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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to ___________________
Commission File Number 0-19117
IMMULOGIC PHARMACEUTICAL CORPORATION .
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(Exact name of registrant as specified in its charter)
Delaware 13-3397957
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
610 Lincoln Street, Waltham, MA 02154
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 466-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 requirement for the past 90 days.
Yes X No.
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Number of shares of $.01 par value common stock outstanding as of March 31, 1997
20,241,640
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PAGE 1 OF 10
Exhibit Index is on Page 9
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IMMULOGIC PHARMACEUTICAL CORPORATION
INDEX TO FORM 10-Q
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Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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Condensed Consolidated Balance Sheets 3
March 31, 1997 and December 31, 1996
Condensed Consolidated Statements of Operations 4
Three Months Ended March 31, 1997 and 1996
Condensed Consolidated Statements of Cash Flows 5
Three Months Ended March 31, 1997 and 1996
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 7
- ------ Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits 9
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Reports on Form 8-K 9
SIGNATURES 10
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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IMMULOGIC PHARMACEUTICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
March 31, 1997 December 31, 1996
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(Unaudited)
ASSETS
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Current assets:
Cash and cash equivalents $ 14,276 $ 23,742
Short-term investments 34,258 30,881
Prepaid expenses and other current assets 752 625
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Total current assets 49,286 55,248
Property and equipment, net 8,837 8,933
Long-term investments 14,450 15,424
Other assets 49 49
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Total assets $ 72,622 $ 79,654
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LIABILITIESRu
Current liabilities:
Accounts payable $ 706 $ 789
Accrued expenses and other current liabilities 5,861 6,564
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Total current liabilities 6,567 7,353
Long-term liabilities 375 375
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Total liabilities 6,942 7,728
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STOCKHOLDERS' EQUITY
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Preferred stock - $.01 par value;
1,000,000 shares authorized; no shares issued
or outstanding -- --
Common stock-$.01 par value; 40,000,000 shares authorized;
20,241,640 and 20,224,516 shares issued and
outstanding at March 31, 1997 and December 31, 1996,
respectively 202 202
Additional paid-in capital 185,130 185,040
Less deferred compensation -- --
Accumulated deficit (119,652) (113,316)
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Total stockholders' equity 65,680 71,926
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Total liabilities and stockholders' equity $72,622 $ 79,654
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The accompanying notes are an integral part of the condensed consolidated
financial statements.
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IMMULOGIC PHARMACEUTICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share date)
Three Months Ended March 31,
1997 1996
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Revenues:
License and research revenues $ 552 $ 625
Operating expenses:
Research and development 4,891 6,107
General and administrative 2,888 1,468
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Total operating expenses 7,779 7,575
Operating loss (7,227) (6,950)
Interest income 891 1,271
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Net loss $(6,336) $(5,679)
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Net loss per common share $ (0.31) $ (0.28)
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Weighted average number of
common shares outstanding 20,234 20,172
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The accompanying notes are an integral part of the condensed consolidated
financial statements.
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IMMULOGIC PHARMACEUTICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended March 31,
1997 1996
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Operating activities:
Net loss $(6,336) $(5,679)
Depreciation and amortization 657 653
Non-cash employee benefit payments 86 71
Other (912) (119)
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Net cash provided by (used in) operating activities (6,505) (5,074)
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Investing activities:
Purchase of equipment and leasehold improvements (563) (225)
Net change in short-term investments (3,377) 11,336
Net change in long-term investments 974 (119)
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Net cash provided by (used in) investing activities (2,966) 10,992
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Financing activities:
Issuance of common stock -- --
Exercise of common stock options 5 855
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Net cash provided by financing activities 5 855
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Net increase (decrease) in cash and cash equivalents (9,466) 6,773
Cash and cash equivalents, beginning of period 23,742 19,067
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Cash and cash equivalents, end of period $14,276 $25,840
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The accompanying notes are an integral part of the condensed consolidated
financial statements.
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IMMULOGIC PHARMACEUTICAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
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The accompanying unaudited condensed consolidated financial statements reflect
all adjustments which are necessary, in the opinion of management, for a fair
presentation of results of the interim periods presented. The statements do not
include all information and footnote disclosures required by generally accepted
accounting principles and therefore should be read in conjunction with the
consolidated financial statements and footnotes included in the Company's 1996
Annual Report. The results of operations for the interim periods presented are
not necessarily indicative of the results of operations for the full fiscal
year.
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Item 2.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
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Revenues for the first quarter of 1997 were $552,000, consisting of sponsored
research funding from Schering AG, Germany (Schering AG) under a joint
collaboration agreement for the Company's multiple sclerosis program, sponsored
bioassay research funding from Hoechst Marion Roussel, Inc., and government
grant revenue from the National Institutes of Health. Revenues were $625,000 for
the first quarter of 1996, which consisted solely of sponsored research funding
from Schering AG.
Total operating expenses for the first quarter of 1997 were $7,779,000, an
increase of $204,000 or 2.7% from the first quarter of 1996. Research and
development expenses were $4,891,000 for the first quarter of 1997, a decrease
of $1,216,000 or 19.9% from the first quarter of 1996. The decrease in
research and development expenses was due primarily to reduced material-related
manufacturing expenses and clinical trial expenses. General and administrative
expenses were $2,888,000 for the first quarter of 1997, an increase of
$1,420,000 or 96.7% from the first quarter of 1996, which was primarily due to
severance agreements with executive officers, including the Company's former
Chairman of the Board.
Interest income for the first quarter of 1997 was $891,000 compared to
$1,271,000 in the first quarter of 1996. The decrease of $380,000 was due to a
lower investable cash balance.
The Company reported a net loss of $6,336,000 ($(0.31) per share) for the first
quarter of 1997 compared to a net loss of $5,679,000 ($(0.28) per share) for the
first quarter of 1996. The increase in net loss was primarily due to the
increase in general and administrative expenses, the decrease in interest
income, and the decrease in revenues.
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Liquidity and Capital Resources
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At March 31, 1997, the Company had $42,719,000 of working capital, consisting
primarily of cash and cash equivalents and short-term investments, compared to
$47,895,000 at December 31, 1996. In addition, the Company had $14,450,000 in
long-term investments at March 31, 1997 compared to $15,424,000 at December 31,
1996. The net decrease in working capital and long-term investments resulted
primarily from cash used in operations of $6,505,000 and capital expenditures of
$563,000, offset by cash received from employee stock option exercises of
$5,000.
The Company expects to incur losses for at least a number of years as the
Company's research, development, and clinical trial programs expand. ImmuLogic
has funded its operations to date primarily through the sale of equity
securities, sponsored research revenues, license payments, and earnings on
invested capital. The Company has expended substantial funds for the research
and development of its products, and will in the future expend substantial funds
for further research and development, establishment of commercial-scale
manufacturing capabilities, and the marketing of its products. The Company will
seek to obtain additional funds for these purposes through equity or debt
financings, collaborative arrangements with corporate partners, or from other
sources. No assurance can be given that such additional funds will be available
to the Company for such purposes on acceptable terms, if at all. Insufficient
funds could require the Company to delay, scale back, or eliminate certain of
its research and development programs or to license third parties to
commercialize products or technologies that the Company would otherwise develop
or commercialize itself.
A number of factors could affect the future operating results of the Company,
including, without limitation, those set forth under the heading "Factors
Affecting Future Results" and elsewhere in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1996, and the information contained
in this Quarterly Report on Form 10-Q should be read in light of such factors.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) EXHIBITS:
Page #
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27.01 Financial Data Schedule 11
(b) REPORTS ON FORM 8-K:
On March 13, 1997, the Company filed with the Securities and Exchange
Commission, a Current Report on Form 8-K relating to the restructuring of the
Company's Board of Directors.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IMMULOGIC PHARMACEUTICAL CORPORATION
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(Registrant)
Date: May 8, 1997 /s/ J.Joseph Marr
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J.Joseph Marr, M.D.
Chief Operating Officer
Date: May 8, 1997 /s/ John E. Morrison
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John E. Morrison
Treasurer
(Principal Financial and Accounting Officer)
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