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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended June 30, 2001
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[_] 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: 0-19290
[LOGO APPEARS HERE (TM)]
COR
COR THERAPEUTICS, INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
94-3060271
(I.R.S. employer identification no.)
(650) 244-6800
(Registrant's telephone number, including area code)
256 East Grand Avenue, South San Francisco, California 94080
(Address of principal executive offices and zip code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
As of June 30, 2001, the number of outstanding shares of the Registrant's
Common Stock was 55,548,417
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COR THERAPEUTICS, INC.
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INDEX
Page
Section Contents No.
- ------- -------- -----
PART I FINANCIAL INFORMATION
Item 1. Condensed Financial Statements and Notes
Condensed Balance Sheets - June 30, 2001 and December 31, 2000 3
Condensed Statements of Operations - for the three and six months ended June 30, 2001 and 2000 4
Condensed Statements of Cash Flows - for the six months ended June 30, 2001 and 2000 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
PART II OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Changes in Securities and Use of Proceeds 20
Item 4. Submission of Matters to a Vote of Security Holders 21
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 22
INTEGRILIN(R) (eptifibatide) Injection, COR THERAPEUTICS(R), and COR(R) are
registered trademarks of COR Therapeutics, Inc.
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Page 2 of 22
COR THERAPEUTICS, INC.
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements and Notes
CONDENSED BALANCE SHEETS
(unaudited, in thousands)
June 30, December 31,
2001 2000
-------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 214,484 $ 41,142
Short-term investments 362,515 298,736
Contract receivables 21,510 12,134
Prepaid copromotion expenses 70,621 58,649
Other current assets 1,681 1,189
--------- ---------
Total current assets 670,811 411,850
Property and equipment, net 4,091 3,724
Other assets 16,988 9,572
--------- ---------
$ 691,890 $ 425,146
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,904 $ 12,052
Accrued interest payable 5,625 5,000
Accrued compensation 4,600 8,086
Accrued development costs 1,441 1,447
Accrued copromotion costs 1,503 2,830
Deferred revenue 65,948 44,165
Other accrued liabilities 515 511
Capital lease obligations--current portion 1,010 1,265
---------- ---------
Total current liabilities 87,546 75,356
Capital lease obligations--noncurrent portion 993 1,659
Convertible senior notes 250,000 --
Convertible subordinated notes 300,000 300,000
Stockholders' equity 284,784 280,016
Accumulated deficit (231,433) (231,885)
---------- ---------
Total stockholders' equity 53,351 48,131
--------- ---------
$ 691,890 $ 425,146
========== =========
See accompanying notes.
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COR THERAPEUTICS, INC.
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CONDENSED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------
2001 2000 2001 2000
------------------------------------------------------
Contract revenues:
Copromotion revenue $34,581 $22,981 $55,213 $ 39,885
Development and other contract revenue 3,482 2,101 5,630 3,093
------- ------- ------- --------
Total contract revenues 38,063 25,082 60,843 42,978
------- ------- ------- --------
Expenses:
Cost of copromotion revenue 14,463 12,321 25,212 23,268
Research and development 12,916 12,330 23,661 22,744
Marketing, general and administrative 7,775 8,228 15,069 15,408
------- ------- ------- --------
Total expenses 35,154 32,879 63,942 61,420
------- ------- ------- --------
Income (loss) from operations 2,909 (7,797) (3,099) (18,442)
Interest income 5,222 5,527 12,571 7,919
Interest expense (4,815) (4,227) (9,011) (5,915)
------- ------- ------- --------
Income (loss) before income taxes 3,316 (6,497) 461 (16,438)
Provision for income taxes 9 -- 9 --
------- ------- ------- --------
Net income (loss) $ 3,307 $(6,497) $ 452 $(16,438)
======= ======= ======= ========
Basic net income (loss) per share $ 0.06 $(0.12) $ 0.01 $(0.31)
======= ======= ======= ========
Shares used in computing basic net income (loss) per share 55,463 53,230 55,248 52,502
======== ======= ======= ========
Diluted net income (loss) per share $ 0.06 $(0.12) $ 0.01 $(0.31)
======= ======= ======= ========
Shares used in computing diluted net income (loss) per share 59,300 53,230 59,230 52,502
======= ======= ======= ========
See accompanying notes.
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COR THERAPEUTICS, INC.
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CONDENSED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(unaudited, in thousands)
Six Months Ended
June 30,
--------------------------
2001 2000
--------------------------
Cash flows provided by (used in) operating activities:
Net income (loss) $ 452 $ (16,438)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 1,877 1,759
Changes in assets and liabilities:
Contract receivables (9,376) (2,734)
Prepaid copromotion expenses (11,972) (3,464)
Other current assets (492) 109
Accounts payable (5,148) (54)
Accrued interest payable 625 5,215
Accrued compensation (3,486) 1,724
Accrued development costs (6) 1,226
Accrued copromotion costs (1,327) (533)
Deferred revenue 21,783 4,674
Other accrued liabilities 4 (2)
--------- ---------
Total adjustments (7,518) 7,920
--------- ---------
Net cash used in operating activities (7,066) (8,518)
--------- ---------
Cash flows provided by (used in) investing activities:
Purchases of short-term investments (331,050) (297,876)
Sales of short-term investments 178,840 39,464
Maturities of short-term investments 87,724 14,047
Additions to property and equipment (1,471) (552)
--------- ---------
Net cash used in investing activities (65,957) (244,917)
--------- ---------
Cash flows provided by (used in) financing activities:
Repayment of capital lease obligations (921) (877)
Proceeds from convertible senior notes, net of issuance costs 241,811 --
Proceeds from convertible subordinated notes, net of issuance costs -- 289,249
Issuance of common stock 5,475 17,917
--------- ---------
Net cash provided by financing activities 246,365 306,289
--------- ---------
Net increase in cash and cash equivalents 173,342 52,854
Cash and cash equivalents at the beginning of the period 41,142 12,780
--------- ---------
Cash and cash equivalents at the end of the period $ 214,484 $ 65,634
========= =========
See accompanying notes.
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COR THERAPEUTICS, INC.
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NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Summary of significant accounting policies
COR Therapeutics, Inc. ("COR") was incorporated in Delaware on February 4, 1988.
COR is dedicated to the discovery, development and marketing of novel
therapeutic products to establish new standards of care for treating and
preventing acute and chronic cardiovascular diseases. We market INTEGRILIN(R)
(eptifibatide) Injection, our approved drug, to treat patients with acute
cardiovascular disease. We are also developing a portfolio of product
candidates to treat and prevent a broad range of acute and chronic
cardiovascular diseases and other conditions.
Interim financial information
We prepared the accompanying unaudited condensed financial statements in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10 of Regulation
S-X. In our opinion, these condensed financial statements include all
adjustments, consisting only of normal recurring adjustments, that we consider
necessary to fairly state our financial position, our results of operations and
our cash flows. We derived the condensed balance sheet at December 31, 2000
from the audited financial statements at that date. The condensed balance sheet
at June 30, 2001 does not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The accompanying condensed financial statements should be read in conjunction
with the audited financial statements and notes thereto included in our annual
report on Form 10-K for the year ended December 31, 2000. The results of
operations for any interim period are not necessarily indicative of the results
of operations for any other interim period or for a full fiscal year.
Contract revenues
Contract revenues include copromotion revenue and development and other contract
revenue.
Copromotion revenue includes our share of profits from the sale of INTEGRILIN in
copromotion territories by Schering-Plough Ltd. and Schering Corporation
(collectively, "Schering"), as well as the reimbursement from Schering of our
costs of copromotion revenue. We generally recognize copromotion revenue when
Schering ships related product to wholesalers and record it net of allowances,
if any, which we believe are necessary. Our costs of copromotion revenue
consist of certain manufacturing-related, advertising and promotional expenses
related to the sale of INTEGRILIN within copromotion territories. We defer
certain manufacturing-related expenses until the time Schering ships related
product to its customers inside and outside copromotion territories. Deferred
revenue includes payments from Schering received prior to the period in which
the related contract revenues are earned.
We record development revenue as earned based on the performance requirements of
the contract, and expense related costs as they are incurred. Other contract
revenue includes recognition of reimbursement to us by Schering of certain
manufacturing-related expenses for materials used outside the copromotion
territory, and royalties from Schering on sales of INTEGRILIN outside the
copromotion territory. We recognize these revenues when Schering ships the
related product to its customers.
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COR THERAPEUTICS, INC.
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Prepaid copromotion expenses
Prepaid copromotion expenses represent materials on hand, valued at cost, and
prepayments to third-party suppliers associated with manufacturing-related
copromotion expenses. Prepaid copromotion expenses consist of the following (in
thousands):
June 30, December 31,
2001 2000
-------- ------------
Deposits and prepayments $ 883 $ 4,690
Bulk materials 46,535 30,918
Finished goods 23,203 23,041
------- -------
$70,621 $58,649
======= =======
Other assets
Other assets represent issuance costs associated with our sale of $250,000,000
aggregate principal amount of 4.5% convertible senior notes in June 2001 and our
sale of $300,000,000 aggregate principal amount of 5.0% convertible subordinated
notes in February 2000. The issuance costs are being amortized over the five-
year life of the convertible senior notes and the seven-year life of the
convertible subordinated notes. Other assets consist of the following (in
thousands):
June 30, December 31,
2001 2000
-------- ------------
4.5% convertible senior notes due June 15, 2006 $ 8,189 $ --
5.0% convertible subordinated notes due March 1, 2007 10,869 10,869
Less accumulated amortization (2,070) (1,297)
------- -------
$16,988 $ 9,572
======= =======
Information concerning market and source of supply concentration
COR and Schering copromote INTEGRILIN in the United States and share any profits
or losses. Together with Schering and Genentech, Inc., we also copromote
INTEGRILIN with Genentech's fibrinolytic, or clot-dissolving drugs, TNKase(TM)
and Activase(R) across the United States. INTEGRILIN has received regulatory
approval in the European Union and a number of other countries for various
indications. We have exclusively licensed Schering to market INTEGRILIN outside
the United States, and Schering pays us royalties based on sales of INTEGRILIN
outside the United States. We have long-term supply arrangements with two
suppliers for the bulk product and with another two suppliers, one of which is
Schering, for the filling and final packaging of INTEGRILIN.
Advertising and promotion costs
Advertising and promotion costs are expensed in the period they are incurred and
classified as cost of copromotion revenue. Advertising and promotion costs
totaled $4,091,000 and $8,171,000 for the three and six months ended June 30,
2001 compared to $3,605,000 and $6,892,000 for the corresponding periods in
2000.
Reclassification
We have reclassified certain prior year balances to conform to the current year
presentation.
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COR THERAPEUTICS, INC.
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Comprehensive income (loss)
Comprehensive income (loss) is comprised of net income (loss) and other
comprehensive income (loss). Other comprehensive income (loss) includes certain
changes in equity that are excluded from net income (loss). Specifically,
unrealized holding gains and losses on our available-for-sale securities, which
are reported in stockholders' equity, are included in other comprehensive income
(loss). Comprehensive income (loss) totaled $2,681,000 and ($255,000) for the
three and six months ended June 30, 2001 compared to ($6,462,000) and
($16,532,000) for the corresponding periods in 2000.
Segment information
Our business activities include the discovery, development and commercialization
of novel cardiovascular and other pharmaceutical products and are organized into
one operating segment. All of our operating assets are located in the United
States. All of our revenues are derived from within the United States, except
for royalty and other contract revenue earned on sales of INTEGRILIN by Schering
outside of the United States.
Stock dividend
On August 15, 2000, we effected a two-for-one stock split by means of a stock
dividend, in which our stockholders of record at the close of business on July
31, 2000 received one additional share of our common stock for every share of
common stock then held. The effect of the two-for-one stock dividend has been
reflected throughout this report, including the share and per share amounts for
all periods presented.
2. Financial instruments.
We used the following methods and assumptions in estimating the fair value
disclosures for financial instruments:
Cash and cash equivalents. The carrying amount of cash and cash equivalents
reported on the balance sheet approximates its fair value.
Short-term investments. Short-term investments consist of marketable government
and other debt securities and are classified as available-for-sale. These
investments are carried at fair value and any unrealized gains and losses are
reported in stockholders' equity. The fair values are based upon quoted market
prices.
At June 30, 2001, the amortized cost and estimated fair value of short-term
investments, classified by contractual maturity, are (in thousands):
Amortized Estimated
Cost Fair Value
--------- ----------
Due in one year or less $152,098 $152,718
Due after one year and in less than three years 209,257 209,797
-------- --------
$361,355 $362,515
======== ========
During the three and six months ended June 30, 2001, we sold short-term
investments with a fair value of $58,859,000 and $178,840,000 resulting in gross
realized gains of $368,000 and $2,458,000. We had no realized losses as a
result of the sale of these short-term investments.
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COR THERAPEUTICS, INC.
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Long and short-term debt. The estimated fair values of our convertible senior
notes and convertible subordinated notes at June 30, 2001 are approximately
$248,000,000 and $320,000,000, respectively, based upon quoted market prices.
The carrying amounts of our capital lease obligations at June 30, 2001
approximate their fair values. These fair values are estimated using a
discounted cash flow analysis based on current incremental borrowing rates for
similar types of borrowing arrangements.
Earnings per share
In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" we have computed basic net income (loss) per share using
the weighted average number of shares of common stock outstanding during the
period. Diluted net income (loss) per share also includes the effect of any
potentially dilutive securities, consisting of stock options, for the three and
six months ended June 30, 2001. Had we been in a net income position for the
three and six months ended June 30, 2000, diluted earnings per share (EPS) would
have included the shares used in the computation of basic net income per share
as well as the impact of 5,838,000 and 6,176,000 net shares issued upon the
assumed exercise of outstanding stock options. We have excluded the impact of
our convertible senior and convertible subordinated notes from the computation
of diluted shares outstanding because the impact of an assumed conversion of
these convertible notes is anti-dilutive for all periods presented. The
following is a reconciliation of the numerators and denominators of the basic
and diluted EPS computations for the three and six months ended June 30, 2001
and 2000 (in thousands).
Three Months Six Months
Ended June 30, Ended June 30,
----------------- -------------------
2001 2000 2001 2000
------- ------- ------- --------
Numerator for basic and diluted EPS:
Net income (loss) $ 3,307 $(6,497) $ 452 $(16,438)
======= ======= ======= ========
Denominator:
Denominator for basic EPS -
weighted-average shares 55,463 53,230 55,248 52,502
Effect of dilutive securities -
stock options 3,837 -- 3,982 --
------- ------- ------- --------
Denominator for diluted EPS - adjusted
weighted-average shares 59,300 53,230 59,230 52,502
======= ======= ======= ========
3. Contingencies.
In October 1997, a patent opposition was filed in Europe by another company
against the claims of a patent granted to us in Europe covering broad, generic
claims for INTEGRILIN, as well as numerous related compounds that are not part
of our core technology. The opposition asserted that all claims of the patent
are unpatentable. In July 2000, the Opposition Division of the European Patent
Office confirmed the validity of our patent claims without requiring us to limit
or otherwise amend our claims. In November 2000, the opposition filed an appeal
of this decision.
4. Subsequent Event.
On July 1, 2001 we executed a new facility lease for laboratory and office space
in South San Francisco, California. This lease expires in June 2011.
On July 11, 2001 we sold an additional $50,000,000 principal amount of 4.5%
convertible senior notes to cover over-allotments in connection with our June
2001 issuance of $250,000,000 principal amount of 4.5% convertible senior notes.
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COR THERAPEUTICS, INC.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
In addition to historical information, this report contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ
materially from the anticipated results discussed in such forward-looking
statements. Factors that could cause or contribute to such differences include
the commercial success of INTEGRILIN and other factors discussed below and under
the caption "Risk Factors." Forward-looking statements are based on our current
expectations, and we do not intend to update such information to reflect future
events or developments.
Overview
COR is dedicated to the discovery, development and marketing of novel
therapeutic products to establish new standards of care for treating and
preventing acute and chronic cardiovascular diseases. We market INTEGRILIN, our
approved drug, to treat patients with acute cardiovascular disease. We are also
developing a portfolio of product candidates to treat and prevent a broad range
of acute and chronic cardiovascular diseases and other conditions.
INTEGRILIN is our first product taken from discovery to commercialization. In
May 1998, the United States Food and Drug Administration approved INTEGRILIN to
treat patients who undergo a procedure known as angioplasty to open blood
vessels. The FDA has also approved INTEGRILIN to treat patients with
intermittent chest pains known as unstable angina and patients suffering from a
type of heart attack known as non-Q-wave myocardial infarction, whether the
doctor intends to treat these patients with medicines alone or with a subsequent
angioplasty. INTEGRILIN is the only drug in its class that the FDA has approved
for use in all these indications.
COR and Schering copromote INTEGRILIN in the United States and share any profits
or losses. INTEGRILIN also has received regulatory approval for various
cardiovascular indications in the European Union and a number of other
countries. We have exclusively licensed Schering to market INTEGRILIN outside
the United States, and Schering pays us royalties based on sales of INTEGRILIN
outside the United States.
In January 2001, we, Schering and Genentech, Inc., entered into an agreement to
copromote INTEGRILIN with Genentech's fibrinolytic, or clot-dissolving drugs,
TNKase(TM) and Activase(R) across the United States. We, Schering and Genentech
have also agreed to an exclusive clinical collaboration for any future large-
scale clinical trials that combine a fibrinolytic with drugs in the same class
as INTEGRILIN.
In addition to our commercial activities, we continue to pursue a wide array of
research and development programs. These programs have therapeutic potential for
a variety of indications including acute coronary syndromes, stroke, restenosis,
cancer and venous and arterial thrombosis.
We have funded our operations primarily through public and private debt and
equity financings and proceeds from research and development and
commercialization collaboration agreements. We have incurred a cumulative net
loss of $231,433,000 through June 30, 2001.
Results of Operations
Three and six months ended June 30, 2001 and 2000
Total contract revenues, which include copromotion and development and other
contract revenue, were $38,063,000 and $60,843,000 for the three and six months
ended June 30, 2001 compared to $25,082,000 and $42,978,000 for the
corresponding periods in 2000.
Copromotion revenue related to the sales of INTEGRILIN by Schering was
$34,581,000 and $55,213,000 for the three and six months ended June 30, 2001
compared to $22,981,000 and $39,885,000 for the corresponding periods in 2000.
Schering reported to us total worldwide sales of INTEGRILIN of $66,915,000 and
$104,966,000 for the three and six months ended June 30, 2001 compared to
$41,872,000 and $69,488,000 for the corresponding periods in 2000. Sales of
INTEGRILIN in the United States were $61,328,000 and $94,894,000 for the three
and six months ended June 30, 2001. The sales increase in the three and six
months ended June 2001 compared to 2000 is
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Page 10 of 22
COR THERAPEUTICS, INC.
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attributable to overall market growth as well as increased market share for
INTEGRILIN. Copromotion revenue fluctuates in relation to the domestic sales of
INTEGRILIN and to our and Schering's respective costs of copromotion revenue,
and we expect these fluctuations to continue. Product sales reported by Schering
for any period are not necessarily indicative of product sales for any future
period. Wholesaler management decisions to increase or decrease their inventory
of INTEGRILIN may result in sales of INTEGRILIN to wholesalers that do not track
directly with sales from wholesalers of INTEGRILIN to hospitals.
Development and other contract revenue was $3,482,000 and $5,630,000 for the
three and six months ended June 30, 2001 compared to $2,101,000 and $3,093,000
for the corresponding periods in 2000. These fluctuations are due to increased
royalty and other contract revenue resulting from increased international sales
of INTEGRILIN and to fluctuations in clinical trial and development activities.
We expect royalty and other contract revenue and clinical trial and development
activities to fluctuate in the future.
Cost of copromotion revenue was $14,463,000 and $25,212,000 for the three and
six months ended June 30, 2001 compared to $12,321,000 and $23,268,000 for the
corresponding periods in 2000. Cost of copromotion revenue includes certain
manufacturing-related, advertising and promotional expenses related to the sale
of INTEGRILIN within copromotion territories. Cost of copromotion revenue
fluctuates in relation to the domestic sales of INTEGRILIN and as we incur more
or less of the joint manufacturing, advertising or promotional activities that
we undertake in our collaboration with Schering.
Research and development expenses were $12,916,000 and $23,661,000 for the three
and six months ended June 30, 2001 compared to $12,330,000 and $22,744,000 for
the corresponding periods in 2000, consistent with our ongoing clinical trial
activities and expenses pertaining to other research, development and clinical
activities associated with product candidates. Research and development
expenses are expected to increase over the next several years, although the
timing of certain of these expenses may depend on the timing and phase of, and
indications pursued in, additional clinical trials of INTEGRILIN and product
candidates in development.
Marketing, general and administrative expenses were $7,775,000 and $15,069,000
for the three and six months ended June 30, 2001 compared to $8,228,000 and
$15,408,000 for the corresponding periods in 2000, consistent with our ongoing
marketing and general corporate activities. We expect marketing, general and
administrative costs to increase over the next several years.
Interest income was $5,222,000 and $12,571,000 for the three and six months
ended June 30, 2001 compared to $5,527,000 and $7,919,000 for the corresponding
periods in 2000. The decrease in the second quarter of 2001 compared to the
second quarter of 2000 was primarily due to a decline in interest rates. The
increase for the six months ended June 30, 2001 compared to the six months ended
June 30, 2000 was primarily due to changes in average cash and investment
balances, including the proceeds from the issuance of $300,000,000 aggregate
principal amount of 5.0% convertible subordinated notes in February 2000 and
realized gains from the sale of short-term investments during the three months
ended March 31, 2001.
Interest expense was $4,815,000 and $9,011,000 for the three and six months
ended June 30, 2001 compared to $4,227,000 and $5,915,000 for the corresponding
periods in 2000. The increase in the second quarter of 2001 compared to the
second quarter of 2000 was primarily due to changes in average outstanding debt
obligations, including the issuance of $250,000,000 aggregate principal amount
of 4.5% convertible senior notes in June 2001. The increase for the six months
ended June 30, 2001 compared to the six months ended June 30, 2000 was primarily
due to changes in average outstanding debt obligations, including the issuance
of $300,000,000 aggregate principal amount of 5.0% convertible subordinated
notes in February 2000.
Net income was $452,000 for the six months ended June 30, 2001. The provision
for income taxes of $9,000 reflects federal alternative minimum taxes.
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Page 11 of 22
Liquidity and Capital Resources
We had available cash, cash equivalents and short-term investments of
$576,999,000 at June 30, 2001. Cash in excess of immediate requirements is
invested with the primary objective of preserving principal while at the same
time maximizing yields without significantly increasing risk. We have funded
our operations primarily through public and private debt and equity financings
and revenues from commercialization and research and development collaboration
agreements. Additional funding has come from grant revenues, interest income
and property and equipment financings.
Net cash used in operating activities and additions to capital equipment was
$8,537,000 for the six months ended June 30, 2001, compared to $9,070,000 for
the six months ended June 30, 2000. The decrease in 2001 compared to 2000 was
primarily due to the timing of activities related to our agreement with Schering
and the effect of reduced losses from operations. Cash requirements for
operating activities and additions to capital equipment may increase in future
periods. The timing of these cash requirements may vary from period to period
depending on the timing and phase of, and indications pursued in, additional
clinical trials of INTEGRILIN and other product candidates in development and
depending on our debt service obligations.
Cash provided by financing activities was $246,365,000 for the six months ended
June 30, 2001 compared to $306,289,000 for the six months ended June 30, 2000,
primarily due to the issuance of $250,000,000 aggregate principal amount of 4.5%
convertible senior notes in June 2001 and the issuance of $300,000,000 aggregate
principal amount of 5.0% convertible subordinated notes in February 2000.
Additional cash provided by financing activities stems from the issuance of
common stock pursuant to our stock option and stock purchase plans.
We expect our cash requirements will increase in future periods due to
anticipated expansion of research and development, including clinical trials,
and increased marketing, sales, and general and administrative activities.
Existing capital resources and interest earned thereon are expected to meet
these increased cash requirements for the next several years. However, cash
requirements may change depending on numerous factors, including the progress of
anticipated research and development programs, the scope and results of pre-
clinical and clinical studies and the number and nature of the indications
pursued in clinical studies. Cash requirements may also change due to the
timing of regulatory approvals, technological advances, determinations as to the
commercial potential of future products and the status of competitive products.
Finally, the establishment and maintenance of collaborative relationships with
other companies, the availability of financing and other unexpected factors may
require additional funds that may not be available on favorable terms, if at
all.
Risk Factors
Our business faces significant risks. Stockholders and potential investors in
our securities should carefully consider the following risk factors, in addition
to other information in this report. We are identifying these risk factors as
important factors that could cause our actual results to differ materially from
those contained in any forward-looking statements made by or on behalf of us.
These risks may not be the only risks we face. Additional risks that we do not
yet know of or that we currently think are immaterial also may impair our
business. We are relying upon the safe-harbor for forward-looking statements
and any such statements made by or on behalf of COR are qualified by reference
to the following cautionary statements, as well as to those set forth elsewhere
in this report.
Risks related to our drug development and commercialization activities
If INTEGRILIN does not achieve commercial success, we will not be able to
generate the revenues necessary to support our business.
Our business depends on the commercial success of INTEGRILIN, which has been on
the market in the United States since June 1998. Marketing outside the United
States commenced in mid-1999 and INTEGRILIN has not yet achieved acceptance in
foreign markets. Although sales of INTEGRILIN have increased since its launch,
if they fail to continue to increase over current levels, we may not achieve
sustained profitability, and we will be forced to scale back our operations and
research and development programs.
Page 12 of 22
We may not be able to compete effectively in the cardiovascular disease market.
Due to the incidence and severity of cardiovascular diseases, the market for
therapeutic products that address these diseases is large, and competition is
intense and expected to increase. Our most significant competitors are major
pharmaceutical companies and more established biotechnology companies. The two
products that compete with INTEGRILIN are ReoPro(R), which is produced by
Johnson & Johnson and sold by Johnson & Johnson and Eli Lilly & Co., and
Aggrastat(R), which is produced and sold by Merck & Co., Inc. Our competitors
operate large, well-funded cardiovascular research and development programs and
have significant expertise in manufacturing, testing, regulatory matters and
marketing. We also must compete with academic institutions, governmental
agencies, and other public and private research organizations that conduct
research in the cardiovascular field, seek patent protection for their
discoveries and establish collaborative arrangements for product and clinical
development and marketing.
We may not be able to obtain the regulatory approvals necessary to market new
products and to market INTEGRILIN for additional therapeutic uses.
We must satisfy stringent governmental regulations in order to develop,
commercialize and market our products. INTEGRILIN is the only product we have
submitted to the FDA for approval for commercial sale, and it has been approved
for a specific set of therapeutic uses. To grow our business, we may need to
obtain regulatory approval to be able to promote INTEGRILIN for additional
therapeutic uses and to commercialize new product candidates. A company cannot
market a pharmaceutical product in the United States until it has completed
rigorous pre-clinical testing and clinical trials of the product and an
extensive regulatory clearance process that the FDA implements. It typically
takes many years to satisfy regulatory requirements, depending upon the type,
complexity and novelty of the product. The process is very expensive. Of
particular significance are the requirements covering research and development,
testing, manufacturing, quality control, labeling and promotion of drugs for
human use.
Before we can receive FDA clearance to market a product, we must demonstrate
that the product is safe and effective for the patient population that will be
treated. Preclinical and clinical data are susceptible to varying
interpretations that could delay, limit or prevent regulatory clearances. In
addition, we may encounter delays or rejections from additional government
regulation, from future legislation or administrative action or changes in FDA
policy during the period of product development, clinical trials and FDA
regulatory review. Failure to comply with applicable FDA or other applicable
regulatory requirements may result in criminal prosecution, civil penalties,
recall or seizure of products, total or partial suspension of production or
injunction, as well as other regulatory action against our potential products or
us. If a product receives regulatory clearance, its marketing will be limited
to those disease states and conditions for which clinical trials demonstrate
that the product is safe and effective. Any compound we develop may not prove to
be safe and effective in clinical trials and may fail to meet all of the
regulatory requirements needed to receive marketing clearance.
Outside the United States, our ability to market a product depends on our
receiving a marketing authorization from the appropriate regulatory authorities.
This foreign regulatory approval process includes all of the risks associated
with FDA clearance described above. Schering has applied for an expanded
marketing authorization for INTEGRILIN in the European Union. A payment from
Schering to us is due upon approval of the expanded marketing authorization.
The timing of any approval, and any related payment, is uncertain. If Schering
is unable to obtain approval for the expanded marketing authorization, continued
commercialization of INTEGRILIN in the European Union will be impaired and we
will not receive the related payment from Schering or be able to record the
anticipated revenue. Our public guidance regarding our results of operations
for the year ending December 31, 2001 includes this anticipated revenue.
We depend on our collaborative relationship with Schering to market and sell
INTEGRILIN, and our business will suffer if Schering fails to perform under the
collaboration.
Our strategy is to work with collaborative partners to develop product
candidates and commercialize products. Generally, collaborations with
established pharmaceutical companies provide funding for product development and
the benefit of an established sales and marketing organization. In particular,
our ability to successfully
Page 13 of 22
commercialize INTEGRILIN depends on our collaboration with Schering. Under this
collaboration, Schering has agreed to:
. co-market INTEGRILIN with us in the United States and market the product as
our exclusive licensee outside the United States;
. share profits and losses in the United States and pay royalties to us on
sales of INTEGRILIN outside the United States;
. provide manufacturing and manufacturing support services;
. design and conduct advanced clinical trials;
. fund promotional activities with us; and
. pay us fees upon achievement of certain milestones.
Schering's performance under the collaboration is outside our control. If
Schering fails to perform its obligations diligently and in a timely manner,
commercialization of INTEGRILIN will be impaired and our business may not be
profitable.
If we do not establish additional collaborative relationships, our ability to
develop and commercialize new products will be impaired.
In addition to INTEGRILIN, we have various product candidates in pre-clinical
and clinical trials and other product candidates in various stages of research
and development. We are a party to numerous research agreements related to these
product candidates, most of which do not contemplate taking a product candidate
through development and commercialization. We will need to enter into additional
collaborations to develop and commercialize these and additional product
candidates. We face significant competition in seeking appropriate collaborative
partners. Negotiating these arrangements is complex and time consuming. If we
are successful in establishing a collaboration, the collaboration may not be
successful. If we fail to establish collaborative partnerships for our product
candidates, we may have to terminate, delay or cut back development programs.
If our clinical trials are unsuccessful, or if they experience significant
delays, our ability to commercialize products will be impaired.
We must provide the FDA and foreign regulatory authorities with pre-clinical and
clinical data that demonstrate that our products are safe and effective before
they can be approved for commercial sale. Clinical development, including pre-
clinical testing, is a long, expensive and uncertain process. It may take us
several years to complete our testing, and failure can occur at any stage of
testing. Interim results of pre-clinical or clinical studies do not necessarily
predict their final results, and acceptable results in early studies might not
be seen in later studies. Any pre-clinical or clinical test may fail to produce
results satisfactory to the FDA. Pre-clinical and clinical data can be
interpreted in different ways, which could delay, limit or prevent regulatory
approval. Negative or inconclusive results from a pre-clinical study or
clinical trial or adverse medical events during a clinical trial could cause a
pre-clinical study or clinical trial to be repeated or a program to be
terminated, even if other studies or trials relating to the program are
successful.
We may not complete our planned pre-clinical or clinical trials on schedule or
at all. In addition, due to the substantial demand for clinical trial sites in
the cardiovascular area, we may have difficulty obtaining a sufficient number of
appropriate patients or clinician support to conduct our clinical trials as
planned. If so, we may have to expend substantial additional funds to obtain
access to resources or delay or modify our plans significantly. Our product
development costs will increase if we have delays in testing or approvals.
Significant clinical trial delays could allow our competitors to bring products
to market before we do and impair our ability to commercialize our product or
potential products. Even if regulators approve a product for marketing, it may
not be commercially successful.
Page 14 of 22
If our manufacturers fail to deliver sufficient quantities of INTEGRILIN or
product candidates on schedule, we may be unable to meet demand for INTEGRILIN
and may experience delays in product development.
We have no manufacturing facilities and, accordingly, rely on third parties and
Schering for clinical and commercial production of INTEGRILIN and for clinical
production of product candidates. We have only two manufacturers producing bulk
product, and two manufacturers, one of which is Schering, performing packaging
of INTEGRILIN. We have additional manufacturers producing product candidates
for clinical trials. We rely on our contract manufacturers to deliver
INTEGRILIN and product candidates that have been manufactured in accordance with
Current Good Manufacturing Practices and other applicable regulations.
If the third-party manufacturers or suppliers were to cease production or
otherwise fail to supply us, or if we were unable to renew our manufacturing
contracts or contract for additional manufacturing services on acceptable terms,
or if Schering and our other contract manufacturers were to fail to adhere to
Current Good Manufacturing Practices, our ability to produce INTEGRILIN and to
conduct pre-clinical testing and clinical trials of product candidates would be
impaired. If we do not have adequate supplies of INTEGRILIN to meet market
demand, we may lose potential revenues, and the healthcare community may turn to
competing products. If we cannot obtain adequate supplies of product candidates
for pre-clinical and clinical trials, regulatory approval and development of
product candidates may be delayed.
Our ability to commercialize cromafiban may be diminished if the ongoing
clinical study of roxifiban is unsuccessful.
Previous clinical trials of oral GP IIb-IIIa inhibitors developed by other
pharmaceutical companies have thus far failed to demonstrate the safety and
efficacy of drugs in this class. DuPont Pharmaceuticals is conducting an
ongoing Phase III clinical trial of the oral GP IIb-IIIa inhibitor roxifiban.
New patient enrollment for the trial has been deferred while DuPont effects
changes to the trial design and protocol. If the roxifiban trial is
unsuccessful, we may be unwilling to pursue development of our oral GP IIb-IIIa
inhibitor, cromafiban. Even if we were willing to continue to develop
cromafiban after an unsuccessful roxifiban trial, we may not be able to secure
development partners for the drug, obtain regulatory approval for continued
clinical studies or to enroll patients in such studies.
Our ability to generate revenues will be diminished if we fail to obtain
acceptable prices or an adequate level of reimbursement from third party payors.
Healthcare insurers, including the United States Health Care Financing
Administration, managed care providers, private health insurers and other
organizations set aggregate dollar amounts that they will reimburse to hospitals
for the medicines and care the hospitals administer to treat particular
conditions. These insurers adjust the amounts periodically, and could lower the
amount that they will reimburse hospitals to treat the conditions for which the
FDA has approved INTEGRILIN. If they do, pricing levels or sales volumes of
INTEGRILIN may decrease and cause a reduction in sales and a loss of potential
revenues. In foreign markets a number of different governmental and private
entities determine the level at which hospitals will be reimbursed for
administering INTEGRILIN to insured patients. If these levels are set, or
reset, too low, it may not be possible to sell INTEGRILIN at a profit in these
markets. Each of our product candidates, if approved for marketing, will face
the same risk.
If we are unable to protect our patents and proprietary rights, we may not be
able to compete successfully.
We rely on patent and trade secret protection for significant new technologies,
products and processes because of the long development time, uncertainty and
high cost associated with bringing a new product to the marketplace. Our success
will depend in part on our ability to obtain and enforce patent protection for
our technology both in the United States and other countries. While we are
seeking and/or maintaining patents for INTEGRILIN and our product candidates,
patents may not be issued, and issued patents may afford limited or no
protection.
We may be required to obtain licenses to patents or other proprietary rights
from third parties. Licenses required under any patents or proprietary rights
may not be made available on terms acceptable to us, if at all. If we do not
obtain required licenses, we may encounter delays in product development while
attempting to redesign products or
Page 15 of 22
methods or we could find the development, manufacture or sale of such products
requiring licenses to be foreclosed. Further, we could incur substantial costs
in defending any patent litigation brought against us or in asserting our patent
rights, including those rights licensed to us by others.
If product liability lawsuits are successfully brought against us, we may incur
substantial liabilities.
The testing, marketing and sale of human pharmaceutical products expose us to
significant and unpredictable risks of product liability claims in the event
that the use of our technology or products is alleged to have resulted in
adverse effects. Our products are administered to patients with serious
cardiovascular disease who have a high incidence of mortality. A successful
product liability suit against us could impair our financial condition and force
us to limit commercialization of products.
If we do not attract and retain key employees and consultants, our business
could be impaired.
We are highly dependent on the principal members of our scientific and
management staff. In addition, we rely on consultants to assist us in
formulating our research and development strategy. Attracting and retaining
qualified personnel is critical to our success. Competition for scientific and
managerial personnel is particularly intense in the San Francisco Bay Area where
we, together with numerous other life sciences companies, universities and
research institutions, maintain our operations. Failure to continue to attract
these individuals, or the loss of key personnel, could impair the progress of
our programs.
Risks related to our finances
We have a history of annual operating losses and are uncertain of future
profitability.
Historically, our expenses have exceeded our revenues. As of June 30, 2001, we
had an accumulated deficit of $231,433,000. The extent of future losses and
timing of future profitability are uncertain, even taking into account our share
of revenues from sales of INTEGRILIN. We continue to incur significant expenses
for research and development and to develop, train, maintain and manage our
sales force, and these expenses have exceeded our share of INTEGRILIN product
revenues. We may never achieve ongoing profitability.
If we should need additional funds beyond our existing capital resources and
fail to obtain them, we will be unable to successfully develop and commercialize
products.
We may require significant additional funds beyond our existing capital
resources to market INTEGRILIN and conduct the costly and time-consuming
research, pre-clinical testing and clinical trials necessary to develop and
optimize our technology and potential products, to establish manufacturing,
marketing and sales capabilities for product candidates and to bring any such
products to market. We may raise these funds through public or private equity
offerings, debt financings or additional corporate collaborations and licensing
arrangements. We may find that additional funding may not be available to us
when we need it, on acceptable terms or at all.
If we raise capital by issuing equity securities, our stockholders may
experience dilution. To the extent we raise additional funds through
collaborative arrangements, we may be required to relinquish some rights to our
technologies or product candidates or grant licenses on terms that are not
favorable to us. If we are unable to obtain adequate funding when needed,
commercialization of INTEGRILIN may be impaired, and we may be required to
curtail one or more development programs.
Our indebtedness and debt service obligations may adversely affect our cash
flow.
At July 31, 2001, we had $601,924,000 of outstanding debt, including primarily
our convertible senior and subordinated notes. During each of the last five
years, our earnings were insufficient to cover our fixed charges. During each
of the next three years, our debt service obligations on our convertible senior
and subordinated notes will be approximately $28,500,000 in interest payments.
If we are unable to generate sufficient cash to meet these obligations and have
to use existing cash or investments, we may have to delay or curtail research
and development programs.
Page 16 of 22
We intend to fulfill our debt service obligations both from cash generated by
our operations and from our existing cash and investments. We may add
additional lease lines to finance capital expenditures and may obtain additional
long-term debt and lines of credit.
Our indebtedness could have significant additional negative consequences,
including:
. increasing our vulnerability to general adverse economic and industry
conditions;
. limiting our ability to obtain additional financing;
. requiring the dedication of a substantial portion of our expected cash flow
from operations to service our indebtedness, thereby reducing the amount of
our expected cash flow available for other purposes, including capital
expenditures;
. limiting our flexibility in planning for, or reacting to, changes in our
business and the industry in which we compete; and
. placing us at a possible competitive disadvantage to less leveraged
competitors and competitors that have better access to capital resources.
Risks related to an investment in our securities
Our common stock price is volatile, and an investment in our securities could
suffer a decline in value.
Our stock price has been highly volatile and may continue to be highly volatile
in the future. Our stock price depends on a number of factors, some of which are
beyond our control, which could cause the market price of our common stock to
fluctuate substantially. These factors include:
. fluctuations in our financial and operating results;
. whether our financial results are consistent with securities analysts'
expectations;
. the results of pre-clinical and clinical trials and other companies' clinical
trials of products and product candidates in the same class as our products
and product candidates;
. announcements of technological innovations or new commercial products by us
or our competitors;
. developments concerning proprietary rights; and
. publicity regarding actual or potential performance of products under
development by us or our competitors.
In the past, stockholders have filed securities class action lawsuits against
companies after the market price of the company's stock has fallen
precipitously. Such a lawsuit could cause us to incur significant defense costs
and divert management's attention and other resources. Any adverse determination
could subject us to significant liabilities.
In addition, the stock market in general has from time to time and in
particular, recently experienced extreme price and volume fluctuations. These
broad market fluctuations may lower the market price of our common stock.
Moreover, during periods of stock market price volatility, share prices of many
biotechnology companies have often fluctuated in a manner not necessarily
related to the companies' operating performance. Accordingly, our common stock
may be subject to greater price volatility than the stock market as a whole, and
you could lose a part of your investment.
Because our convertible senior notes and convertible subordinated notes are
convertible into shares of our common stock, their value may be affected by
these factors as well.
Page 17 of 22
If a change in control were to occur, we may not have sufficient funds to pay
the redemption price for all the notes tendered.
If there is a change in control of our company, the holders of our convertible
senior and convertible subordinated notes may require us to redeem some or all
of the notes. Although the indentures governing our convertible senior and
convertible subordinated notes allow us in certain circumstances to pay the
redemption price in shares of our common stock, if a change in control were to
occur, we may not have sufficient funds to pay the redemption price for all the
notes tendered. There is no sinking fund for our convertible senior or
convertible subordinated notes.
Anti-takeover provisions in our charter documents and under Delaware law may
make it more difficult to acquire us, even though an acquisition may be
beneficial to our stockholders.
Provisions of our certificate of incorporation and by-laws could make it more
difficult for a third party to acquire us, even if doing so would benefit our
stockholders. These provisions:
. authorize the issuance of "blank check" preferred stock that could be issued
by our board of directors to increase the number of outstanding shares and
thwart a takeover attempt; and
. limit who may call a special meeting of stockholders; and
. require a vote of 2/3 of our voting stock to approve any business combination
with a holder of 15% or more of our voting stock, or any person affiliated
with a person who is or was a holder of 15% or more of our voting stock,
unless procedural and minimum price requirements are met.
In January 1995, our board of directors adopted a preferred share purchase
rights plan, commonly known as a "poison pill." The provisions described above,
our preferred share purchase rights plan and provisions of the Delaware General
Corporation Law relating to business combinations with interested stockholders
may discourage, delay or prevent a third party from acquiring us, even if our
stockholders might receive a premium for their shares in the acquisition over
then current market prices.
Page 18 of 22
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our exposure to market risk for changes in interest rates relate primarily to
our investment portfolio and long-term obligations. Our primary investment
objective is to preserve principal while at the same time maximizing yields
without significantly increasing risk. To achieve this objective, we invest in
highly liquid and high-quality government and other debt securities. Our
portfolio includes money market funds, commercial paper, medium-term notes,
corporate notes and government securities. To minimize the exposure due to
adverse shifts in interest rates, we invest in short-term securities with
maturities of less than three years. At June 30, 2001, approximately 64% of our
cash and investment portfolio was composed of investments maturing in one year
or less. The remainder of our investment portfolio matures in less than three
years.
Our long-term obligations include $250,000,000 of 4.5% convertible senior notes
due June 15, 2006 and $300,000,000 of 5.0% convertible subordinated notes due
March 1, 2007. Interest on the convertible senior notes is fixed and payable
semi-annually on June 15 and December 15 of each year and interest on the
convertible subordinated notes is fixed and payable semi-annually on March 1 and
September 1 of each year. The notes are convertible into shares of our common
stock at different rates at any time prior to maturity, unless previously
redeemed or repurchased, subject to adjustment in certain events.
The following table presents, as of June 30, 2001, the amounts of our cash, cash
equivalents and short-term investments that may be subject to interest rate risk
and the average interest rates by year of maturity ($ in thousands):
2001 2002 2003 2004 Total Fair Value
---------------- --------------- -------------- ------------- -------------- ----------------
Cash, cash equivalents and
short-term investments:
Fixed rate amount $279,727 $87,114 $119,755 $36,750 $523,346 $523,346
Average fixed rate 4.48% 6.27% 5.99% 5.37% 5.19% 5.19%
Variable rate amount $ 47,086 $ - $ 3,044 $ 3,523 $ 53,653 $ 53,653
Average variable rate 4.19% - 5.52% 4.41% 4.28% 4.28%
---------------- --------------- -------------- ------------- -------------- ----------------
Total cash, cash equivalents
and short-term investments:
Fixed and variable
rate amount $326,813 $87,114 $122,799 $40,273 $576,999 $576,999
Average rate 4.44% 6.27% 5.98% 5.28% 5.10% 5.10%
---------------- --------------- -------------- ------------- -------------- ----------------
Page 19 of 22
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In October 1997, a patent opposition was filed in Europe by another company
against the claims of a patent granted to us in Europe covering broad, generic
claims for INTEGRILIN, as well as numerous related compounds that are not part
of our core technology. The opposition asserted that all claims of the patent
are unpatentable. In July 2000, the Opposition Division of the European Patent
Office confirmed the validity of our patent claims without requiring us to limit
or otherwise amend our claims. In November 2000, the opposition filed an appeal
of this decision.
Item 2. Changes in Securities and Use of Proceeds
On June 11, 2001, we completed a private placement of $250,000,000 aggregate
principal amount of 4.5% convertible senior notes due June 15, 2006 (the
"notes"). The initial purchasers of the notes were Goldman, Sachs & Co.,
Robertson Stephens, Inc., Credit Suisse First Boston Corporation, CIBC World
Markets Corp., and Needham & Company, Inc. (the "initial purchasers"). On July
11, 2001, we sold an additional $50,000,000 aggregate principal amount of the
notes to the initial purchasers to cover overallotments. The offering price of
the notes was 100% of the principal amount of the notes, less an aggregate
underwriting discount of $9,750,000. The sale of the notes to the initial
purchasers was exempt from registration in reliance on Section 4(2) and
Regulation D under the Securities Act of 1933, as amended, as a transaction not
involving a public offering.
The notes were re-offered by the initial purchasers to qualified institutional
buyers in reliance on Rule 144A under the Securities Act.
The holders of the notes may convert the notes into shares of our common stock
at a conversion rate of 24.9389 shares per each $1,000 principal amount of
notes, which is equivalent to a conversion price of $40.10 per share. The
conversion rate is subject to adjustment in certain circumstances. We have
reserved 7,481,670 shares of our authorized common stock for issuance upon
conversion of the notes. The notes are convertible at any time before the close
of business on the maturity date, June 15, 2006, unless we have previously
redeemed or repurchased the notes. Holders of the notes called for redemption
or repurchase will be entitled to convert them up to and including, but not
after, the business day immediately preceding the date fixed for redemption or
repurchase, as the case may be.
Page 20 of 22
Item 4. Submission of Matters to a Vote of Security Holders.
We held our annual meeting of stockholders on June 12, 2001.
The stockholders elected the board of director nominees for director by the
votes indicated:
Nominee Votes in Favor Votes Withheld
----------------- ------------------
Vaughn M. Kailian 40,933,484 5,881,747
Shaun R. Coughlin 46,698,697 116,534
James T. Doluisio 46,697,032 118,199
Ginger L. Graham 46,693,099 122,132
Charles J. Homcy 40,924,579 5,890,652
Jerry T. Jackson 46,696,297 118,934
Ernest Mario 46,696,797 118,434
Michael G. McCaffery 46,677,707 137,524
The proposal to amend our 1991 Equity Incentive Plan to increase the aggregate
number of shares of common stock authorized for issuance under the plan by
1,000,000 shares and to extend the termination date of the plan until February
13, 2011 was approved with 30,753,851 affirmative votes, 1,032,713 negative
votes, 123,459 abstentions and 23,330,279 broker non-votes.
The proposal to amend our 1994 Non-Employee Directors' Stock Option Plan to
increase the aggregate number of shares of common stock authorized for issuance
under the plan by 300,000 shares and to eliminate the fixed termination date was
approved with 30,261,887 affirmative votes, 1,592,105 negative votes, 56,031
abstentions and 23,330,279 broker non-votes.
The proposal to amend our 1991 Employee Stock Purchase Plan to increase the
aggregate number of shares of common stock authorized for issuance under the
plan by 450,000 shares was approved with 30,902,861 affirmative votes, 936,923
negative votes, 70,239 abstentions and 23,330,279 broker non-votes.
The proposal to ratify the selection of Ernst & Young LLP as our independent
auditors for the fiscal year ending December 31, 2001 was approved with
46,711,428 affirmative votes, 74,100 negative votes, 29,703 abstentions and
8,425,071 broker non-votes.
Page 21 of 22
Item 6. Exhibits and Reports on Form 8-K
Exhibits
Number Exhibit
- ------------------------- --------------------------------------------------------------------
4.1 Indenture, between the Registrant, as Issuer, and Firstar Bank,
N.A., as Trustee, dated June 11, 2001.
10.1 Purchase Agreement among the Registrant and Goldman, Sachs & Co.,
Robertson Stephens, Inc., Credit Suisse First Boston Corporation,
CIBC World Markets Corp., and Needham & Company, Inc., dated June
6, 2001.
10.2 Registration Rights Agreement among the Registrant and Goldman,
Sachs & Co., Robertson Stephens, Inc., Credit Suisse First Boston
Corporation, CIBC World Markets Corp., and Needham & Company, Inc.,
dated June 11, 2001.
- --------------------------------------------------------------------------------
Reports on Form 8-K
On June 4, 2001, the Company filed a report on Form 8-K related to the proposed
sale of convertible senior notes.
On June 7, 2001, the Company filed a report on Form 8-K related to an agreement
for the sale of $250,000,000 of 4.5% convertible senior notes.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 3, 2001
COR THERAPEUTICS, INC.
Signature Title
- --------------------------------------------- --------------------------------------------------------------------
/s/ VAUGHN M. KAILIAN
- --------------------------------------------- President, Chief Executive Officer and Director
Vaughn M. Kailian (Principal Executive Officer)
/s/ PETER S. RODDY
- --------------------------------------------- Senior Vice President, Finance and Chief Financial Officer
Peter S. Roddy (Principal Financial Officer)
/s/ JOHN M. SCHEMBRI
- --------------------------------------------- Director, Finance and Controller
John M. Schembri (Principal Accounting Officer)
Page 22 of 22