________________________________________________________________________________
________________________________________________________________________________
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, 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: 0-21643
________________________________________________________________________________
CV THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1570294
(State of Incorporation)(I.R.S. Employer Identification No.)
3172 PORTER DRIVE, PALO ALTO, CA 94304
(Address of principal executive offices)
Registrant's telephone number, including area code: (650) 812-0585
________________________________________________________________________________
Indicate by check whether the Registrant (1) has filed all reports 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
As of October 31, 1998, there were 11,191,962 shares of the issuer's Common
Stock, $0.001 par value, outstanding.
________________________________________________________________________________
________________________________________________________________________________
CV THERAPEUTICS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of September 30, 1998 and December
31, 1997 3
Consolidated Statements of Operations for the three months
and the nine months ended September 30, 1998 and 1997 4
Consolidated Statements of Cash Flows for the nine months
ended September 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CV THERAPEUTICS, INC.
Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
September 30, 1998 December 31, 1997
------------- -------------
(unaudited) (Note 1)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 11,002 $ 6,286
Short-term investments 4,908 11,862
Other current assets 1,316 1,249
------------- -------------
Total current assets 17,226 19,397
Long-term investments 29,653 19,942
Notes receivable from related parties 413 413
Property and equipment, net 2,580 2,277
Intangible and other assets 207 615
------------- -------------
$ 50,079 $ 42,644
============= =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 807 $ 683
Accrued liabilities 3,027 1,572
Current portion of long-term debt 2,000 1,500
Current portion of capital lease obligation 78 680
Deferred revenue 1,000 2,000
------------- -------------
Total current liabilities 6,912 6,435
Long-term debt 3,000 4,500
Capital lease obligation 358 552
Deferred revenue - 4,009
Other liabilities 470 591
------------- -------------
Total liabilities 10,740 16,087
Commitments
Stockholders' equity:
Common stock 104,128 84,037
Warrants to purchase common stock 1,225 1,225
Notes receivable issued for stock (108) (108)
Deferred compensation (1,233) (1,649)
Unrealized (loss) gain on investments 54 3
Accumulated deficit (64,727) (56,951)
------------- -------------
Total stockholders' equity 39,339 26,557
------------- -------------
$ 50,079 $ 42,644
============= =============
</TABLE>
See accompanying notes
CV THERAPEUTICS, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Collaborative research $ 37 $ 605 $ 4,519 $ 2,236
Operating expenses:
Research and development 3,422 2,082 10,347 6,992
General and administrative 1,004 1,329 3,121 3,545
--------- --------- --------- ---------
Total operating expenses 4,426 3,411 13,468 10,537
--------- --------- --------- ---------
Loss from operations (4,389) (2,806) (8,949) (8,301)
Interest and other income, net 515 133 1,173 503
--------- --------- --------- ---------
Net loss $ (3,874) $ (2,673) $ (7,776) $ (7,798)
========= ========= ========= =========
Basic and diluted net loss per share $ (0.35) $ (0.38) $ (0.72) $ (1.15)
========= ========= ========= =========
Shares used in computing basic and diluted
net loss per share 11,128 7,010 10,807 6,755
========= ========= ========= =========
</TABLE>
See accompanying notes
CV THERAPEUTICS, INC.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (7,776) $ (7,798)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of deferred compensation 565 563
Depreciation and amortization 843 821
Issuance of capital stock and warrants for payment of - 544
license fees
Change in assets and liabilities:
Other current assets (67) (399)
Intangible and other assets 408 107
Accounts payable 124 257
Accrued and other liabilities 1,334 (598)
Deferred revenue (5,009) 6,000
------------- -------------
Net cash provided by (used in) operating activities (9,578) (503)
Cash flows from investing activities:
Purchases of investments (19,777) (28,990)
Maturities of investments 16,815 11,546
Capital expenditures (891) (98)
Notes receivable from officers and employees - 138
------------- -------------
Net cash used in investing activities (3,853) (17,404)
Cash flows from financing activities:
Borrowings on capital lease obligations 443 -
Payments on capital lease obligations (1,238) (627)
Borrowings under long-term debt - 3,000
Repayments of long-term debt (1,000) (15)
Proceeds from issuance of common stock 19,942 5,433
------------- -------------
Net cash provided by financing activities 18,147 7,791
------------- -------------
Net increase (decrease) in cash and cash equivalents 4,716 (10,116)
Cash and cash equivalents at beginning of period 6,286 19,575
------------- -------------
Cash and cash equivalents at end of period $ 11,002 $ 9,459
============= =============
</TABLE>
See accompanying notes
CV THERAPEUTICS, INC.
__________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed consolidated financial statements of CV
Therapeutics, Inc. have been prepared in accordance with generally accepted
accounting principles, are unaudited and reflect all adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion of
management, necessary to present fairly the financial position at and
results of operations for the interim periods presented. The results of
operations for the three- and nine-month periods ended September 30, 1998
are not necessarily indicative of the results to be expected for the entire
year ending December 31, 1998. The financial information included herein
should be read in conjunction with the Company's Annual Report on Form 10-K
for 1997 which includes the audited consolidated financial statements and
the notes thereto for the year ended December 31, 1997.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, CV Therapeutics International, which was
incorporated in December 1993 in the Cayman Islands. All significant
intercompany balances have been eliminated.
Revenue Recognition
Revenue under the Company's collaborative research arrangement is
recognized based on the performance requirements of the contract. Payments
received, which are still subject to future performance requirements, are
recorded as deferred revenue until earned (see note 3).
Net Loss Per Share
Net loss per share is computed using the weighted average number of
common shares outstanding. Common equivalent shares are excluded from the
computation as their effect is antidilutive.
2. NEW ACCOUNTING STANDARDS
As of January 1, 1998, the Company adopted Statement 130 (SFAS 130),
"Reporting Comprehensive Income". SFAS 130 establishes new rules for the
reporting and display of comprehensive income and its components; however,
the adoption of SFAS 130 had no impact on the Company's net loss or
stockholders' equity. SFAS 130 requires unrealized gains or losses on the
Company's available-for-sale securities, which prior to adoption were
reported separately in stockholders' equity, to be included in other
comprehensive income.
The components of comprehensive loss for the nine months ended September
30, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
(in thousands)
Net loss $ (7,776) $ (7,798)
Unrealized gains on securities 51 18
------------- -------------
Comprehensive loss (7,725) (7,780)
============= =============
</TABLE>
Accumulated unrealized gains at September 30, 1998 were $54,000 compared
to $3,000 at December 31, 1997.
CV THERAPEUTICS, INC.
__________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
3. LICENSE AND COLLABORATION AGREEMENTS
In February 1998, the Company completed the research component of its
collaboration with Biogen, Inc. and, as a result, $4.0 million of deferred
revenue was recognized during the first quarter of 1998.
On June 12, 1998, the Company amended its collaboration and loan
agreements with Biogen, Inc. to accelerate the release of a $4.5 million
loan. Under the terms of the revised agreement, the Company will be entitled
to draw down the $4.5 million loan subsequent to the Company's delivery of a
final study report. As of September 30, 1998, the Company had not yet
delivered the final study report. In addition, certain other unexpended
funds previously provided by Biogen, Inc. for research and development, and
recorded as deferred revenue, will be used to reimburse Biogen for future
program related expenses since Biogen, Inc. will now be undertaking the
remaining research and development activities. The unexpended funds have
been reclassified from deferred revenue to accrued liabilities.
4. CAPITAL LEASE OBLIGATION
On September 30, 1998, the Company entered into an equipment lease, with
Mellon US Leasing, which bears an interest rate of 8.2% per annum and has a
final maturity in September 2002. Total minimum lease payments will be
$446,000.
5. INTEREST AND OTHER INCOME, NET
In March 1998, the Company retired its capital lease obligation. The
early retirement payment included approximately $303,000 in excess of the
recorded liability and required the acceleration of approximately $68,000
for the amortization of debt issuance costs which would have otherwise been
recognized over the next eighteen months. Each of these items reduced
interest and other income, net.
6. FOLLOW-ON PUBLIC OFFERING
On January 4, 1998 the Company filed a registration statement with the
Securities and Exchange Commission for a follow-on public offering. The
follow-on public offering closed on January 27, 1998, and the total number
of shares sold, including the exercise of the underwriters' option to
purchase additional shares, was 2,575,000 at a price of $8.25 per share with
net proceeds to the Company of approximately $19,624,000.
CV THERAPEUTICS, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other parts of this Quarterly Report on Form 10-Q
contain forward looking statements which involve risks and uncertainties.
The Company's actual results could differ materially from those discussed
herein. Factors that might cause such a difference include, but are not
limited to, those listed below and those listed in "Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
OVERVIEW
CV Therapeutics, Inc. ("CVT" or the "Company") is an early stage
biopharmaceutical company focused on the application of molecular cardiology
to the discovery, development and commercialization of novel small molecule
drugs for the treatment of cardiovascular disease. Since its inception in
December 1990, substantially all of the Company's resources have been
dedicated to research and development. To date, CVT has not generated any
product revenue and does not expect to generate any such revenues for at
least several years. As of September 30, 1998, the Company had an
accumulated deficit of $64.7 million. The Company expects its sources of
revenue, if any, for the next several years to consist of payments under
corporate partnerships and interest income. The process of developing the
Company's products will require significant additional research and
development, preclinical testing and clinical trials, as well as regulatory
approval. These activities, together with the Company's general and
administrative expenses, are expected to result in operating losses for the
foreseeable future. The Company will not receive product revenue unless it
or its collaborative partners complete clinical trials and successfully
commercialize one or more of its products.
CVT is subject to risks common to biopharmaceutical companies, including
risks inherent in its research and development efforts and clinical trials,
reliance on collaborative partners, enforcement of patent and proprietary
rights, the need for future capital, potential competition and uncertainty
of regulatory approval. In order for a product to be commercialized, it
will be necessary for CVT and its collaborators to conduct preclinical tests
and clinical trials, demonstrate efficacy and safety of the Company's
product candidates, obtain regulatory clearances and enter into
manufacturing, distribution and marketing arrangements, as well as obtain
market acceptance. There can be no assurance that the Company will generate
revenues or achieve and sustain profitability in the future.
RESULTS OF OPERATIONS
Revenues. The Company recognized collaborative research revenues of
$37,000 for the quarter ended September 30, 1998, compared to $605,000 for
the quarter ended September 30, 1997. Collaborative research for the
nine-month period ended September 30, 1998 was $4.5 million compared to $2.2
million for the nine-month period ended September 30, 1997. Collaborative
research revenue for the three- and the nine-month periods ended September
30, 1998 and 1997 was earned primarily in connection with the Company's
collaboration with Biogen, Inc. ("Biogen") for the development and
commercialization of CVT-124. The decrease in collaborative research revenue
for the quarter ended September 30, 1998, compared to the same period in
1997, was the result of the Company's completion of the research component
of its collaboration with Biogen during the first quarter of 1998. The
increase in collaborative research revenue for the nine-month period ended
September 30, 1998, over the same period in 1997, was the result of $4.0
million of deferred revenue being recognized in conjunction with the
Company's completion of the research component of its collaboration with
Biogen.
CV THERAPEUTICS, INC.
Research and Development Expenses. The Company's research and
development expenses increased to $3.4 million for the quarter ended
September 30, 1998, compared to $2.1 million for the quarter ended
September 30, 1997. Research and development expenses increased to
$10.3 million for the nine-month period ended September 30, 1998,
compared to $7.0 million for the nine-month period ended September
30, 1997. The increases for both the three- and nine-month periods
ended September 30, 1998, compared to the same periods in 1997, were
primarily due to increased outside service expenses associated with
ranolazine clinical trials. The Company expects research and
development expenses to increase significantly over the next several
years as the Company expands research and product development
efforts. The Company has taken, and is continuing to take, extra
measures to stimulate faster enrollment in its ongoing Phase III
monotherapy clinical trial of ranolazine due to slower than
originally projected enrollment. These measures resulted in an
increase in enrollment in the third quarter of 1998, and are
expected to result in further enrollment increases, and hence an
increase in expenses. Two other Phase III clinical trials with
ranolazine are expected to begin in 1999, which will likely result
in a further increase in research and development expenses. Research
and development expenses will also increase due to activities
associated with CVT-510, which entered a Phase I clinical trial in
September 1998.
General and Administrative Expenses. General and administrative expenses
decreased to $1.0 million for the quarter ended September 30, 1998 compared
to $1.3 million for the quarter ended September 30, 1997. General and
administrative expenses decreased to $3.1 million for the nine-month period
ended September 30, 1998, compared to $3.5 million for the nine-month period
ended September 30, 1997. The decreases for both the three- and nine-month
periods ended September 30, 1998, compared to the same periods in 1997, were
primarily due to a decrease in outside service expenses related to various
non-recurring items incurred in 1997. The Company expects general and
administrative expenses to increase in the future due to increases in the
Company's development activities.
Interest and Other Income, Net. Interest and other income, net increased
to $515,000 for the quarter ended September 30,1998 compared to $133,000 for
the quarter ended September 30, 1997. Interest and other income, net
increased to $1.2 million for the nine-month period ended September 30, 1998
compared to $503,000 for the nine-month period ended September 30, 1997.
Interest income increased during both the three- and nine-month periods
ended September 30, 1998, compared to the same periods in 1997, due to
higher average investment balances, but for the nine-month period ended
September 30, 1998 was offset by an increase in interest and other expenses,
mainly associated with the early retirement of a capital lease obligation in
March 1998. The Company expects that interest and other income, net will
fluctuate with average investment balances.
YEAR 2000
Many computer systems, applications, information technologies and
equipment containing computer related components (generally "computer
systems and equipment") are unable to differentiate between the year 2000
and the year 1900 because they were programmed with two-digit, rather than
four-digit, date fields. Accordingly, older computer systems that have
time-sensitive applications may not properly recognize the year 2000 and
beyond. This could cause system or equipment shut downs, failures or
miscalculations resulting in inaccuracies in computer output or disruptions
of operations, including, among other things, inaccurate processing of
financial information and/or temporary inabilities to process transactions,
manufacture products, or engage in similar normal business activities.
The Company has formed a committee to assess the impact of the problem on
the Company's operations; the committee's assessment of the Year 2000 issue
is not yet complete. The Company has tested its key computer systems and
equipment (including financial, informational and operational systems) and
determined that these systems are largely Year 2000 compliant. The Company
expects to complete upgrades to its systems which are not Year 2000
compliant by the end of 1999. The Company believes that with these upgrades,
the Year 2000 issue will not pose significant operational problems for its
computer systems and equipment. However, if such upgrades are not made or
are not completed in a timely fashion, the Year 2000 issue might have an
adverse impact on the operations of the Company, the precise degree of which
cannot be known at this time. The Company currently has no contingency plans
to deal with major Year 2000 failures.
CV THERAPEUTICS, INC.
In addition to risks associated with the Company's own computer systems
and equipment, the Company has relationships with, and is to varying degrees
dependent upon, a large number of third parties that provide information,
goods and services to the Company. These include financial institutions,
suppliers, vendors, research partners and governmental entities. If
significant numbers of these third parties experience failures in their
computer systems or equipment due to Year 2000 non-compliance, it could
affect the Company's ability to process transactions, manufacture products,
or engage in similar normal business activities. While some of these risks
are outside of the Company's control, the Company has instituted programs,
including internal records review and use of external questionnaires, to
identify key third parties, assess their level of Year 2000 compliance,
update contracts and address any non-compliance issues.
The total cost of the Year 2000 systems assessment and upgrades is funded
through operating cash flows and the Company is expensing these costs. The
Company has created a mechanism to trace certain of the costs related to the
Year 2000 issue and budgeted funds to address the issues of assessment
conversion. The financial impact of making the required systems changes
cannot be known precisely at this time, but it is currently expected to be
less than $100,000. The actual financial impact could, however, exceed this
estimate. These costs are not expected to be material to the Company's
financial position, results of operations or cash flows.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through
private placements of preferred and common stock, public offerings of common
stock, equipment and leasehold improvement financing, other debt financing
and payments received under corporate collaborations. In January 1998, the
Company completed a follow-on public offering of 2,575,000 shares of the
Company's common stock and raised net proceeds of approximately $19.6
million. In September 1998, the Company arranged equipment financing in the
amount of $443,000 resulting in the establishment of a new capital lease.
Cash, cash equivalents and short- and long-term investments at September
30, 1998 totaled $45.6 million compared to $38.1 million at December 31,
1997. The increase in the first nine months of 1998 was due to the receipt
of approximately $19.6 million in net proceeds from the follow-on public
offering that was completed in January 1998. This increase was partially
offset by a $1.4 million payment in March 1998, for the early retirement of
a capital lease obligation.
Net cash used in operating activities for the nine-months ended September
30, 1998 was $9.6 million, compared to $503,000 for the nine-months ended
September 30, 1997. The $9.1 million cash differential was primarily the
result of the $7.0 million up-front payment of deferred revenue received in
the first half of 1997 under the collaboration with Biogen, Inc. The
remaining increase of $2.1 million in 1998 was primarily due to increased
research and development efforts.
As of September 30, 1998, the Company had invested approximately $7.0
million in property and equipment, of which approximately $4.8 million was
financed through equipment and leasehold financings at various times.
The Company will likely require substantial additional funding in order
to complete its research and development activities and commercialize any
potential products. The Company currently estimates that its existing
resources and projected interest income will enable the Company to maintain
its current and planned operations through the first half of 2000, however,
there can be no assurance that the Company will not require additional
funding prior to such time.
CV THERAPEUTICS, INC.
The Company's forecast of the period of time through which its financial
resources will be adequate to support its operations is a forward-looking
statement that involves risks and uncertainties, and actual results could
vary as a result of a number of factors. The Company's future capital
requirements will depend on many factors, including scientific progress in
its research and development programs, the size and complexity of such
programs, the scope and results of preclinical studies and clinical trials,
the ability of the Company to establish and maintain corporate partnerships,
the time and costs involved in obtaining regulatory approvals, the costs
involved in filing, prosecuting and enforcing patent claims, competing
technological and market developments, the cost of manufacturing preclinical
and clinical material and other factors not within the Company's control.
There can be no assurance that such additional financing to meet the
Company's capital requirements will be available on acceptable terms or at
all. Insufficient funds may require the Company to delay, scale back or
eliminate some or all of its research or development programs, to lose
rights under existing licenses or to relinquish greater or all rights to
product candidates at an earlier stage of development or on less favorable
terms than the Company would otherwise choose or may adversely affect the
Company's ability to operate as a going concern. If additional funds are
raised by issuing equity securities, substantial dilution to existing
stockholders may result.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's business, financial condition and results of operations are
subject to various risks, including those described below and elsewhere in
this Quarterly Report on Form 10-Q.
The Company is an early stage company and must be evaluated in light of
the uncertainties and complications present in an early stage
biopharmaceutical company. All of the Company's products are at an early
stage of development, and the Company has not generated any product revenue.
In addition, the Company has only three products in clinical development,
ranolazine, CVT-124 and CVT-510, which entered a Phase I clinical trial in
September 1998. There can be no assurance that clinical trials conducted by
the Company will demonstrate sufficient safety and efficacy to obtain the
requisite approvals or that marketable products will result. In addition,
the rate of completion of clinical trials may be delayed by many factors.
The Company's product candidates will require significant additional
development, preclinical studies, clinical trials and regulatory approval
prior to commercialization. These activities may take several years and
require the expenditure of substantial resources. In addition, these
activities, together with the Company's general and administrative expense,
are expected to result in operation losses for the foreseeable future.
The Company's strategy for the research, development and
commercialization of its product candidates has required, and will continue
to require, the Company to enter into various arrangements with corporate
and academic collaborators, licensors, licensees and others, and the Company
is dependent upon the success of these parties in performing their
responsibilities. There can be no assurance that the Company will be able
to enter into additional collaborative arrangements or license agreements on
acceptable terms, or at all, or that the contemplated benefits from any of
these agreements will be realized.
The Company's business is affected by other factors, including:
uncertainty of market acceptance, intense competition and rapid
technological change, uncertainty of patent position and proprietary rights,
dependence on key personnel and the need to attract and retain key employees
and consultants, limited manufacturing, marketing and sales experience,
significant government regulation, uncertainty of product pricing and
reimbursement, product liability exposure and the availability of insurance.
CV THERAPEUTICS, INC.
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
On November 19, 1996, the Securities and Exchange Commission declared the
Company's Registration Statement (file number 2-12675) effective. The
Company received net proceeds of $11,970,000 from this initial public
offering. The Company used $9,584,000 of the net proceeds from its initial
public offering for operating activities, $1,738,000 for repayment of debt
and $648,000 for capital expenditures. On January 4, 1998 the Company filed
a registration statement with the Securities and Exchange Commission for a
follow-on public offering. The follow-on public offering closed on January
27, 1998 and the Company received net proceeds of approximately $19,624,000.
As of September 30, 1998, the Company has used all of the net proceeds from
the follow-on public offering for temporary investments, including money
market and short- and long-term funds. Such payments were direct or indirect.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
Exhibit Number Description
27.1 Financial Data Schedule
_____________
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Quarterly Report on Form 10-Q to be signed
on its behalf by the undersigned thereunto duly authorized.
CV THERAPEUTICS, INC.
Date: November 9, 1998
/s/ Louis G. Lange, M.D., Ph.D.
Louis G. Lange, M.D., Ph.D.
Chairman of the Board & Chief
Executive Officer
(Principal Executive Officer)
/s/ Daniel K. Spiegelman
Daniel K. Spiegelman
Chief Financial Officer
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from the Consolidated
Balance Sheet as of September 30, 1998 and the Consolidated Statement of
Operations for the nine month period ended September 30, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 15,910
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,226
<PP&E> 7,017
<DEPRECIATION> (4,437)
<TOTAL-ASSETS> 50,079
<CURRENT-LIABILITIES> 6,912
<BONDS> 0
0
0
<COMMON> 104,128
<OTHER-SE> (64,789)
<TOTAL-LIABILITY-AND-EQUITY> 50,079
<SALES> 0
<TOTAL-REVENUES> 4,519
<CGS> 0
<TOTAL-COSTS> 13,468
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 606
<INCOME-PRETAX> (7,776)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,776)
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<NET-INCOME> (7,776)
<EPS-PRIMARY> (0.72)
<EPS-DILUTED> (0.72)
</TABLE>
