leasehold improvements
using accounts payable 251,507
The Company entered into various capital lease
arrangements 204,610
The Company received stock as payment of a
note receivable 4,226
</TABLE>
The accompanying notes are an integral
part of the financial statements
5
<PAGE>
ANESTA CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Significant Accounting Policies:
-------------------------------
In the opinion of management, the accompanying financial statements contain
all adjustments (consisting only of normal recurring items) necessary to
present fairly the financial position of Anesta Corp. (a development stage
company) (the Company) as of June 30, 1998, the results of its operations
for the three and six months ended June 30, 1998 and 1997 and for the
period from inception (August 1, 1985) to June 30, 1998, and its cash flows
for the three and six months ended June 30, 1998 and 1997 and for the
period from inception (August 1, 1985) to June 30, 1998. The results of
operations for the periods presented are not necessarily indicative of the
results to be expected for the full year period.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
financial statements be read in conjunction with the Company's Annual
Report on Form 10-K for the period ended December 31, 1997 and quarterly
report on Form 10-Q for the period ended March 31, 1998.
Net Loss Per Share
------------------
Basic and diluted earnings per share are computed in accordance with
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per
------------
Share (EPS). Basic EPS excludes dilution and is computed by dividing
-----
income available to common stockholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS reflects the
potential dilution from securities or contracts to issue common stock.
Common equivalent shares are excluded from the computation of diluted EPS
when their effect is antidilutive. As of June 30, 1998, options to purchase
1,358,003 shares of common stock at prices between $1.00 and $19.25 per
share were outstanding. As of June 30, 1997, options to purchase 1,060,047
shares of common stock were outstanding at prices between $0.80 and $19.25.
None of these options were included in the computation of diluted loss per
share because the effect would have been antidilutive.
2. Cash and Cash Equivalents and Marketable Debt Securities:
--------------------------------------------------------
At June 30, 1998, the Company maintained a majority of its cash and cash
equivalents and marketable debt securities in two banks in San Francisco,
California.
3. Income Taxes:
------------
The provision for income taxes for the three and six months ended June 30,
1998 and 1997 is related solely to state income taxes.
6
<PAGE>
ANESTA CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS, Continued
(Unaudited)
4. Revolving/Term Promissory Note Agreements:
-----------------------------------------
On January 11, 1995, the Company entered into a revolving/term promissory
note in the amount of $1.5 million. On May 15, 1995, the term of the
revolving promissory note ended and the Company entered into a 10 year term
note in the amount of $1.5 million. Additionally, on March 20, 1997 the
Company entered into an 8 year term note for an additional $800,000, for a
total of $2.3 million. The agreements provide for a constant interest rate
of "160 basis points" above the financial institution's certificate of
deposit rate (6.00% at June 30, 1998). As of June 30, 1998 two payments
totaling $300,000 had been made leaving a balance of $2,000,000. Annual
payments in the amount of $250,000 will be made on approximately July 15
for the next 8 years beginning on July 15, 1998. Borrowings under the
agreement are collateralized by a certificate of deposit in the amount of
$2,040,000, which is maintained in a bank in Salt Lake City, Utah.
5. Collaborative Relationships:
---------------------------
Effective October 12, 1995, the Company entered into an amendment to a
prior agreement between Abbott International (A.I.) and the Company to
provide the Company the right to terminate or cause to become nonexclusive
A.I.'s license rights to OT-fentanyl products in one or more countries in
the world except the U.S. The amendment also eliminated $100,000 of the
$450,000 unearned advance royalty obligation, which amount was recognized
as royalty revenue during the year ended December 31, 1995. In January
1998, the Company exercised its right to terminate A.I.'s license rights to
OT-fentanyl products in all countries in the world except the U.S. As the
Company receives payments related to international partnering for OT-
Fentanyl products, the Company is obligated to make certain payments to
A.I. until the remaining $350,000 has been fully repaid, at which time such
payments to A.I. will cease. As of June 30, 1998, the Company had made
payments of $35,000, leaving a balance of $315,000 owed to A.I.
On January 28, 1998, the Company announced the signing of an exclusive
agreement with Grupo Ferrer (Ferrer) for the marketing, sales and
distribution of Anesta's OT-fentanyl product line, including Actiq/(R)/, in
Spain and Portugal. Under terms of the agreement, Ferrer will have
exclusive rights in Spain and Portugal to market and distribute Actiq and
certain other product applications of OT-fentanyl which will be
manufactured for Ferrer by Anesta. Grupo Ferrer is a leading private
Spanish pharmaceutical company.
On June 4, 1998, the Company announced the signing of an exclusive
agreement with Laboratoire L. Lafon (Lafon) for the marketing, sales and
distribution of Anesta's OT-fentanyl product line, including Actiq, in
France. Under terms of the agreement, Lafon will have exclusive rights in
France to market and distribute Actiq and certain other product
applications of OT-fentanyl which will be manufactured for Lafon by Anesta.
Lafon is a leading private French pharmaceutical company.
7
<PAGE>
ANESTA CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS, Continued
(Unaudited)
_________
6. Stockholders' Equity:
The table below presents the activity in stockholders' equity from January 1,
1998 to June 30, 1998:
<TABLE>
<CAPTION>
Deficit
Common Stock Accumulated Accumulated
----------------------------------- During the Other
Paid-in Development Comprehensive
Shares Amount Capital Stage Income (Loss) Total
--------- -------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1998 9,551,465 $ 9,551 $ 62,142,239 $ (32,962,206) $ 8,407 $ 29,197,991
Exercise of stock options in
Jan. 1998 for cash and stock
(at $0.80 to $13.50 per share) 8,916 9 (19,580) (19,571)
Exercise of stock options in
Feb. 1998 for cash
(at $1.00 to $16.50 per share) 5,577 6 54,751 54,757
Exercise of stock options in
Mar. 1998 for cash
(at $5.00 to $14.125 per share) 3,857 4 30,726 30,730
Exercise of stock options in
Apr. 1998 for cash
(at $1.00 to $11.00 per share) 10,178 10 49,928 49,938
Exercise of stock options in
May 1998 for cash
(at $1.00 to $12.75 per share) 8,376 8 58,831 58,839
Exercise of stock options in
June 1998 for cash
(at $1.00 to $14.125 per share) 8,943 9 73,966 73,975
Net loss (5,980,860) (5,980,960)
Other Comprehensive loss (8,700) (8,700)
--------- -------- ------------ ------------- ------------- ------------
Balance at June 30, 1998 9,597,312 $ 9,597 $ 62,390,861 $ (38,943,066) $ (293) $ 23,457,099
--------- -------- ------------ ------------- ------------- ------------
</TABLE>
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements which involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors discussed in this section. Additional risks and uncertainties are
described in the Company's most recently filed Annual Report on Form 10-K for
the fiscal year ended December 31, 1997.
RESULTS OF OPERATIONS
Revenues.
Total revenues increased by $351,400 or 975.9% for the three months ended June
30, 1998 as compared to the corresponding period in 1997 and by $366,400 or
601.1% for the six months ended June 30, 1998 as compared to the corresponding
period in 1997. The increase is a result of new collaborative relationships for
Spain, Portugal and France (See Note 5 to Financial Statements) and growth in
the number of new orders and reorders of the Company's first oral transmucosal
product, Fentanyl Oralet/(R)/.
Under the Company's agreements with Abbott Laboratories (Abbott), Abbott
manufactures Anesta's OT-fentanyl product line (Fentanyl Oralet and Actiq) and
sells these products to the Company at a price which reflects Abbott's cost of
manufacturing. The Company then sells the products to Abbott at a price related
to Abbott's selling price which results in a gross profit to the Company ranging
from approximately 40-70%. In addition, the Company is entitled to receive a
royalty on OT-fentanyl product sales by Abbott.
Operating Expenses.
Research and development expenses increased by $144,300 or 9.4% for the three
months ended June 30, 1998 as compared to the corresponding period in 1997 and
by $243,900 or 7.3% for the six months ended June 30, 1998 as compared to the
corresponding period in 1997. The increase is due to higher expenditures in 1998
related to clinical research programs and preparation for filing the amendment
for the Actiq New Drug Application (NDA). The Company expects that its research
and development expenses will increase in the future as a result of increased
expenses related to the hiring of additional personnel, preclinical studies,
clinical trials, product development and manufacturing process development
activities.
Depreciation expense increased by $16,900 or 28.3% for the three months ended
June 30, 1998 as compared to the corresponding period in 1997 and by $34,300 or
28.8% for the six months ended June 30, 1998 as compared to the corresponding
period in 1997. The increase in 1998 is due to the Company's remodeling of
additional facilities near the end of 1997.
Marketing, general and administrative expenses increased by $596,000 or 45.6%
for the three months ended June 30, 1998 as compared to the corresponding period
in 1997 and by $465,800 or 16.4% for the six months ended June 30, 1998 as
compared to the corresponding period in 1997. The increase in marketing, general
and administrative expenses is due primarily to higher expenditures for
personnel, corporate development activities, marketing research, and Actiq
pre-launch marketing activities. The Company expects that its marketing and
general and administrative expenses will increase in the future as a result of
the increased support required for marketing research, Actiq pre-launch market
development and market launch activities, European operations including
international clinical research studies, and corporate development activities.
9
<PAGE>
Non Operating Income (Expense).
Interest income decreased by $152,800 or 31.2% for the three months ended June
30, 1998 as compared to the corresponding period in 1997 and by $314,700 or
29.6% for the six months ended June 30, 1998 as compared to the corresponding
period in 1997. The decrease is primarily due to a reduction in the amount of
invested funds.
Interest expense increased by $2,100 or 5.7% for the three months ended June 30,
1998 as compared to the corresponding period in 1997 and by $14,300 or 25.5% for
the six months ended June 30, 1998 as compared to the corresponding period in
1997. The increase is primarily due to increased borrowings under the term note
(See Note 4 to Financial Statements).
Net Loss.
As a result of the increase in total revenues, the increase in research and
development activities and other factors discussed above, the net loss for the
three months ended June 30, 1998 was $2,987,600 or $0.31 per share as compared
to $2,417,000 or $0.25 per share for the same period in 1997. The net loss for
the six months ended June 30, 1998 was $5,980,900 or $0.62 per share as compared
to $5,259,200 or $0.56 per share for the same period in 1997.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1998, the Company had cash and cash equivalents totaling
$10,411,800, $2,040,000 in a certificate of deposit used as collateral for a
revolving/term loan (See Note 4 to Financial Statements) and $11,048,700 in
marketable debt securities which are available for sale. Thus cash, cash
equivalents, certificate of deposit and marketable debt securities totaled
$23,500,474 as of June 30, 1998. Cash in excess of immediate requirements is
invested according to the Company's investment policy, which provides guidelines
with regard to liquidity and return, and, wherever possible, seeks to minimize
the potential effects of concentration of credit risk.
The Company used cash in operating activities of $6,330,400 for the six months
ended June 30, 1998 compared to $5,610,000 for the corresponding period in 1997.
The increase in cash used in the period is a direct result of the increase in
net loss.
During the six months ended June 30, 1998, the Company made capital expenditures
of approximately $85,600 as compared to capital expenditures of $24,600 during
the corresponding period in 1997. During the six months ended June 30, 1998, the
Company received net proceeds from the maturity of marketable debt securities of
$6,816,500. This compares to a net increase in marketable debt securities of
$1,050,600 during the corresponding period in 1997. During the six months ended
June 30, 1998 the Company purchased a certificate of deposit in the amount of
$816,000.
During the six months ended June 30, 1998, the Company realized cash proceeds of
$248,700 relating to the exercise of stock options. During the six months ended
June 30, 1997 the Company realized cash proceeds of $129,300 relating to the
exercise of stock options and $800,000 from issuance of notes payable.
The Company's future capital requirements could be substantial and will depend
on, and could increase as a result of, many factors, including progress of the
Company's research and development programs; the results and costs of
preclinical and clinical testing of the Company's products, if developed; the
time and costs involved in obtaining regulatory approvals; the costs involved in
filing patents; the time and costs involved in developing and maintaining
collaborative research relationships; the costs associated with potential
commercialization of its products; and administrative and legal costs.
The Company believes that it is prudent to monitor existing cash balances in
order to fund the activities which the Company believes are necessary to
continue its growth. Therefore, the Company periodically evaluates market
conditions and various financing alternatives for obtaining funds to augment
existing cash balances.
Other Matters.
The Company has reviewed all other recently issued, but not yet adopted,
accounting standards in order to determine their effects, if any, on the results
of operations or financial position of the Company. Based on that review, the
Company believes that none of these pronouncements will have a significant
effect on current or future earnings or operations.
10
<PAGE>
II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on June 23, 1998, at which the
stockholders elected eight directors to each serve until the next annual meeting
of stockholders and until his successor is elected and has qualified or until
such director's death, resignation or removal. Stockholders also approved
amendments to the Company's 1993 Stock Option Plan and the Company's 1993 Non-
Employee Directors' Stock Option Plan and stockholders ratified the selection of
Coopers & Lybrand L.L.P. as independent auditors of the Company for its fiscal
year ending December 31, 1998. Votes were cast as follows:
<TABLE>
<CAPTION>
Votes Against
Votes For Or Withheld Votes Abstained Broker Non-Votes
--------- ----------- --------------- ----------------
<S> <C> <C> <C> <C>
Election of Directors:
Edwin M. Kania, Jr. 8,394,005 482,990 Not Applicable Not Applicable
Thomas B. King 8,393,488 483,507 Not Applicable Not Applicable
Richard H. Leazer 8,393,530 483,465 Not Applicable Not Applicable
William C. Moeller 8,393,488 483,507 Not Applicable Not Applicable
Emanuel M. Papper 8,383,648 493,347 Not Applicable Not Applicable
Daniel L. Kisner 8,394,030 482,965 Not Applicable Not Applicable
Theodore H. Stanley 8,393,513 483,482 Not Applicable Not Applicable
Richard P. Urfer 8,394,513 482,482 Not Applicable Not Applicable
Approval of an amendment
to the Company's 1993
Stock Option Plan 6,234,357 2,556,183 18,187 68,268
Approval of an amendment
to the Company's 1993
Non-Employee Directors'
Stock Option Plan 8,041,565 814,133 21,297 None
Ratification of Coopers &
Lybrand L.L.P. as independent
auditors for the fiscal year
ending December 31, 1998 8,856,858 15,682 4,455 None
</TABLE>
Item 5. Other Information
Notice of Deadlines for Stockholder Proposals for 1999 Proxy Statement
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 1999 annual
meeting of stockholders pursuant to Rule 14a-8, "Shareholder Proposals", of the
Securities and Exchange Commission's Regulation 14A and the date after which
notice of a stockholder proposal submitted outside the procedures of Rule 14a-8
is considered untimely is February 1, 1999.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits.
(27) Financial Data Schedule
b) Reports on Form 8-K.
None.
11
<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.
Date: August 14, 1998 ANESTA CORP.
By: /s/ Thomas B. King
-----------------------------
Thomas B. King, President and
Chief Executive Officer
(Authorized Signatory)
By: /s/ Roger P. Evans
-------------------------------
Roger P. Evans, Vice President-
Finance and Administration
(Principal Accounting Officer)
12
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