<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1998.
or
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______________
to _______________.
COMMISSION FILE NO. 0-19222
GENELABS TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
CALIFORNIA 94-3010150
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
</TABLE>
<TABLE>
<S> <C>
505 PENOBSCOT DRIVE, REDWOOD CITY, CALIFORNIA 94063
(Address of principal executive offices) (Zip code)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (650) 369-9500
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
--- ---
There were 39,668,803 shares of the Registrant's Common Stock issued and
outstanding on October 30, 1998.
================================================================================
1
<PAGE> 2
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C>
September 30, December 31,
1998 1997
------------------ ------------------
(Unaudited) (Note)
ASSETS
Current assets:
Cash and cash equivalents $ 2,528 $ 4,230
Short-term investments 16,825 16,869
------------------ ------------------
Cash, cash equivalents and short-term investments 19,353 21,099
Accounts receivable 1,864 2,014
Inventories 2,141 2,281
Other current assets 364 554
------------------ ------------------
Total current assets 23,722 25,948
Property and equipment, net 2,098 1,239
Investment in affiliate 1,174 3,658
Other assets 264 294
================== ==================
$ 27,258 $ 31,139
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities $ 4,860 $ 4,458
Accrued compensation and related expenses 1,820 1,932
Unearned contract revenue 650 843
------------------ ------------------
Total current liabilities 7,330 7,233
Long-term obligations 647 696
------------------ ------------------
Total liabilities 7,977 7,929
------------------ ------------------
Shareholders' equity:
Preferred stock 9,682 9,682
Common stock 138,174 137,604
Accumulated deficit (128,784) (123,892)
Cumulative foreign currency translation adjustment 209 (184)
------------------ ------------------
Total shareholders' equity 19,281 23,210
================== ==================
$ 27,258 $ 31,139
================== ==================
</TABLE>
See notes to condensed consolidated financial statements.
Note: The condensed consolidated balance sheet at December 31, 1997 has been
derived from the audited financial statements at that date but does not include
all the information and footnotes required by generally accepted accounting
principles for complete financial statements.
2
<PAGE> 3
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
September 30, September 30,
------------------------------- --------------------------------
1998 1997 1998 1997
-------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 1,959 $ 2,463 $ 6,055 $ 7,482
Contract 2,478 786 5,915 2,342
-------------- --------------- --------------- ---------------
Total revenues 4,437 3,249 11,970 9,824
-------------- --------------- --------------- ---------------
Operating costs and expenses:
Cost of product sales 1,101 1,427 3,266 4,489
Research and development 3,395 3,326 9,833 8,966
Selling, general and administrative 1,921 2,073 5,945 6,397
-------------- --------------- --------------- ---------------
Total operating costs and expenses 6,417 6,826 19,044 19,852
-------------- --------------- --------------- ---------------
Operating loss (1,980) (3,577) (7,074) (10,028)
-------------- --------------- --------------- ---------------
Interest income 268 354 760 1,048
Equity in loss of affiliate - (114) (223) (343)
Gain on sale of investment - - 1,645 -
-------------- --------------- --------------- ---------------
Net loss $ (1,712) $ (3,337) $ (4,892) $ (9,323)
============== =============== =============== ===============
Net loss per share $ (0.04) $ (0.08) $ (0.12) $ (0.24)
============== =============== =============== ===============
Weighted average shares outstanding 39,668 39,329 39,581 38,841
============== =============== =============== ===============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the nine months ended
September 30,
--------------------------------------
1998 1997
----------------- ------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (4,892) $ (9,323)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization expense 522 434
Equity in loss of affiliate 223 343
Gain on sale of investment (1,645) -
Changes in assets and liabilities:
Receivables 150 1,007
Inventories 140 815
Accounts payable, accrued liabilities, accrued
compensation and long-term obligations 341 (634)
Unearned contract revenue (193) (281)
Other 163 6
----------------- ------------------
Net cash used in operating activities (5,191) (7,633)
----------------- ------------------
Cash flows from investing activities:
Purchases of securities available-for-sale (16,435) (12,507)
Proceeds from sales and maturities of securities
available-for-sale 16,479 9,860
Capital expenditures (1,424) (323)
Proceeds from sale of investment 4,300 -
----------------- ------------------
Net cash provided by/(used in) investing activities 2,920 (2,970)
----------------- ------------------
Cash flows from financing activities -
proceeds from issuance of common stock, net 570 7,939
Effect of exchange rate change on cash (1) (40)
----------------- ------------------
Net decrease in cash and cash equivalents (1,702) (2,704)
Cash and cash equivalents, beginning of the period 4,230 4,377
----------------- ------------------
Cash and cash equivalents, end of the period 2,528 1,673
Short-term investments, end of the period 16,825 21,782
----------------- ------------------
Cash, cash equivalents and short-term investments,
end of the period $ 19,353 $ 23,455
================= ==================
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
GENELABS TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1998
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements include
the accounts of Genelabs Technologies, Inc. and its wholly-owned subsidiaries
(collectively, "Genelabs" or the "Company") after elimination of all significant
intercompany accounts and transactions. These financial statements have been
prepared in accordance with generally accepted accounting principles ("GAAP")
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Certain prior year amounts have been reclassified to conform to the current year
presentation. Operating results for the three and nine month periods ended
September 30, 1998 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998.
These unaudited condensed consolidated financial statements are meant to be read
in conjunction with the audited consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
2. INVENTORIES
The components of inventory are as follows:
<TABLE>
<CAPTION>
(in thousands) September 30, 1998 December 31, 1997
------------------ -----------------
<S> <C> <C>
Raw materials $ 1,193 $ 1,113
Work-in-process 254 542
Finished goods 694 626
----------- -----------
$ 2,141 $ 2,281
=========== ===========
</TABLE>
3. BUSINESS SEGMENTS
The Company operates in two business segments, biopharmaceuticals and
diagnostics. The biopharmaceutical business is engaged in research and
development directed towards drugs that treat human disease. Headquarters for
the biopharmaceutical business is integrated with the corporate headquarters in
Redwood City, California. The diagnostics business primarily sells tests for
detection of infectious diseases. The diagnostics' manufacturing headquarters
are located in Singapore and the principal sales office is based in Switzerland.
Revenues from external customers for the biopharmaceutical segment are reported
as contract revenues on the Condensed Consolidated Statement of Operations and
revenues from external customers for the diagnostics segment are reported as
product sales. For the three months ended September 30, 1998 and 1997, the
biopharmaceutical operating loss was $1,951,000 and $3,537,000, respectively,
and the diagnostics operating loss was $29,000 and $40,000, respectively. For
the nine months ended September 30, 1998 and 1997, the biopharmaceutical
operating loss was $7,100,000 and $9,787,000, respectively, and the diagnostics
operating income/(loss) was $26,000 and $(241,000), respectively.
5
<PAGE> 6
4. CHANGES IN ACCOUNTING STANDARDS
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No.
130 establishes new rules for the reporting and display of comprehensive income
and its components; however, the adoption of this Statement has no impact on the
Company's net income or shareholders' equity. SFAS No. 130 requires, among other
things, unrealized gains or losses on the Company's foreign currency translation
adjustments to be included in comprehensive income or loss. For the three months
ended September 30, 1998 and 1997, the Company's comprehensive loss amounted to
$1,745,000 and $3,510,000, respectively, and for the nine months ended September
30, 1998 and 1997, the Company's comprehensive loss amounted to $4,499,000 and
$9,551,000, respectively.
5. INVESTMENT IN AFFILIATE
During the second quarter of 1998, through two separate events the Company
reduced its ownership interest in its Taiwan-based affiliate, Genelabs
Biotechnology Co., Ltd. ("GBL"). The first reduction occurred when GBL closed an
equity financing in which the Company chose not to invest additional cash,
reducing the Company's holdings in GBL from 40% to 30%. The second reduction
occurred when Genelabs sold a portion of its shares in GBL to a third party,
further reducing the Company's holdings in GBL to 16%. Prior to the sale of a
portion of this investment, the Company recorded its relative share of GBL's
operating results as equity income or loss in the Consolidated Statement of
Operations. With its ownership reduced to less than 20%, Genelabs now accounts
for this investment at the lower of cost or market instead of using the equity
method.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
All statements in Management's Discussion and Analysis of Financial Condition
and Results of Operations that are not historical are forward-looking statements
which involve a number of risks and uncertainties, including, but not limited
to, those statements concerning the commencement and completion of clinical
trials and the announcement of trial data results, the Company's strategic
plans, anticipated expenditures and the timing and need for additional funds.
Among the factors that could cause actual results of the Company's activities to
differ materially are product non-approval or delays in approval by the U.S.
Food and Drug Administration and foreign regulatory authorities, product
development, manufacturing and market acceptance risks, the impact of
competitive products, pricing and intellectual property rights, the results of
current and future licensing and other collaborative relationships and other
factors and risks detailed under the caption "Risk Factors" in the Company's
1997 Annual Report on Form 10-K and other filings with the U.S. Securities and
Exchange Commission. The Company disclaims any obligation to update these
statements for subsequent events.
OVERVIEW
Genelabs Technologies, Inc. (together with its subsidiaries, "Genelabs" or the
"Company") is a biopharmaceutical company engaged in the discovery of small
molecule drugs that bind to DNA or RNA to regulate gene expression or inactivate
pathogens. The Company's drug discovery program is based on an integrated
platform of technologies that encompass genomics, transcription biology,
structure-biased combinatorial chemistry, high-throughput screening with
proprietary assays, and several proprietary validation and characterization
assays. The Company's clinical development efforts are focused on its drug
candidate, GL701, which is in Phase III clinical trials as a new therapy for
systemic lupus erythematosus ("SLE").
The Company also conducts a diagnostic business through its wholly-owned
subsidiary, Genelabs Diagnostics (Pte.) Ltd. ("GLD"), located in Singapore,
which sells diagnostic tests for infectious diseases primarily in Europe and
Asia. In addition, Genelabs has an investment in a Taiwan-based pharmaceutical
company, Genelabs Biotechnology Co., Ltd. ("GBL").
The Company expects to continue to invest in biopharmaceutical product research
and development. Revenue from the sale of therapeutic products is not expected
until the launch of its first product, which is not expected to occur for
several years, if at all. The Company has several collaborations and is seeking
additional collaborations with other pharmaceutical companies for some of its
technologies to maximize its profitability for products that may result from
those technologies and to obtain funding for a portion of its research and
development expenses. However, Genelabs expects to continue to incur operating
losses for at least the next several years.
RESULTS OF OPERATIONS
Revenues
Total revenues for the quarter ended September 30, 1998 were $4.4 million,
compared to $3.2 million for the same period in 1997. For the nine months ended
September 30, 1998, total revenues were $12.0 million compared to $9.8 million
for the same period in 1997. Total revenues include both diagnostic product
sales and contract revenue.
Diagnostic product sales were $2.0 million for the quarter ended September 30,
1998, compared to $2.5 million for the same period in 1997. For the nine months
ended September 30, 1998, diagnostic product sales were $6.1 million compared to
$7.5 million for the same period in 1997. For the three months ended September
30, 1998
7
<PAGE> 8
compared to the same period in 1997, sales of substantially all diagnostic
products declined. For the nine months ended September 30, 1998 compared to the
same period in 1997, the decrease in diagnostic product sales for the Company's
western blot products and rapid tests was partially offset by increases in
reagent sales.
Contract revenues were $2.5 million for the quarter ended September 30, 1998,
compared to $0.8 million for the same period in 1997. For the nine months ended
September 30, 1998, contract revenues were $5.9 million compared to $2.3 million
for the same period in 1997. Contract revenues include licensing, milestone,
research and development payments and government grants. The increase in
contract revenues for both the three and nine month periods of 1998, compared to
the same periods in 1997, was primarily due to revenue from a Defense Advanced
Research Projects Agency ("DARPA") grant and a payment received for the
expansion of marketing rights granted to a corporate partner for a hepatitis E
virus ("HEV") vaccine. Contract revenues recognized in the future will be
dependent in part upon the continuation of existing corporate collaborations and
the DARPA grant, achievement of milestones under existing corporate
collaborations and establishment of new research, development and/or licensing
agreements.
Cost of Product Sales
Cost of product sales were $1.1 million for the quarter ended September 30,
1998, compared to $1.4 million for the same period in 1997. Gross margins
increased to 44% for the third quarter of 1998 from 42% for the same period a
year ago. For the nine months ended September 30, 1998, cost of product sales
were $3.3 million compared to $4.5 million for the same period in 1997. Gross
margins increased to 46% for the first nine months of 1998 from 40% for the same
period a year ago. The increase in gross margins was primarily due to an
increase in the proportion of higher margin product sales and higher production
yields to those of the previous year.
Research and Development Expenses
The Company's research and development expenses were $3.4 million for the
quarter ended September 30, 1998, compared to $3.3 million for the same period
in 1997. For the first nine months of 1998, research and development expenses
were $9.8 million compared to $9.0 million for the same period in 1997. The
increases were primarily due to expansion of the drug discovery research
programs, partially offset by lower expenditures on GL701 as patients complete
their portion of the clinical trial.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $1.9 million for the quarter
ended September 30, 1998, compared to $2.1 million for the same period in 1997.
For the first nine months of 1998, selling, general and administrative expenses
were $5.9 million compared to $6.4 million for the same period in 1997. The
decreases were primarily due to lower sales and marketing costs of the Company's
diagnostics subsidiary.
Gain on Sale of Investment
During the second quarter of 1998, Genelabs sold a portion of its investment in
GBL for net proceeds of $4.3 million, resulting in a gain of $1.6 million for
the nine months ended September 30, 1998.
Net Loss
The Company has operated at a loss since its inception and had an accumulated
deficit of $128.8 million as of September 30, 1998. The net loss was $1.7
million for the three months ended September 30, 1998, compared to $3.3 million
for the same period in 1997. For the first nine months of 1998, the net loss was
$4.9 million compared to $9.3 million for the same period in 1997. Revenue from
the DARPA grant and the HEV vaccine marketing rights contributed to the
reduction in Genelabs' net loss for the three months ended September 30, 1998,
compared to the same period in 1997. In addition to the above noted items, the
gain on the sale of shares in GBL contributed to the reduced net loss for the
nine months ending September 30, 1998, compared to the same period in 1997,
partially offset by increased spending on drug discovery research.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash, cash equivalents and short-term investment balances
totaling $19.4 million at September 30, 1998, compared to $21.1 million at
December 31, 1997. During the nine months ended September 30, 1998, Genelabs
used $5.2 million to fund operations as the Company expanded its drug discovery
research and continued development of GL701 for SLE. This use of cash was
partially offset by receipt of $4.3 million from the sale of shares in GBL.
Purchases of capital equipment for drug discovery research also contributed to
the use of cash during the period ended September 30, 1998.
The Company has funded its operations since inception primarily through public
and private offerings of its common stock, private offerings of its preferred
stock, contract revenues and product sales. The Company has no bank debt or open
credit lines. Genelabs expects to incur substantial additional costs, including
costs for clinical trials for products currently under development and costs for
further research on drug discovery. The amount of the additional costs, as well
as increased expenditures necessary for working capital and capital
requirements, will depend on numerous factors including the timing and outcome
of any regulatory actions related to the Company's products. In addition,
funding requirements will depend on the progress of the Company's research and
development programs as well as its ability to establish and maintain
collaborations with other pharmaceutical companies to fund these programs.
The Company anticipates that its current resources and expected revenues from
existing collaborative agreements will enable it to maintain its current and
planned operations at least through 1999. The Company anticipates realizing a
net loss at least until 2000, and profitability thereafter is subject to
significant uncertainty. There can be no assurance that revenues from product
sales or royalties or from other sources will be sufficient to fund operations
or that the Company will achieve profitability or positive cash flow. Additional
financing may be required to fund the Company's continuing operations and
research and development activities in the form of debt or equity securities or
bank financing. There can be no assurance that such financing will be available
on acceptable terms, if at all. The unavailability of such financing could delay
or prevent the development, testing, regulatory approval, manufacturing or
marketing of some or all of the Company's products and technologies and could
have a material adverse effect on the Company's business, financial condition
and results of operations.
CERTAIN BUSINESS RISKS
Genelabs' technology is at an early stage of development and its product
candidates are at varying stages of development, all subject to various risks.
The Company has experienced significant operating losses since its inception and
expects to incur significant losses over the next several years. The Company's
technologies, including the DNA and RNA-binding technologies, are in many cases
new and still under development. These approaches have not yet been proven to
have a therapeutic effect. There can be no assurance that these technologies or
any of the Company's product candidates resulting therefrom will be successfully
developed. All of Genelabs' proposed therapeutic products, including GL701 for
the treatment of SLE, are in research or development and will require
substantial additional research and development efforts prior to any commercial
use, including extensive clinical testing as well as potentially lengthy
regulatory approval. The Company is currently conducting Phase III clinical
trials on GL701 for the treatment of SLE, and the Company expects to unblind and
announce the results from these trials during 1999. Clinical trials are subject
to significant risk and uncertainty, and no assurance can be given as to the
results of these trials. In the event that these trials do not demonstrate the
efficacy of GL701, the Company would be required to commence additional clinical
trials or may elect to terminate development of this compound, which, in either
case, could have a material adverse effect on the Company's business and
prospects. There can be no assurance that any of these therapeutic products or
others resulting from
9
<PAGE> 10
Genelabs' research programs will be successfully developed, prove to be safe and
efficacious at each stage of clinical trials, meet applicable regulatory
standards, be capable of being produced in commercial quantities at reasonable
costs or be successfully marketed.
The active ingredient in GL701 for the treatment of SLE is
dehydroepiandrosterone ("DHEA"). DHEA is currently being marketed by others as a
dietary supplement. The Company believes that DHEA is a drug that should be
subject to regulation and approval by the FDA. The Company further believes that
in a few instances these supplements do not contain true DHEA, but instead
contain related substances that are not biologically equivalent. The Company has
submitted documentation to the FDA requesting clarification of DHEA's status as
a drug and removal from the market as a dietary supplement. However, to date the
FDA has taken no action to limit or regulate the sale of these dietary
supplements, and no assurance can be given as to the willingness or ability of
the FDA to do so in the future. In the event that clinical trials for GL701 are
promising and the drug candidate receives FDA marketing approval, the concurrent
sale of these dietary supplements could adversely affect the market for or the
selling price of GL701. While the Company has obtained U.S. patents relating to
the use of GL701 to treat SLE and reduce steroid dosage in SLE patients,
Genelabs is unable to obtain patent protection for the compound itself.
The Company has no internal manufacturing capabilities for pharmaceutical
products and is entirely dependent on contract manufacturers to manufacture
clinical and, if successfully developed, commercial-scale quantities of GL701
pursuant to supply agreements. While the Company believes its suppliers
currently meet FDA standards for manufacturing, there can be no assurance that
these third party manufacturers will continue to meet FDA or product
specification standards or that the Company's manufacturing requirements can be
met in a consistent and timely manner. In addition, the Company has only limited
sales, marketing and distribution capabilities. If the Company successfully
develops any new products, Genelabs must either rely on large pharmaceutical
companies to market such products or must develop a marketing and sales force
with technical expertise and supporting distribution capability in order to
market such products directly.
Also inherent in the Company's stage of development is a range of additional
risks, including competition, uncertainties regarding protection of patents and
proprietary rights and the possibility of infringement of the proprietary rights
of others, government regulation, and uncertainties regarding health care
reform.
IMPACT OF YEAR 2000
The Company has assessed its computer systems and believes that such systems
will function properly with respect to dates in the year 2000 and thereafter.
The Company is assessing the possible effects on the Company's operations of the
year 2000 readiness of key suppliers, contractors and collaborators; however,
the potential impact and related costs are not known at this time.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
GENELABS DIAGNOSTICS (PTE.) LTD. On October 5, 1998, Institut Pasteur and
Pasteur Sanofi Diagnostics (collectively, the "Plaintiffs") filed a Writ of
Summons in the High Court of the Republic of Singapore against Genelabs
Diagnostics (Pte.) Ltd. ("GLD"), the wholly-owned diagnostics subsidiary of
Genelabs Technologies, Inc., and Nagase Singapore Pte. Ltd., GLD's distributor
of products in Malaysia. In the Writ, the Plaintiffs allege that GLD has, by
making, using and selling HIV-2 Western Blot diagnostic products, infringed a
Singaporean patent owned by Institut Pasteur and exclusively licensed to Pasteur
Sanofi. The Plaintiffs are seeking injunctive relief and damages in an
unspecified amount. GLD believes that it has substantial defenses and is
defending the suit vigorously.
ITEM 5. OTHER INFORMATION
Pursuant to the Company's by-laws, stockholders who wish to bring matters or
propose nominees for director at the Company's 1999 annual meeting of
stockholders must provide specified information to the Company between February
20, 1999 and March 22, 1999 (unless such matters are included in the Company's
proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act of
1934, as amended).
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter ended September 30,
1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
GENELABS TECHNOLOGIES, INC.
(Registrant)
Chief Executive Officer:
/s/ IRENE A. CHOW
-----------------------------------------
Date: November 6, 1998 IRENE A. CHOW
President and Chief Executive Officer
Principal Accounting Officer:
/s/ MATTHEW M. LOAR
Date: November 6, 1998 -----------------------------------------
MATTHEW M. LOAR
Director of Finance and Controller
</TABLE>
11
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF GENELABS TECHNOLOGIES, INC. FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,528
<SECURITIES> 16,825
<RECEIVABLES> 1,864
<ALLOWANCES> 0
<INVENTORY> 2,141
<CURRENT-ASSETS> 23,722
<PP&E> 12,393
<DEPRECIATION> 10,295
<TOTAL-ASSETS> 27,258
<CURRENT-LIABILITIES> 7,330
<BONDS> 0
0
9,682
<COMMON> 138,174
<OTHER-SE> (128,574)
<TOTAL-LIABILITY-AND-EQUITY> 27,258
<SALES> 6,055
<TOTAL-REVENUES> 11,970
<CGS> 3,266
<TOTAL-COSTS> 3,266
<OTHER-EXPENSES> 15,778
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (760)
<INCOME-PRETAX> (4,892)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,892)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,892)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
