-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, E9g3aLiQdw7Tz34RRkDMA9fslyzhsvU69+TNbSbc1e/zDnYBs1Xh0s/Hp1EaxFEH cgmip+WfZNQqs7lQHSlvGw== 0000950123-95-001412.txt : 19950531 0000950123-95-001412.hdr.sgml : 19950531 ACCESSION NUMBER: 0000950123-95-001412 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ONCOGENE SCIENCE INC CENTRAL INDEX KEY: 0000729922 STANDARD INDUSTRIAL CLASSIFICATION: 8731 IRS NUMBER: 133159796 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15190 FILM NUMBER: 95538644 BUSINESS ADDRESS: STREET 1: 106 CHARLES LINDBERGH BLVD CITY: UNIONDALE STATE: NY ZIP: 11553 BUSINESS PHONE: 5162220023 MAIL ADDRESS: STREET 1: 106 CHARLES LINDBERGH BLVD CITY: UNIONDALE STATE: NY ZIP: 11553-3649 10-Q 1 FORM 10-Q FOR PERIOD ENDED MARCH 31, 1995 1 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 March 31, 1995 -------------- 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 number 0-15190 ------------------------------------------------------ ONCOGENE SCIENCE, INC. - - ----------------------------------------------------------------------------- - - ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 13-3159796 - - ----------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 106 Charles Lindbergh Blvd., Uniondale, New York 11553 - - ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) 516-222-0023 - - ----------------------------------------------------------------------------- (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 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 --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: At April 29, 1995 the registrant had outstanding 17,253,142 shares of common stock .$01 par value. Total Pages: 11 2 ONCOGENE SCIENCE, INC. AND SUBSIDIARIES INDEX
Page No. -------- PART I - FINANCIAL INFORMATION - UNAUDITED Consolidated Balance Sheets - March 31, 1995 and September 30, 1994 3 Consolidated Statements of Operations - Three months ended March 31, 1995 and 1994 4 Consolidated Statements of Operations - Six months ended March 31,1995 and 1994 5 Consolidated Statements of Cash Flows - Six months ended March 31, 1995 and 1994 6 Notes to Consolidated Financial Statements 7 Management's Discussion and Analysis of Financial 8 Condition and Results of Operations PART II - OTHER INFORMATION 10 SIGNATURES 11
* * * * 3 ITEM 1. FINANCIAL STATEMENTS ONCOGENE SCIENCE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, September 30, Assets 1995 1994 - - ------ ------------ ------------ Current Assets: Cash and cash equivalents $ 1,614,090 $ 322,308 Short-term investments 15,145,729 17,835,583 Accounts receivable, including trade receivables of $904,301 and $956,747 at March 31, 1995 and September 30, 1994, respectively 3,010,860 3,032,839 Inventory 1,591,761 1,744,663 Accrued interest receivable 130,552 147,222 Grants receivable 498,935 659,621 Prepaid expenses 323,300 445,464 ------------ ------------ Total current assets 22,315,227 24,187,700 Property, equipment and leasehold improvements - net 6,131,157 6,554,237 Other receivable 257,060 425,520 Loans to officers and employees 75,116 85,516 Other assets 115,334 118,068 Intangible assets - net 9,797,019 10,669,859 ------------ ------------ $ 38,690,913 $ 42,040,900 ============ ============ Liabilities and Stockholders' Equity - - ------------------------------------ Current liabilities: Accounts payable and accrued expenses $ 1,523,346 $ 2,522,171 Current portion of unearned revenue 882,725 457,384 ------------ ------------ Total current liabilities 2,406,071 2,979,555 ------------ ------------ Other Liabilities: Long-term portion of unearned revenue 189,181 216,588 Post-retirement benefits other than pension 257,820 188,443 ------------ ------------ Total liabilities 2,853,072 3,384,586 ------------ ------------ Stockholders' equity: Common stock, $.01 par value; 50,000,000 shares authorized, 16,565,970 and 16,564,715 shares issued at March 31, 1995 and September 30, 1994, respectively 165,659 165,647 Additional paid-in capital 61,203,280 61,199,670 Accumulated deficit (24,730,426) (21,870,671) Cumulative foreign currency translation adjustment (99,113) (41,773) Unrealized holding loss on short-term investments (559,000) (654,000) ------------ ------------ 35,980,400 38,798,873 Less: Treasury stock, at cost 222,521 shares at March 31, 1995 and September 30, 1994 (142,559) (142,559) ------------ ------------ Total stockholders' equity 35,837,841 38,656,314 ------------ ------------ Commitments and contingencies $ 38,690,913 $ 42,040,900 ============ ============
See accompanying notes to consolidated financial statements. 3 4 ONCOGENE SCIENCE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended March 31, ----------------------------- Revenues: 1995 1994 ----------- ----------- Collaborative program revenues, principally from related parties $ 2,461,403 $ 2,285,605 Sales 1,283,899 1,275,051 Other research revenue 523,780 570,505 ----------- ----------- 4,269,082 4,131,161 ----------- ----------- Expenses: Research and development 3,348,571 2,830,657 Production 393,974 270,865 Selling, general and administrative 1,826,436 1,873,237 Amortization of intangibles 436,507 436,291 ----------- ----------- 6,005,488 5,411,050 ----------- ----------- Loss from operations (1,736,406) (1,279,889) Other income (expense): Interest income 221,219 203,582 Other income (expense) 46,419 (27,143) ----------- ----------- Net loss (1,468,768) (1,103,450) =========== =========== Weighted average number of shares of common stock outstanding 16,343,241 16,332,437 =========== =========== Net loss per weighted share of common stock outstanding $ (.09) $ (.07) =========== ===========
See accompanying notes to consolidated financial statements. 4 5 ONCOGENE SCIENCE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Six Months Ended March 31, ------------------------------- Revenues: 1995 1994 ----------- ----------- Collaborative program revenues, principally from related parties $ 4,779,777 $ 4,418,508 Sales 2,597,588 2,411,956 Other research revenue 1,099,698 1,081,333 ----------- ----------- 8,477,063 7,911,797 ----------- ----------- Expenses: Research and development 6,425,536 5,388,329 Production 799,252 671,549 Selling, general and administrative 3,700,865 3,545,903 Amortization of intangibles 872,841 872,582 ----------- ----------- 11,798,494 10,478,363 ----------- ----------- Loss from operations (3,321,431) (2,566,566) Other income (expense): Interest income 441,891 393,021 Other income (expense) 19,785 (67,854) ----------- ----------- Net loss $(2,859,755) $(2,241,399) =========== =========== Weighted average number of shares of common stock outstanding 16,342,919 16,331,716 =========== =========== Net loss per weighted share of common stock outstanding $ (.18) $ (.14) =========== ===========
See accompanying notes to consolidated financial statements. 5 6 ONCOGENE SCIENCE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Six Months Ended March 31, ------------------------------ 1995 1994 ------------- ------------ Cash flows from operating activities: Cash received for goods and services $ 9,226,128 $ 9,138,527 Cash paid for goods and services (10,628,408) (9,642,964) Interest received 301,170 440,493 ------------ ----------- Net cash used by operating activities (1,101,110) (63,944) ------------ ----------- Cash flows from investing activities: Additions to short-term investments (499,688) (5,517,880) Maturities and sales of short-term investments 3,441,932 5,805,242 Additions to property, equipment and leasehold improvements (539,668) (630,552) Additional employee loans - (60,258) Repayment of employee loans - 20,000 Foreign currency translation (13,306) 11,646 ------------ ----------- Net cash provided (used) by investing activities 2,389,270 (371,802) ------------ ----------- Cash flows from financing activities: Proceeds from exercise of stock options and employee stock purchases 3,622 14,350 ------------ ----------- Net cash provided by financing activities 3,622 14,350 ------------ ----------- Net increase (decrease) in cash and cash equivalents 1,291,782 (421,396) Cash and cash equivalents at beginning of period 322,308 822,033 ------------ ----------- Cash and cash equivalents at end of period $ 1,614,090 $ 400,637 ============ =========== Reconciliation of net loss to net cash used by operating activities: Net loss $ (2,859,755) $(2,241,399) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 650,187 555,384 Amortization of intangibles 872,841 872,582 Foreign exchange(gain) loss (44,034) 11,807 Decrease in loans to officers and employees 10,400 25,000 Decrease in accounts receivable 21,980 1,350,287 Decrease (increase) in interest receivable (140,721) 47,472 Decrease in grant receivable 160,686 196,695 Decrease (increase) in other receivable 168,460 (431,957) Decrease (increase) in inventory 152,902 (73,665) Decrease (increase) in other assets (3,430) 2,115 Decrease in prepaid expenses 122,164 20,316 Decrease in accounts payable (680,103) (579,657) Increase in post-retirement benefits liability 69,378 69,375 Increase in unearned revenue 397,935 111,701 ------------ ----------- Cash used by operating activities $ (1,101,110) $ (63,944) ============ ===========
See accompanying notes to unaudited consolidated financial statements. 6 7 ONCOGENE SCIENCE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) Opinion of Management In the opinion of Management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company's financial position as of March 31, 1995 and September 30, 1994, its results of operations for the three and six months ended March 31, 1995 and 1994 and its cash flows for the six months ended March 31, 1995 and 1994. Certain reclassifications have been made to the prior financial statements to conform them to the current presentation. It is recommended that these consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto in the Company's 1994 Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of results for the entire year. Net loss per share of common stock outstanding is based on the weighted average number of shares outstanding. Common share equivalents (stock options) are not included in the computation for the three months and six months ended March 31, 1995 and 1994 since their inclusion would be anti-dilutive. (2) Subsequent Event On April 19, 1995, the Company entered into an agreement with CIBA-GEIGY Limited which expands the scope of the companies' collaborative efforts with respect to recombinant Human Transforming Growth Factor Beta 3 ("TGF-B3") to include development of TGF- B3 products for the treatment of oral mucositis and certain other indications. Pursuant to the agreement, CIBA purchased 909,091 shares of the Company's common stock at $5.50 per share for an aggregate purchase price of $5,000,000. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION Three and Six Months Ended March 31, 1995, Compared to the Three and Six Months Ended March 31, 1994. Revenues for the quarter and six months ended March 31, 1995 increased by approximately $138,000 and $565,000 or 3% and 7% respectively, as compared to the same periods in the previous fiscal year. Collaborative program revenues increased by approximately $176,000 and $361,000 or 8% for both the quarter and six month period due to the commencement of the research program with Hoechst-Roussel Pharmaceuticals in April 1994 and due to the expansion and extension of the collaborative research agreement with Wyeth-Ayerst in March 1994. These increases were offset by decreased funding from Pfizer associated with Pfizer's decreased participation in the TGF-B3 oral mucositis program in order to focus exclusively on its collaborative programs with the Company related to the research and development of anti-cancer drugs. Previously, Pfizer had funded the Company's TGF-B3 oral mucositis program as a supplement to its anti-cancer collaborative program. Under a Collaborative Agreement with CIBA-GEIGY entered into on April 19, 1995, the Company will fund the development of TGF-B3 for oral mucositis through the end of Phase I clinical trials and CIBA-GEIGY will fund its subsequent clinical development. Sales for the quarter and six months ended March 31, 1995 increased approximately $9,000 and $186,000, or 1% and 7% respectively, as compared to the same periods in the previous fiscal year. The six month increase is due to an increase in the number of units sold including private labeling products sold to Becton Dickinson primarily in the first quarter. Other research revenues decreased approximately $47,000 or 8% for the quarter ended March 31, 1995 as a result of decreased funding related to the National Cooperative Drug Discovery Group grant partially offset by increased revenue under other grant awards. The Company's operation expenses increased by approximately $594,000 and $1,320,000 or 11% and 13%, for the quarter and six months ended March 31, 1995, compared to the same periods in the previous fiscal year. Research and development costs increased approximately $518,000 and $1,037,000 or 18% and 19% respectively, due principally to the start of the research program with Hoechst-Roussel and the increase in activities related to the Company's proprietary programs in the area of medicinal and natural products chemistry and clinical development of TGF-Beta 3 for oral mucositis. Production expenses increased by approximately $123,000 and $128,000 or 46% and 19%, for the quarter and six months ended March 31, 1995 compared to the same periods in the previous fiscal year due principally to reduced inventory levels, higher sales and changes in product mix. Selling, general and administrative expenses increased $155,000 or 4% for the six months ended March 31, 1995, compared to the six-month period of the prior year, as a result of expenses related to the restructuring of the Company's European subsidiary and employee severance costs. The savings from the restructuring took effect at the beginning of the second quarter, and selling, general and administrative expenses decreased approximately $47,000 or 3% during the three months ended March 31, 1995 as compared to the comparable earlier quarter. Since 1991, the cancer diagnostics collaborative program with Becton Dickinson has focused on both serum-based and histochemical immunoassays. During the second quarter Becton Dickinson decided to focus exclusively on histochemical immunoassays. The Company is continuing the development of serum-based cancer diagnostic products and is seeking a new collaborative partner in this area. Interest income increased approximately $18,000 or 9% and $49,000 or 12% for the quarter and six months ended March 31, 1995. This increase is due to a change in the investment portfolio to higher yielding funds off-set by decreased funds invested. 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION (CONT'D) Liquidity and Capital Resources At March 31, 1995, working capital (representing primarily cash, cash equivalents and short-term investments) aggregated approximately $19,909,000. The Company has been, and will continue to be, dependent upon collaborative research revenues, government research grants, sales of research products, interest income and cash balances until other products developed from its technology are commercially marketed. Pursuant to its collaborative agreement with the Company entered into on April 19, 1995, CIBA-GEIGY purchased 909,091 shares of the Company's common stock for an aggregate purchase price of $5,000,000. Management believes that with the funding from its collaborative programs, research products sales, government research grants, interest income, and cash balances, the Company's financial resources are adequate for its current needs. However, the Company's capital requirements may vary as a result of a number of factors, including results of the research products business, competitive and technological developments, and the time and expense required to obtain governmental approval of products, some of which factors are beyond the Company's control. There can be no assurance that scheduled payments will be made by third parties, that current agreements will not be cancelled, that government research grants will continue to be received at current levels or that unanticipated events requiring the expenditure of funds will not occur. Further, there can be no assurance that the Company will be able to obtain any additional required funds, or, if such funds are available, that such funds will be available on favorable terms. 9 10 PART II. OTHER INFORMATION Items 1-3. Not applicable. Item 4. Submission of matters to a vote of security holders. The Company's annual meeting of stockholders was held March 22, 1995. The following ten directors were elected:
Name For Withholding Authority ---- --- --------------------- Edwin A. Gee 14,273,786 494,713 Shares Gary E. Frashier 14,293,886 474,613 Shares Steven M. Peltzman 14,299,286 469,213 Shares J. Gordon Foulkes 14,293,880 474,619 Shares G. Morgan Browne 14,299,586 468,913 Shares John French, II 14,296,186 472,313 Shares Walter M. Lovenberg 14,299,386 469,113 Shares Walter M. Miller 14,296,836 471,663 Shares Gary Takata 14,278,586 489,913 Shares John P. White 14,283,834 484,665 Shares
In addition, the appointment of KPMG Peat Marwick LLP as auditors for fiscal year ended September 30, 1995 was ratified with 14,587,209 shares voted in favor, 79,635 shares against and 101,655 shares abstained. 10 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ONCOGENE SCIENCE, INC. (Registrant) Date 5/12/95 /s/ Gary E. Frashier -------------------------- ------------------------------- Gary E. Frashier President and Chief Executive Officer Date 5/12/95 /s/ Robert L. Van Nostrand -------------------------- ------------------------------- Robert L. Van Nostrand Vice President Finance & Administration 12 EXHIBIT INDEX ------------- Exhibit 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS SEP-30-1995 JAN-01-1995 MAR-31-1995 1,614,090 15,145,729 3,010,860 (41,050) 1,591,761 952,787 12,533,422 (6,402,265) 38,690,913 2,406,071 0 165,659 0 0 35,672,182 38,690,913 1,283,899 4,269,082 393,974 6,005,488 46,419 12,000 221,219 (1,468,768) 0 0 0 0 0 (1,468,768) .09 .09
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