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[NEOPATH LOGO]
8271 154TH AVENUE NE
REDMOND, WASHINGTON 98052
NASDAQ: NPTH
September 20, 1999
Dear Stockholder:
I am enclosing for your consideration a supplement to the joint proxy
statement/prospectus of AutoCyte and NeoPath dated September 8, 1999. The
enclosed supplement describes a lawsuit against AutoCyte that arose after the
mailing on September 10, 1999 of the joint proxy statement/prospectus. Also
enclosed is a replacement proxy card for the special meeting of shareholders of
NeoPath. Please note that the replacement proxy card is a different color than
the proxy card that you originally received.
TO HAVE YOUR VOTE COUNTED AT THE NEOPATH SPECIAL MEETING, WE MUST
RECEIVE THE ENCLOSED PROXY CARD EVEN IF YOU HAVE ALREADY SIGNED AND
RETURNED THE PROXY CARD THAT ACCOMPANIED THE ORIGINAL JOINT PROXY
STATEMENT/PROSPECTUS.
We urge you to complete and return the enclosed proxy card at your earliest
convenience.
Sincerely,
Ronald R. Bromfield
President and Chief Executive
Officer
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PROSPECTUS SUPPLEMENT NO. 1
DATED SEPTEMBER 20, 1999
TO
JOINT PROXY STATEMENT/PROSPECTUS DATED SEPTEMBER 8, 1999
AUTOCYTE, INC. AND NEOPATH, INC.
This prospectus supplement supplements the joint proxy statement/prospectus
dated September 8, 1999 of AutoCyte and NeoPath relating to the issuance of
shares of AutoCyte's common stock to shareholders of NeoPath in connection with
AutoCyte's proposed acquisition of NeoPath. You should read this prospectus
supplement in conjunction with the prospectus included in our joint proxy
statement/ prospectus dated September 8, 1999, and this prospectus supplement is
qualified by reference to the joint proxy statement/ prospectus, except to the
extent that the information in this prospectus supplement replaces or
supplements the information in the joint proxy statement/prospectus.
BUSINESS OF AUTOCYTE
The following discussion amends and restates in its entirety the discussion
under "Business of AutoCyte -- Legal Proceedings" and supplements the discussion
under "Business of AutoCyte -- Patents, Copyrights, Licenses and Proprietary
Rights."
On September 13, 1999, Cytyc Corporation filed suit in the United State
District Court for the District of Delaware against AutoCyte. The complaint
alleges that AutoCyte's CytoRich(R) proprietary preservatives and reagents
infringe Cytyc's patent titled "Cell Preservative Solution." The complaint seeks
a determination that AutoCyte is infringing Cytyc's patent and an injunction
preliminarily and permanently enjoining and restraining AutoCyte from further
infringing Cytyc's patent. The complaint also seeks treble damages, plus
interest, in an amount to be determined, as well as costs and reasonable
attorneys fees.
AutoCyte believes that Cytyc's claims are without factual or legal merit
and intends to vigorously defend this action. However, given the early stage of
this litigation, AutoCyte cannot guarantee that it will be successful in its
defense of this claim. If the court were to uphold Cytyc's claims of
infringement, AutoCyte, in addition to paying Cytyc's proven damages, if any,
could then be prevented from selling its CytoRich preservatives and reagents or
be required to obtain a license from Cytyc. If such a license were not
available, AutoCyte would need to redesign its CytoRich preservatives and
reagents to be non-infringing. Any change to the CytoRich preservatives and
reagents would likely need to be approved by the FDA before it could be sold in
the United States for gynecological applications.
Except as described above, AutoCyte is not a party to any material legal
proceedings.
