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Filed by Medscape, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Commission File Number: 000-26883
Subject Company: Medscape, Inc.
THE FOLLOWING COMMUNICATION IS FILED PURSUANT TO RULES 165 AND 425 PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS TO BE FILED BY
MEDICALOGIC, INC. (Nasdaq: MDLI) WITH THE SECURITIES AND EXCHANGE COMMISSION
(SEC) IN CONNECTION WITH THE PROPOSED MERGER WITH MEDSCAPE, INC. BECAUSE IT
CONTAINS IMPORTANT INFORMATION. A PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS
WAS INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-4 FILED WITH THE SEC BY
MEDICALOGIC ON MARCH 14, 2000. INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO
OBTAIN A FREE COPY OF THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS FILED BY
MEDICALOGIC, INC. WITH THE SEC AT THE COMMISSION'S WEB SITE AT WWW.SEC.GOV.
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The following is the text of a letter sent by Paul Sheils, the President and
Chief Executive Officer of Medscape, Inc. to the editor of Barron's on March 22,
2000.
The Editor
Barron's
200 Liberty Street
New York, NY 10281
To the Editor:
Your March 20 story, "Burning Fast," makes the seriously flawed assumption that
none of the more than 200 Internet companies you surveyed will change the ratio
between quarterly revenues and spending at any time this year. Based on that
false methodology, you predict the demise of some of the largest and best-known
names on the Web.
In Medscape's case, had a Barron's reporter called us or just reviewed recent
SEC filings, he or she would have learned the following:
The S-4 filing made on March 14 by MedicaLogic regarding its proposed
merger with Medscape and acquisition of Total eMed includes a pro forma
balance sheet showing a
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combined $195 million in cash and short-term investments, and debt of
approximately $2.2 million, for the three companies as of December 31,
1999.
Both Medscape's recently filed 10-K and MedicaLogic's S-4 contain the
statement that Medscape "believes that its current cash, cash
equivalents and investment securities combined with any cash generated
from operations will be sufficient to meet anticipated cash needs for
working capital and capital expenditures for at least the next 12
months."
As part of our July 1999 agreement with CBS Corporation, we received
approximately $150 million in non-cash advertising and promotional
opportunities over seven years. While we have been taking non-cash
charges related to these opportunities, they have no effect on our cash
position.
Your piece does a great disservice to those Internet companies and their
employees who are changing -- for the better -- the way we work and live in the
21st Century.
Paul T. Sheils
President and CEO
Medscape, Inc.
134 West 29th Street
New York, NY 10001
212-760-3200
