<PAGE>
________________________________________________________________________________
________________________________________________________________________________
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 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: 0-21643
________________________________________________________________________________
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 August 3, 1998, there were 11,106,136 shares of the issuer's Common
Stock, $0.001 par value, outstanding.
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
CV THERAPEUTICS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of June 30, 1998 and December
31, 1997 3
Consolidated Statements of Operations for the three months
and the six months ended June 30, 1998 and 1997 4
Consolidated Statements of Cash Flows for the six months
ended June 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 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CV THERAPEUTICS, INC.
Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
------------- -------------
(unaudited) (Note 1)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 11,667 $ 6,286
Short-term investments 5,205 11,862
Other current assets 1,353 1,249
------------- -------------
Total current assets 18,225 19,397
Long-term investments 32,672 19,942
Notes receivable from related parties 413 413
Property and equipment, net 2,125 2,277
Intangible and other assets 237 615
------------- -------------
$ 53,672 $ 42,644
============= =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 792 $ 683
Accrued liabilities 3,009 1,572
Current portion of long-term debt 2,000 1,500
Current portion of capital lease obligation - 680
Deferred revenue 1,000 2,000
------------- -------------
Total current liabilities 6,801 6,435
Long-term debt 3,500 4,500
Capital lease obligation - 552
Deferred revenue - 4,009
Other liabilities 513 591
------------- -------------
Total liabilities 10,814 16,087
Commitments
Stockholders' equity:
Common stock 104,044 84,037
Warrants to purchase Common Stock 1,225 1,225
Notes receivable issued for stock (108) (108)
Deferred compensation (1,434) (1,649)
Unrealized (loss) gain on investments (17) 3
Accumulated deficit (60,852) (56,951)
------------- -------------
Total stockholders' equity 42,858 26,557
------------- -------------
$ 53,672 $ 42,644
============= =============
</TABLE>
See accompanying notes
<PAGE>
CV THERAPEUTICS, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Collaborative research $ 299 $ 811 $ 4,482 $ 1,631
Operating expenses:
Research and development 3,589 3,120 6,925 4,910
General and administrative 1,109 1,195 2,117 2,216
--------- --------- --------- ---------
Total operating expenses 4,698 4,315 9,042 7,126
--------- --------- --------- ---------
Loss from operations (4,399) (3,504) (4,560) (5,495)
Interest and other income, net 553 264 659 370
--------- --------- --------- ---------
Net loss $ (3,846) $ (3,240) $ (3,901) $ (5,125)
========= ========= ========= =========
Basic and diluted net loss per share $ (0.35) $ (0.47) $ (0.37) $ (0.77)
========= ========= ========= =========
Shares used in computing basic and diluted
net loss per share 11,073 6,909 10,647 6,628
========= ========= ========= =========
</TABLE>
See accompanying notes
<PAGE>
CV THERAPEUTICS, INC.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1998 1997
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (3,901) $ (5,125)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of deferred compensation 371 290
Depreciation and amortization 545 543
Change in assets and liabilities:
Other current assets (104) (515)
Intangible and other assets 378 27
Accounts payable 109 (92)
Accrued and other liabilities 1,359 695
Deferred revenue (5,009) 6,500
------------- -------------
Net cash provided by (used in) operating activities (6,252) 2,323
Cash flows from investing activities:
Purchases of investments (19,078) (21,603)
Maturities of investments 12,815 6,455
Capital expenditures (224) (51)
Notes receivable from officers and employees - 75
------------- -------------
Net cash used in investing activities (6,487) (15,124)
Cash flows from financing activities:
Payments on capital lease obligations (1,232) (466)
Borrowings under long-term debt - 3,000
Repayments of long-term debt (500) (15)
Proceeds from issuance of common stock 19,852 5,447
------------- -------------
Net cash provided by financing activities 18,120 7,966
------------- -------------
Net increase (decrease) in cash and cash equivalents 5,381 (4,835)
Cash and cash equivalents at beginning of period 6,286 19,575
------------- -------------
Cash and cash equivalents at end of period $ 11,667 $ 14,740
============= =============
</TABLE>
See accompanying notes
<PAGE>
CV THERAPEUTICS, INC.
__________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 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 six-month periods ended June 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 4).
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 six months ended June 30,
1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
(in thousands)
Net loss $ (3,901) $ (5,125)
Unrealized losses on securities (20) -
------------- -------------
Comprehensive loss (3,921) (5,125)
============= =============
</TABLE>
Accumulated unrealized losses at June 30, 1998 were approximately $17,000
while accumulated gains at December 31, 1997 were approximately $3,000.
<PAGE>
CV THERAPEUTICS, INC.
__________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
3. LICENSE AND COLLABORATION AGREEMENTS
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 June 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 refunded 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. DEFERRED REVENUE
In February 1998, the Company terminated 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.
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.
<PAGE>
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 June 30, 1998, the Company had an accumulated
deficit of approximately $60.9 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
$299,000 for the quarter ended June 30, 1998, compared to $811,000 for the
quarter ended June 30, 1997. Collaborative research for the six-month
period ended June 30, 1998 was $4.5 million compared to $1.6 million for the
six-month period ended June 30, 1997. Collaborative research revenue for the
three- and the six-month periods ended June 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.
Collaborative research revenue for the three-month period ended June 30,
1998 also included revenue generated by shipment of ranolazine for
pre-clinical trial testing purposes to Kissei Pharmaceutical Co., Ltd. of
Matsumoto-City, Japan. The decrease in collaborative research revenue for
the quarter ended June 30, 1998, from 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 six-month period ended June 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.
<PAGE>
CV THERAPEUTICS, INC.
Research and Development Expenses. The Company's research and
development expenses increased to $3.6 million for the quarter ended June
30, 1998, compared to $3.1 million for the quarter ended June 30, 1997.
Research and development expenses increased to $6.9 million for the
six-month period ended June 30, 1998, compared to $4.9 million for the
six-month period ended June 30, 1997. The increases for both the three- and
six-month periods ended June 30, 1998, over 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. In particular,
expenses will likely increase due to further clinical trial expenses for
ranolazine and activities associated with CVT-510, the Company's preclinical
product candidate.
General and Administrative Expenses. General and administrative expenses
decreased to $1.1 million for the quarter ended June 30, 1998 compared to
$1.2 million for the quarter ended June 30, 1997. General and administrative
expenses decreased to $2.1 million for the six-month period ended June 30,
1998, compared to $2.2 million for the six-month period ended June 30, 1997.
General and administrative expenses associated with average personnel
headcount increased in both the three- and six-month periods ended June 30,
1998, but were offset by a decrease in outside service expenses when
compared to the same periods 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 $553,000 for the quarter ended June 30,1998 compared to $264,000 for the
quarter ended June 30, 1997. Interest and other income, net increased to
$659,000 for the six-month period ended June 30, 1998 compared to $370,000
for the six-month period ended June 30, 1997. Interest income increased, as
compared to the same periods in 1997, due to higher average investment
balances, but was offset by an increase in interest and other expenses,
mainly associated with the early retirement of the Company's capital lease
obligation in March 1998. The Company expects that interest and other
income, net will fluctuate with average investment balances.
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.
Cash, cash equivalents and short- and long-term investments at June 30,
1998 totaled $49.5 million compared to $38.1 million at December 31, 1997.
The increase in the first six 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
the Company's capital lease obligation.
Net cash used in operating activities for the six-months ended June 30,
1998 was $6.3 million, compared to $2.3 million provided by operating
activities for the six-months ended June 30, 1997. The $8.6 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. In addition, the remaining increase of $1.6
million in 1998 was primarily due to increased research and development
efforts.
As of June 30, 1998, the Company had invested approximately $6.4 million
in property and equipment, of which approximately $4.3 million was financed
through equipment and leasehold financings at various times.
<PAGE>
CV THERAPEUTICS, INC.
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 1999. However, there can be no
assurance that the Company will not require additional funding prior to such
time.
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 products are at an early
stage of development, and the Company has not generated any product revenue.
In addition, the Company has only two products in clinical development,
ranolazine and CVT-124. 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, licensers, 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.
<PAGE>
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. As of June 30, 1998, the Company has used approximately
$7,478,000 of the net proceeds from its initial public offering for
operating activities, approximately $1,683,000 for repayment of debt and
approximately $224,000 for capital expenditures. The Company has used the
remainder of the net proceeds from its initial public offering for temporary
investments, including money market and short- and long-term funds. Such
payments were direct or indirect. 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 June 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 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders of CV Therapeutics, Inc. was
held on June 9, 1998.
(b) Thomas L. Gutshall and Costa G. Sevastopoulos, Ph.D. were
elected to the Board of Directors. The terms of Louis G. Lange,
M.D., Ph.D., David P. Holveck, Barbara J. McNeil, M.D., Ph.D.,
J. Leighton Read, M.D., and Issac Stein continued after the
Annual Meeting.
(c) The matters voted upon at the meeting and the voting of
stockholders with respect thereto was as follows:
Election of Directors:
Nominee For Withheld
Thomas L. Gutshall 6,922,985 18,734
Costa G. Sevastopoulos, Ph.D. 6,936,769 4,950
Proposal to increase the aggregate number of shares of Common Stock
authorized for issuance under the 1994 Equity Incentive Plan, as amended, by
One Million (1,000,000) shares:
For Against Abstain
5,053,246 648,775 15,439
Proposal to ratify the selection of Ernst & Young LLP as independent
auditors of the Company for its fiscal year ending December 31, 1998:
For Against Abstain
6,932,581 8,801 337
Item 5. Other Information
Pursuant to the Company's bylaws, stockholders who wish to bring matters or
propose nominees for director at the Company's 1999 annual meeting of
stockholders must provide specified information to the Company between March
11, 1999 and April 10, 1999 (unless such matters are to be included in the
Company's proxy statement pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended).
<PAGE>
CV THERAPEUTICS, INC.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
Exhibit Number Description
10.54 Amendment to Research Collaboration and License
Agreement (U.S.), dated June 12, 1998, between
Biogen, Inc. and CV Therapeutics, Inc.
10.55 Amendment No. 1 to Loan Agreement, dated as of
June 12, 1998, between Biotech Manufacturing Ltd.
and CV Therapeutics, Inc.
10.56* Letter agreement regarding termination of research
program of the Research Collaboration and License
Agreement, dated June 12, 1998, between Biogen,
Inc. and CV Therapeutics, Inc.
27.1 Financial Data Schedule
_____________
* Confidential treatment is being sought for portions of this
exhibit. Brackets indicate portions of the text that have been
omitted. A separate filing of such omitted text has been made
with the Commission as part of the Company's application for
confidential treatment.
(b) Reports on Form 8-K
None
<PAGE>
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: August 7, 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)
<PAGE>
CV THERAPEUTICS, INC.
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Page
________________________________________________________________________________
10.54 Amendment to Research Collaboration and License
Agreement (U.S.), dated June 12, 1998, between
Biogen, Inc. and CV Therapeutics, Inc.
10.55 Amendment No. 1 to Loan Agreement, dated as of
June 12, 1998, between Biotech Manufacturing Ltd.
and CV Therapeutics, Inc.
10.56* Letter agreement regarding termination of research
program of the Research Collaboration and License
Agreement, dated June 12, 1998, between Biogen, Inc.
and CV Therapeutics, Inc.
27.1 Financial Data Schedule
_____________
* Confidential treatment is being sought for portions of this exhibit. Brackets
indicate portions of the text that have been omitted. A separate filing of such
omitted text has been made with the Commission as part of the Company's
application for confidential treatment.
AMENDMENT TO
RESEARCH COLLABORATION AND LICENSE AGREEMENT (U.S.)
This Amendment to the Research Collaboration and License Agreement (U.S.)
is entered into as of this 12th day of June, 1998 by and between Biogen,
Inc., a Massachusetts corporation located at 14 Cambridge Center, Cambridge,
MA 02142 ("Biogen") and CV Therapeutics, Inc., a Delaware corporation with
principal offices located at 3172 Porter Drive, Palo Alto, CA 94304 ("CVT").
WHEREAS, Biogen and CVT are parties to a certain Research Collaboration
and License Agreement (U.S.), dated as of March 7, 1997 (the "U.S. Research
Agreement") and Biotech Manufacturing Ltd. ("BML") and CVT are parties to a
certain Loan Agreement dated as of March 7, 1997 (the "Loan Agreement") in
connection therewith; and
WHEREAS, in connection with the amendment to the Loan Agreement, the
parties desire to amend the U.S. Research Agreement to change the definition
of "Performance Assessment Study";
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Amendment, the parties agree as follows:
1. Definitions.
The capitalized terms used in this Amendment shall have the meanings
assigned to such terms in the U.S. Research Agreement.
2. Amended provisions.
Biogen and CVT agree that the U.S. Research Agreement shall be amended
in the manner set forth below:
(a) Section 1.19 of the U.S. Research Agreement is amended to be,
and read, in its entirety as follows:
The term "PHASE II PERFORMANCE ASSESSMENT STUDY" shall mean the
clinical study known as BG1205.
3. Ratification.
Except as otherwise expressly set forth in this Amendment, all of the
terms and conditions of the Loan Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date
first above written.
BIOGEN, INC. CV THERAPEUTICS, INC.
By: /s/ James R. Tobin By: /s/ Louis G. Lange
Title: Chief Executive Officer Title: Chief Executive Officer
AMENDMENT NO. 1 TO LOAN AGREEMENT
This Amendment No. 1 to Loan Agreement is entered into as of this 12th day
of June 1998 by and between Biotech Manufacturing Ltd., with principal
offices located at Rutland House, Pitt Street, St. Helier, Jersey JE4 8ZB,
Channel Islands ("BML") and CV Therapeutics, Inc., with principal offices
located at 3172 Porter Drive, Palo Alto, CA 94304 ("CVT").
WHEREAS, BML and CVT are parties to a certain Loan Agreement, dated as of
March 7, 1997 (the "Loan Agreement") under which BML has agreed to make
funds available to CVT in the form of a loan or loans of up to $12,000,000
under certain conditions;
WHEREAS, under the Loan Agreement, a portion of the loan amount is not
available to CVT until receipt by CVT of the Phase II Performance Assessment
Study milestone payment from Biogen, Inc. ("Biogen") pursuant to a certain
Research Collaboration and License Agreement between Biogen and CVT, dated
as of March 7, 1997, (the "U.S. Research Agreement");
WHEREAS, the parties desire to amend the Loan Agreement to change the
trigger for availability of a certain portion of the loan;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Amendment, the parties hereby agree as follows:
1. Definitions.
The capitalized terms used in this Amendment shall have the meanings
assigned to such terms in the Loan Agreement or in the U.S. Research
Agreement, as the case may be.
2. Amended Provisions.
BML and CVT agree that the Loan Agreement shall be amended in the manner
set forth below:
(a) The third and fourth sentences of Section 2.1(a) of the Loan
Agreement are amended to be, and read, in their entirety as follows:
"Unless the BML AGREEMENT has been terminated for any reason, CVT may,
in such amounts and at such times as CVT, in its sole discretion, may
determine, draw down the remaining balance of the Loan (the "Loan
Remainder") as follows: (i) FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
($4,500,000) of the Loan Remainder (the "Second Installment") will
become available for draw down commencing on the date of delivery to
Biogen of the final study report for the clinical study known as
CVT2123 (the "Final Study Report Date") and may drawn down over a
period of twenty-four months following the Final Study Report Date,
and (ii) the remaining FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
($4,500,000) of the Loan Remainder (the "Third Installment") will
become available for draw down upon receipt by CVT of the Phase II
Performance Assessment Study milestone payment (the "Milestone
Payment") pursuant to the BIOGEN AGREEMENT and may be drawn down over
a period of twenty-four months following the date of the Milestone
Payment, provided, however, that the total draw down amount from the
Loan Remainder shall not exceed FOUR MILLION FIVE HUNDRED THOUSAND
DOLLARS ($4,500,000) in any Calendar Year, as defined below. For
purposes of this Section, a "Calendar Year" commences on the date of
the earlier to occur of the Final Study Report Date or the date of the
Milestone Payment (the "Commencement Date") or an anniversary of the
Commencement Date and terminates twelve months later."
(b) The last sentence of Section 2.1 (a) of the Loan Agreement is
amended to be, and read, in its entirety as follows:
"Subject to the additional limitations on draw down specific to the
Second Installment and the Third Installment, respectively, as set
forth above, BML's obligation to advance any funds under the Loan
Remainder shall terminate upon the earlier to occur of (i) twenty-four
months following the later to occur of the Final Study Report Date or
the date of the Milestone Payment (the "Last Draw-down Date") or (ii)
termination or expiration of this Agreement."
(c) Section 5.1 of the Loan Agreement is amended to be, and read, in
its entirety as follows:
"Except as otherwise provided herein, this Agreement shall terminate
on the earlier to occur of (i) termination or expiration of the BML
AGREEMENT or (ii) the Last Draw-down Date."
(d) Section 6 of the Loan Agreement is amended by adding Section 6.7
as follows:
"6.7 Publicity. Neither party may disclose the terms of the Loan
Agreement or the terms of any advance of funds under the Loan
Agreement except to the extent required by law. Once any written
statement is approved for disclosure by both parties, either party may
make subsequent public disclosure of the contents of such statement
without further approval of the other party."
3. Ratification.
Except as otherwise expressly set forth in this Amendment, all of the
terms and conditions of the Loan Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date
first above written.
BIOTECH MANUFACTURING LTD. CV THERAPEUTICS
By: /s/ Timothy M. Kish By: /s/ Louis G. Lange
Timothy M. Kish Louis Lange, M.D., Ph.D.
Director Chief Executive Officer
June 12, 1998
Mr. Dan Spiegelman
Chief Financial Officer
CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
Re: Termination of Research Program
Dear Dan:
As you know, Biogen, Inc. ("Biogen") and CV Therapeutics, Inc. ("CVT")
have agreed to terminate the research program being conducted under the
terms of Section 8 of the Research Collaboration and License Agreement
between the parties dated March 7, 1997 (the "Agreement"). We understand
that [*] of the amount provided by Biotech Manufacturing Ltd. ("BML") to
fund the research program was not expended in connection with Phase 1. This
letter will serve to acknowledge termination of the research program and to
confirm our agreement as to reimbursement of the unexpended funds.
Capitalized terms used in this letter have the meanings set forth in the
Agreement.
Our understanding of the agreement between Biogen and CVT is as follows:
1. The RESEARCH PROGRAM is deemed to have been terminated by mutual
agreement of Biogen and CVT under Section 8.5 of the Agreement.
2. BML will have no further obligation under Section 10.1(b)(ii) or
Section 10.1(b)(iii) of the BML AGREEMENT to make an additional equity
investment in CVT.
3. CVT will reimburse Biogen, up to [ * ] for costs and expenses incurred
by Biogen in connection with any of the following activities
(collectively, the "Supplemental Research Activities") to the extent
such costs and expenses are incurred by Biogen prior to December 31,
1999:
(i) [ * ];
(ii) A [ * ];
(iii) A [ * ]; and/or
(iv) Research activities related to [ * ].
Biogen will send an invoice to CVT on a quarterly basis describing in
detail the Supplemental Research Activities performed and the costs and
expenses incurred by Biogen in connection with such activities. CVT will
pay all invoices within thirty (30) days of receipt.
If this letter accurately reflects the agreement between Biogen and CVT
related to termination of the RESEARCH PROGRAM and reimbursement of
unexpended research funding, please so indicate by signing this letter and
the enclosed copy where indicated then return a signed copy to me.
If you have any questions, please do not hesitate to call.
Sincerely,
/s/ John W. Palmer
John W. Palmer
Program Executive, CVT-124
Agreed to and accepted:
CV Therapeutics, Inc.
By: /s/ Louis G. Lange
Title: CEO
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This schedule contains financial information extracted from the Consolidated
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