1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: JUNE 30, 1999 Commission File No. 0-19193
CAMBRIDGE NEUROSCIENCE, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-3319074
- ------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
ONE KENDALL SQUARE, BUILDING 700
CAMBRIDGE, MA 02139
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(Address of principal executive offices including zip code)
617-225-0600
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(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
---
At July 31, 1999, 18,135,964 shares of Common Stock, par value $.001 per share,
were issued and outstanding.
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CAMBRIDGE NEUROSCIENCE, INC.
INDEX
PAGE
PART I - FINANCIAL INFORMATION NUMBER
- ------------------------------ ------
ITEM 1 - FINANCIAL STATEMENTS (unaudited)
Condensed Consolidated Balance Sheets
At June 30, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Operations for the
three and six months ended June 30, 1999 and 1998 4 - 5
Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 1999 and 1998 6
Notes to Condensed Consolidated Financial Statements 7 - 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 - 14
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 14
PART II - OTHER INFORMATION
- ---------------------------
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 15
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURES 16
EXHIBIT INDEX 17
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CAMBRIDGE NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
June 30, December 31,
1999 1998
--------- ------------
ASSETS (Unaudited) (Note)
Current Assets
Cash and cash equivalents $ 3,771 $ 4,863
Marketable securities 7,042 7,037
Receivables from collaboration agreements 174 2,080
Prepaid expenses and other current assets 1,314 1,260
--------- ---------
Total Current Assets 12,301 15,240
Equipment, Furniture and Fixtures, net 290 377
--------- ---------
Total Assets $ 12,591 $ 15,617
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 719 $ 1,637
Research and development advances -- 250
--------- ---------
Total Current Liabilities 719 1,887
Stockholders' Equity
Preferred stock, par value $.01, 10,000
shares authorized; none issued -- --
Common stock, par value $.001, 30,000
shares authorized; 18,136 shares issued
and outstanding at June 30, 1999;
18,085 at December 31, 1998 18 18
Additional paid-in capital 120,119 120,088
Accumulated deficit (108,265) (106,376)
--------- ---------
Total Stockholders' Equity 11,872 13,730
--------- ---------
Total Liabilities and Stockholders' Equity $ 12,591 $ 15,617
========= =========
Note: The balance sheet at December 31, 1998 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 principals for complete
financial statements.
The accompanying notes are an integral part of the condensed consolidated
financial statements.
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CAMBRIDGE NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended June 30,
---------------------------
1999 1998
------- -------
Revenues
Research and development $ 490 $ 250
Operating expenses
Research and development 1,195 1,585
General and administrative 314 426
------- -------
1,509 2,011
------- -------
Loss from operations (1,019) (1,761)
Interest income 136 265
------- -------
Net loss $ (883) $(1,496)
======= =======
Basic and diluted net loss per share $ (0.05) $ (0.08)
======= =======
Shares used in computing basic and diluted
net loss per share 18,100 17,924
======= =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
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CAMBRIDGE NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Six months ended June 30,
-------------------------
1999 1998
------- -------
Revenues
Research and development $ 872 $ 551
Operating expenses
Research and development 2,434 3,917
General and administrative 633 939
Restructuring cost -- 921
------- -------
3,067 5,777
------- -------
Loss from operations (2,195) (5,226)
Interest income 306 786
------- -------
Net loss $(1,889) $(4,440)
======= =======
Basic and diluted net loss per share $ (0.10) $ (0.25)
======= =======
Shares used in computing basic and diluted
net loss per share 18,100 17,907
======= =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
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CAMBRIDGE NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six months ended June 30,
-------------------------
1999 1998
------- --------
Operating Activities
Net loss $(1,889) $ (4,440)
Items not requiring cash:
Depreciation and amortization 96 185
Common stock issued pursuant to an
employee benefit plan -- 103
------- --------
(1,793) (4,152)
Changes in current assets and liabilities:
Receivables from collaboration agreements 1,906
Prepaid expenses and other current assets (54) 511
Accounts payable and accrued expenses (918) (1,290)
Research and development advances (250) (250)
------- --------
684 (1,029)
------- --------
Cash used for operating activities (1,109) (5,181)
Investing Activities
Purchases of marketable securities (3,782) (8,996)
Sales of marketable securities 3,777 30,539
Purchase of equipment, furniture and
fixtures, net of disposals (9) (11)
------- --------
Cash (used for) provided by investing
activities (14) 21,532
Financing Activities
Sale of common stock 31 38
Dividend -- (17,907)
------- --------
Cash provided by (used for) financing
activities 31 (17,869)
Net Increase in Cash and Cash Equivalents (1,092) (1,518)
Cash and Cash Equivalents at beginning of period 4,863 12,020
------- --------
Cash and Cash Equivalents at end of period $ 3,771 $ 10,502
======= ========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
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CAMBRIDGE NEUROSCIENCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements as
of June 30, 1999 and for the three and six month periods ended June 30, 1999 and
1998 have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q. 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, the accompanying consolidated
financial statements include all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of the financial position,
results of operations and cash flows for the periods presented. The results of
operations for the interim period ended June 30, 1999 are not necessarily
indicative of the results expected for the full fiscal year.
The condensed consolidated financial statements presented as of December
31, 1998 are derived from the audited consolidated financial statements and
footnotes included in the Company's Annual Report on Form 10-K (file number
0-19193).
Cambridge NeuroScience, Inc. (the "Company") is a biopharmaceutical company
engaged in the discovery and development of proprietary pharmaceuticals to
prevent or treat severe disorders of, or injuries to, the nervous system.
2. BASIC AND DILUTED NET LOSS PER SHARE
Net loss per share is based on the weighted-average number of common shares
outstanding during each of the periods presented. Due to the fact that the
Company continues to be in a net loss position, common equivalent shares from
stock options are excluded as their effect is antidilutive.
3. RESEARCH AND DEVELOPMENT REVENUE
The Company recognizes research and development revenue as earned and such
revenue represents reimbursement of the Company's expenditures pursuant to the
terms of its collaboration and license agreements and government grants.
Research and development revenue meets the criteria of being earned when all of
the following have occurred: all obligations of the Company relating to the
revenue have been met; cash received or receivable is not refundable
irrespective of whether the research efforts are successful; and the Company is
not obligated to meet future milestones. Revenue from government grants is
recorded as earned based on the performance requirements of each respective
grant. Expenses relating to collaboration and license agreements and to the
performance of government grants are recorded as research and development
expenses. Cash received in advance of research and development performed
pursuant to the Company's research and development agreements is designated as
research and development advances and is included in current liabilities.
In November 1996, the Company entered into a collaboration agreement with
Allergan, Inc. ("Allergan") for the development of treatments for ophthalmic
disorders, including glaucoma. Pursuant to this agreement, Allergan is providing
$3.0 million in research funding over a three year period through November 1999.
In December 1998, the Company entered into a collaborative agreement with
Bayer AG ("Bayer") for the development of recombinant human Glial Growth Factor
2 ("GGF2") for the treatment of neurodegenerative diseases such as multiple
sclerosis. The Company received an upfront licensing fee
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CAMBRIDGE NEUROSCIENCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
of $1.0 million and will receive an additional $1.0 million in reimbursements
for research expenses incurred relating to a research protocol covered by the
agreement. As of June 30, 1999, the Company has received $777,000 of this
research reimbursement.
4. NEW ACCOUNTING PRINCIPLE
In June 1998, the Financial Accounting Standards Board issued Statement No.
133, Accounting for Derivative Instruments and Hedging Activities ("FAS 133"),
which is effective for fiscal years beginning after June 15, 2000. The Company
believes the adoption of this new accounting standard will not have a
significant effect on its financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
Revenues
Research and development revenues in the three months ended June 30, 1999
increased by $240,000 compared to the same quarter of 1998. This increase was
due to revenue earned under the collaboration with Bayer, which was entered into
in December 1998. Total revenue in the second quarter of 1999 was comprised of
the Bayer revenue and $250,000 under the Allergan collaboration. The Allergan
revenue is comparable with the amount earned in the second quarter of last year.
Operating Expenses
Total operating expenses in the three months ended June 30, 1999 decreased
by $502,000 compared to the same period in 1998, a decrease of 25%. This was
primarily due to a restructuring implemented in the first half of 1998 to focus
resources on programs funded by collaborative partners. The restructuring
resulted in reduced payroll, facilities and external research costs. During the
second quarter of 1999, the Company averaged 17 full-time employees,
approximately 29% lower than a year ago.
Research and development expenses decreased by $390,000, and general and
administrative expenses decreased by $112,000 as compared to last year's second
quarter. These decreases were a result of the restructuring described above and
attrition.
Interest Income
Interest income for the quarter ended June 30, 1999 was lower by $129,000
than that in the same period in 1998, as a result of lower cash, cash
equivalents and marketable securities available for investment, due primarily to
a dividend payment of $17.9 million to shareholders in April 1998 and cash used
for operating purposes.
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
Net Loss Per Share
For the quarter ended June 30, 1999, the Company's net loss and net loss
per share were approximately 40% lower than in the same period last year, as a
result of higher research and development revenue and lower operating expenses,
both as described earlier.
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
Revenues
In the six months ended June 30, 1999, the Company's research and
development revenues increased by $321,000 as compared to the same period in
1998, an increase of 58%. This increase was due to revenue earned under the
Bayer collaboration totaling $372,000 during the first six months of 1999.
Revenues in the first half of 1999 and 1998 included $500,000 under the Allergan
collaboration. During the first half of last year, the Company also had a Small
Business Innovation Research Grant, accounting for $50,000 in revenue.
Operating Expenses
In the first half of 1999, the Company's total operating expenses decreased
by $2.7 million, or 47% as compared to the same period of last year. Research
and development expenses decreased by $1.5 million or 38%, and general and
administrative expenses decreased by $306,000 or 33% as compared to the same
period of last year. These decreases were attributable primarily to lower
payroll, facilities and external research costs as a result of a restructuring
program implemented during the first half of 1998. In addition the 1998 period
included $921,000 of restructuring charges relating to severance costs.
Interest Income
Interest income decreased by $480,000, or 61%, compared to the same period
in 1998. This decrease was a result of the decrease in cash available for
investment following the payment of a dividend totaling $17.9 million in April
1998 and cash used for operating activities.
Net Loss Per Share
In the first half of 1999, the Company's net loss per share was 60% lower
than that of a year ago. This decrease in net loss per share was the result of
higher research and development revenues and lower operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999, the Company had cash, cash equivalents and marketable
securities of $10.8 million, compared to $11.9 million at December 31, 1998, a
decrease of $1.1 million. The decrease was the result primarily of net cash used
for operating activities.
In December 1998, the Company and Bayer entered into an agreement whereby
Bayer licensed the development and manufacturing rights to GGF2 for the
treatment of multiple sclerosis and peripheral neuropathies. In exchange, the
Company received a $1.0 million license fee in January 1999, and will
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
receive up to $1.0 million for reimbursement of costs under a research protocol
covered by the agreement. Through June 30, 1999, the Company has received
$777,000 of this $1.0 million and anticipates receiving the remaining $223,000
during the balance of 1999. The Company may also receive up to $24.0 million in
milestone payments. However, there can be no assurance as to when or if any
milestones will be achieved. Under terms of the agreement, Bayer is responsible
for the manufacture and development of GGF2, and all costs associated therewith.
Bayer may terminate this agreement at any time upon 120 days written notice.
Pursuant to a collaborative agreement with Allergan, the Company is to
receive a total of $3.0 million in research funding, $1.0 million per year,
through November 1999. Through June 30, 1999, the Company has received $2.6
million of the total $3.0 million, and expects to receive the remaining $400,000
during the second half of 1999. Under this agreement, Allergan is responsible
for the development of potential products and will bear all associated costs.
The collaboration also provides that the Company may receive up to an additional
$18.5 million upon the achievement of certain milestones. However, there can be
no assurance as to when or if these milestones will be achieved. Allergan may
terminate this agreement upon six months prior written notice.
In December 1996, the Company formed a subsidiary, Cambridge NeuroScience
Partners, Inc. ("CNPI"), to pursue the development of treatments for Alzheimer's
disease and other neurological disorders. CNPI entered into a collaboration
agreement with the J. David Gladstone Institutes ("Gladstone"). Pursuant to this
collaboration, Gladstone is conducting a research program over a three year
period for which CNPI is providing $1.25 million in funding per year through
December 1999. The Company owns 80% of the outstanding stock of CNPI and has
guaranteed CNPI's obligations with respect to its collaboration with Gladstone.
To date, the minority shareholders have not made equity investments in CNPI. As
a result, the entire net loss of CNPI has been attributed to the Company.
During the first quarter of 1999, the Company and two outside stroke
research groups designed a new phase III clinical trial for aptiganel, the
Company's lead stroke candidate, focused on a subset of the stroke patient
population. In addition, the two outside stroke researchers collaborated on a
grant application to the National Institutes of Health to fund this new phase
III study. Based on preliminary feedback received by the outside researchers,
the grant will not be funded. As a result, the Company is continuing to explore
other funding opportunities for the further development of aptiganel. Further
development of aptiganel may require substantial expenditures by the Company,
and require the Company to reduce spending on its other research programs. There
can be no assurance that further development of aptiganel will occur or that
funding for such development will be available or sufficient to complete such
development.
The Company is continuing to evaluate alternatives for maximizing
shareholder value, which may include the sale of some or all of the Company's
technology and other assets or a merger with another company.
The Company believes that its cash, cash equivalents and marketable
securities as of June 30, 1999 will be sufficient to maintain operations through
2000.
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
YEAR 2000 PROBLEM
The Company is aware of the issues that many computer systems will face as
the year 2000 approaches. These issues are the result of computer programs
having been written using two digits rather than four digits to define the
applicable year. Computer hardware and software that have time-sensitive
operating data may recognize a date of "00" as the year 1900 rather than the
year 2000, resulting in system failures or miscalculations.
State of Readiness
The following paragraphs describe the Company's state of readiness relating
to the year 2000 issue, including the Company's formal plan for addressing the
issue, a review of progress made to date, and the estimated dates for completion
of each phase of the plan.
The phrase "In-house Systems" will be used in the discussion, and is
defined as the Company's: i.) computer hardware and software, ii.)
computer-aided laboratory equipment, and iii.) computer-aided office equipment,
including telephones and security systems. All of these items were purchased
from third-party manufacturers or suppliers. The Company has no internally
manufactured or developed computers or computer-related hardware or software.
The Company's evaluation of the year 2000 issue covers both: i.) In-house
Systems, and ii.) service providers. The Company's plan with respect to its
In-house Systems is comprised of three phases: inventory and assessment;
remediation; and testing and implementation.
Inventory and Assessment:
The inventory and assessment phase of this process involves the
identification of all of the Company's In-house Systems and determining which of
them may be impacted by the year 2000 problem and require repair, upgrade or
replacement. This entails performing initial tests of each component of hardware
and software and/or asking manufacturers of such components whether their
systems are currently year 2000 compliant or whether they require modification
to become compliant.
As of June 30, 1999, the Company had completed approximately 95% of its
inventory and assessment. The Company has completed the inventory and assessment
of its personal and network computers, its general operating software, its
accounting and administrative software, and its computer-aided office equipment
and systems. The Company has completed an inventory and has essentially
completed the assessment of its laboratory equipment, and is awaiting feedback
from manufacturers on two pieces of laboratory equipment. The inventory and
assessment of all systems is expected to be completed by August 15, 1999.
Remediation:
Remediation entails repairing, upgrading or replacing equipment or software
that is not compliant. Based on the results of the inventory and assessment,
approximately half of the Company's laboratory equipment needed repair or
modification. The majority of the Company's personal and network computers and
operating systems also required minor repair or upgrade in order to become
compliant, as did certain of the Company's office equipment and administrative
software. Remediation of all personal
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
and network computers and operating systems has been completed. Remediation of
non-compliant laboratory equipment, office systems, and administrative software
is approximately 90% complete, and is scheduled to be completed by August 31,
1999.
Testing and Implementation:
This will include testing all repaired, replaced and new In-house Systems
to determine that they are working properly and adequately address the year 2000
issues identified. All personal and network computers and operating systems have
been tested and are deemed compliant. The Company expects to complete this phase
of its year 2000 plan and have all systems fully operational by September 1999.
Third-Party Service Providers:
The Company's major service providers that may be impacted by the year 2000
issue are as follows: i.) banks and financial institutions, ii.) administrative
services such as transfer agent and payroll agent, iii.) utility services such
as electricity, heat, water and telephone, and iv.) external research and
development services.
To evaluate the readiness of its third-party service providers, the Company
has contacted and reviewed written literature from each provider to ascertain
whether the services they provide are at risk of being non-compliant, whether
the providers are addressing this issue and what their plans are for resolving
any issues. To date, the Company has completed the assessment of approximately
90% of its third-party service providers, but is still awaiting letters of
compliance from some. The Company is monitoring the progress of each service
provider. The identification of alternative vendors of services is being
considered in the course of this process and in the development and
implementation of a contingency plan.
Costs
The Company does not expect to incur material costs to evaluate and resolve
any year 2000 problems. The Company may contract with outside consultants at
various times during this process to ensure the timely completion of the
project. The Company expects to upgrade or replace certain systems supporting
the administrative functions and facilities and may have to replace some of the
software or equipment used in its research operations. Based on information
available at this time, the Company estimates that it will spend between $25,000
and $50,000 to complete the process of resolving the year 2000 problem. These
expenditures will be funded from existing cash resources and will not have a
material impact on the amount of funds available for other operating purposes.
The Company has not incurred material outside costs to date related to
repairing, upgrading or replacing equipment to become compliant. The actual
costs to be incurred by the Company will depend on a number of factors which
cannot be accurately predicted, including the availability and cost of
consultants and the extent and difficulty of the remediation and other work to
be done.
Risks
In the event that no further progress is made on the remediation of any
year 2000 problems, the Company may experience interruptions in the processing
of certain data generated by the Company's research activities. The Company is
aware of certain pieces of computer-aided research and discovery
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
equipment that are not compliant, which could cause the Company to revert to
manual laboratory testing procedures and/or outsourcing for these services.
The Company expects to have completed all phases of this project before the
end of 1999 and does not believe that the existence of significant unresolved
year 2000 problems will result in the prolonged and material interruption of its
daily operations, including the conduct of its research and development
activities. However, there can be no assurance that the Company will complete
the remediation of any year 2000 problems on a timely basis or that any
unresolved problems would not have an adverse impact on the Company's ability to
continue operations and fulfill its obligations pursuant to research and
development collaboration agreements.
The Company has certain relationships with third parties, including utility
providers, financial institutions, vendors and other service providers. The
Company believes that with the exception of its utility providers, its
relationships with vendors and service providers are not exclusive or material.
Consequently, the Company believes that, in the event of a failure on the part
of these third parties to become year 2000 compliant on a timely basis, the
Company would be able to continue to maintain operations, including the conduct
of most of its research and development activities, utilizing alternative
vendors where necessary. An interruption of the Company's utility services could
materially affect the Company's research, development and administrative
operations until such time that those utility services are resumed. There can be
no assurance that any third-party service provider engaged by the Company will
achieve year 2000 compliance on a timely basis, or that any lack of compliance
on the part of such provider will not materially affect the Company's
operations. The identification of alternative vendors of services and supplies
will be considered in the course of this process and in the development and
implementation of a contingency plan.
Contingency plan
The Company has developed a contingency plan to address what it believes is
the major risk associated with the year 2000 problem, the failure of electrical
power to the Company's facility. In regards thereto, the Company has developed
an emergency response plan to ensure the Company's In-house systems are
safeguarded against data loss or malfunction and that any freezers containing
key research material do not fail. The Company has an emergency generator
powered by natural gas which will be available should there be a temporary
electrical power outage. As long as any potential electrical power outage is
temporary, the Company's operations should not be materially affected. If the
outage is other than temporary, in all likelihood the Company will be unable to
resume research activities until such power is restored.
The Company is in the process of establishing contingency plans to identify
alternative research testing methods, recordkeeping and third-party services in
the event of other potential year 2000 problems. The Company expects to have
established this plan, to the extent deemed necessary, before the end of 1999.
The Company does not believe that inflation has had a material impact on
its results of operations.
The discussion contained in this section as well as elsewhere in this
Quarterly Report on Form 10-Q may contain forward-looking statements based on
the current expectations of the Company's management. The Company cautions
readers that there can be no assurance that the actual results or
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
business conditions will not differ materially from those projected or suggested
in the forward-looking statements as a result of various factors, including, but
not limited to, the following: uncertainties relating to the Company's product
candidates; uncertainties as to the Company's ability to continue operations and
achieve profitability; the early stage of development of all of the Company's
product candidates; the Company's reliance on current and prospective
collaborative partners to supply funds for research and development and to
commercialize its products; technical risks associated with the development of
new products; the competitive environment of the biotechnology and
pharmaceutical industries, and the Company's ability to resolve potential year
2000 problems on a timely basis. Readers are cautioned not to place undue
reliance on these forward-looking statements which speak only as of the date
hereof. The Company undertakes no obligation to publicly release the result of
any revisions to these forward-looking statements which may be made to reflect
events or circumstances occurring after the date hereof or to reflect the
occurrence of unanticipated events.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The information required by Item 3 is not provided as the disclosure
requirements are not applicable to the Company pursuant to Item 305(e) of
Regulation S-K.
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CAMBRIDGE NEUROSCIENCE, INC.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Company's Annual Meeting of stockholders held on Wednesday, June 3,
1999, the following individuals were elected directors of the Company:
Votes
--------------------------------------------------------- ---------------------
Nominees For Against Abstentions Broker Non-Votes
-------- --- ------- ----------- ----------------
Nancy S. Amer 12,045,440 123,971 0 2,840,671
Burkhard Blank 11,971,990 197,421 0 2,840,671
Ira A. Jackson 11,954,618 214,793 0 2,840,671
Joseph B. Martin 11,776,580 392,831 0 2,840,671
Paul C. O'Brien 11,765,358 404,053 0 2,840,671
Harry W. Wilcox, III 11,984,140 185,271 0 2,840,671
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Amended and restated Bylaws of the Company as of June 4, 1999
27.1 Financial Data Schedule for the interim year-to-date period ended
June 30, 1999 (for electronic filing only)
(b) Reports on Form 8-K
None.
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CAMBRIDGE NEUROSCIENCE, INC.
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.
CAMBRIDGE NEUROSCIENCE, INC.
Date August 10, 1999 /s/ Harry W. Wilcox, III
------------------------ --------------------------------------
Harry W. Wilcox, III
President and Chief Executive Officer
(Principal Executive Officer;
Acting Principal Financial Officer)
Date August 10, 1999 /s/ Glenn A. Shane
------------------------ --------------------------------------
Glenn A. Shane
(Principal Accounting Officer)
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CAMBRIDGE NEUROSCIENCE, INC.
EXHIBIT INDEX
Exhibit
Number Description
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3.1 Amended and restated Bylaws of the Company as of June 4, 1999
27.1 Financial Data Schedule for the interim year-to-date period
ended June 30, 1999 (for electronic filing only)
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