UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-15006
T CELL SCIENCES, INC.
(Exact name of registrant as specified in charter)
Delaware No. 13-3191702
(State of Incorporation) (I.R.S. Employer Identification No.)
119 Fourth Avenue, Needham, Massachusetts 02194-2725
(Address of principal executive offices) (Zip code)
(617) 433-0771
(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 .
--- ---
Outstanding as of
Class July 31, 1997
----- -------------
Common Stock, par value $.001 24,948,383
T CELL SCIENCES, INC.
Table of Contents
June 30, 1997
Page
----
Part I -- Financial Information
- -------------------------------
Condensed Consolidated Balance Sheet at June 30, 1997 and December 31, 1996..........................3
Condensed Consolidated Statement of Operations for the Quarters Ended
June 30, 1997 and 1996......................................................................4
Condensed Consolidated Statement of Operations for the Six Months Ended
June 30, 1997 and 1996......................................................................5
Condensed Consolidated Statement of Cash Flows for the Six Months Ended
June 30 , 1997 and 1996.....................................................................6
Notes to Condensed Consolidated Financial Statements.................................................7
Management's Discussion and Analysis of Financial Condition and Results of
Operations.........................................................................................9
Part II -- Other Information
- ----------------------------
Item 1. Legal Proceedings..........................................................................12
Item 4. Submission of Matters to a Vote of Security Holders........................................12
Item 5. Other Information..........................................................................12
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits...............................................................................13
B. Reports on Form 8-K....................................................................13
Signatures..........................................................................................14`
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
T CELL SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1997 and December 31, 1996
June 30, December 31,
1997 1996
- ----------------------------------------------------------------------------------------------------------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 10,671,300 $ 12,591,800
Accounts Receivable 17,600 19,500
Inventories -- 24,000
Current Portion Note Receivable -- 400,600
Prepaid Expenses and Other 274,500 241,500
- ----------------------------------------------------------------------------------------------------------
Total Current Assets 10,963,400 13,277,400
- ----------------------------------------------------------------------------------------------------------
Property and Equipment, Net 443,500 511,600
Restricted Cash 685,000 685,000
Long-Term Note Receivable -- 1,402,100
Other Noncurrent Assets 1,293,300 1,347,600
- ----------------------------------------------------------------------------------------------------------
Total Assets $ 13,385,200 $ 17,223,700
- ----------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 332,500 $ 326,000
Accrued Expenses 990,700 1,278,500
Deferred Revenue 56,700 --
- ----------------------------------------------------------------------------------------------------------
Total Current Liabilities 1,379,900 1,604,500
- ----------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Common Stock, $.001 Par Value 25,000 25,000
Additional Paid-in Capital 72,787,800 72,791,800
Less: Common Treasury Shares at Cost (62,400) (68,900)
Accumulated Deficit (60,745,100) (57,128,700)
- ----------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 12,005,300 15,619,200
- ----------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 13,385,200 $ 17,223,700
- ----------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements
3
T CELL SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Quarters Ended June 30, 1997 and 1996
June 30, June 30,
1997 1996
- ----------------------------------------------------------------------------------------------------------
OPERATING REVENUE:
Product Development and Licensing Agreements $ 693,300 $ 179,400
Product Sales -- 8,800
- ----------------------------------------------------------------------------------------------------------
Total Operating Revenue 693,300 188,200
- ----------------------------------------------------------------------------------------------------------
OPERATING EXPENSE:
Cost of Product Sales -- 2,900
Research and Development 1,483,000 1,437,100
General and Administrative 1,024,600 3,072,200
Marketing and Sales 30,100 97,900
- ----------------------------------------------------------------------------------------------------------
Total Operating Expenses 2,537,700 4,610,100
- ----------------------------------------------------------------------------------------------------------
Operating Loss (1,844,400) (4,421,900)
Non-Operating Income, Net 163,600 114,000
- ----------------------------------------------------------------------------------------------------------
Net Loss $ (1,680,800) $(4,307,900)
- ----------------------------------------------------------------------------------------------------------
Net Loss Per Common Share $ (0.07) $ (0.22)
- ----------------------------------------------------------------------------------------------------------
Weighted Average Common Shares Outstanding 24,948,400 19,938,200
- ----------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements
4
T CELL SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997 and 1996
June 30, June 30,
1997 1996
- ----------------------------------------------------------------------------------------------------------
OPERATING REVENUE:
Product Development and Licensing Agreements $ 755,400 $ 270,600
Product Sales 1,300 506,400
- ----------------------------------------------------------------------------------------------------------
Total Operating Revenue 756,700 777,000
- ----------------------------------------------------------------------------------------------------------
OPERATING EXPENSE:
Cost of Product Sales 400 351,200
Research and Development 2,818,900 2,928,100
General and Administrative 1,798,700 3,936,000
Marketing and Sales 70,900 282,900
- ----------------------------------------------------------------------------------------------------------
Total Operating Expenses 4,688,900 7,498,200
- ----------------------------------------------------------------------------------------------------------
Operating Loss (3,932,200) (6,721,200)
Non-Operating Income, Net 315,800 561,700
- ----------------------------------------------------------------------------------------------------------
Net Loss $ (3,616,400) $(6,159,500)
- ----------------------------------------------------------------------------------------------------------
Net Loss Per Common Share $ (0.14) $ (0.31)
- ----------------------------------------------------------------------------------------------------------
Weighted Average Common Shares Outstanding 24,948,400 19,923,800
- ----------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements
5
T CELL SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1997 and 1996
June 30, June 30,
1997 1996
- ----------------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net Loss $(3,616,400) $(6,159,500)
Adjustments to Reconcile Net Loss to Net Cash
Used by Operating Activities:
Depreciation and Amortization 186,900 280,900
Gain on Sale of Research Products and Operations of
T Cell Diagnostics, Inc. -- (309,800)
Write-off of Capitalized Patent Costs 51,100 1,751,600
Compensation Associated with Stock Options -- 170,300
Net Change in Current Assets and Current Liabilities (231,700) (1,058,300)
- ----------------------------------------------------------------------------------------------------------
Net Cash Used by Operating Activities (3,610,100) (5,324,800)
- ----------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Acquisition of Property and Equipment (57,100) (11,600)
Other Noncurrent Assets (58,500) (382,500)
Sale of Investment in Common Stock of Endogen, Inc. 1,802,700 --
- ----------------------------------------------------------------------------------------------------------
Net Cash Provided (Used) by Investing Activities 1,687,100 (394,100)
- ----------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from Sale of Stock 2,500 11,600
Proceeds from Exercise of Stock Options -- 158,700
- ----------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 2,500 170,300
- ----------------------------------------------------------------------------------------------------------
Decrease in Cash and Cash Equivalents (1,920,500) (5,548,600)
Cash and Cash Equivalents at Beginning of Period 12,591,800 12,275,200
- ----------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period $10,671,300 $ 6,726,600
- ----------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements
6
T CELL SCIENCES, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1997
(1) Nature of Business
------------------
T Cell Sciences, Inc. (the "Company"), is a biopharmaceutical company
engaged in the discovery and development of innovative drugs targeting diseases
of the immune, inflammatory and vascular systems. The Company develops and
commercializes products on a proprietary basis and in collaboration with
established pharmaceutical partners, including Astra AB and Yamanouchi
Pharmaceutical Co., Ltd. In March 1996, the Company sold substantially all of
the assets of its wholly-owned subsidiary, T Cell Diagnostics, Inc. ("TCD"),
while retaining all the rights to the TRAx(R) diagnostic franchise.
The condensed consolidated financial statements include the accounts of
T Cell Sciences, Inc. and its wholly owned subsidiary, T Cell Diagnostics, Inc.
All intercompany transactions have been eliminated.
(2) Interim Financial Statements
----------------------------
The accompanying condensed consolidated financial statements for the
three and six months ended June 30, 1997 and 1996 include the consolidated
accounts of the Company, and have been prepared in accordance with generally
accepted accounting principles and with the instructions to Form 10-Q and
article 10 of Regulation S-X. In the opinion of management, the information
contained herein reflects all adjustments, consisting solely of normal recurring
adjustments, that are necessary to present fairly the financial positions at
June 30, 1997 and December 31, 1996, the results of operations for the three and
six months ended June 30, 1997 and 1996, and the cash flows for the six months
ended June 30, 1997 and 1996. The results of operations for the three and six
months ended June 30, 1997 are not necessarily indicative of results for any
future interim period or for the full year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted, although the Company believes that the disclosures
included are adequate to make the information presented not misleading. The
condensed consolidated financial statements and the notes included herein should
be read in conjunction with footnotes contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996.
(3) Litigation
----------
In December 1994, the Company filed a lawsuit in the Superior Court of
Massachusetts against the landlord of its former Cambridge, Massachusetts
headquarters, to recover the damages incurred by the Company resulting from the
evacuation of the building, due to air quality problems which caused skin and
respiratory irritation to a significant number of employees. The landlord
defendant has filed counterclaims, alleging the Company has breached its lease
obligations. The court ordered a limited trial between the Company and the
landlord on certain factual issues which began on November 20, 1996. Closing
arguments for the limited trial were heard on January 13, 1997. The court has
not yet entered its findings on the limited trial. Until the court enters its
findings, the Company is unable to assess what impact the findings will have on
the trial of the issue of the Company's liability under the lease. In a separate
lawsuit, the landlord's mortgagee has filed claims against the Company for
payment of the same rent alleged to be owed. A motion for summary judgment filed
by the bank was denied by the court. Due to the current stage of the lawsuits, a
range of potential losses, cannot be estimated at this time.
7
Accordingly, no accrual has been made in the financial statements relative to
any potential effects on the Company's future operating results. A significant
adverse settlement could have a negative impact on the future operating results
of the Company.
(4) Disposition of Assets
---------------------
On March 5, 1996 the Company sold to Endogen, Inc. the research
products and operations of TCD for a purchase price of approximately $2,880,000,
while retaining the TRAx diagnostic product franchise. The consideration for
this sale was paid in the form of a convertible subordinated note receivable
(the "Convertible Note") in the principal amount of $2,003,000 and a combination
of cash and a short-term note used to repay approximately $980,000 of
obligations under the Company's operating lease. On February 10, 1997, the
Company converted the remaining outstanding principal balance of the Convertible
Note into shares of Endogen common stock which it subsequently sold. Net
proceeds from the sale were $1,829,000 and included an immaterial gain.
(5) Statement of Financial Accounting Standards No. 128, "Earnings per
------------------------------------------------------------------
Share"
------
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share." SFAS 128 is effective for interim and annual periods ending after
December 15, 1997. The adoption of SFAS 128 is not expected to have a material
impact in the Company's net loss per share computation.
8
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995: Statements contained in the following, Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations, that
are not historical facts may be forward-looking statements that are subject to a
variety of risks and uncertainties. There are a number of important factors that
could cause the actual results to differ materially from those expressed in any
forward-looking statements made by the Company. These factors include, but are
not limited to: (i) the Company's ability to successfully complete product
research and development, including pre-clinical and clinical studies, and
commercialization; (ii) the Company's ability to obtain substantial additional
funding; (iii) the Company's ability to obtain required governmental approvals;
(iv) the Company's ability to attract manufacturing, sales, distribution and
marketing partners and other strategic alliances; and (v) the Company's ability
to develop and commercialize its products before its competitors.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- -------------------------------------------------------------------------------
OF OPERATIONS
-------------
Overview
The Company's lead therapeutic program is focused on developing
compounds that inhibit complement activation which is part of the body's immune
defense system. In August 1996, the Company began enrollment in a Phase I/II
clinical trial for the evaluation of its lead therapeutic compound, TP10, to
prevent reperfusion injury in patients receiving lung transplants. Patients are
followed for 28 days for clinical efficacy and six months to monitor safety.
Patient accrual completed in May 1997 and the trial will conclude in the second
half of 1997 when the last patient completes the six-month safety evaluation
period. The Company initiated a Phase IIa clinical trial to evaluate the use of
TP10 in patients with adult respiratory syndrome in January 1996. Completion of
the Phase IIa trial is expected in the second half of 1997. In February 1997,
the Company was awarded a second $100,000 Phase I Small Business Innovation
Research grant from the National Institutes of Health. Funding from the grant
will contribute to the Company's program for the development of a vaccine for
the management of atherosclerosis. In June 1997, the Company received
milestone payments from its partner, Astra AB ("Astra"), following the transfer
of certain of its rights to the TCAR technology to Astra, which was completed in
May 1997, and approval received by Astra to initiate clinical trials for one of
the products derived from the TCAR technology platform for the treatment of
multiple sclerosis.
Results of Operations
Quarter Ended June 30, 1997 Compared to Quarter Ended June 30, 1996 --
The Company reported a consolidated net loss of $1,680,800 or $.07 per share for
the quarter ended June 30, 1997 reflecting a decrease of $2,627,100 or 61.0%
compared with a net loss of $4,307,900 or $.22 per share for the quarter ended
June 30, 1996. The decrease in net loss for the quarter is primarily due to a
charge to earnings of $1,751,600 for the write-off of certain capitalized patent
costs and a $425,300 charge to earnings resulting from a severance agreement
with the Company's former President and Chief Executive Officer included in the
quarter last year. Excluding these charges, the net loss for the quarter ended
June 30, 1997 decreased $450,200 or 21.1% compared to the same period last year.
The decrease in net loss, as adjusted, is mainly attributable to an increase in
operating revenue of $505,100.
Operating revenue increased 268.4% for the quarter ended June 30, 1997
to $693,300 compared to $188,200 for the quarter ended June 30, 1996. The
increase is primarily due to certain milestone payments received under the
Company's agreement with Astra. In May 1997, the Company completed the transfer
of certain of its rights to the TCAR technology to Astra who will be solely
responsible for further clinical development and commercialization. In June
1997, Astra received approval to initiate clinical trials for one of the
products derived from the TCAR technology platform for the treatment of multiple
sclerosis.
Research and development expenses were $1,483,000 for the quarter ended
June 30, 1997 compared to $1,437,100 for the same period last year. The increase
is primarily due to costs associated
9
with the Phase I/II and Phase IIa clinical trials which were initiated in July
1996 and January 1996, respectively.
General and administrative expenses decreased $2,047,600 to $1,024,600
for the quarter ended June 30, 1997 from $3,072,200 for the comparable period
last year. The decrease is primarily due to the $425,300 charge in June 1996
resulting from the severance agreement with the Company's former President and
Chief Executive Officer combined with the $1,751,600 write-off of certain
capitalized patent costs in June 1996. Excluding these charges, general and
administrative expenses increased $129,300 for the quarter ended June 30, 1997
compared to the same period last year. The increase is primarily attributable to
increased consulting fees related to business development partially offset by a
decrease in administrative payroll and benefit costs.
Marketing and sales expenses decreased 69.3% or $67,800 to $30,100 for
the quarter ended June 30, 1997 compared to $97,900 for the quarter ended June
30, 1996. The decrease in marketing and sales expenses is primarily due to the
Company's reduced direct sales efforts for the TRAx(R) product line while it
focuses on establishing a partnership for the TRAx(R) technology.
Non-operating income of $163,600 for the quarter ended June 30, 1997
reflects a 43.5% increase in interest income for the quarter compared with the
same period last year. The increase in interest income is primarily the result
of higher cash balances during the quarter ended June 30, 1997 compared with the
quarter ended June 30, 1996.
Six Months Ended June 30, 1997 Compared to Six Months Ended June 30,
1996 -- The Company reported a consolidated net loss of $3,616,400 or $.14 per
share for the six months ended June 30, 1997 compared with a net loss of
$6,159,500 or $.31 per share for the six months ended June 30, 1996. Included in
the six months ended June 30, 1996 is two months of operations of TCD prior the
sale of its research products and operations in March 1996 and a gain recognized
from the sale. The $2,543,100 decrease in net loss is mainly due to a $1,751,600
write-off of certain capitalized patent costs and a $425,300 charge to earnings
resulting from a severance agreement with the Company's former President and
Chief Executive Officer included in the six months ended June 30, 1996.
For the six months ended June 30, 1997, product development and
licensing agreements revenue increased $484,800 to $755,400 compared to $270,600
for the six months ended June 30, 1996. The increase is primarily attributable
to milestone payments received from Astra in accordance with the amended
agreement of December 1996. In addition, the Company recognized approximately
$105,000 of revenue relating to its Small Business Innovation Research grants
from the National Institutes of Health. Included in product development and
licensing agreements revenue in 1996 is research and development funding from
Astra relating to the Company's earlier agreement and a $100,000 non-refundable
execution fee associated with a license agreement with CytoTherapeutics, Inc.
Product sales decreased $505,100 for the first half of 1997 compared to the same
period last year primarily due to the sale of the research products and
operations of TCD in March 1996.
Research and development expenses were $2,818,900 for the six months
ended June 30, 1997 compared to $2,928,100 for the same period last year. The
decrease is primarily attributed to the sale of the research products and
operations of TCD in March 1996 partially offset by increased costs associated
with two clinical trials initiated in 1996.
General and administrative expenses decreased $2,137,300 to $1,798,700
for the six months ended June 30, 1997 from $3,936,000 for the comparable period
last year. The decrease is primarily due to the $425,300 charge in June 1996
resulting from a severance agreement with the Company's former President and
Chief Executive Officer combined with the $1,751,600 write-off of certain
capitalized patent costs in June 1996.
10
Marketing and sales expenses decreased 74.9% to $70,900 for the six
months ended June 30, 1997 compared to $282,900 for the six months ended June
30, 1996. The decrease in marketing and sales expenses is primarily due to the
sale of the research products and operations of TCD in March 1996 combined with
the Company's reduced direct sales efforts for the TRAx(R) product line while it
focuses on establishing a partnership for the TRAx(R) technology.
Non-operating income of $315,800 for the six months ended June 30, 1997
reflects a 43.8% decrease compared to the same period last year. Included in
non-operating income for the six months ended June 30, 1996 is a $309,800 gain
recognized from the sale of the research products and operations of TCD in March
1996. Interest income increased 32.4% for the six months ended June 30, 1997
compared with the same period last year. The increase in interest income is
primarily the result of higher cash balances during the six months ended June
30, 1997 compared with the six months ended June 30, 1996.
Liquidity and Capital Resources
The Company's cash and cash equivalents at June 30, 1997 was
$10,671,300 compared to $12,591,800 at December 31, 1996. Cash used in
operations was $3,610,100 for the six months ended June 30, 1997 which was
partially offset by $1,829,000 received from the conversion and subsequent sale
of the convertible subordinated note receivable from Endogen, Inc. The Company
received the convertible subordinated note receivable in connection with the
sale of the research products and operations of TCD in March 1996. On February
10, 1997 the Company converted the remaining outstanding principal balance of
$1,802,700 into shares of common stock of Endogen and subsequently sold the
shares.
In December 1994, the Company filed a lawsuit in the Superior Court of
Massachusetts against the landlord of its former Cambridge, Massachusetts
headquarters, to recover the damages incurred by the Company resulting from the
evacuation of the building, due to air quality problems which caused skin and
respiratory irritation to a significant number of employees. The landlord
defendant has filed counterclaims, alleging the Company has breached its lease
obligations. In a separate lawsuit, the landlord's mortgagee has filed claims
against the Company for payment of the same rent alleged to be owed. A motion
for summary judgment filed by the bank was denied by the court. Due to the
current stage of the lawsuits, a range of potential losses cannot be estimated
at this time. Accordingly, no accrual has been made in the financial statements
relative to any potential effects on the Company's future operating results. A
significant adverse settlement could have a negative impact on the future
operating results of the Company.
The Company believes its current cash and cash equivalents, combined
with anticipated net cash provided by operations will be sufficient to meet
working capital requirements into 1998. These requirements will depend on
several factors including, but not limited to, the progress and costs associated
with research and development programs; preclinical and clinical studies; time
and costs associated with obtaining regulatory approval; timing and scope of
collaborative arrangements; long term facility costs; and expenses and outcome
of pending litigation on the air quality problem. The Company will consider
alternative sources of funding and capital when available and appropriate.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share." SFAS 128 is effective for interim and annual periods ending after
December 15, 1997. The adoption of SFAS 128 is not expected to have a material
impact in the Company's net loss per share computation.
11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
No material changes since the Company's annual report on Form 10-K for
the year ended December 31, 1996.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
On May 13, 1997, the Company held its Annual Meeting of Stockholders at
which the voters elected seven directors to its Board of Directors.
At the Company's Annual Meeting of Stockholders, the following were
elected to the Board of Directors:
Number of Shares/Votes
----------------------
For Authority Withheld
--- ------------------
James D. Grant 18,455,315 309,412
Patrick C. Kung 18,460,770 303,957
John P. Munson 18,484,713 280,014
Thomas R. Ostermueller 18,467,763 296,964
Harry H. Penner, Jr. 18,507,863 256,864
Una S. Ryan 18,541,938 222,789
John Simon 18,456,270 308,457
The number of shares issued, outstanding and eligible to vote as of the
record date of April 1, 1997 were 24,948,383. Quorum was 18,764,727 shares
represented by 236 proxies or 75.2% of the eligible voting shares tabulated.
ITEM 5. OTHER INFORMATION
-----------------
The Company announced on May 28, 1997, the completion of patient
accrual for its Phase I/II clinical trial evaluating TP10 in patients with
reperfusion injury following lung transplantation. Objectives of the trial are
to determine the safety and pharmacokinetics of TP10 in patients following lung
transplant surgery, and to determine the ability of TP10 to reduce reperfusion
injury and improve lung function in patients following lung transplant surgery.
Patients are followed for 28 days for clinical efficacy and 6 months to monitor
safety. The trial will conclude in the second half of 1997 when the last patient
completes the six-month safety evaluation period.
In June 1997, the Company announced the appointment of Ronald M.
Urvater to its Board of Directors. Mr. Urvater is currently a Managing Director
of Aurora Capital Corporation, an investment bank dedicated to private financing
of private and public biotechnology companies. He has also been the president of
Capital Partners, a venture capital company, since 1987. Prior to that Mr.
Urvater was a Vice President of Allen and Company, Inc. Mr. Urvater was one of T
Cell's founders and original board members, and resigned from the board in 1995.
His re-appointment increases the number of board members to eight.
The Company announced on June 23, 1997 that it has achieved another
milestone in its T Cell Antigen Receptor (TCAR) program with Astra AB. Astra AB
has received approval to initiate clinical trials for one of the products
derived from the TCAR technology platform for the treatment of multiple
12
sclerosis. T Cell Sciences and Astra AB signed an amended agreement in December
1996 in which T Cell has transferred certain of its rights to the TCAR
technology to Astra AB, who is responsible for all development activities
including the clinical development and commercialization. T Cell Sciences will
receive royalties from product sales, as well as upfront and milestone payments
which may total up to $4 million as certain clinical developments are achieved.
Astra AB will assume all costs for continued development and will have all
marketing rights for the products worldwide.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
A. Exhibits
None
B. Reports on Form 8-K
None
13
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.
T CELL SCIENCES, INC.
BY: /s/ Norman W. Gorin
-------------------
Norman W. Gorin
Vice President, Finance
and Chief Financial Officer
14
5
U.S. DOLLARS
6-MOS
DEC-31-1997
JAN-01-1997
JUN-30-1997
1
10,671,300
0
17,600
0
0
10,963,400
3,083,100
(2,639,600)
13,385,200
1,379,900
0
0
0
25,000
11,980,300
13,385,200
1,300
756,700
400
4,688,500
17,900
0
(333,700)
(3,616,400)
0
(3,616,400)
0
0
0
(3,616,400)
(0.14)
(0.14)
