UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the quarterly period ended September 30, 2006
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 000-51711
ALTUS PHARMACEUTICALS INC.
(Exact Name of Registrant as Specified in its Charter)
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| Delaware
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04-3573277 |
| (State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.) |
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| 125 Sidney Street, Cambridge, Massachusetts
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02139 |
| (Address of Principal Executive Offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (617) 299-2900
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 þ NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated
filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o Accelerated filer o Non-accelerated filer þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
YES o NO þ
The number of shares outstanding of the registrant’s Common Stock, $0.01 par value per share, as of
January 10, 2007 was 23,129,859.
TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our cash, cash equivalents and short-term investments are invested with highly-rated financial
institutions in North America with the primary objective of preservation of principal and minimum
risk. When purchased, the investments generally have a maturity of less than 18 months. Some of the
securities we invest in are subject to interest rate risk and will fall in value if market interest
rates increase. To minimize the risk associated with changing interest rates, we invest primarily
in money market funds, bank certificates of deposit, United States government securities and
investment-grade commercial paper and corporate notes that can be held to their maturity date. All
of our investments at September 30, 2006 met these criteria. We had gross unrealized losses of $0.0
million on our investments at September 30, 2006. If market interest rates were to increase
immediately and uniformly by 10% from levels at September 30, 2006, we estimate that the fair value
of our investment portfolio would decline by an immaterial amount.
Our total debt at September 30, 2006 was $4.8 million, primarily representing drawdowns under
our expired capital equipment and lease credit facilities. All borrowings under these credit
facilities carried fixed rates of interest established at the time such drawdowns were made.
Accordingly, our future interest costs relating to such drawdowns are not subject to fluctuations
in market interest rates.
Our assets are principally located in the United States and a majority of our historical
revenues and operating expenses are denominated in United States dollars, however, contract revenue
under our collaboration with Dr. Falk and some purchases of raw materials and contract
manufacturing services are denominated in Euros. Accordingly, we are subject to market risk with
respect to foreign currency-denominated revenues and expenses. We had no foreign currency exchange
gains or losses in the nine months ended September 30, 2006 and foreign currency losses of $0.3
million in the year ended December 31, 2005. If the average Euro/United States dollar exchange rate
were to strengthen or weaken by 10% against the average respective exchange rates experienced in
the nine months ended September 30, 2006 and the year ended December 31, 2005, we estimate that the
impact on our financial position, results of operations and cash flows would be immaterial. Since
ALTU-135 has not reached commercialization in North America or in the territory covered by the Dr.
Falk agreement, we do not believe we are subject to significant foreign currency risk at this time.
We may engage in additional collaborations with international partners. When ALTU-135 or any other
future drug candidates reach commercialization outside of the United States, if at all, or we enter
into additional collaborations with international partners providing for foreign
currency-denominated revenues and expenses, we may be subject to significant market risk.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer, or CEO, and Chief
Financial Officer, or CFO, evaluated the effectiveness of our disclosure controls and procedures as
of September 30, 2006. In designing and evaluating our disclosure controls and procedures, our
management recognized that any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving their objectives, and our management necessarily
applied its judgment in evaluating the cost-benefit relationship of possible controls and
procedures. Based on the evaluation by our management, our CEO and CFO concluded that, as of
September 30, 2006, our disclosure controls and procedures were: (1) designed to ensure that
material information relating to us is made known to our CEO and CFO by others within the Company,
particularly during the period in which this report was being prepared and (2) effective, in that
they provide reasonable assurance that information required to be disclosed by us in reports that
we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is
recorded, processed, summarized, and reported within the time periods specified in the Securities
and Exchange Commission’s, or SEC, rules and forms.
Changes in Internal Control
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended September 30, 2006 that
materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.