1
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 June 30, 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 0-28494
MILLENNIUM PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-3177038
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
640 MEMORIAL DRIVE, CAMBRIDGE, MA 02139
(Address of principal executive offices, including zip code)
617-679-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
--- ---
Number of shares of Common Stock, $.001 par value per share, outstanding as of
August 6, 1997 was 28,884,309.
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MILLENNIUM PHARMACEUTICALS, INC.
REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
TABLE OF CONTENTS
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PAGE
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)
Condensed Consolidated Balance Sheets
June 30, 1997 and December 31, 1996 3
Condensed Consolidated Statements of Operations
for the three and six months ended June 30, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
PART II - OTHER INFORMATION 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURES 17
EXHIBIT INDEX 18
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Millennium Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
JUNE 30, DECEMBER 31,
1997 1996
----------------------------------
(Unaudited) (Note)
ASSETS
Current assets:
Cash and cash equivalents $ 18,591,000 $ 10,088,000
Marketable securities 40,935,000 53,760,000
Due from strategic partners 22,294,000 5,710,000
Prepaid expenses and other current assets 3,769,000 2,512,000
----------------------------------
Total current assets 85,589,000 72,071,000
Property and equipment, net 24,731,000 15,191,000
Deposits and other assets 897,000 483,000
Intangible assets, net 9,764,000 -
----------------------------------
$ 120,981,000 $ 87,744,000
==================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,475,000 $ 2,262,000
Accrued expenses 2,670,000 1,284,000
Deferred revenue 3,396,000 3,543,000
Current portion of long-term debt 667,000 1,467,000
Current portion of capital lease obligations 4,948,000 3,241,000
----------------------------------
Total current liabilities 14,156,000 11,797,000
Capital lease obligations, net 13,185,000 9,308,000
Minority Interest 20,000,000 -
Stockholders' equity:
Common Stock, $0.001 par value: 100,000,000 shares authorized;
28,853,519 shares in 1997 and 23,914,151 shares in 1996 issued and
outstanding 29,000 24,000
Additional paid-in capital 191,459,000 87,790,000
Deferred compensation (2,580,000) (2,768,000)
Notes receivable from officers (206,000) (245,000)
Unrealized loss on securities (22,000) (18,000)
Accumulated deficit (115,040,000) (18,144,000)
----------------------------------
Total stockholders' equity 73,640,000 66,639,000
----------------------------------
Total liabilities and stockholders' equity $ 120,981,000 $ 87,744,000
==================================
Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to consolidated condensed financial statements.
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Millennium Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
----------------------------------------------------------------
Revenue under strategic
alliances $ 13,372,000 $ 5,101,000 $ 24,328,000 $12,659,000
Costs and expenses:
Research and development 18,333,000 8,080,000 29,932,000 14,714,000
General and administrative 4,514,000 1,786,000 7,863,000 3,051,000
Acquired in-process research
and development - - 83,800,000 -
Amortization of intangible
assets 675,000 - 1,046,000 -
----------------------------------------------------------------
23,522,000 9,866,000 122,641,000 17,765,000
----------------------------------------------------------------
Loss from operations (10,150,000) (4,765,000) (98,313,000) (5,106,000)
Interest income 976,000 830,000 2,053,000 1,250,000
Interest expense (303,000) (194,000) (636,000) (415,000)
----------------------------------------------------------------
Net loss $ (9,477,000) $(4,129,000) $(96,896,000) $(4,271,000)
================================================================
Net loss per share $ (0.33) $ (0.19) $ (3.50) $ (0.21)
================================================================
Shares used in computing net loss
per share 28,764,467 22,268,382 27,663,696 20,717,782
================================================================
See notes to consolidated condensed financial statements.
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Millennium Pharmaceuticals, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
SIX MONTHS ENDED JUNE 30,
1997 1996
--------------------------------------
CASH USED IN OPERATIONS $ (5,874,000) $ (4,631,000)
INVESTING ACTIVITIES
Purchase of property and equipment (4,842,000) (4,476,000)
Sale of marketable securities 37,805,000 20,212,000
Purchase of marketable securities (23,487,000) (66,917,000)
--------------------------------------
Net cash provided by (used in) investing activities 9,476,000 (51,181,000)
FINANCING ACTIVITIES
Acquisition of ChemGenics, net of cash acquired 7,087,000 -
Proceeds from sale of Preferred Stock - 3,500,000
Proceeds from sale of Common Stock 910,000 58,268,000
Repurchase of Common Stock (86,000) (1,000)
Payments of long-term debt (800,000) (800,000)
Payments of capital lease obligations (2,210,000) (938,000)
--------------------------------------
Net cash provided by financing activities 4,901,000 60,029,000
--------------------------------------
Increase in cash and cash equivalents 8,503,000 4,217,000
Cash and cash equivalents at beginning of year 10,088,000 10,586,000
--------------------------------------
Cash and cash equivalents at end of period 18,591,000 14,803,000
======================================
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Equipment acquired under capital leases $ 6,202,000 $ 1,548,000
======================================
Deferred compensation $ - $ 3,187,000
======================================
See notes to consolidated condensed financial statements.
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MILLENNIUM PHARMACEUITCALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(unaudited)
1 - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Interim results for the six-month period ended June 30, 1997 are
not indicative of the results that may be expected for the year ended December
31, 1997. For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report on 10-K for the fiscal
year ended December 31, 1996 which was filed with the Securities Exchange
Commission on March 31, 1997.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share" (FAS 128) which simplifies the
calculation of earnings per share (EPS) and creates a standard of comparability
to the recently issued International Accounting Standard No. 33, "Earnings Per
Share". Since early application is not permitted, the Company will adopt this
standard in the fourth quarter of 1997. The pro form earnings per share
calculations required under FAS 128 are not materially different from the net
loss per share calculations presented herein.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" and SFAS No. 131, "Disclosures About Segments of an Enterprise and
Related Information." Both SFAS No. 130 and SFAS No. 131 are effective for
fiscal years beginning after December 15, 1997. The Company believes that the
adoption of these new accounting standards will not have a material impact on
the Company's financial statements.
2 - NET LOSS PER SHARE
Net loss per share is computed using the weighted-average number of
outstanding shares of Common Stock and Common Stock Equivalents, reflecting the
conversion of Series A, B, C and D Convertible Preferred Stock into Common Stock
(as of their original date of issuance), which occurred upon completion of the
Company's initial public offering on May 7, 1996 and the exercise of stock
options and warrants (using the treasury stock method). Common Stock equivalents
are excluded from the computation when their effect is anti-dilutive; however,
pursuant to the requirements of the Securities and Exchange Commission, Common
Stock equivalent shares relating to stock options and warrants (using the
treasury stock method and an initial public offering price of $12.00 per share)
and Convertible Preferred Stock issued during the twelve month period prior to
the initial public offering are included for all periods prior to and including
the date of the initial public offering whether or not anti-dilutive.
3 - SUBSIDIARY
In May 1997, the Company established Millennium BioTherapeutics, Inc.
("MBIO") as a subsidiary, and, pursuant to a Technology Transfer and License
Agreement, has transferred and/or licensed certain technology to MBIO in
exchange for 9,000,000 shares of Series A Convertible Preferred Stock of MBIO.
At that time, MBIO entered into a strategic alliance with Eli Lilly and Company
("Lilly") for the
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discovery and development of novel therapeutic proteins. The agreement covers a
three year program with Lilly providing $8 to $10 million in research funding
per year with a provision to extend up to an additional two years at the same
level of funding. Additional licensing fees, clinical development milestones and
royalties will be payable by Lilly in connection with specific therapeutic
protein product candidates identified in the collaboration and licensed by
Lilly. Under the terms of the agreement, MBIO and Lilly will equally fund the
collaborative program and each company will share the rights to use discoveries
made in the collaboration, as described in the agreement.
Under the terms of a related stock purchase agreement, Lilly agreed to
purchase $20 million of Series B Convertible Preferred Stock of MBIO. The
accompanying condensed consolidated financial statements include the accounts of
MBIO since inception. The minority interest reflects the approximate 18 percent
equity interest of Lilly in MBIO as of the balance sheet date.
The Company is not required to provide any funds for the operations of
MBIO, but has entered into certain agreements with MBIO to provide specific
services and facilities at negotiated fees. All such intercompany transactions
have been eliminated in consolidation.
4 - MERGER
On February 10, 1997, the Company acquired ChemGenics Pharmaceuticals,
Inc. ("ChemGenics") for 4,783,688 shares of Common Stock at $21.50 per share for
an aggregate of approximately $103,000,000 in exchange for all outstanding
shares of common stock of ChemGenics. In addition, a principal shareholder of
ChemGenics received approximately $4,000,000 in settlement of a promissory note
and repurchase of warrants previously issued by ChemGenics, and outstanding
warrants were purchased from another shareholder of ChemGenics for approximately
$500,000. The operating results of ChemGenics have been included in the
Company's financial statements from the date of acquisition. The transaction has
been recorded as a purchase for accounting purposes. The fair value of the
issued shares has been allocated to the assets purchased and liabilities assumed
based upon their respective fair values. In connection with the acquisition, the
Company incurred a non-recurring charge of $83,800,000 for acquired in-process
research and development which was charged to operations because in management's
opinion technological feasibility for the acquired research and development had
not been established.
The following unaudited pro forma consolidated results of operations
have been prepared as if the acquisition of ChemGenics had occurred at the
beginning of 1997 and 1996:
Six months ended
June 30, 1997 June 30, 1996
Pro Forma:
Revenues under strategic
alliances $ 24,821,000 $ 14,137,000
Net loss $(98,060,000) $(98,135,000)
Net loss per share $ (3.41) $ (3.85)
Shares used in calculating net
loss per share 28,747,000 25,501,000
The pro forma net loss and net loss per share amounts for each period above
include the acquired in-process research and development charge. The pro forma
consolidated results do not purport to be indicative of results that would have
occurred had the acquisition been in effect for the periods presented, nor do
they purport to be indicative of the results that will be obtained in the
future.
5. CONSORTIUM AGREEMENT
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In April 1997 the Company joined a corporate consortium to fund a
five-year research program in functional genomics at the Whitehead Institute/MIT
Center for Genome Research. The new program will advance the development of
gene-based technologies for research and health care.
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s
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This Report on Form 10-Q contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," "intends,"
and similar expressions are intended to identify forward-looking statements.
There are a number of important factors that could cause the Company's actual
results to differ materially from those indicated by such forward-looking
statements. These factors are set forth under the caption "Risk Factors" in the
Company's Registration Statement on Form S-3 (333-28239), which "Risk Factor"
discussion is expressly incorporated by reference herein.
Overview
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The Company was incorporated in January 1993 and has devoted
substantially all of its resources to the development and application of
genetics, genomics and bioinformatics technology used to identify the genes
responsible for major diseases, as well as comprehensive technologies to
elucidate the role of these genes in disease initiation and progression.
On February 10, 1997 (the "ChemGenics Acquisition Date"), the Company
acquired ChemGenics Pharmaceuticals Inc. ("ChemGenics") for approximately
4,800,000 shares of Common Stock. In connection with this acquisition, a
principal stockholder of ChemGenics received $4.0 million in settlement of a
promissory note and as the repurchase price of warrants previously issued by
ChemGenics and outstanding warrants were purchased from another stockholder of
ChemGenics for $500,000. Upon such acquisition, ChemGenics became a wholly-owned
subsidiary of the Company. In May 1997, ChemGenics was merged into Millennium
and ceased to be a separate company. At the time of the acquisition, ChemGenics
had approximately 70 employees and approximately 11,500 square feet of
laboratory and office space in Cambridge, Massachusetts.
In May 1997, the Company established Millennium BioTherapeutics, Inc.
("MBIO") as a subsidiary, and, pursuant to a Technology Transfer and License
Agreement, transferred and/or licensed certain technology to MBIO in exchange
for 9,000,000 shares of Series A Convertible Preferred Stock of MBIO. At that
time, MBIO entered into a strategic alliance with Eli Lilly and Company
("Lilly") for the discovery and development of novel therapeutic proteins. Under
the terms of a related stock purchase agreement, Lilly made an equity investment
of $20,000,000 in MBIO pursuant to which Lilly owns approximately 18% of the
outstanding capital stock of MBIO.
To date, all of the Company's revenue, including revenue of ChemGenics
from the ChemGenics Acquisition Date, has resulted from payments from strategic
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partners and United States government research grants. The Company has not
received any revenue from the sale of products.
The Company has entered into several strategic alliances: in March 1994
with Hoffmann La-Roche, Inc. ("Roche") with respect to obesity and type II
diabetes; in October 1995 and March 1996 with Lilly with respect to
atherosclerosis and select areas of oncology, respectively; in December 1995
with Astra AB ("Astra") with respect to inflammatory respiratory diseases; and
in July 1996 with American Home Products ("AHP") with respect to certain
disorders of the central nervous system. In addition, ChemGenics had entered
into several strategic alliances; in January 1995 with Pfizer Inc. ("Pfizer")
with respect to human fungal infections; in December 1996 with AHP with respect
to human bacterial infections; and in May, November and December 1996 with
PerSeptive Biosystems, Inc. ("PerSeptive") where a substantial equity interest
in ChemGenics was exchanged for certain present and future rights to patents,
technology and prototype equipment. Millennium has succeeded to ChemGenics in
connection with ChemGenics' strategic alliances with Pfizer, AHP and PerSeptive
as a result of Millennium's acquisition of ChemGenics.
These strategic alliance agreements have provided the combined Company
with various combinations of equity investments, up-front and follow-on fees and
research funding and may provide certain additional payments upon the attainment
of research and regulatory milestones and royalty and/or profit sharing payments
based on sales of any products resulting from the collaborations. Revenue
recognized under these collaborations through June 30, 1997 aggregated
approximately $86,935,000.
Although the Company intends to enter into additional strategic
alliances, it also expects to incur increasing expenses and additional losses
for at least the next several years, as it continues to build the infrastructure
to support its operations. Payments under strategic alliance and licensing
arrangements will be subject to significant fluctuation in both timing and
amounts and, therefore, the Company's results of operations for any period may
not be comparable to the results of operations for any other period.
Results of Operations
- ---------------------
Quarters Ended June 30, 1997 and June 30, 1996
----------------------------------------------
Revenue under strategic alliances increased to $13,372,000 for the
three months ended June 30, 1997 (the "1997 Quarterly Period") from $5,101,000
for the three months ended June 30, 1996 (the "1996 Quarterly Period"). The
increase for the 1997 Quarterly Period was primarily due to strategic alliance
revenue from AHP in connection with the central nervous systems alliance signed
in July 1996, strategic alliance revenue from both the ChemGenics/Pfizer (human
fungal infections) and
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ChemGenics/AHP (human bacterial infections) strategic alliances and revenue from
Lilly related to the collaboration between Lilly and MBIO.
Research and development expenses increased to $18,333,000 for the
three months ended June 30, 1997 from $8,080,000 for the three months ended June
30, 1996. The increase was attributable primarily to increased payroll and
personnel expenses as the Company hired additional research and development
personnel; increased purchase of laboratory supplies and increased equipment
depreciation and facilities efforts. In addition, the 1997 Quarterly Period
included research and development expenses related to the former ChemGenics
operations and MBIO. The Company's research and development expenses may
continue to increase as personnel and research and development facilities are
expanded to accommodate the Company's existing and any future strategic
alliances.
General and administrative expenses increased to $4,514,000 for the
three months ended June 30, 1997 from $1,786,000 for the three months ended June
30, 1996. The increase was attributable primarily to increased payroll and
personnel expenses as the Company hired additional management, business
development and administrative personnel, and to professional fees in connection
with the further expansion of the Company's operations, the acquisition of
ChemGenics and formation of MBIO. The 1997 Period also includes general and
administrative expenses related to the former ChemGenics operations. It is
anticipated that general and administrative expenses will continue to increase
as the Company continues to build the infrastructure to support its operations.
The Company's total operating expenses increased to $23,522,000 for the
three months ended June 30, 1997 from $9,866,000 for the three months ended June
30, 1996. In addition to the research and development and general and
administrative expenses discussed above, the 1997 Quarterly Period includes a
$675,000 charge for amortization of the intangible assets created by the
ChemGenics acquisition.
Interest income increased to $976,000 for the three months ended June
30, 1997 from $830,000 for the three months ended June 30, 1996. Although the
balance of cash, cash equivalents and marketable securities is lower at June 30,
1997 than at June 30, 1996, the average balance was lower during the 1996
Quarterly Period because the Company's inrest expense increased to $303,000
for the 1997 Quarterly Period from $194,000 for the 1996 Quarterly Period due
to increased capital lease obligations.
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Six Months Ended June 30, 1997 and June 30, 1996
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Revenue under strategic alliances increased to $24,328,000 for the six
months ended June 30, 1997 (the "1997 Six Month Period") from $12,659,000 for
the six months ended June 30, 1996 (the "1996 Six Month Period"). The increase
for the 1997 Six Month Period was primarily due to strategic alliance revenue
from AHP in connection with the central nervous systems alliance signed in July
1996, from Lilly in connection with the oncology alliance effective March 1996,
strategic alliance revenue from the ChemGenics Acquisition Date through June 30,
1997, from both the ChemGenics/Pfizer (human fungal infections) and
ChemGenics/AHP (human bacterial infections) strategic alliances and revenue from
Lilly pursuant to the collaboration between Lilly and MBIO.
Research and development expenses increased to $29,932,000 for the six
months ended June 30, 1997 from $14,714,000 for the six months ended June 30,
1996. The increase was primarily attributable to increased payroll and personnel
expenses as the Company hired additional research and development personnel,
increased purchase of laboratory supplies and increased equipment depreciation
and facilities expenses in connection with the expansion of the Company's
research efforts. In addition, the 1997 Six Month Period includes research and
development expenses related to the former ChemGenics operations as of the
ChemGenics Acquisition Date and to MBIO. The Company's research and development
expenses may continue to increase as personnel and research and development
facilities are expanded to accommodate the Company's existing and any future
strategic alliances.
General and administrative expenses increased to $7,863,000 for the six
months ended June 30, 1997 from $3,051,000 for the six months ended June 30,
1996. The increase was prim as the Company hired additional management, business
development and administrative personnel, and to professional fees in connection
with the further expansion of the Company's operations, the acquisition of
ChemGenics and formation of MBIO. The 1997 Six Month Period also includes
general and administrative expenses related to the former ChemGenics from the
ChemGenics Acquisition Date through the end of the period. It is anticipated
that general and administrative expenses will continue to increase as the
Company continues to build the infrastructure to support its operations.
The Company's total operating expenses increased to $122,641,000 for
the six months ended June 30, 1997 from $17,765,000 for the six months ended
June 30, 1996. In addition to the research and development and general and
administrative expenses discussed above, the 1997 Six Month Period includes a
$83,800,000 one-time charge for acquired in-process research and development
associated with the acquisition of
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ChemGenics as well as a $1,046,000 charge for amortization of the intangible
assets created by the acquisition.
Interest income increased to $2,053,000 for the six months ended June
30, 1997 from $1,250,000 for the six months ended June 30, 1996. Although the
balance of cash, cash equivalents and marketable securities is lower at June 30,
1997 than at June 30, 1996, the average balance was lower during the 1996 Six
Month Period because the Company's initial public offering occurred in May 1996.
Interest expense increased to $636,000 for the 1997 Six Month Period from
$415,000 for the 1996 Six Month Period due to increased capital lease
obligations.
Liquidity and Capital Resources
- -------------------------------
The Company has financed its operations since inception primarily
through strategic alliances, private placement of equity securities, issuance of
debt, and capital leases. In May 1996, the Company completed an initial public
offering of common stock resulting in proceeds, net of underwriting discounts,
of $57,753,000. Through June 30, 1997, the Company recognized approximately
$86,935,000 of revenue under strategic alliances. The private placement of
equity securities has provided the Company with aggregate gross proceeds of
approximately $25,590,000. The Company has obtained $4,000,000 in long-term
debt, approximately $22,000,000 in capital lease financings, and $1,100,000 to
finance the build-out of an 9,000 square foot in-house animal facility. As of
June 30, 1997, the Company had approximately $59,526,000 in cash, cash
equivalents and marketable securities. In July 1997, the Company received
proceeds of $20,000,000 from Lilly in connection with Lilly's equity investment
in MBIO.
During the first six months of 1997, the Company used $5,874,000 of
cash in its operations, purchased $4,842,000 of property and equipment, obtained
net cash of $7,087,000 in connection with the acquisition of ChemGenics and used
cash of $800,000 to pay long term debt and $2,210,000 to pay capital lease
obligations. In addition, during the first six months of 1997, the Company
acquired equipment under capital leases of $6,202,000.
The Company believes that existing cash and investment securities, and
anticipated cash flow from its current strategic alliances, will be sufficient
to support the Company's operations for at least the next 24 months. The
Company's actual future cash requirements, however, will depend on many factors,
including progress of its disease research programs, the number and breadth of
these programs, achievement of milestones under strategic alliance arrangements,
the ability of the Company to establish and maintain additional strategic
alliance and licensing arrangements, and the progress of the development efforts
of the Company's strategic partners. These factors also include the level of the
Company's activities relating to commercialization rights it has retained in its
strategic alliance arrangement,
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competing technological and market developments, the costs associated with the
collection of patient information and DNA samples, the costs involved in
obtaining and enforcing patent claims and other intellectual property rights,
and the costs and timing of regulatory approvals. The Company expects that it
will require significant additional financing in the future, which it may seek
to raise through public or private equity offerings, debt financings, or
additional strategic alliance and lance can be given that additional financing
or strategic alliance and licensing arrangements will be available when needed
or that, if available, such financing will be obtained on terms favorable to the
Company or its stockholders. The Company's forecast of the period of time
through which its financial resources will be adequate to support its operations
is forward-looking information, and, as such, actual results may vary.
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PART II - OTHER INFORMATION
---------------------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company's 1997 Annual Meeting of Stockholders was held on May 21,
1997 (the "Annual Meeting"). At the Annual Meeting, William W. Helman was
elected as a Class I Director for a term of three years. The other directors
whose terms of office as a director continue after the meeting are as follows:
Eugene Cordes, Ph.D., Raju Kucherlapati, Ph.D., Eric S. Lander, Ph.D., Mark J.
Levin, Joshua Boger, Ph.D. and A. Grant Heidrich III.
The following is a summary of each matter voted upon at the meeting and
the number of votes cast for, against or withheld, and broker non-votes and
abstentions, as to each such matter:
1. To elect William W. Helman as a Class I Director.
For: 18,240,872 Withheld: 28,898
2. To approve (i) an amendment to the Company's 1996 Equity Incentive Plan
increasing from 2,100,000 to 4,100,000 the number of shares of Common
Stock reserved for issuance under the Plan, and (ii) the continuance of
the 1996 Equity Incentive Plan.
For: 13,657,159 Against: 2,264,144 Abstain: 17,577 Non-Votes: 2,330,890
3. To approve the Company's 1997 Equity Incentive Plan.
For: 13,465,964 Against: 2,342,020 Abstain: 47,102 Non-Votes: 2,414,684
4. To ratify the selection by the Board of Directors of Ernst & Young LLP as
the Company's independent auditors for 1997.
For: 18,249,002 Against: 13,331 Abstain: 7,437 Non-Votes: 0
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
The exhibits listed in the Exhibit Index are included in this report.
(b) Reports on Form 8-K
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(i) On June 5, 1997, the Company filed with the Securities and
Exchange Commission a Current Report on Form 8-K reporting the issuance of a
press release on May 29, 1997 under Item 5 thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MILLENNIUM PHARMACEUTICALS, INC.
(Registrant)
Date: August 11, 1997 By: /s/ Steven H. Holtzman
----------------------------------------
Steven H. Holtzman
Chief Business Officer
(Principal Financial Officer)
Date: August 11, 1997 By: /s/ Peter J. Courossi
----------------------------------------
Peter J. Courossi
Director of Finance
(Principal Accounting Officer)
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EXHIBIT INDEX
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The following exhibits are filed as part of this Quarterly Report on Form
10-Q:
Exhibit
No. Description
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10.1 Lease dated May 15, 1997 by and between the Company
and Massachusetts Institute of Technology.
10.2 1997 Equity Incentive Plan.
10.3 1996 Equity Incentive Plan, as amended.
10.4+ Sponsored Research Agreement by and among Whitehead
Institute for Biomedical Research, Affymetrix, Inc.,
Bristol-Myers Squibb Company and the Company dated
April 28, 1997.
10.5+ Consortium Member Agreement by and among Affymetrix,
Inc., Bristol-Myers Squibb Company and the Company
dated April 28, 1997.
10.6+ Collaboration Agreement by and among the Company,
Millennium BioTherapeutics, Inc. ("MBIO") and Eli
Lilly and Company dated as of May 28, 1997.
10.7+ Technology Transfer and License Agreement by and
between the Company and MBIO dated as of May 28,
1997.
10.8+ Rights Exchange Agreement by and between the Company
and MBIO dated as of May 28, 1997.
10.9 Amendment to Master Equipment Lease Agreement dated
June 16, 1997 by and between the Company and GE
Capital Corporation.
11 Statement regarding Computation of Per Share
Earnings.
27.1 Financial Data Schedule.
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19
99.1 Pages 5 through 15 of the Company's Registration
Statement on Form S-3 (333-28239), as filed with the
Securities Exchange Commission (which are deemed
filed except to the extent that portions are not
expressly incorporated by reference herein).
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+ Confidential treatment requested as to certain portions.
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