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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 AND
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from ______________________ to ____________________
COMMISSION FILE NUMBER 0-28150
NEUROCRINE BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0525145
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
10555 SCIENCE CENTER DRIVE
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices)
(858) 658-7600
(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
The number of outstanding shares of the registrant's Common Stock, par
value of $0.001, was 26,212,635 as of October 31, 2001.
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NEUROCRINE BIOSCIENCES, INC.
FORM 10-Q INDEX
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1: Financial Statements.............................................3
Condensed Balance Sheets as of September 30, 2001
and December 31, 2000.........................................3
Condensed Statements of Operations for the three and nine months
ended September 30, 2001 and 2000.............................4
Condensed Statements of Cash Flows for nine months
ended September 30, 2001 and 2000.............................5
Notes to the Condensed Financial Statements......................6
ITEM 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations.....................................7
ITEM 3: Quantitative and Qualitative Disclosures About Market Risk......11
PART II. OTHER INFORMATION
ITEM 6: Exhibits and Reports on Form 8-K................................11
SIGNATURES......................................................11
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NEUROCRINE BIOSCIENCES, INC.
CONDENSED BALANCE SHEETS
(in thousands)
September 30, December 31,
2001 2000
(unaudited)
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ASSETS
Current assets:
Cash and cash equivalents .............................$ 11,946 $ 21,078
Short-term investments, available-for-sale ............ 129,309 143,592
Receivables under collaborative agreements ............ 19,710 5,974
Other current assets .................................. 1,704 1,761
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Total current assets ............................. 162,669 172,405
Property and equipment, net ............................. 12,653 11,300
Licensed technology and patent applications costs, net .. 245 362
Other assets ............................................ 2,387 1,895
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Total assets .....................................$ 177,954 $ 185,962
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ......................................$ 1,354 $ 1,065
Accrued liabilities ................................... 11,119 11,135
Deferred revenues ..................................... 8,243 1,172
Current portion of long-term debt ..................... 149 149
Current portion of capital lease obligations .......... 1,545 1,438
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Total current liabilities .......................... 22,410 14,959
Long-term debt, net of current portion .................. 37 162
Capital lease obligations, net of current portion ....... 2,005 2,121
Deferred rent ........................................... 4,996 1,646
Deferred revenues ....................................... 2,075 2,890
Other liabilities ....................................... 898 976
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Total liabilities ............................... 32,421 22,754
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares
authorized; no shares issued and outstanding ....... - -
Common stock, $0.001 par value; 50,000,000 shares
authorized; issued and outstanding shares were
26,187,852 in 2001 and 25,314,470 in 2000 .......... 26 25
Additional paid in capital ............................ 238,880 233,565
Deferred compensation ................................. (444) (59)
Stockholder notes .................................... (104) (104)
Accumulated other comprehensive income (loss) ......... (45) 261
Accumulated deficit .................................. (92,780) (70,480)
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Total stockholders' equity ...................... 145,533 163,208
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Total liabilities and stockholders' equity .......$ 177,954 $ 185,962
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See accompanying notes to the condensed financial statements.
NEUROCRINE BIOSCIENCES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited; in thousands except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
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2001 2000 2001 2000
(restated) (restated)
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Revenues:
Sponsored research and development .$ 5,104 $ 1,887 $ 10,948 $ 4,943
License and option fees ............ 501 152 959 2,152
Milestones ......................... 15,500 - 15,500 -
Grant income and other revenues .... 488 386 1,002 1,050
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Total revenues ................. 21,593 2,425 28,409 8,145
Operating expenses:
Research and development ........... 18,327 12,499 49,583 28,404
General and administrative ......... 2,073 2,509 7,304 6,930
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Total operating expenses ........ 20,400 15,008 56,887 35,334
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Income (loss) from operations ........ 1,193 (12,583) (28,478) (27,189)
Other income and (expenses):
Interest income .................... 1,254 1,431 5,965 4,466
Interest expense ................... (79) (61) (223) (173)
Other income and expenses, net ..... 139 282 436 926
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Income (loss) before income taxes .... 2,507 (10,931) (22,300) (21,970)
Income taxes ......................... - 102 - 302
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Net income (loss) ....................$ 2,507 $(11,033) $(22,300) $(22,272)
==================== ====================
Income (loss) per common share:
Basic $ 0.10 $ (0.50) $ (0.87) $ (1.02)
Diluted $ 0.09 $ (0.50) $ (0.87) $ (1.02)
Shares used in the calculation of loss per common share:
Basic 25,816 22,032 25,575 21,900
Diluted 27,972 22,032 25,575 21,900
See accompanying notes to the condensed financial statements.
NEUROCRINE BIOSCIENCES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
Nine Months Ended
September 30,
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2001 2000
(restated)
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CASH FLOW FROM OPERATING ACTIVITIES
Net loss ................................................$ (22,300) $ (22,272)
Adjustments to reconcile net loss to net cash
provided by/(used in) operating activities:
Loss on asset disposal ............................ 51 -
Depreciation and amortization ..................... 1,918 1,618
Deferred revenues ................................. 9,177 2,791
Deferred expenses ................................. 352 785
Compensation expenses for stock options ........... 1,585 1,986
Change in operating assets and liabilities:
Accounts receivable and other current assets . (13,680) 545
Other non-current assets ..................... (238) 837
Accounts payable and accrued liabilities ..... 1,188 886
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Net cash flows used in operating activities ............. (21,947) (12,824)
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of short-term investments ..................... (73,953) (25,140)
Sales/maturities of short-term investments .............. 87,930 26,775
Purchases of property and equipment ..................... (3,459) (1,688)
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Net cash flows provided by/(used in) investing activities 10,518 (53)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of common stock ................................ 2,431 2,816
Proceeds from capital lease financing ................... 1,011 650
Principal payments on long-term obligations ............. (1,145) (706)
Payments received on notes receivable from stockholders . - 15
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Net cash flows provided by financing activities ......... 2,297 2,775
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Net decrease in cash and cash equivalents ............... (9,132) (10,102)
Cash and cash equivalents at beginning of the period .... 21,078 21,265
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Cash and cash equivalents at end of the period ..........$ 11,946 $ 11,163
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See accompanying notes to the condensed financial statements.
NEUROCRINE BIOSCIENCES, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
The condensed financial statements included herein are unaudited. Certain
reclassifications have been made to prior year amounts to conform to the
presentation for the three and nine months ended September 30, 2001. These
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions of the
Securities and Exchange Commission (SEC) on Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, these financial statements
include all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation of the financial position, results of operations, and
cash flows for the periods presented.
The results of operations for the interim periods shown in this report are
not necessarily indicative of results expected for the full year. The financial
statements should be read in conjunction with the audited financial statements
and notes for the year ended December 31, 2000, included in our Annual Report on
Form 10-K filed with the SEC.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the period. Actual results could differ from those estimates.
3. NET EARNINGS OR LOSS PER COMMON SHARE
Basic net earnings or loss per common share is calculated using the
weighted average number of common shares outstanding during the period. Diluted
net earnings or loss per common share is calculated by adding the total
incremental number of common share equivalents and the weighted average number
of common shares outstanding during the period using the treasury stock method.
Except for the quarter ending September 30, 2001, the incremental shares of the
common share equivalents for all other periods were excluded from the
calculation of diluted net loss per share as their effects were antidilutive.
4. COMPREHENSIVE INCOME
Our comprehensive losses consist of net losses and unrealized gains and
losses on investments. The accumulated balances of these components are
disclosed as a separate component of stockholders' equity.
5. REVENUE RECOGNITION
During the fourth quarter of 2000, the Company adopted SAB 101, "Revenue
Recognition in Financial Statements". SAB 101 provides, among other revenue
items, guidance in the recognition of nonrefundable, up-front fees received in
conjunction with a research and development agreement. The result of the
adoption of SAB 101 was to reduce recognition of license fee revenues reported
during the third quarter of 2000 by $2.9 million, increasing net loss per share
by $0.13 for the three and nine months ended September 30, 2000. These revenues
were deferred and will be recognized as income, ratably over the estimated lives
of the respective agreements.
Milestones are recognized as revenue when earned. The earnings process is
considered complete when the milestone coincides with the occurrence of a
contract specified event and represents the completion of a substantive element
of an arrangement. In July 2001, the Company and Glaxo Group Limited, a
subsidiary of GlaxoSmithKline (GSK), signed a worldwide collaboration and
license agreement to engage in the research, development and commercialization
of Corticotropin Releasing Factor Receptor Antagonist Compounds. Under the GSK
agreement, we completed and recognized a $15.5 million milestone in September
2001.
6. NEW ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board (FASB) issued FASB
Statements Nos. 141 and 142 (FAS 141 and FAS 142), "Business Combinations" and
"Goodwill and Other Intangible Assets." FAS 141 replaces APB 16 and eliminates
pooling-of-interests accounting prospectively. It also provides guidance on
purchase accounting related to the recognition of intangible assets and
accounting for negative goodwill. FAS 142 changes the accounting for goodwill
from an amortization method to an impairment only approach. Under FAS 142,
goodwill will be reviewed annually and also whenever events or circumstances
occur indicating that goodwill might be impaired. FAS 141 and FAS 142 are
effective for all business combinations completed after June 30, 2001. Upon
adoption of FAS 142, amortization of goodwill recorded for business combinations
consummated prior to July 1, 2001 will cease, and intangible assets acquired
prior to July 1, 2001 that do not meet the criteria for recognition under FAS
141 will be reclassified to goodwill. Companies are required to adopt FAS 142
for fiscal years beginning after December 15, 2001, but early adoption is
permitted under certain circumstances. The adoption of these standards is not
expected to have a material impact on the Company's results of operations and
financial position.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations section contains forward-looking statements which
involve risks and uncertainties, pertaining generally to the expected
continuation of our collaborative agreements, the receipt of research payments
there under, the future achievement of various milestones in product development
and the receipt of payments related thereto, the potential receipt of royalty
payments, pre-clinical testing and clinical trials of potential products, the
period of time that our existing capital resources will meet our funding
requirements, and our financial results and operations. Our actual results could
differ materially from those anticipated in these forward-looking statements as
a result of various factors, including those set forth below and those outlined
in our 2000 Annual Report on Form 10-K and the most recent Form S-3 filed with
the SEC.
OVERVIEW
We incorporated in California in 1992 and reincorporated in Delaware in
1996. Since we were founded, we have been engaged in the discovery and
development of novel pharmaceutical products for neurologic and endocrine
diseases and disorders. Our product candidates address some of the largest
pharmaceutical markets in the world including insomnia, anxiety, depression,
cancer and diabetes. To date, we have not generated any revenues from the sale
of products, and we do not expect to generate any product revenues in the
foreseeable future. We have funded our operations primarily through private and
public offerings of our common stock and payments received under research and
development agreements. We are developing a number of products with corporate
collaborators and will rely on existing and future collaborators to meet funding
requirements. We expect to generate future net losses in anticipation of
significant increases in operating expenses as product candidates are advanced
through the various stages of clinical development. As of September 30, 2001, we
have incurred a cumulative deficit of $92.8 million and expect to incur
operating losses in the future, which may be greater than losses in prior years.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
Revenues for the third quarter of 2001 were $21.6 million compared with
$2.4 million for the same period last year. The increase in revenues from last
year to this year resulted primarily from revenues received under the
GlaxoSmithKline (GSK) and Taisho Pharmaceuticals Co., Ltd. (Taisho) agreements.
On July 20, 2001, the Company and Glaxo Group Limited, a subsidiary of GSK,
signed a worldwide collaboration and license agreement to engage in the
research, development and commercialization of Corticotropin Releasing Factor
Receptor Antagonist Compounds. Under the GSK agreement, we recognized $1.6
million in license and sponsored research and development funding and a $15.5
million milestone. We also recognized $2.5 million in license and sponsored
development fees, and $713,000 in sponsored research related to the Taisho
agreement this quarter compared to $538,000 in license and sponsored development
fees in the same quarter last year. The increase in revenues from these
agreements was partially offset by the completion of the sponsored research
portion of the 1999 Janssen Pharmaceutica, N.V. (Janssen) agreement. These
activities concluded, as scheduled, in February 2001. Under the Janssen
agreement, we received $743,000 in sponsored research and development during the
third quarter of 2000.
Research and development expenses increased to $18.3 million for the third
quarter of 2001 compared with $12.5 million for the respective period in 2000.
Increased expenses primarily reflect higher costs associated with expanding
development activities and the addition of scientific and clinical development
personnel. Currently, we have 15 programs in our research and development
pipeline. Five of these programs are in clinical development, three programs are
in advanced pre-clinical development and seven are in various stages of
research. We expect to incur significant increases in future periods as later
phases of development typically involve an increase in the scope of studies, the
number of patients treated and the number of scientific personnel required to
manage the clinical trials.
General and administration expenses decreased to $2.1 million for the third
quarter of 2001 compared with $2.5 million during the same period last year. The
decrease resulted primarily from lower management consulting fees associated
with the Taisho agreement.
Interest income decreased to $1.3 million during the third quarter of 2001
compared to $1.4 million for the same period last year. Even though the cash
balance was higher in the third quarter of 2001 compared to 2000, interest
income was lower as a result of declining interest rates in 2001.
Net income for the third quarter of 2001 was $2.5 million, or $0.10 per
share, compared to a net loss $11.0 million, or $0.50 per share, for the same
period in 2000. The increase to a net income was primarily the result of the
GlaxoSmithKline revenue recognized in the third quarter of 2001. The increased
revenue was partially offset from the cost of expanded testing of our five
clinical programs and the addition of scientific and clinical development
personnel. We expect net losses in the fourth quarter and year-end 2001 as our
programs continue to advance through the various stages of the research and
clinical development processes.
To date, the Company's revenues have come from funded research and
achievements of milestones under corporate collaborations. The nature and amount
of these revenues from period to period may lead to substantial fluctuations in
the results of quarterly revenues and earnings. Accordingly, results and
earnings of one period are not predictive of future periods.
NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
Revenues for the nine months ended September 30, 2001 were $28.4 million
compared with $8.1 million in 2000. The increase from last year to this year
resulted primarily from revenues received under the GSK and Taisho agreements.
Under the new GSK agreement, we recognized $1.6 million in license and sponsored
research and development funding and a $15.5 million milestone in 2001. We also
recognized $7.0 million in sponsored research and development, and $579,000 in
license fees related to the Taisho agreement in the nine months ended September
30, 2001 compared to $2.2 million in option and license fees and $388,000 in
sponsored development fees for the respective period last year. The increase in
revenues from these agreements was partially offset by the completion of the
sponsored research portion of the Janssen agreement. These activities concluded,
as scheduled, in February 2001. Under the Janssen agreement, we received
$342,000 and $2.2 million for the nine months ended September 30, 2001 and 2000,
respectively.
Research and development expenses increased to $49.6 million for the first
nine months of 2001 compared with $28.4 million for the respective period in
2000. Increased expenses primarily reflect higher costs associated with
expanding development activities and the addition of scientific and clinical
development personnel. Currently, we have 15 programs in our research and
development pipeline. Five of these programs are in clinical development, three
programs are in advanced pre-clinical development and seven are in various
stages of research. We expect to incur significant increases in future periods
as later phases of development typically involve an increase in the scope of
studies, the number of patients treated and the number of scientific personnel
required to manage the clinical trials.
General and administration expenses increased to $7.3 million for the nine
months ended September 30, 2001 compared with $6.9 million during the same
period last year. The increase resulted from additional administrative personnel
expenses, primarily recruiting and relocation, and professional service
expenses, predominantly legal costs to support the expanded research and
clinical development efforts. The increase was partially offset by lower
management consulting fees associated with the Taisho agreement.
Interest income increased to $6.0 million for the first nine months of
2001, compared to $4.5 million for the same period last year. Despite lower
interest rates in 2001 compared to 2000, interest income increased because of
higher investment balances achieved through offerings of our common stock. In
December 2000, we sold 3.2 million shares in a public offering, which resulted
in net proceeds of $90.4 million. Due to the increase in cash reserves generated
from this transaction, we anticipate interest income for this year will be
higher than that of last year.
Net loss for the first nine months of 2001 was $22.3 million, or $0.87 per
share compared to $22.3 million, or $1.02 per share, for the same period in
2000. Higher costs in 2001 from expanded testing of our five clinical programs
and the addition of scientific and clinical development personnel were offset by
the increase in third quarter revenues. Net losses are expected to increase this
year as our programs continue to advance through the various stages of the
research and clinical development processes.
To date, the Company's revenues have come from funded research and
achievements of milestones under corporate collaborations. The nature and amount
of these revenues from period to period may lead to substantial fluctuations in
the results of quarterly revenues and earnings. Accordingly, results and
earnings of one period are not predictive of future periods.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2001, our cash, cash equivalents, and short-term
investments totaled $141.3 million compared with $164.7 million at December 31,
2000. The decrease in cash balances at September 30, 2001 resulted primarily
from funding of operations.
Net cash used by operating activities during the nine months ended
September 30, 2001 was $21.9 million compared with $12.8 million during the same
period last year. The increase in cash used in operations resulted primarily
from the increase in clinical development activities and the addition of
scientific and clinical development personnel.
Net cash provided by investing activities during the nine months ended
September 30, 2001 was $10.5 million compared to net cash used of $53,000 for
the first nine months of 2000. This fluctuation resulted primarily from the
timing differences in the investment purchases, sales, maturities and the
fluctuations in our portfolio mix between cash equivalents and short-term
investment holdings. We expect similar fluctuations to continue in future
periods. Capital equipment purchases for 2001 will be financed primarily through
leasing agreements and are expected to be approximately $4.0 million this year,
of which $3.5 million has been incurred in the nine months ending September 30,
2001.
Net cash provided by financing activities during the first nine months of
2001 was $2.3 million compared with $2.8 million for the respective period last
year. Cash proceeds from the issuance of common stock under option and employee
purchase programs was $2.4 million and $2.8 million in the nine months ended
September 30, 2001 and 2000, respectively. In addition, capital lease financing
provided $1.0 million in cash during the first nine months of 2001 and $650,000
for the same period in 2000. We expect similar fluctuations to occur throughout
the year, as the amount and frequency of stock-related transactions are
dependent upon the market performance of our common stock.
We believe that our existing capital resources, together with interest
income and future payments due under our strategic alliances, will be sufficient
to satisfy our current and projected funding requirements for at least the next
12 months. However, we cannot guarantee that these capital resources and
payments will be sufficient to conduct our research and development programs as
planned. The amount and timing of expenditures will vary depending upon a number
of factors, including progress of our research and product development programs.
We will require additional funding to continue our research and product
development programs, to conduct pre-clinical studies and clinical trials, for
operating expenses, to pursue regulatory approvals for our product candidates,
for the costs involved in filing and prosecuting patent applications and
enforcing or defending patent claims, if any, the cost of product in-licensing
and any possible acquisitions, and we may require additional funding to
establish manufacturing and marketing capabilities in the future. We may seek to
access the public or private equity markets whenever conditions are favorable.
We may also seek additional funding through strategic alliances and other
financing mechanisms. We cannot assure you that adequate funding will be
available on terms acceptable to us, if at all. If adequate funds are not
available, we may be required to curtail significantly one or more of our
research or development programs or obtain funds through arrangements with
collaborators or others. This may require us to relinquish rights to certain of
our technologies or product candidates.
We expect to incur operating losses over the next several years as our
research, development, pre-clinical studies and clinical trial activities
increase. To the extent that we are unable to obtain third party funding for
such expenses, we expect that increased expenses will result in increased losses
from operations. We cannot assure you that we will be successful in the
development of our product candidates, or that, if successful, any products
marketed will generate sufficient revenues to enable us to earn a profit.
INTEREST RATE RISK
We are exposed to interest rate risk on our short-term investments and on
our long-term debt. The primary objective of our investment activities is to
preserve principal while at the same time maximizing yields without
significantly increasing risk. To achieve this objective, we invest in highly
liquid and high quality government and other debt securities. To minimize our
exposure due to adverse shifts in interest rates, we invest in short-term
securities and ensure that the maximum average maturity of our investments does
not exceed 40 months. If a 10% change in interest rates were to have occurred on
September 30, 2001, this change would not have had a material effect on the fair
value of our investment portfolio as of that date. Due to the short holding
period of our investments, we have concluded that we do not have a material
financial market risk exposure.
Interest risk exposure on long-term debt relates to our note payable, which
bears a floating interest rate of prime plus one quarter percent (6.25% at
September 30, 2001 and 9.75% at December 31, 2000). At September 30, 2001 and
December 31, 2000, the note balance was $186,000 and $311,000, respectively.
This note is payable in equal monthly installments through January 2003. Based
on the balance of our long-term debt, we have concluded that we do not have
material financial market risk exposure.
CAUTION ON FORWARD-LOOKING STATEMENTS
Our business is subject to significant risks, including but not limited to,
the risks inherent in our research and development activities, including the
successful continuation of our strategic collaborations, the successful
completion of clinical trials, the lengthy, expensive and uncertain process of
seeking regulatory approvals, uncertainties associated both with the potential
infringement of patents and other intellectual property rights of third parties,
and with obtaining and enforcing our own patents and patent rights,
uncertainties regarding government reforms and of product pricing and
reimbursement levels, technological change and competition, manufacturing
uncertainties and dependence on third parties. Even if our product candidates
appear promising at an early stage of development, they may not reach the market
for numerous reasons. Such reasons include the possibilities that the product
will be ineffective or unsafe during clinical trials, will fail to receive
necessary regulatory approvals, will be difficult to manufacture on a large
scale, will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties. For more information
about the risks we face, see "Risk Factors" included in Part I of our Form 10-K
filed with the SEC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A discussion of the Company's exposure to, and management of, market risk
appears in Part 1, Item 2 of this Quarterly Report on Form 10-Q under the
heading "Interest Rate Risk".
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits. The following exhibit is filed as part of this report:
10.1 Employment Agreement dated October 17, 2001, between the Registrant
and Henry Pan, MD, PhD.
(B) Reports on Form 8-K. There were no current reports on Forms 8-K filed this
quarter.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: 11/12/01 /s/ Paul W. Hawran
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Paul W. Hawran
Executive Vice President and
Chief Financial Officer