UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2004 |
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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: 0-24760
Orphan Medical, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
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41-1784594 |
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(State or other jurisdiction of |
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(I.R.S. Employer Identification Number) |
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13911 Ridgedale Drive, Suite 250, Minnetonka, MN 55305 |
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(952) 513-6900 |
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(Address of principal executive office |
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(Registrant’s telephone number, |
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, and (2) has been subject to such filing requirements for the past 90 days.
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Yes ý |
No o |
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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 |
No o |
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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.
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Common Stock, $.01 par value |
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11,423,211 |
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(Class) |
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(Outstanding at November 1, 2004) |
INDEX
ORPHAN MEDICAL, INC. ®
Antizol®, Antizol-Vet®, Cystadane®, Xyrem®, MedExpand™ “The” Orphan Drug Company™ Orphan Medical®, Inc. and Dedicated to Patients with Uncommon Diseases® are trademarks of the Company.
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ORPHAN MEDICAL, INC.
(in thousands except share and per share amounts)
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September 30, |
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December 31, |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
14,820 |
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$ |
23,285 |
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Restricted cash |
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125 |
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128 |
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Accounts receivable, less allowance for doubtful accounts of $25 and $112, respectively |
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2,816 |
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2,552 |
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Inventories |
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1,796 |
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1,696 |
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Prepaid expenses and other |
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810 |
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907 |
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Total current assets |
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20,367 |
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28,568 |
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Office equipment and software |
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562 |
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754 |
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Total assets |
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$ |
20,929 |
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$ |
29,322 |
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Liabilities and shareholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
1,073 |
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$ |
2,923 |
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Accrued compensation |
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1,314 |
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881 |
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Deferred revenue |
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1,667 |
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2,500 |
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Accrued expenses and other |
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3,093 |
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2,460 |
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Total current liabilities |
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7,147 |
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8,764 |
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Capital lease obligation-less current maturities |
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48 |
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62 |
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Commitments |
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Shareholders’ equity: |
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Senior Convertible Preferred Stock, $.01 par value; 14,000 shares authorized; 8,706 shares issued and outstanding; liquidation preference of $8,706 |
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— |
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— |
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Series B Convertible Preferred Stock, $.01 par value; 5,000 shares authorized; 4,106 and 3,957 shares issued and outstanding; liquidity preference of $4,106 and $3,957 |
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— |
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— |
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Series C Convertible Preferred Stock, $.01 par value; 4 ,000 shares authorized; 0 shares issued and outstanding |
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— |
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— |
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Series D Convertible Preferred Stock, $.01 par value; 1,000 shares authorized; 0 shares issued and outstanding |
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— |
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— |
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Common stock, $.01 par value; 25,000,000 shares authorized; 11,422,791 and 10,747,656 issued and outstanding |
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114 |
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107 |
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Additional paid-in capital |
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80,946 |
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76,714 |
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Accumulated deficit |
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(67,326 |
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(56,325 |
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Total shareholders’ equity |
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13,734 |
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20,496 |
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Total liabilities and shareholders’ equity |
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$ |
20,929 |
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$ |
29,322 |
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Note: The Balance Sheet at December 31, 2003 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See Accompanying Notes.
3
Orphan Medical, Inc.
(in thousands except for per share amounts)
(Unaudited)
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For the Three Months Ended |
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For the Nine Months Ended |
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2004 |
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2003 |
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2004 |
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2003 |
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Product revenues, net |
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$ |
6,651 |
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$ |
2,982 |
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$ |
16,049 |
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$ |
11,898 |
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Licensing and royalty revenue |
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437 |
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— |
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1,854 |
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— |
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Total revenue |
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7,088 |
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2,982 |
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17,903 |
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11,898 |
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Operating expenses: |
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Cost of product revenues |
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884 |
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501 |
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2,249 |
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1,965 |
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Product development |
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2,938 |
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2,895 |
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10,125 |
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7,381 |
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Sales and marketing |
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3,832 |
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3,397 |
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12,596 |
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11,355 |
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General and administrative |
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829 |
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1,106 |
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3,085 |
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3,749 |
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Total operating expenses |
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8,483 |
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7,899 |
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28,055 |
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24,450 |
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Loss from operations |
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(1,395 |
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(4,917 |
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(10,152 |
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(12,552 |
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Interest income |
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41 |
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41 |
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132 |
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77 |
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Interest expense |
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— |
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(35 |
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(22 |
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(84 |
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Other income |
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— |
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34 |
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34 |
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Gain on divestment of products |
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— |
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— |
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— |
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