UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| (Mark One) | |
 |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2002
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 000-23143
PROGENICS
PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
|
DELAWARE |
13-3379479 |
|
(State or other jurisdiction
of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
| 777 Old Saw Mill River Road Tarrytown, New York |
10591 |
|
(Address of principal
executive offices) |
(Zip Code) |
(914) 789-2800
(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
No
As of November 8, 2002 there were 12,634,184 shares of common stock, par value $.0013 per share, of the registrant outstanding.
PROGENICS PHARMACEUTICALS, INC.
INDEX
| . | ||
| PART I - FINANCIAL INFORMATION | ||
| Item 1. Financial Statements | Page No | |
| 3 | ||
| 4 | ||
| 5 | ||
| 6 | ||
| 7 | ||
| 11 | ||
| 15 | ||
| 15 | ||
| PART II - OTHER INFORMATION | ||
| Item 6. Exhibits and Reports on Form 8-K | 17 | |
| Certifications | 19 |
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
PROGENICS PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
AT SEPTEMBER 30, 2002 AND DECEMBER 31, 2001 (Unaudited)
| September
30, 2002 |
December
31, 2001 |
|||||||
| ASSETS: | |
|
||||||
| Current assets: | ||||||||
Cash
and cash equivalents |
$ | 7,170,796 | $ | 10,759,636 | ||||
Certificates
of deposit |
1,750,000 | |||||||
Marketable
securities |
32,785,469 | 30,523,239 | ||||||
Accounts
receivable |
241,674 | 378,020 | ||||||
Interest
receivable |
900,253 | 1,245,890 | ||||||
Other
current assets |
1,125,684 | 840,695 | ||||||
Total
current assets |
43,973,876 | 43,747,480 | ||||||
| Marketable securities | 5,719,660 | 20,594,274 | ||||||
Fixed
assets, at cost, net of accumulated depreciation and amortization |
3,622,962 | 2,560,199 | ||||||
| Investment in joint venture | 270,939 | 579,296 | ||||||
| Restricted cash | 121,284 | |||||||
Total
assets |
$ | 53,708,721 | $ | 67,481,249 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||
| Current liabilities: | ||||||||
Accounts
payable and accrued liabilities |
$ | 1,797,461 | $ | 2,597,089 | ||||
Amount
due to joint venture |
500,000 | |||||||
Total
current liabilities |
1,797,461 | 3,097,089 | ||||||
| Deferred lease liability | 63,147 | 38,797 | ||||||
Total
liabilities |
1,860,608 | 3,135,886 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
Preferred
stock, $.001 par value, 20,000,000 authorized; none issued and outstanding |
||||||||
Common
stock - $.0013 par value, 40,000,000 authorized; issued and outstanding
- 12,615,932 in 2002 and 12,429,916 in 2001 |
16,401 | 16,159 | ||||||
| Additional paid-in capital | 91,012,654 | 89,664,075 | ||||||
| Unearned compensation | (23,150 | ) | ||||||
| Accumulated deficit | (39,287,269 | ) | (25,518,834 | ) | ||||
| Accumulated other comprehensive income | 106,327 | 207,113 | ||||||
Total
stockholders’ equity |
51,848,113 | 64,345,363 | ||||||
Total
liabilities and stockholders’ equity |
$ | 53,708,721 | $ | 67,481,249 | ||||
The accompanying notes are an integral part of these financial statements.
3
PROGENICS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
| For the three
months ended September 30, |
For the nine
months ended September 30, |
|||||||||||||
| Revenues: | 2002 | 2001 | 2002 | 2001 | ||||||||||
Contract research and development from joint venture |
$ | 1,817,042 | $ | 3,901,298 | ||||||||||
Other contract research and development |
$ | 305,874 | 193,734 | $ | 4,709,726 | |||||||||
Research grants |
916,029 | 1,072,355 | 3,642,650 | 2,876,724 | ||||||||||
Product sales |
8,921 | 9,000 | 28,260 | 37,000 | ||||||||||
Interest income |
390,162 | 923,847 | 1,409,509 | 1,941,140 | ||||||||||
|
|
||||||||||||||
Total
revenues |
3,132,154 | 2,311,076 | 9,175,451 | 9,564,590 | ||||||||||
|
|
||||||||||||||
| Expenses: | ||||||||||||||
Research and development |
6,656,787 | 3,456,919 | 17,089,313 | 10,479,113 | ||||||||||
General and administrative |
1,598,831 | 1,000,109 | 4,608,020 | 4,162,006 | ||||||||||
Loss in joint venture |
999,932 | 707,482 | 2,108,357 | 1,645,449 | ||||||||||
Interest expense |
12,371 | 36,138 | ||||||||||||
Depreciation and amortization |
288,898 | 176,033 | 738,196 | 513,180 | ||||||||||
|
|
||||||||||||||
Total
expenses |
9,544,448 | 5,352,914 | 24,543,886 | 16,835,886 | ||||||||||
|
|
||||||||||||||
Operating
loss |
(6,412,294 | ) | (3,041,838 | ) | (15,368,435 | ) | (7,271,296 | ) | ||||||
| Payment from insurance settlement | 1,600,000 | |||||||||||||
| Payment from collaborator | 9,852,012 | |||||||||||||
|
|
||||||||||||||
Net
income (loss) |
$ | (6,412,294 | ) | $ | (3,041,838 | ) | $ | (13,768,435 | ) | $ | 2,580,716 | |||
|
|
||||||||||||||
| Net income (loss) per share - basic | $ | (0.51 | ) | $ | (0.25 | ) | $ | (1.10 | ) | $ | 0.21 | |||
| |
|
|||||||||||||
| Net income (loss) per share - diluted | $ | (0.51 | ) | $ | (0.25 | ) | $ | (1.10 | ) | $ | 0.19 | |||
The accompanying notes are an integral part of these financial statements.
4
PROGENICS
PHARMACEUTICALS, INC.
CONDENSED
STATEMENT OF STOCKHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER
30, 2002 (Unaudited)
| COMMON STOCK | ADDITIONAL PAID-IN CAPITAL |
UNEARNED
COMPENSATION |
ACCUMULATED DEFICIT |
ACCUMULATED OTHER COMPREHENSIVE INCOME |
TOTAL
STOCKHOLDERS’ EQUITY |
COMPREHENSIVE (LOSS) |
|||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||
Balance
at December 31, 2001 |
12,429,916 | $ | 16,159 | $ | 89,664,075 | $ | (23,150) | $ | (25,518,834) | $ | 207,113 | $ | 64,345,363 | ||||||||||||
Amortization
of unearned compensation |
23,150 | 23,150 | |||||||||||||||||||||||
Issuance
of compensatory stock options |
232,579 | 232,579 | |||||||||||||||||||||||
Sale
of common stock under employee stock purchase plans and exercise of stock
options and warrants |
186,016 | 242 | 1,116,000 | 1,116,242 | |||||||||||||||||||||
| Net loss | (13,768,435 | ) | (13,768,435 | ) | (13,768,435 | ) | |||||||||||||||||||
Change
in unrealized gain on marketable securities |
(100,786 | ) | (100,786 | ) | (100,786 | ) | |||||||||||||||||||
Balance
at September 30, 2002 |
12,615,932 | $ | 16,401 | $ | 91,012,654 | $ | (39,287,269) | $ | 106,327 | $ | 51,848,113 | $ | (13,869,221) | ||||||||||||
|
|
|||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
5
PROGENICS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
| Nine months
ended September 30,
|
||||||||
| 2002 | 2001 | |||||||
| Cash flows from operating activities: | |
|
|
|||||
Net
income (loss) |
$ | (13,768,435 | ) | $ | 2,580,716 | |||
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities: |
||||||||
Depreciation
and amortization |
738,196 | 513,180 | ||||||
Amortization
of discounts, net of premiums, on marketable securities |
927,184 | 207,407 | ||||||
Amortization
of discount on amount due to joint venture |
32,058 | |||||||
Loss
in joint venture |
2,108,357 | 1,645,449 | ||||||
Noncash
expenses incurred in connection with issuance of common stock, stock options
and warrants |
255,729 | 404,912 | ||||||
Changes
in assets and liabilities: |
||||||||
Decrease
in accounts receivable |
136,346 | 1,730,935 | ||||||
Decrease
in prepaid expenses and other assets |
60,648 | 245,967 | ||||||
Decrease
in accounts payable and accrued expenses |
(1,425,172 | ) | (471,277 | ) | ||||
Increase
in investment in LLC |
(2,300,000 | ) | (1,689,077 | ) | ||||
Increase
in deferred lease liability |
24,350 | |||||||
Total adjustments |
525,638 | 2,619,554 | ||||||
Net
cash (used in) provided by operating activities |
(13,242,797 | ) | 5,200,270 | |||||
| Cash flows from investing activities: | ||||||||
Capital
expenditures |
(1,175,415 | ) | (923,145 | ) | ||||
Sales
of marketable securities |
22,095,000 | 30,575,000 | ||||||
Purchase
of marketable securities |
(10,510,586 | ) | (25,899,264 | ) | ||||
Increase
in restricted cash |
(121,284 | ) | ||||||
Sale
of certificate of deposit |
1,000,000 | |||||||
Purchase
of certificate of deposit |
(1,750,000 | ) | ||||||
Net
cash provided by investing activities |
8,537,715 | 4,752,591 | ||||||
| Cash flows from financing activities: | ||||||||
Proceeds
from the exercise of stock options and warrants and other adjustments
to stockholders’ equity |
1,116,242 | 784,115 | ||||||
Payment
of capital lease obligations |
(5,681 | ) | ||||||
Net
cash provided by financing activities |
1,116,242 | 778,434 | ||||||
Net
(decrease) increase in cash and cash equivalents |
(3,588,840 | ) | 10,731,295 | |||||
| Cash and cash equivalents at beginning of period | 10,759,636 | 5,628,987 | ||||||
Cash
and cash equivalents at end of period |
$ | 7,170,796 | $ | 16,360,282 | ||||
| |
||||||||
Supplemental
disclosure of noncash investing and financing activities: |
||||||||
Fixed
assets included in accounts payable and accrued expenses |
$ | 650,896 | $ | 89,331 | ||||
The accompanying notes are an integral part of these financial statements.
6
PROGENICS PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Interim Financial Statements
The interim Condensed Financial Statements of Progenics Pharmaceuticals, Inc. (the “Company”) have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and disclosures necessary for a presentation of the Company’s financial position, results of operations and cash flows in conformity with generally accepted accounting principles. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for such periods. The results of operations for interim periods are not necessarily indicative of the results for the full year. The December 31, 2001 Condensed Balance Sheet data was derived from audited financial statements, but as set forth herein does not include all disclosures required by generally accepted accounting principles. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
2. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of September 30, 2002 and December 31, 2001 consist of the following:
| September 30,
2002 |
December
31, 2001 |
||||||
| Accounts payable | $ | 1,319,477 | $ | 916,711 | |||
Accrued
consulting and clinical trial costs |
165,364 | 703,508 | |||||
Accrued
payroll and related costs |
165,775 | 543,283 | |||||
Accrued
legal and auditing fees payable |
146,845 | 433,587 | |||||
|
|
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