FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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, 2000
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: 000-28347
TULARIK INC.
(Exact name of Registrant as specified in its charter)
Delaware 94-3148800
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two Corporate Drive
South San Francisco, California 94080
(Address of principal executive offices) (Zip code)
(650) 825-7000
(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 ____
As of June 30, 2000, 47,880,903 shares of the registrant's common
stock were outstanding.
1
TULARIK INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements..................................................................... 3
Consolidated Balance Sheets.................................................................... 3
Consolidated Statements of Operations.......................................................... 4
Consolidated Statements of Cash Flows.......................................................... 5
Notes to Consolidated Financial Statements..................................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results Of Operations.... 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk............................... 10
Part II. OTHER INFORMATION........................................................................ 10
Item 5. Other Information........................................................................ 10
Item 6. Exhibits and Reports on Form 8-K......................................................... 11
(a) Exhibits................................................................................... 11
(b) Reports on Form 8-K........................................................................ 11
Signatures....................................................................................... 11
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TULARIK INC.
Consolidated Balance Sheets
(In thousands, except share data)
June 30, December 31,
ASSETS 2000 1999 (1)
----------------- ----------------
Current assets: (unaudited)
Cash and cash equivalents $ 103,282 $ 95,269
Marketable securities 151,246 107,760
Prepaid expenses and other current assets 3,349 3,103
----------------- ----------------
Total current assets 257,877 206,132
Property and equipment, net 17,855 15,434
Non-current marketable securities 36,626 -
Restricted investments 2,055 4,000
Other assets 5,301 4,872
----------------- ----------------
Total assets $ 319,714 $ 230,438
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 894 $ 807
Accrued compensation and related liabilities 2,476 1,769
Accrued liabilities 4,580 2,724
Current portion of long-term debt and capital lease
obligations 6,022 5,052
Deferred revenue 21,340 11,227
----------------- ----------------
Total current liabilities 35,312 21,579
Long-term debt and capital lease obligations, non-current 10,788 10,097
Other non-current liabilities 22,998 1,193
Commitments
Stockholders' equity:
Convertible preferred stock; $.001 par value; 5,000,000
shares authorized; none issued and outstanding - -
Common stock; $.001 par value; 145,000,000
shares authorized; issued and outstanding
47,880,903 and 44,835,844, respectively 48 45
Additional paid-in capital 369,698 291,114
Notes receivable from stockholders (1,372) (1,609)
Deferred compensation, net (3,218) (4,586)
Accumulated deficit ( 114,540) (87,395)
----------------- ----------------
Total stockholders' equity 250,616 197,569
----------------- ----------------
Total liabilities and stockholders' equity $ 319,714 $ 230,438
================= ================
The accompanying notes are an integral part of these consolidated financial
statements.
(1) The balance sheet at December 31, 1999 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.
3
TULARIK INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue:
Collaborative research and development $ 5,824 $ 6,049 $ 11,500 $ 11,993
Operating expenses:
Research and development 14,452 10,885 29,447 20,951
General and administrative 2,477 1,279 4,535 2,648
Amortization of deferred stock compensation 597 617 1,373 840
Charge for acceleration of stock and option vesting - - 5,396 -
----------- ----------- ----------- ----------
17,526 12,781 40,751 24,439
----------- ----------- ----------- ----------
Loss from operations (11,702) (6,732) (29,251) (12,446)
Interest income 4,419 1,449 7,598 3,004
Interest expense (335) (272) (692) (437)
----------- ----------- ----------- ----------
Loss before the cumulative effect of a change
in accounting principle (7,618) (5,555) (22,345) (9,879)
Cumulative effect of a change in accounting
principle - - (4,800) -
----------- ----------- ------------ ----------
Net loss $ (7,618) $ (5,555) $ (27,145) $ (9,879)
=========== =========== ============ ==========
Basic and diluted amounts per share:
-----------------------------------
Loss before cumulative effect of a change in accounting
principle $ (0.16) $ (0.76) $ (0.49) $ (1.37)
=========== =========== =========== ==========
Cumulative effect of a change in accounting principle - - $ (0.10) -
=========== =========== =========== ==========
Net loss $ (0.16) $ (0.76) $ (0.59) $ (1.37)
=========== =========== =========== ==========
Weighted average shares used in computing
basic and diluted net loss per share 47,247,554 7,307,089 45,960,720 7,198,168
=========== =========== ============ ===========
The accompanying notes are an integral part of these consolidated financial
statements.
4
TULARIK INC.
Consolidated Statements of Cash Flows
(In thousands)
For the six months ended
June 30,
2000 1999
------------- -------------
(unaudited) (unaudited)
Cash flows from operating activities:
Net Loss $ (27,145) $ (9,879)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 2,246 1,808
Amortization of deferred stock compensation 1,373 840
Noncash stock compensation 6,156 250
Changes in assets and liabilities:
Other assets (375) (1,285)
Accounts payable and accrued liabilities 2,757 (2,293)
Deferred revenue 31,811 (1,575)
------------- -------------
Net cash provided by (used in) operating activities 16,823 (12,134)
------------- -------------
Cash flows from investing activities:
Maturities of marketable securities 193,357 60,876
Purchases of marketable securities (271,824) (69,808)
Acquisition of property and equipment (4,667) (5,798)
------------- -------------
Net cash used in investing activities (83,134) (14,730)
------------- -------------
Cash flows from financing activities:
Payments of long-term obligations (2,525) (1,417)
Proceeds from issuance of long-term obligations 4,186 9,995
Proceeds from notes receivable from stockholders 237 -
Proceeds from issuances of common stock, net 72,426 1,227
------------- -------------
Net cash provided by financing activities 74,324 9,805
------------- -------------
Net increase (decrease) in cash and cash equivalents 8,013 (17,059)
Cash at the beginning of the period 95,269 53,398
------------- -------------
Cash at the end of the period $ 103,282 $ 36,339
============= =============
The accompanying notes are an integral part of these consolidated financial
statements.
5
TULARIK INC.
Notes to Consolidated Financial Statements
(unaudited)
Basis of Presentation
The unaudited consolidated financial statements of Tularik
Inc.("Tularik" or the "Company") reflect, in the opinion of management, all
adjustments, consisting only of normal and recurring adjustments, necessary to
present fairly the Company's consolidated financial position at June 30, 2000
and the Company's consolidated results of operations for the three-month and
six-month periods ended June 30, 2000 and 1999. Interim-period results are not
necessarily indicative of results of operations or cash flows for a full-year
period.
The year-end balance sheet data were derived from audited financial
statements, but do not include all disclosures required by generally accepted
accounting principles.
These financial statements and the notes accompanying them should be
read in conjunction with the Company's annual report on Form 10-K for the year
ended December 31, 1999. Stockholders are encouraged to review the Form 10-K for
a broader discussion of the Company's business and the opportunities and risks
inherent in the Company's business. Copies of the Form 10-K are available from
the Company on request.
Revenue Recognition
Collaborative research and development agreements provide for periodic
payments in support of the Company's research activities. Collaboration revenue
is recognized as earned based on actual costs incurred or as milestones are
achieved. Research support payments received in advance of work performed are
recorded as deferred revenue. The Company previously recognized nonrefundable
technology access fees as revenue when received and when all contractual
obligations of the Company relating to the fees had been fulfilled. As reported
in Form 10-Q for the first quarter of 2000 and effective January 1, 2000, the
Company changed its method of accounting for nonrefundable technology access
fees to recognize such fees over the term of the related research collaboration
agreement. The Company believes that the change in accounting principle is
preferable based on guidance provided in the Securities and Exchange
Commission's Staff Accounting Bulletin No. 101 - Revenue Recognition in
Financial Statements. The $4.8 million cumulative effect of a change in
accounting principle was reported as a charge in the quarter ended March 31,
2000 and is reflected as a charge for the six months ended June 30, 2000. The
cumulative effect was initially recorded as deferred revenue that will be
recognized as revenue over the remaining contractual terms of the collaborative
research and development agreements. For the six months ended June 30, 2000, the
impact of the change in accounting principle was to increase net loss by $4.0
million, or $0.09 per share, comprised of the $4.8 million cumulative effect of
the change as described above ($0.10 per share), net of the $0.8 million of the
related deferred revenue that was recognized as revenue during the six-month
period ($0.02 per share). For the three months ended June 30, 2000, the impact
of the change in accounting principle was to decrease net loss by $0.4 million,
or $0.01 per share. The remainder of the related deferred revenue will be
recognized in revenue approximately as follows: $0.8 million over the remainder
of 2000, $1.6 million in 2001, $1.1 million in 2002, and $0.5 million in 2003.
Had the change in accounting principle been adopted as of January 1, 1999,
income for the three and six months ended June 30, 1999 would have increased
respectively by $0.4 and $0.8 million, or $0.05 and $0.11 per diluted share of
common stock.
Reclassifications
Certain financial statement items have been reclassified to conform to
the current quarter's format. These reclassifications had no impact on
previously reported net losses.
6
Net Loss Per Share
The following table sets forth the computation of the Company's basic
and diluted net loss per share (in thousands, except per share amounts):
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
--------- --------- ---------- -----------
Numerator:
Net loss $ (7,618) $ (5,555) $ (27,145) $ (9,879)
========= ========= ========== ===========
Denominator:
Weighted average shares of common outstanding 47,731 7,697 46,501 7,646
Less: weighted average shares subject to repurchase (483) (390) (540) (448)
--------- --------- ---------- -----------
Weighted average shares used in computing basic
and diluted net loss per share 47,248 7,307 45,961 7,198
========= ========= ========== ===========
Basic and diluted net loss per share $ (0.16) $ (0.76) $ (0.59) $ (1.37)
========= ========= ========== ===========
Outstanding options and warrants to purchase in aggregate 5,503,922
shares of common stock at June 30, 2000 and 7,059,987 shares of common stock at
June 30, 1999 were excluded from diluted earnings calculations for the periods
ended June 30, 2000 and 1999 respectively because inclusion of options and
warrants would have an anti-dilutive effect on losses in these periods. At June
30, 2000, 410,682 shares of common stock were subject to repurchase.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results Of Operations
Some statements contained in this Quarterly Report on Form 10-Q are
forward-looking statements concerning the Company's operations, economic
performance and financial condition. Forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, are
included, for example, in the discussions about:
. the Company's strategy;
. sufficiency of the Company's cash resources;
. revenues from existing and new collaborations;
. product development;
. the Company's research and development and other expenses; and
. the Company's operational and legal risks.
These statements involve risks and uncertainties. Actual results may
differ materially from those expressed or implied in those statements. Factors
that could cause these differences include, but are not limited to, those
discussed below, including under "Liquidity and Capital Resources" and "Risk
Factors," and in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999, including under "Business--Risk Factors."
Company Overview
Tularik is engaged in the discovery and development of a broad range
of novel and superior orally available drugs based on gene regulation. Tularik
programs address cancer, CMV, diabetes, obesity, inflammation, allergy/asthma,
lipid disorders and bacterial diseases, and a class of targets known as orphan
nuclear receptors. Tularik has established strategic partnerships with Japan
Tobacco Inc., Roche Bioscience and Knoll AG.
Operating Results
For the three months ended June 30, 2000, Tularik incurred a net loss
of $7.6 million compared to a net loss of $5.6 million for the same period in
1999. For the six months ended June 30, 2000, Tularik incurred a net loss of
$27.1 million compared to a net loss of $9.9 million for the same period in
1999.
7
Included in the loss for the six months ended June 30, 2000 were non-cash
charges of $4.8 million related to the cumulative effect of a change in
accounting principle (see notes to the financial statements) and $5.4 million
for the acceleration of vesting of certain options and restricted stock. 1999
earnings per diluted share amounts do not reflect preferred stock that converted
to common stock at the initial public offering in December 1999.
Revenues from collaborative research and development for the three and
six months ended June 30, 2000 were $5.8 and $11.5 million respectively,
compared to 1999 three and six month revenues of $6.0 and $12.0 million,
respectively. Revenue for the three months ended June 30, 2000 primarily
included research payments from Japan Tobacco and Knoll AG in obesity, Japan
Tobacco in orphan nuclear receptors and Roche in inflammation, but included only
one month of revenue from a new collaborative agreement with Japan Tobacco in
the metabolic disease area that was signed in May 2000. Tularik has been
notified by Japan Tobacco that Japan Tobacco will exercise its contractual right
to terminate the agreement with respect to the Tularik obesity/diabetes program
in September 2000. During 1999, Tularik received an aggregate of $4.5 million
from this agreement and will recognize approximately $3.3 million in revenue in
2000 from this agreement of which approximately $2.1 million in revenue was
recognized in the six months ending June 30, 2000 and $1.2 million in revenue
will be recognized in the third quarter of 2000.
Total operating expenses for the quarters ended June 30, 2000 and 1999
were $17.5 and $12.8 million, respectively. Total operating expenses for the six
months ended June 30, 2000 were $35.4 million, excluding the effect of a
non-cash charge of $5.4 million related to the acceleration of vesting of
certain options and restricted stock, against $24.4 million for the same period
in 1999.
Total research and development expenses for the three months and six
months ended June 30, 2000 increased to $14.5 and $29.4 million, respectively,
from $10.9 and $21.0 million for the same periods in 1999, primarily due to
increased numbers of preclinical and clinical studies, as well as manufacturing
costs for Tularik's cancer drug candidates T67, T607 and T64.
Total general and administrative expenses for the three months and six
months ended June 30, 2000 increased to $2.5 and $4.5 million, respectively,
from $1.3 and $2.6 million for the same periods in 1999, primarily due to a
commission fee associated with the signing of the new research collaboration
with Japan Tobacco and to non-cash, stock-based consultant compensation.
Interest income increased to $4.4 million in the quarter ended June 30,
2000 from $1.4 million in the comparable quarter of 1999 and to $7.6 million in
the six months ended June 30, 2000 from $3.0 million in the respective period of
1999. These increases were principally due to the Company's higher cash, cash
equivalent and investment balances during the 2000 periods as a result of
investing net proceeds of approximately $104.7 and $71.3 million from the
Company's December 1999 and March 2000 public offerings.
Liquidity and Capital Resources
Since inception, the Company's primary sources of funds have been the
sale of equity securities, non-equity payments from collaborators and interest
income. Combined cash, cash equivalents and investments (both current and
non-current) totaled $291.2 million at June 30, 2000, an increase of $88.1
million from December 31, 1999. The increase was due to proceeds of
approximately $72.6 million from the issuance of common stock, $16.8 million of
net cash from operations, $4.2 million of cash from issuance of debt and $1.7
million in net investments that are no longer restricted offset by $4.7 million
in capital expenditures and $2.5 million in repayment of debt. Included in net
cash provided by operating activities was $36.4 million received from
collaborators during the second quarter of 2000.
On June 1, 2000, Tularik Inc. and Japan Tobacco Inc. entered into a
broad collaborative agreement for the discovery, development and
commercialization of products for the treatment of metabolic diseases. Under the
terms of the agreement, Tularik has formed a wholly-owned subsidiary to conduct
the research portion of the collaboration. The research conducted by the
subsidiary is independent from any research programs that currently exist at
Tularik or Japan Tobacco. The subsidiary is located in South San Francisco,
California.
8
Japan Tobacco has made a $34.2 million payment to Tularik and has
agreed to make additional research and other payments to Tularik of up to
approximately $37.0 million during the five year term of the research programs.
Expenses incurred in conjunction with the development and commercialization of
any compound identified by the subsidiary will be shared equally by the parties.
Tularik and Japan Tobacco will also share equally all profit from the
commercialization of any compound identified by the subsidiary during the
collaboration. Each party may elect to terminate its co-development obligations
with respect to, and profit sharing interest in, a given collaboration product.
In such case, the other party may continue to develop and commercialize such
product at its expense, subject to an obligation to pay a royalty on sales of
such product to the party that terminated its co-development of such product.
Japan Tobacco has the option to purchase the subsidiary at various times.
The Company's forecast of the period of time through which financial
resources will be adequate to support the Company's operations is a
forward-looking statement that involves risks and uncertainties, and actual
results could vary as a result of a number of factors. The Company believes that
existing cash and investment securities and anticipated cash flow from existing
collaborations will be sufficient to support the Company's current operating
plan through the end of 2003. The Company has based this estimate on assumptions
that may prove to be wrong. The Company's future capital requirements will
depend on many factors, including:
. the progress of the Company's research activities;
. the number and scope of the Company's research programs;
. the progress of the Company's pre-clinical and clinical development
activities;
. the progress of the development efforts of the Company's
collaborators;
. the Company's ability to establish and maintain current and new
collaboration and licensing arrangements;
. the Company's ability to achieve milestones and receive funding under
collaboration arrangements;
. the costs involved in enforcing patent claims and other intellectual
property rights;
. the costs and timing of regulatory approvals; and
. the costs of establishing sales, marketing and distribution capabilities.
Future capital requirements will also depend on the extent to which
the Company acquires or invests in businesses, products and technologies. Until
the Company can generate sufficient levels of cash from the Company's
operations, which the Company does not expect to achieve for at least several
years, the Company expects to finance future cash needs through the sale of
equity securities, strategic collaborations and debt financing as well as
interest income earned on cash balances. The Company cannot assure stockholders
that additional financing or collaboration and licensing arrangements will be
available when needed or that, if available, this financing will be obtained on
terms favorable to the Company or the Company's stockholders. Insufficient funds
may require the Company to delay, scale back or eliminate some or all of the
Company's research or development programs, to lose rights under existing
licenses or to relinquish greater or all rights to product candidates at an
earlier stage of development or on less favorable terms than the Company would
otherwise choose or may adversely affect the Company's ability to operate as a
going concern. If additional funds are raised by issuing equity securities,
substantial dilution to existing stockholders may result.
The Company's cash and investments policy emphasizes liquidity and
preservation of principal over other portfolio considerations. The Company
selects investments that maximize interest income to the extent possible given
these two constraints. The Company satisfies its liquidity requirements by
investing excess cash in securities with different maturities to match projected
cash needs and limit concentration of credit risk by diversifying the Company's
investments among a variety of high credit-quality issuers.
Risk Factors
9
An investment in the Company's common stock is risky. Investors should
carefully consider the following risks, as well as further description and
discussion of these risks contained in the "Business--Risk Factors" section of
the Company's Annual Report on Form 10-K for the year ended December 31, 1999,
which description and discussion is incorporated herein by reference: If the
Company continues to incur operating losses for a period longer than
anticipated, the Company may be unable to continue operations; because the
Company's products are in an early stage of development, there is a high risk of
failure; the progress and results of the Company's animal and human testing are
uncertain; because the Company must obtain regulatory approval to market its
products in the United States and foreign jurisdictions, the Company cannot
predict whether or when it will be permitted to commercialize its products;
failure to attract, retain and motivate skilled personnel and cultivate key
academic collaborations will delay the Company's key product development
programs and its research and development efforts; the drug discovery methods
that the Company employs are relatively new and may not lead to the development
of drugs; if the Company cannot maintain its current corporate collaborations
and enter into new corporate collaborations, its product development could be
delayed; if the Company does not realize value from its retained
commercialization rights, the Company may not achieve its commercial objectives;
if the Company's competitors develop and market products that are more effective
than the Company's own products, the Company's commercial opportunity will be
reduced or eliminated; because it is difficult and costly to protect its
proprietary rights, the Company cannot ensure their protection; if the Company
is unable to contract with third parties to manufacture its products in
sufficient quantities and at an acceptable cost, the Company may be unable to
meet demand for its products and lose potential revenues; if the Company is
unable to create sales, marketing and distribution capabilities or enter into
agreements with third parties to perform these functions, the Company will not
be able to commercialize products; the Company's ability to generate revenues
will be diminished if it fails to obtain acceptable prices or an adequate level
of reimbursement for its products from third-party payors; if conflicts arise
between the Company's collaborators, advisors or directors and the Company, they
may act in their self-interest, which may be adverse to the investors' best
interests; if the Company fails to obtain the capital necessary to fund its
operations, it will be unable to successfully develop products; if product
liability lawsuits are successfully brought against the Company, the Company may
incur substantial liabilities and may be required to limit commercialization of
its products; and if the Company uses biological and hazardous materials in a
manner that causes injury or violates the law, the Company may be liable for
damages.
If any of the foregoing or other risks actually occur, the Company's
business could be harmed. In that case, the trading price of the Company's
common stock could decline, and investors might lose all or part of their
investment. The risks and uncertainties described above are not the only ones
facing the Company. Additional risks and uncertainties not presently known to
the Company, or that the Company currently sees as immaterial, may also harm the
Company's business. If any of these additional risks or uncertainties occur, the
trading price of the Company's common stock could decline, and investors might
lose all or part of their investment.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company's exposure to market risk is principally limited to its
cash equivalents and investments that have maturities of less than two years.
The Company maintains a non-trading investment portfolio of investment grade,
liquid debt securities that limits the amount of credit exposure to any one
issue, issuer or type of instrument. The securities in the Company's investment
portfolio are not leveraged, are classified as available-for-sale and are
therefore subject to interest rate risk. The Company currently does not hedge
interest rate exposure.
Part II. OTHER INFORMATION
Item 5. Other Information
Clinical Trial Update
10
The Company currently has three drug candidates in its cancer program
that are undergoing clinical testing. Tularik has recently commenced phase I/II
efficiency clinical trials for its lead anti-cancer drug candidate, T67. For its
second anti-cancer drug candidate, T607, Tularik has initiated phase I studies
in the U.S., the United Kingdom and Canada. In addition, in the second quarter
of 2000, Tularik initiated a phase II study with T64, its third anti-cancer drug
candidate. Early in the third quarter of 2000, Tularik also initiated a phase I
combination study with T64.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT
NUMBER
3.1.1# Amended and Restated Certificate of Incorporation of Registrant
3.2+ Amended and Restated Bylaws of Registrant
10.28* Collaboration agreement between Registrant and Japan Tobacco Inc.
dated June 1, 2000
10.29* License agreement between Registrant and Tularik Pharmaceutical
Company dated June 1, 2000
10.30* Option agreement among Registrant, Japan Tobacco Inc. and Tularik
Pharmaceutical Company dated June 1, 2000
27 Financial data schedule
# Filed as an exhibit to the registrant's Form 10-Q for the quarter ended
March 31, 2000, and incorporated herein by reference
+ Filed as an exhibit to the registrant's Registration Statement on Form S-1
No. 333-89177, and incorporated herein by reference
* Confidential treatment has been requested as to specific portions
(b) Reports on Form 8-K
None.
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.
TULARIK INC.
August 10, 2000 by: /s/ David V. Goeddel
------------------------------------
David V. Goeddel
Chief Executive Officer
August 10, 2000 by: /s/ Corinne H. Lyle
------------------------------------
Corinne H. Lyle
Chief Financial Officer
11