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EX-31.1 - PHARMACYCLICS INC | ex311to10q07380_12312009.htm |
EX-31.2 - PHARMACYCLICS INC | ex312to10q07380_12312009.htm |
EX-32.1 - PHARMACYCLICS INC | ex321to10q07380_12312009.htm |
EX-10.2 - PHARMACYCLICS INC | ex102to10q07380_12312009.htm |
EX-10.1 - PHARMACYCLICS INC | ex101to10q07380_12312009.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended December
31, 2009
or
o 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: 000-26658
Pharmacyclics,
Inc.
|
(Exact name
of registrant as specified in its
charter)
|
Delaware
|
94-3148201
|
(State or
other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
No.)
|
995
E. Arques Avenue, Sunnyvale, CA
|
94085-4521
|
(Address of
principal executive offices)
|
(Zip
Code)
|
(408)
774-0330
|
(Registrant’s
telephone number, including area code)
|
|
(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 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
o
Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files). Yes o
No o
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer o
|
Accelerated filer o
|
Non-accelerated
filer o (Do not
check if a smaller reporting company)
|
Smaller reporting company
x
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of February 11,
2010, there were 50,409,167 shares of the registrant's Common Stock, par value
$0.0001 per share, outstanding.
This quarterly
report on Form 10-Q consists of 28 pages, of
which this is page 1. The Exhibits Index page immediately follows page
28.
PHARMACYCLICS,
INC.
Form
10-Q
Table of Contents
Page
No.
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3
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4
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5
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6
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14
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25 | ||
25
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26
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Risk Factors | 26 | |
26
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26
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26
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26
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27
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27
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28
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PART I - FINANCIAL
INFORMATION
PHARMACYCLICS,
INC.
(a
development stage enterprise)
CONDENSED BALANCE SHEETS
(unaudited;
in thousands)
December
31,
|
June
30,
|
|||||||
2009
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 5,767 | $ | 14,534 | ||||
Marketable
securities
|
24,353 | 1,792 | ||||||
Accounts
receivable
|
575 | 632 | ||||||
Prepaid
expenses and other current assets
|
1,695 | 583 | ||||||
Total
current assets
|
32,390 | 17,541 | ||||||
Property
and equipment, net
|
376 | 470 | ||||||
Other
assets
|
319 | 290 | ||||||
$ | 33,085 | $ | 18,301 | |||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 1,891 | $ | 1,167 | ||||
Accrued
liabilities
|
729 | 801 | ||||||
Notes
payable to related party
|
- | 6,379 | ||||||
Deferred
revenue - current portion
|
6,600 | 7,025 | ||||||
Total
current liabilities
|
9,220 | 15,372 | ||||||
Deferred
revenue - non-current portion
|
1,899 | 4,603 | ||||||
Deferred
rent
|
58 | 67 | ||||||
Total
liabilities
|
11,177 | 20,042 | ||||||
Stockholders'
equity (deficit):
|
||||||||
Preferred
stock
|
- | - | ||||||
Common
stock
|
5 | 3 | ||||||
Additional
paid-in capital
|
389,882 | 361,153 | ||||||
Accumulated
other comprehensive income (loss)
|
(18 | ) | 1 | |||||
Deficit
accumulated during development stage
|
(367,961 | ) | (362,898 | ) | ||||
Total
stockholders' equity (deficit)
|
21,908 | (1,741 | ) | |||||
$ | 33,085 | $ | 18,301 |
The accompanying
notes are an integral part of these condensed financial
statements.
PHARMACYCLICS,
INC.
(a
development stage enterprise)
CONDENSED STATEMENTS OF OPERATIONS
(unaudited;
in thousands, except per share data)
Period
From
|
||||||||||||||||||||
Inception
|
||||||||||||||||||||
(April
19, 1991)
|
||||||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
through
|
||||||||||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
||||||||||||||||
Revenues:
|
||||||||||||||||||||
License,
collaboration and milestone revenues
|
$ | 4,702 | $ | - | $ | 4,702 | $ | - | $ | 12,557 | ||||||||||
Contract
and grant revenues
|
- | - | - | - | 6,154 | |||||||||||||||
Total
revenues
|
4,702 | - | 4,702 | - | 18,711 | |||||||||||||||
Operating
expenses:
|
||||||||||||||||||||
Research
and development*
|
3,723 | 2,986 | 7,011 | 6,189 | 332,887 | |||||||||||||||
General
and administrative*
|
1,765 | 1,874 | 3,298 | 5,313 | 87,913 | |||||||||||||||
Purchased
in-process research
|
||||||||||||||||||||
and
development
|
- | - | - | - | 6,647 | |||||||||||||||
Total
operating expenses
|
5,488 | 4,860 | 10,309 | 11,502 | 427,447 | |||||||||||||||
Loss from
operations
|
(786 | ) | (4,860 | ) | (5,607 | ) | (11,502 | ) | (408,736 | ) | ||||||||||
Interest and
other income (expense), net
|
18 | 26 | (6 | ) | 126 | 40,775 | ||||||||||||||
Loss before
benefit from income taxes
|
(768 | ) | (4,834 | ) | (5,613 | ) | (11,376 | ) | (367,961 | ) | ||||||||||
Benefit from
income taxes
|
550 | - | 550 | - | - | |||||||||||||||
Net
loss
|
$ | (218 | ) | $ | (4,834 | ) | $ | (5,063 | ) | $ | (11,376 | ) | $ | (367,961 | ) | |||||
Basic and
diluted net loss per share
|
$ | (0.00 | ) | $ | (0.19 | ) | $ | (0.11 | ) | $ | (0.44 | ) | ||||||||
Shares used
to compute basic and
|
||||||||||||||||||||
diluted
net loss per share
|
50,076 | 26,034 | 45,535 | 26,025 | ||||||||||||||||
* includes
non-cash share based compensation
|
||||||||||||||||||||
of the
following:
|
||||||||||||||||||||
Research
and development
|
$ | 216 | $ | 173 | $ | 374 | $ | 352 | $ | 7,088 | ||||||||||
General
and administrative
|
356 | 461 | 446 | 2,099 | 9,548 |
The accompanying
notes are an integral part of these condensed financial statements.
PHARMACYCLICS,
INC.
(a
development stage enterprise)
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited;
in thousands)
Period
From
|
||||||||||||
Inception
|
||||||||||||
(April
19, 1991)
|
||||||||||||
Six
Months Ended
|
through
|
|||||||||||
December
31,
|
December
31,
|
|||||||||||
2009
|
2008
|
2009
|
||||||||||
Cash flows
from operating activities:
|
||||||||||||
Net
loss
|
$ | (5,063 | ) | $ | (11,376 | ) | $ | (367,961 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Depreciation
and amortization
|
119 | 166 | 15,403 | |||||||||
Amortization
of premium/discount on marketable securities, net
|
127 | (33 | ) | 101 | ||||||||
Amortization
of debt discount
|
21 | - | 570 | |||||||||
Gain
on sale of marketable securities
|
- | (1 | ) | 50 | ||||||||
Purchased
in-process research and development
|
- | - | 4,500 | |||||||||
Share-based
compensation expense
|
820 | 2,451 | 16,636 | |||||||||
Common
stock issued in exchange for services provided
|
- | - | 15 | |||||||||
Write-down
of fixed assets
|
- | - | 370 | |||||||||
Changes
in assets and liabilities:
|
||||||||||||
Accounts
receivable
|
57 | (107 | ) | (1,125 | ) | |||||||
Prepaid
expenses and other assets
|
(1,141 | ) | (18 | ) | (1,464 | ) | ||||||
Accounts
payable
|
724 | (222 | ) | 1,891 | ||||||||
Accrued
liabilities
|
(72 | ) | 273 | 729 | ||||||||
Deferred
revenue
|
(3,129 | ) | - | 8,499 | ||||||||
Deferred
rent
|
(9 | ) | (2 | ) | 58 | |||||||
Net
cash used in operating activities
|
(7,546 | ) | (8,869 | ) | (321,728 | ) | ||||||
Cash flows
from investing activities:
|
||||||||||||
Purchase
of property and equipment
|
(25 | ) | (15 | ) | (12,391 | ) | ||||||
Proceeds
from sale of property and equipment
|
- | - | 123 | |||||||||
Purchases
of marketable securities
|
(25,157 | ) | (3,179 | ) | (559,674 | ) | ||||||
Proceeds
from maturities and sales of marketable securities
|
2,450 | 7,698 | 535,152 | |||||||||
Net
cash (used in) provided by investing activities
|
(22,732 | ) | 4,504 | (36,790 | ) | |||||||
Cash flows
from financing activities:
|
||||||||||||
Issuance
of common stock, net of issuance costs
|
21,744 | 20 | 332,050 | |||||||||
Exercise
of stock options
|
81 | 2 | 6,516 | |||||||||
Proceeds
from related party notes payable
|
- | 5,000 | 6,400 | |||||||||
Proceeds
from note payable
|
- | - | 3,000 | |||||||||
Issuance
of convertible preferred stock, net of issuance costs
|
- | - | 20,514 | |||||||||
Payments
under capital lease obligations
|
- | - | (3,881 | ) | ||||||||
Repayment
of notes payable
|
(314 | ) | - | (314 | ) | |||||||
Net
cash provided by financing activities
|
21,511 | 5,022 | 364,285 | |||||||||
(Decrease)/Increase
in cash and cash equivalents
|
(8,767 | ) | 657 | 5,767 | ||||||||
Cash and cash
equivalents at beginning of period
|
14,534 | 12,260 | - | |||||||||
Cash and cash
equivalents at end of period
|
5,767 | 12,917 | 5,767 | |||||||||
Supplemental
disclosures of non-cash
|
||||||||||||
investing and
financing activities:
|
||||||||||||
Settlement
of related party notes
|
||||||||||||
payable
by issuance of common stock
|
$ | 6,086 | $ | - | $ | 6,086 |
PHARMACYCLICS,
INC.
(a
development stage enterprise)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note
1 – The Company and Significant Accounting Policies
Description
of the Company
We
are a clinical-stage biopharmaceutical company focused on developing and
commercializing innovative small-molecule drugs for the treatment of cancer and
immune mediated diseases. Our purpose is to create a profitable
company by generating income from products we develop, license and
commercialize, either with one or several potential collaborators/partners or
alone as may best forward the economic interest of our
stakeholders. We endeavor to create novel, patentable, differentiated
products that have the potential to significantly improve the standard of care
in the markets we serve.
Presently, we have
four product candidates in clinical development and two product candidates in
pre-clinical development. It is our business strategy to establish
collaborations with large pharmaceutical and biotechnology companies for the
purpose of generating present and future income in exchange for adding to their
product pipelines. In addition, we strive to generate collaborations
that allow us to retain valuable territorial rights and simultaneously fast
forward the clinical development and commercialization of our
products.
We
continue to evolve into a company focused on licensing and co-development
activities. Most recently we signed a collaboration and licensing agreement for
one of our key compounds allowing us to significantly expedite the development
path outside of the U.S., while retaining U.S. rights and receiving upfront and
potential future milestone payments. This partnership is indicative of our
strategy going forward.
To
date, substantially all of our resources have been dedicated to the research and
development of our products, and we have not generated any commercial revenues
from the sale of our products. We do not anticipate the generation of any
product commercial revenues until we receive the necessary regulatory and
marketing approvals to launch one of our products.
We
have incurred significant operating losses since our inception in 1991, and as
of December 31, 2009, had an accumulated deficit of approximately $368.0
million. The process of developing and commercializing our products
requires significant research and development, preclinical testing and clinical
trials, manufacturing arrangements as well as regulatory and marketing
approvals. These activities, together with our general and
administrative expenses, are expected to result in significant operating losses
until the commercialization of our products, or partner collaborations, generate
sufficient revenues to cover our expenses. We expect that losses will
fluctuate from quarter to quarter and that such fluctuations may be
substantial. Our achieving profitability depends upon our ability to
successfully complete the development of our products, obtain required
regulatory approvals and successfully manufacture and market our
products.
Basis
of Presentation
The accompanying
interim condensed financial statements have been prepared by Pharmacyclics, Inc.
(the “company” or “Pharmacyclics”), without audit, in accordance with the
instructions to Form 10-Q and, therefore, do not necessarily include all
information and footnotes necessary for a fair statement of its financial
position, results of operations and cash flows in accordance with accounting
principles generally accepted in the United States. The balance sheet at June
30, 2009 is derived from the audited balance sheet at that date which is not
presented herein.
In
the opinion of management, the unaudited financial information for the interim
periods presented reflects all adjustments, which are only normal and recurring,
necessary for a fair statement of results of operations, financial position and
cash flows. These condensed financial statements should be read in conjunction
with the financial statements included in the company’s Annual Report on Form
10-K for the fiscal year ended June 30, 2009. Operating results for interim
periods are not necessarily indicative of operating results for an entire fiscal
year.
The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States requires management to make estimates and assumptions that
affect the reported amounts and the disclosure of contingent amounts in the
company’s financial statements and the accompanying notes. Actual results could
differ from those estimates.
The company has evaluated material subsequent events
through February 12, 2010, the date these financial statements were
issued.
Note
2 – Basic and Diluted Net Loss Per Share
Basic net loss per
share is computed using the weighted average number of common shares outstanding
during the period. Diluted net loss per share is computed using the weighted
average number of common and potential common shares outstanding during the
period. Potential common shares consist of shares issuable upon the exercise of
stock options (using the treasury stock method). Options to purchase
7,604,263 and 5,866,066 shares of common stock were outstanding as of
December 31, 2009 and 2008, respectively, but have been excluded from the
computation of diluted net loss per share because their effect was
anti-dilutive.
Note
3 – Share-Based Compensation
The company grants options to purchase its
common stock pursuant to its 2004 Equity Incentive Award Plan. Options vest upon
the passage of time or a combination of time and the achievement of certain
performance obligations. The Compensation Committee of the Board of
Directors determines if the performance conditions have been
met. Share-based compensation expense for the options with
performance obligations is recorded when the company believes that the vesting
of these options is probable.
The components of
share-based compensation recognized in the company’s statements of operations
for the three and six months ended December 31, 2009 and 2008 and since
inception are as follows:
Period
From
|
||||||||||||||||||||
Inception
|
||||||||||||||||||||
(April
19, 1991)
|
||||||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
through
|
||||||||||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
||||||||||||||||
Research and
development
|
$ | 216,000 | $ | 173,000 | 374,000 | $ | 352,000 | $ | 7,088,000 | |||||||||||
General and
administrative
|
356,000 | 461,000 | 446,000 | 2,099,000 | 9,548,000 | |||||||||||||||
Total
share-based compensation
|
$ | 572,000 | $ | 634,000 | 820,000 | $ | 2,451,000 | $ | 16,636,000 |
The following table
summarizes the company’s stock option activity for the six months ended December
31, 2009:
Weighted
|
||||||||
Number
|
Average
|
|||||||
of
|
Exercise
|
|||||||
Shares
|
Price
|
|||||||
Balance at
June 30, 2009
|
7,054,899 | $ | 5.75 | |||||
Options
granted
|
297,522 | 1.97 | ||||||
Options
exercised
|
(84,076 | ) | 0.97 | |||||
Options
forfeited
|
(513,261 | ) | 4.82 | |||||
Balance at
December 31, 2009
|
6,755,084 | 5.72 |
The table above
does not include 855,750 performance options granted in fiscal 2009 for which
the performance criteria had not been established as of December 31,
2009.
Employee Stock Purchase Plan.
The company adopted an Employee Stock Purchase Plan (the “Purchase Plan”) in
August 1995. Qualified employees may elect to have a certain percentage of their
salary withheld to purchase shares of the company's common stock under the
Purchase Plan. The purchase price per share is equal to 85% of the fair market
value of the stock on specified dates. Sales under the Purchase Plan in the six
months period ended December 31, 2009 and 2008 were 17,867 and 18,207 shares of
common stock at a price of $1.40 and $1.08, respectively. Shares available for
future purchase under the Purchase Plan are 460,705 at December 31,
2009.
Note
4 – Comprehensive Loss
Comprehensive loss
includes net loss and unrealized gains on marketable securities that are
excluded from the results of operations. The company's comprehensive losses were
as follows:
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
December
31,
|
December
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
loss
|
$ | (218,000 | ) | $ | (4,834,000 | ) | $ | (5,063,000 | ) | $ | (11,376,000 | ) | ||||
Change in net
unrealized gain (losses)
|
||||||||||||||||
on
available-for-sale securities
|
(17,000 | ) | 8,000 | (19,000 | ) | (10,000 | ) | |||||||||
Comprehensive
loss
|
$ | (235,000 | ) | $ | (4,826,000 | ) | $ | (5,082,000 | ) | $ | (11,386,000 | ) |
Note
5 – Fair Value Measurements and Marketable Securities
Our marketable securities are held as
“available-for-sale”. We classify these investments as current assets
and carry them at fair value. Unrealized gains and losses on
available-for-sale securities are included in accumulated other income
(loss). The amortized cost of debt securities is adjusted for the
amortization of premiums and accretions of discounts to
maturity. Such amortization is included in interest
income. Gains and losses on securities sold are recorded based on the
specific identification method and are included in interest expense and other
income (expense), net in the statement of operations.
Management assesses whether declines in the
fair value of marketable securities are other than temporary. If the
decline is judged to be other than temporary, the cost basis of the individual
security is written down to fair value and the amount of the write down is
included in the statement of operations. In determining whether a
decline is other than temporary, management considers various factors including
the length of time and the extent to which the fair value has been less than
cost, the financial condition and near-term prospects of the issuer and our
intent and ability to retain our investment in the issuer for a period of time
sufficient to allow for any anticipated recovery in fair value. To date we have
not recorded any impairment charges on marketable securities related to
other-than-temporary declines in fair value.
In
September 2006, the FASB issued accounting guidance that defines fair value,
establishes a framework for measuring fair value in GAAP, and expands
disclosures about fair value measurements. The company adopted this
accounting guidance on July 1, 2008. In February 2008, the FASB
issued a statement that delayed the effective date of new fair value principles
for non-financial assets and liabilities, that are not measured or disclosed on
a recurring basis, to fiscal years beginning after November 15, 2008. The
company adopted this guidance on July 1, 2009.
The accounting
guidance for fair value measurements defines fair value as the exchange price
that would be received for an asset or paid to transfer a liability (an exit
price) in the principal or most advantageous market for the asset or liability
in an orderly transaction between market participants on the measurement date.
The accounting guidance also establishes a fair value hierarchy which requires
an entity to maximize the use of observable inputs, and minimize the use of
unobservable inputs, when measuring fair value. The guidance describes three
levels of inputs that may be used to measure fair value:
Level 1 - Quoted prices in
active markets for identical assets or liabilities.
Level 2 - Observable inputs
other than Level 1 prices such as quoted prices for similar assets or
liabilities, quoted prices in markets that are not active, or other inputs that
are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities. The company’s
short-term investments primarily utilize broker quotes in markets with
infrequent transactions for valuation of these securities.
Level 3 - Unobservable inputs
that are supported by little or no market activity and that are significant to
the fair value of the assets or liabilities.
The company
utilizes the market approach to measure fair value for its financial assets and
liabilities. The market approach uses prices and other relevant information
generated by market transactions involving identical or comparable assets or
liabilities. The following table sets forth the company’s financial assets (cash
equivalents and marketable securities) at fair value on a recurring basis as of
December 31, 2009.
Estimated
|
||||||||||||||||
Fair
Value as of
|
Basis
of Fair Value Measurements
|
|||||||||||||||
December
31, 2009
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Money market
funds
|
$ | 4,929 | $ | 4,929 | $ | - | $ | - | ||||||||
Corporate
bonds
|
4,581 | - | 4,581 | - | ||||||||||||
Government
agency securities
|
20,278 | - | 20,278 | - | ||||||||||||
Total cash
equivalents and marketable securities
|
$ | 29,788 | $ | 4,929 | $ | 24,859 | $ | - | ||||||||
Estimated
|
||||||||||||||||
Fair
Value as of
|
Basis
of Fair Value Measurements
|
|||||||||||||||
June
30, 2009
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Money market
funds
|
$ | 10,077 | $ | 10,077 | $ | - | $ | - | ||||||||
Government
agency securities
|
2,642 | - | 2,642 | - | ||||||||||||
Total cash
equivalents and marketable securities
|
$ | 12,719 | $ | 10,077 | $ | 2,642 | $ | - |
The following is a
summary of the company’s available-for-sale securities as of December 31, 2009
and June 30, 2009:
Estimated
|
||||||||||||||||
Unrealized
|
Unrealized
|
Fair
|
||||||||||||||
As
of December 31, 2009
|
Cost
Basis
|
Gain
|
Loss
|
Value
|
||||||||||||
Money market
funds
|
$ | 4,929 | $ | - | $ | - | $ | 4,929 | ||||||||
Corporate
bonds
|
4,584 | 1 | (4 | ) | 4,581 | |||||||||||
Government
agency securities
|
20,293 | 3 | (18 | ) | 20,278 | |||||||||||
29,806 | 4 | (22 | ) | 29,788 | ||||||||||||
Less cash
equivalents
|
(5,435 | ) | - | - | (5,435 | ) | ||||||||||
Total
marketable securities
|
$ | 24,371 | $ | 4 | $ | (22 | ) | $ | 24,353 | |||||||
Estimated
|
||||||||||||||||
Unrealized
|
Unrealized
|
Fair
|
||||||||||||||
As
of June 30, 2009
|
Cost
Basis
|
Gain
|
Loss
|
Value
|
||||||||||||
Money market
funds
|
$ | 10,077 | $ | - | $ | - | $ | 10,077 | ||||||||
Government
agency securities
|
2,641 | 1 | - | 2,642 | ||||||||||||
12,718 | 1 | - | 12,719 | |||||||||||||
Less cash
equivalents
|
(10,927 | ) | - | - | (10,927 | ) | ||||||||||
Total
marketable securities
|
$ | 1,791 | $ | 1 | $ | - | 1,792 |
As
of December 31, 2009, the company’s marketable securities had the following
contractual maturities (in thousands):
Amortized
|
Estimated
|
|||||||
Cost
|
Fair
Value
|
|||||||
Less than one
year
|
$ | 21,357 | $ | 21,345 | ||||
Between one
and two years
|
3,014 | 3,008 | ||||||
$ | 24,371 | $ | 24,353 |
Note
6 – Servier Agreement
Collaboration and License Agreement
with Les Laboratoires Servier. In
April 2009, we entered into a collaboration and license agreement with Les
Laboratoires Servier ("Servier") to research, develop and commercialize
PCI-24781, an orally active, novel, small molecule inhibitor of Pan HDAC
enzymes. Under the terms of the agreement, Servier acquired the
exclusive right to develop and commercialize the Pan HDAC inhibitor product
worldwide except for the United States and will pay a royalty to Pharmacyclics
on sales outside of the United States. Pharmacyclics will continue to own all
rights within the United States. In May 2009, Pharmacyclics received an upfront
payment of $11.0 million from Servier, less applicable withholding taxes of
$0.55 million, for a net receipt of $10.45 million.
Pharmacyclics is
due to receive from Servier a total of $4.0 million for research collaboration
over a twenty-four month period beginning April 2009, paid in equal increments
every six months. The initial payment of $1.0 million was received in
October 2009. Servier is solely responsible for conducting and paying for all
development activities outside the United States. In addition,
Pharmacyclics could also receive from Servier up to approximately $24.5 million
upon the achievement of certain future milestones up to and including
commercialization, as well as royalty payments.
Revenue associated
with our Servier collaboration and related agreements is recognized upon
achieving the four general criteria for revenue recognition (i.e., evidence of
arrangement, delivery, fixed or determinable amount and
collectability). The company's collaboration agreement with Servier
is accounted for in accordance with accounting rules governing “Revenue
Arrangements with Multiple Deliverables.” The non-refundable portion of upfront
payments received under the company’s existing agreements is deferred by the
company upon receipt and recognized on a pro rata basis over the period ending
on the anticipated date of completion of the research activities associated with
the Research Program, which management believes represents the conclusion of all
significant obligations on the part of the company. For the company’s
current agreement, this period was determined to be two years for reasons
described further below.
Under
the terms of the agreement, four company representatives are required to
participate on a Joint Research and Development Committee ("JRDC"). The JRDC’s
only responsibilities are to:
- Meet at least twice a year
during the agreement term,
- Oversee the Research
Program, Research Plan (as defined) and Development Plan (as
defined),
- Oversee the registration
and commercialization of licensed products, and
- Maintain a list of Option
Compounds (as defined) existing prior to and identified during the Research
Term.
We
believe that our involvement in the JRDC over the term required to complete the
research activities associated with the Research Program (currently expected to
be the two year Research Term defined in the agreements) associated with the
collaboration represents a substantive performance obligation or
"deliverable.” However, following completion of such research
activities, participation on the JRDC represents only a right and a governance
role, rather than a substantive performance obligation.
Given that the
deliverables under the collaboration do not meet criteria in the accounting
rules for separation (e.g., no separately identifiable fair value), the
arrangement is being treated as a single unit-of-accounting for purposes of
revenue recognition. We recognize the combined unit of accounting over the
estimated period required to complete the research activities under the
collaboration (two years), which coincides with the delivery period for all
substantive obligations or “deliverables” associated with the
collaboration.
The collaboration
and license agreement required us to enter into an agreement to supply drug
product for Servier’s use in clinical trials. During the quarter
ending December 31, 2009, the supply agreement, which is considered part of the
arrangement, was completed and executed. Prior to the execution of
the supply agreement, we did not meet the “evidence of an arrangement” criterion
required for revenue recognition and therefore had deferred revenue recognition
until the execution of the supply agreement. Accordingly upon the completion of
the drug supply agreement with Servier in the second quarter ended December 31,
2009, the company began recognizing revenue from its collaboration and license
agreement with Servier which was entered into in April 2009. Total
revenue recognized in the quarter was $4.7 million. Of the $4.7 million in
revenue, $2.7 million represents the pro rata portion of revenue attributable to
the period from April 2009 (i.e., the signing of the collaboration agreement) to
September 30, 2009, had the supply agreement been completed in April
2009.
Note
7 – Related Party Notes Payable
In
December 2008, the company borrowed $5,000,000 and in March 2009, borrowed
$1,400,000 from an affiliate of Robert W. Duggan, the company’s Chairman of the
Board and CEO. Under the terms of the unsecured loans, the company was to repay
the principal sum of $6,400,000 on the earlier of (i) July 1, 2010 or (ii) upon
the closing of an equity offering or rights offering by the company. The loans
bore interest as follows: (i) 1.36% from December 30, 2008 until March 31, 2009,
(ii) the rate of interest in effect for such day as publicly announced from time
to time by Citibank N.A. as its “prime rate” from April 1, 2009 until December
31, 2009 and (iii) the prime rate plus 2% from January 1, 2010 until the
expiration of the loan. Interest was to be paid
annually. In accordance with the terms of the loans, all principal
and accrued interest were fully repaid in August 2009.
The principal
amount of the loans have been discounted to fair value for balance sheet
presentation such that the stated interest rate together with the accretion of
the discount will reflect an estimate of the market interest rate during the
term of the loan. As described in Note 5, the accounting guidance for fair value
measurements establishes a three-tier fair value hierarchy which prioritizes the
inputs used in measuring the fair value of assets and liabilities. Due to the
lack of reliable and objective observable data available to estimate the fair
value of the $5,000,000 loan, the value of the loan was determined using Level 3
inputs. These inputs included an estimate of the probable term of the loan. The
loan matured at the earlier of an equity offering or a rights offering, meeting
the criteria stated in the loan agreement, or eighteen months from its effective
date. Due to already initiated corporate events and the current cash situation
of the company, the probable term of the loan was estimated at 6.25
months.
With the term
established, the company used various methods to estimate the fair market
interest rate of the $5,000,000 loan. The first and primary approach was a
market risk approach, beginning with the risk-free rate on the effective date of
the loan increased by the calculated estimates of the cost of each of the
different premiums a lender would require for the various risks taken. These
premiums included the non-marketability risk of the note, the risk of default,
the cost of arrangement and the opportunity costs. Using this methodology, the
company estimated the fair market interest rate to be 23%. The reasonableness of
this rate was then further supported by comparison to the outcome of the Black
Scholes pricing model calculated using the following assumptions:
|
·
|
Strike price:
$5,000,000
|
|
·
|
Expected
term: 6.25 months
|
|
·
|
Risk free
interest rate: 0.28%
|
|
·
|
Six month
volatility: 139%
|
The calculation was
performed using actual volatility for both the six-month and three-month periods
prior to the loan effective date. The company’s fair market rate estimate was
further supported by market data estimating the interest rate on high yield
bonds that the company believes would be of comparable quality to the
loan. The total amortized discount related to the $5,000,000 loan was
$484,000 at June 30, 2009.
As
the terms of the $1,400,000 loan are the same as the $5,000,000 loan with the
same expiration date, the company applied the same methodology to determine the
fair value of this loan. Due to the lack of reliable and objective observable
data available to estimate the fair value of the $1,400,000 loan, the value of
the loan was determined using Level 3 inputs. These inputs included first an
estimate of the probable term of the loan. The loan matured at the earlier of an
equity offering or a rights offering, meeting the criteria stated in the loan
agreement, or eighteen months from its effective date. Due to already initiated
corporate events and the cash situation of the company, the probable term of the
loan was estimated at 3.25 months.
With the term
established, the company used various methods to estimate the fair market
interest rate of the $1,400,000 loan. The first and primary approach was a
market risk approach, beginning with the risk-free rate on the effective date of
the loan increased by the calculated estimates of the cost of each of the
different premiums a lender would require for the various risks taken. These
premiums included the non-marketability risk of the note, the risk of default,
the cost of arrangement and the opportunity costs. Using this methodology, the
company estimated the fair market interest rate to be 23%. The reasonableness of
this rate was then further supported by comparison to the outcome of the Black
Scholes pricing model calculated using the following assumptions:
|
·
|
Strike price:
$1,400,000
|
|
·
|
Expected
term: 3.25 months
|
|
·
|
Risk free
interest rate: 0.16%
|
|
·
|
Three month
volatility: 115%
|
The calculation was
performed using actual volatility for the three month period prior to the loan
effective date. The company’s fair market rate estimate was further supported by
market data estimating the interested rate on high yield bonds that the company
believes would be of comparable quality to the loan. The total
amortized discount related to the $1,400,000 loan was $65,000 at June 30,
2009.
Total interest
expense related to the loans was $43,000 in the quarter ended September 30,
2009. In accordance with the terms of the loans, both loans, plus accrued
interest, were fully settled in August 2009 by the issuance of 4,754,870 shares
of common stock in the company's Rights Offering.
Note
8 – Income Taxes
In
the year ended June 30, 2009, the company recorded a $550,000 income tax
provision as result of a withholding taxes paid on the $11.0 million upfront
licensing payment received from Servier. In the quarter ended
December 31, 2009, the company recorded a $550,000 income tax receivable related
to a tax credit resulting from a December 2009 tax treaty revision enacted
between France and the United States that eliminates withholding taxes related
to licensing agreements and provides that prior withholding taxes may be
reclaimed.
Note
9 – Rights Offering
On
July 17, 2009, the company commenced a rights offering to sell up to 18.8
million shares for gross proceeds of $24.0 million pursuant to which holders of
the company’s common stock were entitled to purchase additional shares of the
company’s common stock at a price of $1.28 per share (the “Rights Offering”). On
July 29, 2009, the Rights Offering was amended to increase the maximum number of
shares that could be sold from 18.8 million to 22.5 million for an aggregate
amount of up to $28.8 million.
In
the Rights Offering, stockholders of record as of July 15, 2009, were
issued, at no charge, one subscription right for each share of common stock then
outstanding. Each right entitled the holder to purchase 0.6808 share
of the company’s common stock for $1.28 per share.
Fractional shares
were not issued in the Rights Offering. The subscription rights issued pursuant
to the Rights Offering expired on July 31, 2009. Stockholders who exercised
their rights in full were also permitted an oversubscription right to purchase
additional shares of common stock that remained unsubscribed at the expiration
of the Rights Offering, subject to the availability of shares and a pro rata
allocation of shares among persons exercising the oversubscription
right.
As
of the close of the Rights Offering on July 31, 2009, the Rights Offering was
oversubscribed. The proration of available over-subscription shares
was made in accordance with the Offering Prospectus. Approximately
22.5 million shares of the company’s common stock were purchased in the Rights
Offering for net proceeds (after offering costs of $1.0 million and the partial
settlement of loans from an affiliate of Robert W. Duggan, our Chairman of the
Board and Chief Executive Officer, of approximately $6.1 million) of
approximately $21.7 million. Mr. Duggan participated in the Rights
Offering for a total of approximately $6.1 million.
Note
10 – Related Party Transaction
As
discussed in Note 7 – Related Party Notes Payable, as of June 30, 2009, the
company had borrowed $6,400,000 from an affiliate of Robert W. Duggan, the
company’s Chairman of the Board and Chief Executive Officer, in the form of an
unsecured loan. The related party notes were partially settled by the
issuance of 4,754,870 shares in the company’s Rights Offering.
Note
11 – Recent Accounting Pronouncements
In
October 2009, the FASB issued two updates relating to revenue recognition. The
first update eliminates the requirement that all undelivered elements in an
arrangement with multiple deliverables have objective and reliable evidence of
fair value before revenue can be recognized for items that have been delivered.
The update also no longer allows use of the residual method when allocating
consideration to deliverables. Instead, arrangement consideration is to be
allocated to deliverables using the relative selling price method, applying a
selling price hierarchy. Vendor specific objective evidence (VSOE) of selling
price should be used if it exists. Otherwise, third party evidence (TPE) of
selling price should be used. If neither VSOE nor TPE is available, the
company’s best estimate of selling price should be used. The second update
eliminates tangible products from the scope of software revenue recognition
guidance when the tangible products contain software components and non-software
components that function together to deliver the tangible products’ essential
functionality. Both updates require expanded qualitative and quantitative
disclosures and are effective for fiscal years beginning on or after June 15,
2010, with prospective application for new or materially modified arrangements
or retrospective application permitted. Early adoption is permitted. The same
transition method and period of adoption must be used for both updates. The
company is in the process of analyzing the impact of these updates.
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
You
should read the following
discussion and analysis of our financial condition and results of operations
together with our interim financial statements and the related notes appearing
at the beginning of this report. The interim financial statements and this
Management’s Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the financial statements and notes
thereto for the year ended June 30, 2009 and the related Management’s
Discussion and Analysis of Financial Condition and Results of Operations, both
of which are contained in our Annual Report on Form 10-K initially filed with
the Securities and Exchange Commission on September 22,
2009.
The
following discussion contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events, such as our future
clinical and product development, financial performance and regulatory review of
our product candidates. Our actual results could differ materially from any
future performance suggested in this report as a result of various factors,
including those discussed elsewhere in this report, in the company’s
Annual Report on Form 10-K for the fiscal year ended June 30, 2009 and in
our other Securities and Exchange Commission reports and filings. All
forward-looking statements are based on information currently available to
Pharmacyclics; and we assume no obligation to update such forward-looking
statements. Stockholders are cautioned not to place undue reliance on such
statements.
Company
Overview
We
are a clinical-stage biopharmaceutical company focused on developing and
commercializing innovative small-molecule drugs for the treatment of cancer and
immune mediated diseases. Our purpose is to create a profitable company by
generating income from products we develop, license and commercialize, either
with one or several potential collaborators/partners or alone as may best
forward the economic interest of our stakeholders. We endeavor to
create novel, patentable, differentiated products that have the potential to
significantly improve the standard of care for patients in the markets we
serve. Presently, we have four product candidates in clinical
development and two series of product candidates in pre-clinical
development. It is our business strategy to establish collaborations
with large pharmaceutical and biotechnology companies for the purpose of
generating present and future income in exchange for adding to their product
pipelines. In addition, we strive to generate collaborations that
allow us to retain valuable territorial rights and simultaneously fast forward
the clinical development and commercialization of our products.
It
is our intention to identify product candidates based on exceptional scientific
and development expertise, bring these products to a clinical proof of concept
in a rapid, cost-effective manner, and then seek development and/or
commercialization partners. We are committed to high standards of ethics,
scientific rigor, and operational efficiency as we move our individual programs
to viable commercialization.
To
date, substantially all of our resources have been dedicated to the research and
development of our products, and we have not generated any commercial revenues
from the sale of our products. We do not anticipate the generation of any
commercial product revenues until we receive the necessary regulatory and
marketing approvals to launch one of our products.
We
have incurred significant operating losses since our inception in 1991, and as
of December 31, 2009 have an accumulated deficit of approximately $368.0
million. The process of developing and commercializing our products
requires significant research and development, preclinical testing and clinical
trials, manufacturing arrangements as well as regulatory and marketing
approvals. These activities, together with our general and administrative
expenses, are expected to result in significant operating losses until the
commercialization of our products, or partner collaborations, generate
sufficient revenues to cover our expenses. We expect that losses will
fluctuate from quarter to quarter and that such fluctuations may be substantial.
Our achieving sustained profitability depends upon our ability to successfully
complete the development of our products, to obtain required regulatory
approvals and to successfully manufacture and market our products.
PHARMACYCLICS
Development Portfolio:
Bruton's Tyrosine Kinase (Btk)
Inhibitor, PCI-32765, the company’s Btk Inhibitor is an orally active
small molecule inhibitor of Bruton’s tyrosine kinase (Btk) that is being
developed by Pharmacyclics for the treatment of patients with B-cell lymphoma or
leukemia. Btk plays a prominent role in B-cell lymphocyte maturation by
mediating B-cell receptor (BCR) signal transduction. In the human genetic
immunodeficiency disease X-linked agammaglobulinemia, mutation of the gene that
encodes the Btk protein results in reduced BCR signaling and a failure to
generate mature B-cells. Recent studies indicate that some large B-cell
lymphomas have kinases that are activated and lie downstream of the BCR and that
inhibition of this signaling by Btk can induce apoptosis in these cells. BCR
signaling is also thought to promote malignant cell expansion and survival in
chronic lymphocytic leukemia. In preclinical models, inhibition of Btk by
PCI-32765 led to apoptosis in multiple malignant B-cell lines, and inhibited
B-cell lymphoma progression in vivo.
A
multicenter U.S. Phase I trial in B-cell lymphoma is currently enrolling
patients. This Phase I trial is designed to determine the safety and
tolerability of our Btk Inhibitor PCI-32765, and to evaluate effects on
pharmacodynamic assays and tumor response. The company has most recently
published interim clinical results of the first two dosing cohorts of this Phase
I trial at the American Society of Hematology (ASH) on December 7, 2009. In
these cohorts, 16 heavily pretreated and progressing lymphoma patients with a
variety of B-cell malignancies were evaluated. The ASH poster presentation
reported that of the 16 patients evaluable for response 5 had confirmed partial
responses (a 50% decrease in the aggregate sum of the diameters of up to 6
largest dominant masses; no increase in size of other nodes per the Revised
Response Criteria for Malignant Lymphoma Bruce D. Cheson J Clin Oncol
25:579-586). The partial responses were 2 patient with mantle cell
lymphoma, 2 patient with chronic lymphocytic leukemia and 1 patients with
follicular lymphoma. In addition 3 patients had stable disease and 8 patients
had progressive disease.
The first dose
cohort consisted of 7 patients treated with our Btk Inhibitor PCI-32765. This
cohort generated 2 partial responses (1 patient with mantle cell lymphoma and 1
patient with follicular lymphoma) and 1 stable disease. The second dose cohort
consisted of 9 patients generating 3 partial responses (1 patient with mantle
cell lymphoma and 2 patients with chronic lymphocytic leukemia (CLL/SLL)) and 2
patients with stable disease. The overall response rate (ORR), considering only
partial and complete responses, was 31% for the first two dose
cohorts.
Concurrent with the
ASH poster presentation the company announced in a press release the results of
interim evaluations performed up to December 5, 2009 on 3 CLL/SLL patients in
the third dose cohort. All three patients were determined to have a
partial tumor response based on the interim analysis. The partial
response rate at that point in CLL/SLL patients was 5 out of
6.
The company
anticipates enrolling 5 ascending-dose cohorts in the current Phase I study with
PCI-32765. As per protocol, dose escalation will continue up to three levels
above full Btk active-site occupancy, which occurred in dose cohort
2.
The company has
submitted interim results of the trial in an abstract to be presented at the
upcoming American Society for Clinical Oncology (ASCO) Meeting on June 2-6, 2010
in Chicago, IL. For a study to be eligible for acceptance into the ASCO Annual
Meeting, the contents and conclusions of the abstract must not be presented to
the public before the Annual Meeting and must be held confidential until
publicly released in conjunction with the ASCO Annual Meeting. Adhering to this
policy precludes the company from providing further updates on its Btk Program
until the abstract will be accepted for presentation and has been made public by
ASCO. At that time the company is planning to give a full update on the trial
results.
Research is
continuing to expand clinical indications for our Btk Inhibitor PCI-32765 beyond
hematologic tumors and to support our ongoing clinical trials in lymphoma and
CLL. PCI-32765 is a potent inhibitor of mast cell (and basophil) degranulation.
Largely based on the work of Dr. Gerard Evan and others at UCSF, mast cells have
emerged as an important component of the proinflammatory microenvironment
crucial for the physical expansion and maintenance of tumor growth (Nature
Medicine 13 (10), p. 1211-18). Dr. Evan's lab tested our Btk Inhibitor PCI-32765
in his mouse pancreatic model. In the model, PCI-32765 completely blocked mast
cell degranulation which led to tumor regression and vascular collapse. This
work will be presented at the 2010 American Association for Cancer Research
(AACR) Annual Meeting as an oral presentation in Washington DC, April 17-21,
2010. With respect to research in lymphoma the NCI has made valuable discoveries
indicating that many types of lymphoma are driven by chronic active BCR
signaling, a process dependent upon Btk activity. These findings, which included
experiments with PCI-32765, were most recently published in Nature Davis et al.
(2010) Vol. 463, p88-94. Please find a link to his article on our
website in the Investor Relations Section http://ir.pharmacyclics.com/presentations.cfm.
Pharmacyclics is
focusing on the preclinical optimization of a series of Btk inhibitors for
autoimmune diseases. We are anticipating to have the in-life phase of
IND-enabling preclinical safety studies completed this year and are planning to
file an IND in the first half of 2011. This program is currently being pursued
with priority by our pre-clinical team.
Histone deacetylase (HDAC) Inhibitor,
PCI-24781, is the company’s orally-bioavailable
histone deacetylase inhibitor that is currently in multiple clinical trials,
including a Phase I trial in patients with advanced solid tumors, a Phase I/II
trial in patients with recurrent lymphomas and a Phase I/II trial in sarcoma (in
combination with doxorubicin). Our HDAC Inhibitor PCI-24781 targets
histone deacetylase (HDAC) enzymes and inhibits their function. We
have shown that PCI-24781 works by multiple mechanisms including re-expression
of tumor suppressors, disruption of DNA repair, inhibition of cell cycle and
increase in reactive oxygen species, which contribute to tumor cell
cytotoxicity. Previous clinical trials have demonstrated that our
HDAC Inhibitor PCI-24781 has favorable pharmacokinetic properties when dosed
orally, and inhibits the target enzmyes at physiological
doses. Clinical response or control of tumor growth has been recorded
in the three single agent clinical trials to date.
Most recently the
company announced at the American Society for Hematology in December of 2009 its
Phase I trial results of our HDAC Inhibitor PCI 24781 tested in heavily
pretreated relapsed / refractory lymphoma patients. In a
review of the clinical data at the end of the Phase I dose-escalation portion of
the current lymphoma trial, we have found that PCI-24781 produced encouraging
efficacy results with minimal toxicity when administered as a single agent.
Among 16 lymphoma patients evaluated for disease control after the completion of
at least 2 treatment cycles, we observed 1 Complete Response (follicular
lymphoma), 4 Partial Responses (2 follicular lymphoma, 1 diffuse large B-cell
lymphoma, 1 mantle cell lymphoma) and 6 patients with Stable
Disease. Of the 4 follicular lymphoma patients evaluated in this
trial, 3 had objective response and one manifested stable disease.
Our HDAC Inhibitor
PCI-24781 has demonstrated a good safety profile in over 80 patients treated so
far, with the main dose-limiting toxicity observed being a rapidly reversible
thrombocytopenia, which we believe is related to the pharmacologic mechanism of
action. The duration and severity of the thrombocytopenia is being successfully
managed using novel dose scheduling strategies that we have developed and tested
in the clinic.
In
preclinical models, we have identified synergy of the Pharmacyclics HDAC
inhibitor PCI-24781 with several approved cancer therapeutics, and some of these
combinations are being or will be tested in the clinic, including the use of PCI
24781 together with doxorubicin in sarcoma patients. This last trial
is co-sponsored by prominent investigators at Massachusetts General Hospital and
Dana-Farber / Harvard Cancer Center. During this trial we will also test the
novel biomarker RAD51 that we have developed in collaboration with scientists at
Stanford University, which may be useful as predictive biomarker in clinical
testing by improving patient selection.
In
April 2009, the company entered into a collaboration agreement with Servier
pursuant to which Pharmacyclics granted to Servier an exclusive license for its
Pan-HDAC inhibitors, including PCI-24781, for territories throughout the world
excluding the United States. Under the terms of the agreement, Servier acquired
the exclusive right to develop and commercialize the Pan-HDAC inhibitor product
worldwide except for the United States and will pay a royalty to Pharmacyclics
on sales outside of the United States. Pharmacyclics will continue to own all
rights to develop and commercialize within the United States. Servier
is committing significant resources to the clinical development of Pharmacyclics
HDAC Inhibitor PCI-24781. Most recently we signed a supply agreement to provide
Servier with 10 kg of PCI 24781, sufficient to supply drugs for a multitude of
Phase I and Phase II trials.
Histone deacetylase 8 (HDAC 8)
Inhibitor, PCI-34051, is at the preclinical lead optimization stage.
PCI-34051 is the current lead molecule. The company plans to conclude its lead
optimization work by the end of calendar year 2010. Most recently a presentation
for this molecule was accepted by the American Association for Cancer Research
and the company will present a poster on April 17-21, 2010 at the AACR annual
meeting in Washington DC.
Factor VIIa Inhibitor,
PCI-27483, is a potent and highly selective small molecule inhibitor of
coagulation Factor VIIa. This drug selectively inhibits Factor VIIa,
the active form of Factor VII that results from contact with the cell surface
membrane protein known as tissue factor (TF). In cancer, the Factor
VIIa:TF complex is found in abundance in pancreatic, gastric, colon and other
tumors, and triggers a host of physiologic processes that facilitate tumor
angiogenesis, growth and invasion. The Factor VIIa:TF complex is thought to be
the cause of the increased propensity of cancer patients to develop thromboses.
Laboratory studies and animal models indicate that inhibitors of Factor VIIa
block the growth of tumors that express TF.
We
have completed our initial Phase I testing of Factor VIIa Inhibitor PCI-27483 in
healthy volunteers. The primary objective of the ascending dose Phase I study
was to assess the pharmacodynamic and pharmacokinetic profiles of Factor VIIa
Inhibitor PCI-27483 following a single, subcutaneous injection. In
addition, the safety and tolerability of our Factor VIIa Inhibitor was
evaluated. The drug was well tolerated and no adverse event was observed at any
dose level. The International Normalized Ratio (INR) of prothrombin
time, a simple laboratory test for coagulation, was used to measure
pharmacodynamic effect at dose levels of 0.05, 0.20, 0.80 and 2.0
mg/kg. A mean peak INR of 2.7 was achieved without adverse effects at
the highest dose level administered. The target INR range for oral
anti-coagulants i.e. Coumadin, is between 2 and 3. The half-life of PCI-27483
was 10 to 12 hours, which compares favorably to the single-dose half-life of the
low molecular weight heparin Lovenox (4.5 hours) and Fragmin (3 to 5
hours).
A
multicenter Phase I/II study has begun in the fourth quarter of calendar 2009.
This study is enrolling patients with locally advanced and metastatic pancreatic
cancer that are either receiving or planned to receive gemcitabine
therapy. The objectives are to; a) assess the safety of Pharmacyclics
Factor VIIa Inhibitor PCI-27483 at pharmacologically active dose levels; b) to
assess potential survival benefit and c) obtain initial information of the
effects on the incidence of thromboembolic events.
Motexafin Gadolinium (MGd), PCI-0120,
is a radiation and chemotherapy sensitizing agent with a novel mechanism
of action. MGd is designed to accumulate selectively in cancer cells.
Once inside cancer cells, MGd in combination with radiation induces apoptosis
(programmed cell death) by disrupting redox-dependent pathways. MGd is also
detectable by magnetic resonance imaging (MRI) and may allow for more precise
tumor detection. The National Cancer Institute (NCI) is currently
sponsoring two Phase II trials which have and continue to provide valuable
developmental insights and directions. One Phase II trial is a
multi-center study in newly diagnosed patients with glioblastoma
multiform. In this study, which completed enrollment in July 2009,
MGd is being administered in combination with radiation therapy and
temozolomide. Previous studies in malignant gliomas have shown that
the combination of MGd and temozolomide has no additional overlapping toxicities
when used in combination. The second Phase II trial is a multi-center
study evaluating MGd in combination with radiation in children with pontine
(“brain stem”) gliomas. This 60 patient study completed enrollment in January
2009 with patients currently being followed per the clinical
protocol.
We
are subject to risks common to pharmaceutical companies developing products,
including risks inherent in our research, development and commercialization
efforts, preclinical testing, clinical trials, uncertainty of regulatory and
marketing approvals, uncertainty of market acceptance of our products, history
of and expectation of future operating losses, reliance on collaborative
partners, enforcement of patent and proprietary rights, and the need for future
capital. In order for a product to be commercialized, we must conduct
preclinical tests and clinical trials, demonstrate efficacy and safety of our
product candidates to the satisfaction of regulatory authorities, obtain
marketing approval, enter into manufacturing, distribution and marketing
arrangements, build a U.S. commercial capability, obtain market acceptance and,
in many cases, obtain adequate coverage of and reimbursement for our products
from government and private insurers. We cannot provide assurance
that we will generate revenues or achieve and sustain profitability in the
future.
Results
of Operations
Revenues
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
December
31,
|
Percent
|
December
31,
|
Percent
|
|||||||||||||||||||||
2009
|
2008
|
Change
|
2009
|
2008
|
Change
|
|||||||||||||||||||
License,
collaboration and milestone revenues
|
$ | 4,702,000 | $ | - | N/A | $ | 4,702,000 | $ | - | N/A |
The company recorded $4,702,000 in revenue in
the three and six month periods ended December 31, 2009 associated with its
collaboration and license agreement with Servier which was entered into in April
2009. Given that the deliverables under the collaboration agreement
with Servier do not meet criteria in the accounting rules for separation (e.g.,
no separately identifiable fair value), the arrangement is being treated as a
single unit-of-accounting for purposes of revenue recognition. We
recognize the combined unit of accounting over the estimated period required to
complete the research activities (two years), which coincides with the delivery
period for all substantive obligations or “deliverables” associated with this
agreement.
The collaboration
and license agreement required us to enter into an agreement to supply drug
product for Servier’s use in clinical trials. As the supply agreement
is considered part of the arrangement we deferred recognition of all revenue
under the Servier collaboration agreement until the supply agreement was
completed and executed. We completed the drug supply agreement with
Servier in the second quarter ended December 31, 2009 and therefore began
recognizing revenue from the Servier collaboration agreement in the quarter
ended December 31, 2009. Total revenue recognized in the quarter was
$4.7 million. Of the $4.7 million in revenue, $2.7 million represents
the pro rata portion of revenue attributable to the period from April 2009
(i.e., the signing of the collaboration agreement) to September 30, 2009, had
the supply agreement been completed in April 2009.
Of
the total research and development collaboration revenues, $3,918,000 represents
the amortization of the $11,000,000 upfront payment from Servier received in
April 2010. The remaining revenue of $784,000 represent the
amortization of payments of $2,200,000 from Servier associated with a research
payment, sales of products to Servier and reimbursements of patent expenses
received since establishing the collaboration.
Research and
Development
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
December
31,
|
Percent
|
December
31,
|
Percent
|
|||||||||||||||||||||
2009
|
2008
|
Change
|
2009
|
2008
|
Change
|
|||||||||||||||||||
Research and
development expenses
|
$ | 3,723,000 | $ | 2,986,000 | 25 | % | $ | 7,011,000 | $ | 6,189,000 | 13 | % |
The increase of 25%
or $737,000 in research and development expenses for the three months ended
December 31, 2009 as compared to the three months ended December 31, 2008, was
primarily due to increases of $125,000 in personnel costs, $224,000 in drug
manufacturing costs associated with our Btk and Factor VIIa programs, $95,000 in
outside services, $93,000 in preclinical work and $74,000 clinical trial
costs.
The increase of 13%
or $822,000 in research and development expenses for the six months ended
December 31, 2009, as compared to the six months ended December 31, 2008, was
primarily due to increases of $381,000 in outside clinical trial costs, $330,000
in drug manufacturing costs associated with our Btk and Factor VIIa programs,
and $149,000 in outside contracts and research.
Research and
development costs are identified as either directly attributed to one of our
research and development programs or as an indirect cost, with only direct costs
being tracked by specific program. Direct costs consist of personnel costs
directly associated with a program, preclinical study costs, clinical trial
costs, and related clinical drug and device development and manufacturing costs,
drug formulation costs, contract services and other research expenditures.
Indirect costs consist of personnel costs not directly associated with a
program, overhead and facility costs and other support service expenses. The
following table summarizes our principal product development initiatives,
including the related stages of development for each product, the direct costs
attributable to each product and total indirect costs for each respective
period. For a discussion of the risks and uncertainties associated
with the timing and cost of completing a product development phase, see the Risk
Factors discussed in our Annual Report on Form 10-K for the fiscal year ended
June 30, 2009.
Prior to fiscal
1999, we did not track our research and development expenses by specific program
and for this reason we cannot accurately estimate our total historical costs on
a specific program basis. Direct costs by program and indirect costs are as
follows:
Related
R&D Expenses
|
Related
R&D Expenses
|
|||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||
December
31,
|
December
31,
|
|||||||||||||||||
Phase
of
|
||||||||||||||||||
Program
|
Description
|
Development
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Btk
Inhibitors
|
Cancer
|
Phase
I
|
$ | 1,308,000 | $ | 659,000 | $ | 2,312,000 | $ | 1,545,000 | ||||||||
HDAC
Inhibitors
|
Cancer
|
Phase
I/II
|
638,000 | 515,000 | 1,270,000 | 1,025,000 | ||||||||||||
Factor VIIa
Inhibitor
|
Cancer
|
Phase
I/II
|
569,000 | 322,000 | 1,095,000 | 666,000 | ||||||||||||
MGd
|
Cancer
|
Phase
II
|
49,000 | 449,000 | 81,000 | 680,000 | ||||||||||||
Total direct
costs
|
2,564,000 | 1,945,000 | 4,758,000 | 3,916,000 | ||||||||||||||
Indirect
costs
|
1,159,000 | 1,041,000 | 2,253,000 | 2,273,000 | ||||||||||||||
|
||||||||||||||||||
Total
research and development expenses
|
|
$ | 3,723,000 | $ | 2,986,000 | $ | 7,011,000 | $ | 6,189,000 |
General and
Administrative
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
December
31,
|
Percent
|
December
31,
|
Percent
|
|||||||||||||||||||||
2009
|
2008
|
Change
|
2009
|
2008
|
Change
|
|||||||||||||||||||
General and
adiministrative expenses
|
$ | 1,765,000 | $ | 1,874,000 | -6 | % | $ | 3,298,000 | $ | 5,313,000 | -38 | % |
The decrease of 6%
or $109,000 in general and administrative expenses for the three months ended
December 31, 2009 as compared to the three months ended December 31, 2008 was
primarily due to a decrease of $105,000 in share-based compensation
expense.
The decrease of 38%
or $2,015,000 in general and administrative expenses for the six months ended
December 31, 2009, as compared to the six months ended December 31, 2008, was
primarily due to share-based compensation expense of $1,795,000 and $740,000 of
severance expenses associated with separation agreements entered into with the
company's former CEO and CFO in September 2008, partially offset by an increase
of $121,000 in outside services.
Interest and Other, Income
(Expense), Net
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
December
31,
|
Percent
|
December
31,
|
Percent
|
|||||||||||||||||||||
2009
|
2008
|
Change
|
2009
|
2008
|
Change
|
|||||||||||||||||||
Interest
income
|
$ | 18,000 | $ | 25,000 | -28 | % | $ | 37,000 | $ | 125,000 | -70 | % | ||||||||||||
Interest
expense
|
- | $ | - | N/A | (43,000 | ) | - |
NA
|
||||||||||||||||
Gain/Loss on
sale in investments
|
- | 1,000 | -100 | % | - | 1,000 | -100 | % | ||||||||||||||||
Interest and
other income (expense), net
|
$ | 18,000 | $ | 26,000 | -31 | % | $ | (6,000 | ) | $ | 126,000 | -105 | % |
The decreases of
31% or $8,000 in interest and other income (expense), net for the three months
ended December 31, 2009 as compared to the three months ended December 31, 2008,
and 105% or $132,000 for the six months ended December 31, 2009, as compared to
the six months ended December 31, 2008, were primarily due to lower interest
earned on the company’s investments due to lower interest rates and $43,000 of
interest expense associated with $6,400,000 in related party loans which were
outstanding for part of the first quarter of fiscal 2010.
Income
Taxes:
In
the year ended June 30, 2009, the company recorded a $550,000 income tax
provision as result of a withholding taxes paid on the $11.0 million upfront
licensing payment received from Servier. In the quarter ended
December 31, 2009, the company recorded a $550,000 income tax receivable related
to a tax credit resulting from to a December 2009 tax treaty revision enacted
between France and the United States that eliminates withholding taxes related
to licensing agreements and provides that prior withholding taxes may be
reclaimed.
Liquidity
and Capital Resources
Our principal
sources of working capital have been private and public equity financings and
also proceeds from collaborative research and development agreements, as well as
interest income.
As
of December 31, 2009, we had approximately $30,120,000 in cash, cash equivalents
and marketable securities. Net cash used in operating activities of $7,546,000
during the six months ended December 31, 2009 resulted primarily from our net
loss, a decrease in deferred revenue, and an increase in prepaid and other
assets, partially offset by share-based compensation expense. Net
cash used in operating activities of $8,869,000 during the six months ended
December 31, 2008 resulted primarily from our net loss net of share-based
compensation expense.
Net cash used in
investing activities of $22,732,000 in the six months ended December 31, 2009
consisted primarily of purchases of marketable securities, partially offset by
maturities of marketable securities. Net cash provided by investing activities
of $4,504,000 in the six months ended December 31, 2008 consisted primarily of
proceeds from maturities and sales of marketable securities, partially offset by
purchases of marketable securities.
Net cash provided
by financing activities of $21,511,000 for the six months ended December 31,
2009 was primarily due to $21,720,000 in net proceeds from the sale of
approximately 22.5 million shares of common stock in a Rights Offering completed
in August 2009. Net cash provided by financing activities of $5,022,000 in the
six months ended December 31, 2008 was primarily due to proceeds from a
$5,000,000 loan.
In
April 2009, we signed a collaboration and license agreement with
Servier. In May 2009, we received an upfront payment from Servier of
$11,000,000 less applicable withholding taxes of $550,000, for a net payment of
$10,450,000. The withholding tax paid to the French Government will be reclaimed
due to a recent revision in the Double Tax Treaty between the US and France, see
Note 8.
In
February 2009, we sold approximately 1.5 million shares of unregistered common
stock at $0.93 per share for net proceeds of approximately $1.4
million.
In
December 2008, we borrowed $5,000,000 from an affiliate of Robert W.
Duggan. In March 2009, the loan amount was increased to
$6,400,000. In August 2009, pursuant to the terms of the loans, the
company repaid the $6,400,000 loans outstanding at June 30, 2009 through the
issuance of shares in the Rights Offering.
In
April 2006, we acquired multiple small molecule drug candidates for the
treatment of cancer and other diseases from Celera Genomics, an Applera
Corporation (now Celera Corporation) business. Future milestone
payments we could be required to make under the agreement, as amended, could
total as much as $98 million, although we currently cannot predict if or when
any of the milestones will be achieved. In addition, Celera will also
be entitled to royalty payments based on annual sales of drugs commercialized
from these programs.
Based upon the
current status of our product development plans, we believe that our existing
cash, cash equivalents and marketable securities will be adequate to satisfy our
capital needs through at least the next twelve months. We expect research and
development expenses, as a result of on-going and future clinical trials, to
consume a large portion of our existing cash resources. Changes in our research
and development plans or other changes affecting our operating expenses may
affect actual future consumption of existing cash resources as well. In any
event, due to our extensive drug programs we will need to raise substantial
additional capital to fund our operations in the future. We are seeking
partnership collaborations to help fund the development of our product
candidates. We also expect to raise additional funds through the
public or private sale of securities, bank debt or otherwise. If we
are unable to secure additional funds, whether through partnership
collaborations or sale of our securities, we will have to delay, reduce the
scope of or discontinue one or more of our product development programs. Our
actual capital requirements will depend on many factors, including the
following:
· our
ability to establish and the scope of any new collaborations;
· the
progress and success of clinical trials of our product candidates;
and
· the
costs and timing of obtaining regulatory approvals.
Our forecast of the
period of time through which our financial resources will be adequate to support
our operations is a forward-looking statement that involves risks and
uncertainties, and actual results could vary materially. The factors described
above will impact our future capital requirements and the adequacy of our
available funds. If we are required to raise additional funds, we cannot be
certain that such additional funding will be available on terms attractive to
us, or at all. Furthermore, any additional equity financing may be highly
dilutive, or otherwise disadvantageous, to existing stockholders and debt
financing, if available, may involve restrictive covenants. Collaborative
arrangements, if necessary to raise additional funds, may require us to
relinquish rights to certain of our technologies, products or marketing
territories. Our failure to raise capital when needed and on acceptable terms,
would require us to reduce our operating expenses and would limit our ability to
respond to competitive pressures or unanticipated requirements to develop our
product candidates and to continue operations, any of which would have a
material adverse effect on our business, financial condition and results of
operations.
Off-Balance
Sheet Arrangements
We
do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
Critical
Accounting Policies, Estimates and Judgments
This discussion and
analysis of financial condition and results of operations is based upon our
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosures. On an on-going basis, we evaluate our estimates, including
those related to revenue recognition and clinical trial accruals. We base our
estimates on historical experience and on various other factors that we believe
are reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results, however, may differ
significantly from these estimates under different assumptions or conditions and
may adversely affect the financial statements.
We
believe the following critical accounting policies reflect the more significant
judgments and estimates used in the preparation of our financial statements and
accompanying notes.
Revenue
Recognition
We
recognize revenue when the following criteria are met: persuasive
evidence of an arrangement exists; delivery has occurred or services have been
rendered; the fee is fixed or determinable; and collectability is reasonably
assured. Revenue under our license and collaboration arrangements is
recognized based on the performance requirements of the contract. Amounts
received under such arrangements consist of up-front collaboration payments,
periodic milestone payments and payments for research activities. Collaboration
arrangements with multiple elements are divided into separate units of
accounting if certain criteria are met, including whether the delivered element
has stand-alone value and whether there is verifiable objective and reliable
evidence of the fair value of the undelivered items. The
consideration we receive is combined and recognized as a single unit of
accounting when criteria for separation are not met.
Up-front payments
under agreements which include future performance requirements are recorded as
deferred revenue and are recognized over the performance period. The performance
period is estimated at the inception of the arrangement and is reevaluated at
each reporting period. The reevaluation of the performance period may shorten or
lengthen the period during which the deferred revenue is recognized. Revenues
related to substantive, at-risk collaboration milestones are recognized upon
achievement of the event specified in the underlying agreement. Revenues for
research activities are recognized as the related research efforts are
performed.
Research
and Development Expenses and Accruals
Research and
development expenses include personnel and facility-related expenses, outside
contracted services including clinical trial costs, manufacturing and process
development costs, research costs and other consulting services. Research and
development costs are expensed as incurred.
Our cost accruals
for clinical trials are based on estimates of the services received and efforts
expended pursuant to contracts with clinical trial centers and clinical research
organizations. In the normal course of business we contract with third parties
to perform various clinical trial activities in the on-going development of
potential products. The financial terms of these agreements are subject to
negotiation and vary from contract to contract and may result in uneven payment
flows. Payments under the contracts depend on factors such as the achievement of
certain events, the successful enrollment of patients, the completion of
portions of the clinical trial or similar conditions. The objective of our
accrual policy is to match the recording of expenses in our financial statements
to the actual services received and efforts expended. As such, expense accruals
related to clinical trials are recognized based on our estimate of the degree of
completion of the event or events specified in the specific clinical study or
trial contract.
Share-Based
Compensation
We
adopted accounting guidance for share-based payments, effective beginning July
1, 2005 using the modified prospective application transition method. The
modified prospective application transition method requires that companies
recognize compensation expense on new share-based payment awards and existing
share-based payment awards that are modified, repurchased, or cancelled after
the effective date. Additionally, compensation cost of the portion of
awards of which the requisite service has not been rendered that are outstanding
as of the July 1, 2005 has been expensed as the requisite service was
rendered.
Options vest upon
the passage of time or a combination of time and the achievement of certain
performance obligations. The Compensation Committee of the Board of
Directors determines if the performance conditions have been
met. Share-based compensation expense for the options with
performance obligations is recorded when the company believes that the vesting
of these options is probable.
The fair value of
each stock option is estimated on the date of grant using the Black-Scholes
valuation model. Expected volatility is based on historical volatility data of
the company’s stock. The expected term of stock options granted is
based on historical data and represents the period of time that stock options
are expected to be outstanding. The expected term is calculated for
and applied to one group of stock options as the company does not expect
substantially different exercise or post-vesting termination behavior among its
employee population. The risk-free interest rate is based on a
zero-coupon United States Treasury bond whose maturity period equals the
expected term of the company’s options.
Item
3.
|
Quantitative
and Qualitative Disclosures About Market
Risk
|
Not
Applicable.
Item
4T.
|
Controls
and Procedures
|
(a) Evaluation of disclosure controls
and procedures: As required by Rule 13a-15 under the Securities Exchange
Act of 1934, as of the end of the second fiscal quarter of 2010, we carried out
an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures. This evaluation was carried out under the supervision
and with the participation of our management, including our Principal Executive
Officer and our Principal Financial Officer. Based upon that evaluation, our
Principal Executive Officer and our Principal Financial Officer have concluded
that our disclosure controls and procedures are adequate and effective to ensure
that information required to be disclosed in our reports filed or submitted
under the Exchange Act is recorded, processed, summarized, and reported, within
the time periods specified in the Securities and Exchange Commission’s rules and
forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed in
our reports filed under the Exchange Act is accumulated and communicated to
management, including our Principal Executive Officer and Principal Financial
Officer, as appropriate to allow timely decisions regarding required
disclosure.
(b) Changes in internal controls over
financial reporting: There has been no change in our internal control
over financial reporting during our most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal
controls over financial reporting.
PART II. OTHER
INFORMATION
Item 1.
|
Legal
Proceedings
|
Not
Applicable.
Item 2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Not
Applicable.
Item 3.
|
Defaults
Upon Senior Securities
|
Not
Applicable.
Item 4.
|
Submission
of Matters to a Vote of Security
Holders
|
On
December 17, 2009, at the company’s 2009 Annual Meeting of Stockholders, the
following matters were submitted to and voted on by stockholders and were
adopted:
|
A.
|
The election
by the stockholders of Cynthia C. Bamdad, Ph.D.; Robert W. Duggan; Richard
van den Broek; Minesh P. Mehta, M.D.; Glenn C. Rice, Ph.D.; Jason Adelman
and David D. Smith, Ph.D.
|
Total Vote
for
Each
Director
|
Total
Withheld
|
|||||||
Cynthia C.
Bamdad, Ph.D.
|
36,296,810 | 5,442,283 | ||||||
Robert W.
Duggan
|
41,151,277 | 587,816 | ||||||
Richard van
den Broek
|
41,429,763 | 309,330 | ||||||
Minesh P.
Mehta, M.D.
|
39,423,947 | 2,315,146 | ||||||
Glenn C.
Rice, Ph.D.
|
41,075,261 | 663,832 | ||||||
Jason
Adelman
|
39,417,227 | 2,321,866 | ||||||
David D.
Smith, Ph.D.
|
41,132,204 | 606,889 |
|
B.
|
The amendment
of the company’s 2004 Equity Incentive Award Plan (the “2004 Plan”) in
order to increase the total number of shares of Common Stock authorized
for issuance over the term of the 2004 Plan by an additional 2,000,000
shares.
|
The results of the vote are as
follows:
For
|
Against
|
Abstain
|
20,361,436
|
8,161,233
|
218,595
|
|
C.
|
The
authorization of the company’s Board of Directors (the “Board”), at its
discretion, to amend the company’s Amended and Restated Certificate of
Incorporation, as amended (the “Certificate of Incorporation”), to effect
a reverse stock split of the company’s issued and outstanding shares of
Common Stock, by a ratio of up to 1-for-3, without further approval or
authorization of the company’s
stockholders
|
The results of the vote are as
follows:
For
|
Against
|
Abstain
|
39,369,695
|
2,262,017
|
107,380
|
|
D.
|
The
ratification of the appointment of PricewaterhouseCoopers LLP as the
company’s independent registered public accounting firm for the fiscal
year ending June 30, 2010.
|
The results of the vote are as
follows:
For
|
Against
|
Abstain
|
41,612,662
|
45,499
|
80,932
|
Item 5.
|
Other
Information
|
Not
Applicable.
Item 6.
|
Exhibits
|
10.1
|
Drug Supply
Agreement with Les Laboratoires Servier.
|
||
10.2
|
Agreement and
Release with Glenn Rice.
|
||
31.1
|
Rule
13a-14(a)/15d-14(a) Certification of Principal Executive
Officer.
|
||
31.2
|
Rule
13a-14(a)/15d-14(a) Certification of Principal Financial
Officer.
|
||
32.1
|
Section 1350
Certifications of Principal Executive Officer and Principal Financial
Officer.
|
Signatures
Pursuant to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Pharmacyclics,
Inc.
|
|||
(Registrant)
|
|||
Dated:
February 12, 2010
|
By:
|
/s/ ROBERT W.
DUGGAN
|
|
Robert W.
Duggan
|
|||
Chairman
and Chief Executive Officer
(Principal
Executive Officer)
|
|||
Dated:
February 12, 2010
|
By:
|
/s/ RAINER
ERDTMANN
|
|
Rainer M.
Erdtmann
|
|||
Vice
President, Finance & Administration and
Secretary
(Principal Financial and Accounting Officer)
|
EXHIBITS INDEX
Exhibit
Number
|
Description
|
10.1
|
Drug Supply
Agreement with Les Laboratoires Servier.
|
10.2
|
Agreement and
Release with Glenn Rice.
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification of Principal Executive
Officer.
|
31.2
|
Rule
13a-14(a)/15d-14(a) Certification of Principal Financial
Officer.
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32.1
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Section 1350
Certifications of Principal Executive Officer and Principal Financial
Officer.
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