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Exhibit 99.3
FINANCIAL INFORMATION EXTRACTED FROM ALRT'S
QUARTERLY REPORT FILED ON FORM 10-Q FOR THE QUARTERLY
PERIOD ENDED JUNE 30, 1997
FINANCIAL INFORMATION
Allergan Ligand Retinoid Therapeutics, Inc.
Statements of Operations
(In thousands, except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------------------- ---------------------------
Revenues: 1997 1996 1997 1996
---------- ---------- ---------- ----------
Interest income $ 493 $ 1,133 $ 1,112 $ 2,088
Costs and expenses:
Research and development 9,579 6,832 19,095 12,710
General and administra-
tive expenses 466 435 770 788
---------- ---------- ---------- ----------
Total costs and expenses 10,045 7,267 19,865 13,498
---------- ---------- ---------- ----------
Net loss $ (9,552) $ (6,134) $ (18,753) $ (11,410)
========== ========== ========== ==========
Net loss per callable
common share $ (2.94) $ (1.89) $ (5.77) $ (3.51)
========== ========== ========== ==========
Weighted average callable
common shares
outstanding 3,250 3,250 3,250 3,250
See accompanying notes.
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Allergan Ligand Retinoid Therapeutics, Inc.
Condensed Balance Sheets
(In thousands, except share data)
June 30, December 31,
1997 1996
----------- -----------
ASSETS
Cash and cash equivalents $ 14,260 $ 29,897
Marketable securities 17,442 20,394
Other assets 616 $ 720
----------- -----------
$ 32,318 $ 51,011
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Payable to Allergan, Inc. and Ligand
Pharmaceuticals Incorporated $ 3,859 $ 3,889
Accounts payable and accrued liabilities 361 261
----------- -----------
Total current liabilities 4,220 4,150
Stockholders' equity:
Callable Common Stock, $.001 par value;
3,250,000 shares authorized, issued
and outstanding 3 3
Additional paid-in capital 94,256 94,256
Accumulated deficit (65,981) (47,228)
Unrealized holding loss on
marketable securities (180) (170)
----------- -----------
Total stockholders' equity 28,098 46,861
----------- -----------
$ 32,318 $ 51,011
=========== ===========
See accompanying notes.
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Allergan Ligand Retinoid Therapeutics, Inc.
Statements of Cash Flows
(In thousands)
Six Months Ended
-----------------------------
June 30, June 30,
1997 1996
----------- -----------
OPERATING ACTIVITIES:
Net loss $ (18,753) $ (11,410)
Changes in operating assets and liabilities:
Other assets 104 (770)
Payable to Allergan, Inc. and
Ligand Pharmaceuticals Incorporated (30) (416)
Accounts Payable and accrued liabilities 100 (533)
----------- -----------
Net cash used in operating activities (18,579) (13,129)
INVESTING ACTIVITIES:
Sale (purchase) of marketable securities 2,942 (24,064)
----------- -----------
Net decrease in cash and equivalents (15,637) (37,193)
Cash and equivalents at beginning of period 29,897 79,793
----------- -----------
Cash and equivalents at end of period $ 14,260 $ 42,600
=========== ===========
See accompanying notes.
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Allergan Ligand Retinoid Therapeutics, Inc.
Notes to Financial Statements
1. Allergan Ligand Retinoid Therapeutics, Inc. (the Company)
was incorporated in Delaware in 1994 and commenced operations on June 3, 1995 to
continue the efforts of the Allergan Ligand Joint Venture (Joint Venture),
established by Allergan, Inc. (Allergan) and Ligand Pharmaceuticals Incorporated
(Ligand) in June 1992, to discover, develop and commercialize drugs based on
retinoids.
On June 3, 1995, the Company and Ligand completed a
public offering (the Offering) of 3.25 million units (the Units), each Unit
consisting of one share of the Company's callable common stock (Callable Common
Stock) and two warrants (the Warrants), each to purchase one share of Ligand
common stock. The Offering raised net proceeds for the Company of $26.8 million.
At the completion of the Offering, Ligand contributed $17.5 million in cash, as
well as warrants in exchange for (i) a right to acquire all of the Callable
Common Stock at specified future dates and amounts and (ii) a right to acquire
all rights to the Panretin (ALRT1057) product, jointly with Allergan, currently
under development by the Company. At the same time, Allergan contributed $50.0
million in cash to the Company in exchange for (i) the right to acquire one-half
of technologies and other assets in the event Ligand exercises its right to
acquire all of the Callable Common Stock, (ii) a similar right to acquire all of
the Callable Common Stock if Ligand does not exercise its right and (iii) a
right to acquire all rights to the Panretin (ALRT1057) product, jointly with
Ligand.
On June 3, 1997, the Units separated and the Callable
Common Stock and Warrants currently trade separately.
ALRT's Board of Directors approved a research and
development plan for the year ending December 31, 1997 which represents an
acceleration in spending on ALRT's retinoid programs. The accelerated spending
is the result of more rapid discovery and development of a significantly larger
library of viable retinoid compounds than anticipated at the time of formation
of ALRT. ALRT anticipates the acceleration in spending could result in the use
of substantially all of the funds available for research and development
remaining in ALRT in late 1997 or early 1998. Ligand and Allergan have certain
purchase options over the Callable Common Stock and the assets of ALRT, the
exercise of which could be triggered by the use of substantially all of ALRT's
funds. There can be no assurance that Ligand or Allergan will exercise these
options.
2. In the opinion of management, the accompanying unaudited
financial statements contain all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the financial information
contained therein. These statements do not include all disclosures required by
generally accepted accounting principles. The results of operations for the
quarter and six months ended June 30, 1997 are not necessarily indicative of the
results to be expected for the year ending December 31, 1997. Net loss per
callable common share is computed by dividing the net loss by the number of
callable common shares outstanding, which was 3,250,000 at all times during the
periods reported.
3. The Company invests its excess cash in money market funds
and debt instruments of financial institutions and corporations with strong
credit ratings. The Company has established guidelines with respect to the
diversification and maturities in order to maintain safety and liquidity.
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Allergan Ligand Retinoid Therapeutics, Inc.
Notes to Financial Statements (continued)
The Company considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents. The Company's
investments are classified as available-for-sale and are carried at fair value,
with unrealized gains and losses reported as a separate component of
stockholders' equity. The investments are adjusted for amortization of premiums
and discounts to maturity and such amortization is included in interest income.