Prepared by R.R. Donnelley Financial -- Form 8-K
 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
 
Date of Report (Date of earliest event reported): July 25, 2002
 
 
SCIOS INC.
(Exact Name of Registrant as Specified in Charter)
 
 
 
Delaware
     
0-11749
  
95-3701481
(State or Other Jurisdiction of Incorporation)
     
(Commission File Number)
  
(I.R.S. Employer Identification No.)
 
 
 
820 West Maude Avenue, Sunnyvale, CA 94085
(Address of Principal Executive Offices) (Zip Code)
 
 
 
(408) 616-8200
(Registrant’s telephone number, including area code)
 
 
 
N/A
(Former Name or Former Address, if Changed Since Last Report)
 
 
 

Item 5.    Other Events.
 
On July 26, 2002, Scios, Inc. issued a press release which is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
 
On July 25, 2002, Scios Inc. (NASDAQ: SCIO) announced its financial results for the second quarter and six months ended June 30, 2002.
 
Second quarter 2002 net revenues were $23.0 million compared to $5.2 million in the second quarter of 2001. This increase was primarily due to Natrecor sales.
 
Total operating costs and expenses for the second quarter of 2002 were $44.3 million compared to $23.4 million in the second quarter of 2001. The increase in costs and expenses was largely attributable to building a marketing and sales infrastructure for Natrecor, clinical development of the p38 kinase inhibitor program and preclinical development of the TGF-beta program.
 
Net loss for the quarter was $22.5 million, or $0.48 per diluted share, compared to a net loss of $18.3 million, or $0.46 per diluted share, for the same period last year. Per share amounts were based on 46.5 million weighted average diluted shares in the second quarter of 2002, compared to 40.1 million weighted average diluted shares in the same quarter last year.
 
Cash, cash equivalents and marketable securities (both current and non-current) balances at June 30, 2002 were $101.3 million.
 
Net revenues for the first six months of 2002 were $39.5 million compared to $17.2 million in the same period last year. The increase was primarily due to Natrecor sales of $37.9 million. Total operating costs and expenses in the six-month period were $84.8 million, compared to $39.3 million for the year-ago period. The six months period ended June 30, 2001 included $12.5 million of revenues, inclusive of a $9.4 million gain on the sale of marketing rights from the Psychiatric Sales and Marketing Division that was discontinued in March 2001. The company reported a net loss of $47.7 million in the first six months of 2002, or $1.03 per diluted share, compared to a $22.5 million net loss, or $0.57 per diluted share, in the same period last year.

2

 
SCIOS INC.
 
Consolidated Balance Sheets
(in thousands, except share data and per share data)
 
    
June 30,
2002
     
December 31,
2001
  
    
(Unaudited)
         
Assets
                  
Current assets:
                  
Cash and cash equivalents
   
$
39,212
 
   
$
58,296
 
Marketable securities
   
 
13,396
 
   
 
7,351
 
Accounts receivable, net
   
 
11,081
 
   
 
6,943
 
Inventory
   
 
2,613
 
   
 
1,158
 
Prepaid expenses and other assets
   
 
5,070
 
   
 
4,214
 
    
  
Total current assets
   
 
71,372
 
   
 
77,962
 
Marketable securities, non-current
   
 
48,673
 
   
 
63,669
 
Property and equipment, net
   
 
10,252
 
   
 
10,424
 
Other assets
   
 
758
 
   
 
4,123
 
    
  
Total assets
   
$
131,055
 
   
$
156,178
 
    
  
Liabilities and stockholder’s equity
                  
Current liabilities:
                  
Accounts payable
   
$
7,727
 
   
$
9,625
 
Accrued employee compensation
   
 
10,697
 
   
 
9,685
 
Other accrued liabilities
   
 
9,531
 
   
 
7,206
 
Deferred contract revenue
   
 
1,102
 
   
 
—  
 
Current portion of long-term debt
   
 
41,313
 
   
 
33,035
 
    
  
Total current liabilities
   
 
70,370
 
   
 
59,551
 
Deferred contract revenue
   
 
3,493
 
   
 
—  
 
Long-term debt
   
 
15,396
 
   
 
15,479
 
    
  
Total liabilities
   
 
89,259
 
   
 
75,030
 
    
  
Stockholders’ equity:
                  
Preferred stock; $.001 par value; 20,000,000 shares authorized; 4,991 issued and outstanding
   
 
—  
 
   
 
—  
 
Common stock; $.001 par value; 150,000,000 shares authorized; issued and outstanding 46,654,473 and 46,015,167, respectively
   
 
47
 
   
 
46
 
Additional paid-in capital
   
 
567,958
 
   
 
561,352
 
Treasury stock; shares of 40,000 at June 30, 2002 and 30,000 at December 31, 2001, respectively
   
 
(644
)
   
 
(445
)
Deferred warrant costs
   
 
(4,389
)
   
 
(6,794
)
Deferred compensation
   
 
(106
)
   
 
(106
)
Accumulated other comprehensive income
   
 
564
 
   
 
999
 
Accumulated deficit
   
 
(521,634
)
   
 
(473,904
)
    
  
Total stockholders’ equity
   
 
41,796
 
   
 
81,148
 
    
  
Total liabilities and stockholders’ equity
   
$
131,055
 
   
$
156,178
 
    
  

3

 
SCIOS INC.
 
Consolidated Statements of Operations
(in thousands, except share and per share data)
 
    
Three months ended June 30,
     
Six months ended June 30,
  
    
2002
     
2001
     
2002
     
2001
  
    
(Unaudited)
     
(Unaudited)
  
Revenues:
                                    
Product sales
   
$
22,510
 
   
$
2,098
 
   
$
37,883
 
   
$
2,098
 
Research and development contracts and royalties
   
 
517
 
   
 
1,484
 
   
 
1,588
 
   
 
2,581
 
Psychiatric product sales and co-promotion commissions, net of expenses
   
 
—  
 
   
 
1,659
 
   
 
—  
 
   
 
3,142
 
Gain on sale of marketing rights
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
9,363
 
    
  
  
  
    
 
23,027
 
   
 
5,241
 
   
 
39,471
 
   
 
17,184
 
    
  
  
  
Costs and expenses:
                                    
Cost of product sales
   
 
1,381
 
   
 
—  
 
   
 
2,392
 
   
 
—  
 
Research and development
   
 
16,808
 
   
 
13,084
 
   
 
31,663
 
   
 
22,564
 
Selling, general and administration
   
 
26,075
 
   
 
10,278
 
   
 
50,789
 
   
 
16,758
 
    
  
  
  
    
 
44,264
 
   
 
23,362
 
   
 
84,844
 
   
 
39,322
 
    
  
  
  
Loss from operations
   
 
(21,237
)
   
 
(18,121
)
   
 
(45,373
)
   
 
(22,138
)
    
  
  
  
Other income (expense):
                                    
Interest income
   
 
913
 
   
 
742
 
   
 
1,721
 
   
 
1,554
 
Interest expense
   
 
(2,498
)
   
 
(754
)
   
 
(4,442
)
   
 
(1,603
)
Realized gains on securities
   
 
370
 
   
 
135
 
   
 
293
 
   
 
389
 
Other income (expense)
   
 
(56
)
   
 
(275
)
   
 
71
 
   
 
(698
)
    
  
  
  
    
 
(1,271
)
   
 
(152
)
   
 
(2,357
)
   
 
(358
)
    
  
  
  
Net loss
   
$
(22,508
)
   
$
(18,273
)
   
$
(47,730
)
   
$
(22,496
)
    
  
  
  
Loss per common share:
                                    
Basic and diluted
   
$
(0.48
)
   
$
(0.46
)
   
$
(1.03
)
   
$
(0.57
)
Weighted average number of common shares outstanding used in calculation of:
                                    
Basic and diluted
   
 
46,478,885
 
   
 
40,087,161
 
   
 
46,290,276
 
   
 
39,653,959
 

4

 
Item
 
7.    Financial Statements, Pro Forma Financial Information and Exhibits.
 
(c)  Exhibits
 
The following exhibits are filed as part of this Report:
 
No.
   
Exhibit
99.1
   
Press Release dated July 26, 2002
 

5

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 hereunto duly authorized.
 
 
 
SCIOS INC.
By:
  
    /s/    DAVID W. GRYSKA        
   
David W. Gryska        
Senior Vice President and
Chief Financial Officer
 
Date:
  
July 26, 2002        

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