The notes bear interest semi-annually on September 15 and March 15 of each year, beginning September 15, 2000. In May 2000, pursuant to a registration rights agreement, we filed a registration statement under the Securities Act of 1933 with the SEC to register resales of the notes and the shares of common stock into which the notes are convertible. In February 1999, we acquired the manufacturing assets, principally land, buildings and laboratory equipment, for the xenotransplantation program developed by US Surgical. The principal balance under the note is due in May 2005. Security for this term note is the manufacturing assets that we purchased.
Principal is due with interest at a variable rate which is reset quarterly.
We anticipate our research and development expense will increase significantly for the foreseeable future to support our clinical and manufacturing development of our product candidates. We expect to relocate our administrative and research and development facilities at the end of calendar year 2000. Our pilot manufacturing plant, encompassing approximately 21,000 square feet of labs and office space, is currently being utilized for producing compounds for our current clinical trials and will remain currently in New Haven, Connecticut at our current facilities. In addition through a wholly-owned subsidiary, we own a transgenic manufacturing facility located in the Northeast. We believe the laboratory space will be adequate for our current research and development activities.