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As filed with the Securities and Exchange Commission on August 1, 2000
Registration No. 333-33500
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
___________________
INCYTE GENOMICS, INC.
(Previously known as Incyte Pharmaceuticals, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 94-3136539
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3160 Porter Drive
Palo Alto, California 94304
(650) 855-0555
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
ROY A. WHITFIELD
Chief Executive Officer
INCYTE GENOMICS, INC.
3160 Porter Drive
Palo Alto, California 94304
(650) 855-0555
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
STANTON D. WONG
Pillsbury Madison & Sutro LLP
P.O. Box 7880
San Francisco, California 94120
___________________
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. [ ] ______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
2,000,000 SHARES
INCYTE GENOMICS, INC.
COMMON STOCK
___________________
The selling stockholders identified in this prospectus may sell up to
2,000,000 shares of our common stock.
Our common stock is traded on the Nasdaq National Market under the symbol
"INCY." The last reported sale price of our common stock on the Nasdaq National
Market on July 31, 2000 was $75.8125 per share.
___________________
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY READ AND CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 3.
___________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
___________________
The date of this prospectus is _______, 2000
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You should read carefully the entire prospectus, as well as the documents
incorporated by reference in the prospectus, before making an investment
decision.
INCYTE GENOMICS, INC.
We provide products and services based on genomic information. Genomics
involves the analysis of genetic information and its relationship to disease. We
develop and sell the following products and services:
- genomic databases that include
- our proprietary and publicly available genomic information,
including the order, or sequence, of the molecules, or bases, in the
DNA comprising genes,
- information regarding variations in a single base between two
individuals, which are referred to as single nucleotide
polymorphisms or SNPs, and
- gene expression information, which is information regarding the
extent to which specific genes in a cell are active in specified
conditions;
- software that helps to analyze and manage genomic data;
- microarray-based gene expression services that use microarrays, which
are silicon or glass chips that have different DNA fragments, or
probes, located in known positions on the chips, to obtain gene
expression information; and
- physical copies of genes or gene fragments in our databases, called
bioreagents, and related services.
We focus on providing integrated products and services designed to assist
pharmaceutical and biotechnology companies in the discovery and development of
new drugs and diagnostic tests. Our products and services can be applied to gene
discovery, understanding the genetic bases for diseases, identifying new
molecules that may play a role in the disease process, referred to as drug
targets, and the discovery and correlation of variations in the sequence of
individual genes to disease.
Incyte and LifeSeq are our registered trademarks. GEM is our trademark. We
also refer to trademarks of other corporations and organizations in this
prospectus.
Incyte was incorporated in Delaware in 1991. We changed our name from
Incyte Pharmaceuticals, Inc. to Incyte Genomics, Inc. in June 2000. Our
executive offices are located at 3160 Porter Drive, Palo Alto, California 94304
and our telephone number is (650) 855-0555.
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RISK FACTORS
WE HAVE HAD ONLY LIMITED PERIODS OF PROFITABILITY, WE EXPECT TO INCUR LOSSES IN
THE FUTURE AND WE MAY NOT RETURN TO PROFITABILITY
We had net losses from inception in 1991 through 1996 and again incurred
net losses in 1999 and the six months ended June 30, 2000. Because of those
losses, we had an accumulated deficit of $69.9 million as of June 30, 2000. In
2000, we intend to continue to spend significant amounts on new product and
technology development, including making our products available online, and to
increase our investment in marketing, sales and customer service. The amounts we
intend to spend on new product and technology development include spending for
our efforts to determine the sequence of genes, or genomic sequencing, determine
gene functions, develop database and software products such as our gene
expression database, discover SNPs, expand research and development alliances,
and develop electronic commerce products. As a result, we expect to report a net
loss for the year ending December 31, 2000. We may report net losses in future
periods as well. We will not return to profitability unless we increase our
revenues.
TO GENERATE SIGNIFICANT REVENUES AND RETURN TO PROFITABILITY, WE MUST OBTAIN
ADDITIONAL DATABASE COLLABORATORS AND RETAIN EXISTING COLLABORATORS
As of June 30, 2000, we had over 20 database agreements. If we are unable
to enter into additional agreements we will not generate additional revenues.
Also, our current database collaborators may choose not to renew their
agreements upon expiration. Our database revenues are also affected by the
extent to which existing collaborators expand their agreements with us to
include our new database products and the extent that existing collaborators
reduce the number of products or services for which they subscribe. Some of our
database agreements require us to meet performance obligations. A database
collaborator can terminate its agreement before the end of its scheduled term if
we breach the agreement and fail to cure the breach within a specified period.
OUR LONGER-TERM STRATEGY FOR PROFITABILITY INCLUDES LICENSES UNDER OUR
GENE-RELATED INTELLECTUAL PROPERTY TO OUR DATABASE COLLABORATORS, BUT THESE
LICENSES WILL NOT CONTRIBUTE TO REVENUES FOR SEVERAL YEARS, AND MAY NEVER RESULT
IN REVENUES
Part of our strategy is to license to database collaborators our know how
and patent rights associated with the genetic information in our proprietary
databases, for use in the discovery and development of potential pharmaceutical,
diagnostic or other products. Any potential product that is the subject of such
a license will require several years of further development, clinical testing
and regulatory approval before commercialization. Therefore, milestone or
royalty payments from these collaborations may not contribute to revenues for
several years, if at all.
IF WE ARE NOT ABLE TO GENERATE SIGNIFICANT REVENUES FROM EXPRESSION DATABASES
AND MICROARRAY SERVICES, WE MAY NOT BE PROFITABLE
We acquired Synteni, Inc. in January 1998 to provide microarray services
and to generate information for our gene expression database. The contribution
of our microarray operations to our operating results depends on whether we can
continue to obtain high-volume customers for microarray services and expression
databases, whether we can continue to increase our microarray production
capacity in a timely manner and with consistent volumes and quality, and the
costs associated with increasing our microarray production capacity.
OUR OPERATING RESULTS ARE UNPREDICTABLE, WHICH MAY CAUSE OUR STOCK PRICE TO
DECLINE AND RESULT IN LOSSES TO INVESTORS
Our operating results are unpredictable and may fluctuate significantly
from period to period, which may cause our stock price to decline and result in
losses to investors. Some of the factors that could cause our operating results
to fluctuate include:
- changes in the demand for our products and services, including our
database business;
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- the introduction of competitive databases or services, including
databases of publicly available, or public domain, genetic information;
- the nature, pricing and timing of other products and services provided
to our collaborators;
- acquisition, licensing and other costs related to the expansion of our
operations, including operating losses of acquired businesses;
- losses and expenses related to our investments in joint ventures and
businesses;
- regulatory developments or changes in public perceptions relating to
the use of genetic information and the diagnosis and treatment of
disease based on genetic information;
- changes in intellectual property laws that affect our rights in genetic
information that we sell;
- payments of milestones, license fees or research payments under the
terms of our increasing number of external alliances; and
- expenses related to, and the results of, litigation and other
proceedings relating to intellectual property rights, including the
lawsuits filed by Affymetrix, Inc.
We have significant fixed expenses, due in part to our need to continue to
invest in product development and extensive support for our database
collaborators. We may be unable to adjust our expenditures if revenues in a
particular period fail to meet our expectations, which would harm our operating
results for that period. Forecasting operating and integration expenses for
acquired businesses may be particularly difficult, especially where the acquired
business focuses on technologies that do not have an established market. We
believe that period-to-period comparisons of our financial results will not
necessarily be meaningful. You should not rely on these comparisons as an
indication of our future performance. If our operating results in any future
period fall below the expectations of securities analysts and investors, our
stock price will likely fall, possibly by a significant amount.
OUR INDUSTRY IS INTENSELY COMPETITIVE, AND IF WE DO NOT COMPETE EFFECTIVELY, OUR
REVENUES MAY DECLINE
We compete in markets that are new, intensely competitive, rapidly
changing, and fragmented. Many of our current and potential competitors have
greater financial, human and other resources than we do. If we cannot respond
quickly to changing customer requirements, secure intellectual property
positions, or adapt quickly and obtain access to new and emerging technologies,
our revenues may decline. Our competitors include
- Celera Genomics Group of PE Corporation,
- CuraGen Corporation,
- Gene Logic Inc.,
- Human Genome Sciences, Inc.,
- major pharmaceutical companies, and
- universities and other research institutions, including The SNP
Consortium, which is funded by a number of pharmaceutical companies,
and those receiving funding from the federally funded Human Genome
Project.
The human genome contains a finite number of genes. Our competitors may
seek to identify, sequence and determine the biological function of numerous
genes in order to obtain a proprietary position with respect to new genes.
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In addition, we face competition from companies who are developing and may
seek to develop new technologies for discovering the functions of genes, gene
expression information, including microarray technologies, discovery of
variations among genes and related technologies. Also, if we are unable to
obtain the technology we currently use or new advanced technology on acceptable
terms, but other companies are, we will be unable to compete.
We also face competition from providers of software. A number of companies
have announced their intent to develop and market software to assist
pharmaceutical companies and academic researchers in managing and analyzing
their own genomic data and publicly available data. If pharmaceutical companies
and researchers are able to manage their own genomic data, they may not
subscribe to our databases.
Extensive research efforts resulting in rapid technological progress
characterize the genomics industry. To remain competitive, we must continue to
expand our databases, improve our software, and invest in new technologies. New
developments will probably continue, and discoveries by others may render our
services and potential products noncompetitive.
IF PATENT POSITIONS BECOME PUBLICLY AVAILABLE, OR IF OUR COMPETITORS PUBLICLY
DISCLOSE THEIR DISCOVERIES, OUR REVENUES COULD DECLINE
Our competitors may discover and establish patent positions with respect
to the genes in our databases. Our competitors and other entities who engage in
discovering the way in which genes are ordered in DNA may also make the results
of their sequencing efforts publicly available. Currently, academic institutions
and other laboratories participating in the Human Genome Project make their gene
sequence information available through a number of publicly available databases,
including the GenBank database. Also, Celera Genomics Group has publicly stated
that it is committed to make available to the public basic human sequence data.
The public availability of these discoveries or resulting patent positions
covering substantial portions of the human genome could reduce the potential
value of our databases to our collaborators. It could also impair our ability to
realize royalties or other revenue from any commercialized products based on
this genetic information.
WE ARE INVOLVED IN PATENT LITIGATION, WHICH IF NOT RESOLVED FAVORABLY COULD
REQUIRE US TO PAY DAMAGES AND STOP SELLING AND USING MICROARRAY PRODUCTS
We are currently involved in patent litigation. If we lose this litigation
we could be prevented from producing and using our microarray products and be
required to pay damages. In January 1998, Affymetrix filed a lawsuit in federal
court alleging infringement of U.S. patent number 5,445,934 by both Synteni and
Incyte. The complaint alleges that Synteni and Incyte infringed the `934 patent
by making, using, selling, importing, distributing or offering to sell high
density arrays in the United States and that this infringement was willful.
Affymetrix seeks a permanent injunction enjoining Synteni and Incyte from
further infringement of the `934 patent and seeks damages, costs, attorneys'
fees and interest. Affymetrix also requests triple damages based on allegedly
willful infringement.
In September 1998, Affymetrix filed an additional lawsuit alleging
infringement of U.S. patent numbers 5,744,305 and 5,800,992 by Synteni and
Incyte. The complaint alleges that Synteni and Incyte infringed the `305 patent
has been infringed by Synteni's and Incyte's making, using, selling, importing,
distributing or offering to sell high density arrays in the United States. It
also alleges that Synteni and Incyte infringed the `992 patent by using their
GEM microarray technology to conduct gene expression monitoring using two-color
labeling and that this infringement was willful. Affymetrix had sought a
preliminary injunction enjoining Synteni and Incyte from using GEM microarray
technology to conduct this kind of gene expression monitoring, and a permanent
injunction enjoining Synteni and Incyte from further infringing the `305 and
`992 patents.
The lawsuits were initially filed in the United States District Court for
the District of Delaware. In November 1998, the court granted Incyte's motion to
transfer the suits to the United States District Court for the Northern District
of California. Affymetrix's request for a preliminary injunction was denied in
May 1999. The court has scheduled a pretrial hearing in November 2000 to
determine how to construe the patent claims that will be litigated in trial;
but has not scheduled any other pretrial hearings or set a trial date.
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In April 1999, the Board of Patent Appeals and Interferences of the United
States Patent and Trademark Office declared interferences between pending patent
applications licensed exclusively to us and the Affymetrix `305 and `992
patents. The Board of Patent Appeals and Interferences invokes an interference
proceeding when more than one patent applicant claims the same invention and,
during the proceeding, evaluates all relevant facts and makes a determination as
to who, if anyone, is entitled to the patent on the disputed invention. In
September 1999, the Board of Patent Appeals and Interferences ruled that patents
licensed by Incyte and Synteni from Stanford University were not entitled to
priority over corresponding claims in the two Affymetrix patents. We are seeking
de novo review in the United States District Court for the Northern District of
California.
We believe we have meritorious defenses and intend to defend these suits
vigorously. However, our defense may be unsuccessful. At this time, we cannot
reasonably estimate the possible range of any loss resulting from these suits
due to uncertainty about the ultimate outcome. We have spent and expect to
continue to spend a significant amount of money and management time on this
litigation. Also, if we are required to license any technology as a result of
these suits, we do not know whether we will be able to do so on commercially
acceptable terms, if at all. This litigation may also affect our potential
customers' willingness to use our microarray services and gene expression
databases, which could affect our revenues.
IF WE ARE SUBJECT TO ADDITIONAL LITIGATION AND INFRINGEMENT CLAIMS, THEY COULD
BE COSTLY AND DISRUPT OUR BUSINESS
The technology that we use to develop our products, and the technology
that we incorporate in our products, may be subject to claims that they infringe
the patents or proprietary rights of others. The risk of this occurring will
tend to increase as the genomics, biotechnology and software industries expand,
more patents are issued and other companies attempt to discover genes and SNPs
and engage in other genomic-related businesses.
As is typical in the genomics, biotechnology and software industries, we
have received, and we will probably receive in the future, notices from third
parties alleging patent infringement. We believe that we are not infringing the
patent rights of any third parties. Except for Affymetrix, no third party has
filed a patent lawsuit against us.
We may, however, be involved in future lawsuits alleging patent
infringement or other intellectual property rights violations. In addition,
litigation may be necessary to:
- assert claims of infringement;
- enforce our patents;
- protect our trade secrets or know-how; or
- determine the enforceability, scope and validity of the proprietary
rights of others.
We may be unsuccessful in defending or pursuing these lawsuits. Regardless
of the outcome, litigation can be very costly and can divert management's
efforts. An adverse determination may subject us to significant liabilities or
require us to seek licenses to other parties' patents or proprietary rights. We
may also be restricted or prevented from manufacturing or selling our products
and services. Further, we may not be able to obtain any necessary licenses on
acceptable terms, if at all.
WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY INFORMATION, WHICH MAY RESULT IN ITS
UNAUTHORIZED USE AND A LOSS OF REVENUE
Our business and competitive position depend upon our ability to protect
our proprietary database information and software technology. Despite our
efforts to protect this information and technology, unauthorized parties may
attempt to obtain and use information that we regard as proprietary. Although
our database subscription agreements require our subscribers to control access
to our databases, policing unauthorized use of our databases and software may be
difficult.
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We pursue a policy of having our employees, consultants and advisors
execute proprietary information and invention agreements when they begin working
for us. However, these agreements may not provide meaningful protection for our
trade secrets or other proprietary information in the event of unauthorized use
or disclosure.
Our means of protecting our proprietary rights may not be adequate, and
our competitors may:
- independently develop substantially equivalent proprietary information
and techniques;
- otherwise gain access to our proprietary information; or
- design around patents issued to us or our other intellectual property.
IF THE INVENTIONS DESCRIBED IN OUR PATENT APPLICATIONS ON FULL-LENGTH OR PARTIAL
GENES ARE FOUND TO BE UNPATENTABLE, OUR ISSUED PATENTS ARE NOT ENFORCED OR OUR
PATENT APPLICATIONS CONFLICT WITH PATENT APPLICATIONS FILED BY OTHERS, OUR
REVENUES MAY DECLINE
One of our strategies is to file patent applications on what we believe to
be novel full-length and partial genes and SNPs obtained through our efforts to
discover the order, or sequence, of the molecules, or bases, of genes. We have
filed U.S. patent applications in which we claimed partial sequences of some
genes. We have also applied for patents in the U.S. and other countries claiming
full-length gene sequences associated with cells and tissues involved in our
gene sequencing program. We hold a number of issued U.S. patents on full-length
genes and one issued U.S. patent claiming multiple partial gene sequences. While
the United States Patent and Trademark Office has issued patents covering
full-length genes, partial gene sequences and SNPs, the Patent and Trademark
Office may choose to interpret new guidelines for the issuance of patents in a
more restrictive manner in the future, which could impact the issuance of our
pending patent applications. We also do not know whether or how courts may
enforce our issued patents, if that becomes necessary. If a court finds these
types of inventions to be unpatentable, or interprets them narrowly, the value
of our patent portfolio and possibly our revenues could be diminished.
We believe that some of our patent applications claim genes and partial
sequences of genes that may also be claimed in patent applications filed by
others. In some or all of these applications, a determination of priority of
inventorship may need to be decided in an interference before the United States
Patent and Trademark Office, before a patent is issued. If a full-length or
partial length sequence for which we seek a patent is issued to one of our
competitors, we may be unable to include that full-length or partial length
sequence on a microarray or in a library of bioreagents. This could result in a
loss of revenues.
IF THE EFFECTIVE TERM OF OUR PATENTS IS DECREASED DUE TO CHANGES IN THE U.S.
PATENT LAWS OR IF WE NEED TO REFILE SOME OF OUR PATENT APPLICATIONS, THE VALUE
OF OUR PATENT PORTFOLIO AND THE REVENUES WE DERIVE FROM IT MAY BE DECREASED
The value of our patents depends in part on their duration. A shorter
period of patent protection could lessen the value of our rights under any
patents that we obtain and may decrease the revenues we derive from our patents.
The U.S. patent laws were amended in 1995 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 average time from filing
to issuance of biotechnology applications is at least one year and may be more
than three years depending on the subject matter, a 20-year patent term from the
filing date may result in substantially shorter patent protection. Also, we may
need to refile some of our applications claiming large numbers of gene sequences
and, in these situations, the patent term will be measured from the date of the
earliest priority application. This would shorten our period of patent
exclusivity and may decrease the revenues that we might obtain from the patents.
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INTERNATIONAL PATENT PROTECTION IS PARTICULARLY UNCERTAIN, AND IF WE ARE
INVOLVED IN OPPOSITION PROCEEDINGS IN FOREIGN COUNTRIES, WE MAY HAVE TO EXPEND
SUBSTANTIAL SUMS AND MANAGEMENT RESOURCES
Biotechnology patent law outside the United States is even more uncertain
than in the United States and is currently undergoing review and revision in
many countries. Further, the laws of some foreign countries may not protect our
intellectual property rights to the same extent as U.S. laws. We may participate
in opposition proceedings to determine the validity of our foreign patents or
our competitors foreign patents, which could result in substantial costs and
diversion of our efforts.
IF OUR NEW PROGRAMS RELATING TO THE ROLE OF GENETIC VARIATION IN DISEASE AND
DRUG RESPONSE ARE NOT SUCCESSFUL, THEY MAY NOT GENERATE SIGNIFICANT REVENUES OR
RESULT IN PROFITABLE OPERATIONS
We recently began to focus part of our business on developing
information-based and other products and services to assist pharmaceutical
companies in a new and unproven area: the identification and correlation of
variation in genetic composition to disease and drug response. We will incur
significant costs over the next several years in expanding our research and
development in this area. These activities may never generate significant
revenues or profitable operations.
This new aspect of our business will focus on single nucleotide
polymorphisms or SNPs, one type of genetic variation. The role of SNPs in
disease and drug response is not fully understood, and relatively few, if any,
therapeutic or diagnostic products based on SNPs have been developed and
commercialized. Among other things, demand in this area may be adversely
affected by ethical and social concerns about the confidentiality of
patient-specific genetic information and about the use of genetic testing for
diagnostic purposes.
Except for a few anecdotal examples, there is no proof that SNPs have any
correlation to diseases or a patient's response to a particular drug or class of
drug. Identifying statistically significant correlations is time-consuming and
could involve the collection and screening of a large number of patient samples.
We do not know if the SNPs we have discovered to date are suitable for these
correlation studies because the variations we discovered may not occur
frequently enough to justify use by a pharmaceutical company.
Our success in this area will also depend upon our ability to develop, use
and enhance new and relatively unproven technologies. Among other things, we
will need to continue to improve the throughput of our SNP-discovery technology.
We may not be able to achieve these necessary improvements, and other factors
may impair our ability to develop our SNP-related products and services in time
to be competitively available.
IF OUR STRATEGIC INVESTMENTS RESULT IN LOSSES, OUR EARNINGS MAY DECLINE
We make strategic investments in joint ventures or businesses that
complement our business. These investments may:
- often be made in securities lacking a public trading market or subject
to trading restrictions, either of which increases our risk and reduces
the liquidity of our investment;
- require us to record losses and expenses related to our ownership
interest, such as the losses we reported in 1997, 1998 and 1999 related
to our investment in diaDexus, LLC;
- require us to record charges related to the acquisition of in-process
technologies or for the impairment in the value of the securities
underlying our investment; and
- require us to invest greater amounts than anticipated or to devote
substantial management time to the management of research and
development relationships and joint ventures.
The market values of many of these investments fluctuate significantly. We
evaluate our long-term equity investments for impairment of their values on a
quarterly basis. Impairment could result in future charges to our earnings.
These losses and expenses may exceed the amounts that we anticipated.
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BECAUSE OUR SALES CYCLE IS LENGTHY, WE MAY SPEND A LOT OF TIME AND MONEY TRYING
TO OBTAIN NEW OR RENEWED SUBSCRIPTIONS TO OUR PRODUCTS AND SERVICES BUT MAY BE
UNSUCCESSFUL, WHICH COULD HURT OUR PROFITABILITY
Our ability to obtain new subscribers for our databases, software tools
and microarray and other services or to obtain renewals or additions to existing
subscriptions depends upon prospective subscribers' perceptions that our
products and services can help accelerate drug discovery efforts. Our database
sales cycle is typically lengthy because we need to educate our potential
subscribers and sell the benefits of our tools and services to a variety of
constituencies within potential subscriber companies. In addition, each database
subscription and microarray services agreement involves the negotiation of
unique terms. We may expend substantial funds and management effort with no
assurance that a new, renewed or expanded subscription or services agreement
will result. These expenditures, without increased revenues, will negatively
impact our profitability. Actual and proposed consolidations of pharmaceutical
companies have affected the timing and progress of our sales efforts. We expect
that future proposed consolidations will have similar effects.
IF WE ENCOUNTER PROBLEMS IN MEETING CUSTOMERS' SOFTWARE NEEDS, OUR REVENUES
COULD DECLINE AND WE COULD LOSE OUR CUSTOMERS' GOODWILL
Our databases require software support and will need to incorporate
features determined by database collaborators. If we experience delays or
difficulties in implementing our database software or collaborator-requested
features, we may be unable to service our collaborators, which could result in a
loss of revenues and customer goodwill.
WE HAVE ENCOUNTERED DIFFICULTIES INTEGRATING COMPANIES WE ACQUIRED, AND IF IN
THE FUTURE WE CANNOT SMOOTHLY INTEGRATE BUSINESSES WE ACQUIRE, OUR OPERATIONS
AND FINANCIAL RESULTS COULD BE HARMED
As part of our business strategy, we may acquire other assets,
technologies and businesses. Our past acquisitions have involved and our future
acquisitions may involve risks such as the following:
- we may be exposed to unknown liabilities of acquired companies;
- our acquisition and integration costs may be higher than we anticipated
and may cause our quarterly and annual operating results to fluctuate;
- we may experience difficulty and expense in assimilating the operations
and personnel of the acquired businesses, disrupting our business and
diverting management's time and attention;
- we may be unable to integrate or complete the development and
application of acquired technology;
- we may experience difficulties in establishing and maintaining uniform
standards, controls, procedures and policies;
- our relationships with key customers of acquired businesses may be
impaired, due to changes in management and ownership of the acquired
businesses;
- we may be unable to retain key employees of the acquired businesses;
- we may incur amortization expenses if an acquisition results in
significant goodwill or other intangible assets; and
- our stockholders may be diluted if we pay for the acquisition with
equity securities.
In addition, if we acquire additional businesses that are not located near
our Palo Alto, California headquarters, we may experience more difficulty
integrating and managing the acquired businesses' operations.
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IF WE ARE UNABLE TO MANAGE EFFECTIVELY OUR GROWTH, OUR OPERATIONS AND ABILITY TO
SUPPORT OUR CUSTOMERS COULD BE AFFECTED, WHICH COULD HARM OUR REVENUES
We expect to continue to experience significant growth in the number of
our employees and the scope of our operations. This growth has placed, and may
continue to place, a significant strain on our management and operations. Our
ability to manage this growth will depend upon our ability to attract, hire and
retain skilled employees. Our success will also depend on the ability of our
officers and key employees to continue to implement and improve our operational
and other systems and to hire, train and manage our employees.
In addition, we must continue to invest in customer support resources as
the number of database collaborators and their requests for support increase.
Our database collaborators typically have worldwide operations and may require
support at multiple U.S. and foreign sites. To provide this support, we may need
to open offices in additional locations, which could result in additional
burdens on our systems and resources.
WE DEPEND ON KEY EMPLOYEES IN A COMPETITIVE MARKET FOR SKILLED PERSONNEL, AND
THE LOSS OF THE SERVICES OF ANY OF OUR KEY EMPLOYEES WOULD AFFECT OUR ABILITY TO
ACHIEVE OUR OBJECTIVES
We are highly dependent on the principal members of our management,
operations and scientific staff. Our product development, operations and
marketing efforts would be delayed or curtailed if we lose the services of any
of these people.
Our future success also will depend in part on the continued service of
our executive management team, key scientific, software, bioinformatics and
management personnel and our ability to identify, hire, train and retain
additional personnel, including customer service, marketing and sales staff. We
experience intense competition for qualified personnel. If we are unable to
continue to attract, train and retain these personnel, we may be unable to
expand our business.
WE RELY ON A SMALL NUMBER OF SUPPLIERS OF PRODUCTS WE NEED FOR OUR BUSINESS, AND
IF WE ARE UNABLE TO OBTAIN SUFFICIENT SUPPLIES, WE WILL BE UNABLE TO COMPETE
EFFECTIVELY
Currently, we use gene sequencing machines supplied by Molecular Dynamics,
a subsidiary of Amersham Pharmacia Biotech, Ltd., and chemicals used in the
sequencing process, called reagents, supplied by Sigma-Aldrich, Inc., in our
gene sequencing operations. If we are not able to obtain additional machines or
an adequate supply of reagents or other materials at commercially reasonable
rates, our ability to identify genes or genetic variations would be slower and
more expensive.
IF THE INFORMATION WE OBTAIN FROM THIRD-PARTY DATA SOURCES IS CORRUPT OR
VIOLATES THE LAW, OUR REVENUES AND OPERATING RESULTS COULD DECLINE
We rely on and include in our databases scientific and other data supplied
by others, including publicly available information from sources such as the
Human Genome Project. This data could contain errors or other defects, which
could corrupt our databases. In addition, we cannot guarantee that our data
sources acquired this information in compliance with legal requirements. If this
data caused database corruption or violated legal requirements, we would be
unable to sell subscriptions to our databases. These lost sales would harm our
revenue and operating results.
SECURITY RISKS IN ELECTRONIC COMMERCE OR UNFAVORABLE INTERNET REGULATIONS MAY
DETER FUTURE USE OF OUR PRODUCTS AND SERVICES, WHICH COULD RESULT IN A LOSS OF
REVENUES
We plan to make our products available through our website on the Internet
and have recently introduced our first online product, the LifeSeq Gene-by-Gene
program. Our ability to provide secure transmissions of confidential information
over the Internet may limit online use of our products and services by our
database collaborators as we may be limited by our inability to provide secure
transmissions of confidential information over the Internet. Advances in
computer capabilities and new discoveries in the field of cryptography may
compromise the security measures we use to protect our website, access to our
databases, and transmissions to and from our website.
10
<PAGE> 12
If our security measures are breached, our proprietary information or
confidential information about our collaborators could be misappropriated. Also,
a security breach could result in interruptions in our operations. The security
measures we adopt may not be sufficient to prevent breaches, and we may be
required to incur significant costs to protect against security breaches or to
alleviate problems caused by breaches. Further, if the security of our website,
or the website of another company, is breached, our collaborators may no longer
use the Internet when the transmission of confidential information is involved.
For example, recent attacks by computer hackers on major e-commerce websites and
other Internet service providers have heightened concerns regarding the security
and reliability of the Internet.
Because of the growth in electronic commerce, the United States Congress
has held hearings on whether to further regulate providers of services and
transactions in the electronic commerce market. The federal government could
enact laws, rules and regulations that would affect our business and operations.
Individual states could also enact laws regulating the use of the Internet. If
enacted, these federal and state laws, rules and regulations could require us to
change our online business and operations, which could limit our growth and our
development of our online products.
BECAUSE OUR ACTIVITIES INVOLVE THE USE OF HAZARDOUS MATERIALS, WE MAY BE SUBJECT
TO COSTLY ENVIRONMENTAL LIABILITY THAT COULD EXCEED OUR RESOURCES
Our research and development involves the controlled use of hazardous and
radioactive materials and biological waste. We are subject to federal, state and
local laws and regulations governing the use, manufacture, storage, handling and
disposal of these materials and waste products. Although we believe that our
safety procedures for handling and disposing of these materials comply with
legally prescribed standards, the risk of accidental contamination or injury
from these materials cannot be completely eliminated. In the event of an
accident, we could be held liable for damages, and this liability could exceed
our resources.
We believe that we are in compliance in all material respects with
applicable environmental laws and regulations and currently do not expect to
make material additional capital expenditures for environmental control
facilities in the near term. However, we may have to incur significant costs to
comply with current or future environmental laws and regulations.
BECAUSE OUR REVENUES ARE DERIVED PRIMARILY FROM THE PHARMACEUTICAL AND
BIOTECHNOLOGY INDUSTRIES, OUR REVENUES MAY FLUCTUATE SUBSTANTIALLY DUE TO
REDUCTIONS AND DELAYS IN RESEARCH AND DEVELOPMENT EXPENDITURES
We expect that our revenues in the foreseeable future will be derived
primarily from products and services provided to the pharmaceutical and
biotechnology industries as well as to the academic community. Accordingly, our
success will depend in large part upon the success of the companies within these
industries and their demand for our products and services. Our operating results
may fluctuate substantially due to reductions and delays in research and
development expenditures by companies in these industries or by the academic
community. These reductions and delays may result from factors such as:
- changes in economic conditions;
- consolidation in the pharmaceutical industry;
- changes in the regulatory environment affecting health care and health
care providers;
- pricing pressures;
- market-driven pressures on companies to consolidate and reduce costs;
and
- other factors affecting research and development spending.
These factors are not within our control.
11
<PAGE> 13
IF A NATURAL DISASTER OCCURS, WE MAY HAVE TO CEASE OR LIMIT OUR BUSINESS
OPERATIONS
We conduct our database, sequencing and a significant portion of our other
activities at our facilities in Palo Alto, California, and conduct our
microarray-related activities at our facilities in Fremont, California. Both
locations are in a seismically active area. Although we maintain business
interruption insurance, we do not have or plan to obtain earthquake insurance. A
major catastrophe, such as an earthquake or other natural disaster, could result
in a prolonged interruption of our business.
WE HAVE A LARGE AMOUNT OF DEBT AND OUR DEBT SERVICE OBLIGATIONS MAY PREVENT US
FROM TAKING ACTIONS THAT WE WOULD OTHERWISE CONSIDER TO BE IN OUR BEST
INTERESTS
As of June 30, 2000, we had
- total consolidated debt of approximately $203.3 million, and
- stockholders' equity of approximately $601.9 million, and
- a deficiency of earnings available to cover fixed charges of $13.5
million for the six months ended June 30, 2000.
A variety of uncertainties and contingencies will affect our future
performance, many of which are beyond our control. We may not generate
sufficient cash flow in the future to enable us to meet our anticipated fixed
charges, including our debt service requirements with respect to the $200
million of convertible subordinated notes we sold in February 2000. The
following table shows the aggregate amount of our principal and interest
payments due in each of the five years:
<TABLE>
<CAPTION>
Year Aggregate Principal Aggregate Interest
---- ------------------- ------------------
<S> <C> <C>
2000 $ 796,000 $ 5,531,000
2001 -- 11,000,000
2002 -- 11,000,000
2003 -- 11,000,000
2004 -- 11,000,000
</TABLE>
Our substantial proportion of debt to equity, or leverage, could have
significant negative consequences for our future operations, including:
- increasing our vulnerability to general adverse economic and industry
conditions;
- limiting our ability to obtain additional financing;
- requiring the dedication of a substantial portion of our expected cash
flow from operations to service our indebtedness, thereby reducing the
amount of our expected cash flow available for other purposes,
including working capital and capital expenditures;
- limiting our flexibility in planning for, or reacting to, changes in
our business and the industry in which we compete; or
- placing us at a possible competitive disadvantage compared to less
leveraged competitors and competitors that have better access to
capital resources.
12
<PAGE> 14
OUR STOCK PRICE HAS BEEN AND WILL LIKELY CONTINUE TO BE VOLATILE, AND YOU MAY BE
UNABLE TO RESELL YOUR SHARES AT OR ABOVE THE PRICE YOU PAID
Our stock price has been and is likely to continue to be highly volatile.
For example, our stock price has since the beginning of 2000 traded as high as
$289.06 on February 25, 2000 and as low as $43.38 on May 24, 2000. Our stock
price could fluctuate significantly due to a number of factors, including:
- variations in our actual or anticipated operating results;
- sales of substantial amounts of our stock;
- announcements about us or about our competitors, including
technological innovation or new products or services;
- litigation and other developments relating to our patents or other
proprietary rights or those of our competitors;
- conditions in the life sciences, pharmaceuticals or genomics
industries;
- governmental regulation and legislation; and
- changes in securities analysts' estimates of our performance, or our
failure to meet analysts' expectations.
Many of these factors are beyond our control.
In addition, the stock markets in general, and the Nasdaq National Market
and the market for life sciences and technology companies in particular, have
experienced extreme price and volume fluctuations recently. These fluctuations
often have been unrelated or disproportionate to the operating performance of
these companies. These broad market and industry factors may decrease the market
price of our common stock, regardless of our actual operating performance.
In the past, companies that have experienced volatility in the market
prices of their stock have been the object of securities class action
litigation. If we were the object of securities class action litigation, it
could result in substantial costs and a diversion of management's attention and
resources, which could affect our profitability.
13
<PAGE> 15
FORWARD-LOOKING STATEMENTS
When used in this prospectus, the words "expects," "anticipates,"
"estimates," "plans," and similar expressions are intended to identify
forward-looking statements. These are statements that relate to future periods
and include statements as to our expected net losses, our expected cash flows,
the adequacy of our capital resources, growth in our operations, our ability to
commercialize products developed under collaborations and alliances, our ability
to complete the sequence of full-length genes in areas of therapeutic interest
and file patents on these potential drug targets, our ability to integrate
companies and operations that we have acquired or will acquire, our ability to
implement online delivery of our database and software products, the scheduling
and timing of our litigation, our strategy with regard to protecting our
proprietary technology, our ability to compete and respond to rapid
technological change and the performance and utility of our products and
services. Forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those projected. These
risks and uncertainties include, but are not limited to, the extent to which the
pharmaceuticals and biotechnology industries use genomic information in research
and development, risks relating to development of new products and services and
their use by our potential customers and collaborators, our ability to work with
our collaborators to meet the goals of our collaborators and alliances, our
ability to retain and obtain customers, the cost of accessing or acquiring
technologies or intellectual property, the effectiveness of our sequencing
efforts, the impact of alternative technological advances and competition,
uncertainties associated with changes in patent laws, developments in and
expenses related to litigation and interference proceedings, and the risks set
forth above under the caption "Risk Factors."
PROCEEDS FROM THE OFFERING
We will not receive any proceeds from the sale of the shares by the
selling stockholders. All proceeds from the sale of the shares will be for the
account of the selling stockholders, as described below. See "Selling
Stockholders" and "Plan of Distribution."
14
<PAGE> 16
SELLING STOCKHOLDERS
In February 2000, we entered into common stock purchase agreements with
the selling stockholders pursuant to which we sold the shares covered by this
prospectus. Under the agreements, we agreed to register the shares under the
Securities Act for resale to the public and, subject to the terms of the
agreements, to cause this registration statement to be kept effective until the
earlier of (1) February 28, 2002, (2) the date on which all selling stockholders
are eligible to sell all shares then held by them without volume restrictions
under Rule 144(e) of the Securities Act, or (3) such time as all the shares
offered by this prospectus have been sold.
The following table sets forth information regarding the beneficial
ownership of common stock by each of the selling stockholders and the shares
being offered by the selling stockholders. Information with respect to
beneficial ownership is based upon information obtained from the selling
stockholders. Information with respect to shares owned beneficially after the
offering assumes the sale of all of the shares offered and no other purchases or
sales of common stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR NUMBER OF OWNED AFTER
TO OFFERING SHARES OFFERING
-------------------- BEING -------------------
SELLING STOCKHOLDERS NUMBER PERCENT OFFERED NUMBER PERCENT
-------------------- --------- ------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Janus Capital Corporation ...... 3,524,295 11.0% 2,000,000 1,524,295 4.8%
100 Fillmore Street
Denver, CO 80206
</TABLE>
--------------
The share amounts in the table above are based on a Schedule 13G dated
March 9, 2000. The number of shares being offered includes:
- 100,000 shares held by Janus Olympus Fund (Managed by Claire Young),
- 498,785 shares held by Janus Worldwide Fund (Co-managed by Helen Young
Hayes and Laurence Chang),
- 101,215 shares held by Janus Aspen Series -- Worldwide Growth
Portfolio (Managed by Helen Young Hayes),
- 95,860 shares held by Janus Enterprise Fund (Managed by Jim Goff),
- 204,140 shares held by Janus Aspen Series -- Aggressive Growth
Portfolio (Managed by Jim Goff),
- 600,000 shares held by Janus Twenty Fund (Managed by Scott Schoelzel),
and
- 400,000 shares held by Janus Mercury Fund (Managed by Warren Lammert).
15
<PAGE> 17
PLAN OF DISTRIBUTION
The selling stockholders may offer and sell the shares covered by this
prospectus at various times. As used in this prospectus, the term "selling
stockholders" includes donees, pledgees, transferees or other
successors-in-interest selling shares received from a named selling stockholder
as a gift, partnership distribution, or other non-sale-related transfer after
the date of this prospectus. The selling stockholders will act independently of
Incyte in making decisions with respect to the timing, manner and size of each
sale. The shares may be sold by or for the account of the selling stockholders
in transactions on the Nasdaq National Market, the over-the-counter market, or
otherwise. These sales may be made at fixed prices, at market prices prevailing
at the time of sale, at prices related to prevailing market prices, or at
negotiated prices. The shares may be sold by means of one or more of the
following methods:
- a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by that
broker-dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions in which the broker solicits
purchasers;
- in connection with short sales, in which the shares are redelivered to
close out short positions;
- in connection with the loan or pledge of shares registered hereunder to
a broker-dealer, and the sale of the shares so loaned or the sale of
the shares so pledged upon a default;
- in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions
in standardized or over-the-counter options;
- privately negotiated transactions; or
- in a combination of any of the above methods.
If required, we will distribute a supplement to this prospectus to
describe material changes in the terms of the offering.
In effecting sales, broker-dealers engaged by the selling stockholders may
arrange for other broker-dealers to participate in resales. Broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the selling stockholders or from the purchasers of the shares or from both. This
compensation may exceed 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 of
1933. Any commissions paid or any discounts or concessions allowed to any of
those 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.
Incyte 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 stockholders selling those shares.
LEGAL MATTERS
Selected legal matters with respect to the validity of common stock
offered by this prospectus are being passed upon for Incyte by Pillsbury Madison
& Sutro LLP, San Francisco, California.
16
<PAGE> 18
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements included in our Annual Report on Form 10-K for the year ended
December 31, 1999. Our financial statements are incorporated by reference in
this prospectus in reliance upon Ernst & Young LLP's report, which is based in
part on the report of PricewaterhouseCoopers LLP, given on their authority as
experts in accounting and auditing.
The audited financial statements of diaDexus, LLC not separately presented
in this prospectus, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report thereon appears therein. Such financial
statements, to the extent they have been included in the financial statements
of Incyte Genomics, Inc., have been so included in reliance on the report of
such independent accountants given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
information with the Securities and Exchange Commission. You may read and copy
any materials we file with the Commission at the Commission's public reference
rooms:
<TABLE>
<CAPTION>
<S> <C> <C>
450 Fifth Street, N.W. 500 West Madison Street 7 World Trade Center
Room 1024 14th Floor Suite 1300
Washington, D.C. Chicago, Illinois New York, New York
</TABLE>
Please call the Commission at 1-800-SEC-0330 for more information on its public
reference rooms. The Commission also maintains an Internet Website at
http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the
Commission.
We have filed with the Commission a registration statement, which contains
this prospectus, on Form S-3 under the Securities Act of 1933. The registration
statement relates to the common stock offered by the selling stockholders. This
prospectus does not contain all of the information set forth in the registration
statement and the exhibits and schedules to the registration statement. Please
refer to the registration statement and its exhibits and schedules for further
information with respect to the Company and the common stock. Statements
contained in this prospectus as to the contents of any contract or other
document are not necessarily complete and, in each instance, we refer you to the
copy of that contract or document filed as an exhibit to the registration
statement. You may read and obtain a copy of the registration statement and its
exhibits and schedules from the Commission, as described in the preceding
paragraph.
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be a part of this prospectus, and later information that we file
with the Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the Commission under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is completed. The documents
we incorporate by reference are:
- Our Annual Report on Form 10-K for the year ended December 31, 1999.
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
- Our current reports on Form 8-K filed with the Commission on February
1, 2000; February 17, 2000; February 22, 2000; February 24, 2000; March
24, 2000 and July 25, 2000.
17
<PAGE> 19
- The description of our common stock contained in our registration
statement on Form 8-A filed under the Exchange Act on January 5, 1996.
- The description of our Series A Participating Preferred Stock Purchase
Rights contained in the registration statement on Form 8-A filed under
the Exchange Act on September 30, 1998.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and number:
Investor Relations
Incyte Genomics, Inc.
3160 Porter Drive
Palo Alto, California 94304
Telephone (650) 845-4589
------------------------
We have not authorized anyone to provide you with information or to
represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. The selling stockholders are
offering to sell, and seeking offers to buy, only the shares of Incyte common
stock covered by this prospectus, and only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date, regardless of the time of delivery of
this prospectus or of any sale of the shares.
18
<PAGE> 20
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
Commission registration fee.
<TABLE>
<CAPTION>
Amount
-----------
<S> <C>
SEC registration fee .................. $ 59,400.00
Accounting fees and expenses .......... 15,000.00
Legal fees and expenses ............... 30,000.00
Miscellaneous fees and expenses ....... 10,600.00
-----------
Total ........................... $115,000.00
===========
</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. Article VII of the Registrant's Restated Certificate of
Incorporation (Exhibit 4.1 to the Registrant's Registration Statement on Form
S-3 (File No. 333-31307)) and Article V of the Registrant's Bylaws (Exhibit 4.2
to the Registrant's Registration Statement on Form S-3 (File No. 333-31307))
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, Independent Auditors.
23.2 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.3* Consent of Pillsbury Madison & Sutro LLP (included in its
opinion filed as Exhibit 5.1).
24.1* Power of Attorney.
</TABLE>
---------------
* Filed previously.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
II-1
<PAGE> 21
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that 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 Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each 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
Securities 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 the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Palo Alto, State of California, on August 1,
2000.
INCYTE GENOMICS, INC.
By /s/ Roy A. Whitfield
----------------------------------
Roy A. Whitfield
Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Amendment to
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>
/s/ Roy A. Whitfield Chief Executive Officer (Principal August 1, 2000
------------------------------------ Executive Officer) and Director
Roy A. Whitfield
/s/ John M. Vuko* Chief Financial Officer (Principal August 1, 2000
------------------------------------ Financial Officer)
John M. Vuko
/s/ Timothy Henn* Controller (Principal Accounting Officer) August 1, 2000
------------------------------------
Timothy Henn
/s/ Jeffrey J. Collinson* Chairman of the Board August 1, 2000
------------------------------------
Jeffrey J. Collinson
/s/ Barry M. Bloom* Director August 1, 2000
------------------------------------
Barry M. Bloom
/s/ Frederick B. Craves* Director August 1, 2000
------------------------------------
Frederick B. Craves
/s/ Jon S. Saxe* Director August 1, 2000
------------------------------------
Jon S. Saxe
/s/ Randal W. Scott* Director August 1, 2000
------------------------------------
Randal W. Scott
* /s/ Roy A. Whitfield
------------------------------------
Roy A. Whitfield
As Attorney-In-Fact
</TABLE>
II-3
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
-------------- -----------------------
<S> <C>
5.1* Opinion of Pillsbury Madison & Sutro LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.3* Consent of Pillsbury Madison & Sutro LLP (included in its
opinion filed as Exhibit 5.1).
24.1* Power of Attorney.
</TABLE>
--------------
* Filed previously.
