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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-17999
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IMMUNOGEN, INC.
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2726691
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State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
128 Sidney Street, Cambridge, MA 02139
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(Address of principal executive offices, including zip code)
(617) 661-9312
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of class)
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
-
Aggregate market value, based upon the closing sale price of the shares as
reported by the Nasdaq National Market System, of voting stock held by
non-affiliates at September 18, 1995: $50,754,868 (excludes shares held by
Executive Officers, Directors, and beneficial owners of more than 10% of the
Company's Common Stock). Exclusion of shares held by any person should not be
construed to indicate that such person possesses the power, direct or indirect,
to direct or cause the direction of management or policies of the registrant,
or that such person is controlled by or under common control with the
registrant. Common Stock outstanding at September 18, 1995: 12,586,606 shares.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Definitive Proxy Statement for its 1995 Annual
Meeting of Shareholders are incorporated by reference into Part III of this
Report.
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PART I
ITEM I. BUSINESS
ImmunoGen, Inc. ("ImmunoGen" or "the Company") develops pharmaceuticals,
primarily for the treatment of cancer. The Company's products are
"immunoconjugates," each comprising a potent effector molecule -- a proprietary
toxin or drug -- coupled to a monoclonal antibody for delivery to and
destruction of targeted cells. Through its subsidiary, Apoptosis Technology,
Inc. ("ATI") established in 1993, the Company is developing additional
technology platforms, based on the regulation of cell proliferation and
programmed cell death, or apoptosis, with which to identify therapeutic product
candidates for the treatment of cancer and viral diseases.
Since its inception, the Company has acquired significant expertise and
proprietary know-how with regard to the development of immunoconjugates for the
treatment of cancer. The key elements of the Company's proprietary position
include its expertise in identifying and designing both potent effector
molecules and specific targeting agents. Through its network of collaborators,
advisors and consultants, the Company also has access to significant medical
expertise with regard to the treatment of cancer. Through ATI, the Company has
established collaborative ties with leading academic researchers in the area of
apoptosis research and its applications to the treatment of cancer and viral
diseases.
The Company uses several different toxins and drugs in its immunoconjugates as
effector molecules with which to destroy target cells. In each of the
Company's first four products -- the Oncolysins -- a proprietary derivative of
ricin, a powerful, naturally occurring plant toxin, is coupled to a targeting
monoclonal antibody. In the Company's next group of products -- small-drug
immunoconjugates -- potent small-molecule drugs are conjugated to humanized
monoclonal antibodies. ATI is basing its proprietary technology portfolio on
the development of molecular and cellular screening systems for the
identification of leads for therapeutic product candidates.
The Company began conducting clinical trials with the first of the Oncolysin
products in 1988. That first product, Oncolysin B, is now being tested in
lymphoma patients in a large-scale, randomized Phase III clinical study. The
Company's small-drug immunoconjugates are in the research and preclinical
phases of development: in April 1994, the Company successfully submitted an
Investigational New Drug Application ("IND") with the U.S. Food and Drug
Administration ("FDA") to begin human clinical testing of anti-B4-DC1, its
first small-drug immunoconjugate.
The Company's products will require significant additional investment and
laboratory and clinical testing, and regulatory approvals. The Company is
seeking to commercialize its products through collaborations with established
pharmaceutical companies to support clinical testing and development and
manufacturing and for product sales and marketing. The Company also may elect
in the future to establish a specialized sales force in the United States and
to serve international markets through foreign licensees. There can be no
assurance, however, that the Company will be successful in developing or
commercializing its products.
IMMUNOCONJUGATE TECHNOLOGY
The Company has developed two classes of effector molecules whose distinct
characteristics have yielded products it believes are uniquely suited to the
treatment of different stages of cancer; namely, as initial therapy or to
reduce the residual cancer cells that often remain after initial therapy.
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In the Company's first four products, the Oncolysins, blocked ricin (a
derivative of ricin, a potent, naturally occurring plant toxin readily
available from castor beans) is linked to a monoclonal antibody to form an
immunoconjugate. The Company's blocked-ricin immunoconjugates possess high
potency, specificity for target cells and, importantly, a mechanism of cell
killing -- disruption of protein synthesis -- that is not shared by
conventional anticancer agents. The mechanism of action of blocked-ricin
immunoconjugates makes them particularly attractive agents for the treatment of
the subclinical (undetectable) residual disease which frequently remains after
initial chemotherapy. Residual disease may be resistant to conventional agents
and often regrows, causing relapsed disease.
The Company has conducted in vitro tests which compare the potency of blocked
ricin to the most commonly used conventional chemotherapeutic agents, including
adriamycin, methotrexate, actinomycin D, vinblastine and mitomycin C. In these
tests, the Company has shown that the same proportion of tumor cells is killed
by antibody immunoconjugates of blocked ricin at concentrations 1,000-times
lower than those of the chemotherapeutic drugs tested. Thus, due to the
potency and specificity of the immunotoxin, blocked-ricin immunoconjugates have
the potential for greater tumor destruction before reaching dose levels which
cause severe illness or death in the patient.
ImmunoGen believes it is the only company with a proprietary position in an
effective derivative of intact ricin. See "Patents, Trade Secrets and
Trademarks." Two U.S. patents relating to blocked ricin and its use in
antibody conjugates have issued to Dana-Farber Cancer Institute
("Dana-Farber"): No. 5,239,062, issued in August 1993, and No. 5,395,924,
issued in March 1995. ImmunoGen has an exclusive worldwide license for all
therapeutic applications of these patents.
The Company has also tested two groups of small-molecule drugs, each as toxic
as ricin, which it believes offer great promise for use as effector molecules
in immunoconjugates. The Company has developed derivatives of these drugs
which allow them to be attached to antibodies to target tumor cells and allow
for their release at the target site in a fully active form.
The first compound, DC1, is representative of a group of agents called natural
groove-binding compounds. After binding to DNA, these agents attach
covalently, thereby interfering with cellular function and inducing the death
of cells. ImmunoGen has incorporated DC1 into several immunoconjugates, and in
April 1994 the Company submitted an IND to FDA to begin human testing of its
first DC1-based immunoconjugate. In June 1995, the Company received a $750,000
Phase II Small Business Innovation Research ("SBIR") grant from the National
Cancer Institute ("NCI") of the National Institutes of Health to help fund
development of DC1-based immunoconjugates. The award is for $375,000 annually
for two years beginning June 1, 1995. In August 1995, the Company received
notification from the U.S. Patent and Trademark Office that a U.S. patent will
soon issue on the use of DC1 in immunoconjugates.
The second small-drug compound, DM1, binds to tubulin and is a potent inhibitor
of cell division. It is derived from maytansine, a natural product. The
Company has obtained an exclusive license for use of maytansine in conjugated
form. See "Licenses -- Takeda Chemical Industries Ltd." The Company has
received two patents, No. 5,208,020, issued in May 1993, and No. 5,416,064,
issued in May 1995, covering the use in conjugated form of small-drug
immunoconjugates derived from maytansine.
The Company has conducted IN VITRO tests that it believes demonstrate that
immunoconjugates containing either DC1 or DM1 are more effective than current
anticancer drugs at killing tumor cells. This high degree of killing power is
important in debulking tumor masses. In animal tumor models using SCID
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mice, small-drug immunoconjugates have shown therapeutic efficacy and complete
cures at low doses with no toxicity to normal tissues. In September 1995,
the Company published the results of its in vitro and animal studies of
DC1-based immunoconjugates in a leading medical journal, Cancer Research.
The specificity of an antibody forms the basis for its use to deliver effector
molecules to disease sites. Antibodies are proteins produced by the immune
system in response to the presence of foreign substances in the body. A
particular antibody detects and binds to only one specific antigen, or marker.
Since cancer cells may have unique antigens on their surfaces, an antibody with
the correct specificity for those cells may be used as a targeting agent. When
such an antibody is coupled to a highly toxic agent, forming an
immunoconjugate, tumor cells are killed while normal cells, even those in close
association with the tumor, can be spared.
The Company uses humanized monoclonal antibodies as targeting agents in its
small-drug immunoconjugates because they are expected to be nonimmunogenic.
Nonimmunogenic molecules are desirable because, over time, a patient's immune
system may recognize a nonhuman protein as foreign and remove it from
circulation. As a result, the triggering of an immune response may limit the
ability to conduct long-term therapy using immunoconjugates comprising nonhuman
proteins. Because they are expected to be nonimmunogenic, the Company's
small-drug immunoconjugates are being developed for long-term dosing for the
treatment of patients who have relapsed and for debulking tumor masses.
ImmunoGen has invested in two antibody humanization techniques for the
development of these nonimmunogenic targeting agents for use in its small-drug
immunoconjugates: CDR grafting and resurfacing. The Company has humanized the
antibodies used in Oncolysin B and Oncolysin S using both CDR grafting and
resurfacing -- techniques that alter antibodies derived from animals to make
them appear human to the immune system. Laboratory experiments have
demonstrated that these humanized antibodies maintain the same level of
high-affinity binding as the original, mouse-derived antibodies. In addition
to these, the Company intends to humanize other antibodies, including those
which target solid tumors. In February 1995, the Company entered into an
agreement with Oxford Molecular Ltd ("OML"), a research and development firm
which provides computer software for modeling protein structure, under which
OML receives rights to utilize the Company's antibody resurfacing technology.
See "Licenses -- Oxford Molecular Ltd."
APOPTOSIS TECHNOLOGY
In January 1993, the Company established ATI, a subsidiary founded to develop
screening systems for drugs which influence the regulation of cell
proliferation and programmed cell death, or apoptosis. Initially, ATI licensed
technology from Dana-Farber. See "Licenses -- Dana-Farber Cancer Institute."
ATI's strategy has been to leverage existing knowledge in the field of
apoptosis by developing, at the discovery stage, a series of key research
collaborations with academic scientists. To this end, in addition to its
collaboration with Dana-Farber in this area, ATI has established collaborative
ties with leading scientists at additional academic centers to complement its
own internal research team.
ATI is expected to identify leads for the development of therapeutic product
candidates based on the regulation of cell proliferation and apoptosis, the
natural, orderly process by which cells in the body die or are killed. The
Company expects that, over the next several years, research at ATI will yield a
flow of new product candidates which ImmunoGen, under the terms of its
agreement with ATI, will have the option to commercialize. For the past two
years, ATI has been engaged in the identification of specific diseases which
may be treated through the regulation of apoptosis and is focusing its efforts
on cancer and viral diseases.
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Apoptosis is an active process regulated by specific genes. All cells have the
potential to undergo apoptosis. The activation of a cell death program is
regulated by a multitude of signals that either can originate on the cell
surface and be transmitted through receptors to intracellular pathways, or
which arise in the interior of the cell. The discovery over the past few years
of key regulatory elements makes it possible to develop novel therapies
intended to enhance or decrease the tendency of specific cell populations to
undergo apoptosis.
ATI's research objective is to define opportunities for intervention at key
signaling points in these pathways. Because of promising research developments
made both at ATI and in the laboratories of its collaborators in the regulation
of so-called "ANTI-DEATH" genes and SURVIVAL SIGNALS, ATI has focused its
discovery efforts on the identification of molecular targets and the subsequent
development of molecular screening systems in these areas.
REGULATION OF ANTI-DEATH GENES. Tumor cells escape apoptosis through the active
suppression of stimuli which directly induce apoptosis. For example, the BCL-2
proto-oncogene can block cell death induced by a broad spectrum of
apoptosis-inducing stimuli. Therefore, it has been categorized as a regulator
of cell death, or an "anti-death" gene. It is known that BCL-2 is a member of
a small gene family and that interactions among the members of this family may
regulate its function.
In April 1995, ATI researchers published the results of cloning and functional
analysis of Bak, a member of the BCL-2 gene family which, unlike BCL-2,
promotes cell death. Laboratory experiments have shown that forced expression
of Bak induces rapid and extensive apoptosis, raising the possibility that it
is directly involved in the machinery of a cell death program. Further, ATI
scientists have identified the domain in Bak that ATI believes is both
necessary and sufficient to trigger cell-killing activity. This domain gives
ATI a molecular target with which to begin the design of screens for drugs
which trigger apoptosis.
ATI is pursuing ways of disrupting the suppression of Bak function by Bcl-2
family members. In addition, ATI, with outside collaborators at the St. Louis
University Medical Center, have demonstrated that Bak is the target of
inhibitory gene products from two unrelated viruses and are now progressing
toward identification of the anti-apoptotic mechanisms of cytomegalovirus.
REGULATION OF THE CELL DEATH PATHWAY BY SURVIVAL SIGNALS. In normal, healthy
tissue, proliferation and cell death are coupled, providing an efficient means
for organisms to control unwanted or excess cellular proliferation. However,
cancer cells have accumulated mutations that circumvent the normal regulation
of proliferation and cell death, leading to excess and uncontrolled cell growth
not compensated for by apoptosis. One way that the cell suppresses the cell
death program is through mediation of survival signals provided by growth
factors such as insulin-like growth factor 1 ("IGF-1"). Research from the
laboratory of Dr. Gerard Evan of the Imperial Cancer Research Fund ("ICRF"), a
leading cancer research foundation in the United Kingdom, has shown that
survival signals provided by IGF-1 help prevent cells transformed by the MYC
proto-oncogene from undergoing apoptosis. ATI has established a research
program with Dr. Evan to dissect the role of IGF-1 and other survival factors
in the death pathway and to identify drugs that mimic or disrupt the survival
signal of IGF-1 in cells. See "Licenses -- Imperial Cancer Research Fund."
Since the IGF-1 receptor ("IGF-1R") is overexpressed on cells of many tumor
types, such as breast and small-cell lung carcinoma, it is expected that the
down-regulation of survival signals should induce apoptosis in a great number
of tumor types, potentially offering ATI highly specific therapeutics for an
array of cancers.
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To further enhance this program, in January 1995, ATI signed a consulting
agreement with Dr. Renato Baserga of Thomas Jefferson University, Philadelphia,
Pennsylvania, an expert on IGF-1R and its role in proliferation, transformation
and regulation of apoptosis. Dr. Baserga and his laboratory have provided ATI
with IGF-1R mutants with which to study ways of intervening with the IGF-1
survival signal and thereby triggering the cell death program. In
collaboration with Dr. Baserga, ATI has identified areas on IGF-1R which are
necessary to transmit the survival signal, thereby providing potential
molecular targets for drug design.
PRODUCTS
ImmunoGen has selected specific markets in which to focus its initial product
development efforts. Oncolysin B and Oncolysin M are designed to treat
patients in remission with lethal forms of blood-cell malignancies. Oncolysin
S is an immunoconjugate for the treatment of small-cell lung cancer ("SCLC")
patients in remission and Oncolysin CD6 is designed for the treatment of T-cell
malignancies in remission and for acute organ transplant rejection. The
Company's small-drug immunoconjugates are being developed as initial therapy
for lymphoma, SCLC and certain solid tumors. The Company believes that
applications of the Oncolysin products, to treat patients in remission to
prevent or substantially delay relapse, will be complementary to those of its
small-drug immunoconjugates, which are being developed for use as initial
therapy and as agents for long-term administration.
In December 1994, the Company implemented a restructuring which included the
suspension of operations at its Canton and Norwood production facilities and
the reduction or elimination of certain areas of the Company's research. This
plan resulted in the termination of approximately 100 employees, or an
approximately 60% reduction in workforce. As part of the restructuring, the
Company focused its clinical resources on Oncolysin B and scaled back clinical
trials of its other products. Clinical development of the other Oncolysins -
including Oncolysin S, which has progressed into Phase II testing for the
treatment of small-cell lung cancer - is expected to remain on hold until the
Company enters into new agreements with third parties to support their
commercialization. The Company's small-drug immunoconjugates, now in the
research and preclinical stages of development, also will not enter human
clinical trials until third-party funding is secured for them.
The Company expects that future expenditures for manufacturing improvements and
for new clinical trials will be defrayed by corporate partners. Although the
Company currently is seeking such partners, no such arrangements have been
concluded nor is there any assurance that any such arrangements may be
concluded.
The following table summarizes the current development status of the Company's
products and product candidates. For a description of Phase I-III clinical
trials, see "Regulatory Issues -- Clinical Trials Process." Preclinical denotes
work to refine product performance characteristics and studies relating to
product composition, stability, scale-up, toxicity and efficacy to create a
prototype formulation in preparation for submission of an IND application to
FDA to begin human clinical studies. Research denotes work up to and including
bench-scale production of a formulation which meets the basic product
performance characteristics established for the product. For products now in
clinical testing, each line item in the table represents a separate clinical
indication:
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DEVELOPMENT STATUS OF IMMUNOGEN'S PRODUCTS
Product/Application Clinical Setting Status
I. ONGOING DEVELOPMENT:
Oncolysin B
B-Cell Lymphomas After Autologous Bone Marrow Phase III
and Leukemias Transplantation (1)
AIDS-Related Lymphoma (2) Phase I/II
Synergy with Chemotherapy Phase I/II
Pediatric Phase I (NCI IND)
Anti-B4-DC1
B-Cell Lymphomas Tumor Debulking IND Accepted
huN901-DC1
Small-Cell Lung Cancer Tumor Debulking Preclinical
Colon-DM1
Colon Cancer Tumor Debulking Research
Anti-EGFR-DM1
Squamous-Cell Carcinomas Tumor Debulking Research
II. SUSPENDED, CLOSED OR COMPLETED CLINICAL STUDIES:
Oncolysin B
B-Cell Lymphomas After Chemotherapy (2,3) Phase II
and Leukemias At Relapse (3) Phase I/II
Bone Marrow Purging (3) Phase I/II
Oncolysin S
Small-Cell Lung Cancer After Chemotherapy (4) Phase II
CD56+ Pediatric Tumors At Relapse Phase I (NCI IND)
Oncolysin M
Myelogenous Leukemias Bone Marrow Purging (3) Phase I/II
Oncolysin CD6
T-Cell Cancers After Relapse (4) Phase I
<FN>
(1)Pivotal study to serve as the basis for Product License Application ("PLA").
(2)Studies to generate data to support Oncolysin B PLA.
(3)Study closed; no new trials planned in this clinical setting.
(4)Not currently enrolling patients to focus additional clinical resources to
Oncolysin B PLA.
With certain exceptions, ImmunoGen has conducted its own clinical studies. The
ongoing Phase III trial of Oncolysin B is being conducted in conjunction with
the Cancer and Leukemia Group B ("CALGB") and the Eastern Cooperative Oncology
Group ("ECOG"), both NCI cooperative groups. Currently, the
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study is open to enrollment at 42 sites in the United States and Canada.
The Company also supports some clinical trials of the Oncolysin products which
are conducted directly by the NCI.
Oncolysin B. Non-Hodgkin's lymphoma affects an estimated 45,000 new patients
every year in the United States; over 36,000 suffer from the B-cell variant.
There are approximately 19,000 deaths each year among B-cell lymphoma patients.
There are also approximately 12,500 new cases of acute and chronic lymphocytic
leukemia in the United States each year. Approximately 5,700 persons die of
these B-cell leukemias annually, the majority of whom are under the age of
twenty. Oncolysin B uses an antibody, anti-B4, to target blocked ricin
specifically to a marker, CD19, found on these B-cell malignancies.
As indicated in the preceding table, Oncolysin B is being evaluated for a
number of different indications and in a number of different settings. Over
800 patients have been enrolled in clinical studies of Oncolysin B using the
drug intravenously or as a bone marrow purging agent. Clinical responses have
been observed in these trials with an acceptable side-effect profile.
Based on encouraging data from Phase I and Phase II studies in patients with
minimal residual disease, the Company began enrollment of patients in a
pivotal, multicenter Phase III study of Oncolysin B in July 1993. This study
is measuring the effectiveness of the drug in the treatment of relapsed
lymphoma patients subsequent to autologous bone marrow transplantation
("ABMT"). In the ABMT procedure, a portion of the patient's bone marrow is
removed and stored and a remission is then induced with high-dose chemotherapy,
with or without radiation. This intensive chemotherapy and radiation
obliterates the remaining bone marrow and the patient is then salvaged by
reinfusion of the previously stored marrow. Even if these patients have no
clinical evidence of disease subsequent to ABMT, 50-70% are expected to relapse
in two years because of occult, residual tumor.
The Company believes that the ABMT setting, which numbers approximately 5,000
new cases per year in the United States, serves as a model for all B-cell
malignancy patients in remission. The Phase III trial measures the time to
relapse of patients in complete remission who receive Oncolysin B subsequent to
ABMT versus results for those who do not receive the drug subsequent to ABMT.
Enrollment in the Oncolysin B Phase III trial was slower than anticipated in
1995. The Company expects enrollment in the trial to continue at least through
1996 and does not expect to submit data to FDA until 1998, at the earliest. A
number of factors make the time to completion of the Phase III trial difficult
to predict. These include the rate of enrollment of patients into the trial,
the number of patients who are declared ineligible or who voluntarily drop out
prior to randomization (the time when patients are divided into two groups --
treatment with Oncolysin B versus observation) and their time to relapse
subsequent to randomization.
The Company also has tested Oncolysin B in Phase II trials in patients who are
in remission following conventional chemotherapy. Unlike patients in the
ongoing Phase III study, these patients did not undergo ABMT. Using supportive
data from these studies, the Company intends to seek approval to use Oncolysin
B to treat the entire population of patients with B-cell malignancies who are
in remission (or who have minimal residual disease), no matter how the
remission has been achieved.
AIDS-related lymphoma is another setting where the Company believes Oncolysin B
may be effective. Two Phase I studies of Oncolysin B began in this setting in
the fall of 1991, one of which was performed under an IND submitted by NCI.
AIDS-related lymphoma is a devastating disease where conventional chemotherapy
has limited effectiveness and relapsed disease usually is refractory to
additional
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chemotherapy. A further problem in the treatment of AIDS-related
lymphoma is that the aggressive chemotherapy normally undertaken for lymphoma
patients may not be tolerated by patients with AIDS. Because Oncolysin B does
not suppress the bone marrow, the Company believes that AIDS patients with
compromised bone marrow function may tolerate Oncolysin B better than they
tolerate the myelosuppressive agents normally used to treat lymphoma.
Forty patients were treated in the initial Phase I/II trials in AIDS-related
lymphoma, and preliminary data indicate that Oncolysin B may be given safely to
these patients. The data also suggest that Oncolysin B may cause significant
tumor shrinkage in relapsed patients. Based on these results, in September
1994 the Company initiated a Phase I/II trial of patients given combination
conventional chemotherapy and a 28-day continuous infusion of Oncolysin B.
This study met its objectives and was completed in September 1995.
Encouraging laboratory and preclinical results also led the Company to begin a
Phase I/II trial of Oncolysin B using the drug in combination with conventional
agents. Studies in mice which had been given B-cell tumors show that combining
Oncolysin B with the conventional chemotherapeutics adriamycin or vincristine
produced additive, or synergistic, anti-tumor effects -- superior to those seen
with Oncolysin B or the conventional agents alone. Furthermore, ImmunoGen
scientists observed enhanced cell killing using Oncolysin B in combination with
the conventional agents on tumors which were resistant to conventional drugs.
The Phase I/II study testing the synergistic effects of Oncolysin B in
combination with conventional chemotherapy began in September 1994 in lymphoma
patients and is ongoing.
Oncolysin S. Lung cancer is diagnosed in over 172,000 Americans every year and
their overall five-year survival rate is approximately 13%. However, over 30%
of these patients (approximately 55,000 per year) have small-cell lung cancer
("SCLC") and their five-year survival rate is only 1%. Using the N901
antibody, which binds to an antigen, CD56, found on SCLC, the Company initiated
a clinical trial with Oncolysin S in early 1991.
The Company completed its initial Phase I study of Oncolysin S in March 1993.
The trial established that the drug may be administered safely, is well
tolerated and is delivered to the tumor. Clinicians also saw one partial
response and observed stabilization of disease in six other patients treated in
the trial. The Company believes these results are very encouraging, especially
since current therapies for relapsed SCLC rarely produce durable responses and
the long-term prognosis for these patients is poor.
Based on the results obtained in the initial study, the Company initiated a
Phase II trial in September 1993 in patients with a best response following
conventional chemotherapy. Following treatment with Oncolysin S, a subset of
patients developed abnormalities which could be consistent with interaction of
the N901 antibody with cardiac tissues. The Company stopped enrollment of new
patients in Oncolysin S trials in October 1994, before treating a sufficient
number of patients to be able to make an assessment of responses or of
potential cross-reactivity of the antibody in this patient group. The Company
cannot estimate the time to completion of the Phase II trial, nor does it
intend to expand into additional Phase II trials of Oncolysin S, due to the
focus of its clinical effort on studies of Oncolysin B to support its first
Product License Application ("PLA"), until it secures third-party support.
Oncolysin M. Acute myelogenous leukemia affects approximately 12,000 new
patients annually in the United States; approximately 7,500 patients die of the
disease each year. Anti-My9 is a highly specific antibody for these leukemia
cells which, when combined with the Company's blocked ricin, yields a potent
immunoconjugate.
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Early results of bone marrow purging studies indicate that Oncolysin M
decreases the number of malignant cells while not damaging the stem cells
necessary for successful regrowth of the marrow. The study achieved its
objectives and the Company does not plan to initiate new trials of Oncolysin M
until it secures third-party support.
Oncolysin CD6. ImmunoGen has developed Oncolysin CD6, a product which may have
applications in the inhibition of the inflammatory response, mediated by T
cells, which accompanies autoimmune disease. An IND for Oncolysin CD6 was
submitted to FDA in February 1992 seeking to test the ability of the drug to
suppress the immune system and prevent rejection of organ transplants. In
response, FDA requested that the first clinical test of Oncolysin CD6 be
conducted in a population of patients with life-threatening illness. The
Company then prepared an IND amendment to evaluate Oncolysin CD6 in patients
with cutaneous T-cell lymphoma or leukemia. The Company began a Phase I study
in this setting in June 1993, which has been placed on hold by the Company in
order to permit the Company to focus its clinical effort on studies of
Oncolysin B to support its first PLA. The Company cannot estimate the time to
completion of the Phase I trial, nor does it intend to expand trials of
Oncolysin CD6 until it secures third-party support.
Anti-B4-DC1. The first of the Company's small-drug immunoconjugates,
anti-B4-DC1 consists of the same antibody as in Oncolysin B (anti-B4) linked to
the potent small-drug effector molecule, DC1. DC1 is a synthetic drug and is
not expected to be immunogenic. The immunoconjugate, therefore, may be a
suitable agent for tumor debulking. The Company submitted an IND to begin
testing anti-B4-DC1 in relapsed lymphoma patients in April 1994. The FDA has
accepted its application and the Company expects to initiate human clinical
trials when it enters into an agreement with a corporate partner to support
commercialization.
huN901-DC1. This product consists of a humanized version of the antibody in
Oncolysin S (N901), conjugated to DC1. The antibody has been humanized
successfully, and the Company has expressed it in cells at sufficiently high
levels to begin manufacturing scale up. As with anti-B4-DC1, the Company will
not begin clinical testing of huN901-DC1 before a corporate partner is found to
support further development and commercialization. The Company expects to test
huN901 as a tumor debulking agent in small-cell lung cancer.
Colon-DM1. Under a research agreement with a major pharmaceutical company, the
Company has been testing an antibody which targets colon cancer cells. The
Company believes this antibody possesses the requisite specificity which would
make it a useful targeting agent in a small-drug immunoconjugate: the antibody
binds strongly to 70% of colon cancers and has minimal cross-reactivity with
normal human tissues. Upon the successful execution of a licensing agreement
to obtain commercial rights to the antibody, the Company expects to humanize
it, conjugate it to DM1 and begin preclinical studies. The Company will not
begin clinical testing of colon-DM1 until a corporate partner is found to
support clinical development and commercialization.
Anti-EGFR-DM1. The Company currently is evaluating several new antibodies,
developed at ImmunoGen, which are directed against the epidermal growth factor
receptor ("EGFR"). EGFR is overexpressed on many solid tumors, such as head
and neck cancer and non-small-cell lung cancer. The Company will not pursue
further development of this immunoconjugate until it secures third-party
support.
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BUSINESS STRATEGY
ImmunoGen's products may be marketed potentially by licensees or by the
Company. The Company recognizes that successful marketing of its anticancer
products both in the United States and abroad will require resources and
expertise not resident in-house and may be beyond the capabilities of all but
the largest pharmaceutical marketing organizations. The Company therefore is
seeking marketing agreements or other exchanges of product rights with
established pharmaceutical companies in order to reach the oncology community.
ImmunoGen's strategy is to license rights to its products and require that its
licensees fund the Company's later-stage development work on its products. The
Company may also, in the future, develop a small sales force to introduce and
detail its products; however, it has no current plans to do so.
To reduce expenditures and focus on its competitive strengths in research and
preclinical product development, the Company implemented a restructuring in
December 1994 which included a 60% reduction in its workforce. The Company
believes that it has already produced sufficient quantities of its products to
support ongoing clinical trials, and the restructuring included the suspension
of manufacturing. The Company expects that future expenditures for
manufacturing improvements, as well as for new clinical trials, will be
defrayed by corporate partners.
LICENSES -- IMMUNOGEN, INC.
Dana-Farber Cancer Institute. Under the Company's Research and License
Agreement with Dana-Farber, entered into in May 1981, the Company has provided
funds for research projects conducted by Dana-Farber involving the development
of monoclonal antibodies, toxins and drugs for conjugation and use as cancer
therapeutics. Dana-Farber retains ownership of the technology developed
through such research and has granted the Company a worldwide exclusive license
to use such technology in the Company's products, including the right to
sublicense to others. The Company's first four products, Oncolysin B,
Oncolysin M, Oncolysin S and Oncolysin CD6, and several of the Company's other
products under development, use Dana-Farber technology which has been licensed
to the Company under this agreement.
In return for these rights, the Company has agreed to pay Dana-Farber royalties
on product sales by ImmunoGen and its sublicensees. In general, royalties on
sales by ImmunoGen of products based primarily on patented Dana-Farber
technology will be paid at the rate of 4% of ImmunoGen's net sales, and
royalties on products based primarily on unpatented Dana-Farber technology will
be paid at a reduced rate to be agreed upon. ImmunoGen is required to pay to
Dana-Farber 20% of royalties that the Company receives from sublicensees on
sales by them of ImmunoGen's products based primarily on patented Dana-Farber
technology and a reduced percentage, to be agreed upon, with respect to
products based primarily on unpatented Dana-Farber technology. As of August
1995, no royalties have been paid under the agreement.
The licenses of Dana-Farber technology and related royalty obligations continue
with respect to patented technology for the life of the related patent, and
with respect to unpatented technology until such technology becomes public (but
not longer than 17 years after first commercial sale). The Dana-Farber
Research and License Agreement is automatically extended from year to year
unless terminated by either party on 60 days' prior written notice, but all
outstanding licenses and royalty obligations at the time of termination
continue.
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Initial clinical trials of the Company's first three products have been
conducted principally at Dana-Farber. Because of its reputation, Dana-Farber
attracts a large number of patients suffering from different forms of cancer.
Thus, the Company's long-standing relationship with Dana-Farber has permitted
ready access to a large pool of patients for clinical trials at one location
which might not otherwise be available to the Company.
Oxford Molecular Ltd. In March 1995, the Company entered into an agreement
with OML under which the two companies cross-licensed technology for the design
of monoclonal antibodies. Under the agreement, the Company receives access to
OML's molecular modeling software in exchange for granting OML the right to use
the Company's proprietary resurfacing technology in the development of
monoclonal antibodies outside of the field of oncology and case-by-case rights
within oncology areas not under development at the Company. OML also will pay
the Company a percentage of the gross revenues it derives from the use of
resurfacing.
Takeda Chemical Industries, Ltd. A licensing agreement with Takeda Chemical
Industries, Ltd. ("Takeda"), executed in April 1994, gives the Company a
worldwide license to make, use and market immunoconjugate products containing
maytansine or its analogs. Under the agreement, Takeda will receive a royalty
of 4% of ImmunoGen's annual net sales of such products and will have a right of
first refusal to market such products in most Asian and certain Middle Eastern
countries.
In addition, Takeda will furnish to ImmunoGen, free of charge, up to 40 grams
of maytansine for research and development during the term of the license
agreement. Subsequent supplies will either be furnished by Takeda on a cost
plus 15% basis or produced by ImmunoGen with royalties payable to Takeda equal
to 15% of ImmunoGen's cost.
LICENSES -- APOPTOSIS TECHNOLOGY, INC.
Dana-Farber Cancer Institute. In January 1993, ATI and Dana-Farber entered
into a licensing agreement in the field of apoptosis under which ATI was
granted an exclusive, worldwide license, with full right to enter into
sublicense agreements, for all therapeutic applications and certain diagnostic
applications arising from existing inventions and an option to license future
inventions made in specified laboratories at Dana-Farber. In consideration for
this license, Dana-Farber received a minority equity share in ATI, an initial
license fee and a commitment by ATI to fund the research activities of those
laboratories at Dana-Farber from which ATI is to derive rights under the
agreement. Additionally, ATI will provide Dana-Farber milestone payments and
pay royalties based upon the sale of any products which incorporate licensed
Dana-Farber technology. As of August 1995, no milestone or royalty payments
have been made under this agreement.
Imperial Cancer Research Fund and Imperial Cancer Research Technology Ltd. In
July 1994, ATI entered into a three-year research and development collaboration
agreement in the field of apoptosis and cell proliferation with the Imperial
Cancer Research Fund ("ICRF") and the Imperial Cancer Research Technology Ltd
("ICRT"), ICRF's technology transfer arm, under which ATI was granted an
exclusive, worldwide license, with full right to enter into sublicense
agreements, for all therapeutic and diagnostic applications arising from
existing inventions and an option to license future inventions within the scope
of the collaboration made in specified laboratories at ICRF. In consideration
for this license, ICRT received a minority equity interest in ATI in addition
to a commitment by ATI to fund ongoing research in those ICRF laboratories from
which ATI will derive rights under the agreement. ATI also will give ICRT
royalty payments on the sale of any products which incorporate licensed ICRF
technology. As of August 1995, no milestone or royalty payments have been made
under this agreement.
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PATENTS, TRADE SECRETS AND TRADEMARKS
ImmunoGen seeks patent protection for its proprietary technology and products
both in the United States and abroad. Nine patents have been issued to
Dana-Farber in the United States covering technology exclusively licensed by
ImmunoGen, along with several patents in Canada, Europe and Japan. Five of
these patents claim a variety of acid-labile and photo-labile conjugation
technologies as inventions; one claims a toxin immunoconjugate as an invention;
one claims a monoclonal antibody specific to small-cell lung carcinoma cells as
an invention; and two claim the use of blocked ricin in immunoconjugates.
Also, the Company has received two patents on the use of maytansinoids in
conjugated form.
Additional patent applications covering proprietary toxins, small-drug
derivatives, immunoconjugates and use of certain of these products for
indicated diseases have been submitted in the United States, Canada, Europe and
Japan and are pending or awaiting examination. Work leading to other patent
applications is being performed by Company employees. In all such cases, the
Company will either be the assignee or owner of such patents or have an
exclusive license to the technology covered by the patents. No assurance can
be given, however, that the patent applications will issue as patents or that
any patents, if issued, will provide ImmunoGen with adequate protection against
competitors with respect to the covered products, technology or processes.
The Company is aware that a patent issued to a third party in Europe containing
claims covering the Company's blocked-ricin technology. The Company also is
aware that patents have been issued in Australia and New Zealand, that a patent
application has been filed in Canada, and the Company believes that a patent
application has been filed in the United States, each of which contains claims
which may cover the Company's blocked-ricin technology. The Company has
contested the European patent and that patent has now officially lapsed. The
Company believes that the Australian and New Zealand patents are narrow and do
not encompass its blocked-ricin technology. The Company may initiate
revocation proceedings against the Australian and New Zealand patents and
initiate interference proceedings against the Canadian and United States
applications if such patents are shown to cover the Company's blocked-ricin
technology. The Company believes that, on the merits of its case, it will be
able to successfully challenge any of the above-listed potential competing
claims on its blocked-ricin technology. There can be no assurance, however,
that the Company will be successful in any opposition, revocation or
interference proceeding. Moreover, there can be no assurance that additional
patents containing similar claims will not be issued in other jurisdictions.
Many of the processes and much of the know-how of importance to the Company's
technology are dependent upon the skills, knowledge and experience of certain
of the Company's key scientific and technical personnel, which skills,
knowledge and experience are not patentable. To protect its rights in these
areas, the Company requires all employees and most consultants, advisors and
collaborators to enter into confidentiality agreements with ImmunoGen. There
can be no assurance, however, that these agreements will provide meaningful
protection for the Company's trade secrets, know-how or other proprietary
information in the event of any unauthorized use or disclosure of such trade
secrets, know-how or proprietary information. Further, in the absence of
patent protection, the Company may be exposed to competitors who independently
develop substantially equivalent technology or otherwise gain access to the
Company's trade secrets, know-how or other proprietary information.
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The Company has exclusive rights to a large number of antibodies, most of which
are covered by Dana-Farber patents or patent applications in the United States
and abroad. In many cases, the underlying antigens also are patented.
The Company has also obtained a registered trademark -- Oncolysin(r) -- for its
first group of products.
COMPETITION
The areas of product development on which the Company has focused are highly
competitive. ImmunoGen's competitors include major pharmaceutical and chemical
companies, specialized biotechnology firms, universities and research
institutions, many of which have greater resources than the Company. In
addition, many specialized biotechnology firms have formed collaborations with
large, established companies to support research, development and
commercialization of products that may be competitive with those of the
Company. Competitive factors within the cancer therapeutic market include the
safety and efficacy of products, the timing of regulatory approval and
commercial introduction, special regulatory designation of products, such as
Orphan Drug status, and the effectiveness of marketing and sales efforts.
The Company's competitive position also depends on its ability to attract and
retain qualified personnel, develop effective proprietary products, implement
production and marketing plans, obtain patent protection and secure sufficient
capital resources.
Competitors have developed products which currently are in clinical trials on
B-cell lymphoma, a disease for which the Company has designed Oncolysin B, its
first product. The Company does not believe that any of these products are
being developed for the treatment of patients in remission with minimal
residual disease. Competitors have initiated clinical trials of modified
monoclonal antibodies for the treatment of acute myelogenous leukemia, the
disease for which Oncolysin M has been designed. Competitors also have begun
clinical trials of monoclonal antibody-based products for the treatment of
small-cell lung cancer which could compete with Oncolysin S, although none are
known by the Company to be directed at the treatment of minimal residual
disease. The Company also is aware of competitors developing
monoclonal-antibody based products to purge cancer cells ex vivo, which may
compete with the ex vivo use of Oncolysin B or Oncolysin M or which may be used
to perfuse organs before transplant, and so may compete with the organ
transplant indication of Oncolysin CD6.
Technologies other than those involving monoclonal antibodies can be applied to
the treatment of cancer. The application of recombinant DNA technology to
develop potential products made of proteins that occur normally in the body in
small amounts has been underway for some time. Included in this group are
Interleukin-2, the interferons, tumor necrosis factor, colony stimulating
factors and a number of other biological response modifiers. The Company
believes that these products offer only limited competition for ImmunoGen's
anticancer products.
Continuing development of conventional chemotherapeutics by large
pharmaceutical companies carries with it the potential for discovery of an
agent active against resistant forms of non-Hodgkin's lymphoma, acute and
chronic lymphocytic leukemia, acute myelogenous leukemia and small-cell lung
cancer -- the markets upon which the Company has focused. The Company is not
aware of the development of any experimental agents which are targeted
specifically for these markets, although many companies do not publish or
otherwise distribute information about their products under development.
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The technology of the Company's subsidiary, ATI, also is highly competitive.
ATI is expected to face competition from other biotechnological approaches as
well as more traditional, drug-based approaches to cancer and viral diseases.
ATI will experience competition from fully integrated pharmaceutical companies
with expertise in research and development, manufacturing and product
commercialization, and which have greater resources in these areas than ATI.
The Company also is aware of numerous development-stage companies that are
exploring new therapies for the same disease targets as ATI.
REGULATORY ISSUES
ImmunoGen's products are regulated in the United States by FDA in accordance
with the Federal Food, Drug, and Cosmetic Act as well as the Public Health
Service Act. Parenteral monoclonal antibody products are most often considered
biologicals and therefore subject to regulation by the Center for Biologics
Evaluation and Research within FDA. Thus, human clinical trials of a new
product are conducted after submission of an IND application acceptable to FDA
and commercial marketing of that product may occur only after approval of a PLA
and an Establishment License Application ("ELA"). Manufacturing must be
performed in accordance with Good Manufacturing Practices ("GMPs").
The regulatory issues that have potential impact on future marketing of
ImmunoGen products are summarized in the following paragraphs:
CLINICAL TRIALS PROCESS. Before a pharmaceutical product may be sold in the
United States and other countries, clinical trials of the product must be
conducted and the results submitted to the appropriate regulatory agencies for
approval.
In the United States, these clinical trial programs generally involve a
three-phase process. Typically, Phase I trials are conducted in healthy
volunteers to determine the early side-effect profile and the pattern of drug
distribution and metabolism. In Phase II, trials are conducted in groups of
patients afflicted with the target disease to determine preliminary efficacy
and optimal dosages and to expand the safety profile. In Phase III,
large-scale comparative trials are conducted in patients with the target
disease to provide sufficient data for the proof of efficacy and safety
required by federal regulatory agencies. In the case of drugs for cancer and
other life-threatening diseases, Phase I human testing is performed in patients
with advanced disease rather than in healthy volunteers. Because these
patients are already afflicted with the target disease, it is possible for such
studies to provide results traditionally obtained in Phase II trials and they
often are referred to as Phase I/II studies.
The Company also will be subject to widely varying foreign regulations
governing clinical trials and pharmaceutical sales. Whether or not FDA
approval has been obtained, approval of a product by the comparable regulatory
authorities of foreign countries must be obtained prior to the commencement of
marketing of the product in those countries. The approval process varies from
country to country and the time may be longer or shorter than that required for
FDA approval. The Company intends to rely on foreign licensees to obtain
regulatory approvals to market ImmunoGen products in foreign countries.
Regulatory approval often takes a number of years and involves the expenditure
of substantial resources. Approval times also depend on a number of factors,
including the severity of the disease in question, the availability of
alternative treatments and the risks and benefits demonstrated in clinical
trials.
ORPHAN DRUG DESIGNATION. The Orphan Drug Act of 1983 generally provides
incentives to manufacturers to undertake development and marketing of products
to treat relatively rare diseases or diseases affecting fewer than 200,000
persons in the United States at the time of application for Orphan
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Drug designation. Orphan Drug designation has been granted for Oncolysin B,
Oncolysin S, Oncolysin M and Oncolysin CD6.
ImmunoGen will continue to pursue this designation with respect to all of its
products intended for qualifying patient populations. A drug that receives
Orphan Drug designation and is the first product to receive FDA marketing
approval for its product claim is entitled to a seven-year exclusive marketing
period in the United States for that product claim. However, a drug that is
considered by the FDA to be different from a particular Orphan Drug is not
barred from sale in the United States during such seven-year exclusive
marketing period.
TREATMENT IND STATUS. ImmunoGen may file for Treatment IND status for some
indications under provisions of the IND regulations revised in 1987. These
regulations apply to products for patients with serious or life-threatening
diseases and are intended to facilitate the availability of new products to
desperately ill patients after clinical trials have shown convincing evidence
of efficacy, but before general marketing approval has been granted by FDA.
Under these regulations, the Company anticipates that it will be in a position
to recover some of the costs of research, development and manufacture of its
products before marketing begins.
DRUGS FOR LIFE-THREATENING ILLNESSES. FDA regulations issued in October 1988
are intended to speed the availability of new therapies to desperately ill
patients. These procedures permit early consultation and commitment from FDA
regarding preclinical and clinical studies necessary to gain marketing
approval. Additional FDA regulations issued in December 1992 define
opportunities for accelerated review and approval of therapies for serious or
life-threatening illnesses. Guidelines for FDA accelerated review, articulated
in November 1991 by the President's Council on Competitiveness, state that by
1994 such reviews should be made within six months. The Company believes that
certain applications for its products qualify for accelerated review.
RESEARCH AND DEVELOPMENT SPENDING
During each of the three years ended June 30, 1993, 1994 and 1995 the Company
spent approximately $17.1 million, $19.9 million and $16.8 million,
respectively, on research and development activities. Most of these
expenditures were for Company-sponsored research and development.
EMPLOYEES
As of June 30, 1995, the Company had 76 full-time employees, of whom 21 hold
Ph.D. or M.D. degrees. The Company considers its relations with its employees
to be good and has experienced a low rate of employee attrition relative to
other companies in the industry. None of the Company's employees is covered by
a collective bargaining agreement. The Company has entered into confidentiality
agreements with all of its employees, members of the Scientific Advisory Board
and other consultants.
SCIENTIFIC ADVISORY BOARDS
IMMUNOGEN, INC.
At June 30, 1995 the members of the Company's Scientific Advisory Board were as
follows:
Baruj Benacerraf, M.D. Chairman of the Scientific Advisory Board; President,
Dana-Farber, Inc. and Fabyan Professor of Comparative Pathology, Emeritus,
Harvard University Medical School; 1980 Nobel Prize in Physiology or Medicine.
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Emil Frei, III, M.D. Physician-in-Chief, Emeritus, and Chief, Division of
Cancer Pharmacology, Dana-Farber Cancer Institute and Richard and Susan Smith
Professor of Medicine, Harvard University Medical School; 1983 Kettering Prize.
Stuart F. Schlossman, M.D. Professor of Medicine, Harvard University Medical
School; member of the National Academy of Sciences; Head of the Division of
Tumor Immunology of Dana-Farber Cancer Institute.
APOPTOSIS TECHNOLOGY, INC.
Paul J. Anderson, M.D., Ph.D. Assistant Professor of Medicine, Harvard
University Medical School; Associate Rheumatologist, Brigham & Women's
Hospital; associated with Dana-Farber Cancer Institute since 1986. Dr. Anderson
has received numerous awards for excellence in research, and is a member of the
American Association of Immunologists and a Fellow of the American College of
Rheumatology.
Walter A. Blattler, Ph.D. Vice President of Research, ATI and Chairman of the
ATI Scientific Advisory Board. Dr. Blattler received his Ph.D. from the Swiss
Federal Institute of Technology (ETH) in Zurich in 1978. He was the founding
scientist of ImmunoGen, Inc. and currently serves as ImmunoGen's Vice President
for Research.
Gerard Evan, Ph.D. Principal Scientist and Head of Biochemistry of the Cell
Nucleus Laboratory, Imperial Cancer Research Fund. Dr. Evan received his Ph.D.
from the University of Cambridge and MRC Laboratory of Molecular Biology and is
an authority on the control of cellular proliferation and programmed cell death
in mammalian cells.
Elliott D. Kieff, M.D., Ph.D., Professor of Medicine and Professor of
Microbiology and Molecular Genetics, Harvard University Medical School;
Director of Infectious Diseases, Brigham and Women's Hospital; Chairman of
Virology at Harvard University and an authority on herpes viruses.
Stuart F. Schlossman, M.D. Professor of Medicine, Harvard University Medical
School; member of the National Academy of Sciences; Head of the Division of
Tumor Immunology of Dana-Farber Cancer Institute.
ITEM 2. PROPERTIES
ImmunoGen leases approximately 52,700 square feet of laboratory and office
space at two locations in Cambridge, Massachusetts, of which approximately
30,800 square feet has been subleased by the Company as of September 1, 1995.
The Company also leases 27,500 square feet of space in Norwood, Massachusetts,
which is currently the Company's pilot manufacturing facility, and 47,000
square feet of space in Canton, Massachusetts, which have been idle since the
Company implemented its restructuring plan in December 1994. The Company
believes that the manufacturing portion of each of the Norwood and Canton
facilities, although not yet inspected by the FDA, complies with all applicable
FDA Good Manufacturing Practice Regulations.
ITEM 3. LEGAL PROCEEDINGS
Not applicable.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
DIRECTORS AND EXECUTIVE OFFICERS
See Item 10 below.
PART II
ITEM 5. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
ImmunoGen's Common Stock is traded in the over-the-counter market and is quoted
in the Nasdaq National Market System under the symbol IMGN. The table below
sets forth the high and low sale prices for ImmunoGen Common Stock for each of
the quarters indicated during the Company's last two fiscal years.
Fiscal Year 1995 HIGH LOW
First Quarter 5 1/8 2 5/8
Second Quarter 5 1 7/8
Third Quarter 2 23/32 1 3/4
Fourth Quarter 4 1 3/4
Fiscal Year 1994 HIGH LOW
First Quarter 8 5 1/4
Second Quarter 11 7 1/4
Third Quarter 9 3/4 5 1/2
Fourth Quarter 6 3 1/2
As of June 30, 1995, there were approximately 729 holders of record of the
Company's Common Stock and, according to the Company's estimates, approximately
9,500 beneficial owners of the Company's Common Stock.
The Company has not paid any cash dividends on its Common Stock since its
inception and does not intend to pay any cash dividends in the foreseeable
future.
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ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth consolidated financial data with respect to the
Company for each of the five years in the period ended June 30, 1995. The
information set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and related notes included elsewhere in
this 10-K report.
Year Ended June 30,
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1991 1992 1993 1994 1995
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(in thousands, except per share data)
Total revenues $ 3,368 $ 2,770 $ 1,658 $ 926 $ 512
Total expenses 12,112 18,074 20,274 24,606 20,363
Net loss (8,814) (15,344) (18,634) (23,690) (19,857)
Loss per share
of common stock (1.28) (1.58) (1.76) (2.09) (1.58)
Total assets 44,422 62,036 46,458 38,384 17,046
Capital lease obligations,
less current portion 648 551 1,212 3,338 2,331
Stockholders' equity 41,988 59,080 40,540 29,960 10,123
Weighted average
shares outstanding 6,882,852 9,702,988 10,617,109 11,332,194 12,571,134
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Since its inception, ImmunoGen has been primarily engaged in research and
development of immunoconjugate products which it believes have significant
commercial potential as human therapeutics. The major sources of the Company's
working capital have been the proceeds of equity financings, license fees and
income earned on the investment of those funds.
In an action to reduce costs, the Company in December 1994 implemented a
restructuring plan, suspending its operations at its Canton and Norwood,
Massachusetts production facilities, reducing or eliminating certain areas of
research and focusing its clinical efforts on its first product. This plan
resulted in the termination of approximately 100 employees and affected all
functional areas within the Company. Restructuring charges approximating
$643,000 were charged to expense in December 1994 representing severance costs
for terminated employees. As of June 30, 1995 all costs related to the plan
had been paid.
In a further cost reduction effort, the Company entered into an agreement
effective September 1, 1995 to sublease approximately 82% of one of its
Cambridge, Massachusetts facilities. The initial term of this agreement
expires in February 1997 (with two one-year renewal options).
The Company has been unprofitable since inception and incurred net operating
losses of $18.6 million in fiscal 1993, $23.7 million in fiscal 1994 and $19.9
million in fiscal 1995. The Company expects to incur net losses over the next
several years.
RESULTS OF OPERATIONS
Revenues in fiscal 1993, 1994 and 1995 were derived principally from interest
income on the proceeds of the Company's equity offerings. Smaller amounts of
development revenues were received under the Small Business Innovative Research
Program of the U.S. National Science Foundation and under the Orphan Product
Development Program of the U.S. Department of Health and Human Services. In
addition, a gain on sale of assets which resulted from a sale/leaseback
agreement executed in March 1994 has been deferred and is being recorded as
other income over the life of the lease.
Interest income decreased 44% from approximately $1.5 million in fiscal 1993 to
approximately $0.8 million in fiscal 1994 and then decreased 45% to
approximately $0.5 million in fiscal 1995. These decreases are attributable to
the lower cash balances available for investment between these periods.
The Company's total expenses increased 21% from approximately $20.3 million in
fiscal 1993 to approximately $24.6 million in fiscal 1994 and then decreased
17% to approximately $20.4 million in fiscal 1995. Research and development
costs constituted the primary component of the Company's total expenses (84%,
81% and 83% in fiscal 1993, 1994 and 1995, respectively) increasing from
approximately $17.1 million in fiscal 1993 to approximately $19.9 million in
fiscal 1994 and then decreasing to approximately $16.8 million in fiscal 1995.
The 17% increase between fiscal 1993 and fiscal 1994 resulted largely from
continued expansion of the Company's medical affairs department to support
ongoing clinical trials, full-year operations of the Company's 72%-owned
subsidiary, Apoptosis Technology, Inc. ("ATI"), commencement of operations at
the Company's Canton, Massachusetts facility and certain facilities costs of
the Company's new Cambridge, Massachusetts facility allocated to research
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and development. The 16% decrease between fiscal 1994 and fiscal 1995 is the
result of the Company's restructuring plan implemented in December 1994, offset
somewhat by increased costs associated with ATI and increased non-cash
depreciation charges associated with the capital expenditures made in prior
periods. A planned substantial reduction in raw materials purchases in fiscal
1995 also contributed to the decrease in expenses.
General and administrative expenses increased 43% from approximately $3.1
million in fiscal 1993 to approximately $4.5 million in fiscal 1994 and then
decreased 33% to approximately $3.0 million in fiscal 1995. Increases from
fiscal 1993 to fiscal 1994 were due largely to the facilities costs associated
with the new Cambridge facility allocated to administration, increases in the
Company's management information services and business development efforts,
increased director and officer liability insurance costs and severance costs to
one of the Company's former senior executives. Decreases from fiscal 1994 to
fiscal 1995 represented savings associated with the restructuring plan and
reductions in management and administrative staff in the second and third
quarters of calendar 1994, offset somewhat by the restructuring charges
incurred.
Interest expense increased 167% from approximately $65,000 in fiscal 1993 to
approximately $174,000 in fiscal 1994 and increased 193% to approximately
$510,000 in fiscal 1995 as the Company utilized capital lease arrangements to
finance certain equipment and leasehold improvements at its Canton production
facility.
LIQUIDITY AND CAPITAL RESOURCES
Since July 1, 1992 the Company has financed its operating deficit of $62.2
million from various sources, including net proceeds of $13.0 million raised in
its fiscal 1994 public offering and from the exercise of stock options. Since
July 1, 1992 the Company has received approximately $0.2 million from
development and licensing revenues and $2.8 million of interest income. At
June 30, 1995 approximately $3.0 million of cash and cash equivalents remained
available.
In February 1994 the Company sold in a public offering 2,012,500 shares of its
common stock. Net proceeds to the Company amounted to $13,242,250. In March
1994 the Company executed a sale/leaseback agreement to finance approximately
$4.0 million of equipment at the Canton facility. At June 30, 1994 all monies
available under this agreement had been received. The transaction included
warrants to purchase common stock which expire in April 1999.
In August 1995 the Company issued $3.6 million of subordinated convertible
debentures, due July 31, 1996, in a private placement to a small number of
foreign investors. Net proceeds to the Company amounted to approximately $3.3
million. Subject to certain restrictions, the debentures are convertible to
common stock, at the holders' discretion, at any time between October 1995 and
July 1996.
In the period since July 1, 1992 approximately $16.3 million was expended on
property and equipment, including the equipment sold and leased back,
principally for construction of the Company's manufacturing facilities in
Norwood, Massachusetts. No significant amounts are expected to be expended on
property and equipment in fiscal 1996.
Pursuant to its agreements with ATI, the Company committed to provide ATI with
$3.0 million in research and development services and $2.0 million of cash
equity contributions. At June 30, 1995 these obligations had been fulfilled by
the Company. ImmunoGen has also agreed to obtain or furnish an additional $3.0
million in equity for ATI on such terms and conditions as may be mutually
agreed to by
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23
ATI and the providers of such additional equity. The Company anticipates that
approximately $650,000 of funding may be required by ATI during calendar year
1996 in order for ATI to satisfy certain contractual obligations.
The Company anticipates that its existing capital resources will enable it to
maintain its current and planned operations through January 1996. Because of
its continuing losses from operations and working capital deficit, the Company
will be required to obtain additional capital to satisfy its ongoing capital
needs and to continue its operations. Although managment continues to pursue
additional funding arrangements, no assurance can be given that such financing
will in fact be available to the Company. If the Company is unable to obtain
financing on acceptable terms in order to maintain operations through the next
fiscal year, it could be forced to curtail or discontinue its operations.
23
24
ITEM 8. FINANCIAL STATEMENTS
Index to Consolidated Financial Statements
Page
- ----------------------------------------------------------------------------
Report of Independent Accountants 25
Consolidated Financial Statements:
Consolidated Balance Sheets at June 30, 1994 and 1995 26
Consolidated Statements of Operations for the Years
Ended June 30, 1993, 1994 and 1995 27
Consolidated Statements of Stockholders' Equity
for the Years Ended June 30, 1993, 1994 and 1995 28
Consolidated Statements of Cash Flows for the Years
Ended June 30, 1993, 1994 and 1995 29
Notes to Consolidated Financial Statements 30
24
25
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF IMMUNOGEN, INC.:
We have audited the accompanying consolidated balance sheets of ImmunoGen, Inc.
as of June 30, 1994 and 1995, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended June 30, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of ImmunoGen, Inc.
as of June 30, 1994 and 1995 and the consolidated results of its operations and
its cash flows for each of the three years in the period ended June 30, 1995,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A, the Company
has suffered recurring losses from operations, has a net working capital
deficit and requires significant additional financing. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note A.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/Coopers & Lybrand L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 1, 1995
26
IMMUNOGEN, INC.
CONSOLIDATED BALANCE SHEETS
As of June 30, 1994 and 1995
June 30,
------------------------------------
1994 1995
- ----------------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 1,572,389 $ 3,047,236
Marketable securities 19,629,177 -
Other current assets 629,809 293,852
------------------------------------
Total current assets 21,831,375 3,341,088
------------------------------------
Property and equipment, net of accumulated
depreciation (Notes E and H) 16,468,761 13,621,383
Other assets 83,700 83,700
------------------------------------
Total assets $ 38,383,836 $ 17,046,171
====================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable (Note D) 2,209,151 2,229,003
Accrued compensation (Note K) 936,914 316,973
Other accrued liabilities (Note D) 929,978 978,253
Current portion of capital lease obligations (Note H) 828,954 942,749
------------------------------------
Total current liabilities 4,904,997 4,466,978
------------------------------------
Capital lease obligations (Note H) 3,337,932 2,330,680
Other non-current liabilities (Note H) 181,067 125,354
Commitments (Notes D and H)
Redeemable convertible preferred stock,
$.01 par value; authorized 277,080 shares;
none issued (Note G) - -
Stockholders' equity (Note G):
Common stock, $.01 par value; authorized
20,000,000 shares; issued and outstanding
12,554,731 and, 12,578,606 shares as of
June 30, 1994 and 1995, respectively 125,547 125,786
Additional paid-in capital 118,968,588 118,988,736
------------------------------------
119,094,135 119,114,522
Accumulated deficit (89,134,295) (108,991,363)
------------------------------------
Total stockholders' equity 29,959,840 10,123,159
------------------------------------
Total liabilities and stockholders' equity $ 38,383,836 $ 17,046,171
====================================
The accompanying notes are an integral part of the financial statements.
26
27
IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended June 30, 1993, 1994 and 1995
June 30,
-------------------------------------------------------
1993 1994 1995
- ------------------------------------------------------------------------------------------------
Revenues:
Development fees (Note D) $ 158,810 $ 74,700
Interest 1,486,852 839,005 $ 459,293
Other (Note D) 12,554 12,504 52,571
-------------------------------------------------------
Total revenues 1,658,216 926,209 511,864
-------------------------------------------------------
Expenses:
Research and development (Note D) 17,067,162 19,929,474 16,819,082
General and administrative 3,141,512 4,502,259 3,034,087
Interest (Note H) 65,188 173,867 509,700
-------------------------------------------------------
Total expenses 20,273,862 24,605,600 20,362,869
-------------------------------------------------------
Loss before income taxes (18,615,646) (23,679,391) (19,851,005)
Income tax expense (Note F) 18,214 11,075 6,063
-------------------------------------------------------
Net loss $(18,633,860) $(23,690,466) $(19,857,068)
=======================================================
Loss per common share (Note C) $ (1.76) $ (2.09) $ (1.58)
=======================================================
Shares used in computing loss
per share amounts (Note C) 10,617,109 11,332,194 12,571,134
=======================================================
The accompanying notes are an integral part of the financial statements.
27
28
IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY
For the years ended June 30, 1993,
1994 and 1995
Common Stock
-------------------------------------
Additional Total
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
--------------------------------------------------------------------
Balance at June 30, 1992 10,394,695 $103,947 $105,786,115 $ (46,809,969) $ 59,080,093
--------------------------------------------------------------------
Issuance of common stock 104,098 1,041 92,871 - 93,912
Net loss for the year ended June 30, 1993 - - - (18,633,860) (18,633,860)
--------------------------------------------------------------------
Balance at June 30, 1993 10,498,793 104,988 105,878,986 (65,443,829) 40,540,145
--------------------------------------------------------------------
Issuance of common stock 2,055,938 20,559 13,012,864 - 13,033,423
Issuance of common stock warrants 76,738 76,738
Net loss for the year ended June 30, 1994 - - - (23,690,466) (23,690,466)
--------------------------------------------------------------------
Balance at June 30, 1994 12,554,731 125,547 118,968,588 (89,134,295) 29,959,840
--------------------------------------------------------------------
Stock options excercised 23,875 239 20,148 - 20,387
Net loss for the year ended June 30, 1995 - - - (19,857,068) (19,857,068)
--------------------------------------------------------------------
Balance at June 30, 1995 12,578,606 $125,786 $118,988,736 $(108,991,363) $ 10,123,159
====================================================================
The accompanying notes are an integral part of the financial statements.
28
29
IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended June 30, 1993, 1994 and 1995
June 30,
----------------------------------------------------
1993 1994 1995
----------------------------------------------------
Cash flows from operating activities:
Net loss $ (18,633,860) $(23,690,466) $(19,857,068)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 1,664,750 2,031,477 3,350,685
(Gain)/Loss on sale of property and equipment - 4,888 (15,630)
Changes in operating assets and liabilities:
Other current assets (211,887) 18,988 335,957
Other assets (410,471) 392,015 -
Accounts payable 1,030,736 (566,100) 19,852
Accrued compensation 165,913 531,073 (619,941)
Accrued construction costs 616,816 (616,816) -
Other accrued liabilities 374,204 176,728 48,275
Other non-current liabilities - 250,709 -
----------------------------------------------------
Net cash used for operating activities (15,403,799) (21,467,504) (16,737,870)
----------------------------------------------------
Cash flows from investing activities:
Capital expenditures (8,216,379) (7,628,278) (477,288)
Proceeds from sale of marketable securities 56,960,818 40,967,462 30,505,763
Purchase of marketable securities (62,660,419) (35,685,475) (10,925,635)
----------------------------------------------------
Net cash provided by (used for)
investing activities (13,915,980) (2,346,291) 19,102,840
----------------------------------------------------
Cash flows from financing activities:
Stock issuances, net 93,912 13,033,423 20,387
Proceeds from sale/leaseback transactions 871,417 4,015,330 -
Principal payments on capital lease obligations (97,033) (1,197,999) (910,510)
----------------------------------------------------
Net cash provided by (used for)
financing activities 868,296 15,850,754 (890,123)
----------------------------------------------------
Net change in cash and cash equivalents (28,451,483) (7,963,041) 1,474,847
----------------------------------------------------
Cash and cash equivalents, beginning balance 37,986,913 9,535,430 1,572,389
----------------------------------------------------
Cash and cash equivalents, ending balance $ 9,535,430 $ 1,572,389 $ 3,047,236
====================================================
Supplemental disclosure of cash flow information:
Cash paid for interest $ 65,188 $ 156,669 $ 513,635
====================================================
Cash paid (refunded) for income taxes $ 18,216 $ 12,310 $ (4,390)
====================================================
The accompanying notes are an integral part of the financial statements.
29
30
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. NATURE OF BUSINESS AND PLAN OF OPERATION:
ImmunoGen, Inc. (the "Company") was incorporated in Massachusetts on March 27,
1981. The Company was formed to develop, produce and market commercial cancer
and other pharmaceuticals based on molecular immunology. The Company continues
research and development of its various products, and expects no revenues to be
derived from product sales in the near future.
In an action to reduce costs, the Company in December 1994 implemented a
restructuring plan, suspending its operations at its Canton and Norwood,
Massachusetts production facilities (with a net book value of approximately
$8.8 million), reducing or eliminating certain areas of research and focusing
its clinical efforts on certain products. This plan resulted in the
termination of approximately 100 employees and affected all functional areas
within the Company. Restructuring charges approximating $643,000 were charged
to expense in December 1994 representing severance costs for terminated
employees. As of June 30, 1995 all severance costs have been paid.
In a further reduction effort, the Company entered into an agreement effective
September 1, 1995 to sublease approximately 82% of one of its Cambridge,
Massachusetts facilities. This initial lease term expires in February 1997,
with two one-year renewal options.
In August 1995 the Company issued $3.6 million of 7% subordinated convertible
debentures, due July 31, 1996, in a private placement to a small number of
overseas investors. Subject to certain restrictions, the debentures are
convertible to common stock, at the holders' discretion at any time between
October 1995 and July 1996.
Because of its continuing losses from operations and working capital deficit,
the Company will be required to obtain additional capital in the short term to
satisfy its ongoing capital needs and to continue its operations. Although
management continues to pursue additional funding arrangements and/or strategic
partnering, no assurance can be given that such financing will in fact be
available to the Company. If the Company is unable to obtain financing on
acceptable terms in order to maintain operations through the next fiscal year,
it could be forced to curtail or discontinue its operations. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary, ImmunoGen Securities Corp. (established in
December 1989), and its 72%-owned subsidiary, Apoptosis Technology, Inc.
("ATI") (established in January 1993) (see Note D). All intercompany activity
has been eliminated.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs are expensed as incurred.
30
31
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
The Company considers all investments purchased with maturity dates of three
months or less from date of acquisition to be cash equivalents.
Cash and cash equivalents include, at cost plus accrued interest which
approximates market value, $1,572,389 and $3,047,236 of money market funds,
demand notes and repurchase agreements at June 30, 1994 and 1995, respectively.
As of June 30, 1994, marketable securities, consisting primarily of U.S.
Government debt securities of approximately $19.6 million, were carried at
amortized cost which approximates market value.
In fiscal 1995 the Company implemented Financial Accounting Standard (SFAS) No.
115, "Accounting for Certain Investments in Debt and Equity Securities." The
impact was immaterial to its financial position and results of operations.
CONCENTRATION OF CREDIT RISK
The Company minimizes the risk associated with concentration of credit by
utilizing the services of more than one custodian for its cash and assuring
that financial instruments purchased by its cash managers include only
high-grade, low-risk investments. At June 30, 1994 and 1995, those investments
included various U.S. Government securities, money market investments with
major financial institutions and cash on deposit with major banks.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. The Company provides for
depreciation based upon expected useful lives using the straight-line method
over the following estimated useful lives:
Machinery and equipment................. 3-5 years
Computer hardware and software.......... 5 years
Furniture and fixtures.................. 5 years
Leasehold improvements.................. Shorter of lease term or
estimated useful life
Maintenance and repairs are charged to expense as incurred. Upon retirement or
sale, the cost of disposed assets and the related accumulated depreciation are
removed from the accounts and any resulting gain or loss is credited or charged
to operations. Gains recorded under sale/leaseback arrangements are deferred
and amortized to operations over the life of the lease.
INCOME TAXES
The Company uses the liability method whereby the deferred tax liabilities and
assets are recognized based on temporary differences between the financial
statement and tax basis of assets and liabilities using current statutory tax
rates. A valuation allowance against net deferred tax assets is recorded if,
31
32
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
based on the weighted available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized.
C. LOSS PER COMMON SHARE:
Net loss per common share is based on the weighted average number of common
shares outstanding during the periods. Common share equivalents have not been
included because their effect would be anti-dilutive. Fully diluted earnings
per share are the same as primary earnings per share.
D. AGREEMENTS:
The Company has a long-standing research and license agreement with the
Dana-Farber Cancer Institute, Inc. ("Dana-Farber"), a Massachusetts
not-for-profit corporation. As part of the agreement, the Company has agreed
to fund certain research and development projects conducted by Dana-Farber in
relation to the development and eventual commercialization of certain
biologicals to be used in the treatment of certain forms of cancer. In fiscal
years 1993, 1994 and 1995 the Company incurred research and development
expenses of approximately $825,000, $567,000 and $225,000 respectively, in
connection with this agreement. To the extent that an invention is developed
at Dana-Farber with principal support and funding by the Company, the Company
shall have the exclusive right to use the invention. As part of this
arrangement, the Company is required to pay to Dana-Farber, when product sales
commence, certain royalties based on a formula stipulated in the agreement.
The Company owed Dana-Farber approximately $1,207,000 and $1,169,000 at June
30, 1994 and 1995, respectively, for work performed under this agreement.
The agreement also contains provisions, which expired in June 1994, whereby
Dana-Farber is required to pay to the Company a percentage of royalties
received by Dana-Farber in consideration for the Company's consulting in
connection with the identification of a commercial entity through which
Dana-Farber can develop and market certain antibodies of its own. The Company
earned royalties under these provisions of approximately $13,000 in each of
fiscal years 1993 and 1994.
In January 1993, the Company purchased 7,000 shares of Class A Preferred Stock
of ATI. ATI is a joint venture between ImmunoGen and Dana-Farber established
to develop therapeutics based on apoptosis technology developed at Dana-Farber.
ATI is the licensee of Dana-Farber's apoptosis technology. Under an agreement
entered into between ATI and ImmunoGen, subject to certain provisions of the
agreement between ATI and Dana-Farber, ImmunoGen has the exclusive right to
license products developed by ATI, including those based on Dana-Farber's
apoptosis technology.
The Preferred Stock is voting stock and carries a liquidation preference over
the common stock. The Company's investment represents 72% of the currently
authorized equity of ATI and, accordingly, is consolidated. In addition, the
Company has a right of first refusal to purchase any ATI shares which may be
offered for sale by the other current stockholders of ATI. If ATI has not
concluded a public offering of its stock for at least $5.0 million prior to
January 11, 1998, the other stockholders (currently representing 2,765 shares
of common stock) of ATI can require ImmunoGen to purchase, or ImmunoGen can
require such stockholders to sell, their shares in ATI at a predetermined
price. At ImmunoGen's option, the shares of common stock of ATI can be paid
for in cash or by delivery of shares of ImmunoGen common stock.
32
33
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
A portion of the Company's research and development expenses was incurred in
connection with an agreement between ATI and Dana-Farber, under which ATI has
agreed to fund certain research projects conducted at Dana-Farber. In fiscal
1993, 1994 and 1995 these expenses amounted to approximately $273,000, $530,000
and $670,000, respectively.
ImmunoGen was committed to provide ATI with $3.0 million in research and
development services and $2.0 million in cash equity contributions over a
three-year period. At June 30, 1995 these obligations had been fulfilled by
the Company. ImmunoGen has also agreed to obtain or furnish an additional $3.0
million in equity for ATI on such terms and conditions as may be mutually
agreed to by ATI and the providers of such additional equity.
Development revenues of approximately $159,000 and $75,000 in fiscal 1993 and
1994, respectively, represent payments received under the Small Business
Innovative Research Program of the U.S. National Science Foundation and under
the Orphan Product Development Program of the U.S. Department of Health and
Human Services.
E. PROPERTY AND EQUIPMENT:
Property and equipment consisted of the following at June 30, 1994 and 1995:
June 30,
-----------------------------
1994 1995
-----------------------------
Machinery and equipment $ 6,621,985 $ 6,760,500
Computer hardware and software 1,051,855 1,063,883
Furniture and fixtures 139,569 136,722
Leasehold improvements 15,641,540 15,889,963
----------- -----------
23,454,949 23,851,068
Less accumulated depreciation
and amortization 6,986,188 10,229,685
----------- -----------
$16,468,761 $13,621,383
=========== ===========
Depreciation and amortization expense was $1,349,580, $2,043,537 and $3,284,583
for the years ended June 30, 1993, 1994 and 1995, respectively.
Maintenance and repair expense was approximately $135,000, $229,000 and
$173,000 for fiscal years 1993, 1994 and 1995, respectively.
33
34
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
F. INCOME TAXES:
No income tax provision or benefit has been provided for U.S. federal income
tax purposes as the Company has incurred losses since inception. As of June
30, 1995 net deferred tax assets totaled approximately $40.0 million consisting
of federal net operating loss carryforwards of approximately $102.0 million and
approximately $4.0 million of research and experimentation credit
carryforwards. These net operating loss and credit carryforwards will expire
at various dates between 1996 and 2010 and may be subject to limitation when
used due to certain changes in ownership of the Company's capital stock. Due
to the uncertainty surrounding the realization of these favorable tax
attributes in future tax returns, the net deferred tax assets of approximately
$38.0 million and $40.0 million at June 30, 1994 and June 30, 1995,
respectively, have been fully offset by a valuation allowance. Income tax
expense consists primarily of state income taxes levied on the interest income
of the Company's wholly-owned subsidiary, ImmunoGen Securities Corp., at a rate
of 1.32%.
G. CAPITAL STOCK:
COMMON STOCK
On February 2, 1994 the Company sold 1,750,000 shares of common stock in a
public offering. Proceeds to the company before deducting expenses amounted to
$12,250,000. On February 8, 1994 as part of the same public offering, the
Underwriters exercised their over-allotment option to purchase an additional
262,500 shares of common stock. Additional proceeds to the Company totaled
$1,837,500 before deducting offering expenses.
STOCK OPTIONS
Under the Company's Restated Stock Option Plan (the "Stock Option Plan")
originally adopted by the Board of Directors on February 13, 1986, and
subsequently amended and restated, employees, consultants, and directors may be
granted options to purchase up to 2,400,000 shares of common stock of the
Company. Prior to June 7, 1994, 1,700,000 shares of Common Stock were
reserved for the grant of options under the Plan. On June 7, 1994, the Board
of Directors authorized, and the shareholders subsequently approved, an
amendment to the Plan to increase the number of shares reserved for the grant
of options to 2,400,000 shares of Common Stock.
34
35
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Information related to stock option activity under the Stock Option Plan during
fiscal years 1993, 1994 and 1995 is as follows.
Shares Option Price
--------- --------------
Outstanding at June 30, 1992........ 763,845 $0.67 - 14.75
---------
Granted............................. 647,000 6.75 - 12.00
Exercised........................... 104,098 0.83 - 2.00
Canceled............................ 58,127 2.00 - 14.75
---------
Outstanding at June 30, 1993........ 1,248,620 0.67 - 14.75
---------
Granted............................. 582,200 4.50 - 10.50
Exercised........................... 41,438 0.90 - 2.00
Canceled............................ 205,869 2.00 - 14.75
---------
Outstanding at June 30, 1994........ 1,583,513 0.67 - 14.75
---------
Granted............................. 338,300 1.94 - 4.38
Exercised........................... 10,875 0.90 - 2.00
Canceled............................ 623,572 0.90 - 14.75
---------
Outstanding at June 30, 1995........ 1,287,366 $0.67 - 14.75
=========
In addition to options granted under the Stock Option Plan, the Board
previously has approved the granting of other, non-qualified options. In July
1987 and February 1988, the Company granted non-qualified options for the
purchase of 115,500 and 15,000 shares of common stock at exercise prices of
$0.67 and $0.90 per share, respectively. During 1994 and 1995, options for
2,000 and 13,000 shares were exercised at a price of $0.67 per share. As of
June 30, 1995, options for 19,687 of these shares had been canceled, 32,813 had
been exercised and 78,000 were outstanding and exercisable.
There are a total of 697,632 stock options exercisable under the Company's
stock option plans as of June 30, 1995.
Options vest at various rates over periods up to four years and may be
exercised within ten years from the date of grant.
COMMON STOCK RESERVED
Shares of authorized common stock have been reserved for the exercise of all
options and warrants outstanding.
WARRANTS
In connection with a capital lease financing in March 1994 the Company issued
warrants to purchase 26,738 shares of Common Stock at an exercise price of
$7.48 expiring in April 1999. The value of these warrants, approximating
$77,000, is being recognized as interest expense over the life of the lease.
35
36
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
H. COMMITMENTS:
OPERATING LEASES
At June 30, 1995 the Company is leasing facilities in Cambridge, Norwood and
Canton, Massachusetts. The facilities are rented under four separate lease
arrangements whereby the respective lease terms expire in June 1997 (with a
three-year extension option), September 1997, June 2002 (with an option to
purchase at any time throughout the lease term) and April 2003. The Company is
required to pay all operating expenses for the leased premises subject to
escalation charges for certain expense increases over a base amount. Rent
expense for leased facilities and equipment was approximately $936,000,
$1,186,000 and $913,000 during fiscal years 1993, 1994 and 1995, respectively.
The minimum rental commitments, including real estate taxes, for the next five
years under the lease agreements are as follows:
Fiscal Year Amount
----------- ------
1996.............................. $1,023,814
1997.............................. 1,018,807
1998.............................. 673,929
1999.............................. 675,404
2000.............................. 668,702
CAPITAL LEASES
In fiscal year 1988, the Company, as part of one of its lease agreements,
arranged financing for $989,975 of improvements to one of its leased facilities
through the lessor. The lessor obtained a five-year promissory note with a
bank specifically to finance the improvements to the facility. The promissory
note was amortized over a ten-year period. At the end of the first five years,
the lessor refinanced the unamortized principal due the bank. Interest expense
on the new note is incurred at the rate of 7.50% per annum.
In fiscal 1993 the Company executed a sale/leaseback agreement to finance up to
$4.0 million of equipment costs at its Canton, Massachusetts manufacturing
facility. In October 1993 the Company utilized $0.9 million of the agreement,
subsequently terminated this agreement and the outstanding balance was repaid
in April 1994.
In March 1994 the Company executed a sale/leaseback agreement to finance
approximately $4.0 million of equipment at the Canton, Massachusetts
manufacturing facility. As of June 30, 1994 all funds available under this
agreement had been received. This transaction resulted in a gain on the sale
of the assets which has been deferred and included in other non-current
liabilities. This deferred gain is being amortized as other income over the
life of the lease and amounted to approximately $56,000 in fiscal year 1995.
The transaction also included warrants which expire in April 1999 (see Note G).
The agreement commenced April 1, 1994 and expires in September 1998.
36
37
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Assets recorded under capital leases as of June 30, 1994 and 1995 are included
in property and equipment as follows:
June 30,
---------------------------
1994 1995
---------------------------
Machinery and equipment............. $1,590,510 $1,590,510
Leasehold improvements.............. 3,414,793 3,413,490
Less accumulated depreciation....... 1,032,880 1,727,403
---------- ----------
Net book value...................... $3,972,423 $3,276,597
========== ==========
The future minimum lease payments are as follows:
Fiscal Year Amount
----------- ----------
1996............................................ $1,309,270
1997............................................ 1,309,270
1998............................................ 1,196,674
1999............................................ 193,190
----------
Total future minimum lease payments............. 4,008,404
Less amount representing interest............... 734,975
----------
Present value of minimum lease payments......... 3,273,429
Less current Portion............................ 942,749
----------
Noncurrent portion, minimum lease payments...... $2,330,680
==========
I. RELATED PARTY TRANSACTION:
In April 1991 the Company made a $70,000 loan to one of its executive officers.
The note carried an interest rate of 8.75% and was payable in equal, biweekly
installments over a period of three years. In December 1993, the loan was paid
in full.
J. EMPLOYEE BENEFIT PLANS:
Effective September 1, 1990, the Company implemented a deferred compensation
plan under Section 401(k) of the Internal Revenue Code (the "Plan"). Under the
Plan, eligible employees are permitted to contribute, subject to certain
limitations, up to 15% of their gross salary. The Company makes a matching
contribution which currently totals 20% of the employee's contribution, up to a
maximum amount equal to 1% of the employee's gross salary. In fiscal 1994 and
1995, the Company's contributions to the Plan amounted to $62,000 and $51,000,
respectively.
37
38
K. SEVERANCE AGREEMENTS:
Two of the Company's senior executives terminated their employment in fiscal
1994. At June 30, 1995 all severance costs had been paid to these individuals.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
The section entitled "Election of Directors" in the Company's definitive proxy
statement for its 1995 Annual Meeting of Shareholders, which the Company
intends to file with the Securities and Exchange Commission on or about October
1, 1995, is hereby incorporated by reference.
EXECUTIVE OFFICERS
The following is a list of the executive officers of the Company and their
positions with the Company. Each individual officer serves at the pleasure of
the Board of Directors.
Name Age Positions with the Company
- ---- --- --------------------------
Mitchel Sayare, Ph.D. 47 Chairman of the Board of Directors
and Chief Executive Officer
Frank J. Pocher 54 Vice President, Chief Financial
Officer and Treasurer
Walter A. Blattler, Ph.D. 46 Senior Vice President, Research and Development
Carol A. Gloff, Ph.D. 43 Vice President, Chief Regulatory Officer
The background of these executive officers is as follows:
Mitchel Sayare, Chief Executive Officer and a Director since 1986, joined the
Company in 1986. He served as President from 1986 to July 1992. From 1982 to
1985, Mr. Sayare was an executive at Xenogen, Inc., a biotechnology company
specializing in monoclonal antibody-based diagnostic systems for cancer. As
Vice President for Development at Xenogen, Mr. Sayare was responsible for the
development of several diagnostic kits which were licensed to major
pharmaceutical companies. From 1977 to 1982, Mr. Sayare was Assistant Professor
of Biophysics and Biochemistry at the University of Connecticut. He holds a
Ph.D. in Biochemistry from Temple University School of Medicine.
Frank J. Pocher, Vice President, Chief Financial Officer and Treasurer joined
the Company in November 1988. Prior to joining ImmunoGen, Mr. Pocher was the
Executive Vice President and Chief Financial Officer of Seragen, Inc., a
biotechnology company developing recombinant products for cancer and
transplantation rejection. From 1980 to 1984, Mr. Pocher served as Chief
Financial Officer and then President and Chief Executive Officer of Aviation
Simulation Technology, Inc. Prior to that time, he held a variety of senior
financial positions at General Electric Company and Honeywell, Inc. He holds an
MBA from Rutgers University.
Walter A. Blattler, Ph.D., Senior Vice President, Research and Development,
joined the Company in October 1987. From 1981 to 1987, Dr. Blattler was chief
scientist for the ImmunoGen-supported research program at Dana-Farber
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Cancer Institute, where he managed the work of fourteen other scientists.
Dr. Blattler received his Ph.D. from the Swiss Federal Institute of Technology
in Zurich in 1978.
Carol A. Gloff, Ph.D., Vice President, Chief Regulatory Officer, joined the
Company in November 1993. Prior to joining ImmunoGen, Dr. Gloff held various
positions at Alkermes, Inc., a neuropharmaceutical company developing CNS
therapeutics and diagnostics, including Director of Product Development and
most recently Vice President of Regulatory Affairs. From 1984 to 1990, Dr.
Gloff held a variety of positions at Triton Biosciences, Inc., a biotechnology
firm specializing in recombinant DNA and monoclonal antibody-derived
technologies applied to cancer diagnosis and therapy, most recently as Manager
of Toxicology/Pharmacology. Prior to that time, Dr. Gloff held positions at
Pennwalt Pharmaceuticals and the University of Rochester Medical Center. Dr.
Gloff holds a Ph.D. in Pharmaceutical Chemistry from the University of
California San Francisco.
The section entitled "Compliance with Section 16(a) of the Securities Exchange
Act of 1934" in the Company's definitive proxy statement for its 1995 Annual
Meeting of Shareholders is hereby incorporated by reference.
ITEM 11. EXECUTIVE COMPENSATION
The reports entitled "Summary Compensation Table," "Option Grants in Last
Fiscal Year," "Employment Contracts, Termination of Employment and Change in
Control Agreements" and "Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Values" in the Company's definitive proxy statement for its
1995 Annual Meeting of Shareholders are hereby incorporated by reference.
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section entitled "Principal Shareholders" in the Company's definitive proxy
statement for its 1995 Annual Meeting of Shareholders is hereby incorporated by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The section entitled "Certain Transactions" in the Company's definitive proxy
statement for its 1995 Annual Meeting of Shareholders is hereby incorporated by
reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements
(1) and (2) See "Index to Consolidated Financial Statements and
Supplemental Schedules" at Item 8 of this Annual Report on Form 10-K.
Schedules not included herein are omitted because they are not applicable or
the required information appears in the Consolidated Financial Statements or
Notes thereto.
(3) Exhibits
Exhibit No. Description
----------- -----------
(3.1) Restated Articles of Organization+
(3.2) By-Laws, as amended#
(4.1) Article 4 of the Restated Articles of Organization (See Exhibit 3.1)+
(4.2) Form of Common Stock Certificate*
(10.1) Research and License Agreement dated as of May 22, 1981 by and
between the Registrant and Sidney Farber Cancer Institute, Inc. (now
Dana-Farber Cancer Institute, Inc.) with addenda dated as of August 13,
1987 and August 22, 1989*
(10.3) Amended and Restated Registration Rights Agreement dated as of
December 23, 1988 by and among the Registrant and various beneficial
owners of the Registrant's securities*
(10.4) x Restated Stock Option Plan##
(10.6) x Letter Agreement Regarding Employment dated as of October 14, 1988
between the Registrant and Mr. Frank J. Pocher*
(10.7) x Letter Agreement Regarding Employment dated as of October 1, 1987
between the Registrant and Dr. Walter A. Blattler*
(10.8a)x Letter Agreement Regarding Employment Termination of Dr. Carol L.
Epstein, dated April 16, 1994 as amended May 25 and June 6, 1994###
(10.9) Lease dated June 30, 1987 by and between Edward S. Stimpson, III and
Harry F. Stimpson, III, as trustees, lessor, and the Registrant, lessee1
(10.10) Lease dated as of January 13, 1989 by and between FAR IV Limited
Partnership, lessor, and the Registrant, lessee2
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(10.10a) First Amendment to Lease dated as of February 1, 1990 by and between 60
Hamilton Street Limited Partnership, lessor, and Registrant, lessee3
(10.11) Leases dated as of December 1, 1986 and June 21, 1988 by and between
James H. Mitchell, Trustee of New Providence Realty Trust, lessor, and
Charles River Biotechnical Services, Inc. ("Lessee") together with
Assignment of Leases dated June 29, 1989 between Lessee and
the Registrant4
(10.11a) First Amendment, dated as of May 9, 1991, to Lease dated as of June 21,
1988 by and between James A. Mitchell, Trustee of New Providence Realty
Trust, lessor, and the Registrant5
(10.13c)x Letter Agreement Regarding Compensation of Mitchel Sayare, dated
April 29, 1994###
(10.14a)x Transition Agreement Regarding Employment Termination of Dr.
Donald J. McCarren, dated May 20, 1994###
(10.15) Lease dated as of July 1, 1992 by and between AEW#1 Corporation,
lessor, and the Registrant, lessee++
(10.16) Lease dated as of December 23, 1992 by and between Massachusetts
Institute of Technology, lessor, and the Registrant, lessee##
(10.18) Option Agreement dated April 5, 1990 by and between the Registrant
and Takeda Chemical Industries, Ltd.6
(10.19a)x Separation Agreement regarding employment termination of Robert E.
Tellis dated June 14, 1994 and as amended June 21, 1994###
(10.21) x Letter Agreement Regarding Employment dated September 15, 1993 between
the Registrant and Carol A. Gloff###
(10.22) Capital Lease Agreement dated March 31, 1994 by and between the Registrant
and Aberlyn Capital Management Limited Partnership###
(10.23) Sublease dated as of August 31, 1995 by and between the Registrant, as
landlord, and Astra Research Center Boston, Inc., as tenant
(10.24) Equipment Use and Services Agreement dated as of August 31, 1995 by and
between the Registrant, as landlord, and Astra Research Center Boston,
Inc., as tenant
(10.25) Consent to Sublease and Agreement dated as of August 31, 1995 by and
between Massachusetts Institute of Technology, as lessor, the Registrant,
as sublessor, and Astra Research Center Boston, Inc., as sublessee
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44
(10.26) Amendment to Lease dated August 31, 1995 between Massachusetts Institute
of Technology, as lessor, and the Registrant, as lessee
(10.27) Form of 7% Subordinated Convertible Debenture Due July 31, 1996 and
Schedule of Debenture Holders
(10.28) Form of Offshore Securities Subscription Agreement between the Registrant
and Purchasers of the Debentures.
(21) Subsidiaries of the Registrant
(23) Consent of Coopers & Lybrand.
<FN>
* Previously filed with the Commission as Exhibits to, and incorporated
herein by reference from, the Registrant's Registration Statement on Form S-1,
File No. 33-31219.
+ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference from, the Registrant's Registration Statement on Form S-1,
File No. 33-38883.
++ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference from, the Registrant's annual report on Form 10-K for the
fiscal year ended June 30, 1992.
# Previously filed with the Commission as Exhibits to, and incorporated
herein by reference from, the Registrant's annual report on Form 10-K for the
fiscal year ended June 30, 1990.
## Previously filed with the Commission as Exhibits to, and incorporated
herein by reference from, the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1992.
### Previously filed with the Commission as Exhibits to, and
incorporated herein by reference from the registrant's annual report on Form
10-K in the fiscal year ended June 30, 1994.
1 Previously filed with the Commission as Exhibit No. 10.8 to, and
incorporated herein by reference from, the Registrant's Registration Statement
on Form S-1, File No. 33-31219.
2 Previously filed with the Commission as Exhibit No. 10.9 to, and
incorporated herein by reference from, the Registrant's Registration Statement
on Form S-1, File No. 33-31219.
3 Previously filed with the Commission as Exhibit No. 10.9a to, and
incorporated herein by reference from, the Registrant's Registration Statement
on Form S-1, File No. 33-38883.
4 Previously filed with the Commission as Exhibit No. 10.10 to, and
incorporated herein by reference from, the Registrant's Registration Statement
on Form S-1, File No. 33-31219.
5 Previously filed with the Commission as Exhibit No. 10.10a to, and
incorporated herein by reference from, the Registrant's Registration Statement
on Form S-1, File No. 33-43725, as amended.
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45
6 Previously filed with the Commission as Exhibit No. 10.15 to, and
incorporated herein by reference from, the Registrant's Registration
Statement on Form S-1, File No. 33-38883.
x Exhibit is a management contract or compensatory plan, contract or
arrangement required to be filed as an exhibit to Form 10-K.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter
ended June 30, 1995.
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46
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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.
IMMUNOGEN, INC.
By: /s/Mitchel Sayare
-----------------
Mitchel Sayare
Chairman of the Board and
Chief Executive Officer
Dated: September 28, 1995
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
Signature Title Date
- ----------------------------------------------------------------------------------
/s/ Mitchel Sayare Chairman of the Board of September 28, 1995
- ------------------ Directors and Chief
Mitchel Sayare Executive Officer
(principal executive officer)
/s/ Frank J. Pocher Vice President, Chief September 28, 1995
- ------------------ Financial Officer and
Frank J. Pocher Treasurer (principal
financial officer and
principal accounting
officer)
/s/ Michael Eisenson Director September 28, 1995
- --------------------
Michael Eisenson
/s/ Stuart F. Feiner Director September 28, 1995
- --------------------
Stuart F. Feiner
/s/ Donald E. O'Neill Director September 28, 1995
- ---------------------
Donald E. O'Neill
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INDEX TO EXHIBITS
Exhibit
No. Description
- ------- -----------
10.23 Sublease dated as of August 31, 1995 by and
between the Registrant, as landlord, and
Astra Research Center Boston, Inc., as tenant
10.24 Equipment Use and Services Agreement dated
as of August 31, 1995 by and between the
Registrant, as landlord, and Astra Research
Center Boston, Inc., as tenant
10.25 Consent to Sublease and Agreement dated
as of August 31, 1995 by and between
Massachusetts Institute of Technology, as lessor,
the Registrant, as sublessor, and Astra Research
Center Boston, Inc., as sublessee
10.26 Amendment to Lease dated August 31, 1995
between Massachusetts Institute of Technology,
as lessor, and the Registrant, as lessee
10.27 Form of 7% Subordinated Convertible Debenture
Due July 31, 1996 and Schedule of Debenture Holders
10.28 Form of Offshore Securities Subscription
Agreement between the Registrant and
Purchasers of the Debentures
21 Subsidiaries of the Registrant
23 Consent of Coopers & Lybrand
47