UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003, or
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
Commission File No. 0-18728
INDEVUS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
| Delaware |
04-3047911 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| One Ledgemont Center |
02421-7966 | |
| 99 Hayden Avenue |
(Zip Code) | |
| Lexington, Massachusetts |
||
| (Address of principal executive offices) |
Registrant’s telephone number, including area code: (781)861-8444
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 such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12(b)-2 of the Exchange Act.)
Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s class of common stock, as of the latest practicable date.
| Class: |
Outstanding at May 12, 2003: | |
| Common Stock $.001 par value |
46,922,555 shares |
INDEX TO FORM 10-Q
2
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands except share data)
| ASSETS |
|||||||||
| March 31, 2003 |
September 30, 2002 |
||||||||
| Current assets: |
|||||||||
| Cash and cash equivalents |
$ |
23,211 |
|
$ |
19,977 |
| |||
| Marketable securities |
|
9,859 |
|
|
20,516 |
| |||
| Accounts receivable |
|
69 |
|
|
550 |
| |||
| Prepaids and other current assets |
|
2,060 |
|
|
533 |
| |||
| Total current assets |
|
35,199 |
|
|
41,576 |
| |||
| Marketable securities |
|
838 |
|
|
1,050 |
| |||
| Equity securities |
|
15 |
|
|
31 |
| |||
| Insurance claim receivable |
|
1,258 |
|
|
1,258 |
| |||
| Property and equipment, net |
|
17 |
|
|
16 |
| |||
| Total assets |
$ |
37,327 |
|
$ |
43,931 |
| |||
| LIABILITIES | |||||||||
| Current liabilities: |
|||||||||
| Accounts payable |
$ |
1,879 |
|
$ |
350 |
| |||
| Accrued expenses |
|
6,597 |
|
|
6,326 |
| |||
| Deferred revenue |
|
— |
|
|
24 |
| |||
| Total current liabilities |
|
8,476 |
|
|
6,700 |
| |||
| Minority interest |
|
13 |
|
|
13 |
| |||
| STOCKHOLDERS’ EQUITY | |||||||||
| Preferred stock, $.001 par value, 5,000,000 shares authorized; |
|||||||||
| Series B, 239,425 shares issued and outstanding (liquidation preference at March 31, 2003 $3,041); |
|
3,000 |
|
|
3,000 |
| |||
| Series C, 5,000 shares issued and outstanding (liquidation preference at March 31, 2003 $504) |
|
500 |
|
|
500 |
| |||
| Common stock, $.001 par value, 80,000,000 shares authorized; 46,922,555 and 46,875,885 shares issued and outstanding at March 31, 2003 and September 30, 2002, respectively |
|
47 |
|
|
47 |
| |||
| Additional paid-in capital |
|
302,727 |
|
|
302,678 |
| |||
| Accumulated deficit |
|
(277,276 |
) |
|
(268,879 |
) | |||
| Accumulated other comprehensive loss |
|
(160 |
) |
|
(128 |
) | |||
| Total stockholders’ equity |
|
28,838 |
|
|
37,218 |
| |||
| Total liabilities and stockholders’ equity |
$ |
37,327 |
|
$ |
43,931 |
| |||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended March 31, 2003 and 2002
(Unaudited)
(Amounts in thousands except per share data)
| Three months ended March 31, |
Six months ended March 31, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Royalty revenue |
$ |
2,857 |
|
$ |
14 |
|
$ |
2,857 |
|
$ |
3,213 |
| ||||
| Contract and license fees |
|
14 |
|
|
72 |
|
|
836 |
|
|
414 |
| ||||
| Total revenues |
|
2,871 |
|
|
86 |
|
|
3,693 |
|
|
3,627 |
| ||||
| Costs and expenses: |
||||||||||||||||
| Cost of revenues |
|
596 |
|
|
85 |
|
|
806 |
|
|
923 |
| ||||
| Research and development |
|
3,240 |
|
|
2,501 |
|
|
7,017 |
|
|
5,746 |
| ||||
| General and administrative |
|
2,160 |
|
|
2,605 |
|
|
4,617 |
|
|
4,183 |
| ||||
| Total costs and expenses |
|
5,996 |
|
|
5,191 |
|
|
12,440 |
|
|
10,852 |
| ||||
| Loss from operations |
|
(3,125 |
) |
|
(5,105 |
) |
|
(8,747 |
) |
|
(7,225 |
) | ||||
| Investment income, net |
|
159 |
|
|
298 |
|
|
350 |
|
|
526 |
| ||||
| Minority interest |
|
— |
|
|
(1 |
) |
|
— |
|
|
(55 |
) | ||||
| Net loss |
$ |
(2,966 |
) |
$ |
(4,808 |
) |
$ |
(8,397 |
) |
$ |
(6,754 |
) | ||||
| Net loss per common share: |
||||||||||||||||
| Basic and diluted |
$ |
(0.06 |
) |
$ |
(0.10 |
) |
$ |
(0.18 |
) |
$ |
(0.15 |
) | ||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic and diluted |
|
46,886 |
|
|
46,508 |
|
|
46,881 |
|
|
45,068 |
| ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended March 31, 2003 and 2002
(Unaudited)
(Amounts in thousands)
| Six months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ |
(8,397 |
) |
$ |
(6,754 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Deprecation and amortization |
|
8 |
|
|
46 |
| ||
| Minority interest in net income of consolidated subsidiary |
|
— |
|
|
55 |
| ||
| Noncash compensation |
|
— |
|
|
2,139 |
| ||
| Change in assets and liabilities: |
||||||||
| Accounts receivable |
|
481 |
|
|
156 |
| ||
| Prepaid and other assets |
|
(1,527 |
) |
|
(208 |
) | ||
| Accounts payable |
|
1,529 |
|
|
69 |
| ||
| Accrued expenses and other liabilities |
|
229 |
|
|
(1,586 |
) | ||
| Net cash used in operating activities |
|
(7,677 |
) |
|
(6,083 |
) | ||
| Cash flows from investing activities: |
||||||||
| Purchase of marketable securities |
|
(3,877 |
) |
|
(21,132 |
) | ||
| Proceeds from maturities and sales of marketable securities |
|
14,732 |
|
|
4,668 |
| ||
| Capital expenditures |
|
(10 |
) |
|
(4 |
) | ||
| Net cash provided by (used in) investing activities |
|
10,845 |
|
|
||||