<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 30, 1998
REGISTRATION NO. 333-60135
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 3
TO FORM S-4
ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
GENE LOGIC INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 8731 06-1411336
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code) Identification Number)
</TABLE>
708 Quince Orchard Road
Gaithersburg, Maryland 20878
(301) 987-1700
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
MICHAEL J. BRENNAN, M.D., PH.D.
President and Chief Executive Officer
GENE LOGIC INC.
708 Quince Orchard Road
Gaithersburg, Maryland 20878
(301) 987-1700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
FREDERICK T. MUTO, ESQ.
L. KAY CHANDLER, ESQ.
NANCY E. DENYES, ESQ.
Cooley Godward LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, $.01 par value..................... 5,850 $4.406 $25,775.10 $7.17
============================================================================================================================
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(1) In connection with the merger of Oncormed, Inc. ("Oncormed") with and into
Gene Logic Acquisition Corp., a wholly owned subsidiary of Registrant
("Merger Sub"), Registrant initially registered 1,006,631 shares on
Registrant's Registration Statement on Form S-4 (File No. 333-60135). In
the merger, each share of common stock of Oncormed was exchanged for a
fraction of a share of Registrant's common stock. Based primarily on a
higher actual exchange ratio per share of common stock of Oncormed than was
estimated at the filing of the Registration Statement on Form S-4,
Registrant is registering an additional 5,850 shares which were issued or
are issuable upon exercise of certain warrants.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457. The price per share and aggregate
offering price are based upon the average of the high and low sales price
of Registrant's common stock on November 24, 1998 as reported on the Nasdaq
National Market System. The registration fee with respect to the 1,006,631
shares initially registered on Registrant's Registration Statement on Form
S-4 (File No. 333-60135) was previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
EXPLANATORY NOTE
Gene Logic Inc. (the "Registrant") hereby amends its Registration
Statement on Form S-4 (File No. 333-60135) (the "Form S-4"), by filing this
Post-Effective Amendment No. 3 to Form S-4 on Form S-3 (the "Registration
Statement") relating to 1,012,481 shares of common stock, $.01 par value, of the
Registrant held by Oncor, Inc., a Delaware corporation, or issuable upon the
exercise of certain warrants of the Registrant.
On September 28, 1998, pursuant to an Agreement and Plan of Merger and
Reorganization, dated as of July 6, 1998 (the "Merger Agreement"), Oncormed was
merged with and into Merger Sub. As provided in the Merger Agreement, each
outstanding share of common stock of Oncormed was converted into the right to
receive a fraction of a share of the Registrant's common stock equal to .4673 of
a share.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 30, 1998
PROSPECTUS
1,012,481 SHARES
GENE LOGIC INC.
Common Stock
----------
The Selling Securityholders identified in this Prospectus are selling
1,012,481 shares of our common stock. These shares may be offered from time to
time by the Selling Securityholders through public or private transactions, on
or off the Nasdaq National Market, at prevailing market prices or at privately
negotiated prices. The Selling Securityholders will receive all of the proceeds
from the sale of the shares and will pay all underwriting discounts and selling
commissions, if any, applicable to the sale of the shares. We will pay the
expenses of registration of the sale of the shares.
In September 1998, our subsidiary merged with Oncormed, Inc. In the merger,
we exchanged each share of Oncormed common stock for a fraction of a share of
Gene Logic common stock. We also assumed warrants to purchase Oncormed common
stock so that we will issue Gene Logic common stock when the warrants are
exercised. In connection with the merger, we agreed to register the shares of
our common stock received by one of the Selling Securityholders in the merger
and shares of our common stock that the other Selling Securityholders will
receive when they exercise their warrants.
Our common stock is traded on the Nasdaq National Market under the
symbol "GLGC." On November 24, 1998, the last reported sales price of a share of
Gene Logic common stock on the Nasdaq National Market was $4.125 per share.
----------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _______, 1998.
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THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE
SEC. YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU
WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN
ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THE DOCUMENT.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy the documents we file at
the SEC's public reference room in Washington, D.C., New York, New York and
Chicago, Illinois. You can request copies of these documents by writing to the
SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC filings are also
available to the public at no cost from the SEC's website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information that we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities and Exchange Act of 1934:
1. Annual Report on Form 10-K for the fiscal year ended December
31, 1997;
2. Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998;
3. Current Reports on Form 8-K filed with the SEC on July 10,
1998 and October 8, 1998;
4. Definitive Proxy Statement on Schedule 14A filed with the SEC
on April 29, 1998; and
5. The description of our common stock set forth in the
Registration Statement on Form 8-A filed with the SEC on
November 4, 1997.
You may request a copy of these filings at no cost by writing or
calling us, or you may view a copy by visiting our website, each at the
following address:
Gene Logic Inc.
708 Quince Orchard Road
Gaithersburg, Maryland 20878
Attn: Investor Relations
(301) 987-1700
http://www.genelogic.com
THE COMPANY
Gene Logic develops and commercializes products using technologies to
analyze the expression and regulation of genes and to manage the genetic
information that it generates. Our products include databases of genetic
information used for discovering targets for drug discovery, a technology for
screening to identify new drug leads and a technology that uses genetic
information to assist in designing clinical studies. Our products are designed
to help our pharmaceutical company customers reduce the time, cost and risk
associated with their discovery and development of new drugs.
Our executive offices are located at 708 Quince Orchard Road,
Gaithersburg, Maryland 20878 and our telephone number is (301) 987-1700. We
maintain a website at http://www.genelogic.com.
This Prospectus contains our trademarks as well as trademarks of other
companies.
2.
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FORWARD-LOOKING STATEMENTS
Except for historical information, the information contained in this
Prospectus and in our SEC reports are "forward-looking" statements about our
expected future business and performance. Our actual operating results and
financial performance may be very different from what we have predicted as of
the date of this Prospectus. The risks described in the following section
address some of the factors that might affect our future operating results and
financial performance. Additional factors that might affect our business are
described in "Risk Factors," in our most recent annual report on Form 10-K and
in the section entitled "Risk Factors" and in our Form S-4 Registration
Statement, as well as in our other SEC reports.
RISK FACTORS
Investment in Gene Logic shares involves a high degree of risk. You
should consider the following discussion of risks as well as other information
in this Prospectus before purchasing any Gene Logic shares.
UNCERTAINTY RELATING TO INTEGRATING ONCORMED
On September 28, 1998, we acquired Oncormed, Inc., and it is now our
subsidiary. As a result, two companies that had previously operated
independently must now work together. The integration will require significant
effort from our personnel and the personnel of Oncormed who are now Gene Logic
employees. We cannot assure you that the two companies will be able to integrate
and consolidate their efforts without problems. The following risks are common
to the integration of two companies and may limit or disrupt our ability to
realize the benefits we anticipated when we decided to acquire Oncormed:
- diversion of our management's attention from other important
issues;
- difficulties integrating the research and development
activities of the two companies;
- loss of momentum in research and development activities;
- difficulties integrating the systems which help to run the two
companies;
- delays in completing the integration; and
- loss of key personnel from Oncormed.
If these problems occur and we are not successful in resolving them, our
business would be materially and adversely affected, and we might be unable to
realize our long-term goals.
UNCERTAINTY OF OUR TECHNOLOGY AND PRODUCT DEVELOPMENT RISK
Our technologies involve new and unproven approaches. They are based on
the assumption that information about gene expression and gene sequences may
help scientists to better understand complex disease processes. Generally, there
is limited understanding of the roles of genes in these diseases. Relatively few
therapeutic products based on gene discoveries have been developed and
commercialized. We cannot assure you that our technologies will enable us or our
partners to identify genes, drug targets and drug leads. Even if we are
successful in identifying genes, drug targets and drug leads associated with
specific diseases, we cannot assure you that we, or our partners, will be able
to discover or develop products based on these discoveries. To date, no one has
developed or commercialized any therapeutic, diagnostic or agricultural products
based on our technologies. If we fail to identify genes useful for the discovery
and development of such products, it will have a material adverse effect on our
business.
Development of therapeutic, diagnostic and other life science products
based on our discoveries will also be subject to other risks of failure inherent
in their development. These risks include the possibility that any such
products:
- will be found to be ineffective;
- will be found to be toxic;
- will fail to receive necessary regulatory approvals;
- will be difficult or impossible to manufacture on a large
scale;
3.
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- will be uneconomical to market;
- will be impossible to market because they infringe on the
proprietary rights of third parties; and
- will compete with products marketed by third parties that are
similar or superior.
As a result, we cannot assure you that either Gene Logic or our
partners will develop any products which will be commercially viable.
We created a prototype of the Flow-thru Chip and began in-house testing
this year. We have not produced the Flow-thru Chip on a commercial scale. We are
developing several genomic database products, but, to date, we have only
licensed the Gene Express Normal and Toxicology Express databases. We cannot
assure you that the development or commercialization of the Flow-thru Chip or
the genomic database products will be successful or that we will be successful
in marketing such products.
We will need to generate information about gene expression and
regulation to include in our genomic database products. We also need to analyze
that information using our software tools. The development and commercialization
of our genomic database products will be materially adversely affected if our
technologies fail to generate the necessary genetic information. Our database
products are complex and sophisticated and could contain erroneous data, design
defects or software errors that could be difficult to detect and correct. Bugs
and viruses may be found in current products or future products, if we develop
any. If we fail to maintain and further develop the necessary data to support
our drug discovery efforts and the efforts of our partners, it could result in
loss of or delay in our revenues and market acceptance.
Our pharmacogenomic technologies are designed to help use genetic
discoveries to develop therapeutic products that are clinically useful. Very few
companies have used these technologies for this purpose. The market for these
technologies is in an early stage of development. Our ability to successfully
develop this business is unproven. We cannot assure you that the market for
these technologies and products will continue to evolve. The discoveries and
technologies which form the basis for these products have not been widely
adopted by pharmaceutical companies. We cannot assure you that such companies
will adopt these technologies or products.
OUR RELIANCE ON COLLABORATORS AND LICENSEES
Our strategy for developing and commercializing therapeutic, diagnostic
and other life science products depends, in large part, upon collaboration and
licensing arrangements. We have established collaborations with American Home
Products' Wyeth-Ayerst Research Division, SmithKline Beecham, N.V. Organon, the
pharmaceutical unit of Akzo Nobel, N.V., Japan Tobacco, Inc., Procter & Gamble
Pharmaceuticals, Inc., Rhone-Poulenc Rorer, Schering-Plough and Merck & Company.
We also have a collaboration with Hoechst Schering AgrEvo for discovery of genes
to develop improved crops and crop protection products. These collaborations
have only been formed within the past 18 months. We cannot assure you that we
will maintain these collaborations or establish additional collaborations or
that any of these collaborations will be successful.
Since our inception, we have received a substantial portion of our
revenues from collaborations, and we expect to continue to do so. Our failure to
maintain our existing collaborations or to enter into additional collaborations
would have a material adverse effect on our business. In particular, if funding
from partners was not available or was reduced, we would need to devote
additional internal resources to our programs or possibly scale back or
terminate some of our programs.
Our strategy includes entering into multiple, concurrent
collaborations. We cannot assure you that we will be able to manage our multiple
collaborations successfully. The risks we face in managing multiple
collaborations include:
- maintaining confidentiality among our partners;
- avoiding conflicts between our partners; and
- avoiding conflicts between us and our partners.
4.
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If we fail to manage our collaborations effectively or any of the
problems described above arise, one or more of the following may occur which
could have a material adverse effect on our business:
- use of significant management resources to resolve conflicts;
- delay in research efforts;
- legal claims involving significant time, expense and loss of
reputation;
- loss of capital; and
- loss of revenues.
If our partners discover therapeutic, diagnostic or other life science
products from our research programs with them, we will rely on them for product
development, regulatory approval, manufacturing and marketing of those products.
Our agreements with our partners typically allow them significant discretion in
electing whether to pursue any of these activities. We cannot control the amount
and timing of resources our partners may devote to our programs or potential
products. As a result, we cannot assure you that our partners will perform their
obligations as expected or that our partners will continue the collaborations.
In addition, if a partner is involved in a business combination, such as a
merger or acquisition or changes its business focus, its performance in our
collaboration may suffer. Certain of our current collaborations provide the
partner with rights to terminate the collaboration prior to the natural
expiration of its term. If any of our partners decide to terminate their
collaboration with us early, our business could be materially and adversely
affected.
OUR LIMITED OPERATING HISTORY
We have a limited operating history and we are at an early stage of
development. Substantially all of our resources have been dedicated to
developing our proprietary technologies and using them to identify genes. All of
our discovery programs and collaborations are at an early stage. Continuing to
develop our technologies and using them to identify genes will require us to do
significant additional research and development and make a significant
additional investment. We expect that it will be a number of years, if ever,
before we will recognize revenue from product sales or royalties.
OUR HISTORY OF OPERATING LOSSES
We have incurred operating losses in each year since our inception,
including net losses of approximately:
- $2.9 million during the year ended December 31, 1996;
- $7.2 million during the year ended December 31, 1997; and
- $41.4 million during the nine months ended September 30, 1998.
At September 30, 1998, excluding the $35.2 million non-recurring charge
incurred in connection with our acquisition of Oncormed, the Company had
accumulated operating losses of approximately $18.8 million. We expect to incur
additional losses for at least the next several years. We also expect that such
losses may increase as we expand our research and development activities. Our
losses to date have resulted principally from costs incurred in research and
development and general and administrative costs associated with operations. As
we mentioned above, we expect that our revenues for the foreseeable future will
result from payments under our collaborations, as well as interest income. We
cannot assure you that we will receive additional revenues under existing
collaborations or that we will be able to enter into new collaborations. We
cannot assure you that Gene Logic will operate profitably.
OUR DEPENDENCE UPON ACCESS TO CERTAIN MATERIALS AND INFORMATION AND LICENSED
TECHNOLOGIES
To be able to use our technologies to discover genes, we need access to
normal and diseased human tissue samples, related clinical and other biological
information and animal disease models. We compete with many other companies for
these materials and information. We cannot assure you that we will be able to
obtain and maintain access to these materials and information upon terms
acceptable to us, if at all. If these materials are not available, it would have
a material adverse effect on our business.
5.
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Certain of our genomics and bioinformatics technologies have been
acquired or licensed from third parties. We expect to acquire or license
additional technologies from third parties. Our research and development
activities could be adversely affected if these licenses are changed or
terminated or if we are not able to establish access to additional technologies
that we believe are important to our business.
FLUCTUATIONS IN OUR OPERATING RESULTS
Our revenues and results of operations may fluctuate significantly,
depending on a variety of factors, including the following:
- changes in the demand for our technologies and products;
- variations in the timing of payments under collaborations;
- the timing of our new product introductions, if any;
- changes in the research and development budgets of our
partners and potential partners;
- the introduction of new products and services by our
competitors;
- regulatory actions;
- our adoption of new technologies; and
- the cost, quality and availability of cell and tissue samples,
reagents and related components and technologies.
We will not be able to control many of these factors. In addition, if
our revenues in a particular period do not meet expectations, we may not be able
to adjust our expenditures in that period, which could have a material adverse
effect on our operating results.
UNCERTAINTIES RELATING TO PATENTS AND PROPRIETARY RIGHTS
Our success will depend in part on our ability to obtain commercially
valuable patent claims and to protect our intellectual property. Our patent
position is generally uncertain and involves complex legal and factual
questions. Legal standards relating to the validity and scope of claims in our
technology field is still evolving. Therefore, the degree of future protection
for our proprietary rights is uncertain. The risks and uncertainties that we
face with respect to our patents and other proprietary rights include the
following:
- the pending patent applications we have filed or to which we
have exclusive rights may not result in issued patents;
- the claims of any patents which are issued to us may not
provide us meaningful protection;
- we may not be able to develop additional proprietary
technologies that are patentable;
- we, or our partners, may not be able to develop commercially
viable products or services from patents licensed or issued to
us or our partners;
- the patents licensed or issued to us or our partners may not
provide us or our partners with a competitive advantage;
- other companies may challenge patents licensed or issued to us
or our partners; and
- patents issued to other companies may have an adverse effect
on our ability to do business.
Others may independently develop similar or alternative technologies or
duplicate our technologies. Others may also unfairly design around technologies
we have licensed or developed. We could incur substantial litigation costs to
defend ourselves in patent suits brought by other companies or to initiate such
suits. In particular we are aware of a number of patents and patent applications
owned by others relating to the analysis of gene expression or the manufacture
and use of DNA chips. We cannot assure you that these or other technologies will
not provide others with competitive advantages over our technologies and will
not have a material adverse effect on our business.
We apply for patent protection for methods relating to gene expression,
disease-specific patterns of gene expression we identify and individual disease
genes and targets we discover. These patent applications may include claims
relating to novel genes and gene fragments and to novel uses for known genes or
gene fragments identified through our discovery programs. We cannot assure you
that we will be able to obtain meaningful patent protection for our discoveries.
Even if patents are issued, their scope of coverage or protection is uncertain.
6.
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Several groups are attempting to identify and patent gene fragments
and full-length genes, the functions of which have not been characterized, as
well as fully characterized genes. There is substantial uncertainty regarding
the possible patent protection for gene fragments or genes without known
function or correlation with specific diseases. To the extent any patents are
issued to others on partial or full-length genes, the risk increases that
potential products and processes of our company or our partners may give rise to
claims of patent infringement. The public availability of partial or full
sequence information or patent applications claiming those sequences, even if
not accompanied by relevant function or disease association, prior to the time
we apply for patent protection on a corresponding gene could adversely affect
our ability to obtain patent protection with respect to the gene or to the
related expression patterns. Furthermore, others may file patent applications
covering genes or gene products that are similar or identical to any for which
we may seek patent protection. We cannot assure you that any such patent
application will not have priority over patent applications that we file. We
believe that there is likely to be significant litigation in the industry
regarding patent and other intellectual property rights. If we become involved
in such litigation, it could have a material adverse effect on our business.
We also rely on trade secret protection and confidentiality agreements
to protect our interests in proprietary know-how that is not patentable and for
processes for which patents are difficult to enforce. We have taken security
measures to protect our proprietary know-how and confidential data and continue
to explore further methods of protection. While we require all employees,
consultants and collaborators to enter into confidentiality agreements, we can
not be certain that we will be able to meaningfully protect our trade secrets.
Any material leak of confidential data into the public domain or to third
parties could have a material adverse effect on our business, financial
condition and results of operations.
INTENSE COMPETITION
There is intense competition among entities attempting to identify
genes associated with specific diseases and to develop products and services
based on these discoveries. We face competition from pharmaceutical,
biotechnology and diagnostic companies, academic and research institutions and
government agencies. Many of our competitors have substantially greater capital
resources, research and development staffs, facilities, manufacturing and
marketing experience, distribution channels and human resources than we do. Our
competitors may discover or develop important genes before us, develop genes
which are more effective than those we develop or obtain regulatory approvals of
products more rapidly than we or our partners do.
OUR FUTURE CAPITAL REQUIREMENTS AND THE UNCERTAINTY OF OUR ACCESS TO ADDITIONAL
FUNDING
We believes that existing cash and marketable securities and
anticipated cash flow from our current collaborations and licensing arrangements
will be sufficient to support our operations for at least the next 24 months. We
may choose to raise additional capital due to market conditions or strategic
considerations even if we have sufficient funds for our operating plan. We
expect that we will require significant additional funding in the future. We may
seek funding through public or private equity offerings, debt financings or
additional collaborations. If we raise additional capital by issuing equity or
convertible debt securities, the issuances may dilute your share ownership and
future investors may be granted rights superior to yours. We cannot assure you
that additional financing will be available when needed, or that, if available,
financing will be obtained on favorable terms.
IMPACT OF GOVERNMENT REGULATION
Any new drug developed by our efforts and the efforts of our
collaborative partners must undergo an extensive regulatory approval process in
the United States and other countries before it can be marketed. This regulatory
process can take many years and require substantial expense. Changes in FDA
policies can increase the delay for each new drug, product license and
biological license application. We expect similar delays in the regulatory
approval of any diagnostic or agricultural product, where such approval is
required, and in obtaining regulatory approval in foreign countries. Even if
regulatory approval is obtained, a marketed product and its manufacturer are
subject to continuing review. Discovery of previously unknown problems with a
product may result in withdrawal of the product from the market. We cannot be
certain if and when we or our partners will
7.
<PAGE> 10
submit any applications for regulatory approval. We cannot assure you that
we or our partners will obtain regulatory approval for any products on a timely
basis, if at all.
No investigational new drug application has been submitted for any
product candidate resulting from our discovery programs. In addition, no product
candidate has been approved for commercialization in the United States or
elsewhere. We expect to rely on our partners to file such applications and
generally direct the regulatory approval process. If our partners fail to obtain
required governmental approvals, it will delay or prevent them from marketing
drugs or diagnostic products, or limit the commercial use of such products. The
occurrence of any of these events would have a material adverse effect on our
business.
OUR LIMITED CLINICAL DEVELOPMENT, MANUFACTURING, MARKETING AND SALES EXPERIENCE
We have made no investment in therapeutic, diagnostic or other life
science product manufacturing, marketing or sales resources and do not expect to
enter such fields. Instead, we expect our partners to pursue the
commercialization of products based upon or discovered using our technologies.
We can provide no assurance that we will be able to enter into such arrangements
on acceptable terms, if at all. We will depend on partners, licensees or other
entities for such services. Our dependence may adversely affect our ability to
develop and deliver such products on a timely and competitive basis. To the
extent we directly engage in development, manufacturing and marketing of
products, it will require substantial additional funds, personnel and production
facilities.
RISK OF LIABILITY
We may be exposed to claims of liability from use of products either we
or our partners provide. In addition, genetic testing and information services
that we provide, or that were provided by Oncormed prior to the merger, could
expose us to the risk of certain types of litigation, including medical
malpractice claims, negligence claims or contract disputes. We currently
maintain product liability and medical malpractice insurance. We cannot assure
you that our insurance coverage will be adequate to protect us against future
claims. A product liability claim, product recall or a medical malpractice claim
could have a material adverse effect on our business.
POSSIBLE VOLATILITY OF OUR STOCK PRICE
The market price of our common stock, which is quoted on the Nasdaq
National Market System, has been and is likely to continue to be highly volatile
due to a variety of factors, including the following:
- developments concerning our proprietary rights, including
patents and litigation matters;
- developments concerning our collaboration agreements or
licensing arrangements;
- publicity regarding actual or potential results from our
products or technology;
- sales of substantial amounts of our stock by existing
stockholders;
- announcements of technological innovations and new commercial
products by us or our competitors;
- fluctuations in our operating results;
- price and volume fluctuations in the stock market at large
which do not relate to our operating performance; and
- comments by securities analysts.
8.
<PAGE> 11
SELLING SECURITYHOLDERS
In connection with the merger with Oncormed, we are registering for
resale certain shares of Gene Logic common stock issued to Oncor, Inc. and
certain shares of Gene Logic common stock issuable to the holders of warrants
upon exercise of the warrants. Applying the exchange ratio of .4673 used upon
consummation of the merger, (the "Final Exchange Ratio"), an aggregate of 77,881
shares of Gene Logic common stock are issuable upon exercise of the warrants at
an exercise price of approximately $18.27 per share.
The following table sets forth (i) the name and address of the Selling
Securityholders, (ii) the number of shares of Gene Logic common stock that the
Selling Securityholders beneficially owned prior to the offering for resale of
any of the shares of Gene Logic common stock being registered hereby, (iii) the
maximum number of shares of Gene Logic common stock that may be offered for
resale for the account of the Selling Securityholders pursuant to this
Prospectus (the "Resale Shares"), and (iv) the number of shares of Gene Logic
common stock to be held by the Selling Securityholders after the offering of the
Resale Shares (assuming all of the Resale Shares are sold by the Selling
Securityholders).
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES OF GENE
LOGIC COMMON STOCK
NUMBER OF BENEFICIALLY OWNED (2)
SHARES OF SHARES OF -----------------------------
GENE LOGIC GENE LOGIC BEFORE
COMMON STOCK COMMON STOCK OFFERING OF AFTER OFFERING
TO BE RESOLD BENEFICIALLY THE RESALE OF THE RESALE
SELLING SECURITYHOLDERS(1) IN THE OFFERING OWNED (2) SHARES SHARES(3)
- -------------------------- --------------- ------------- ----------- --------------
<S> <C> <C> <C> <C>
Oncor, Inc.................................. 934,600 934,600 4.8% --
209 Perry Parkway
Gaithersburg, Maryland 20877
Incyte Pharmaceuticals, Inc................. 7,788 856,224(4) 4.3% 4.2%
3174 Porter Drive
Palo Alto, CA 94304
Southbrook International Investments, Ltd... 29,206 313,977(4) 1.6% 1.4%
c/o Trippoak Advisors, Inc.
630 Fifth Avenue, Suite 2000
New York, New York 10111
Westover Investments, L.P................... 10,222 110,592(4) * *
c/o HBK Investments
300 Crescent Court, Suite 700
Dallas, Texas 75201
Montrose Investments, LTD................... 18,984 203,709(4) 1.0% *
c/o HBK Investments
300 Crescent Court, Suite 700
Dallas, Texas 75201
Brown Simpson Strategic Growth
Fund, L.P................................ 2,803 30,256(4) * *
152 West 57th Street, 40th Floor
New York, New York 10019
Brown Simpson Strategic Growth
Fund, Ltd................................ 8,878 95,815(4) * *
152 West 57th Street, 40th Floor
New York, New York 10019
</TABLE>
- ----------
9.
<PAGE> 12
* Represents beneficial ownership of less than 1%.
(1) This table is based upon information supplied to us by Oncormed or the
Selling Securityholders.
(2) Number of Shares Beneficially Owned and Percentage of Shares
Beneficially Owned are determined as of September 30, 1998 and in
accordance with the rules of the Commission based upon 19,644,093
shares of Gene Logic common stock issued and outstanding on September
30, 1998.
(3) Assumes the sale of all of the Resale Shares.
(4) Using the Final Exchange Ratio, includes for (i) Incyte
Pharmaceuticals, Inc., warrants to purchase 7,788 shares of Gene Logic
common stock at an exercise price of $18.27 per share and 368,573
shares of Gene Logic common stock at an exercise price equal to the
greater of 110% of the fair market value per share of Gene Logic common
stock on the trading day prior to the date of exercise and (a) $19.25
per share (if the warrant is exercised after February 25, 1998 but on
or prior to February 25, 1999), or (b) $28.88 per share (if the warrant
is exercised after February 25, 1999 but on or prior to February 25,
2000); (ii) Southbrook International Investments, L.P., warrants to
purchases 29,206 shares of Gene Logic common stock at an exercise price
of $18.27 per share; (iii) Westover Investments, L.P., warrants to
purchase 10,222 shares of Gene Logic common stock at an exercise price
of $18.27 per share; (iv) Montrose Investments, LTD, warrants to
purchase 18,984 shares of Gene Logic common stock at an exercise price
of $18.27 per share; (v) Brown Simpson Strategic Growth Fund, L.P.,
warrants to purchase 2,803 shares of Gene Logic common stock at an
exercise price of $18.27 per share; and (vi) Brown Simpson Strategic
Growth Fund, Ltd., warrants to purchase 8,878 shares of Gene Logic
common stock at an exercise price of $18.27 per share.
PLAN OF DISTRIBUTION
The Resale Shares may be sold from time to time by the Selling
Securityholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. The Selling Securityholders may offer their Resale Shares in
one or more of the following transactions:
- on any national securities exchange or quotation service on
which the Gene Logic common stock may be listed or quoted at
the time of sale, including the Nasdaq National Market;
- in the over-the-counter market;
- in private transactions;
- through options;
- by pledge to secure debts or other obligations; or
- a combination of any of the above transactions.
The Selling Securityholders may effect such transactions by selling to
or through one or more broker-dealers, and such broker-dealers may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Securityholders. The Selling Securityholders and any
broker-dealers that participate in the distribution may, under certain
circumstances, be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, and any commissions received by such broker-dealers and
any profits realized on any resale of the Resale Shares by them might be deemed
to be underwriting discounts and commissions under the Securities Act. The
Selling Securityholders may agree to indemnify such broker-dealers against
certain liabilities, including liabilities under the Securities Act.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Resale Shares may not simultaneously
engage in market making activities with respect to Gene Logic's common
10.
<PAGE> 13
stock for a period of two business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, the Selling
Securityholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including without limitation, Regulation M
under the Exchange Act, which may limit the timing of purchases and sales of
shares of Gene Logic common stock (including the Resale Shares) by the Selling
Securityholders.
In the event of a "distribution" of Gene Logic common stock, the
Selling Securityholders, any selling broker-dealer or agent and any "affiliated
purchasers" may be subject to Regulation M under the Exchange Act, which would
prohibit, with certain exceptions, each such person from bidding for, purchasing
or attempting to induce any person to bid for or purchase any security which is
the subject of such distribution until his participation in that distribution is
completed. In addition, Regulation M under the Exchange Act prohibits certain
"stabilizing bids" or "stabilizing purchases" for the purpose of pegging, fixing
or maintaining the price of Gene Logic common stock in connection with any offer
of Gene Logic common stock by the Selling Securityholders.
Any or all of the sales or other transactions involving the Resale
Shares, whether effected by the Selling Securityholders, any broker-dealer or
others, may be made pursuant to this Prospectus. In addition, any Resale Shares
that qualify for sale pursuant to Rule 145 under the Securities Act may be sold
under Rule 145 rather than pursuant to this Prospectus.
In order to comply with the securities laws of certain states, if
applicable, the Resale Shares may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Resale Shares may not be sold unless they have been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with.
We will make copies of this Prospectus available to the Selling
Securityholders and have informed the Selling Securityholders of the need for
delivery of a copy of this Prospectus to each purchaser of the Resale Shares
prior to or at the time of any sale of the Resale Shares. We have agreed with
the Selling Securityholders to keep this Prospectus effective until the earlier
to occur of (i) the time when all of the Resale Shares may be resold pursuant to
an exemption from registration under the Securities Act, and (ii) the time at
which the Selling Securityholders no longer hold any Resale Shares.
The Selling Securityholders will pay all underwriting discounts,
commissions, transfer taxes and other expenses associated with the sale of the
Resale Shares by them. We will pay all costs and expenses associated with the
registration of the Resale Shares.
Oncor has entered into a lock-up agreement with us with respect to the
shares of Gene Logic common stock issued to it in the merger. Oncor has agreed
that it will not sell or transfer any shares of Gene Logic common stock received
by it in the merger during the period beginning on the closing date of the
merger with Oncormed and ending 60 days later. During the period beginning the
day following such period and ending 30 days later, and during each three-month
period thereafter, Oncor may sell or transfer that number of shares of Gene
Logic common stock received by it in the merger equal to the greater of (i) 1%
of the then outstanding shares of Gene Logic common stock, and (ii) the average
weekly reported volume of trading in Gene Logic common stock during the four
calendar weeks preceding the date of any such sale or transfer. Certain third
parties affiliated with Oncor have rights to purchase shares of Gene Logic
common stock currently held by Oncor. Each such third party has agreed to be
bound by the terms of the lock-up agreement executed by and between Oncor and
Gene Logic if it purchases Gene Logic common stock from Oncor. We may issue
stop-transfer instructions in order to enforce the terms of the lock-up
agreement.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the Selling
Securityholders of any of the Resale Shares. All proceeds from the sale of the
Resale Shares will be for the accounts of the Selling Securityholders.
11.
<PAGE> 14
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby has
been passed upon for the Company by Cooley Godward LLP, San Diego, California.
EXPERTS
The financial statements of the Company as of December 31, 1997 and
1996 and for each of the years in the three-year period ended December 31, 1997
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said reports.
12.
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than the
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of the common stock being registered. All the amounts shown are
estimates except for the registration fee.
<TABLE>
<S> <C>
Registration Fee............................... $ 7.17
Legal fees and expenses........................ 10,000.00
Accounting fees and expenses................... 5,000.00
-----------
Total................................. $ 15,007.17
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its Directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act.
The Registrant's Restated Certificate of Incorporation and By-laws include
provisions to (i) eliminate the personal liability of its directors for monetary
damages resulting from breaches of their fiduciary duty to the extent permitted
by Section 102(b)(7) of the General Corporation Law of Delaware (the "Delaware
Law") and (ii) require the Registrant to indemnify its Directors and officers to
the fullest extent permitted by Section 145 of the Delaware Law, including
circumstances in which indemnification is otherwise discretionary. Pursuant to
Section 145 of the Delaware Law, a corporation generally has the power to
indemnify its present and former directors, officers, employees and agents
against expenses incurred by them in connection with any suit to which they are
or are threatened to be made a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in or not opposed to, the best interests of the corporation and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. The Registrant believes that these provisions are
necessary to attract and retain qualified persons as Directors and officers.
These provisions do not eliminate the Directors' duty of care, and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware Law. In addition,
each Director will continue to be subject to liability for breach of the
Director's duty of loyalty to the Registrant, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
acts or omissions that the Director believes to be contrary to the best
interests of the Registrant or its stockholders, for any transaction from which
the Director derived an improper personal benefit, for acts or omissions
involving a reckless disregard for the Director's duty to the Registrant or its
stockholders when the Director was aware or should have been aware of a risk of
serious injury to the Registrant or its stockholders, for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the Director's duty to the Registrant or its stockholders, for improper
transactions between the Director and the Registrant and for improper
distributions to stockholders and loans to Directors and officers. The provision
also does not affect a Director's responsibilities under any other law, such as
the federal securities law or state or federal environmental laws.
The Registrant has entered into indemnity agreements with each of its
Directors and executive officers that require the Registrant to indemnify such
persons against expenses, judgments, fines, settlements and other amounts
incurred (including expenses of a derivative action) in connection with any
proceeding, whether actual or threatened, to which any such person may be made a
party by reason of the fact that such person is or was a Director or an
executive officer of the Registrant or any of its affiliated enterprises,
provided that such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Registrant and, with respect to any criminal proceeding, had no reasonable cause
to believe his conduct was unlawful. The
II-1.
<PAGE> 16
indemnification agreements also set forth certain procedures that will apply in
the event of a claim for indemnification thereunder.
At present, there is no pending litigation or proceeding involving a
Director, officer or key employee of the Registrant as to which indemnification
is being sought nor is the Registrant aware of any threatened litigation that
may result in claims for indemnification by any officer or Director.
The Registrant has an insurance policy covering the officers and Directors
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS.
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
*3.1 Amended and Restated Certificate of Incorporation of Registrant.
*3.2 By-laws of Registrant, as amended and restated.
*4.1 Specimen certificate for shares of common stock. Reference is
made to Exhibits 3.1 and 3.2.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>
* Incorporated by reference from the Registrant's Registration Statement
on Form S-1 (Registration No. 333-37317).
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers, and controlling persons of the Registrant pursuant to the provisions
described in Item 15 or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
II-2.
<PAGE> 17
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided however, that clauses (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by these clauses is
contained in periodic reports filed by the Registrant pursuant to section 13 or
section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement; (2) that, for the purpose of determining any liability
under the Securities Act, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant undertakes that: (1) for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of the registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of the registration statement as of the time it was declared
effective; (2) for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and (3) for the purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3.
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Gaithersburg, State of Maryland, on November 30,
1998.
GENE LOGIC INC.
By /s/ MICHAEL J. BRENNAN, M.D., PH.D.
--------------------------------------
Michael J. Brennan, M.D., Ph.D.
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL J. BRENNAN, M.D., PH.D. President and Chief Executive November 30, 1998
- -------------------------------------- Officer (Principal Executive Officer)
Michael J. Brennan, M.D., Ph.D.
/s/ MARK D. GESSLER Senior Vice President, Corporate Development, November 30, 1998
- -------------------------------------- Chief Financial Officer and Secretary
Mark D. Gessler (Principal Financial and Accounting Officer)
/s/ ALAN G. WALTON, PH.D., D.SC.* Chairman of the Board of Directors November 30, 1998
- --------------------------------------
Alan G. Walton, Ph.D., D.Sc.
/s/ JULES BLAKE, PH.D.* Director November 30, 1998
- --------------------------------------
Jules Blake, Ph.D.
/s/ CHARLES L. DIMMLER, III* Director November 30, 1998
- --------------------------------------
Charles L. Dimmler, III
/s/ G. ANTHONY GORRY, PH.D.* Director November 30, 1998
- --------------------------------------
G. Anthony Gorry, Ph.D.
/s/ JEFFREY D. SOLLENDER* Director November 30, 1998
- --------------------------------------
Jeffrey D. Sollender
*By /s/ MARK D. GESSLER
- --------------------------------------
Mark D. Gessler
Attorney-in-fact
</TABLE>
II-4.
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
*3.1 Amended and Restated Certificate of Incorporation of Registrant.
*3.2 By-laws of Registrant, as amended and restated.
*4.1 Specimen certificate for shares of common stock. Reference is
made to Exhibits 3.1 and 3.2.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>
* Incorporated by reference from the Registrant's Registration Statement
on Form S-1 (Registration No. 333-37317).
- ----------
<PAGE> 1
EXHIBIT 5.1
[COOLEY GODWARD LETTERHEAD]
November 25, 1998
GENE LOGIC INC.
708 Quince Orchard Road
Gaithersburg, Maryland 20878
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by GENE LOGIC INC., a Delaware corporation (the "Company"), of
Post-Effective Amendment No. 3 on Form S-3 to the Registration Statement on Form
S-4 (File No. 333-60135) (the "Registration Statement"), including a related
prospectus filed with the Registration Statement (the "Prospectus"), covering
the registration of up to 1,012,481 shares of common stock, $.01 par value, of
the Company (the "Common Stock") on behalf of certain selling securityholders,
including 934,600 shares of Common Stock (the "Shares") and 77,881 shares of
Common Stock (the "Warrant Shares") issuable upon exercise of certain warrants
held by certain selling securityholders (the "Warrants").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, your Restated Certificate of Incorporation and By-laws, the
Warrants and such other documents, records, certificates, memoranda and other
instruments as we deem necessary as a basis for this opinion. We have assumed
the genuineness and authenticity of all documents submitted to us as originals,
the conformity to originals of all documents submitted to us as copies thereof
and the due execution and delivery of all documents where due execution and
delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that (i) the Shares are validly issued, fully paid and nonassessable, and (ii)
the Warrant Shares, when issued and sold in accordance with the terms of the
Warrants will be validly issued, fully paid and nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in the
Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Sincerely,
Cooley Godward LLP
By: /s/ Frederick T. Muto
-------------------------------------
Frederick T. Muto
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 20, 1998,
included in Gene Logic Inc.'s Form 10-K for the year ended December 31, 1997,
and to all references to our Firm included in this registration statement.
Baltimore, Maryland
November 30, 1998
