-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I+z1WRBGxWCQ/HegO+SCWhmC+1vSDoOx8JDmf824xAj79rwZfcLUFdQJKTY4a0X2 WOWfTP/+2/VgwQHWbPXZhw== 0000912057-99-006067.txt : 19991117 0000912057-99-006067.hdr.sgml : 19991117 ACCESSION NUMBER: 0000912057-99-006067 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AURORA BIOSCIENCES CORP CENTRAL INDEX KEY: 0001010919 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 330669859 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22669 FILM NUMBER: 99754988 BUSINESS ADDRESS: STREET 1: 11010 TORREYANA ROAD CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 619-4046635 MAIL ADDRESS: STREET 1: 11010 TORREYANA RD CITY: SAN DIEGO STATE: CA ZIP: 92121 10-Q 1 10-Q UNITED STATES 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 QUARTERLY PERIOD ENDED September 30, 1999 ------------------ or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-22669 ---------- AURORA BIOSCIENCES CORPORATION - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 33-0669859 - --------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 11010 Torreyana Road, San Diego, CA 92121 - ------------------------------------- ------------------------------------ (Address of principal executive offices) (Zip code) (858) 404-6600 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------- (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 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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at Class October 29, 1999 ----- ---------------- Common Stock, $.001 par value 17,294,232 AURORA BIOSCIENCES CORPORATION FORM 10-Q INDEX PAGE NO. PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Balance Sheets - September 30, 1999 (Unaudited) and December 31, 1998............................3 Statements of Operations (Unaudited) - Nine months ended September 30, 1999 and 1998.............4 Statements of Cash Flows (Unaudited) - Nine months ended September 30, 1999 and 1998.............5 Notes to Financial Statements (Unaudited)........................................................6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................................................7 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K.......................................................11 SIGNATURE.............................................................................................12
2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. AURORA BIOSCIENCES CORPORATION BALANCE SHEETS
September 30, December 31, 1999 1998 ---------------------- ----------------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 10,524,279 $ 9,477,916 Investment securities, available-for-sale 17,704,321 18,547,991 Accounts receivable 6,834,409 3,750,291 Notes receivable from officers and employees -- 210,000 Prepaid expenses 1,119,525 475,927 Other current assets 2,642,689 1,104,249 ---------------------- ----------------------- Total current assets 38,825,223 33,566,374 Equipment, furniture and leaseholds, net 11,440,114 10,863,357 Notes receivable from officers and employees 185,000 210,000 Restricted cash 740,467 1,096,034 Other assets 5,355,108 5,218,951 ---------------------- ----------------------- Total assets $ 56,545,912 $ 50,954,716 ---------------------- ----------------------- ---------------------- ----------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 6,846,229 $ 3,216,696 Accrued compensation 751,746 550,770 Other current liabilities 621,628 391,694 Customer advances 875,000 -- Unearned revenue 7,934,264 2,440,833 Capital lease and loan obligations, current portion 2,511,944 2,024,786 ---------------------- ----------------------- Total current liabilities 19,540,811 8,624,779 Capital lease and loan obligations, less current portion 4,690,989 4,787,667 Stockholders' equity: Preferred stock, $.001 par value; 7,500,000 shares authorized and no shares issued and outstanding -- -- Common stock, $.001 par value, 50,000,000 shares authorized, 17,167,808 and 17,024,919 shares issued and outstanding at September 30, 1999 and December 31, 1998, respectively 17,168 17,025 Additional paid-in capital 61,567,421 61,496,842 Unrealized loss from investments (2,940) -- Deferred compensation (1,011,068) (2,240,606) Accumulated deficit (28,256,469) (21,730,991) ---------------------- ----------------------- Total stockholders' equity 32,314,112 37,542,270 ---------------------- ----------------------- Total liabilities and stockholders' equity $ 56,545,912 $ 50,954,716 ---------------------- ----------------------- ---------------------- -----------------------
See accompanying notes. 3 AURORA BIOSCIENCES CORPORATION STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, 1999 1998 1999 1998 ------------------ ------------------ ----------------- ----------------- Revenue $ 10,880,151 $ 9,145,837 $ 30,440,929 $ 18,192,197 Operating expenses: Cost of revenue 6,560,914 7,108,925 19,728,053 16,086,172 Research and development 3,234,796 4,053,497 9,299,210 13,005,576 Selling, general and administrative 2,978,022 1,871,001 8,543,400 4,307,355 ------------------ ------------------ ----------------- ----------------- Total operating expenses 12,773,732 13,033,423 37,570,663 33,399,103 ------------------ ------------------ ----------------- ----------------- Loss from operations (1,893,581) (3,887,586) (7,129,734) (15,206,906) Interest income 401,287 554,552 1,123,805 1,970,581 Interest expense (175,940) (168,018) (519,549) (481,443) ------------------ ------------------ ----------------- ----------------- Net loss $ (1,668,234) $ (3,501,052) $ (6,525,478) $ (13,717,768) ------------------ ------------------ ----------------- ----------------- ------------------ ------------------ ----------------- ----------------- Basic and diluted loss per share $ (0.10) $ (0.21) $ (0.39) $ (0.85) ------------------ ------------------ ----------------- ----------------- ------------------ ------------------ ----------------- ----------------- Shares used in computing basic and diluted loss per share - weighted average common shares outstanding 17,010,179 16,417,747 16,881,342 16,219,425 ------------------ ------------------ ----------------- ----------------- ------------------ ------------------ ----------------- -----------------
See accompanying notes. 4 AURORA BIOSCIENCES CORPORATION STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30, 1999 1998 -------------------- -------------------- OPERATING ACTIVITIES: Net loss $ (6,525,478) $ (13,717,768) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 2,391,760 1,669,409 Amortization of deferred compensation 660,834 613,703 Revenue earned through barter agreement (300,000) -- Changes in operating assets and liabilities: Accounts receivable (3,084,118) (1,351,452) Prepaid expenses and other current assets (2,182,038) (720,191) Other assets (1,120,061) (1,392,902) Accounts payable and accrued compensation 3,830,509 3,165,878 Other current liabilities 229,934 (227,778) Customer advances 875,000 -- Unearned revenue 5,493,431 599,332 Other noncurrent liabilities -- 1,182 -------------------- -------------------- Net cash provided by (used in) operating activities 269,773 (11,360,587) INVESTING ACTIVITIES: Purchases of short-term investments (6,922,439) (23,629,171) Sales and maturities of short-term investments 7,763,169 26,205,000 Purchases of property and equipment (269,375) (3,310,599) Notes receivable from officers and employees 235,000 30,000 Restricted cash 355,567 231,639 Other assets -- (2,467,868) -------------------- -------------------- Net cash provided by (used in) investing activities 1,161,922 (2,940,999) FINANCING ACTIVITIES: Issuance of common stock, net 639,426 816,626 Issuance of capital loan obligations 619,225 -- Principal payments on capital lease and loan obligations (1,643,983) (1,023,319) -------------------- -------------------- Net cash used in financing activities (385,332) (206,693) -------------------- -------------------- Net increase (decrease) in cash and cash equivalents 1,046,363 (14,508,279) Cash and cash equivalents at beginning of period 9,477,916 23,168,690 -------------------- -------------------- Cash and cash equivalents at end of period $ 10,524,279 $ 8,660,411 -------------------- -------------------- -------------------- -------------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 519,549 $ 481,443 -------------------- -------------------- -------------------- -------------------- SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Property and equipment acquired under capital leases and loans $ 1,415,238 $ 2,600,598 -------------------- -------------------- -------------------- -------------------- Property and equipment acquired through barter agreement $ 300,000 $ -- -------------------- -------------------- -------------------- --------------------
See accompanying notes. 5 AURORA BIOSCIENCES CORPORATION NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1999 (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying unaudited financial statements of Aurora Biosciences Corporation ("Aurora" or the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year. The balance sheet at December 31, 1998 has been derived from the audited 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. These financial statements should be read in conjunction with the audited financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission ("SEC"). 2. COMPREHENSIVE LOSS Total comprehensive loss was $1,659,371 and $3,501,052 for the three months ended September 30, 1999 and 1998, respectively, and $6,528,418 and $13,717,768 for the nine months ended September 30, 1999 and 1998, respectively. Total comprehensive loss for the three and nine months ended September 30, 1999 includes unrealized gains from investments totaling $8,863 and unrealized losses from investments totaling $2,940, respectively. 6 AURORA BIOSCIENCES CORPORATION SEPTEMBER 30, 1999 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THIS FORM 10-Q CONTAINS CERTAIN STATEMENTS OF A FORWARD-LOOKING NATURE RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF THE COMPANY. SUCH STATEMENTS ARE ONLY PREDICTIONS AND ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, WITHOUT LIMITATION, THOSE DISCUSSED IN THIS ITEM 2 AS WELL AS THOSE DISCUSSED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998 AND FORM 10-Q FOR THE QUARTERS ENDED MARCH 31, 1999 AND JUNE 30, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. OVERVIEW Aurora Biosciences Corporation ("Aurora" or the "Company") combines innovative biotechnology with its novel, high technology automation and software to provide solutions to challenges in drug discovery for the pharmaceutical and biotechnology industries. Operating activities in 1996 and 1997 focused on the development of an integrated technology platform comprised of a portfolio of proprietary fluorescent assay technologies for drug discovery and its highly automated ultra-high throughput screening system (the "UHTSS(-TM-)" Platform) applicable to Aurora's miniaturized NanoWell-TM- Assay Plate format. Through 1998 and the first nine months of 1999, while continuing development and manufacture of other UHTSS components, the Company delivered Module 1, the automated storage and retrieval system of its UHTSS Platform, to four of its syndicate customers, began development of its automated master compound storage ("AMCS-TM-") system, continued to manufacture and deliver certain subsystems to customers, performed screen development and screening services for customers, and initiated its functional genomics GenomeScreen-TM- program. The Company had an accumulated deficit of $28.3 million as of September 30, 1999. The Company's objective is to focus on increasing revenue, while controlling the growth of expenses, to position the Company for profitability in 2000. The Company's ability to achieve profitability will depend in part on its ability to successfully complete development, manufacture and delivery of the UHTSS Platform and other systems that meet contractual specifications, continue to provide screen development and screening services to existing and future pharmaceutical and biotechnology customers and achieve the required further growth of sales of its systems, services and technologies. The Company currently generates revenue by developing screens for discovering new medicines, providing screening services, providing functional genomics services, developing and providing the UHTSS Platform and other systems and instruments, as well as licensing its proprietary assay technologies. In the future, the Company may realize royalty and milestone payments from the development and commercialization of drug candidates identified by its customers using Aurora's technologies. The Company believes that its ability to achieve profitability is not dependent on receipt of any such milestone payments or royalties, which are not expected for several years, if at all. The Company may encounter significant fluctuations in its quarterly financial performance depending on factors such as the timing of the delivery of equipment and acceptance by Aurora's collaborators, the completion of contracted service commitments to Aurora's collaborators, the timing of expenditures to develop its products and the timing of revenue recognized from future contracts. Accordingly, the Company's results of operations for any historical period may not be predictive of the results of operations for any future period. Aurora will also continue to evaluate various strategic opportunities that expand or enhance its range of services and products. These strategic opportunities could take the form of joint ventures, acquisitions, business combinations, collaborations or licensing agreements. Transactions 7 of this nature have the potential for enhancing longer-term equity value, but could also result in earnings fluctuations. RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 Total revenue increased 19% from the three months ended September 30, 1998 to the three months ended September 30, 1999 (the "three-month period") and increased 67% from the nine months ended September 30, 1998 to the nine months ended September 30, 1999 (the "nine-month period"). The increases in revenue resulted primarily from new agreements entered into since September 30, 1998. These new agreements include a services, systems and technology access agreement with Pfizer Inc. ("Pfizer"), licensing agreements with Clontech Laboratories, Inc., Genentech, Inc., Exelixis Pharmaceuticals, Inc. and AntiCancer, Inc., and screen development and/or screening services agreements with Pharmacia & Upjohn, Inc., Cytovia, Inc., F.Hoffmann-LaRoche Ltd., Becton Dickinson and Company and the Cystic Fibrosis Foundation (collectively, the "New Agreements"). Also contributing to the increases in revenue were acceptance by a customer of six of the eight subsystems of Module 2 of the UHTSS Platform, acceptance by Merck & Co. ("Merck") of Module 1 of the UHTSS Platform and screen development milestone payments from Merck and Warner-Lambert in the first nine months of 1999. Total operating expenses decreased slightly for the three-month period and increased 12% for the nine-month period. The increase in operating expenses for the nine-month period resulted primarily from the growth of the Company, reflected by the increase from 144 employees at September 30, 1998 to 180 at September 30, 1999. Cost of revenue decreased 8% for the three-month period and increased 23% for the nine-month period, related to the development of the UHTSS Platform, the AMCS system and screening subsystems for the Company's customers, as well as screen development and screening services performed under the New Agreements. Research and development expenses decreased 20% and 29% for the three-month and nine-month periods, respectively, with a shift of resources and expenditures to revenue-generating projects as reflected by the New Agreements. Selling, general and administrative expenses increased 59% and 98% for the three-month and nine-month periods, respectively, due to the growth of the sales, marketing and business development functions and headcount increases in other administrative areas to support the overall growth of the Company. Such increases included the appointment of Stuart J.M. Collinson, Ph.D., as president in May 1999. In November 1999, Dr. Collinson was named Chief Executive Officer, replacing Timothy J. Rink, M.D., Sc.D., who remains Chairman of the Board. The Company anticipates that selling, general and administrative expenses may continue to increase over prior-year periods as it continues to expand its sales and marketing program. Net interest income decreased due to decreased cash and investment balances and an increase in interest expense incurred on capital lease and loan obligations. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1999, Aurora held cash, cash equivalents and investment securities available-for-sale of $28.2 million and working capital of $19.3 million. The Company has funded its operations since inception primarily through the issuance of equity securities with aggregate net proceeds of $57.7 million, receipts from corporate collaborations and strategic technology alliances of $75.7 million, capital equipment lease and loan financing of $11.1 million and interest income of $5.9 million. The Company has received an advance payment of $0.9 million from a customer. The payment relates to potential future sales agreements, however no formal agreement with the customer has been signed. In 8 September 1999, the Company delivered a product it believes will be covered by the future sales agreements. The related revenue will be recorded upon completion of a formal contract with the customer, which the Company expects will occur in the fourth quarter of 1999. The Company has entered into an agreement with a customer whereby Aurora will receive a series of milestone payments upon the achievement of certain specified performance criteria. The milestone achieved in the third quarter of 1999 entitles the Company to a $300,000 credit against the purchase of equipment from the customer. The Company expects to complete the purchase in late 1999. The Company's facility lease agreements are secured by letters of credit, which are secured by certificates of deposit recorded as restricted cash. At September 30, 1999, such restricted cash totaled $0.7 million. The letters of credit will be reduced over the next two years on a predetermined schedule. The Company has entered into certain technology and license agreements with commitments totaling approximately $6.7 million payable over the next five years. The Company's strategy for the development of the UHTSS Platform includes the establishment of a syndicate of collaborators to provide the Company with funding for development, technology and personnel resources and payments for system validation at collaborator sites. The Company's UHTSS Platform co-development syndicate currently includes Bristol-Myers Squibb Pharmaceutical Research Institute ("BMS"), Eli Lilly and Company, Warner-Lambert, Merck and Pfizer. The Company has also entered into agreements with Warner-Lambert and Pfizer to develop an AMCS system for long-term company-wide sample inventory storage. In addition, the Company has entered into collaborations with Cytovia, Inc., Pharmacia & Upjohn, Inc. and F.Hoffmann-LaRoche Ltd. to provide screen development and/or screening services and with Warner-Lambert and Becton Dickinson and Company for functional genomics programs. Other collaborations include a combinatorial chemistry agreement with SIDDCO, Inc. to synthesize large libraries of chemical compounds for Aurora. The Company's ability to achieve profitability will be dependent upon its ability to deliver and obtain acceptance of equipment by collaborators, perform contracted screening services, sell or license new products and services, and to increase market share of existing discovery services and technologies by agreements with new collaborators and expansion of agreements with existing collaborators. Although the Company is actively seeking to enter into additional collaborations, there can be no assurance that the Company will be able to negotiate additional collaborative agreements on acceptable terms, if at all, that the Company's revenue goals will be met, or that the Company will be able to achieve or sustain profitability. Some of the Company's current collaborative agreements provide that they may be terminated by the collaborator without cause upon short notice, which would result in loss of anticipated revenue. Although certain of the Company's collaborators would be required to pay certain penalties in the event they terminate their agreements without cause, there can be no assurance that any one or more of the Company's collaborators will not elect to terminate their agreements with the Company. In addition, collaborators may terminate their agreements for cause if the Company cannot deliver the technology in accordance with such agreements. There can be no assurance that the Company will derive any additional revenue from such agreements or that such current or future collaborative agreements will be successful and provide the Company with expected benefits. Termination of the Company's existing or future collaborative agreements, or the failure to enter into a sufficient number of additional collaborative agreements on favorable terms, or to generate sufficient revenues from the Company's services and technologies, could have a material adverse effect on the Company's business, financial condition and results of operations. In the third quarter of 1999, the Company and BMS amended their syndicate agreement to extend the screen development portion of the collaboration for an additional two years and provide a team of Aurora scientists to develop assays for use by BMS in its screen development operations. As a result of the amendment, the Company will receive contracted payments from BMS over two years. The Company has been notified by one of its ultra-high throughput screening system syndicate members that such syndicate member desires to amend its syndicate agreement with the Company to discontinue further work on the UHTSS Platform to be provided by the Company. The Company is in the process of discussing potential amendments to the agreement with such syndicate member. Based on the Company's current understanding of such syndicate member's intentions, the Company believes such amendment, should it be entered into, will provide for continuation of the screen development and license fees and is not expected to have a material adverse impact on the Company's business, financial condition or results of operations. 9 The Company may be required to raise additional capital over the next several years in order to conduct or expand its operations or acquire new technology. Such additional capital may be raised through additional public or private equity financings, borrowings and other available sources. No assurance can be given that the Company's business or operations will not change in a manner that would consume available resources more rapidly than anticipated, or that substantial additional funding will not be required before the Company can achieve or sustain profitable operations. There can be no assurance that the Company will continue to generate sales from and receive payments under its existing collaborative agreements or that the Company's existing or potential revenue will be adequate to fund the Company's operations. If additional funding becomes necessary, there can be no assurance that additional funds will be available on favorable terms, if at all. If adequate funds are not available, the Company may be required to curtail operations significantly or to obtain funds by entering into arrangements with others that may have a material adverse effect on the Company's business, financial condition and results of operations. IMPACT OF YEAR 2000 The Company recognizes the need to ensure its operations will not be adversely impacted by the inability of computer systems to process data having dates on or after January 1, 2000 (the "Year 2000" issue). The Company has modified or replaced portions of its software and certain hardware so that its systems should function properly, based on third party representations, with respect to dates in the year 2000 and thereafter. Required modifications and conversions of existing software and certain hardware are essentially complete. The Company believes that the Year 2000 issue will not pose significant operational problems for its systems. The Company has gathered information about its significant suppliers, financial institutions and others with whom the Company does business to determine the extent to which the Company's systems are vulnerable to those third parties' failure to remediate their own Year 2000 issues. The Company continues to monitor the Year 2000 compliance status of such third parties, and no significant issues with third parties' systems have been identified to date. While the Company has no material systems that interface directly with those of third parties, there can be no assurance that any failure within systems of third parties will not have a material adverse impact on the operations of the Company. The Company has not incurred significant costs for modifications and conversions of existing software and certain hardware and has not utilized significant external resources to assess, test, modify or replace existing software and hardware for Year 2000 issues. Accordingly, the total Year 2000 issue cost to the Company is expected to be less than $50,000, substantially all of which has already been paid and expensed. The Company continues to evaluate the status of the Year 2000 issue and has developed contingency plans which primarily involve the use of back-up systems and procedures which do not rely on computers. 10 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 10.49* Collaborative Research and License Agreement (Second Amendment) effective as of July 29, 1999 between the Registrant and Bristol-Myers Squibb Pharmaceuticals Research Institute. 10.50 Agreement dated November 2, 1999 between the Registrant and Timothy J. Rink, M.D., Sc.D. 27.1 Financial Data Schedule related to the Financial Statements for the period ended September 30, 1999. - ------------- * The Company has requested confidential treatment with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended September 30, 1999. 11 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed in its behalf by the undersigned thereunto duly authorized. Aurora Biosciences Corporation Date: November 15, 1999 By: /s/ John Pashkowsky --------------------- John Pashkowsky Senior Director, Finance and Treasurer (on behalf of the Registrant and as Registrant's Principal Financial and Accounting Officer) 12 EX-10.49 2 EXHIBIT 10.49 Confidential EXHIBIT 10.49 SECOND AMENDMENT TO COLLABORATIVE RESEARCH AND LICENSE AGREEMENT This Second Amendment ("Second Amendment") is entered into by and between Bristol-Myers Squibb Pharmaceuticals Research Institute, a division of E.R. Squibb & Sons, Inc., a Delaware corporation, having offices at Route 206 at Province Line Road, P.O. Box 4000, Princeton, New Jersey 08543-4000 ("BMS"), and between Aurora Biosciences Corporation, a Delaware corporation having offices at 11010 Torreyana Road, San Diego, California 92121 ("Aurora"). WHEREAS, effective November 26, 1996, BMS and Aurora entered into a Collaborative Research and License Agreement and a First Amendment entered into on June 18, 1997 (which collectively are referred to as the "Research and License Agreement"); WHEREAS, BMS and Aurora are obligated to develop in collaboration with one another certain ESP screens under Section 3.1 of the Research and License Agreement and desire to amend such obligations and expand the development of Nonexclusive Screens under Section 3.1 of the Research and License Agreement; and WHEREAS, BMS and Aurora are, the licensee and licensor, respectively, of certain Reporters under Section 5.1 of the Research and License Agreement and desire to clarify and amend certain provisions relating to licensing certain Patent Rights and technology for the benefit of both parties under the Research and License Agreement. NOW THEREFORE, in consideration of the above premises and of the faithful performance of the covenants herein contained, the parties hereto agree as follows: 1. All capitalized terms used in this Second Amendment shall have the meaning ascribed to such term in the Research and License Agreement, unless otherwise specifically defined herein. The definition of "PLP" shall be amended to read as follows: "PLP" means a ***. Page 1 *** Confidential Treatment Requested Newly defined terms, include: "Second Amendment" as defined in the first paragraph of page one herein. "Second Amendment Effective Date" is defined as the date of the last party to sign this Second Amendment below. "Research and License Agreement" as defined in the recitals herein. ""Collaborative NSP Screen", "Successful Collaborative NSP Screen" and "NSP Activities" shall have the meanings set forth in Section 3.2 of Exhibit B hereof." "Burdened Reporter System Technology", "Burdened Reporter System", "Burdened Reporter" and "Burdened Patent Rights" as defined in Section 3.7. "Stanford Patents" is defined as ***. 2. Section 3.1.1 of the Research and License Agreement shall be amended to replace the first paragraph thereof with the new paragraph attached as EXHIBIT A to this Second Amendment. In the last subparagraph (ii) of Section 3.1.1 of the Research and License Agreement, ***. Exhibit 3.1.1 of the Research and License Agreement shall be amended throughout to replace "ESP" with "ESP or NSP." 3. Section 3.2 of the Research and License Agreement shall be amended and replaced in its entirety with a new Section 3.2 attached as EXHIBIT B to this Second Amendment. Page 2 *** Confidential Treatment Requested 4. Section 3.6 of the Research and License Agreement is amended in its entirety and replaced with new Sections 3.6 and 3.7 attached as EXHIBIT C to this Second Amendment. 5. Aurora, to the best of its knowledge, hereby represents and warrants to BMS that: a. As of the Second Amendment Effective Date, the ***. b. As of the Second Amendment Effective Date, ***. 6. Section 5.1.2.4 is added to the Research and License Agreement, as follows: "The right to use a Burdened Reporter System Technology, Burdened Reporter System, Burdened Reporter or Burdened Patent Rights (as such terms are defined in Section 3.7), where BMS and Aurora ***set forth in Section 3.7 hereof." 7. Section 2.1.7.4 of the Research and License Agreement is amended to add after the words "Nonexclusive Screens" the following: "(other than Exclusive and Collaborative NSP Screens that were developed by Aurora for BMS under this Agreement***, subject to such milestone and royalty obligations as BMS may have under Section 3.2 hereof)" and delete ***. 8. Section 2.1.7.4.1 of the Research and License Agreement is amended by replacing the words "milestone payments" with the words "milestone and royalty payments". 9. Section 2.1.8.4 of the Research and License Agreement is amended to add after the words "Nonexclusive Screens" the following: "(other than Nonexclusive Screens that were developed by Aurora for BMS under this Agreement, ***, subject to such milestone and royalty obligations as BMS may have under Section 3.2 hereof)". 10. Section 2.1.8.4.1 of the Research and License Agreement is amended by replacing the words "milestone payments" with the words "milestone and royalty payments". 11. Sections 5.2.2, 10.1, 10.2 and 12.5.1 of the Research and License Agreement are each amended by replacing the references to "3.2.5" therein with "3.2.6". Page 3 *** Confidential Treatment Requested 12. Section 12.5.1 of the Research and License Agreement is amended by adding ", 3.6, 3.7," between "3.4" and "5.2". 13. Aurora provides ***attached as *** to the Second Amendment. 14. Exhibit 1.2 of the Research and License Agreement shall be amended and replaced in its entirety as of the Second Amendment Effective Date with a new Exhibit attached as EXHIBIT E to this Second Amendment. *** Patent Rights covering compositions or uses of the Reporters and Reporters Systems listed on Exhibit E *** and that are licensed, sublicensed or ***. 15. Exhibit 11.2.1 of the Research and License Agreement shall be amended and replaced in its entirety as of the Second Amendment Effective Date with a new Exhibit attached as EXHIBIT F to this Second Amendment, but only to the extent that the same relates to Aurora Reporter System Patent Rights, ***. Aurora acknowledges that the use by BMS of the Aurora Reporter System Patent Rights listed on Exhibit F or otherwise existing as of the Second Amendment Effective Date in accordance with the terms of the Research and License Agreement shall ***Patent Rights covering compositions or uses of the Reporters and Reporters Systems *** and that are licensed, sublicensed or ***. 16. The parties make the following representations and warranties to each other: (i) Each party hereby represents and warrants that such party (a) is duly organized and validly existing under the laws of the state of its incorporation and has full corporate power and authority to enter into this Second Amendment and to carry out the provisions hereof; (b) has the requisite power and authority and the legal right to own and operate its property and assets, to lease the property and assets it operates under lease, and to carry on its business as it is now being conducted; and (c) is in compliance with all requirements of applicable law, except to the extent that any noncompliance would not have a material adverse effect on the properties, business, financial or other condition of it and would not materially adversely affect its ability to perform its obligations under the Research and License Agreement, as amended by this Second Amendment. Page 4 *** Confidential Treatment Requested (ii) Each party hereby represents and warrants that such party (a) has the requisite power and authority and the legal right to enter into the Second Amendment and to perform its obligations and grant the rights extended by it hereunder; and (b) has taken all necessary action on its part to authorize the execution and delivery of the Second Amendment and to authorize the performance of its obligations hereunder and the grant of rights extended by it hereunder. (iii) Each party hereby represents and warrants to the other that: (a) this Second Amendment has been duly executed and delivered on its behalf and is a legal and valid obligation binding upon it and is enforceable in accordance with its terms; (b) the execution, delivery and performance of this Second Amendment and the Research and License Agreement, as modified by this Second Amendment, by such party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having authority over it; and (c) all necessary consents, approvals and authorizations of all governmental authorities and other persons required to be obtained by it in connection with the execution, delivery and performance of the Second Amendment and the Research and License Agreement, as modified by this Second Amendment, have been obtained. 17. Except as herein amended and extended, the parties confirm and ratify that the terms and conditions of the Research and License Agreement remain in full force and effect. Except as may be specifically referenced herein, all changes to the Research and License Agreement made in this Second Amendment shall be effective as of the date that this Second Amendment is signed by the last party to sign below. Page 5 *** Confidential Treatment Requested IN WITNESS WHEREOF, the parties have caused this Second Amendment to be executed in multiple counterparts by their duly authorized representatives. Bristol-Myers Squibb Aurora Biosciences Corporation Pharmaceutical Research Institute By: By: ------------------------------ -------------------------------- Title: Title: --------------------------- ----------------------------- Date: Date: ---------------------------- ------------------------------ Page 6 *** Confidential Treatment Requested EXHIBIT A OF THE SECOND AMENDMENT (TO REPLACE ORIGINAL SECTION 3.1.1 AS OF THE SECOND AMENDMENT EFFECTIVE DATE) 3.1.1 SCOPE. Under ***, BMS and Aurora will collaborate, using the Screening Technology, to develop high throughput and/or ultra high throughput screens for BMS' use in accordance with this Agreement and which will be manufactured by Aurora and delivered to BMS *** selected by BMS ***. The parties will collaborate on the specifications for, and development of, the particular screens (each screen, together with all of the reagents and any other materials to be delivered by Aurora in connection therewith, ***, which shall be manufactured by Aurora and delivered to BMS (the ***). BMS will *** parties will use all reasonable efforts to select *** months following the Effective Date. Page 7 *** Confidential Treatment Requested EXHIBIT B OF THE SECOND AMENDMENT (TO REPLACE ORIGINAL SECTION 3.2 AS OF THE SECOND AMENDMENT EFFECTIVE DATE) *** Page 8 *** Confidential Treatment Requested *** Promptly following mutual agreement ***, the parties will jointly prepare the *** Work Plan, which shall set forth in detail the respective responsibilities of the parties in the development of each Collaborative *** Screen, and which must be executed by both parties to be effective. Each such *** Work Plan will contain, where applicable, a description of the tasks to be performed by each party, location, the specific deliverables (including number of reagents and any other materials to be provided for each ***Screen) and documentation to be produced by Aurora, acceptance criteria for each Collaborative NSP Screen, *** any other relevant terms, conditions, and work specifications. Promptly following the execution of each *** Work Plan, the parties will commence their respective duties under the *** Work Plan for the development, manufacture, and delivery of the applicable ***Screen. All work under a ***Work Plan shall be performed in accordance with the provisions of this Agreement, and each party will use its reasonable best efforts to complete its Page 9 *** Confidential Treatment Requested obligations under the *** Work Plan as expeditiously as practicable. If any provisions of any such *** Work Plan should conflict with any provisions set forth in this Agreement, the provisions of this Agreement shall take precedence, unless such *** Work Plan expressly refers to the specific provision(s) of this Agreement that it is intended to replace or modify (and which shall be limited in force and effect to such *** Work Plan ***). During the development of a *** Screen, ***. *** reagents and other materials to be delivered for use with *** Screen shall be based on the specifications and validation criteria for such *** Screen, reagents and other materials as established by such *** Work Plan. ***, after which the *** Screen shall be delivered to BMS. Promptly following receipt of each such *** Screen, *** days after receipt by BMS and *** BMS so that Aurora may develop ***. Aurora will use its commercially reasonable best efforts to promptly ***, if possible, provide *** Screen within a reasonable time ***. If Aurora is *** Screen for ***, or BMS is *** Screen transferred to BMS by Aurora and Aurora is ***Screen to *** as the parties may agree, Aurora will prepare an *** Work Plan for *** and BMS will *** Screen; provided, however, that (i) the foregoing shall not *** BMS in *** Screen, and, except as set forth in (ii) that follows, BMS shall *** as a result of BMS' use of such ***, and (ii) BMS may, ***, elect to incorporate the cells provided by Aurora from such *** Screen into an *** Screen *** BMS for ***, in which *** using such ***Screen that incorporates such cells provided by Aurora as BMS would have ***. If at any time within *** delivery of a *** Screen for whatever reason such ***, Aurora *** promptly as *** are required to *** Screen), in which event BMS will reimburse Aurora for *** incurred to manufacture and supply same ***. ***. *** BMS under Section *** will not *** of the number of such *** to be delivered to BMS as part of such *** Plan; provided, however BMS shall pay for Materials unique to such *** Screens (e.g. cell lines not available to Aurora or readily commercially available, specific ligands not available to Aurora or readily commercially available, ***). *** Page 10 *** Confidential Treatment Requested All Materials provided by BMS in furtherance of an *** Work Plan shall be used in accordance with *** attached to the Research and License Agreement. 3.2.2 *** RESOURCE. In each year for a period of *** years following the Second Amendment Effective Date, Aurora will use reasonable effort and a screen development resource of *** Aurora FTEs each of which shall spend up *** hours per year to develop the *** Screens at Aurora provided for in Section 3.2. 3.2.3 TRAINING OF BMS PERSONNEL IN AURORA TECHNOLOGIES. In each year for a period of *** years following the Second Amendment Effective Date, Aurora will dedicate *** Aurora FTE who will devote up to *** hours per year to train BMS personnel in aspects of Aurora Reporter System Technology. This will include, with BMS's approval and at the expense of BMS, the training of BMS scientist in BMS's facilities *** times per year and the training of up to *** BMS scientists per year in Aurora Technology at Aurora's facilities in San Diego. BMS and Aurora will determine the nature of the training and coordination of such training sessions, and ***. Page 11 *** Confidential Treatment Requested 3.2.4 PAYMENTS FOR SUPPORT AND SCREEN DEVELOPMENT RESOURCE. As partial consideration for the development of *** Screens at Aurora under Section 3.2 and the training and support of BMS personnel in Aurora Reporter System Technology under Section 3.2.3, BMS shall commit to pay Aurora *** per year for *** years following the Second Amendment Effective Date. The payments with respect to the *** Second Amendment Effective Date shall be paid as follows: *** shall be paid *** Second Amendment, and the *** shall become payable ***. The *** to be paid with respect to the *** Second Amendment Effective Date shall be paid in *** installments of *** which shall be paid upon the *** of the Second Amendment Effective Date, and the *** shall become payable ***. 3.2.5 DEPLOYMENT OF *** SCREENS BY BMS. BMS and its Affiliates will employ each *** Screen developed in collaboration with Aurora to screen such BMS Test Materials as BMS deems appropriate for such purpose in the exercise of its sole and absolute discretion. *** Affiliates shall have the right to continue to use the *** Screens developed by Aurora and provided to BMS hereunder (and to use the Reporters and Reporter System provided by Aurora for use ***. 3.2.6 ***. Page 12 *** Confidential Treatment Requested 3.2.7 PAYMENTS TO AURORA. In addition to such payments as are made by BMS to Aurora pursuant to section 3.2.4 hereof, the following payments shall be made to Aurora with respect to the delivery and use of *** Screens by BMS: 3.2.7.1 MILESTONES. BMS will pay to Aurora the following milestone payments on each Product containing an Approved PLP *** Screen developed under this Section 3.2 ***: 3.2.7.1.1 BMS will promptly notify Aurora in writing of each Approved PLP Compound *** Screen ***. BMS will pay Aurora *** for each such Approved PLP Compound so approved for further development by the ***. Payments shall be wired to a bank account specified by Aurora within *** days following such notification from BMS. 3.2.7.1.2 ***: Event Payment (US$) ----- ------------- *** Page 13 *** Confidential Treatment Requested 3.2.7.2 ROYALTIES. With respect to each Covered Product containing an Approved PLP Compound *** Screen developed in collaboration between Aurora and BMS under this Section 3.2 ***, BMS shall pay a royalty on *** of such Covered Product during the Royalty Term for such Covered Product, as follows (the worldwide annual *** are multiplied by the applicable royalty rate ***: Worldwide *** (in US$ millions) *** Percentage of Net Sales ----------------------------------- ----------------------- *** ***. Page 14 *** Confidential Treatment Requested Royalties for Net Sales of any such Covered Product in any given country shall be due and payable only during the Royalty Term for such Covered Product in such country; thereafter, BMS shall be entitled to continue to sell such Covered Product in such country without further compensation to Aurora. 3.2.8 ***: Page 15 *** Confidential Treatment Requested (i) ***. 3.2.9 ***. 3.2.10 ***. Page 16 *** Confidential Treatment Requested EXHIBIT C TO SECOND AMENDMENT 3.6 ***. Page 17 *** Confidential Treatment Requested *** Page 18 *** Confidential Treatment Requested *** Page 19 *** Confidential Treatment Requested *** Page 20 *** Confidential Treatment Requested EXHIBIT D TO THE SECOND AMENDMENT *** Page 21 *** Confidential Treatment Requested *** Page 22 *** Confidential Treatment Requested *** Page 23 *** Confidential Treatment Requested *** Page 24 *** Confidential Treatment Requested EXHIBIT E TO THE SECOND AMMENDMENT *** Page 25 *** Confidential Treatment Requested EXHIBIT F OF THE SECOND AMENDMENT *** Page 26 *** Confidential Treatment Requested *** Page 27 *** Confidential Treatment Requested *** Page 28 *** Confidential Treatment Requested EXHIBIT G TO THE SECOND AMENDMENT *** Page 29 *** Confidential Treatment Requested EXHIBIT H TO THE SECOND AMENDMENT *** Page 30 *** Confidential Treatment Requested *** Page 31 *** Confidential Treatment Requested *** Page 32 *** Confidential Treatment Requested EXHIBIT I TO THE SECOND AMENDMENT *** Page 33 *** Confidential Treatment Requested EX-10.50 3 EXHIBIT 10.50 EXHIBIT 10.50 November 2, 1999 Timothy J. Rink, M.D., Sc.D. Chairman & Chief Executive Officer Aurora Biosciences Corporation 11010 Torreyana Road San Diego, CA 92121 Dear Tim: This letter agreement ("Agreement") sets out the terms for your part-time employment with Aurora Biosciences Corporation (the "Company") as well as the terms under which you will act as Chairman of the Company's Board of Directors (the "Board"). This Agreement will become effective November 8, 1999, consequent to Stuart Collinson's appointment as Chief Executive Officer of the Company. - - COMPENSATION AND HOURS FOR 1999. Your work schedule, compensation,executive bonus plan for 1999, and fringe benefits will remain at their current levels through December 31, 1999. It is understood that you will take Paid Personal Leave ("PPL") from December 13 through December 23 and that you will be paid holiday pay for December 24 through December 31, 1999. - - CHAIRMANSHIP OF BOARD OF DIRECTORS. Beginning January 1, 2000 and as long as you serve as Chairman of the Board, you will receive fees for meetings comparable to the fees received by other non-executive directors, namely $2,500.00 per Board meeting attended by you in person, $500.00 per telephone or committee meeting in which you participate. You will also receive a quarterly Chairman's fee of $2,500.00, payable in advance on the first day of each quarter for as long as you remain Chairman of the Board. - - PART-TIME EMPLOYMENT. - Areas of service include: recruitment; customer relations; business development; strategic alliances; investor relations; organization development; scientific and technical review and any other areas in which the Board requests your service. - Reporting to: Chief Executive Officer - Hours: You agree to provide 28 days of service per quarter, up to 15 of which may, at the Company's request be performed at the Company's San Diego headquarters or elsewhere in the USA, and the remainder will be in Europe, where it is understood you will be residing. - You will not be required to make more than four visits to the USA in any quarter. - Compensation: You will be paid $70,000 per quarter in advance, subject to applicable deductions and withholdings. - Expenses: The Company will pay reasonable and documented travel and incidental business expenses including: business-class air travel for inter-continental flights for business performed in the USA at the Company's request, car rental and hotel-suite accommodations for work periods in San Diego. - Secretarial assistance and other facilities: You will receive reasonable secretarial assistance and office facilities at the Company's San Diego headquarters. - COBRA: The Company will reimburse you for the costs of your COBRA coverage or the premiums for medical coverage similar to your current Company sponsored medical coverage (excluding family members) during your service as a part-time employee. - The Company's Business is a Priority: You agree that so far as reasonably practicable the Company's business will take precedence over any other professional work obligations in which you are or become involved. - Other professional activities: You agree that you will not provide more than eighteen (18) days' paid work to third parties per quarter. You agree that such third party work shall not conflict with the Company's business interests. You further agree to notify the CEO of the Company of the identity and nature of work involved in any third party affiliations during the term of this agreement. - Term: Beginning April 30, 2000, other than termination for "cause" as defined in Attachment A, your employment with the Company may be terminated by either the Company or you for any reason or no reason with a minimum of 60 days' written notice to the other party. The Company retains the right to pay you severance in lieu of notice in exchange for your signature of a release of claims, in the form attached hereto as Attachment B. - Stock Options: All of the stock options to purchase Company Common Stock which have been granted to you and dated February 18, 1997 and July 23, 1998 will continue to vest pursuant to the current vesting schedules as provided in the Company's 1996 Stock Plan, as long as you are serving as Chairman of the Board or a part-time employee to the Company pursuant to this Agreement. - Employee Proprietary Information & Inventions Agreement: The conditions of the Employee Proprietary Information & Inventions Agreement you executed on February 20, 1996, and attached hereto as Attachment C, will remain in effect during and beyond the term of your employment with the Company as provided therein. - This Agreement is subject to satisfactory proof of your right to work in the USA. This Agreement is made in San Diego, California. This Agreement shall be construed and interpreted in accordance with the laws of the State of California. Once signed by you this Agreement will constitute the complete, final and exclusive agreement between you and the Company relating to the terms and conditions of your employment, and supersedes all prior and contemporaneous oral and written employment agreements or arrangements between the Company and you. Yours sincerely, /s/ James Blair /s/ Hugh Rienhoff, Jr. - -------------------- ------------------------ James Blair, Ph.D. Hugh Rienhoff, Jr., M.D. Compensation Committee of the Board of Directors Cc: S. Collinson, President P. Fritz, Senior Director, Human Resources I accept the terms and conditions outlined in this Agreement. /s/ Timothy J. Rink - --------------------------- Timothy J. Rink, M.D., Sc.D. ATTACHMENT A Termination by the Company for Cause: The Company may immediately terminate your - ------------------ employment "for cause" at any time without any prior written notice to you. Termination shall constitute a termination "for cause" if such termination is for one or more of the following causes, as found by the Board of Directors of the Company by a resolution duly adopted by a majority of its members, excluding you if you are then a member of the Board (a copy of which resolution shall be delivered to you): (i) your substantial and continuing willful or grossly negligent failure to perform your duties substantially in accordance with your responsibilities, which materially and adversely affects the business, prospects, financial condition, operations, property or affairs of the Company, after 30 days notice from the Board of Directors of the Company (so long as such failure is continuing), such notice setting forth in reasonable detail the nature of such failure; (ii) the commission by you of an act of willful misconduct, fraud or embezzlement, which results in material loss, damage or injury to the Company, whether directly or indirectly, or the commission by you of any other action with the intent to injure materially the Company which could, in the reasonable opinion of the Board of Directors, result in material harm to the Company; (iii) if you are convicted of a felony, either in connection with the performance of your responsibilities for the Company or which shall materially adversely affect your ability to perform your responsibilities for the Company; or (iv) the commission of an act which constitutes unfair competition with the Company or with the intent of inducing any third party to breach a material contract with the Company or the willful and materially injurious unauthorized disclosure of any trade secret or confidential information of the Company. In the event of a termination "for cause" pursuant to the provisions of clauses (i) through (iv) above, inclusive, you shall be entitled to no severance or other termination benefits except as required by law. ATTACHMENT B RELEASE AND WAIVER OF CLAIMS In consideration of the payments and other benefits set forth in the Employment Agreement dated November 2, 1999, to which this form is attached, I, TIMOTHY J. RINK, M.D., SC.D., hereby furnish AURORA BIOSCIENCES CORPORATION (the "Company"), with the following release and waiver ("Release and Waiver"). I hereby release, and forever discharge the Company, its officers, directors, agents, employees, stockholders, successors, assigns affiliates and Benefit Plans, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys' fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising at any time prior to and including my employment Termination Date with respect to any claims relating to my employment and the termination of my employment, including but not limited to, claims pursuant to any federal, state or local law relating to employment, including, but not limited to, discrimination claims, claims under the California Fair Employment and Housing Act, and the Federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"), or claims for wrongful termination, breach of the covenant of good faith, contract claims, tort claims, and wage or benefit claims, including but not limited to, claims for salary, bonuses, commissions, stock, stock options, vacation pay, fringe benefits, severance pay or any form of compensation. I also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims I may have against the Company. I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company. I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the Release and Waiver granted herein does not relate to claims which may arise after this Release and Waiver is executed; (b) I have the right to consult with an attorney prior to executing this Release and Waiver (although I may choose voluntarily not to do so); and if I am over 40 years of age upon execution of this Release and Waiver: (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired. Date: November 2, 1999 By: /s/ Timothy J. Rink --------------------------- TIMOTHY J. RINK, M.D., SC.D. EX-27.1 4 EX-27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AT SEPTEMBER 30, 1999 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 10,524,279 17,704,321 6,834,409 0 0 38,825,223 17,113,144 5,673,030 56,545,912 19,540,811 0 0 0 17,168 32,296,944 56,545,912 0 30,440,929 0 19,728,053 17,842,610 0 519,549 (6,525,478) 0 (6,525,478) 0 0 0 (6,525,478) (0.39) (0.39)
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