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 September 30, 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 September 30, 2000, 48,086,399 shares of the registrant's common
stock were outstanding.
TULARIK INC.
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION...........................................................................................3
Item 1. Financial Statements........................................................................................3
Consolidated Balance Sheets.........................................................................................3
Consolidated Statements of Operations...............................................................................4
Consolidated Statements of Cash Flows...............................................................................5
Notes to Consolidated Financial Statements..........................................................................6
Item 2. Management's Discussion and Analysis of Financial Condition and Results Of Operations.........................8
Item 3. Quantitative and Qualitative Disclosures about Market Risk...................................................11
Part II. OTHER INFORMATION.............................................................................................11
Item 5. Other Information..........................................................................................11
Item 6. Exhibits and Reports on Form 8-K.............................................................................12
(a) Exhibits.......................................................................................................12
(b) Reports on Form 8-K............................................................................................12
Signatures...........................................................................................................12
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TULARIK INC.
Consolidated Balance Sheets
(In thousands, except share data)
September 30, December 31,
ASSETS 2000 1999 (1)
----------------- ----------------
(unaudited)
Current assets:
Cash and cash equivalents $ 125,009 $ 95,269
Marketable securities 136,314 107,760
Prepaid expenses and other current assets 4,353 3,103
----------------- ----------------
Total current assets 265,676 206,132
Property and equipment, net 18,030 15,434
Non-current marketable securities 23,916 -
Restricted investments 2,003 4,000
Other assets 28,650 4,872
----------------- ----------------
Total assets $ 338,275 $ 230,438
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,854 $ 807
Accrued compensation and related liabilities 2,174 1,769
Accrued liabilities 4,723 2,724
Current portion of long-term debt and capital lease
obligations 5,731 5,052
Deferred revenue 22,959 11,227
----------------- ----------------
Total current liabilities 37,441 21,579
Long-term debt and capital lease obligations, non-current 9,575 10,097
Other non-current liabilities 21,413 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; 145,000,000
shares authorized; issued and outstanding
48,086,399 and 44,835,844, respectively 48 45
Additional paid-in capital 371,590 291,114
Notes receivable from stockholders (1,285) (1,609)
Deferred compensation, net (2,728) (4,586)
Accumulated other comprehensive income 23,513 -
Accumulated deficit (121,292) (87,395)
----------------- ----------------
Total stockholders' equity 269,846 197,569
----------------- ----------------
Total liabilities and stockholders' equity $ 338,275 $ 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.
3
TULARIK INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue:
Collaborative research and development $ 7,144 $ 5,863 $ 18,644 $17,856
Operating expenses:
Research and development 15,936 13,904 45,383 34,855
General and administrative 2,091 1,255 6,626 3,903
Amortization of deferred stock compensation 490 880 1,863 1,720
Charge for acceleration of stock and option vesting - - 5,396 -
--------------- -------------- --------------- --------------
18,517 16,039 59,268 40,478
--------------- -------------- --------------- --------------
Loss from operations (11,373) (10,176) (40,624) (22,622)
Interest income 5,027 1,334 12,625 4,338
Interest expense (406) (233) (1,098) (670)
--------------- -------------- --------------- --------------
Loss before the cumulative effect of a change
in accounting principle (6,752) (9,075) (29,097) (18,954)
Cumulative effect of a change in accounting
principle - - (4,800) -
--------------- -------------- --------------- --------------
Net loss $(6,752) $(9,075) $ (33,897) $ (18,954)
=============== ============== =============== ==============
BASIC AND DILUTED AMOUNTS PER SHARE:
Loss before cumulative effect of a change in
accounting principle $ (0.14) $ (1.16) $ (0.63) $ (2.57)
=============== ============== =============== ==============
Cumulative effect of a change in accounting
principle - - $ (0.10) -
=============== ============== =============== ==============
Net loss $ (0.14) $ (1.16) $ (0.73) $ (2.57)
=============== ============== =============== ==============
Weighted average shares used in computing
basic and diluted net loss per share 47,622,581 7,812,843 46,516,258 7,387,943
=============== ============== =============== ==============
The accompanying notes are an integral part of these consolidated financial
statements.
4
TULARIK INC.
Consolidated Statements of Cash Flows
(In thousands)
For the nine months ended
September 30,
2000 1999
----------------- ----------------
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (33,897) $ (18,954)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 3,560 2,731
Amortization of deferred stock compensation 1,863 1,720
Noncash stock compensation 6,534 515
Changes in assets and liabilities:
Other assets 835 (1,663)
Accounts payable and accrued liabilities 3,558 1,762
Deferred revenue 31,845 2,312
----------------- ----------------
Net cash provided by (used in) operating activities 14,298 (11,577)
----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of marketable securities 264,977 74,699
Purchases of marketable securities (317,800) (99,689)
Acquisition of property and equipment (6,156) (8,531)
----------------- ----------------
Net cash used in investing activities (58,979) (33,521)
----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term obligations (4,029) (2,495)
Proceeds from issuance of long-term obligations 4,186 10,087
Proceeds from notes receivable from stockholders 324 -
Proceeds from issuances of common stock, net 73,940 1,377
----------------- ----------------
Net cash provided by financing activities 74,421 8,969
----------------- ----------------
Net increase (decrease) in cash and cash equivalents 29,740 (36,129)
Cash at the beginning of the period 95,269 53,398
----------------- ----------------
Cash at the end of the period $ 125,009 $ 17,269
================= ================
The accompanying notes are an integral part of these consolidated financial
statements.
5
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 September 30, 2000 and the
Company's consolidated results of operations for the three-month and nine-month
periods ended September 30, 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. As reported
in Form 10-Q for the first quarter of 2000 and 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 and is
reflected as a charge for the nine months ended September 30, 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. For the nine months ended September 30,
2000, the impact of the change in accounting principle was to increase net loss
by $3.6 million, or $0.08 per share, comprised of the $4.8 million cumulative
effect of the change as described above ($0.10 per share), net of the $1.2
million of the related deferred revenue that was recognized as revenue during
the nine-month period ($0.02 per share). For the three months ended September
30, 2000, the impact of the change in accounting principle was to decrease net
loss by $0.4 million, or $0.01 per share. The remainder of the related deferred
revenue will be recognized in revenue approximately as follows: $0.4 million in
the fourth quarter 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 three and nine months ended September 30, 1999
would have increased respectively by $0.4 and $1.2 million, or $0.05 and $0.16
per diluted share of common stock.
Reclassifications
Certain financial statement items have been reclassified to conform to the
current quarter's format. These reclassifications had no impact on previously
reported net losses.
6
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 Nine months ended
September 30, September 30,
2000 1999 2000 1999
----------- ----------- ------------ -------------
Numerator:
Net loss $(6,752) $ (9,075) $ (33,897) $ (18,954)
=========== =========== ============ =============
Denominator:
Weighted average shares of common stock outstanding 47,997 7,985 47,001 7,856
Less: weighted average shares subject to (374) (172) (485) (468)
repurchase
----------- ----------- ------------ -------------
Weighted average shares used in computing basic
and diluted net loss per share 47,623 7,813 46,516 7,388
=========== =========== ============ =============
Basic and diluted net loss per share $(0.14) $(1.16) $ (0.73) $ (2.57)
=========== =========== ============ =============
Outstanding options and warrants to purchase in aggregate 5,563,132 shares
of common stock at September 30, 2000 and 6,971,056 shares of common stock at
September 30, 1999 were excluded from diluted earnings calculations for the
periods ended September 30, 2000 and 1999, respectively, because inclusion of
options and warrants would have an anti-dilutive effect on losses in these
periods. At September 30, 2000, 335,039 shares of common stock were subject to
repurchase.
Comprehensive Income
Comprehensive income is comprised of net loss and other comprehensive
income. Other comprehensive income includes certain changes in equity that are
excluded from net loss. Specifically, unrealized holding gains and losses on
Tularik's equity investments, which were reported separately in stockholders'
equity, are included in accumulated other comprehensive income. Comprehensive
income (loss) and its components for the three- and nine-month periods ended
September 30, 2000 and 1999 are as follows (in thousands):
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
----------- ----------- ------------- -------------
Net loss $(6,752) $(9,075) $(33,897) $(18,954)
Change in unrealized
gain on equity investments 23,513 - 23,513 -
----------- ----------- ------------- -------------
Comprehensive income (loss) $ 16,761 $(9,075) $(10,384) $(18,954)
=========== =========== ============= =============
Recent Pronouncements
In July 1999, the Financial Accounting Standards Board, or FASB, announced
the delay of the effective date of Statement of Financial Accounting Standards
133, or FAS 133, "Accounting for Derivative Instruments and Hedging Activities,"
for one year, to the first quarter of 2001. Also, in June 2000, the FASB issued
FAS 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities." FAS 133 as amended by FAS 138 is intended to be comprehensive
guidance on accounting for derivatives and hedging activities. It requires
companies to recognize all derivatives as either assets or liabilities on the
balance sheet and measure those instruments at fair value. Gains or losses
resulting from changes in the values of those derivatives would be accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting under FAS 133 and 138. The impact of FAS 133 and 138 on our financial
position and results of operations is not expected to be material.
On March 31, 2000, the FASB issued Interpretation No. 44, "Accounting for
Certain Transactions involving Stock Compensation," which provides guidance on
7
several implementation issues related to Accounting Principles Board Opinion No.
25. The most significant of which are clarification of the definition of
employee for purposes of applying Opinion 25 and the accounting for options that
have been repriced. Under the interpretation, the employer-employee relationship
would be based on case law and Internal Revenue Service regulations. The FASB
granted an exception to this definition for outside directors. Under the
interpretation, a modification that reduces the exercise price of a fixed stock
option award, commonly referred to as repricing, effectively changes the terms
of the award to a variable award subject to compensation expense. We currently
do not have any options that have been repriced. The impact of the
interpretation on our financial position and results of operations is not
material.
In June 2000, the Securities and Exchange Commission delayed the
implementation date of Staff Accounting Bulletin No. 101, or SAB 101, "Revenue
Recognition in Financial Statements," until no later than the fourth quarter of
2000. SAB 101 provides guidance on applying generally accepted accounting
principles to revenue recognition issues in financial statements. We adopted SAB
101 in the first quarter of 2000.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
Of Operations
This discussion and analysis should be read in conjunction with our
financial statements and accompanying notes included in this report and our 1999
financial statements and notes thereto included in our Annual Report on Form
10-K for the year ended December 31, 1999. Operating results are not necessarily
indicative of results that may occur in future periods.
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;
. the progress of the Company's research programs, including its
clinical testing;
. 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 disease, diabetes, obesity, inflammation, immune
disorders, lipid disorders 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.
Operating Results
For the three months ended September 30, 2000, Tularik incurred a net loss
of $6.8 million, compared to a net loss of $9.1 million for the same period in
1999. For the nine months ended September 30, 2000, Tularik incurred a net loss
of $33.9 million, compared to a net loss of $19.0 million for the same period in
1999. Included in the loss for the nine months ended September 30, 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
8
the acceleration of vesting of certain options and restricted stock. 1999
earnings per diluted share amounts do not reflect preferred stock that converted
to common stock at the initial public offering in December 1999.
Revenues from collaborative research and development for the three and nine
months ended September 30, 2000 were $7.1 and $18.6 million, respectively,
compared to 1999 three and nine month revenues of $5.9 and $17.9 million,
respectively. Revenue primarily included research payments from Japan Tobacco in
obesity, orphan nuclear receptors and metabolic diseases, Roche in inflammation
and Knoll AG in obesity.
Total operating expenses for the quarters ended September 30, 2000 and 1999
were $18.5 and $16.0 million, respectively. Total operating expenses for the
nine months ended September 30, 2000 were $59.3 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, as compared with $40.5 million for the
same period in 1999.
Total research and development expenses for the three months and nine
months ended September 30, 2000 increased to $15.9 and $45.4 million,
respectively, from $13.9 and $34.9 million for the same periods in 1999. The
increase in the first nine months of 2000 compared to the first nine months of
1999 was due primarily to a greater number of ongoing preclinical and clinical
studies, and the manufacturing costs for Tularik's three anti-cancer drug
candidates T67, T607 and T64. In addition, new research in metabolic diseases
contributed to higher research and development costs in the third quarter of
2000 compared to the third quarter of 1999.
Total general and administrative expenses for the three months ended
September 30, 2000 increased to $2.1 million from $1.3 million for the same
period in 1999, primarily due to non-cash, stock-based consultant compensation,
higher international patent legal expenses and the increased costs associated
with operating as a publicly traded company. Total general and administrative
expenses for the nine months ended September 30, 2000 increased to $6.6 million
from $3.9 million for the same period in 1999.
Interest income increased to $5.0 million in the quarter ended September
30, 2000 from $1.4 million in the comparable quarter of 1999, and to $12.6
million in the nine months ended September 30, 2000 from $4.3 million in the
comparable period of 1999. These increases were principally due to the Company's
higher cash, cash equivalent and investment balances during the 2000 periods as
a result of investing net proceeds of approximately $104.7 and $71.3 million
from the Company's December 1999 and March 2000 public offerings.
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 $285.2 million at September 30, 2000, an increase of $82.2
million from December 31, 1999. The increase was due to proceeds of
approximately $73.9 million from the issuance of common stock, $14.3 million of
net cash from operations, $4.2 million of cash from issuance of debt offset by
$6.2 million in capital expenditures and $4.0 million in repayment of debt. The
average maturity of available-for-sale securities is approximately 211 days.
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'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 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;
9
- - 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;
- - 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 important 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
10
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
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 5. Other Information
Clinical Trial Update
The Company currently has three drug candidates in its cancer program
that are undergoing clinical testing. Tularik is testing one of its
anti-cancer drug candidates, T67, in a phase I/II study in patients with
hepatocellular carcinoma and recently initiated phase II studies in patients
with non-small cell lung cancer and breast cancer. Tularik anticipates
enrolling patients in 2 additional phase II studies of T67 in glioma (brain
cancer) and colon cancer in the fourth quarter of 2000. The T67 studies are
being conducted in the US, the United Kingdom (UK), Hong Kong and Taiwan.
Tularik's second anti-cancer drug candidate, T607, is currently in phase I
clinical trials in the US, the UK and Canada. Tularik's third anti-cancer
drug candidate, T64, is currently in phase II clinical trials in patients
with head and neck cancer, soft tissue sarcoma and melanoma. In addition, T64
is in phase I combination trials with anti-cancer agents gemcitabine,
doxorubicin and paclitaxel. Tularik expects to initiate breast cancer and
non-small cell lung cancer phase II studies with T64, as well as 2 additional
phase I combination studies with T64, in the fourth quarter of 2000. The T64
studies are being conducted in the US, the UK, the Netherlands and Australia.
Tularik has also initiated a phase I study in the UK for its oral
anti-cytomegalovirus drug candidate, T611. Cytomegalovirus is a ubiquitous
herpes virus that causes disease in immunocompromised patients. Tularik expects
to initiate phase I multiple dose studies in healthy volunteers before the end
of 2000.
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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 Form 10-Q for the quarter ended
March 31, 2000, and incorporated herein by reference
+ Filed as an exhibit to the registrant's Registration Statement on Form S-1
No. 333-89177, and incorporated herein by reference
(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.
November 7, 2000 by: /s/ David V. Goeddel
------------------------------------
David V. Goeddel
Chief Executive Officer
November 7, 2000 by: /s/ Corinne H. Lyle
------------------------------------
Corinne H. Lyle
Chief Financial Officer
12