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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 ending March 31, 2001
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 000-29101
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SEQUENOM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0365889
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3595 John Hopkins Court, San Diego, CA 92121
(Address of principal executive offices)
(858) 202-9000
(Registrant's telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) [X] Yes [_] No, and (2) has
been subject to such filing requirements for the 90 days. [X] Yes [_] No
The number of shares of the Registrant's Common Stock outstanding as of
April 30, 2001 was 24,346,644.
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SEQUENOM, INC.
INDEX
Page No.
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PART I FINANCIAL INFORMATION.......................................... 3
Item 1. Financial Statements........................................ 3
Condensed Consolidated Balance Sheets--as of March 31, 2001
(unaudited) and December 31, 2000........................... 3
Condensed Consolidated Statements of Operations (unaudited)
for the three months ended March 31, 2001 and 2000.......... 4
Condensed Consolidated Statements of Cash Flows (unaudited)
for the three months ended March 31, 2001 and 2000.......... 5
Notes to Unaudited Condensed Consolidated Financial
Statements.................................................. 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk... 20
PART II OTHER INFORMATION............................................. 22
Item 2. Changes in Securities and Use of Proceeds.................... 22
Item 6. Exhibits and Reports on Form 8-K............................. 22
2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
SEQUENOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2001 2000
------------ ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents........................ $ 44,986,993 $ 70,045,695
Short-term investments, available-for-sale....... 83,658,892 68,378,050
Accounts receivable, net......................... 5,750,140 4,267,238
Inventories, net................................. 3,345,388 2,923,218
Other current assets and prepaid expenses........ 9,440,460 8,399,905
------------ ------------
Total current assets........................... 147,181,873 154,014,106
Equipment and leasehold improvements, net.......... 9,580,565 8,117,600
Other assets....................................... 3,830,328 4,130,178
------------ ------------
Total assets................................... $160,592,766 $166,261,884
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses............ $ 10,647,357 $ 8,707,810
Deferred revenue ................................ 9,275,902 9,830,430
Current portion of capital lease obligations..... 992,574 957,042
------------ ------------
Total current liabilities...................... 20,915,833 19,495,282
Deferred revenue, less current portion............. 250,000 750,000
Capital lease obligations, less current portion.... 881,510 1,077,200
Commitments
Stockholders' equity:
Convertible preferred stock, $.001 par value;
5,000,000 shares authorized and no shares issued
and outstanding.................................
Common stock, $.001 par value; 75,000,000 shares
authorized, 24,346,917 and 24,442,092 shares
issued and outstanding at March 31, 2001 and
December 31, 2000 respectively.................. 24,346 24,442
Additional paid-in capital......................... 223,528,580 223,140,159
Notes receivable for stock......................... (598,500) (598,500)
Deferred compensation related to stock options..... (1,327,033) (1,551,044)
Accumulated other comprehensive income............. 339,009 314,843
Accumulated deficit................................ (83,420,979) (76,390,498)
------------ ------------
Total stockholders' equity..................... 138,545,423 144,939,402
------------ ------------
Total liabilities and stockholders' equity..... $160,592,766 $166,261,884
============ ============
See accompanying notes.
3
SEQUENOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
-------------------------
2001 2000
----------- ------------
(Unaudited)
Revenues:
Products......................................... $ 3,709,565 $ 1,450,525
Services......................................... 1,470,925 --
Research and development grants.................. 67,026 124,141
----------- ------------
Total revenues................................. 5,247,516 1,574,666
Costs and expenses:
Cost of product and service revenue.............. 4,152,238 1,028,454
Research and development......................... 5,289,774 4,236,529
Selling, general and administrative.............. 4,526,461 5,212,372
Amortization of deferred compensation............ 291,322 2,497,803
----------- ------------
Total costs and expenses....................... 14,259,795 12,975,158
----------- ------------
Loss from operations............................... (9,012,279) (11,400,492)
Interest income.................................... 2,087,963 1,539,415
Interest expense................................... (73,386) (4,479,620)
Other (expense)/income, net........................ (32,779) 15,987
----------- ------------
Net loss........................................... $(7,030,481) $(14,324,710)
=========== ============
Historical net loss per share, basic and diluted... $ (0.29) $ (0.85)
=========== ============
Weighted average shares outstanding, basic and
diluted........................................... 24,317,175 16,803,894
=========== ============
Pro forma net loss per share, basic and diluted.... $ (0.65)
============
Pro forma weighted average shares outstanding,
basic and diluted................................. 22,057,958
============
See accompanying notes.
4
SEQUENOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
--------------------------
2001 2000
------------ ------------
(Unaudited)
Operating activities
Net loss.......................................... $ (7,030,481) $(14,324,711)
Adjustments to reconcile net loss to net cash used
in operating activities:
Non-cash items.................................. 1,816,954 9,342,898
Changes in operating assets and liabilities:
Inventories..................................... (467,415) (364,518)
Accounts receivable............................. (1,583,777) (1,078,994)
Other current assets............................ (1,071,994) 1,283,543
Other assets.................................... 299,850 5,102
Accounts payable and accrued expenses........... 1,729,361 1,285,041
Deferred revenue................................ (1,054,529) --
Other liabilities............................... 345,335 --
------------ ------------
Net cash used in operating activities............. (7,016,696) (3,851,639)
Investing activities
Purchase of equipment and leasehold improvements.. (2,979,199) (474,143)
Net change in marketable investment securities.... (15,124,844) (4,201,428)
------------ ------------
Net cash used in investing activities............. (18,104,043) (4,675,571)
Financing activities
Net payments on capital lease obligations......... (160,158) (107,694)
Repayment of long-term debt....................... (3,090,870)
Net proceeds from initial public offering......... -- 144,056,842
Proceeds from sale of stock to consultants........ -- 1,486,827
Proceeds from exercise of stock options and ESPP
purchases........................................ 245,324 274,418
------------ ------------
Net cash provided by financing activities......... 85,166 142,619,523
Net increase (decrease) in cash and cash
equivalents...................................... (25,035,573) 134,092,313
Effect of exchange rate changes on cash and cash
equivalents...................................... (23,129) (134,760)
Cash and cash equivalents at beginning of period.. 70,045,695 5,200,734
------------ ------------
Cash and cash equivalents at end of period........ $ 44,986,993 $139,158,287
============ ============
Supplemental schedule of non-cash investing and
financing activities:
Conversion of Preferred Stock to Common Stock..... $ -- $ 56,793,947
============ ============
Conversion of long-term debt and interest payable
to Common Stock.................................. $ -- $ 7,387,010
============ ============
Supplemental disclosure of cash flow information:
Interest paid..................................... $ 73,387 $ 98,538
============ ============
See accompanying notes.
5
SEQUENOM, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying unaudited financial statements of SEQUENOM, Inc.
("SEQUENOM" or the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with 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.
Interim results are not necessarily indicative of results for a full year.
The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
These financial statements should be read in conjunction with the audited
financial statements and footnotes thereto included in the SEQUENOM's Annual
Report on Form 10-K for the year ended December 31, 2000, as filed with the
Securities and Exchange Commission ("SEC").
(2) Comprehensive Income (Loss)
SFAS No. 130, Reporting Comprehensive Income ("SFAS 130") requires
reporting and displaying comprehensive income (loss) and its components which,
for SEQUENOM, includes net loss and unrealized gains and losses on investments
and foreign currency translation gains and losses. In accordance with SFAS
130, the accumulated balance of other comprehensive income (loss) is disclosed
as a separate component of stockholders' equity.
(3) Net Loss Per Share
In accordance with SFAS No. 128, Earnings Per Share, basic net income
(loss) per share is computed by dividing the net income (loss) for the period
by the weighted average number of common shares outstanding during the period.
Diluted net income (loss) per share is computed by dividing the net income
(loss) for the period by the weighted average number of common and common
equivalent shares outstanding during the period. Common equivalent shares are
comprised of incremental common shares issuable upon the exercise of stock
options and warrants, and common shares issuable on conversion of preferred
stock, and were excluded from historical diluted loss per share because of
their anti-dilutive effect.
Pro forma net loss per share has been computed as described above and also
gives effect to common equivalent shares arising from preferred stock and
long-term debt that automatically converted upon the closing of the Company's
initial public offering in February 2000 (using the as-if converted method
from the original date of issuance) and reflects the elimination of interest
expense on the debt which was converted.
(4) New Accounting Pronouncements
The Company adopted SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, effective January 1, 2001. The adoption of the SFAS No.
133 did not have a significant effect on its results of operations or
financial position as the Company does not engage in activities covered by
SFAS No. 133.
6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Form 10-Q may contain forward-looking statements. When used in this
Form 10-Q, the words "anticipate," "believe," "estimate," "will," "intend" and
"expect" and similar expressions identify forward-looking statements. Actual
results, performance or achievements could differ materially from those
contemplated, expressed or implied, by any such forward-looking statements
contained in this Form 10-Q. Important factors that could cause actual results
to differ materially from our forward-looking statements are set forth in this
Form 10-Q, included under the heading "Risks and Uncertainties." In addition,
the "Risk Factors" discussed in the Company's Annual Report on Form 10-K for
the year ended December 31, 2000, filed with the Securities and Exchange
Commission should be taken into consideration. All forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements set forth in this Form 10-Q. We
are under no obligation to update any forward-looking statement, whether as a
result of new information, future events or otherwise.
Overview
We are a genomics company that develops and commercializes technologies,
products, and services to accelerate the discovery of new genetics-based
diagnostics, drugs and therapies. Our core technology components include the
MassARRAY system for genetic variation and drug target validation, a broad
portfolio of SNP assays and diverse human populations. These components
represent enabling technology advancements that allow us to screen virtually
all human genes in relation to all diseases across large human populations.
Using these technologies in house and in partnerships, we are generating a
portfolio of candidate disease gene markers associated to major human health
disorders, including cardiovascular disease, cancer, diabetes, stress and
obesity.
Since we began operations in 1994, we have devoted substantially all of our
resources to the development and application of products, technologies and
services to analyze genetic variations, or single nucleotide polymorphisms
(SNPs), and, more recently, to determine their association to disease. Our
products include the MassARRAY system, disposable MassARRAY kits consisting of
SpectroCHIPs and reagents, a SNP assay portfolio and a disease gene portfolio.
Our services include assay design for MassARRAY customers, in-house validation
projects using our MassARRAY system and disease association studies using our
proprietary DNA banks. We are also using the MassARRAY technology to identify
the medical utility of genes and develop SNP panels based on the correlation
of SNPs to specific diseases.
We sold our first product, the MassARRAY system, in January 2000. Through
March 31, 2001, we have commercially placed a total of 29 systems with leading
companies and institutions. We currently sell our products to genomics,
pharmacogenomics, diagnostic and agricultural biotechnology companies, as well
as leading research institutions, in the United States, Europe and Asia.
Through March 31, 2001 our product revenues consisted of revenues from the
sale of MassARRAY systems, MassARRAY kits and proprietary software, which is
sold separately from the MassARRAY system. The MassARRAY kits are used in the
operation of the MassARRAY system. Our service revenues consisted of SNP
validation services, with revenue recognized as phases of the projects were
completed. We anticipate that revenues from our collaborations with third
parties will become an increasingly important component of our service
revenues in the future.
Since our inception, we have incurred significant losses. As of March 31,
2001, we had an accumulated deficit of $83.4 million as compared to an
accumulated deficit of $57.8 million for the same period in 2000. As we
increase our production, due to demand and increased product sales, we expect
to incur substantial expenditures related to sales and marketing expenses and
general administrative overhead. Our cost of product and service revenues
includes the materials, labor and overhead expenses related to the production
of and assembly of our products and the services we provide. Our research and
development expenses will be an integral part in expanding our business and
will therefore increase appreciably with new product lines. We expect to incur
losses for the foreseeable future, and expect all expenses to increase, as we
expand development and
7
commercialization of new information-based products, establish a high
throughput genotyping center, and fully implement our SNP validation business
strategies. Our move in March 2001 to expanded facilities in San Diego has
also added to our expenses. If we are unable to lease our old facilities in
San Diego, we may incur costs of approximately $1.0 million relating to
exiting the lease agreement for our old facilities.
Results of Operations for the Three Months Ended March 31, 2001 and 2000
Revenues
Total revenues increased to $5.2 million for the three months ended March
31, 2001, from approximately $1.6 million in the same period of the prior
year. Product revenues were $3.7 million for the three months ended March 31,
2001 compared to $1.5 million for the three months ended March 31, 2000. These
revenues were derived from the sale of MassARRAY systems and disposable kits
containing our proprietary SpectroCHIP. During the quarter, we placed 7 of our
MassARRAY systems and continued to sell our disposables to customers who
already have our system. Service revenues were $1.5 million for the quarter
ended March 31, 2001. These revenues consisted of completion of significant
phases in SNP validation projects.
Research and development grant revenues were approximately $67,000 for the
quarter ended March 31, 2001 compared to approximately $124,000 for the same
period of the prior year.
Research and development expenses
Research and development expenses increased to $5.3 million in the quarter
ended March 31, 2001, from $4.2 million in the same period of 2000. These
expenses consist primarily of salaries and related personnel costs, and
materials and other costs related to product development. The expenses in 2001
consisted of approximately $3.2 from personnel costs associated with
recruiting and hiring additional research and development personnel, and
approximately $2.1 million from material costs and other product development
costs. $1.3 million of the expenses in 2000 consisted of a charge from
forgiveness of loans granted to executives in 1999 in connection with the
exercise of stock options.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased to $ 4.5 million for
the three months ended March 31, 2001, from $5.2 million in the same period of
2000. The expenses in 2001 consist primarily of salaries and related costs for
executive, sales, business development, finance and other administrative
personnel, and general and patent-related legal expenses. Approximately $1.6
of the expenses resulted from hiring selling, general and administrative
personnel and approximately $2.9 from expenses associated with our facilities.
Approximately $2.5 million of the expenses in 2000 consisted of a charge from
forgiveness of loans granted to executives in 1999 in connection with the
exercise of stock options.
Amortization of deferred stock-based compensation
Deferred stock compensation represents the difference between the estimated
fair value of our common stock and the exercise price of options at the date
of grant. During the three months ended March 31, 2001, we recorded
amortization of deferred stock compensation totaling approximately $291,000
compared to $2.5 million in the same period of 2000. The deferred compensation
is being amortized over the vesting periods of the individual stock options
using the graded vesting method. We expect to record amortization for deferred
compensation approximately as follows:$939,000 in 2001, $432,000 in 2002, and
$187,000 in 2003.
Interest income
Interest income increased to approximately $2.1 million for the quarter
ended March 31, 2001 from approximately $1.5 in the same period of 2000. The
increase resulted from higher average balances of cash and cash equivalents
and short-term investments, from the investment of the net proceeds from our
initial public offering in February 2000.
8
Interest expense
Interest expense was approximately $73,000 in the quarter ended March 31,
2001 compared to approximately $4.5 million in the same period of 2000. The
decrease was a result of long-term debt being repaid and converted to common
stock upon the completion of our initial public offering in February 2000,
leaving only capital lease obligations outstanding. The $4.5 million is
comprised of approximately $4.8 million of non-cash interest expense recorded
upon conversion of debt of $2.2 million (4.0 million German deutsche marks
exchanged at a rate of 1.84 deutsche marks per 1 US dollar) into common stock
and approximately $100,000 of interest related to capital lease obligations,
offset in part by approximately $400,000 of a non-cash gain recorded upon
issuance of common stock to extinguish long-term interest payable.
Income taxes
As of December 31, 2000, we had federal and state net operating loss
carryforwards of approximately $60.1 million and $25.8 million, respectively.
We also have federal and state research and development tax credit
carryforwards of approximately $1.2 million and $894,000, respectively, and
German net operating loss carryforwards of approximately $9.8 million. The
research and development tax credit carryforwards will begin to expire in
2010, unless previously utilized. The federal and state net operating loss and
credit carryforwards will begin to expire in 2000 and 2008, respectively. The
German net operating losses may be carried forward indefinitely. Pursuant to
Internal Revenue Code Sections 382 and 388, our net operating loss and credit
carryforwards may be limited due to a cumulative change in ownership of more
than 50%, which occurred during 1998 and also in connection with our initial
public offering in February 2000. However, we do not believe these limitations
will materially impact the use of the net operating loss and credit
carryforwards.
Liquidity and capital resources
In February 2000, we completed our initial public offering (IPO) raising
net proceeds of approximately $144.1 million. At March 31, 2001, cash, cash
equivalents and short-term investments totaled $128.6 million compared to
$159.7 million at March 31, 2000. Our cash reserves are held in a variety of
interest-bearing instruments including investment-grade corporate bonds,
commercial paper and money market accounts.
Cash used in operations for the quarter ended March 31, 2001 was $7.0
million compared with $3.9 million for the same period in 2000. A net loss of
$7.0 million for the three months ended March 31, 2001 was partially offset by
non-cash charges of $1.4 million for depreciation and amortization expense,
$367,000 for amortization of deferred compensation and we used approximately
$1.8 million for changes in operating assets and liabilities. Investing
activities, other than the changes in our short-term investments, consumed
$2.9 million in cash during the first quarter of 2001 due to expenditures for
leasehold improvements at our new facility and laboratory equipment.
Cash provided by financing activities was $85,000 for the quarter ended
March 31, 2001 compared to $142.6 million for the same period in 2000.
Financing activities in 2001 included the receipt from proceeds from the
exercise of stock options and ESPP purchases, offset by net payments on our
capital lease. During the same period of 2000, we received $145.8 from
financing activities, including $144.1 million of which was received from the
sale of common stock in our initial public offering, which was partially
offset by $3.2 million repayment of long-term debt and capital lease
obligations.
Working capital decreased to $126.3 million at March 31, 2001 from $155.7
million at March 30, 2000. The decrease in working capital was principally due
to our use of cash in operations.
As of March 31, 2001, we had an aggregate of $1.9 million in future
obligations of principal payments under capital leases, $1.0 million of which
we plan to repay within the next year.
Based on our current plans, we believe our existing cash, cash equivalents
and short-term investments will be sufficient to fund our operating expenses,
debt obligations and capital requirements through at least the next
9
12 months. However, the actual amount of funds that we will need during or
after the next 12 months will be determined by many factors, some of which are
beyond our control, and we may need funds sooner than currently anticipated.
These factors include:
. the level of our success in selling our MassARRAY systems, consumables,
assays and services;
. the level of our sales and marketing expenses;
. the extent to which we enter into collaborations or joint ventures;
. our progress with research and development;
. our ability to introduce and sell new products and services;
. the costs and timing of obtaining new patent rights;
. the extent to which we acquire technologies or companies;
. regulatory changes and competition and technological developments in the
market; and
. the level of our expenses associated with litigation.
We have a $25.0 million bank line of credit, all of which is available for
borrowing. In addition, we have established an $8.0 million capital equipment
financing agreement, $6.1 million of which was available for utilization at
March 31, 2001. We have no commitments for any additional financings. If
additional funds are required and we are unable to obtain them on terms
favorable to us, we may be required to cease or reduce further
commercialization of our products, to sell some or all of our technology or
assets or to merge with another entity. If we raise additional funds by
selling shares of our capital stock, the ownership interest of our
stockholders will be diluted.
10
RISKS AND UNCERTAINTIES
The following is a summary of the many risks we face in our business. You
should carefully read these risks and uncertainties in evaluating our
business.
We have a limited operating history.
We are a relatively new company, and for the most part, our technologies
are still in the early stages of development. We commercially launched our
first product, the MassARRAY system, in December 1999. As a result, our
business is subject to all of the risks inherent in the development of a new
business enterprise, such as the need to:
. obtain substantial capital to support the expenses of further developing
our technology and commercializing our products and services;
. develop a market for our products and services; and
. attract and retain qualified management, sales, technical and scientific
staff.
Our operations may also be affected by problems frequently encountered with
the use of new technologies and by the competitive environment in which we
operate, as well as the risks detailed below.
We have a history of operating losses, expect to incur future losses and
cannot be certain that we will become profitable.
We have experienced significant operating losses in each period since
inception, and we expect these losses to continue. It is uncertain when, if
ever, we will become profitable. As of March 31, 2001, our accumulated deficit
was $83.4 million. Our losses have resulted principally from costs incurred in
research and development and from selling, general and administrative costs
associated with our operations. These costs have exceeded revenues and
interest income in each period since inception. We have generated revenues
principally from MassARRAY system and disposable sales, validation services
and government research grants. We expect to incur increasing operating losses
as a result of expenses associated with production, marketing and sales,
research and product development and selling, general and administrative
costs.
Our operating results may fluctuate significantly.
Our revenues and results of operations may fluctuate significantly,
depending on a variety of factors, including the following:
. our success in selling, and changes in the demand for, our products and
services;
. variations in the timing of payments from customers and collaborative
partners and the recognition of these payments as revenues;
. the pricing of our products and services;
. the timing of any new product or service offerings;
. changes in the research and development budgets of our customers and
partners;
. the introduction of new products and services by our competitors;
. changes in the regulatory environment affecting health care and health
care providers;
. expenses related to, and the results of, any litigation or other
proceedings relating to intellectual property rights;
. the cost and timing of our adoption of new technologies; and
11
. the cost, quality and availability of oligonucleotides, tissue samples,
reagents and related components and technologies.
In particular, our revenues and operating results are unpredictable because
the sales cycle for our MassARRAY and service products is lengthy. Our
revenues and operating results depend to a large extent on the number and
timing of MassARRAY system placements that we make during the quarter and the
duration of revenue generating license agreements and collaborative programs
with partners. We expect to recognize a substantial portion of our quarterly
revenues in the last month of a quarter, with a concentration of these
revenues in the last weeks or days of the third month. Our expense levels are
relatively fixed in the short term and are based, in part, on our expectations
of our future revenues. Any delay in generating or recognizing revenues could
cause significant variations in our operating results from quarter to quarter
and could result in increased operating losses.
We believe that period-to-period comparisons of our financial results will
not necessarily be meaningful. You should not rely on these comparisons as an
indication of our future performance. If our operating results in any future
period fall below the expectations of securities analysts and investors, our
stock price will likely fall.
A reduction in revenues from sales of MassARRAY systems would harm our
business.
A decline in the demand for MassARRAY Systems would reduce our total
revenues and harm our business. We expect that the MassARRAY system will
continue to account for a substantial portion of our total revenues for the
foreseeable future. The following factors may reduce the demand for MassARRAY
systems:
. competition from other products;
. failure of SNPs to demonstrate medical relevance;
. negative publicity or evaluation; or
. intellectual property claims or litigation.
If we are unable to obtain additional funds, we would have to reduce or cease
operations, attempt to sell some or all of our operations or merge with
another entity.
If we require additional funds and we are unable to obtain them on terms
favorable to us, we may be required to cease or reduce further
commercialization of our products and services, sell some or all of our
technology or assets or merge with another entity. If we raise additional
funds by selling additional shares of our capital stock, the ownership
interest of our stockholders will be diluted.
We may not be able to successfully adapt our products for commercial
applications.
A number of potential applications of our MassARRAY technology will require
significant enhancements in our core technology, including adaptation of our
software and further miniaturization. In addition, we need to enhance our
population-based DNA bank, expand databases for determining the medical
importance of SNPs and rapidly design assays for SNP analysis in sufficient
quantities to meet the high throughput that we expect our future customers
will require. If we are unable, for technological or other reasons, to
complete the development, introduction or scale-up of the manufacturing of any
product or genotyping facility, or if any of our products does not achieve a
significant level of market acceptance, our business, financial condition and
results of operations could be seriously harmed. Market acceptance will depend
on many factors, including demonstrating to customers that our technology is
superior to other technologies and products which are available now or which
may become available in the future. We believe that our revenue growth and
profitability will substantially depend on our ability to overcome significant
technological challenges and successfully introduce our products and services
into the marketplace.
12
We may not be able to expand our business to offer services to our customers.
We are currently expanding our business to run multiple assays and validate
SNPs at our facilities for some of our customers. To do this, we recently
leased additional facilities, and will need to purchase equipment and hire
additional personnel. If we are unable to successfully implement or manage an
expanded business, or are delayed in doing so, our relationships with our
customers may be harmed.
We and our collaborative partners may not be successful in developing or
commercializing therapeutic, diagnostic or other products using our products
or services.
Development of therapeutic, diagnostic and other products based on our
discoveries and/or our collaborative partners' discoveries will also be
subject to other risks of failure inherent in their development or commercial
viability. These risks include the possibility that any such products will:
. fail to receive necessary regulatory approvals;
. fail to be developed prior to the successful marketing of similar
products by competitors;
. be found to be ineffective;
. be difficult or impossible to manufacture on a commercial scale;
. be uneconomical to market;
. be found to be toxic; or
. be impossible to market because they infringe on the proprietary rights
of third parties or compete with products marketed by third parties that
are superior.
If a partner or we discover therapeutic, diagnostic or other products using
our products or services, we may rely on that partner for product development,
regulatory approval, manufacturing and marketing of those products before we
can realize some of the milestone payments, royalties and other payments we
may be entitled to under the terms of our collaboration agreements. Our
collaboration agreements typically allow the partner significant discretion in
electing whether to pursue any of these activities. We cannot control the
amount and timing of resources our collaborators may devote to our programs or
potential products. As a result, we cannot be certain that our collaborators
will choose to develop or commercialize any products or will be successful in
doing so. In addition, if a collaborator is involved in a business
combination, such as a merger or acquisition or changes its business focus,
its performance in its agreement with us may suffer and, as a result, we may
not generate any revenues from the royalty, milestone and similar payment
provisions of our agreement with that collaborator.
We may not successfully develop or derive revenues from our genotyping and
gene discovery programs.
Our genotyping and gene discovery programs are still in the early stages of
development and may not result in marketable products. We are directing our
technology and development focus primarily toward identifying genes that are
believed to be responsible for, or indicate the presence of, certain diseases.
We have only identified a limited number of specific candidate genes under our
research programs and have not yet validated any disease genes. Our
technologies and approach to gene discovery may not enable us to successfully
identify the specific genes that cause or predispose individuals to the
complex diseases that are the targets of our efforts to identify genetic
variations that have medical utility. In addition, the diseases we are
targeting are generally believed to be caused by a number of genetic and
environmental factors. It may not be possible to address such diseases through
gene-based therapeutic or diagnostic products. Accordingly, even if we are
successful in identifying specific genes, our discoveries may not lead to the
development of commercial products.
13
If the medical relevance of SNPs becomes questionable, we may have less demand
for our products and services.
Some of the products we hope to develop involve new and unproven
approaches. They are based on the assumption that information about genes may
help scientists better understand complex disease processes. Scientists
generally have a limited understanding of the role of genes in diseases, and
few products based on gene discoveries have been developed. We cannot be
certain that genetic information will play a key role in the development of
drugs and diagnostics in the future. If we are unable to generate valuable
information that can be used to develop these drugs and diagnostics, the
demand for our products and services will be reduced and our business is
likely to be harmed.
If we do not succeed in obtaining development and marketing rights for some of
the assays developed in collaboration with our customers, our revenue and
profitability could be reduced.
Our business strategy includes the development of assays in collaboration
with customers, and we intend to obtain commercialization rights to those
assays. If we are unable to obtain rights to those assays, our revenue and
profitability could be reduced. To date, we have initiated limited activities
towards the exploitation of any commercialization rights or products developed
in collaboration with third parties. Even if we obtain commercialization
rights, commercialization of products may require resources that we do not
currently possess and may not be able to develop or obtain.
We depend on sales of SpectroCHIPs and other disposables for a significant
portion of our revenues. Our system and related disposable sales may be
limited if our MassARRAY system is used below its capacity.
Sales of SpectroCHIPs and other disposables will become an increasingly
important source of revenue. Factors which may limit the use of SpectroCHIPs
and other disposables include: additional sales of MassARRAY systems, the
acceptance of our technology by our customers, the extent of our customers'
level of utilization of their MassARRAY systems, and the training of customer
personnel. If our customers do not purchase sufficient quantities of
SpectroCHIPs and other disposables, our revenues will be lower than expected.
If our customers are unable to adequately prepare samples as required by our
MassARRAY system, the overall market demand for our products may decline.
Before using our MassARRAY system, customers must prepare samples by
following several steps that are prone to human error, including DNA isolation
and DNA segment amplification. If DNA samples are not prepared appropriately,
our MassARRAY system will not generate a reading. If our customers experience
similar difficulties, they may achieve lower levels of throughput than those
for which our system was designed. If our customers are unable to generate
expected levels of throughput, they may not continue to purchase our
disposables, they may express their discontent with our products in the
marketplace, potentially driving down demand for our products, or they may
collaborate with others to jointly use our products. Any or all of these
actions would reduce the overall market demand for our products.
We have limited commercial production capability and experience and may
encounter production problems or delays, which could result in lower revenue.
We assemble the MassARRAY system and manufacture the SpectroCHIP and
MassARRAY kit. To date, we have only produced these products in limited
quantities. Our customers require that we comply with current good
manufacturing practices that we may not be able to meet. We may not be able to
maintain acceptable quality standards as we ramp up production. To achieve
anticipated customer demand levels, we will need to scale-up our production
capability and maintain adequate levels of inventory. We may not be able to
produce sufficient quantities to meet market demand. If we cannot achieve the
required level and quality of production, we may need to outsource production
or rely on licensing and other arrangements with third parties. This reliance
could reduce our gross margins and expose us to the risks inherent in relying
on others. We may not be able to
14
successfully outsource our production or enter into licensing or other
arrangements with these third parties, which could adversely affect our
business.
If ethical, privacy or other concerns surrounding the use of genetic
information become widespread, we may have less demand for our products and
services.
Our customers use our products and services for genetic testing. Genetic
testing has raised ethical issues regarding privacy and the appropriate uses
of the resulting information. For these reasons, governmental authorities may
call for limits on or regulation of the use of genetic testing or prohibit
testing for genetic predisposition to certain conditions, particularly for
those that have no known cure. Similarly, such concerns may lead individuals
to refuse to use genetics tests even if permissible. Any of these scenarios
could reduce the potential markets for our products and services, which could
seriously harm our business, financial condition and results of operations.
We depend on third-party products and services and sole or limited sources of
supply to develop and manufacture components and materials used in our
products.
We rely on outside vendors to supply the components and materials used in
our products. Some of these components and materials are obtained from a
single supplier or a limited group of suppliers. We have experienced quality
problems with, and delays in receiving, oligonucleotides, which are necessary
materials used in connection with the operation of the MassARRAY system. Our
reliance on outside vendors generally, and a sole or a limited group of
suppliers in particular, involves several risks, including:
. the inability to obtain an adequate supply of required components and
materials due to capacity constraints, a discontinuance of a product by a
supplier or other supply constraints;
. reduced control over quality and pricing of components and materials; and
. delays and long lead times in receiving components or materials from
vendors.
If our access to necessary tissue samples or information is restricted, we
will not be able to continue to develop our business.
We need access to normal and diseased human tissue samples, other
biological materials and related clinical and other information to continue to
develop our products and services. We compete with many other companies for
these materials and information. We may not be able to obtain or maintain
access to these materials and information. In addition, government regulation
in the United States and foreign countries could result in restricted access
to, or use of, human and other tissue samples. If we lose access to sufficient
numbers or sources of tissue samples, or if tighter restrictions are imposed
on our use of the information generated from tissue samples, our business will
suffer.
We may not successfully integrate future acquisitions.
In the future, we may acquire additional complementary companies or
technologies. Managing these acquisitions will entail numerous operational and
financial risks, including:
. exposure to unknown liabilities;
. higher than expected acquisition and integration costs which may cause
our quarterly and annual operating results to fluctuate;
. combining the operations and personnel of acquired businesses with our
own, which may be difficult and costly, and integrating or completing the
development and application of any acquired technologies, which may
disrupt our business and divert our management's time and attention;
15
. impairment of relationships with key customers of acquired businesses due
to changes in management and ownership of the acquired businesses;
. inability to retain key employees of any acquired businesses or hire
enough qualified personnel to staff any new or expanded operations; and
. increased amortization expenses if an acquisition results in significant
goodwill or other intangible assets.
Our industry is highly competitive and we may not have the resources required
to successfully compete.
The biotechnology industry is highly competitive. We compete with a broad
range of companies in the United States and abroad that are engaged in the
development and production of products, services and strategies to analyze
genetic information. They include:
. biotechnology, pharmaceutical, chemical and other companies;
. academic and scientific institutions;
. governmental agencies; and
. public and private research organizations.
Many of our competitors have much greater financial, technical, research,
marketing, sales, distribution, service and other resources than we do.
Moreover, our competitors may offer broader product lines, services and have
greater name recognition than we do, and may offer discounts as a competitive
tactic. In addition, several early stage companies are currently making or
developing products that compete with or will compete with our products. Our
competitors may develop or market technologies, products or services that are
more effective or commercially attractive than our current or future products
and services, or that may render our technologies and products obsolete. We
may also compete against some of our customers, which may adversely affect our
relationships with them.
We are highly dependent on our Board of Directors and principal members of our
management and scientific staff, the loss of whom would impair our ability to
compete.
The loss of the services of any of these persons could delay or reduce our
product development and commercialization efforts. In addition, we will
require additional personnel in the areas of scientific research, diagnostic
testing, manufacturing and marketing. We may not be able to attract and retain
qualified personnel at the Board of Directors level or any management level,
which could seriously harm our business, financial condition and results of
operations.
Our ability to compete in the market may decline if we lose some of our
intellectual property rights due to lawsuits to protect or enforce our
patents.
Our success will depend on our ability to obtain and protect patents on our
technology and to protect our trade secrets. Our patents, which have been or
may be issued, may not afford meaningful protection for our technology and
products. Others may challenge our patents and, as a result, our patents could
be narrowed, invalidated or unenforceable. In addition, our current and future
patent applications may not result in the issue of patents in the United
States or foreign countries. Competitors may develop products similar to ours
that do not conflict with our patents. In addition, others may develop
products for use in the MassARRAY system in violation of our patents that
could reduce sales of disposables. In order to protect or enforce our patent
rights, we may initiate interference proceedings, oppositions, or patent
litigation against third parties, such as infringement suits. These lawsuits
could be expensive, take significant time and divert management's attention
from other business concerns. The patent position of biotechnology firms
generally is highly uncertain, involves complex legal and factual questions,
and has recently been the subject of much litigation. No consistent policy has
emerged from the U.S. Patent and Trademark Office or the courts regarding the
breadth of claims allowed or the degree of protection afforded under
biotechnology patents. In addition, there is a substantial backlog of
16
biotechnology patent applications at the U.S. Patent and Trademark Office, and
the approval or rejection of patent applications may take several years.
The rights we rely upon to protect the intellectual property underlying our
products may not be adequate, which could enable third parties to use our
technology and would reduce our ability to compete in the market.
We require our employees, consultants and advisors to execute
confidentiality agreements. However, we cannot guarantee that these agreements
will provide us with adequate protection against improper use or disclosure of
confidential information. In addition, in some situations, these agreements
may conflict with, or be subject to, the rights of third parties with whom our
employees, consultants or advisors have prior employment or consulting
relationships. Further, others may independently develop substantially
equivalent proprietary information and techniques, or otherwise gain access to
our trade secrets.
Our success will depend partly on our ability to operate without infringing on
or misappropriating the proprietary rights of others.
We may be sued for infringing on the patent rights of others. Intellectual
property litigation is costly, and, even if we prevail, the cost of such
litigation could adversely affect our business, financial condition and
results of operations. In addition, litigation is time consuming and could
divert management attention and resources away from our business. If we do not
prevail in any litigation, in addition to any damages we might have to pay, we
could be required to stop the infringing activity or obtain a license. Any
required license may not be available to us on acceptable terms, or at all. In
addition, some licenses may be non-exclusive, and therefore, our competitors
may have access to the same technology licensed to us. If we fail to obtain a
required license or are unable to design around a patent, we may be unable to
sell some of our products, which could have a material adverse affect on our
business, financial condition and results of operations. From time to time, we
receive letters from companies regarding their issued patents and patent
applications alleging or suggesting possible infringement.
We may be unable to obtain licenses to patented SNPs, which could prevent us
from obtaining significant revenue or becoming profitable.
The U.S. Patent and Trademark Office has issued and continues to issue
patents claiming SNP discoveries and their related associations and functions.
If important SNPs are patented, we will need to obtain rights to those SNPs in
order to develop, use and sell related assays. Required licenses may not be
available on commercially acceptable terms, or at all. If we fail to obtain
licenses to important patented SNPs, we may never achieve significant revenue
or become profitable.
Because our products currently depend on components licensed or supplied from
third parties, our breach of any of the terms of these licenses or supply
agreements could result in our loss of access to these components and could
delay or suspend our commercialization efforts.
We have acquired or licensed components of our technology from third
parties. Our failure to maintain the right to use these components could
seriously harm our business, financial condition and results of operations. In
addition, changes to or termination of our agreements with these third parties
could result in the loss of access to these aspects of our technology and
could delay or suspend our commercialization efforts.
Our grants from the government give the government certain license rights
to inventions resulting from funded work in the event that we fail to
commercialize the technology developed using government funds. Our business
could be harmed if the government exercises those rights.
17
Failure to expand our international sales as we intend would reduce our
ability to become profitable.
We expect that a significant portion of our sales will be made outside the
United States. A successful international effort will require us to develop
relationships with international customers and partners. We may not be able to
identify, attract or retain suitable international customers and partners. As
a result, we may be unsuccessful in our international expansion efforts.
Furthermore, expansion into international markets will require us to continue
to establish and grow foreign operations, hire additional personnel to run
these operations and maintain good relations with our foreign customers and
partners.
International operations involve a number of risks not typically present in
domestic operations, including:
. currency fluctuation risks;
. changes in regulatory requirements;
. costs and risks of deploying systems in foreign countries;
. licenses, tariffs and other trade barriers;
. political and economic instability;
. difficulties in staffing and managing foreign operations;
. potentially adverse tax consequences;
. the burden of complying with a wide variety of complex foreign laws and
treaties; and
. different rules, regulations, and policies governing intellectual
property protection and enforcement.
Our international operations are also be subject to the risks associated
with the imposition of legislation and regulations relating to the import or
export of high technology products. We cannot predict whether tariffs or
restrictions upon the importation or exportation of our products will be
implemented by the United States or other countries.
We may lose money when we exchange foreign currency received from
international sales into U.S. dollars.
A significant portion of our business is expected to be conducted in
currencies other than the U.S. dollar. We recognize foreign currency gains or
losses arising from our operations in the period incurred. As a result,
currency fluctuations between the U.S. dollar and the currencies in which we
do business will cause foreign currency translation gains and losses. We
cannot predict the effects of exchange rate fluctuations upon our future
operating results because of the variability of currency exposure and the
potential volatility of currency exchange rates. We do not currently engage in
foreign exchange hedging transactions to manage our foreign currency exposure.
Our revenues are derived primarily from, and are subject to risks faced by,
pharmaceutical and biotechnology companies and governmental and others
research institutions.
We expect that our revenues in the foreseeable future will be derived
primarily from products and services provided to pharmaceutical and
biotechnology companies and governmental and other research institutions.
Accordingly, our success will depend upon their demand for our products and
services. Our operating results may fluctuate substantially due to reductions
and delays in research and development expenditures by these customers. These
reductions and delays may result from factors such as:
. changes in economic conditions;
. changes in government programs that provide funding;
. changes in the regulatory environment affecting health care and health
care providers;
18
. pricing pressures and reimbursement policies;
. market-driven pressures on companies to consolidate and reduce costs; and
. other factors affecting research and development spending.
None of these factors is within our control.
We may not have adequate insurance and if we become subject to product
liability claims, we may experience reduced demand for our products and
services or be required to pay damages that exceed our insurance limitations.
Our business exposes us to potential product liability claims that are
inherent in the life science field. Any product liability claim in excess of
our insurance coverage would have to be paid out of our cash reserves, which
would have a detrimental effect on our financial condition. It is difficult to
determine whether we have obtained sufficient insurance to cover potential
claims. Also, we cannot assure you that we can or will maintain our insurance
policies on commercially acceptable terms, or at all.
Responding to claims relating to improper handling, storage or disposal of
hazardous chemicals and radioactive and biological materials which we use,
could be time consuming and costly.
We use controlled hazardous and radioactive materials in our business. The
risk of accidental contamination or injury from these materials cannot be
completely eliminated. If an accident with these substances occurs, we could
be liable for any damages that result, which could seriously harm our
business. Additionally, an accident could damage our research and
manufacturing facilities and operations, resulting in delays and increased
costs.
If our production and laboratory facilities are damaged, we could experience
lost revenue and our business would be seriously harmed.
Our only production facility is located in San Diego, California. We have
laboratories located in San Diego, Sudbury, Massachusetts and Hamburg,
Germany. Damage to our facilities due to fire, natural disaster, power loss,
communications failure, unauthorized entry or other events could result in a
loss of important data or cause us to cease development and production of our
products. We have limited insurance to protect against business interruption;
however, there can be no assurance this insurance will be adequate or will
continue to be available to us on commercially reasonable terms, or at all.
If we do not effectively manage our growth, it could affect our ability to
pursue business opportunities and expand our business.
Growth in our business has placed, and will continue to place, a
significant strain on our personnel, facilities, management systems and
resources. We will need to continue to improve our operational and financial
systems and managerial controls and procedures and expand, train and manage
our workforce. We will rely heavily on software systems, including an
enterprise resource planning system and a laboratory information management
system that have been or will be installed and utilized. Furthermore, we will
have to maintain close coordination among our technical, accounting,
marketing, sales and research departments. If we fail to effectively manage
our growth and address the above concerns, it could affect our ability to
pursue business opportunities and expand our business.
Our stock price could be volatile and your investment could suffer a decline
in value.
The trading price of our common stock has been volatile and could be
subject to wide fluctuations in price in response to various factors, many of
which are beyond our control, including:
. actual or anticipated variations in quarterly operating results;
. announcements of technological innovations by us or our competitors;
19
Inflation
We do not believe that inflation has had a material adverse impact on our
business or operating results during the periods presented.
. announcements related to patent and other intellectual property
developments;
. new products or services introduced or announced by us or our
competitors;
. changes in financial estimates by securities analysts;
. conditions or trends in the biotechnology, pharmaceutical and genomics
industries;
. changes in the market valuations of other similar companies;
. announcements by us of significant acquisitions, strategic partnerships,
joint ventures or capital commitments;
. additions or departures of key personnel; and
. sales of our common stock.
In addition, the stock market in general, and the Nasdaq National Market
and the market for technology companies in particular, has experienced extreme
price and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of those companies. Further,
there has been particular volatility in the market prices of securities of
biotechnology and life sciences companies. These broad market and industry
factors may seriously harm the market price of our common stock, regardless of
our operating performance. In the past, following periods of volatility in the
market price of a company's securities, securities class-action litigation has
often been instituted against that company. Such litigation, if instituted
against us, could result in substantial costs and a diversion of management's
attention and resources, which could seriously harm our business, financial
condition and results of operations.
Anti-takeover provisions in our charter documents and Delaware law could make
a third-party acquisition of us difficult. This could limit the price
investors might be willing to pay in the future for our common stock.
The anti-takeover provisions in our certificate of incorporation, our
bylaws and Delaware law could make it more difficult for a third party to
acquire us without approval of our board of directors. As a result of these
provisions, we could delay, deter or prevent a takeover attempt or third party
acquisition that our stockholders consider to be in their best interests,
including a takeover attempt that results in a premium over the market price
for the shares held by our stockholders.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Short-term investments
The primary objective of our investment activities is to preserve principal
while at the same time maximizing the income we receive from our investments
without significantly increasing risk. Some of the securities that we invest
in may have market risk. This means that a change in prevailing interest rates
may cause the fair value of the principal amount of the investment to
fluctuate. For example, if we hold a security that was issued with a fixed
interest rate at the then-prevailing rate and the prevailing interest rate
later rises, the fair value of the principal amount of our investment will
probably decline. To minimize this risk in the future, we intend to maintain
our portfolio of cash equivalents and short-term investments in a variety of
securities, including commercial paper, money market funds, government and
non-government debt securities. The average duration of all of our investments
has generally been less than one year. Due to the short-term nature of these
investments, we believe we have no material exposure to interest rate risk
arising from our investments. Therefore, no quantitative tabular disclosure is
provided.
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Foreign currency rate fluctuations
The functional currency for our German subsidiary is the deutsche mark. The
German subsidiary's accounts are translated from the German deutsche mark to
the US dollar using the current exchange rate in effect at the balance sheet
date, for balance sheet accounts, and using the average exchange rate during
the period for revenues and expense accounts. The effects of translation are
recorded as a separate component of stockholders' equity. Our German
subsidiary conducts its business with customers in local European currencies.
Exchange gains and losses arising from these transactions are recorded using
the actual exchange differences on the date of the transaction. We have not
taken any action to reduce our exposure to changes in foreign currency
exchange rates, such as options or futures contracts, with respect to
transactions with our German subsidiaries or transactions with our European
customers. The net liabilities of our German subsidiary totaled $2.4 million
at March 31, 2001. A 1% decrease in the value of the German deutsche mark
relative to the US dollar would result in an approximately $24,000 unrealized
foreign translation loss. As of January 2002, the functional currency of our
German subsidiary will be the Euro. We do not foresee that this transition
from the deutsche mark to the Euro will have a material impact on the Companys
financial position.
21
PART II OTHER INFORMATION
Item 2 Changes in Securities and Use of Proceeds
On January 31, 2000, the Company's Form S-1 registration statement (File
No. 333-91665) was declared effective by the Securities and Exchange
Commission. The registration statement, as amended, covered the offering of
5,250,000 shares of common stock. The offering commenced on January 31, 2000
and the sale to the public of shares of common stock at $26.00 per share was
completed on February 3, 2000 for an aggregate price of approximately $136.5
million. The registration statement covered an additional 787,500 shares of
common stock that the underwriters had the option to purchase solely to cover
over-allotments. These shares were purchased on February 2, 2000 at $26.00 per
share for an aggregate price of approximately $20.5 million. The managing
underwriters for the offering were Warburg Dillon Read LLC, FleetBoston
Robertson Stephens Inc. and SG Cowen Securities Corporation. Expenses incurred
through March 31, 2001 in connection with the issuance and distribution of
common stock in the offering included underwriting discounts, commissions and
allowances of approximately $11.0 million and other expenses of approximately
$1.9 million. Total offering expenses of approximately $12.9 million resulted
in net offering proceeds to the Company of approximately $144.1 million. No
payments or expenses were paid to directors, officers or affiliates of the
Company or 10% owners of any class of equity securities of the Company. Of the
net offering proceeds, through March 31, 2001, approximately $3.9 million has
been used to payoff long-term and other debt, approximately $8.8 million to
purchase equipment and improve leaseholds and approximately $45.4 million for
general corporate purposes, including hiring additional personnel, development
and manufacturing of products, expansion of facilities and expenses for filing
and pursing patent applications. The balance is invested in a variety of
interest-bearing instruments including investment-grade corporate bonds,
commercial paper and money market accounts.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
No exhibits were filed during the quarter ended March 31, 2001.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31, 2001.
22
SEQUENOM, INC.
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.
SEQUENOM, Inc.
/s/ Stephen L. Zaniboni
Date: May 15, 2001 By: _________________________________
Stephen L. Zaniboni
Chief Financial Officer
(Duly Authorized Officer and
Principal
Financial and Accounting Officer)
23