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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
__X__ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the quarterly period ended June 30, 1996.
_____ 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
0-19290
COR THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3060271
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
256 East Grand Avenue, South San Francisco, California 94080
(Address of principal executive offices and zip code)
(415) 244-6800
(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
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock $.0001 par value 19,551,268
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Outstanding at July 18, 1996
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COR THERAPEUTICS, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
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Item 1. Financial Statements and Notes
Condensed Balance Sheets - June 30, 1996
and December 31, 1995 3
Statements of Operations - for the three and six months
ended June 30, 1996 and 1995 4
Statements of Cash Flows - for the three and six months
months ended June 30, 1996 and 1995 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
COR(TM) and INTEGRILIN(TM) are trademarks of the Company.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements and Notes
COR THERAPEUTICS, INC.
CONDENSED BALANCE SHEETS
ASSETS
June 30, December 31,
1996 1995
------------ ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 2,706,000 $ 5,463,000
Short-term investments 61,005,000 79,371,000
Other current assets 6,581,000 7,995,000
------------ ------------
Total current assets 70,292,000 92,829,000
Property and equipment, net 7,875,000 8,077,000
------------ ------------
$ 78,167,000 $100,906,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,295,000 $ 1,555,000
Accrued compensation 1,769,000 1,928,000
Accrued development costs 5,015,000 5,759,000
Other accrued liabilities 1,723,000 2,486,000
Long-term debt--current portion 1,299,000 1,321,000
Capital lease obligations--current portion 1,563,000 1,046,000
------------- -------------
Total current liabilities 12,664,000 14,095,000
Long-term debt--noncurrent portion 1,181,000 1,801,000
Capital lease obligations--noncurrent portion 3,003,000 2,773,000
Stockholders' equity 173,685,000 173,749,000
Accumulated deficit (112,366,000) (91,512,000)
------------- -------------
Total stockholders' equity 61,319,000 82,237,000
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$ 78,167,000 $ 100,906,000
============= =============
See accompanying notes.
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COR THERAPEUTICS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
Revenues
License fees $ 0 $ 19,500,000 $ 0 $ 19,500,000
Contract revenues 4,793,000 1,550,000 7,324,000 1,550,000
------------ ------------ ------------ ------------
Revenues 4,793,000 21,050,000 7,324,000 21,050,000
Expenses:
Research & development 12,909,000 9,127,000 26,050,000 16,933,000
Marketing, general &
administrative 1,911,000 1,431,000 3,723,000 3,015,000
------------ ------------ ------------ ------------
Total expenses 14,820,000 10,558,000 29,773,000 19,948,000
------------ ------------ ------------ ------------
Income (loss) from operations (10,027,000) 10,492,000 (22,449,000) 1,102,000
Interest income 854,000 1,330,000 1,980,000 2,236,000
Interest expense (191,000) (201,000) (385,000) (381,000)
------------ ------------ ------------ ------------
Net income (loss) $ (9,364,000) $ 11,621,000 $(20,854,000) $ 2,957,000
============ ============ ============ ============
Net income (loss) per share $ (0.48) $ 0.57 $ (1.07) $ 0.15
============ ============ ============ ============
Shares used in net income (loss) per share 19,523,000 20,403,000 19,505,000 20,292,000
============ ============ ============ ============
See accompanying notes.
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COR THERAPEUTICS, INC.
STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
Cash flows from operating activities:
Net income (loss) $ (9,364,000) $ 11,621,000 $(20,854,000) $ 2,957,000
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,046,000 895,000 2,105,000 1,700,000
Amortization of deferred compensation 38,000 87,000 77,000 174,000
Changes in assets and liabilities:
Other current assets 2,347,000 (1,167,000) 1,414,000 (850,000)
Accounts payable (368,000) (215,000) (260,000) (361,000)
Accrued compensation 209,000 198,000 (159,000) 66,000
Accrued development costs 60,000 (640,000) (744,000) (6,344,000)
Other accrued liabilities (476,000) 592,000 (763,000) 322,000
------------ ------------ ------------ ------------
Total adjustments 2,856,000 (250,000) 1,670,000 (5,293,000)
------------ ------------ ------------ ------------
Net cash provided by (used in) operating activities (6,508,000) 11,371,000 (19,184,000) (2,336,000)
------------ ------------ ------------ ------------
Cash flows from investing activities:
Purchases of short-term investments (12,836,000) (13,513,000) (15,369,000) (25,368,000)
Sales of short-term investments 14,949,000 16,699,000 25,726,000 36,619,000
Maturities of short term investments 3,500,000 10,000,000 7,500,000 15,000,000
Additions to property and equipment (607,000) (473,000) (1,903,000) (1,623,000)
------------ ------------ ------------ ------------
Net cash provided by investing activities 5,006,000 12,713,000 15,954,000 24,628,000
------------ ------------ ------------ ------------
Cash flows from financing activities:
Principal payments on long-term debt (326,000) (300,000) (642,000) (586,000)
Proceeds from capital lease obligations 841,000 1,368,000 1,167,000 1,753,000
Principal payments under capital lease obligations (161,000) (131,000) (420,000) (248,000)
Issuance of common stock 199,000 200,000 368,000 216,000
------------ ------------ ------------ ------------
Net cash provided by financing activities 553,000 1,137,000 473,000 1,135,000
------------ ------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents (949,000) 25,221,000 (2,757,000) 23,427,000
Cash and cash equivalents at the beginning of the period 3,655,000 844,000 5,463,000 2,638,000
------------ ------------ ------------ ------------
Cash and cash equivalents at the end of the period $ 2,706,000 $ 26,065,000 $ 2,706,000 $ 26,065,000
============ ============ ============ ============
See accompanying notes.
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COR THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COR Therapeutics, Inc. (the "Company") was incorporated in Delaware on February
4, 1988. The Company is focused on the discovery, development and
commercialization of novel biopharmaceutical products for the treatment and
prevention of severe cardiovascular diseases.
Interim financial information
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10 of
Regulation S-X. In the Company's opinion, the financial statements include all
adjustments, consisting only of normal recurring adjustments, which the Company
considers necessary to fairly state the Company's financial position and the
results of operations and cash flows. The balance sheet at December 31, 1995
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. The accompanying
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1995. The results of the Company's
operations for any interim period are not necessarily indicative of the
results of the Company's operations for any other interim period or for a full
fiscal year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This document includes forward-looking statements which involve risks and
uncertainties. Actual results of the Company's activities may differ
significantly from the potential results discussed in such forward-looking
statements. Risk factors that might cause such differences include, but are not
limited to, those factors identified below and under the caption "Risk Factors"
in the Company's Annual Report on Form 10-K for fiscal 1995.
OVERVIEW
Since its inception, COR has focused on the discovery and development of novel
pharmaceutical products for the treatment and prevention of severe
cardiovascular diseases. The Company has not generated any product revenues.
The Company has been unprofitable since inception and has incurred a cumulative
net loss of $112,366,000 during the period from inception to June 30, 1996. The
Company's principal sources of working capital have been primarily public
equity financings and proceeds from collaboration research and development
agreements, as well as private equity financings, grant revenues, interest
income and property and equipment financings.
The Company's business is subject to significant risks including, but not
limited to, the success of its research and development efforts, the lengthy
and expensive regulatory process, possible competition from other products and
obtaining and enforcing patents important to the Company's business. Even if
the Company's products appear promising at various stages of development, they
may not reach the market for a number of reasons. Such reasons include, but are
not limited to, the possibilities that the potential products will
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COR THERAPEUTICS, INC.
be found ineffective during clinical trials, fail to receive necessary
regulatory approvals, be difficult to manufacture on a large scale, be
uneconomical to market or be precluded from commercialization by proprietary
rights of third parties. Additional expenses, delays and losses of
opportunities that may arise out of these and other risks could have a material
adverse impact on the Company's financial condition and results of operations.
In April 1996, the Company submitted a New Drug Application ("NDA") to the
United States Food and Drug Administration (the "FDA") for INTEGRILIN(TM)
(antithrombotic injection). In May 1996, the NDA was accepted for filing and
review by the FDA. The NDA seeks approval to market the INTEGRILIN(TM) product
for use in helping to prevent acute cardiac ischemic complications in patients
undergoing percutaneous transluminal coronary angioplasty ("PTCA"). The
Company's worldwide partner for INTEGRILIN(TM), Schering-Plough Corporation
("Schering"), has submitted a filing for this indication in Europe. There can
be no assurance that INTEGRILIN(TM) or any of the Company's other products in
development will receive marketing approval in any country on a timely basis or
at all. If the Company were unable to demonstrate the safety or efficacy of
INTEGRILIN(TM) to the satisfaction of the FDA or other regulatory authorities,
the Company's business, financial condition and results of operations would be
materially adversely affected.
Collaborative research under the Company's collaboration agreement with Eli
Lilly and Company ("Lilly") ended by the terms of the agreement in April 1996.
In connection therewith, the Company and Lilly are discussing transfer of
certain rights.
RESULTS OF OPERATIONS
Total revenues decreased for the three and six months ended June 30, 1996 from
the comparable periods of 1995. The revenues result primarily from the
Company's collaboration with Schering. Revenues for the three and six months
ended June 30, 1996 included a milestone payment of $3,000,000 from Schering in
connection with the European regulatory filing of the INTEGRILIN(TM) product,
while revenues for the three and six months ended June 30, 1995 included the
recognition of $19,500,000 of a one-time license fee from Schering.
Research and development expenses increased 41% and 54% for the three months
and six months ended June 30, 1996, respectively, as compared to the
corresponding periods in 1995. The increase was attributable primarily to costs
associated with the clinical development of the INTEGRILIN(TM) product and
increased staffing, particularly costs associated with the conduct of PURSUIT,
a large multi-national Phase III clinical trial designed to assess the safety
and efficacy of INTEGRILIN(TM) in the management of patients with unstable
angina and non-Q wave myocardial infarction. The Company expects research and
development expenses to continue to increase over the next several years,
although the timing of certain of these expenses may depend on the timing and
phase of, and indications pursued in, clinical trials of potential products,
including INTEGRILIN(TM).
Marketing, general and administrative expenses increased 34% and 23% for the
three and six months ended June 30, 1996, respectively, as compared to the
corresponding periods in 1995. The increases in 1996 were related to expenses
associated with general corporate activities and increased staffing. The
Company expects marketing, general and administrative expenses to increase
significantly over the next several years.
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COR THERAPEUTICS, INC.
Interest income decreased by 36% and 11% for the three and six months ended
June 30, 1996, primarily due to lower average balances in cash, cash
equivalents, and short-term investments.
The results of the Company's operations for any interim period are not
necessarily indicative of the results of the Company's operations for any other
interim period or for a full fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended June 30, 1996 cash used in operating activities and
additions to capital equipment was $21,087,000. The Company expects that such
expenditures will increase significantly in future periods.
The Company has funded its operations primarily through public equity
financings and proceeds from collaboration research and development agreements,
as well as private equity financings, grant revenues, interest income and
property and equipment financings. The Company had available cash, cash
equivalents and short-term investments of $63,711,000 at June 30, 1996. Cash in
excess of immediate requirements is invested according to the Company's
investment policy, which provides guidelines with regard to liquidity and return
and, wherever possible, seeks to minimize the potential effects of
concentration and credit risk.
The Company expects its cash requirements may increase in future years due to
costs related to continuation and expansion of research and development,
including clinical trials, and increased marketing, general and administrative
activities. The Company anticipates that its existing capital resources and
interest earned thereon will enable it to maintain its current and planned
operations at least through 1997. However, the Company's requirements may
change depending on numerous factors, including, but not limited to, the
progress of the Company's research and development programs, the scope and
results of preclinical and clinical studies, the number and the nature of the
indications the Company pursues in clinical studies, the timing of regulatory
approvals, technological advances, determinations as to the commercial
potential of the Company's products and the status of competitive products. In
addition, expenditures will be dependent on existing and the establishment of
new, collaborative relationships with other companies, the availability of
financing and other factors. The Company will need to raise substantial
additional funds in the future, and there can be no assurance that such funds
will be available on favorable terms, if at all. In such event, the Company may
need to delay or curtail its research and development activities to a
significant extent.
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COR THERAPEUTICS, INC.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on May 21, 1996.
The stockholders elected the Board's nominees for director by the votes
indicated:
Nominee Votes in Favor Votes Withheld
------- -------------- --------------
Vaughn M. Kailian 15,987,724 299,590
Shaun R. Coughlin 15,982,817 304,497
James T. Doluisio 15,990,143 297,191
Jerry T. Jackson 15,990,643 296,671
Ernest Mario 15,988,043 299,271
Robert R. Momsen 15,990,643 296,671
L. Hollingsworth Smith, Jr. 15,990,543 296,771
William H. Younger, Jr. 15,990,643 296,671
The proposal to approve the Company's 1991 Equity Incentive Plan, as
amended, was approved with 7,448,177 affirmative votes, 5,615,373
negative votes, 67,958 abstentions and 3,155,806 broker non-votes.
The proposal to ratify the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending December 31,
1996 was approved with 16,211,234 affirmative votes, 33,402 negative
votes, 42,678 abstentions and no broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports
There were no reports on Form 8-K filed for the quarter ended
June 30, 1996.
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COR THERAPEUTICS, 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.
Date: August 8, 1996
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COR THERAPEUTICS, INC.
By: /s/ VAUGHN M. KAILIAN By: /s/ LAURA A. BREGE
--------------------- ------------------
Vaughn M. Kailian Laura A. Brege
President and Vice President, Finance and
Chief Executive Officer Chief Financial Officer
By: /s/ PETER S. RODDY
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Peter S. Roddy
Director, Finance and Controller
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