##### Table of Contents

---




UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON DC 20549





---




FORM 10-Q





|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------------




For the quarterly period ended March 31, 2002





OR





| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ----------------------------------------------------------------------------------------




For the transition period from
 to
 .





Commission file number: 0-29975





---




ACLARA BioSciences, Inc.


(Exact name of registrant as specified in its charter)





Delaware

94-3222727(State of incorporation)

(IRS Employer Identification Number)





1288 Pear Avenue


Mountain View, California 94043


(Address of principal executive offices and zip code)





650-210-1200


(Registrants telephone number, including area code)





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





The number of shares outstanding of the registrants common stock as of April 30, 2002 was 35,988,502.





---



---

##### Table of Contents

ACLARA BIOSCIENCES, INC.





T
ABLE OF CONTENTS





PAGEPart I:

Financial InformationItem 1.

Financial Statements (Unaudited)Condensed Balance Sheets as of March 31, 2002 and December 31, 2001

3Condensed Statements of Operations for the Three Months Ended March 31, 2002 and 2001 and for the Cumulative Period From May 5, 1995 (Inception) to March 31, 2002

4Condensed Statements of Cash Flows for the Three Months Ended March 31, 2002 and 2001 and for the Cumulative Period from May 5, 1995 (Inception) to March 31, 2002

5Notes to the Condensed Financial Statements

6Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations

8Item 3.

Quantitative and Qualitative Disclosures About Market Risk

17Part II:

Other InformationItem 1.

Legal Proceedings

18Item 2.

Changes in Securities and Use of Proceeds

18Item 3.

Defaults upon Senior Securities

18Item 4.

Submission of Matters to a Vote of Security Holders

18Item 5.

Other Information

18Item 6.

Exhibits and Reports on Form 8-K.

18Signatures

21




2




---

##### Table of Contents

PART I  FINANCIAL INFORMATION





ITEM 1.    Financial Statements





ACLARA BIOSCIENCES, INC.


(A Company in the Development Stage)





CONDENSED BALANCE SHEETS


(in Thousands, Except Share and per Share Amounts)





March 31, 2002


December 31, 2001(Unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
16,868


$
30,970Restricted cash


34,625



34,125Short-term marketable investments


59,338



45,883Accounts receivable


482



1,540Prepaid expenses and other current assets


293



546Inventories


16



14Total current assets


111,622



113,078Long-term marketable investments


54,841



60,598Restricted cash






500Property and equipment, net


9,292



8,887Other assets, net


106



119Total assets

$
175,861


$
183,182LIABILITIES & STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
673


$
974Accrued payroll and related expenses


954



1,077Accrued expenses and other current liabilities


2,851



1,987Deferred revenue


561



596Litigation settlements accrual


28,730



27,197Current portion of loans payable


56



55Total current liabilities


33,825



31,886Loans payable, net of current portion


492



507Deferred rent


350



322Total liabilities


34,667



32,715Contingencies (Note 3)Stockholders equity:Common stock, $0.001 par value:Authorized 150,000,000 shares; Issued and outstanding: 35,984,752 shares at March 31, 2002 and 35,871,066 shares at December 31,
2001


36



36Additional paid-in capital


259,004



259,327Deferred stock-based compensation


(2,051
)


(2,785
)Stockholder notes receivable for common stock


(571
)


(571
)Accumulated other comprehensive income (loss)


(315
)


281Deficit accumulated during development stage


(114,909
)


(105,821
)Total stockholders equity


141,194



150,467Total liabilities and stockholders equity

$
175,861


$
183,182





The accompanying notes are an integral part of these condensed financial statements.




3




---

##### Table of Contents

ACLARA BIOSCIENCES, INC.


(A Company in the Development Stage)





CONDENSED STATEMENTS OF OPERATIONS


(in Thousands, Except per Share Data)


(Unaudited)





Three Months Ended March 31,


Cumulative Period from May 5, 1995 (Inception) to March 31, 20022002


2001Revenues

$
590


$
934


$
15,958Costs and operating expenses:Research and development


6,392



5,755



69,637Selling, general and administrative


2,833



2,879



37,043Litigation settlements


1,534



4,777



41,581Total costs and operating expenses


10,759



13,411



148,261Loss from operations


(10,169
)


(12,477
)


(132,303
)Interest income


1,093



2,675



20,193Interest expense


(12
)


(13
)


(1,213
)Net loss before extraordinary loss


(9,088
)


(9,815
)


(113,323
)Extraordinary loss on early retirement of debt










(1,103
)Net loss


(9,088
)


(9,815
)


(114,426
)Dividends related to beneficial conversion feature of preferred stock










(5,000
)Accretion to redemption value and accrued dividends on mandatorily redeemable convertible preferred stock










(6,292
)Net loss attributable to common stockholders

$
(9,088
)

$
(9,815
)

$
(125,718
)Net loss per common share, basic and diluted

$
(0.25
)

$
(0.28
)Shares used in net loss per common share calculation, basic and diluted


35,860



34,449





The accompanying notes are an integral part of these condensed financial statements.




4




---

##### Table of Contents

ACLARA BIOSCIENCES, INC.


(A Company in the Development Stage)





CONDENSED STATEMENTS OF CASH FLOWS


(in Thousands)


(Unaudited)





Three Months Ended March 31,


Cumulative Period from May 5, 1995 (Inception) to March 31,20022002


2001CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(9,088
)

$
(9,815
)

$
(114,426
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization


493



350



4,374Amortization of discount on marketable investments


(192
)


(287
)


(3,029
)Amortization of note and long-term debt discount










597Amortization of deferred stock-based compensation


361



731



11,582Amortization of other assets


13







94Preferred stock issued for interest expense










128Interest income from notes receivable from stockholders


(9
)


(10
)


(70
)Revaluation expense of litigation settlement obligation


1,534



4,777



7,931Changes in assets and liabilities:Accounts receivable


1,058



(385
)


(482
)Prepaid expenses and other current assets


251



(104
)


(283
)Accounts payable


(301
)


(1
)


674Accrued payroll and related expenses


(123
)


(16
)


954Accrued expenses and other liabilities


864



(1,519
)


2,850Litigation settlement accrual










32,500Deferred revenue


(35
)






561Deferred rent


28



37



349Net cash used in operating activities


(5,146
)


(6,242
)


(55,696
)CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition of property and equipment


(898
)


(814
)


(12,071
)Sale of property and equipment


1







17Restricted cash






(34,125
)


(34,750
)Purchase and maturities of investments


(8,104
)


84,000



(111,467
)Change in other assets










(97
)Net cash provided (used) in investing activities


(9,001
)


49,061



(158,368
)CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments under capital lease obligations










(1,503
)Proceeds from issuance of notes payable to related parties










2,487Proceeds from issuance of loans payable










4,365Principal payments for loans payable


(14
)


(13
)


(3,957
)Proceeds from issuance of preferred stock, net of issuance costs










29,889Principal payments for notes payable to related parties










(119
)Repurchase of Series A preferred stock and one share of common stock










(2,713
)Proceeds from initial public offering, net of issuance costs










201,003Proceeds from notes receivable from stockholders


7



4



120Proceeds from issuance of common stock


52



81



1,360Net cash provided by financing activities


45



72



230,932Net increase (decrease) in cash and cash equivalents


(14,102
)


42,891



16,868Cash and cash equivalents, beginning of period


30,970



108,886



Cash and cash equivalents, end of period

$
16,868


$
151,777


$
16,868





The accompanying notes are an integral part of these condensed financial statements.




5




---

##### Table of Contents

ACLARA BIOSCIENCES, INC.


(A Company in the Development Stage)





NOTES
TO CONDENSED FINANCIAL STATEMENTS


(Unaudited)





1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis of Presentation





The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for
interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary for a fair presentation
of the interim financial information for ACLARA BioSciences, Inc. (ACLARA). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for the presentation of complete
financial statements. The preparation of interim financial statements in conformity with generally accepted accounting principals requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from these estimates.





This Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Annual Report on Form 10-K for the year
ended December 31, 2001, as filed with the Securities and Exchange Commission on April 1, 2002. Furthermore, interim results of operations are not necessarily indicative of the results that may be expected for the entire year or for other interim
periods.





Net Loss Per Share





Basic earnings per share is calculated based on the weighted-average number of common shares outstanding during the period. Diluted earnings per share would give effect to the dilutive effect of common stock
equivalents consisting of stock options and warrants (calculated using the treasury stock method). Potentially dilutive securities have been excluded from the diluted earnings per share computations as they have an antidilutive effect due to
ACLARAs net loss.




6




---

##### Table of Contents




A reconciliation of shares used in the calculations is as follows (in thousands, except per
share data):





Three Months Ended March 31,2002


2001Basic and diluted:Net loss

$
(9,088
)

$
(9,815
)Weighted-average shares of common stock outstanding


35,934



34,805Less: weighted-average shares subject to repurchase


(74
)


(356
)Weighted-average shares of common stock used in basic and diluted net loss per share calculations


35,860



34,449Net loss per common sharebasic and diluted

$
(0.25
)

$
(0.28
)





The following outstanding options and warrants (prior to the application of the
treasury stock method), were excluded from the computation of diluted net loss per share as they had an anti-dilutive effect (in thousands):


March 31,2002

2001Options and warrants

3,260

2,545





2.    RESTRICTED CASH





Current restricted cash at March 31, 2002 and December 31, 2001 comprised of $34.1 million held in escrow as part of our settlement of litigation with Caliper Technologies
Corporation (Caliper). Pursuant to the Caliper settlement agreement, ACLARA has provided a letter of credit to Caliper in the amount of $32.5 million as a guarantee of ACLARAs performance. The banking institution which had issued
the letter of credit, required ACLARA to maintain a balance of 105% of the letter of credit amount in a segregated account. This amount of $34.1 million is invested in short-term US government agency debt and money market funds.





Current restricted cash at March 31, 2002 also includes $500,000 held as a certificate of deposit as collateral against operating lease
payments. This item was classified as restricted cash, non-current, at December 31, 2001.





3.    LITIGATION SETTLEMENTS AND
CONTINGENCIES





As part of the litigation settlement with Caliper, 900,000 shares of ACLARA common stock were




7




---

##### Table of Contents

issued in March 2001 with a guaranteed liquidation price of $36.11 per share if Caliper sells the shares after August 21, 2002 but before February 21, 2003.
ACLARA initially valued the put obligation associated with these shares at $20.8 million. The put obligation is classified as a liability as ACLARA had posted collateral in the form of a letter of credit to Caliper in the amount of $32.5 million, as
a guarantee of ACLARAs performance under the terms of the litigation settlement.





Based on the change in ACLARAs
stock price and in accordance with EITF No. 96-13 Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock (EITF No. 96-13) and its related interpretations, and
Statement of Financial Accounting Standards No. 133, Accounting for Derivatives Instruments and Hedging Activities (SFAS 133), the put obligation was subsequently revalued on a quarterly basis and at March 31, 2001, December
31, 2001 and March 31, 2002, the put obligation had a value of $25.6 million, $27.2 million and $28.7 million, respectively. As a result of these revaluations, revaluation expenses of $1.5 million and $4.8 million were recorded in the accompanying
Statements of Operations for the quarters ended March 31, 2002 and 2001, respectively. The revaluation of the put obligation uses a Black-Scholes pricing model with changes in valuation being recorded in the Statements of Operations.





4.    RECENT ACCOUNTING PRONOUNCEMENTS





In July 2001, the Financial Accounting and Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. SFAS No. 141 required that all business combinations initiated after June 30, 2001 be accounted for under a single methodthe purchase method. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 142 requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment upon initial adoption of the Statement and on an annual basis going forward. The provisions of SFAS No. 142 are effective for
fiscal years beginning after December 15, 2001. The adoption of these standards has not had a material impact on ACLARAs financial statements.





In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of and APB Opinion No. 30, Reporting the Results of Operations, Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions. SFAS No.144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets including amortizable intangibles and is effective for fiscal years beginning after December 15, 2001. SFAS No. 144 also
addresses the impairment of goodwill and non-amortizable intangibles. The adoption of SFAS No. 144 has not had a material impact on ACLARAs financial statements.





|ITEM 2. |  | MANAGEMENTS DISCUSSION AND A
NALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- |  | --------------------------------------------------------------------------------------




The following discussion
of the Financial Condition and Results of Operations should be read in conjunction with our financial statements and the notes to those statements included elsewhere in this Form 10-Q, and in conjunction with the Form 10-K for the year ended
December 31, 2001. Statements in this Managements Discussion and Analysis of Financial Condition and Results of Operations which express that ACLARA believes, anticipates, expects or plans to as
well as other statements which are not historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. Actual events or results may differ materially as a result of the risks and uncertainties
described herein and elsewhere, including, but not limited to, those factors discussed in Factors Affecting Operating Results set forth below.




8




---

##### Table of Contents

OVERVIEW





ACLARA is a leading
developer of assay chemistry and microfluidic products for life science research. Since our inception we have engaged primarily in research and development activities related to the application of our proprietary microfluidics and assay chemistry
technologies to genomics and proteomics in the field of drug discovery.





Our business strategy is to commercialize our assay
chemistries and microfluidic devices for use in conjunction with multiple existing instrument platforms, and in the longer term, to integrate these assay chemistries and microfluidic technologies into powerful, new instrument systems.





We have engaged in several collaborative agreements. Our collaborators include Roche Diagnostics (Roche), Third Wave
Technologies, Inc. and Stanford University. We have received government grants from the Defense Advanced Research Projects Agency (DARPA).





We have invested substantial amounts in establishing our assay chemistries and microfluidic devices for life science research. From our inception to March 31, 2002, we have incurred over $69.6 million in research and
development expenses. Over 80% of our 161 employees at April 30, 2002 were engaged in research and development activities.





We
have incurred significant losses since our inception. As of March 31, 2002, our accumulated deficit was $114.9 million and total stockholders equity was $141.2 million. Operating expenses were $10.8 million (includes a $1.5 million charge
related to a litigation settlement) and $13.4 million (includes a $4.8 million charge related to a litigation settlement) for the quarters ended March 31, 2002 and 2001, respectively. We expect to incur additional operating losses over at least the
next year as we continue to expand our research and development activities, build our sales and marketing organizations and commercialize our initial products.





Our sources of potential revenue for the next several years are likely to be from receipts under existing and possible future collaborative arrangements, government research grants and product revenue from our
proprietary eTag assay chemistries and microfluidic devices.





RESULTS OF OPERATIONS





QUARTERS ENDED MARCH 31, 2002 AND 2001





Revenues.    Revenues for the quarters ended March 31, 2002 and March 31, 2001 were $590,000 and $934,000, respectively. Our revenues to date have been derived primarily from commercial collaboration agreements
and government grants. Variations in these revenues have been caused by the timing and amount of government grant awards and completion of collaboration efforts.





Research and Development.    Research and development expenses for the quarters ended March 31, 2002 and March 31, 2001 were $6.4 million and $5.8 million,
respectively. The increase from 2001 to 2002 was primarily due to increased license fees and increased personnel-related expenses as a result of an increased level of staffing related to our proprietary eTag assay chemistries. These increases were
partially offset by a reduction of $350,000 in stock-based compensation expense. We expect to continue to devote substantial resources to research and development, and we expect that research and development expenses will continue to increase on an
absolute dollar basis.





Selling, General and Administrative.    Selling, general and administrative
expenses for the quarters ended March 31, 2002 and March 31, 2001 were $2.8 million and $2.9 million, respectively. This primarily reflects an increase in compensation related expense and an increase in sales




9




---

##### Table of Contents

and marketing expense related to the initiation of commercialization activities for our proprietary eTag assay chemistries. These increases were partially
offset by a reduction in legal expenses and a reduction in other general expenses. We expect that our selling, general and administrative expenses will increase in absolute dollar amounts as we increase our sales and marketing activities related to
the commercialization of our products and as we increase the administrative and support infrastructure required to support our customers.





Litigation Settlements.    As part of the litigation settlement with Caliper, 900,000 shares of ACLARA common stock were issued in March 2001 with a guaranteed liquidation price of $36.11
per share if Caliper sells the shares after August 21, 2002 but before February 21, 2003. ACLARA initially valued the put obligation associated with these shares at $20.8 million. Based on the change in ACLARAs stock price, the put obligation
was subsequently revalued on a quarterly basis and at March 31, 2001, December 31, 2001 and March 31, 2002, the put obligation had a value of $25.6 million, $27.2 million and $28.7 million, respectively. As a result of these revaluations, a
revaluation expense of $1.5 million and $4.8 million was recorded in the accompanying Statements of Operations for the quarters ended March 31, 2002 and 2001, respectively. The put obligation has been classified as a current liability at March 31,
2002. The put obligation will continue to be revalued on a quarterly basis until settlement using a Black-Scholes pricing model with changes in valuation being recorded in the Statements of Operations.





Net Interest Income (Expense).    Net interest income (expense) represents income earned on our cash and cash equivalents,
short-term investments, long-term investments and restricted cash, and interest paid on equipment loans. Net interest income was $1.1 million and $2.7 million for the quarters ended March 31, 2002 and March 31, 2001, respectively. The decrease in
net interest income from 2001 to 2002 was primarily due to lower average balances of cash and cash equivalents, short-term and long-term investments and lower market interest rates.





LIQUIDITY AND CAPITAL RESOURCES





Since inception, we have financed our operations
primarily through our initial public offering in March 2000 that raised net proceeds of $201.0 million, private placements of preferred stock totaling $32.3 million, loans from the landlord of our Mountain View facility and equipment financing lines
of credit totaling $4.4 million, capital leases totaling $1.5 million, and research and development funding from collaborators and government grants. As of March 31, 2002, we had $16.9 million in cash and cash equivalents, $59.3 million in
short-term marketable investments, $54.8 million in long-term marketable investments, as well as $34.6 million in restricted cash.





A loan agreement with the landlord of the Mountain View facility allowed us to borrow $663,000 for leasehold improvements at an annual interest rate of 8.5%. The principal balance of this loan at March 31, 2002 was $548,000. The note
matures on July 1, 2009.





Financing activities provided cash of $45,000 and $72,000 for the quarters ended March 31, 2002 and
2001, respectively. This primarily reflects cash proceeds received through the employee exercise of stock options.





Operating
activities used cash of $5.1 million and $6.2 million for the quarters ended March 31, 2002 and 2001, respectively. Uses of cash in operating activities primarily resulted from operating losses adjusted for non-cash expenses and changes in working
capital and other liabilities.





As part of our investing activities, cash outflows were $9.0 million for the quarter ended March
31, 2002, primarily due to the net purchase of marketable investments. Investing activities for the quarter ended March 31, 2001 provided cash of $49.0 million, primarily reflecting $84 million of net investments maturing being partially offset by
the increase in restricted cash of $34.1 million.





We believe that our current cash and cash equivalents, short-term and
long-term marketable investment balances and funding received from collaborators and government grants will be sufficient to




10




---

##### Table of Contents

satisfy our anticipated cash needs for working capital and capital expenditures for at least the next 24 months. After that time, we cannot be certain that
additional funding, if required, will be available on acceptable terms, or at all. Despite our expectations, we may need to raise additional capital before the end of the next 24 months. We may raise additional funds through public or private
financing, collaborative relationships or other arrangements. Further, any additional equity financing may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants. Our failure to raise capital when needed may
harm our business and operating results.





As part of our litigation settlement with Caliper, we have provided a letter of credit
to Caliper in the amount of $32.5 million as a guarantee of our performance under the settlement agreement. The banking institution that issued the letter of credit required us to maintain a balance of 105% of the letter of credit amount in a
segregated account. This amount of $34.1 million is recorded as restricted cash in our financial statements at March 31, 2002. Restricted cash at March 31, 2002 also includes $500,000 held as a certificate of deposit as collateral against operating
lease payments.





FACTORS AFFECTING OPERATING RESULTS





The following risk factors outline certain risks and uncertainties concerning future results and should be read in conjunction with the information contained in our Annual Report on Form 10-K for the year ended
December 31, 2001. Any of these risk factors could materially and adversely affect our business results of operations, financial condition and future growth prospects. Additional risks and uncertainties that we do not currently know about or that we
currently deem immaterial may also impair our business, financial condition, results of operations and future growth prospects.





WE HAVE A HISTORY OF OPERATING LOSSES AND AN ACCUMULATED DEFICIT, AND WE MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE.





Since we were founded in May 1995, we have engaged primarily in research and development efforts. We have incurred operating losses every year, and we may never achieve profitability. Net losses for the quarter ended
March 31, 2002 and the years ended December 31, 2001, 2000, and 1999 were $9.1 million, $29.0 million, $59.2 million and $8.2 million, respectively. As of March 31, 2002, we had an accumulated deficit of $114.9 million. Our losses have resulted
principally from costs incurred in connection with our research and development activities, from litigation settlement charges and from selling, general and administration costs associated with our operations.





To date, we have not generated any significant revenue from the sale of products. Our ability to generate revenues from product sales or to achieve
profitability is dependent on our ability, alone or with our collaborative partners, to successfully design, develop, manufacture and commercialize our proprietary assay chemistry systems and microfluidic products in a timely manner. Our revenue to
date has been generated principally from collaborative research and development agreements and government grants. We expect that our costs will continue to exceed our revenues on an annual basis for at least the next two years. Even if we do achieve
profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.





OUR OPERATING RESULTS
MAY FLUCTUATE SIGNIFICANTLY.





Our operating results have fluctuated in the past and are likely to do so in the future. These
fluctuations could cause our stock price to decline. Some of the factors that could cause our operating results to fluctuate include:





| |  |  | expiration or termination of contracts with collaborators or government research grants, which may not be renewed or replaced;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------




| |  |  | final outcome of litigation to which we are currently a party or threatened claims against us;
| | - |  | ----------------------------------------------------------------------------------------------



11




---

##### Table of Contents

| |  |  | the timing and willingness of collaborators to commercialize our products;
| | - |  | --------------------------------------------------------------------------




| |  |  | the timing of the release, and the competitiveness of our products;
| | - |  | -------------------------------------------------------------------




| |  |  | the adoption of our technologies by customers;
| | - |  | ----------------------------------------------




| |  |  | general and industry-specific economic conditions, which may affect our customers research and development expenditures and use of our products; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | a quarterly revaluation of a put obligation which is dependent, among other things, on the volatility and level of ACLARAs stock price.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------




If revenue declines in a quarter, whether due to a delay in recognizing expected revenue or otherwise, our earnings will decline because many
of our expenses are relatively fixed in the short-term. In particular, research and development and selling, general and administrative expenses are not affected directly by variations in revenue.





Due to fluctuations in our revenue and operating expenses, we believe that period-to-period comparisons to results of historical operations are not a
good indication of our future performance. It is possible that in some future quarter or quarters, our operating results will be below the expectations of securities analysts or investors. In that case, our stock price could fluctuate significantly
or decline.





NONE OF OUR PRODUCTS HAS YET BEEN SUCCESSFULLY COMMERCIALIZED.





We are in the process of commercially launching one productthe Arteas Microfluidic Deviceand are in the initial stages of commercializing
our eTag assay chemistries. However, we have limited experience with developing, manufacturing, distributing or selling commercial products using either our assay chemistry or microfluidic technologies. We may not be able to perfect the design of
our products due to the complexity of the technologies on which they are based and/or the demands of the scientific processes that they address. For instance, we have limited experience establishing the high degrees of accuracy, reliability and ease
of use required for commercial introduction of our products. Even though we have designed products that function in a prototype system or on a limited volume basis, we cannot assure you that we will be able to adapt the design to allow for
large-scale manufacturing. Although we have projected launch periods for certain of our products, we cannot assure you that we will complete development of the systems by those launch dates, or at all. If we are unable to design commercially viable
assay chemistry products, LabCard products or other products or systems, either independently or with our collaborative partners, we may be unable to remain in business.





COMMERCIALIZATION OF OUR PRODUCTS DEPENDS ON MARKET ACCEPTANCE OF OUR ASSAY CHEMISTRY AND LABCARD PRODUCTS AND RELATED SYSTEMS. IF THEY DO NOT ACHIEVE ACCEPTANCE, OUR ABILITY TO
GENERATE SALES WILL BE LIMITED AND OUR LOSSES WOULD INCREASE.





Demand for our products is substantially dependent upon
widespread market acceptance of our assay chemistry products for applications in drug discovery and LabCard products as tools for applications in genomics and pharmaceutical drug screening. Our assay chemistry products represent a new technological
approach and our ability to sell assay chemistry products will depend on the willingness of customers to adopt such new technological approaches. We cannot assure you that our assay chemistry and microfluidic products will achieve substantial
acceptance in our target markets. Market acceptance will depend on many factors, including:





| |  |  | our ability and the ability of our collaborative partners to demonstrate to potential customers the benefits and cost-effectiveness of our assay chemistry products and LabCard
products, relative to competing technologies and products; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12




---

##### Table of Contents

| |  |  | the extent and success of our efforts and our partners efforts to market, sell and distribute the assay chemistry products and LabCard products.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------




Further, failure of our initial assay chemistry and Labcard products to be favorably received by the market could
undermine our ability to successfully introduce subsequent assay chemistry and Labcard products. If our assay chemistry and Labcard products do not gain market acceptance, our losses would increase and we may be unable to remain in business.





OUR DIRECT AND THIRD PARTY SALES AND MARKETING CHANNELS NEED TO BE DEVELOPED. IF WE ARE UNABLE TO DO SO SUCCESSFULLY WE MAY
BE UNABLE TO GENERATE SIGNIFICANT REVENUES.





We have not fully developed sales and distribution channels for our products.
We will depend on our marketing partner, Roche Diagnostics Corp., to market and sell our Arteas Microfluidic Device. We will depend in part on our partner, Third Wave Technologies, Inc. to develop the market and sell our eTag assay chemistries for
certain genomic applications. For our eTag assay chemistries, especially for applications in proteomics, and for our Plurex Multiplexing System, we will be dependent on our own sales and marketing organization, which has yet to be fully developed.
We may not be able to successfully recruit executive management and sales and marketing personnel to market and sell our products.





Our ability to generate revenues will be dependent on the resources devoted by our partners to commercialization activities and the success of those activities. Our ability to generate revenue will also be dependent on our success in
recruiting management and sales personnel and in building a sales and marketing organization. We cannot assure you that we will be able to successfully build and manage effective sales and distribution channels, or that our partners will devote
sufficient resources to our commercialization efforts to be effective.





WE DEPEND ON A COLLABORATIVE PARTNER TO DEVELOP AND
MARKET KITS THAT INCORPORATE OUR ASSAY CHEMISTRY PRODUCTS. IF OUR COLLABORATIVE PARTNER DOES NOT PERFORM AS EXPECTED, WE MAY BE UNABLE TO DEVELOP AND MARKET OUR PRODUCTS IN CERTAIN TARGET MARKETS.





We have entered into an agreement with Third Wave Technologies, Inc. (Third Wave) to jointly develop and market kits for applications in the
field of genomics. Generally, Third Wave is expected to incorporate our eTag assay chemistry as a component of a kit that also includes their Invader ® product. While we will jointly market these kits and the related technological approach to customers, Third Wave will have the primary marketing responsibility. Accordingly, we will be
substantially relying on Third Wave to market our eTag assay chemistry products for genomic applications. If Third Wave does not perform these functions satisfactorily, our ability to market, sell and distribute our products could be severely
limited.





We generally do not have control over the resources or degree of effort that Third Wave may devote to our joint
development and marketing programs. If Third Wave fails to conduct these collaborative activities successfully, with a suitable level of priority and in a timely manner, our business would be harmed. In addition, Third Wave could cease operations,
eliminate relevant product lines, or offer, design, manufacture or promote competing lines of products. Any of those occurrences would increase our losses.





IF WE ARE UNABLE TO EFFECTIVELY PROTECT OUR INTELLECTUAL PROPERTY, WE WOULD BE UNABLE TO PREVENT THIRD PARTIES FROM USING OUR TECHNOLOGY, WHICH COULD IMPAIR OUR ABILITY TO COMPETE IN THE MARKET. THE COST OF
ENFORCING OUR PROPRIETARY RIGHTS MAY BE EXPENSIVE AND RESULT IN INCREASED LOSSES.





Our success will depend in part on our
ability to obtain and maintain meaningful patent protection for our products, both in the United States and in other countries, and our inability to do so could harm our




13




---

##### Table of Contents

competitive position. We rely on our portfolio of approximately 230 issued and pending patent applications in the United States and in other countries to
protect a large part of our intellectual property and our competitive position. We cannot assure you that any of the currently pending or future patent applications will be issued as patents, or that any patents issued to us will not be challenged,
invalidated, held unenforceable or circumvented. Further, we cannot assure you that our intellectual property rights will be sufficiently broad to prevent third parties from producing competing products similar in design to our products.





In addition to patent protection, we also rely on protection of trade secrets, know-how and confidential and proprietary
information. We generally enter into confidentiality agreements with our employees, consultants and our collaborative partners upon commencement of a relationship with us. However, we cannot assure you that these agreements will provide meaningful
protection against the unauthorized use or disclosure of our trade secrets or other confidential information or that adequate remedies would exist if unauthorized use or disclosure were to occur. The exposure of our trade secrets and other
proprietary information would impair our competitive advantages and could have a material adverse effect on our operating results, financial condition and future growth prospects. Further, we cannot assure you that others have not or will not
independently develop substantially equivalent know-how and technology.





Our commercial success also depends in part on avoiding
the infringement of other parties patents or proprietary rights and the breach of any licenses that may relate to our technologies and products. We are aware of various third-party patents that may relate to our technology. We believe that we
do not infringe these patents but cannot assure you that we will not be found in the future to infringe these or other patents or proprietary rights of third parties, either with products we are currently developing or with new products that we may
seek to develop in the future. If third parties assert infringement claims against us, we may be forced to enter into license arrangements with them. We cannot assure you that we could enter into the required licenses on commercially reasonably
terms, if at all. The failure to obtain necessary licenses or to implement alternative approaches may prevent us from commercializing products under development and would impair our ability to be commercially competitive. We may also become subject
to interference proceedings conducted in the U.S. Patent and Trademark Office to determine the priority of inventions.





The
defense and prosecution, if necessary, of intellectual property suits, U.S. Patent and Trademark Office interference proceedings and related legal and administrative proceedings will result in substantial expense to us, and significant diversion of
effort by our technical and management personnel. An adverse determination in litigation or interference proceedings to which we may become a party could subject us to significant liabilities to third parties, could put our patents at risk of being
invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.





Further, there is a risk that
some of our confidential information could be compromised during the discovery process of any litigation. During the course of any lawsuit, there may be public announcements of the results of hearings, motions and other interim proceedings or
developments in the litigation. If securities analysts or investors perceive these results to be negative, it could have a substantial negative effect on the trading price of our stock.





WE HAVE LIMITED MANUFACTURING EXPERIENCE, AND WILL BE SUBJECT TO THE RISK OF FINALIZING CONTRACTUAL ARRANGEMENTS, TRANSFERRING TECHNOLOGY AND MAINTAINING RELATIONSHIPS WITH
THIRD-PARTY MANUFACTURERS TO MANUFACTURE OUR LABCARD CHIPS.





We have no experience manufacturing our products in the high
volumes that will be necessary for us to achieve significant commercial sales. To date, we have limited our manufacturing activities to the pilot manufacturing of limited volumes of Arteas and Plurex microfluidic devices, and low volume
manufacturing of eTag assay chemistry products for testing purposes and for validation use by our collaborative partners and potential customers. The nature of our LabCard products requires the use of sophisticated injection molding and other
manufacturing processes that are not widely available. For this reason, only a limited number of vendors currently have the expertise to manufacture our products. We




14




---

##### Table of Contents

have relationships with outside suppliers who are currently manufacturing limited quantities of our LabCard products for initial product launch quantities and
for research and development purposes. The nature of our assay chemistries necessitates access to specialized raw materials. There are only a limited number of vendors who supply these materials. We cannot be certain that these vendors will continue
to supply these materials consistently or in the quantities necessary for high volume production. We will need to enter into contractual relationships with these or other manufacturers for commercial scale production of LabCard products and assay
chemistries, and we cannot assure you that we will be able to do so on a timely basis, for sufficient quantities of products or on commercially reasonable terms. Accordingly, we cannot assure you that we can establish or maintain reliable,
high-volume manufacturing at commercially reasonable costs. In addition, the loss of any of these suppliers may result in a delay or interruption of our supply of LabCard products or assay chemistries. Any significant delay or interruption would
have a material adverse effect on our ability to supply adequate quantities of our products and would result in lost revenues.





WE DEPEND ON OUR KEY PERSONNEL, THE LOSS OF WHOM WOULD IMPAIR OUR ABILITY TO COMPETE.





Our performance is
substantially dependent on the performance of our senior management and key scientific and technical personnel. The loss of the services of any member of our senior management, scientific or technical staff may significantly delay or prevent the
achievement of product development and other business objectives and could have a material adverse effect on our business, operating results and financial condition. Our future success will also depend on our ability to identify, recruit and retain
additional qualified scientific, technical and managerial personnel. There is currently a shortage of skilled executives and intense competition for such personnel in the areas of our activities, and we cannot assure you that we will be able to
continue to attract and retain personnel with the advanced qualifications necessary for the development of our business. The inability to attract and retain the necessary scientific, technical and managerial personnel could have a material adverse
effect on our research and development activities, sales revenue, operating costs and future growth prospects.





WE EXPECT
INTENSE COMPETITION IN OUR TARGET MARKETS.





We compete with companies that design, manufacture and market analytical
instruments for genomics, proteomics and pharmaceutical drug screening using technologies such as gel electrophoresis, capillary electrophoresis, microwell plates, robotic liquid handling systems and other products and systems. In addition, a number
of companies are developing new technologies for miniaturizing various laboratory procedures for genomics, proteomics and drug screening markets targeted by us, using such methods as beads, hybridization chips and high density microwell plates.





We anticipate that we will face increased competition in the future as new companies enter the market with new technologies.
Rapidly changing technology, evolving industry standards, changes in customer needs, emerging competition and new product introduction, characterize the markets for our products. One or more of our competitors may render our technology obsolete or
uneconomical by advances in existing technological approaches or the development of different approaches. Many of these competitors have greater financial and personnel resources and more experience in research and development than we have.
Furthermore, we cannot assure you that the pharmaceutical and biotechnology companies which are our potential customers or our strategic partners will not develop competing products.





WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE INSURANCE, WHICH WOULD INCREASE OUR LOSSES IF SUCH CLAIMS OCCURRED.





As we begin commercialization of our products, we will face exposure to product liability claims. Any product liability claims arising in the future,
regardless of their merit or eventual outcome, could increase




15




---

##### Table of Contents

our losses. We cannot assure you that we will continue to be able to maintain our current coverage or obtain new insurance on acceptable terms with adequate
coverage, or at reasonable costs. In addition, potential product liability claims may exceed the amount of our insurance or may be excluded from coverage under the terms of the policy.





WE MAY BE UNABLE TO RAISE ADDITIONAL CAPITAL WHEN NEEDED OR GENERATE THE CAPITAL NECESSARY TO EXPAND OUR OPERATIONS AND INVEST IN NEW PRODUCTS, WHICH COULD HURT OUR ABILITY TO COMPETE
OR ACHIEVE PROFITABILITY.





It might be necessary for us to raise additional capital over the next few years to continue our
research and development efforts and to commercialize our products. We believe that the proceeds from our initial public offering and projected revenue from collaborations should be sufficient to fund our anticipated levels of operations through at
least the end of 2003. However, we cannot assure you that our business or operations will not change in a manner that would consume available resources more rapidly than anticipated. We also cannot assure you that we will continue to receive funding
under existing collaborative arrangements or that existing or potential future collaborations or sales revenue will be adequate to fund our operations. We may need additional funds sooner than planned to meet operational needs, capital requirements
for product development and commercialization and payment of monetary damages in any on-going or future litigation. We cannot assure you that additional funds will be available when needed, or on terms acceptable to us, or that sufficient revenue
will be generated from sales. If adequate funds are not available, we may have to reduce substantially or eliminate expenditures for the development and production of certain of our proposed products or obtain funds through arrangements with
collaboration partners that require us to relinquish rights to certain of our technologies or products. Either of these alternatives could have a material adverse effect on our business, operating results, financial condition and future growth
prospects.





CONCENTRATION OF OWNERSHIP AMONG OUR EXISTING EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS MAY
PREVENT NEW INVESTORS FROM INFLUENCING SIGNIFICANT CORPORATE DECISIONS.





Our executive officers, directors and their
affiliates presently beneficially own or control a significant percentage of the outstanding shares of common stock. Accordingly, our current executive officers, directors and their affiliates, if acting together, would have the ability to influence
the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets and any other significant corporate transactions. The concentration of
ownership could also delay or prevent a change of control of our company at a premium price if these stockholders oppose it.





THE MARKET PRICE OF OUR COMMON STOCK MAY BE HIGHLY VOLATILE.





There has only been a public market for our common
stock since March 21, 2000, and since then our common stock has traded in a range between $2.35 and $66.00 per share.





The
trading price of our common stock may continue to be highly volatile and could be subject to wide fluctuations in price in response to various factors, many of which are beyond our control including: quarterly fluctuations in results of operations;
our ability to successfully commercialize our products; technological innovations or new commercial products by us or our competitors; developments concerning government regulations or proprietary rights which could affect the potential growth of
our customers; the execution of new collaborative agreements and material changes in the relationships with business partners; market reaction to trends in revenues and expenses, especially research and development; changes in earnings estimates by
analysts; sales of common stock by existing stockholders; and economic and political conditions.





The market price for our
common stock may also be affected by our ability to meet analysts expectations. Any failure to meet such expectations, even slightly, could have an adverse effect on the market price of our common stock. In addition, the stock market, and the
Nasdaq National Market and the




16




---

##### Table of Contents

market for technology companies in particular, is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market
prices of securities issued by many companies for reasons unrelated to the operating performance of these companies. In the past, companies that have experienced volatility in the market price of their securities have been the subject of securities
class action litigation, and as noted in our Form 10-K for the year ended December 31, 2001, we have recently been sued in a securities class action lawsuit. Although we believe that the class action lawsuit and the other lawsuits described in our
Form 10-K for the year ended December 31, 2001 are without merit, an adverse determination in any of the lawsuits could have a very significant effect on our business and results of operations, and could materially affect the price of our stock.
Moreover, regardless of the ultimate result, it is likely that the lawsuits will divert managements attention and resources from other matters, which could also adversely affect our business and the price of our stock.





ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW LIMIT THE ABILITY OF ANOTHER PARTY TO ACQUIRE US, WHICH COULD CAUSE OUR STOCK
PRICE TO DECLINE.





Certain provisions of our certificate of incorporation and our bylaws could delay or prevent a third
party from acquiring us, even if doing so might be beneficial to our stockholders. For example, we have a classified board of directors whose members serve staggered three-year terms and are removable only for cause. In addition, on March 16, 2001,
ACLARA adopted a stockholder rights plan (the Rights Plan). Pursuant to the Rights Plan, ACLARAs Board of Directors declared a dividend distribution of one Preferred Share Purchase Right (a Right) on each outstanding
share of ACLARAs common stock. Each Right will entitle stockholders to buy one-one hundredth of a share of newly created Series A Junior Participating Preferred Stock at an exercise price of $40.50 in the event that the Rights become
exercisable. Subject to limited exceptions, the Rights will be exercisable if a person or group acquires 15% or more of the Companys common stock or announces a tender offer for 15% or more of the common stock. If ACLARA is acquired in a
merger or other business combination transaction which has not been approved by the Board of Directors, each Right will entitle its holder to purchase, at the Rights then-current exercise price, a number of the acquiring companys common
shares having a market value at the time of twice the Rights exercise price. These provisions may have the effect of making it more difficult for a third party to acquire, or discourage a third party from attempting to acquire control of
ACLARA. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit large stockholders from consummating a merger or combination with us. These
factors could also limit the price that investors might be willing to pay for our common stock in the future.





ITEM 3.    QU
ANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





The following discussion of Quantitative
and Qualitative Disclosures About Market Risk should be read in conjunction with the information contained in our Annual Report on Form 10-K for the year ended December 31, 2001. Our exposure to interest rate risk relates primarily to our investment
portfolio. Fixed rate securities may have their fair market value adversely impacted due to fluctuations in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors,
our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if forced to sell securities which have declined in market value due to changes in interest rates. The primary
objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we invest in debt instruments of the U.S. Government and its agencies and
high-quality corporate issuers, and, by policy, restrict our exposure to any single corporate issuer by imposing concentration limits. To minimize the exposure due to adverse shifts in interest rates, we maintain investments at an average maturity
of generally less than two years.





The following table present the hypothetical changes in fair values in ACLARAs cash and
cash equivalents, short-term and long-term marketable investments held at March 31, 2002, that are sensitive to changes in interest rates. The modeling technique used measures the change in fair values arising from




17




---

##### Table of Contents

hypothetical parallel shifts in the yield curve of plus or minus 50 basis points (BPS), 100 BPS and 150 BPS. Fair values
represent the market principal plus accrued interest at March 31, 2002 (in thousands).





Given an Interest Rate Decrease of X Basis Points



Given an Interest Rate Increase of X Basis PointsIssuer

150 BPS

100 BPS

50 BPS

0 BPS

50 BPS

100 BPS

150 BPSMoney Market

$
15,252

$
15,229

$
15,206

$
15,182

$
15,159

$
15,135

$
15,112Commercial Paper

$
11,215

$
11,127

$
11,037

$
10,947

$
10,856

$
10,766

$
10,678Government Agencies

$
106,859

$
106,219

$
105,574

$
104,918

$
104,276

$
103,635

$
103,001$
133,326

$
132,575

$
131,817

$
131,047

$
130,291

$
129,536

$
128,791





The weighted average maturity of ACLARAs long-term marketable investments
at March 31, 2002 was 793 days.





With the exception of the put obligation associated with the settlement of litigation, we do
not utilize derivative financial instruments, derivative commodity instruments or other market-risk sensitive instruments, positions or transactions in any material fashion.





PART II.    OTHER INFORMATION





ITEM 1.
LEGAL PROCEEDINGS





Information with respect to this item is incorporated by
reference to ACLARAs Form 10-K for the year ended December 31, 2001.





ITEM 2.    CHANGES IN SE
CURITIES AND USE OF PROCEEDS





Not applicable.





ITEM 3.    DEFAULTS UPON SENI
OR SECURITIES





None.





ITEM 4.    SUBMISSION OF MAT
TERS TO A VOTE OF SECURITY HOLDERS





Not applicable.





ITEM 5.    OTHER INF
ORMATION





None.





ITEM 6.    EXHIBITS AND REPO
RTS ON FORM 8-K





(a)  Exhibits.    The exhibits listed below are
incorporated by reference as part of this report:




18




---

##### Table of Contents

Exhibit Number

Description3.1

Amended and Restated Certificate of Incorporation of ACLARA BioSciences, Inc. (Incorporated by reference to Exhibit 3.1 to our
Registration Statement on Form S-1 filed with the Securities and Exchange Commission, File No. 222-95107 (our Form S-1).)3.2

Certificate of Amendment to Amended and Restated Certificate of Incorporation of ACLARA BioSciences, Inc. (Incorporated by
reference to Exhibit 3.6 to our Form S-1.)3.3

Amended and Restated Bylaws of ACLARA BioSciences, Inc. (Incorporated by reference to Exhibit 3.4 to our Form S-1.)10.1

Form of Indemnification Agreement between ACLARA and each of our directors and officers (Incorporated by reference to Exhibit
10.1 to our Form S-1.)10.2

1995 Stock Option Plan (Incorporated by reference to Exhibit 10.2 to our Form S-1.)10.3

Amended and Restated ACLARA BioSciences, Inc. 1997 Stock Plan (Incorporated by reference to Exhibit 10.3 to our Form
S-1.)10.4

Amended and Restated Investors Rights Agreement, dated as of December 30, 1999 (Incorporated by reference to Exhibit 10.4
to our Form S-1.)10.5

Change of Control Agreement by and between Joseph M. Limber and ACLARA BioSciences, Inc., effective as of January 19, 2000
(Incorporated by reference to Exhibit 10.5 to our Form S-1.)10.8

Lease Agreement between ACLARA BioSciences, Inc. and The Pear Avenue Group, dated March 1, 1999 (Incorporated by reference to
Exhibit 10.8 to our Form S-1.)10.9

Master Equipment Lease between Phoenix Leasing and Soane BioSciences, Inc., dated as of November 15, 1995 (Incorporated by
reference to Exhibit 10.9 to our Form S-1.)10.10

Agreement for an Exclusive Alliance to Develop, Manufacture and Market a Chip-Based Screening System for Cell Analysis between
Cellomics, Inc. and ACLARA BioSciences, Inc, dated as of October 26, 1999 (Incorporated by reference to Exhibit 10.10 to our Form S-1.)10.11

Collaboration Agreement between ACLARA BioSciences, Inc. and The Perkin-Elmer Corporation, dated as of March 19, 1999
(Incorporated by reference to Exhibit 10.11 to our Form S-1.)10.12

Side Agreement between ACLARA BioSciences, Inc. and The Perkin-Elmer Corporation, dated as of March 19, 1999 (Incorporated by
reference to Exhibit 10.12 to our Form S-1.)10.13

Custom Instrument Development and Commercialization Agreement between The R.W. Johnson Pharmaceutical Research Initiative, The
Perkin-Elmer Corporation and ACLARA BioSciences, Inc., signed in March 1999 (Incorporated by reference to Exhibit 10.13 to our Form S-1.)10.14

Collaboration Agreement between Soane BioSciences, Inc. and The Perkin-Elmer Corporation, dated as of April 25, 1998
(Incorporated by reference to Exhibit 10.14 to our Form S-1.)




19




---

##### Table of Contents

Exhibit Number

Description10.15

Master Loan and Security Agreement by and between ACLARA BioSciences, Inc. and Transamerica Business Credit Corporation, dated as
of May 27, 1999 (Incorporated by reference to Exhibit 10.15 to our Form S-1.)10.16

ACLARA BioSciences, Inc. Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.16 to our Form S-1.)10.17

Agreement between Packard BioScience Company and ACLARA BioSciences, dated as of February 21, 2000 (Incorporated by reference to
Exhibit 10.17 to our Form S-1.)10.18

Consulting Agreement with Dr. Eric Lander dated as of January 15, 2000 (Incorporated by reference to Exhibit 10.18 to our Form
S-1.)10.19

Consulting Agreement with Mr. Andre Marion dated as of January 19, 2000 (Incorporated by reference to Exhibit 10.19 to our Form
S-1.)10.20

Settlement Agreement and Mutual General Release between Caliper Technologies Corp. and ACLARA BioSciences, Inc., dated as of
March 12, 2001 (Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on May 15, 2001.)10.21

Cross-License Agreement between Caliper Technologies Corp. and ACLARA BioSciences, Inc., dated as of March 12, 2001 (Incorporated
by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 14 , 2001.)10.22

Common Stock Issuance Agreement between ACLARA BioSciences, Inc. and Caliper Technologies Corp., dated as of March 12, 2001
(Incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q filed on May 15, 2001.)10.23

Form of Change of Control Agreement between ACLARA BioSciences, Inc. and each of our executive officers. (Incorporated by
reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 14, 2001.)10.24*

Amended and Partially Restated Collaboration Agreement between ACLARA BioSciences, Inc. and PE Corporation (NY), executed as of
March 22, 2002. (Incorporated by reference to Exhibit 10.24 to our Annual Report on Form 10-K filed on April 1, 2002.)10.25

Second Side Agreement Between ACLARA BioSciences, Inc. and PE Corporation (NY), effective as of September 30, 2000. (Incorporated
by reference to Exhibit 10.25 to our Annual Report on Form 10-K filed on April 1, 2002.)10.26*

Supply and Distributorship Agreement between ACLARA BioSciences, Inc. and Roche Diagnostics Corporation, dated as of October 26,
2001. (Incorporated by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed on April 1, 2002.)10.27

First Amendment to the Custom Instrument Development and Commercialization Agreement between The R.W. Johnson Pharmaceutical
Research Institute and ACLARA BioSciences, Inc., executed as of October 1, 2001. (Incorporated by reference to Exhibit 10.27 to our Annual Report on Form 10-K filed on April 1, 2002.)




20




---

##### Table of Contents

Exhibit Number

Description10.28*

Second Amendment to the Custom Instrument Development and Commercialization Agreement between The R.W. Johnson Pharmaceutical
Research Institute and ACLARA BioSciences, Inc., dated as of October 26, 2001. (Incorporated by reference to Exhibit 10.28 to our Annual Report on Form 10-K filed on April 1, 2002.)10.29*

Development and Commercialization Agreement between Third Wave Technologies, Inc. and ACLARA BioSciences, Inc., dated as of
October 24, 2001. (Incorporated by reference to Exhibit 10.29 to our Annual Report on Form 10-K filed on April 1, 2002.)10.30*

Agreement between Third Wave Technologies, Inc. and ACLARA BioSciences, Inc. dated as of October 24, 2001. (Incorporated by
reference to Exhibit 10.30 to our Annual Report on Form 10-K filed on April 1, 2002.)


---

| |  | Confidential treatment has been granted as to portions of this exhibit.
|- |  | -----------------------------------------------------------------------




|* |  | Confidential treatment has been requested as to portions of this exhibit.
|- |  | -------------------------------------------------------------------------




(b)  Current Reports on Form 8-K.    ACLARA did not file any reports on Form 8-K during the quarter ended March 31, 2002.





SIGN
ATURES





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.





/s/    ALFRED G. MERRIWEATHER Alfred G. Merriweather

Vice President, Finance and Chief Financial Officer (duly authorized officer and principal financial officer)

May 15, 2002




21