UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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: 000-30681
DENDREON CORPORATION
(Exact name of registrant as specified in its charter)
| DELAWARE |
22-3203193 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
3005 FIRST AVENUE, SEATTLE, WASHINGTON 98121
(Address of principal executive offices, including zip code)
(206) 256-4545
(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. x Yes ¨ No
The number of shares of the registrant’s common stock, $.001 par value, outstanding as of April 24, 2003 was 26,813,004.
INDEX
| PAGE NO. | ||||||
| PART I. |
FINANCIAL INFORMATION |
|||||
| Item 1. |
Financial Statements |
|||||
| a) Condensed Balance Sheets as of March 31, 2003 (unaudited) and December 31, 2002 |
2 | |||||
| b) Condensed Statements of Operations for the Three Months Ended March 31, 2003 and 2002 (unaudited) |
3 | |||||
| c) Condensed Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002 (unaudited) |
4 | |||||
| 5 | ||||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
7 | ||||
| Item 3. |
19 | |||||
| Item 4. |
19 | |||||
| PART II. |
OTHER INFORMATION |
|||||
| Item 6. |
19 | |||||
| 21 | ||||||
| 22 | ||||||
| 25 | ||||||
PART 1—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED BALANCE SHEETS
(in thousands, except share and per share amounts)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
13,321 |
|
$ |
11,263 |
| ||
| Short-term investments |
|
34,133 |
|
|
35,614 |
| ||
| Restricted cash |
|
— |
|
|
308 |
| ||
| Accounts receivable |
|
623 |
|
|
1,760 |
| ||
| Other current assets |
|
1,692 |
|
|
2,309 |
| ||
| Total current assets |
|
49,769 |
|
|
51,254 |
| ||
| Property and equipment, net |
|
3,428 |
|
|
3,578 |
| ||
| Long-term investments |
|
— |
|
|
8,102 |
| ||
| Deposits and other assets |
|
788 |
|
|
790 |
| ||
| Total assets |
$ |
53,985 |
|
$ |
63,724 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
402 |
|
$ |
1,041 |
| ||
| Accrued liabilities |
|
5,199 |
|
|
4,923 |
| ||
| Accrued compensation |
|
998 |
|
|
1,892 |
| ||
| Deferred revenue |
|
4,700 |
|
|
5,096 |
| ||
| Current portion of capital lease obligations |
|
1,172 |
|
|
1,198 |
| ||
| Total current liabilities |
|
12,471 |
|
|
14,150 |
| ||
| Deferred revenue, less current portion |
|
2,987 |
|
|
3,750 |
| ||
| Capital lease obligations, less current portion |
|
1,093 |
|
|
1,081 |
| ||
| Stockholders’ equity: |
||||||||
| Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued or outstanding |
|
— |
|
|
— |
| ||
| Common stock, $0.001 par value; 80,000,000 shares authorized, 26,813,004 and 26,558,506 shares issued and outstanding at March 31, 2003 and December 31, 2002, respectively |
|
27 |
|
|
27 |
| ||
| Additional paid-in capital |
|
160,684 |
|
|
160,314 |
| ||
| Deferred stock-based compensation |
|
(178 |
) |
|
(253 |
) | ||
| Accumulated other comprehensive income |
|
71 |
|
|
118 |
| ||
| Accumulated deficit |
|
(123,170 |
) |
|
(115,463 |
) | ||
| Total stockholders’ equity |
|
37,434 |
|
|
44,743 |
| ||
| Total liabilities and stockholders’ equity |
$ |
53,985 |
|
$ |
63,724 |
| ||
See accompanying notes
2
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenue |
$ |
1,776 |
|
$ |
3,028 |
| ||
| Operating expenses: |
||||||||
| Research and development |
|
6,940 |
|
|
8,376 |
| ||
| General and administrative |
|
2,571 |
|
|
2,317 |
| ||
| Marketing |
|
86 |
|
|
261 |
| ||
| Total operating expenses |
|
9,597 |
|
|
10,954 |
| ||
| Loss from operations |
|
(7,821 |
) |
|
(7,926 |
) | ||
| Interest income, net: |
||||||||
| Interest income |
|
215 |
|
|
632 |
| ||
| Interest expense |
|
(101 |
) |
|
(89 |
) | ||
| Interest income, net |
|
114 |
|
|
543 |
| ||
| Net loss |
$ |
(7,707 |
) |
$ |
(7,383 |
) | ||
| Basic and diluted net loss per share |
$ |
(0.29 |
) |
$ |
(0.30 |
) | ||
| Shares used in computation of basic and diluted net loss per share |
|
26,729 |
|
|
24,983 |
| ||
See accompanying notes
3
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ |
(7,707 |
) |
$ |
(7,383 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation expense |
|
480 |
|
|
423 |
| ||
| Non-cash stock-based compensation expense |
|
75 |
|
|
200 |
| ||
| Non-cash consulting expense |
|
39 |
|
|
— |
| ||
| Non-cash interest expense |
|
3 |
|
|
3 |
| ||
| Changes in current assets and liabilities |
||||||||
| Accounts receivable |
|
1,137 |
|
|
149 |
| ||
| Other current assets |
|
689 |
|
|
582 |
| ||
| Deposits and other assets |
|
2 |
|
|
— |
| ||
| Deferred revenue |
|
(1,159 |
) |
|
(1,403 |
) | ||
| Accounts payable |
|
(639 |
) |
|
29 |
| ||
| Accrued liabilities and compensation |
|
(618 |
) |
|
(1,602 |
) | ||
| Net cash used in operating activities |
|
(7,698 |
) |
|
(9,002 |
) | ||
| INVESTING ACTIVITIES: |
||||||||
| Purchases of investments |
|
(6,606 |
) |
|
(31,054 |
) | ||
| Maturities of investments |
|
16,142 |
|
|
51,754 |
| ||
| Proceeds from asset disposals |
|
500 |
|
|
— |
| ||
| Purchases of property and equipment |
|
(330 |
) |
|
(555 |
) | ||
| Deferred acquisition costs |
|
(306 |
) |
|
— |
| ||
| Net cash provided by investing activities |
|
9,400 |
|
|
20,145 |
| ||
| FINANCING ACTIVITIES: |
||||||||
| Payments on long-term debt |
|
— |
|
|
(281 |
) | ||
| Payments on capital lease obligations |
|
(266 |
) |
|
(278 |
) | ||
| Proceeds from equipment financing arrangement |
|
252 |
|
|
— |
| ||
| Proceeds from employee stock purchase plan |
|
285 |
|
|
324 |
| ||
| Proceeds from exercise of stock options |
|
85 |
|
|
32 |
| ||
| Net cash provided by (used in) financing activities |
|
356 |
|
|||||