FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 000-28347
TULARIK INC.
(Exact name of Registrant as specified in its charter)
Delaware 94-3148800
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two Corporate Drive
South San Francisco, California 94080
(Address of principal executive offices) (Zip code)
(650) 825-7000
(Registrant's telephone number including area 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 April 12, 2000, 47,721,214 shares of the registrant's common
stock were outstanding.
I
TULARIK INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION 1
Item 1. Financial Statements........................................................................................1
Consolidated Balance Sheets 1
Consolidated Statements of Operations 2
Consolidated Statements of Cash Flows 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results Of Operations.........................5
Item 3. Quantitative and Qualitative Disclosures about Market Risk....................................................8
Part II. OTHER INFORMATION 8
Item 2. Changes in Securities and Use of Proceeds.....................................................................8
Item 4. Submission of Matters to a Vote of Security Holders...........................................................9
(a) Election of Directors 9
(b) Ratification of Ernst & Young LLP as the Company's independent auditors for the fiscal year ending
December 31, 2000. 9
(c) Approval of a Certificate of Amendment to the Company's Restated Articles of Incorporation to increase the
authorized number of shares of capital stock from 70,000,000 to 150,000,000. 9
Item 5. Other Information...........................................................................................9
Item 6. Exhibits and Reports on Form 8-K.............................................................................10
(a) Exhibits 10
(b) Reports on Form 8-K 11
Signatures...........................................................................................................11
II
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TULARIK INC.
Consolidated Balance Sheets
(In thousands, except share data)
March 31, December 31,
ASSETS 2000 1999 (1)
----------------- ----------------
(unaudited)
Current assets:
Cash and cash equivalents $ 111,753 $ 95,269
Investments 124,804 107,760
Prepaid expenses and other current assets 2,950 3,103
----------------- ----------------
Total current assets 239,507 206,132
Property and equipment, net 15,607 15,434
Other investments 18,979 2,050
Restricted investments 4,000 4,000
Other assets 4,106 2,822
----------------- ----------------
Total assets $ 282,199 $ 230,438
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,899 $ 807
Accrued compensation and related liabilities 1,457 1,769
Accrued liabilities 3,264 2,724
Current portion of long-term debt and capital lease
obligations 5,132 5,052
Deferred revenue 9,982 11,227
----------------- ----------------
Total current liabilities 21,734 21,579
Long-term debt and capital lease obligations, non-current 8,793 10,097
Other non-current liabilities 3,845 1,193
Commitments
Stockholders' equity:
Convertible preferred stock; $.001 par value; 5,000,000
shares authorized; none issued and outstanding - -
Common stock; $.001 par value; 65,000,000
shares authorized; issued and outstanding
47,420,964 and 44,835,844, respectively 47 45
Additional paid-in capital 359,916 291,114
Notes receivable from stockholders (1,398) (1,609)
Deferred compensation, net (3,815) (4,586)
Accumulated deficit (106,923) (87,395)
----------------- ----------------
Total stockholders' equity 247,827 197,569
----------------- ----------------
Total liabilities and stockholders' equity $ 282,199 $ 230,438
================= ================
The accompanying notes are an integral part of these consolidated financial
statements.
(1) The balance sheet at December 31, 1999 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
1
TULARIK INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
Three months ended
March 31,
2000 1999
---------------- ------------------
(unaudited) (unaudited)
Revenue:
Collaborative research and development $ 5,676 $ 5,944
Operating expenses:
Research and development 14,995 10,066
General and administrative 2,058 1,369
Amortization of deferred stock compensation 776 223
Charge for acceleration of stock and option vesting 5,396 -
---------------- ------------------
23,225 11,658
---------------- ------------------
Loss from operations (17,549) (5,714)
Interest income 3,179 1,555
Interest expense (357) (165)
---------------- ------------------
Loss before the cumulative effect of a change
in accounting principle (14,727) (4,324)
Cumulative effect of a change in accounting
principle (4,800) -
---------------- ------------------
Net loss $(19,527) $ (4,324)
================ ==================
BASIC AND DILUTED AMOUNTS PER SHARE:
Loss before the cumulative effect of a change in accounting
principle $ (0.33) $ (0.59)
================ ==================
Cumulative effect of a change in accounting principle $ (0.11) $ -
================ ==================
Net loss $ (0.44) $ (0.59)
================ ==================
Weighted average shares used in computing
basic and diluted net loss per share 44,671,923 7,313,356
================ ==================
The accompanying notes are an integral part of these
consolidated financial statements.
2
TULARIK INC.
Consolidated Statements of Cash Flows
(In thousands)
For the three months ended
March 31,
2000 1999
----------------- ----------------
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (19,527) $ (4,324)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 1,004 818
Amortization of deferred stock compensation 776 223
Noncash stock compensation 5,917 -
Changes in assets and liabilities: - -
Other assets (1,131) (655)
Accounts payable and accrued liabilities 1,427 207
Deferred revenue 1,300 (819)
----------------- ----------------
Net cash used in operating activities (10,234) (4,550)
----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of investments 76,640 43,413
Purchases of investments (110,613) (32,513)
Acquisition of property and equipment (1,177) (3,893)
----------------- ----------------
Net cash provided by (used in) investing activities (35,150) 7,007
----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term obligations (1,224) (571)
Proceeds from note receivables from stockholders 211 2
Proceeds from issuances of common stock, net 62,881 278
----------------- ----------------
Net cash provided by (used in) financing activities 61,868 (291)
----------------- ----------------
Net increase in cash and cash equivalents 16,484 2,166
Cash at the beginning of the period 95,269 53,398
----------------- ----------------
Cash at the end of the period $ 111,753 $ 55,564
================= ================
The accompanying notes are an integral part of these
consolidated financial statements.
3
TULARIK INC.
Notes to Consolidated Financial Statements
(unaudited)
Basis of Presentation
The unaudited consolidated financial statements of Tularik
Inc.("Tularik" or the "Company") reflect, in the opinion of management, all
adjustments, consisting only of normal and recurring adjustments, necessary to
present fairly the Company's consolidated financial position at March 31, 2000
and the Company's consolidated results of operations for the three-month periods
ended March 31, 2000 and 1999. Interim-period results are not necessarily
indicative of results of operations or cash flows for a full-year period.
The year-end balance sheet data were derived from audited financial
statements, but do not include all disclosures required by generally accepted
accounting principles.
These financial statements and the notes accompanying them should be
read in conjunction with the Company's annual report on Form 10-K for the year
ended December 31, 1999. Stockholders are encouraged to review the Form 10-K for
a broader discussion of the Company's business and the opportunities and risks
inherent in the Company's business. Copies of the Form 10-K are available from
the Company on request.
Revenue Recognition
Collaborative research and development agreements provide for periodic
payments in support of the Company's research activities. Collaboration revenue
is recognized as earned based on actual costs incurred or as milestones are
achieved. Research support payments received in advance of work performed are
recorded as deferred revenue. The Company previously recognized nonrefundable
technology access fees as revenue when received and when all contractual
obligations of the Company relating to the fees had been fulfilled. Effective
January 1, 2000, the Company changed its method of accounting for nonrefundable
technology access fees to recognize such fees over the term of the related
research collaboration agreement. The Company believes that the change in
accounting principle is preferable based on guidance provided in the Securities
and Exchange Commission's Staff Accounting Bulletin No. 101 - REVENUE
RECOGNITION IN FINANCIAL STATEMENTS. The $4.8 million cumulative effect of a
change in accounting principle was reported as a charge in the quarter ended
March 31, 2000. The cumulative effect was initially recorded as deferred revenue
that will be recognized as revenue over the remaining contractual terms of the
collaborative research and development agreements. During the quarter ended
March 31, 2000, the impact of the change in accounting principle was to increase
net loss by $4.4 million, or $0.10 per share, comprised of the $4.8 million
cumulative effect of the change as described above ($0.11 per share), net of the
$0.4 million of the related deferred revenue that was recognized as revenue
during the quarter ($0.01 per share). The remainder of the related deferred
revenue will be recognized in revenue approximately as follows: $1.2 million
over the remainder of 2000, $1.6 million in 2001, $1.1 million in 2002, and $0.5
million in 2003. Had the change in accounting principle been adopted as of
January 1, 1999, income for the quarter ended March 31, 1999 would have
increased by $0.4 million, or $0.05 per weighted-average share of common stock
outstanding for the period ended March 31, 1999.
4
Net Loss Per Share
The following table sets forth the computation of the Company's basic
and diluted net loss per share (in thousands, except per share amounts):
Three months ended
March 31,
2000 1999
------------ ----------
Numerator - net loss $ (19,527) $ (4,324)
============ ==========
Denominator for basic and
diluted net loss per share -
weighted-average shares outstanding 44,672 7,313
============ =========
Basic and diluted net loss per share $ (0.44) $ (0.59)
============ ==========
Outstanding options and warrants to purchase in aggregate 4,452,090
shares of common stock at March 31, 2000 and 6,398,741 shares of common stock at
March 31, 1999 were excluded from diluted earnings calculations for the periods
ended March 31, 2000 and 1999 respectively because inclusion of options and
warrants would have an anti-dilutive effect on losses in these periods. At March
31, 2000, 544,130 shares of common stock were subject to repurchase.
Common Stock Offering
The Company received net proceeds of approximately $71.3 million from
the issuance of 1,875,000 shares of common stock on March 27, 2000, including
proceeds received in April 2000 in connection with the exercise of the
underwriters' overallotment option to purchase 281,250 shares.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
Of Operations
Some statements contained in this Quarterly Report on Form 10-Q are
forward-looking statements concerning the Company's operations, economic
performance and financial condition. Forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, are
included, for example, in the discussions about:
- the Company's strategy;
- sufficiency of the Company's cash resources;
- revenues from existing and new collaborations;
- product development;
- the Company's research and development and other expenses; and
- the Company's operational and legal risks.
These statements involve risks and uncertainties. Actual results may
differ materially from those expressed or implied in those statements. Factors
that could cause these differences include, but are not limited to, those
discussed below, including under "Liquidity and Capital Resources" and "Risk
Factors," and in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999, including under "Business--Risk Factors."
Company Overview
Tularik is engaged in the discovery and development of a broad range of
novel and superior orally available drugs based on gene regulation. Tularik
programs address cancer, CMV, diabetes, obesity, inflammation, allergy/asthma,
hypercholesterolemia and bacterial diseases, and a class of targets known as
orphan nuclear receptors. Tularik has established strategic partnerships with
Japan Tobacco Inc., Roche Bioscience and Knoll AG.
5
Operating Results
The Company had a net loss of $19.5 million for the three-month period
ended March 31, 2000 compared to a net loss of $4.3 million in the corresponding
quarter of 1999. Included in the loss for the quarter ended March 31, 2000 were
non-cash charges of $4.8 million related to the cumulative effect of a change in
accounting principle (see notes to the financial statements) and $5.4 million
for the acceleration of vesting of certain options and restricted stock.
Excluding these one-time charges, net loss for the quarter ended March 31, 2000
would have been $9.3 million or $0.21 per share.
Revenue from collaborative research and development for the first
quarter of 2000 was $5.7 million, compared to 1999 first quarter revenue of $5.9
million. Revenue for the three months ended March 31, 2000 primarily included
collaborative revenue from Japan Tobacco in obesity/diabetes and orphan nuclear
receptors, Knoll AG in obesity and Roche Bioscience in inflammation.
Total operating costs and expenses for the quarters ended March 31,
2000 and 1999 were $17.8 million, excluding the effect of a non-cash charge of
$5.4 million related to the acceleration of vesting of certain options and
restricted stock, and $11.7 million respectively. For the current quarter,
spending for research and development increased to $15.0 million in 2000 from
$10.1 million in 1999. The year-to-year increase for the three-month period was
due largely to increased numbers of pre-clinical and clinical studies for T67
and T607, Tularik's leading cancer drug candidates, as well as manufacturing
costs for T64, Tularik's third cancer drug candidate. For the three-month
periods ended March 31, 2000 and 1999, respectively, general and administrative
expenses increased to $2.1 million from $1.4 million, primarily as a result of
increased legal patent fees, professional service fees associated with operating
as a publicly traded company and stock-based consultant fees.
Interest income increased to $3.2 million in the quarter ended March
31, 2000 from $1.6 million in the comparable quarter of 1999. This increase was
principally due to the Company's higher cash, cash equivalent and investment
balances during the 2000 period as a result of investing net proceeds of
approximately $104.7 million from the Company's December 1999 initial public
offering.
Liquidity and Capital Resources
Since inception, the Company's primary sources of funds have been the
sale of equity securities, non-equity payments from collaborators and interest
income. Combined cash, cash equivalents and investments (both current and
non-current) totaled $253.2 million at March 31, 2000, an increase of $50.3
million from December 31, 1999. The increase was due to proceeds of
approximately $62.9 million from the issuance of common stock in a public
offering offset by $10.2 million in cash operating expenses, $1.2 million in
capital expenditures and $1.2 million in repayment of debt. Included in the cash
used by operating activities was $2.2 million received from collaborators.
The Company's forecast of the period of time through which financial
resources will be adequate to support the Company's operations is a
forward-looking statement that involves risks and uncertainties, and actual
results could vary as a result of a number of factors. The Company believes that
existing cash and investment securities and anticipated cash flow from existing
collaborations will be sufficient to support the Company's current operating
plan through the end of 2003. The Company has based this estimate on assumptions
that may prove to be wrong. The Company's future capital requirements will
depend on many factors, including:
- - the progress of the Company's research activities;
- - the number and scope of the Company's research programs;
- - the progress of the Company's pre-clinical and clinical development
activities;
- - the progress of the development efforts of the Company's collaborators;
- - the Company's ability to establish and maintain current and new
collaboration and licensing arrangements;
- - the Company's ability to achieve milestones and receive funding under
collaboration arrangements;
6
- - the costs involved in enforcing patent claims and other intellectual
property rights;
- - the costs and timing of regulatory approvals; and
- - the costs of establishing sales, marketing and distribution capabilities.
Future capital requirements will also depend on the extent to which the
Company acquires or invests in businesses, products and technologies. Until the
Company can generate sufficient levels of cash from the Company's operations,
which the Company does not expect to achieve for at least several years, the
Company expects to finance future cash needs through the sale of equity
securities, strategic collaborations and debt financing as well as interest
income earned on cash balances. The Company cannot assure stockholders that
additional financing or collaboration and licensing arrangements will be
available when needed or that, if available, this financing will be obtained on
terms favorable to the Company or the Company's stockholders. Insufficient funds
may require the Company to delay, scale back or eliminate some or all of the
Company's research or development programs, to lose rights under existing
licenses or to relinquish greater or all rights to product candidates at an
earlier stage of development or on less favorable terms than the Company would
otherwise choose or may adversely affect the Company's ability to operate as a
going concern. If additional funds are raised by issuing equity securities,
substantial dilution to existing stockholders may result.
The Company's cash and investments policy emphasizes liquidity and
preservation of principal over other portfolio considerations. The Company
selects investments that maximize interest income to the extent possible given
these two constraints. The Company satisfies its liquidity requirements by
investing excess cash in securities with different maturities to match projected
cash needs and limit concentration of credit risk by diversifying the Company's
investments among a variety of high credit-quality issuers.
Risk Factors
An investment in the Company's common stock is risky. Investors should
carefully consider the following risks, as well as further description and
discussion of these risks contained in the "Business--Risk Factors" section of
the Company's Annual Report on Form 10-K for the year ended December 31, 1999,
which description and discussion is incorporated herein by reference: If the
Company continues to incur operating losses for a period longer than
anticipated, the Company may be unable to continue operations; because the
Company's products are in an early stage of development, there is a high risk of
failure; the progress and results of the Company's animal and human testing are
uncertain; because the Company must obtain regulatory approval to market its
products in the United States and foreign jurisdictions, the Company cannot
predict whether or when it will be permitted to commercialize its products;
failure to attract, retain and motivate skilled personnel and cultivate key
academic collaborations will delay the Company's key product development
programs and its research and development efforts; the drug discovery methods
that the Company employs are relatively new and may not lead to the development
of drugs; if the Company cannot maintain its current corporate collaborations
and enter into new corporate collaborations, its product development could be
delayed; if the Company does not realize value from its retained
commercialization rights, the Company may not achieve its commercial objectives;
if the Company's competitors develop and market products that are more effective
than the Company's own products, the Company's commercial opportunity will be
reduced or eliminated; because it is difficult and costly to protect its
proprietary rights, the Company cannot ensure their protection; if the Company
is unable to contract with third parties to manufacture its products in
sufficient quantities and at an acceptable cost, the Company may be unable to
meet demand for its products and lose potential revenues; if the Company is
unable to create sales, marketing and distribution capabilities or enter into
agreements with third parties to perform these functions, the Company will not
be able to commercialize products; the Company's ability to generate revenues
will be diminished if it fails to obtain acceptable prices or an adequate level
of reimbursement for its products from third-party payors; if conflicts arise
between the Company's collaborators, advisors or directors and the Company, they
may act in their self-interest, which may be adverse to the investors' best
interests; if the Company fails to obtain the capital necessary to fund its
operations, it will be unable to successfully develop products; if product
liability lawsuits are successfully brought against
7
the Company, the Company may incur substantial liabilities and may be
required to limit commercialization of its products; and if the Company uses
biological and hazardous materials in a manner that causes injury or violates
the law, the Company may be liable for damages.
If any of the foregoing or other risks actually occur, the Company's
business could be harmed. In that case, the trading price of the Company's
common stock could decline, and investors might lose all or part of their
investment. The risks and uncertainties described above are not the only ones
facing the Company. Additional risks and uncertainties not presently known to
the Company, or that the Company currently sees as immaterial, may also harm the
Company's business. If any of these additional risks or uncertainties occur, the
trading price of the Company's common stock could decline, and investors might
lose all or part of their investment.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company's exposure to market risk is principally limited to its
cash equivalents and investments that have maturities of less than two years.
The Company maintains a non-trading investment portfolio of investment grade,
liquid debt securities that limits the amount of credit exposure to any one
issue, issuer or type of instrument. The securities in the Company's investment
portfolio are not leveraged, are classified as available-for-sale and are
therefore subject to interest rate risk. The Company currently does not hedge
interest rate exposure.
Part II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
The Company's Registration Statement on Form S-1 (Registration No.
333-30978) with respect to its recent follow-on public offering was declared
effective on March 27, 2000. In a public offering lead managed by Lehman
Brothers, J.P. Morgan and Co., Chase H&Q, Thomas Weisel Partners LLC and Warburg
Dillon Read LLC, the Company registered a total of 2,875,000 shares of common
stock. The Company sold an aggregate of 2,156,250 shares of common stock and
selling stockholders sold an aggregate of 718,750 shares of common stock at a
public offering price of $35.125 per share. Gross proceeds to the Company were
$75,738,281.
Including proceeds received in April 2000 in connection with the
exercise of underwriters' overallotment option, the Company received net
proceeds of approximately $71,310,386 after deducting offering expenses of
$4,427,896, including underwriting discounts and commissions of $3,502,896 and
other offering expenses of $925,000.
None of the offering expenses represented direct or indirect payments
to directors, officers or general partners of the Company or their associates,
to persons owning 10% or more of any class of equity securities of the Company
or to affiliates of the Company.
The Company intends to use the net proceeds of the offering for
research and development and general corporate purposes and is currently
assessing the specific uses and allocations for these funds. None of the net
proceeds of the offering is expected to be paid to directors, officers or
general partners of the Company or their associates, to persons owning 10% or
more of any class of equity securities of the Company or to affiliates of the
Company.
8
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of stockholders on April 26, 2000.
At such meeting the following actions were voted upon:
(a) Election of Directors
For Withheld
------------- ----------
David V. Goeddel, Ph.D. 30,063,636 3,127
Grant Heidrich, III 30,063,636 3,127
Mark J. Levin 29,788,486 278,277
Edward R. McCracken 30,062,436 4,327
Steven L. McKnight, Ph.D. 30,058,536 8,227
Paul A. Marks, M.D. 30,040,103 26,660
Peter J. Sjstrand 30,063,541 3,222
(b) Ratification of Ernst & Young LLP as the Company's independent auditors for
the fiscal year ending December 31, 2000.
For Against Abstentions Broker Non-Votes
- --- ------- ----------- ----------------
30,053,489 150 13,124 0
(c) Approval of a Certificate of Amendment to the Company's Restated Articles of
Incorporation to increase the authorized number of shares of capital stock from
70,000,000 to 150,000,000.
For Against Abstentions Broker Non-Votes
- --- ------- ----------- ----------------
29,803,173 235,897 27,693 0
Item 5. Other Information
Clinical Trial Update
The Company currently has three drug candidates in its cancer program
that are undergoing clinical testing.
T67. Tularik's scientists have discovered T67, a cancer compound that
binds irreversibly to tubulin, the cellular building block of microtubules,
which are essential to cell division. T67 disrupts microtubule function, causing
the cell to die and potentially resulting in tumor shrinkage. Since cancer cells
divide more rapidly than normal cells and microtubules are essential for cell
division, cancer cells are more sensitive than normal cells to treatment with
drugs that target tubulin. This concept has been proven clinically by other
tubulin-active agents, such as paclitaxel and vincristine; however, over time,
many tumors become resistant to these drugs.
T67 causes tumor shrinkage in a variety of human tumors implanted into
mice. T67 retains its activity against those tumors and cell lines that are
multiple drug resistant. In contrast, these multiple drug resistant cells and
tumors were resistant to paclitaxel, vinblastine and doxorubicin. T67
demonstrates enhanced activity when used in combination with cisplatin against
the MX-1 mammary tumor implanted into mice. T67 is currently in advanced phase 1
clinical trials. A total of four studies based on varying dosing regimens are
ongoing at major medical centers in the United States and the United Kingdom. To
date, the Company has enrolled 53 patients and has observed dose-limiting
toxicities of myelosuppression and neuropathy. The Company has enrolled
additional patients at lower dose levels with various dosing schedules. These
dose levels are sufficient to induce anti-tumor activity in animals. The Company
9
has also observed a partial response in a patient with liver cancer. Assuming
that a tolerable dose and schedule can be identified for repeat administration,
the Company expects to initiate a number of phase 2 clinical trials to determine
anti-tumor activity. These studies are expected to begin during the third
quarter of 2000 and to encompass the following tumor types: gliomas, breast
cancer, non-small cell lung cancer, liver cancer and possibly lymphoma or
colorectal cancer. In the event that T67 has sufficient activity in refractory
tumor types for which no other treatment exists, T67 may be a potential
candidate for accelerated approval by the FDA.
T607. In the first quarter of 2000, the Company began phase 1 clinical
trials in the United States and the United Kingdom for T607, an analog of T67.
This drug also binds irreversibly to tubulin. Animal studies indicate that T607
is different from T67 in that T607 may be given by rapid injection, or bolus,
and it also has a reduced propensity to enter the brain. This may be a desirable
feature for treatment of peripheral tumors. To date, the Company has enrolled
seven patients and has not observed any dose-limiting toxicities. The Company
has observed a partial response in a patient with Non-Hodgkin's lymphoma.
Tularik intends to evaluate three different dosing schedules of T607 in phase 1
clinical trials. Tularik has been granted approval in Canada for its third phase
1 clinical study that is expected to begin in the second quarter of 2000.
T64 (FORMERLY KNOWN AS LOMETREXOL). Tularik has licensed from Eli Lilly
a cancer drug candidate that the Company refers to as T64. T64 is an antifolate,
a class of drugs that disrupt the synthesis of DNA and have been validated for
use in the treatment of cancer. For example, methotrexate, which acts by a
mechanism of action similar to that of T64, has been used extensively in the
treatment of breast, bladder and head and neck cancers. Eli Lilly conducted
phase 1 trials of T64 both with and without folic acid supplementation. Several
deaths were observed in phase 1 trials of T64. However, patients treated with
T64 who received oral supplementation with folic acid demonstrated greatly
improved tolerance to the drug.
During the course of phase 1 clinical trials, Eli Lilly observed a
total of five partial responses and one complete response in different tumor
types and in different centers and countries. Partial responses were noted for
patients with melanoma, breast cancer, soft tissue sarcoma, ovarian cancer and
non-small cell lung cancer. Despite the fact that it is unusual to see complete
responses in phase 1 clinical trials because patients enrolling in these trials
tend to be heavily pre-treated and are typically at an advanced stage in the
progression of their disease, Eli Lilly noted a complete response lasting more
than 18 months in a patient with head and neck cancer.
Tularik anticipates commencing phase 2 clinical trials of T64 in 2000
and has submitted five phase 2 and four phase 1 protocols relating to T64 for
review by various ethics committees among 35 sites internationally. Phase 2
studies are expected to encompass the following malignancies: head and neck
cancer, melanoma, soft tissue sarcoma, breast cancer and non-small cell lung
cancer. The primary endpoint of these studies will be efficacy, as assessed by
response rate.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT
NUMBER
3.1.1 Amended and Restated Certificate of Incorporation of Registrant
3.2+ Amended and Restated Bylaws of Registrant
27 Financial data schedule
+ Filed as an exhibit to the registrant's Registration Statement on Form S-1
No. 333-89177, and incorporated herein by reference.
10
(b) Reports on Form 8-K
None.
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.
TULARIK INC.
May 12, 2000 by: /s/ David V. Goeddel
------------------------------------
David V. Goeddel
Chief Executive Officer
May 12, 2000 by: /s/ Corinne H. Lyle
------------------------------------
Corinne H. Lyle
Chief Financial Officer
11