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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Pharmacopeia, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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[_] Fee paid previously with preliminary materials.
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Notes:
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[PHARMACOPEIA LOGO APPEARS HERE]
Joseph A. Mollica, Ph.D.
Chairman and Chief Executive Officer
June 1, 1998
Dear Stockholder:
Proxy material for the Annual Meeting of Stockholders of Pharmacopeia, Inc. was
sent to you recently. According to our records, your proxy for this meeting,
which will be held on Friday, June 12, 1998, has not yet been received.
REMEMBER - unless a sufficient number of shares of common Stock vote in favor of
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the Agreement and Plan of Merger and Reorganization, Pharmacopeia will not be
able to proceed with the proposed acquisition of Molecular Simulations
Incorporated.
For the reasons set forth in the proxy statement dated May 13, 1998, your Board
of Directors has determined that this transaction is fair to and in the best
interests of Pharmacopeia and its stockholders and recommends a vote FOR the
transaction.
Regardless of the number of shares you may own, it is important that they be
represented. We urge you to sign, date, and mail the enclosed proxy promptly.
Sincerely,
/s/ Joseph A. Mollica
Joseph A. Mollica
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[Logo appears here]
WHO IS MOLECULAR SIMULATIONS INCORPORATED?
MSI is a San Diego, California-based provider of predictive modeling software
and services for both life and material sciences research. MSI's products enable
scientists to simulate chemical behavior at the molecular level by modeling
structures and properties of molecular systems. These products are used by
scientists in research and development laboratories worldwide to enhance the
speed and efficiency of the R&D process by reducing overall costs, decreasing
product lead times, and accelerating time to market. MSI has recently
implemented a Web-based architecture which expands the availability of MSI
software products to any scientist using a Web browser on a desktop computer.
MSI has over 3,500 installed sites in commercial, academic and governmental
research and development laboratories with approximately 10,000 users. In 1997,
MSI generated revenues of $56.7 million and net income of $5.5 million.
BUSINESS OVERVIEW
Pharmacopeia is a leader in drug discovery combining three platform
technologies: informatics, small molecule combinatorial chemistry, and high-
throughput screening. Upon completion of its acquisition of Molecular
Simulations Incorporated (MSI), Pharmacopeia will develop and commercialize
molecular modeling, simulation, and informatics software and services. Using
ECLiPS (TM), its proprietary combinatorial chemistry technology, Pharmacopeia
has generated more than 3.8 million diverse, easily identifiable, small
molecules. Pharmacopeia tests these molecules using state-of-the-art high-
throughput screening. These technologies are integrated to support the following
businesses: 1) licensing collections of compounds to pharmaceutical companies
for evaluation in multiple drug discovery programs, 2) identifying and
optimizing lead compounds for specific targets provided by customers, and 3)
licensing drug development candidates developed in Pharmacopeia's internal drug
discovery programs to pharmaceutical companies.
INFORMATION
For further information about Pharmacopeia or MSI, please visit our web sites at
WWW.PCOP.COM and WWW.MSI.COM, respectively, or contact us at:
Pharmacopeia, Inc.
Investor Relations
101 College Road East
Princeton, NJ 08540
(609) 452-3600
STOCK TRANSFER AGENT
For information on stock certificates or for change of address, please contact:
American Stock Transfer and Trust Company
40 Wall Street
New York, NY 10005
(212) 936-5100
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[Logo appears here]
FIRST QUARTER REPORT FISCAL YEAR 1998
To our stockholders:
The 1998 first quarter marked an important time in Pharmacopeia's evolution. On
February 4, 1998, we announced an agreement to acquire Molecular Simulations
Incorporated (MSI), a leading provider of computational chemistry software used
in drug discovery and other industries. We believe this acquisition, which is
expected to close in June and remains subject to shareholder approval, will
allow us to more effectively compete in the drug discovery industry by resulting
in the following benefits:
. COMPLEMENTARY BUSINESSES - By accessing Pharmacopeia's large database of
biological and chemical information, MSI may improve the predictive utility and
scientific accuracy of its software. Applying MSI's software to Pharmacopeia's
drug discovery activities will improve Pharmacopeia's ability to achieve further
success on behalf of its customers and internal programs;
. BROADENED TECHNOLOGY PLATFORM - By combining Pharmacopeia's proprietary
ECLiPS (TM) technology, 3.8 million compound sample collection and expertise in
biology and chemistry with MSI's software and expertise in using informatics
tools, the combined company could offer a powerful technology platform for
improving the speed and efficiency of drug discovery;
. NEW MARKETS - Using MSI's expertise, Pharmacopeia will be better positioned
to apply its technology to the non-pharmaceutical area; and
. CROSS-SELLING PRODUCTS AND SERVICES - Leveraging its global sales and
marketing organization, MSI will help market Pharmacopeia's current and
potential future drug discovery products and services.
In addition to this exciting acquisition, we continued to make progress in our
core business. The first of our compounds from a drug discovery collaboration
was chosen as a development candidate. Final preparatory steps are underway by
our pharmaceutical partner in preparation for an IND submission. We also
announced a milestone in our collaboration with Daiichi Pharmaceutical Company.
In a period of less than 2 years, our large, rationally designed libraries and
high-throughput screening enabled us to identify and optimize a highly potent
and selective lead compound in this collaborative inflammation program.
Total revenues for the quarter were $6.4 million, with a net loss of $2.2
million, or $0.19 per share. This compared to total revenues of $5.9 million,
with a net loss of $1.4 million, or $0.13 per share for the comparable quarter
last year. The 1998 first quarter results reflect a 36% increase in proprietary
research and development as Pharmacopeia continues to invest in internal
discovery programs, ultra high-throughput screening, and informatics. These
results do not include the financial performance of MSI.
With several important achievements under our belt, we'll aim to make even
further progress in the weeks and months ahead. I look forward to keeping you
apprised of our progress.
Sincerely,
/s/ Joseph A. Mollica
Joseph A. Mollica, Ph.D.
Chairman of the Board, President and Chief Executive Officer
May 15, 1998
Statements of Operations
Dollars in thousands except share and per
share data; unaudited
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
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1998 1997
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<S> <C> <C>
Contract revenue $ 6,432 $ 5,932
Operating expenses:
Research and development
Collaborative 4,420 4,151
Proprietary 3,724 2,729
General and administrative 1,587 1,458
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Operating loss (3,299) (2,406)
Interest income 1,116 1,064
Interest expense (43) (67)
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Net loss $ (2,226) $ (1,409)
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Basic net loss per share $ (.19) $ (.13)
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Weighted average common
shares outstanding 11,798,024 11,269,752
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Actual common shares outstanding at period end 11,811,079 11,270,953
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Balance Sheet
Dollars in thousands, unaudited
Balance Sheet
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March 31, 1998 December 31, 1997
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Cash, cash equivalents and marketable securities $ 76,455 $ 82,621
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Total assets $ 89,770 $ 95,687
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Current liabilities $ 18,813 $ 21,263
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Total liabilities $ 21,364 $ 25,250
Stockholders' equity $ 68,406 $ 70,437
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Total liabilities and stockholders' equity $ 89,770 $ 95,687
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</TABLE>
