-----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, OjldQptah+nB3dJSxncS3E/SxUa81jwCZD3rPnR+rG67d2uFqRauWZPW8UGMkzKs d1O9m4liFN29P5sXZyR+WQ== 0000950135-97-002325.txt : 19970514 0000950135-97-002325.hdr.sgml : 19970514 ACCESSION NUMBER: 0000950135-97-002325 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 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: 97601568 BUSINESS ADDRESS: STREET 1: 64 SIDNEY ST CITY: CAMBRIDGE STATE: MA ZIP: 02139 BUSINESS PHONE: 6174940171 10-Q 1 ALKERMES CLINICAL PARTNERS, L.P. 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 March 31, 1997 [ ] 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 -March 31, 1997 and December 31, 1996 Statements of Operations 4 -Three months ended March 31, 1997 and 1996 Statements of Cash Flows 5 -Three months ended March 31, 1997 and 1996 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 Reports 9 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)
March 31, December 31, 1997 1996 --------- ------------ A S S E T S Current Assets: Cash and cash equivalents $19,625 $32,804 ------- ------- Total current assets 19,625 32,804 ------- ------- Total Assets $19,625 $32,804 ======= ======= 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 $16,994 $28,272 ------- ------- Total current liabilities 16,994 28,272 ------- ------- Partners' capital 2,631 4,532 ------- ------- Total Liabilities and Partners' Capital $19,625 $32,804 ======= =======
See notes to financial statements. (3) 4 ALKERMES CLINICAL PARTNERS, L.P. (A LIMITED PARTNERHIP) STATEMENTS OF OPERATIONS (Unaudited)
Three Months Three Months Ended Ended March 31, March 31, 1997 1996 ------- ----------- Revenue Interest income $ 155 $ 9,884 ------- ----------- Expenses: Research and development -- 3,400,000 General and administrative 2,056 24,825 ------- ----------- 2,056 3,424,825 ------- ----------- Net loss $(1,901) $(3,414,941) ======= =========== Net Loss Per Class A and B Unit $ 0 $ (3,671) ======= =========== Average Units Outstanding 921 921 ======= ===========
See notes to financial statements. (4) 5 ALKERMES CLINICAL PARTNERS, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Three Months Ended Ended March 31, March 31, 1997 1996 ----------- ----------- Cash flows from operating activities: Net loss $ (1,901) $(3,414,941) Adjustment to reconcile net loss to net cash used for operating activities: Amortization -- 13,819 Changes in assets and liabilities: Prepaid expenses to Alkermes, Inc. -- 500,000 Interest receivable -- (908) Accrued expenses (11,278) 6,846 -------- ----------- Net cash used for operating activities (13,179) (2,895,184) -------- ----------- Cash flows from investing activities: Purchases of short-term investments -- (1,407,337) -------- ----------- Cash flows from financing activities: Partners' cash capital contributions -- 2,011,958 -------- ----------- Net decrease in cash and cash equivalents (13,179) (2,290,563) Cash and cash equivalents, beginning of period 32,804 2,365,478 ======== =========== Cash and cash equivalents, end of period $ 19,625 $ 74,915 ======== ===========
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 month periods ended March 31, 1997 and 1996, 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, 1996, which includes financial statements and notes thereto for the years ended December 31, 1996, 1995 and 1994. 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. NET LOSS PER CLASS A AND B LIMITED PARTNERSHIP INTEREST ------------------------------------------------------- Net loss per Class A and B limited partnership interest is calculated with the net loss attributable only to the limited partners of the partnership (each, a "Limited Partner" and collectively, the "Limited Partners") and excludes the loss attributable to the General Partner. There was no loss attributable to the Limited Partners for the three months ended March 31, 1997. In March 1997, the Financial Accounting Standards Board released Statement of Financial Accounting Standards No. 128 ("SFAS No.128"), "Earnings per Share," which the Partnership will adopt in the fourth quarter of 1997. The adoption of SFAS No. 128 is not expected to have any impact on the Partnership's financial statements because the Partnership does not have, nor is expected to have, any common stock equivalents. 3. ACCRUED EXPENSES ---------------- Included in accrued expenses at March 31, 1997 are amounts totaling approximately $2,600 which are due to Alkermes, Inc. 4. COMPLETION OF SCHEDULED FUNDING ------------------------------- 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. Since the completion of funding to Alkermes and because none of the Partners of the Partnership are obligated to make any further capital contributions to the Partnership, Alkermes has used its own resources, and intends to continue to use its own resources, to develop RMP-7. Alkermes is also obligated, through the General Partner, to perform administrative services for the Partnership, such as preparing financial statements, tax returns and reports to Partners. Alkermes intends to continue to cause the General Partners 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 the interests in the Partnership. The services performed by Alkermes and the General Partner constitutes all of the activities undertaken by or on behalf of the Partnership. After March 31, 1997, the Partnership is expected to have no significant assets, liabilities or partners' capital and will have no future liquidity or capital resources requirements other than those funded by Alkermes. (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 its general partner, 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(TM) ("RMPs(TM)"), for human pharmaceutical use in the United States and Canada. RESULTS OF OPERATIONS Revenues The Partnership's sole source of revenue for the three months ended March 31, 1997 and 1996 was the interest earned on the investments made with the capital contributions made by the General Partner and the limited partners of the Partnership (the "Limited Partners") prior to their disbursement to Alkermes for research and development and/or other Partnership expenses. Interest income for the three months ended March 31, 1997 was $155 compared to $9,884 for the corresponding period of the prior year. Interest income for the three months ended March 31, 1997 as compared to 1996 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 payment of the development funding to Alkermes which was completed during the quarter ended June 30, 1996. Expenses Research and development expenses for the three months ended March 31, 1997 were zero as compared to $3,400,000 for the three months ended March 31, 1996. 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 months ended March 31, 1997 were $2,056 as compared to $24,825 for the three months ended March 31, 1996. The decrease was mainly a result of a decrease in amortization of organization costs, accountant fees and the cost of reports to the Limited Partners. (7) 8 LIQUIDITY AND CAPITAL RESOURCES At March 31, 1997, the Partnership had current assets totaling $19,625, consisting solely of cash; and current liabilities of $16,994. 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 $2,052,000 in cash as a result of the purchase by Alkermes of previously defaulted Class A limited partnership units. There have been and 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. The research and development funding to Alkermes ended during the quarter ended June 30, 1996. Such funding was not sufficient for Alkermes to complete clinical trials and seek regulatory approval of RMP-7. Because none of the Partners of the Partnership is obligated to make any further capital contributions to the Partnership, Alkermes has used its own resources, and intends to continue to use its own resources to develop RMP-7. Alkermes is required to fund the development of RMP-7 to maintain its Purchase Option with the Partnership. The Partnership's remaining cash and cash 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 March 31, 1997, the Partnership is expected to have no significant 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 March 31, 1997. A report on Form 8-K dated March 31, 1997 was filed by the Registrant on April 3, 1997. (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: May 13, 1997 By: /s/ Richard F. Pops ------------------------------------- Richard F. Pops Director, President and Chief Executive Officer (Principal Executive Officer) Date: May 13, 1997 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 PER SHARE EARNINGS 1 EXHIBIT 11 STATEMENT REGARDING COMPUTATION OF PER SHARE LOSS
Three Months Three Months Ended Ended March 31, 1997 March 31, 1996 -------------- -------------- Net loss-Limited Partners $ (0) $(3,380,792) ==== =========== Average Class A and B units outstanding 921 921 ==== =========== Net loss per Class A and B unit $ 0 $ (3,671) ==== ===========
EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 20 0 0 0 0 20 0 0 20 17 0 0 0 0 3 20 0 0 0 2 0 0 0 (2) 0 (2) 0 0 0 (2) 0 0
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