SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
- - Act of 1934: For the quarterly period ended January 31, 1997
OR
- - Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934: For the transition period from ________ to ________
Commission file number: 0-27756
ALEXION PHARMACEUTICALS, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3648318
--------------- ----------------
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
25 SCIENCE PARK, SUITE 360, NEW HAVEN, CONNECTICUT 06511
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
203-776-1790
------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ___
---
CLASS OUTSTANDING AT MARCH 5, 1997
------------------------------- ----------------------------
Common Stock, $0.0001 par value 7,361,721
Page 1 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
INDEX
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of January 31, 1997
and July 31, 1996 3
Statements of Operations for the three and six months ended
January 31, 1997 and 1996 and for the period from inception
January 28, 1992 to January 31, 1997 4
Statements of Cash Flows for the six months ended January 31,
1997 and 1996 and for the period from inception
January 28, 1992 to January 31, 1997 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
PART II. OTHER INFORMATION 14
SIGNATURES 15
Page 2 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
BALANCE SHEETS
January 31, 1997 July 31, 1996
---------------- -------------
ASSETS (UNAUDITED)
Current Assets:
Cash and cash equivalents $8,634,750 $9,491,217
Marketable securities 6,762,296 9,106,534
Prepaid expenses 231,728 466,731
---------- ----------
Total current assets 15,628,774 19,064,482
---------- ----------
Equipment, net of accumulated
depreciation and amortization 733,499 592,271
----------- -----------
Other Assets:
License technology rights, net 286,366 330,365
Patent application costs, net 189,951 194,004
Organization costs, net 0 5,280
Security deposits and other assets 264,853 267,578
----------- -----------
Total other assets 741,170 797,227
----------- -----------
TOTAL ASSETS $17,103,443 $20,453,980
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities;
Current portion of notes payable $276,566 $322,508
Current obligations under capital leases 21,307 28,593
Accounts payable 366,867 280,913
Accrued expenses 464,006 400,577
Deterred revenue 131,067 1,000,000
---------- ----------
Total current liabilities 1,259,813 2,032,591
---------- ----------
Notes Payable, less current portion included above 0 128,264
---------- ----------
Obligatiors under Capital Leases, less
current portion included above 913 8,200
---------- ----------
Stockholders' Equity:
Series A convertible preferred stock $.0001 par value; 0 0
5,000,000 shares authorized; no shares issued and
outstanding at January 31,1997 and July 31,1996
Common stock $.0OO1 par value; 25,000,000 shares 737 733
authorized; 7,371,896 and 7,334,909 shares issued
at January 31,1997 and July 31,1996
Additional paid-in capital 43,030,577 42,858,975
Deficit accumulated during development stage (27,188,495) (24,574,681)
Deferred offering costs 0 0
Treasury stock, at cost; 11,875 shares (102) (102)
---------- ----------
Total stockholders' equity 15,842,717 18,284,925
---------- ----------
TOTAL LIABILITIES AND NET EQUITY $17,103,443 $20,453,980
=========== ===========
See accompanying notes to financial statements
Page 3 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
Statements of Operations
(UNAUDITED)
January 28,1992
Three months ended January 31, Six months ended January 31, (inception)
------------------------------ ---------------------------- through
1997 1996 1997 1996 January 31, 1997
---------- ----------- ----------- ----------- ----------------
CONTRACT RESEARCH REVENUES $ 1,437,984 $ 616,485 $ 2,248,739 $ 1,069,913 $ 5,025,069
----------- ----------- ----------- ----------- -------------
OPERATING EXPENSES:
Research and Development 1,921,113 1,362,727 3,895,051 2,771,536 25,049,879
General and Administrative 758,306 395,776 1,407,361 749,845 8,098,227
----------- ----------- ----------- ----------- ------------
Total Operating Expenses 2,679,419 1,758,503 5,302,412 3,521,381 33,148,106
----------- ----------- ----------- ----------- ------------
OPERATING LOSS (1,241,435) (1,142,018) (3,053,673) (2,451,468) (28,123,037)
OTHER INCOME (EXPENSE), Net 205,231 9,196 439,859 32,387 934,542
----------- ----------- ----------- ----------- ------------
NET LOSS ($1,036,204) ($1,132,822) ($2,613,814) ($2,419,081) ($27,188,495)
=========== =========== =========== =========== ============
NET LOSS PER COMMON SHARE (Note 3) ($0.14) ($0.25) ($0.36) ($0.54)
=========== =========== =========== ===========
SHARES USED IN COMPUTING NET
LOSS PER COMMON SHARE 7,341,939 4,515,926 7,335,173 4,513,990
=========== =========== =========== ===========
See accompanying notes to financial statements.
Page 4 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
Statements of Cash Flows
(UNAUDITED)
January 28,1992
Six months ended January 31 (inception)
--------------------------- through
1997 1996 January 31,1997
----------- ----------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss ($2,613,814) ($2,419,081) ($27,188,495)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 367,501 436,763 2,765,077
Compensation expense related to grant of stock options 0 0 122,500
Net realized loss (gain) on marketable securities 0 0 45,390
Change in assets and liabilities:
Prepaid expenses 235,003 (112,825) (231,728)
Accounts payable 85,954 (243,242) 366,867
Accrued expenses 63,429 (40,931) 464,006
Deferred revenue (868,933) (160,500) 131,067
----------- ----------- ------------
Net cash used in operating activities (2,730,860) (2,539,816) (23,525,316)
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchases of) Proceeds from marketable securities, net 2,363,941 0 (6,753,824)
Proceeds from marketable securities 0 0 0
Purchases of equipment (434,394) (141,631) (2,607,137)
Licensed technology costs 0 0 (615,989)
Patent application costs (21,003) (29,855) (356,807)
Organization costs 0 0 (63,530)
----------- ----------- ------------
Net cash (used in) provided by investing activities 1,908,544 (171,486) (10,397,287)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of preferred and common stock 151,903 6,591 41,701,586
Deferred offering costs 0 (119,198) 0
Advances from stockholder 0 0 1,200,000
Repayments of capital lease obligations (14,573) (52,559) (355,844)
Borrowings under notes payable 0 0 1,179,135
Repayments of notes payable (174,206) (157,506) (902,569)
Security deposits and other assets 2,725 (12,350) (264,853)
Repurchase of common stock 0 0 (102)
----------- ----------- ------------
Net cash provided by (used in) financing activities (34,151) (335,022) 42,557,353
----------- ----------- ------------
NETINCREASE(0ECREASE)IN CASH (856,467) (3,046,324) 8,634,750
CASH at beginning of period 9,491,217 5,079,212 0
----------- ----------- ------------
CASH AT END OF PERIOD $8,634,750 $2,032,888 $8,634,750
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid (refunded) for income taxes ($7,950) $0 $22,734
========== ========== ==========
Cash paid fer interest expense $30,395 $57,954 $436,360
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES
Conversion of advances from stockholder info common stock $0 $0 $1 200 000
========== ========== ==========
Equipment acquired pursuant to capital lease obligations $0 $0 $378 064
========== ========== ==========
Deferred offering costs accrued $0 $226,930 $0
========== ========== ==========
See accompanying notes to financial statements
Pages 5 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Operations and Basis of Presentation -
Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company") was organized in
January 1992 and is engaged in the research and development of proprietary
immunoregulatory compounds for the treatment of cardiovascular disorders
(perioperative bleeding and inflammation associated with cardiopulmonary bypass,
myocardial infarction, and stroke) and autoimmune diseases (lupus nephritis,
rheumatoid arthritis, multiple sclerosis). As an outgrowth of its core
technologies, the Company is developing, in collaboration with third parties
(see Note 5), non-human organ ("xenograft" organs) products designed for
transplantation into humans without clinical rejection and immunoprotected
retroviral vectors and producer cells for gene therapy.
The Company is in the development stage and is devoting substantially all of its
efforts toward product research and development. The Company has incurred losses
since inception and has cumulative net losses of approximately $27.2 million
through January 31, 1997. The Company has made no product sales to date and has
recognized cumulative revenues from research support funding and licensing
aggregating $5.0 million through January 31, 1997. During 1996, the Company
completed an initial public offering ("IPO") of 2,530,000 shares of common stock
resulting in net proceeds of approximately $18.4 million (see Note 6). In
addition, the Company has received various grants to fund certain research
activities (see Note 5).
The Company will need additional financing to obtain regulatory approvals, fund
early operating losses, and, if deemed appropriate, establish a manufacturing,
sales, and marketing capability. In addition to normal risks associated with
development stage companies, there can be no assurance that the Company's
research and development will be successfully completed, that adequate patent
protection for the Company's technology will be obtained, that any products
developed will obtain necessary government regulatory approval or that any
approved products will be commercially viable. In addition, the Company operates
in an environment of rapid change in technology, substantial competition from
pharmaceutical and biotechnology companies and is dependent upon the services of
its employees and its consultants.
The Company expects to incur substantial expenditures in the foreseeable future
for the research and development and commercialization of its products. The
Company will require funds in addition to those previously described, which it
will seek to raise through public or private equity or debt financings,
collaborative or other arrangements with corporate sources, or through other
sources of financing. The Company has no banking or other capital sources and no
arrangements or commitments with regards to obtaining any further funds.
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and include, in the opinion of management, all
adjustments, consisting of normal, recurring adjustments, necessary for a fair
presentation of interim period results. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The results for the interim periods
presented are not necessarily indicative of results to be expected for any
future period. It is suggested that these condensed financial
Page 6 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
statements be read in conjunction with the audited financial statements and
notes thereto included in the Company's Form 10-K Annual Report for the fiscal
year ended July 31, 1996.
2. Cash and Cash Equivalents and Marketable Securities -
Cash and cash equivalents are stated at cost, which approximates market, and
include short-term highly liquid investments with original maturities of less
than three months.
The Company invests in marketable securities of highly rated financial
institutions and investment-grade debt instruments and limits the amount of
credit exposure with any one entity. The Company follows Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." Pursuant to this Statement, the Company has classified
its marketable securities as "available for sale" and, accordingly, carries such
securities at aggregate fair value. Unrealized gains or losses are included in
stockholders' equity as a component of additional paid-in capital.
3. Net Loss Per Share -
Net loss per common share is computed using the weighted average number of
common shares outstanding during the period. Common equivalent shares from stock
options and warrants are excluded from the computation as their effect is
antidilutive, except pursuant to the requirements of the SEC. Pursuant to these
requirements, common stock issued by the Company during the 12 months
immediately preceding the initial public offering, plus shares of common stock
which became issuable during the same period pursuant to the grant of common
stock options and warrants, have been included in the calculation of weighted
average number of common shares outstanding for the period from August 1, 1995
to January 31, 1996 using the treasury stock method. The inclusion of additional
shares assuming the conversion of Series A convertible preferred stock into
common stock would have been antidilutive for all periods presented and,
accordingly, has been excluded from the computation of net loss per common
share.
4. Revenue Recognition -
Contract research revenues are recognized as the related work is performed under
the terms of the contracts and expenses for development activities are incurred.
License fee payments are recognized as revenue upon receipt. Any revenue
contingent upon future funding by the Company is deferred and recognized as the
future funding is expended. Any revenues resulting from the achievement of
milestones would be recognized when the milestone is achieved.
Page 7 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
5. Contract Research and License Fee Revenues -
Contract research revenues recorded by the Company consist of: (1) research and
development support under separate collaborations with United States Surgical
Corporation ("US Surgical") and Genetics Therapy Inc. ("GTI/Novartis"), a wholly
owned subsidiary of Novartis; (2) Small Business Innovation Research ("SBIR")
grants awarded in July and September 1995 from the National Institutes of Health
("NIH"), and (3) funding from the Commerce Department's National Institute of
Standards and Technology ("NIST").
License fee revenues represent non-refundable payments received in accordance to
contractural agreements for various access and rights to the Company's
technologies, research, potential products and markets.
In January 1997, the Company announced that it had entered into an agreement
with GTI/Novartis. The Company granted to GTI/Novartis exclusive worldwide
rights to use the Company's technology to develop and market immunoprotected
retroviral gene therapy products for direct in vivo gene therapy. Terms of the
agreement call for the Company to receive upfront license fees, research
payments and milestone payments totaling up to $10 million. In addition, the
Company would also receive royalties on net sales of such products.
In September 1995, the Company was awarded a Phase II SBIR grant for
approximately $750,000 over two years from the NIH to support research and
clinical development of the Company's product to treat complications of
cardiovascular surgery.
In August 1995, the Company was awarded funding from NIST under its Advanced
Technology Program ("ATP"). Through the ATP, the Company may receive up to
approximately $2 million over three years to support the Company's UniGraft
program in universal donor organs for transplantation.
In July 1995, the Company entered into a research and development agreement with
US Surgical. US Surgical agreed to fund preclinical development of the Company's
xenotransplant products in return for exclusive worldwide manufacturing,
marketing and distribution rights of such products by paying the Company up to
$7.5 million allocated as follows: (1) up to $4.0 million of the cost of
preclinical development in four semi-annual installments of up to $1.0 million
(the first installment of which was paid on July 31, 1995), and (2) $3.5 million
upon achieving certain milestones. In furtherance of this joint collaboration,
US Surgical also purchased $4.0 million of the Company's common stock.
Page 8 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
6. Initial Public Offering -
During fiscal year 1996, the Company completed an initial public offering of
2,530,000 shares of common stock at a price of $8.25 per share of common stock,
par value of $0.0001, resulting in net proceeds of approximately $18.4 million.
In connection with the Company's IPO, the preferred stockholders converted all
of their shares into 794,554 shares of common stock.
In connection with the Company's public offering, the Company sold to its
underwriter for nominal consideration, warrants to purchase from the Company
220,000 shares of common stock. These warrants are initially exercisable at a
price of $9.90 per share for a period of forty-two (42) months commencing on
August 27, 1997.
Page 9 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This report contains forward looking statements which involve risks and
uncertainties. Such statements are subject to certain factors and uncertainties
which may cause the Company's plans to differ. Factors and uncertainties that
may cause such differences include, but are not limited to, the rate of
progress, if any, of the Company's research and development programs, the
Company's ability to compete successfully, the Company's ability to attract and
retain qualified personnel, the Company's ability to successfully enter into
collaborations with third parties, the Company's ability to enter into and
progress in clinical trials, the time and costs involved in obtaining regulatory
approvals, the costs involved in obtaining and enforcing patents and any
necessary licenses, the ability of the Company to establish development and
commercialization relationships and strategic alliances with third parties, the
cost of manufacturing, the Company's ability to obtain additional funds, and
those other risks discussed in the Company's Annual Report on Form 10-K for the
fiscal year ended July 31, 1996.
OVERVIEW
Since its inception in January 1992, Alexion has devoted substantially all of
its resources to its drug discovery, research and product development programs.
To date, the Company has not received any revenues from the sale of products.
The Company has been unprofitable since inception, and expects to incur
substantial and increasing operating losses for the next several years due to
expenses associated with product research and development, preclinical and
clinical testing, regulatory activities and manufacturing development and
scale-up. For the period from inception to January 31, 1997, the Company
incurred a cumulative net loss of approximately $27.2 million.
The Company's plan is to develop and commercialize on its own those product
candidates for which the clinical trial and marketing requirements can be funded
by the Company. For certain of the Company's C5 Inhibitor and Apogen products
for which greater resources will be required, Alexion's strategy is to form
corporate partnerships with major pharmaceutical companies for product
development and commercialization. While there can be no assurance as to the
terms of future corporate partnerships, if any, for licensed applications, a
corporate partner would likely be expected to bear the substantial cost and much
of the manpower-intensive effort of clinical development, scale-up production,
seeking U.S. Food and Drug Administration ("FDA") approval and marketing.
Alexion has entered into strategic alliances with United States Surgical
Corporation ("US Surgical") with respect to the Company's UniGraft program and
with Genetics Therapy Inc. ("GTI/Novartis"), a wholly-owned subsidiary of
Novartis, with respect to the Company's immunoresistant retroviral vector
program. The Company intends to seek additional strategic alliances with major
pharmaceutical companies.
The Company recognizes research and development revenues when the development
expenses are incurred and the related work is performed under the terms of the
contracts. Any revenue contingent upon future funding by the Company is deferred
and recognized as the future funding is expended. Any revenues resulting from
the achievement of milestones would be recognized when the milestone is
achieved.
Page 10 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
RESULTS OF OPERATIONS
Three Months Ended January 31, 1997
Compared with Three Months Ended January 31, 1996
The Company's contract research and license revenues increased to $1,438,000 for
the three months ended January 31, 1997 from $616,000 for the same period ended
January 31, 1996. This increase was due primarily to the receipt of an upfront
license fee from GTI/Novartis. Contract research revenues represent principally
the Company's collaborative research and development agreements with US Surgical
and GTI/Novartis and the Company's research grants from the National Institutes
of Health ("NIH") and the Commerce Department's National Institute of Standards
and Technology ("NIST").
Research and development expenses increased to $1,921,000 for the three months
ended January 31, 1997 from $1,362,000 for the three months ended January 31,
1996. The increase resulted principally from incurred costs related to the
clinical trials of the Company's lead C5 Inhibitor, 5G1.1-SC, manufacturing
validation costs, expanded preclinical development and manufacturing process
development costs for the Company's recombinant product candidates, and
increased external research related to preclinical development of the Company's
xenotransplant products.
General and administrative related expenses increased to $758,000 for the three
months ended January 31, 1997 from $396,000 for the same period ended January
31, 1996. This increase was due principally to a concentration of patent related
activities in this quarter plus increased external professional services, costs
related to investor and shareholder relations and insurance costs as a public
company, business development, recruiting, and increased travel and
administrative expenses related to the Company's increased clinical and
regulatory activities and presentations at scientific conferences.
The Company earned other income, net, of $205,000 for the three months ended
January 31, 1997 as compared to other income, net, of $9,000 for the three
months ended January 31, 1996. This other income, net, resulted principally from
greater interest income from higher cash balances available for investment and
decreased interest expense associated with maturing notes payable and maturing
capital equipment leases used to finance the purchase of certain equipment.
As a result of the above factors, the Company incurred a net loss of $1,036,000
for the three months ended January 31, 1997 as compared to a net loss of
$1,133,000 for the same three month period in 1996.
Six Months Ended January 31, 1997
Compared with Six Months Ended January 31, 1996
The Company's earned contract research and license revenues increased to
$2,249,000 for the six months ended January 31, 1997 from $1,070,000 for the six
months ended January 31, 1996. The increase was primarily due to the receipt of
an upfront license fee received from GTI/Novartis.
Page 11 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
During the six months ended January 31, 1997 and 1996, the Company expended
$3,895,000 and $2,772,000, respectively on research and development activities.
The increase of 41% or $1,123,000 resulted principally from costs incurred
related to the clinical trials of the Company's lead C5 Inhibitor, 5G1.1-SC,
manufacturing validation costs, expanded preclinical development and
manufacturing process development costs for the Company's recombinant product
candidates, and increased external research related to preclinical development
of the Company's xenotransplant products.
General and administrative expenses increased to $1,407,000 for the six months
ended January 31, 1997 from $750,000 for the six months ended January 31, 1996.
The increase was due principally to the high level of patent related activities
in the most recent three months plus increased external professional services
related to investor and shareholder relations and insurance costs as a public
company, business development, recruiting, legal fees, and increased travel and
administrative expenses related to the Company's increased clinical and
regulatory activities and presentations at scientific conferences.
Other income, net was $440,000 for the six months ended January 31, 1997 as
compared to other income, net of $32,000 for same period a year ago. This other
income, net was due primarily to greater interest income from higher cash
balances available for investment.
As a result of the above factors, the Company's net loss increased to $2,642,000
from $2,419,000 for the six months ended January 31, 1997 and 1996,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has financed its operations and capital
expenditures primarily through private placements and its initial public
offering of equity securities resulting in aggregate net proceeds of
approximately $41.7 million. The Company has financed the purchase of certain
equipment through $1.2 million of secured notes payable to a financing
institution and $378,000 of capital lease obligations. Through January 1997, the
Company has received approximately $3.9 million in research and development
support and license fees under its collaborations with US Surgical and
GTI/Novartis. The Company has also received $711,000 from its SBIR grants from
the NIH and $516,000 under the ATP from NIST, respectively, through January
1997.
The proceeds of the Company's initial public offering, private placements, notes
payable and capital leases, and the cash generated from the corporate
collaborations and SBIR and ATP grants have been used to fund operating
activities of approximately $23.5 million and investments of approximately $2.6
million in equipment and approximately $973,000 in licensed technology rights
and patents through January 31, 1997. During the six months ended January 31,
1997 and January 31, 1996, the Company's capital expenditures totaled $434,000
and $142,000, respectively, primarily for the acquisition of laboratory and
manufacturing scale-up equipment. As of January 31, 1997, the Company had cash,
cash equivalents and marketable securities of approximately $15.4 million.
Page 12 of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
The Company leases its administrative and research and development facilities
under three operating leases expiring in June 1998, December 1997, and March
1999, respectively, each with an option for up to an additional three years.
The Company anticipates that its existing available capital resources and
interest earned on available cash and marketable securities should be sufficient
to fund its operating expenses and capital requirements as currently planned for
at least the next twelve months. The Company's future capital requirements will
depend on many factors, the progress of the Company's research and development
programs, progress in clinical trials, the time and costs involved in obtaining
regulatory approvals, the costs involved in obtaining and enforcing patents and
any necessary licenses, the ability of the Company to establish development and
commercialization relationships, and the costs of manufacturing scale-up.
The Company expects to incur substantial additional costs, including costs
associated with research, preclinical and clinical testing, manufacturing
process development, contract manufacturing, and additional capital expenditures
associated with facility expansion and manufacturing requirements in order to
commercialize its products currently under development. The Company will need to
raise substantial additional funds through additional financings including
public or private equity offerings and collaborative research and development
arrangements with corporate partners. There can be no assurance that funds will
be available on terms acceptable to the Company, if at all, or that discussions
with potential collaborative partners will result in any agreements. The
unavailability of additional financing could require the Company to delay, scale
back or eliminate certain of its research and product development programs or to
license third parties to commercialize products or technologies that the Company
would otherwise undertake itself, any of which could have a material adverse
effect on the Company.
Page 13 Of 15
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
PART II. OTHER INFORMATION
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K
Exhibits
10.1 License and Collaborative Research Agreement between Alexion
Pharmaceuticials, Inc. and Genetic Therapy, Inc. (Incorporated by
reference from the Company's Registration Statement on Form S-1
(File No. 333-19905) (Confidential Treatment has been requested
for portions of such Exhibit)
Form 8-K
Form 8-K filed on February 21, 1997 relating to the adoption
of a Shareholder Rights Plan.
Page 14 of 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALEXION PHARMACEUTICALS, INC.
Date: March 13, 1996 By: /s/ LEONARD BELL, M.D.
---------------------------------------
Leonard Bell, M.D.
President and Chief Executive Officer,
Secretary and Treasurer (principal
executive officer)
Date: March 13, 1996 By: /s/ DAVID W. KEISER
---------------------------------------
David W. Keiser
Executive Vice President and Chief
Operating Officer (principal
financial officer)
Date: March 13, 1996 By: /s/ BARRY P. LUKE
---------------------------------------
Barry P. Luke
Senior Director of Finance and
Administration (principal accounting
officer)
Page 15 of 15
