SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
- ------- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
- --------- THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-21794
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GENZYME TRANSGENICS CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 04-3186494
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Five Mountain Road, Framingham, Massachusetts 01701
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(Address of principal executive offices) (Zip Code)
(508) 872-8400
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Registrant's telephone number, including area code
Indicate by check 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.
Class Outstanding at October 30, 1997
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Common Stock, $0.01 par value 17,389,916
GENZYME TRANSGENICS CORPORATION
TABLE OF CONTENTS
PAGE #
PART 1. FINANCIAL INFORMATION
ITEM 1 - Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
September 28, 1997 and December 29, 1996..................................3
Condensed Consolidated Statements of Operations for
the Three Months and Nine Months Ended September 28, 1997 and
September 29, 1996........................................................4
Condensed Consolidated Statements of Cash Flows for
the Nine Months Ended September 28, 1997
and September 29, 1996....................................................5
Notes to Unaudited Condensed Consolidated
Financial Statements......................................................6
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations.............................9
PART II. OTHER INFORMATION
ITEM 6
Exhibits and Reports on Form 8-K..........................................13
SIGNATURES....................................................................16
EXHIBIT INDEX.................................................................17
GENZYME TRANSGENICS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, dollars in thousands except per share amounts)
September 28, December 29,
1997 1996
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents.............................................. $ 5,346 $ 8,894
Accounts receivable, net............................................... 7,156 7,499
Unbilled contract revenue.............................................. 6,058 6,740
Other current assets................................................... 1,480 1,509
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Total current assets.................................................. 20,040 24,642
Net property, plant and equipment....................................... 25,582 20,566
Costs in excess of net assets acquired, net............................. 19,823 20,695
Investment in Joint Venture............................................. 280 283
Other assets............................................................ 946 518
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$ 66,671 $ 66,704
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................................ $ 1,974 $ 2,992
Accounts payable--Genzyme Corporation................................... 3,228 1,339
Revolving line of credit................................................ 6,000 6,000
Accrued expenses........................................................ 6,487 5,911
Advance payments........................................................ 6,388 6,649
Current portion of long-term debt....................................... 2,401 1,867
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Total current liabilities.............................................. 26,478 24,758
Long-term debt, net of current portion.................................. 8,461 5,708
Deferred lease obligation............................................... 587 508
Other liabilities....................................................... 237 526
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Total liabilities...................................................... 35,763 31,500
Stockholders' equity:
Preferred stock, $.01 par value, authorized 5,000,000
shares, none outstanding;.............................................. -- --
Common stock, $.01 par value; 24,000,000 shares authorized;
17,367,516 and 17,130,901 shares issued and outstanding
at September 28, 1997 and December 29, 1996, respectively.............. 174 171
Capital in excess of par value.......................................... 54,498 52,974
Accumulated deficit..................................................... (23,754) (17,931)
Accumulated translation adjustments..................................... (10) (10)
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Total stockholders' equity............................................... 30,908 35,204
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$ 66,671 $ 66,704
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The accompanying notes are an integral part of these financial statements.
GENZYME TRANSGENICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------- ------------------------------
SEPTEMBER 28, SEPTEMBER 29, SEPTEMBER 28, SEPTEMBER 29,
1997 1996 1997 1996
------------- ------------- --------------- -------------
Revenues
Services.......................................... $ 10,363 $ 9,857 $ 32,908 $ 28,033
Research and development.......................... 4,375 2,598 12,358 6,146
--------- --------- --------- ---------
14,738 12,455 45,266 34,179
Costs and operating expenses:
Services.......................................... 8,869 8,579 27,564 24,356
Research and development.......................... 4,516 2,274 11,582 6,373
Selling, general and administrative............... 3,662 2,748 10,816 8,165
Equity in loss of Joint Venture................... -- 50 531 184
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17,047 13,651 50,493 39,078
------------- ------------- --------------- -------------
Loss from operations............................... (2,309) (1,196) (5,227) (4,899)
Other income (expense):
Interest income................................... 20 26 112 37
Interest expense.................................. (316) (238) (733) (911)
Other income...................................... 50 220 50 538
------------- ------------- --------------- -------------
Loss before provision for income taxes............. (2,555) (1,188) (5,798) (5,235)
Provision for income taxes......................... -- -- 25 92
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Net loss........................................... $ (2,555) $ (1,188) $ (5,823) $ (5,327)
------------- ------------- --------------- -------------
------------- ------------- --------------- -------------
Net loss per common share.......................... $ (0.15) $ (0.08) $ (0.34) $ (0.38)
------------- ------------- --------------- -------------
------------- ------------- --------------- -------------
Number of common shares outstanding for purposes of
computing net loss per share..................... 17,303 15,629 17,217 14,028
------------- ------------- --------------- -------------
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The accompanying notes are an integral part of these financial statements.
GENZYME TRANSGENICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, dollars in thousands except per share amounts)
NINE MONTHS ENDED
----------------------------
SEPTEMBER 28, SEPTEMBER 29,
1997 1996
------------- -------------
Cash flows for operating activities:
Net loss........................................................ $ (5,823) $ (5,327)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization.................................. 3,097 2,735
Adjustment to Goodwill......................................... -- (233)
Equity in loss of Joint Venture................................ 531 184
Changes in assets and liabilities, net of effects
from purchase of subsidiaries:
Accounts receivable and unbilled contract revenue.............. 1,025 (6,048)
Other current assets........................................... 29 (525)
Accounts payable............................................... (1,018) (1,075)
Accounts payable--Genzyme Corporation.......................... 1,889 1,679
Other accrued expenses......................................... 788 (197)
Advance payments............................................... (261) 993
------------ -----------
Net cash provided by (used in) operating activities............ 257 (7,814)
Cash flows for investing activities:
Purchase of property, plant and equipment....................... (5,982) (1,427)
Investment in Joint Venture..................................... (528) --
Restricted cash................................................. -- 950
Other assets.................................................... (480) (58)
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Net cash used by investing activities.......................... (6,990) (535)
Cash flows from financing activities:
Net proceeds from the issuance of common stock.................. 1,315 13,424
Proceeds from long-term debt.................................... 5,221 --
Repayment of long-term debt..................................... (3,141) (1,368)
Net borrowings under revolving line of credit................... -- (6,000)
Investment and advances by Genzyme Corporation.................. -- 1,673
Other long-term liabilities..................................... (210) (296)
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Net cash provided by financing activities...................... 3,185 7,433
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Net decrease in cash and cash equivalents........................ (3,548) (916)
Cash and cash equivalents at beginning of the period............. 8,894 4,400
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Cash and cash equivalents at end of period....................... $ 5,346 $ 3,484
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Noncash Investing and Financing Activities:
Property acquired under capital leases.......................... $ 1,207 $ 1,142
The accompanying notes are an integral part of these financial statements.
GENZYME TRANSGENICS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. Basis of Presentation:
---------------------
These unaudited condensed consolidated financial statements should be read
in conjunction with the Company's Annual Report on Form 10-K for the fiscal
year ended December 29, 1996 and the financial statements and footnotes
included therein. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
Securities and Exchange Commission rules and regulations.
Per share information is based upon the weighted average number of shares
of Common Stock outstanding during the period.
The financial statements for the nine months ended September 28, 1997 and
September 29, 1996 are unaudited but include, in the Company's opinion, all
adjustments (consisting only of normally recurring accruals) necessary for
a fair presentation of the results for the periods presented.
2. Accounting Policies:
-------------------
The accounting policies underlying the quarterly financial statements are
those set forth in Note 2 of the financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 29, 1996.
3. Joint Venture:
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In February 1997, the Company reached an agreement with a joint venture
formed by the Company and Sumitomo Metal Industries, Ltd. (the "Joint
Venture") entitling the Company to receive up to $4.4 million in future
milestone payments for the development of Antithrombin III ("AT-III"). In
1997, the Company earned $1.4 million in the first quarter and $1 million
in the second quarter in milestone payments under the agreement. In March
1997, the Joint Venture partners agreed to raise $2.4 million in additional
equity, of which the Company contributed $528,000 in April 1997 to maintain
its 22% ownership.
4. AT-III Joint Venture with Genzyme:
---------------------------------
In March 1997, the Company amended its Convertible Debt and Development
Funding Agreement (the "Development Funding Agreement") dated March 29,
1996 with Genzyme to provide for continued funding by Genzyme of the
development costs of the AT-III program through June 30, 1997. In June
1997, the Company agreed to extend the Agreement until December 31, 1997.
Under the extension agreement, Genzyme agreed to provide $7 million in
development funding in 1997.
In July 1997, the Company and Genzyme announced an agreement to establish a
joint venture for the development, marketing and distribution of AT-III,
subject to the execution of a definitive agreement. Under the terms of the
agreement, Genzyme will provide 70 percent of the development costs, up to
a maximum contribution of $33 million, and the Company will fund the
remaining 30%. Development costs in excess of $33 million will be funded
equally by the partners. In addition to the funding, both partners will
contribute manufacturing, marketing and other resources to the joint
venture at cost and will share profits from product sales equally. The
agreement covers all territories other than Asia and may include milestone
payments from Genzyme to the Company after the product has been approved by
the United States Food and Drug Administration.
5. Pharming Litigation:
-------------------
In April 1997, the Company reached an agreement to settle its arbitration
with Pharming B.V., a Netherlands corporation, in connection with a license
agreement between the two parties. The terms of the agreement include a
stipulation dismissing all claims submitted in the arbitration proceedings
and a clarification of certain terms of the license agreement.
6. Mason Debt Financing:
--------------------
In June 1997, the Company completed financing for the expansion of its
Mason Laboratories facility. The financing package provides $5 million in
available funds from a consortium of federal, state and local government
agencies in conjunction with a commercial bank. The loan carries a 10-year
amortization schedule with a variable interest rate adjusted annually. The
current rate is 9.25%. The Company utilized $3.8 million of the line in
June to fund the initial phase of renovations and to refinance
approximately $800,000 of existing mortgage debt on the facility. The
remaining $1.2 million is available through December 31, 1998 for
additional renovations of the facility, if any.
7. Redfield Debt Financing:
-----------------------
In June 1997, the Company's Redfield Laboratories subsidiary obtained
$1,050,000 in financing from a commercial bank in conjunction with a state
government agency for the refinancing of approximately $750,000 in existing
mortgage debt and to fund expansion of its facility. The financing consists
of two notes, both at 10% annual interest. The first note, in the amount of
$350,000, has a 10-year term. The second note, in the amount of $750,000,
has a 10-year amortization with a balloon payment due in May 1998. The
annual balloon requirement is intended to be refinanced each year.
In July 1997, Redfield Laboratories obtained an additional $350,000 in
financing for the expansion of its facility from a combination of federal,
state and county government agencies. The loan is amortized over 15-year
term and carries an interest rate of 5.5%.
8. Amended Convertible Debt Agreement:
----------------------------------
In September 1997, the Company and Genzyme amended the terms of the $8.3
million credit line provided by Genzyme to the Company as part of the
Development Funding Agreement (see Note 4). Under the Amended and
Restated Convertible Debt Agreement, the expiration date of the revolving
credit line was extended to March 31, 2000, with an option, at that date,
for the Company to convert the outstanding balance to a three-year term
loan. The interest rate remains at 7% through April 1, 1998, increasing
annually through the end of the term loan; starting at the lower of 8% or
the prime lending rate in the first year increasing to the lower of 10% or
the prime lending rate plus 2% in the final year of the term loan.
Financial covenants require positive quarterly earnings before interest,
taxes, depreciation, amortization and unfunded research and development
expense starting April 1, 1998.
Any amounts outstanding under the credit line may be converted into the
Company's common stock at Genzyme's option at any time for up to the full
amount outstanding or at the Company's option on a quarterly basis limited
to an amount sufficient to maintain a minimum tangible net worth. All such
conversions are to be based on the average closing stock price over 20
trading days prior to conversion.
No amounts were outstanding under this credit line at September 28, 1997.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three months ended September 28, 1997 and September 29, 1996
Total revenues for the three-month period ending September 28, 1997 were
$14.7 million, compared with $12.5 million in the comparable period of 1996,
an increase of $2.2 million or 18%. Service revenues increased to $10.4
million in the third quarter of 1997 from $9.9 million in the third quarter
of 1996, an increase of $506,000 or 5%. Research and development revenue
increased to $4.4 million in the third quarter of 1997 from $2.6 million in
the third quarter of 1996, an increase of $1.8 million or 68%, due primarily
to an increase in activity and revenues related to the funding received from
Genzyme Corporation ("Genzyme") for the development of the lead compound,
transgenic antithrombin III ("AT-III"), the achievement of a $1.5 million
milestone from Bristol-Meyers Squibb related to the BR96 collaboration and
increased commercial activity.
Cost of services for the third quarter of 1997 was $8.9 million compared to
$8.6 million in the comparable period of 1996, an increase of $290,000 or 3%,
due to the increase in service revenues. Research and development expenses
increased to $4.5 million in the third quarter of 1997 from $2.3 million in
the third quarter of 1996, an increase of $2.2 million or 99%. The increase
is due to the operating costs of a manufacturing facility coming on-line for
the production of AT-III clinical trial material and increased activity in
the research and commercial programs.
Gross profit for the third quarter of 1997 amounted to $1.4 million versus
$1.6 million in the third quarter of 1996. Gross profit on services for the
third quarter of 1997 was $1.5 million, a gross margin of 14%, versus $1.3
million, a gross margin of 13%, in the third quarter of 1996. The
improvement in services margins was primarily due to increased services
revenues.
Selling, general and administrative ("SG&A") expenses increased to $3.7
million in the third quarter of 1997 from $2.7 million in the third quarter
of 1996, an increase of $914,000 or 33%. The increase is due to an increase
in the sales and marketing effort and to the addition of administrative
personnel required to support the growth in research and development programs.
Interest income decreased to $20,000 in the third quarter of 1997, from
$26,000 in the third quarter of 1996, due to the decrease in funds available
for investment from the Company's secondary public offering in August 1996.
Interest expense increased to $316,000 in the third quarter of 1997 from
$238,000 in the third quarter of 1996 due to increased borrowings in the
third quarter of 1997 versus the comparable period in 1996.
The Company recognized no Joint Venture losses during the third quarter of
1997 compared to $50,000 in the comparable period of 1996. The decrease was
due to the fact that there was no additional research funding provided by
the Joint Venture in the third quarter of 1997.
Nine months ended September 28, 1997 and September 29, 1996
Total revenues for the nine-month period ending September 28, 1997 were $45.3
million, compared with $34.2 million in the comparable period of 1996, an
increase of $11.1 million or 32%. Service revenues increased to $32.9 million
during the first nine months of 1997 from $28 million in the comparable
period of 1996, an increase of $4.9 million or 17%. Research and development
revenues increased to $12.4 million during the first nine months of 1997 from
$6.1 million in the comparable period of 1996, an increase of $6.3 million or
101%, due primarily to an increase in activity and revenues related to the
funding received from Genzyme in the development of AT-III, the achievement
of $2.4 million in milestones from the Joint Venture, the achievement of a
$1.5 million milestone from Bristol-Meyers Squibb related to the BR96
collaboration and increased commercial activity.
Cost of services during the first nine months of 1997 was $27.6 million
compared to $24.4 million in the comparable period of 1996, an increase of
$3.2 million or 13%, due, primarily, to the increased service revenues.
Research and development expenses increased to $11.6 million during the first
nine months of 1997 from $6.4 million in the comparable period of 1996, an
increase of $5.2 million or 82%. The increase is due to the operating costs
of a manufacturing facility coming on-line for the production of AT-III
clinical trial material and increased activity in the research and commercial
programs.
Gross profit for the first nine months of 1997 amounted to $6.1 million
versus $3.4 million in the comparable period of 1996. Gross profit on
services for the first nine months of 1997 was $5.3 million, a gross margin
of 16%, versus $3.7 million, a gross margin of 13%, in the comparable period
of 1996. The improvement in the services margins was primarily due to
increased services revenues and a shift to higher margin services.
Selling, general and administrative ("SG&A") expenses increased to $10.8 million
in the third quarter of 1997 from $8.2 million in the comparable period of 1996,
an increase of $2.6 million or 32%. The increase is due to an increase in the
sales and marketing effort and to the addition of administrative personnel
required to support the growth in research and development programs.
Interest income increased to $112,000 in the first nine months of 1997, from
$37,000 in the comparable period of 1996, due to the investment of funds from
the Company's secondary public offering and receipt of interest on funds that
were held in escrow last year. Interest expense decreased to $733,000 in the
first nine months of 1997 from $911,000 in the comparable period of 1996 due
to lower borrowings in 1997.
The Company recognized $531,000 of Joint Venture losses during the first nine
months of 1997 compared to $184,000 in the comparable period of 1996. The
increase was due to additional research by the Joint Venture including
increased research funding to the Company (see Note 3 to the Financial
Statements appearing in this Report).
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $5.3 million at September 28,
1997. During the first nine months of 1997 the Company had a $3.5 million net
decrease in cash; $6 million was invested in capital equipment, further
expansion of the transgenic production facility and the expansion of
laboratory facilities and $3.1 million was used to pay down long-term debt.
Sources of funds during the period included $257,000 of cash provided by
operations (due primarily to a decrease in non-cash working capital of $2.5
million and $3.6 million of non-cash charges offset by the net loss of $5.8
million), $5.2 million of proceeds from issuance long-term debt and $1.3
million of proceeds from the issuance of common stock.
In June 1997, the Company completed a $3 million expansion of its Mason
Laboratories facility. The Company obtained $5 million in long-term
financing for this project from a consortium consisting of state and local
government agencies in conjunction with a commercial bank. In June 1997, the
Company received approximately $3.8 million in funds under this facility, of
which approximately $800,000 was used to pay down existing debt. In
connection with the financing, the Company issued 20,000 warrants at the
closing market value on June 26, 1997 of $8.75. The remaining $1.2 million
of financing is available through December 31, 1998 to fund future
renovations of this facility, if any (see Note 6).
In September 1997, the Company and Genzyme amended the terms of the $8.3
million credit line provided by Genzyme to the Company as part of the
Convertible Debt and Development Funding Agreement dated March 29, 1996.
Under the terms of the Amended and Restated Convertible Debt Agreement
("Genzyme Convertible Debt Agreement"), the expiration date of the revolving
credit line was extended to March 31, 2000 with an option , at that date, for
the Company to convert the outstanding balance to a three-year term loan.
There was no balance outstanding as of September 28, 1997 (see Note 8).
In September 1997, the Company entered into an agreement with Advanced Cell
Technology ("ACT") to utilize ACT's cloning technology to produce transgenic
proteins. In return for exclusive access to this technology and subject to
successful achievement of technical milestones, the Company agreed to place a
minimum of $2 million in contract services with ACT annually from 1998
through 2002.
The Company had a working capital deficit of $6.4 million at September 28,
1997 compared to a deficit of $116,000 at December 29, 1996. The Company
expects to continue to operate with negative working capital for the
foreseeable future. As of September 28, 1997 the Company had approximately
$8.3 million available under the Genzyme Convertible Debt Agreement, $1.8
million available under various capital lease lines and $1.2 million
available under the Mason facility financing.
The Company is considering various alternative financing strategies, such as
collaborative arrangements, public or private sales of its securities,
including securities in certain subsidiaries, additional mortgage or lease
financing, asset sales and other funding sources. The Company expects to
realize sufficient cash from one or more of such transactions to fund
operations and capital investment through September 29, 1998.
Management's current expectations regarding the sufficiency of the Company's
cash resources are forward-looking statements and the Company's cash
requirements may vary materially from such expectations. Such
forward-looking statements are dependent on several factors, including the
results of the Company's testing services business, the ability of the
Company to enter into any transgenic research and development collaborations
in the future and the terms of such collaborations, the results of research
and development and preclinical and clinical testing, competitive and
technological advances and regulatory requirements. If the Company
experiences increased losses, the Company may have to seek additional
financing through collaborative arrangements or from public or private sales
of its securities, including equity securities. There can be no assurance
that additional funding will be available on terms acceptable to the Company,
if at all. If additional financing cannot be obtained on acceptable terms,
to continue its operations the Company could be forced to delay, scale back
or eliminate certain of its research and development programs or to enter
into license agreements with third parties for the commercialization of
technologies or products that the Company would otherwise undertake itself.
PART II
ITEM 6: Exhibits and Reports on From 8-K
--------------------------------
(a) Exhibits
10.1 Amended and Restated Employment Agreement, dated as of August 28, 1997,
between the Company and James A. Geraghty. Filed herewith.
10.2 Amended and Restated Employment Agreement, dated as of August 28, 1997,
between the Company and John B. Green. Filed herewith.
10.3 Amended and Restated Employment Agreement, dated as of September 16,
1997, between the Company and Peter Glick. Filed herewith.
10.4 Amended and Restated Convertible Debt Agreement dated as of September
4, 1997, between the Company and Genzyme Corporation. Filed herewith.
10.5* Development and Commercialization Agreement, dated as of September 25,
1997, between the Company and Advanced Cell Technology, Inc. Filed
herewith.
10.6* Development and Commercialization Agreement, dated as of September 25,
1997, between the Company and B. Braun Melsungen AG. Filed herewith.
27 Financial Data Schedule. Filed herewith.
(b) Reports on Form 8-K
No reports were filed on Form 8-K during the quarter ended September 28, 1997.
___________________________________
* Certain confidential information contained in the document has been
omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 promulgated under the Securities and Exchange Act of
1934, as amended.
GENZYME TRANSGENICS CORPORATION AND SUBSIDIARY
FORM 10-Q
SEPTEMBER 28, 1997
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 hereunto duly authorized.
Date: November 5, 1997 GENZYME TRANSGENICS CORPORATION
BY: /s/ John B. Green
-----------------
John B. Green
Duly Authorized Officer,
Vice President and
Chief Financial Officer
EXHIBIT INDEX
-------------
Exhibit
- -------
Description
10.1 Amended and Restated Employment Agreement, dated as of August
28, 1997, between the Company and James A. Geraghty. Filed
herewith.
10.2 Amended and Restated Employment Agreement, dated as of August 28, 1997,
between the Company and John B. Green. Filed herewith.
10.3 Amended and Restated Employment Agreement, dated as of September 16,
1997, between the Company and Peter Glick. Filed herewith.
10.4 Amended and Restated Convertible Debt Agreement dated as of
September 4, 1997, between the Company and Genzyme Corporation. Filed
herewith.
10.5* Development and Commercialization Agreement, dated as of September 25,
1997, between the Company and Advanced Cell Technology, Inc. Filed
herewith.
10.6* Development and Commercialization Agreement, dated as of September 25,
1997, between the Company and B. Braun Melsungen AG. Filed herewith.
27 Financial Data Schedule. Filed herewith.
- -------------------------------
* Certain confidential information contained in the document has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 promulgated under the Securities and Exchange Act of 1934, as
amended.