<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1997, or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________ to _____________.
COMMISSION FILE NO.: 0-25978
----------
THERAPEUTIC ANTIBODIES INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 62-1212485
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1207 17TH AVENUE SOUTH, SUITE 103
NASHVILLE, TENNESSEE 37212
- --------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(615) 327-1027
- -------------------------------
(Registrant's Telephone Number,
Including Area Code)
NOT APPLICABLE
----------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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
---- ----
As of November 11, 1997, 23,200,325 shares of the registrant's Common Stock
were outstanding.
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,084,795 $ 20,502,536
Short-term investments 6,010,838 2,002,266
Trade receivables 104,230 101,281
Value added tax receivable 170,569 251,186
Inventories 343,138 400,167
Other current assets 459,472 474,412
------------ ------------
Total current assets 11,173,042 23,731,848
Property and equipment, net 11,608,271 12,682,680
Patent costs, net 659,220 529,228
Other assets, net 180,269 236,234
------------ ------------
Total assets $ 23,620,802 $ 37,179,990
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 980,060 $ 936,591
Accrued interest 71,491 161,367
Current portion of notes payable 1,298,462 1,446,327
------------ ------------
Total current liabilities 2,350,013 2,544,285
Notes payable, net of current portion 7,627,834 8,592,755
Deferred revenue 563,930 656,170
Other liabilities 161,850 171,250
------------ ------------
Total liabilities 10,703,627 11,964,460
------------ ------------
Stockholders' equity:
Common stock - par value $.001 per share; 30,000,000 shares authorized; 23,197,631 -
September 30, 1997 and 22,353,692 - December 31, 1996 issued and outstanding 23,198 22,354
Additional paid-in capital 68,306,203 67,082,048
Deficit accumulated during the development stage (1984-1997) (55,606,631) (42,564,665)
Cumulative translation adjustment 194,405 675,793
------------ ------------
Total stockholders' equity 12,917,175 25,215,530
------------ ------------
Total liabilities and stockholders' equity $ 23,620,802 $ 37,179,990
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 3
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Cumulative
Development Stage
For the Nine Months Ended For the Three Months Ended from August 10,1984
September 30, September 30, (inception) Through
1997 1996 1997 1996 September 30, 1997
------------ ------------ ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Sales and contract revenue $ 329,805 $ 547,965 $ 110,610 $ 324,970 $ 2,728,034
Licensing revenue 81,405 -- 19,100 -- 324,905
Interest income 733,464 326,818 245,234 293,909 1,769,639
Grant income 30,593 107,966 10,161 10,113 557,543
Value-added tax and insurance recoveries -- -- -- -- 577,170
Foreign currency gains -- 176,065 -- 174,843 1,785,984
Other 46,410 55,908 14,558 20,027 187,216
------------ ------------ ------------ ------------ ------------
1,221,677 1,214,722 399,663 823,862 7,930,491
------------ ------------ ------------ ------------ ------------
Expenses:
Cost of sales and contract revenue 94,207 266,137 20,754 209,955 528,624
Research and development 8,250,487 6,498,907 2,775,553 2,776,675 39,155,864
General and administrative 2,520,279 1,982,880 890,039 585,966 11,576,633
Marketing and distribution 386,453 245,245 139,518 75,912 1,748,408
Depreciation and amortization 1,236,566 1,075,593 465,152 373,809 5,104,314
Interest 804,883 1,034,620 269,524 427,081 3,533,507
Debt conversion expense -- 801,597 -- -- 801,597
Foreign currency losses 961,056 -- 245,365 -- 961,056
Other 9,712 -- -- -- 127,119
------------ ------------ ------------ ------------ ------------
14,263,643 11,904,979 4,805,905 4,449,398 63,537,122
------------ ------------ ------------ ------------ ------------
Net loss $(13,041,966) $(10,690,257) $ (4,406,242) $ (3,625,536) $(55,606,631)
============ ============ ============ ============ ============
Net loss per share $ (0.57) $ (0.60) $ (0.19) (0.19) (5.74)
============ ============ ============ ============ ============
Weighted average shares used in
computing net loss per share 22,775,892 17,782,690 22,779,226 19,344,431 9,685,370
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Cumulative
For the Nine Months Ended Development Stage
September 30, from August 10, 1984
----------------------------- (Inception) Through
1997 1996 September 30, 1997
----------- ------------ --------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(13,041,966) $(10,690,257) $(55,606,631)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,236,566 1,075,593 5,104,314
Foreign currency (gain) loss 961,056 (176,065) (824,928)
Warrant expense - - 193,994
Compensation expense 57,388 - 119,819
Debt conversion expense - 801,597 801,597
Changes in:
Trade receivable 63,456 (185,757) (11,636)
Inventories (57,029) 198,057 (343,022)
Other current assets 6,272 19,841 (462,451)
Accounts payable and accrued expenses 64,987 (87,958) 971,819
Accrued interest (84,543) 105,116 692,459
Deferred revenue (49,211) - 264,459
Other - - (43,489)
------------- ------------ -------------
Net cash used in operating activities (10,843,024) (8,939,833) (49,143,696)
------------- ------------ -------------
Cash flows from investing activities:
Purchase of property and equipment (975,017) (2,210,039) (12,961,460)
Patent costs (141,766) (124,980) (693,054)
Purchase of short term investments (9,865,277) - (11,867,543)
Maturity of short term investments 5,800,412 - 5,800,412
Other - (44,992) 69,750
------------- ------------ -------------
Net cash used in investing activities (5,181,648) (2,380,011) (19,651,895)
------------- ------------ -------------
Cash flows from financing activities:
Proceeds from notes payable 208,892 6,292,438 16,000,292
Payments on notes payable (1,024,919) (5,923,397) (5,903,179)
Proceeds from line of credit 8,129 - 3,317,510
Payments on line of credit (108,573) (1,018,580) (3,317,510)
Proceeds from convertible debt, net - 1,081,732 9,655,000
Payments on convertible debt - - (4,320,325)
Proceeds from issuance of stock, net 1,167,611 31,750,451 56,821,105
Proceeds from issuance of warrants - - 65,000
Other - - (186,782)
------------- ------------ -------------
Net cash provided by financing activities 251,140 32,182,644 72,131,111
------------- ------------ -------------
Effect of exchange rate changes on cash and
cash equivalents (644,209) 120,820 749,275
------------- ------------ -------------
Net increase (decrease) in cash and cash
equivalents (16,417,741) 20,983,620 4,084,795
Cash and cash equivalents at beginning of period 20,502,536 3,397,082 -
------------- ------------ -------------
Cash and cash equivalents at end of period $ 4,084,795 $ 24,380,702 $ 4,084,795
============= ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 1997
NOTE 1 - BASIS OF PRESENTATION
The accompanying interim financial statements are unaudited, but include all
adjustments (consisting of normal recurring accruals) which are, in the opinion
of management, necessary for a fair statement of the results for such periods.
The unaudited interim consolidated financial statements should be read in
conjunction with the audited December 31, 1996 consolidated financial statements
of the Company. The December 31, 1996 condensed consolidated balance sheet data
was derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
The results of operations for the interim periods are not necessarily indicative
of the results to be expected for the full year ending December 31, 1997.
Certain reclassifications were made to the three month and nine month 1996
financial statements to conform with the 1997 presentation. The
reclassifications had no effect on total assets, liabilities, net loss or
stockholders' equity.
NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
During February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128"). The Company will adopt SFAS No. 128 during the fourth quarter of 1997 as
required and does not expect it to have a material impact on the calculation of
net income per share.
During June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130") and Statement of Financial Accounting Standards No. 131 "Disclosures
about Segments of an Enterprise and Related Information" ("SFAS No. 131"). The
Company will adopt SFAS No. 130 and SFAS No. 131 in 1998 as required. Because
these standards require only disclosure of certain additional information, the
effect of adoption will not have a significant impact on the Company's financial
position.
5
<PAGE> 6
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS
THERAPEUTIC ANTIBODIES INC.
We have reviewed the condensed consolidated balance sheet of Therapeutic
Antibodies Inc. and Subsidiaries at September 30, 1997 and the related condensed
consolidated statement of operations and condensed consolidated statement of
cash flows for the three-month and nine-month periods then ended. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted accounting standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet at December 31, 1996 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein); and in our report dated March 7,
1997, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1996, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Louisville, Kentucky
November 12, 1997
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of the financial condition and results of
operations of the Company should be read in conjunction with the financial
statements and notes thereto. This discussion and analysis contains both
historical and forward looking information. The forward looking statements are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward looking statements may be significantly impacted by
certain risks and uncertainties, and there can be no assurance that other
factors will not affect the accuracy of such forward-looking statements. While
it is impossible to identify all such factors, factors which could cause actual
results to differ materially from those estimated by the Company include but are
not limited to, changes on the regulation of the pharmaceutical industry, both
in the United States and internationally, changes in pharmaceutical product
testing or approval standards, both in the United States and internationally,
competitive pressures on the pharmaceutical industry and the Company's response
thereto, general conditions in the economy and capital markets, and other
factors which may be identified from time to time in the Company's Securities
and Exchange Commission filings and other public announcements.
GENERAL
Therapeutic Antibodies Inc. ("TAb" or the "Company") has been in the
development stage since inception in 1984, devoting its efforts and resources to
drug discovery and development programs relating to the development of highly
purified, polyclonal antibodies for the treatment of disease. Since inception
the Company's revenues have been from contract agreements with corporate
partners, product sales, grant income, interest income, and insurance and value
added tax recoveries. Net losses have been incurred each year since its
inception and the Company expects to continue to incur operating losses during
at least the next year due to continued spending on research, product
development and increasing requirements for process development, preclinical and
clinical testing, regulatory compliance, manufacturing activities and
administration. The Company may require additional financing until product sales
or licensing fees are sufficient to generate positive cash flows from
operations.
The Company conducts its operations from its headquarters in the United
States and through subsidiaries located in the United Kingdom, Australia and New
Zealand. International operations are primarily located in the United Kingdom.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1997 Compared to Three Months Ended September
30, 1996
Total revenues for the three months ended September 30, 1997 decreased
by 52% to $399,000 from $824,000 for the three months ended September 30, 1996.
In the third quarter of 1996, the Company recognized $173,000 related to the
production of EchiTAb(TM). Secondly, TAb reported a foreign currency gain of
$175,000 in the third quarter of 1996 as a result of foreign cash holdings.
During the same period for 1997, TAb recognized a $245,365 foreign currency loss
due to a decline in foreign currency exchange rates as discussed below.
Additionally, in the third quarter of 1997, interest income decreased to
$245,000 from $294,000 in the third quarter of 1996.
Total expenses increased by 8% to $4,805,000 in the third quarter of
1997 from $4,449,000 in the third quarter of 1996. Research and development
expenses, the largest component of TAb's expenses, remained unchanged at
$2,776,000 compared to $2,777,000 in the quarter ended September 30, 1996.
During the third quarter of 1997, the Company initiated its Phase IIb clinical
trial of CytoTAb(TM) for Sepsis in
7
<PAGE> 8
September 1997, and expects research and development expenses to increase
slightly in the fourth quarter of 1997. The Company's research and development
costs are related to manufacturing TAb's products for clinical trials,
conducting clinical trials, regulatory compliance and ensuring that the
necessary quality control and assurance procedures are in place.
General and administrative expenses in the third quarter of 1997
increased by 52% to $890,000 from $586,000 in the third quarter of 1996, as a
result of additional costs required since the Company's Common Stock began
publicly trading in July 1996. These costs relate primarily to accelerating
shareholder and public relations expenses, higher insurance requirements and
staffing expansion.
Marketing expenses in the third quarter of 1997, increased by 84% to
$140,000 compared to $76,000 in the third quarter of 1996 due to the addition of
personnel and increased business development activities that began in the last
quarter of 1996.
Interest expense in the quarter ended September 30, 1997, decreased by
37% to $270,000 from $427,000 in the quarter ended September 30, 1996 due to
repayment by the Company of approximately $4,750,000 of debt obligations in the
third and fourth quarters of 1996.
In the quarter ended September 30, 1997, the Company recorded foreign
currency losses of $245,000. These losses were the result of a decline in the
exchange rate of the British pound and Australian dollar to the U.S. dollar from
June 30, 1997 to September 30, 1997 on the Company's holdings of cash in British
pounds sterling and Australian dollars.
The Company's net loss for the quarter ended September 30, 1997, was
$4.4 million compared to a net loss of $3.6 million for the quarter ended
September 30, 1996.
Nine Months Ended September 30, 1997 Compared to Nine Months Ended September
30, 1996
TAb's total revenues for the first nine months of 1997 were comparable
to the same period of 1996, increasing to $1,222,000 from $1,215,000. Several
items attributed to total income remaining at relatively the same level. First,
in 1997, there were increases of 124% in interest income and 100% in licensing
fee revenues over the 1996 amounts. The increase in interest income to $733,000
in the first nine months of 1997 from $327,000 in the first nine months of 1996
reflects additional cash and short term investment holdings from the proceeds of
the Company's initial public offering of Common Stock in the United Kingdom in
July 1996. TAb received total licensing fees of $81,000 in the first nine months
of 1997 from two sources. For the signing of a collaboration agreement for
BrownTAb(TM), the Company's Australian Brown snake antivenom, the Company
received a $62,000 licensing fee. In addition, a $19,000 licensing fee was
recorded in September, 1997, which the Company received pursuant to the F. H.
Faulding agreement for clinical trials for CytoTAb(TM) for malaria. Offsetting
those increases were decreases in 1997 in sales and contract revenue, grant
income and foreign currency gains. Sales and contract revenue decreased by 40%
to $330,000 for the nine months ended September 30, 1997 from $548,000 for the
first nine months of 1996. Sales of EchiTAb(TM) increased $15,120 while sales of
ViperaTAb(TM) decreased $40,800. Grant income decreased by 72% in the nine
months ended September 30, 1997 to $31,000 from $108,000 in the nine months
ended September 30, 1996 due to a one-time grant in 1996 of $79,000 from the
Economic Development Authority of the Government of South Australia for
expansion of the Company's production facilities. As a result of a decline in
the exchange rate of the British pound and Australian dollar to the U.S. dollar
during the year, the Company experienced a $961,056 foreign currency transaction
loss in the nine months ended September 30, 1997 as opposed to the $176,065 gain
that was recognized in the nine months ended September 30, 1996.
8
<PAGE> 9
Expenses for the first nine months of 1997 increased by 20% to
$14,264,000 from $11,905,000 for the same period in 1996. Research and
development expenses during the same periods increased by 27% to $8,250,000 from
$6,499,000 as a result of two main activities. First, extensive development
activities were devoted to optimizing the formulations for CroTAb(R) and
DigiTAb(TM). Secondly, the Company has been preparing its production facilities
for the commercial release of CroTAb(R) in 1998. In addition, there were
continued costs associated with the development of TriTAb(TM) and clinical trial
activities for DigiTAb(TM). Costs associated with regulatory compliance, a
component of research and development expenses, also increased as CroTAb(R)
progresses through the FDA licensing process.
General and administrative expenses for the first nine months of 1997
increased by 27% to $2,520,000 from $1,983,000 for the first nine months of 1996
as a result of additional costs required since the Company's Common Stock began
publicly trading in July 1996. These costs relate primarily to accelerating
shareholder and public relations expenses, higher insurance requirements and
staffing expansion.
Marketing and distribution expenses increased by 58% to $386,000 in the
first nine months of 1997 from $245,000 in the first nine months of 1996 due to
the addition of personnel and increased business development activities that
began in the last quarter of 1996.
Interest expense in the nine months ended September 30, 1997 decreased
by 22% to $805,000 from $1,035,000 in the nine months ended September 30, 1997
due to repayment by the Company of approximately $4,750,000 of debt obligations
in the third and fourth quarters of 1996.
In the first quarter of 1996, the Company recorded a one-time debt
conversion expense of $801,597, relating to the conversion of an aggregate of
$2,565,105 of principal and interest on the Company's 6% Notes into shares of
Common Stock, which represents the difference between the stated conversion
price on the debt of $8.00 per share and the actual conversion price of $5.50.
As previously stated, in the nine months ended September 30, 1997, the
Company recorded foreign currency losses of $961,000. These losses were the
result of changes in the UK and Australian exchange rates from December 31, 1996
to September 30, 1997 on the Company's holdings of cash in British pounds
sterling and Australian dollars. The Company did not hold significant foreign
currencies until July of 1996 and therefore, did not recognized as notable a
foreign currency gain during the nine month period ended September 30, 1996.
The Company's net loss for the nine months ended September 30, 1997,
was $13 million compared to a net loss of $10.7 million for the nine months
ended September 30, 1996.
9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, TAb has been in the development stage, devoting
its efforts and resources to drug discovery and development programs. Capital
resources have been used for the establishment and expansion of production
facilities, research and development, clinical testing and to meet TAb's
increased working capital needs in connection with such activities. Management
does not expect revenues from product sales to be a significant source of
funding until additional products receive regulatory approval. Future capital
requirements will depend on numerous factors, including the progress of its
research programs and clinical trials, the development of regulatory
submissions, the commercial viability of the Company's products, the development
of sales, distribution and marketing capabilities, and the terms of any new
licensing arrangements. Financing for the Company's operating and capital
requirements historically has been provided by the sale of equity, convertible
debt and through other financings.
At September 30, 1997, the Company had cash, cash equivalents and short
term investments totaling $10,096,000 (cash and cash equivalents of $4,085,000
and short term investments of $6,011,000) of which approximately $5,050,000 was
denominated in British pounds and $861,000 in Australian dollars. The Company's
net cash used in operating activities during the nine months ended September 30,
1997 totaled $10,843,000, an increase of 24% from the nine months ended
September 30, 1996. Capital expenditures of $975,000 for the first nine months
of 1997 related primarily to expansion of production facilities in Wales and
Australia. TAb anticipates that total capital expenditures for 1997 will be
approximately $1.5 million.
The Company's holdings of short-term investments increased 200% to
$6,011,000 as of September 30, 1997 from $2,002,000 as of December 31, 1996.
This increase is due to the additional purchases of higher-yielding debt
instruments with a greater than three month maturity.
On October 13, 1997, TAb entered into an agreement providing for the
sale of the Company's U.S. distribution rights of its CroTAb(R), DigiTAb(TM) and
TriTAb(TM) products to Altana, Inc. Under the agreement, TAb received $500,000
in the fourth quarter of 1997 and expects to receive a total of $4 million in
payments upon the achievement of milestones expected in 1998. TAb will earn up
to another $5.5 million upon achievement of certain additional milestones
culminating with U.S. Food and Drug Administration (FDA) approvals for the
product lines. In addition, the Company may earn an additional estimated $13
million in bonus payments tied to the first three years of each product's sales
following FDA approval. Product revenues will be shared between the Companies
with TAb receiving 50 per cent of net revenues.
The Company is currently exploring raising additional financing in 1998
in the form of either secured debt, equity or a convertible debt security. The
Company may raise funds in 1998 through private bridge financing and is
currently negotiating with one or more financial institutions. Furthermore, the
Company is considering an additional equity offering in 1998 or 1999.
10
<PAGE> 11
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
During February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128"). The Company will adopt SFAS No. 128 during the fourth quarter of 1997 as
required and does not expect it to have a material impact on the calculation of
net income per share.
During June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130") and Statement of Financial Accounting Standards No. 131 "Disclosures
about Segments of an Enterprise and Related Information" ("SFAS No. 131"). The
Company will adopt SFAS No. 130 and SFAS No. 131 in 1998 as required. Because
these standards require only disclosure of certain additional information, the
effect of adoption will not have a significant impact on the Company's financial
position.
OTHER FINANCIAL INFORMATION
Coopers & Lybrand, L.L.P., the Company's independent public accountants,
performed a limited review of the financial data presented on pages 2 through 6
inclusive. The review was performed in accordance with standards for such
reviews established by the American Institute of Certified Public Accountants.
The review did not constitute an audit; accordingly, Coopers & Lybrand, L.L.P.
did not express an opinion on the aforementioned data.
11
<PAGE> 12
PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
Between July 1, 1997 and September 30, 1997, certain holders of
warrants for the Company's stock exercised warrants to purchase an aggregate of
8,891 shares of Common Stock. The exercise prices of the warrants was $2.50 per
share. These shares were issued pursuant to exemptions from registration
contained in Section 4(2) of the Securities Act of 1933, as amended.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description of Exhibits
- ------- -----------------------
11.1 Statement re: computation of per share earnings
27 Financial Data Schedule (SEC use only)
(b) Reports on Form 8-K.
The Company did not file any Current Reports on Form 8-K
during the third quarter of 1997.
12
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.
Date: November 12, 1997 /s/ Martin S. Brown
-----------------------------
Martin S. Brown
Chairman of the Board
Chief Executive Officer
(Principal Executive Officer)
Date: November 12, 1997 /s/ Robert D. Brown
-----------------------------
Robert D. Brown, CPA
Vice President & Controller
(Principal Accounting Officer)
13
<PAGE> 1
Exhibit 11.1
THERAPEUTIC ANTIBODIES INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
FOR THE CUMULATIVE
FOR THE NINE FOR THE THREE DEVELOPMENT STAGE
MONTHS ENDED MONTHS ENDED FROM AUGUST 10, 1984
SEPTEMBER 30, SEPTEMBER 30, (INCEPTION) THROUGH
1997 1997 SEPTEMBER 30, 1997
------------- ------------- --------------------
<S> <C> <C> <C>
ACTUAL
Weighted average shares outstanding 22,775,892 22,779,226 9,685,370
============= ============ =============
Net loss $(13,041,966) $(4,406,242) $(55,606,631)
============= ============ =============
Net loss per share $ (0.57) $ (0.19) $ (5.74)
============= ============ =============
PRIMARY
Weighted average shares outstanding 22,775,892 22,779,226 9,685,370
Dilutive effect of stock options and warrants 467,466 467,466 623,658
------------- ------------ -------------
23,243,358 23,246,692 10,309,028
============= ============ =============
Net loss $(13,041,966) $(4,406,242) $(55,606,631)
============= ============ =============
Net loss per share $ (0.56) $ (0.19) $ (5.39)
============= ============ =============
FULLY DILUTED
Weighted average shares outstanding 22,775,892 22,779,226 9,685,370
Dilutive effect of stock options and warrants 623,658 467,466 623,658
------------- ------------ -------------
23,399,550 23,246,692 10,309,028
============= ============ =============
Net loss $(13,041,966) $(4,406,242) $(55,606,631)
============= ============ =============
Net loss per share $ (0.56) $ (0.19) $ (5.39)
============= ============ ============
</TABLE>
The dilutive effect of stock options and warrants is determined under the
treasury stock method utilizing fair value per share of $5.46 for both primary
and fully diluted earnings per share in the nine months ended September 30,
1997 and $4.49 for both primary and fully diluted earnings per share in the
three months ended September 30, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF THERAPEUTIC ANTIBODIES, INC. FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,084,795
<SECURITIES> 6,010,838
<RECEIVABLES> 104,230
<ALLOWANCES> 0
<INVENTORY> 343,138
<CURRENT-ASSETS> 11,173,042
<PP&E> 16,115,022
<DEPRECIATION> 4,506,751
<TOTAL-ASSETS> 23,620,802
<CURRENT-LIABILITIES> 2,350,013
<BONDS> 7,627,834
0
0
<COMMON> 23,198
<OTHER-SE> 12,893,977
<TOTAL-LIABILITY-AND-EQUITY> 23,620,802
<SALES> 329,805
<TOTAL-REVENUES> 1,221,677
<CGS> 94,207
<TOTAL-COSTS> 480,660
<OTHER-EXPENSES> 13,782,983
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 804,883
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 13,041,966
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,041,966
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
</TABLE>
