SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly report pursuant to
Section 13 or 15(d)
of the Securities Exchange Act of 1934
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For the Quarter Ended September 30, 2003 |
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Commission File No. 000-21429 |
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ArQule, Inc. |
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(Exact Name of Registrant as Specified in its Charter) |
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Delaware |
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04-3221586 |
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(State of Incorporation) |
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(I.R.S. Employer Identification Number) |
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19 Presidential Way, Woburn, Massachusetts 01801 |
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(Address of Principal Executive Offices) |
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(781) 994-0300 |
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(Registrant’s Telephone Number, including Area Code) |
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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.
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YES ý |
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NO o |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
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YES ý |
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NO o |
Number of shares outstanding of the registrant’s Common Stock as of November 12, 2003:
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Common Stock, par value $.01 |
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28,080,838 shares outstanding |
ArQule, Inc.
Quarter Ended September 30, 2003
Table of Contents
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PART I - FINANCIAL INFORMATION |
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Item 1 – Unaudited Consolidated Financial Statements |
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Consolidated Balance Sheet (Unaudited) |
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Consolidated Statement of Cash Flows (Unaudited) |
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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3 – Qualitative and Quantitative Disclosure about Market risk |
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ArQule, Inc.
Consolidated Balance Sheet (Unaudited)
(In thousands, except share data)
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September 30, |
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December 31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
33,731 |
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$ |
40,283 |
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Marketable securities |
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40,667 |
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45,343 |
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Accounts receivable |
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1,379 |
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126 |
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Prepaid expenses and other current assets |
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1,923 |
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2,545 |
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Total current assets |
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77,700 |
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88,297 |
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Property and equipment, net |
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47,690 |
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51,516 |
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Other assets |
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5,312 |
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5,266 |
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$ |
130,702 |
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$ |
145,079 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
12,981 |
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$ |
16,207 |
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Current portion of long-term debt |
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6,452 |
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7,350 |
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Deferred revenue |
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4,092 |
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10,564 |
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Total current liabilities |
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23,525 |
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34,121 |
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Long-term debt, net of current portion |
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2,470 |
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6,850 |
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Deferred revenue |
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16,338 |
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10,393 |
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Total liabilities |
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42,333 |
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51,364 |
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Stockholders’ equity: |
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Common stock, $0.01 par value; 50,000,000 shares Authorized; 28,014,163 and 21,373,848 shares Issued and outstanding at September 30, 2003 and December 31, 2002, respectively |
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280 |
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214 |
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Additional paid-in capital |
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267,456 |
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243,285 |
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Accumulated other comprehensive income |
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(160 |
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(199 |
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Accumulated deficit |
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(179,207 |
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(149,585 |
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Total stockholders’ equity |
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88,369 |
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93,715 |
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$ |
130,702 |
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$ |
145,079 |
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The accompanying notes are an integral part of these unaudited financial statements.
3
ArQule, Inc.
Consolidated Statement of Operations (Unaudited)
(In thousands, except per share data)
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Three Months Ended |
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Nine Months Ended |
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2003 |
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2002 |
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2003 |
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2002 |
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Revenue: |
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Compound development revenue |
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$ |
15,961 |
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$ |
15,959 |
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$ |
47,096 |
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$ |
45,192 |
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Compound development revenue - related party |
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— |
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500 |
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— |
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1,466 |
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Total revenue |
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15,961 |
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16,459 |
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47,096 |
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46,658 |
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Costs and expenses: |
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Cost of revenue |
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8,878 |
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9,164 |
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27,069 |
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25,818 |
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Cost of revenue - related party |
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— |
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200 |
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— |
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620 |
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Research and development |
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4,726 |
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8,064 |
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12,860 |
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24,434 |
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Marketing, general and administrative |
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2,349 |
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3,444 |
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7,165 |
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10,268 |
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Stock-based compensation |
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— |
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468 |
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— |
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2,660 |
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Amortization of intangibles |
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— |
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845 |
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— |
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2,530 |
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Restructuring credit |
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(290 |
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— |
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(290 |
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— |
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In-process research and development |
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30,359 |
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— |
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30,359 |
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— |
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Total costs and expenses |
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46,022 |
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22,185 |
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77,163 |
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66,330 |
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Loss from operations |
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(30,061 |
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(5,726 |
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(30,067 |
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(19,672 |
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Net investment income |
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152 |
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258 |
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445 |
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902 |
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Net loss |
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$ |
(29,909 |
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$ |
(5,468 |
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$ |
(29,622 |
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$ |
(18,770 |
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