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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 INCLUDED IN THE
REGISTRATION STATEMENT ON FORM S-4 FILED BY MEDICALOGIC, INC. (NASD:MDLI) WITH
THE SECURITIES AND EXCHANGE COMMISSION (SEC) IN CONNECTION WITH THE PROPOSED
MERGER WITH MEDSCAPE, INC. BECAUSE IT CONTAINS IMPORTANT INFORMATION. INVESTORS
AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THE JOINT PROXY
STATEMENT/PROSPECTUS FILED BY MEDICALOGIC, INC. WITH THE SEC AT WWW.SEC.GOV.
*************************
The following is a press release disseminated by Medscape, Inc. on April 25,
2000.
MEDSCAPE, INC. GROWS FIRST QUARTER 2000 REVENUES 265%
AND PAGE VIEWS 169% VS. FIRST QUARTER 1999
Registered Membership Crosses 2.2 Million Mark,
Including 350,000 Registered as Physicians
Proposed Merger with MedicaLogic Moves Forward;
New Company to Provide Electronic Records, Information,
Other Services at Point of Care
NEW YORK, Apr 25, 2000 --
Medscape, Inc. (NASDAQ NM: MSCP), a leading provider of authoritative health and
medical information on the Internet since 1995, today announced a 265% increase
in revenues and a 169% increase in page views for the first quarter ended March
31, 2000, compared to the same period last year, with the Company reaching more
than 2.2 million registered members worldwide, including over 350,000 registered
as physicians.
Medscape reported the following financial and statistical highlights for the
quarter:
- - Medscape achieved record revenue of $6 million, a 265% increase over the $1.6
million generated in the first quarter of 1999, and a 50% increase over the
fourth quarter of 1999. The increase was due primarily to strong advertising and
sponsorship sales.
- - Registered membership for all of Medscape reached more than 2.2 million
worldwide, up 94% versus the first quarter of last year and 22% compared to the
fourth quarter of 1999. At the close
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of the first quarter, members registered as physicians had risen to over
350,000, allied healthcare professionals to more than 1,000,000 and consumers to
over 800,000, all new records for the Company. Nearly half of the physicians are
based in the United States.
- - Total page views were over 53 million, up 169% versus the first quarter of
last year and 58% above the fourth quarter of 1999. In addition, according to
Media Metrix, Medscape remains the "stickiest" eHealthcare site, with visitors
spending an average of more than 8 minutes per month on Medscape in March.
- - In addition to Medscape's strong growth in physician members, the Company has
now created customized Web sites for more than 10,000 medical practices across
the United States.
- - The Company reported a first quarter loss -- excluding amortization of
deferred stock compensation and merger-related costs -- of $20.5 million, or
$0.46 per share, compared to a loss of $22.5 million or $0.50 per share in the
fourth quarter of 1999. The net loss in the first quarter included $10 million
of non-cash charges related to Medscape's use of promotional opportunities
through its partnerships with the CBS Corporation and National Data Corporation.
- - Including amortization of deferred stock compensation and merger-related
costs, the first quarter loss was $23.7 million. Merger-related costs for the
first quarter amounted to $2.4 million. Medscape also reported continuing
progress toward completion of its proposed merger with MedicaLogic, Inc.
(NASDAQ:MDLI), The Online Health Record Company(TM). Transition teams are moving
ahead with integration plans, as the companies await necessary shareholder votes
scheduled for Medscape, MedicaLogic and Total eMed. Medscape's shareholder vote
is scheduled for May 15, 2000.
"With our strong financial results and the merger announcement, this was another
important and exciting quarter for Medscape," said President and CEO Paul
Sheils. "We continued to benefit from solid advertising and sponsorship sales
based on expanding relationships with pharmaceutical and medical device
companies and other clients. We also continued to build partnerships to further
develop our market research arm, and to pursue and execute our international
growth strategy."
Sheils added, "Since Medscape's sites began offering access to MedicaLogic's
products immediately after our February 22 merger announcement, we have seen a
significant increase in the number of clinicians accessing and signing up daily
for the Logician Internet medical record product. We're looking forward to
combining three companies with the complementary products, strategic
partnerships, financial strength and experience necessary to bring real change
to 'eHealthcare' where physicians and patients come together at the 'point of
care.' We'll be providing them with health information that matters -- saving
lives, money and time. No other company in our industry is more focused on using
the Internet to increase communication and interaction between physicians,
patients and other health professionals than the new organization that will come
from this merger."
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The Company also reported these significant recent events:
- - Beyond the proposed merger with MedicaLogic, Medscape announced in early March
the planned acquisition of Dialog Medical, a leading provider of electronic
informational documents such as consent forms, questionnaires, diets, pre- and
post-operative instructions and education forms. The acquisition brings
strategic value to MedicaLogic/Medscape's previously announced plans to focus on
the point of care.
- - Medscape announced in March a strategic alliance with the United Information
Healthcare Group (UIHG), one of the world's top three primary research
organizations to serve the medical industry. Medscape and UIHG plan to provide
pharmaceutical companies worldwide with new market research tools capitalizing
on the speed, reach and cost efficiencies of the Internet.
- - In late February, Medscape and The National Committee for Quality Assurance
(NCQA) announced that the revolutionary new NCQA Health Plan Report Card
database was launching simultaneously on both organizations' sites. The Health
Plan Report Card, providing consumers with access to the most comprehensive
health plan quality information available anywhere, evaluates and rates health
plans in several categories and allows consumers to find the right
plan for themselves and their families. Medscape's management will conduct a
conference call tomorrow morning at 10:00 a.m. Eastern Time to discuss the first
quarter 2000 results, as well as the Company's strategies. Investors and
interested parties may listen to the call via a live Webcast accessible through
the Company's investor relations site, http://investor.medscape.com. To listen,
please register and download audio software at the site at least 15 minutes
prior. A replay will be available on the site as well as via telephone for 48
hours beginning at noon Eastern time, April 26, at 1-800-633-8284 or
1-858-812-6440, reservation # 14913711.
ABOUT MEDSCAPE, INC. Medscape, Inc. (NASDAQ NM: MSCP), a leading provider of
authoritative health and medical information on the Internet since 1995,
currently operates two primary healthcare Web sites, medscape.com and
CBSHealthWatch by Medscape. As of March 31, 2000 Medscape, Inc.'s sites had more
than 2.2 million registered members worldwide, including over 350,000 registered
as physicians, one million registered as allied health professionals and 800,000
registered as consumers.
Medscape.com, www.medscape.com, provides comprehensive, authoritative and timely
medical information and interactive programs to physicians, allied healthcare
professionals and consumers, and includes the following specialty sites and
pages: Medscape Japan, http://japan.medscape.com, Medscape General Medicine, or
MedGenMed, www.medscape.com/journal/MedGenMed, believed to be the first and only
peer-reviewed online general medical journal; Medical Office Management,
http://medoffice.medscape.com, Medscape Nursing, http://nursing.medscape.com;
Medscape Pharmacists, http://pharmacists.medscape.com; Medscape Med Students,
http://medstudents.medscape.com; and Today on Medscape,
http://www.medscape.com/today, featuring the latest health and medical news.
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The Company also operates CBSHealthWatch by Medscape,
http://cbs.healthwatch.com, the recently launched consumer site designed to help
families and individuals make better informed healthcare decisions and to
simplify management of their healthcare needs. Developed jointly with CBS
Corporation, the site provides personalized, authoritative medical content
written for the consumer, access to professional content on medscape.com and
interactive personal health management tools, such as health diaries. CBS and
the CBS eye device are registered trademarks of CBS Broadcasting Inc.
Investors and security holders are urged to read the definitive joint proxy
statement/prospectus included in the registration statement on Form S-4 filed by
MedicaLogic, Inc. (NASD:MDLI) with the Securities and Exchange Commission (SEC)
in connection with the proposed merger with Medscape, Inc. because it contains
important information. Investors and security holders may obtain a free copy of
the definitive joint proxy statement/prospectus filed by MedicaLogic with the
SEC at the SEC's Web site, www.sec.gov.
The statements made in this press release contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934 that involve a number of risks and
uncertainties. Actual events or results may differ from the Company's
expectations.
(Financial Tables Follow)
Medscape, Inc.
Statements of Operations
(in thousands, except share data)
<TABLE>
<CAPTION>
First Quarter
Ended
3/31/00 3/31/99
------- -------
<S> <C> <C>
Revenue $ 6,009 $ 1,644
------- -------
Operating Expenses:
Editorial, Production, Content
and Technology 5,555 1,268
Sales & Marketing 18,547 1,247
General & Administrative 2,167 562
Merger Costs 2,366 0
Deferred Stock Comp. Expense 810 298
</TABLE>
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<TABLE>
<S> <C> <C>
Depreciation & Amortization 741 95
------------ ------------
Total Operating Expenses 30,186 3,470
------------ ------------
Loss from Operations (24,177) (1,826)
------------ ------------
Interest Income 490 81
------------ ------------
Net Loss $ (23,687) $ (1,745)
============ ============
Basic and Diluted Net Loss per Share $ (.53) $ (.25)
Weighted Average Shares 44,827,358 6,871,000
Supplemental Information:
Net Loss, Excluding Deferred Stock
Compensation Expense and
Merger-related Costs $ (20,511) $ (1,447)
Basic and Diluted Net Loss per Share,
excluding Deferred Stock Compensation Expense
and Merger-related Costs $ (.46) $ (.21)
</TABLE>
Medscape, Inc.
Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
3/31/99 12/31/99
------- -------
<S> <C> <C>
Assets
Current Assets
Cash and Investment Securities $28,514 $40,819
Accounts Receivable 6,320 5,946
Prepaid Expenses and Other Assets 14,539 15,256
------- -------
Total Current Assets 49,373 62,021
</TABLE>
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<TABLE>
<S> <C> <C>
Fixed Assets - Net 7,962 7,568
Intangible Assets and Goodwill - Net 12,068 12,590
Investment in Softwatch 3,156 3,156
--------- ---------
Total Assets $ 72,559 $ 85,335
========= =========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable and Accrued Liabilities $ 10,108 $ 9,567
Deferred Revenue 1,016 1,580
--------- ---------
Total Current Liabilities 11,124 11,147
Stockholders' Equity
Common Stock 453 447
Additional Paid-In Capital 266,378 266,196
Deferred Stock Compensation (6,501) (7,984)
Treasury Stock (78) (3)
Contribution of Services (135,395) (145,224)
Warrants 6,353 6,840
Note Receivable from Stockholder (628) (628)
Unrealized Loss on Investment Securities
Available for Sale (39) (36)
Accumulated Deficit (69,108) (45,420)
--------- ---------
Total Stockholders' Equity 61,435 74,188
--------- ---------
Total Liabilities & Stockholders' Equity $ 72,559 $ 85,335
========= =========
</TABLE>
CONTACT: Lippert/Heilshorn & Associates
John Nesbett
212/838-3777
[email protected]
or
Medscape
David Fluhrer
212/760-3138
[email protected]
or
Mary Ellen Adipietro
212/838-3777
[email protected]
