SECURITIES AND EXCHANGE COMMISSION Conformed
Washington, D.C. 20549 Copy
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, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
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Commission file number 333-02015
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CYTOGEN Corporation
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(Exact name of Registrant as specified in its charter)
Delaware 22-2322400
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
600 College Road East, CN 5308, Princeton, NJ 08540-5308
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(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code (609) 987-8200
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 .
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Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date:
Class Outstanding at October 26, 1998
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Common Stock, $.01 par value 58,604,950
PART I - FINANCIAL INFORMATION
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Item I: Consolidated Financial Statements
CYTOGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share data)
(Unaudited)
September 30, December 31,
ASSETS: 1998 1997
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Current Assets:
Cash and cash equivalents $ 3,027 $ 7,401
Accounts receivable, net 1,196 4,064
Inventories 127 443
Other current assets 469 258
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Total current assets 4,819 12,166
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Property and Equipment:
Leasehold improvements 10,128 10,126
Equipment and furniture 7,803 7,696
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17,931 17,822
Less- Accumulated depreciation and amortization (14,884) (13,910)
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Net property and equipment 3,047 3,912
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Investment in Targon Subsidiary - 10,343
Other Assets 1,014 1,134
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$ 8,880 $ 27,555
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
Current Liabilities:
Accounts payable and accrued liabilities $ 7,472 $ 5,662
Current portion of long-term liabilities 1,836 1,739
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Total current liabilities 9,308 7,401
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Long-Term Liabilities 2,141 10,171
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Stockholders' Equity (Deficit):
Preferred stock, $.01 par value, 5,400,000 shares authorized -
Series A Convertible and Exchangeable Preferred Stock, $.01 par value,
1,000 shares authorized, 0 and 1,000 shares issued and outstanding
in 1998 and 1997, respectively - -
Series B Convertible Preferred Stock, $.01 par value,
750 shares authorized, 0 and 750 shares issued and outstanding
in 1998 and 1997, respectively - -
Series C Junior Participating Preferred Stock, $.01 par value,
200,000 shares authorized, 0 issued and outstanding - -
Common stock, $.01 par value, 89,600,000 shares authorized,
58,603,000 and 51,170,000 shares issued and outstanding
in 1998 and 1997, respectively 586 512
Additional paid-in capital 298,371 298,212
Accumulated deficit (301,526) (288,741)
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Total stockholders' equity (deficit) (2,569) 9,983
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$ 8,880 $ 27,555
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The accompanying notes are an integral part of these statements.
2
CYTOGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except per share data)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
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1998 1997 1998 1997
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Revenues:
Product Related:
Product Sales
ProstaScint $ 1,597 $ 1,178 $ 4,593 $ 2,779
Quadramet 735 - 955 -
Others 228 350 696 929
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Product Sales 2,560 1,528 6,244 3,708
Quadramet Royalty - 1,631 1,664 1,652
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Total Product Related 2,560 3,159 7,908 5,360
License and Contract 210 1,013 1,456 4,834
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Total Revenues 2,770 4,172 9,364 10,194
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Operating Expenses:
Cost of Product Related and
Contract Manufacturing Revenues 2,255 1,595 6,090 4,604
Research and Development 2,579 3,468 8,341 14,739
Equity Loss in Targon Subsidiary - 7,969 1,020 8,709
Selling and Marketing 1,247 1,215 3,581 3,782
General and Administrative 3,212 1,858 5,833 4,760
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Total Operating Expenses 9,293 16,105 24,865 36,594
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Operating Loss (6,523) (11,933) (15,501) (26,400)
Gain on Sale of Targon Subsidiary 2,833 - 2,833 -
Interest Income 109 82 537 527
Interest Expense (97) (73) (535) (219)
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Net Loss (3,678) (11,924) (12,666) (26,092)
Dividends on Series B Preferred Stock - - (119) -
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Net Loss to Common Stockholders $ (3,678) $ (11,924) $ (12,785) $ (26,092)
========== ========== =========== ==========
Basic and Diluted Net Loss
per Common Share $ (0.06) $ (0.23) $ (0.23) $ (0.51)
========== ========== =========== ==========
Basic and Diluted Weighted Average
Common Shares Outstanding 58,149 51,152 55,426 51,124
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The accompanying notes are an integral part of these statements.
3
CYTOGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands)
(Unaudited)
Nine Months Ended September 30,
1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (12,666) $ (26,092)
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Adjustments to Reconcile Net Loss to Cash Used for
Operating Activities:
Depreciation and Amortization 974 1,139
Imputed Interest 81 195
Stock Grants 32 42
Equity Loss in Targon Subsidiary 1,020 8,709
Gain on Sale of Targon Subsidiary (2,833) -
Changes in Assets and Liabilities:
Accounts receivable, net 2,868 (2,660)
Inventories 316 152
Other assets (91) (218)
Accounts payable and accrued liabilities 2,010 748
Other liabilities 87 58
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Total adjustments 4,464 8,165
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Net cash used for operating activities (8,202) (17,927)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption of Short Term Investments - 4,474
Investment in Targon Subsidiary - (10,000)
Proceed from Sale of Targon Subsidiary 2,000 -
Purchases of Property and Equipment (109) (520)
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Net cash provided by (used for) investing activities 1,891 (6,046)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Notes Payable 2,000 10,000
Payment of Note Payable - (1,600)
Principal Payment of Capital Lease Obligations (100) (81)
Proceeds from Issuance of Common Stock 37 231
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Net cash provided by financing activities 1,937 8,550
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Net Decrease in Cash and Cash Equivalents (4,374) (15,423)
Cash and Cash Equivalents, Beginning of Period 7,401 20,296
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Cash and Cash Equivalents, End of Period $ 3,027 $ 4,873
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The accompanying notes are an integral part of these statements.
4
CYTOGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Company
CYTOGEN Corporation ("CYTOGEN" or the "Company") is a biopharmaceutical
company engaged in the development, commercialization and marketing of products
to improve diagnosis and treatment of cancer and other disease. In March 1997,
CYTOGEN received approval from U.S. Food and Drug Administration ("FDA") to
market Quadramet , CYTOGEN's product for the relief of pain due to cancers
that have spread to the skeleton and that can be visualized on a bone scan.
In October 1996, CYTOGEN received marketing approval from FDA for the
ProstaScint imaging agent, CYTOGEN's prostate cancer diagnostic imaging
product. In December 1992, FDA approved OncoScint CR/OV imaging agent,
CYTOGEN's colorectal and ovarian cancer specific diagnostic imaging product,
for single administration per patient. In November 1995, FDA approved an
expanded indication allowing for repeat administration of OncoScint CR/OV.
All three products are currently available in the market place. Operations
of the Company are subject to certain risks and uncertainties including,
but not limited to uncertainties related to access to capital, product
market acceptance, product efficacy and clinical trials, technological
uncertainty, uncertainties of future profitability, dependence on
collaborative relationships and key personnel. The Company has
incurred losses since its inception and expects to incur operating losses
in the near future. There can be no assurance that the Company will ever be
able to commercialize successfully its products or that profitability
will ever be achieved.
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction
of liabilities in the normal course of business. During the third quarter
of 1998, management implemented a restructuring plan including operating
expense reductions. Management believes the Company's existing capital
resources together with decreased operating costs, the $750,000 proceeds
from the term loan (see Note 5), the $4 million net receipt from Berlex
Laboratories ("Berlex") anticipated in the fourth quarter of 1998 (see Note
2), but exclusive of the Equity Line Agreement (see Note 6) will be adequate
to fund the Company's operations into 1999. Management believes the addition of
the Equity Line Agreement will provide the Company with adequate cash flow to
sustain operations into 2000. Based on the Company's historical ability to
raise capital and current market conditions, the Company believes other
financing alternatives (including accounts receivable financing) are
available. There can be no assurance that the Equity Line Agreement or
other financial alternatives will be available when needed or at terms
commercially acceptable to the Company.
Basis of Consolidation
The consolidated financial statements include the accounts of CYTOGEN and
its wholly-owned subsidiaries, AxCell Biosciences Corporation ("AxCell")
and Cellcor, Inc. ("Cellcor"). The financial statements also include the
investment results of Targon Corporation ("Targon"), which were accounted
for on the equity method (see Investment in Targon Subsidiary). Intercompany
balances and transactions have been eliminated in consolidation.
5
CYTOGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
As of September 30, 1998, the Cellcor and Targon subsidiaries were
closed and sold, respectively.
Basis of Presentation
The consolidated financial statements of CYTOGEN Corporation are
unaudited and include all adjustments which, in the opinion of management,
are necessary to present fairly the financial condition and results of
operations as of and for the periods set forth in the Consolidated Balance
Sheets, Consolidated Statements of Operations and Consolidated Statements of
Cash Flows. All such accounting adjustments are of a normal, recurring nature.
The consolidated financial statements do not include all of the information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles and should be read
in conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K/A, filed with the
Securities and Exchange Commission, which includes financial statements as
of and for the year ended December 31, 1997. The results of the Company's
operations for any interim period are not necessarily indicative of the
results of the Company's operations for any other interim period or for a
full year.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks and all
highly-liquid investments with a maturity of three months or less at the
time of purchase.
Cost of Product Related and Contract Manufacturing Revenues
Beginning in 1997, the Company began providing contract manufacturing
services to third parties, and its second product ProstaScint was approved
resulting in significantly higher product sales. Prior to 1997, product
sales were minimal and no revenues derived from contract manufacturing,
therefore cost of product sales was immaterial.
Investment in Targon Subsidiary
As a result of the 1998 reduction of CYTOGEN's ownership interest in
Targon, the Company began accounting for its investment in Targon using the
equity method. In addition, the Company retroactively adopted Emerging
Issues Task Force (EITF) 96-16. Under the equity method, the Company
recognized 100% of Targon's losses through March 31, 1998 in its consolidated
statement of operations as "Equity Loss in Targon Subsidiary" with a
corresponding reduction in the carrying amount of its investment. The
Company did not recognize Targon's losses after March 31, 1998 based on the
completion of the sale of Targon (see Note 3).
As a result of the adoption of EITF 96-16 and the equity method,
approximately $461,000 and $1.4 million of research and development expenses
recorded in the third quarter and year-to-date periods ended September 30,
1997, respectively, and $7.5 million of acquisition of product rights expense
recorded in the third quarter of 1997, were reclassified to "Equity Loss in
6
CYTOGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
Targon Subsidiary". The primary effect on the December 31, 1997 balance sheet
was the reclassification of Restricted Cash to "Investment in Targon
Subsidiary". All other changes were immaterial.
On August 12, 1998 the Company sold its remaining ownership interest in
Targon to Elan Corporation, plc ("Elan") for $2.0 million (see Note 3). As a
result, the Company recorded a gain of approximately $2.8 million in the
statement of operations in the third quarter of 1998.
Net Loss Per Share
Basic net loss per common share is based upon the weighted average common
shares outstanding during each period. Diluted net loss per common share is
the same as basic net loss per common share, as the inclusion of common stock
equivalents would be antidilutive.
Reclassifications
Certain reclassifications have been reflected in the 1997 financial
statements to conform with the 1998 presentation.
New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 130, which establishes standards for
reporting and disclosure of comprehensive income. SFAS No. 130 is effective
for interim and annual periods beginning after December 15, 1997. SFAS No. 130
requires additional disclosures in the Company's consolidated financial
statements, but does not have any impact on the Company's financial position or
consolidated results of operations. The Company has reviewed SFAS No. 130 and
determined that for the third quarter and year-to-date periods ended
September 30, 1998 and 1997, no items meeting the definition of comprehensive
income as specified in SFAS No. 130 existed in the financial statements.
As a result, no disclosure is necessary to comply with SFAS No. 130.
2. QUADRAMET RELATED REVENUES/EXPENSES:
In March 1997, the Company received marketing approval from FDA for
Quadramet. As a result of the approval CYTOGEN recorded a milestone payment
of $2.0 million from The DuPont Pharmaceutical Company, formerly the
Radiopharmaceutical Division of The DuPont Merck Pharmaceutical Company
("DuPont"), for manufacturing and marketing rights to Quadramet, and
also recorded a $4.0 million milestone payment to The Dow Chemical Company
("Dow") for the exclusive license to Quadramet. From the time of product
launch in the second quarter of 1997 up to June 3, 1998, CYTOGEN
recorded royalty revenues from DuPont based on minimum contractual
payments, which were in excess of actual sales. On June 3, 1998,
pursuant to an agreement between CYTOGEN and DuPont, the minimum
royalty arrangement was discontinued and CYTOGEN reclaimed the
marketing rights to Quadramet. Subsequent to June 3, 1998,
CYTOGEN has recorded product revenues from Quadramet based on
actual sales. For the third quarter and year-to-date periods ended
7
CYTOGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
September 30, 1998, CYTOGEN recognized $735,000 and $2.6 million,
respectively, in sales and royalties from Quadramet compared to
$1.6 million and $1.7 million, respectively, in each of the
comparable periods of the prior year.
On October 29, 1998 CYTOGEN announced an exclusive license and
marketing agreement ("Berlex Agreement") with Berlex for the
manufacture and sale of Quadramet. CYTOGEN and Berlex are jointly
finalizing a long-term supply agreement with DuPont, the current
contract manufacturer of Quadramet. Under the terms of the Berlex
Agreement, CYTOGEN will receive an $8 million up front payment
upon completion of the supply agreement with DuPont, of which $4
million will be paid to DuPont upon completion of the supply
agreement with DuPont to secure a long-term manufacturing commitment.
Berlex will pay CYTOGEN royalties on net sales of Quadramet,
as well as milestone payments based on achievement of certain sales
levels. In connection with the Berlex Agreement, CYTOGEN granted
Berlex a warrant to purchase 1 million shares of CYTOGEN common
stock at an exercise price of $1.002 per share through October 2003
and exercisable after the earlier of one year or the achievement of
defined sales levels.
CYTOGEN has also paid royalty expenses to Dow since the product
launch in 1997. The royalty expenses are based on a percentage of
sales of Quadramet or guaranteed contractual minimum royalty
payments, whichever is greater. For the third quarter and year-to-date
periods ended September 30, 1998, CYTOGEN recorded $125,000
and $375,000, respectively, in royalty expenses compared to
$161,000 and $189,000, respectively, recorded in each of the
comparable periods of 1997.
3. SALE OF TARGON CORPORATION:
Targon was established in September 1996 pursuant to agreements
between CYTOGEN and Elan, and was a majority-owned (99.75%)
subsidiary of CYTOGEN. On March 31, 1998, Elan exchanged its
shares of the Company's Series A Convertible Preferred Stock for
50% of CYTOGEN's interest in Targon. On August 12, 1998, CYTOGEN
sold its remaining 49.875% interest in Targon to Elan for $2.0
million (see Note 1). As a result of the sale, the warrant to
purchase up to 1 million shares of CYTOGEN common stock previously
granted to Elan and all notes among CYTOGEN, Elan and Targon were
canceled. In addition to the sale of Targon, on August 14, 1998,
CYTOGEN received $2.0 million from Elan in exchange for a convertible
promissory note. See Note 5.
4. CONVERSION OF CYTOGEN'S SERIES B PREFERRED STOCK:
During the third quarter and year-to-date periods of 1998, the
aggregate face amounts of $1.0 million and $7.5 million, respectively,
of the Company's Series B Preferred Stock ("Series B")
issued in December 1997 were converted into common stock resulting
in the issuance of 1,796,745 and 7,377,054 shares, respectively, of
CYTOGEN common stock for both the conversion and accrued dividends.
At September 30, 1998, all of Series B was converted and therefore,
none was outstanding.
8
CYTOGEN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
5. LONG TERM DEBT:
On August 14, 1998, CYTOGEN received $2.0 million from Elan in
exchange for a convertible promissory note. The note is convertible
into CYTOGEN common shares at $2.80 per share, subject to
adjustments and matures in seven years. The note bears interest of
7% compounded semi-annually, however, such interest is not payable
in cash but be added to the principal for the first 24 months;
thereafter, interest will be payable in cash.
On October 19, 1998, the Company entered into a $750,000 term
loan agreement with The CIT Group/Credit Finance Inc., using the
Company's tangible assets as collateral. The note bears interest
at prime plus 3%. The note is payable over 35 monthly principal
payments of $12,500 plus interest with the remaining balance due
October 2001.
6. COMMON STOCK:
On October 23, 1998, the Company entered into an agreement (the
"Equity Line Agreement") with an institutional investor (the
"Investor") for a $12 million common stock equity line. Pursuant
to the Equity Line Agreement, the Company, subject to the satisfaction
of certain conditions including the effective registration of
such shares, was granted the right to issue and sell to the
Investor, and the Investor would be obligated to purchase up to $12
million of CYTOGEN common stock from time to time (collectively,
the "Put Rights") over a two year period at a purchase price per
share equal to 85% of the average of lowest trade prices of CYTOGEN
common stock during five designated trading days as determined
under the Equity Line Agreement. The Company can exercise the Put
Rights every 20 trading days in the amounts ranging from $150,000
to $1 million, subject to the satisfaction of minimum trading
volume, market price of CYTOGEN common stock and registration of
the shares of common stock under the Securities Act of 1933, as
amended. The Company is required to exercise Put Rights with
respect to a minimum of $3 million over the life of the Equity Line
Agreement. In addition, the Company granted to the Investor a
warrant to purchase up to 200,000 shares of CYTOGEN common stock at
an exercise price of $1.016 per share through April 2002.
9
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
From time to time, as used herein, the term "Company" may
include CYTOGEN and its subsidiaries AxCell, Targon, and Cellcor,
taken as a whole, where appropriate.
Results of Operations
Background. To date, the Company's revenues have resulted
primarily from (i) sales and royalties from ProstaScint, Quadramet
and OncoScint CR/OV, (ii) payments received from contract
manufacturing and research services pursuant to agreements, (iii)
fees generated from the licensing of its technology and marketing
rights to its products, and (iv) milestone payments received when
events stipulated in the collaborative agreements with third
parties have been achieved.
On October 29, 1998 CYTOGEN announced an exclusive license
agreement with Berlex for the manufacture and sale of Quadramet.
CYTOGEN and Berlex are jointly finalizing a long-term supply
agreement with DuPont, the current contract manufacturer of
Quadramet. Under the terms of the Berlex Agreement, CYTOGEN will
receive an $8 million up front payment upon completion of the
supply agreement with DuPont, of which $4 million will be paid to
DuPont upon the completion of the supply agreement with DuPont to
secure a long-term manufacturing commitment. Berlex will pay
CYTOGEN royalties on net sales of Quadramet, as well as milestone
payments based on achievement of certain sales levels. See Note 2
to the Consolidated Financial Statements.
Quadramet was previously marketed in the United States by
DuPont. Under this arrangement, CYTOGEN recorded royalty revenues
based on a percentage of sales of Quadramet or guaranteed contractual
minimum royalty payments, whichever was greater. Actual sales
were substantially less than the minimum royalties. On June 3,
1998, pursuant to an agreement (the "Termination Agreement")
between CYTOGEN and DuPont, CYTOGEN reclaimed marketing rights to
Quadramet and the minimum royalty arrangement was terminated. All
terms of the Termination Agreement have been met. As a result,
near-term royalty revenues were adversely affected and Quadramet
revenues are now based on actual sales.
On September 15, 1998, CYTOGEN implemented a restructuring plan
including operating expense reductions with the closure of Cellcor
subsidiary and corporate downsizing. As a result, significant
aspects of the Company's operations were scaled back or eliminated
to increase its focus on marketing of its products, Quadramet,
ProstaScint and OncoScint CR/OV. In conjunction with this
restructuring plan, CYTOGEN recorded a charge of $1.7 million in
the third quarter of 1998 to its general and administrative
expenses for severances, other closure related expenses and costs
to implement the turn-around plan.
On August 12, 1998, CYTOGEN completed the sale of its remaining
49.875% ownership interest of Targon to Elan for $2.0 million As
a result, the Company recognized a non-operating gain of approximately
$2.8 million in the third quarter of 1998. All previous
notes among CYTOGEN, Targon and Elan were canceled. Also on August
14, 1998, CYTOGEN received $2.0 million from Elan in exchange for
a convertible promissory note. See Notes 3 and 5 to The Consolidated
Financial Statements.
10
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Third quarter ended September 30, 1998 and 1997
Revenues. Total revenues for the third quarter in 1998 and
1997 were $2.8 million and $4.2 million, respectively. The product
related revenues, which included product sales and royalties,
accounted for 92% of total revenues in 1998 versus 76% from the
same period of 1997. License and contract revenues accounted for
the remainder of revenues.
Product related revenues for the third quarter in 1998 and 1997
were $2.6 million and $3.2 million, respectively. ProstaScint
accounted for 62% and 37% of product related revenues in the third
quarter of 1998 and 1997, respectively, while revenues from
Quadramet accounted for 29% and 52% of product related revenues for
the comparable periods in 1998 and 1997, respectively (see Note 2
to The Consolidated Financial Statements). ProstaScint and
Quadramet were introduced to the market in 1997. The increase of
ProstaScint sales over prior year period was attributable to the
increased market acceptance of the product, as well as to the
increased number of accredited nuclear imaging centers, or Partners
in Excellence (" PIETM") sites, which are qualified to offer
ProstaScint scans. Each PIE site receives rigorous training,
undergoes proficiency testing and is certified as proficient in the
interpretation of ProstaScint scan. The increase in PIE sites has
included a number of major cancer centers across the country.
Sales of ProstaScint were $1.6 million in the third quarter of 1998
compared to $1.2 million in the third quarter of 1997. Revenues
from Quadramet decreased to $735,000 in the third quarter of 1998
from $1.6 million in the third quarter of 1997. During the interim
period until the re-launch of Quadramet by Berlex in the first
quarter of 1999, the Company does not expect Quadramet sales to be
significant. Although CYTOGEN believes that Berlex is the
appropriate marketing partner since they have a strategic focus in
oncology and are actively involved in patient and disease management
program, there can be no assurance that Quadramet, after the
re-launch, will achieve market acceptance on a timely basis or at
all to result in significant increases in revenues for CYTOGEN.
Other Revenues, including sales from OncoScint CR/OV and
autolymphocyte therapy ("ALT") treatments, were $228,000 in 1998
compared to $350,000 recorded in the comparable period of 1997.
The decrease from the prior year is due to the discontinuation of
the ALT treatment program pending the closure of Cellcor. As a
result, there will be no revenue from ALT treatments after
September 15, 1998.
License and contract revenues for the third quarter in 1998 and
1997 were $210,000 and $1.0 million, respectively. The third
quarter 1998 license and contract revenues consisted primarily of
contract manufacturing revenues. The third quarter 1997 revenues
included $365,000 and $278,000 in research revenues from DuPont for
continued clinical development of Quadramet and from Elan,
respectively, and $371,000 in contract manufacturing revenues.
License and contract revenues have fluctuated in the past and may
fluctuate in the future.
Operating Expenses. Total operating expenses were $9.3 million
and $16.1 million for the third quarter of 1998 and 1997, respectively.
The 1998 expenses included $1.2 million of restructuring
costs associated with the closure of Cellcor and corporate
downsizing, as well as approximately $500,000 in costs related to
11
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
the implementation of a turn-around plan. An additional $500,000
for miscellaneous charges including unusually high costs associated
with legal matters, a milestone payment to Dow for Canadian
approval of Quadramet, and a write-down on property were also
recorded in the third quarter. With the dissolution of DuPont
marketing agreement, expenses associated with Quadramet manufacturing
and distribution also increased. The Company expects these
expenses will be eliminated with the re-launch of the product by
Berlex in the first quarter of 1999. The third quarter of 1997
operating expenses included $7.5 million of product acquisition
costs and operating expenses for Targon.
Cost of product related and contract manufacturing revenues for
the third quarter of 1998 were $2.3 million compared to $1.6
million recorded in the same period of the prior year. The
increase from the prior year period is due primarily to increased
manufacturing costs associated with increased revenues in 1998 and
to expenses related to Quadramet including royalty, manufacturing
and distribution costs (see Note 2 to the Consolidated Financial
Statements).
Research and development expenses for the third quarter of 1998
were $2.6 million compared to $3.5 million recorded in the same
period of 1997. These expenses principally reflect product
development efforts and support of clinical trials. The 1998
expenses also included a $150,000 milestone payment to Dow for
Canadian approval of Quadramet. The 1998 decrease from the prior
year period is due to various savings including the scale back of
the genetic diversified library ("GDL") program and the product
development efforts by AxCell subsidiary.
The Company did not recognize Targon's losses after March 31,
1998, based on the completion of the sale of Targon to Elan (see
Note 3 to the Consolidated Financial Statements). For the third
quarter of 1997, the Company recorded $8.0 million in equity loss
in Targon subsidiary which included a one-time $7.5 million product
acquisition charge.
Selling and marketing expenses were $1.2 million for each of the third
quarter of 1998 and 1997. These expenses reflected the marketing efforts for
ProstaScint product and expenses to establish and maintain PIE sites.
General and administrative expenses for the third quarter of 1998 were
$3.2 million which included a $1.2 million of restructuring costs associated
with the closure of Cellcor subsidiary and reduction of work force,
approximately $500,000 in cost related to the implementation of a
turn-around plan, and $350,000 for increased legal costs and a writedown
of property. For the third quarter in 1997, general and administrative
expenses were $1.9 million.
Gain on sale of Targon subsidiary was $2.8 million recorded in the third
quarter of 1998 resulted from a sale of CYTOGEN's ownership interest in
Targon to Elan (see Note 3 to the Consolidated Financial Statements).
12
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Interest Income/Expense. Interest income for the third quarter in 1998
was $109,000 compared to $82,000 realized in the same period of 1997 and
included interest income realized from the $10.0 million note due to CYTOGEN
from Targon. The $10.0 million note was canceled as a result of a sale to
Elan of CYTOGEN's ownership in Targon on August 12, 1998.
Interest expense for the third quarter of 1998 was $97,000
compared to $73,000 recorded in the same period of 1997 and
included interest expense associated with the $10.0 million note
due to Elan, which was canceled as a result of a sale to Elan of
CYTOGEN's ownership in Targon on August 12, 1998.
Net Loss. Net loss to common stockholders for the third quarter
in 1998 was $3.7 million compared to a net loss of $11.9 million
incurred in the same period of 1997. The loss per common share was
$0.06 on 58.1 million average common shares outstanding compared to
$0.23 on 51.2 million average common shares outstanding for the
same period in 1997. The 1997 net loss to common stockholders
included a one-time $7.5 million charge or a $0.15 per share loss
for the product acquisition.
Year-to-date periods ended September 30, 1998 and 1997
Revenues. Total revenues for the year-to-date periods of 1998
and 1997 were $9.4 million and $10.2 million, respectively. The
product related revenues accounted for 84% of total revenues in
1998 versus 53% from the same period of the prior year. License
and contract revenues accounted for the remainder of revenues with
16% and 47% of total revenues recorded in the year-to-date periods
of 1998 and 1997, respectively.
Product related revenues for the year-to-date periods in 1998
and 1997 were $7.9 million and $5.4 million, respectively.
ProstaScint accounted for 58% and 52% of product related revenues
in 1998 and 1997, respectively, while Quadramet royalty and sales
revenue accounted for 33% and 31% of product related revenues in
1998 and 1997, respectively (see Note 2 to The Consolidated
Financial Statements). Sales from ProstaScint were $4.6 million in
the year-to-date period of 1998 compared to $2.8 million in the
comparable period of 1997. Royalty and sales revenues from
Quadramet were $2.6 million and $1.7 million in 1998 and 1997,
respectively. Other Revenues, including sales from OncoScint
CR/OV and ALT treatments, were $696,000 in 1998 compared to
$929,000 recorded in the comparable period of 1997.
License and contract revenues for the year-to-date periods in
1998 and 1997 were $1.5 million and $4.8 million, respectively.
The 1998 license and contract revenues included $1.1 million in
contract manufacturing revenues from eleven customers, $127,000
from Boston Life Sciences for clinical services and $100,000
license fee from Antisoma. The 1997 revenues included a $2.0
million milestone payment from DuPont, $1.1 million and $810,000 in
research revenues from DuPont for continued clinical development of
Quadramet and from Elan, respectively, and $781,000 in contract
manufacturing revenues from eleven customers.
13
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Operating Expenses. The current year operating expenses reflect
the Company's continued efforts to control spending. For the year-to-date
period in 1998, operating expenses were $24.9 million compared to $36.6
million recorded in the same period of 1997. The decrease from the prior
year period is due to the overall savings from cost containment efforts in
1998, a one-time $4.0 million milestone payment to Dow recorded in the first
quarter of 1997 upon the approval of Quadramet by FDA, and a one-time $7.5
million charge recorded in the third quarter of 1997 for product acquisition
by Targon. The decrease is partially offset $1.5 million increase in costs
of sales, and $1.7 million in restructuring charge and in costs related to
the implementation of a turn-around plan recorded in the third quarter of 1998.
Cost of product related and contract manufacturing revenues for
the year-to-date period in 1998 were $6.1 million compared to $4.6
million recorded in the same period of 1997. The increase from the
prior period is due primarily to increased manufacturing costs
associated with increased revenues in 1998, and to expenses related
to Quadramet including royalty, manufacturing and distribution
costs (see Note 2 to the Consolidated Financial Statements).
Research and development expenses for the year-to-date period
in 1998 were $8.3 million compared to $14.7 million recorded in
the same period of 1997. These expenses principally reflect
product development efforts and support of clinical trials. The
decrease from the prior year period is due to the aforementioned
$4.0 million milestone payment to Dow in the first quarter of 1997
combined with various savings from the Company's product development
efforts in 1998 including the scale back of the GDL program and AxCell
subsidiary.
Equity loss in Targon subsidiary for the year-to date period in
1998 was $1.0 million reflecting Targon's product development and
clinical trials programs. The Company did not recognize Targon's
losses after March 31, 1998, based on the completion of the sale of
Targon. For the comparable period in 1997, the Company recorded
$8.7 million for equity loss in Targon subsidiary which included a
one-time charge of $7.5 million recorded in the third quarter of
1997 for a product acquisition
Selling and marketing expenses were $3.6 million and $3.8
million for the year-to-date periods of 1998 and 1997, respectively.
The 1998 expenses reflected the marketing efforts to increase ProstaScint
sales and expenses to establish and maintain PIE sites. The 1997 expenses
included costs associated with ProstaScint launch and PIE program.
General and administrative expenses for year-to-date period in
1998 were $5.8 million which included a $1.2 million of restructuring
costs associated with the closure of Cellcor and work force
reduction and $500,000 of expenses related to the implementation
of a corporate turn-around plan. Excluding the aforementioned
charges, the 1998 general and administrative expenses were lower
than the $4.8 million recorded in the comparable period of 1997
reflecting cost containment efforts.
Gain on sale of Targon subsidiary was $2.8 million recorded in the
third quarter of 1998, a result of a sale of CYTOGEN's ownership interest
in Targon to Elan (see Note 3 to the Consolidated Financial Statements).
14
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Interest Income/Expense. Interest income for the year-to-date
period in 1998 was $537,000 compared to $527,000 realized in the
same period in 1997. The increase from the prior year period is
due to the $410,000 interest income realized in 1998 from the $10.0
million note due to CYTOGEN from Targon, partially offset by lower
investment income due to lower cash and short term investment
balances for the periods. As mentioned above, the note was canceled
as a result of a sale of Targon to Elan.
Interest expense for the year-to-date period in 1998 was $535,000
compared to $219,000 recorded in the same period of 1997. The increase
from the prior year period is due to the 1998 interest expense of
$410,000 associated with the $10.0 million note due to Elan which was canceled
as a result of a sale of Targon to Elan in August 1998.
Net Loss. Net loss to common stockholders for the year-to-date period
of 1998 was $12.8 million compared to a net loss of $26.1 million incurred
in the same period of 1997. The loss per common share was $0.23 on 55.4
million average common shares outstanding compared to $0.51 on 51.1 million
average common shares outstanding for the same period in 1997. The 1998 net
loss to common stockholders included $119,000 of accrued dividends on the
Series B Preferred Stock. The 1997 net loss to common stockholders included
a one-time $7.5 million charge or a $0.15 per share loss for the product
acquisition.
Liquidity and Capital Resources
The Company's cash and cash equivalents were $3.0 million as of
September 30, 1998, compared to $7.4 million as of December 31, 1997 and
$3.0 million as of June 30, 1998. The cash used for operating activities
for the year -to-date period ended September 30, 1998 was $8.2 million
compared to $17.9 million in the same period of 1997. The decrease in
cash usage for operating activities from the prior year period was primarily
due to lower research and development spendings and to the receipts of
revenues generated by sales and royalties from Quadramet and ProstaScint.
Historically, the Company's primary sources of cash have been proceeds
from the issuance and sale of its stock through public offerings and private
placements, product related revenues, revenues from contract manufacturing
and research services, fees paid under its license agreements and
interest earned on its cash and short term investments.
On October 23, 1998, the Company entered into an agreement (the
"Equity Line Agreement") with an institutional investor (the
"Investor") for a $12 million common stock equity line. Pursuant
to the Equity Line Agreement, the Company, subject to the satisfaction
of certain conditions including the effective registration of
such shares, was granted the right to issue and sell to the
Investor, and the Investor would be obligated to purchase up to $12
million of CYTOGEN common stock from time to time (collectively,
the "Put Rights") over a two year period at a purchase price per
share equal to 85% of the average of lowest trade prices of CYTOGEN
common stock during five designated trading days as determined
under the Equity Line Agreement. The Company can exercise the Put
Rights every 20 trading days in the amounts ranging from $150,000
to $1 million, subject to the satisfaction of minimum trading
volume, market price of CYTOGEN common stock and registration of
15
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
the shares of common stock under the Securities Act of 1933, as
amended. The Company is required to exercise Put Rights with
respect to a minimum of $3 million over the life of the Equity Line
Agreement. In addition, the Company granted to the Investor a
warrant to purchase up to 200,000 shares of CYTOGEN common stock at
an exercise price of $1.016 per share through April 2002.
On October 19, 1998, the Company entered into a $750,000 term
loan agreement with The CIT Group/Credit Finance Inc., using the
Company's tangible assets as collateral. The note bears interest
at prime plus 3%. The note is payable over 35 monthly principal
payments of $12,500 plus interest with the remaining balance due
October 2001.
On August 14, 1998, CYTOGEN received $4.0 million from Elan consisting
of $2.0 million for the sale of CYTOGEN's remaining interest in Targon and
$2.0 million in exchange for a convertible promissory note. The note is
convertible into CYTOGEN common shares at $2.80 per share, subject to
adjustments, and matures in seven years. The note bears interest of 7%
compounded semi-annually, however, such interest is not payable in cash
but be added to the principal for the first 24 months; thereafter, interest
will be payable in cash.
Quadramet. On October 29, 1998 CYTOGEN announced an exclusive
license agreement with Berlex for the manufacture and sale of
Quadramet. Under the terms of the Berlex Agreement, CYTOGEN will
receive an $8 million up front payment, of which $4 million will be
paid to DuPont, upon completion of the supply agreement with DuPont
to secure a long-term manufacturing commitment. Berlex will pay
CYTOGEN royalties on net sales of Quadramet, as well as milestone
payments based on achievement of certain sales levels (see Note 2
to the Consolidated Financial Statements). In connection with the
Berlex Agreement, CYTOGEN granted Berlex a warrant to purchase 1
million shares of CYTOGEN common stock at an exercise price of
$1.002 per share through October 2003 and exercisable after the
earlier of one year or the achievement of defined sales levels.
CYTOGEN acquired an exclusive license to Quadramet in the U.S., Canada
and Latin America from Dow. The agreement requires the Company to pay Dow
royalties based on a percentage of net sales of Quadramet, or guaranteed
contractual minimum payments, whichever is greater, and future payments
upon achievement of certain milestones. Minimum royalties due Dow for 1998
are $500,000. For the year-to-date periods ended September 30, 1998 and 1997,
the Company recorded $375,000 and $189,000 in royalty expenses for Quadramet.
ProstaScint. ProstaScint was launched in February 1997. Significant
cash will be required to support the Company's marketing program and
expansion and maintenance of the PIE program.
In 1996, CYTOGEN entered into an agreement with Bard (the "Co-Promotion
Agreement") to market and promote ProstaScint, pursuant to which Bard
will make payments upon the occurrence of certain milestones, which include
expansion of co-marketing rights in selected countries outside the U.S.
During the term of the Co-Promotion Agreement, Bard will receive
performance-based compensation for its services. For the year-to-date
periods in 1998 and 1997, the Company recorded $550,000 and $393,000,
respectively, for Bard commissions.
16
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
OncoScint CR/OV. To date, sales of OncoScint CR/OV have not been
material. In 1994, the Company reacquired all U.S. marketing rights to
OncoScint from Knoll Pharmaceuticals Company ("Knoll") and is required to
pay Knoll $1.7 million on or before December 15, 1998 in addition to accrued
interest from July 1, 1998 (the original due date) through the date of payment
at the prevailing prime rate of interest as of such date. The Company will
fund this payment from product related revenues and other sources.
The Company's capital and operating requirements may change depending
upon various factors, including:(i) the success of the Company and its
strategic partners in manufacturing, marketing and commercialization of
its other products; (ii) the amount of resources which the Company devotes
to clinical evaluations and the expansion of marketing and sales capabilities;
(iii) results of preclinical testing, clinical trials and research and
development activities; and (iv) competitive and technological developments.
The Company's financial objectives are to meet its capital and operating
requirements through revenues from existing products, contract manufacturing,
license and research contracts, and control of spending. To achieve its
strategic objectives, the Company may enter into research and development
partnerships and acquire, in-license and develop other technologies, products or
services. Certain of these strategies may require payments by the Company in
either cash or stock in addition to the costs associated with developing and
marketing a product or technology. The Company currently has no commitments
or specific plans for acquisitions or strategic alliances. However, the
Company believes that, if successful, such strategies may increase long term
revenues. There can be no assurance as to the success of such strategies or
that resulting funds will be sufficient to meet cash requirements until
product revenues are sufficient to cover operating expenses. To fund
these strategic and operating activities, the Company may sell equity and debt
securities as market conditions permit or enter into credit facilities.
The Company has incurred negative cash flows from operations since its
inception, and has expended, and expects to continue to expend in the future,
substantial funds to complete its planned product development efforts,
including acquisition of products and complementary technologies, research
and development, clinical studies and regulatory activities, and to further
expand its marketing and sales. The Company expects that its existing capital
resources, together with decreased operating costs, $750,000 proceeds from the
term loan, the anticipated $4.0 million net cash receipt from Berlex, but
exclusive of the Equity Line Agreement, will be adequate to fund the
Company's operations into 1999. Management believes the addition of the
Equity Line Agreement will provide the Company with adequate cash flow to
sustain operations into 2000. No assurance can be given that the Company will
not consume a significant amount of its available resources before that time.
In addition, the Company expects that it will have additional requirements
for debt or equity capital, irrespective of whether and when it reaches
profitability, for further development of products, product and
technology acquisition costs, and working capital. The Company's future
capital requirements and the adequacy of available funds will depend on
numerous factors, including the successful commercialization of its products,
the costs associated with the acquisition of complementary products and
technologies, progress in its product development efforts, the magnitude and
scope of such efforts, progress with preclinical studies and clinical trials,
progress with regulatory affairs
17
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
activities, the cost of filing, prosecuting, defending and enforcing patent
claims and other intellectual property rights, competing technological and
market developments, and the expansion of strategic alliances for the sales,
marketing, manufacturing and distribution of its products. To the extent
that the currently available funds and revenues including the Equity Line
Agreement, $750,000 proceeds from the term loan, and the anticipated $4.0
million net cash receipt from Berlex are insufficient to meet current or
planned operating requirements, the Company will be required to obtain
additional funds through equity or debt financing, strategic alliances with
corporate partners and others, or through other sources. Based on the
Company's historical ability to raise capital and current market conditions,
the Company believes other financing alternatives are available. There can
be no assurance that the financing commitments described above or other
financial alternatives will be available when needed or at terms commercially
acceptable to the Company. If adequate funds are not available, the Company
may be required to delay, scale back or eliminate certain aspects of its
operations or attempt to obtain funds through arrangements with collaborative
partners or others that may require the Company to relinquish rights to certain
of its technologies, product candidates, products or potential markets. If
adequate funds are not available, the Company's business, financial condition
and results of operations will be materially and adversely affected.
Year 2000 Compliance
The "Year 2000 problem" describes the concern that certain computer
applications, which use two digits rather than four to represent dates, will
interpret the year 2000 as 1900 and malfunction on January 1, 2000.
CYTOGEN's Internal Systems. The efficient operation of the Company's
business is dependent in part on its computer software programs and operating
systems (collectively, Programs and Systems). These Programs and Systems
are used in several key areas of the Company's business, including clinical,
purchasing, inventory management, sales, shipping, and financial reporting, as
well as in various administrative functions. The Company has completed its
evaluation of the Program and Systems to identify any potential year 2000
compliance problem. Based on present information, the Company believes that
it will be able to achieve year 2000 compliance through combination of
modification of some existing Programs and Systems and replacement of others
with new Programs and Systems that are already year 2000 compliant. The
majority of the Company internal systems have been replaced with fully
compliant new systems. The remaining is expected to be completed by
February 28, 1999. The total future cost is estimated at $40,000.
Readiness of Third Parties. The Company is also working with its
processing banks and network providers to ensure their systems are year 2000
compliant. All these costs will be borne by the processors, network and
software companies. In the event some of the processors are unable to
convert their systems appropriately, the Company will switch merchant accounts
to those that are able to perform the processing.
18
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Risks Associated with the Year 2000. The Company is not aware, at this
time, of any Year 2000 non-compliance that will not be fixed by the Year 2000
and that will materially affect the Company. However, some risks that the
Company faces include: the failure of internal information systems, defects
in its work environment, a slow down in customer's ability to make payments.
Contingency Plans. The Company is in the process of developing contingency
plans to address a worst case year 2000 scenario. This contingency plan is
expected to be completed by February 28, 1999.
==========================
Cautionary Statement
The foregoing discussion contains historical information as well as
forward looking statements that involve a number of risks and uncertainties.
In addition to the risks discussed above, among other factors that could
cause actual results to differ materially from expected results are the
following: (i) the Company's ability to continue as a going concern if the
Company is unable to raise sufficient funds or generate sufficient cash flows
from operations to cover the cost of its operations; (ii) the Company's
ability to access the capital markets in the near term and in the future for
continued funding of existing projects and for the pursuit of new projects;
(iii) the timing and results of clinical studies; (iv) market acceptance of
the Company's products, including programs designed to facilitate use of
the products, such as the PIE Program; (v) the decision by the majority of
public and private insurance carriers on whether to reimburse patients for
the Company's products; (vi) the profitability of its products; (vii) the
ability to attract, and the ultimate success of strategic partnering
arrangements, collaborations, and acquisition candidates; (viii) the ability
to attract additional contract manufacturing customers; (ix) the ability of
the Company and its partners to identify new products as a result of those
collaborations that are capable of achieving FDA approval, that are
cost-effective alternatives to existing products and that are ultimately
accepted by the key users of the product; and (x) the success of the
Company's marketing partners in obtaining marketing approvals in Canada and
in European countries, in achieving milestones and achieving sales of products
resulting in royalties.
19
PART II - OTHER INFORMATION
- -----------------------------
Item 5 - Other Information.
- ------
The Company's Common Stock (the "Common Stock") is listed on the Nasdaq
National Market (NNM"). The continued listing of the Common Stock on
the NNM is conditioned upon the Company's compliance with certain
quantitative criteria related to the market price of the Common Stock,
net tangible assets, market capitalization and certain other requirements
set forth by the NNM. At September 30, 1998, the Company's net tangible
assets were below NNM maintenance standards. The Company has been in
discussions with NNM on this subject. The Company is also taking steps
toward achieving compliance; however, there can be no assurance that
the Company will be able to maintain the listing of its securities on
the NNM. In the event that the Common Stock is delisted from the NNM,
the Company could apply to have the Common Stock listed on the Nasdaq
SmallCap Market. If, however, the Company did not meet the requirements
of the Nasdaq SmallCap Market, trading of the Common Stock could be
conducted on an electronic bulletin board established for securities
that do not meet the Nasdaq SmallCap Market listing requirements or in
what is commonly referred to as the "pink sheets." Such delisting of
the Common Stock could make it difficult for the Company to obtain future
financing. In addition, any such delisting may restrict investors'
interest in the Common Stock and materially adversely affect the trading
in and price of the Common Stock.
Item 6 - Exhibits and Reports on Form 8-K
- ------
(a) Exhibits:
1. Amended and Restated Rights Agreement, dated as of October 19, 1998
between CYTOGEN Corporation and Chase Mellon Shareholder Services,
L.L.C., as Rights Agent. The Amended and Restated Rights Agreement
includes the Form of Certificate of Designations of Series C Junior
Preferred Stock as Exhibit A, the form of Rights Certificate as
Exhibit B and the Summary of Rights as Exhibit C. Filed herewith.
10.1 Employment agreement effective as of August 20, 1998 between CYTOGEN
Corporation and H. Joseph Reiser. Filed herewith.
10.2 Loan and Security Agreement, dated as of October 19, 1998 between
CYTOGEN Corporation and the CIT Group/Credit Finance, Inc.
Filed herewith.
10.3 Private Equity Line Agreement by and between Kingsbridge Capital
Limited and CYTOGEN Corporation dated as of October 23, 1998.
Filed herewith.
10.4 License Agreement by and between Berlex Laboratories, Inc. and
CYTOGEN Corporation dated as of October 28, 1998. Filed herewith.*
10.5 Addendum to the Letter Agreement effective as of October 29, 1998
between CYTOGEN Corporation and DuPont Pharmaceuticals Company.
Filed herewith.
20
27 Financial Data Schedule (Submitted to SEC only in electronic format).
* CYTOGEN Corporation has requested confidential treatment of certain
provisions contained in this exhibit. The copy filed as an exhibit
omits the information subject to the confidentiality request.
(b) Reports on Form 8-K:
During the third quarter of 1998, the Company filed a Form 8-K dated
August 24, 1998 to report on "Item 5. Other Events" regarding the
appointment of H. Joseph Reiser as the Company's President and Chief
Executive Officer and as a member of the board of directors.
21
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.
CYTOGEN CORPORATION
Date November 13, 1998 By /s/ Jane M. Maida
----------------- ------------------------
Jane M. Maida
Chief Accounting Officer
(Authorized Accounting Officer)
22