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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
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 0-22332
INSITE VISION INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-3015807
(State or other jurisdiction) (IRS Employer
of incorporation or organization) Identification No.)
965 ATLANTIC AVENUE, ALAMEDA, CALIFORNIA 94501
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (510) 865-8800
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FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE
LAST REPORT.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of Registrant's common stock, $0.01 par value,
outstanding as of April 30, 2001: 24,881,937.
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QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE MONTHS ENDED MARCH 31, 2001
TABLE OF CONTENTS
Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
March 31, 2001 and December 31, 2000......................................... 1
Condensed Consolidated Statements of Operations
For the three months ended March 31, 2001 and 2000........................... 2
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2001 and 2000........................... 3
Notes to Condensed Consolidated Financial Statements ....................... 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................................ 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk................... 17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................................ 17
Item 2. Changes in Securities and Use of Proceeds.................................... 17
Item 3. Defaults Upon Senior Securities.............................................. 17
Item 4. Submission of Matters to a Vote of Security Holders.......................... 17
Item 5. Other Information............................................................ 17
Item 6. Exhibits and Reports on Form 8-K
Exhibits .................................................................... 17
Reports on Form 8-K.......................................................... 17
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INSITE VISION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
(in thousands, except share and per share amounts) 2001 2000
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 16,831 $ 18,904
Prepaid expenses and other current assets 610 605
--------- ---------
Total current assets 17,441 19,509
Property and equipment, at cost:
Laboratory and other equipment 694 647
Leasehold improvements 8 9
Furniture & fixtures 3 3
--------- ---------
705 659
Accumulated depreciation 213 168
--------- ---------
492 491
--------- ---------
Total assets $ 17,933 $ 20,000
========= =========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND COMMON
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 135 $ 181
Accrued liabilities 336 376
Accrued compensation and related expense 666 647
--------- ---------
Total current liabilities 1,137 1,204
Capital lease obligation, less current portion 24 26
Commitments
Common stockholders' equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 24,881,937
issued and outstanding at March 31, 2001; 24,853,767 issued and
outstanding at December 31, 2000 249 248
Additional paid-in-capital 107,036 106,976
Notes receivable from stockholder (257) (257)
Accumulated deficit (90,256) (88,197)
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Common stockholders' equity 16,772 18,770
--------- ---------
Total liabilities and common stockholders' equity
$ 17,933 $ 20,000
========= =========
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See accompanying notes to condensed consolidated financial statements.
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INSITE VISION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended March 31,
(in thousands, except per share amounts) 2001 2000
(Restated)*
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Revenues:
License fees $ -- $ 396
Royalties 2 6
-------- --------
Total 2 402
Operating expenses:
Research and development 1,727 1,445
Cost reimbursement 263 1,201
-------- --------
Research and development, net 1,464 244
General and administrative 830 576
-------- --------
Total 2,294 820
-------- --------
Loss from operations (2,292) (418)
Interest, other income and expense, net 233 82
-------- --------
Net loss before cumulative effect of change in
accounting principle (2,059) (336)
Cumulative effect of change in accounting principle -- (4,486)
-------- --------
Net loss (2,059) (4,822)
Non-cash preferred dividends -- 1
-------- --------
Net loss applicable to common stockholders $ (2,059) $ (4,823)
======== ========
Net loss per share basic and diluted:
Net loss before cumulative effect of accounting change $ (0.08) $ (0.02)
Cumulative effect of accounting change -- (0.21)
-------- --------
Net loss per share applicable to common stockholders $ (0.08) $ (0.23)
======== ========
Shares used to calculate basic and diluted net loss per share 24,873 21,058
======== ========
No cash dividends were declared or paid during the periods.
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See accompanying notes to condensed consolidated financial statements.
* See footnote two
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INSITE VISION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three months ended March 31,
(in thousands) 2001 2000
(Restated)*
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OPERATING ACTIVITIES
Net loss $ (2,059) $ (4,822)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 80 82
Changes in:
Prepaid expenses and other current assets (5) (398)
Accounts payable and accrued liabilities (66) 1,556
Deferred revenue -- 4,090
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Net cash provided by (used in) operating activities (2,050) 508
INVESTING ACTIVITIES
Purchases of property and equipment (46) (43)
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Net cash used in investing activities (46) (43)
FINANCING ACTIVITIES
Issuance of common stock 25 2,122
Payment of capital lease obligation (2) (1)
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Net cash provided by financing activities 23 2,121
Net increase (decrease) in cash and cash equivalents (2,073) 2,586
Cash and cash equivalents, beginning of period 18,904 6,746
-------- --------
Cash and cash equivalents, end of period $ 16,831 $ 9,332
======== ========
Supplemental disclosures:
Non-cash preferred dividends $ -- $ 1
======== ========
Capital lease obligation incurred $ -- $ 39
======== ========
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See accompanying notes to condensed consolidated financial statements.
* See footnote two
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INSITE VISION INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information pursuant to the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, considered necessary
for a fair presentation have been included. Operating results for the three
month period ended March 31, 2001, are not necessarily indicative of the results
that may be expected for any future period.
These financial statements and notes should be read in conjunction with
our audited financial statements and notes thereto included in our Annual Report
on Form 10-K for the year ended December 31, 2000.
NOTE 2 - REVENUE RECOGNITION
Effective January 1, 2000, in accordance with Staff Accounting Bulletin
No. 101, "Revenue Recognition in Financial Statements", the Company changed its
method of accounting for up-front technology license fees when ongoing research
and development services will be performed. Previously, on the only such
arrangement it had executed, the Company had recognized the up-front fee as
revenue upon the effective date of the arrangement. Under the new accounting
method adopted retroactive to January 1, 2000, the Company recognized the
up-front fee over the expected term of the research and development services,
which was 36 months, using the straight-line method. As a result of the
termination of this arrangement in December 2000, the Company recognized the
then remaining deferred revenue in the fourth quarter of 2000. The cumulative
effect of the change on prior years resulted in a charge to operations of
$4,486,000, which is included in net loss for the year ended December 31, 2000.
The effect of the change on the year ended December 31, 2000 was to increase
income before the cumulative effect of the accounting change by $ 4,486,000
($.19 per share).
The following table is a summary of the quarterly results of operations
for the year ended December 31, 2000 (in thousands, except per share amounts) as
restated to reflect the adoption of the accounting change described above:
2000
First Second Third Fourth Total
Quarter* Quarter* Quarter* Quarter Year
---------------------------------------------------------
Revenues 402 398 410 3,303 4,513
Income (loss) from operations (418) (422) (1,121) 2,216 255
Net income (loss) applicable to common
stockholders before cumulative effect of
change in accounting principle (337) (253) (850) 2,483 1,043
Cumulative effect of accounting change (4,486) -- -- -- (4,486)
Net income (loss) applicable to common
stockholders (4,823) (253) (850) 2,483 (3,443)
Basic earnings (loss) per share:
Net income (loss) per share applicable to
common stockholders before cumulative
effect of accounting change (0.02) (0.01) (0.03) 0.10 0.04
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Cumulative effect of accounting change (0.21) -- -- -- (0.19)
Net income (loss) per share applicable
to common stockholders (0.23) (0.01) (0.03) 0.10 (0.15)
Diluted earnings (loss) per share:
Net income (loss) per share applicable
to common stockholders before cumulative
effect of accounting change (0.02) (0.01) (0.03) 0.10 0.04
Cumulative effect of accounting change (0.21) -- -- -- (0.18)
Net income (loss) per share applicable
to common stockholders (0.23) (0.01) (0.03) 0.10 (0.14)
Shares used to calculate basic net
income (loss) per share 21,058 23,601 24,795 24,843 23,574
Shares used to calculate diluted net
income (loss) per share 21,058 23,601 24,795 25,965 24,483
* The first, second and third quarter differ from Form 10Q originally filed with
the SEC for the respective periods because of a cumulative accounting change
related to the implementation of SAB 101.
NOTE 3 - SUBSEQUENT EVENTS
In April 2001, we signed a licensing agreement with SSP Co., Ltd.
of Tokyo, Japan ("SSP"), for two second generation fluoroquinolones which have
indicated increased sensitivity against gram positive and negative bacteria. We
have exclusive rights to any products we develop using these compounds, with the
exception of Japan, where SSP will retain the rights and the rest of Asia, where
we will share joint rights with SSP. One of the compounds, SS734, is currently
under development under the designation ISV-403.
In May 2001, we received notice from Pharmacia Corporation of
their intent to terminate the January 1999 licensing agreement we had entered
into that granted Pharmacia an exclusive worldwide license for ISV-205 for the
treatment of glaucoma. All global development and commercialization rights that
had been granted to Pharmacia will be returned to us at the end of a ninety day
termination period.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
financial statements and notes thereto included in this Quarterly Report and in
our Annual Report on Form 10-K for the year ended December 31, 2000.
Except for the historical information contained herein, the
discussion in this Quarterly Report may contain certain forward-looking
statements, such as statements of our plans, objectives, expectations and
intentions, that involve risks and uncertainties. The cautionary statements made
in this Quarterly Report, including those set forth below under the heading
"Risk Factors," should be read as being applicable to all relevant
forward-looking statements wherever they appear in this Quarterly Report. Our
actual results could differ materially from those discussed herein.
OVERVIEW
We are an ophthalmic product development company focused on
developing genetically based tools, for the diagnosis, prognosis and management
of glaucoma, as well as ophthalmic pharmaceutical products based on our
proprietary DuraSite(R) eyedrop-based drug delivery technology. Our retinal
programs include both therapeutic agents and drug delivery technologies.
We are focusing our research and development on the following:
- expanding our ISV-900 technology for the diagnosis,
prognosis and management of glaucoma;
- ISV-401, a DuraSite formulation of a novel antibiotic not
currently used in ophthalmology;
- ISV-403, a DuraSite formulation of a second generation
fluoroquinolone;
- ISV-205, a DuraSite formulation for the treatment of
glaucoma;
- ISV-014, a retinal drug delivery device; and
- treatments for diabetic retinopathy and macular
degeneration.
We are collaborating with academic researchers to develop new
diagnostic, prognostic and management tools for primary congenital, juvenile and
primary open angle glaucomas. Primary congenital glaucoma is an inherited eye
disorder and is one of the leading causes of blindness and visual impairment
affecting infants. A gene-based diagnostic kit may allow early detection of the
disease before considerable irreversible damage has occurred and may improve the
ability to treat it successfully. Primary open angle glaucoma usually affects
people over the age of forty. Current glaucoma tests are generally unable to
detect the disease before substantial damage to the optic nerve has occurred.
Gene-based tests may make it possible to identify patients at risk and initiate
treatment before permanent optic nerve damage and vision loss occurs.
Our glaucoma genetics program is being carried out in
collaboration with academic researchers. This program focuses on discovering
genes that are associated with glaucoma and the mutations on these genes that
cause the disease. The application of this genetic information may enable the
development of new glaucoma diagnostic, prognostic and management tools. To
date, our academic collaborators have identified genes associated with primary
open-angle glaucoma (the most prevalent form of the disease in adults), juvenile
glaucoma and primary congenital glaucoma. We have developed a
diagnostic/prognostic technology, ISV-900, which may be capable of identifying
multiple glaucoma genetic markers from a single sample.
The development of the ISV-205 product candidate is another result
of our glaucoma genetics research. This DuraSite formulation contains a drug
that has been shown in cell and organ culture systems to inhibit the production
of a protein that appears to cause glaucoma.
ISV-401 is a DuraSite formulation of an antibiotic that has not
previously been used in ophthalmology. ISV-401 contains an antibiotic that is
effective for gram-negative and gram-positive bacteria and may enable reduced
dosing frequency. ISV-401 may be effective for a broad-spectrum of bacteria and
may enable physicians the ability to use it to treat a variety of ophthalmic
diseases.
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ISV-403 is a DuraSite formulation of a second generation
fluoroquinolone which we licensed from SSP in April 2001.
ISV-014 is a device designed to provide controlled, non-surgical
delivery of ophthalmic drugs to the retina and surrounding tissues. We are
continuing to enhance the device and are collaborating with various academic
researchers to perform invivo experiments delivering products with a variety of
molecular sizes to retinal tissues. The combination of this device technology
with polymer-based drug platforms may permit long term delivery of therapeutic
agents to treat several retinal diseases that currently cannot be effectively
treated.
Our DuraSite delivery system is a patented eyedrop formulation
comprising a cross-linked carboxyl-containing polymer which incorporates the
drug to be delivered to the eye and can be customized to deliver a wide variety
of potential drug candidates with a broad range of molecular weights and other
properties. The formulation is instilled in the cul-de-sac of the eye as a small
volume eyedrop and remains in the eye for up to several hours. The active drug
ingredient is gradually released during this time. This increased residence time
is designed to permit lower concentrations of a drug to be administered over a
longer period of time, thereby minimizing the inconvenience of frequent dosing
and reducing potential adverse side effects. Eyedrops delivered in the DuraSite
system are a contrast to conventional eyedrops because conventional eyedrops
typically only last a few minutes in the eye and require delivery of a highly
concentrated burst of drug and frequent administration to sustain therapeutic
levels.
To date, we have not received any revenues from the sale of our
products, although we have received a small amount of royalties from the sale of
products using our licensed technology. With the exception of 1999, we have been
unprofitable since our inception due to continuing research and development
efforts, including preclinical studies, clinical trials and manufacturing of our
product candidates. We have financed our research and development activities and
operations primarily through private and public placement of our equity
securities and, to a lesser extent, from collaborative agreements.
In December 2000, Pharmacia terminated our November 1999 ISV-900
licensing agreement. As a result of this termination, we will now be responsible
for all marketing and further development activities related to the ISV-900
program. We have developed and are implementing a detailed marketing plan
intended to support a launch of a glaucoma genetic test in the second half of
2001.
As part of the December 2000 termination of our ISV-900 licensing
agreement with Pharmacia, we also terminated the credit agreement. The credit
agreement, entered into in November of 1999, provided for a $4.0 million
revolving line of credit to be made available to us on November 11, 2001 for a
period of three (3) years.
In May 2001, we received notice from Pharmacia of their intent to
terminate the January 1999 licensing agreement we had entered into that granted
Pharmacia an exclusive worldwide license for ISV-205 for the treatment of
glaucoma. All global development and commercialization rights that had been
granted to Pharmacia will be returned to us at the end of a ninety day
termination period. We will be seeking a new corporate partner to assist us in
moving this program forward.
As of March 31, 2001, our accumulated deficit was approximately
$90.3 million. There can be no assurance that we will ever achieve or be able to
maintain either significant revenues from product sales or profitable
operations.
RESULTS OF OPERATIONS
We earned revenues of $2,000 in the first quarter of 2001, from
sales of AquaSite(R) by CIBA Vision and certain key components of AquaSite to
Kukje Pharma Ind. Co., Ltd., our AquaSite manufacturing partner in Korea. We
earned $402,000 in the first quarter of 2000, from the amortization of licensing
fees received from
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Pharmacia for ISV-900 and sales of AquaSite by CIBA Vision. To date, we have not
relied on such revenues to fund our activities. The ISV-900 license agreement
was terminated in December 2000 and we will no longer receive any payments
thereunder.
Research and development expenses increased to $1.7 million from
$1.4 million for the first quarter of 2001 compared to the first quarter of
2000. This 20% increase reflects a 22% increase in R&D headcount mainly to
support the preparation of an Investigational New Drug (IND) application for
ISV-401. Additionally, costs were incurred in the first quarter of 2001 for new
research collaborations to further the development of the ISV-014 intra-scleral
drug delivery device. Cost reimbursement decreased 78% to $263,000 in the first
quarter of 2001 from $1.2 million in the comparable period of 2000. This
reflects the termination of the ISV-900 licensing agreement with Pharmacia that
provided for reimbursement of the on-going development costs for the program.
Also, costs reimbursed under the January 1999, ISV-205 licensing agreement
decreased consistent with our level of activity on the program. The ISV-205
agreement was terminated in May 2001 and we will no longer receive any payments
thereunder.
General and administrative expenses increased to $830,000 during
the first quarter of 2001 from $576,000 during the first quarter of 2000. This
increase was due to the initiation of sales and marketing activities for the
ISV-900 genetic diagnostic, legal costs related to licensing activities and our
other public filings.
Net interest and other income was $233,000 and $82,000 in the
first quarter of 2001 and 2000, respectively. These fluctuations are due
principally to changes in average cash balances. Interest earned in the future
will be dependent on our funding cycles and prevailing interest rates.
We incurred net losses applicable to common stockholders before
cumulative effect of a change in accounting principle of $2.1 million and
$337,000 during the first quarter of 2001 and 2000, respectively. The increase
for the first quarter of 2001 compared to 2000 was due primarily to the decrease
in reimbursement of research expenses by Pharmacia, our increased R&D expenses
related to the ISV-401 program and our increased G&A expenses as we prepare for
the launch of the ISV-900 product. We may incur substantial additional losses
over the next several years. These losses are expected to fluctuate from period
to period based primarily on the level of our product development and clinical
activities, our ability to enter into a collaboration to our ISV-205 product and
the level of third-party reimbursement and milestone payments received by us, if
any.
LIQUIDITY AND CAPITAL RESOURCES
Through 1995, we financed our operations primarily through private
placements of preferred stock, totaling approximately $32 million, and an
October 1993 public offering of Common Stock, which resulted in net proceeds of
approximately $30 million. After 1995, we financed our operations primarily
through a January 1996 private placement of Common Stock and warrants resulting
in net proceeds of approximately $4.7 million and an April 1996 public offering
which raised net proceeds of approximately $8.1 million. In accordance with a
July 1996 agreement between Bausch & Lomb Pharmaceuticals, Inc. (B&L) and us, we
received a total of $2.0 million from the sale of Common Stock in August 1996
and 1997. In September 1997, we completed a $7.0 million private placement of
7,000 shares of Series A Redeemable Convertible Preferred Stock (Series A
preferred stock) for which net proceeds were approximately $6.5 million. In
January 1999, we entered into a transaction with Pharmacia from which we
received a total of $3.5 million from the sale of Common Stock in January 1999
and September 1999. In November 1999, we entered into another transaction with
Pharmacia from which we received a $5.0 million licensing fee and, in January
2000, received $2.0 million from the sale of 723,195 shares of Common Stock. In
April 2000, we received $625,000 from the issuance of Common Stock from the
exercise of warrants issued as part of the January 1996 private placement. In
May 2000, we completed a private placement of Common Stock and warrants
resulting in net proceeds of approximately $13.0 million.
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At March 31, 2001, we had cash and cash equivalents totaling $16.8
million compared to $18.9 million as of December 31, 2000. It is our policy to
invest these funds in highly liquid securities, such as interest bearing money
market funds, Treasury and federal agency notes and corporate debt.
The net cash used in operating activities of $2.1 million in the
three months ended March 31, 2001 from December 31, 2000, related primarily to
increased net research and development expenditures as a result of a decrease in
received cost reimbursements.
We purchased $46,000 of laboratory and other equipment in the
first quarter of 2001 compared with $43,000 in the first quarter of 2000. We
also entered into a $39,000 capital lease for certain laboratory equipment in
the first quarter of 2000.
We received $25,000 and $122,000 in the first quarter of 2001 and
2000, respectively, from the issuance of Common Stock from the exercise of stock
options by employees. In the first quarter of 2000, we received $2.0 million
from the issuance of Common Stock to Pharmacia pursuant to the November 1999
Stock Purchase Agreement.
Our future capital expenditures and requirements will depend on
numerous factors, including the progress of our research and development
programs and preclinical and clinical testing, the time and costs involved in
obtaining regulatory approvals, our ability to establish additional
collaborative arrangements, particularly for our ISV-205 product, the cost of
filing, prosecuting, defending and enforcing patent claims and other
intellectual property rights, competing technological and market developments,
changes in our existing collaborative and licensing relationships, acquisition
of new businesses, products and technologies, the completion of
commercialization activities and arrangements, and the purchase of additional
property and equipment.
We anticipate no material capital expenditures to be incurred for
environmental compliance in fiscal year 2001. Based on our good environmental
compliance record to date, and our current compliance with applicable
environmental laws and regulations, environmental compliance is not expected to
have a material adverse effect on our operations.
We believe that our cash and cash equivalents will be sufficient
to meet our operating expenses and cash requirements beyond the end of 2001. We
may require substantial additional funds prior to reaching sustained
profitability and we may seek private or public equity investments, future
collaborative agreements, and possibly research funding to meet such needs. Even
if we do not have an immediate need for additional cash, we may seek access to
the private or public equity markets if and when we believe conditions are
favorable. There is no assurance that such additional funds will be available
for us to finance our operations on acceptable terms, or at all.
RISK FACTORS
IT IS DIFFICULT TO EVALUATE OUR BUSINESS BECAUSE WE ARE IN AN EARLY STAGE OF
DEVELOPMENT AND OUR TECHNOLOGY IS UNTESTED
We are in an early stage of developing our business. We have only
received an insignificant amount of royalties from the sale of one of our
products, an over-the-counter dry eye treatment. Before regulatory authorities
grant us marketing approval, we need to conduct significant additional research
and development and preclinical and clinical testing. All of our products are
subject to risks that are inherent to products based upon new technologies.
These risks include the risks that our products:
- are found to be unsafe or ineffective;
- fail to receive necessary marketing clearance from regulatory
authorities;
- even if safe and effective, are too difficult or expensive to
manufacture or market;
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- are unmarketable due to the proprietary rights of third parties;
or
- are not able to compete with superior, equivalent or more
cost-effective products offered by competitors.
Therefore, our research and development activities may not result in any
commercially viable products.
WE WILL REQUIRE SIGNIFICANT ADDITIONAL FUNDING FOR OUR CAPITAL REQUIREMENTS AND
WE MAY HAVE DIFFICULTY RAISING ADDITIONAL FUNDING
We will require substantial additional funding to develop and conduct
testing on our potential products. We will also require additional funding to
support our sales and marketing efforts for our ISV-900 product and if we decide
to independently manufacture or market any of our other products, including our
ISV-205 product. Our future capital requirements depend upon many factors,
including:
- the cost of establishing a marketing organization for ISV-900 and
the related promotional activities;
- the progress of our research and development programs;
- the progress of preclinical and clinical testing;
- changes in, or termination of, our existing collaboration or
licensing arrangements;
- whether we manufacture and market any of our other products
ourselves;
- our ability to establish additional corporate partnerships to
develop, manufacture and market our potential products, including
our ISV-205 product;
- the time and cost involved in obtaining regulatory approvals;
- the cost of filing, prosecuting, defending and enforcing patent
claims and other intellectual property rights;
- competing technological and market developments; and
- the purchase of additional capital equipment.
We may seek additional funding through public or private equity or debt
financing, collaborative or other arrangements, and from other sources. We may
not be able to secure additional funding from these sources, and any funding may
not be on terms acceptable to us. In addition, our board of directors has the
authority to determine the price and terms of any sale of common stock and the
rights, preferences and privileges of any preferred stock or debt or other
security that is convertible into or exercisable for the common stock. The terms
of any securities issued to future investors may be superior to the rights of
our common stockholders, could result in substantial dilution and could
adversely affect the market price for our common stock.
Our stockholders will suffer substantial dilution if we raise additional
funds by issuing equity securities. However, if we cannot raise additional
funding, we may be required to delay, scale back or eliminate one or more of our
research, discovery or development programs, or scale back or cease operations
altogether. In addition, the failure to raise additional funding may force us to
enter into agreements with third parties on terms which are disadvantageous to
us, which may, among other things, require us to relinquish rights to our
technologies, products or potential products.
WE HAVE A HISTORY OF OPERATING LOSSES AND WE EXPECT TO CONTINUE TO HAVE LOSSES
IN THE FUTURE
We have incurred significant operating losses since our inception in 1986
and have pursued numerous drug development candidates that did not prove to have
commercial potential. As of March 31, 2001, our accumulated deficit was
approximately $90.3 million. We expect to incur net losses for the foreseeable
future or until we are able to achieve significant royalties from sales of our
licensed products.
Attaining significant revenue or profitability depends upon our ability,
alone or with third parties, to successfully develop our potential products,
conduct clinical trials, obtain required regulatory approvals and
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successfully manufacture and market our products. We may not ever achieve or be
able to maintain significant revenue or profitability.
WE RELY ON THIRD PARTIES TO DEVELOP, MARKET AND SELL OUR PRODUCTS, WE MAY NOT BE
ABLE TO CONTINUE OR ENTER INTO THIRD PARTY ARRANGEMENTS, AND THESE THIRD
PARTIES' EFFORTS MAY NOT BE SUCCESSFUL
Following the termination of our ISV-900 agreement in December 2000, we
have begun to develop a marketing organization focused on the launch of our
ISV-900 product. We do not plan on establishing a dedicated sales force or a
marketing organization for our other product candidates and plan to primarily
use external marketing and sales resources even for ISV-900. We also rely on
third parties for clinical testing or product development. In addition, in May
2001, we received notice from Pharmacia of their intent to terminate the January
1999 licensing agreement we had entered into that granted Pharmacia an exclusive
worldwide license for ISV-205 for the treatment of glaucoma. We now must enter
into another third party collaboration agreement for the development, marketing
and sale of the ISV-205 product. There can be no assurance that we will be
successful in finding a new corporate partner for our ISV-205 program or that
any collaboration will be successful, either of which could significantly harm
our business. If we are to successfully develop and commercialize our product
candidates, including ISV-205, we will be required to enter into arrangements
with one or more third parties that will:
- provide for Phase II and/or III clinical testing;
- obtain or assist us in other activities associated with obtaining
regulatory approvals for our product candidates; and
- market and sell our products, if they are approved.
We plan to market and sell the ISV-900 product mainly using external
marketing and sales resources that may include:
- marketing consultants;
- contract sales organizations;
- a network of key ophthalmic clinicians; and
- other resources with ophthalmic expertise.
We may not be able to enter into arrangements with third parties with
ophthalmic or diagnostic industry experience on acceptable terms or at all. If
we are not successful in concluding such arrangements on acceptable terms, we
may be required to establish our own sales force and significantly expand our
marketing organization, despite the fact that we have no experience in sales,
marketing or distribution. Even if we do not enter into collaborative
relationships, as we have recently experience with Pharmacia, these
relationships may be forcing us to seek other alternatives. We may not be able
to build a marketing staff or sales force and our sales and marketing efforts
may not be cost-effective or successful.
Our strategy for research, development and commercialization of our
products requires us to enter into various arrangements with corporate and
academic collaborators, licensors, licensees and others. Furthermore, we are
dependent on the diligent efforts and subsequent success of these outside
parties in performing their responsibilities.
Even if we, or those working with us, obtain regulatory approvals, to the
extent we have entered into or will enter into co-marketing, co-promotion or
other licensing arrangements for the marketing and sale of our products, any
revenues that we receive will be dependent on the efforts of third parties, such
as our corporate collaborators. These partners may terminate their relationships
with us and may not diligently or successfully market our products. We may not
be able to conclude arrangements with other companies to support the
commercialization of our products on acceptable terms. In addition, our
collaborators may take the position that they are free to compete using our
technology without compensating or entering into agreements with us.
Furthermore, our collaborators may pursue alternative technologies or develop
alternative products either on their own or in collaboration with others,
including our competitors, as a means for developing treatments for the diseases
or disorders targeted by these collaborative programs.
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OUR BUSINESS DEPENDS UPON OUR PROPRIETARY RIGHTS, AND WE MAY NOT BE ABLE TO
ADEQUATELY PROTECT, ENFORCE OR SECURE OUR INTELLECTUAL PROPERTY RIGHTS
Our success will depend in large part on our ability to obtain patents,
protect trade secrets, obtain and maintain rights to technology developed by
others, and operate without infringing upon the proprietary rights of others. A
substantial number of patents in the field of ophthalmology and genetics have
been issued to pharmaceutical, biotechnology and biopharmaceutical companies.
Moreover, competitors may have filed patent applications, may have been issued
patents or may obtain additional patents and proprietary rights relating to
products or processes competitive with ours. Our patent applications may not be
approved. We may not be able to develop additional proprietary products that are
patentable. Even if we receive patent issuances, those issued patents may not be
able to provide us with adequate protection for our inventions or may be
challenged by others. Furthermore, the patents of others may impair our ability
to commercialize our products. The patent positions of firms in the
pharmaceutical and genetic industries generally are highly uncertain, involve
complex legal and factual questions, and have recently been the subject of much
litigation. Neither the United States Patent and Trademark Office nor the courts
has developed, formulated, or presented a consistent policy regarding the
breadth of claims allowed or the degree of protection afforded under
pharmaceutical and genetic patents. Despite our efforts to protect our
proprietary rights, others may independently develop similar products, duplicate
any of our products or design around any of our patents. In addition, third
parties from which we have licensed or otherwise obtained technology may attempt
to terminate or scale back our rights.
A number of pharmaceutical and biotechnology companies and research and
academic institutions have developed technologies, filed patent applications or
received patents on various technologies that may be related to our business.
Some of these technologies, applications or patents may conflict with our
technologies or patent applications. Such conflicts could limit the scope of the
patents, if any, we may be able to obtain or result in the denial of our patent
applications. In addition, if the United States Patent and Trademark Office or
foreign patent agencies have issued or issue patents that cover our activities
to other companies, we may not be able to obtain licenses to these patents at
all, or at a reasonable cost, or be able to develop or obtain alternative
technology. If we do not obtain such licenses, we could encounter delays in or
be precluded altogether from introducing products to the market.
We may need to litigate in order to defend against or assert claims of
infringement, to enforce patents issued to us or to protect trade secrets or
know-how owned or licensed by us. Litigation could result in substantial cost to
and diversion of effort by us, which may harm our business. We have also agreed
to indemnify our licensees against infringement claims by third parties related
to our technology, which could result in additional litigation costs and
liability for us. In addition, our efforts to protect or defend our proprietary
rights may not be successful or, even if successful, may result in substantial
cost to us.
We also depend upon unpatented trade secrets to maintain our competitive
position. Others may independently develop substantially equivalent proprietary
information and techniques or otherwise gain access to our trade secrets. Our
trade secrets may also be disclosed, and we may not be able to effectively
protect our rights to unpatented trade secrets. To the extent that we or our
consultants or research collaborators use intellectual property owned by others,
disputes also may arise as to the rights in related or resulting know-how and
inventions.
IF WE ENGAGE IN ACQUISITIONS, WE WILL INCUR A VARIETY OF COSTS, AND THE
ANTICIPATED BENEFITS OF THE ACQUISITION MAY NEVER BE REALIZED
At some point in the future we may pursue acquisitions of companies,
product lines, technologies or businesses that our management believes are
complementary or otherwise beneficial to us. Any of these acquisitions could
have negative effects on our business. Future acquisitions may result in
substantial dilution to our stockholders, the incurrence of additional debt and
amortization expenses related to goodwill, research and development and other
intangible assets. Any of these results could harm our financial condition. In
addition, acquisitions would involve several risks for us, including:
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- assimilating employees, operations, technologies and products from
the acquired companies with our existing employees, operation,
technologies and products;
- diverting our management's attention from day-to-day operation of
our business;
- entering markets in which we have no or limited direct experience;
and
- potentially losing key employees from the acquired companies.
WE HAVE NO EXPERIENCE IN COMMERCIAL MANUFACTURING AND NEED TO ESTABLISH
MANUFACTURING RELATIONSHIPS WITH THIRD PARTIES, AND IF CONTRACT MANUFACTURING IS
NOT AVAILABLE TO US OR DOES NOT SATISFY REGULATORY REQUIREMENTS, WE WILL HAVE TO
ESTABLISH OUR OWN REGULATORY COMPLIANT MANUFACTURING CAPABILITY
We have no experience manufacturing products for commercial purposes. We
have a pilot facility licensed by the State of California to manufacture a
number of our products for Phase I and Phase II clinical trials. In July 1999,
we terminated our alliance under which Bausch & Lomb agreed to manufacture our
products. Any delays or difficulties that we may encounter in establishing and
maintaining a relationship with other qualified manufacturers to produce,
package and distribute our finished products may harm our clinical trials,
regulatory filings, market introduction and subsequent sales of our products.
Contract manufacturers must adhere to Good Manufacturing Practices
regulations which are strictly enforced by the Food and Drug Administration, or
FDA, on an ongoing basis through its facilities inspection program. Contract
manufacturing facilities must pass a pre-approval plant inspection before the
FDA will approve a new drug application. Some of the material manufacturing
changes that occur after approval are also subject to FDA review and clearance
or approval. The FDA or other regulatory agencies may not approve the process or
the facilities by which any of our products may be manufactured. Our dependence
on third parties to manufacture our products may harm our ability to develop and
deliver products on a timely and competitive basis. Should we be required to
manufacture products ourselves, we:
- will be required to expend significant amounts of capital to
install a manufacturing capability;
- will be subject to the regulatory requirements described above;
- will be subject to similar risks regarding delays or difficulties
encountered in manufacturing any such products; and
- will require substantial additional capital.
Therefore, we may not be able to manufacture any products successfully or
in a cost-effective manner.
WE HAVE NO EXPERIENCE IN PERFORMING THE ANALYTICAL PROCEDURES RELATED TO GENETIC
TESTING AND NEED TO ESTABLISH A COMMERCIAL AGREEMENT WITH THIRD PARTIES TO
PERFORM THESE PROCEDURES, AND IF WE ARE UNABLE TO ESTABLISH AN AGREEMENT, WE
WILL HAVE TO ESTABLISH OUR OWN REGULATORY COMPLAINT ANALYTICAL PROCESS FOR
GENETIC TESTING
We have no experience in the analytical procedures related to genetic
testing. We have an agreement with a clinical laboratory to perform the
procedures at a research scale. If we are unsuccessful in reaching a commercial
scale agreement with this clinical laboratory, the launch of the ISV-900 product
may be delayed. If we are unable to reach an agreement with another clinical
laboratory, we may have to establish our own facilities.
Clinical laboratories must adhere to Good Laboratory Practice regulations
that are strictly enforced by the FDA on an ongoing basis through its facilities
inspection program. Should we be required to perform the analytical procedures
for genetic testing ourselves, we:
- will be required to expend significant amounts of capital to
install an analytical capability;
- will be subject to the regulatory requirements described above;
and
- will require substantial additional capital.
Therefore, we may not be able to perform any procedures related to the
ISV-900 product successfully or in a timely or cost-effective manner.
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WE RELY ON A SOLE SOURCE FOR SOME OF THE RAW MATERIALS IN OUR PRODUCTS, AND THE
RAW MATERIALS WE NEED MAY NOT BE AVAILABLE TO US
We have been dependent upon British Biotech for the supply of batimastat.
Batimastat is the active drug incorporated into our ISV-615 product candidate.
British Biotech has terminated license negotiations with us and is no longer
supplying us with batimastat. We are pursuing resumption of licensing
negotiations with British Biotech. If we cannot obtain batimastat from British
Biotech we most likely will not have any source of ongoing raw materials for
ISV-615 and we may be forced to discontinue this program.
In addition, certain of the raw materials we use in formulating our
DuraSite drug delivery system, and other components of our product candidates,
are available from only one source. Any significant interruption in the supply
of these raw materials could delay our clinical trials, product development or
product sales and could harm our business.
OUR PRODUCTS ARE SUBJECT TO GOVERNMENT REGULATIONS AND APPROVAL WHICH MAY DELAY
OR PREVENT THE MARKETING OF POTENTIAL PRODUCTS AND IMPOSE COSTLY PROCEDURES UPON
OUR ACTIVITIES
The FDA and comparable agencies in state and local jurisdictions and in
foreign countries impose substantial requirements upon preclinical and clinical
testing, manufacturing and marketing of pharmaceutical products. Lengthy and
detailed preclinical and clinical testing, validation of manufacturing and
quality control processes, and other costly and time-consuming procedures are
required. Satisfaction of these requirements typically takes several years and
the time needed to satisfy them may vary substantially, based on the type,
complexity and novelty of the pharmaceutical product. The effect of government
regulation may be to delay or to prevent marketing of potential products for a
considerable period of time and to impose costly procedures upon our activities.
The FDA or any other regulatory agency may not grant approval for any products
we develop on a timely basis, or at all. Success in preclinical or early stage
clinical trials does not assure success in later stage clinical trials. Data
obtained from preclinical and clinical activities are susceptible to varying
interpretations that could delay, limit or prevent regulatory approval. If
regulatory approval of a product is granted, such approval may impose
limitations on the indicated uses for which a product may be marketed. Further,
even after we have obtained regulatory approval, later discovery of previously
unknown problems with a product may result in restrictions on the product,
including withdrawal of the product from the market. Moreover, the FDA has
recently reduced previous restrictions on the marketing, sale and prescription
of products for indications other than those specifically approved by the FDA.
Accordingly, even if we receive FDA approval of a product for certain indicated
uses, our competitors, including our collaborators, could market products for
such indications even if such products have not been specifically approved for
such indications. Delay in obtaining or failure to obtain regulatory approvals
would make it difficult or impossible to market our products and would harm our
business.
The FDA's policies may change and additional government regulations may
be promulgated which could prevent or delay regulatory approval of our potential
products. Moreover, increased attention to the containment of health care costs
in the United States could result in new government regulations that could harm
our business. Adverse governmental regulation might arise from future
legislative or administrative action, either in the United States or abroad. See
"--Uncertainties regarding health care reform and third-party reimbursement may
impair our ability to raise capital, form collaborations and sell our products."
WE COMPETE IN HIGHLY COMPETITIVE MARKETS AND OUR COMPETITORS' FINANCIAL,
TECHNICAL, MARKETING, MANUFACTURING AND HUMAN RESOURCES MAY SURPASS OR LIMIT OUR
ABILITY TO DEVELOP AND/OR MARKET OUR PRODUCTS AND TECHNOLOGIES
Our success depends upon developing and maintaining a competitive
advantage in the development of products and technologies in our areas of focus.
We have many competitors in the United States and abroad, including
pharmaceutical, biotechnology and other companies with varying resources and
degrees of concentration
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in the ophthalmic market. Our competitors may have existing products or products
under development which may be technically superior to ours or which may be less
costly or more acceptable to the market. Competition from these companies is
intense and is expected to increase as new products enter the market and new
technologies become available. Many of our competitors have substantially
greater financial, technical, marketing, manufacturing and human resources. In
addition, they may also succeed in developing technologies and products that are
more effective, safer, less expensive or otherwise more commercially acceptable
than any which we have or will develop. Our competitors may obtain cost
advantages, patent protection or other intellectual property rights that would
block or limit our ability to develop our potential products. Our competitors
may also obtain regulatory approval for commercialization of their products more
effectively or rapidly than we will. If we decide to manufacture and market our
products by ourselves, we will be competing in areas in which we have limited or
no experience such as manufacturing efficiency and marketing capabilities. See
"-- We have no experience in commercial manufacturing and need to establish
manufacturing relationships with third parties, and if contract manufacturing is
not available to us or does not satisfy regulatory requirements, we will have to
establish our own regulatory compliant manufacturing capability."
WE ARE DEPENDENT UPON KEY EMPLOYEES AND WE MAY NOT BE ABLE TO RETAIN OR ATTRACT
NEW KEY EMPLOYEES
We are highly dependent on Dr. Chandrasekaran and other principal members
of our scientific and management staff. The loss of services from these key
personnel might significantly delay the achievement of planned development
objectives. Furthermore, a critical factor to our success is recruiting and
retaining qualified personnel. Competition for skilled individuals in the
biotechnology business is highly intense, and we may not be able to continue to
attract and retain personnel necessary for the development of our business. The
loss of key personnel or the failure to recruit additional personnel or to
develop needed expertise could harm our business.
OUR INSURANCE COVERAGE MAY NOT ADEQUATELY COVER OUR POTENTIAL PRODUCT LIABILITY
EXPOSURE
We are exposed to potential product liability risks inherent in the
development, testing, manufacturing, marketing and sale of human therapeutic
products. Product liability insurance for the pharmaceutical industry is
extremely expensive. Our present product liability insurance coverage may not be
adequate. In addition, our existing coverage will not be adequate as we further
develop, manufacture and market our products, and adequate insurance coverage
against potential claims may not be available in sufficient amounts or at a
reasonable cost.
UNCERTAINTIES REGARDING HEALTHCARE REFORM AND THIRD-PARTY REIMBURSEMENT MAY
IMPAIR OUR ABILITY TO RAISE CAPITAL, FORM COLLABORATIONS AND SELL OUR PRODUCTS
The continuing efforts of governmental and third party payers to contain
or reduce the costs of healthcare through various means may harm our business.
For example, in some foreign markets the pricing or profitability of health care
products is subject to government control. In the United States, there have
been, and we expect there will continue to be, a number of federal and state
proposals to implement similar government control. The implementation or even
the announcement of any of these legislative or regulatory proposals or reforms
could harm our business by impeding our ability to achieve profitability, raise
capital or form collaborations.
In addition, the availability of reimbursement from third party payers
determines, in large part, the demand for healthcare products in the United
States and elsewhere. Examples of such third party payers are government and
private insurance plans. Significant uncertainty exists as to the reimbursement
status of newly approved healthcare products, and third party payers are
increasingly challenging the prices charged for medical products and services.
If we succeed in bringing one or more products to the market, reimbursement from
third party payers may not be available or may not be sufficient to allow us to
sell our products on a competitive or profitable basis.
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OUR USE OF HAZARDOUS MATERIALS MAY POSE ENVIRONMENTAL RISKS AND LIABILITIES
WHICH MAY CAUSE US TO INCUR SIGNIFICANT COSTS
Our research, development and manufacturing processes involve the
controlled use of small amounts of radioactive and other hazardous materials. We
are subject to federal, state and local laws, regulations and policies governing
the use, manufacture, storage, handling and disposal of radioactive and other
hazardous materials and waste products. Although we believe that our safety
procedures for handling and disposing of these materials comply with the
standards prescribed by current laws and regulations, we cannot completely
eliminate the risk of accidental contamination or injury from these materials.
In the event of such an accident, we could be held liable for any damages that
result, and any such liability could exceed our resources. Moreover, we may be
required to incur significant costs to comply with environmental laws and
regulations, especially to the extent that we manufacture our own products.
MANAGEMENT AND PRINCIPAL STOCKHOLDERS MAY BE ABLE TO EXERT SIGNIFICANT CONTROL
ON MATTERS REQUIRING APPROVAL BY OUR STOCKHOLDERS
As of March 31, 2001, our management and principal stockholders together
beneficially owned approximately 25% of our outstanding shares of common stock.
As a result, these stockholders, acting together, may be able to effectively
control all matters requiring approval by our stockholders, including the
election of a majority of our directors and the approval of business
combinations.
THE MARKET PRICES FOR SECURITIES OF BIOPHARMACEUTICAL AND BIOTECHNOLOGY
COMPANIES SUCH AS OURS MAY BE HIGHLY VOLATILE DUE TO REASONS THAT ARE RELATED
AND UNRELATED TO THE OPERATING PERFORMANCE AND PROGRESS OF OUR COMPANY
The market prices for securities of biopharmaceutical and biotechnology
companies, including ours, have been highly volatile. The market has from time
to time experienced significant price and volume fluctuations that are unrelated
to the operating performance of particular companies. In addition, future
announcements, such as the results of testing and clinical trials, the status of
our relationships with third-party collaborators, technological innovations or
new therapeutic products, governmental regulation, developments in patent or
other proprietary rights, litigation or public concern as to the safety of
products developed by us or others and general market conditions, concerning us,
our competitors or other biopharmaceutical companies, may have a significant
effect on the market price of our common stock. We have not paid any cash
dividends on our common stock, and we do not anticipate paying any dividends in
the foreseeable future.
WE HAVE ADOPTED AND ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS THAT COULD DELAY OR
PREVENT AN ACQUISITION OF OUR COMPANY
Provisions of our certificate of incorporation and bylaws may constrain
or discourage a third party from acquiring or attempting to acquire control of
us. Such provisions could limit the price that investors might be willing to pay
in the future for shares of our common stock. Our board of directors has the
authority to issue up to 5,000,000 shares of preferred stock. The board of
directors has the authority to determine the price, rights, preferences,
privileges and restrictions of the remaining unissued shares of preferred stock
without any further vote or action by the stockholders. The rights of the
holders of common stock will be subject to, and may be adversely affected by,
the rights of the holders of any preferred stock that may be issued in the
future. The issuance of preferred stock, while providing desirable flexibility
in connection with possible acquisitions and other corporate purposes, could
have the effect of making it more difficult for a third party to acquire a
majority of our outstanding voting stock. Provisions of Delaware law applicable
to us could also delay or make more difficult a merger, tender offer or proxy
contest involving us, including Section 203 of the Delaware General Corporation
Law, which prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years unless
conditions set forth in the Delaware General Corporation Law are met.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discusses our exposure to market risk related to changes in
interest rates.
We invest our excess cash in investment grade, interest-bearing
securities. At March 31, 2001, we had approximately $16.8 million invested in
money market mutual funds. While a hypothetical decrease in market interest
rates by 10 percent from the March 31, 2001 levels would cause a decrease in
interest income, it would not result in a loss of the principal. Additionally,
the decrease in interest income would not be material.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
In May 2001, we received notice from Pharmacia of their intent to
terminate the January 1999 licensing agreement we had entered into that granted
Pharmacia an exclusive worldwide license for ISV-205 for the treatment of
glaucoma. All global development and commercialization rights that had been
granted to Pharmacia will be returned to us at the end of a ninety day
termination period.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) See Exhibit Index on page 19.
b) We filed a Report on Form 8-K on February 6, 2001 concerning the
following events: (i) the issuance of a press release and distribution of
a letter to our stockholders; (ii) the issuance of a press release
relating to the filing of a shelf registration statement on Form S-3; and
(iii) the issuance of a press release relating to the return of all
rights for the ISV-900 technology to us. We also filed a report on Form
8-K on May 14, 2001 concerning the issuance of a press release relating
to our first quarter financial results, our return of rights for the
ISV-205 technology to us and other updates about our programs.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
INSITE VISION INCORPORATED
Dated: May 15, 2001 by: /s/ S. Kumar Chandrasekaran, Ph.D.
----------------------------------
S. Kumar Chandrasekaran, Ph.D.
Chairman of the Board,
Chief Executive Officer and
Chief Financial Officer
(on behalf of the registrant and
as principal financial and
accounting officer)
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
10.39(1) Placement Agent Agreement with Ladenburg, Thalmann & Co. Inc.
dated January 9, 2001.
- ----------
(1) Incorporated by reference to an exhibit to our Registration Statement on
Form S-3 (Registration No. 333-54912) as filed with the Securities and
Exchange Commission on February 2, 2001.
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