SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Quarterly Period Ended June 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________ to _________
Commission File No. 0-20111
ARONEX PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 76-0196535
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3400 Research Forest Drive, The Woodlands, Texas 77381
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (713) 367-1666
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
CLASS OUTSTANDING AT JUNE 30, 1996
----- ----------------------------
Common Stock, $.001 par value 14,526,801 shares
ARONEX PHARMACEUTICALS, INC.
Quarterly Period June 30, 1996
INDEX
PART I. FINANCIAL INFORMATION
Page
Item 1 FINANCIAL STATEMENTS................................................................. 3
Balance Sheets - December 31, 1995 and June 30, 1996 (unaudited)..................... 4
Statements of Operations:
Six months ended June 30, 1995 and June 30, 1996 (unaudited) and for
the Period from Inception (June 13, 1986)
through June 30, 1996 (unaudited).................................................. 5
Statements of Cash Flows:
Six months ended June 30, 1995 and June 30, 1996 (unaudited) and for
the Period from Inception (June 13, 1986)
through June 30, 1996 (unaudited).................................................. 6
Notes to Financial Statements - June 30, 1996........................................ 7
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................................................ 9
PART II. OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security Holders.................................. 12
Item 6 Exhibits and Reports on Form 8-K..................................................... 12
SIGNATURES ............................................................................ 13
2
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The following unaudited financial statements have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made herein are adequate to make the
information presented not misleading. These financial statements should be read
in conjunction with the financial statements for the year ended December 31,
1995 included in the Company's Annual Report on Form 10- K/A for the year ended
December 31, 1995, as amended, filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
The information presented in the accompanying financial statements is
unaudited, but in the opinion of management, reflects all adjustments (which
include only normal recurring adjustments) necessary to present fairly such
information.
3
ARONEX PHARMACEUTICALS, INC.
(A development stage company)
BALANCE SHEETS
(All amounts in thousands, except share data)
A S S E T S
June 30,
December 31, 1996
1995 (Unaudited)
Current assets:
Cash and cash equivalents...................................................... $ 7,781 $ 3,162
Short-term investments......................................................... 2,480 38,003
Accounts receivable - affiliates............................................... 345 173
Accrued interest receivable.................................................... 9 534
Prepaid expenses and other assets.............................................. 279 197
------------ -----------
Total current assets......................................................... 10,894 42,069
Long-term investments............................................................. 1,754 1,762
Furniture, equipment and leasehold improvements, net.............................. 2,832 2,387
Investment in affiliate........................................................... 50 --
------------ ----------
Total assets............................................................... $ 15,530 $ 46,218
============ ============
L I A B I L I T I E S A N D S T O C K H O L D E R S ' E Q U I T Y
Current liabilities:
Accounts payable and accrued expenses.......................................... $ 1,478 $ 1,106
Accrued payroll................................................................ 161 120
Current portion of notes payable - related party............................... 87 --
Current portion of other notes payable......................................... 211 211
Current portion of obligations under capital leases............................ 25 19
------------ ------------
Total current liabilities.................................................... 1,962 1,456
Long-term obligations:
Notes payable - related party, net of current portion.......................... 211 --
Other notes payable, net of current portion.................................... 446 345
Obligations under capital leases, net of current portion....................... 41 35
Deferred revenue............................................................... 876 926
------------ ------------
Total long-term obligations.................................................. 1,574 1,306
Commitments and contingencies
Stockholders' equity:
Preferred stock $.001 par value, 10,000,000 shares authorized,
none issued and outstanding.................................................. -- --
Common stock $.001 par value, 75,000,000 shares authorized
10,380,056 and 14,526,801 shares issued and outstanding, respectively 21 29
Additional paid-in capital..................................................... 56,331 93,679
Common stock warrants.......................................................... 1,488 970
Treasury stock................................................................. (11) (11)
Deferred compensation.......................................................... (1,536) (2,520)
Unrealized loss on investments................................................. (116) (108)
Deficit accumulated during development stage................................... (44,183) 48,583)
------------- -------------
Total stockholders' equity................................................... 11,994 43,456
------------ ------------
Total liabilities and stockholders' equity..................................... $ 15,530 $ 46,218
The accompanying notes are an integral part of these financial
statements.
4
ARONEX PHARMACEUTICALS, INC.
(A development stage company)
STATEMENTS OF OPERATIONS
(All amounts in thousands, except loss per share data)
(Unaudited)
Period from
Inception
(June 13, 1986)
Six Months Ended Three Months Ended through
June 30, June 30, June 30,
1995 1996 1995 1996 1996
---------- ----------- ---------- -----------
Revenues:
Research and development
grants and contracts............... $ 291 $ 1,008 $ 206 $ 465 $ 2,437
Interest income...................... 212 470 94 328 2,410
--------- ------------ ------------ ----------- -----------
Total revenues................... 503 1,478 300 793 4,847
--------- ------------ ------------ ----------- -----------
Expenses:
Research and development............. 3,540 4,845 1,760 2,523 33,630
Purchase of in-process
research and development......... -- 191 -- 191 8,574
General and administrative........... 815 771 435 376 10,314
Interest expense.................... 100 71 48 30 912
--------- ------------ ------------ ----------- -----------
Total expenses.................. 4,455 5,878 2,243 3,120 53,430
--------- ------------ ------------ ----------- -----------
Net loss ................................. $ (3,952)$ (4,400) $ (1,943) $ (2,327) $ (48,583)
=========== ============= ============= ============ ============
Loss per share........................... $ (0.76) $ (0.38) $ (0.37) $ (0.19)
===== ===== ====== =====
Weighted average shares used in
computing loss per share............ 5,227 11,527 5,291 12,404
The accompanying notes are an integral part of these financial
statements.
5
ARONEX PHARMACEUTICALS, INC.
(A development stage company)
STATEMENTS OF CASH FLOWS
(All amounts in thousands)
(Unaudited)
Period from
Inception
(June 13, 1986)
Six months ended through
June 30, June 30,
1995 1996 1996
---- ---- ----
Cash flows from operating activities:
Net loss ......................................................... $ (3,952) $ (4,400) $(48,583)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities-
Depreciation and amortization ................................ 346 486 2,437
Compensation expense related to stock and stock options ...... 231 303 2,392
Charge for purchase of in-process research and development ... -- 191 8,574
Changes in assets and liabilities-
Increase in prepaid expenses and other assets .............. (17) (443) (546)
Increase (decrease) in accounts payable and accrued expenses 137 (413) 1,153
Decrease (increase) in accounts receivable - affiliates .... (130) 172 (173)
Increase in deferred revenue ............................... 235 50 573
Accrued interest payable converted to stock .................. -- -- 97
-------- -------- --------
Net cash used in operating activities .................... (3,150) (4,054) (34,076)
Cash flows from investing activities:
Net sales (purchases) of investments ............................. 3,931 (35,523) (34,022)
Purchase of furniture, equipment and leasehold
improvements ................................................... (78) (41) (3,554)
Unrealized gain (loss) on investment ............................. 143 8 (108)
Acquisition costs, net of cash received of $947,000 .............. -- (26) (296)
Loss in affiliate ................................................ 150 50 500
Investment in affiliate .......................................... -- -- (500)
Increase in other assets ......................................... (838) -- --
-------- -------- --------
Net cash provided by (used in) investing activities ...... 3,308 (35,532) (37,980)
Cash flows from financing activities:
Proceeds from notes payable and capital leases ................... 64 -- 2,672
Repayment of notes payable and principal payments under
capital lease obligations ...................................... (171) (411) (2,063)
Purchase of treasury stock ....................................... -- -- (11)
Proceeds from issuance of stock .................................. 11 35,378 74,620
------- -------- --------
Net cash provided by (used in) financing activities ...... (96) 34,967 75,218
------- -------- --------
Net increase (decrease) in cash and cash equivalents ................ 62 (4,619) 3,162
Cash and cash equivalents at beginning of period .................... 1,426 7,781 --
------- -------- --------
Cash and cash equivalents at end of period .......................... $ 1,488 $ 3,162 $ 3,162
======= ======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest ......................... $ 100 $ 30 $ 544
Supplemental schedule of noncash financing activities:
Conversion of notes payable and accrued interest to
common stock ................................................. $ -- $ -- $ 3,043
The accompanying notes are an integral part of these financial
statements.
6
ARONEX PHARMACEUTICALS, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
1. Organization and Basis of Presentation
Aronex Pharmaceuticals, Inc. ("Aronex" or the "Company") was incorporated
in Delaware on June 13, 1986 and merged with Triplex Pharmaceutical Corporation
("Triplex") and Oncologix, Inc. ("Oncologix") effective September 11, 1995.
Aronex is a development stage company which has devoted substantially all of its
efforts to research and product development and has not yet generated any
significant revenues, nor is there any assurance of significant revenues in the
future. In addition, the Company expects to continue to incur losses for the
foreseeable future and there can be no assurance that the Company will complete
the transition from a development stage company to successful operations. The
research and development activities engaged in by the Company involve a high
degree of risk and uncertainty. The ability of the Company to successfully
develop, manufacture and market its proprietary products is dependent upon many
factors. These factors include, but are not limited to, the need for additional
financing, attracting and retaining key personnel and consultants, and
successfully developing manufacturing, sales and marketing operations. The
Company's ability to develop these operations may be impacted by uncertainties
related to patents and proprietary technologies, technological change and
obsolescence, product development, competition, government regulations and
approvals, health care reform and product liability exposure. Additionally, the
Company is reliant upon collaborative arrangements for research, contractual
agreements with corporate partners, and its exclusive license agreements with
M.D. Anderson Cancer Center ("MD Anderson"), and an affiliate of the Baylor
College of Medicine ("Baylor"). Further, during the period required to develop
these products, the Company will require additional funds which may not be
available to it. The Company expects that its existing cash resources will be
sufficient to fund its cash requirements through mid-1998. Accordingly, there
can be no assurance of the Company's future success.
The balance sheet at June 30, 1996 and the related statements of operations
and cash flows for the six month periods ending June 30, 1996 and 1995 and the
period from inception (June 13, 1986) through June 30, 1996 are unaudited. These
interim financial statements should be read in conjunction with the December 31,
1995 financial statements and related notes. The unaudited interim financial
statements reflect all adjustments which are, in the opinion of management,
necessary for a fair statement of results for the interim periods presented and
all such adjustments are of a normal recurring nature. Interim results are not
necessarily indicative of results for a full year.
Certain reclassifications have been made to December 31, 1995 balances to
conform to current year presentation.
2. Cash, Cash Equivalents and Investments
The Company has adopted Statement of Financial Accounting Standards No. 115
("SFAS 115"), Accounting for Certain Investments in Debt and Equity Securities.
Debt and equity securities that the Company has the intent and ability to hold
to maturity are classified as "held to maturity" and reported at amortized cost.
Debt and equity securities that are held for current resale are classified as
"trading securities" and reported at fair value with unrealized gains and losses
included in earnings. Debt and equity securities not classified as either
"securities held to maturity" or "trading securities" are classified as
"securities available for sale" and reported at fair value, with unrealized
gains and losses excluded from earnings and reported as a separate component of
stockholders' equity. The adoption of SFAS 115 did not have a material effect on
the Company's financial position or results of operations.
Cash and cash equivalents include money market accounts and investments
with an original maturity of less than three months. All securities held to
maturity consist of high-grade commercial securities and U.S. Government backed
securities with a maturity date of less than one year and have a carrying value
which approximates fair market value and cost. Available for sale securities are
U.S. mortgage backed securities with various maturity dates over the next
several years that have an amortized cost of $1,870,000, a fair market value of
$1,762,000 and a gross unrealized loss of $108,000 at June 30, 1996. The Company
currently has no trading securities.
7
ARONEX PHARMACEUTICALS, INC.
(A development stage company)
3. Federal Income Taxes
At December 31, 1995, the Company had net operating loss ("NOL")
carryforwards for federal income tax purposes of approximately $57.1 million.
The Tax Reform Act of 1986 provided a limitation on the use of NOL and tax
credit carryforwards following certain ownership changes that could limit the
Company's ability to utilize these NOLs and tax credits. Accordingly, the
Company's ability to utilize its NOLs and tax credit carryforwards to reduce
future taxable income and tax liabilities may be limited. As a result of the
mergers with Triplex and Oncologix a change in control as defined by federal
income tax law occurred, causing the use of these carryforwards to be limited
and possibly eliminated. Additionally because U.S. tax laws limit the time
during which NOLs and the tax credit carryforwards may be applied against future
taxable income and tax liabilities, the Company may not be able to take full
advantage of its NOLs and tax credit carryforwards for federal income tax
purposes. The carryforwards will begin to expire in 2001 if not otherwise used.
The Company has not made any income tax payments since inception.
4. Subsequent Events
In August 1995, the Company was named as a defendant in a lawsuit filed by
certain common stockholders of Oncologix seeking damages as a result of the
merger with Oncologix. Plaintiffs contend that the provision of the merger
whereby common stockholders obtained no consideration is contrary to law and
damaging to them. Plaintiffs sought prior injunctive relief to prevent
consummation of the merger, but this relief was denied by the District Court. In
July 1996, the Company resolved this matter and the lawsuit was dismissed
without a material adverse effect on the accompanying financial statements. An
expense relating to this settlement has been recorded in the purchase of
in-process research and development.
At a Special Meeting of Stockholders held on May 24, 1996, the stockholders
of the Company approved a one-for-two reverse split of the Common Stock (the
"Reverse Split"). The Reverse Split became effective with the filing of an
amendment to the Company's Certificate of Incorporation on July 1, 1996. The
accompanying financial statements have been restated to give effect to the
Reverse Split.
8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Overview
Since its inception in 1986, Aronex Pharmaceuticals, Inc. ("Aronex" or the
"Company") has primarily devoted its resources to fund research, drug discovery
and development. The Company has been unprofitable to date and expects to incur
substantial operating losses for the next several years as it expends its
resources for product research and development, preclinical and clinical testing
and regulatory compliance. The Company has sustained losses of approximately
$48.6 million through June 30, 1996. The Company has financed its research and
development activities and operations primarily through public and private
offerings of securities. The Company's operating results have fluctuated
significantly during each quarter, and the Company anticipates that such
fluctuations, largely attributable to varying commitments and expenditures for
clinical trials and research and development, will continue for the next several
years. On September 11, 1995, Aronex acquired Oncologix, Inc. ("Oncologix") and
Triplex Pharmaceutical Corporation ("Triplex") in a three way merger (the
"Mergers"), which were accounted for under the purchase method of accounting.
The financial data prior to September 11, 1995 discussed below represent the
operations and balance sheet data of Aronex, while the financial data from and
after September 11, 1995 discussed below represent the combined operations and
balance sheet data of the merged companies.
Three and Six Month Periods Ended June 30, 1995 and 1996
Revenues from research and development grants and contracts were $465,000
and $206,000 for the three months ended June 30, 1996 and 1995, respectively, an
increase of $259,000. Research and development grants and contracts were
$1,008,000 and $291,000 for the six months ended June 30, 1996 and 1995,
respectively, an increase of $717,000. These increases were primarily due to the
increase in development revenue from RGene Therapeutics, Inc. ("RGene"), an
affiliate of the Company, to $335,000 for the six months ended June 30, 1996
from $291,000 for the corresponding period in 1995; revenues of $600,000 from
Hoechst Marion Roussel Inc. ("Hoechst") for the six months ended June 30, 1996;
and $73,000 from Small Business Innovative Research ("SBIR") grants for the six
months ended June 30, 1996. There were no Hoechst or SBIR grant revenue in the
first six months of 1995 because these grants and contracts were obtained as a
result of the Mergers.
Interest income was $328,000 and $94,000 for the three months ended June
30, 1996 and 1995, respectively, an increase of $234,000. Interest income was
$470,000 and $212,000 for the six months ended June 30, 1996 and 1995,
respectively, an increase of $258,000. These increases were primarily due to an
increase of funds available for investment in 1996 resulting from cash received
from the exercise of warrants and the completion of a stock offering in May
1996.
Research and development expenses were $2,523,000 and $1,760,000 for the
three months ended June 30, 1996 and 1995, respectively, an increase of
$763,000. Research and development expenses were $4,845,000 and $3,540,000 for
the six months ended June 30, 1996 and 1995, respectively, an increase of
$1,305,000. These increases were primarily due to the addition of Triplex's
research department following the Mergers.
In-process research and development represents costs incurred during the
six month period ended June 30, 1996 relating to the recording of the Mergers
including the settlement of a lawsuit that had been filed by certain common
stockholders of Oncologix.
General and administrative expenses were $376,000 and $435,000 for the
three months ended June 30, 1996 and 1995, respectively, a decrease of $59,000.
General and administrative expenses were $771,000 and $815,000 for the six
months ended June 30, 1996 and 1995, respectively, a decrease of $44,000. These
decreases were primarily a result of $229,000 in non-recurring operating
expenses incurred on behalf of Oncologix paid by the Company pursuant to the
terms of the Oncologix merger agreement in 1995. In the six months ended June
30, 1996 this decrease was partially offset by increases in payroll costs,
business consultant expenses and legal expenses.
Interest expense was $30,000 and $48,000 for the three months ended June
30, 1996 and 1995, respectively, a decrease of $18,000. Interest expense was
$71,000 and $100,000 for the six months ended June 30, 1996 and 1995,
respectively, a decrease of $29,000. These decreases in interest expense
resulted primarily from a decrease in the amount of laboratory equipment
obtained through leases and promissory notes payable
9
.
Net loss was $2,327,000 and $1,943,000 for the three months ended June
30, 1996 and 1995, respectively, an increase of $384,000. Net loss for the six
months ended June 30, 1996 and 1995, respectively, was $4,400,000 and
$3,952,000, an increase of $448,000. These increases were primarily due to the
increase in research expenses.
Liquidity and Capital Resources
Since its inception, the Company's primary source of cash has been from
financing activities, which have consisted primarily of sales of equity
securities. The Company has raised an aggregate of approximately $74.6 million
from the sale of equity securities from its inception through June 30, 1996. In
July 1992, the Company raised net proceeds of approximately $10.7 million in the
initial public offering of its Common Stock. In September 1993, the Company
entered into a collaborative agreement with Genzyme relating to the development
and commercialization of TretinoinLF, in connection with which the Company
received net proceeds of approximately $4.5 million from the sale of Common
Stock to Genzyme. In November 1993, the Company raised net proceeds of
approximately $11.5 million in a public offering of Common Stock. From October
1995 through June 30, 1996, the Company received aggregate net proceeds of
approximately $5.3 million from the exercise of certain warrants issued in the
Mergers. From its inception until June 30, 1996, the Company also received an
aggregate of $2.5 million cash from collaborative arrangements and SBIR grants.
In September 1995, the Company's cash and securities held to maturity increased
by approximately $6.7 million as a result of its merger with Triplex. In May
1996, the Company received net proceeds of approximately $32.1 million in a
public offering of Common Stock.
Since its inception, the Company has an aggregate of approximately $2.4
million from research and development revenue grants and contracts. A
substantial portion of this revenue over the past two years resulted from the
collaborative agreements with RGene and Hoechst. As a result of RGene's merger
with Targeted Genetics Corporation in June 1996, Aronex expects that the
collaborative development work being performed for RGene will decrease
substantially over the next few months. The agreement with Hoechst terminates at
the end of 1996 unless the parties agree to renew it. No assurance can be given
that the agreement will be renewed. Hoechst recently completed a merger with
Marion Merrell Dow Pharmaceuticals, Inc. and has indicated that it is
re-evaluating its collaborative arrangements.
The Company's primary use of cash to date has been in operating activities
to fund research and development, including preclinical studies and clinical
trials, and general and administrative expenses. Cash of $4.1 million and $3.2
million was used in operating activities during the first six months of 1996 and
1995, respectively. The Company had cash, cash- equivalents and investments of
$42.9 million as of June 30, 1996, consisting primarily of cash in banks and
money market accounts, commercial securities and United States government
securities.
The Company has experienced negative cash flows from operations since its
inception and has funded its activities to date primarily from equity
financings. The Company has expended, and will continue to require, substantial
funds to continue research and development, including preclinical studies and
clinical trials of its products, and to commence sales and marketing efforts if
FDA and other regulatory approvals are obtained. The Company expects that its
existing capital resources will be sufficient to fund its capital requirements
through mid-1998. Thereafter, the Company will need to raise substantial
additional capital to fund its operations. The Company's capital requirements
will depend on many factors, including the problems, delays, expenses and
complications frequently encountered by development stage companies; the
progress of the Company's research, development and clinical trial programs; the
Company's ability to satisfy certain milestones under its current collaborative
arrangements with Genzyme and Hoechst; the extent and terms of any future
collaborative research, manufacturing, marketing or other funding arrangements;
the costs and timing of seeking regulatory approvals of the Company's products;
the Company's ability to obtain regulatory approvals; the success of the
Company's sales and marketing programs; the costs of filing, prosecuting and
defending and enforcing any patent claims and other intellectual property
rights; and changes in economic, regulatory or competitive conditions or the
Company's planned business. Estimates about the adequacy of funding for the
Company's activities are based on certain assumptions, including the assumption
that testing and regulatory procedures relating to the Company's products can be
conducted at projected costs. There can be no assurance that changes in the
Company's research and development plans, acquisitions or other events will not
result in accelerated or unexpected expenditures. To satisfy its capital
requirements, the Company may seek to raise additional funds in the public or
private capital markets. The Company's ability to raise additional funds in the
public or private markets will be adversely affected if the results of its
current or future clinical trials are not favorable. The Company may seek
additional funding through corporate collaborations and other financing
vehicles. There can be no assurance that any such funding will be available to
the Company on favorable terms or at all. If adequate funds are not available,
the Company may be required to curtail significantly one or more of its research
or development programs, or it may be required to obtain funds through
arrangements with future collaborative partners or others that may require the
Company to relinquish rights to some or all of its technologies or products. If
the Company is successful in obtaining additional financing, the terms of such
10
financing may have the effect of diluting or adversely affecting the holdings or
the rights of the holders of the Company's Common Stock.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The words
"anticipate," "believe," "expect," "estimate," "project" and similar expressions
are intended to identify forward-looking statements. Such statements are subject
to certain risks, uncertainties and assumptions. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, believed,
expected, estimated or projected. For additional discussion of such risks,
uncertainties and assumptions, see "Item 1.Business -- Manufacturing," "-- Sales
and Marketing," "-- Patents, Proprietary Rights and Licenses," "-- Government
Regulation," "-- Competition" and "-- Additional Business Risks" included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995, as
amended, and "-- Liquidity and Capital Resources" included elsewhere in this
report.
11
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) A Special Meeting of the Stockholders of Aronex Pharmaceuticals, Inc.
was held on May 24, 1996, to consider and vote upon a proposal to
amend the Company's Amended and Restated Certificate of Incorporation
to effect a one-for-two reverse stock split. The proposal was
approved, with the following numbers of shares voted for and against
and abstaining from voting upon the proposal:
For Against Abstain
--- ------- -------
13,794,213 77,976 1,595
(b) The Annual Meeting of the Stockholders of Aronex Pharmaceuticals, Inc.
was held on July 9, 1996, to consider and vote upon the following
proposals:
(i) Election of Class III Directors. The following individuals
were nominated and elected as Class III directors, with the
following numbers of shares voted for and against and
withheld for each director:
For Against Abstain
--- ------- -------
James M. Chubb, Ph.D. 19,039,619 none 130,445
George B. Mackaness, M.D. 19,039,619 none 130,445
Gregory F. Zaic 19,039,967 none 130,097
(ii) Ratification and Selection of Arthur
Andersen LLP as Independent
Public Accountants 19,150,035 4,350 15,679
(iii) Amendment and Restatement of the
Aronex Pharmaceuticals, Inc., 1993
Non-Employee Director Stock Option
Plan 18,978,830 129,413 37,821
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Amended and Restated Certificate of Incorporation, as amended.
3.2 Restated Bylaws. Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (No. 33-47418), declared effective by the
Commission on July 10, 1992, is incorporated herein by reference.
4.1 Specimen certificate for shares of Common Stock, par value $.001
per share.
11.1 Statement regarding computation of per share earnings.
27.1 Financial Data Schedule.
99.1 Amended and Restated 1993 Non-Employee Director Stock Option
Plan.
(b) Reports on Form 8-K
None
12
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.
ARONEX PHARMACEUTICALS, INC.
Dated: July 29, 1996 By:/S/JAMES M. CHUBB
-----------------
James M. Chubb, Ph.D.
President and Chief Executive Officer
Dated: July 29, 1996 By:/S/TERANCE A. MURNANE
---------------------
Terance A. Murnane
Controller
13