-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QOPKbVD1hSuQteoTm18jS4Qi1BBmMOlDttAZ+yqprCLwJJNQxUGaQBz9Fk5aNEyT zwrxf5Xt/o4dCFnyQY8+Ag== 0000950135-96-004693.txt : 19961107 0000950135-96-004693.hdr.sgml : 19961107 ACCESSION NUMBER: 0000950135-96-004693 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961106 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALKERMES CLINICAL PARTNERS LP CENTRAL INDEX KEY: 0001000688 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 043145043 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-26758 FILM NUMBER: 96654975 BUSINESS ADDRESS: STREET 1: 64 SIDNEY ST CITY: CAMBRIDGE STATE: MA ZIP: 02139 BUSINESS PHONE: 6174940171 10-Q 1 ALKERMES CLINICAL PARTNERS, L.P. FORM 10-Q 1 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 September 30, 1996 / / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transaction period from __________ to __________ Commission file number 0-26758 ALKERMES CLINICAL PARTNERS, L.P. -------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 043-145043 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 64 Sidney Street, Cambridge, MA 02139-4136 ------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (617) 494-0171 ------------------------------ Not Applicable - -------------------------------------------------------------------------------- Former name, former address, and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- 2 ALKERMES CLINICAL PARTNERS, L.P. INDEX ----- Page No. -------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets 3 -September 30, 1996 and December 31, 1995 Statements of Operations 4 -Three months ended September 30, 1996 and 1995 -Nine months ended September 30, 1996 and 1995 Statements of Cash Flows 5 -Nine months ended September 30, 1996 and 1995 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of 7 Financial Condition and Results of Operations PART II - OTHER INFORMATION Item 6. Exhibits, Financial Statement Schedules and 9 Reports on Form 8-K SIGNATURES 10 EXHIBIT INDEX 11 (2) 3 ITEM 1. FINANCIAL STATEMENTS: ALKERMES CLINICAL PARTNERS, L.P. (A LIMITED PARTNERSHIP) BALANCE SHEETS (Unaudited)
September 30, December 31, 1996 1995 ------------- ------------ A S S E T S Current Assets: Cash and cash equivalents $40,518 $2,365,478 Prepaid expenses to Alkermes, Inc. -- 500,000 Interest receivable -- 1,375 ------- ---------- Total current assets 40,518 2,866,853 Other Assets: Organization costs, less amortization of $221,112 and $205,726 -- 15,386 ------- ---------- Total Assets $40,518 $2,882,239 ======= ========== L I A B I L I T I E S A N D P A R T N E R S' C A P I T A L Current Liabilities: Accrued expenses $14,998 $ 26,464 ------- ---------- Total current liabilities 14,998 26,464 ------- ---------- Partners' capital 25,520 2,859,147 Less: Notes receivable from limited partners -- (3,372) ------- ---------- 25,520 2,855,775 ------- ---------- Total Liabilities and Partners' Capital $40,518 $2,882,239 ======= ==========
See notes to financial statements. (3) 4 ALKERMES CLINICAL PARTNERS, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS (Unaudited)
Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 1996 1995 1996 1995 ------------- ------------- ------------- ------------- Revenue: Interest income $ 329 $ 90,832 $ 11,287 $ 236,564 ------- ----------- ----------- ----------- Expenses: Research and development -- 2,698,000 4,850,000 8,284,000 General and administrative 8,136 41,369 49,815 102,153 Interest expense -- -- -- 98,666 ------- ----------- ----------- ----------- 8,136 2,739,369 4,899,815 8,484,819 ------- ----------- ----------- ----------- Net loss $(7,807) $(2,648,537) $(4,888,528) $(8,248,255) ======= =========== =========== =========== Net Loss Per Class A and B Limited Partnership Interest $ (8) $ (2,847) $ (5,255) $ (8,866) ======= =========== =========== =========== Average Limited Partnership Interests Outstanding 921 921 921 921 ======= =========== =========== ===========
See notes to financial statements. (4) 5 ALKERMES CLINICAL PARTNERS, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Nine Months Ended Ended September 30, September 30, 1996 1995 ------------- ------------- Cash flows from operating activities: Net loss $(4,888,528) $(8,248,255) Adjustment to reconcile net loss to net cash used for operating activities: Amortization 15,386 41,459 Changes in assets and liabilities: Prepaid expenses to Alkermes, Inc. 500,000 1,884,000 Interest receivable 1,375 24,320 Accrued expenses (11,466) 26,423 Accrued interest payable -- (256,459) ----------- ----------- Net cash used by operating activities (4,383,233) (6,528,512) ----------- ----------- Cash flows from investing activities: Purchases of short-term investments -- (2,698,191) ----------- ----------- Cash flows from financing activities: Payment of note payable to Alkermes, Inc. -- (4,735,000) Partners' cash capital contributions 2,058,273 10,755,238 ----------- ----------- Net cash provided by financing activities 2,058,273 6,020,238 ----------- ----------- Net decrease in cash and cash equivalents (2,324,960) (3,206,465) Cash and cash equivalents, beginning of period 2,365,478 3,308,800 ----------- ----------- Cash and cash equivalents, end of period $ 40,518 $ 102,335 =========== =========== Noncash Supplemental Disclosure - Write-off of notes receivable from limited partners $ -- $ 184,788 =========== ===========
See notes to financial statements. (5) 6 ALKERMES CLINICAL PARTNERS, L.P. NOTES TO FINANCIAL STATEMENTS ----------------------------- 1. BASIS OF PRESENTATION -------------------- The financial statements for Alkermes Clinical Partners, L.P. (the "Partnership") for the three and nine month periods ended September 30, 1996 and 1995, are unaudited and include all adjustments which, in the opinion of management, are necessary to present fairly the results of operations for the periods then ended. All such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995, which includes financial statements and notes thereto for the years ended December 31, 1995, 1994 and 1993. The results of the Partnership's operations for any interim period are not necessarily indicative of the results of the Partnership's operations for any other interim period or for a full year. 2. PRODUCT DEVELOPMENT AGREEMENT ----------------------------- Alkermes, Inc. has been issued U.S. Patent No. 5,506,206 in April 1996. The patent covers the specific chemical composition of RMP-7[Trademark] and the rights to the patent have been licensed to the Partnership pursuant to a product development agreement. 3. ACCRUED EXPENSES ---------------- Included in accrued expenses at September 30, 1996 are amounts totaling approximately $3,500 which are due to Alkermes, Inc. (6) 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION Alkermes Clinical Partners, L.P. (the "Partnership") was formed on February 7, 1992, and is managed by Alkermes Development Corporation, II (the "General Partner"), a wholly owned subsidiary of Alkermes, Inc. ("Alkermes"). The Partnership was organized to fund the further development and clinical testing of a family of molecules, designated by Alkermes as Receptor-Mediated Permeabilizers[Trademark] ("RMPs[Trademark]"), for human pharmaceutical use in the United States and Canada. RESULTS OF OPERATIONS Revenues The Partnership's sole source of revenue for the three and nine months ended September 30, 1996 and 1995 was the interest earned on the investments made with the capital contributions received from the General Partner and the limited partners of the Partnership (the "Limited Partners") prior to their disbursement to Alkermes for research and development as well as other Partnership expenses. Interest income for the three and nine months ended September 30, 1996 was $329 and $11,287 compared to $90,832 and $236,564 for the corresponding periods of the prior year. Interest income for the three and nine months ended September 30, 1996 as compared to 1995 decreased as a result of the decrease in cash and cash equivalents and short-term investments. The decrease in the cash and cash equivalents and short-term investments of the Partnership are a result of the substantial completion of the annual capital contributions by the Limited Partners and the General Partner in 1995 and the completion of the development funding to Alkermes during the quarter ended June 30, 1996. Expenses Research and development expenses for the three and nine months ended September 30, 1996 were zero and $4,850,000 as compared to $2,698,000 and $8,284,000 for the three and nine months ended September 30, 1995. The decrease in research and development expenses was a result of the completion of the development funding to Alkermes pursuant to the product development agreement between Alkermes and the Partnership (the "Product Development Agreement"). General and administrative expenses for the three and nine months ended September 30, 1996 were $8,136 and $49,815 as compared to $41,369 and $102,153 for the three and nine months ended September 30, 1995. The decrease was mainly a result of a decrease in amortization of organization costs and legal fees. There was no interest expense for the three and nine months ended September 30, 1996 as compared to zero and $98,666 for the three and nine months ended September 30, 1995. The decrease was a result of the repayment in April 1995 of the $4,735,000 note payable to Alkermes. (7) 8 LIQUIDITY AND CAPITAL RESOURCES At September 30, 1996, the Partnership had current assets totaling $40,518, consisting solely of cash; and current liabilities of $14,998. The Partnership's primary source of funding and capital resources has been the annual capital contributions by the Limited Partners and the General Partner. The Limited Partners' capital contributions have been remitted to the Partnership in four annual installment payments, the fourth and final payment of which was due on April 15, 1995. During the six months ended June 30, 1996, the Partnership received approximately $2,058,000 in cash as a result of the purchase by Alkermes of previously defaulted Class A limited partnership units. There will be no additional capital contributions received by the Partnership after the quarter ended June 30, 1996. The Partnership has used its capital resources primarily to fund the further development and clinical testing of RMPs. Such development is being conducted for the Partnership by Alkermes pursuant to the Product Development Agreement. During the six months ended June 30, 1996, the Partnership completed its development funding to Alkermes and incurred expenses totaling $4,850,000 for reimbursable costs incurred by Alkermes. Alkermes anticipates that its clinical testing of RMPs will continue beyond such date. Since none of the Partners of the Partnership are obligated to make any further capital contributions to the Partnership, Alkermes intends to fund the further development of RMPs. The Partnership's remaining cash and equivalents will be used to pay for administrative services for the Partnership. Alkermes is obligated, through the General Partner, to perform administrative services for the Partnership, such as preparing financial statements, tax returns and reports to the Limited Partners. Alkermes intends to continue to cause the General Partner to perform such services at its expense after the Partnership's current assets are depleted, unless it exercises its Purchase Option and thereby acquires all limited partnership interests in the Partnership. The activities performed by Alkermes and the General Partner constitute all of the activities undertaken by or on behalf of the Partnership. After September 30, 1996, the Partnership is expected to have no material assets, liabilities or partners' capital and will have no future liquidity or capital resources requirements other than those funded by Alkermes. (8) 9 ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Exhibits: Number Exhibit ------ ------- 3.1 Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of February 7, 1992.* 3.1(a) Amendment No. 1 to Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of September 29, 1992.* 3.1(b) Amendment No. 2 to Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of March 30, 1993.* 4.1 Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of February 7, 1992.* 4.1(a) Amendment No. 1 to Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of September 29, 1992.* 4.1(b) Amendment No. 2 to Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of March 30, 1993.* 10.1 Product Development Agreement, dated as of March 6, 1992, between the Partnership and Alkermes.* 10.2 Purchase Agreement, dated as of March 6, 1992, by and among Alkermes and each of the Limited Partners, from time to time, of the Partnership.* 11 Statement Regarding Computation of Per Share Loss. 27 Financial Data Schedule. *Incorporated by reference to Exhibits to the Registrant's Registration Statement on Form 10 filed September 13, 1995. (b) The Registrant has not filed any reports on Form 8-K during the quarter ended September 30, 1996. (9) 10 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. ALKERMES CLINICAL PARTNERS, L.P. (Registrant) By its General Partner ALKERMES DEVELOPMENT CORPORATION II Date: November 6, 1996 By: /s/ Richard F. Pops ------------------------------------------ Richard F. Pops Director, President and Chief Executive Officer (Principal Executive Officer) Date: November 6, 1996 By: /s/ Michael J. Landine ------------------------------------------ Michael J. Landine Director, Vice President, Chief Financial Officer, Treasurer and Assistant Secretary (Principal Financial and Accounting Officer) (10) 11 EXHIBIT INDEX ------------- Exhibit Number Description ------- ----------- 3.1 Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of February 7, 1992.* 3.1(a) Amendment No. 1 to Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of September 29, 1992.* 3.1(b) Amendment No. 2 to Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of March 30, 1993.* 4.1 Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of February 7, 1992.* 4.1(a) Amendment No. 1 to Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of September 29, 1992.* 4.1(b) Amendment No. 2 to Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as of March 30, 1993.* 10.1 Product Development Agreement, dated as of March 6, 1992, between the Partnership and Alkermes.* 10.2 Purchase Agreement, dated as of March 6, 1992, by and among Alkermes and each of the Limited Partners, from time to time, of the Partnership.* 11 Statement Regarding Computation of Per Share Loss. 27 Financial Data Schedule. *Incorporated by reference to Exhibits to the Registrant's Registration Statement on Form 10 filed September 13, 1995. (11) EX-11 2 STATEMENT RE COMPUTATION OF NET LOSS 1 EXHIBIT 11 STATEMENT REGARDING COMPUTATION OF NET LOSS PER PARTNERSHIP INTEREST
Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 1996 September 30, 1995 September 30, 1996 September 30, 1995 ------------------ ------------------ ------------------ ------------------ Net loss-Limited Partners $(7,729) $(2,622,052) $(4,839,643) $(8,165,772) ======= =========== =========== =========== Average Class A and B limited partnership interests outstanding 921 921 921 921 ======= =========== =========== =========== Net loss per Class A and B limited partnership interest $ (8) $ (2,847) $ (5,255) $ (8,866) ======= =========== =========== ===========
EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 41 0 0 0 0 41 0 0 41 15 0 0 0 0 26 41 0 11 0 4,850 0 0 0 (4,889) 0 (4,889) 0 0 0 (4,889) (5,255) (5,255)
-----END PRIVACY-ENHANCED MESSAGE-----