Incyte Reports Record Revenue of $194.2 Million for Fiscal Year 2000, up 24% From Prior Year Palo Alto, CA, February 1, 2001 - Incyte Genomics, Inc. (Nasdaq: INCY), the leading genomic information company, today reported its consolidated financial results for the fourth quarter and fiscal year ended December 31, 2000. Highlights: Full Year 2000: Incyte Broadens Market for Genomic Databases: Incyte entered into more database subscriptions in 2000 than any previous year, driving database and partnership program revenues to a record level. Sankyo Co. Ltd. and Sumitomo Pharmaceuticals Co., Ltd. became the first companies to subscribe to Incyte's online solution for their drug research programs. Custom Genomics Business Experiences Rapid Growth: Strong demand for Incyte's proprietary full-length clones and custom genomic services led to an annual growth rate of 52%. Incyte also expanded its global customer reach through the addition of 19 new distributors. Exponential Growth in Intellectual Property: Incyte's continued investment in intellectual property hit another significant milestone in fiscal year 2000 as the number of human, full-length gene patents grew to over 560 and is now believed to be the largest human, full-length gene patent portfolio, by more than a factor of three, in the industry. Dramatic Strengthening of the Balance Sheet: Incyte successfully raised $622 million for future business acquisitions, technology acquisitions and strategic investments through the issuance of $200 million of convertible subordinated notes and a private offering of its common stock that raised $422 million. Expansion of Product Offering Through Proteome Inc. Acquisition: Incyte acquired Proteome, Inc. to reinforce its position as the leading provider of genomic and proteomic annotation information to the life science community. With this acquisition, Incyte is uniquely positioned to annotate the human proteome. Successful Execution of 2000 Operating Plan: The year 2000 was a year of execution, as Incyte implemented key initiatives in its expansion of its direct sales and marketing capabilities and development and launch of its online solution for both its line of database and custom genomic products. "2000 was a great year for Incyte Genomics as we successfully implemented our initiatives to broaden our customer reach and improve our overall execution. We ended the year on a high note with the acquisition of Proteome, Inc., clearly positioning our core business of genomic information as the global leader," said Roy A. Whitfield, Chief Executive Officer for Incyte. "With our database and custom genomic business foundations established in a sustainable position, we can leverage our leading intellectual property position and research resources to catalyze our internal disease pathway discovery and therapeutic drug research programs." Revenue for the quarter ended December 31, 2000 increased 20% to $55.4 million versus $46.0 million for the comparable quarter in 1999. This growth brought revenue, for the year ended December 31, 2000, to $194.2 million or 24% higher than the $157.0 million for 1999. Net loss for the quarter ended December 31, 2000 was $7.4 million, or $0.11 per diluted share, compared to the net loss of $6.4 million, or $0.11 per diluted share, for the quarter ended December 31, 1999. The net loss for the year ended December 31, 2000 was $29.7 million, or $0.47 per diluted share, compared to a net loss of $26.8 million, or $0.48 per diluted share for 1999. Included in the net loss for the quarter and year ended December 31, 2000 is a $3.1 million extraordinary gain resulting from Incyte's repurchase of $15 million par value of its convertible notes. Per share data have been adjusted to reflect the stock split that occurred in 2000. For the quarter ended December 31, 2000, database and partnership program revenues were $40.6 million compared to $36.0 million for the same quarter in 1999. For the year ended December 31, 2000, database and partnership program revenues increased 17% to $146.1 million compared to $124.3 million in 1999. Custom genomics revenues for the quarter ended December 31, 2000 were $14.8 million, a 48% increase over the $10.0 million for the same quarter in 1999. For the year ending December 31, 2000, custom genomic revenues increased to $48.1 million, a 52% increase over 1999 revenues of $31.6 million. These increases in both the fourth quarter and annual revenues reflect the strong demand for our database products and partnership programs as well as for our custom genomics products. Research and Development expenses for the quarter ended December 31, 2000 were $53.9 million compared to $42.6 million for the same period in 1999. Research and Development expenses for the year ended December 31, 2000 were $192.6 million versus $146.8 million in 1999. This 31% increase for the year reflects several major investments including Incyte's efforts to expand its intellectual property portfolio, increase content in the database products and enhance its therapeutic drug discovery and development programs. Selling, General and Administrative expenses for the quarter ended December 31, 2000 were $18.5 million compared to $10.4 million for the same period in 1999. For the year ended December 31, 2000, expenses were $64.2 million versus $37.2 million for 1999. Growth in expenditures was primarily attributed to the "build-up" in direct sales and marketing capabilities as well as corporate legal and outside service expenses. "We look for 2001 to be another exciting year for Incyte. Operationally we enter 2001 with a strong balance sheet and the financial discipline that will enable us to grow our business in both customers and content," said John Vuko, Incyte's Chief Financial Officer. "We are also positioned to create value by taking advantage of our unique capabilities and resources by expanding our internal disease pathway and therapeutic drug discovery programs." The following contains forward-looking guidance regarding Incyte's financial outlook for 2001. This guidance excludes the impact of any potential business acquisition, technology acquisition, or significant strategic equity investment that may be made. Revenue guidance for 2001 is in the range of $220 to $240 million. Quarterly percentage increases over the prior year are anticipated to be similar (within 5 percentage points) to the overall percentage increase for the year. To provide additional visibility on the underlying profitability of Incyte's database and partnership programs and custom genomics business, guidance for adjusted net income (adjusted to exclude Incyte's investment spending programs, goodwill amortization and other depreciation and amortization, as further described below) is a profit of $58 to $68 million. Including these items, guidance is for a net loss of $47 to $57 million. - investment spending programs are forecasted at approximately $60 million which are focused on further development of Incyte's intellectual property portfolio and internal disease pathway and therapeutic drug discovery programs - goodwill amortization is anticipated to be $12 million - other depreciation and amortization is estimated at $43 million The guidance for the quarterly net loss is that approximately 67% of the annual loss is anticipated in the first half of the year with narrowing losses through the remainder of the year. The improvement is primarily due to forecasted increases in revenue. Capital spending is forecasted to be in the $40 to $45 million range. Cash balance guidance for year-end 2001 is in the range of $520 to $540 million. Company management will host a conference call on Thursday, February 1, 2001 at 2:00 p.m. PST to discuss the company's results. The dial in number for the conference call will be (973) 633-1010. A replay of the conference call will be available through February 8, 2001 (12:00 midnight PST). The replay dial in number for U.S. and International callers will be (973) 341-3080 and the PIN number access code will be 2375809. Incyte Genomics, Inc. is the leading provider of an integrated platform of genomic technologies designed to aid in the understanding of the molecular basis of disease. Incyte develops and markets genomic databases and partnership programs, genomic data management software, microarray-based gene expression services, related reagents and services. These products, programs and services assist pharmaceutical and biotechnology researchers with all phases of drug discovery and development including gene discovery, understanding disease pathways, identifying new disease targets and the discovery and correlation of gene sequence variation to disease. For more information, visit Incyte's web site at http://www.incyte.com. Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements as to anticipated financial results, the impact of acquisitions, and the success of disease pathway discovery and drug or therapy research, are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of factors that may cause results to differ, see Incyte's SEC reports, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2000. Incyte disclaims any intent or obligation to update these forward-looking statements. INCYTE GENOMICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)   Three months ended Twleve months ended   December 31, December 31,   2000   1999   2000   1999   Revenue   $55,416   $46,024   $194,167   $156,962   Costs and expenses:     Research and development 53,935 42,593 192,556 146,833     Selling, general and administrative 18,532 10,370 64,201 37,235 Total costs & expenses   72,467   52,963   256,757   184,068   Income (loss) from operations   (17,051)   (6,939)   (62,590)   (27,106)   Interest income and other income, net 9,484 986 41,735 5,485 Interest and other expense (2,735) (68) (10,529) (316) Equity in earnings of joint venture -- (1,184) (1,283) (5,631) Provision (benefit) from taxes 205 (800) 205 (800) Loss before extraordinary item (10,507) (6,405) (32,872) (26,768) Extraordinary gain - debt extinguishment 3,137 -- 3,137 -- Net Loss   $ (7,370)   $ (6,405)   $ (29,735)   $ (26,768)   Basic and diluted net loss per share   $ (0.11)   $ (0.11)   $ (0.47)   $ (0.48)   Shares used in computation of:     Basic and diluted net loss per share   64,369   57,040   63,211   56,276   Share and per share data have been adjusted to reflect the stock split that occurred in 2000. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)   December 31, December 31,   2000   1999   Assets     Cash and cash equivalents $110,155 $32,220     Marketable securities - available-for-sale 472,025 $34,717     Accounts receivable, net 35,022 26,608     Prepaid expenses and other current assets 30,693 15,956         Total current assets   647,895   109,501       Property and eqiupment, net 98,948 67,293     Long-term investments 40,003 19,275     Goodwill and other intangible assets, net 82,944 14,564     Deposits and other assets 17,030 11,301         Total assets   $886,820   $221,934   Liabilities and Stockholders' Equity     Accounts payable $17,497 $6,501     Accrued compensation 13,023 6,731     Accrued and other current liabilities 23,036 11,767     Deferred revenue 22,756 26,459         Total current liabilities   76,312   51,458       Non-current liabilities -- 194     Convertible subordinated notes 187,814 --         Total liabilities   264,126   51,652           Total stockholders' equity 622,694 170,282         Total liabilities and stockholders' equity $886,820 $221,934