SEC Info - Accelrys, Inc. - ‘10-Q’ for 6/30/98

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Accelrys, Inc. – ‘10-Q’ for 6/30/98

As of: Friday, 8/14/98 · For: 6/30/98 · Accession #: 1036050-98-1417 · File #: 0-27188

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/14/98  Accelrys, Inc.                    10-Q        6/30/98   11:698K                                   Donnelley R R & S… 14/FA

Quarterly Report — Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      18     88K 
 2: EX-10.19    Employment Agreement                                   3     19K 
 3: EX-10.27.A  Amendment to Employment Agreement                      5     18K 
 4: EX-10.28.A  Amendment to Employment Agreement                      4     17K 
 5: EX-10.35    Joint Venture Agreement                              177    641K 
 6: EX-10.36    Amendement No. 1 to Joint Venture Agreement            4     18K 
 7: EX-10.37    Distributorship Agreement                             60    233K 
 8: EX-10.38    Amendment to Distributorship Agreement                 2±     9K 
 9: EX-10.39    Amendment No. 2 to Distributorship Agreement          42    275K 
10: EX-27.1     Financial Data Schedule                                2     10K 
11: EX-27.2     Financial Data Schedule                                2     10K

10-Q — Quarterly Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Exhibits and Reports on Form 8-K Exhibits and Reports on Form 8-K 13-16 Financial Statements: Management's Discussion and Analysis of Financial Condition and 8-10 Results of Operations Management's Discussion And Analysis Of Financial Condition And Results Operations Submission of Matters to A Vote of Security Holders Submission of Matters to a Vote of Security Holders 11-12
1	1st Page - Filing Submission
2	Item 1. Financial Statements:
"	Item 2. Management's Discussion and Analysis of Financial Condition and 8-10 Results of Operations
"	Item 4. Submission of Matters to a Vote of Security Holders 11-12
"	Item 6. Exhibits and Reports on Form 8-K 13-16
8	Item 2. Management's Discussion And Analysis Of Financial Condition And Results Operations
11	Item 4. Submission of Matters to A Vote of Security Holders
13	Item 6. Exhibits and Reports on Form 8-K

10-Q 1st Page of 18 TOC ↑Top Previous Next ↓Bottom Just 1st
 
SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

FORM 10-Q 

(Mark One)                                                                      
[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES 
EXCHANGE ACT OF 1934                                        

For the quarterly period ended June 30, 1998                              

or  

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934                                        

Commission File Number: 0-27118 

PHARMACOPEIA, INC.  
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware                                                  33-0557266            
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)                                                  

CN 5350, Princeton, New Jersey                            08543-5350            
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip code)            

    (609) 452-3600
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)  

    Not Applicable
--------------------------------------------------------------------------------
(Former name, former address and former fiscal ear, if changed since last 
report) 

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for  
the past 90 days -- Yes  X     No                                               
-----     ----                    

Indicate the number of shares outstanding of each of the issuer's classes of    
common stock, as of the latest practicable date:                                

         CLASS                              Outstanding at June 30, 1998
-------------------------------                ---------------------------------
Common Stock, $.0001 par value                            18,938,883            

10-Q 2nd Page of 18 TOC 1st Previous Next ↓Bottom Just 2nd
PHARMACOPEIA, INC. AND SUBSIDIARY 

Form 10-Q 

Table of Contents 

                                                                [Download Table]


ITEM                                                                          Page
----                                                                          ----
                                                                                  
PART I.  FINANCIAL INFORMATION                                                    

Item 1.    Financial Statements:                                                  

           Consolidated Balance Sheets-June 30, 1998 and December 31, 1997       3

           Consolidated Statements of Operations-Three and Six Months Ended      4
           June 30, 1998 and 1997                                                 

           Consolidated Statements of Cash Flows-Six Months Ended                5
           June 30, 1998 and 1997                                                 

           Notes to Consolidated Financial Statements                          6-8

Item 2.    Management's Discussion and Analysis of Financial Condition and    8-10
           Results of Operations                                                  

PART II.  OTHER INFORMATION                                                       

Item 4.    Submission of Matters to a Vote of Security Holders               11-12

Item 6.    Exhibits and Reports on Form 8-K                                  13-16

SIGNATURE                                                                       17
INDEX TO EXHIBITS                                                                 
                                                                                18

10-Q 3rd Page of 18 TOC 1st Previous Next ↓Bottom Just 3rd
PART I  
FINANCIAL INFORMATION 

ITEM 1.  FINANCIAL STATEMENTS                                                   
PHARMACOPEIA, INC. AND SUBSIDIARY 
CONSOLIDATED BALANCE SHEETS 
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) 

                                                        [Enlarge/Download Table]

                                                                               JUNE 30,           December 31,    
                                                                                 1998                1997         
                                                                      --------------------------------------------
                                                                          (Unaudited)                             
ASSETS                                                                                                            
Current assets:                                                                                                   
                                                                                                                  
  Cash and cash equivalents                                                   $ 22,720             $ 24,609       
  Marketable securities                                                         64,029               60,166       
  Trade receivables, net of allowance for doubtful accounts of $386                                               
    and $466, respectively                                                      14,480               19,424       

  Prepaid expenses and other current assets                                      5,493                4,671       
                                                                    -----------------------------------------     
        Total current assets                                                   106,722              108,870       
                                                                    -----------------------------------------     

  Non-current investments in marketable securities                                                   12,865       
  Property and equipment, net                                                   13,832               13,141       
  Software development costs, net                                                3,273                3,437       
  Investment in joint venture                                                                         1,013       
  Other assets                                                                   1,195                  725       
                                                                    -----------------------------------------     
                                                                              $125,022             $140,051       
                                                                    =========================================     

LIABILITIES AND STOCKHOLDERS' EQUITY                                                                              
 Current liabilities:                                                                                             
   Accounts payable                                                           $  3,562             $  4,232       
   Accrued liabilities                                                          18,703               18,294       
   Notes payable, current portion                                                1,350                1,390       
   Deferred revenue, current portion                                            25,373               29,345       
                                                                    -----------------------------------------     

        Total current liabilities                                               48,988               53,261       
                                                                    -----------------------------------------     

  Notes payable, long-term portion                                                 423                1,412       
  Other long-term liabilities                                                    1,388                  440       
  Deferred revenue, long term                                                    1,190                4,342       
  Minority interest in joint venture                                             1,073                            

Commitments                                                                                                       
Stockholders equity:                                                                                              
    Preferred stock, $.0001 par value; 2,000,000 shares authorized;                                               
       none issued and outstanding                                                                                
    Common stock, $.0001 par value; 40,000,000 shares authorized;                                                 
      18,938,883 and 18,804,524 shares issued and outstanding at                                                  
      June 30, 1998 and December 31, 1997, respectively                              1                    1       
    Additional paid in capital                                                 145,070              144,440       
    Accumulated deficit                                                        (72,235)             (62,657)      
    Cumulative translation adjustment                                             (876)              (1,188)      
                                                                    -----------------------------------------     
         Total stockholders' equity                                             71,960               80,596       
                                                                    -----------------------------------------     
                                                                              $125,022             $140,051       
                                                                    =========================================     

See accompanying notes to these unaudited financial statements. 

10-Q 4th Page of 18 TOC 1st Previous Next ↓Bottom Just 4th
PHARMACOPEIA, INC. AND SUBSIDIARY 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                                       Three Months Ended June 30,         Six Months Ended June 30,    
                                                         1998             1997              1998             1997       
                                                  -----------------------------------  ---------------------------------
                                                               (UNAUDITED)                         (UNAUDITED)          
                                                                                                                        
Revenue:                                                                                                                
       Contract                                          $  7,023          $ 5,586          $ 13,455          $11,518   
       Software license, service and other                 11,458           10,954            24,512           22,258   
       Hardware                                             1,814            1,691             2,880            3,101   
                                                        ---------------------------         --------------------------- 
                       Total revenue                       20,295           18,231            40,847           36,877   

Cost and expenses:                                                                                                      
       Software, license and other                            794              756             1,563            1,555   
       Hardware                                             1,549            1,467             2,420            2,705   
       Research and development:                                                                                        
              Collaborative                                 4,715            4,178             9,135            8,329   
              Proprietary                                   7,207            5,833            13,964           11,966   
       Sales, general and administrative                    8,248            7,448            16,889           14,368   
       Merger related costs                                 7,998                              7,998                    
                                                        ---------------------------         --------------------------- 
                      Total costs and expenses             30,511           19,682            51,969           38,923   
                                                        ---------------------------         --------------------------- 
Operating loss                                            (10,216)          (1,451)          (11,122)          (2,046)  
Interest and other income, net                                907            1,333             1,949            2,250   
                                                        ---------------------------         --------------------------- 
Loss before provision (benefit) for income taxes           (9,309)            (118)           (9,173)             204   
Provision (benefit) for income taxes                         (936)             595                (8)           1,248   
                                                        ---------------------------         --------------------------- 
Net loss                                                 $ (8,373)         $  (713)         $ (9,165)         $(1,044)  
                                                        ===========================         =========================== 
Basic net loss per share                                   $(0.44)          $(0.04)           $(0.49)          $(0.06)  
                                                        ===========================         =========================== 
Diluted net loss per share                                 $(0.44)          $(0.04)           $(0.49)          $(0.06)  
                                                        ===========================         =========================== 
Weighted average shares of common stock,                                                                                
    outstanding-basic                                      18,906           18,353            18,872           18,311   
Weighted average shares of common stock, and                                                                            
    common stock equivalents outstanding-diluted           18,906           18,353            18,872           18,311   


See accompanying notes to these unaudited financial statements. 

10-Q 5th Page of 18 TOC 1st Previous Next ↓Bottom Just 5th
PHARMACOPEIA, INC. AND SUBSIDIARY 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(DOLLARS IN THOUSANDS)  

                                                        [Enlarge/Download Table]

                                                             SIX MONTHS ENDED JUNE 30,   
                                                            1998                  1997   
                                                         --------------------------------
                                                                   (UNAUDITED)           
                                                                                         
Cash flows from operating activities                                                     
   Net loss                                                 $ (9,165)           $ (1,044)
   Adjustments to reconcile net loss to net cash                                         
       (used in) operating activities:                                                   
      Depreciation and amortization                            2,820               2,805 
      Equity in undistributed earnings of joint venture        1,013                (152)
       Changes in assets and liabilities:                                                
           Accounts receivable                                 4,944               4,764 
           Prepaid expenses and other current assets            (822)               (644)
           Other assets                                         (470)               (291)
           Accounts payable                                     (670)                608 
           Accrued liabilities                                   533              (1,916)
           Deferred revenue                                   (7,124)             (4,967)
           Other liabilities                                   2,021                 (52)
                                                         ------------------------------- 
              Net cash used in operating activities           (6,920)               (889)

CASH FLOWS FROM INVESTING ACTIVITIES                                                     
   Capital expenditures                                       (2,876)             (4,294)
   Increase in capitalized software development costs           (471)               (870)
   Purchase of marketable securities                         (26,756)            (53,174)
   Proceeds from maturities of marketable securities          35,758              45,453 
                                                         ------------------------------- 
              Net cash provided by (used in) investing         5,655             (12,885)
               activities                                                                

CASH FLOWS FROM FINANCING ACTIVITIES                                                     
   Net proceeds from issuance of common stock                    630               4,396 
   Payments on notes payable                                  (1,029)               (959)
   Principal payments on capital leases                         (124)               (228)
                                                         ------------------------------- 
             Net cash provided by (used in) financing           (523)              3,209 
              activities                                                                 

    Exchange rate effects on cash                               (101)               (523)
                                                         ------------------------------- 
    Net decrease in cash and cash equivalents                 (1,889)            (11,088)
    Cash and cash equivalents, beginning of period            24,609              31,568 

    Cash and cash equivalents, end of period                $ 22,720            $ 20,480 
                                                         =============================== 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                        
       Cash paid during the period for:                                                  
                 Interest                                   $    263            $    157 
                 Income taxes                                  1,405                 578 

See accompanying notes to these unaudited financial statements. 

10-Q 6th Page of 18 TOC 1st Previous Next ↓Bottom Just 6th
PHARMACOPEIA, INC. AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
(UNAUDITED) 

NOTE (1) -- BASIS OF PRESENTATION                                               

The unaudited consolidated financial statements have been prepared in 
accordance with generally accepted accounting principles for interim financial  
information.  Accordingly, they do not include all of the information and       
footnotes required by generally accepted accounting principles for complete     
financial statements. In the opinion of management, all adjustments (consisting 
of normal recurring accruals) considered necessary for a fair presentation have 
been included. The Company's wholly-owned subsidiary, Molecular Simulations     
Incorporated, ("MSI") was acquired by the Company on June 12, 1998 (see Note 3).
All intercompany balances have been eliminated in consolidation. Interim results
are not necessarily indicative of the results that may be expected for the year.
For further information, refer to the financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K, as amended, for the year  
ended December 31, 1997 and the Company's Registration Statement on Form S-4    
(Registration No. 333-47475).                                                   

NOTE (2) -- BASIC NET LOSS PER SHARE                                            

Basic net loss per share is based on net loss for the relevant period 
divided by the weighted average number of common shares issued and outstanding  
during the period and does not include any other potentially dilutive           
securities.                                                                     

NOTE (3) -- MOLECULAR SIMULATIONS INCORPORATED ACQUISITION                      

    On June 12, 1998, the Company completed its merger with MSI. In connection
with the merger, the Company exchanged approximately 7.1 million shares of its  
Common Stock for all of the issued and outstanding MSI Common Stock, MSI Class B
Common Stock and MSI Series A Convertible Preferred Stock.  The Company believes
this merger qualifies as a tax-free reorganization. This merger was accounted   
for as a pooling-of-interests. Accordingly, the Company's financial statements  
have been restated for all periods presented to include MSI.  In connection with
the transaction, the Company recorded merger related charges of approximately   
$8.0 million in the second quarter of 1998.  Such charges consist of transaction
costs, principally investment banking and professional fees which must be       
expensed under the pooling-of-interests method of accounting.                   

10-Q 7th Page of 18 TOC 1st Previous Next ↓Bottom Just 7th
     The following table summarizes 1998 information on a separate company basis
for Pharmacopeia and MSI prior to completion of the merger.                     

                                                                [Download Table]

                              Period from                  PERIOD FROM       
                           APRIL 1, 1998 TO             JANUARY 1, 1998 TO   
                             JUNE 12, 1998                JUNE 12, 1998      
                    ----------------------------  ---------------------------
Total revenue:                                                               
                                                                             
     Pharmacopeia             $ 5,890                      $12,322           
     MSI                        6,137                       20,437           

Net income (loss):                                                           
     Pharmacopeia             $(1,362)                     $(3,588)          
     MSI                       (3,007)                      (1,483)          

NOTE (4) -- MARKETABLE SECURITIES                                               

As a result of the Company's merger with MSI (see Note 3) which was   
completed on June 12, 1998, the Company anticipates that it's working capital   
needs may fluctuate from month to month. Accordingly, as of June 30, 1998, the  
Company transferred the classification of its marketable securities from        
held-to-maturity to available-for-sale. As of June 30, 1998, marketable         
securities with an amortized cost of $64,029 were transferred from              
held-to-maturity to available-for-sale. The estimated fair value of the         
marketable securities approximates cost as of June 30, 1998 and, therefore, no  
unrealized gains or losses existed at June 30, 1998.                            

NOTE (5) -- REPORTING COMPREHENSIVE INCOME                                      

As of January 1, 1998, the Company adopted Statement of Financial     
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130").
SFAS No. 130 establishes new rules for the reporting and display of             
comprehensive income and its components. The adoption of SFAS No. 130 had no    
impact on the Company's results of operation or stockholders' equity. SFAS No.  
130 requires foreign currency gains or losses, which prior to adoption were     
reported separately in stockholder's equity, to be included in other            
comprehensive income. The components of comprehensive income (loss) for the     
three and six month periods ended June 30, are as follows:                      

                                                        [Enlarge/Download Table]

                                         THREE MONTHS ENDED                 SIX MONTHS ENDED       
                                              JUNE 30,                          JUNE 30,           
                                 -------------------------------   ------------------------------- 
                                      1998              1997             1998              1997    
                                 ------------     --------------   -------------     ------------- 

                                                                                                   
Net loss                              $(8,373)             $ (70)        $(9,165)          $(1,044)
Foreign currency gain (loss)              161               (185)             (6)             (529)
Total comprehensive gain (loss)       $(8,212)             $(255)        $(9,171)          $(1,573)
                                 ============     ==============   =============     ============= 

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NOTE (6) -- IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS                      

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS No.
131").  SFAS No. 131 establishes standards for the way that public business     
enterprises report information about operating segments in annual financial     
statements and requires that those enterprises report selected information about
operating segments in interim financial reports issued to stockholders.  It also
establishes standards for related disclosures about products and services,      
geographic areas, and major customers.  SFAS No. 131 is effective for financial 
statements for fiscal years beginning after December 15, 1997.  The Company will
adopt the new requirements in conjunction with its 1998 Form 10-K.  The adoption
of SFAS No. 131 will have no significant impact on the Company's financial      
reporting except with respect to reporting information regarding MSI.           

Item 2.  Management's Discussion And Analysis Of Financial Condition And Results
Operations                                                    

OVERVIEW                                                                        

The Company's financial statements for all periods presented have been
restated to include the operations of MSI.  The MSI merger was completed on June
12, 1998 and was accounted for as a pooling-of-interests. The acquisition of MSI
was completed by merging Micro Acquisition Corporation ("Micro") a wholly-owned 
subsidiary of Pharmacopeia, with and into MSI, pursuant to an Agreement and Plan
of Merger and Reorganization dated as of February 4, 1998 by and among          
Pharmacopeia, MSI and Micro.  Upon the merger of Micro with and into MSI, each  
outstanding share of MSI Common Stock, MSI Class B Common Stock and MSI Series A
Convertible Preferred Stock was converted into 0.5292 shares of Pharmacopeia    
common stock.                                                                   

    Pharmacopeia was incorporated in March 1993 and is engaged in research and
development and chemical library production for collaborations and for its own  
use. The Company's research and development has focused on efficient, cost      
effective, high throughput systems for synthesizing and screening large         
libraries of chemicals for new drug discovery and optimization.  MSI was        
incorporated in June 1994 and develops and commercializes molecular modeling,   
simulation, and informatics software and services.                              

RESULTS OF OPERATIONS                                                           

THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997                               

     Contract revenue for the three and six months ended June 30, 1998 increased
to $7.0 million and $13.5 million, respectively, compared to $5.6 million and   
$11.5 million for the comparable periods in 1997. The three and six month year  
to year increases primarily reflects expanded efforts in the Schering-Plough and
Bristol-Myers Squibb collaborations.                                            

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  Software license, service and other revenue for the three and six months
ended June 30, 1998 increased to $11.5 million and $24.5 million, respectively, 
compared to $11.0 million and $22.3 million for the three and six months ended  
June 30, 1997. The increases of $0.5 million, or 5%, and $2.3 million, or 10%,  
respectively, are primarily the result of consolidating, in 1998, the operating 
results of TMSI, the existing joint venture between MSI and Teijin as a result  
of MSI become the controlling partner in the joint venture.                     

Research and development expenses increased to $11.9 million and $23.1
million for the three and six months ended June 30, 1998, respectively, compared
to $10.0 million and $20.3 million for the corresponding periods in 1997. The   
increases of $1.9 million, or 19% and $2.8 million, or 14%, respectively,       
primarily reflect increased spending on proprietary research and development as 
Pharmacopeia continues to invest in internal discovery programs, ultra high-    
throughput screening, and informatics. Research and development expenses are    
expected to continue to increase as the Company further expands its activities  
and incurs, among other things, expenses related to additional staff increases, 
increased rent for expanded facilities, and increased equipment and reagent     
purchases.                                                                      

  Sales, general and administrative expenses increased to $8.2 million and
$16.9 million for the three and six months ended June 30, 1998, respectively,   
compared to $7.4 million and $14.4 million for the corresponding periods in     
1997. The increases of $0.8 million, or 11% and $2.5 million, or 18%,           
respectively, are primarily attributable to consolidating, in 1998, the         
operating results of TMSI along with increased payroll and personnel expenses as
the Company continued to hire additional sales, marketing and administrative    
personnel.                                                                      

  Merger related costs of $8.0 million were recorded for the three and six
months ended June 30, 1998 in connection with the MSI merger.  Such charges     
consist of transaction costs, principally investment banking and professional   
fees which must be expensed under the pooling-of-interests method of accounting.

     The Company had interest  and other income of $0.9 million and $1.9 million
for the three and six months ended June 30, 1998, respectively, compared to $1.3
million and $2.2 million for the comparable periods in 1997. The decreases of   
$0.4 million, or 32%, and $0.3 million, or 13%, respectively, resulted primarily
from a decrease in the average balance of cash, cash equivalents and marketable 
securities.                                                                     

 The Company recorded a benefit for income taxes of $0.9 million for the
three months ended June 30, 1998 as compared to a provision for income taxes of 
$0.6 million for the three months ended June 30, 1997. The Company recorded a   
minimal benefit of income taxes for the six months ended June 30, 1998 as       
compared to a provision for income taxes of $1.2 million for the six months     
ended June 30, 1997. The year to year favorable tax variances are the result of 
the combined companies' ability to offset MSI's taxable income with             
Pharmacopeia's losses during the period following the completion of the merger. 

10-Q 10th Page of 18 TOC 1st Previous Next ↓Bottom Just 10th
LIQUIDITY AND CAPITAL RESOURCES                                                 

     As of June 30, 1998, the Company had working capital of $44.9 million.  The
Company has funded its activities through June 30, 1998 primarily through the   
sale of equity securities, funding under collaborative arrangements, and sales  
of software licenses and hardware.                                              

    The Company's funds are currently invested in U.S. Treasury and government
agency obligations, investment grade commercial paper and other short-term money
market instruments. As of June 30, 1998, the Company's cash and cash equivalents
totaled $22.7 million.  In addition, the Company had marketable securities of   
$64 million.                                                                    

   In addition, as of June 30, 1998, the Company had outstanding commitments
for construction and equipment purchases totaling $0.6 million.  The Company    
anticipates that its capital requirements will continue to increase at          
approximately the same level over the next two years as the Company expands its 
research and development activities.  In connection with such expansion, the    
Company expects to incur substantial expenditures for hiring additional         
management and scientific and administrative personnel, and for planned         
expansion and upgrading of its facilities, including acquisition of additional  
equipment.                                                                      

The Company anticipates that its existing capital resources will be   
adequate to fund the Company's operations at least through 2000.  There can be  
no assurance that changes will not occur that would consume available capital   
resources before such time.  The Company's capital requirements depend on       
numerous factors, including the ability of the Company to extend existing       
collaborations and enter into additional collaborative arrangements, competing  
technological and market developments, changes in the Company's existing        
collaborative relationships, the cost of filing, prosecuting, defending and     
enforcing patent claims and other intellectual property rights and the outcome  
of related litigation, the purchase of additional capital equipment,            
acquisitions of other businesses or technologies, the progress of the Company's 
drug discovery programs and the progress of the Company's customers' milestone  
and royalty producing activities.  There can be no assurance that additional    
funding, if necessary, will be available on favorable terms, if at all.  The    
Company's forecasts of the period of time through which its financial resources 
will be adequate to support its operations is forward looking information, and  
actual results could vary.  The factors described earlier in this paragraph will
impact the Company's future capital requirements and the adequacy of its        
available funds.                                                                

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PART II 

OTHER INFORMATION 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     

(a)     The Annual Meeting of Stockholders was held on June 12, 1998.           

(b)     The following persons were elected to continue as directors of the      
Company:                                                        
 
                                                                [Download Table]
                                                                               

                                                FOR                 AGAINST     
                                        ------------------    ------------------
                                                                                
Paul A. Bartlett                             8,391,695               299,981    
Charles A. Sanders                           8,391,595               300,081    

and the following persons are incumbent directors whose terms of office     
continued after the Annual Meeting:                                         

Joseph A. Mollica 
Gary E. Costley   
Frank Baldino     
Edith W. Martin   

(c)     The other matters voted upon and the results of the voting were as      
follows:                                                        

  (1)  To consider and act upon the proposal to approve the issuance
      of up to 8,726,020 shares of Common Stock in connection with
the acquisition of Molecular Simulations Incorporated.

                                                                [Download Table]

                                                              BROKER  
   FOR             Against              ABSTAIN              NON-VOTES

                                                                      
6,944,898           9,050                4,921              1,732,807 

      (2)  To consider and act upon the proposal to amend the Company's 1994
         Incentive Stock Plan to increase the number of shares of Common
Stock authorized for issuance thereunder to 2,225,000.

                                                                [Download Table]

                                                              BROKER  
   FOR             Against              ABSTAIN              NON-VOTES

                                                                      
5,982,613           1,019,556            7,121              1,682,386 

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      (3)  To consider and act upon the proposal to amend the Company's 1994
         Incentive Stock Plan to increase the number of shares of Common
    Stock authorized for issuance thereunder to 2,750,000 upon
  consummation of the acquisition of Molecular Simulations
Incorporated.                                         

                                                                [Download Table]

                                                              BROKER  
   FOR             Against              ABSTAIN              NON-VOTES

                                                                      
5,510,369           1,492,550            6,371              1,682,386 

       (4)  Ratification of the appointment by the Board of Directors of Ernst
            & Young LLP to serve as the Company's independent auditors for the
fiscal year ending December 31, 1998.                 

                                                                [Download Table]


   FOR                AGAINST                  ABSTAIN

                                                      
8,682,755             6,050                     2,871 

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ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K                                     

(a)  Exhibits:                                                                  

                                                        [Enlarge/Download Table]
                                                                                                         
3.1******          Restated Certificate of Incorporation of the Registrant.                              
3.3******          Bylaws of the Registrant, as amended.                                                 
3.3(a)********     Amendment to Bylaws of Pharmacopeia dated July 31, 1997.                              
4.3*               Stockholders Rights Agreement, dated February 15, 1995.                               
10.1*              Series A and Series B Preferred Stock Purchase Agreement, dated July 21, 1993.        
10.2*              Series B Preferred Stock Purchase Agreement, dated March 11, 1994.                    
10.3*              Series C Preferred Stock Purchase Agreement, dated December 22, 1994.                 
10.4*              Series D Preferred Stock Purchase Agreement, dated February 15, 1995.                 
10.5**#            Amended 1994 Incentive Stock Plan.                                                    
10.5(a)*******#    Amendment No. 3 to the 1994 Incentive Stock Plan dated May 9, 1997.                   
10.6*#             1995 Employee Stock Purchase Plan.                                                    
10.7*#             1995 Director Option Plan.                                                            
10.8*+             Library Collection Agreement, dated as of October 1, 1995, between Pharmacopeia and   
                   Novartis Corporation.                                                                 
10.9*+             Research, License, and Royalty Agreement, dated as of February 15, 1995, between      
                   Pharmacopeia and Berlex Laboratories, Inc.                                            
10.9(a)*******+    Amendment No. 1 to Research, License and Royalty Agreement between the Company and    
                   Berlex Laboratories, Inc. dated November 27, 1996.                                    
10.9(b)*******+    Amendment No. 2 to Research, License and Royalty Agreement between the Company and    
                   Berlex Laboratories, Inc. dated June 30, 1997.                                        
10.9(c)*********+  Amendment No.3 to Research, License and Royalty Agreement between the Company and     
                   Berlex Laboratories, Inc. dated November 21, 1997.                                    
10.10*+            License Agreement, dated as of October 6, 1995, among Pharmacopeia, the Trustees of   
                   Columbia University in the City of New York and Cold Spring Harbor Laboratory.        
10.11*+            Collaboration Agreement, dated as of December 22, 1994, between Pharmacopeia and      
                   Schering Corporation and Schering-Plough, Ltd.                                        
10.11(b)*******+   Amendment No. 2 to Collaboration Agreement and Random Library Agreement between the   
                   Company and Schering Corporation and Schering-Plough, Ltd. dated as of April 22, 1996.
10.11(c)*******+   Amendment No. 3 to Collaboration Agreement and Random Library Agreement between the   
                   Company and Schering Corporation and Schering-Plough, Ltd. dated as of April 21, 1997.
10.12*+            Random Library Agreement, dated as of December 22, 1994, between Pharmacopeia and     
                   Schering Corporation and Schering-Plough, Ltd.                                        
10.13*             Lease Agreement between Pharmacopeia and Eastpark at 8A.                              
10.13(a)**         Amendment dated as of January 22, 1996 to Lease Agreement between Pharmacopeia and    
                   Eastpark at 8A.                                                                       
10.13(b)****       Third Amendment to Lease Agreement dated March 31, 1996 between Pharmacopeia and      
                   Eastpark at 8A.                                                                       

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                                                        [Enlarge/Download Table]
                                                                                                            
10.14*              Sublease, dated as of December 7, 1994, between Pharmacopeia and Enichem Americas, Inc. 
10.15*              Lease, dated as of May 2, 1994, between Pharmacopeia and College Road Associates        
                    Limited, as amended.                                                                    
10.15(a)**          Lease dated as of December 1, 1995 between Pharmacopeia and College Road Associates, as 
                    amended.                                                                                
10.15(b)****        Third Execution and Modification of lease dated June 7, 1996, between Pharmacopeia and  
                    College Road Associates Limited.                                                        
10.17*#             Employment Agreement, dated October 4, 1994, between the Company and Lewis J. Shuster.  
10.18*********#     Employment Agreement effective November 1, 1997 between the Company and Joseph A.       
                    Mollica, Ph.D.                                                                          
10.19#              Employment Agreement, dated January 30, 1998, between the Company and Richard Walsh     
10.20*#             Employment Agreement, dated June 3, 1993, between the Company and John J. Baldwin, Ph.D.
10.21*#             Employment Agreement, dated December 2, 1993, between the Company and Nolan H.          
                    Sigal, M.D., Ph.D.                                                                      
10.22*#             Consulting Agreement, dated April 30, 1993, between the Company and W. Clark Still,     
                    Ph.D.                                                                                   
10.23*              Warrant to purchase Common Stock issued to Columbia University.                         
10.24*              Warrant to purchase Common Stock issued to Cold Spring Harbor Laboratory.               
10.25**+            Collaboration Agreement effective as of December 31, 1995 between Pharmacopeia and      
                    Bayer.                                                                                  
10.26**+            Random Library Agreement effective as of December 31, 1995 between Pharmacopeia and     
                    Bayer.                                                                                  
10.27***********#   Employment Agreement effective November 30, 1995 between Molecular Simulations          
                    Incorporated and Michael J. Savage                                                      
10.27(a)#           Amendment No. 1 to Employment Agreement between Molecular Simulations Incorporated and  
                    Michael J. Savage dated as of October 1, 1997                                           
10.28************#  Employment Agreement effective November 30, 1995 between Molecular Simulations          
                    Incorporated and Saiid Zarrabian                                                        
10.28(a)#           Amendment No. 1 to Employment Agreement between Molecular Simulations Incorporated and  
                    Saiid Zarrabian dated as of October 1, 1997                                             
10.30***+           Collaborative Agreement dated as of March 29, 1996 with Daiichi Pharmaceutical Co., Ltd.
10.30(a)*******+    Amendment No. 1 to Collaboration Agreement between the  Company and Daiichi             
                    Pharmaceutical Co., Ltd. dated April 14, 1997.                                          
10.31****+          Research Agreement, between Pharmacopeia, Inc. and N.V. Organon dated May 31, 1996.     
10.32*****#         Employment Agreement, dated June 20, 1996, between the Company and Stephen A. Spearman, 
                    Ph.D.                                                                                   
10.33*****          Lease Agreement, dated June 21, 1996, between Pharmacopeia and South Brunswick          
                    Rental I, Ltd.                                                                          

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                                                        [Enlarge/Download Table]
                                                                                                         
10.34**********+  Collaboration and License Agreement between Pharmacopeia, Inc. and Bristol-Myers Squibb
                  Company dated November 26, 1997.                                                       
10.35++           Joint Venture Agreement dated February 14, 1992 between Polygen Corporation and Teijin 
                  Limited.                                                                               
10.36             Amendment No. 1 to Joint Venture Agreement dated March 30, 1998 between Teijin Limited 
                  and Molecular Simulations Incorporated.                                                
10.37++           Distributorship Agreement dated April 1, 1992 between Polygen Corporation and Teijin   
                  Molecular Simulations Incorporated.                                                    
10.38             Amendment to Distributorship Agreement dated October 17, 1994 between Molecular        
                  Simulations Incorporated and Teijin Molecular Simulations Incorporated.                
10.39++           Amendment No. 2 to Distributorship Agreement dated September 30, 1996 between Molecular
                  Simulations Incorporated and Teijin Molecular Simulations Incorporated.                
11.1*             Statement re Computation of Per Share Earnings.                                        
27.1              Financial Data Schedule                                                                
27.2              Restated Financial Data Schedule as of June 30, 1997.                                  

* Incorporated by reference to the same numbered exhibit filed with the         
Company's Registration Statement on Form S-1 No. 33-93460.                      
** Incorporated by reference to the same numbered exhibit filed with the        
Company's Form 10-K for the year ended December 31, 1995.                       
*** Incorporated by reference to the same numbered exhibit filed with the       
Company's Form 10-Q for the quarter ended March 31, 1996.                       
**** Incorporated by reference to the same numbered exhibit filed with the      
Company's Form 10-Q for the quarter ended June 30, 1996.                        
***** Incorporated by reference to the same numbered exhibit filed with the     
Company's Form 10-Q for the quarter ended September 30, 1996.                   
****** Incorporated by reference to the same numbered exhibit filed with the    
Company's Form 10-K for the year ended December 31, 1996.                       
******* Incorporated by reference to the same numbered exhibit filed with the   
Company's Form 10-Q for the quarter ended June 30, 1997.                        
******** Incorporated by reference to the same numbered exhibit filed with the  
Company's form 10-Q for the quarter ended September 30, 1997.                   
********* Incorporated by reference to the same numbered exhibit filed with the 
Company's Form 10-K for the year ended December 31, 1997.                       
********** Incorporated by reference to the same numbered exhibit filed with the
Company's Form 10-K/ A-2 for the year ended December 31, 1997.                  

*********** Incorporated by reference to Exhibit 10.15 to Molecular Simulations 
Incorporated's Registration Statement on Form S-1 (Registration No. 333-21427)  
filed on February 10, 1997.                                                     

************ Incorporated by reference to Exhibit 10.16 to Molecular Simulations
Incorporated's Registration Statement on Form S-1 (Registration No. 333-21427)  
filed on February 10, 1997.                                                     

+  Confidential treatment granted.                                              
++ Confidential treatment requested.                                            

# Represents a management contract or compensatory plan or arrangement.         

10-Q 16th Page of 18 TOC 1st Previous Next ↓Bottom Just 16th
(b)  REPORTS ON FORM 8-K                                                        

  (i) Current report on Form 8-K dated June 12, 1998 (filed June 19, 1998)
reported under Item 2 the completion of the acquisition of Molecular Simulations
Incorporated pursuant to the Agreement and Plan of Merger and Reorganization    
among Pharmacopeia, Inc., Micro Acquisition Corporation and Molecular           
Simulations Incorporated and reported under Item 7 the list of related exhibits.

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SIGNATURES    

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the        
undersigned, thereunto duly authorized.                                         

          PHARMACOPEIA, INC.

                 By:  /s/ LEWIS J. SHUSTER
                     ---------------------
                Lewis J. Shuster
                                   Executive Vice President, Corporate
                                     Development & Chief Financial Officer
                                  (Duly Authorized Officer and Chief
                         Accounting Officer)

              Date:  August 13, 1998

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PHARMACOPEIA, INC.  
INDEX TO EXHIBITS 

                                                                [Download Table]

EXHIBIT NUMBER                         Exhibit Name                         Page
                                                                                
     10.19      Employment Agreement, dated January 30, 1998, between the       
                Company and Richard Walsh                                       
  10.27(a)      Amendment No. 1 to Employment Agreement between Molecular       
                Simulations Incorporated and Michael J. Savage dated as of      
                October 1, 1997                                                 
  10.28(a)      Amendment No. 1 to Employment Agreement between Molecular       
                Simulations Incorporated and Saiid Zarrabian dated as of        
                October 1, 1997                                                 
     10.35      Joint Venture Agreement dated February 14, 1992 between         
                Polygen Corporation and Teijin Limited.                         
     10.36      Amendment No. 1 to Joint Venture Agreement dated March 30,      
                1998 between Teijin Limited and Molecular Simulations           
                Incorporated.                                                   
     10.37      Distributorship Agreement dated April 1, 1992 between           
                Polygen Corporation and Teijin Molecular Simulations            
                Incorporated                                                    
     10.38      Amendment to Distributorship Agreement dated October 17,        
                1994 between Molecular Simulations Incorporated and Teijin      
                Molecular Simulations Incorporated.                             
     10.39      Amendment No. 2 to Distributorship Agreement dated              
                September 30, 1996 between Molecular Simulations                
                Incorporated and Teijin Molecular Simulations Incorporated.     
      27.1      Financial Data Schedule                                         
      27.2      Restated Financial Data Schedule as of June 30, 1997

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-Q’ Filing	Date	First	Last	Other Filings

	12/31/98	12		10-K405, 10-K405/A
Filed on:	8/14/98
	8/13/98	17
For Period End:	6/30/98	1	10
	6/19/98	16		8-K
	6/12/98	6	16	8-K
	4/1/98	7
	3/30/98	15	18
	2/4/98	8		8-K
	1/30/98	14	18
	1/1/98	7
	12/31/97	3	15	10-K, 10-K/A
	12/15/97	8
	11/26/97	15
	11/21/97	13
	11/1/97	14
	10/1/97	18
	9/30/97	15		10-Q
	7/31/97	13
	6/30/97	2	18	10-Q
	5/9/97	13		DEF 14A
	4/21/97	13
	4/14/97	14
	2/10/97	15
	12/31/96	15		10-K
	11/27/96	13
	9/30/96	15	18	10-Q
	6/30/96	15		10-Q, 10-Q/A
	6/21/96	14
	6/20/96	14
	6/7/96	14
	5/31/96	14
	4/22/96	13
	3/31/96	13	15	10-Q, 10-Q/A
	3/29/96	14
	1/22/96	13
	12/31/95	14	15	10-K405/A
	12/1/95	14
	11/30/95	14
	10/6/95	13
	10/1/95	13
	2/15/95	13
	12/22/94	13
	12/7/94	14
	10/17/94	15	18
	10/4/94	14
	5/2/94	14
	3/11/94	13
	12/2/93	14
	7/21/93	13
	6/3/93	14
	4/30/93	14
	4/1/92	15	18
	2/14/92	15	18
				List all Filings

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Filing Submission 0001036050-98-001417 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Accelrys, Inc. – ‘10-Q’ for 6/30/98

As of: Friday, 8/14/98 · For: 6/30/98 · Accession #: 1036050-98-1417 · File #: 0-27188

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Quarterly Report — Form 10-QFiling Table of Contents

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Dates Referenced Herein and Documents Incorporated by Reference

Quarterly Report — Form 10-Q
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