<PAGE> 1
U.S. 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, 1996
/ / 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 0-26866
SONUS PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-4343413
(State or Other Jurisdiction (I.R.S. Employer Identification Number)
of Incorporation or Organization)
22026 20th Ave. S.E., Suite 102
Bothell, Washington 98021
(Address of Principal Executive Offices)
(206) 487-9500
(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 whether the issuer (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
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.
Class Outstanding at October 31, 1996
----- -------------------------------
Common Stock, $.001 par value 8,521,210
Page 1 of 13 Pages
Exhibit Index is on Page 11
<PAGE> 2
SONUS PHARMACEUTICALS, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page Number
-----------
<S> <C>
Item 1. Financial Statements
Balance Sheets as of September 30, 1996 (unaudited) and December 31, 1995............................ 3
Unaudited Statements of Operations for the three months and nine months ended
September 30, 1996 and September 30, 1995............................................................ 4
Unaudited Statements of Cash Flow for the nine months ended September 30, 1996 and
September 30, 1995................................................................................... 5
Notes to Financial Statements........................................................................ 6
Item 2. Managements' Discussion and Analysis of Financial Condition and Results of Operations................ 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.................................................. 9
Item 6. Exhibits and Reports on Form 8-K..................................................................... 9
SIGNATURES ............................................................................................................ 11
</TABLE>
2
<PAGE> 3
SONUS PHARMACEUTICALS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30,
1996 DECEMBER 31,
(UNAUDITED) 1995
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ........................................ $ 5,926,151 $ 5,656,620
Marketable securities ............................................ 16,125,319 12,564,513
Prepaid expenses and other current assets ........................ 334,313 137,153
------------ ------------
Total current assets ........................................... 22,385,783 18,358,286
Equipment, furniture, and leasehold improvements net of accumulated
depreciation of $1,102,383 and $794,364 .......................... 1,074,259 1,123,089
Other assets ........................................................ 73,338 164,755
------------ ------------
Total assets ........................................................ $ 23,533,380 $ 19,646,130
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank line of credit .............................................. $ 5,000,000 $ 5,000,000
Accounts payable and accrued expenses ............................ 2,304,163 1,454,607
Accrued clinical trials expenses ................................. 1,506,352 1,568,992
Current portion of capitalized lease obligations ................. 179,854 207,247
------------ ------------
Total current liabilities ...................................... 8,990,369 8,230,846
Capitalized lease obligations, less current portion ................. 333,326 467,989
Commitments
Stockholders' equity:
Preferred stock, $.001 par value: 5,000,000 authorized; no shares
outstanding .................................................... -- --
Common stock, $.001 par value: 20,000,000 shares authorized;
8,515,724 and 8,448,082 shares outstanding in 1996 and 1995,
respectively ................................................... 34,249,811 30,106,638
Accumulated deficit .............................................. (19,986,629) (19,066,414)
Deferred compensation ............................................ (53,497) (92,929)
------------ ------------
Total stockholders' equity ....................................... 14,209,685 10,947,295
------------ ------------
Total liabilities and stockholders' equity .......................... $ 23,533,380 $ 19,646,130
============ ============
</TABLE>
See accompanying notes.
3
<PAGE> 4
SONUS PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- -----------------------------
1996 1995 1996 1995
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Collaborative agreements ....................................... $ 6,400,000 $ 400,000 $ 11,200,000 $ 4,100,000
Operating expenses:
Research and development ....................................... 2,495,893 1,514,081 9,380,292 4,202,548
General and administrative ..................................... 923,611 524,160 2,659,356 1,651,238
----------- ------------ ------------ ------------
3,419,504 2,038,241 12,039,648 5,853,786
----------- ------------ ------------ ------------
Operating income (loss) .......................................... 2,980,496 (1,638,241) (839,648) (1,753,786)
Other income (expense):
Interest income ................................................ 204,711 5,669 506,768 59,036
Interest expense ............................................... (43,462) (273,758) (172,157) (651,763)
----------- ------------ ------------ ------------
Income (loss) before income taxes ................................ 3,141,745 (1,906,331) (505,037) (2,346,513)
Income tax expense ............................................... 340,000 40,844 420,000 491,644
----------- ------------ ------------ ------------
Net income (loss) ................................................ $ 2,801,745 $ (1,947,175) $ (925,037) $ (2,838,157)
=========== ============ ============ ============
Net income (loss) per share ...................................... $ 0.31 $ (0.95) $ (0.11) $ (1.38)
=========== ============ ============ ============
Shares used in computation of net income
(loss) per share ............................................... 9,130,992 2,050,060 8,467,100 2,061,573
=========== ============ ============ ============
Pro forma, assuming conversions into common stock:
Net loss per share ............................................. $ (0.35) $ (0.49)
============ ============
Shares used in computation of net loss
per share ...................................................... 5,412,385 5,400,748
============ ============
</TABLE>
See accompanying notes.
4
<PAGE> 5
SONUS PHARMACEUTICALS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------------
1996 1995
------------ -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss ........ ........................................................... $ (925,037) $(2,838,157)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization ............................................ 308,019 256,909
Amortization of premium (discount) on marketable securities .............. 32,541 14,154
Amortization of deferred compensation .................................... 39,432 --
Loss on asset retirements ................................................ -- 66,403
Deferred taxes ........................................................... -- 200,000
Changes in operating assets and liabilities:
Prepaid expenses and other assets ...................................... (105,743) (329,184)
Accounts payable and accrued expenses .................................. 852,918 1,359,164
Change in accrued clinical trials expenses ............................. (62,639) 326,304
Accrued relocation expenses ............................................ (3,361) (338,680)
Deferred revenue ....................................................... -- (400,000)
------------ -----------
Net cash provided by (used in) operating activities ......................... 136,130 (1,683,087)
INVESTING ACTIVITIES
Purchases of equipment, furniture, and leasehold improvements ............... (259,190) (271,453)
Purchases of marketable securities .......................................... (56,969,288) (7,968,976)
Proceeds from sale of marketable securities ................................. 50,484,820 9,022,657
Proceeds from maturities of marketable securities ........................... 2,895,942 493,087
------------ -----------
Net cash provided by investing activities ................................... (3,847,716) 1,275,315
FINANCING ACTIVITIES
Proceeds from line of credit borrowings ..................................... 16,400,000 3,850,000
Repayment of line of credit borrowings ...................................... 16,400,000 --
Repayment of notes payable to stockholders .................................. -- (2,927,005)
Proceeds from capitalized lease obligations ................................. -- 117,171
Repayment of capitalized lease obligations .................................. (162,057) (212,813)
Proceeds from issuance (repurchase) of common stock and warrants ............ 4,143,173 (25,414)
------------ -----------
Net cash provided by financing activities ................................... 3,981,116 801,939
Increase in cash and cash equivalents for the period ........................ 269,530 394,167
Cash and cash equivalents at beginning of period ............................ 5,656,621 34,719
------------ -----------
Cash and cash equivalents at end of period .................................. $ 5,926,151 $ 428,886
============ ===========
Supplemental cash flow information:
Interest paid ............................................................... $ 30,962 $ 294,381
============ ===========
Income taxes paid ........................................................... $ 420,000 $ 291,644
============ ===========
</TABLE>
See accompanying notes
5
<PAGE> 6
SONUS PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 (UNAUDITED)
(1) BASIS OF PRESENTATION
The unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q. Accordingly, they do not include all of
the information and footnotes required to be presented for complete financial
statements. The accompanying financial statements reflect all adjustments
(consisting only of normal recurring accruals) which are, in the opinion of
management, necessary for a fair presentation of the results for the interim
periods presented.
The financial statements and related disclosures have been prepared
with the assumption that users of the interim financial information have read or
have access to the audited financial statements for the preceding fiscal year.
Accordingly, these financial statements should be read in conjunction with the
audited financial statements and the related notes thereto included in the 1995
Annual Report and incorporated by reference in Form 10-K for the year ended
December 31, 1995.
(2) COLLABORATIVE AGREEMENTS
In May 1996, the Company formed a strategic alliance with Abbott
Laboratories for the marketing and sale of EchoGen (R) Emulsion ("EchoGen") in
the United States. SONUS has primary responsibility for clinical development,
regulatory affairs, and medical and technical marketing support of EchoGen,
and Abbott has primary responsibility for United States marketing and sales.
SONUS has retained certain co-promotion rights to EchoGen in the United
States. Under the agreement, Abbott has paid the Company $7.0 million as of
September 30, 1996 and has agreed to pay an additional $24.0 million
consisting of $6.0 million in the form of quarterly payments over the next 6
quarters and $18.0 million in the form of milestone payments conditioned on
the achievement of certain regulatory and commercialization milestones. After
the United States Food and Drug Administration ("FDA") has approved the
marketing of EchoGen, for which there can be no assurance, SONUS will receive
47 percent of net EchoGen revenues in the United States -- a portion of which
SONUS must use to fund its responsibilities under the agreement. The
agreement spans the life of the patents relating to EchoGen. Abbott can
acquire the rights to additional indications for EchoGen by making additional
clinical support payments. In addition, Abbott purchased for $4.0 million,
five year warrants to acquire 500,000 shares of the Company's common stock at
an exercise price of $16.00 per share.
(3) SUBSEQUENT EVENTS
In October 1996, the Company expanded its strategic alliance with
Abbott Laboratories by signing a second agreement for EchoGen that extends
Abbott's licensed territory to include the following: Europe, Latin America,
Canada, Middle East, Africa and certain Asia/Pacific Rim countries. Under the
agreement, Abbott has agreed to pay the Company $34.6 million in payments
conditioned upon the achievement of certain regulatory and commercialization
milestones, of which $12.6 million are offsettable against future royalty
payments. After applicable regulatory agencies have approved the marketing of
EchoGen, for which there can be no assurance, SONUS will receive a royalty
that ranges from 36% to 42% of EchoGen net sales based on aggregate annual
sales in the territory. The agreement spans the life of the patents relating
to EchoGen in the countries of the territory.
6
<PAGE> 7
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Since its inception in October 1991, the Company has engaged primarily
in the research and development of proprietary contrast agents for use in
ultrasound imaging. The Company has financed its research and development and
clinical trials through payments received under agreements with its
collaborative partners, private equity and debt financings, and an initial
public offering completed in 1995. As of September 30, 1996, the Company had
accumulated net losses of approximately $20.0 million since its inception.
Clinical trials of the Company's principal product under development, EchoGen(R)
Emulsion, began in January 1994. The Company has completed various Phase 1,
Phase 2 and Phase 3 clinical trials of EchoGen since 1994 and in August 1996
submitted a new drug application ("NDA") with the FDA. The Company expects to
file for marketing authorization with the European Medicines Evaluation
Agency for EchoGen by year end.
The Company will not be able to commence U.S. sales of EchoGen unless
and until it receives FDA approval. To date, all of the Company's revenues have
been derived from option and license payments that have been received under
agreements with Abbott Laboratories, Inc. ("Abbott"), Daiichi Pharmaceutical Co.
Ltd. ("Daiichi"), and Guerbet S.A. for the collaborative development of EchoGen
within the United States and in certain foreign territories. In May 1996, the
Company formed a strategic alliance with Abbott Laboratories for the marketing
and sale of EchoGen in the United States. Under the agreement, Abbott has agreed
to pay the Company $31.0 million in upfront, clinical support and milestone
payments, of which $7.0 million has been paid as of September 30, 1996. In
addition, Abbott has purchased, for $4.0 million, warrants to acquire 500,000
shares of common stock of the Company, equal to approximately six percent (6%)
of the Company's outstanding common stock. The warrants are exercisable over
five years at $16.00 per share. In April 1993, the Company granted Daiichi an
option to acquire exclusive marketing and distribution rights to EchoGen in
certain countries in the Pacific Rim. In March 1995, Daiichi exercised the
option and entered into a license agreement with the Company. Under the
option and license agreements, Daiichi has paid the Company option and
license fees totaling $12.0 million and has agreed to pay an additional $20.0
million, consisting of $0.8 million in the form of quarterly payments over
the next two quarters and $19.2 million in the form of milestone payments
conditioned on the achievement of certain clinical development, regulatory
and commercialization milestones in Japan. In addition to the option and
license agreements, Daiichi entered into a convertible subordinated debenture
purchase agreement with the Company in November 1993 under which the Company
issued a convertible subordinated debenture to Daiichi in the principal amount
of $3.0 million, which was converted into 462,857 shares of common stock
concurrently with the closing of the Company's initial public offering. In
October 1994, the Company granted Guerbet an option, which expired September
30, 1996, to acquire exclusive marketing and distribution rights to EchoGen
in Europe. In exchange for such option, the Company received payments
totaling approximately $4.7 million, of which $3.6 million, plus accrued
interest ($245,875 at the time of conversion),was converted into 549,410
shares of common stock of the Company concurrently with the closing of the
Company's initial public offering. The remaining $1.1 million was recognized
as revenue in 1994.
The Company's results of operations have varied and will continue to
vary significantly from quarter to quarter and depend on, among other factors,
the timing of fees and milestone payments made by collaborative partners, the
entering into product license agreements by the Company and the timing and costs
of the clinical trials conducted by the Company. The Company's current
collaborative partners can terminate their agreements on short notice, and there
can be no assurance that the Company will receive any additional funding or
milestone payments.
RESULTS OF OPERATIONS
Revenue from collaborative agreements increased to $6.4 million for the
three months ended September 30, 1996 as compared to $400,000 for the three
months ended September 30, 1995. The revenue in the current period represents
regular quarterly payments from Abbott and Daiichi as well as milestone payments
related to the NDA submission with the U.S. FDA and certain Phase 2 clinical
trial results. The prior period revenue represented a regular quarterly payment
under the Daiichi agreement. Revenue from collaborative agreements increased to
$11.2 million for the nine months ended September 30, 1996 as compared to $4.1
million for the nine months ended September 30, 1995.
Research and development expenses increased to $2.5 million for the
three months ended September 30, 1996 from $1.5 million for the three months
ended September 30, 1995 and to $9.4 million for the nine months ended
7
<PAGE> 8
September 30, 1996 from $4.2 million for the nine months ended September 30,
1995. The increases in the current year periods were primarily due to expenses
relating to two Phase 3 clinical trials of EchoGen as well as costs incurred in
the preparation and subsequent submission of the NDA.
General and administrative expenses increased to $924,000 for the three
months ended September 30, 1996 from $524,000 for the three months ended
September 30, 1995 and to $2.7 million for the nine months ended September 30,
1996 as compared to $1.7 million for the nine months ended September 30, 1995.
The increases in the current year periods reflected increased costs of filing
and prosecuting patent and trademark applications, the implementation of market
research programs, legal fees related to corporate alliances, as well as
investor related and other expenses resulting from being a public company.
Interest income increased to $205,000 and $507,000 for the three and
nine months ended September 30, 1996 as compared to $6,000 and $59,000 for the
three and nine months ended September 30, 1995, respectively, as a result of
larger average invested cash balances resulting from the initial public offering
and the Abbott strategic alliance. Interest expense decreased by $230,000 and
$480,000 for the three and nine months periods ended September 30, 1996,
respectively, primarily due to the repayment of notes to stockholders and the
conversion of debts into common stock upon completion of the initial public
offering.
Income taxes of $340,000 and $41,000 for the three months ended
September 30, 1996 and 1995, respectively, and income taxes of $420,000 and
$492,000 for the nine months ended September 30, 1996 and 1995, respectively,
were primarily attributable to withholding taxes paid to Japan relating to the
collaborative payments received from Daiichi.
LIQUIDITY AND CAPITAL RESOURCES
Through September 30, 1996, the Company has financed its operations
with payments from Abbott, Daiichi and Guerbet of $26.7 million, proceeds from
the issuance of convertible, redeemable preferred stock of $4.0 million (which
converted into common stock at the closing of the Company's initial public
offering), proceeds from a line of credit of $5.0 million, net proceeds of
$19.0 million from the initial public offering and proceeds of $4.0 million
for the issuance of Common Stock warrants. At September 30, 1996, the Company
had cash, cash equivalents and marketable securities of $22.1 million,
compared to $18.2 million at December 31, 1995. Cash provided by operations
for the nine months ended September 30, 1996 was $136,000 as compared to cash
used in operations of $1.7 million for the nine months ended September 30, 1995.
In August 1996, the Company renewed a loan agreement with Silicon
Valley Bank which provides for a $5.0 million revolving line of credit facility,
which is secured by the tangible assets of the Company. At September 30, 1996,
there was $5.0 million outstanding under the line of credit. The line of credit
expires in August 1997 and bears interest at the prime rate plus 1.0% per annum
and the Company is required to maintain certain minimum balances of cash, cash
equivalents and marketable securities.
The Company's cash needs may increase in future periods due to its
pending and planned research and clinical development programs. The Company
estimates that existing cash, cash equivalents and marketable securities will be
sufficient to meet the Company's capital requirements for at least the next 12
months. The Company's future capital requirements will, however, depend on many
factors, including the progress of the Company's research and development
programs, clinical trials, the time and costs required to gain regulatory
approvals, the ability of the Company to obtain and retain continued funding
from third parties under collaborative agreements, the costs of filing,
prosecuting and enforcing patents, patent applications, patent claims and
trademarks, the costs of marketing and distribution, the status of competing
products and the market acceptance of the Company's products, if and when
approved. The Company may have to raise substantial additional funds to complete
development of any product or to commercialize any products if and when approved
by the FDA. There can be no assurance that additional financing will be
available on acceptable terms, if at all.
FORWARD-LOOKING STATEMENTS
This 10-Q report contains certain forward-looking statements that
involve risk and uncertainties. As discussed in the Company's 1995 annual report
on Form 10-K, the Company's future operating results are uncertain and may be
impacted by the following factors, among others: FDA and foreign regulatory
requirements, lengthy regulatory approval process, uncertainty of clinical
trials for additional clinical indications of EchoGen, future capital
requirements and
8
<PAGE> 9
uncertainty of additional funding, dependence on third parties for funding,
clinical development and distribution and uncertainty of market acceptance.
PART II. OTHER INFORMATION
ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Number Description
------ -----------
11.1 Computation of net income (loss) per share.
11.2 Computation of pro forma net income (loss) per share.
(B) REPORTS ON FORM 8-K
The Company filed the following report on Form 8-K during the
quarter ended June 30, 1996:
1. The Registrant filed a report on Form 8-K on
August 23, 1996 in connection with the adoption of a
Shareholder Rights Plan dated July 29, 1996.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SONUS PHARMACEUTICALS, INC.
Date: November 14, 1996 By: /s/ Gregory Sessler
--------------------
Gregory Sessler
Chief Financial Officer and
Assistant Secretary (Principal
Financial Officer and Duly
Authorized Officer)
10
<PAGE> 11
EXHIBIT INDEX
Exhibit Page
Number Description Number
- ------ ----------- ------
11.1 Computation of net income (loss) per share.....................12
11.2 Computation of pro forma net income (loss) per share...........13
11
<PAGE> 1
EXHIBIT 11.1
SONUS PHARMACEUTICALS, INC.
COMPUTATION OF NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- -------------------------------
1996 1995 1996 1995
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income (loss) .............................. $2,801,745 $(1,947,175) $ (925,037) $(2,838,157)
========== =========== =========== ===========
Weighted average shares outstanding ............ 8,490,201 1,952,864 8,467,100 1,963,843
Net effect of stock option exercised and stock
options and warrants granted during the 12
months prior to the Company's filing of its
initial public offering, calculated using the
treasury stock method at the offering price
of $7 per share, and treated as outstanding
for all periods prior to the closing of the
initial public offering ...................... -- 97,196 -- 97,730
Net effect of common stock equivalents
calculated using the treasury stock method ... 640,790 -- -- --
---------- ----------- ----------- -----------
Shares used in computation of net income
(loss) per share ............................. 9,130,992 2,050,060 8,467,100 2,061,573
========== =========== =========== ===========
Net income (loss) per share .................... $ 0.31 $ (0.95) $ (0.11) $ (1.38)
========== =========== =========== ===========
</TABLE>
12
<PAGE> 1
EXHIBIT 11.2
SONUS PHARMACEUTICALS, INC.
COMPUTATION OF PRO FORMA NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, 1995 September 30, 1995
------------------ ------------------
<S> <C> <C>
Net loss ....................................................................... $(1,947,175) $(2,838,157)
Add interest on deferred revenue ............................................... 76,412 204,913
----------- -----------
$(1,870,763) $(2,633,244)
=========== ===========
Weighted average shares outstanding ............................................ 1,952,864 1,963,843
Weighted average common shares giving effect to the
conversion of preferred stock into common stock for
all periods subsequent to issuance ........................................... 2,352,219 2,352,219
Net effect of stock options exercised and stock options
and warrants granted during the 12 months prior to the Company's filing of its
initial public offering calculated using the treasury stock method at the
offering price of $7 per share, and treated as outstanding for all periods
prior to the closing of the initial public offering .......................... 97,196 97,730
Weighted average common shares giving effect to the
conversion of the convertible subordinated debenture
into common stock using the initial public offering
price of $7 per share ........................................................ 462,857 462,857
Weighted average common shares giving effect to the
conversion of $3.6 million of deferred revenue from
the time of receipt, plus accrued interest at the initial
public offering price of $7 per share ........................................ 547,249 524,099
----------- -----------
Shares used in computation of pro forma net loss per
share ........................................................................ 5,412,385 5,400,748
=========== ===========
Pro forma net loss per share ................................................... $ (0.35) $ (0.49)
=========== ===========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000949858
<NAME> Sonus Pharmaceuticals
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 5,926,151
<SECURITIES> 16,125,319
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,385,783
<PP&E> 2,176,642
<DEPRECIATION> 1,102,383
<TOTAL-ASSETS> 23,533,380
<CURRENT-LIABILITIES> 8,990,369
<BONDS> 0
0
0
<COMMON> 34,249,811
<OTHER-SE> (20,040,126)
<TOTAL-LIABILITY-AND-EQUITY> 23,533,380
<SALES> 0
<TOTAL-REVENUES> 11,200,000
<CGS> 0
<TOTAL-COSTS> 12,039,648
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 172,157
<INCOME-PRETAX> (505,037)
<INCOME-TAX> 420,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (925,037)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
