FORM 1O-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, 1999
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 0-19732
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CORVAS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 33-0238812
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3030 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices and zip code)
(858) 455-9800
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)
Indicate by check mark whether the Registrant (l) 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 August 2, 1999, there were 15,237,277 shares of Common Stock, $0.001
par value, of the Registrant issued and outstanding.
CORVAS INTERNATIONAL, INC.
INDEX
Page
PART I -- FINANCIAL INFORMATION ----
Item 1. Financial Statements
Condensed Balance Sheets as of June 30, 1999 (unaudited)
and December 31, 1998 1
Condensed Statements of Operations for the Three
and Six Months Ended June 30, 1999 and 1998 (unaudited) 2
Condensed Statements of Cash Flows for the Six Months
Ended June 30, 1999 and 1998 (unaudited) 3
Notes to Condensed Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
None
Item 3. Defaults Upon Senior Securities 10
None
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 11
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits 11
(b) Reports on Form 8-K 11
None
SIGNATURES 12
PART I -- FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CORVAS INTERNATIONAL, INC.
CONDENSED BALANCE SHEETS
(In thousands)
JUNE 30, 1999 DECEMBER 31, 1998
------------- -----------------
ASSETS (unaudited)
- - ------
Current assets:
Cash and cash equivalents $ 1,377 $ 611
Short-term debt securities held to maturity
and time deposits, partially restricted 12,399 17,002
Receivables 201 251
Note receivable from related party 153 153
Other current assets 381 411
------------ ------------
Total current assets 14,511 18,428
Property and equipment, net 1,249 1,484
------------ ------------
$ 15,760 $ 19,912
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
Current liabilities:
Accounts payable $ 516 $ 326
Accrued liabilities 1,226 993
Accrued vacation 214 207
------------ ------------
Total current liabilities 1,956 1,526
------------ ------------
Stockholders' equity:
Preferred stock - Series A 1 1
Preferred stock - Series B 0 0
Common stock 15 15
Additional paid-in capital 96,327 96,223
Accumulated deficit (82,539) (77,853)
------------ ------------
Total stockholders' equity 13,804 18,386
Commitments and contingencies
------------ ------------
$ 15,760 $ 19,912
============ ============
See accompanying notes to condensed financial statements.
1
CORVAS INTERNATIONAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
In thousands, except per share data
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ ------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
REVENUES:
Revenue from collaborative agreements $ 1,554 $ 1,746 $ 3,300 $ 3,493
License fees and milestones 0 1,000 0 2,000
Net product sales 0 10 0 44
Royalties 13 53 36 95
------------ ------------ ------------ ------------
Total revenues 1,567 2,809 3,336 5,632
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Research and development 3,678 4,098 6,782 7,682
General and administrative 857 1,400 1,635 2,266
Cost of products sold 0 1 0 18
------------ ------------ ------------ ------------
Total costs and expenses 4,535 5,499 8,417 9,966
------------ ------------ ------------ ------------
Loss from operations (2,968) (2,690) (5,081) (4,334)
OTHER INCOME:
Interest income 157 245 395 572
Other income 0 5 0 5
------------ ------------ ------------ ------------
157 250 395 577
------------ ------------ ------------ ------------
Net loss and other
comprehensive loss $ (2,811) $ (2,440) $ (4,686) $ (3,757)
============ ============ ============ ============
Basic and diluted net loss
per share $ (0.19) $ (0.18) $ (0.31) $ (0.27)
============ ============ ============ ============
Shares used in calculation of
basic and diluted net
loss per share 15,153 14,038 15,140 14,005
============ ============ ============ ============
See accompanying notes to condensed financial statements.
2
CORVAS INTERNATIONAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
In thousands
(unaudited)
Six Months Ended
June 30,
------------------------------
1999 1998
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,686) $ (3,757)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 284 303
Amortization of premiums and discounts on investments 21 (460)
Loss on sale of property and equipment 0 81
Stock compensation expense 12 104
Change in assets and liabilities:
Decrease in receivables 50 31
(Increase) decrease in other current assets 30 (14)
Increase in accounts payable, accrued
liabilities and accrued vacation 430 758
Decrease in deferred revenue 0 (2,656)
------------ ------------
Net cash used in operating activities (3,859) (5,610)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments held to maturity (7,791) (19,693)
Proceeds from maturity of investments held to maturity 12,373 27,295
Purchases of property and equipment (49) (733)
------------ ------------
Net cash provided by investing activities 4,533 6,869
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 92 238
------------ ------------
Net cash provided by financing activities 92 238
------------ ------------
Net increase in cash and cash equivalents 766 1,497
Cash and cash equivalents at beginning of period 611 2,044
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,377 $ 3,541
============ ============
See accompanying notes to condensed financial statements.
3
CORVAS INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(1) The Company
-----------
Corvas International, Inc. (the "Company") was incorporated on March
27, 1987 under the laws of the State of California. In July 1993, the Company
reincorporated in the State of Delaware. The Company is engaged in the design
and development of a new generation of therapeutic agents for cardiovascular,
cancer and other major diseases.
(2) Basis of Presentation
---------------------
The interim financial information contained herein is unaudited but, in
management's opinion, includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation. The condensed
financial statements should be read in conjunction with the Company's audited
financial statements and notes thereto for the year ended December 31, 1998.
Results for the interim periods are not necessarily indicative of results for
other interim periods or for the full year.
(3) Net Loss Per Share
------------------
Net loss per share for the three and six months ended June 30, 1999 and
1998 is computed using the weighted average number of common share equivalents
outstanding. Options, warrants and convertible preferred stock totaling
4,989,000 and 6,209,000 shares were excluded from the calculation of net loss
per share for the periods ended June 30, 1999 and 1998, respectively, since the
effect of their inclusion would be anti-dilutive.
(4) Subsequent Event
----------------
In July 1999, the Company, Vascular Genomics Inc. ("VGI") and the
stockholders of VGI entered into a Settlement Agreement and Mutual General
Release ("Settlement Agreement") that terminated the Company's option to acquire
all the stock of VGI in exchange for the Company's Common Stock or, in certain
circumstances, a combination of cash and Common Stock. Upon expiration or
cancellation of the option, VGI had the right to put 19.9% of its stock to the
Company for $3,960,000 in Corvas Common Stock. In addition, during the option
period, the Company funded research and other related costs involved in further
developing the technology. Pursuant to the Settlement Agreement, the Company
agreed to pay VGI the sum of $1,200,000 and to deliver to the stockholders of
VGI 250,000 shares of the Company's Common Stock that the Company agreed to
register for resale. Also pursuant to the Settlement Agreement, VGI agreed to
deliver to the Company shares of VGI stock equal to 6.5% of VGI's outstanding
shares.
4
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE FOLLOWING
DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THESE STATEMENTS RELATE TO FUTURE EVENTS, FUTURE CLINICAL TRIALS,
PRODUCT DEVELOPMENT OR FINANCIAL PERFORMANCE. IN SOME CASES, FORWARD-LOOKING
STATEMENTS CAN BE IDENTIFIED BY TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD,"
"EXPECTS," "PLANS," "ANTICIPATES," "BELIEVES," "ESTIMATES," "PREDICTS,"
"POTENTIAL," OR "CONTINUE." THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE
OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K.
OVERVIEW
Formed in 1987, Corvas International, Inc. ("Corvas" or the "Company")
is a clinical stage biopharmaceutical firm engaged in the design and development
of a new generation of therapeutic agents for cardiovascular, cancer and other
major diseases. To date, the Company has not generated significant revenues from
product sales and does not currently sell any commercial products. The Company
has not been profitable on an annual basis since inception and expects to incur
substantial additional operating losses over the next several years as the
Company progresses in its research and development programs. The Company's
historical results are not necessarily indicative of future results. In
addition, there is no assurance that the Company will successfully develop,
commercialize, manufacture or market any products or generate sufficient
revenues to become profitable on a sustained basis or at all. At June 30, 1999,
the Company had an accumulated deficit of $82,539,000.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
Operating revenues in the quarter ended June 30, 1999 decreased to
$1,567,000 from $2,809,000 in the corresponding period of 1998. This $1,242,000
decrease was primarily the result of a $1,000,000 milestone received from
Schering Corporation ("Schering-Plough") in the second quarter of 1998 upon
commencement of a Phase I trial of an oral thrombin inhibitor discovered by
Corvas. Revenue from collaborative agreements decreased by $192,000 comparing
these same periods, as the funding from Pfizer Inc. ("Pfizer") on the neutrophil
inhibitory factor ("NIF") program reached its contractual end, and the option
and related research and development agreements with Vascular Genomics Inc.
("VGI"), which covered a vascular targeting strategy, also ended.
Total costs and expenses decreased by $964,000 to $4,535,000 in the
three months ended June 30, 1999, from $5,499,000 in the same period of 1998.
Research and development expenses decreased by $420,000, mainly due to the
manufacture of clinical supplies for the Company's proprietary rNAP5 program in
1998 that were not incurred in 1999. In addition, general and administrative
expenses decreased by $543,000, primarily as a result of reductions in
administrative headcount in 1999 and higher recruiting costs in 1998.
Total other income decreased to $157,000 in the three month period
ended June 30, 1999 from $250,000 in the corresponding period of 1998. This
$93,000 decrease was due to both lower balances available for investment and
lower yields earned thereon.
5
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
Operating revenues in the six months ended June 30, 1999 decreased to
$3,336,000 from $5,632,000 in the same period of 1998. This $2,296,000 decrease
was primarily attributable to two milestone payments of $1,000,000 each earned
in the first half of 1998 upon commencement of Phase I clinical trials in both
the oral thrombin inhibitor program partnered with Schering-Plough and the NIF
program with Pfizer. In addition, revenue from collaborative agreements
decreased by $193,000 due to the contractual end in the first half of 1999 of
research and development funding from Pfizer and VGI. Revenues from product
sales and royalties decreased by $44,000 and $59,000, respectively, due to the
transfer of tissue factor manufacturing to two Johnson & Johnson affiliate
companies in 1998.
Total costs and expenses decreased by $1,549,000 comparing the first
halves of 1999 and 1998, to $8,417,000 in the 1999 period from $9,966,000 in
1998. Expenses associated with rNAP5 manufacturing in 1998 and a lower headcount
in 1999 accounted for the majority of the $900,000 decrease in research and
development expenditures. General and administrative expenses also decreased
comparing these same periods, by $631,000, primarily due to reductions in
administrative headcount.
Total other income decreased by $182,000, to $395,000 in the first
six months of 1999 from $577,000 in the 1998 period. This decrease was
primarily the result of reduced interest income.
Subject to the availability of additional capital, the Company expects
it will continue to incur significant expenses and operating losses over the
next several years as research and development and clinical trials progress.
However, there is no assurance that the Company will be able to raise any
additional capital. The Company also expects both its expenses and losses to
fluctuate from quarter to quarter and that such fluctuations may, at times, be
substantial.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, the Company's operations have been funded primarily
through public offerings and private placements of equity securities, funding
and milestones from collaborative agreements, license fees and interest income
earned on cash and investment balances. The Company's principal sources of
liquidity are its cash and cash equivalents, time deposits and debt securities
which, net of restricted time deposits, totaled $13,708,000 as of June 30, 1999.
Working capital at June 30, 1999 was $12,555,000. Available cash is invested in
accordance with the Company's investment policy, which was set by the Board of
Directors. This policy provides guidelines concerning the quality, term and
liquidity of investments, and has established objectives to preserve principle,
maintain adequate liquidity and maximize income. The Company presently invests
its excess cash primarily in government-backed debt instruments and, to a
smaller degree, in debt instruments of corporations with strong credit ratings.
For the six months ended June 30, 1999, net cash of $3,859,000 was used
in operating activities, a decrease of $1,751,000 from the cash usage one year
earlier. This was primarily due to decreased expenses in 1999. Net cash provided
by investing activities decreased by $2,336,000, to $4,533,000 in the six months
ended June 30, 1999 from $6,869,000 in the same period of 1998. This was due to
fewer capital expenditures and the ability to re-invest maturing investments
since less cash was required for operating activities. Net cash provided by
financing activities was $92,000 for the six month period ending June 30, 1999
compared to $238,000 one year earlier. This $146,000 decrease was attributable
to a decline in the number of stock options exercised.
6
Substantial additional costs will likely be incurred in the future,
including, but not limited to, costs related to ongoing and planned clinical
trials, preclinical studies, and research and development activities. Over the
next several years, the Company expects that such costs will result in
additional operating losses and negative cash flows from operations. The Company
expects costs to increase over the current levels in the second half of 1999 due
to the planned manufacture of Phase III clinical supplies for rNAPc2, a
proprietary anticoagulant currently in Phase II clinical testing in orthopedic
surgery patients, as well as an additional Phase IIa study planned in coronary
care patients. Further, in connection with the termination of the option and
research and development agreements with VGI, the Company will record a
settlement payment in the third quarter of 1999. In addition, the Company
expects that 1999 revenues will be less than those recognized in 1998 due to the
contractual end of research and development funding of both NIF and VGI in 1999,
the nine month funding extension on the oral anticoagulant program and the
milestones earned in 1998. Management continues to pursue strategic financings
and additional collaborative relationships, as well as continuing to consider
ways to reduce the Company's burn rate, including, but not limited to,
allocating existing resources to clinical trials and research programs which are
more advanced. As of June 30, 1999, the Company believes that, at the current
burn rate, its existing capital resources and interest earned thereon should be
sufficient to satisfy its anticipated funding requirements for at least the next
12 months. In the future, the Company may also receive additional funds through
milestone payments and royalties on sales of products in connection with its
alliances. However, there is no assurance that the Company will be able to raise
any additional amounts under existing or any future alliances, or that it will
be successful in raising additional capital through strategic or other
financings.
Strategic collaborations with Schering-Plough and Pfizer provide for
payments to the Company if and when certain milestones are met. In addition to
future milestones, the Company may also receive royalties on sales of products
in connection with its existing, as well as any future, alliances. If all
milestones on all of the Company's existing collaborations are achieved, Corvas
could receive a maximum of $67,681,000 in future milestone payments and research
and development funding over the next several years. However, there is no
assurance that the Company's existing collaborations will be successful, that
the Company will receive any future milestones or other payments pursuant to
collaborative agreements, that the collaborations will continue since the
existing agreements are terminable at the option of the collaborator upon
certain events, or that the existing collaborations will be commercially
successful.
In July 1999, the Company, VGI and the stockholders of VGI entered into
a Settlement Agreement and Mutual General Release ("Settlement Agreement") that
terminated the Company's option to acquire all the stock of VGI in exchange for
the Company's Common Stock or, in certain circumstances, a combination of cash
and Common Stock. Upon expiration or cancellation of the option, VGI had the
right to put 19.9% of its stock to the Company for $3,960,000 in Corvas Common
Stock. In addition, during the option period, the Company funded research and
other related costs involved in further developing the technology. Pursuant to
the Settlement Agreement, the Company agreed to pay VGI the sum of $1,200,000
and to deliver to the stockholders of VGI 250,000 shares of the Company's Common
Stock that the Company agreed to register for resale. Also pursuant to the
Settlement Agreement, VGI agreed to deliver to the Company shares of VGI stock
equal to 6.5% of VGI's outstanding shares. By declining to exercise the option
and entering into the Settlement Agreement, the Company favorably closed the put
right held by the VGI stockholders and avoided spending an additional $1,000,000
in option payments and other related expenses.
7
The Company leases its laboratory and office facilities under an
operating lease that expires in September 2006. Future capital requirements of
the Company will depend on many factors, including, but not limited to, the
following: the scientific progress in and magnitude of its drug discovery
programs; the progress and results of preclinical and clinical testing; the
costs involved in regulatory compliance; the costs of filing, prosecuting,
maintaining and enforcing patents; the progress of competing technologies and
other market developments; the changes in its existing collaborative
relationships; the Company's ability to establish and maintain collaborative or
licensing arrangements; the cost of manufacturing scale-up; and the
effectiveness of activities and arrangements of the Company or its collaborative
partners to commercialize the Company's products.
To continue its long-term product development efforts, the Company must
raise substantial additional funding either through collaborative arrangements
or through public or private financings. The Company's ability to raise
additional funds through sales of securities depends in part on investors'
perceptions of the biotechnology industry, in general, and of Corvas, in
particular. The market for securities of biotechnology companies, including
Corvas, has historically been highly volatile and investors have not been
focusing on the biotechnology market; accordingly, there is no assurance that
additional funding will be available, or, if available, that it will be
available on acceptable terms. If additional funds are raised by issuing
securities, further dilution, possibly substantial, to existing stockholders
will likely result. The Company may enter into additional collaborative
relationships to develop and commercialize certain of its current or future
technologies or products. There is no assurance that the Company will be able to
establish such relationships on satisfactory terms, if at all, or that
agreements with collaborators will successfully reduce the Company's funding
requirements. In addition, the Company has not attempted to establish bank
financing arrangements, and there is no assurance that it would be able to
establish such arrangements on satisfactory terms, if at all. If adequate funds
are not available, the Company may be required to significantly delay, scale
back or discontinue one or more of its drug discovery programs, clinical trials
or other aspects of its operations, or obtain funds through arrangements with
collaborative partners or others which may require the Company to relinquish
rights to certain of its technologies, product candidates or products that the
Company would not otherwise relinquish or at prices below what the Company would
otherwise choose to accept for relinquishing such rights.
IMPACT OF THE YEAR 2000
Any date fields in computer systems coded to accept only two digits
will be unable to properly interpret dates beyond the end of 1999, which could
lead to business interruptions commonly referred to as the "Year 2000" or "Y2K"
issue.
In August 1998, Corvas established an internal task force to address
the impact of any potential Y2K disruptions and administer the Company's Y2K
program. The task force meets regularly to review potential exposure of the
Company's information systems, laboratory and office equipment, corporate
infrastructure, key vendors and suppliers, corporate partners, communication and
utility providers, financial institutions and certain governmental agencies.
This assessment of both internal systems and external providers is an ongoing
process which will continue into the year 2000. The task force has completed an
initial inventory and review of all hardware and software, and has begun the
testing on items deemed to be critical in nature. As of June 30, 1999, the
Company's review of its financial, informational and operational systems had not
identified any material Y2K issues, and the Company does not expect costs
connected with remediation, if any, to be material.
8
In addition to risks associated with the Company's internal operating
systems, the Company is potentially vulnerable to failure by third parties to
adequately address their Y2K issues. Corvas continues to access the readiness of
its key third parties by monitoring such parties' readiness statements. To date,
no significant issues have been identified relating to third party vendors.
However, there is no assurance that the systems of third parties on which the
Company relies will be Y2K ready, or that any system failure by such parties
would not have a material adverse effect on the Company. Corvas believes that
its most likely exposure will be from third parties that fail to remediate their
Y2K issues. The Company has developed a contingency plan that identifies and
addresses material risks to Corvas in the event of third party system failures.
The plan specifically addresses potential power outages and outlines steps to
avoid problems relating to contract manufacturing and drug shipments for
clinical trials.
As the Company continues its ongoing evaluation of the impact of Y2K
issues, there is no assurance that additional costs and efforts will not be
required which may have a material adverse impact on the Company's business,
financial condition or results of operations. Furthermore, the Y2K issue is
complex and there is no assurance that the Company will be able to address any
problems that may arise without incurring a material adverse effect on the
Company's business, financial condition or results of operations.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
The Company invests its excess cash in short-term, high quality fixed
income investments that are held to maturity. The Company does not invest in
derivative financial instruments or any other market risk sensitive instruments.
Interest income earned on the Company's short-term investment portfolio is
affected by changes in the general level of interest rates. The Company believes
that its interest rate market risk is limited, and that it is not exposed to
significant changes in fair value because such investments are held to maturity.
The fair value of each investment approximates its amortized cost.
9
PART II -- OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
In March 1999, the Company was served with a Complaint in the Superior
Court of California, County of San Diego, by a former employee of the Company
who is also a principal shareholder of VGI. The Complaint consisted of several
allegations including, among others, violation of the Labor Code and breach of
contract. The Company continues to deny all claims and allegations and maintains
this denial as part of a Settlement Agreement and Mutual General Release reached
in July 1999. All amounts due under this agreement will be paid in the third
quarter of 1999.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders of the Company was scheduled on May
24, 1999 at which time the Board adjourned such meeting. The annual meeting was
reconvened and held on June 22, 1999. The matters described below were submitted
to a vote of stockholders. The Company had 15,141,588 shares of common stock,
1,000,000 shares of Series A convertible preferred stock and 250,000 shares of
Series B convertible preferred stock outstanding as of March 31, 1999, the
record date for the annual meeting. At the annual meeting, holders of a total of
13,885,711 shares of common and preferred stock were present in person or
represented by proxy.
a. Election of Class I Director for a three-year term expiring at the 2002
annual meeting. In light of the recent retirement of W. Leigh Thompson,
Jr., M.D., Ph.D., the director that was nominated by the Board in the
Proxy Statement, the Board, pursuant to its authority, nominated George
P. Vlasuk, Ph.D. to serve on the Board until the 2002 annual meeting
and until a successor is duly elected and qualified. Dr. Vlasuk was
nominated for election as the Class I director and the proxies that had
been submitted were voted for Dr. Vlasuk.
Name Shares voting for Shares withheld
---- ----------------- ---------------
George P. Vlasuk, Ph. D. 11,842,047 1,243,664
Class II Directors continuing in office until the 2000 annual meeting:
Michael Sorell, M.D.
Nicole Vitullo
Class III Directors continuing in office until the 2001 annual meeting:
M. Blake Ingle, Ph.D.
Randall E. Woods
10
b. A proposal to ratify the appointment of KPMG LLP as independent
auditors for the Company for the fiscal year ending December 31, 1999.
For 13,044,404
Against 30,757
Abstain 810,550
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit Number Description
-------------- -----------
10.59 Thirteenth Amendment to Lease Agreement for
3030 Science Park Road, San Diego, California
between the Company and Hub Properties Trust,
dated as of June 15, 1999.
10.60 Letter of Agreement between the Company and
Schering Corporation and Schering-Plough Ltd.,
dated as of June 23, 1999.
10.61 Second Amendment Agreement between the
Company and Schering Corporation and
Schering-Plough Ltd., effective as of June 29,
1999. 1
10.62 Second Amendment to Amended and Restated
Secured Promissory Note between the Company and
Randall E. Woods and Nancy Saint Woods, dated
as of July 7, 1999.
10.63 Settlement Agreement and Mutual General Release
between the Company and Vascular Genomics Inc.
and its stockholders, dated as of July 26,
1999, with certain exhibits thereto.
10.64 Amendment to Settlement Agreement and Mutual
General Release between the Company and
Vascular Genomics Inc. and its stockholders,
effective as of July 26, 1999.
27.1 Financial Data Schedule.
b. Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended June
30, 1999.
- - ----------------
1 Confidential treatment has been requested from the Securities and Exchange
Commission for portions of this exhibit.
11
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.
CORVAS INTERNATIONAL, INC.
Date: August 12, 1999 By: /s/ RANDALL E. WOODS
---------------------------------------
Randall E. Woods
President and Chief Executive Officer
Date: August 12, 1999 By: /s/ CAROLYN M. FELZER
---------------------------------------
Carolyn M. Felzer
Senior Director of Finance
Principal Financial Officer
12