<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the 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 No.
0-21905
COULTER PHARMACEUTICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3219075
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
550 California Ave, Palo Alto, California 94306
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 415-842-7300
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 [ ]
Number of shares outstanding of the issuer's Common Stock, par value
$.001 per share, as of October 30, 1997: 10,364,515.
<PAGE> 2
COULTER PHARMACEUTICAL, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
--------
<S> <C> <C>
Item 1. Consolidated Financial Statements and Notes 3
Consolidated Balance Sheets - September 30, 1997 and
December 31, 1996 3
Consolidated Statements of Operations -- for the three months
and nine months ended September 30, 1997 and 1996 and for the
period from inception (February 16, 1995) to September 30,
1997 4
Consolidated Statements of Cash Flows -- for the nine months
ended September 30, 1997 and 1996 and for the period from
inception (February 16, 1995) to September 30, 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 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements and Notes
COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
ASSETS
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -------------
<S> <C> <C>
Current assets: (Unaudited)
Cash and cash equivalents $ 6,190 $ 8,826
Short-term investments 28,531 7,617
Prepaid expenses and other current assets 460 499
Current portion of employee loans receivable 76 35
-------- --------
Total current assets 35,257 16,977
Property and equipment, net 1,853 924
Employee loans receivable 323 271
Other assets 275 149
-------- --------
$ 37,708 $ 18,321
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,500 $ 1,490
Payable to Coulter Corporation 70 111
Accrued liabilities 1,725 4,330
Equipment financing obligations debt 695 309
-------- --------
Total current liabilities 4,990 6,240
Noncurrent portion of equipment financing obligations
and debt facility 2,483 1,535
Commitments
Stockholders' equity:
Preferred stock, issuable in series, $.001 par value:
3,000,000 shares authorized; none and 19,797,940 shares
issued and outstanding at September 30, 1997 and
December 31, 1996, respectively -- 28,355
Common stock, $.001 par value; 30,000,000 shares
authorized; 10,360,515 shares and 437,612 shares issued
and outstanding at September 30, 1997 and
December 31, 1996, respectively 10 1
Additional paid-in capital 65,381 2,488
Net unrealized loss on securities available for sale (3) (3)
Deferred compensation (1,103) (1,964)
Deficit accumulated during the development stage (34,050) (18,331)
-------- --------
Total stockholders' equity 30,235 10,546
-------- --------
$ 37,708 $ 18,321
======== ========
</TABLE>
See accompanying notes.
3
<PAGE> 4
COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED FOR THE PERIOD
SEPTEMBER 30, SEPTEMBER 30, FROM INCEPTION
------------------------ ------------------------ (FEBRUARY 16, 1995)
1997 1996 1997 1996 TO SEPT. 30, 1997
-------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
Operating expenses:
Research and development $ 5,227 $ 4,956 $ 11,810 $ 9,896 $ 28,030
General and administrative 2,146 828 5,326 1,453 8,316
-------- -------- -------- -------- --------
Total operating expenses 7,373 5,784 17,136 11,349 36,346
Interest income, net 454 274 1,417 528 2,296
-------- -------- -------- -------- --------
Net loss $ (6,919) $ (5,510) $(15,719) $(10,821) $(34,050)
======== ======== ======== ======== ========
Net loss per share $ (0.67) $ (0.71) $ (1.70) $ (1.40)
======== ======== ======== ========
Shares used in computing pro forma
net loss per share 10,315 7,736 9,267 7,736
======== ======== ======== ========
</TABLE>
See accompanying notes.
4
<PAGE> 5
COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
NINE MONTHS FOR THE PERIOD
ENDED SEPTEMBER 30, FROM INCEPTION
------------------------ (FEB. 16, 1995)
1997 1996 TO SEPT 30, 1997
-------- -------- ----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(15,719) $(10,821) $(34,050)
Adjustments used to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 110 34 174
Amortization of deferred compensation 861 104 1,191
Changes in operating assets and liabilities:
Prepaid expenses and other current assets 41 (245) (458)
Employee loans receivable (93) (318) (399)
Other assets (127) (92) (279)
Accounts payable 1,009 1,144 2,499
Payable to Coulter Corporation (41) 38 70
Accrued liabilities (2,606) 3,865 1,811
-------- -------- --------
Net cash used in operating activities (16,565) (6,291) (29,441)
-------- -------- --------
Cash flows from investing activities:
Purchases of short-term investments (33,003) (3,758) (41,612)
Maturities of short-term investments 12,089 -- 13,075
Purchases of property and equipment (1,038) (838) (2,019)
-------- -------- --------
Net cash used in investing activities (21,952) (4,596) (30,556)
-------- -------- --------
Cash flows from financing activities:
Payments of equipment financing obligations
and debt facility (366) -- (410)
Borrowings under equipment lease financing
and debt facility 1,700 -- 3,500
Proceeds from issuances of convertible preferred
stock, net -- 22,366 28,355
Proceeds from issuance of common stock, net 34,547 184 34,742
-------- -------- --------
Net cash provided by
financing activities 35,881 22,550 66,187
-------- -------- --------
Net increase (decrease) in cash and cash equivalents (2,636) 11,663 6,190
Cash and cash equivalents at beginning of period 8,826 3,438 --
-------- -------- --------
Cash and cash equivalents at end of period $ 6,190 $ 15,101 $ 6,190
======== ======== ========
</TABLE>
See accompanying notes.
5
<PAGE> 6
COULTER PHARMACEUTICAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
(unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The information at September 30, 1997, for the three and nine month
periods ended September 30, 1997 and 1996 and for the period from inception
(February 16, 1995) to September 30, 1997 is unaudited but includes all
adjustments (consisting only of normal recurring adjustments) which, in the
opinion of management, are necessary to state fairly the financial information
set forth therein in accordance with generally accepted accounting principles.
The interim results are not necessarily indicative of results to be expected for
the full fiscal year. These financial statements should be read in conjunction
with the audited financial statements for the fiscal year ended December 31,
1996 included in the Company's annual report to security holders furnished to
the Securities and Exchange Commission pursuant to Rule 14a-3(b) in connection
with the Company's 1997 Annual Meeting of Stockholders.
The consolidated balance sheet at December 31, 1996 has been derived
from audited consolidated financial statements at that date but does not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements.
Net Loss Per Share
Net loss per share is computed using the weighted average number of
common shares outstanding during the period. Common stock equivalents relating
to stock options are excluded from the computation as their effect is
antidilutive. For periods prior to the Company's initial public offering, the
calculation includes those shares required by the Securities and Exchange
Commission's staff accounting bulletins and guidelines including convertible
preferred stock as if converted on the initial date of issuance.
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement No. 128, "Earnings Per Share" ("Statement 128"). The statement
is effective for both interim and annual financial statements for periods ending
after December 15, 1997. Under Statement 128, primary EPS computed in accordance
with Accounting Principles Board Opinion No. 25 will be replaced with a new
simpler calculation called "basic EPS" and the Company will be required to
restate comparative EPS amounts for all prior periods. Under the new
requirements, basic EPS for the three and nine month periods ended September 30,
1997 and 1996 will be unchanged from primary EPS as currently disclosed. Fully
diluted EPS will not change significantly but has been renamed "diluted EPS".
The Company will implement the Statement in the fourth quarter of 1997.
In June 1997, the FASB issued Statement No. 130 "Reporting Comprehensive
Income". Although the Company has only recently commenced evaluation of this new
pronouncement, its impact is not expected to be significant. The Company will be
required to comply with the revisions of the statement in fiscal 1998.
6
<PAGE> 7
2. INVESTMENTS
Management determines the appropriate classification of debt securities
at the time of purchase and reevaluates such designation as of each balance
sheet date. The Company's debt securities are classified as available-for-sale
and are carried at estimated fair value in cash equivalents and short-term
investments. Unrealized gains and losses are reported as a separate component of
stockholders' equity. The amortized cost of debt securities in this category is
adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in interest income. Realized gains and losses on
available-for-sale securities are included in interest income and expense. The
cost of securities sold is based on the specific identification method. Interest
and dividends on securities classified as available-for-sale are included in
interest income. The Company's cash equivalents and short-term investments as of
September 30, 1997 are as follows (in thousands):
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
---------------------------------------------------------
<S> <C> <C> <C> <C>
Money market funds $ 93 $ -- $ -- $ 93
Commercial paper 5,491 -- (18) 5,473
Corporate bond 15,393 15 -- 15,408
U.S. Government backed securities 5,931 1 -- 5,932
CDs 7,191 -- -- 7,191
-------- -------- -------- --------
Total 34,099 16 (18) 34,097
Less amounts classified
as cash equivalents (5,584) -- 18 (5,566)
-------- -------- -------- --------
Total short-term investments $ 28,515 $ 16 $ -- $ 28,531
======== ======== ======== ========
</TABLE>
At September 30, 1997, the contractual maturities of short term investments were
as follows (in thousands):
ESTIMATED
AMORTIZED COST FAIR VALUE
Due in one year or less $16,780 $16,784
Due after one year through two years 11,735 11,747
------- -------
$28,515 $28,531
3. STOCKHOLDERS' EQUITY
On January 28, 1997, the Company completed its initial public offering
of 2,500,000 shares of its common stock at a price to the public of $12.00 per
share, resulting in net proceeds to the Company of approximately $27.9 million.
A one-for-three reverse common stock split became effective prior to the
commencement of the offering. All common share and per share amounts have been
retroactively restated to reflect the reverse stock split.
Also in January 1997, the Company received approximately $3.1 million
from the cash exercise of warrants to purchase 385,315 shares of its common
stock and issued an additional 37,785 shares of its common stock upon the net
exercise of warrants to purchase 113,390 shares of its common stock. In February
1997, the Company received approximately $4.2 million from
7
<PAGE> 8
the sale of 375,000 shares of its common stock pursuant to the exercise of the
underwriters' over-allotment option in connection with the initial public
offering.
Upon completion of the initial public offering all of the 19,797,940
shares of Series A, B and C preferred stock outstanding converted to shares of
common stock on a three-for-one basis. Also upon the completion of the offering,
the Company filed an Amended and Restated Certificate of Incorporation
authorizing the Company to issue 33,000,000 shares, 30,000,000 of which is
designated Common Stock and 3,000,000 of which is designated Preferred Stock.
In July 1997, the Company adopted a Share Purchase Rights Plan (the
"Plan"), commonly known as a "poison pill". The Plan provides for the
distribution of certain rights to acquire shares of the Company's Series A
Junior Participating Preferred Stock (the "Rights") as dividend for each share
of common stock held of record as of August 20, 1997. Under certain conditions
involving an acquisition or proposed acquisition by any person or group holding
20% or more of the common stock, the Rights permit the holders (other than the
20% holder) to purchase the Company's common stock at a 50% discount from the
market price at that time, upon payment of an exercise price of $70 per Right.
In addition, in the event of certain business combinations, the Rights permit
the purchase of shares of common stock of an acquirer at a 50% discount from the
market price at that time. The Rights have no voting privileges and are attached
to and automatically trade with the Company's common stock. The Rights expire on
July 30, 2007.
4. SUBSEQUENT EVENT
On October 10, 1997, the Company completed a public offering of
2,750,000 shares of common stock at a price to the public of $15.50 per share,
resulting in net proceeds to the Company of approximately $40.2 million. On
October 21, 1997, the underwriters for the Company's follow-on offering of
common stock exercised their full over-allotment option to purchase 412,500
additional shares of common stock, raising additional net proceeds of $6.0
million.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion contains, in addition to historical
information, forward-looking statements that involve risks and uncertainties.
Actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
OVERVIEW
Coulter Pharmaceutical, Inc. ("Coulter Pharmaceutical" or the "Company")
is engaged in the development of novel drugs and therapies for the treatment of
people with cancer. The Company's first product candidate, Bexxar(TM)
(previously referred to as the B-1 Therapy), is based upon the antibody
therapeutics program which originated in the late 1970s at Coulter Corporation.
Coulter Corporation conducted research and development on the potential
therapeutic applications of the B-1 Antibody as part of a broader antibody
therapeutics program. To accelerate the pace of development of Bexxar and to
obtain external sources of capital for the program, Coulter Corporation decided
to create a separate Company into which it placed its conjugated antibody
therapeutics assets. Thus, in February 1995, Coulter Pharmaceutical was
incorporated and acquired worldwide rights to Bexxar and related intellectual
property, know-how and other assets from Coulter Corporation.
8
<PAGE> 9
To date, the Company has devoted substantially all of its resources to
its research and development programs. No revenues have been generated from
product sales, and products resulting from the Company's research and
development efforts, if any, are not expected to be available commercially for
at least the next few years. The Company has a limited history of operations and
has experienced significant operating losses to date. The Company expects to
incur significant additional operating losses over the next several years and
expects cumulative losses to increase substantially due to expanded research and
development efforts, preclinical studies and clinical trials and development of
manufacturing, marketing and sales capabilities. The Company expects that losses
will fluctuate from quarter to quarter and that such fluctuations may be
substantial. There can be no assurance that the Company will successfully
develop, manufacture and commercialize its products or ever achieve or sustain
product revenues or profitability. As of September 30, 1997, the Company's
accumulated deficit during the development stage was approximately $34.1
million.
RESULTS OF OPERATIONS
Operating Expenses
For the quarter ended September 30, 1997, research and development
expenses increased $0.2 million to $5.2 million from $5.0 million for the same
period in 1996. The Company's research and development expenses increased $1.9
million to $11.8 million for the nine month period ended September 30, 1997 from
$9.9 million for the same period in 1996. These increases were due primarily to
increases in staffing and expenditures associated with the development of
Bexxar, including costs of clinical trials and manufacturing expenses. Included
in manufacturing expenses are certain expenses associated with scaled-up
production of monoclonal antibodies and the establishment of a centralized
radiolabeling capability. The Company expects its research and development
expenses to grow reflecting anticipated increased costs related to staffing,
preclinical studies, clinical trials and manufacturing.
General and administrative expenses were $2.1 million and $0.8 million
for the quarters ended September 30, 1997 and 1996, respectively, representing
an increase of $1.3 million. For the nine month periods ended September 30, 1997
and 1996, such expenses were $5.3 million and $1.5 million, respectively,
representing an increase of $3.8 million. These increases were incurred to
support the Company's facilities and staffing expansion, increased corporate
development activities and related legal and patent activities. The Company
expects its general and administrative expenses to continue to increase in
support of its increased research and development, patent and corporate
development activities, as well as increasing commercialization efforts in
anticipation of potential product sales.
Net Interest Income
Net interest income was $454,000 and $274,000 for the quarters ended
September 30, 1997 and 1996, respectively. Net interest income for the nine
month periods ended September 30, 1997 and 1996 was $1,417,000 and $528,000,
respectively. These increases were due to higher average cash, cash equivalent
and short-term investment balances as a result of the Company's sale of
Preferred Stock in April 1996 and the completion of the Company's initial public
offering in January 1997.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception through September 30, 1997, the Company has financed
its operations primarily through private and public equity financings totaling
$63.4 million. In December 1996, the Company entered into a $3.8 million
equipment financing agreement, $0.3 million of which is available at September
30, 1997.
9
<PAGE> 10
Cash, cash equivalents and short-term investments totaled $34.7 million
at September 30, 1997. In October 1997, the Company completed a follow-on public
offering of 3,162,500 shares, including the exercise of the underwriters'
over-allotment option, at a price to the public of $15.50 per share. This
resulted in net proceeds to the company of approximately $46.2 million dollars.
The negative cash flows from operations result primarily from the
Company's net operating losses and are expected to continue and to accelerate in
the foreseeable future. The Company expects to incur substantial and increasing
research and development expenses, including expenses related to additions to
personnel, preclinical studies, clinical trials, manufacturing, as well as
increasing expenses associated with expansion of its facilities, and
commercialization efforts. The Company will need to raise substantial additional
capital to fund its operations. The Company intends to seek such additional
funding through public or private equity or debt financings, as well as through
collaborative arrangements. There can be no assurance that additional financing
will be available on acceptable terms, if at all. If adequate funds are not
available, the Company may be required to delay, reduce the scope of, or
eliminate one or more of its research and development programs or obtain funds
through arrangements with collaborative partners or others that may require the
Company to relinquish rights to certain of its technologies, product candidates
or products that the Company would otherwise seek to develop or commercialize.
Net cash used in operations was $16.6 million for the nine month period
ended September 30, 1997, compared to $6.3 million for the same period in 1996.
This $10.3 million increase is primarily the result of the increased net loss
for the nine month period ended September 30, 1997, as well as a $2.6 million
decrease in accrued liabilities resulting from payments primarily related to
manufacturing activities. Net cash used in investing activities increased to
$22.0 million for the nine month period ended September 30, 1997 from $4.6
million for the same period in 1996 primarily resulting from the purchase of
$33.0 million in short-term investments using a portion of the proceeds of the
Company's initial public offering. Maturities of such investments were $12.1
million during the nine month period ended September 30, 1997. Net cash provided
by financing activities increased to $35.9 million for the nine month period
ended September 30, 1997 resulting primarily from the completion of the
Company's initial public offering.
The Company expects that its existing capital resources, including the
net proceeds of its public offering of common stock completed in October 1997
and interest thereon, will be adequate to satisfy the requirements of its
current and planned operations into the second half of 1999. At September 30,
1997, the Company had no material commitments for capital expenditures. The
Company's future capital requirements will depend on a number of factors,
including: the scope and results of preclinical studies and clinical trials;
continued progress of the Company's research and development of potential
products; the cost, timing and outcome of regulatory approvals; the adequacy of
its facilities; the expenses of establishing a sales and marketing force; the
timing and cost of establishment or procurement of requisite production,
radiolabeling and other manufacturing capacities; the cost involved in
preparing, filing, prosecuting, maintaining, defending and enforcing patent
claims; the need to acquire licenses to new technology; the status of
competitive products, and the availability of other financing.
BUSINESS RISKS
Except for the historical information contained herein, the matters
discussed in this filing are forward-looking statements that involve risks and
uncertainties, including uncertainties related to product development,
uncertainties related to the need for regulatory and other government approvals,
dependence on proprietary technology, uncertainty of market acceptance of Bexxar
(TM) or the Company's other product candidates and other risks, including those
10
<PAGE> 11
detailed in the Company's other filings with the Securities and Exchange
Commission. In particular, see "Item 1, Financial Business-Risk Factors," of the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description of Document
------- -----------------------
4.5 Rights Agreement, dated July 30, 1997, by and between
ChaseMellon Shareholder Services LLC and the Registrant. (1)
10.13 Third Amendment to Manufacturing Agreement, dated September 26,
1997, by and between Lonza Biologics PLC and the Registrant. (2)
10.14 Fourth Amendment in Manufacturing Agreement, dated September 17,
1997, by and between Lonza Biologics PLC and the Registrant. (2)
27 Financial Data Schedule.
(b) Reports on Form 8-K
(i) The Company filed a report of Form 8-K, dated August 1, 1997,
with respect to its adoption of a Rights Plan.
(ii) The Company filed a report on Form 8-K, dated September 29,
1997, with respect to the signing of a Third and Fourth
Amendment to the Manufacturing Agreement between the Company and
Lonza Biologics PLC.
- ----------
(1) Incorporated by reference to the Registrant's Current Report on Form
8-K, filed August 1, 1997.
(2) Incorporated by reference to the Registrant's Current Report on Form
8-K, filed September 29, 1997.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COULTER PHARMACEUTICAL, INC.
Date: November 5, 1997 /s/ Michael F. Bigham
-----------------------------------------
Michael F. Bigham
President and Chief Executive Officer
Date: November 5, 1997 /s/ William G. Harris
-----------------------------------------
William G. Harris
Vice President and
Chief Financial Officer
12
<PAGE> 13
Exhibit Exhibit
Footnote Number Description of Document
- -------- ------- -----------------------
4.5 Rights Agreement, dated July 30, 1997, by and
between ChaseMellon Shareholder Services LLC and
the Registrant. (1)
10.13 Third Amendment to Manufacturing Agreement,
dated September 26, 1997, by and between Lonza
Biologics PLC and the Registrant. (2)
10.14 Fourth Amendment in Manufacturing Agreement,
dated September 17, 1997, by and between Lonza
Biologics PLC and the Registrant. (2)
27 Financial Data Schedule
- ----------
(1) Incorporated by reference to the Registrant's Current Report on Form
8-K, filed August 1, 1997.
(2) Incorporated by reference to the Registrant's Current Report on Form
8-K, filed September 29, 1997.
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 6,190
<SECURITIES> 28,531
<RECEIVABLES> 399
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35,257
<PP&E> 2,020
<DEPRECIATION> 167
<TOTAL-ASSETS> 37,708
<CURRENT-LIABILITIES> 4,990
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 30,225
<TOTAL-LIABILITY-AND-EQUITY> 37,708
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,373
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 193
<INCOME-PRETAX> (6,919)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,919)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,919)
<EPS-PRIMARY> (0.67)
<EPS-DILUTED> 0
</TABLE>
