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UNITED STATES
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 June 30, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-26534
VION PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3671221
State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
4 Science Park
New Haven, Ct 06511
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 498-4210
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 [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
The number of shares outstanding of the registrant's common stock as of August
8, 2003 was 32,796,203.
Page 1
PART I
FINANCIAL INFORMATION
ITEM 1. Financial Statements
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Balance Sheet
(Unaudited)
June 30, December 31,
(In thousands, except share and per share data) 2003 2002
- -------------------------------------------------------------------------------------------------------------------------
ASSETS
Current Assets:
Cash and cash equivalents $ 10,452 $ 10,131
Interest receivable 4 10
Accounts receivable 15 48
Prepaid expenses 52 249
--------------------------------------
Total current assets 10,523 10,438
Property and equipment, net 403 456
Security deposits 29 29
--------------------------------------
Total assets $ 10,955 $ 10,923
======================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accrued payroll and payroll-related expenses $ 573 $ 411
Accounts payable and other accrued expenses 2,620 1,648
--------------------------------------
Total current liabilities 3,193 2,059
--------------------------------------
Shareholders' Equity:
Preferred stock, $0.01 par value, authorized: 5,000,000 shares; issued and
outstanding: none -- --
Common stock, $0.01 par value, authorized: 100,000,000 shares;
issued and outstanding: 32,782,203 and 28,908,872 shares
at June 30, 2003 and December 31, 2002, respectively 328 289
Additional paid-in-capital 116,867 112,447
Accumulated deficit (109,433) (103,872)
--------------------------------------
7,762 8,864
--------------------------------------
Total liabilities and shareholders' equity $ 10,955 $ 10,923
======================================
The accompanying notes are an integral part of these financial statements.
Page 2
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Statement of Operations
(Unaudited)
For the Three Months Ended For the Six Months Ended May 1, 1994 (Inception)
June 30, June 30, through
(In thousands, except per share data) 2003 2002 2003 2002 June 30, 2003
----------------------- -------------------------- -------------------
Revenues:
Contract research grants $ 72 $ 35 $ 138 $ 56 $ 2,330
Research support 24 -- 24 -- 5,527
Technology license fees 6 2 6 28 4,437
Laboratory support services -- -- 3 -- 146
--------------------- ------------------------- ---------
Total revenues 102 37 171 84 12,440
--------------------- ------------------------ ---------
Operating expenses:
Research and development 887 1,564 1,856 3,575 60,465
Clinical trials 1,721 1,328 2,597 2,748 23,964
--------------------- ------------------------ ---------
Total research and development 2,608 2,892 4,453 6,323 84,429
General and administrative 654 782 1,356 1,694 23,533
--------------------- ------------------------ ---------
Total operating expenses 3,262 3,674 5,809 8,017 107,962
--------------------- ------------------------ ---------
Interest income (24) (101) (55) (368) (4,792)
Interest expense -- -- -- -- 208
--------------------- ------------------------ ---------
Loss before income tax benefit (3,136) (3,536) (5,583) (7,565) (90,938)
Income tax benefit -- (227) (22) (227) (249)
--------------------- ------------------------ ---------
Net loss (3,136) (3,309) (5,561) (7,338) (90,689)
Preferred stock dividends and accretion -- -- -- -- (18,489)
--------------------- ------------------------ ---------
Loss applicable to common shareholders $(3,136) $(3,309) $(5,561) $(7,338) $(109,178)
===================== ======================== =========
Loss applicable to common shareholders
per share $ (0.11) $ (0.11) $ (0.19) $ (0.25)
===================== ========================
Weighted-average number of shares of
common stock outstanding 29,274 28,887 29,101 28,883
===================== ========================
The accompanying notes are an integral part of these financial statements.
Page 3
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Statement of Changes in Shareholders' Equity
(Unaudited)
Accumulated
Additional Other Total
Common Stock Paid-in Comprehensive Accumulated Shareholders'
(In thousands, except share data) Shares Amount Capital Income (Loss) Deficit Equity
- ------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000 26,167,642 $ 262 $ 100,027 $ 120 $ (77,752) $ 22,657
Public offering of common stock -
August 2001 2,500,000 25 11,386 11,411
Exercise of stock options 191,527 2 777 779
Exercise of warrants 4,015 -- 14 14
Compensation associated with stock option
grants 111 111
Issuances under employee benefit plans 10,189 -- 62 62
Change in net unrealized gains and losses (126) (126)
Net loss (13,810) (13,810)
------------
Comprehensive loss (13,936)
--------------------------------------------------------------------------------
Balance at December 31, 2001 28,873,373 $ 289 $ 112,377 $ (6) $ (91,562) $ 21,098
Exercise of stock options 10,395 -- 32 32
Issuances under employee benefit plans 25,104 -- 38 38
Change in net unrealized gains and losses 6 6
Net loss (12,310) (12,310)
------------
Comprehensive loss (12,304)
--------------------------------------------------------------------------------
Balance at December 31, 2002 28,908,872 $ 289 $ 112,447 $ -- $ (103,872) $ 8,864
Private placement of common stock - June 2003 3,846,150 38 4,411 4,449
Issuances under employee benefit plans 27,181 1 9 10
Net loss (5,561) (5,561)
--------------------------------------------------------------------------------
Balance at June 30, 2003 32,782,203 $ 328 $ 116,867 $ -- $(109,433) $ 7,762
================================================================================
The accompanying notes are an integral part of these financial statements.
Page 4
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
For The Period From
For the Six Months May 1, 1994
Ended June 30, (Inception) through
(In thousands) 2003 2002 June 30, 2003
- -----------------------------------------------------------------------------------------------------------------
Operating activities:
Net loss $ (5,561) $ (7,338) $(90,689)
Adjustments to reconcile net loss to net cash used
in operating activities-
Depreciation and amortization 100 120 2,520
Loss on equipment disposals 9 -- 13
Non-cash compensation -- -- 1,068
Purchased research and development -- -- 4,481
Stock issued for services -- -- 600
Amortization of financing costs -- -- 346
Extension/reissuance of placement agent warrants -- -- 168
Changes in operating assets and liabilities-
Receivables and prepaid expenses 236 (59) (70)
Other assets -- -- (26)
Current liabilities 1,134 26 3,158
---------------------------------------------------
Net cash used in operating activities (4,082) (7,251) (78,431)
---------------------------------------------------
Investing activities:
Purchases of marketable securities -- (2,234) (83,351)
Maturities of marketable securities -- 14,977 83,351
Acquisition of property and equipment (54) (128) (1,990)
---------------------------------------------------
Net cash provided by (used in) investing activities (54) 12,615 (1,990)
---------------------------------------------------
Financing activities:
Initial public offering -- -- 9,696
Net proceeds from issuances of common stock 4,457 44 38,346
Net proceeds from issuance of preferred stock -- -- 20,716
Net proceeds from exercise of Class A Warrants -- -- 5,675
Net proceeds from exercise of Class B Warrants -- -- 17,538
Net proceeds from exercise of other warrants -- -- 115
Repayment of equipment capital leases -- -- (927)
Other financing activities, net -- -- (286)
--------------------------------------------------
Net cash provided by financing activities 4,457 44 90,873
--------------------------------------------------
Change in cash and cash equivalents 321 5,408 10,452
Cash and cash equivalents, beginning of period 10,131 6,645 --
--------------------------------------------------
Cash and cash equivalents, end of period $ 10,452 $ 12,053 $ 10,452
==================================================
The accompanying notes are an integral part of these financial statements.
Page 5
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
1. The Company
Vion Pharmaceuticals, Inc. (the "Company") is a development stage
biopharmaceutical company engaged in the research, development and
commercialization of therapeutics and technologies for the treatment of cancer.
The Company, formerly OncoRx, Inc., was incorporated in March 1992 as a Delaware
corporation and began operations on May 1, 1994.
2. Liquidity and Continuation of Operations
Through June 30, 2003, the Company has continued to use cash to fund
significant, recurring operating losses. At June 30, 2003, the Company had
remaining cash and cash equivalents of $10.5 million. Based on its current
operating plan, the Company does not have sufficient funds to operate its
business for the next twelve months. The Company will need to raise additional
capital to fund its future operations. The Company is currently pursuing
additional financing and other strategic alternatives. If the Company is unable
to raise additional capital or consummate a strategic transaction, it will have
to make substantial changes to its operating plan or cease operations. The
Company must implement changes to its operating plan by the end of 2003 in order
to fund its operations beyond the first quarter of 2004. Accordingly,
substantial doubt exists as to the ability of the Company to continue as a going
concern. The accompanying financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result should
the Company be unable to continue as a going concern.
3. Private Placement of Common Stock
In June 2003, the Company completed a private placement of 3,846,150
shares of its common stock at $1.30 per share and warrants to purchase 1,923,075
shares of common stock at $2.20 per share. The net proceeds of $4.5 million from
this offering were allocated between common stock and the warrants based on
their relative fair values. The warrants expire June 25, 2008.
4. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and on
a going concern basis, which
Page 6
assumes continuity of operations and realization of assets and liquidation of
liabilities in the ordinary course of business. They do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
interim periods are not necessarily indicative of the results that may be
expected for the full year. For further information, refer to the financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 2002 (File No. 000-26534).
5. Per Share Data - Antidilution
The Company has outstanding warrants and stock options that were
antidilutive and not included in the calculation of the diluted loss applicable
to common shareholders per share.
6. Income Tax Benefits
The Company recognized state tax benefits of $22,000 and $227,000
during the six-month periods ended June 30, 2003 and 2002, respectively, related
to the sale of research and development tax credits to the State of Connecticut.
7. Stock-Based Compensation
The Company follows Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB 25") and related Interpretations
in accounting for its employee stock options. Under APB 25, if the terms of the
option are fixed and the exercise price of the Company's employee stock options
equals the fair value of the underlying stock on the date of grant, no
compensation expense is recognized. For the six-month periods ended June 30,
2003 and 2002, no compensation expense was required to be recorded.
For purposes of pro forma disclosures computed under Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation,
the estimated fair value of employee stock option grants is amortized to expense
over the options' vesting periods. Pro forma information (as restated as of
March 31, 2003 and for prior periods) follows (in thousands, except per share
amounts):
Page 7
From Inception
For the Three Months For the Six Months (May 1, 1994)
Ended June 30, Ended June 30, through
2003 2002 2003 2002 June 30, 2003
--------------------- ----------------- -----------------
Net loss, as reported $(3,136) $(3,309) $(5,561) $ (7,338) $(90,689)
Add: Stock-based employee
compensation expense
included in reported net loss -- -- -- -- 768
Deduct: Total stock-based employee
compensation expense
determined under fair value
based method for all awards (1,308) (1,713) (2,686) (3,360) (22,952)
----------------------------------------------------------------
Pro forma net loss (4,444) (5,022) (8,247) (10,698) (112,873)
Pro forma preferred stock dividend
and accretion -- -- -- -- (18,489)
----------------------------------------------------------------
Pro forma loss applicable to common
shareholders $ (4,444) $(5,022) $(8,247) $(10,698) $(131,362)
================================================================
Pro forma basic and diluted loss applicable
to common shareholders per share $ (0.15) $ (0.17) $ (0.28) $ (0.37)
===============================================
8. Gift to Yale University
In July 2003, the Company made a gift of $0.2 million to support
research projects at a Yale University research laboratory headed by one of its
directors. The gift is payable in three installments through January 1, 2004. In
accordance with Statement of Financial Accounting Standards No. 116, Accounting
for Contributions Received and Contributions Made, the Company will record the
total amount of the gift as research and development expense in the three-month
period ended September 30, 2003.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
All statements other than statements of historical fact included in
this Quarterly Report on Form 10-Q, including without limitation statements
under "Management's Discussion and Analysis of Financial Condition and Results
of Operations," regarding our financial position, business strategy, and plans
and objectives of our management for future operations, are forward-looking
statements. When used in this Quarterly Report on Form 10-Q, words such as
"may," "will," "should," "could," "potential," "seek," "project," "predict,"
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to us or our management, identify forward-looking statements.
Forward-looking statements are based on the beliefs of our management as well as
assumptions made by and information currently available to our management. Such
statements are subject to certain risk factors which may cause our plans to
differ or results to vary from those expected, including our ability to continue
as a going concern, which is dependent on securing external sources of funding
to continue operations, the inability to access capital and funding on
Page 8
favorable terms, continued operating losses and the inability to continue
operations as a result, our dependence on regulatory approval for our products,
delayed or unfavorable results of drug trials, the possibility that favorable
results of earlier clinical trials are not predictive of safety and efficacy
results in later clinical trials, the need for additional research and testing,
and a variety of other risks set forth from time to time in our filings with the
U.S. Securities and Exchange Commission including, but not limited to, the
detailed discussion of risks attendant to the forward-looking statements
included under Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our Annual Report on Form 10-K for the
year ended December 31, 2002. The information contained in this Quarterly Report
on Form 10-Q is believed to be current as of the date of filing with the U.S.
Securities and Exchange Commission. Except in special circumstances in which a
duty to update arises under law when prior disclosure becomes materially
misleading in light of subsequent events, we do not intend to update any of
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
Overview
We are a development stage biopharmaceutical company committed to the
development and commercialization of therapeutics and technologies for the
treatment of cancer. Our activities to date have consisted primarily of research
and product development, obtaining regulatory approval for clinical trials,
conducting clinical trials, negotiating and obtaining collaborative agreements,
and obtaining financing in support of these activities. Our current revenues
consist of contract research grants. Since inception, we have generated minimal
revenues and have incurred substantial operating losses from our activities. We
expect to incur substantial operating losses for the foreseeable future due to
expenses associated with our activities.
At the present time, under our current operating plan, we do not have
sufficient cash to fund our operations through June 30, 2004. Accordingly, this
raises substantial doubt as to our ability to continue as a going concern. If we
are unable to raise additional capital or consummate a strategic relationship as
further described in "Liquidity and Capital Resources", we will have to
substantially reduce our operating plan, or cease operations. In addition, if we
were to cease operations, it could have a material adverse effect on our
ownership of, or ability to use, our technologies.
If we are able to obtain additional financing or consummate a strategic
transaction, our plan of operations for the next 12 months includes the
following elements:
o Conduct Phase I clinical studies for safety and dosage of Triapine'r'in
conjunction with standard chemotherapy treatments;
o Conduct Phase II clinical studies of Triapine in conjunction with
standard chemotherapy treatments;
Page 9
o Conduct Phase II clinical studies of Triapine'r' as a single agent;
o Conduct Phase I clinical studies for safety and dosage of VNP40101M;
o Conduct Phase I clinical studies for safety and dosage of VNP40101M in
conjunction with standard chemotherapy treatments;
o Conduct Phase II clinical studies of VNP40101M;
o Develop second generation TAPET'r' vectors;
o Continue to conduct internal research and development with respect to our
core technologies and other product candidates that we may identify;
o Continue to support research and development being performed at Yale
University and by other collaborators;
o Continue to seek collaborative partnerships, joint ventures,
co-promotional agreements or other arrangements with third parties.
Critical Accounting Policies and Estimates
There were no changes in our critical accounting policies from those
discussed in Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations", in our Annual Report on Form 10-K for
the year ended December 31, 2002 and no significant changes in any accounting
estimates during the periods referred to below.
Results of Operations
Comparison of the Three-Month Periods Ended June 30, 2003 and 2002
Revenues. Revenues were $102,000 for the three-month period ended June
30, 2003, as compared to $37,000 for the same period in 2002. The increase was
due primarily to higher revenues from research grants and research support.
Research and Development. Total research and development expenses
(which include clinical trials expenses and other research and development
expenses) were $2.6 million for the three-month period ended June 30, 2003,
compared with $2.9 million for the same 2002 period. Clinical trials expenses
increased to $1.7 million for the second quarter of 2003 from $1.3 million for
the comparable 2002 period due primarily to higher patient enrollment and
start-up costs associated with new clinical trials of Triapine'r' and VNP40101M,
partially offset by lower drug manufacturing costs and, to a lesser extent,
lower costs associated with TAPET'r' clinical trials, which are now closed to
patient accrual.
Page 10
Other research and development costs decreased by $0.7 million primarily due to
lower external research spending and fewer employees.
General and Administrative. General and administrative expenses
decreased to $0.7 million for the three-month period ended June 30, 2003 from
$0.8 million for the comparable 2002 period. The decrease was primarily due to
lower patent fees.
Interest Income. Interest income was $24,000 for the three-month
period ended June 30, 2003, as compared to $101,000 for the same period in 2002.
The decrease was due to a lower average level of invested funds and, to a lesser
extent, lower interest rates.
Net Loss. The net loss was $3.1 million, or $0.11 per share, for the
three-month period ended June 30, 2003, compared to a net loss of $3.3 million,
or $0.11 per share, for the same period in 2002.
Comparison of the Six-Month Periods Ended June 30, 2003 and 2002
Revenues. Revenues were $171,000 for the six-month period ended June
30, 2003, as compared to $84,000 for the same period in 2002. The increase was
primarily due to higher revenues from research grants and research support.
Research and Development. Total research and development expenses
(which include clinical trials expenses and other research and development
expenses) were $4.5 million for the six-month period ended June 30, 2003,
compared with $6.3 million for the same 2002 period. Clinical trials expenses
were $2.6 million for the six-month period ended June 30, 2003, as compared to
$2.7 million for the same period in 2002. Other research and development costs
decreased to $1.9 million for the six months ended June 30, 2003, from $3.6
million for the same period in 2002. The decrease of $1.7 million was due
primarily to lower external research spending and fewer employees.
General and Administrative. General and administrative expenses were
$1.4 million for the six-month period ended June 30, 2003, as compared to $1.7
million for the comparable 2002 period. The decrease was due primarily to lower
patent and professional fees.
Interest Income. Interest income was $55,000 for the six-month period
ended June 30, 2003, as compared to $368,000 for the same period in 2002. The
2003 decrease in interest income was due primarily to a lower average level of
invested funds and, to a lesser extent, lower interest rates.
Income Tax Benefit. Income tax benefits of $22,000 and $227,000 were
recognized during the six-month periods ended June 30, 2003 and 2002,
respectively, related to sales of certain research and development tax credits
to the State of Connecticut.
Page 11
Net Loss. The net loss was $5.6 million, or $0.19 per share, for the
six-month period ended June 30, 2003, compared to a net loss of $7.3 million,
or $0.25 per share, for the same period in 2002.
Liquidity and Capital Resources
At June 30, 2003, we had cash and cash equivalents of $10.5 million
compared to cash and cash equivalents of $10.1 million at December 31, 2002. The
increase in 2003 was due to net proceeds of $4.4 million from a private
placement of securities in June 2003, described below, offset by cash used to
fund operating activities of $4.1 million.
In June 2003, we completed a private placement of 3,846,150 shares of
our Common Stock at $1.30 per share. The investors also received warrants to
purchase 1,923,075 shares of Common Stock at $2.20 per share, expiring June 25,
2008. The net proceeds of $4.4 million will be used to fund clinical and
research development activities, working capital and general corporate purposes.
Effective August 1, 2003, we reinstated the full salaries of our senior
management, a portion of which were deferred in connection with our May 2002
realignment plan. The salary deferrals will be repaid in equal installments over
the twelve month period ended July 31, 2004. As of June 30, 2003, the salary
deferral totaled $379,000 and is included in accrued payroll and payroll-related
expenses in the accompanying balance sheet.
We need to raise additional capital or consummate a strategic
transaction, such as an acquisition or business partnership, in order for our
operations to continue. We are currently pursuing additional financing and other
strategic alternatives. We cannot assure you that we will be able to raise
additional capital or otherwise complete another form of transaction to allow us
to continue our operations, nor can we predict what the terms of any financing
or other transaction might be. Any financing or other strategic transaction
could be at prices below the market price of our common stock and could be
extremely dilutive to our current stockholders.
Until we raise capital or consummate a strategic transaction, if ever,
our operating plan will be under constant evaluation by our Board and management
for potentially substantial changes, including reducing expenses through
reductions in the number of employees, and curtailment or complete cessation of
product trials or research. If we are unable to raise additional capital or
consummate a strategic transaction, we will have to make substantial changes to
our operating plan or cease operations. Based on its current operating plan, the
Company does not have sufficient funds to operate its business for the next
twelve months. We must implement changes to our operating plan by the end of
2003 in order to fund our operations beyond the first quarter of 2004.
Accordingly, substantial doubt exists as to our ability to continue as a going
concern.
Page 12
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
For information regarding our exposure to certain market risks, see
Item 7A, "Quantitative and Qualitative Disclosures About Market Risk", in our
Annual Report on Form 10-K for the year ended December 31, 2002. There have been
no significant changes in our market risk exposure since then.
ITEM 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures - Within 90 days
prior to the date of this report, we carried out an evaluation, under the
supervision and with the participation of our chief executive officer and chief
financial officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on this evaluation, our chief
executive officer and chief financial officer concluded that our disclosure
controls and procedures are effective in timely alerting them to material
information required to be included in our periodic filings with the Securities
and Exchange Commission. It should be noted that the design of any system of
controls is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of
how remote.
(b) Changes in internal controls - There have been no significant
changes in our internal controls or in other factors that could significantly
affect those controls subsequent to the date of their last evaluation.
PART II
OTHER INFORMATION
ITEM 2. Changes in Securities and Use of Proceeds
In June 2003, the Company issued 3,846,150 shares of its Common Stock
in a private placement in reliance on an exemption under Section 4(2) of the
Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The
investors also received warrants to purchase 1,923,075 shares of Common Stock at
$2.20 per share, expiring June 25, 2008. The Company has subsequently registered
the resale of these shares by the investors pursuant to an effective
registration statement on Form S-3.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
Page 13
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 99.1 CEO Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
Exhibit 99.2 CFO Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
(b) Reports on Form 8-K.
The Registrant filed the following reports on Form 8-K during the
quarter ended June 30, 2003:
1. On May 15, 2003 under Item 5 and Item 7 to announce the
Company's 2003 first quarter financial results.
2. On May 21, 2003 under Item 5 and Item 7 to announce the
Company initiated a Phase II trial of Triapine'r'and
Gemcitabine in lung cancer.
3. On May 28, 2003 under Item 5 and Item 7 to announce the
Company initiated a Phase II trial of Triapine and
Gemcitabine in pancreatic cancer.
4. On June 2, 2003 under Item 5 and Item 7 to announce the
Company presented clinical data from Phase I trials of its
anticancer agents VNP40101M in leukemia and Triapine'r' in
combination with Gemcitabine in poster sessions at the
annual meeting of the American Society of Clinical Oncology.
5. On June 12, 2003 under Item 5 and Item 7 to announce the
Company had terminated the Phase I trial of its first
generation TAPET'r' vector with immune system modulation and
will continue to study second generation TAPET vectors in
preclinical studies. The Company also announced it had
received notification from The Nasdaq Stock Market that the
Company regained compliance with Marketplace Rule 4450
(a)(5).
6. On June 20, 2003, under Item 5 and Item 7 to announce the
Company entered into a Securities Purchase Agreement with
certain purchasers relating to the private placement of
shares of Common Stock and Warrants, and a Registration
Rights Agreement relating thereto.
Page 14
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.
Dated: August 13, 2003 Vion Pharmaceuticals, Inc.
By: /s/ Howard B. Johnson
--------------------------------------
Howard B. Johnson
Vice President, Finance and
Chief Financial Officer
Page 15
CERTIFICATE OF CHIEF EXECUTIVE OFFICER
I, Alan Kessman, President and Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Vion Pharmaceuticals,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
Page 16
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ Alan Kessman
- -------------------------
Alan Kessman
President and Chief Executive Officer
Date: August 13, 2003
Page 17
CERTIFICATE OF CHIEF FINANCIAL OFFICER
I, Howard B. Johnson, Vice President, Finance and Chief Financial Officer,
certify that:
1. I have reviewed this quarterly report on Form 10-Q of Vion Pharmaceuticals,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
Page 18
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ Howard B. Johnson
- ------------------------------
Howard B. Johnson
Vice President, Finance and Chief Financial Officer
Date: August 13, 2003
Page 19
STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as..................... 'r'