United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
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For the quarterly period ended March 31, 2003 | ||
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
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For the transition period from ______ to _________. | ||
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| Commission file number: 000-26727 | |||
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| BIOMARIN PHARMACEUTICAL INC. | |||
| (Exact name of registrant issuer as specified in its charter) | |||
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| Delaware |
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68-0397820 | |
| (State of other jurisdiction of Incorporation or organization) |
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(I.R.S. Employer Identification No.) | |
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| 371 Bel Marin Keys Blvd., #210, Novato, California |
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94949 | |
| (Address of principal executive offices) |
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(Zip Code) | |
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| Registrant’s telephone number: (415) 884-6700 | |||
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| Securities registered pursuant to Section 12(b) of the Act: None | |||
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| Securities registered under Section 12(g) of the Act: Common Stock, $.001 par value | |||
| (Title of Class) | |||
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| (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 preceeding 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 o |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of The Exchange Act).
| Yes x |
No o |
APPLICABLE ONLY TO ISSUERS
INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
| Yes o |
No o |
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 63,387,739 shares common stock, par value $0.001, outstanding as of April 30, 2003.
BIOMARIN PHARMACEUTICAL INC.
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| PART I. FINANCIAL INFORMATION |
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1 | ||
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1 | ||
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2 | ||
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3 | ||
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4 | ||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 | |
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Item 3. Quantitative and Qualitative Disclosure about Market Risk |
27 | |
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Item 4. Controls and Procedures |
27 | |
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| PART II. OTHER INFORMATION |
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Item 1. Legal Proceedings |
28 | |
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28 | ||
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Item 3. Defaults upon Senior Securities |
28 | |
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28 | ||
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Item 5. Other Information |
28 | |
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Item 6. Exhibits and Reports on Form 8-K |
28 | |
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| 29 | |||
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| 30 | |||
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Item 1. Consolidated Financial Statements
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
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December 31, |
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March 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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$ |
33,638 |
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$ |
125,835 |
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| Short-term investments |
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40,340 |
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22,743 |
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| Investment in and advances to BioMarin/Genzyme LLC |
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4,955 |
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5,003 |
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| Other current assets |
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2,139 |
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1,214 |
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| Total current assets |
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81,072 |
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154,795 |
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| Property and equipment, net |
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28,206 |
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26,338 |
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| Other assets |
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1,338 |
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1,984 |
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| Total assets |
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$ |
110,616 |
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$ |
183,117 |
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| Liabilities and Stockholders’ Equity |
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| Current liabilities: |
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| Accounts payable and accrued liabilities |
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$ |
3,930 |
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$ |
9,532 |
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| Other current liabilities |
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2,917 |
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3,187 |
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| Total current liabilities |
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6,847 |
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12,719 |
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| Long-term liabilities |
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5,226 |
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4,496 |
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| Total liabilities |
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12,073 |
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17,215 |
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| Stockholders’ equity: |
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| Common stock, $0.001 par value: 75,000,000 shares authorized, 53,782,426 and 63,103,286 shares issued and outstanding December 31, 2002 and March 31, 2003, respectively |
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54 |
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63 |
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| Additional paid-in capital |
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319,038 |
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406,059 |
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| Warrants |
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5,219 |
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5,219 |
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| Deferred compensation |
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(47 |
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— |
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| Notes receivable from stockholders |
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(468 |
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(475 |
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| Accumulated other comprehensive income |
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327 |
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299 |
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| Accumulated deficit |
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(225,580 |
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(245,263 |
) |
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| Total stockholders’ equity |
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98,543 |
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165,902 |
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| Total liabilities and stockholders’ equity |
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$ |
110,616 |
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$ |
183,117 |
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| (1) December 31, 2002 balances were obtained from audited financial statements. |
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See accompanying notes to consolidated financial statements.
1
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2002 and 2003
(In thousands, except per share
data, unaudited)
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Three Months Ended March 31, |
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2002 |
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2003 |
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| Revenue from BioMarin/Genzyme LLC |
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$ |
3,792 |
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$ |
3,496 |
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| Operating expenses: |
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| Research and development |
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13,218 |
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17,758 |
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| General and administrative |
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3,926 |
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3,024 |
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| In-process research and development |
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11,223 |
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— |
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| Loss of BioMarin /Genzyme LLC |
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2,298 |
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3,257 |
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| Total operating expenses |
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30,665 |
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24,039 |
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| Loss from operations |
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(26,873 |
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(20,543 |
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| Interest income |
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380 |
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413 |
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| Interest expense |
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(91 |
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(130 |
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| Net loss from continuing operations |
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(26,584 |
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(20,260 |
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| Income from discontinued operations |
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122 |
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— |
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| Gain (loss) on disposal of discontinued operations |
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(141 |
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577 |
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| Net loss |
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$ |
(26,603 |
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$ |
(19,683 |
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| Net loss per share, basic and diluted: |
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| Net loss from continuing operations |
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$ |
(0.51 |
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$ |
(0.36 |
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| Income from discontinued operations |
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— |
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— |
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| Gain (loss) on disposal of discontinued operations |
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— |
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0.01 |
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| Net loss |
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$ |
(0.51 |
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$ |
(0.35 |
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| Weighted average common shares outstanding |
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52,535 |
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56,964 |
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See accompanying notes to consolidated financial statements.
2
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2002 and 2003
(In thousands, unaudited)
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Three Months Ended March 31, |
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2002 |
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2003 |
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| Cash flows from operating activities: |
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| Net loss from continuing operations |
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$ |
(26,584 |
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$ |
(20,260 |
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| Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: |
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| In-process research and development |
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10,286 |
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— |
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| Depreciation and amortization |
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2,061 |
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2,085 |
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| Gain on disposals of property and equipment |
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— |
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(28 |
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| Other non-cash charges |
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206 |
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95 |
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| Changes in operating assets and liabilities: |
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| Investment in and advances to BioMarin/Genzyme LLC |
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(1,159 |
) |
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(48 |
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| Other current assets |
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2,078 |
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1,092 |
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| Other assets |
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(300 |
) |
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(313 |
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| Accounts payable and accrued liabilities |
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854 |
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5,539 |
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| Other current liabilities |
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— |
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(98 |
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| Net cash used in continuing operations |
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(12,558 |
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(11,936 |
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| Net cash provided by (used in) discontinued operations |
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(279 |
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140 |
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| Net cash used in operating activities |
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(12,837 |
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(11,796 |
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| Cash flows from investing activities: |
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| Purchase of property and equipment |
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(2,245 |
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(170 |
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| Proceeds from sale of equipment |
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— |
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28 |
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| Purchase of Synapse Technologies, Inc. |
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(1,028 |
) |
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— |
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| Sale of short-term investments |
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21,973 |
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17,558 |
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| Net cash provided by investing activities |
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18,700 |
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17,416 |
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| Cash flow from financing activities: |
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| Net proceeds from public offering of common stock |
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— |
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80,530 |
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| Net proceeds from sale of common stock to Acqua Wellington |
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— |
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4,950 |
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| Proceeds from exercise of stock options |
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375 |
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1,448 |
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| Repayment of notes payable |
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(443 |
) |
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(352 |
) |
| Repayment of capital lease obligations |
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(15 |
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(10 |
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| Interest accrued on notes receivable from stockholders |
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(45 |
) |
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— |
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| Net cash provided by (used in) financing activities |
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(128 |
) |
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86,566 |
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| Effect of foreign currency translation on cash |
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(61 |
) |
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11 |
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| Net increase in cash |
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5,674 |
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92,197 |
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| Cash and cash equivalents: |
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| Beginning of period |
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12,528 |
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33,638 |
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| End of period |
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$ |
18,202 |
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