-----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, STSWLAiROCZUPlxC4bL5NXOgtgVQCN4AFikIqVzAt64qKUB3OM1fGgOuvZiwNLSR L5jKv8NHB7eBdxmkE9Iklw== 0000950135-96-004723.txt : 19961111 0000950135-96-004723.hdr.sgml : 19961111 ACCESSION NUMBER: 0000950135-96-004723 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961108 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARIAD PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000884731 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 223106987 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21696 FILM NUMBER: 96656493 BUSINESS ADDRESS: STREET 1: 26 LANDSDOWNE ST CITY: CAMBRIDGE STATE: MA ZIP: 02139 BUSINESS PHONE: 6174940400 MAIL ADDRESS: STREET 2: 26 LANDSDOWNE CITY: CAMBRIDGE STATE: MA ZIP: 02139 10-Q 1 ARIAD PHARMACEUTICALS, INC. REPORT ON 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 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: 0-21696 ARIAD PHARMACEUTICALS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 22-3106987 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 26 LANDSDOWNE STREET, CAMBRIDGE, MASSACHUSETTS 02139 (Address of principal executive offices)(Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 494-0400 Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report: Not Applicable 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 --- --- The number of shares of the Registrant's common stock outstanding as of October 14, 1996 was 19,025,579. ================================================================================ 2 ARIAD PHARMACEUTICALS, INC. TABLE OF CONTENTS -----------------
PART I. FINANCIAL INFORMATION Page No. - ----------------------------------- -------- ITEM 1. UNAUDITED FINANCIAL STATEMENTS: Condensed Consolidated Balance Sheets - September 30, 1996 and December 31, 1995 ................................................................... 1 Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 1996 and 1995 .......................... 2 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1996 and 1995 ........................................... 3 Notes to Unaudited Condensed Consolidated Financial Statements .......................... 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ..................................................... 5 PART II. OTHER INFORMATION - ------------------------------- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ........................................... 9 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .............................................................. 9
3 PART I. FINANCIAL INFORMATION ITEM 1. UNAUDITED FINANCIAL STATEMENTS ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
ASSETS SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------ Current assets: Cash and cash equivalents $ 5,143,916 $ 3,750,082 Marketable securities 13,357,618 23,306,152 Prepaid expenses and other 505,600 504,460 ------------ ------------ Total current assets 19,007,134 27,560,694 ------------ ------------ Property and equipment: Leasehold improvements 6,999,689 6,978,006 Equipment and furniture 4,140,714 3,100,507 ------------ ------------ Total 11,140,403 10,078,513 Less accumulated depreciation and amortization 4,381,181 3,365,904 ------------ ------------ Property and equipment, net 6,759,222 6,712,609 ------------ ------------ Licensed technology and patent application costs, net 1,348,587 1,080,823 ------------ ------------ Other assets, net 1,495,263 1,847,604 ------------ ------------ Total $ 28,610,206 $ 37,201,730 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 1,456,643 $ 1,460,695 Accounts payable 870,837 677,918 Accrued liabilities 531,794 760,165 Deferred revenue 3,666,665 3,666,665 ------------ ------------ Total current liabilities 6,525,939 6,565,443 ------------ ------------ Long-term debt 1,187,674 1,540,727 ------------ ------------ Deferred revenue 3,911,114 6,411,113 ------------ ------------ Stockholders' equity: Common stock, $.001 par value; authorized, 60,000,000 shares; issued and outstanding, 19,023,234 shares in 1996 and 18,965,728 shares in 1995 19,023 18,966 Additional paid-in capital 70,555,262 70,428,410 Net unrealized loss on marketable securities (119,276) (113,273) Accumulated deficit (53,469,530) (47,649,656) ------------ ------------ Stockholders' equity 16,985,479 22,684,447 ------------ ------------ Total $ 28,610,206 $ 37,201,730 ============ ============
See notes to unaudited condensed consolidated financial statements. 1 4 ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------------- ------------------------------ 1996 1995 1996 1995 ---------- ---------- ------------ ----------- Revenue: Research revenue $ 2,109,333 $ 265,000 $ 6,260,999 $ 615,000 Interest income 365,215 336,982 1,001,538 1,012,012 ----------- ----------- ----------- ------------ Total revenue 2,474,548 601,982 7,262,537 1,627,012 ----------- ----------- ----------- ------------ Operating expenses: Research and development 3,831,267 3,485,588 11,218,929 10,139,208 General and administrative 459,136 515,153 1,661,452 1,728,076 Interest expense 63,760 76,855 202,030 254,559 ----------- ----------- ----------- ------------ Total operating expenses 4,354,163 4,077,596 13,082,411 12,121,843 ----------- ----------- ----------- ------------ Net loss $(1,879,615) $(3,475,614) $(5,819,874) $(10,494,831) =========== =========== =========== ============ Net loss per share $ (.10) $ (.18) $ (.31) $ (.59) =========== =========== =========== ============ Weighted average number of shares of common stock outstanding 19,006,714 18,952,112 18,990,027 17,642,631
See notes to unaudited condensed consolidated financial statements. 2 5 ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, ---------- ---------- 1996 1995 ---------- ---------- Cash flows from operating activities: Net loss $ (5,819,874) $(10,494,831) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,704,093 1,009,658 Deferred revenue (2,499,999) Stock-based compensation 15,571 Increase (decrease) from: Prepaid expenses and other (1,140) 68,299 Other assets (115,990) (266,492) Accounts payable 192,919 99,392 Accrued liabilities (228,371) 441,113 ------------ ------------ Net cash used in operating activities (6,752,791) (9,142,861) ------------ ------------ Cash flows from investing activities: Acquisitions of marketable securities (13,788,564) (20,103,931) Proceeds from sale and maturities of marketable securities 23,630,820 19,339,235 Investment in property and equipment, net (1,108,360) (179,807) Acquisitions of licensed technology and patents (387,974) (215,111) ------------ ------------ Net cash provided by (used in) investing activities 8,345,922 (1,159,614) ------------ ------------ Cash flows from financing activities: Repayment of borrowings (1,146,691) (1,007,145) Proceeds from sale/leaseback of equipment 836,057 366,950 Proceeds from issuance of common stock, net of issuance costs 7,000,000 Proceeds from exercise of stock options 111,337 89,043 Purchase of warrants (50,000) ------------ ------------ Net cash (used in) provided by financing activities (199,297) 6,398,848 ------------ ------------ Net increase (decrease) in cash and equivalents 1,393,834 (3,903,627) Cash and equivalents, beginning of period 3,750,082 8,074,320 ------------ ------------ Cash and equivalents, end of period $ 5,143,916 $ 4,170,693 ============ ============
See notes to unaudited condensed consolidated financial statements. 3 6 ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Management Statement -------------------- In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of September 30, 1996 and December 31, 1995 and the results of operations for the three-month and nine-month periods ended September 30, 1996 and 1995. Certain reclassifications have been made to the 1995 financial statements to conform with the 1996 presentation. The results of operations for such periods are not necessarily indicative of the results to be expected for the full year. 2. Marketable Securities --------------------- The Company has classified its marketable securities as available for sale and, accordingly, carries such securities at aggregate fair value. At September 30, 1996 and December 31, 1995, the Company's marketable securities consisted of the following:
Aggregate Amortized Gross Unrealized 1996 Fair Value Cost Basis Gains Losses ---- ---------- ---------- ------ ------- U.S. Government obligations $ 3,856,513 $ 3,938,504 $ 225 $ (82,216) Corporate debt securities 9,251,634 9,288,919 4,541 (41,826) Certificate of deposit 249,471 249,471 ----------- ----------- ------- --------- Total $13,357,618 $13,476,894 $ 4,766 $(124,042) =========== =========== ======= ========= 1995 ---- U.S. Government obligations $14,871,417 $14,981,763 $ 2,623 $(112,969) Corporate debt securities 8,185,264 8,188,191 19,376 (22,303) Certificate of deposit 249,471 249,471 ----------- ----------- ------- --------- Total $23,306,152 $23,419,425 $21,999 $(135,272) =========== =========== ======= =========
At September 30, 1996, approximately $9,450,000 of investments in marketable securities had contractual maturities of one year or less, and approximately $177,000 of such investments had periodic contractual maturity dates. Realized gains and losses on sales of marketable securities were not material during the nine months ended September 30, 1996; the net unrealized loss of $119,276 is included in stockholders' equity. 4 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW ARIAD was formed in 1991 to pursue the discovery and development of pharmaceuticals based on an understanding of intracellular signal transduction pathways and their role in disease. ARIAD combines the knowledge of molecular cell biology with an advanced capability in structure-based drug design and combinatorial chemistry in an effort to create a new class of biopharmaceuticals capable of treating a broad range of diseases. ARIAD has focused its drug discovery efforts on two major programs: 1) the development of small-molecule drugs that inhibit critical signal transduction pathways in cells responsible for allergy and asthma, immune-related disorders and osteoporosis; and 2) the development of small-molecule drugs that control signal transduction pathways in genetically engineered cells to provide a means to regulate protein production in gene and cell therapy. RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE THREE MONTHS ENDED SEPTEMBER 30, 1995 Revenues for the quarter ended September 30, 1996 were $2,475,000 compared to $602,000 for the same period in 1995. Revenues are comprised principally of research revenues from the collaborative research and development agreement with Hoechst Marion Roussel ("HMR") (the "HMR Agreement") (see "-- Liquidity and Capital Resources") and government-sponsored research grants and interest income earned on investments of cash equivalents and marketable securities. Research revenues earned in the quarter ended September 30, 1996 increased by $1,844,000 over the corresponding period in 1995 primarily as a result of the HMR Agreement, which commenced in November 1995. Interest income for the current period increased by $28,000 in 1996 over 1995 primarily as a result of higher yields on a lower level of funds invested. Research and development expenses increased by 9.9% to $3,831,000 for the quarter ended September 30, 1996 from $3,486,000 for the same period in 1995 due primarily to increased research activity as a result of the HMR Agreement. The Company expects its research and development expenses to increase moderately as a result of the HMR Agreement. General and administrative expenses decreased by 10.9% to $459,000 for the quarter ended September 30, 1996 from $515,000 for the corresponding period in 1995 primarily due to savings in insurance expense and the timing of legal expenses. The Company incurred interest expense of $64,000 for the quarter ended September 30, 1996 compared to $77,000 for the corresponding period in 1995. The decrease resulted from a lower level of long-term debt during the period. 5 8 The Company incurred losses of $1,880,000 for the quarter ended September 30, 1996 and $3,476,000 for the corresponding period in 1995, or $.10 and $.18 per share, respectively. NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE NINE MONTHS ENDED SEPTEMBER 30, 1995 Revenues for the nine months ended September 30, 1996 were $7,263,000 compared to $1,627,000 for the corresponding period in 1995. Research revenue earned in 1996 increased by $5,646,000 over 1995 primarily as a result of the HMR Agreement, which commenced in November 1995. Interest income for the nine months ended September 30, 1996 decreased by $10,000 over the corresponding period in 1995 primarily as a result of a lower level of funds invested partially offset by higher yields on funds invested. Research and development expenses increased by 10.6% to $11,219,000 for the nine months ended September 30, 1996 from $10,139,000 in 1995, primarily due to increased research activity as a result of the HMR Agreement. General and administrative expenses decreased by 3.9% to $1,661,000 for the nine months ended September 30, 1996 compared to $1,728,000 for the corresponding period in 1995, primarily due to savings in insurance expense. The Company incurred interest expense of $202,000 for the nine months ended September 30, 1996 compared to $255,000 for the corresponding period in 1995. The decrease results from a lower level of long-term debt. The Company incurred losses of $5,820,000 for the nine months ended September 30, 1996 and $10,495,000 for the corresponding period in 1995, or $.31 and $.59 per share, respectively. The Company expects that operating losses will continue for several more years and may increase as its activities expand and may fluctuate as a result of differences in the timing and composition of revenue earned and expenses incurred. 6 9 LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1996, the Company had cash, cash equivalents and marketable securities totaling $18,502,000 and working capital of $12,481,000 compared to cash, cash equivalents and marketable securities totaling $27,056,000 and working capital amounting to $20,995,000 at December 31, 1995. The primary uses of cash during the nine months ended September 30, 1996 were $6,753,000 to finance the Company's operations and working capital requirements, $1,108,000 to purchase equipment, $388,000 to acquire licensed technology and patents and $1,147,000 to repay long-term debt. During the nine months ended September 30, 1996, net proceeds of $836,000 from the sale/leaseback of laboratory equipment and $111,000 from the exercise of stock options were received. The Company has financed its operations and investments in property and equipment primarily through the private placement and public offering of its securities, supplemented by the issuance of long-term debt, sale/leaseback and capital lease transactions, interest income, government-sponsored research grants and, commencing in November 1995, research revenues under the HMR Agreement. In November 1995, the Company entered into an agreement with HMR to collaborate on the discovery and development of drugs to treat osteoporosis and related bone diseases, one of the Company's signal transduction drug discovery programs. Under the HMR Agreement, the Company granted to HMR exclusive rights to develop and commercialize these drugs worldwide. ARIAD has the right, under certain circumstances, to participate in the development and commercialization of these products for certain nonosteoporosis indications in North America. Under the terms of the Agreement, HMR made an initial cash payment to the Company of $10,000,000, will provide research funding in equal quarterly amounts of $1,000,000 up to an aggregate of $20,000,000 over a five-year period and will provide an aggregate of up to $10,000,000 upon the attainment of certain research milestones. In addition, HMR has established a dedicated research group to collaborate with the Company on the discovery of osteoporosis drugs and has agreed to fund all of the preclinical and clinical development costs for products that emerge from the collaboration. The agreement further provides for the payment of royalties to the Company based on product sales. HMR may elect to terminate the Agreement and further payment obligations after three years if certain scientific milestones have not been achieved, whereupon all rights would revert back to the Company. Revenue recognized under the Agreement amounted to $1,833,000 and $5,500,000 for the three months and nine months ended September 30, 1996, respectively. From its inception and through September 30, 1996, the Company has invested an aggregate of $17,797,000 in property and equipment, including $7,000,000 in leasehold improvements and $10,797,000 in laboratory equipment and furniture. An aggregate of $6,553,000 of equipment and furniture was sold in the four years prior to 1996 pursuant to sale/leaseback transactions under its lease credit facilities. These lease agreements, which are classified as operating leases for financial reporting purposes, have terms ranging from three to four years. 7 10 Pursuant to a commitment from its principal equipment lessor, the Company has $1,000,000 of additional lease credit available through 1996. In 1995, the Company arranged a $2,000,000 capital lease line with its principal bank under which it may finance, over a four-year period, the purchase of equipment. The Company placed equipment with an acquisition cost of $836,000 and $598,000 under this agreement in 1996 and 1995, respectively. The capital lease obligations are payable in monthly installments of $33,772. The agreements under which these lease obligations and other long-term debt were issued contain certain restrictive covenants that limit the amount of additional indebtedness, capital spending and stock redemption; prohibit dividend distributions; and require the Company to maintain certain minimum levels of net worth, working capital and liquid assets. The Company will require substantial additional funding for its research and product development programs, for operating expenses, for the pursuit of regulatory clearances and for building manufacturing, sales and marketing capabilities. Adequate funds for these purposes, whether obtained through financial markets or collaborative or other arrangements with corporate partners, or from other sources, may not be available when needed or on terms acceptable to the Company. The Company believes that its available cash and existing sources of funding will be adequate to satisfy its capital and operating requirements through mid-1998. However, there can be no assurance that changes in the Company's research and development plans or other events affecting the Company's operating expenses will not result in the Company depleting its funds before that time. SECURITIES LITIGATION REFORM ACT Safe harbor statement under the Private Securities Litigation Reform Act of 1995: Except for the historical information contained in this Quarterly Report on Form 10-Q, the matters discussed herein are forward-looking statements that involve risks and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices, and other factors discussed under the heading "Cautionary Statement Regarding Forward-Looking Statements" in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission. 8 11 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the quarter ended September 30, 1996. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.24 Amendment dated June 3, 1996 to Agreement dated as of January 1, 1994 between the Board of Trustees of the Leland Stanford Junior University and ARIAD Gene Therapeutics, Inc.* (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the quarter ended September 30, 1996. -------------------- * Confidential treatment has been requested from the Securities and Exchange Commission. 9 12 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. ARIAD Pharmaceuticals, Inc. (Registrant) By: /s/ Jay R. LaMarche --------------------------------------- Jay R. LaMarche Senior Vice President, Finance and Chief Financial Officer (Duly authorized Officer and Principal Financial Officer) Date: November 8, 1996 10 EX-10.24 2 AMENDMENT TO AGREEMENT WITH TRUSTEES OF LSJU 1 EXHIBIT 10.24 ARIAD PHARMACEUTICALS, INC. HAS OMITTED FROM THIS EXHIBIT 10.24 PORTIONS OF THE AGREEMENT FOR WHICH IT HAS REQUESTED CONFIDENTIAL TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED "[ ]" AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. July 3, 1996 Director Office of Technology Licensing Stanford University 90 Welch Road, Suite 350 Palo Alto, California 94304-1850 Dear Ms. Ku: Reference is made to the Agreement effective as of January 1, 1994 between the Board of Trustees of the Leland Stanford Junior University ("STANFORD") and ARIAD Gene Therapeutics, Inc. ("AGT") (the "License Agreement") relating to certain inventions by Drs. Crabtree and Schreiber (Stanford Docket 92-147). This letter will set forth our understanding regarding an amendment to the provisions of the License Agreement dealing with the granting of sublicenses thereunder. Terms which are defined in the License Agreement are used herein as so defined. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. The provisions of Paragraph 14.6 of the License Agreement shall not apply to sublicenses entered into by AGT on or before [ ]. The provisions of Paragraph 6.6 of the Licensed Agreement shall not apply to any sublicense of the type described in Paragraph 14.6 of the License Agreement (as amended by Paragraph 2 hereof) (hereinafter called "Paragraph 14.6 Sublicenses") granted by AGT on or before [ ]. 2. The following provisions shall apply, in lieu of Paragraphs 6.6 and 14.6 of the License Agreement, to any Paragraph 14.6 Sublicenses granted by AGT on or before [ ]: 14.6. (a) If AGT grants sublicense(s) other than sublicense(s) covered in Paragraph 14.5 above, in the fields of human and veterinary healthcare or genetically engineered animals, under STANFORD's rights in the Licensed Patent(s), then AGT shall pay to STANFORD: 2 Director, Office of Technology Licensing July 3, 1996 Page 2 [ ] . (b) If AGT grants sublicense(s) other than sublicense(s) covered in Paragraph 14.5 above, in the fields of Research Reagents or genetically engineered plants, under STANFORD's rights in the Licensed Patent(s), then AGT shall pay to STANFORD: [ ] . (c) Notwithstanding the foregoing, in no event will LICENSORS be paid less than [ ] of the Net Sales of AGT's sublicensees. (d) For the avoidance of doubt, it is acknowledged and agreed that payments for [ ]. 3 Director, Office of Technology Licensing July 3, 1996 Page 3 3. Notwithstanding any other provision of the License Agreement (as amended hereby), including, without limitation, Paragraph 6.5 thereof, the royalty payable to STANFORD with respect to Net Sales by AGT or by a sublicensee of AGT of a Licensed Product [ ]. 4. On or before [ ], the parties will meet to discuss in good faith whether the provisions set forth in Paragraphs 1 and 2 hereof shall be [ ]. 5. In all other respects, the License Agreement shall remain in full force and effect and shall not be modified hereby. If the foregoing accurately sets forth our understanding, please so signify by signing a duplicate copy of this letter and returning to the undersigned, whereupon it will take effect as an amendment to the License Agreement in accordance with Paragraph 19.3 thereof. Sincerely yours, ARIAD GENE THERAPEUTICS, INC. By: /s/ Harvey J. Berger ------------------------------------ Chairman and Chief Executive Officer ACCEPTED AND AGREED: THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY By: /s/ Katharine Ku ------------------------------ Director, Technology Licensing EX-27 3 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1996 SEP-30-1996 5,143,916 13,357,618 0 0 0 19,007,134 11,140,403 4,381,181 28,610,206 6,525,939 0 19,023 0 0 16,966,456 28,610,206 0 7,262,537 0 0 12,880,381 0 202,030 (5,819,874) 0 0 0 0 0 (5,819,874) (.31) (.31)
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