<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 3, 1996
REGISTRATION NO. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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INCYTE PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 94-3136539
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
3174 Porter Drive
Palo Alto, CA 94304
(415) 855-0555
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
ROY A. WHITFIELD
President and Chief Executive Officer
INCYTE PHARMACEUTICALS, INC.
3174 Porter Drive
Palo Alto, CA 94304
(415) 855-0555
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
STANTON D. WONG
SALLY BRAMMELL
Pillsbury Madison & Sutro LLP
P.O. Box 7880
San Francisco, California 94120
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
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 only 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.
/ /
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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. / /
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value......... 107,408 shares $46.75 $5,021,324 $1,522
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low prices
of the Company's Common Stock on the Nasdaq National Market on September
27, 1996.
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 WHICH 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.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 3, 1996
PROSPECTUS
107,408 SHARES
I N C Y T E
P H A R M A C E U T I C A L S, I N C.
COMMON STOCK
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This Prospectus covers 107,408 shares (the "Shares") of Common Stock,
$.001 par value (the "Common Stock"), of Incyte Pharmaceuticals, Inc. ("Incyte"
or the "Company") offered for the account of certain stockholders of the Company
(the "Selling Stockholders"). The Shares may be offered by the Selling
Stockholders from time to time in transactions (which may include block
transactions) on the Nasdaq National Market, in negotiated transactions, through
a combination of such methods of sale, or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
prevailing market prices, or at negotiated prices. The Selling Stockholders may
effect such transactions by selling the Shares to or through broker-dealers, who
may receive compensation in the form of discounts, concessions or commissions
from the Selling Stockholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they may sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). The Company will not receive any of the proceeds from
the sale of the Shares by the Selling Stockholders. The Company has agreed to
bear all expenses of registration of the Shares, but all selling and other
expenses incurred by a Selling Stockholder will be borne by that Selling
Stockholder.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and any commissions paid or any
discounts or concessions allowed to any such persons, and any profits received
on the resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Selling Stockholders"
and "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the
symbol "INCY."
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of any offer to buy any
security other than the shares of Common Stock offered by this Prospectus, nor
does it constitute an offer to sell or solicitation of any offer to buy the
shares of Common Stock by anyone in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so or to any person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that the information contained herein is correct as of any time subsequent to
the date hereof.
The date of this Prospectus is , 1996
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements, and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements, and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C., as
well as the regional offices of the Commission located at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois, and 7 World Trade Center,
Suite 1300, New York, New York. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission maintains a World
Wide Web site that contains reports, proxy and information statements, and other
information that are filed through the Commission's Electronic Data Gathering,
Analysis and Retrieval System. This Web site can be accessed at
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock, reference is made to the
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete and, in each instance, reference is made
to the copy of such contract or document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. Copies of the Registration Statement, including all exhibits thereto,
may be obtained from the Commission's principal office in Washington, D.C. upon
payment of the fees prescribed by the Commission, or may be examined without
charge at the offices of the Commission described above.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Prospectus: (i) the Company's Annual Report
on Form 10-K for the year ended December 31, 1995, (ii) the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996,
(iii) the Company's Current Report on Form 8-K dated July 22, 1996, and (iv) the
description of the Common Stock contained in the Company's Registration
Statement on Form 8-A filed under the Exchange Act on October 7, 1993. All
documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act prior to the termination of the offering to which
this Prospectus relates shall be deemed to be incorporated by reference into
this Prospectus and to be part of this Prospectus from the date of filing
thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus and
the Registration Statement of which it is a part to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies or replaces such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Prospectus or such Registration Statement. The Company
will provide without charge to each person to whom a copy of the Prospectus has
been delivered, and who makes a written or oral request, a copy of any and all
of the foregoing documents incorporated by reference in the Registration
Statement (other than exhibits unless such exhibits are specifically
incorporated by reference into such documents). Requests should be submitted in
writing or by telephone to Investor Relations, Incyte Pharmaceuticals, Inc.,
3174 Porter Drive, Palo Alto, California 94304, telephone (415) 845-4111.
2
<PAGE> 4
THE COMPANY
Incyte Pharmaceuticals, Inc. ("Incyte" or the "Company") is a leader in
the design, development and marketing of genomic database products, software
tools, and related services. The Company has created a portfolio of database
products including the LifeSeq(TM) gene expression and sequence database,
LifeSeq FL(TM) database of full-length genes, LifeSeq Atlas(TM) mapping
database, and PathoSeq(TM) microbial database. These databases integrate
bioinformatics software with both proprietary and publicly available genetic
information to create information-based tools used by pharmaceutical companies
in drug discovery and development. In building its databases, the Company
utilizes high-throughput, computer-aided gene sequencing and analysis
technologies to identify and characterize expressed genes. The Company's current
pharmaceutical customers subscribe on a nonexclusive basis. Revenues from these
customers generally include database subscription fees and may include
additional fees for specific sequencing services, such as satellite database
services. The Company's agreements with its customers also provide for milestone
payments and royalties from the sale of products developed with Incyte
technology and database information. The Company also offers its proprietary
software, LifeTools(TM), as a stand-alone product. LifeTools is a suite of
specialized bioinformatics software that enable the analysis and management of
complex genomic data from multiple sources.
The Company was incorporated in Delaware in 1991. The Company's
executive offices are located at 3174 Porter Drive, Palo Alto, California 94304
and its telephone number is (415) 855-0555.
RISK FACTORS
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. THE
FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN INVESTMENT IN
THE SHARES OF COMMON STOCK OFFERED HEREBY.
Limited Operating History; History of Operating Losses; Uncertainty of
Future Profitability or Continued Revenues. The Company has had a limited
operating history and is at an early stage of development. For the six months
ended June 30, 1996 and the years ended December 31, 1995, 1994 and 1993, the
Company had net losses of $3.7 million, $10.1 million, $11.5 million and $4.9
million, respectively, and as of December 31, 1995, the Company had an
accumulated deficit of $33.8 million. The Company's expansion of its gene
sequencing and database efforts, together with the development of new products,
has required and is expected to continue to require a substantial increase in
expenditures. The Company currently expects to incur operating losses at least
through 1996 and the Company may never achieve significant revenues or
profitable operations. The Company's ability to achieve significant revenues or
profitability will be dependent upon the Company's ability to obtain additional
customers for its database and sequencing products and services. While the
Company currently has eleven database subscribers, there can be no assurance
that the Company will be able to obtain any additional subscribers for such
products and services. Further, the Company's database subscriptions typically
have a term of three years, which may be terminated earlier by a subscriber if
the Company breaches a material provision of the database subscription
agreement, which may include certain performance obligations, and fails to cure
such breach within a specified period. There can be no assurance that any of the
Company's database subscription agreements will be renewed upon expiration or
not terminated earlier upon a material breach thereof by the Company. The loss
of revenues from any customer could have a material adverse effect on the
Company's business and operating results.
An element of the Company's commercialization strategy is the licensing
to customers of the Company's patent rights to individual partial genes or full
length cDNA sequences from the Company's proprietary sequence database for
development as a potential pharmaceutical, diagnostic or other product. Although
some of the Company's customers have taken non-exclusive know-how licenses to
specified sequences, to date, none of the Company's customers have entered into
an exclusive license under the Company's patent rights. Any potential product
that is the subject of such a license would require several years of further
development, clinical testing and regulatory approval prior to
commercialization. Accordingly, the Company does not expect to receive any
milestone or royalty payments from any such licenses for a substantial period of
time, if at all.
3
<PAGE> 5
New and Uncertain Business. The Company's genomic database subscription
business and the use of its databases, software tools, and related services to
assist in and improve the efficiency of the traditional drug discovery process
represents a business for which there is no precedent. There can be no assurance
that such companies will accept the usefulness of the Company's databases,
software tools, and related services. The Company's strategy of using
high-throughput sequencing to identify genes rapidly and obtain proprietary
rights in as many genes as possible is unproven. In addition, the Company has
limited experience in providing software-based relational database products or
services. The Company's ability to achieve profitability depends on attracting
additional customers for its database and sequencing products and services. The
high-end nature and price of the Company's database and sequencing products and
services are such that there is a limited number of large pharmaceutical
companies that are potential customers for such products and services.
Additional factors that may affect demand for the Company's products and
services include the extent to which the Company's potential customers choose to
conduct in-house gene sequencing and bioinformatics analysis, the emergence of
competitors offering similar services at competitive prices, the ability of the
Company to service satisfactorily its existing customers, the extent to which
the gene and related information in the Company's database is made public by or
is the subject of patents issued to others, and the emergence of technological
innovations in gene sequencing or bioinformatics and relational database
software that are more advanced than the technology used by and available to the
Company. There can be no assurance that the Company will be able to attract
additional customers on acceptable terms for its products and services or
develop a sustainable profitable business.
Competition and Technological Changes. There are a finite number of
genes in the human genome, and competitors in gene sequencing may seek to
identify, sequence and determine in the shortest time possible the biological
function of a large number of genes in order to obtain a proprietary position
with respect to the largest number of new genes discovered. There are a number
of companies, other institutions, and government-financed entities, including
Human Genome Sciences, Inc. ("HGS"), the National Institutes of Health ("NIH"),
and the Department of Energy, engaged in gene sequencing. Many of these
companies, institutions and entities have greater financial and human resources
than the Company.
In addition, the gene sequencing machines that are utilized in the
Company's high-throughput computer-aided gene sequencing operations are
commercially available and are currently being utilized by several competitors.
Moreover, some of the Company's competitors or potential competitors are in the
process of developing, and may successfully develop, proprietary sequencing
technologies that may be more advanced than the technology used by the Company.
There can be no assurance that such advanced sequencing technology, if
developed, will be commercially available for purchase or license by the Company
on reasonable terms, or at all.
HGS has entered into a collaboration with SmithKline Beecham Corporation
("SmithKline Beecham") to engage in large-scale gene sequencing and to develop
from gene sequence data therapeutic, vaccine and diagnostic products. Such
entities have made certain gene sequence information available to a consortium
of four pharmaceutical companies in a similar manner as the Company's database
subscriptions and have announced their intention to add at least one more
pharmaceutical company to the consortium. HGS is also funding gene sequencing
and gene research at The Institute for Genomic Research ("TIGR"), a
not-for-profit research institute. TIGR has announced that it, HGS and
SmithKline Beecham have established a human cDNA database that is available to
academic researchers. In addition, Merck & Co., Inc. ("Merck") is funding gene
sequencing efforts at Washington University that are making sequencing
information publicly available (the "Merck Gene Index"). The Company expects
that additional competitors may attempt to establish gene sequence or genomics
databases in the future. In addition, such entities or other persons may
discover and establish patent positions with respect to gene sequences in the
Company's databases. Such patent positions or the public availability of gene
sequences comprising substantial portions of the human genome or on microbial or
plant genes could decrease the potential value of the Company's databases to the
Company's customers and adversely affect the Company's ability to realize
royalties or other revenue from commercialization of products based upon such
genetic information.
The Company's databases also require extensive software support and
incorporates features determined by customer needs. To the extent the Company
experiences delays or difficulties in implementing its database software or
customer requested features, its ability to service its customers may be
adversely affected, which might have an adverse effect on the Company's business
and operating results.
4
<PAGE> 6
The genomics industry is characterized by extensive research efforts and
rapid technological progress. To remain competitive, the Company will be
required to continue to expand its database offerings and to enhance the
functionality of its bioinformatics and database software. New developments are
expected to continue and there can be no assurance that discoveries by others
will not render the Company's services and potential products noncompetitive.
Uncertainty of Protection of Patents and Proprietary Rights. The
Company's database business and competitive position are dependent in part upon
its ability to protect its proprietary database information and software
technology. Despite the Company's efforts to protect its proprietary database
information and software technology, unauthorized parties may attempt to obtain
and use information that the Company regards as proprietary. Although the
Company's database subscription agreements require its customers to provide
adequate security for the Company's databases and access thereto, policing
unauthorized use of the Company's databases and software by the Company or its
customers is difficult. The Company relies on patent, trade secret and copyright
law and nondisclosure and other contractual arrangements to protect its
proprietary information, although to date, the Company has not been issued any
patents with respect to the gene sequences in the Company's databases or
registered copyrights for its related software. Patents cannot prevent others
from developing, selling or licensing databases which include sequences which
might be covered by the Company's patents, copyrights cannot prevent others from
independently developing software which might be covered by any copyrights
issued to the Company, and trade secret laws do not prevent independent
development. Thus, there can be no assurance that others will not independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to the Company's proprietary information, that such
information will not be disclosed or that the Company can effectively protect
its rights to unpatented trade secrets.
The Company pursues a policy of having its employees, consultants and
advisors execute proprietary information and invention agreements upon
commencement of employment or consulting relationships with the Company, which
agreements provide that all confidential information developed or made known to
the individual during the course of the relationship shall be kept confidential
except in specified circumstances. There can be no assurance, however, that
these agreements will provide meaningful protection for the Company's trade
secrets or other proprietary information in the event of unauthorized use or
disclosure of such information.
The patentability of gene sequences and other genetic information in
general is uncertain, involves complex legal and factual questions, and has
recently been the subject of much litigation. As a result, there can be no
assurance that patent applications relating to the Company's products or
processes will result in patents being issued, or that any issued patents will
provide protection against competitors. Even if patents are issued on the basis
of gene sequences, there may be uncertainty as to the scope of the coverage,
enforceability or commercial protection provided by any such patents. Certain
court decisions indicate that disclosure of a partial sequence may not be
sufficient to support the patentability of a full-length sequence. In view of
these court decisions, as well as the position of the United States Patent and
Trademark Office ("USPTO") referred to below, the Company believes that there is
a significant risk that patents will not be issued on partial gene sequences
derived through high-throughout gene sequencing. Even if patents are issued on
the basis of gene sequences, there may be uncertainty as to the scope of the
coverage, enforceability or commercial protection provided by any such patents.
Finally, if the USPTO begins a policy of allowing applications which claim large
numbers of sequences, that policy may adversely affect the ability of the
Company to market its products and services in that (1) the policy may result in
competitors obtaining patents on a large number of sequences contained in the
Company's database, and (2) the policy may result in interferences with
competitors causing negotiations or litigation, which could require a protracted
period of time and could result in substantial costs to and diversion of efforts
by the Company.
The USPTO initially rejected an application filed by the NIH claiming
large number of partial sequences, and the NIH announced in February 1994 that
it will not pursue further such application. There has been a substantial
backlog of biotechnology patent applications, and specifically with respect to
applications disclosing or claiming gene sequences, at the USPTO. Although no
established policy has emerged from the USPTO regarding the breadth of claims
allowed or the degree of protection which should be afforded to applicants
claiming gene sequences, present USPTO examiners may reject patent applications
claiming large numbers of gene sequences as not having utility under 35 U.S.C.
Section 101 and/or not enabled under 35 U.S.C. Section 112.
5
<PAGE> 7
Additionally, there have been recent discussions concerning whether
clinical data will be required for issuance of patents for human therapeutics,
which, if required, could delay or affect the ability to obtain patent
protection. The USPTO issued new Utility Guidelines in July 1995 that address
the requirements for demonstrating utility, particularly in inventions relating
to human therapeutics. Notwithstanding the adoption of such Utility Guidelines,
there can be no assurance that the position of USPTO examiners will not change
with respect to what is required to establish utility for partial or full gene
sequences.
As a result of the foregoing, there can be no assurance that patent
applications relating to the Company's products or processes will result in
patents being issued, or that any issued patents will provide protection against
competitors who successfully challenge the Company's patents, obtain patents
that may have an adverse effect on the Company's ability to conduct business, or
are able to circumvent the Company's patent position.
In view of the time delay in patent approval and the secrecy afforded
patent applications, the Company does not know if other applications that would
have priority over the Company's applications have been filed. Furthermore,
recent changes in U.S. patent laws resulting from the General Agreement on
Tariffs and Trade ("GATT") became effective in June 1995. Most notably, GATT
resulted in U.S. law being amended to change the term of patent protection from
17 years from patent issuance to 20 years from the earliest effective filing
date of the application. Because the time from filing to issuance of
biotechnology and gene sequence applications has averaged more than three years,
a 20 year patent term from the date of filing may result in a substantially
shortened term of patent protection, which may adversely affect the Company's
patent position. Pending applications claiming large numbers of gene sequences
may, in some situations, need to be refiled while claiming priority to the
earlier filing date and, in such situations, the patent term will be measured
from the earliest filing date, thereby reducing the patent term and having a
potentially adverse effect on the Company's patent position.
The biotechnology patent situation outside the United States is even
more uncertain and is currently undergoing review and revision in many
countries. Further, the laws of certain foreign countries may not protect the
Company's intellectual property rights to the same extent as do the laws of the
United States. The Company may participate in opposition proceedings to
determine the validity of its or its competitors' non-United States patents,
which could result in substantial cost to and diversion of effort by the
Company.
Incyte may be required to obtain licenses to patents or proprietary
rights of others. As the biotechnology industry expands and more patents are
issued and other companies engage in the business of discovering genes through
the use of high speed sequencers or other sequencing technology, the risk
increases that the Company's potential products or product rights that it seeks
to license may give rise to claims that they infringe the patents of others. No
assurance can be given that any licenses required under any such patents or
proprietary rights would be made available on terms acceptable to the Company.
Litigation may be necessary to defend against or assert claims of infringement,
to enforce patents issued to the Company, to protect trade secrets or know-how
owned by the Company, or to determine the scope and validity of the proprietary
rights of others. Such litigation could result in substantial cost to and
diversion of effort by the Company and may have a material adverse effect on the
Company's business, operating results and financial condition. In addition,
there can be no assurance that these efforts by the Company will be successful.
The Company holds issued patents and has filed several additional patent
applications relating to BPI and related molecules. The Company is aware that
XOMA Corporation ("Xoma") is developing a BPI product and has licensed a patent
and patent applications relating to BPI from New York University. In the event
that Xoma is successful in developing its BPI product and such product is
believed by the Company possibly to infringe or otherwise threaten the Company's
patent rights with respect to BPI, the Company may choose to protect or enforce
such patent rights through negotiations, litigation, or infringement or
opposition proceedings, which could require a protracted period of time and
could result in substantial cost to and diversion of effort by the Company.
Fluctuations in Operating Results. The Company's operating results may
fluctuate significantly in the future as a result of a variety of factors,
including changes in the demand for the Company's products and services, the
pricing of database subscriptions, the nature, pricing and timing of other
products and services, including, but not limited to, satellite database
services, provided to the Company's customers, changes in the research and
development
6
<PAGE> 8
budgets of the Company's customers and potential customers, capital expenditures
and other costs related to the expansion of Incyte's operations, and the
introduction of competitive databases or services. The addition or subtraction
of a single subscriber to the Company's databases can have a significant effect
on the Company's revenues and results of operations. Due to the lengthy sales
cycle required for the Company's database products, the Company's revenue levels
are difficult to forecast. The need for continued investment in development of
the Company's databases and related products and services and for extensive
ongoing customer support capabilities results in significant fixed expenses. If
revenue in a particular period does not meet expectations, the Company would not
be able to adjust significantly its level of expenditures in such period, which
would have an adverse effect on the Company's operating results. The Company
believes that quarterly comparisons of its financial results will not
necessarily be meaningful and should not be relied upon as an indication of
future performance.
Lengthy Sales Cycle. The ability of the Company to obtain new customers
for the Company's databases, software tools, and related services depends in
significant part upon prospective customers' perception that the Company's
databases, software tools, and related services can help accelerate drug
discovery efforts. The sales cycle is typically lengthy due to the education
effort that is required as well as the need to effectively sell the benefits of
the Company's databases, software tools, and related services to a variety of
constituencies within potential customer companies, including research and
development personnel and top management. In addition, each Company's databases
subscription involves the negotiation of agreements containing terms that may be
unique to each customer, such as the scope of any licenses granted and whether
satellite database services or access to multiple databases is desired. The
Company may expend substantial funds and management effort with no assurance
that a database subscription will result.
Future Capital Needs; Uncertainty of Additional Funding. The Company
believes that its existing cash and cash equivalents, should be adequate to
satisfy the Company's projected working capital and capital expenditure
requirements at least through 1997. However, there can be no assurance that the
Company will not need additional capital prior to that time. The Company's
capital requirements depend on numerous factors, including the ability of the
Company to attract customers to its database and sequencing products and
services; the Company's research and development activities, including the costs
of technology assessment and acquisition; competing technological and market
developments; the cost of filing, prosecuting, defending and enforcing patent
claims and other intellectual property rights; the Company's facilities needs;
the purchase of additional capital equipment, including capital equipment
necessary to insure that the Company's sequencing operation remains competitive;
and a decision by the Company to pursue development of potential pharmaceutical
products. The Company currently has no plans to develop potential pharmaceutical
products. There can be no assurance that changes in the Company's research and
development plans or other changes affecting the Company's operating expenses
will not result in changes in the timing and amount of expenditure of the
Company's capital resources. To the extent that additional capital is raised
through the sale of equity or convertible debt securities, the issuance of such
securities could result in dilution to the Company's existing stockholders.
There can be no assurance that additional funding, if necessary, will be
available on favorable terms, if at all. If adequate funds are not available,
the Company may be required to curtail operations significantly or to obtain
funds through entering into collaborative arrangements that may require the
Company to relinquish rights to certain of its technologies, product candidates,
products or potential markets.
Management of Growth. The Company has recently experienced, and expects
to continue to experience, significant growth in the number of its employees,
the extent of its gene sequencing efforts and database business, and the scope
of its operations. This growth has placed, and may continue to place, a
significant strain on the Company's management and operations. The Company's
ability to manage effectively such growth will depend upon its ability to
broaden its management team and its ability to attract, hire and retain skilled
employees. The Company's success will also depend on the ability of its officers
and key employees to continue to implement and improve its operational,
management information and financial control systems and to expand, train and
manage its employee base. In addition, the Company must continue to take steps
to provide customer support resources as the number of overall subscribers and
the number of requests from subscribers increases. The Company's inability to
manage effectively growth could have a material adverse effect on the Company's
business, financial condition and operating results.
7
<PAGE> 9
Dependence on Key Employees. The Company is highly dependent on the
principal members of its scientific and management staff, including Roy A.
Whitfield, its President and Chief Executive Officer, and Randal W. Scott, its
Executive Vice President and Chief Scientific Officer, the loss of whose
services would have a material adverse effect on the Company's business. The
Company has not entered into any employment agreements with any of such persons
and does not maintain any key person life insurance policy on the life of any
employee. The Company's future success also will depend in part on the continued
service of its key scientific, software, bioinformatics and management personnel
and its ability to identify, hire and retain additional personnel, including
personnel in the customer service and marketing area. There is intense
competition for such qualified personnel in the areas of the Company's
activities, especially with respect to experienced bioinformatics and software
personnel, and there can be no assurance that the Company will be able to
continue to attract and retain such personnel necessary for the development of
the Company's business. Failure to attract and retain key personnel could have a
material adverse effect on the Company's business, financial condition and
operating results.
Dependence on Others. The Company currently uses a single supplier to
provide its gene sequencing machines and certain reagents required in connection
with the gene sequencing process. While other gene sequencing machines are
available, the Company does not believe that they are as efficient as the
machines currently used by the Company. No assurance can be given that either
the gene sequencing machines or the reagents will remain available in commercial
quantities at acceptable costs. Should the Company be unable to obtain
additional machines or an adequate supply of reagents or other ingredients at
commercially reasonable rates, its ability to continue to identify genes through
gene sequencing would be adversely affected. Although the Company obtains tissue
samples from which mRNA may be isolated from a number of sources, the Company
believes that its tissue access agreement with Mayo Foundation for Medical
Education and Research ("Mayo Clinic") is important to the development and value
of the Company's databases due in part to the inclusion of a full pathology
report on each tissue accessed and the ability to access tissue with diverse
characteristics. The loss of access to tissue from Mayo Clinic could adversely
affect the Company's business.
The Company's strategy for the development of its database and
sequencing business may require the Company to enter into various arrangements
with corporate and academic collaborators and others. In addition, the Company's
strategy for the research, development and commercialization of most, if not
all, of its portfolio of partial and full gene sequences and proteins requires
the Company to enter into various arrangements with corporate and academic
collaborators and others. The success of these collaborations is dependent upon
the performance of outside parties of their responsibilities. There can be no
assurance that the Company will be able to establish collaborative arrangements
or license agreements that the Company deems necessary or acceptable to develop
its database and sequencing business or, in the future, to commercialize its
portfolio of partial and full gene sequences or that such collaborative
arrangements or license agreements will be successful. In addition, there can be
no assurance that the collaborators will not be pursuing alternative
technologies or developing alternative products either on their own or in
collaboration with others, including the Company's competitors.
The Company has relied on scientific, technical, pathology, commercial
and other data supplied and disclosed by others, including its academic
collaborators and sources of tissue samples, and may rely on such data in the
construction of its database. There can be no assurance that such data contains
no errors or omissions, the knowledge of which would adversely change the
prospects for the Company's business.
Risks Associated with Acquisitions. As part of its business strategy,
the Company may from time to time acquire assets and businesses principally
relating to or complementary to its operations, including for the purpose of
acquiring specific technology. The Company acquired Genome Systems, Inc.
("Genome Systems") and Combion Inc., two privately held companies, in July 1996
and August 1996, respectively. These and any other acquisitions by the Company
will be accompanied by the risks commonly encountered in acquisitions of
companies. Such risks include, among other things, potential exposure to unknown
liabilities of acquired companies or to acquisition costs and expenses exceeding
amounts anticipated for such purposes, fluctuations in the Company's quarterly
and annual operating results due to the costs and expenses of acquiring and
integrating new businesses or technologies, the difficulty and expense of
assimilating the operations and personnel of the acquired businesses, the
potential disruption of the Company's ongoing business and diversion of
management time and attention, the inability to successfully integrate or to
complete the development and application of acquired technology and the
potential failure to achieve
8
<PAGE> 10
anticipated financial, operating and strategic benefits from such acquisitions,
difficulties in establishing and maintaining uniform standards, controls,
procedures and policies, the impairment of relationships with and possible loss
of key employees and customers of acquired businesses as a result of changes in
management and ownership, the incurrence of amortization expenses if an
acquisition is accounted for as a purchase, and dilution to the stockholders of
the Company if the consideration for the acquisition consists of stock. There
can be no assurance that the Company will be successful in overcoming these
risks or any other problems encountered in connection with such acquisitions.
Hazardous Materials; Environmental Matters. The Company's research and
development involves the controlled use of hazardous and radioactive materials
and biological waste. The Company is subject to federal, state and local laws
and regulations governing the use, manufacture, storage, handling and disposal
of such materials and certain waste products. Although the Company believes that
its safety procedures for handling and disposing of such materials comply with
the standards prescribed by such laws and regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. In
the event of such an accident, the Company could be held liable for any damages
that result and any such liability could exceed the resources of the Company.
Although the Company believes that it is in compliance in all material respects
with applicable environmental laws and regulations and currently does not expect
to make material additional capital expenditures for environmental control
facilities in the near-term, there can be no assurance that the Company will not
be required to incur significant costs to comply with environmental laws and
regulations in the future, nor that the operations, business or assets of the
Company will not be materially or adversely affected by current or future
environmental laws or regulations. See "Business -- Government Regulation."
Uncertainty of Pharmaceutical Pricing, Health Care Reform and Related
Matters. The levels of revenues and profitability of pharmaceutical companies
may be affected by the continuing efforts of governmental and third party payors
to contain or reduce the costs of health care through various means. For
example, in certain foreign markets pricing or profitability of prescription
pharmaceuticals is subject to government control. In the United States, there
have been, and the Company expects that there will continue to be, a number of
federal and state proposals to implement similar government control. It is
uncertain what legislative proposals will be adopted or what actions federal,
state or private payors for healthcare goods and services may take in response
to any healthcare reform proposals or legislation. The Company cannot predict
the effect healthcare reforms may have on its business, and no assurance can be
given that any such reforms will not have a material effect on the Company.
Further, to the extent that such proposals or reforms have a material adverse
effect on the business, financial condition or profitability of pharmaceutical
companies that are prospective collaborators or licensees for the Company's
databases or the Company's potentially novel genes that may lead to therapeutic
or diagnostic products, the Company's ability to commercialize such products may
be adversely affected. In addition, in both the United States and elsewhere,
sales of prescription pharmaceuticals are dependent in part on the availability
of reimbursement to the consumer from third party payors, such as government and
private insurance plans. Third party payors are increasingly challenging the
prices charged for medical products and services. If the Company seeks to
commercialize one or more pharmaceutical products, there can be no assurance
that these products will be considered cost effective and that reimbursement to
the consumer will be available or will be sufficient to allow the Company to
sell its products on a competitive basis.
General Economic and Market Conditions. All of the Company's current
revenues are derived from, and the Company expects that all of its revenues in
the foreseeable future will be derived from, products and services provided to
the pharmaceutical industry. Accordingly, the Company's success in the
foreseeable future is directly dependent upon the success of the companies
within those industries and their continued demand for the Company's products
and services. The Company's operations may in the future be subject to
substantial period-to-period fluctuations as a consequence of economic downturns
and pricing pressures experienced by pharmaceutical companies that lead to
delays and reductions in research and development expenditures by such
companies, general domestic and foreign economic conditions affecting the timing
of orders from major customers, the current market-driven pressures on companies
to consolidate and reduce costs, and other factors affecting research and
development spending. There can be no assurance that such factors will not have
a material adverse effect on the Company's business, operating results and
financial condition.
9
<PAGE> 11
Risk of Business Interruption. The Company conducts all of its
sequencing and most of its other activities at its facilities in Palo Alto,
California, a seismically active area. Although the Company maintains business
interruption insurance, the Company does not currently have, nor does it plan to
obtain earthquake insurance. A major catastrophe (such as an earthquake or other
natural disaster) could result in a prolonged interruption of the Company's
business.
Possible Volatility of Stock Price. The market price of the shares of
Common Stock, like that of the common stock of many other life sciences
companies, is likely to be highly volatile, and the market has from time to time
experienced significant price and volume fluctuations that are unrelated to the
operating performance of particular companies. The market price of the Common
Stock could be subject to significant fluctuations in response to variations in
the Company's anticipated or actual operating results, sales of substantial
amounts of Common Stock, announcements concerning the Company or its
competitors, including technological innovations or new commercial products or
services, developments in patent or other proprietary rights of the Company or
its competitors, including litigation, conditions in the life sciences,
pharmaceuticals or genomics industries, governmental regulation, health care
legislation, changes in estimates of the Company's performance by securities
analysts, failure to meet securities analysts' expectations, market conditions
for life sciences or technology stocks in general, and other events or factors.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information as of September 30,
1996 regarding the beneficial ownership of Common Stock by each of the Selling
Stockholders and the Shares offered hereby by such Selling Stockholders.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Number of Beneficially
Owned Prior Shares Owned After
to Offering(1) Being Offered Offering(1)(2)
-------------- ------------- --------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Paul Gold................................ 94,518 * 47,259 47,259 *
David A. Smoller......................... 94,518 * 47,259 47,259 *
Vysis, Inc............................... 15,037 * 7,519 7,518 *
Mark Cunningham(3)....................... 10,741 * 5,371 5,370 *
</TABLE>
- -------------
* Less than 1%.
(1) Information with respect to beneficial ownership is based upon
information obtained from the Selling Stockholders.
(2) Assumes the sale of all Shares offered hereby and no other purchases or
sales of Common Stock. See "Plan of Distribution."
(3) Represents shares that may be purchased upon the exercise of an option.
All of the Selling Stockholders received their respective shares of
Common Stock in connection with the acquisition by the Company of all of the
outstanding shares of capital stock of Genome Systems. Paul Gold and David A.
Smoller are officers and the founders of, and Mark Cunningham is an employee of,
Genome Systems, now a wholly-owned subsidiary of the Company. Vysis, Inc. has
entered into a collaborative agreement with the Company and a services supply
agreement with Genome Systems.
10
<PAGE> 12
PLAN OF DISTRIBUTION
Sales of the Shares may be effected by or for the account of the Selling
Stockholders from time to time in transactions (which may include block
transactions) on the Nasdaq National Market, in negotiated transactions, through
a combination of such methods of sale, or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
prevailing market prices, or at negotiated prices. The Selling Stockholders may
effect such transactions by selling the Shares directly to purchasers, through
broker-dealers acting as agents for the Selling Stockholders, or to
broker-dealers who may purchase Shares as principals and thereafter sell the
Shares from time to time in transactions (which may include block transactions)
on the Nasdaq National Market, in negotiated transactions, through a combination
of such methods of sale, or otherwise. In effecting sales, broker-dealers
engaged by a Selling Stockholders may arrange for other broker-dealers to
participate. Such broker-dealers, if any, may receive compensation in the form
of discounts, concessions or commissions from the Selling Stockholders and/or
the purchasers of the Shares for whom such broker-dealers may act as agents or
to whom they may sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such persons,
and any profits received on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
The Company has agreed to bear all expenses of registration of the
Shares (other than fees and expenses, if any, of counsel or other advisors to
the Selling Stockholders). Any commissions, discounts, concessions or other
fees, if any, payable to broker-dealers in connection with any sale of the
Shares will be borne by the Selling Stockholder selling such Shares.
LEGAL MATTERS
Certain legal matters with respect to the validity of Common Stock
offered hereby are being passed upon for the Company by Pillsbury Madison &
Sutro LLP, San Francisco, California.
EXPERTS
The financial statements of Incyte Pharmaceuticals, Inc. at December 31,
1995 and 1994, and for each of the three years in the period ended December 31,
1995, included in the Company's Annual Report (Form 10-K) for the year ended
December 31, 1995, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
11
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities being
registered hereby. Normal commission expenses and brokerage fees are payable
individually by the Selling Stockholders. All amounts are estimated except the
Securities and Exchange Commission registration fee.
<TABLE>
<CAPTION>
Amount
------
<S> <C>
SEC registration fee .................................. $ 1,731.00
Accounting fees and expenses .......................... 10,000.00
Legal fees and expenses ............................... 10,000.00
Miscellaneous fees and expenses ....................... 3,269.00
----------
Total ........................................ $25,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). Article VII of the Registrant's
Restated Certificate of Incorporation (Exhibit 3(i) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994) and Article V of the
Registrant's Bylaws (Exhibit 3(ii) to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1994) provide for indemnification of the
Registrant's directors, officers, employees and other agents to the extent and
under the circumstances permitted by the Delaware General Corporation Law. The
Registrant has also entered into agreements with its directors and officers that
will require the Registrant, among other things, to indemnify them against
certain liabilities that may arise by reason of their status or service as
directors or officers to the fullest extent not prohibited by law.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
<S> <C>
5.1 Opinion of Pillsbury Madison & Sutro LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Pillsbury Madison & Sutro (included in its opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (see page II-3).
</TABLE>
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such
II-1
<PAGE> 14
indemnification is against public policy as expressed in the 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 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
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 this Registration Statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Act, each such 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.
(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.
(4) That, for purposes of determining any liability under the
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-2
<PAGE> 15
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 Palo Alto, State of California, on October 3,
1996.
INCYTE PHARMACEUTICALS, INC.
By ROY A. WHITFIELD
-------------------------------------------
Roy A. Whitfield
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Roy A. Whitfield, Randal W. Scott, and Denise M.
Gilbert, and each of them, his or her true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments, including post-effective amendments, to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that each of said attorneys-in-fact and
agents or their substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
ROY A. WHITFIELD President and Chief Executive
- -------------------------- Officer (Principal Executive Officer) October 3, 1996
Roy A. Whitfield and Director
DENISE M. GILBERT Executive Vice President and Chief
- -------------------------- Financial Officer (Principal Financial October 3, 1996
Denise M. Gilbert Officer)
JANET L. NIBEL Director of Finance and
- -------------------------- Administration (Principal Accounting October 3, 1996
Janet L. Nibel Officer)
JEFFREY J. COLLINSON Chairman of the Board October 3, 1996
- --------------------------
Jeffrey J. Collinson
BARRY M. BLOOM Director October 3, 1996
- --------------------------
Barry M. Bloom
FREDERICK B. CRAVES Director October 3, 1996
- --------------------------
Frederick B. Craves
</TABLE>
II-3
<PAGE> 16
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
JON S. SAXE Director October 3, 1996
- --------------------------
Jon S. Saxe
RANDAL W. SCOTT Director October 3, 1996
- --------------------------
Randal W. Scott
</TABLE>
II-4
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
<S> <C>
5.1 Opinion of Pillsbury Madison & Sutro.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Pillsbury Madison & Sutro (included in its opinion filed
as Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (see page II-3).
</TABLE>
<PAGE> 1
Exhibit 5.1
LAW OFFICES OF
PILLSBURY MADISON & SUTRO LLP
LOS ANGELES POST OFFICE BOX 7880 MENLO PARK
NEW YORK SAN FRANCISCO, CALIFORNIA 94120 ORANGE COUNTY
SACRAMENTO TELEPHONE (415) 983-1000 SAN DIEGO
SAN FRANCISCO TELECOPIER (415) 983-1200 SAN JOSE
WASHINGTON, D.C. HONG KONG
TOKYO
October 3, 1996
Incyte Pharmaceuticals, Inc.
3174 Porter Drive
Palo Alto, CA 94304
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We are acting as counsel for Incyte Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of 107,408 shares of Common Stock, $.001 par
value (the "Common Stock"), of the Company, to be offered and sold by certain
stockholders of the Company (the "Selling Stockholders"). In this regard we have
participated in the preparation of a Registration Statement on Form S-3 relating
to such 107,408 shares of Common Stock. (Such Registration Statement, as
amended, is herein referred to as the "Registration Statement.")
We are of the opinion that the shares of Common Stock to be offered and
sold by the Selling Stockholders have been duly authorized and legally issued
and are fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus included therein.
Very truly yours,
PILLSBURY MADISON & SUTRO LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Incyte
Pharmaceuticals, Inc. for the registration of 107,408 shares of its common stock
and to the incorporation by reference therein of our report dated February 8,
1996, with respect to the financial statements of Incyte Pharmaceuticals, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31, 1995,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Palo Alto, California
October 2, 1996
