| |X| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |_| | 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: 0-20859
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) |
75-2287752
(I.R.S. EMPLOYER IDENTIFICATION NO.) |
230
CONSTITUTION DRIVE, MENLO PARK, CA 94025
(ADDRESS, INCLUDING ZIP CODE, OF
PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (650) 473-7700
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK
$0.001 PAR VALUE
(TITLE OF CLASS)
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 |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.
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Class: Common Stock, $0.001 par value |
Outstanding
at October 25, 2004: 45,633,456 shares |
| SEPTEMBER
30, 2004 |
DECEMBER
31, 2003 |
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| (UNAUDITED) | (SEE NOTE 1) | |||||
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| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 10,185 | $ | 12,823 | ||
| Restricted cash | 530 | 530 | ||||
| Marketable securities | 80,015 | 96,427 | ||||
| Interest and other receivables | 960 | 1,146 | ||||
| Notes receivable from related parties | 67 | 67 | ||||
| Prepaid assets | 3,371 | 815 | ||||
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| Total current assets | 95,128 | 111,808 | ||||
| Equity investments in licensees | 330 | 401 | ||||
| Notes receivable from related parties | 135 | 172 | ||||
| Property and equipment, net | 2,173 | 1,684 | ||||
| Deposits and other assets | 202 | 231 | ||||
| Intangible assets | 1,671 | 3,819 | ||||
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| $ | 99,639 | $ | 118,115 | |||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 1,667 | $ | 1,297 | ||
| Accrued compensation | 1,304 | 2,499 | ||||
| Accrued liabilities | 677 | 762 | ||||
| Current portion of deferred revenue | 210 | 227 | ||||
| Current portion of equipment loans | 162 | 176 | ||||
| Current portion of research funding obligation | 3,615 | 4,864 | ||||
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| Total current liabilities | 7,635 | 9,825 | ||||
| Noncurrent portion of deferred revenue | 751 | 815 | ||||
| Noncurrent portion of equipment loans | 82 | 201 | ||||
| Noncurrent portion of research funding obligation | — | 950 | ||||
| Commitments | ||||||
| Stockholders’ equity: | ||||||
| Common stock | 45 | 39 | ||||
| Additional paid-in capital | 418,578 | 362,695 | ||||
| Deferred compensation | (140 | ) | (231 | ) | ||
| Accumulated deficit | (326,596 | ) | (255,666 | ) | ||
| Accumulated other comprehensive loss | (716 | ) | (513 | ) | ||
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| Total stockholders’ equity | 91,171 | 106,324 | ||||
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| $ | 99,639 | $ | 118,115 | |||
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3
| THREE
MONTHS ENDED SEPTEMBER 30, |
NINE
MONTHS ENDED SEPTEMBER 30, |
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| 2004 | 2003 | 2004 | 2003 | |||||||||
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| Revenues from collaborative agreements | $ | — | $ | — | $ | — | $ | 72 | ||||
| License fees and royalties | 101 | 472 | 715 | 947 | ||||||||
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| Total revenues | 101 | 472 | 715 | 1,019 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 8,900 | 4,713 | 22,099 | 19,236 | ||||||||
| Acquired in-process research | ||||||||||||
| technology | — | — | 45,150 | — | ||||||||
| General and administrative | 1,676 | 996 | 5,120 | 3,717 | ||||||||
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| Total operating expenses | 10,576 | 5,709 | 72,369 | 22,953 | ||||||||
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| Loss from operations | (10,475 | ) | (5,237 | ) | (71,654 | ) | (21,934 | ) | ||||
| Interest and other income | 348 | 287 | 1,231 | 957 | ||||||||
| Debenture conversion expense | — | — | — | (779 | ) | |||||||
| Interest and other expense | (175 | ) | (157 | ) | (507 | ) | (571 | ) | ||||
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| Net loss | $ | (10,302 | ) | $ | (5,107 | ) | $ | (70,930 | ) | $ | (22,327 | ) |
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| Basic and diluted net loss per share | $ | (0.23 | ) | $ | (0.15 | ) | $ | (1.62 | ) | $ | (0.76 | ) |
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| Weighted average shares used in | ||||||||||||
| computing basic and diluted net | ||||||||||||
| loss per share | 45,442,854 | 33,189,213 | 43,719,086 | 29,192,273 | ||||||||
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4
| NINE
MONTHS ENDED SEPTEMBER 30, |
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| 2004 | 2003 | |||||
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| Cash flows from operating activities: | ||||||
| Net loss | $ | (70,930 | ) | $ | (22,327 | ) |
| Adjustments to reconcile net loss to net cash used in operating | ||||||
| activities: | ||||||
| Depreciation and amortization | 823 | 898 | ||||
| Accretion and amortization on investments | 2,314 | 816 | ||||
| Loss on sale of fixed asset | 15 | — | ||||
| Interest for convertible debentures | — | (1 | ) | |||
| Conversion expense related to modification of Series D | ||||||
| convertible debentures and warrants | — | 779 | ||||
| Issuance of common stock in exchange for acquired research | ||||||
| technology | 45,150 | — | ||||
| Stock-based compensation | 3,165 | 47 | ||||
| Accretion of interest on research funding obligation | 368 | 368 | ||||
| Amortization of deferred compensation | 91 | 78 | ||||
| Realized loss on equity investments in licensees | 15 | — | ||||
| Amortization of intangible assets, principally research related | 2,148 | 2,148 | ||||
| Accrued research funding obligation | (2,567 | ) | (3,280 | ) | ||
| Changes in assets and liabilities: | ||||||
| Other current and noncurrent assets | 2,862 | 1,414 | ||||
| Other current and noncurrent liabilities | 61 | 429 | ||||
| Translation adjustment | 1 | (78 | ) | |||
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| Net cash used in operating activities | (16,484 | ) | (18,709 | ) | ||
| Cash flows from investing activities: | ||||||
| Proceeds from sale of fixed asset | 36 | — | ||||
| Capital expenditures | (1,363 | ) | (257 | ) | ||
| Purchases of marketable securities | (47,023 | ) | (42,623 | ) | ||
| Proceeds from maturities of marketable securities | 60,893 | 43,079 | ||||
| Proceeds from sale of equity investment in licensee | 201 | — | ||||
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| Net cash provided by investing activities | 12,744 | 199 | ||||
| Cash flows from financing activities: | ||||||
| Payments of obligations under equipment loans | (133 | ) | (311 | ) | ||
| Proceeds from issuances of common stock, net of issuance costs | 1,235 | 22,259 | ||||