FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended June 30, 1999
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: 0-11749
Scios Inc.
(Exact name of Registrant as specified in its charter)
Delaware 95-3701481
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Scios Inc.
820 W. Maude Ave.
Sunnyvale, CA 94086
(Address of principal executive offices) (Zip code)
(408) 616-8200
(Registrant's telephone number including area code)
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 ____
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Title Outstanding
Common Stock, $.001 par value 38,468,652
SCIOS INC.
AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SCIOS INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
ASSETS June 30, December 31,
1999 1998
-------------- -------------
(Unaudited)
Current assets:
Cash and cash equivalents $6,922 $6,683
Marketable securities 12,550 23,394
Accounts receivable 4,481 6,768
Prepaid expenses 669 568
-------------- -------------
Total current assets 24,622 37,413
Marketable securities, non-current 58,345 67,234
Property and equipment, net 29,733 32,214
Other assets 1,912 1,968
-------------- -------------
TOTAL ASSETS $114,612 $138,829
-------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,766 $2,327
Other accrued liabilities 9,929 10,087
Deferred contract revenue 17,231 16,896
-------------- -------------
Total current liabilities 28,926 29,310
Long-term debt 35,912 34,573
Minority interests -- 20
-------------- -------------
Total liabilities 64,838 63,903
-------------- -------------
Stockholders' equity:
Preferred stock; $.001 par value; 20,000,000
shares authorized; none issued and outstanding -- --
Common stock; $.001 par value; 150,000,000
shares authorized; issued and outstanding
38,468,652 and 38,468,652 shares, respectively 38 38
Additional paid-in capital 416,698 416,428
Treasury stock; 775,036 and 754,199
shares, respectively (3,646) (3,481)
Notes receivable from stockholders (108) (145)
Deferred compensation, net (357) (505)
Accumulated other comprehensive income (loss) (396) 11,412
Accumulated deficit (362,455) (348,821)
-------------- -------------
Total stockholders' equity 49,774 74,926
-------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $114,612 $138,829
-------------- -------------
The accompanying notes are an integral part of these consolidated financial
statements.
SCIOS INC.
AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss)
(In thousands, except share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1999 1998 1999 1998
------------------ -------- ------------ ------------
Revenues:
Product sales $9,472 $4,729 $17,294 $13,159
Co-promotion commissions 1,886 1,985 4,614 3,253
Research & development contracts 2,885 22,881 5,062 27,473
------------------ --------- ------------ ------------
14,243 29,595 26,970 43,885
------------------ --------- ------------ ------------
Costs and expenses:
Cost of goods sold 4,890 2,985 9,198 7,790
Research and development 8,129 11,930 18,672 22,457
Marketing, general and administration 4,242 4,480 9,555 9,082
Profit distribution to third parties 1,528 128 2,645 1,198
Restructuring charges -- -- 6,670 --
------------------ --------- ------------ ------------
18,789 19,523 46,740 40,527
------------------ --------- ------------ ------------
Income (loss) from operations (4,546) 10,072 (19,770) 3,358
------------------ --------- ------------ ------------
Other income and expense:
Investment income 1,100 962 2,126 1,948
Interest expense (670) (643) (1,340) (1,292)
Realized gains on securities 305 39 5,091 8,077
Other income, net 41 460 272 477
------------------ --------- ------------ ------------
776 818 6,149 9,210
------------------ --------- ------------ ------------
Equity in net loss of affiliates -- (581) -- (825)
------------------ --------- ------------ ------------
Income (loss) before provision for income taxes (3,770) 10,309 (13,621) 11,743
Provision for income taxes (7) (6) (13) (116)
------------------ --------- ------------ ------------
Net income (loss) (3,777) 10,303 (13,634) 11,627
------------------ --------- ------------ ------------
Other comprehensive income (loss):
Unrealized gains (losses) on securities (978) 40 (11,808) (4)
------------------ --------- ------------ ------------
Comprehensive income (loss) ($4,755) $10,343 ($25,442) $11,623
------------------ --------- ------------ ------------
Earnings (loss) per common share:
Basic ($0.10) $0.27 ($0.36) $0.31
------------------ --------- ------------ ------------
Diluted ($0.10) $0.26 ($0.36) $0.30
------------------ --------- ------------ ------------
Weighted average number of common shares outstanding used in calculation of:
Basic 37,724,094 37,850,807 37,735,349 37,562,172
------------------ ------------ ------------ ------------
Diluted 37,724,094 42,092,920 37,735,349 38,733,164
------------------ ------------ ------------ ------------
The accompanying notes are an integral part of these consolidated
financial statements.
SCIOS INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
Six months ended
June 30,
1999 1998
------------ -----------
(Unaudited)
Cash flows from operating activities:
Net income (loss) ($13,634) $ 11,627
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,551 1,909
Accrued long-term interest payable 1,339 1,275
Equity in net loss of affiliates -- 825
Gain on sale of securities (5,091) --
Minority interest (20) --
Amortization of deferred compensation 148 --
Non-cash restructuring expenses 1,273 --
Change in assets and liabilities:
Accounts receivable 2,287 (6,140)
Accounts payable (561) 2,128
Other accrued liabilities (2,904) (5,004)
Other (45) 281
Deferred contract revenue 335 29
Restructuring charges 2,746 --
------------ -----------
Net cash provided by (used in) operating activities (12,576) 6,930
------------ -----------
Cash flows from investing activities:
Purchases of property and equipment (1,843) (1,099)
Proceeds from sale of investment in affiliate -- 144
Proceeds from sale of assets 1,500 --
Sales/maturities of marketable securities 68,303 148,264
Purchases of marketable securities (55,287) (164,759)
------------ -----------
Net cash provided by (used in) investing activities 12,673 (17,450)
------------ -----------
Cash flows from financing activities:
Issuance of common stock and collection of notes receivable from
stockholders, net 1,189 7,317
Purchase of treasury stock (1,047) --
Payment of notes payable and capital leases -- (297)
------------ -----------
Net cash provided by financing activities 142 7,020
------------ -----------
Net increase in cash and cash equivalents 239 (3,500)
Cash and cash equivalents at beginning of period 6,683 10,197
------------ -----------
Cash and cash equivalents at end of period $ 6,922 $ 6,697
------------ -----------
The accompanying notes are an integral part of these consolidated
financial statements.
SCIOS INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
1. Basis of Presentation and Accounting Policies
The unaudited consolidated financial statements of Scios Inc. ("Scios"
or the "Company") reflect, in the opinion of management, all
adjustments, consisting only of normal and recurring adjustments,
necessary to present fairly the Company's consolidated financial
position at June 30, 1999 and the Company's consolidated results of
operations and cashflows for the three-month and six-month periods
ended June 30, 1999 and 1998. Interim-period results are not
necessarily indicative of results of operations or cash flows for a
full-year period.
These financial statements and the notes accompanying them should be
read in conjunction with the Company's annual report on Form 10-K for
the year ended December 31, 1998. Investors are encouraged to review
the Form 10-K for a broader discussion of the Company's business and
the opportunities and risks inherent in the Company's business. Copies
of the 10-K are available from the Company on request and from the
Security and Exchange Commission's Edgar database at web site
www.sec.gov.
The year-end balance sheet data was derived from audited financial
statements, but do not include all disclosures required by generally
accepted accounting principles.
2. Restructuring Charges and Expenses
On March 1, 1999, the Company announced a restructuring plan that
included a reduction of the Company's full-time workforce by
approximately 30% and the consolidation of its headquarters,
development and research staff into currently leased facilities in
Sunnyvale, California. In the quarter ending March 31, 1999, the
Company recorded a one-time restructuring charge of approximately $6.7
million for the disposal of certain excess assets and severance costs.
The provision for the restructure and the activity through June 30,
1999 are summarized in the following table:
Balance at
(in thousands) Provision Activity June 30,1999
- ----------------------------------------------------------------------------------------------------------
Facilities $ 360 $ 256 $ 104
Workforce reductions 2,819 1,805 1,014
Contractual commitments 1,110 281 829
Asset write-downs 1,800 1,273 527
Lease exit costs 581 309 272
--------- --------- ----------
$6,670 $3,924 $2,746
3. Computation of Earnings (Loss) Per Share
The following table sets forth the computation of the Company's basic
and diluted earnings (loss) per share (in thousands, except per share
amounts):
Three months ended Six months ended
June 30, June 30,
1999 1998 1999 1998
------------------------------------------- --------------- --------------- --------------- ---------------
Numerator
Basic
Net income (loss) ($ 3,777) $ 10,303 ($ 13,634) $ 11,627
Diluted
Net income (loss) ($ 3,777) $10,303 ($ 13,634) $11,627
Add: Genentech interest --- 638 --- ---
Net income (loss) ($ 3,777) $ 10,941 ($ 13,634) 11,627
Denominator
Basic
Weighted average shares 37,724 37,851 37,735 37,562
Effect of dilutive securities:
Genentech conversion of
loan to common stock --- 3,000 --- ---
Employee stock options --- 1,242 --- 1,171
Weighted average shares and
Assumed conversions 37,724 42,093 37,735 38,733
Basic earnings (loss) per share ($ 0.10) $ 0.27 ($ 0.36) $ 0.31
Diluted earnings (loss) per share ($ 0.10) $ 0.26 ($ 0.36) $ 0.30
<FN>
The potentially dilutive effect of outstanding options to purchase
common stock would have been anti-dilutive in both periods of 1999, and
they were therefore excluded from the 1999 diluted earnings
calculations. Although potentially dilutive, the payoff of the
Genentech loan through the issuance of common stock would have been
anti-dilutive in 1999 and for the six-month period in 1998 and was,
therefore, excluded from the calculations.
At June 30, 1999, stock options at prices ranging from $3.688 to $7.125
per share would have increased the number of weighted average common
shares outstanding by 323,525 and 2,230,578 shares for the three- and
six-month periods of 1999, respectively, but were not included in the
computation of diluted income per share because they were antidilutive.
</FN>
4. Industry and Geographic Segment Information
Management uses one measurement of profitability for its business. The
Company receives revenue from product sales and from licensing and
development of products. The Company markets its products in the U.S.
and receives licensing revenue from partners in the U.S., Canada,
Europe and Asia Pacific and operates in one business segment.
All long-lived assets are located in the United States and revenues by
geographic area are as follows for the first half of 1999 and 1998,
respectively:
(in thousands) June 30, 1999 June 30, 1998
-------------- ------------- ------------
Revenues - U.S. $ 25,746 $ 20,527
Revenues - International 1,224 23,358
---------- ---------
Total $ 26,970 $ 43,885
-------- --------
5. Subsequent Event
The Company completed the sale of its Mountain View, California,
facilities in July 1999 for proceeds of approximately $20.0 million.
Under the terms of the sale, the Company will lease back approximately
56,000 square feet of the facility for an additional six months.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
In accordance with Federal laws, the Company reminds readers that the
following discussion contains forward-looking statements about plans,
objectives, future results and intentions of the Company. These forward-looking
statements are based on the current expectations of the Company, and the Company
assumes no obligation to update this information. Realization of these plans and
results involves risks and uncertainties, and the Company's actual results could
differ materially from the historical results or future plans discussed here.
Factors that could cause or contribute to such differences include, but are not
limited to, those items discussed below, as well as the considerations discussed
in the Company's Form 10-K for the year ended December 31, 1998.
Results of Operations
Three Months Ended June 30, 1999 and 1998
Revenues in the second quarter of 1999 were $14.2 million and included
$9.5 million in product sales, $1.8 million in co-promotion commissions and $2.9
million in contract revenues. Revenues for the corresponding period in 1998 were
$29.6 million, including $6.7 million generated by product sales and
co-promotion commissions and $22.9 million from contract revenue. The decrease
in contract revenue is mainly due to a $20.0 million payment received in 1998
from Bayer AG ("Bayer") upon signing an agreement for the commercialization of
Natrecor(R)(nesiritide). Product sales from psychiatric products under license
from SmithKline Beecham Corporation ("SB Products") increased $4.7 million from
1998 to 1999, in part, because of unusually low sales in the second quarter of
1998. During the second quarter of 1999, Bayer elected to terminate its rights
to Natrecor and returned all rights and technology to the Company. The Company
is currently seeking another commercialization partner.
The Company incurred total operating expenses of $18.8 million in the
second quarter of 1999 versus $19.5 million in the same period in 1998. The $0.7
million decline in expenses is due to a $3.8 million decrease in research and
development expenses which are partially offset by increases of $1.9 million in
cost of goods and $1.4 million in profit distribution. The decrease in research
and development expenses was mainly the result of lower headcount due to the
March 1999 restructure, and lower expenses for Natrecor drug supply. The
increase in both cost of goods and profit distribution is the result of higher
SB Product sales in the current quarter as compared to the year ago quarter.
The net loss for the quarter was $3.8 million compared to net income of
$10.3 million in 1998. The $14.1 million decrease in earnings was due to the
$20.0 million Bayer payment received in 1998, coupled with a $3.8 million
reduction in research and development expenses in the second quarter of 1999.
Six Months Ended June 30, 1999 and 1998
Revenues in the first six months totaled $27.0 million in 1999 and
$43.9 million in 1998. SB Product sales increased from $13.2 million in 1998 to
$17.3 million in 1999. Co-promotion commissions increased by $1.4 million from
1998 to 1999 because of the change in product lines promoted by the Company. The
Company currently co-promotes Risperdal(R) (risperidone) with Janssen
Pharmaceutica and Paxil(R) (paroxetine HCl) with SmithKline Beecham Corporation.
The decline of $22.4 million in research and development contract revenue from
1998 to 1999 was mainly due to receipt of $20.0 million from Bayer for the
commercialization of Natrecor and from milestone payments received from Novo
Nordisk in 1998.
For the six-month period, costs and expenses increased from $40.5
million in 1998 to $46.7 million in 1999. The increase in expenses is primarily
due to the one-time $6.7 million restructure expense associated with the closure
of the Company's Mountain View facilities and to a 30% reduction in the
workforce in the first quarter. The restructure is expected to reduce annual
operating expenses by $14.0 million per year.
Other income and expense declined from $9.2 million for the six-month
period in 1998 to $6.1 million for the same period in 1999. The decrease was
mainly due to a reduction in realized gains on the sale of the Company's
securities from period to period. For the six-month period in 1998, realized
gains on securities were $8.1 million which was primarily the result of the sale
of the Company's entire interest in its subsidiary, Karo Bio, through a public
stock offering. For the same period in 1999, realized gains were $5.1 million,
which were mainly due to the sales of the Company's holdings in Guilford
Pharmaceuticals Inc.
The Company had a net loss of $13.6 million for the first six months of
1999 versus net income of $11.6 million for the same period in 1998. The $25.2
million change in income is primarily due to the $20.0 million received from
Bayer for commercialization of Natrecor in 1998, coupled with the $6.7 million
recorded for restructuring in 1999.
The ability of the Company to achieve profitability depends principally
on the Company's success in developing and commercializing its own products and
on its ability to complete agreements with third parties that result in
additional revenue. Among the factors that will determine the Company's success
in commercializing its products are: the demonstrated safety and efficacy of
products in development; the cost of and the time taken to complete clinical
trials and regulatory submissions; the timing and scope of regulatory approvals,
particularly with respect to the Company's lead product Natrecor(R)
(nesiritide); the Company's ability to secure a cost-effective drug supply; the
Company's success in developing and implementing cost effective sales and
marketing strategies either on its own behalf or in partnership with other
companies; and the level of market acceptance if products are approved, both at
product launch and over time. The Company's ability to raise additional revenue
through third parties will be dependent on the factors described above, as well
as other factors such as: its success in marketing and selling the third-party
products which it may acquire the right to co-promote; the disposition of
various patent proceedings related to the protection of the Company's potential
products; the perceived value of the Company's current product portfolio and
research programs to outside parties; and the success of third parties, such as
Kaken Pharmaceutical Co., Ltd. and Wyeth-Ayerst Laboratories on Fiblast; and
Novo Nordisk A/S on GLP-1 in developing and commercializing the Company's
products.
Liquidity and Capital Resources
Combined cash, cash equivalents and marketable securities (both current
and non-current) totaled $77.8 million at June 30, 1999, a decrease of $19.5
million from December 31, 1998. The decrease was primarily attributable to cash
used to fund operations and to a decrease of $5.9 million in the value of the
Company's Guilford stock between year-end 1998 and the time of the sale. The
Company sold all of its holdings in Guilford in the first six months of 1999.
The Company is striving to achieve profitability over the next several
years. The timing of the Company's success in reaching its objectives to achieve
and sustain profitability, in the short term, depends principally on the success
of the Company in achieving regulatory approvals and generating sales from
Natrecor. The Company has recently determined with the FDA the nature of the
additional clinical trials that the agency will require before it would consider
approval of Natrecor for marketing. The Company expects to initiate enrollment
in the trial in October, with enrollment in the study to be approximately 500
patients at an estimated cost of $10.0 million. Profitability will also depend
on a number of other factors including the Company's success and timeliness of
its other product development, clinical trial, regulatory approval and product
introduction efforts. Other contributing factors will be the Company's ability
to develop new revenue sources to support research and development programs and
its success in marketing and promoting the products of third-parties that may be
licensed by the Company.
The Company's resources of $77.8 million in cash, cash equivalents and
marketable securities at June 30, 1999, together with revenues from product
sales, collaborative agreements, interest income, the sale of real estate and
any funding from existing or future debt arrangements, will be used to support
current and new clinical trials for proprietary products under development, to
support commercialization efforts for prospective products and for other general
purposes. The Company believes its cash resources will be sufficient to meet its
operating and capital requirements for at least the next several years. Key
factors that will affect future cash use and the timing of the Company's need to
seek additional financing include the Company's decisions concerning the degree
to which it will incur expenses to launch its products in the United States
market following the necessary regulatory approvals, the results of the
Company's partnering efforts, the timing and amounts realized from licensing and
partnering activities, the rate of spending required to develop the Company's
products and respond to changing business conditions, and the net contribution
produced by the Company's ability to co-promote and market products for third
parties.
Over the long-term, the Company may need to arrange additional
financing for the future operation of its business, including the
commercialization of products currently under development, and it will consider
collaborative arrangements and additional public or private financings,
including additional equity financings. Factors influencing the availability of
additional funding include, but are not limited to, the Company's progress in
product development, investor perception of the Company's prospects and the
general conditions of the financial markets.
Impact of Year 2000
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of the
Company's computer programs or hardware that have date-sensitive software or
embedded chips may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Based on recent assessments, the Company has determined that it will
not be required to modify or replace significant portions of hardware or
software to ensure that those systems will properly utilize dates beyond
December 31, 1999. The Company presently believes that with achievable
modifications and modest replacement of existing hardware and software, the Year
2000 Issue can be mitigated. However, if such modifications and replacements are
not made, or are not completed on a timely basis, the Year 2000 Issue could have
an impact on the operations of the Company.
The Company's plan to resolve the Year 2000 Issue involves the
following four phases: assessment, remediation, testing, and implementation. To
date the Company has fully completed its assessment of all internal systems that
could be significantly affected by the Year 2000. The completed assessment
indicated that most of the Company's significant information technology systems
are Year 2000 compliant. That assessment did, however, indicate that certain
systems were at risk. Affected systems include chromatography, clinical case
report forms tracking, and statistical analysis software. The Company is
currently assessing cost comparisons on whether to remediate or replace this
equipment and expects to have the equipment corrected and re-tested by October
31, 1999. For its information technology exposures, to date the Company is 75%
complete on the remediation phase and expects to complete software reprogramming
and replacement no later than November 30, 1999.
The Company is in the process of querying its important suppliers and
contractors that do not share information systems with the Company (external
agents). To date, the Company is not aware of any external agent Year 2000 issue
that would materially impact the company's results of operations, liquidity, or
capital resources. However, the Company has no means of ensuring that external
agents will be Year 2000 ready. The inability of external agents to complete
their Year 2000 resolution process in a timely fashion could materially impact
the Company. The effect of non-compliance by external agents is not
determinable. The Company will update its analysis of external agent systems in
subsequent reports.
The Company will utilize both internal and external resources to
reprogram, or replace, test and implement the software and scientific equipment
for Year 2000 modifications. The total cost of the Year 2000 project is
estimated at approximately $75,000 and is being funded through operating cash
flows. To date, the Company has incurred approximately $13,000 related to all
phases of the Year 2000 project. Of the total remaining project costs,
approximately $28,000 is attributable to the purchase of new software, $20,000
for new hardware, which will be capitalized, and $14,000 for the repair of
hardware and software.
The Company's plans to complete the Year 2000 modifications are based
on management's best estimates, which were derived utilizing numerous
assumptions of future events including continued availability of certain
resources, and other factors. Estimates on the status of completion and the
expected completion dates are based on costs incurred to date compared to total
expected costs. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those plans. Specific
factors that might cause such material differences include, but are not limited
to, the availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes, and similar uncertainties.
The Company has not completed a formal contingency plan for
non-compliance, but it is developing a plan based on the information obtained
from third parties and an on-going evaluation of the Company's own systems. The
Company anticipates having a contingency plan in place by November 30, 1999,
which will include development of backup procedures, identification of alternate
suppliers and possible increases in supplies inventory levels. The Company has
not identified its most reasonably likely worst case scenario with respect to
possible losses in connection with Year 2000 related problems. The Company plans
on completing this analysis by November 30, 1999.
The information above contains forward-looking statements including,
without limitation, statements relating to the Company's plans, strategies,
objectives, expectations, intentions, and adequate resources that are made
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Readers are cautioned that forward-looking statements about
the Year 2000 should be read in conjunction with the Company's disclosures in
its Annual Report or Form 10-K as filed with the Securities and Exchange
Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
No change has occurred since the filing by the Registrant on Form 10-K
for the year ended December 31, 1998. Reference is made to Part II, Item 7A,
Quantitative and Qualitative Disclosures About Market Risk, in the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1998.
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on May
11, 1999.
(a) The following individuals were elected directors of
the Company, each to serve until a successor is
elected:
Total Vote For Total Vote Withheld
Name Each Director From Each Director
Samuel H. Armacost 32,987,153 152,210
Richard B. Brewer 32,983,496 155,867
Myron Du Bain 32,844,616 294,747
Donald B. Rice, Ph.D. 32,989,609 149,754
Charles A. Sanders, M.D. 32,973,807 165,556
Solomon H. Snyder, M.D. 32,993,017 146,346
Burton E. Sobel, M.D. 32,982,110 157,253
Eugene L. Step 32,964,947 174,416
(b) The following matter was approved by stockholder vote,
with votes cast as indicated:
To ratify the selection of PricewaterhouseCoopers
LLP as the Company's independent auditors for
fiscal year 1999:
Votes cast for: 32,958,128
Votes cast against: 84,422
Abstentions: 73,325
Broker non-votes were not relevant to the foregoing matters.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
Report on Form 8-K, dated April 28, 1999 (pursuant to Item 5) regarding
the non-approval of the Company's New Drug Application on Natrecor (R)
nesiritide by the United States Food and Drug Administration.
Report on Form 8-K, dated June 10, 1999 (pursuant to Item 5) regarding
the termination of the Company's commercial alliance with Bayer Corporation on
Natrecor (R) nesiritide.
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.
SCIOS INC.
August 12, 1999 by: ___/s/ Richard B. Brewer__________
--------------------- -
Richard B. Brewer, President and CEO
August 12, 1999 by: ___/s/ David W. Gryska____________
-------------------
David W. Gryska, Vice President and CFO