<PAGE> 1
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
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM _________ TO _______
Commission File Number: 0-24274
LA JOLLA PHARMACEUTICAL COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 33-0361285
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6455 NANCY RIDGE DRIVE 92121
SAN DIEGO, CA (Zip Code)
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (619) 452-6600
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 shares of the Registrant's common stock, $.01 par value,
outstanding at September 30, 1997 was 18,140,880.
<PAGE> 2
LA JOLLA PHARMACEUTICAL COMPANY
FORM 10-Q
QUARTERLY REPORT
INDEX
<TABLE>
<CAPTION>
<S> <C>
COVER PAGE.................................................................................1
INDEX .....................................................................................2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
Balance Sheets as of September 30, 1997 and December 31, 1996 .................... 3
Statements of Operations for the three months and nine months ended
September 30, 1997 and 1996 ...................................................... 4
Statements of Cash Flows for the nine months ended September 30, 1997 and 1996.... 5
Notes to Financial Statements .................................................... 6
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ................................................... 7
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk .............. *
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings ....................................................... *
ITEM 2. Changes in Securities ................................................... *
ITEM 3. Defaults upon Senior Securities ......................................... *
ITEM 4. Submission of Matters to a Vote of Security Holders ..................... *
ITEM 5. Other information ....................................................... *
ITEM 6. Exhibits and Reports on Form 8-K ........................................ 10
SIGNATURE .............................................................................. 13
</TABLE>
* No information provided due to inapplicability of item.
2
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LA JOLLA PHARMACEUTICAL COMPANY
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 12,310 $ 6,613
Short-term investments 15,969 17,621
Receivable -- 4,000
Other current assets 860 1,233
-------- --------
Total current assets 29,139 29,467
Property and equipment, net 1,187 1,361
Patent costs and other assets, net 1,044 859
-------- --------
Total assets $ 31,370 $ 31,687
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 420 $ 1,539
Accrued expenses 623 1,106
Accrued payroll and related expenses 337 294
Deferred liabilities 2,293 --
Current portion of obligations under
capital leases 204 642
-------- --------
Total current liabilities 3,877 3,581
Noncurrent portion of obligations under capital leases 26 168
Commitments
Stockholders' equity:
Common stock 181 173
Additional paid-in capital 80,224 76,307
Deferred compensation (59) (169)
Accumulated deficit (52,879) (48,373)
-------- --------
Total stockholders' equity 27,467 27,938
-------- --------
Total liabilities and stockholders' equity $ 31,370 $ 31,687
======== ========
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived from audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
balance sheets.
See accompanying notes.
3
<PAGE> 4
LA JOLLA PHARMACEUTICAL COMPANY
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue from collaborative agreement $ 2,297 $ -- $ 6,791 $ --
Expenses:
Research and development 3,659 2,676 10,132 7,818
General and administrative 630 631 2,177 1,810
-------- -------- -------- --------
Total expenses 4,289 3,307 12,309 9,628
-------- -------- -------- --------
Loss from operations (1,992) (3,307) (5,518) (9,628)
Interest expense (10) (42) (50) (150)
Interest income 352 274 1,062 896
-------- -------- -------- --------
Net loss $ (1,650) $ (3,075) $ (4,506) $ (8,882)
======== ======== ======== ========
Net loss per share $ (.09) $ (.19) $ (.26) $ (.60)
======== ======== ======== ========
Shares used in computing net loss per
share 17,445 16,160 17,338 14,777
======== ======== ======== ========
</TABLE>
See accompanying notes.
4
<PAGE> 5
LA JOLLA PHARMACEUTICAL COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------
1997 1996
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (4,506) $ (8,882)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Depreciation and amortization 446 567
Deferred compensation amortization 95 211
Change in operating assets and liabilities:
Receivables 4,000 --
Other current assets 373 (861)
Accounts payable and accrued expenses (1,602) 50
Accrued payroll and related expenses 43 (174)
Deferred liabilities 2,293 --
-------- --------
Net cash provided by (used for) operating activities 1,142 (9,089)
INVESTING ACTIVITIES
Decrease (increase) in short-term investments 1,652 (11,326)
Additions to property and equipment (259) (180)
Increase in patent costs and other assets (198) (267)
-------- --------
Net cash provided by (used for) investing activities 1,195 (11,773)
FINANCING ACTIVITIES
Net proceeds from issuance of common stock 3,940 9,833
Payments on obligations under capital leases (580) (630)
Payment on notes receivable from stockholder -- 14
-------- --------
Net cash provided by financing activities 3,360 9,217
-------- --------
Net increase (decrease) in cash and cash equivalents 5,697 (11,645)
Cash and cash equivalents at beginning of period 6,613 19,804
-------- --------
Cash and cash equivalents at end of period $ 12,310 $ 8,159
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 50 $ 150
======== ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Adjustment to deferred compensation for terminations $ 15 $ --
======== ========
</TABLE>
See accompanying notes.
5
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LA JOLLA PHARMACEUTICAL COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 1997
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of La Jolla Pharmaceutical
Company (the "Company") 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
three and nine months ended September 30, 1997 are not necessarily indicative of
the results that may be expected for other quarters or the year ended December
31, 1997. For more complete financial information, these financial statements,
and the notes thereto, should be read in conjunction with the audited financial
statements for the year ended December 31, 1996 included in the Company's Form
10-K filed with the Securities and Exchange Commission.
2. ACCOUNTING POLICIES
REVENUE RECOGNITION
Revenue from collaborative agreements is recorded when earned. Payments received
in advance under these agreements are recorded as deferred revenue and are
included in deferred liabilities on the balance sheet until earned.
ACCOUNTING STANDARD ON EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 128, "Earnings per Share" (Statement No. 128),
which supersedes Accounting Principles Board Opinion 15. Statement No. 128
replaces the presentation of "primary earnings per share" with "basic earnings
per share" which includes no dilution and is based on weighted-average common
shares outstanding for the period. Statement No. 128 is effective for financial
statements issued for periods ending after December 15, 1997. At that time, the
Company will be required to change the method currently used to compute earnings
per share and to restate all prior periods. The adoption of this statement is
not expected to have a material impact as the Company is currently in a net loss
position and therefore stock options and warrants are not included in the
computation of earnings per share since their effect is anti-dilutive.
3. COLLABORATIVE AGREEMENT
In September 1997, the Company issued 831,152 shares of common stock to Abbott
Laboratories for an aggregate purchase price of $4,000,000 in accordance with
the terms of the Company's collaborative agreement with Abbott Laboratories.
6
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LA JOLLA PHARMACEUTICAL COMPANY
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The discussion below includes forward-looking statements, including
without limitation those dealing with the Company's drug development plans and
clinical trials, its relationship with Abbott Laboratories ("Abbott"), and other
matters described in terms of the Company's plans and expectations. The
forward-looking statements involve risks and uncertainties and a number of
factors, both foreseen and unforeseen, could cause actual results to differ from
the Company's current expectations. The Company's ongoing Phase II/III clinical
trial of LJP 394, the Company's drug candidate for the treatment of lupus, could
result in a finding that LJP 394 is not effective in producing a sustained
reduction of dsDNA antibodies in large patient populations or does not provide a
meaningful clinical benefit. The Company's other potential drug candidates are
at earlier stages of development and involve comparable risks. Payments by
Abbott to the Company are contingent upon progress of clinical trials and the
Company's achievement of certain other milestones that might not be met. The
relationship with Abbott could be terminated by either party for various
reasons. Clinical trials could be delayed and could have negative or
inconclusive results. Additional risk factors include the uncertainty of future
revenue from product sales or other sources such as collaborative relationships,
the uncertainty of future profitability, the Company's dependence on patents and
other proprietary rights, the Company's limited manufacturing capabilities and
the Company's lack of marketing experience. Readers are cautioned not to place
undue reliance upon forward-looking statements, which speak only as of the date
hereof, and the Company undertakes no obligation to update forward-looking
statements to reflect events or circumstances occurring after the date hereof.
Interested parties are urged to review the risks described below and in other
reports and registration statements of the Company filed with the SEC from time
to time.
OVERVIEW
Since its inception in May 1989, the Company has devoted substantially
all of its resources to the research and development of technology and potential
drugs to treat antibody-mediated diseases. The Company has never generated any
revenue from product sales and has relied upon private and public investors,
revenues from collaborative agreements, equipment lease financings and interest
income on invested cash balances for its working capital. The Company has been
unprofitable since inception and expects to incur substantial additional
operating losses for at least the next several years as it increases
expenditures on research and development and allocates significant and
increasing resources to its manufacturing, clinical trials, and marketing
activities. The Company's activities to date are not as broad in depth or scope
as the activities it must undertake in the future, and the Company's historical
operations and the financial information reported below are not indicative of
its future operating results or financial condition.
The Company expects that losses will fluctuate from quarter to quarter
as a result of differences in the timing of expenses incurred and potential
revenues from collaborative arrangements. Some of these fluctuations may be
significant. The Company's research and development expenses are expected to
increase significantly in the future as the Company increases its development
efforts. As of September 30, 1997, the Company's accumulated deficit was
approximately $52.9 million.
The Company's business is subject to significant risks including, but
not limited to, the risks inherent in its research and development efforts,
including clinical trials, uncertainties associated with both obtaining and
enforcing its patents and with the 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 its collaborative relationship with Abbott. Even if the Company's product
7
<PAGE> 8
LA JOLLA PHARMACEUTICAL COMPANY
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
products will be ineffective or unsafe during clinical trials, will fail to
receive necessary regulatory approvals, will be difficult to manufacture on a
large scale, will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties. All of the Company's
product development efforts are based upon technologies and therapeutic
approaches that are unproven. There can be no assurance that LJP 394 will
reliably induce or sustain suppression of disease-causing antibodies, or that
LJP 394 will prove to be safe or effective. Furthermore, clinical trials of LJP
394 may be viewed as a test of the Company's entire Tolerance Technology
approach. If these clinical trials are unsuccessful, the applicability of the
Company's Tolerance Technology to other antibody-mediated diseases will be
highly uncertain.
RESULTS OF OPERATIONS
The Company earned $2.3 and $6.8 million in revenue from its
collaborative agreement with Abbott in the three and nine months ended September
30, 1997, respectively, and earned no revenues for the same periods in 1996.
Payments received in advance under the collaborative agreement with Abbott are
recorded as deferred revenue and are included in deferred liabilities on the
balance sheet until earned. Total revenue payments of approximately $9.1 million
were received in advance under the collaborative agreement with Abbott in the
first nine months of 1997, of which approximately $2.3 million was unearned as
of September 30, 1997. The receipt of payments and the recognition of revenue
from the collaborative agreement with Abbott may vary significantly from quarter
to quarter and from year to year depending on the level of research effort
expended and the timing of milestone payments. There can be no assurance that
the Company will realize any further revenue from the Abbott arrangement or any
other collaborative arrangement.
Research and development expenses increased to $3.7 million for the
third quarter of 1997 from $2.7 million for the same period in 1996. For the
nine months ended September 30, 1997, research and development expense increased
to $10.1 million from $7.8 million for the same period in 1996. The increase was
due primarily to manufacturing scale-up activities including increased
facilities expenditures, the conduct of the Company's Phase II/III clinical
trial of LJP 394, and the expansion of the Company's research and development
programs. The Company's research and development expenses are expected to
increase significantly in the future as the organization grows, efforts to
develop additional drug candidates are intensified and potential products
progress into and through clinical trials.
General and administrative expenses decreased slightly to $630,000 for
the third quarter of 1997, from $631,000 for the same period in 1996. For the
nine months ended September 30, 1997, general and administrative expense
increased to $2.2 million from $1.8 million for the same period in 1996. Several
factors contributed to this increase, including increased personnel costs to
support increased research and development and clinical activities, increased
facilities expenditures and expanded business development activities. The
Company expects general and administrative expenses to increase at a greater
rate in the future to support expanded research and development, manufacturing
and business development activities. In the future, general and administrative
expenses may increase due to payment obligations to a financial consultant
arising in connection with certain payments expected from Abbott under the
collaborative agreement.
Interest income increased to $352,000 for the third quarter of 1997 from
$274,000 for the same period in 1996. For the nine months ended September 30,
1997, interest income increased to $1.1 million from $896,000 for the same
period in 1996. The increase was due to higher investment balances following
receipt of the net proceeds of the Company's follow-on public offering in July
and August 1996, its sale of stock to Abbott in December 1996, the initial
license payment from Abbott received in January
8
<PAGE> 9
LA JOLLA PHARMACEUTICAL COMPANY
1997 and the receipt of revenue payments under the collaborative agreement with
Abbott during the first nine months of 1997. For the third quarter of 1997,
interest expense decreased to $10,000 from $42,000 for the same period in 1996.
For the nine months ended September 30, 1997, interest expense decreased to
$50,000 from $150,000 for the same period in 1996. The decrease was the result
of decreases in the Company's capital lease obligations as compared to the same
period in 1996.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Company had incurred a cumulative net loss
since inception of approximately $52.9 million, and had financed its operations
through private and public offerings of its securities, payments under
collaborative agreements, capital and operating lease transactions, and interest
income on its invested cash balances. As of September 30, 1997, the Company had
raised $79.6 million in net proceeds since inception from sales of equity
securities.
At September 30, 1997, the Company had $28.3 million in cash, cash
equivalents and short-term investments, as compared to $24.2 million at December
31, 1996. The Company's working capital at September 30, 1997 was $25.3 million,
as compared to $25.9 million at December 31, 1996. The increases in cash, cash
equivalents and short-term investments resulted from the receipt of the initial
license fee and revenue payments under the Company's collaborative agreement
with Abbott, the sale of stock to Abbott in September 1997 for net proceeds of
approximately $3.9 million, and the financing of property and equipment under
operating leases, partially offset by the continued use of the Company's cash
toward expenses of ongoing clinical and research and development programs and
related general and administrative expenses. The decrease in working capital
resulted from use of cash to fund operations and the deferral of unearned
advance revenue payments under the collaborative agreement with Abbott offset by
the net proceeds received from the sale of stock to Abbott in September 1997.
The Company invests its cash in corporate and U.S. Government backed debt
instruments.
As of September 30, 1997, the Company had acquired an aggregate of $4.8
million in property and equipment, of which approximately $3.2 million had been
acquired through capital lease obligations. In addition, the Company leases its
office and laboratory facilities and certain property and equipment under
operating leases. The Company has no material commitments for the acquisition of
property and equipment but anticipates increasing investment in property and
equipment in connection with the enhancement of its manufacturing and research
capabilities.
The Company intends to use its financial resources to fund research and
development, manufacturing scale-up and for working capital and other general
corporate purposes. Anticipated near-term expenses include the expansion of
manufacturing and research activities, including development of other drug
candidates in addition to LJP 394. The amounts actually expended for each
purpose may vary significantly depending upon numerous factors, including the
results of clinical studies, the timing of regulatory applications and
approvals, and technological advances. Expenditures will also depend upon the
establishment and progress of collaborative arrangements, contract research and
the availability of other financing. There can be no assurance that these funds
will be available on acceptable terms, if at all.
The Company anticipates that its existing capital and interest earned
thereon will be sufficient to fund the Company's operations as currently planned
through 1998. The Company's future capital requirements will depend on many
factors, including continued scientific progress in its research and development
programs, the size and complexity of these programs, the scope and results of
clinical trials, the time and costs involved in applying for regulatory
approvals, the costs involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims, competing technological and market developments, the
ability of the Company to maintain its collaborative arrangement with Abbott and
to establish and maintain additional collaborative relationships and the cost of
manufacturing scale-up and effective commercialization activities and
arrangements. The Company expects to incur significant losses each
9
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LA JOLLA PHARMACEUTICAL COMPANY
year for at least the next several years as it expands its current research and
development programs and invests increasing amounts of capital in manufacturing
scale-up and administration of a more complex organization. It is possible that
the Company's cash requirements will exceed current projections and that the
Company will therefore need additional financing sooner than currently expected.
The Company has no current means of generating cash flow from
operations, and its lead drug candidate, LJP 394, will not generate revenues, if
at all, until it has been proven safe and effective, has received regulatory
approval, and has been successfully commercialized, a process that is expected
to take at least the next several years. The Company's other drug candidates are
much less developed than LJP 394. There can be no assurance that the Company's
product development efforts with respect to LJP 394 or any other drug candidate
will be successfully completed, that required regulatory approvals will be
obtained, or that any product, if introduced, will be successfully marketed or
achieve commercial acceptance. Accordingly, the Company must continue to rely
upon outside sources of financing to meet its capital needs for the foreseeable
future.
Abbott's funding of the development costs for LJP 394 and milestone
payments are expected to enhance the Company's short-term liquidity by
minimizing the expenditure of the Company's own funds on further development of
LJP 394. However, the Company anticipates increasing expenditures on
manufacturing activities and the development of other drug candidates, and in
the long run, the Company's consumption of cash will necessitate additional
sources of financing. Furthermore, the Company has no internal sources of
liquidity, and termination of the Abbott arrangement would have a serious
adverse effect on the Company's ability to generate sufficient cash to meet its
needs.
The Company will continue to seek capital through any appropriate means,
including issuance of its securities and establishment of additional
collaborative arrangements. However, there can be no assurance that additional
financing will be available on acceptable terms, and the Company's negotiating
position in its capital-raising efforts may worsen as it continues to use its
existing resources. Financing through collaborative arrangements is uncertain
because payments under the Company's collaborative agreement with Abbott are
subject to certain termination rights, including related to progress in clinical
trials for LJP 394, and there is no assurance that the Company will be able to
enter into further collaborative relationships.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
3.1 Intentionally omitted
3.2 Bylaws of the Company (1)
3.3 Restated Certificate of Incorporation of the Company (3)
10.1 Intentionally omitted
10.2 Stock Option Agreement dated February 4, 1993 entitling Joseph
Stemler to purchase 35,000 shares of Common Stock (1)*
10.3 Letter regarding terms of employment and potential severance of
Stephen M. Coutts (1) and the modification to this letter (10)*
</TABLE>
10
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LA JOLLA PHARMACEUTICAL COMPANY
<TABLE>
<S> <C>
10.4 Intentionally omitted
10.5 Intentionally omitted
10.6 Steven B. Engle Employment Agreement(1) and Amendment No. 1 (10)*
10.7 Form of Directors and Officers Indemnification Agreement(1)
10.8 Intentionally omitted
10.9 Exclusive License Agreement dated September 1, 1991 regarding
PLA2 inhibition technology between the Company and the Regents of
the University of California (1)
10.10 Option and Collaborative Research Agreement dated June 10, 1991
regarding certain compounds for potential treatment of muscular
dystrophies or myasthenia gravis between the Company and CepTor
Corporation (1)
10.11 Consulting Agreement dated September 1, 1991 between the Company
and Dr. Edward A. Dennis (1)
10.12 Agreement dated September 1, 1991 regarding stock purchase
between the Company and Dr. Edward A. Dennis (1)
10.13 Form of Employee Invention and Confidential Information
Agreement(1)
10.14 Industrial Real Estate Lease (1)
10.15 Intentionally omitted
10.16 Master Lease Agreement dated June 22, 1993 with Aberlyn Capital
Management Limited Partnership ("ACM") and related Agreements to
Issue Warrant with Warrants issued to ACM and Aberlyn Holding
Company, Inc. (1)
10.17 La Jolla Pharmaceutical Company 1989 Incentive Stock Option Plan
and 1989 Nonstatutory Stock Option Plan (1)*
10.18 Form of Stock Option Agreement under the 1989 Nonstatutory Stock
Option Plan (1)
10.19 La Jolla Pharmaceutical Company 1994 Incentive Stock Option Plan
(1)*
10.20 Intentionally omitted
10.21 Letter Agreement dated June 7, 1993 between the Company and
Vector Securities International regarding Vector's engagement as
financial advisor to the Company with respect to potential
corporate strategic alliances (1)
10.22 Letter Agreement dated December 23, 1993 between the Company and
Aberlyn Holding Company, Inc. regarding Aberlyn's engagement as
financial and investment banking advisor to the Company with
respect to potential strategic alliances with Korean
pharmaceutical companies (1)
10.23 Intentionally omitted
10.24 Intentionally omitted
10.25 Second Amendment to Lease dated June 30, 1994 by and between the
Company and BRE Properties, Inc. (2)
10.26 Intentionally omitted
10.27 Third Amendment to Lease dated January 26, 1995 by and between
the Company and BRE Properties, Inc. (4)
10.28 Intentionally omitted
</TABLE>
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LA JOLLA PHARMACEUTICAL COMPANY
<TABLE>
<S> <C>
10.29 Master Lease Agreement dated September 13, 1995 by and between
the Company and Comdisco Electronics Group (5)
10.30 Intentionally omitted
10.31 Agreement dated September 22, 1995 between the Company and Joseph
Stemler regarding option vesting (6)*
10.32 Consulting Agreement dated January 1, 1996 between the Company
and Joseph Stemler(6)*
10.33 Building Lease Agreement effective November 1, 1996 by and
between the Company and WCB II-S BRD Limited Partnership (7)
10.34 Master Lease Agreement dated December 20, 1996 by and between the
Company and Transamerica Business Credit Corporation(9)
10.35 License and Supply Agreement dated December 23, 1996 by and
between the Company and Abbott Laboratories (8)
10.36 Stock Purchase Agreement dated December 23, 1996 by and between
the Company and Abbott Laboratories (9)
10.37 Option Amendment Agreement dated November 3, 1997 between the
Company and Peter G. Ulrich(11)*
23.1 Consent of Ernst & Young LLP, independent auditors(9)
27 Financial Data Schedule(11)
</TABLE>
- ----------
* This exhibit is a management contract or compensatory plan or arrangement.
(1) Previously filed with the Company's Registration Statement on Form S-1 (No.
33-76480) as declared effective by the Securities and Exchange Commission
on June 3, 1994.
(2) Previously filed with the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1994 and incorporated by reference herein.
(3) Previously filed with the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1994 and incorporated by reference herein.
(4) Previously filed with the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 1995 and incorporated by reference herein.
(5) Previously filed with the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 1995 and incorporated by reference herein.
(6) Previously filed with the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1995 and incorporated by reference herein.
(7) Previously filed with the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 1996 and incorporated by reference herein.
(8) Portions of the Exhibit 10.35 have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934.
(9) Previously filed with the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1996 and incorporated by reference herein.
(10) Previously filed with the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1997 and incorporated by reference herein.
(11) Filed herein.
(b) REPORTS ON FORM 8-K
None
12
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LA JOLLA PHARMACEUTICAL COMPANY
SIGNATURE
SEPTEMBER 30, 1997
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.
La Jolla Pharmaceutical Company
Date: November 12, 1997 By: /s/ Wood C. Erwin
-------------------------
Wood C. Erwin
Vice President Finance
Chief Financial Officer
Signed both on behalf of the
Registrant and as Principal
Accounting Officer.
13
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LA JOLLA PHARMACEUTICAL COMPANY
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------ ------- -------------
<S> <C> <C>
10.37 Option Amendment Agreement dated November 3, 1997 between
the Company and Peter G. Ulrich 15
27 Financial Data Schedule 16
</TABLE>
14
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EXHIBIT 10.37
OPTION AMENDMENT AGREEMENT
This Option Amendment Agreement (this "AGREEMENT") is made effective as
of November 3, 1997 by and between La Jolla Pharmaceutical Company, a Delaware
corporation (the "COMPANY") and Peter G. Ulrich ("EXECUTIVE").
Executive has received grants of options to purchase common stock of the
Company pursuant to the Company's 1994 Stock Incentive Plan (the "PLAN") (such
options granted to Executive prior to December 31, 1997 being referred to herein
as the "OPTIONS"), and the Company and Executive desire to amend the terms of
the Options as set forth herein in consideration of Executive's ongoing
employment.
Therefore, notwithstanding anything in the Plan or the terms of grant of
the Options to the contrary, the Company and Executive hereby agree that if a
Change in Control of the Company (as defined in the Plan in its form as of the
date hereof) occurs and Executive's employment with the Company or its successor
is terminated by the Company or its successor, or if such a Change in Control
occurs and Executive's employment with the Company or its successor is
terminated by Executive following any change in Executive's title to any
position other than Vice-President or any material reduction by the Company or
its successor in Executive's responsibilities (other than any such reduction
that is commensurate with Executive's assumption of the position of
Vice-President of the surviving company), or any requirement that Executive's
place of employment be in other than the San Diego area, then all Options shall
automatically vest and become fully exercisable as of the date of termination of
Executive's employment (the "TERMINATION DATE"), notwithstanding any vesting or
performance conditions applicable thereto, and shall remain exercisable for a
period of one year following the Termination Date or such longer period as is
provided by the Plan or grant pursuant to which such Options were received,
provided that in no case will such Options be exercisable beyond the duration of
the original term thereof, and provided further that nothing herein is intended
to require the extension of the exercise period of any Option that qualifies as
an incentive stock option under the Internal Revenue Code and applicable
regulations thereunder, and the exercise period thereof shall not be extended
beyond the termination date otherwise provided by the award grant unless
Executive, in his sole and unqualified discretion, elects to forego incentive
stock option treatment and extend the exercise period thereof as provided
herein. This Agreement does not apply to any options granted to Executive after
December 31, 1997.
IN WITNESS WHEREOF, Executive and the Company have entered into this
Amendment as of the date written above.
LA JOLLA PHARMACEUTICAL COMPANY
By: /s/ Steven B. Engle /s/ Peter G. Ulrich
-------------------------- --------------------
Name: Steven B. Engle Peter G. Ulrich
--------------------------
Title: Chairman & CEO
-------------------------
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