SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
ACT OF 1934
For the quarterly period ended March 31, 2003
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 incorporation or organization) |
(I.R.S. Employer 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 ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes x No ¨
As of March 31, 2003, 55,308,406 shares of the Registrant’s common stock were outstanding.
TULARIK INC.
| PART I. |
FINANCIAL INFORMATION |
|||
| 2 | ||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results Of Operations |
7 | |||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
25 | |||
| 26 | ||||
| PART II. |
OTHER INFORMATION |
|||
| 27 | ||||
| 27 | ||||
| 27 | ||||
| 28 |
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements
TULARIK INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share data)
| ASSETS |
March 31, 2003 |
December 31, 2002 (1) |
||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
85,669 |
|
$ |
95,670 |
| ||
| Short-term investments |
|
70,631 |
|
|
81,030 |
| ||
| Prepaid expenses and other current assets |
|
5,399 |
|
|
4,600 |
| ||
| Total current assets |
|
161,699 |
|
|
181,300 |
| ||
| Property and equipment, net |
|
30,393 |
|
|
31,188 |
| ||
| Other investments |
|
3,633 |
|
|
13,087 |
| ||
| Restricted investments |
|
4,272 |
|
|
4,272 |
| ||
| Other assets |
|
3,703 |
|
|
3,360 |
| ||
| Goodwill |
|
3,100 |
|
|
3,100 |
| ||
| Total assets |
$ |
206,800 |
|
$ |
236,307 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
4,442 |
|
$ |
4,840 |
| ||
| Accrued compensation and related liabilities |
|
2,425 |
|
|
3,111 |
| ||
| Accrued liabilities |
|
6,344 |
|
|
5,789 |
| ||
| Current portion of capital lease obligations |
|
7,558 |
|
|
7,927 |
| ||
| Deferred revenue |
|
8,629 |
|
|
12,119 |
| ||
| Total current liabilities |
|
29,398 |
|
|
33,786 |
| ||
| Long-term portion of capital lease obligations |
|
13,610 |
|
|
14,179 |
| ||
| Long-term portion of deferred revenue |
|
8,729 |
|
|
10,300 |
| ||
| Other non-current liabilities |
|
3,444 |
|
|
3,060 |
| ||
| Total liabilities |
|
55,181 |
|
|
61,325 |
| ||
| Minority interest in Cumbre Inc. |
|
26,250 |
|
|
26,250 |
| ||
| Stockholders’ equity: |
||||||||
| Common stock |
|
55 |
|
|
55 |
| ||
| Additional paid-in capital |
|
421,692 |
|
|
420,338 |
| ||
| Notes receivable from stockholders |
|
(27 |
) |
|
(28 |
) | ||
| Deferred compensation, net |
|
(13 |
) |
|
(41 |
) | ||
| Accumulated other comprehensive income |
|
922 |
|
|
1,457 |
| ||
| Accumulated deficit |
|
(297,260 |
) |
|
(273,049 |
) | ||
| Total stockholders’ equity |
|
125,369 |
|
|
148,732 |
| ||
| Total liabilities and stockholders’ equity |
$ |
206,800 |
|
$ |
236,307 |
| ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| (1) | The condensed consolidated balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. |
2
TULARIK INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
| Three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenue: |
||||||||
| Collaborative research and development |
$ |
5,061 |
|
$ |
6,176 |
| ||
| Technology license fee |
|
1,600 |
|
|
— |
| ||
|
|
6,661 |
|
|
6,176 |
| |||
| Operating expenses: |
||||||||
| Research and development |
|
28,329 |
|
|
25,244 |
| ||
| General and administrative |
|
2,976 |
|
|
2,714 |
| ||
|
|
31,305 |
|
|
27,958 |
| |||
| Loss from operations |
|
(24,644 |
) |
|
(21,782 |
) | ||
| Interest and other income |
|
839 |
|
|
1,619 |
| ||
| Interest expense |
|
(406 |
) |
|
(392 |
) | ||
| Net loss |
$ |
(24,211 |
) |
$ |
(20,555 |
) | ||
| Basic and diluted net loss per share |
$ |
(0.44 |
) |
$ |
(0.41 |
) | ||
| Weighted-average shares used in computing basic and diluted net loss per share |
|
55,103,415 |
|
|
50,008,537 |
| ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
TULARIK INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| For the three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ |
(24,211 |
) |
$ |
(20,555 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
|
2,919 |
|
|
2,743 |
| ||
| Amortization of deferred stock compensation |
|
28 |
|
|
107 |
| ||
| Amortization of loan discount |
|
10 |
|
|
— |
| ||
| Non-cash stock compensation |
|
359 |
|
|
311 |
| ||
| Non-cash license fee revenue |
|
(1,600 |
) |
|
— |
| ||
| Changes in assets and liabilities: |
||||||||
| Other assets |
|
(975 |
) |
|
(19 |
) | ||
| Accounts payable and other liabilities |
|
(708 |
) |
|
(1,748 |
) | ||
| Deferred revenue |
|
(5,061 |
) |
|
(2,354 |
) | ||
| Net cash used in operating activities |
|
(29,239 |
) |
|
(21,515 |
) | ||
| Cash flows from investing activities: |
||||||||
| Maturities of available-for-sale securities |
|
136,811 |
|
|
82,255 |
| ||
| Purchases of available-for-sale securities |
|
(115,404 |
) |
|
(77,625 |
) | ||
| Purchase of restricted cash |
|
— |
|
|
(2,271 |
) | ||
| Acquisition of property and equipment |
|
(2,133 |
) |
|
(2,850 |
) | ||
| Net cash provided by (used in) investing activities |
|
19,274 |
|
|
(491 |
) | ||
| Cash flows from financing activities: |
||||||||
| Payments of long-term obligations |
|
(2,376 |
) |
|
(1,644 |
) | ||
| Proceeds from issuance of long-term obligations |
|
1,349 |
|
|
— |
| ||
| Proceeds from notes receivable from stockholders |
|
16 |
|
|
89 |
| ||
| Proceeds from issuances of common stock, net |
|
976 |
|
|
3,953 |
| ||
| Net cash (used in) provided by financing activities |
|
(35 |
) |
|
2,398 |
| ||
| Effect of exchange rates on cash |
|
(1 |
) |
|
— |
| ||
| Net change in cash and cash equivalents |
|
(10,001 |
) |
|
(19,608 |
) | ||
| Cash and cash equivalents at the beginning of the period |
|
95,670 |
|
|||||