----------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 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 No. 0-15271
---------------------------
CISTRON BIOTECHNOLOGY, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 22-2487972
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10 Bloomfield Avenue, Pine Brook, New Jersey 07058
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(973) 575-1700
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 and 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) has been
subject to such filing requirements for the past 90 days.
Yes _X_ No ___
The aggregate number of Registrant's outstanding shares on February 14,
2000 was 20,810,670 shares of Common Stock, .01 par value.
Page 1 of 14 pages
2
CISTRON BIOTECHNOLOGY, INC.
---------------------------
(A DEVELOPMENT STAGE COMPANY)
---------------------------
INDEX
-----
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance sheets as of December 31, 1999 and June 30, 1999.... 3
Statements of operations for the three months and six months
ended December 31, 1999 and 1998............................ 4
Statements of cash flows for the six months ended
December 31, 1999 and 1998.................................. 6
Notes to financial statements............................... 7
Item 2. Management's discussion and analysis of results of
operations and financial condition.......................... 9
Item 3. Quantitative and Qualitative Disclosures about
Market Risk................................................. 11
PART II - OTHER INFORMATION........................................... 12
Item 5. Other Information................................... 12
Item 6. Exhibits and Report on Form 8-K..................... 12
Signatures.................................................. 14
-2-
3
CISTRON BIOTECHNOLOGY,INC.
--------------------------
BALANCE SHEETS
--------------
June 30, December 31,
ASSETS 1999 1999
- ------ ------------ --------------
CURRENT ASSETS: (unaudited)
Cash and equivalents $ 8,760,916 $ 9,064,524
Accounts receivable-trade 28,279 -
Accounts receivable-other 2,942,361 956,360
Inventories 1,023 -
Taxes receivable 369,557 103,617
Notes receivable $230,000;
reserve $230,000 - -
---------- ----------
TOTAL CURRENT ASSETS $ 12,102,136 $ 10,124,501
ACCOUNTS RECEIVABLE - OTHER - Long-term 931,440 -
PROPERTY AND EQUIPMENT:
Machinery and equipment 507,557 -
Furniture and fixtures 147,113 -
Leasehold improvements 77,674 -
---------- ----------
732,344 -
Less: Accumulated depreciation 706,980 -
---------- ----------
25,364 -
SECURITY DEPOSITS 23,938 22,962
PATENTS, Net of accumulated amortization
of $17,186 and $18,511, respectively 19,919 18,594
---------- ----------
TOTAL ASSETS $ 13,102,797 $ 10,166,057
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses and accounts payable $ 390,386 $ 105,623
Other current liabilities 775,484 296,114
---------- ----------
TOTAL CURRENT LIABILITIES 1,165,870 401,737
Deferred revenue 69,750 -
Other non-current liabilities 270,796 -
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value: 50,000,000
shares authorized; 29,633,854 and
29,883,854 shares respectively, issued
at June 30, and December 31, 1999 296,839 298,339
Additional paid-in capital 9,865,036 9,873,092
Earnings accumulated during the developm 2,106,961 1,529,045
Treasury stock: 3,946,500 and 9,504,906 (394,650) (1,658,350)
Note receivable for shares of stock (277,805) (277,805)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 11,596,381 9,764,321
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 13,102,797 $ 10,166,057
========== ==========
See accompanying notes to financial statements.
4
CISTRON BIOTECHNOLOGY, INC.
---------------------------
STATEMENTS OF OPERATIONS
------------------------
(UNAUDITED)
---------
February 2, 1982
(commencement of
Three months ended December 31, operations) to
1998 1999 December 31, 1999
-----------------------------------------------------
Sales...................................... $ 51,210 $ 1,380 $ 9,804,427
Cost of sales.............................. 75,884 100,636 4,472,394
---------- ----------- ----------
Gross profit............................. (24,674) (99,256) 5,332,033
Other income:
Litigation settlements................... - - 14,684,206
License fees and funded research......... 69,750 69,750 5,210,086
Expenses:
Research and development................. 51,981 85,383 9,154,470
Administrative and marketing............. 248,662 348,349 12,788,682
Occupancy................................ 48,582 20,873 2,746,106
Employee severance....................... - - 369,762
---------- ----------- ----------
Total expenses............................. 349,225 454,605 25,059,020
---------- ----------- ----------
Operating income/(loss).................. (304,149) (484,111) 167,305
Interest income/(expense) - net............ 65,593 75,154 1,421,359
Other income (expense)..................... - 17,620 (42,275)
Amortization of deferred financing costs... - - (173,079)
Acquisition expense........................ - - (429,620)
---------- ----------- ----------
Income/(loss) before income taxes
and extraordinary credit................. (238,556) (391,337) 943,690
Income tax provision (benefit)............. (90,651) 50 1,176,586
---------- ----------- ----------
Income/(loss) before extraordinary credit.. (147,905) (391,387) (232,896)
Extraordinary credit - benefit of tax loss
carryforward............................. - - 262,838
Net income/(loss)........................ $ (147,905) $ (391,387) $ 29,942
========== =========== ============
Net loss per share......................... $ (0.01) $ (0.02)
========== ============
Weighted average shares outstanding........ 24,317,020 20,270,252
========== ============
Net income/(loss) per share -
assuming dilution........................ $ (0.01) $ (0.02)
========== ============
Weighted average shares outstanding -
assuming dilution........................ 24,317,020 20,270,252
========== ============
See accompanying notes to financial statements
5
CISTRON BIOTECHNOLOGY, INC.
---------------------------
STATEMENTS OF OPERATIONS
------------------------
(UNAUDITED)
---------
February 2, 1982
(commencement of
Six months ended December 31, operations) to
1998 1999 December 31, 1999
----------------------------------------------------
Sales....................................... $ 204,780 $ 52,690 $ 9,804,427
Cost of sales............................... 155,518 142,417 4,472,394
---------- ---------- ----------
Gross profit.............................. 49,262 (89,727) 5,332,033
Other revenues:
Litigation settlement, net................ - - 14,684,206
License fee and funded research........... 69,750 171,437 5,210,086
Expenses:
Research and development.................. 155,642 159,686 9,154,470
Administrative and marketing.............. 474,331 597,978 12,788,682
Occupancy................................. 98,795 80,531 2,746,106
Employee severance........................ - - 369,762
---------- ---------- ----------
Total expenses.............................. 728,768 838,195 25,059,020
---------- ---------- ----------
Operating income (loss)................... (609,756) (756,484) 167,305
Interest income/(expense) - net............. 202,304 161,423 1,421,359
Other income (expense)...................... - 17,620 (42,275)
Amortization of deferred financing costs.... - - (173,079)
Acquisition expense......................... - - (429,620)
---------- ---------- ----------
Income/(loss) before income taxes -
and extraordinary credit.................. (407,452) (577,441) 943,690
Income tax provision (benefit).............. (154,831) 100 1,176,586
---------- ---------- ----------
Income/(loss) before extraordinary credit... (252,621) (577,541) (232,896)
Extraordinary credit - benefit of
tax losscarryforward..................... - - 262,838
---------- ---------- ----------
Net income/(loss)......................... $ (252,621) $ (577,541) $ 29,942
========== ========== ==========
Net loss per share.......................... $ (0.01) $ (0.03)
========== ==========
Weighted average shares outstanding......... 24,317,020 20,466,270
========== ==========
Net loss pr share - assuming dilution....... $ (0.01) $ (0.03)
========== ==========
Weighted average shares outstanding -
assuming dilution......................... 24,317,020 20,466,270
========== ==========
See accompanying notes to financial statements
6
CISTRON BIOTECHNOLOGY, INC.
---------------------------
STATEMENTS OF CASH FLOWS
------------------------
(UNAUDITED)
---------
February 2, 1982
(commencement of
Six Months ended December 31, operations) to
1998 1999 December 31, 1999
--------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 274,580 $ 80,990 $ 11,753,327
Cash paid to suppliers and employees (1,726,880) (2,254,747) (36,160,239)
Interest received 139,304 181,475 1,100,902
Acquisition expenses paid - - (429,620)
Royalties, research funding,
license fees received 139,500 106,937 3,829,529
Other receipts 3,003,678 3,368,098 21,519,197
---------- ---------- -----------
Net cash provided by (used in)
operating activities 1,830,182 1,482,753 1,613,096
CASH FLOWS FROM INVESTING ACTIVITIES:
Collection of note receivable - - 15,097
Issuance of note receivable - - (230,000)
Sale of property and equipment - 75,000 (692,121)
---------- ---------- -----------
Net cash (used in) investing activities - 71,015 (907,024)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of capital stock
and additional contributions 930,000 9,555 10,887,040
Principal payments on notes payable - - (870,238)
Purchase of treasury stock - (1,263,700) (1,658,350)
---------- ---------- -----------
Net cash provided by financing activities 930,000 (1,254,145) 8,358,452
---------- ---------- -----------
Net change in cash and cash equivalents 2,760,182 303,608 9,064,524
CASH AND CASH EQUIVALENTS, beginning of period 5,832,031 8,760,916 -
---------- ---------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 8,592,213 $ 9,064,524 9,064,524
========= ========== ===========
RECONCILIATION OF NET INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss) $ (252,621) $ (577,541) $ 29,942
Adjustments to reconcile net income (loss)
to net cash provided used in
operating activities:
Depreciation and amortization 3,843 5,310 756,329
Issue of warrants - - 65,000
Deferred income taxes - - -
Loss(Gain) on disposal of property and equipment - (54,945) (46,414)
Increase in reserve for note receivable - - 230,000
Amortization of deferred financing costs - - 195,179
Decrease (increase) in assets:
Accounts receivable 65,437 2,013,906 1,985,627
Inventory 2,842 1,023 -
Taxes receivable - 265,940 (103,617)
Notes and other receivables 2,838,883 931,440 (2,958,061)
Security deposit - 975 (22,963)
Intangible assets - 1,325 (35,780)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (48,575) (764,134) 1,490,008
Other current and non-current liabilities (779,627) (340,546) 27,846
---------- ---------- -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: $ 1,830,182 1,482,753 $ 1,613,096
========== ========== ===========
See accompanying notes to financial statements
7
CISTRON BIOTECHNOLOGY, INC.
---------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(Unaudited)
A. BASIS OF PRESENTATION
---------------------
The financial statements for the three and six month periods ended
December 31, 1999 and 1998 have been prepared without audit and, in the
opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to fairly present the Company's
financial position, results of operations, and cash flows at December
31, 1999 and 1998 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. Certain amounts in prior year
financial statements have been reclassified to conform to current year
presentation.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 1999. The
results of operations for the periods ended December 31, 1999 and 1998
are not necessarily indicative of the operating results for the full
year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
B. OTHER INCOME
------------
Other income includes sales related royalties and $75,000 ($69,750 net
of commissions) per quarter under a three-year program funded by Aventis
Pasteur formally known as Pasteur Merieux Serums & Vaccins, S.A.
("PMS&V") a subsidiary of Rhone-Poulenc (now known as Aventis
Pharmaceuticals) to fund the Company's vaccine adjuvant development
program.
C. INCOME TAXES
------------
Although tax benefits were recorded against the net losses incurred in
periods ending on or before June 30, 1999, such benefits are no longer
available for periods commencing thereafter.
D. ACCOUNTS RECEIVABLE
-------------------
Accounts receivable - other consists of an amount due in November 2000
pursuant to a litigation settlement agreement entered into in 1996. This
amount has been discounted to reflect its present value. The Company
has licensed manufacture and sale of its products to another company and
discontinued all manufacturing and sales activities in October 1999.
All of the Company's trade receivables have been collected.
8
E. CHANGES IN SHAREHOLDERS' EQUITY
-------------------------------
During the six-month period ended December 31, 1998, shareholders'
equity increased $677,378 due to the sale of 1,333,333 shares of common
stock to Pasteur Merieux Serums & Vaccins, S.A. ("PMS&V") for $1
million, less $70,000 due to BlueStone on the transaction offset, in
part, by a net loss of $252,621. In July 1999, shareholders' equity
decreased due to the repurchase, for $1,263,700, of 5,558,406 shares of
the Company's Common Stock for Treasury. In November 1999, 150,000
shares of the Company's Common Stock were issued pursuant to the
exercise of an option by a former director of the Company, increasing
shareholders' equity by $9,555. During the three and six month periods
ended December 31, 1999, shareholders' equity was decreased by net
losses of $186,154 and $577,441, respectively, and the effect of the
aforementioned transactions.
F. EARNINGS PER SHARE CALCULATIONS
-------------------------------
The following is a summary of the numerators and denominators used to
calculate Earnings per Share:
Three Months Ended Six Months Ended
December 31, December 31,
---------------------------- ----------------------------
1998 1999 1998 1999
------------- ------------- ------------- -------------
Earnings per common share:
- -------------------------
Net income (loss)
(numerator) $ (147,905) $ (391,387) $ (252,621) $ (577,541)
Weighted average shares
(denominator) 24,317,020 20,270,252 24,317,020 20,466,270
Earnings (loss) per share $ (0.01) $ (0.02) $ (0.01) $ (0.03)
========== ========== ========== ==========
Earnings per common share
- assuming dilution:
- -------------------------
Net income (loss)
(numerator) $ (147,905) $ (391,387) $ (252,621) $ (577,541)
Weighted average shares 24,317,020 20,270,252 24,317,020 20,466,270
Effect of dilutive options - - - -
========== ========== ========== ==========
Weighted average shares -
assuming dilution
(denominator) 24,317,020 20,270,252 24,317,020 20,466,270
Earnings (loss) per share $ (0.01) $ (0.02) $ (0.01) $ (0.03)
========== ========== ========== ==========
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
--------------------------------------------------
The following discussion should be read in conjunction with and is
qualified in its entirety by the accompanying financial information and
notes thereto, and management's discussion and analysis of results of
operations and financial condition contained in the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 1999.
Certain statements in this discussion and analysis constitute forward-
looking statements, are not historical facts, and involve risks and
uncertainties that could cause actual results to differ from those
9
expected and projected. Such risks and uncertainties include but are not
limited to: (i) general economic conditions; (ii) conditions specific to
the biotechnology industry; (iii) the Company's ability to develop or
acquire new technology or products through licensing, merger or acquisition
and to obtain regulatory approval to commercialize diagnostic or
therapeutic products; (iv) the effectiveness and ultimate market acceptance
of any such products; (v) limitations on third party reimbursements with
respect to any such products; and (vi) competition. The Company does not
undertake to update or revise any forward-looking statements contained
herein whether as a result of new information, future events or otherwise.
Results of Operations
- ---------------------
The Company has only sold its products to the research market and has not
generated any significant revenues therefrom. The Company ceased the direct
sale of its products to the research market as of October 31, 1999.
The Company believes it is a development stage enterprise because planned
principal operations have not yet commenced. The Company's planned
principal operations include the development of clinical and therapeutic
products for distribution through pharmaceutical and diagnostic companies.
This requires the approval of the Company's products by the FDA. At
December 31, 1999, none of the Company's products had received such
approval. In addition, the Company continues to devote most of its efforts
to activities such as research and development, financial planning and
developing markets which are typical activities for a development stage
enterprise.
Specifically, the Company has expended funds relating to its vaccine
adjuvant program. From October 5, 1998 through December 15, 1999, the
Company engaged the services of Genome Securities, Inc. ("Genome"), whose
Chairman and CEO, Robert Naismith, Ph.D. is also a member of the Company's
Board of Directors, to act as Cistron's financial advisor as to corporate
strategic and financial initiatives. Accordingly, as the Company has not yet
commenced principal operations and is devoting most of its efforts to
activities typical of a development stage enterprise as outlined in Statement
of Financial Accounting Standards No.7, the Company believes that it continues
to be in the development stage.
The Company has outsourced all of its manufacturing and research and
development efforts. The Company reached an agreement with its landlord to
terminate the lease on its office and production space and has further
arranged with the new tenant temporarily to share office space in the
formerly leased facility where it can oversee its research and development
programs and pursue its strategic objectives. The lease change coincided
with an employee reduction in force and all but two of the Company's
employees have been terminated.
The Company has held exploratory discussions with several biotechnology
and pharmaceutical companies regarding possible strategic alliances including
joint ventures, mergers or the sale of the Company. There can be no
assurance that the Company will be successful in consummating a merger or
entering into a partnership agreement. Without such event, the Company may
consider a partial or full liquidation of the Company, though no such
decision has been made at this time. Management believes that it will have
sufficient assets to fund the Company's current programs and plans through
fiscal 2000 and beyond.
10
Three Months Ended December 31, 1999 and Three Months Ended December 31, 1998
- -----------------------------------------------------------------------------
Sales decreased $49,830 (97%) in the quarter ended December 31, 1999 versus
the same period of the prior year due to the Company's earlier decision to
withdraw from direct production and sale of its IL-1 assays. Only
accommodation sales of remaining available products occurred in this
quarter.
Operating expenses increased $105,380 (30%) in the quarter ended December
31, 1999 versus the same quarter of the prior year reflecting significantly
higher administrative and R&D expenses offset by reduced occupancy expense.
Research and development expenses increased $33,320 (64%) due primarily to
the timing of payments for external research funding for vaccine adjuvant
studies. Administrative expenses increased $99,687 (40%) due primarily to
the increase in patent related legal expenses of $34,151, and to
higher consultant and audit expenses offset by reduced employee salary
expense as a result of the staff reduction in October 1999. Occupancy
expense decreased $27,709(57%) due to the termination of the Company's
facility lease and the transition to use of a small part of the facility.
Interest income of $96,707, an increase of $25,483, was earned on the
investment of cash balances which were higher than in the same period of
the prior year. In addition, net interest expense of $21,553 was
recognized on accounts receivable-other and other non-current liabilities
to reflect the increase in their present value and a revised estimate of
the liabilities.
The Company had an operating loss of $391,387 in the quarter and there
can be no assurance that its operations will reach profitability.
Cash was increased in the quarter by the collection of a receivable from
Immunex in the amount of $3 million ($2,167,500 net to the Company).
Six Months Ended December 31, 1999 and Six Months Ended December 31, 1998
- -------------------------------------------------------------------------
Sales decreased $152,090 (74%) in the six months ended December 31, 1999
as compared to the same period of the prior year due to the Company's
decision to withdraw from direct production and sale of its products.
Operating expenses increased $109,427(15%) in the six-month period ended
December 31, 1999 versus the same period of the prior year due primarily to
higher administrative expenses offset by lower occupancy expenses.
Administrative expenses increased $123,647(26%) due mainly to higher legal
and consulting expenses offset, in part, by decreases in employee salaries
and benefits. Legal expense increased $62,936 (84%) over the same period
of the prior year. This change included an increase of $34,151 in patent
related legal expenses. Occupancy expenses decreased $18,264(18%) due to
the termination of the Company's facility lease and the transition to use
of a small part of the facility.
Interest income of $180,736, an increase of $41,436, was earned on the
investment of cash balances, which were higher than in the same period of
the prior year. In addition, net interest expense of $20,052 was
recognized on accounts receivable-other and other non-current liabilities
to reflect the increase in their present value and a revised estimate of
the liabilities. $739 in interest was collected on a tax receivable.
11
The Company had an operating loss of $577,541 in the six-month period
ended December 31, 1999 and there can be no assurance that its operations
will reach profitability.
Cash was increased in the six month period by the collection in November
1999 of a receivable from Immunex in the amount of $3 million ($2,167,500
net to the Company).
Liquidity and Capital Resources
- -------------------------------
At December 31, 1999, the Company had current assets of $10,124,501
including cash and cash equivalents of $9,064,524 and had current
liabilities of $401,737. Cash was increased in the quarter ended December
31, 1999, by the collection of a payment of $3 million ($2,167,500 after
payments to counsel and certain health and research institutions) from
Immunex pursuant to settlement of patent litigation in November 1996.
A final payment of $1 million ($640,000 net to the Company) is due in
November 2000. Cash used in the six-month period ended December 31, 1999
was largely for operating expenses.
From October 1998 through December 15, 1999, Cistron engaged Genome
Securities, Inc., whose Chairman and CEO, Robert Naismith, Ph. D. is also a
member of the Company's Board of Directors, to act as Cistron's financial
advisor as to corporate strategic and financial initiatives. In this
regard, the Company has held exploratory discussions with several
biotechnology and pharmaceutical companies regarding possible strategic
alliances including joint ventures, mergers or the sale of the Company.
There can be no assurance that the Company will be successful in
consummating a merger or entering into a partnership agreement. Without
such event, the Company may consider a partial or full liquidation of the
Company, though no such decision has been made at this time.
Management believes that it will have sufficient assets to fund the
Company's current programs and plans through fiscal 2000 and beyond.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
-----------------------------------------------------------
The table below presents, as of the end of the prior fiscal year, the
carrying values and estimated fair values of the Company's financial
instruments, none of which has been entered into for trading purposes. The
estimated fair values were determined based upon the terms of the
various instruments then and have not been subsequently revised.
June 30, 1999
------------------------
Carrying Estimated
Description value fair value
- -----------------------------------------------------------------
Cash and cash equivalents $ 8,760,916 $ 8,760,916
Accounts receivable - trade 28,279 28,279
Accounts receivable - other current 2,942,361 2,942,361
Accounts receivable - other long term 931,440 826,415
Other current liabilities 775,484 775,484
Other non-current liabilities 270,796 231,396
12
PART II - OTHER INFORMATION
---------------------------
Item 5. Other Information
On January 28, 2000, the Company agreed to lend Richard S.
Dondero, a former officer of the Company, an aggregate of $102,158.27, the
amount necessary under stock options then exercisable by Mr. Dondero to
purchase 481,722 shares of the Company's Common Stock under a loan and
pledge agreement. Under a non-recourse secured promissory note, payment of
the note is required upon on the earliest of: (a) January 1, 2002, (b)
receipt of the proceeds of sale of shares securing the loan, upon the
merger or sale of the Company or (c) the liquidation or dissolution of the
Company.
On September 1, 1998, the Company entered into a Sponsored
Research Agreement ("Agreement") with Duke University ("Duke") whereby
research was to be performed at Duke to determine the safety and efficacy
of IL-1 beta ("IL-1") as a vaccine adjuvant by way of intranasal
administration in mice utilizing tetanus toxoid and Streptococcus
pneumoniae antigen. In December 1998, under Amendment 1 of Agreement the
research was extended to June 1999. In March 1999, under Amendment 2 of
the Agreement, the term of the Agreement was extended through December 31,
1999 and a dosing study was to be performed to determine the safety and
efficacy of IL-1 as a vaccine adjuvant by way of intranasal and
subcutaneous administration in rabbits utilizing tetanus toxoid. In
September 1999, under Amendment 3 of the Agreement, the term of the
Agreement was extended through March 31, 2000 and during this time a dosing
study is to be performed to determine the safety and efficacy of IL-1 and
an IL-1 mutant as a vaccine adjuvant by way of intranasal and subcutaneous
administration in rabbits utilizing tetanus toxoid.
In August 1999, the Company entered into a Licensing Agreement
with Duke for exclusive rights by the Company to commercialization of
intranasally administered adjuvants formulated with IL-1b, under patents
owned jointly with Duke or by Duke separately, in return for an immediate
royalty of $100,000 and subsequent contingent milestone and sales-related
royalties.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits.
10.24 Sponsored Research Agreement dated, September 1, 1998,
between Registrant and Duke University
10.24a 1st Amendment to Sponsored Research Agreement, dated
December 18, 1998, between Registrant and Duke University
10.24b 2nd Amendment to Sponsored Research Agreement, dated
March 22, 1999, between Registrant and Duke University
10.24c 3rd Amendment to Sponsored Research Agreement, dated
September 1, 1999, between Registrant and Duke University
13
10.25 License Agreement, dated August 1, 1999, between
Registrant and Duke University
10.26 Loan and Pledge Agreement dated January 28, 2000,
between Registrant and Richard S. Dondero
10.27 Non-Recourse Secured Promissory Note dated January 28,
2000, between Registrant and Richard S. Dondero
27. Financial Data Schedule
b. Reports on Form 8-K. Not applicable.
14
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.
Date: February 9, 1999 CISTRON BIOTECHNOLOGY, INC.
/s/ISIDORE S. EDELMAN
---------------------
Isidore S. Edelman, M.D.
Chairman & CEO
/s/JONATHAN E. ROTHSCHILD
-------------------------
Jonathan E. Rothschild
Chief Financial Officer
(Principal Financial and
Accounting Officer)