5
9-MOS
JUN-30-1995
MAR-31-1995
6,063,097
0
0
0
0
6,423,856
23,852,214
9,438,558
20,921,211
4,090,110
0
119,103,272
0
0
0
20,921,208
0
434,302
0
0
15,886,254
0
397,029
(15,848,981)
5,223
0
0
0
0
(15,854,204)
(1.26)
(1.26)
IMMUNOGEN, INC.
TABLE OF CONTENTS
-----------------
Page
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PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets as of
March 31, 1995 and June 30, 1994............... 3
Consolidated Statements of Operations
for the three months and the nine months
ended March 31, 1994 and 1995.................. 4
Consolidated Statements of Stockholders'
Equity for the year ended June 30, 1994 and
the nine months ended March 31, 1995........... 5
Consolidated Statements of Cash Flows
for the nine months ended March 31,
1994 and 1995.................................. 6
Notes to Consolidated Financial Statements..... 7
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations.. 8
PART II - OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K............... 11
Signatures ............................................... 12
IMMUNOGEN, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 1994 and March 31, 1995
June 30, March 31,
1994 1995
----------- -----------
ASSETS
Cash and cash equivalents $ 1,572,389 $ 6,063,097
Marketable securities (Note C) 19,629,177 -
Other current assets 629,809 360,759
----------- ------------
Total current assets 21,831,375 6,423,856
Property and equipment, net of accumulated
depreciation 16,468,761 14,413,655
Other assets 83,700 83,700
----------- ------------
Total assets $38,383,836 $ 20,921,211
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 2,209,151 $ 2,065,221
Accrued compensation 936,914 267,834
Other accrued liabilities 929,978 842,078
Current portion of capital lease obligations 828,954 914,982
----------- ------------
Total current liabilities 4,904,997 4,090,115
----------- ------------
Capital lease obligations 3,337,932 2,577,040
Other non-current liabilities 181,067 139,283
Redeemable convertible preferred stock,
$.01 par value; authorized 277,080 shares;
none issued or outstanding - -
Stockholders' equity (Note B)
Common stock, $.01 value; authorized
20,000,000 shares; issued and outstanding
12,554,731 and 12,578,606 shares as of June
30, 1994 and March 31, 1995, respectively 125,547 125,786
Additional paid-in capital 118,968,588 118,977,486
----------- --------------
119,094,135 119,103,272
Accumulated deficit (89,134,295) (104,988,499)
----------- --------------
Total stockholders' equity 29,959,840 14,114,773
----------- --------------
Total liabilities and stockholders' equity $38,383,836 $ 20,921,211
=========== ==============
The accompanying notes are an integral part of the financial statements.
3
IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended March 31, 1994 and 1995
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------------------------------------------------------
1994 1995 1994 1995
--------------- --------------- --------------- ---------------
Revenues:
Interest $ 184,974 $ 76,054 $ 707,926 $ 395,659
Other 3,096 13,928 84,078 38,643
--------------- --------------- --------------- ---------------
Total revenues 188,070 89,982 792,004 434,302
--------------- --------------- --------------- ---------------
Expenses:
Research and development 5,188,356 3,564,096 14,655,780 13,282,151
General and administrative 1,056,683 686,491 3,178,035 2,604,103
Interest 8,170 106,829 60,825 397,029
--------------- --------------- --------------- ---------------
Total expenses 6,253,209 4,357,416 17,894,640 16,283,283
--------------- --------------- --------------- ---------------
Loss before income taxes (6,065,139) (4,267,434) (17,102,636) (15,848,981)
Income tax expense 2,442 1,004 9,345 5,223
--------------- --------------- --------------- ---------------
Net loss $ (6,067,581) $ (4,268,438) $ (17,111,981) $ (15,854,204)
=============== =============== =============== ===============
Loss per common share $ (0.51) $ (0.34) $ (1.57) $ (1.26)
=============== =============== =============== ===============
Shares used in computing loss
per share amounts 11,793,829 12,576,398 10,926,410 12,568,510
=============== =============== =============== ===============
The accompanying notes are an integral part of the financial statements.
4
IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the year ended June 30, 1994 and
the nine months ended March 31, 1995
Common Stock
-----------------------------------
Additional Total
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
---------- --------- ------------ --------------- -------------
Balance at June 30, 1993 10,498,793 $ 104,988 $105,878,986 $ (65,443,829) $ 40,540,145
---------- --------- ------------ --------------- --------------
Issuance of common stock, net 2,055,938 20,559 13,012,864 - 13,033,423
Issuance of common stock warrants - - 76,738 - 76,738
Net loss for the year ended
June 30, 1994 - - - (23,690,466) (23,690,466)
---------- --------- ------------ --------------- --------------
Balance at June 30, 1994 12,554,731 125,547 118,968,588 (89,134,295) 29,959,840
---------- --------- ------------ --------------- --------------
Issuance of common stock 23,875 239 8,898 9,137
Net loss for the nine months ended
March 31, 1995 (15,854,204) (15,854,204)
---------- --------- ------------ --------------- --------------
Balance at March 31, 1995 12,578,606 $ 125,786 $118,977,486 $ (104,988,499) $ 14,114,773
========== ========= ============ =============== ==============
The accompanying notes are an integral part of the financial statements.
5
IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended March 31, 1994 and 1995
Nine Months Ended
March 31,
-------------------------------------
1994 1995
-------------- --------------
Cash flows from operating activities:
Net loss $ (17,111,981) $ (15,854,204)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 1,281,348 2,462,940
Changes in operating assets and liabilities:
Other current assets (126,766) 269,050
Other assets 392,015 -
Accounts payable 247,011 (143,930)
Accrued compensation 279,721 (669,080)
Accrued construction costs (616,816) -
Other accrued liabilities 333,107 (87,900)
Other non-current liabilities 96,413 (41,784)
-------------- --------------
Net cash used for operating activities (15,225,948) (14,064,908)
-------------- --------------
Cash flows from investing activities:
Capital expenditures (7,089,379) (426,922)
Proceeds from sale of marketable securities 26,387,552 27,614,171
Purchase of marketable securities (23,123,489) (7,953,113)
-------------- --------------
Net cash provided by investing activities (3,825,316) 19,234,136
Cash flows from financing activities:
Common stock and warrant issuances, net 13,099,344 9,137
Proceeds from sale/leaseback transaction 1,934,829 -
Principal payments on capital lease obligations (120,373) (687,657)
-------------- --------------
Net cash used for financing
activities 14,913,800 (678,520)
-------------- --------------
Net change in cash and cash equivalents (4,137,464) 4,490,708
-------------- --------------
Cash and cash equivalents, beginning balance 9,535,430 1,572,389
-------------- --------------
Cash and cash equivalents, ending balance $ 5,397,966 $ 6,063,097
============== ==============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 60,825 $ 390,891
============== ==============
Cash paid for income taxes $ 12,310 $ 456
============== ==============
The accompanying notes are an integral part of the financial statements.
6
IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. In the opinion of management, the accompanying financial statements include
all adjustments, consisting of only normal recurring accruals, necessary to
present fairly the consolidated financial position, results of operations and
cash flows of ImmunoGen, Inc. (the "Company"), which include those of its
wholly-owned subsidiary, ImmunoGen Securities Corp. and its 72%-owned
subsidiary, Apoptosis Technology, Inc. ("ATI").
B. Net loss per common share is based on the weighted average number of common
shares outstanding during the periods. Common share equivalents have not been
included because their effect would be anti-dilutive. Fully diluted earnings
per share are the same as primary earnings per share.
C. Effective July 1, 1994, the Company adopted Statement of Financial
Accounting Standard No. 115 - Accounting for Certain Investments in Debt and
Equity Securities (SFAS 115), which requires the Company to categorize its
investments into one of three categories. The Company categorizes its
investments as "held-to-maturity" and they are carried at amortized cost,
which approximates market value, on the balance sheet. The impact of this
change in accounting principle was immaterial to the Company's financial
position and results of operations at July 1, 1994.
D. In an action to reduce costs, the Company in December 1994 implemented
a restructuring plan, suspending its operations at its Canton and Norwood,
Massachusetts production facilities, reducing or eliminating certain areas of
research and focusing its clinical efforts on its lead products. This plan
resulted in the termination of approximately 100 employees and affected all
functional areas within the Company. Restructuring charges approximating
$600,000 were charged to expense in December 1994 representing severance costs
for terminated employees. As of March 31, 1995 the Company had paid
approximately $580,000 of these severance benefits, of which approximately
$564,000 was paid during the three month period ended March 31, 1995.
7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three Months Ended March 31, 1994 and 1995
Revenues for the three months ended March 31, 1994 and 1995 were
approximately $188,000 and $90,000, respectively. These revenues primarily
consisted of approximately $185,000 and $76,000 of interest income in the
respective periods. This decrease of 59% was caused primarily by the
decrease in cash balances available for investment between these periods.
The Company's total expenses for the three months ended March 31, 1994
and 1995 decreased 30% from approximately $6.3 million in 1994 to
approximately $4.4 million in 1995.
Research and development costs were 83% and 82% of the Company's total
expenses in 1994 and 1995, respectively, decreasing approximately 31% from
$5.2 million in the 1994 period to approximately $3.6 million in the 1995
period. This decrease is the result of the Company's restructuring plan
implemented in December 1994, offset somewhat by increased costs associated
with the Company's subsidiary, Apoptosis Technology, Inc. ("ATI") and
increased non-cash depreciation charges associated with capital expenditures
made in prior periods.
General and administrative expenses decreased approximately 35% from
approximately $1.1 million for the three months ended March 31, 1994 to
approximately $681,000 for the same period in 1995. This decrease resulted
largely from implementation of the Company's restructuring plan. In
addition, savings were also recognized through reductions in management and
administrative personnel in the second and third quarters of calendar 1994.
Interest expense increased approximately $99,000 between the two
periods, reflecting the utilization of capital lease arrangements to finance
certain equipment.
Nine Months Ended March 31, 1994 and 1995
Revenues for the nine months ended March 31, 1994 and 1995 were
approximately $792,000 and $434,000, respectively, a decrease of
approximately 45%. These revenues primarily consisted of approximately
$708,000 and $396,000 of interest income in the respective periods. This
decrease was caused primarily by a decrease in cash balances available for
investment. In addition, revenues for the nine months ended March 31, 1994
included approximately $75,000 of contract revenues received under the
Small Business Innovative Research Program of the U.S. National Science
Foundation.
Total expenses decreased approximately 9% from approximately $17.9
million in 1994 to approximately $16.3 million in 1995.
Research and development costs were 82% of the Company's total expenses
in each year, decreasing approximately $1.4 million from $14.7 million for
the nine months ended March 31, 1994 to approximately $13.3 million in the
corresponding period in 1995. As in the three months ended March 31, 1995,
significant components of this decrease include implementation of the
Company's restructuring plan in December 1994, offset somewhat by restruc-
turing charges incurred, increased costs associated with ATI and non-cash
depreciation charges associated with capital spending in prior periods. A
planned substantial reduction in raw materials purchases in a prior fiscal
1995 quarter also contributed to the decrease in expenses.
General and administrative expenses decreased 18% from approximately
$3.2 million for the nine months ended March 31, 1994 to approximately $2.6
million for the 1995 period. As in the three months ended March 31, 1995,
this decrease represented savings associated with the restructuring plan
and reductions in management and administrative staff in the second and
third quarters of calendar 1994, offset somewhat by the restructuring
charges incurred.
Interest expense increased from approximately $61,000 for the nine months
ended March 31, 1994 to approximately $397,000 for the 1995 period. This
increase reflects the utilization of capital lease arrangements to finance
certain equipment.
Liquidity and Capital Resources
Since July 1, 1992 the Company has financed its operating deficit of
$58.4 million from various sources, including over $13.2 million raised in
its fiscal 1994 public offering, net of offering costs, and from the
exercise of stock options. In March 1994, the Company executed a
sale/leaseback agreement to finance approximately $4.0 million of equipment,
under which all monies have been received. This transaction included
warrants to purchase common stock, which expire in April 1999. Since July 1,
1992 the Company has also received approximately $2.6 million of interest
income and approximately $0.3 million of other income, primarily payments
received under the Small Business Innovative Research Program of the U.S.
National Science Foundation and under the Orphan Product Development Program
of the U.S. Department of Health and Human Services.
In the period from July 1, 1992 to March 31, 1995 approximately $16.4
million was expended on property and equipment, including the financed
equipment, principally for construction of the Company's manufacturing
facilities in Canton and Norwood, Massachusetts.
In an action to reduce costs, the Company in December 1994 implemented
a restructuring plan, suspending operations at its Canton and Norwood,
Massachusetts production facilities, reducing or eliminating certain areas
of research and focusing its clinical efforts on its lead products. This
plan resulted in the termination of approximately 100 employees and affected
all functional areas within the Company. Restructuring charges
approximating $600,000 were charged to expense in December representing
severance costs for terminated employees. As of March 31, 1995 the Company
had paid approximately $580,000 of these severance benefits, of which
approximately $564,000 was paid during the three month period ended March
31, 1995.
Since the Company's 1994 public offering, the availability of funding in
the public and private markets has been substantially constrained for many
biotechnology companies. Accordingly, the Company has turned to other
sources to provide additional liquidity. In March 1994, the Company
executed a sale/leaseback agreement to finance approximately $4.0 million of
equipment at its Canton facility. In addition, the Company is actively
engaged in the pursuit of collaborative agreements.
As of March 31, 1995 the Company had approximately $6.1 million in cash
and cash equivalents. The Company anticipates that its existing capital
resources will enable it to maintain its operations through fiscal 1995 and
into the first quarter of fiscal 1996. The Company's ability to fund its
operations beyond that period will be dependent on the Company's ability to
obtain additional funds through equity or debt financings, collaborative
agreements or from other sources of financing. If substantial additional
funding does not become available, it will be necessary for the Company to
address its lack of sufficient liquidity through further reductions in the
method and scale of its operations.
10
IMMUNOGEN, INC.
PART II- OTHER INFORMATION
--------------------------
Item 1. Legal Proceedings.
------------------
Not Applicable.
Item 2. Changes in Securities.
----------------------
Not Applicable.
Item 3. Defaults Upon Senior Securities.
--------------------------------
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
Not Applicable.
Item 5. Other Information.
------------------
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(b) No reports on form 8-K were filed during
the three months ended March 31, 1995.
11
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.
IMMUNOGEN, INC.
Date: May 10, 1995 By: /s/ Mitchel Sayare
----------------------------
Mitchel Sayare
Chief Executive Officer
(principal executive officer)
Date: May 10, 1995 By: /s/ Frank J. Pocher
----------------------------
Frank J. Pocher
Vice President and
Chief Financial Officer
(principal financial officer)
12
