ITEM 2. PROPERTIES
The Company operates a laboratory facility in Alameda, California. This facility houses the research and development staff and laboratories of the Company. The Company has occupied this facility since March 1987 and believes that it is well maintained and generally adequate for the Company's present needs and intended uses. The facility is located in a building of approximately 40,000 square feet at 850 Marina Village Parkway, Alameda, California 94501. The facility is leased through February 2007, at an approximate annual rent of $633,000. In addition, on July 1, 1994 the Company leased approximately 16,000 square feet of office space for the corporate headquarters and administrative staff at 950 Marina Village Parkway and on March 1, 1994 leased 26,000 square feet of shell space at 2060 Challenger Drive, Alameda for a prospective manufacturing site which has been subleased for the balance of the lease. The approximate annual rents are $237,000 and $425,000, respectively, through February 2004. The Company has a one-time option to terminate these leases after five years. On January 25, 1996 the Company leased approximately 13,000 square feet for an animal facility at 2061 Challenger Drive, Alameda through February 2007 at an approximate annual rent of $197,000. Office space at 1301 Marina Village Parkway, consisting of 13,000 square feet, leased at an approximate annual rent of $211,000 until September 1993 and $277,000 per year thereafter through November 1997 has been subleased for the remainder of the lease.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
(a) No material legal proceedings to which Somatix was a party or of which any of its property was the subject were pending during fiscal 1996.
(b) No material legal proceedings were terminated in the fourth quarter of fiscal 1996.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
No matters were submitted to a vote of the Company's stockholders during the last quarter of the fiscal year ended June 30, 1996.
18. PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Shares of the Company's common stock commenced trading in the over-the-counter market on the Nasdaq National Market on June 5, 1986, under the symbol "HANA". On March 15, 1991, as a result of the Merger of Hana and Somatix and the subsequent name change to Somatix Therapy Corporation, the trading symbol was changed to "SOMA". As of June 30, 1996, there were approximately 961 holders of record of the Company's common stock.
The Company has never paid cash dividends on its common stock and does not anticipate paying cash dividends on its common stock in the foreseeable future. See Note 3 to Financial Statements.
The following table sets forth, for fiscal periods indicated, the range of high and low closing sale prices available for the fiscal years 1996 and 1995.
19. ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Consolidated Statements of Operations Data:
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview In February 1995, the Company completed the acquisition of Merlin Pharmaceutical Corporation ("Merlin") a privately held gene therapy company, pursuant to a stock transaction whereby a subsidiary of the
20. Company was merged into Merlin. As a result of the Merlin acquisition, the Company wrote-off to operations an amount equal to $13.7 million in fiscal year 1995. With the exception of fiscal year 1990, when the Company sold its cell biology and diagnostic product line, the Company has been unprofitable since its inception and expects to continue to incur operating losses in future periods due to continued requirements for product development, clinical trials, regulatory activities and other areas. As of June 30, 1996, the Company had an accumulated deficit of $170.2 million.
Results of Operations There were no revenues for the fiscal year ending June 30, 1996 compared to $250,000 in fiscal year 1995. Revenues in fiscal year 1994 were $2,900,000. Revenue in fiscal year 1995 was derived from a research agreement with Baxter Healthcare Corporation. In fiscal year 1994, revenues were derived from research and licensing agreements with Baxter Healthcare Corporation and a private group of investors.
On June 29, 1995, the Company completed a restructuring and cost savings program separating its research and development infrastructure into two groups. The development group will focus on clinical trials and product development and the research group will focus on gene transfer technologies for various medical applications. As a result of the restructuring, the Company recorded in fiscal year 1995 a restructuring charge of $2,752,000, consisting principally of employee severance pay, the accrual of future rent obligations including the write-off of leasehold improvements, and the write-down of certain assets.
Research and development expenses decreased by $886,000 in fiscal year 1996 and increased by $5,209,000 in fiscal year 1995. The decrease in research and development expenses in fiscal year 1996 was primarily due to restructuring and cost saving programs. The increase in research and development expenses in fiscal year 1995 was primarily due to increased staffing, recruitment costs, patent legal services, technology license fees, supplies, and research contracts to meet the requirements of increased preclinical and clinical activities in progress. The Company expects research and development expenses to increase in future periods as the Company's preclinical and clinical activities progress.
General and administrative expenditures decreased $664,000 in fiscal year 1996 and increased $804,000 in fiscal year 1995. The increase in fiscal year 1995 was primarily due to the write-off of $741,000 of future rent expenses and leasehold improvements associated with the former corporate headquarters which the Company is currently marketing for sublease. The Company expects general and administrative expenses to increase in future periods due to expanded research and development efforts.
Other income consists principally of interest income earned on the Company's cash balances. Changes in other income are due to fluctuations in cash balances available for investment and returns on cash invested in recent periods.
Liquidity and Capital Resources On June 30, 1996, the Company had cash, cash equivalents, and marketable securities of $15,036,000 compared with $14,576,000 on June 30, 1995. Subsequent to June 30, 1996, the Company received $5 million in cash from a private placement of convertible preferred stock (see Note 9 to the Consolidated Financial Statements). Operating expenses have exceeded revenues every fiscal year, except 1990, since the Company's inception. For the year ending June 30, 1996, capital expenditures were $1,207,000. The Company expects its cash requirements and net losses to increase significantly in future periods due to higher research and development costs, the cost of Phase III clinical trials due to start December 31, 1996 and other expenses. The Company has no material capital commitments.
The Company anticipates that its existing cash will be sufficient to meet its cash requirements for at least the next 12 months. The Company has financed its operations since inception principally through the sale of equity securities, contract research revenues, license fees and interest income. The Company's future capital requirements will depend on many factors, including the progress of the Company's research and development, the scope and results of preclinical studies and clinical trials, the cost of obtaining regulatory approvals, the rate of technological
21. advances, determinations as to the commercial potential of the Company's products under development, the status of competitive products and the establishment of manufacturing capacity. The Company anticipates that it will be required to raise substantial additional funds, including funds raised through collaborative relationships and public or private financings. Because of the Company's significant operating and capital requirements, it may be required to seek additional financings. It may also seek to access the public equity markets whenever conditions are favorable, even if it does not have an immediate need for additional capital at that time. No assurance can be given that additional financing will be available on acceptable terms, or at all. If adequate funds are not available, the Company will be required to curtail significantly its research and development programs or may be required to discontinue its programs in their entirety and liquidate its assets.
ITEM 8.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
All financial statement schedules of the registrant for the years ended June 30, 1996, 1995, and 1994 have been omitted since the information is not required or is not so material as to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto.
22. REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders Somatix Therapy Corporation
We have audited the accompanying consolidated balance sheets of Somatix Therapy Corporation as of June 30, 1996 and 1995, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Somatix Therapy Corporation at June 30, 1996 and 1995, and the consolidated results of its operations and its cash flows for each of the three years in the period ended June 30, 1996, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Walnut Creek, California July 25, 1996 except for Note 9, as to which the date is September 25, 1996
23. SOMATIX THERAPY CORPORATION CONSOLIDATED BALANCE SHEETS
See accompanying notes.
24. SOMATIX THERAPY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
See accompanying notes.
25. SOMATIX THERAPY CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended June 30, 1996, 1995 and 1994
See accompanying notes.
26.
See accompanying notes
27.
SOMATIX THERAPY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
See accompanying notes.
28.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
NOTE 1. The Company and its Significant Accounting Policies
Company and Basis of Presentation. Somatix Therapy Corporation ("Somatix" or the "Company") is a leader in the emerging field of gene therapy. Somatix is applying its gene therapy expertise to research and develop therapies to treat a variety of diseases. The Company is the result of three transactions. The first transaction, which was consummated in March 1991, combined Somatix Corporation and Hana Biologics, Inc. The second transaction occurred in January 1992, when the Company acquired GeneSys Therapeutics Corporation. The third transaction occurred in February 1995, when the Company acquired Merlin Pharmaceutical Corporation (see Note 2). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
The Company anticipates that it will be required to raise substantial additional funds, including funds raised through collaborative relationships and public or private financings. Because of the Company's significant operating and capital requirements, it may be required to seek additional financings. It may also seek to access the public equity markets whenever conditions are favorable, even if it does not have an immediate need for additional capital at that time. No assurance can be given that additional financing will be available on acceptable terms, or at all. If adequate funds are not available, the Company will be required to curtail significantly its research and development programs or may be required to discontinue its programs in their entirety and liquidate its assets.
Cash and Cash Equivalents. At June 30, 1996, cash equivalents consist of government securities totaling $4,600,000 and short-term corporate debt securities totaling $1,500,000 with maturities at the date of acquisition of three months or less. Cash equivalents are stated at cost which approximates fair value.
Revenue Recognition. License revenue is recorded as revenue when all contractual obligations have been met. Research revenue is recorded when earned as defined under the term of the respective agreements. Payments received which are related to future performance are deferred and recognized as income when earned.
Use of Estimates. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Marketable Securities. At June 30, 1996, current marketable securities consist of government securities totaling $6,698,000 and corporate debt securities totaling $1,040,000 having maturities between three months and one year. Non-current marketable securities consist of government securities having maturities greater than one year. Marketable securities are stated at cost which approximates fair value and the unrealized gains and losses at June 30, 1996 are not significant.
In May 1993, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("SFAS 115"). The Company adopted the provisions of the new standard for investments held as of or acquired after July 1, 1994. In accordance with SFAS 115, prior period financial statements have not been restated to reflect the change in accounting principle. The Company has classified its entire investment portfolio as held-to-maturity. There is no impact of adopting SFAS 115 on results of operations or financial position because the difference between cost and fair value was not significant.
29.
In accordance with SFAS 115, debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in investment income. Interest on securities classified as held-to-maturity is included in investment income.
It is the Company's policy to invest funds not required for current operations in financial instruments with strong credit ratings. The Company has not experienced significant losses to date on these investments.
Equipment and Improvements. Depreciation of equipment and furniture is provided over estimated useful lives of three to ten years using the straight-line method. Assets under capital leases are amortized by the straight-line method over their useful lives of three to five years. Leasehold improvements are amortized over the remaining lives of the applicable leases.
Retirement Plan. On January 1, 1993, the Company established a defined contribution plan which covers all employees 21 years and older. The Company's contributions to the plan are at the discretion of the Company's Board of Directors. Amounts contributed to the plan for the years ended June 30, 1996, 1995, and 1994 were $74,000, $61,000 and $46,000, respectively.
Stock-Based Compensation. The Company accounts for its stock option plan in accordance with the provisions of the Accounting Principles Board's Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees". In 1995, the Financial Accounting Standards Board released the Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation". SFAS 123 provides an alternative method of accounting for stock-based compensation to APB 25 and is effective for the fiscal years beginning after December 15, 1995. The Company expects to continue to account for its stock-based compensation in accordance with the provision of APB 25. Accordingly, SFAS 123 is not expected to have any material impact on the Company's financial position or results of operations. The Company will make the proforma disclosures required by FAS 123 in fiscal year 1997.
Income Taxes. The liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Per Share Information. Per share information is based on the weighted average number of common shares outstanding during each period. Shares issuable upon the exercise of stock options and warrants and the conversion of preferred stock are not included since their inclusion would be anti-dilutive. In addition, the paid in kind dividends on the preferred stock are excluded as their impact would also be anti-dilutive.
NOTE 2. Acquisition of Merlin Pharmaceutical Corporation
On February 13, 1995, the Company completed its acquisition (the "Acquisition") of Merlin Pharmaceutical Corporation ("Merlin"), a privately-held gene therapy company. The Company issued 2,257,385 shares of common stock in exchange for all of the outstanding capital stock of Merlin and assumed options and warrants to purchase an aggregate of 743,371 shares of the Company's common stock at exercise prices between $0.01 and $1.94 per share.
The transaction was accounted for as a purchase and the consideration issued by the Company was allocated to the tangible assets and intangible in-process technology acquired based on their estimated fair values on the Acquisition date. The aggregate purchase price of $13,702,000 consisted of (in thousands):
30. Fair value of common stock issued $ 9,144 Fair value of warrants and options assumed 3,110 Acquisition costs 900 Liabilities assumed 548 ------- Total purchase price $13,702 =======
The aggregate purchase price exceeded the fair value of Merlin's tangible assets by $13,679,000. This amount was allocated to acquired in-process technology and charged to operations in fiscal year 1995. The allocation of the aggregate purchase price was as follows (in thousands):
Current assets $ 23 In-process technology 13,679 ------ $13,702 =======
NOTE 3. Stockholders' Equity
T-body Technology Research and Development Agreement
On April 29, 1994, the Company signed collaborative research and equity purchase agreements with Baxter Healthcare Corporation ("Baxter") to jointly research, develop and commercialize T-body technology for the treatment of cancer. Under the terms of the agreements, the Company and Baxter will be responsible for their own research expenditures. In fiscal year 1994, the Company received a non-refundable technology license fee of $400,000, as well as $1,600,000 for the sale of 232,558 shares of common stock to Baxter at $6.88/share. Baxter agreed to purchase $1,000,000 in common stock at the then-market price along with making a milestone payment of $1,000,000 after the first patient has been treated in a phase I clinical trial. Before initiating phase III clinical trials, the companies will have the opportunity to form a joint venture to complete clinical development and commercialization of this technology. The funding supported by each party at that time will determine the ownership of the joint venture; provided, however, that each party can supplement its funding contributions so that the total amount funded by each party equals at least 30 percent and up to 50 percent of the total expenditures under the program.
Colorectal Cancer Treatment Research and Development Agreement
On May 12, 1994, the Company signed an agreement with a private group of investors (the "Investors") to develop the Company's GVAX(TM) cancer vaccine technology for the treatment of colorectal cancer. Under the terms of the agreement, the Company received $500,000 to fund preclinical research and $1,500,000 for the sale of 230,769 shares of common stock to the Investors, at $6.50 per share. These initial research funds have been used to finance staffing, overhead, and supply costs associated with the Company's preclinical development of the GVAX(TM) cancer vaccine for colorectal cancer. Upon filing an IND, the Investors have agreed to provide an additional $2,500,000 consisting of research funding of $1,250,000 and $1,250,000 from the sale of additional shares of common stock at the then-current market price. In exchange for funding the program, the Investors will receive royalty payments of 2% of net sales of the colorectal product, although such payments are to be terminated when the Investors have received aggregate payments of $1,750,000, therefore recovering research funding under the agreement.
Bristol-Myers Squibb Equity Investment
On August 14, 1995, the Company entered into an agreement with Bristol-Myers Squibb to evaluate possible areas for collaboration in gene therapy and the Company received an initial equity investment of $10 million for 1,195,572 shares of common stock or $8.36 per share. Upon obtaining protocol clearance from the Food and
31. Drug Administration (FDA) for a Phase III clinical trial for GVAX(TM) cancer vaccine in April 1996, the Company received a second equity investment of $10 million for 1,107,649 shares of common stock or $9.03 per share. In addition, Bristol-Myers Squibb received one board of directors seat. The agreement also allows Bristol-Myers Squibb a five year right of first offer with regard to collaborations with the Company in any of its internally initiated oncology programs.
Other Benefit or Bonus Plans
1992 Stock Option Plan. Under the 1992 Stock Option Plan, 3,200,000 shares have been authorized for the grant to employees of either non-qualified or incentive stock options and the grant to consultants of non-qualified options. Incentive stock options are to be granted with exercise prices not less than the fair market value of common stock at the date of grant and non-qualified options at not less than 85% of fair market value. Options are exercisable as determined by the Board of Directors, and the Company may be granted the right to repurchase shares acquired in diminishing amounts over varying periods of time (none through June 30, 1996). The following table summarizes the activity under the Plan for the years ended June 30, 1996, 1995, and 1994:
Of the options outstanding at June 30, 1996, options to purchase 1,355,596 shares were exercisable at prices from $2.44 to $18.72; 101,561 would be subject to repurchase rights if exercised, and 1,021,184 were unvested and unexercisable.
Other Option Plans. As a result of the mergers and acquisitions described in Note 1 and 2, the Company adopted additional option plans. At June 30, 1996, options to purchase 479,436 shares were outstanding with an exercise price ranging from $0.0116 to $14.04 per share. All shares are exercisable; 9,375 are subject to repurchase rights.
32. Stock Option Cancellation/Regrant
On December 14, 1994, the Compensation Committee of the Board of Directors approved a stock option cancellation/regrant program for employees with stock option exercise prices in excess of the then current fair value of the Company's common stock, or $3.00 per share. The holders of such options were offered new options with an exercise price of $3.00 per share in exchange for the cancellation of the old options.
Private Placement of Common and Preferred Stock
On June 29, 1995 the Company closed a private placement of units of common and preferred stock in the aggregate amount of $16,543,000, before issuance costs of $1,476,000. The financing consisted of $10,100,000 in common stock units of the Company ("Common Stock Units"; 2,769,892 shares) and $6,400,000 in preferred stock units of the Company ("Preferred Stock Units"; 254,000 shares).
The Common Stock Units were priced at $3.68, and consisted of one share of the Company's common stock ("Common Stock") and a warrant to purchase 0.56 of a share of Common Stock. The Preferred Stock Units were priced at $25.00, and consisted of one share of the Company's convertible preferred stock (the "Preferred Stock"), convertible to 6.25 shares of Common Stock at $4.00 per share, and warrants for 3.5 shares of Common Stock. In both cases the warrants have exercise prices of $4.00 per share and have three year terms.
The Preferred Stock terms include a paid-in-kind dividend paid quarterly until converted to common stock at the rate of 7% per year, a liquidation preference of $25.00 per share, extraordinary voting rights in the event the Company's net cash position, as defined, falls below $5,000,000, and a conversion price reset provision. Under the reset provision, thirteen months after closing, the conversion price may be reset to the lower of the current conversion price or the twenty day average closing price of the Common Stock in the thirteenth month. The conversion price after reset may not be less than $2.00 per share. Purchasers of the Preferred Stock Units have agreed to certain trading restrictions during this measurement period. The Preferred Stock will automatically convert to Common Stock at any time after two and one-half years after closing if the Common Stock trades at a 100% premium to the then-applicable conversion price.
Outstanding Warrants
As of June 30, 1996 and 1995, the Company had outstanding warrants to purchase 2,290,781 and 3,099,168 shares of common stock, respectively, at prices ranging from $0.01 to $7.25 per share. The outstanding warrants resulted from the private placement of preferred and common stock during fiscal year 1995 and the sale/leaseback agreements entered into during fiscal year 1994 (see Note 6). The warrants became exercisable in 1995 and expire at various dates through 1999. At June 30, 1996 and 1995, 2,290,781 and 3,099,168 shares of common stock respectively, were reserved for that purpose.
Shares Reserved
At June 30, 1996 and 1995, common stock was reserved for the following reasons:
1996 1995 ---------- ------- Exercise of stock warrants 2,290,781 3,099,168 Conversion of preferred stock 1,498,820 1,587,500 Stock option plans 3,200,355 3,525,021 --------- --------- 6,989,956 8,211,689 ========= =========
33.
NOTE 4. Joint Research and Development Agreement
On November 2, 1993, Baxter and the Company signed an agreement to jointly research and develop a gene therapy approach for the treatment of hemophilia. Under the terms of the agreement, the Company received a non-refundable technology license fee of $2,000,000 in fiscal year 1994. The agreement grants Baxter worldwide marketing rights to products developed.
As a part of this relationship, Baxter and the Company will collaborate in areas of research and manufacturing and Baxter will make certain milestone payments to the Company. Baxter will conduct clinical trials and market the product worldwide. The Company will receive royalties on product sales. The Company has also agreed to provide Baxter with a right of first negotiations for certain other approaches for the treatment of hemophilias A and B.
NOTE 5. Income Taxes
Significant components of the Company's deferred tax assets (in thousands) are as follows at June 30, 1996 and 1995:
1996 1995 ---------- -------
Net operating loss carryforward $ 37,000,000 $ 29,400,000 Research and development credit carryforward 4,600,000 4,600,000 Capitalized research and development 2,900,000 2,100,000 Restructuring costs 500,000 800,000 ------------ ------------ Gross deferred tax assets 45,000,000 36,900,000 Valuation allowance (45,000,000) (36,900,000) ------------ ------------ Net deferred tax asset $ 0 $ 0 ------------ ------------
The valuation allowance increased $8,100,000 and $9,200,000 in the fiscal years 1996 and 1995, respectively.
At June 30, 1996 the Company has net operating loss carryforwards for federal and state income tax purposes of approximately $103,000,000 and $32,000,000, respectively, which expire in the years 1996 through 2010. The Company has federal tax credit carryforwards of approximately $3,700,000 which will expire in the years 1996 through 2010.
Because of "change in ownership" provisions of the Tax Reform Act of 1986, a portion of the Company's net operating loss carryforwards and tax credits will be subject to an annual limitation regarding their utilization against taxable income in future periods.
NOTE 6. Commitments
The Company leases certain laboratory, production, and office equipment under capital leases, and all office and laboratory space under operating leases. The operating lease agreements generally require the Company to pay operating costs including property taxes, insurance and maintenance.
34. Future minimum lease payments under capital and operating leases at June 30, 1996 are as follows:
Capital Operating Leases Leases ------- ---------
1997 $1,109,000 $1,678,000 1998 1,037,000 1,517,000 1999 271,000 1,214,000 2000 86,000 780,000 2001 -- 803,000 Thereafter -- 5,017,000 ----------- ------------ Total minimum lease payments $2,503,000 $11,009,000 =========== Less amount representing interest 425,000 ---------- Present value of minimum lease payments 2,078,000 Less current portion 861,000 ---------- Long-term portion $1,217,000 ==========
At June 30, 1996, the Company has certificates of deposit totaling $650,000 which secure obligations under certain operating leases.
Rent expense was $1,033,000, $1,438,000, and $1,051,000 for fiscal years 1996, 1995, and 1994, respectively. At June 30, 1996, the net book value of equipment under capital leases is $1,307,000 ($1,683,000 in 1995). Certain other facilities are sub-leased under a non-cancelable lease for terms substantially identical to the original lease.
In May 1994, the Company entered into a $2,000,000 sale/leaseback transaction for equipment used in the Company's operations. The Company's resulting gain of $358,000 has been recorded on the accompanying balance sheets as an offset to equipment under capital leases and is being amortized over the lease term. The lessor also received warrants, exercisable until May 24, 1999, to purchase 25,000 shares of the Company's common stock at an exercise price of $7.00 per share.
In June 1994, the Company entered into a $2,000,000 lease line for equipment used in the Company's operations and such line expires December 31, 1996. As of June 30, 1996, the Company had borrowed a total of $1,490,000 under this line in the form of sale/leaseback transactions. The lessor also received warrants that became exercisable in fiscal year 1995. Such warrants expire on December 31, 1999, and grant the lessor the right to purchase 19,310 shares of the Company's common stock at an exercise price equal to the lesser of $7.25 per share or the closing sales price per share of the Company's common stock as listed on the NASDAQ National Market on the date the warrants become exercisable, but in no event less than $6.00 per share.
NOTE 7. Other Income
Other income is comprised of the following:
Year ended June 30 --------------------------------------- 1996 1995 1994 --------- --------- --------- Interest income $ 863,000 $ 525,000 $ 731,000 Interest expense (309,000) (300,000) (132,000) Other income (expense), net 302,000 (3,000) (125,000) --------- --------- --------- $ 856,000 $ 222,000 $ 474,000 ========= ========= =========
35.
NOTE 8. Restructuring Costs
In June 1995, the Company initiated certain changes in the structure of its research and development efforts. These changes included a selective reduction in the Company's overall research, clinical and administrative work force. Accordingly, the Company recorded restructuring costs of $2,752,000 in the fourth quarter of fiscal year 1995, which included employee severance costs for 20 employees, totaling $314,000, of which $176,000 was paid during 1995. Restructuring costs also included the write-down of certain assets to net realizable value and the accrual of future rent obligations on vacated buildings and other such future costs related to the restructuring. As of June 30, 1996, the remaining accrued costs amounted to $1,248,000 which relate to future rent obligations.
NOTE 9. Subsequent Events
On September 25, 1996, the Company sold 33,333 shares of convertible Series B-1 preferred stock ("Preferred Stock") in a private placement pursuant to Regulation S under the Securities Act of 1933, as amended, for an aggregate consideration of $5,000,000 in cash. In addition, the Company has the right to sell up to $10,000,000 in additional shares of Preferred Stock during the three (3) year period ending September 25, 1999. No more than $5,000,000 may be sold during any given six month period. The Preferred Stock is not entitled to dividends and is convertible into common stock at a premium over an average of the market price of the Company's Common Stock on the earlier of (i) the investor's option, (ii) immediately following any sixty (60) day trading period after March 1997 in which the Company's common stock has traded above 130% of the closing price of the common stock on September 24, 1996, or (iii) September 25, 1999. The Company also issued to the investor a warrant to purchase 650,000 shares of the Company's common stock at a price equal to 130% of the closing price of the Company's common stock on September 24, 1996. Such warrant is exercisable between March 1998 and September 2002.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
36.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 with respect to the identification of Directors is hereby incorporated by reference from the information under the caption "Proposal One - Election of Directors" in the Company's Proxy Statement for its Annual Meeting of Stockholders to be held on November 21, 1996 (the "Proxy Statement").
The information required by Section 16(a) is hereby incorporated by reference from the information under the caption "Compliance with Section 16(a) of the Securities Exchange Act of 1934" in the Proxy Statement.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to the executive officers of the Company:
- ------------------
(1) Dr. Mulligan resigned from the Company effective as of November 30 1995.
(2) Mr. Bagnall resigned from the Company effective as of August 15, 1996.
Mr. Carter has been President and Chief Executive Officer of the Company since September 1991, and has served as a director of the Company since 1988. In September 1994, Mr. Carter was appointed Chairman of the Board of Directors of the Company. From 1986 until joining Somatix in 1991, he was President and Chief Operating Officer of Northfield Laboratories, a company developing an artificial blood product. Mr. Carter is a member of the Board of Directors of Northfield Laboratories.
Mr. Lanphier joined the Company in July 1992 as Executive Vice President, Commercial Development. Since August 15, 1996, Mr. Lanphier has also served as the Company's Chief Financial Officer. From December 1991 to July 1992, he was Senior Vice President of Business Development and Marketing at Celtrix Pharmaceuticals, Inc., a pharmaceutical company. From 1988 to 1991 he was President and Chief Executive Officer of BioGrowth, Inc., a pharmaceutical company. Mr. Lanphier previously has held positions with Biotherapeutics, Inc., Synergen, Inc. and Eli Lilly & Company.
37.
In November 1995, Dr. Richard Mulligan resigned his position as Director and Executive Vice President, Research and Chief Scientific Officer to accept a position as a Howard Hughes Professor at Harvard University. Dr. Mulligan, a founder and a director of Somatix Corporation from its formation in January 1988 to November 1995, is currently a consultant to Somatix and chairman of the Scientific Advisory Board. He will remain active on the Company's Scientific Advisory Board.
Dr. Drayer joined Somatix in March 1995. From 1990 to March, 1995, he served as Senior Vice President of Scientific Affairs at G.H. Besselaar, a leading clinical research organization, where he worked closely with Somatix in the areas of clinical development and regulatory affairs. Dr. Drayer was also with Boeringer Ingelheim as Director of Clinical Research. He sits on the editorial boards of several clinical development journals.
Mr. Bagnall resigned as Vice President, Finance, and Chief Financial Officer of Somatix in August 1996, a position he had held since July 1992. From September 1990 to July 1992, Mr. Bagnall served as Treasurer and Secretary after joining the Company as the Controller in May 1988. Mr. Bagnall remained secretary of the Company until his resignation in 1996. Prior to joining the Company, Mr. Bagnall held positions in high technology companies as well as with Arthur Young and Company. Mr. Bagnall is a certified public accountant.
Officers are appointed to serve, at the discretion of the board of directors, until their successors are appointed. There are no family relationships among any of the executive officers of the Company.
EMPLOYEES
As of June 30, 1996, the Company employed 110 individuals full-time, of whom 16 hold Ph.D. degrees, and 8 hold M.D. degrees. Of these employees, 41 were engaged in research, 52 in gene therapy development, and 17 in finance and administration. None of the Company's employees is represented by a labor union or is the subject of a collective bargaining agreement. The Company has never experienced a work stoppage and believes that it maintains good relations with its employees.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is hereby incorporated by reference from the information under the captions "Proposal One - Election of Directors", "Summary of Cash and Certain Other Compensation", "Stock Options" and "Option Holdings" in the Proxy Statement.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is hereby incorporated by reference from the information under the caption "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated by reference from the information under the caption "Certain Relationships and Related Transactions" in the Proxy Statement.
38. PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
See Index to Financial Statements under Item 8.
2. Financial Statement Schedules
All financial statement schedules of the registrant for the years ended June 30, 1996, 1995, and 1994 have been omitted since the information is not required or is not so material as to require submission of the schedule, or because the information requested is included in the consolidated financial statements or the notes thereto.
(b) Reports on Form 8-K
None
(c) Exhibits
The following documents are referenced or included in this report.
Exhibit No. - -------
3.1 1 Amended and Restated Certificate of Incorporation effective May 16, 1986. Reference Exhibit 3.1.
3.2 1 Certificates of Determination. Reference Exhibit 3.2.
3.3 2 Bylaws. Reference Exhibit 3.3.
3.4 8 Certificate of Amendment of Certificate of Incorporation effective January 22, 1987. Reference Exhibit 3.2.
3.5 8 Certificate of Amendment of Restated Certificate of Incorporation effective March 15, 1991. Reference Exhibit 3.4.
3.6 8 Certificate of Amendment of Restated Certificate of Incorporation effective January 17, 1992. Reference Exhibit 3.5.
3.7 8 Certificate of Designation of Preferences of Preferred Shares effective December 12, 1988. Reference Exhibit 3.3
3.8 15 Certificate of Amendment of Restated Certificate of Incorporation effective December 16, 1993.
3.9 19 Amended and Restated Certificate of Incorporation effective November 29, 1994. Reference Exhibit 3.1.
3.10 22 Certificate of Designation of Preferences of Preferred Shares effective June 27, 1995. Reference Exhibit 3.3.
3.11 Certificate of Designation of Preferences of Series B-1 Preferred Stock effective September 23, 1996.
3.12 19 Bylaws, as amended and restated September 29, 1994. Reference Exhibit 3.2.
3.13 23 Bylaws, as amended and restated September 14, 1995. Reference Exhibit 3.3.
10.1 2 Lease Agreement dated June 16, 1986, between Hana Biologics, Inc. and Alameda Marina Village Associates. Reference Exhibit 10.37.
10.2 3 1988 Directors Stock Option Plan. Reference Exhibit 10.67.
10.3 4 Trade Secrets Agreement dated September 13, 1989, between Hana Biologics, Inc. and Irvine Scientific Sales Company, Inc. Reference Exhibit 3.
10.4 4 License Agreement dated September 13, 1989, between Hana Biologics, Inc. and Irvine Scientific Sales Company, Inc. Reference Exhibit 4.
39. 10.5 4 Manufacturing and Supply Agreement dated September 13, 1989, between Hana Biologics, Inc. and Irvine Scientific Sales Company, Inc. Reference Exhibit 5.
10.6 5 Development Agreement dated May 1, 1990, between Hana Biologics, Inc. and The Polymer Technology Group, Incorporated. Reference Exhibit 10.68.
10.7 6 License Agreement dated February 1, 1988, between Somatix Corporation and the Massachusetts Institute of Technology. Reference Exhibit 10.1.
10.8 6 Somatix Corporation's 1988 Stock Option Plan, as amended, and forms of agreement currently used thereunder. Reference Exhibit 10.2.
10.9 7 Consulting Agreement dated March 14, 1991, between the Company and Dr. Richard Mulligan. Reference Exhibit 10.29.
10.10 8 Lease Agreement dated September 7, 1990, between GeneSys Therapeutics Corporation and Ventana Leasing, Inc. Reference Exhibit 10.49.
10.11 8 License Agreement dated October 1, 1990, between GeneSys Therapeutics Corporation and Washington University. Reference Exhibit 10.34.
10.12 8 License Agreement dated April 4, 1991, between GeneSys Therapeutics Corporation and the Regents of the University of California. Reference Exhibit 10.37.
10.13 8 Warrant Agreement dated April 15, 1991, between GeneSys Therapeutics Corporation and Ventana Leasing, Inc. Reference Exhibit 10.50.
10.14 8 Letter Agreement dated April 17, 1991, between GeneSys Therapeutics Corporation and the Regents of the University of California, as amended by that Letter Agreement dated May 10, 1991. Reference Exhibit 10.51.
10.15 8 License Agreement dated June 7, 1991, between GeneSys Therapeutics Corporation and the Fred Hutchinson Cancer Research Center. Reference Exhibit 10.38.
10.16 8 License Agreement No. 1 dated August 20, 1991, between GeneSys Therapeutics Corporation and The Salk Institute for Biological Studies. Reference Exhibit 10.39.
10.17 8 Scientific Consulting Agreement dated November 8, 1991, between Somatix and Dr. Theodore Friedmann. Reference Exhibit 10.41.
10.18 8 Scientific Consulting Agreement dated November 8, 1991, between Somatix and Dr. Frederick Gage. Reference Exhibit 10.42.
10.19 8 Scientific Consulting Agreement dated November 8, 1991, between Somatix and Dr. Inder Verma. Reference Exhibit 10.43.
10.20 8 Consulting Agreement dated November 13, 1991, between Somatix and Dr. Harry F. Hixson, Jr. Reference Exhibit 10.44.
10.21 8 Warrant Agreement dated November 9, 1991, between GeneSys Therapeutics Corporation and Kleiner Perkins Caufield & Byers V. Reference Exhibit 10.45.
10.22 8 Agreement dated January 15, 1992, between Somatix and The Board of Trustees of the Leland Stanford Jr. University. Reference Exhibit 10.46.
10.23 8 Registration Rights Agreement dated January 17, 1992, among Somatix and certain Investors as set forth on Exhibit A thereto. Reference Exhibit 10.47.
10.24 8 Shareholder Agreement dated January 21, 1992, among Somatix, GeneSys Therapeutics Corporation and Kleiner Perkins Caufield & Byers V. Reference Exhibit 10.48
10.25 9 License Agreement dated March 4, 1992, by and among Somatix, The Johns Hopkins University and The University of Texas System. Reference Exhibit 10.56.
10.26 9 Lease Agreement dated July 15, 1992, between Somatix and Alameda Real Estate Investments. Reference Exhibit 10.58.
10.27 9 1992 Stock Option Plan, as amended and restated. Reference Exhibit 10.63.
10.28 10 GeneSys Therapeutics Corporation 1991 Stock Option Plan and forms of agreement currently used thereunder. Reference Exhibit 28.5.
10.29 11 Sublease Agreement dated March 26, 1992, by and among GeneSys Therapeutics Corporation, Del Mar Plaza, Ltd. and Ligand Pharmaceuticals, Inc.; Consent to Sublease Agreement dated April 10, 1992. Reference Exhibit 10.57.
40. 10.30 11 Employment Agreement dated July 10, 1992, between Somatix and Dr. Krzysztof S. Bankiewicz. Reference Exhibit 10.66.
10.31 12 Agreement dated January 15, 1993, by and between Somatix and the Regents of the University of California on behalf of its Davis Campus. Reference Exhibit 10.70.
10.32 12 Agreement dated February 10, 1993, by and between Somatix and the California Parkinson's Foundation. Reference Exhibit 10.71.
10.33* 12 Letter Agreement dated March 16, 1993, between Somatix and Vector Securities International, Inc. Reference Exhibit 10.72.
10.34 12 Employment Agreement dated July 1, 1993, between Somatix and David Carter. Reference Exhibit 10.73.
10.35 12 Agreement dated August 30, 1993, by and between Somatix and Ludwig Institute for Cancer Research. Reference Exhibit 10.74.
10.36 13 Employment Agreement dated November 11, 1993, between Somatix and Richard Mulligan. Reference Exhibit 10.76.
10.37 14 Property Lease Agreement dated February 8, 1994, between Somatix and Alameda Real Estate Investments. Reference Exhibit 10.77.
10.38 15 Property Lease Agreement dated May 5, 1994, between Somatix and Alameda Real Estate Investments. Reference Exhibit 10.55.
10.39* 15 Research Collaboration Agreement dated April 29, 1994, by and between Somatix and Baxter Healthcare Corporation. Reference Exhibit 10.53.
10.40 15 Stock Purchase Agreement dated April 29, 1994, by and between Somatix and Baxter Healthcare Corporation. Reference Exhibit 10.54.
10.41 15 Stock Purchase Agreement dated May 12, 1994, by and between Somatix and Health Care Partners, LLC. Reference Exhibit 10.56.
10.42 15 Common Stock Purchase Agreement dated November 29, 1993, among Somatix and the Investors listed on the Schedule of Investors attached thereto. Reference Exhibit 10.52.
10.43 15 Amended and Restated Registration Rights Agreement dated May 12, 1994, among Somatix and the parties listed on Schedule A attached thereto. Reference Exhibit 10.57.
10.44 15 Master Equipment Lease Agreement dated May 24, 1994, between Somatix and Aberlyn Capital Management Limited Partnership. Reference Exhibit 10.58.
10.45 15 Agreement to Issue Warrant dated May 24, 1994, between Aberlyn Capital Management Limited Partnership and Somatix. Reference Exhibit 10.59.
10.46 15 Agreement to Issue Warrant dated May 24, 1994, between Aberlyn Capital Management Limited Partnership and Somatix. Reference Exhibit 10.60.
10.47 15 Master Equipment Lease Agreement dated June 30, 1994, between Financing for Science International, Inc. and Somatix. Reference Exhibit 10.61.
10.48 15 Warrant dated July 30, 1994, issued by Somatix to Financing for Science International, Inc. Reference Exhibit 10.62.
10.49* 16 Agreement dated November 2, 1993, by and between Somatix and Baxter Healthcare Corporation together with Amendment No. 1 dated September 30, 1994. Reference Exhibit 10.75.
10.50 17 Employment Agreement dated August 1, 1993, between Somatix and Arlene Jordan-Levy.
10.51 17 Employment Agreement dated August 1, 1993, between Somatix and Lawrence Cohen.
10.52 17 Employment Agreement dated November 1, 1993, between Somatix and Edward Oliver Lanphier II.
10.53 17 Employment Agreement dated December 30, 1993, between Somatix and Mark N.K. Bagnall.
10.54* 17 Non-Exclusive License Agreement dated April 20, 1994 by and between the Fred Hutchinson Cancer Research Center and Somatix.
10.55 17 Research Agreement dated June 1, 1994 between Baxter Healthcare Corporation and Somatix.
10.56* 17 Letter Agreement dated September 1, 1994 between Baxter Healthcare Corporation and Somatix.
10.57 18 Amendment #1 to the Warrant Agreement and Shareholder Agreement dated November 7, 1994 by and among Somatix, GeneSys Therapeutics Corporation and Kleiner Perkins Caufield & Byers V.
41. 10.58* 19 Agreement and Plan of Reorganization dated December 19, 1994 as amended on January 18, 1995 and January 31, 1995 among Somatix, STC Acquisition Co. and Merlin Pharmaceutical Corporation. Reference Exhibit 3.
10.59 19 Escrow Agreement, dated as of February 3, 1995, by and between STC Acquisition Company, The First National Bank of Boston and the stockholders of Merlin Pharmaceutical Corporation. Reference Exhibit 4.
10.60* 19 Consulting and Repurchase Agreement, dated February 3, 1995, between Somatix and Samuel D. Waksal. Reference Exhibit 5.
10.61* 19 Consulting and Repurchase Agreement, dated January 21, 1995, between Somatix and Thomas Shenk. Reference Exhibit 6.
10.62* 19 Consulting and Repurchase Agreement, dated February 3, 1995, between Somatix and R. Jude Samulski. Reference Exhibit 7.
10.63* 19 Consulting and Repurchase Agreement, dated February 3, 1995, between Somatix and Michael Kaplitt. Reference Exhibit 8.
10.64* 19 Consulting and Repurchase Agreement, dated February 3, 1995, between Somatix and Matthew During. Reference Exhibit 9.
10.65 19 Indemnification Agreement, dated as of December 19, 1994, as amended by Amendment No. 1, dated as of February 3, 1995, among Merlin Pharmaceutical Corporation and Samuel D. Waksal. Reference Exhibit 10.
10.66 19 Promissory Note, dated February 2, 1995, by and between Samuel D. Waksal and Somatix. Reference Exhibit 11.
10.67 20 Merlin Pharmaceutical Corporation 1993 Stock Option Plan. Reference Exhibit 99.1.
10.68 20 Non-Qualified Stock Option Agreement to be generally used in connection with Merlin Pharmaceutical Corporation 1993 Stock Option Plan. Reference Exhibit 99.2.
10.69 20 Stock Option Assumption Agreement - Installment Option. Reference Exhibit 99.3.
10.70 20 Stock Option Assumption Agreement - Immediately Exercisable Option. Reference Exhibit 99.4.
10.71* 21 License Agreement, dated January 10, 1994, between Merlin Pharmaceutical Corporation and University of Florida Research Foundation. Reference Exhibit 10.13.
10.72* 21 License Agreement, dated May 1, 1994, between Merlin Pharmaceutical Corporation and University of Pittsburgh - of the Commonwealth System of Higher Education. Reference Exhibit 10.14.
10.73* 21 License Agreement, dated August 11, 1994, between Merlin Pharmaceutical Corporation and The Research Foundation of State University of New York. Reference Exhibit 10.15.
10.74* 21 License Agreement, dated August 17, 1994, between Merlin Pharmaceutical Corporation and University of Pittsburgh - of the Commonwealth System of Higher Education. Reference Exhibit 10.16.
10.75 21 Sublease Agreement, dated December 1, 1994, between Merlin Pharmaceutical Corporation and ICAgen, Inc. Reference Exhibit 10.17.
10.76* 21 Amendment dated February 15, 1995 to License Agreement dated May 1, 1994, between Merlin Pharmaceutical Corporation and University of Pittsburgh - of the Commonwealth System of Higher Education. Reference Exhibit 10.18.
10.77 21 Employment Agreement, dated April 7, 1995, between Somatix and Jan Drayer, M.D. Reference Exhibit 10.19.
10.78 22 Common Stock Purchase Agreement, dated June 17, 1995. Reference Exhibit 10.20.
10.79 22 Preferred Stock Purchase Agreement, dated June 17, 1995. Reference Exhibit 10.21.
10.80 22 Form of Warrant to Purchase Shares of Common Stock. Reference Exhibit 10.22.
10.81**24 Stock Purchase Agreement, dated August 15, 1995, between Somatix Therapy Corporation and Bristol-Myers Squibb Company. Reference Exhibit 5.2.
10.82 25 Engagement Letter, dated April 27, 1995, between Somatix Therapy Corporation and Merrill Lynch & Co. of Merrill Lynch, Pierce, Fenner & Smith Incorporated.
42. 10.83 26 Amendment No. 2 to the Warrant Agreement and Shareholder Agreement, dated November 9, 1995, by and among Somatix Therapy Corporation and Kleiner Perkins Caufield and Byers V. Reference Exhibit 10.1
10.84 26 Mutual Termination Agreement, dated September 29, 1995, between Somatix Therapy Corporation and Baxter Healthcare Corporation. Reference Exhibit 10.2.
10.85 Subscription Agreement, dated September 24, 1996, by and between Somatix Therapy Corporation and Fletcher International Limited.
10.86 Warrant, dated September 25, 1995, issued by Somatix Therapy Corporation to Fletcher International Limited.
22.1 3 Subsidiaries of the Registrant.
23.1 Consent of Independent Auditors.
24.1 Power of Attorney (see pages 45 and 46).
27 Financial Data Schedule.
- --------------------
1 Incorporated by reference to exhibit of the registrant's Registration Statement on Form S-1 (File No. 33-4795) as filed with the SEC on April 14, 1986.
2 Incorporated by reference to exhibit filed with the registrant's Annual Report on Form 10-K for fiscal year ended June 30, 1986.
3 Incorporated by reference to exhibit filed with the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1989.
4 Incorporated by reference to exhibit filed with the registrant's Form 8-K dated September 13, 1989.
5 Incorporated by reference to exhibit filed with the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1990.
6 Incorporated by reference to exhibit of the registrant's Registration Statement on Form S-4 (File No. 33-4795) as filed with the SEC on January 14, 1991.
7 Incorporated by reference to exhibit filed with the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1991.
8 Incorporated by reference to exhibit of the registrant's Registration Statement on Form S-1 (File No. 33-4795) as filed with the SEC on January 21, 1992.
9 Incorporated by reference to exhibit filed with the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1992.
10 Incorporated by reference to exhibit of the registrant's Registration Statement on Form S-8 as filed with the SEC on August 17, 1992.
11 Incorporated by reference to exhibit filed with the registrant's Quarterly Report on Form 10-Q for quarter ended September 30, 1992.
12 Incorporated by reference to exhibit filed with the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1993.
13 Incorporated by reference to exhibit filed with the registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1993.
14 Incorporated by reference to exhibit filed with the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994.
15 Incorporated by reference to exhibit filed with the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1994.
16 This agreement was originally filed as Exhibit 10.75 to the registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1993, has not been changed and is being filed with Amendment No. 1 thereto for convenience of reference.
17 Incorporated by reference to exhibit filed with the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.
43. 18 Incorporated by reference to exhibit filed with the registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994.
19 Incorporated by reference to exhibit filed with registrant's Amendment No. 1 to Current Report on Form 8-K/A as filed with the SEC on February 14, 1995.
20 Incorporated by reference to exhibit of the registrant's Registration Statement on Form S-8 as filed with the SEC on March 3, 1995.
21 Incorporated by reference to exhibit filed with the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
22 Incorporated by reference to exhibit of the registrant's Registration Statement on Form S-3 (File No. 33-60873) as filed with the SEC on June 19, 1995.
23 Incorporated by reference to exhibit filed with the registrant's Quarterly Report on Form 10-Q for the quarter year ended June 30, 1995.
24 Incorporated by reference to exhibit filed with registrant's Current Report on Form 8-K as filed with the SEC September 20, 1995.
25 Incorporated by reference to exhibit filed with the registrant's Annual Report on Form 10-K for the fiscal ended September 30, 1995.
26 Incorporated by reference to exhibit filed with the registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1995.
* Confidential treatment has been granted as to certain portions of this agreement.
** Confidential treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by an asterisk and has been filed separately with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, pursuant to an application for confidential treatment.
44. SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: September 27, 1996
SOMATIX THERAPY CORPORATION
By: DAVID W. CARTER ------------------------------------------- David W. Carter Chairman, President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person who signature appears below constitutes and appoints jointly and severally, David W. Carter and Edward O. Lanphier II, or either of them as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney as of the date indicated.
Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
45.
46.