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
| ¨ | 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 0-23272
NPS PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
| Delaware |
87-0439579 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 420 Chipeta Way, Salt Lake City, Utah |
84108-1256 | |
| (Address of principal executive offices) |
(Zip Code) |
(801) 583-4939
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
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 at least the past 90 days. YES x NO ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). 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 May 9, 2003 | |
| Common Stock $.001 par value |
35,177,722 |
* Includes 313,085 shares of exchangeable stock, which are exchangeable at any time into common stock on a one-for-one basis. Holders of shares of exchangeable stock are entitled to dividends and other rights economically equivalent to those of the common stock, and, through a voting trust, holders are entitled to vote at all meetings of stockholders of the Registrant, also on a one-for-one basis.
| Page No. | ||||
| PART I |
||||
| Item 1. |
||||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| Notes to Condensed Consolidated Financial Statements (unaudited) |
7 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 | ||
| Item 3. |
17 | |||
| Item 4. |
18 | |||
| PART II |
||||
| Item 1. |
19 | |||
| Item 5. |
19 | |||
| Item 6. |
19 | |||
| 22 | ||||
| 23 | ||||
2
FINANCIAL INFORMATION
NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
| March 31, 2003 |
December 31, 2002 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
69,296 |
|
$ |
96,094 |
| ||
| Marketable investment securities |
|
139,682 |
|
|
138,360 |
| ||
| Accounts receivable |
|
1,807 |
|
|
1,693 |
| ||
| Other current assets |
|
2,508 |
|
|
3,456 |
| ||
| Total current assets |
|
213,293 |
|
|
239,603 |
| ||
| Plant and equipment: |
||||||||
| Land |
|
442 |
|
|
412 |
| ||
| Building |
|
1,263 |
|
|
1,164 |
| ||
| Equipment |
|
10,309 |
|
|
9,727 |
| ||
| Leasehold improvements |
|
3,082 |
|
|
3,016 |
| ||
|
|
15,096 |
|
|
14,319 |
| |||
| Less accumulated depreciation and amortization |
|
10,434 |
|
|
10,009 |
| ||
| Net plant and equipment |
|
4,662 |
|
|
4,310 |
| ||
| Goodwill |
|
7,393 |
|
|
6,900 |
| ||
| Purchased intangible assets, net of accumulated amortization |
|
2,468 |
|
|
2,632 |
| ||
| Other assets |
|
3,635 |
|
|
23 |
| ||
| $ |
231,451 |
|
$ |
253,468 |
| |||
| Liabilities and Stockholders’ Equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
|
6,228 |
|
|
6,623 |
| ||
| Accrued expenses and other liabilities |
|
10,092 |
|
|
4,408 |
| ||
| Deferred revenue |
|
31 |
|
|
75 |
| ||
| Total current liabilities |
|
16,351 |
|
|
11,106 |
| ||
| Stockholders’ equity: |
||||||||
| Common stock |
|
35 |
|
|
35 |
| ||
| Additional paid-in capital |
|
490,119 |
|
|
489,352 |
| ||
| Deferred compensation |
|
(339 |
) |
|
(370 |
) | ||
| Accumulated other comprehensive income |
|
1,210 |
|
|
1,180 |
| ||
| Deficit accumulated during development stage |
|
(275,925 |
) |
|
(247,835 |
) | ||
| Net stockholders’ equity |
|
215,100 |
|
|
242,362 |
| ||
| $ |
231,451 |
|
$ |
253,468 |
| |||
See accompanying notes to condensed consolidated financial statements.
3
NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
| Three Months Ended March 31, |
October 22, 1986, (inception) through March 31, 2003 |
|||||||||||
| 2003 |
2002 |
|||||||||||
| Revenues from research and license agreements |
$ |
138 |
|
$ |
787 |
|
$ |
75,811 |
| |||
| Operating expenses: |
||||||||||||
| Research and development |
|
24,821 |
|
|
21,104 |
|
|
285,237 |
| |||
| General and administrative |
|
4,979 |
|
|
3,582 |
|
|
78,907 |
| |||
| Amortization of goodwill and acquired intangibles |
|
343 |
|
|
325 |
|
|
8,637 |
| |||
| In-process research and development acquired |
|
— |
|
|
— |
|
|
17,760 |
| |||
| Total operating expenses |
|
30,143 |
|
|
25,011 |
|
|
390,541 |
| |||
| Operating loss |
|
(30,005 |
) |
|
(24,224 |
) |
|
(314,730 |
) | |||
| Other income (expense): |
||||||||||||
| Interest income |
|
1,428 |
|
|
2,016 |
|
|
36,839 |
| |||
| Interest expense |
|
— |
|
|
— |
|
|
(806 |
) | |||
| Gain on sale of marketable investment securities |
|
205 |
|
|
135 |
|
|
2,662 |
| |||
| Gain (loss) on disposition of equipment, leasehold improvements and leases |
|
24 |
|
|
— |
|
|
(1,101 |
) | |||
| Foreign currency transaction gain (loss) |
|
175 |
|
|
(18 |
) |
|
324 |
| |||
| Other |
|
83 |
|
|
87 |
|
|
2,603 |
| |||
| Total other income |
|
1,915 |
|
|
2,220 |
|
|
40,521 |
| |||
| Loss before tax expense |
|
(28,090 |
) |
|
(22,004 |
) |
|
(274,209 |
) | |||
| Income tax expense |
|
— |
|
|
— |
|
|
1,216 |
| |||
| Loss before cumulative effect of change in accounting principle |
|
(28,090 |
) |
|
(22,004 |
) |
|
(275,425 |
) | |||
| Cumulative effect on prior years (to December 31, 1999) of changing to a different revenue recognition method |
|
— |
|
|
— |
|
|
(500 |
) | |||
| Net loss |
$ |
(28,090 |
) |
$ |
(22,004 |
) |
$ |
(275,925 |
) | |||
| Basic and diluted net loss per common and common equivalent share |
$ |
(0.80 |
) |
$ |
(0.73 |
) |
||||||
| Weighted average common and common-equivalent shares outstanding—basic and diluted |
|
35,132 |
|
|
30,212 |
|
||||||
See accompanying notes to condensed consolidated financial statements.
4
NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Three Months Ended March 31, |
October 22, 1986 (inception) through March 31, 2003 |
|||||||||||
| 2003 |
||||||||||||