5
3-MOS
JUN-30-1996
SEP-30-1995
3,017,280
0
0
0
0
3,390,738
23,863,970
11,022,158
16,316,250
7,482,473
0
125,866
0
0
0
16,316,250
0
184,589
0
0
3,742,277
0
364,106
(3,557,688)
453
0
0
0
0
(3,558,141)
(.28)
(.28)
IMMUNOGEN, INC.
TABLE OF CONTENTS
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Page
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PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets as of
June 30, 1995 and September 30, 1995........... 3
Consolidated Statements of Operations
for the three months ended September 30,
1994 and 1995.................................. 4
Consolidated Statements of Stockholders'
Equity for the year ended June 30, 1995 and
for the three months ended Septmeber 30, 1995.. 5
Consolidated Statements of Cash Flows
for the three months ended September 30,
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
As of June 30, 1995 and September 30, 1995
June 30, September 30,
1995 1995
----------- ------------
ASSETS
Cash and cash equivalents $ 3,047,236 $ 3,017,280
Other current assets 293,852 373,458
----------- ------------
Total current assets 3,341,088 3,390,738
Property and equipment, net of accumulated
depreciation 13,621,383 12,841,812
Other assets 83,700 83,700
----------- ------------
Total assets $17,046,171 $16,316,250
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 2,229,003 $ 1,757,790
Accrued compensation 316,973 326,207
Other accrued liabilities 978,253 835,914
Subordinated convertible debentures (Note D) - 3,600,000
Current portion of capital lease obligations 942,749 962,562
----------- ------------
Total current liabilities 4,466,978 7,482,473
----------- ------------
Capital lease obligations 2,330,680 2,152,183
Other non-current liabilities 125,354 111,426
Commitments
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
12,578,606 and 12,586,606 shares as of June
30, 1995 and September 30, 1995, respectively 125,786 125,866
Additional paid-in capital 118,988,736 118,993,806
----------- -------------
119,114,522 119,119,672
Accumulated deficit (108,991,363) (112,549,504)
----------- ------------
Total stockholders' equity 10,123,159 6,570,168
----------- ------------
Total liabilities and stockholders' equity $17,046,171 $ 16,316,250
=========== ============
The accompanying notes are an integral part of the financial statements.
3
IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended September 30, 1994 and 1995
Three Months Ended
September 30,
1994 1995
--------------- ---------------
Revenues:
Development Fees $ 136,328
Interest $ 176,649 34,333
Other 10,786 13,928
--------------- ---------------
Total revenues 187,435 184,589
--------------- ---------------
Expenses:
Research and development 4,553,348 2,924,600
General and administrative 992,474 453,571
Interest 168,212 364,106
--------------- ---------------
Total expenses 5,714,034 3,742,277
--------------- ---------------
Loss before income taxes (5,526,599) (3,557,688)
Income tax expense 2,332 453
--------------- ---------------
Net loss $ (5,528,931) $ (3,558,141)
=============== ===============
Loss per common share $ (0.44) $ (0.28)
=============== ===============
Shares used in computing loss
per share amounts 12,559,818 12,581,910
=============== ===============
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, 1995 and for
the three months ended September 30, 1995
Common Stock
-----------------------------------
Additional Total
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
---------- --------- ------------ --------------- -------------
Balance at June 30, 1994 12,554,731 $ 125,547 $118,968,588 $ (89,134,295) $ 29,959,840
---------- --------- ------------ --------------- -------------
Stock options excercised 23,875 239 20,148 - 20,387
Net loss for the year ended
June 30, 1995 - - - (19,857,068) (19,857,068)
---------- --------- ------------ --------------- -------------
Balance at June 30, 1995 12,578,606 125,786 118,988,736 (108,991,363) 10,123,159
---------- --------- ------------ --------------- --------------
Stock options excercised 8,000 80 5,070 - 5,150
Net loss for the three months ended
September 30, 1995 - - - (3,558,141) (3,558,141)
---------- --------- ------------ --------------- -------------
Balance at September 30, 1995 12,586,606 $ 125,866 $118,993,806 $ (112,549,504) $ 6,570,168
========== ========= ============ =============== =============
The accompanying notes are an integral part of the financial statements.
5
IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended September 30, 1994 and 1995
Three Months Ended
September 30,
-------------------------------------
1994 1995
-------------- --------------
Cash flows from operating activities:
Net loss $ (5,528,931) $ (3,558,141)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 825,445 796,731
Gain on sale of property and equipment - (10,886)
Changes in operating assets and liabilities:
Other current assets 70,277 (79,604)
Other assets - -
Accounts payable (637,598) (471,213)
Accrued compensation (274,418) 9,234
Other accrued liabilities (18,288) (142,339)
Other non-current liabilities (13,928) -
-------------- --------------
Net cash used for operating activities (5,577,441) (3,456,218)
-------------- --------------
Cash flows from investing activities:
Capital expenditures (189,040) (18,251)
Proceeds from sale of marketable securities 10,596,385 3,000,000
Purchase of marketable securities (5,552,005) (2,984,898)
-------------- --------------
Net cash provided by (used for)
investing activities 4,855,340 (3,149)
Cash flows from financing activities:
Proceeds from subordinated convertible debentures - 3,600,000
Stock issuances, net 8,557 5,150
Principal payments on capital lease obligations (261,072) (175,739)
-------------- --------------
Net cash provided by (used for)
financing activities (252,515) 3,429,411
-------------- ---------------
Net change in cash and cash equivalents (974,616) (29,956)
-------------- --------------
Cash and cash equivalents, beginning balance 1,572,389 3,047,236
-------------- --------------
Cash and cash equivalents, ending balance $ 597,773 $ 3,017,280
============== ==============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 163,949 $ 103,106
============== ==============
Cash paid for income taxes $ 456 $ 5,000
============== ==============
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").
Because of its continuing losses from operations and working capital defecit,
the Company will be required to obtain additional capital in the short term to
satisfy its ongoing capital needs and to continue its operations. Although
management continues to pursue additional funding arrangements and/or strategic
partnering, no assurance can be given that such financing will in fact be
available to the Company. If the Company is unable to obtain financing on
acceptable terms in order to maintain operations through this fiscal year, it
could be forced to curtail or discontinue its operations. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
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 September 1, 1995, the Company entered into an agreement to
sublease approximately 82% of one of its Cambridge, Massachusetts facilities and
to lease certain related equipment. The initial term of this sublease agreement
expires in February 1997 (with two successive one-year renewal options). Net
receipts under this agreement are expected to total approximately $550,000 in
each of fiscal 1996 and the first nine months fiscal 1997, the initial term of
the sublease.
D. In August 1995 the Company issued $3.6 million of 7% subordinated
convertible debentures, due July 31, 1996, in a private placement to a small
number of overseas investors. The Company incurred debt issuance costs of
$261,000, which has been charged to interest expense. Subject to certain
restrictions, the debentures are convertible to common stock, at the holders'
discretion, at any time from October 1995 through July 1996. The principal
portion of the debentures and any accrued interest thereon at the date of
conversion may be converted into the Company's Common Stock at 75% and 100%,
respectively, of the market price of the Company's Common Stock on the date
of conversion. As of November 7, 1995, debentures totalling $1.8 million plus
accrued interest thereon have been converted to 1,067,279 shares of the
Company's Common Stock.
7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The Company was formed to develop, produce and market commercial cancer
and other pharmaceuticals based on molecular immunology. The Company continues
research and development of its various products and expects no revenues to be
derived from product sales in the near future.
Since July 1, 1994 the Company has taken steps to reduce its operating
costs, including implementation of a restructuring plan in December 1994 and,
effective September 1, 1995, subleasing approximately 82% of one of its
Cambridge, Massachusetts facilities and leasing certain related equipment.
The initial term of this sublease agreement expires in February 1997 (with two
successive one-year renewal options).
The Company has been unprofitable since inception and expects to incur net
losses over the next several years.
Results of Operations
Three Months Ended September 30, 1994 and 1995
The Company's revenues decreased approximately 2% from approximately
$187,000 for the three months ended September 30, 1994 to approximately $185,000
in the same period in fiscal year 1995. Interest income totalled approximately
$177,000, or 95%, of revenues for the three months ended September 30, 1994,
compared to approximately $34,000, or 19%, of revenues in the corresponding
1995 period. This 81% decrease in interest income reflects the significant
decrease in cash balances available for investment in the 1995 period.
Revenues for the three months ended September 30, 1995 include approximately
$136,000 of development revenue, which represents revenue earned under the Small
Business Innovative Research Program of the U.S. National Science Foundation.
Revenues in both periods also include a gain on sale of assets which resulted
from a sale/leaseback agreement executed in fiscal 1994 which has been deferred
and is being recorded as other income over the life of the lease.
The Company's total expenses decreased approximately 35% from
approximately $5.7 million for the three months ended September 30, 1994 to
approximately $3.7 million in the same period in fiscal year 1995. Research
and development costs constituted the primary component of the Company's total
expenses (80% and 78% for the three months ended September 30, 1994 and 1995,
respectively), decreasing from approximately $4.6 million for the three months
ended September 30, 1994 to approximately $2.9 million for the three months
ended September 30, 1995. This 36% decrease is principally the result of the
Company's restructuring plan implemented in December 1994 and that portion of
facilities costs savings attributable to the facility sublease allocated to
research and development.
General and administrative expenses decreased 54% from approximately
$992,000 for the three months ended September 30, 1994 to approximately
$539,000 for the three months ended September 30, 1995. This decrease
principally represents savings associated with the restructuring plan and that
portion of facilities costs savings attributable to the facility sublease
allocated to general and administrative expenses.
Interest expense increased 116% from approximately $168,000 for the three
months ended September 30, 1994 to approximately $364,000 for the three months
ended September 30, 1995. This increase is due primarily to issuance costs
associated with and accrued interest on the Company's 7% subordinated
convertible debentures issued in an August 1995 private offering, offset
somewhat by lower interest costs associated with the decreasing principal
balance of the Company's capital lease arrangements.
8
Liquidity and Capital Resources
Since July 1, 1993 the Company has financed its operating deficit of
approximately $47.1 million from various sources, including net proceeds of
approximately $13.0 million raised in its February 1994 public offering, net
proceeds of approximately $3.3 million raised in its August 1995 private
offering to foreign investors and from the exercise of stock options. Since
July 1, 1993 the Company has received approximately $1.3 million of interest
income. At September 30, 1995 approximately $3.0 million of cash and cash
equivalents remained available.
In February 1994 the Company sold in a public offering 2,012,500 shares of
its common stock. Net proceeds to the Company amounted to $13,242,250. In
March 1994 the Company executed a sale/leaseback agreement to finance
approximately $4.0 million of equipment at its Canton, Massachusetts facility.
At June 30, 1994 all monies available under this agreement had been received by
the Company. The transaction included warrants to purchase common stock, which
expire in April 1999.
In August 1995 the Company issued $3.6 million of 7% subordinated
convertible debentures, due July 31, 1996, in a private placement to a small
number of foreign investors. Net proceeds to the Company amounted to
approximately $3.3 million. Subject to certain restrictions, the debentures are
convertible into Common Stock, at the holders' discretion, at any time from
October 1995 through July 1996. As of November 7, 1995, debentures totalling
$1.8 million plus accrued interest thereon have been converted to shares of the
Company's Common Stock.
In the period since July 1, 1993 approximately $8.1 million was expended
on property and equipment, including equipment sold and leased back by the
Company, principally for construction of the Company's manufacturing facilities.
No significant amounts are expected to be expended on property and equipment in
fiscal 1996.
Pursuant to its agreements with ATI, ImmunoGen has agreed to obtain or
furnish an additional $3.0 million in equity for ATI on such terms and
conditions as may be mutually agreed to by ATI and the providers of such
additional equity. The Company anticipates that approximately $650,000 of
funding may be required by ATI during calendar year 1996 in order for ATI to
satisfy certain contractual obligations.
The Company anticipates that its existing capital resources will enable it
to maintain its current and planned operations through January 1996. Because of
its continuing losses from operations and working capital deficit, the Company
will be required to obtain additional capital to satisfy its ongoing capital
needs and to continue its operations. Although management continues to pursue
additional funding arrangements, no assurance can be given that such financing
will in fact be available to the Company. If the Company is unable to obtain
financing on acceptable terms in order to maintain operations through this
fiscal year, it could be forced to curtail or discontinue its operations.
9
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) The Company filed a report on Form 8-K on August 16, 1995
for purposes of filing a press release on August 17, 1995
announcing the issuance of $3.6 million of 7% subordinated
convertible debentures.
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: November 9, 1995 By: /s/ Mitchel Sayare
----------------------------
Mitchel Sayare
Chief Executive Officer
(principal executive officer)
Date: November 9, 1995 By: /s/ Frank J. Pocher
---------------------------
Frank J. Pocher
Vice President and
Chief Financial Officer
(principal financial officer)
12
