SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) x
  QUARTERLY
  REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE
  QUARTERLY PERIOD ENDED: MARCH 31, 2001ORo
  TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE
  TRANSITION PERIOD FROM ______________ TO ______________COMMISSION
  FILE NUMBER 000-31145
  VERSICOR
  INC.(Exact
  Name of Registrant as Specified in its Charter)DELAWARE
  04-3278032(State
  or Other Jurisdiction of Organization or Incorporation)
  (I.R.S.
  EmployerIdentification number)34790
  ARDENTECH COURT, FREMONT, CALIFORNIA 94555(Address
  of Principal Executive Offices) (Zip Code)(510) 739-3000(Registrant's Telephone Number, Including
  Area Code)
  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 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. YesxNoo Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date. COMMON
STOCK, PAR VALUE $.001 PER SHARE, 23,069,574 SHARES OUTSTANDING ATAPRIL
24, 2001.   VERSICOR
INC.INDEX

Part I - Financial
  InformationItem 1.
  Condensed Financial StatementsCondensed Balance Sheets as of
  March 31, 2001 (unaudited) and December 31, 2000Statements of Operations for
  the Three Months Ended March 31, 2001 and 2000 (Unaudited)Statements of Cash Flows for
  the Three Months Ended March 31, 2001 and 2000 (Unaudited)Notes to
  Condensed Financial StatementsItem
  2. Management's Discussion and Analysis of Financial Condition and Results of
  OperationsItem
  3. Quantitative and Qualitative Disclosures About Market RiskPart II - Other
  InformationItem 1. Legal ProceedingsItem
  2. Changes in Securities and Use of Proceeds.Item 3.
  Defaults upon Senior SecuritiesItem
  4. Submission of Matters to a Vote of SecurityHoldersItem 5. Other InformationItem 6.
  Exhibits and Reports on Form 8-KSignatures

ITEM
1. CONDENSED FINANCIAL STATEMENTS

VERSICOR INC.CONDENSED
BALANCE SHEETS(IN THOUSANDS)

MARCH 31,
  DECEMBER 31,2001
  2000(unaudited)ASSETSCurrent assets:Cash and cash equivalents
  $74,276
  $67,989Marketable securities
  6,820
  17,945Employee notes receivable
  360
  357Prepaid expenses and other current assets
  732
  591Total current assets
  82,188
  86,882Property and equipment, net
  4,675
  4,384Employee notes receivable
  160
  188Other assets
  141
  142Total assets
  $87,164
  $91,596LIABILITIES AND STOCKHOLDERS'
  EQUITYCurrent liabilities:Accounts payable
  $564
  $1,421Accrued liabilities
  3,373
  3,225Related party payable
  -
  12Current portion of term loan payable
  862
  862Deferred revenue
  1,275
  1,233Total current liabilities
  6,074
  6,753Deferred revenue
  -
  108Term loan payable
  3,232
  3,448Other long-term liabilities
  1,000
  1,000Total liabilities
  10,306
  11,309Stockholders' equity:Common stock
  23
  23Additional paid-in capital
  161,216
  160,059Deferred stock compensation
  (8,239)
  (8,819)Accumulated deficit
  (76,142)
  (70,976)Total stockholders' equity
  76,858
  80,287Total liabilities and stockholders' equity
  $87,164
  $91,596The accompanying notes are an integral part of the
condensed financial statementsVERSICOR INC.STATEMENTS
OF OPERATIONS(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

THREE MONTHS ENDEDMARCH 31, 2001
  MARCH 31,2000Revenues:Collaborative research and development and contract
  services
  $1,486
  $1,250License fees and milestones
  8
  8Total revenues
  1,494
  1,258Operating expenses:Research and development -
  non-cash compensation expense
  513
  1,231Research and development -
  other
  4,813
  2,406Total research and development
  5,326
  3,637General and administrative -
  non-cash compensation expense.
  1,216
  1,079General and administrative -
  other
  1,239
  569Total general and administrative
  2,455
  1,648Total operating expenses
  7,781
  5,285Loss from operations
  (6,287)
  (4,027)Other income (expense):Interest income
  1,219
  589Interest expense
  (98)
  (120)Net loss
  (5,166)
  (3,558)Accretion of dividends on
  preferred stock.
  --
  (1,435)Net loss available to common
  stockholders
  $(5,166)
  $(4,993)Net loss per share:Basic and diluted
  $(0.22)
  $(7.09)Weighted average shares
  23,041
  705The accompanying notes are an integral part of the
condensed financial statementsVERSICOR
INC.STATEMENTS
OF CASH FLOWS(UNAUDITED)
(IN THOUSANDS)THREE MONTHS ENDEDMARCH 31, 2001
  MARCH 31, 2000CASH FLOWS FROM OPERATING
  ACTIVITIES:Net loss
  $(5,166)
  $(3,558)Adjustments to reconcile net loss to net cash used in
  operating activities:Depreciation
  220
  225Non-cash stock compensation expense
  1,729
  2,310Changes in operating assets and liabilities:Prepaid expenses and other current assets
  (141)
  (132)Employee notes receivable
  25
  (7)Other assets
  1
  2Accounts payable
  (857)
  67Accrued liabilities
  148
  174Related party payable
  (12)
  25Deferred revenue
  (66)
  507Net cash used in operating activities
  (4,119)
  (387)CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of marketable securities
  (4,847)
  --Sales and maturities of marketable securities
  15,972
  --Additions to property and equipment
  (511)
  (45)Net cash provided by (used in) investing activities
  10,614
  (45)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock
  8
  32Repayments of long-term debt
  (216)
  (216)Net cash used in financing activities
  (208)
  (184)Net change in cash and cash
  equivalents
  6,287
  (616)Cash and cash equivalents at
  beginning of period
  67,989
  34,619Cash and cash equivalents at
  end of period
  $74,276
  $34,003NON CASH TRANSACTIONS:Cash paid during the period for interest
  $98
  $120The accompanying notes are an integral part of the
condensed financial statementsNOTES TO CONDENSED FINANCIAL STATEMENTS

1. BASIS OF
PRESENTATION

The
accompanying interim financial statements are unaudited and have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q. Accordingly,
certain information and footnote disclosures normally included in annual
financial statements have been condensed or omitted. The year-end condensed
balance sheet data was derived from audited financial statements but does not
include all disclosures required by generally accepted accounting principles.
The interim financial statements, in the opinion of management, reflect all
adjustments (including normal recurring accruals) necessary for a fair
presentation of the results for the interim periods ended March 31, 2001 and
2000.

The
results of operations for the interim periods are not necessarily indicative of
the results of operations to be expected for the fiscal year. These condensed
interim financial statements should be read in conjunction with the audited
financial statements for the year ended December 31, 2000, which are included
in the Company's Annual Report on Form 10-K for the year ended December 31,
2000.

2. BASIC AND DILUTED
NET LOSS PER SHARE

Basic
net loss per share is computed using the weighted average number of shares of
common stock outstanding. Diluted net loss per share does not differ from basic
net loss per share since potential common shares are anti-dilutive for all
periods presented and therefore are excluded from the calculation of diluted
net loss per share. The following weighted average potentially dilutive common
shares were excluded from the computation of net loss per share because their
effect was anti-dilutive (in thousands):



THREE MONTHS ENDEDMARCH 31, 2001
  MARCH 31, 2000Convertible and redeemable
  convertible preferred stock
  -
  16,677Stock options
  2,496
  2,013Warrants
  421
  439Common stock subject to
  repurchase
  15
  242,932
  19,153

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following discussion of our financial condition and results of operations
should be read in conjunction with the financial statements included elsewhere
in this Quarterly Report on Form 10-Q and Versicor's audited financial
statements for the year ended December 31, 2000 included in our Form 10-K
previously filed with the SEC. This Quarterly Report on Form 10-Q contains, in
addition to historical information, forward-looking statements, which involve
risk and uncertainties. The words "believe," "expect,"
"estimate," "may," "will," "could,"
"plan," or "continue," and similar expressions are intended
to identify forward-looking statements. Versicor's actual results could differ
significantly from the results discussed in such forward-looking statements.
See "Factors Affecting Future Operating Results" below.

OVERVIEW

Versicor
is a biopharmaceutical company focused on the discovery, development and
marketing of drugs for the treatment of serious bacterial and fungal
infections, primarily in the hospital setting. Since our inception on May 2,
1995 as a wholly-owned subsidiary of Sepracor Inc., we have devoted
substantially all of our efforts to establishing our business and carrying on
research and development activities related to proprietary product candidates,
including V-Echinocandin and V-Glycopeptide, as well as collaborative product
candidates. Since 1996, we have been operating as an independent company
located in California.

On
August 8, 2000, we sold 4,600,000 shares of our common stock at $11 per share
in an initial public offering. On September 7, 2000, the underwriters executed
an overallotment option and purchased an additional 690,000 shares of common
stock at $11 per share. We received total net proceeds from the initial public
offering and the overallotment of approximately $52.7 million.

Since
we began our operations in May 1995, we have not generated any revenues from
product sales. We have one product candidate in Phase III clinical trials, one
product candidate that is expected to begin Phase II clinical trials in the
second quarter of 2001 and several lead compounds in pre-clinical studies.

Our
revenues in the near term are expected to consist primarily of license fees,
milestone payments and collaborative research payments to be received from our
collaborators. These payments are dependent on achievement of certain
milestones. If our development efforts result in clinical success, regulatory
approval and successful commercialization of our products, we will generate
revenues from sales of our products and from receipt of royalties on sales of
licensed products.

Our
expenses have consisted primarily of costs incurred in licensing existing
product candidates, research and development of new product candidates and in
connection with our collaboration agreements, and from general and
administrative costs associated with our operations. We expect our licensing
costs to increase as certain milestones are achieved, and our research and
development expenses to increase as we continue to develop our product
candidates. We also expect that our general and administrative expenses will
increase as we add personnel and continue to directly assume all of the
obligations of a public reporting company. In addition, we expect to incur
sales and marketing expenses in the future when we establish our sales and
marketing organization.

We have
recorded deferred stock compensation expense in connection with the grant of
stock options to employees and consultants. Deferred stock compensation for
options granted to employees is the difference between the fair value for
financial reporting purposes of our common stock on the date such options were
granted and their exercise price. Deferred stock compensation for options
granted to consultants has been determined in accordance with Statement of
Financial Accounting Standards No. 123 as the fair value of the equity
instruments issued. Deferred stock compensation for options granted to
consultants is periodically remeasured as the underlying options vest in
accordance with Emerging Issues Task Force No. 96-18.

We
recorded deferred stock compensation of $1.1 million and $904,000 for the three
months ended March 31, 2001 and 2000, respectively. These amounts were recorded
as a component of stockholders' equity and are being amortized as charges to
operations over the vesting periods of the options. We recorded amortization of
deferred stock compensation of $1.7 million and $2.3 million for the three
months ended March 31, 2001 and 2000, respectively.

Since
our inception, we have incurred significant losses. As of March 31, 2001, we
had an accumulated deficit of $76.1 million. We anticipate incurring additional
losses, which may increase, for the foreseeable future, including at least
through December 31, 2001.

We have
a limited history of operations. We anticipate that our quarterly results of
operations will fluctuate for the foreseeable future due to several factors,
including payments made or received pursuant to licensing or collaboration
agreements, progress of our research and development efforts, and the timing
and outcome of regulatory approvals. Our limited operating history makes
predictions of future operations difficult or impossible.

In May
1999, we obtained from Eli Lilly an exclusive worldwide license for the
development and commercialization of V-Echinocandin, which was then known as
LY303366. We began a Phase III clinical trial for V-Echinocandin in the first
quarter of 2001. We paid $11.0 million for the license and have agreed to pay
an additional $3 million for product inventory of which we have paid $1
million. We are also obligated to make $51.0 million in additional payments to
Eli Lilly if specified milestones are achieved on the intravenous formulations
of V-Echinocandin. Of the $51.0 million payment obligation for the intravenous
formulation, $14.0 million is contingent on developments in the United States
and Canada, $16.0 million is contingent on developments in Japan and Europe and
$21.0 million is contingent on cumulative sales of the intravenous formulation.
We are obligated to make $79 million in additional payments to Eli Lilly if
specified milestones are achieved on the oral formulations of V-Echinocandin.
We are also required to pay to Eli Lilly royalties in respect of sales of any
product resulting from the compound. We may terminate this agreement at any
time by giving ninety days' written notice. Otherwise, the license terminates
on a country-by-country basis as all of our royalty obligations are satisfied
in each country.

In
March 1999, we entered into a collaboration agreement with Pharmacia
Corporation pursuant to which we are collaborating to discover second and third
generation oxazolidinone product candidates. In connection with the
collaboration, Pharmacia Corporation made an equity investment in us of $3.8
million and paid research support and license fee payments of $1.2 million to
us. Under the terms of the agreement, we are entitled to receive additional
research support payments, and if specified milestones are achieved, up to
$14.0 million in additional milestone payments per compound. We are also
entitled to receive royalties on the worldwide sales of any drug developed and
commercialized as a result of the collaboration. In October 2000, Pharmacia
increased its research support payments by 30%.

In
March 1999, we entered into a collaboration agreement with Novartis Pharma AG
pursuant to which we are collaborating to discover and develop novel
deformylase inhibitors. In connection with the collaboration, Novartis has made
a $3.0 million equity investment in us and paid $1.0 million in milestone
payments to us. Under the terms of this agreement, we are entitled to receive
up to $21.3 million in additional payments from Novartis upon the achievement
of specified milestones, a portion of which may be credited against future
royalty payments that we are entitled to on the worldwide sales of any drug
developed and commercialized from this collaboration.

In
February 1998, we entered into two agreements with Biosearch Italia: a license
agreement and a collaborative agreement. Under the license agreement, Biosearch
Italia granted us an exclusive license to develop and commercialize
V-Glycopeptide, then called BI-397, in the United States and Canada. We expect
to begin a Phase II clinical trial for V-Glycopeptide in the second quarter of
2001. In exchange for the license and upon the receipt of favorable results in
pre-clinical studies, we paid $3.0 million and issued 250,000 shares of our
common stock to Biosearch Italia. We are obligated to make up to $9.5 million
in additional payments to Biosearch Italia upon the achievement of specified
milestones. We are also required to pay Biosearch Italia royalties in respect
of sales of any product that results from the compound. Under the collaborative
agreement with Biosearch Italia, we established a lead optimization partnership
called BIOCOR. Biosearch contributes leads and we contribute our combinatorial
and medicinal chemistry expertise to optimize the leads.

RESULTS OF OPERATIONS

THREE MONTHS ENDED
MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

REVENUES

Revenues
were $1.5 million and $1.3 million in the three months ended March 31, 2001 and
2000, respectively. Revenues consisted of $908,000 and $696,000 of
collaborative research and development, contract service and license fees from
Pharmacia Corporation and $586,000 and $562,000 of collaborative research and
development fees from Novartis in the three months ended March 31, 2001 and
2000, respectively. The increase in revenues in the first quarter of 2001 is
due to the increase in collaborative research and development funding from both
Pharmacia Corporation and Novartis.

RESEARCH AND
DEVELOPMENT EXPENSES

Research
and development expenses were $5.3 million and $3.6 million in the three months
ended March 31, 2001 and 2000, respectively. Research and development expenses
include amortization of non-cash stock compensation expense of $513,000 and
$1.2 million in the three months ended March 31, 2001 and 2000, respectively.
Excluding these charges, research and development expenses increased by $2.4
million primarily due to the increase in clinical expenses for the development
of V-Echinocandin and V-Glycopeptide as well as the expansion of our
collaborative and internal research projects.

GENERAL AND
ADMINISTRATIVE EXPENSES

General
and administrative expenses were $2.5 million and $1.6 million in the three
months ended March 31, 2001 and 2000, respectively. General and administrative
expenses include amortization of non-cash stock compensation expense of $1.2
million and $1.1 million in the three months ended March 31, 2001 and 2000,
respectively. Excluding these charges, general and administrative expenses
increased by $670,000 primarily due to the increase in legal, audit, insurance,
personnel, and consultant expenses associated with being a public company.

OTHER INCOME (EXPENSE)

Net
interest income was $1.1 million and $469,000 in the three months ended March
31, 2001 and 2000, respectively. The 2001 period reflects greater interest
income as a result of higher cash and investment balances resulting from our
initial public offering in August 2000.

LIQUIDITY AND CAPITAL
RESOURCES

We have
funded our operations principally with the proceeds of approximately $78.5
million from a series of six preferred stock offerings over the period 1995
through 1999 and net proceeds of approximately $52.7 million from the Company's
initial public offering received in August and September 2000.

As of
March 31, 2001 the Company had received approximately $15.9 million in payments
for collaborative research, contract services and milestone payments, as well
as license fees from our collaborators, including Sepracor. Of these payments,
$1.3 million constitutes deferred revenue as of March 31, 2001 that will be
recognized through the first quarter of 2002.

In
addition, we have a $6 million term loan agreement with Fleet National Bank.
This loan bears interest at the prime rate plus 0.50% and is payable in 15
equal quarterly installments of $216,000, with the balance due on December 31,
2002. The net proceeds of this loan were used to repay Sepracor for leasehold
improvements to our facilities and for general corporate purposes. As of March
31, 2001, there was an outstanding loan balance of $4.1 million.

Cash used in operations was $4.1 million and $387,000 in
the three months ended March 31, 2001 and 2000, respectively. The net loss of
$5.2 million in the first quarter of 2001 was partially offset by non-cash
charges for depreciation and non-cash stock compensation of $1.9 million. In
the first quarter of 2000, the net loss of $3.6 million was substantially
offset by non-cash charges for depreciation and non-cash stock compensation of
$2.5 million.

Cash
provided by (used in) investing activities was $10.6 million and ($45,000) in
the three months ended March 31, 2001 and 2000, respectively. The principal
source of cash in the first quarter of 2001 resulted from the sale and maturity
of marketable securities.

We
expect to have negative cash flow from operations for the foreseeable future.
We expect to incur increasing research and development and general and
administrative expenses including expenses relating to additions to personnel
and production and commercialization efforts. Our future capital requirements
will depend on a number of factors, including our success in developing markets
for our products, payments received or made under collaboration agreements, the
timing and outcome of regulatory approvals, the need to acquire licenses to new
products or compounds, the status of competitive products and the availability
of other financing. We believe our existing cash and cash equivalents and
marketable securities will be sufficient to fund our operating expenses, debt
repayments and capital requirements for at least the next two years.

FACTORS AFFECTING
FUTURE OPERATING RESULTS

Certain
of the information contained in the Quarterly Report on Form 10-Q consist of
forward-looking statements. Important factors that could cause actual results
to differ materially from the forward-looking statements include the following:

RISKS RELATED TO OUR
BUSINESS

IF WE ARE UNABLE TO DEVELOP AND
SUCCESSFULLY COMMERCIALIZE OUR PRODUCT
CANDIDATES, WE MAY NEVER GENERATE SIGNIFICANT REVENUES OR BECOME
PROFITABLE.

You
must evaluate us in light of the uncertainties and complexities present in an
early stage biopharmaceutical company. All of our product candidates are in
early stages of development, and only two are in clinical trials. To date we
have not commercialized any products or recognized any revenue from product
sales. We will require significant additional investment in research and
development, pre-clinical testing and clinical trials, regulatory approval, and
sales and marketing activities. Our product candidates, if successfully
developed, may not generate sufficient or sustainable revenues to enable us to
be profitable.

WE EXPECT TO INCUR
LOSSES FOR THE FORESEEABLE FUTURE AND MAY NEVER ACHIEVE PROFITABILITY.

We have
incurred net losses since our inception in 1995. Before deemed dividends and
accretion to redemption value of preferred stock, our net losses were
approximately $1.1 million in 1995, $4.8 million in 1996, $6.3 million in 1997,
$12.6 million in 1998, $29.2 million in 1999, $15.3 million in 2000 and $5.2
million in the first quarter of 2001. As of March 31, 2001, our accumulated
deficit was approximately $76.1 million. Our losses to date have resulted
principally from:

            research
and development costs relating to the development of our product candidates;            costs
of acquiring product candidates; and            general
and administrative costs relating to our operations.We
expect to incur substantial and increasing losses for the foreseeable future as
a result of increases in our research and development costs, including costs
associated with conducting pre-clinical testing and clinical trials, and
charges related to purchases of technology or other assets. We expect that the
amount of operating losses will fluctuate significantly from quarter to quarter
as a result of increases or decreases in our research and development efforts,
the execution or termination of collaboration agreements, the initiation,
success or failure of clinical trials, or other factors. Our chances for
achieving profitability will depend on numerous factors, including success in:

            developing
and testing new product candidates;            receiving
regulatory approvals;            manufacturing
products;            marketing
products; and            competing
with products from other companies.Many of
these factors will depend on circumstances beyond our control. We expect to
rely heavily on third parties with respect to many aspects of our business,
including research and development, clinical testing, manufacturing and
marketing. We cannot assure you that we will ever become profitable.

OUR REVENUES WILL BE
SUBJECT TO SIGNIFICANT FLUCTUATIONS, WHICH WILL MAKE IT DIFFICULT TO COMPARE
OUR OPERATING RESULTS TO PRIOR PERIODS.

We
expect that substantially all of our revenues for the foreseeable future will
result from payments under collaboration agreements. To date, these payments
have been in the form of upfront payments, reimbursement for research and
development expenses and milestone payments. We may not be able to generate
additional revenues. Furthermore, payments under our existing and any future
collaboration agreements will be subject to significant fluctuation in both
timing and amount. Our revenues may not be indicative of our future performance
or of our ability to continue to achieve additional milestones. Our revenues
and results of operations for any period may also not be comparable to the
revenues or results of operations for any other period.

IF WE CANNOT ENTER INTO NEW LICENSING
ARRANGEMENTS, OUR FUTURE PRODUCT PORTFOLIO COULD BE ADVERSELY AFFECTED.

An
important component of our business strategy is in-licensing drug compounds
developed by other pharmaceutical and biotechnology companies or academic
research laboratories. Competition for promising compounds can be intense. If
we are not able to identify future licensing opportunities or enter into future
licensing arrangements on acceptable terms, our future product portfolio could
be adversely affected.

IF OUR COLLABORATORS
DO NOT PERFORM, WE WILL BE UNABLE TO DEVELOP OUR JOINT PRODUCT CANDIDATES.

We have
entered into collaboration agreements with third parties to develop certain
product candidates. These collaborations are necessary in order for us to:

            fund
our research and development activities;            fund
manufacturing by third parties;            seek
and obtain regulatory approvals; and            successfully
commercialize existing and future product candidates.Only a
limited number of product candidates have been generated pursuant to our
collaborations. We cannot assure you that any of them will result in
commercially successful products. Current or future collaboration agreements
may not be successful. If we fail to maintain our existing collaboration
agreements or fail to enter into additional collaboration agreements, the
number of product candidates from which we could receive future revenues would
decline.

Our
dependence on collaboration agreements with third parties subjects us to a
number of risks. These collaboration agreements may not be on terms favorable
to us. Agreements with collaborators typically allow the collaborators
significant discretion in electing whether to pursue any of the planned
activities. We cannot control the amount and timing of resources our
collaborators may devote to the product candidates, and our collaborators may
choose to pursue alternative products. Our collaborators may not perform their
obligations as expected. Business combinations or significant changes in a
collaborator's business strategy may adversely affect a collaborator's
willingness or ability to complete its obligations under the arrangement.
Moreover, we could become involved in disputes with our collaborators, which
could lead to delays or termination of our development programs with them and
time-consuming and expensive litigation or arbitration. Even if we fulfill our
obligations under a collaborative agreement, our collaborator can terminate the
agreement under certain circumstances. If any collaborator were to terminate or
breach our agreement with it, or otherwise fail to complete its obligations in
a timely manner, our chances of successfully commercializing products would be
materially and adversely affected.

IF CLINICAL TRIALS FOR
OUR PRODUCTS ARE UNSUCCESSFUL OR DELAYED, WE WILL BEUNABLE TO MEET OUR
ANTICIPATED DEVELOPMENT AND COMMERCIALIZATION TIMELINES, WHICH COULD CAUSE OUR
STOCK PRICE TO DECLINE.

Before
obtaining regulatory approvals for the commercial sale of any products, we must
demonstrate through pre-clinical testing and clinical trials that our product
candidates are safe and effective for use in humans. Conducting clinical trials
is a lengthy, time-consuming and expensive process.

Completion
of clinical trials may take several years or more. Our commencement and rate of
completion of clinical trials may be delayed by many factors, including:

            lack of
efficacy during the clinical trials;            unforeseen
safety issues;            slower
than expected rate of patient recruitment;            government
or regulatory delays;            inability
to adequately follow patients after treatment; and            inability
to manufacture sufficient quantities of materials for use in clinical trials.The
results from pre-clinical testing and early clinical trials are often not
predictive of results obtained in later clinical trials. A number of new drugs
have shown promising results in clinical trials, but subsequently failed to
establish sufficient safety and efficacy data to obtain necessary regulatory
approvals. Data obtained from pre-clinical and clinical activities are
susceptible to varying interpretations, which may delay, limit or prevent
regulatory approval. In addition, regulatory delays or rejections may be
encountered as a result of many factors, including perceived defects in the
design of clinical trials and changes in regulatory policy during the period of
product development.

As of
March 31, 2001, two of our product candidates, V-Echinocandin and
V-Glycopeptide, were in clinical trials. Patient follow-up for these clinical
trials has been limited and more trials will be required before we will be able
to apply for regulatory approvals. Clinical trials conducted by us or by third
parties on our behalf may not demonstrate sufficient safety and efficacy to
obtain the requisite regulatory approvals for V-Echinocandin and V-Glycopeptide
or any other potential product candidates. This failure may delay development
of other product candidates and hinder our ability to conduct related
pre-clinical testing and clinical trials. Regulatory authorities may not permit
us to undertake any additional clinical trials for our product candidates. Our
other product candidates are in pre-clinical development, and we have not
submitted investigational new drug applications to commence clinical trials
involving these compounds. Our pre-clinical development efforts may not be
successfully completed and we may not file further investigational new drug
applications. Any delays in, or termination of, our clinical trials will
materially and adversely affect our development and commercialization
timelines, which would cause our stock price to decline. Any of these events
would also seriously impede our ability to obtain additional financing.



IF OUR THIRD PARTY
CLINICAL TRIAL MANAGERS DO NOT PERFORM, CLINICAL TRIALS FOR OUR PRODUCT
CANDIDATES MAY BE DELAYED OR UNSUCCESSFUL.

We have
limited experience in conducting and managing clinical trials, and currently
only have three full-time clinical development employees. We rely on third
parties, including our collaborators, clinical research organizations and
outside consultants, to assist us in managing and monitoring clinical trials.
Our reliance on these third parties may result in delays in completing, or
failing to complete, these trials if they fail to perform under the terms of
our agreements with them.

IF OUR PRODUCTS ARE NOT ACCEPTED BY THE
MARKET, WE ARE NOT LIKELY TO GENERATE SIGNIFICANT REVENUES OR BECOME PROFITABLE.

Even if we obtain regulatory approval to market a
product, our products may not gain market acceptance among physicians,
patients, healthcare payors and the medical community. The degree of market
acceptance of any pharmaceutical product that we develop will depend on a
number of factors, including:

            demonstration
of clinical efficacy and safety;            cost-effectiveness;            potential
advantages over alternative therapies;            reimbursement
policies of government and third-party payors; and            effectiveness
of our marketing and distribution capabilities.Physicians
will not recommend therapies using our products until clinical data or other
factors demonstrate their safety and efficacy as compared to other drugs or
treatments. Even if the clinical safety and efficacy of therapies using our
products is established, physicians may elect not to recommend the therapies
for any number of other reasons, including whether the mode of administration
of our products is effective for certain indications. For example, many
antibiotic or antifungal products are typically administered by infusion or
injection, which requires substantial cost and inconvenience to patients. Our
product candidates, if successfully developed, will compete with a number of
drugs and therapies manufactured and marketed by major pharmaceutical and other
biotechnology companies. Our products may also compete with new products
currently under development by others. Physicians, patients, third-party payors
and the medical community may not accept and utilize any product candidates
that we or our collaborators develop. If our products do not achieve
significant market acceptance, we are not likely to generate significant
revenues or become profitable.

IF WE ARE UNABLE TO ATTRACT AND RETAIN KEY
EMPLOYEES AND CONSULTANTS, WE WILL BE UNABLE TO DEVELOP AND COMMERCIALIZE OUR
PRODUCTS.

We are
highly dependent on the principal members of our scientific, clinical and
management staff. In addition, we have depended to date on third parties to
perform significant management functions. In order to pursue our product
development, marketing and commercialization plans, we will need to hire
personnel with experience in clinical testing, government regulation,
manufacturing and marketing. We may not be able to attract and retain personnel
on acceptable terms given the intense competition for such personnel among high
technology enterprises, including biotechnology, pharmaceutical and healthcare
companies, universities and non-profit research institutions. Most of our
scientific and management employees do not have employment agreements. If we
lose any of these persons, or are unable to attract and retain qualified
personnel, our business, financial condition and results of operations may be
materially and adversely affected.

In
addition, we rely on members of our scientific and clinical advisory boards and
other consultants to assist us in formulating our research and development
strategies. All of our consultants and the members of our scientific and
clinical advisory boards are employed by other entities. They may have
commitments to, or advisory or consulting agreements with, other entities that
may limit their availability to us. If we lose the services of these advisors,
the achievement of our development objectives may be impeded. Such impediments
may materially and adversely affect our business, financial condition and
results of operations. In addition, except for work performed specifically for
and at our direction, the inventions or processes discovered by our scientific
and clinical advisory board members and other consultants will not become our
intellectual property, but will be the intellectual property of the individuals
or their institutions. If we desire access to these inventions, we will be
required to obtain appropriate licenses from the owners. We cannot assure you
that we will be able to obtain such licenses.

IF OUR THIRD-PARTY
MANUFACTURERS FAIL TO DELIVER OUR PRODUCT CANDIDATES, CLINICAL TRIALS AND
COMMERCIALIZATION OF OUR PRODUCT CANDIDATES COULD BE DELAYED.

We do
not have our own manufacturing facilities to produce our product candidates and
anticipate that we will continue to rely on third parties to manufacture our
product candidates and our products. Our contract manufacturers have a limited number
of facilities in which our product candidates can be produced. These
manufacturers have limited experience in manufacturing V-Echinocandin and
V-Glycopeptide in quantities sufficient for conducting clinical trials or for
commercialization.

Contract
manufacturers often encounter difficulties in scaling up production, including
problems involving production yields, quality control and assurance, shortage
of qualified personnel, compliance with FDA regulations, production costs, and
development of advanced manufacturing techniques and process controls. Our
contract manufacturers may not perform as agreed or may not remain in the
contract manufacturing business for the time required by us to successfully
produce and market our product candidates. If our contract manufacturers fail
to deliver the required quantities of our product candidates for clinical use
on a timely basis and at commercially reasonable prices, and if we fail to find
a replacement manufacturer or develop our own manufacturing capabilities,
clinical trials involving our products, or commercialization of our products,
could be delayed.

IF WE FAIL TO ESTABLISH SUCCESSFUL
MARKETING AND SALES CAPABILITIES OR FAIL TO ENTER INTO SUCCESSFUL MARKETING
ARRANGEMENTS WITH THIRD PARTIES, WE WOULD NOT BE ABLE TO COMMERCIALIZE OUR
PRODUCTS AND WE WOULD NOT BECOME PROFITABLE.

We
intend to sell a portion of our products through our own sales force. We
currently have no sales and marketing infrastructure and have no experience in
direct marketing, sales and distribution. Our future profitability will depend
in part on our ability to develop a direct sales and marketing force to sell
our products to our customers. We may not be able to attract and retain
qualified salespeople or be able to build an efficient and effective sales and
marketing force. To the extent that we enter into marketing and sales
arrangements with other companies, our revenues will depend on the efforts of
others. These efforts may not be successful. If we are unable to enter into
third-party arrangements, then we must substantially expand our marketing and
sales force in order to achieve commercial success for certain products, and
compete with other companies that have experienced and well-funded marketing
and sales operations.

IF CIRCUMSTANCES
REQUIRE US TO OBTAIN ADDITIONAL FUNDING, WE MAY BE FORCED TO DELAY OR CURTAIL
THE DEVELOPMENT OF OUR PRODUCT CANDIDATES.

Our
requirements for additional capital may be substantial and will depend on many
factors, some of which are beyond our control, including:

            payments
received or made under possible future collaboration agreements;            continued
progress of our research and development of our products;            costs
associated with protecting our patent and other intellectual property rights;            development
of marketing and sales capabilities; or            market
acceptance of our products.We have
no committed sources of additional capital. To the extent our capital resources
are insufficient to meet future capital requirements, we will have to raise
additional funds to continue the development of our product candidates. We
cannot assure you that funds will be available on favorable terms, if at all.
To the extent that additional capital is raised through the sale of equity or
convertible debt securities, the issuance of those securities could result in
dilution to our stockholders. Moreover, the incurrence of debt financing could
result in a substantial portion of our operating cash flow being dedicated to
the payment of principal and interest on such indebtedness. This could render
us more vulnerable to competitive pressures and economic downturns and could
impose restrictions on our operations. If adequate funds are not available, we
may be required to curtail operations significantly or to obtain funds through
entering into collaboration agreements on unattractive terms. Our inability to
raise capital would have a material adverse effect on our business, financial
condition and results of operations.

IF WE FAIL TO MANAGE
OUR GROWTH, OUR BUSINESS COULD BE HARMED.

Our
business plan contemplates a period of rapid and substantial growth that will
place a strain on our administrative and operational infrastructure. To date,
our management infrastructure has been very limited and dependent on third
parties, including our former parent company, to provide significant
administrative and operational assistance. Our ability to manage effectively
our operations and growth requires us to expand and improve our operational,
financial and management controls, reporting systems and procedures and to
attract and retain sufficient numbers of talented employees. We may not
successfully implement improvements to our management information and control
systems in an efficient or timely manner and may discover deficiencies in existing
systems and controls.

IF WE MAKE ANY
ACQUISITIONS, WE WILL INCUR A VARIETY OF COSTS AND MAY NEVER REALIZE THE
ANTICIPATED BENEFITS.

If
appropriate opportunities become available, we may attempt to acquire products,
product candidates or businesses that we believe are a strategic fit with our
business. We currently have no commitments or agreements with respect to any
material acquisitions. If we do undertake any transaction of this sort, the
process of integrating an acquired product, product candidate or business may
result in operating difficulties and expenditures and may absorb significant
management attention that would otherwise be available for ongoing development
of our business. Moreover, we may never realize the anticipated benefits of any
acquisition. Future acquisitions could result in potentially dilutive issuances
of equity securities, the incurrence of debt, contingent liabilities and/or
amortization expenses related to goodwill and other intangible assets, which
could adversely affect our business, financial condition and results of
operations.

IF OUR USE OF HAZARDOUS MATERIALS RESULTS
IN CONTAMINATION OR INJURY, WE COULD SUFFER SIGNIFICANT FINANCIAL LOSS.

Our
research and manufacturing activities involve the controlled use of hazardous materials.
We cannot eliminate the risk of accidental contamination or injury from these
materials. In the event of an accident or environmental discharge, we may be
held liable for any resulting damages, which may exceed our financial
resources.

RISKS RELATED TO
OPERATING IN OUR INDUSTRY

IF WE DO NOT COMPETE
SUCCESSFULLY IN THE DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS AND KEEP PACE
WITH RAPID TECHNOLOGICAL CHANGE, WE WILL BE UNABLE TO CAPTURE AND SUSTAIN A
MEANINGFUL MARKET POSITION.

The
biotechnology and pharmaceutical industries are highly competitive and subject
to significant and rapid technological change. We are aware of several
pharmaceutical and biotechnology companies that are actively engaged in
research and development in areas related to antibiotic and antifungal
products. These companies have commenced clinical trials or have successfully
commercialized their products. Many of these companies are addressing the same
diseases and disease indications as us or our collaborators.

Many of
these companies and institutions, either alone or together with their
collaborators, have substantially greater financial resources and larger
research and development staffs than we do. In addition, many of these
competitors, either alone or together with their collaborators, have
significantly greater experience than we do in:

            developing
products;            undertaking
pre-clinical testing and human clinical trials;            obtaining
FDA and other regulatory approvals of products; and            manufacturing
and marketing products.Developments
by others may render our product candidates or technologies obsolete or
non-competitive. We face and will continue to face intense competition from
other companies for collaboration agreements with pharmaceutical and
biotechnology companies for establishing relationships with academic and
research institutions, and for licenses of proprietary technology. These
competitors, either alone or with their collaborators, may succeed in
developing technologies or products that are more effective than ours.

IF OUR INTELLECTUAL PROPERTY DOES NOT
ADEQUATELY PROTECT OUR PRODUCT CANDIDATES, OTHERS COULD COMPETE AGAINST US MORE
DIRECTLY, WHICH WOULD HURT OUR PROFITABILITY.

Our success depends in part on our ability to:            obtain
patents or rights to patents;            protect
trade secrets;            operate
without infringing upon the proprietary rights of others; and            prevent
others from infringing on our proprietary rights.We will
be able to protect our proprietary rights from unauthorized use by third
parties only to the extent that our proprietary rights are covered by valid and
enforceable patents or are effectively maintained as trade secrets. The patent
position of biopharmaceutical companies involves complex legal and factual
questions and, therefore, enforceability cannot be predicted with certainty.
Patents, if issued, may be challenged, invalidated or circumvented. Thus, any
patents that we own or license from third parties may not provide any
protection against competitors. Our pending patent applications, those we may
file in the future, or those we may license from third parties, may not result
in patents being issued. Also, patent rights may not provide us with adequate
proprietary protection or competitive advantages against competitors with
similar technologies. The laws of certain foreign countries do not protect our
intellectual property rights to the same extent as do the laws of the United
States.

In addition to patents, we rely on trade secrets and
proprietary know-how. We seek protection, in part, through confidentiality and
proprietary information agreements. These agreements may not provide meaningful
protection or adequate remedies for our technology in the event of unauthorized
use or disclosure of confidential and proprietary information. Failure to
protect our proprietary rights could seriously impair our competitive position.

IF THIRD PARTIES CLAIM
WE ARE INFRINGING THEIR INTELLECTUAL PROPERTY RIGHTS, WE COULD SUFFER
SIGNIFICANT LITIGATION OR LICENSING EXPENSES OR BE PREVENTED FROM MARKETING OUR
PRODUCTS.

Research
has been conducted for many years in the areas in which we have focused our
research and development efforts. This has resulted in a substantial number of
issued patents and an even larger number of still-pending patent applications.
Patent applications in the United States are, in most cases, maintained in
secrecy until patents issue. The publication of discoveries in the scientific
or patent literature frequently occurs substantially later than the date on
which the underlying discoveries were made. Our commercial success depends
significantly on our ability to operate without infringing the patents and
other proprietary rights of third parties. Our technologies may infringe the
patents or violate other proprietary rights of third parties. In the event of
such infringement or violation, we and our collaborators may be prevented from
pursuing product development or commercialization.

The
biotechnology and pharmaceutical industries have been characterized by
extensive litigation regarding patents and other intellectual property rights.
The defense and prosecution of intellectual property suits, U.S. Patent and
Trademark Office interference proceedings and related legal and administrative
proceedings in the United States and internationally involve complex legal and
factual questions. As a result, such proceedings are costly and time-consuming
to pursue and their outcome is uncertain. Litigation may be necessary to:

            enforce
patents that we own or license;            protect
trade secrets or know-how that we own or license; or            determine
the enforceability, scope and validity of the proprietary rights of others.If we
become involved in any litigation, interference or other administrative
proceedings, we will incur substantial expense and the efforts of our technical
and management personnel will be significantly diverted. An adverse
determination may subject us to loss of our proprietary position or to
significant liabilities, or require us to seek licenses that may not be
available from third parties. We may be restricted or prevented from
manufacturing and selling our products, if any, in the event of an adverse
determination in a judicial or administrative proceeding or if we fail to
obtain necessary licenses. Costs associated with these arrangements may be
substantial and may include ongoing royalties. Furthermore, we may not be able
to obtain the necessary licenses on satisfactory terms, if at all.

IF WE EXPERIENCE
DELAYS IN OBTAINING REGULATORY APPROVALS, OR ARE UNABLE TO OBTAIN THEM AT ALL,
WE COULD BE DELAYED OR PRECLUDED FROM COMMERCIALIZING OUR PRODUCTS.

Our
product candidates under development are subject to extensive and rigorous
domestic government regulation. The FDA regulates, among other things, the
development, testing, manufacture, safety, efficacy, record-keeping, labeling,
storage, approval, advertising, promotion, sale and distribution of
pharmaceutical products. If our products are marketed abroad, they will also be
subject to extensive regulation by foreign governments. None of our product
candidates has been approved for sale in the United States or any foreign
market. The regulatory review and approval process takes many years, requires
the expenditure of substantial resources, involves post-marketing surveillance,
and may involve ongoing requirements for post-marketing studies. Delays in
obtaining regulatory approvals may:

            adversely
affect the commercialization of any drugs that we or our collaborators develop;            impose
costly procedures on us or our collaborators;            diminish
any competitive advantages that we or our collaborators may attain; and            adversely
affect our receipt of revenues or royalties.Any
required approvals, once obtained, may be withdrawn. Further, if we fail to
comply with applicable FDA and other regulatory requirements at any stage
during the regulatory process, we may be subject to sanctions, including:

            delays
in clinical trials or commercialization;            refusal
of the FDA to review pending market approval applications or supplements to
approval applications;            product
recalls or seizures;            suspension
of production;            withdrawals
of previously approved marketing applications; and            fines,
civil penalties and criminal prosecutions.We
expect to rely on our collaborators to file investigational new drug
applications and generally direct the regulatory approval process for many of
our products. Our collaborators may not be able to conduct clinical testing or
obtain necessary approvals from the FDA or other regulatory authorities for any
product candidates. If we fail to obtain required governmental approvals, we or
our collaborators will experience delays in or be precluded from marketing
products developed through our research. In addition, the commercial use of our
products will be limited.

We and
our contract manufacturers also are required to comply with the applicable FDA
current good manufacturing practice regulations. Good manufacturing practice
regulations include requirements relating to quality control and quality
assurance as well as the corresponding maintenance of records and
documentation. Manufacturing facilities are subject to inspection by the FDA.
These facilities must be approved before we can use them in commercial
manufacturing of our products. We or our contract manufacturers may not be able
to comply with the applicable good manufacturing practice requirements and
other FDA regulatory requirements. If we or our contract manufacturers fail to
comply, we could be subject to fines or other sanctions, or be precluded from
marketing our products.

IF THE GOVERNMENT AND
THIRD-PARTY PAYORS FAIL TO PROVIDE ADEQUATE COVERAGE AND REIMBURSEMENT RATES
FOR OUR PRODUCT CANDIDATES, THE MARKET ACCEPTANCE OF OUR PRODUCTS MAY BE
ADVERSELY AFFECTED.

In both
domestic and foreign markets, sales of our product candidates will depend in
part upon the availability of reimbursement from third-party payors. Such
third-party payors include government health administration authorities,
managed care providers, private health insurers and other organizations. These
third-party payors are increasingly challenging the price and examining the
cost effectiveness of medical products and services. In addition, significant
uncertainty exists as to the reimbursement status of newly approved healthcare
products. We may need to conduct post-marketing studies in order to demonstrate
the cost-effectiveness of our products. Such studies may require us to commit a
significant amount of management time and financial and other resources. Our
product candidates may not be considered cost-effective. Adequate third-party
reimbursement may not be available to enable us to maintain price levels
sufficient to realize an appropriate return on our investment in product
development. Domestic and foreign governments continue to propose and pass
legislation designed to reduce the cost of healthcare. Accordingly, legislation
and regulations affecting the pricing of pharmaceuticals may change before our
proposed products are approved for marketing. Adoption of such legislation
could further limit reimbursement for pharmaceuticals.

IF A SUCCESSFUL
PRODUCT LIABILITY CLAIM OR SERIES OF CLAIMS IS BROUGHT AGAINST US FOR UNINSURED
LIABILITIES OR IN EXCESS OF INSURED LIABILITIES, WE COULD BE FORCED TO PAY
SUBSTANTIAL DAMAGE AWARDS.

The use
of any of our product candidates in clinical trials, and the sale of any
approved products, may expose us to liability claims and financial losses
resulting from the use or sale of our products. We have obtained limited
product liability insurance coverage for our clinical trials. Our insurance
coverage limits are $4 million per occurrence and $4 million in the aggregate.
We intend to expand our insurance coverage to include the sale of commercial
products if marketing approval is obtained for product candidates in development.
We may not be able to maintain insurance coverage at a reasonable cost or in
sufficient amounts or scope to protect us against losses.

RISKS RELATED TO
OWNERSHIP OF OUR STOCK

OUR STOCK PRICE COULD
BE VOLATILE, AND YOUR INVESTMENTS COULD SUFFER A DECLINE IN VALUE.

The trading price of our common stock is likely 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:

            changes
in, or failure to achieve, financial estimates by securities analysts;            new
products or services introduced or announced by us or our competitors;            announcements
of technological innovations by us or our competitors;            actual
or anticipated variations in quarterly operating results;            conditions
or trends in the biotechnology and pharmaceutical industries;            announcements
by us of significant acquisitions, strategic relationships, joint ventures or
capital commitments;            additions
or departures of key personnel; and            sales
of our common stock.In
addition, the stock market in general, and the Nasdaq National Market in
particular, has experienced significant price and volume fluctuations.
Volatility in the market price for particular companies has often been
unrelated or disproportionate to the operating performance of those companies.
Further, there has been particular volatility in the market prices of
securities of biotechnology and pharmaceutical companies. These broad market
and industry factors may seriously harm the market price of our common stock,
regardless of our operating performance. In addition, securities class action
litigation has often been initiated following periods of volatility in the
market price of a company's securities. A securities class action suit against
us could result in substantial costs, potential liabilities and the diversion
of management's attention and resources.

OUR PRINCIPAL
STOCKHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS OWN A SIGNIFICANT POTION OF OUR
COMMON STOCK, WHICH MAY PREVENT NEW INVESTORS FROM INFLUENCING CORPORATE
DECISIONS.

Our
principal stockholders, directors and executive officers currently own a
significant portion of our common stock. These stockholders will be able to
exercise significant influence over all matters requiring stockholder approval,
including the election of directors and the approval of significant corporate
transactions. This concentration of ownership may also delay or prevent a
change in control of Versicor even if beneficial to our stockholders and deprive
the stockholders of a control premium for their shares.

FUTURE SALES OF OUR
COMMON STOCK MAY DEPRESS OUR STOCK PRICE.

The
market price of our common stock could decline as a result of sales of
substantial amounts of our common stock in the public market, or the perception
that these sales could occur. In addition, these factors could make it more
difficult for us to raise funds through future offerings of common stock. There
were 23,069,574 shares of common stock outstanding as of April 24, 2001. The 5,290,000
shares sold in our public offering are freely transferable without restriction
or further registration under the Securities Act, except for any shares
purchased by our "affiliates," as defined in Rule 144 of the
Securities Act. The remaining 17,779,574 shares of common stock outstanding are
"restricted securities" as defined in Rule 144. These shares may be
sold in the future without registration under the Securities Act to the extent
permitted by Rule 144 or other exemption under the Securities Act.

We have
registered, 1,100,000 shares for offering in our 2000 Employee Stock Purchase
Plan. We also intend to register approximately 3,789,848 shares of common stock
which are reserved for issuance upon exercise of options granted under our
stock option plans. Once we register these shares, they can be sold in the
public market upon issuance, subject to restrictions under the securities laws
applicable to resales by affiliates.

ITEM 3.QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Our
exposure to market risk relates to our cash and cash equivalents and our
available-for-sale securities. Our available-for-sale investments are sensitive
to changes in interest rates; however such exposure is limited due to the
short-term nature of our investments.

PART IIOTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGSWe are not a party
  to any material legal proceedings.ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDSNone.ITEM 3.  DEFAULTS UPON SENIOR SECURITIESNone.ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF
  SECURITY HOLDERSNone.ITEM 5.  OTHER INFORMATIONNone.ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-Ka)
  ExhibitsNoneb)
  Reports on Form
  8-KNone

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.

VERSICOR
  INC.Date: May 11, 2001
  /s/ GEORGE F.
  HORNER IIIGeorge F. Horner
  IIIPresident and Chief Executive Officer(Principal Executive Officer)Date: May 11, 2001
  /s/ DOV A.
  GOLDSTEIN, M.D.Dov A. Goldstein,
  M.D.Vice President,
  Finance and Chief FinancialOfficer (Principal Accounting
  Officer)