-----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, QjueU/MAz/q+ZNYjAuOYKZ9Rxt4lthM5JGY7eS4iNYDG4M5s2vzyS9JxXPkUSAFq saypbXL9EIlaEEwQ1kzxBw== 0001047469-98-020008.txt : 19980515 0001047469-98-020008.hdr.sgml : 19980515 ACCESSION NUMBER: 0001047469-98-020008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORVAS INTERNATIONAL INC CENTRAL INDEX KEY: 0000882100 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 330238812 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19732 FILM NUMBER: 98619565 BUSINESS ADDRESS: STREET 1: 3030 SCIENCE PARK RD CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194559800 MAIL ADDRESS: STREET 2: 3030 SCIENCE PARK ROAD CITY: SAN DIEGO STATE: CA ZIP: 92121 10-Q 1 FORM 10-Q FORM 1O-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 0-19732 CORVAS INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) DELAWARE 33-0238812 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 3030 SCIENCE PARK ROAD SAN DIEGO, CALIFORNIA 92121 (Address of principal executive offices and zip code) (619) 455-9800 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value (Title of class) Indicate by check mark whether the Registrant (l) 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 --- --- At May 1, 1998, there were 14,039,493 shares of Common Stock, $0.001 par value, of the Registrant issued and outstanding. CORVAS INTERNATIONAL, INC. INDEX
Page PART I FINANCIAL INFORMATION Item 1 Financial Statements Condensed Balance Sheets as of March 31, 1998 and December 31, 1997 1 Condensed Statements of Operations for the Three Months Ended March 31, 1998 and 1997 2 Condensed Statements of Cash Flows for the Three Months Ended March 31, 1998 and 1997 3 Notes to Condensed Financial Statements 4 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 5 Item 3 Quantitative and Qualitative Disclosures About Market Risk 8 PART II OTHER INFORMATION Item 1 Legal Proceedings 9 Item 2 Changes in Securities 9 None Item 3 Defaults Upon Senior Securities 9 None Item 4 Submission of Matters to a Vote of Security Holders 9 None Item 5 Other Information 9 None Item 6 Exhibits and Reports on Form 8-K (a) Exhibits 9 (b) Reports on Form 8-K 9 None SIGNATURES 10
PART I -- FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS CORVAS INTERNATIONAL, INC. CONDENSED BALANCE SHEETS (In thousands)
March 31, 1998 December 31, 1997 -------------- ----------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,441 $ 2,044 Short-term debt securities held to maturity and time deposits, partially restricted 21,292 24,076 Receivables 1,102 289 Notes receivable from related parties 153 153 Other current assets 499 340 -------- -------- Total current assets 24,487 26,902 Property and equipment, net 1,560 1,312 -------- -------- $ 26,047 $ 28,214 -------- -------- -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 435 $ 299 Accrued expenses 827 623 Accrued vacation 226 191 Deferred revenue 3,263 4,656 -------- -------- Total current liabilities 4,751 5,769 -------- -------- Stockholders' equity: Preferred stock - Series A 1 1 Preferred stock - Series B 0 0 Common stock 14 14 Additional paid-in capital 92,347 92,179 Accumulated deficit (71,066) (69,749) -------- -------- Total stockholders' equity 21,296 22,445 Commitments and contingencies -------- -------- $ 26,047 $ 28,214 -------- -------- -------- --------
See accompanying notes to condensed financial statements. 1 CORVAS INTERNATIONAL, INC. CONDENSED STATEMENTS OF OPERATIONS In thousands, except per share amounts (unaudited)
Three Months Ended March 31, ------------------------ 1998 1997 REVENUES: Revenue from collaborative agreements $ 1,746 $ 1,075 License fees and milestones 1,000 3,850 Net product sales 34 10 Royalties 43 36 ------- ------- Total revenues 2,823 4,971 ------- ------- COSTS AND EXPENSES: Research and development 3,584 2,349 General and administrative 866 848 Cost of products sold 17 4 ------- ------- Total costs and expenses 4,467 3,201 ------- ------- Income (loss) from operations (1,644) 1,770 ------- ------- OTHER INCOME: Interest income, net 322 388 Other income 5 0 ------- ------- 327 388 ------- ------- Net income (loss) $(1,317) $ 2,158 ------- ------- ------- ------- Basic net income (loss) per share $ (0.09) $ 0.15 ------- ------- ------- ------- Shares used in calculation of basic net income (loss) per share 13,972 14,147 ------- ------- ------- ------- Diluted net income (loss) per share $ (0.09) $ 0.14 ------- ------- ------- ------- Shares used in calculation of diluted net income (loss) per share 13,972 15,397 ------- ------- ------- -------
See accompanying notes to condensed financial statements. 2 CORVAS INTERNATIONAL, INC. CONDENSED STATEMENTS OF CASH FLOWS IN THOUSANDS (UNAUDITED)
Three Months Ended March 31, ------------------------ 1998 1997 Cash flows from operating activities: Net income (loss) $ (1,317) $ 2,158 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 151 157 Amortization of premiums and discounts on investments (260) (159) Stock compensation expense 25 0 Change in assets and liabilities: Increase in receivables (813) (774) Increase in other current assets (159) (564) Increase in accounts payable, accrued expenses and accrued vacation 375 63 Decrease in deferred revenue (1,393) (1,000) -------- -------- Net cash used in operating activities (3,391) (119) Cash flows from investing activities: Purchases of investments held to maturity (13,251) (22,677) Proceeds from maturity of investments held to maturity 16,295 20,985 Purchases of property and equipment (480) (173) Proceeds from sale of property and equipment 81 0 -------- -------- Net cash provided by (used in) investing activities 2,645 (1,865) -------- -------- Cash flows from financing activities: Principal payments under capital lease obligation 0 (20) Net proceeds from issuance of common stock 143 195 -------- -------- Net cash provided by financing activities 143 175 -------- -------- Net decrease in cash and cash equivalents (603) (1,809) Cash and cash equivalents at beginning of period 2,044 2,202 -------- -------- Cash and cash equivalents at end of period $ 1,441 $ 393 -------- -------- -------- --------
See accompanying notes to condensed financial statements. 3 CORVAS INTERNATIONAL, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (1) THE COMPANY Corvas International, Inc. (the "Company") was incorporated on March 27, 1987 under the laws of the State of California. In July 1993, the Company reincorporated in the State of Delaware. The Company is engaged in the design and development of a new generation of therapeutic agents in the fields of blood clot formation (thrombosis), inflammation, cancer and other diseases. (2) BASIS OF PRESENTATION The interim financial information contained herein is unaudited but, in management's opinion, includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 1997. Results for the interim periods are not necessarily indicative of results for other interim periods or for the full year. (3) NET INCOME (LOSS) PER SHARE Pursuant to Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"), financial statements for periods ending after December 15, 1997 must reflect basic and diluted income (loss) per share as defined. Accordingly, basic income (loss) has been computed based upon the weighted average common stock outstanding during the period and diluted income (loss) per share has been computed based upon the weighted average number of shares outstanding during the period plus the dilutive effects of common stock equivalents. Common stock equivalents have been calculated under the treasury stock method and are not included in the per share calculations where the effect of their inclusion would be anti-dilutive. Basic and diluted income (loss) per share have been calculated as follows in thousands:
For the three months ended For the three months ended March 31, 1998 March 31, 1997 -------------------------------------- ------------------------------------- Weighted Weighted Earnings Average Shares Per Share Earnings Average Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------- -------------- --------- ----------- -------------- --------- Basic Income (Loss) Per Share: Net Income (Loss) $(1,317) 13,972 $(0.09) $2,158 14,147 $0.15 Effect of Dilutive Securities 0 1,250 Diluted Income (Loss) Per Share: Net Income (Loss) available to common stockholders plus ------- ------ ------ ------ ------ ----- common stock equivalents $(1,317) 13,972 $(0.09) $2,158 15,397 $0.14 ------- ------ ------ ------ ------ ----- ------- ------ ------ ------ ------ -----
(4) COMPREHENSIVE INCOME As of January 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130 established standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. The adoption of SFAS 130 did not have a significant impact since the Company's net income/(loss) approximates comprehensive income/(loss) for the three month periods ended March 31, 1998 and 1997. 4 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K. OVERVIEW Formed in 1987, Corvas International, Inc. (the "Company") is a biopharmaceutical firm engaged in the design and development of a new generation of therapeutic agents in the fields of blood clot formation (thrombosis), inflammation, cancer and other diseases. To date, the Company has not generated significant revenues from product sales. The Company has not been profitable on an annual basis since inception and expects to incur substantial additional operating losses on an annual basis over the next several years as the Company expands its research and development programs. There is no assurance that the Company will successfully develop, commercialize, manufacture or market its products or generate sufficient revenues to become profitable on a sustained basis or at all. At March 31, 1998, the Company had an accumulated deficit of $71,066,000. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1998 AND 1997 Operating revenues decreased from $4,971,000 for the three months ended March 31, 1997 to $2,823,000 in the corresponding period of 1998. This $2,148,000 decrease was primarily due to a $2,850,000 decrease in license fees and milestones, which was partially offset by a $671,000 increase in revenue from collaborative agreements. In the first quarter of 1998, revenue from collaborative agreements consisted of (i) $1,000,000 attributable to the Company's strategic alliance agreement with Schering Corporation ("Schering-Plough") to collaborate on the discovery and commercialization of orally active inhibitors of coagulation Factor Xa, (ii) $394,000 related to a separate agreement with Schering-Plough regarding the design and development of oral inhibitors of a key protease necessary for hepatitis C virus replication, (iii) $240,000 recognized pursuant to a research and development agreement with Vascular Genomics Inc. ("VGI") covering a novel vascular targeting technology, and (iv) $112,000 attributable to the Company's license and development agreement with Pfizer Inc. ("Pfizer") to collaborate on the development of neutrophil inhibitory factor ("NIF"). The first quarter of 1998 also included license fees and milestones of $1,000,000, as a result of a milestone achieved upon Pfizer's commencement of a Phase I clinical trial of NIF. The remaining revenues in the first quarter of 1998 of $77,000 were attributable to royalties and product sales. The Company discontinued its manufacturing operations, and expects to complete the previously-disclosed transaction with Ortho-Clinical Diagnostics Inc. ("Ortho"), a Johnson & Johnson company, in 1998. Revenue from collaborative agreements in the first quarter of 1997 included (i) $1,000,000 attributable to the Schering-Plough collaboration regarding inhibitors of coagulation Factor Xa and (ii) $75,000 recognized pursuant to the NIF collaboration with Pfizer. License fees and milestones in the first quarter of 1997 consisted of (i) a $3,000,000 milestone achieved upon selection of a clinical development compound in the Company's strategic alliance agreement with Schering-Plough to develop orally active thrombin inhibitors and (ii) $850,000 pursuant to the Pfizer collaboration. 5 Total costs and expenses incurred in the first quarter increased from $3,201,000 in 1997 to $4,467,000 in 1998. This $1,266,000 increase is primarily due to increased research and development expenditures. The majority of this increase relates to the manufacture of clinical supplies for NAP5 and the Company's conduct of clinical studies of NAPc2. General and administrative expenditures increased only slightly comparing the first quarters of 1997 and 1998. Total other income decreased from $388,000 in the first quarter of 1997 to $327,000 in the same period one year later. Decreased cash balances available for investment caused interest income to decrease by $66,000. Subject to the availability of additional capital, the Company expects its expenses to increase over the next several years as the Company's research and development programs progress. The Company also expect both its expenses and losses to fluctuate from quarter to quarter and that such fluctuations may, at times, be substantial. LIQUIDITY AND CAPITAL RESOURCES Since inception, the Company's operations have been funded primarily through public offerings and private placements of equity securities, revenues and milestones from collaborative agreements, license fees and research grants, and interest income earned on cash and investment balances. The Company's principal sources of liquidity are its cash and cash equivalents, time deposits and debt securities which, net of a restricted time deposit, totaled $22,673,000 as of March 31, 1998. Working capital at March 31, 1998 was $19,736,000. Available cash is invested in accordance with an investment policy set by the Board of Directors, which has the objectives to preserve principal, maintain adequate liquidity and maximize income. The policy provides guidelines concerning the quality, term and liquidity of investments. The Company presently invests its excess cash in interest-bearing, investment-grade securities. Net cash used in operations was $3,391,000 in the three months ended March 31, 1998, compared to $119,000 for the same period one year earlier. This was due to increased cash usage and a decrease in operating revenues in 1998, mainly as a result of a $3,000,000 milestone payment received from Schering-Plough in the first quarter of 1997. In the three months ended March 31, 1998, net cash of $2,645,000 was provided by investing activities, compared to net cash of $1,865,000 used in investing activities in the corresponding quarter of 1997. This was attributable to the usage of investment maturities to fund ongoing operations in 1998. Net cash provided by financing activities decreased slightly from $175,000 in the first quarter of 1997 to $143,000 in the first quarter of 1998. This was attributable to the exercise of fewer stock options in this quarter of 1998 compared to 1997. The Company expects to incur substantial additional costs in the foreseeable future, including costs related to clinical and preclinical studies and expanding its research and development activities. The Company expects such costs to continue to increase and, as a result, expects to experience substantial additional operating losses and negative cash flows from operations over the next several years. In particular, increased costs are anticipated as the clinical development of NAPc2 continues, including a Phase II trial planned to commence in the second half of 1998. The Company believes its existing capital resources and interest earned thereon should be sufficient to satisfy its anticipated funding requirements for at least the next 12 months. In addition, the Company may also receive additional funds through milestone payments and royalties on sales of products in connection with its alliances. However, there is no assurance that the Company will receive any additional amounts under existing or any future alliances. 6 Strategic collaborations with Schering-Plough and Pfizer provide for payments to the Company if and when certain milestones are met. However, there is no assurance that any future milestones will be achieved. In the quarter ended March 31, 1998, Pfizer commenced a clinical trial for NIF which triggered a $1,000,000 milestone payment. The next milestone in the collaboration with Schering-Plough covering thrombin inhibitors is $1,000,000 to be paid upon filing by Schering-Plough of an Investigational New Drug Application ("IND"), or its foreign equivalent, for initiating clinical trials in the U.S. or in any corresponding foreign jurisdiction. In the Company's collaboration with Schering-Plough covering inhibitors of the hepatitis C virus, the next milestone is a $500,000 payment upon identification of an initial lead compound in this program. In addition to these milestones, the Company may also receive additional milestone payments and royalties on sales of products in connection with its existing alliances, as well as from any future alliances. If all of the milestones on all of the Company's existing collaborations are met, Corvas could receive up to a total of $97,050,000 in future milestone payments and research and development funding over the next several years. However, there is no assurance that the Company will achieve any such milestones or receive any such amounts under these or any future alliances. In June 1997, the Company entered into an option agreement to acquire all of the outstanding stock of VGI, a vascular targeting company. If this option is exercised prior to its termination on June 30, 2000, the acquisition will be made with newly-issued Corvas Common Stock or, in certain circumstances at the option of the Company, a combination of cash and 633,600 shares of Common Stock. The aggregate acquisition price, which is based on the timing of option exercise, ranges from a minimum of $14,352,000 as of March 31, 1998 to a maximum of $19,960,000. If this option is exercised, the Company expects a noncash charge to earnings for in-process research and development. If Corvas elects not to exercise its option, VGI may require the Company to purchase 19.9% of its outstanding stock for $3,960,000 in Corvas Common Stock. During the option period, Corvas will make monthly option payments of approximately $83,000 to VGI. In addition, under a research and development agreement, VGI is required to make monthly payments of $80,000 to Corvas to be applied to research and development covering the VGI technology. Although the net impact of these payments is not material, the Company may incur substantial additional costs to develop this technology. Corvas may enter into one or more collaborative relationships to develop and commercialize this technology. However, there is no assurance that the Company will be able to establish such relationships on satisfactory terms, that such relationships will successfully reduce the costs associated with research and development of this technology, that the option will be exercised, or that this technology will prove to be effective. Future capital requirements of the Company will depend on many factors, including, but not limited to, the following: continued scientific progress in its drug discovery programs; the magnitude of these programs; the progress of preclinical testing and clinical trials; the costs involved in obtaining regulatory approvals; the costs involved in filing, prosecuting, maintaining and enforcing patent claims; competing technological and market developments; changes in its existing research relationships; the ability of the Company to establish and to maintain collaborative or licensing arrangements; the cost of manufacturing scale-up; and the effectiveness of activities and arrangements to commercialize existing and potential products. The Company leases its laboratory and office facilities under an operating lease and anticipates that it will need to expand its facilities over the next several years. 7 To continue its long-term product development efforts, the Company must raise substantial additional funds through public or private sales of securities, collaborative arrangements or other methods of financing. The Company's ability to raise additional funds through such sales of securities depends in part on investors' perceptions of the biotechnology industry, in general, and of the Company, in particular. The market for biotechnology company stocks has historically been highly volatile and, accordingly, there is no assurance that additional funding will be available, or, if available, that it will be available on acceptable terms. If additional funds are raised by issuing securities, further dilution to stockholders will likely result. The Company may enter into additional collaborative relationships to develop and commercialize certain of its current or future technologies or products. There is no assurance that the Company will be able to establish such relationships on satisfactory terms, if at all, or that agreements with collaborators will successfully reduce the Company's funding requirements. In addition, the Company has not attempted to establish bank financing arrangements, and there is no assurance that it would be able to establish such arrangements on satisfactory terms, if at all. If adequate funds are not available, the Company may be required to significantly delay, scale back or discontinue one or more of its drug discovery programs or other aspects of its operations, or obtain funds through arrangements with collaborative partners or others that may require the Company to relinquish rights to certain of its technologies, product candidates or products that the Company would not otherwise relinquish or at prices below that at which the Company would otherwise choose to relinquish such rights. In 1993, the U.S. Patent and Trademark Office (the "USPTO") declared an interference to determine the priority of invention between a patent for which some rights are licensed to the Company (the "Licensed Patent") and a patent application for which rights are held by other parties (the "First Patent Application"). In 1996, the USPTO added a second patent application to the proceeding (the "Second Patent Application") and redeclared the interference. Rights to the Second Patent Application are held by other parties, at least some of which also hold rights in the First Patent Application. The subject matter of the patent and these applications is recombinant tissue factor, which is used by Ortho to determine the blood clotting abilities of patients. The Company is contesting the other parties' claims of prior invention; however, there can be no assurance that the Licensed Patent will be upheld. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable 8 PART II -- OTHER INFORMATION Item 1. LEGAL PROCEEDINGS In 1993, the U.S. Patent and Trademark Office (the "USPTO") declared an interference to determine the priority of invention between a patent for which some rights are licensed to the Company (the "Licensed Patent") and a patent application for which rights are held by other parties (the "First Patent Application"). In 1996, the USPTO added a second patent application to the proceeding (the "Second Patent Application") and redeclared the interference. Rights to the Second Patent Application are held by other parties, at least some of which also hold rights in the First Patent Application. The subject matter of the patent and these applications is recombinant tissue factor, which is used by Ortho-Clinical Diagnostics Inc. ("Ortho"), a Johnson & Johnson company, to determine the blood clotting abilities of patients. The Company is contesting the other parties' claims of prior invention; however, there can be no assurance that the Licensed Patent will be upheld. Item 2. CHANGES IN SECURITIES None Item 3. DEFAULTS UPON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Item 5. OTHER INFORMATION None Item 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits
Exhibit Number Description -------------- ----------- 10.63 Letter of Agreement between the Company and Schering Corporation and Schering-Plough Ltd., dated as of April 27, 1998. 10.64 Eleventh Amendment to Lease, dated as of April 23, 1998. 27.1 Financial Data Schedule
b. Reports on Form 8-K There were no reports on Form 8-K filed for the quarter ended March 31, 1998. 9 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. CORVAS INTERNATIONAL, INC. Date: May 12, 1998 By: /s/ RANDALL E. WOODS ------------------------------------ Randall E. Woods President and Chief Executive Officer Date: May 12, 1998 By: /s/ CAROLYN M. FELZER ------------------------------------ Carolyn M. Felzer Senior Director of Finance Principal Financial Officer 10 EX-10.63 2 EXHIBIT 10.63 LETTER AGRMT/CO & SCHERING CORP EXHIBIT 10.63 [LETTERHEAD OF SCHERING CORPORATION] April 16, 1998 Mr. Randall E. Woods President and Chief Executive Officer Corvas International, Inc. 3030 Science Park Road San Diego, California 92121 ***Text Omitted and Filed Separately Confidential Treatment Requested Under 17 C.F.R. section 200.80 (b)(4), 200.83 and 200.24b-2 cc: Jonathan Spicehandler, M.D. Cecil B. Pickett, Ph.D. Ashit K. Ganguly, Ph.D. Corporate Secretary, Corvas International Brian C. Cunnigham, Esq., Cooley Godward LLP RE: HCV Research Program Dear Mr. Woods: This is in reference to the License and Collaboration Agreement by and between Corvas International, Inc. (hereinafter "Corvas") and Schering Corporation and Schering-Plough Ltd. (hereinafter collectively called "Schering"), effective as of June 11, 1997, including the Exhibits thereto (the "Agreement"). This Letter of Agreement serves to set forth the terms under which the parties have agreed to extend the Research Program Term for an additional period of one (1) year (the "Extension Year"), to expire two (2) years from the Effective Date of the Agreement. In accordance with Section 2.3 of the Agreement, the Research Committee has agreed that Schering will provide research funding to support [***] FTEs at the rate of [***] per FTE during the Extension Year. The total of Schering's research funding obligation under the Agreement during the Extension Year is therefore [***], which obligation shall be equally apportioned between Schering Corporation and Schering-Plough Ltd., and shall be payable in four quarterly installments due on the first business day of each calendar quarter during the Extension Year (i.e., on July 1, 1998, October 1, 1998, January 1, 1999, and April 1, 1999). *** CONFIDENTIAL TREATMENT REQUESTED Mr. Randall E. Woods April 16, 1998 Except as expressly amended and supplemented hereby, all other terms of the Agreement shall remain in full force and effect. We at Schering look forward to continued success in our collaborative research efforts under the Agreement. Please indicate your acceptance and agreement to the provisions set forth in this Letter of Agreement by signing below on behalf of Corvas and returning one signed original to Schering. Very truly yours, Schering Corporation Schering-Plough Ltd. /s/ DAVID POORVIN, PH.D. /s/ DAVID POORVIN, PH.D. ------------------------ ------------------------ David Poorvin, Ph.D. David Poorvin, Ph.D. Vice President Prokurist Acknowledged and Agreed to Corvas International, Inc. By: /s/ RANDALL E. WOODS ---------------------- Date: April 27, 1998 EX-10.64 3 EXHIBIT 10.64 ELEVENTH AMEND TO LEASE EXHIBIT 10.64 ELEVENTH AMENDMENT TO LEASE This Eleventh Amendment to that certain Lease (this "Eleventh Amendment") dated as of the 23 day of April, 1998, between HUB PROPERTIES TRUST, a Maryland real estate investment trust ("LANDLORD") and Corvas International, Inc., a Delaware corporation ("TENANT"). WHEREAS, Hartford Accident and Indemnity Company (the "ORIGINAL LANDLORD") and Corvas, Inc. (the "ORIGINAL TENANT) entered into a certain lease dated March 28, 1989 of a portion of the premises located at 3030 Science Park Road, San Diego, California, as amended by certain Lease Amendments dated March 23, 1990 and May 18, 1990; and WHEREAS, Corvas International, Inc., a California corporation ("CORVAS") succeeded to the interests of Original Tenant as set forth in Consent to Assignment of Lease dated March 13 1991; and WHEREAS, Original Landlord and Corvas entered into a Third Lease Amendment dated May 16, 1991; Fourth Lease Amendment dated January 21, 1992; Fifth Lease Amendment dated April 15, 1992; Sixth Lease Amendment dated July 16, 1992; and Seventh Lease Amendment dated January 18, 1993; and WHEREAS, Tenant succeeded to the interests of Corvas as set forth in Consent to Assignment of Lease dated September 14, 1993; and WHEREAS, Talcott Realty I Limited Partnership succeeded to the interests of Original Landlord; and WHEREAS, Talcott and Tenant entered into an Eighth Lease Amendment dated July 7, 1995 and a Ninth Lease Amendment dated March 15, 1996; and WHEREAS, Landlord succeeded to the interests of Talcott as set forth in Assignment and Assumption of Leases, Contracts and Other Property Interests dated December 5, 1996; and WHEREAS, Landlord and Tenant entered into a Tenth Amendment to Lease dated May 12, 1997; and WHEREAS, for purposes of this Eleventh Amendment, the above-referenced lease dated March 28, 1989 as amended on March 23, 1990; May 18, 1990; May 16, 1991; January 21, 1992; April 15, 1992; July 16, 1992; January 18, 1993; July 7, 1995; March 15, 1996 and May 12, 1997 shall be hereinafter defined collectively as "the LEASE"; and WHEREAS, Tenant wishes to exercise its final option to extend the term of the Lease and Landlord is willing to agree to such extension upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing and for other consideration, the receipt and sufficiency of which are hereby mutually acknowledged, Landlord and Tenant agree that the Lease is hereby amended as follows: 1. The definition of "TERMINATION DATE" as set forth in Section II.E. of the Lease shall be amended by deleting the date "September 30, 1998" therefrom and inserting the date of "September 30, 1999" in its place. 2. The definition of "BASE RENT" as set forth in Section II.G of the Lease shall be amended by inserting the following at the end thereof: "10/01/98-09/30/99, $1,005,934.48." 3. The definition of "MONTHLY INSTALLMENTS OF BASE RENT" set forth in Section II.H. of the Lease shall be amended by inserting the following at the end thereof: "10/01/98-09/30/99, $83,827.87." 4. Section II.F is hereby deleted in its entirety. 5. Section II.W.a. (a) of the Lease shall be amended by inserting the following at the end thereof: "10/01/98-09/30/99, $33.34." 6. Tenant warrants and represents that it has dealt with no broker in connection with the execution of this Eleventh Amendment and agrees to indemnify Landlord and hold it harmless from and against any and all brokerage claims arising therefrom. 7. Except as herein specifically amended, this Lease is hereby ratified and confirmed. IN WITNESS WHEREOF, the parties have hereto executed this Eleventh Amendment the date first above-written. LANDLORD: HUB PROPERTIES TRUST, a Maryland real estate investment trust By: /s/ DAVID J. HEGARTY ------------------------------- Name: David J. Hegarty Its: President TENANT: CORVAS INTERNATIONAL, INC., a Delaware corporation By: /s/ RANDALL E. WOODS ------------------------------- Name: Randall E. Woods Its: President & CEO EX-27 4 EXHIBIT 27 FDS
5 1,000 3-MOS DEC-31-1998 MAR-31-1998 1,441 21,292 1,255 0 47 24,487 5,011 3,451 26,047 4,751 0 0 1 14 21,281 26,047 34 2,823 17 4,467 0 0 0 (1,317) 0 (1,317) 0 0 0 (1,317) (.09) (.09)
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