<PAGE>


================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  FORM 10-K/A-1

(Mark One)

   /X/   Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                     FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

   / /   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: 0-27188

                       PHARMACOPEIA, INC. AND SUBSIDIARIES
             (Exact name of Registrant as specified in its charter)


                DELAWARE                               33-0557266
     (State or other jurisdiction of     (I.R.S. employer identification number)
     incorporation or organization)


                    CN 5350, PRINCETON, NEW JERSEY 08543-5350
              (Address of principal executive offices and zip code)

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

        Securities registered pursuant to Section 12(b) of the Act: NONE
           Securities registered pursuant to Section 12(g) of the Act:
                         COMMON STOCK $.0001 PAR VALUE

         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 periods as the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                                                   YES X  NO
                                                      ---   ---

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/

The approximate aggregate market value of voting stock held by nonaffiliates of
the Registrant was $516,730,156 based on the last sale price of Common Stock
reported on The Nasdaq National Market on January 31, 2000. 6,746,737 shares of
Common Stock held by officers, directors, and holders of 5% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
to be affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.

As of February 29, 2000, the number of outstanding shares of the Registrant's
Common Stock was 20,715,365.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Certain information required by Part III of Form 10-K is incorporated
by reference from the Registrant's Proxy Statement for the Annual Stockholders
Meeting to be held May 3, 2000 (the "Proxy Statement), which was filed with the
Securities and Exchange Commission on March 27, 2000.

===============================================================================


<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors and Stockholders
Pharmacopeia, Inc.

We have audited the accompanying consolidated balance sheets of Pharmacopeia,
Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the two years in the period ended December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pharmacopeia, Inc. and
subsidiaries at December 31, 1999 and 1998 and the results of their operations
and their cash flows for each of the two years in the period ended December 31,
1999 in conformity with generally accepted accounting principles.

We previously audited and reported on the statements of operations,
stockholders' equity and cash flows of Pharmacopeia, Inc for the year ended
December 31, 1997, prior to the restatement for the 1998 pooling of interests as
described in Note 3. The contribution of Pharmacopeia, Inc. to total revenues
represented 30.2% of the restated total for 1997. Financial statements of the
other pooled company included in the 1997 restated consolidated financial
statements were audited and reported on separately by other auditors. We have
also audited, as to combination only, the accompanying consolidated statements
of operations, stockholders' equity and cash flows for the year ended December
31, 1997, after restatement for the 1998 pooling of interests; in our opinion,
such consolidated financial statements have been properly combined on the basis
described in Note 3 to the consolidated financial statements.


                                                         ERNST  & YOUNG LLP



San Diego, California
January 28, 2000, except for Note 9,
as to which the date
is March 8, 2000


                                     - 30 -

<PAGE>

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Molecular Simulations Incorporated:

We have audited the consolidated statements of income, stockholders' equity
and cash flows of Molecular Simulations Incorporated (a Delaware corporation)
and subsidiaries for the year ended December 31, 1997. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the results of operations of
Molecular Simulations Incorporated and subsidiaries and their cash flows for
the years ended December 31, 1997, in conformity with generally accepted
accounting principles.

                                       /s/ Arthur Andersen LLP

                                       ARTHUR ANDERSEN LLP

San Diego, California
February 4, 1998

                                     - 31 -
<PAGE>


                               PHARMACOPEIA, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                            DECEMBER 31,
                                                                                --------------------------------------
                                                                                      1999                1998
                                                                                -----------------    -----------------
<S>                                                                                  <C>                   <C>
ASSETS
Current assets:
     Cash and cash equivalents                                                       $  17,157             $ 36,863
     Marketable securities                                                              51,875               44,235
     Trade receivables, net of allowance for doubtful
          accounts of $624 and $609, respectively                                       26,836               23,307
     Prepaid expenses and other current assets                                           5,251                5,238
                                                                                -----------------    -----------------
       Total current assets                                                            101,119              109,643
Property and equipment - net                                                            11,362               13,700
Software development costs, net of accumulated
       Amortization of $4,594 and $2,725, respectively                                    3,353                3,492
Goodwill - net of accumulated amortization of $368                                       9,071                   --
Other assets                                                                             1,354                1,030
                                                                                -----------------    -----------------
         Total assets                                                                $ 126,259            $ 127,865
                                                                                =================    =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                  $   3,479             $  5,158
   Accrued liabilities                                                                  18,409               21,427
   Deferred revenue, current portion                                                    20,212               24,415
   Notes payable, current portion                                                          292                1,316
                                                                                -----------------    -----------------
         Total current liabilities                                                      42,392               52,316

Notes payable, long-term portion                                                            --                  328
Other long-term liabilities                                                                 69                1,240
Deferred revenue, long-term                                                              5,052                1,764
Commitments and Contingencies
Stockholders' equity:
    Preferred stock, $.0001 par value, 2,000 shares
         authorized, none issued and outstanding                                            --                   --
    Common stock, $.0001 par value, 40,000 shares
         authorized, 20,183 and 19,121 shares
         issued and outstanding, respectively                                                1                    1
    Additional paid-in capital                                                         148,862              145,499
    Accumulated deficit                                                                (69,049)             (72,820)
    Accumulated comprehensive loss                                                      (1,068)                (463)
                                                                                -----------------    -----------------
    Total stockholders' equity                                                          78,746               72,217
                                                                                -----------------    -----------------
    Total liabilities and stockholders' equity                                       $ 126,259            $ 127,865
                                                                                =================    =================

</TABLE>

       See accompanying notes to these consolidated financial statements.


                                     - 32 -
<PAGE>


                               PHARMACOPEIA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                              YEAR ENDED DECEMBER 31,
                                                             ------------------------------------------------------------
                                                                   1999                  1998                 1997
                                                             -------------------     ---------------      ---------------
<S>                                                                   <C>                <C>                 <C>
Revenue:
    Drug discovery services                                           $34,581            $ 29,677            $ 24,523
    Software license, service and other                                60,943              54,420              49,108
    Hardware                                                            8,435               8,114               7,566
                                                             -------------------     ---------------      ---------------
         Total revenue                                                103,959              92,211              81,197

 Cost of revenue:
     Drug discovery services                                           20,814              20,307              16,931
     Software license, service and other                                7,430               5,285               5,195
     Hardware                                                           7,512               7,061               6,720
                                                             -------------------     ---------------      ---------------
         Total cost of revenue                                         35,756              32,653              28,846
                                                             -------------------     ---------------      ---------------
 Gross margin                                                          68,203              59,558              52,351

 Operating costs and expenses:
     Research and development                                          27,282              28,656              25,251
     Sales, general and administrative                                 40,772              36,360              30,124
     Merger related costs                                                   -               7,998                   -
                                                             -------------------     ---------------      ---------------
         Total operating costs and expenses                            68,054              73,014              55,375
                                                             -------------------     ---------------      ---------------
 Operating income (loss)                                                  149             (13,456)             (3,024)
 Interest and other income, net                                         4,122               4,202               4,292
                                                             -------------------     ---------------      ---------------
 Income (loss) before provision for income taxes                        4,271              (9,254)              1,268
 Provision for income taxes                                               500                 909               2,996
                                                             -------------------     ---------------      ---------------
 Net income (loss)                                                    $ 3,771            $(10,163)            $ (1,728)
                                                             ===================     ===============      ===============

 Net income (loss) per share
       - Basic                                                         $ 0.19            $  (0.54)             $ (0.09)
                                                             ===================     ===============      ===============
       - Diluted                                                       $ 0.19            $  (0.54)             $ (0.09)
                                                             ===================     ===============      ===============

 Weighted average shares of common stock outstanding
       - Basic                                                         19,684              18,916              18,445
       - Diluted                                                       20,294              18,916              18,445

</TABLE>

       See accompanying notes to these consolidated financial statements.


                                     - 33 -
<PAGE>


                               PHARMACOPEIA, INC.
          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                           COMMON STOCK                           TREASURY STOCK
                                                        --------------------                  -------------------------
                                                                                ADDITIONAL
                                                        NUMBER OF                PAID-IN        NUMBER OF                ACCUMULATED
                                                          SHARES     AMOUNT      CAPITAL         SHARES       AMOUNT       DEFICIT
                                                        --------------------  --------------  ------------------------- ------------
<S>                                                     <C>         <C>       <C>             <C>            <C>        <C>
  Balance at December 31, 1996                            18,244       $  1     $ 136,928               -      $   -      $ (60,929)
  Comprehensive income (loss):
       Net loss                                                                                                              (1,728)
       Translation adjustment

       Comprehensive loss
  Acquisition of  treasury stock                                                                    1,646         (1)
  Retirement of treasury stock                                (2)         -            (1)         (1,646)         1
  Issuance of common stock in  private placements, net       438          -         6,861
  Issuance of common stock for exercise of stock
     options                                                  93          -           201
  Issuance of common stock in employee stock purchase
     plan                                                     19          -           235
  Issuance of common stock for 401(k) matching                13          -           216
                                                        --------------------  --------------  ------------------------- ------------
  Balance at December 31, 1997                            18,805          1       144,440               -           -       (62,657)
  Comprehensive income (loss):
       Net loss                                                                                                             (10,163)
       Translation adjustment

       Comprehensive loss
  Acquisition of  treasury stock                                                                     3,584         (1)
  Retirement of treasury stock                                (4)          -            (1)         (3,584)         1
  Issuance of common stock for exercise of stock
     options                                                 264          -           502
  Issuance of common stock in employee stock purchase
     plan                                                     32          -           298
  Issuance of common stock for 401(k) matching                24          -           260
                                                        --------------------  --------------  ------------------------- ------------
  Balance at December 31, 1998                            19,121          1       145,499               -           -       (72,820)
  Comprehensive income (loss):
       Net income                                                                                                             3,771
       Translation adjustment
       Unrealized loss on marketable securities

       Comprehensive income
  Issuance of common stock for exercise of stock             886          -         1,762
     options and warrants
  Issuance of common stock in employee stock purchase
     plan                                                    100          -           767
  Issuance of common stock for 401(k) matching                76          -           834
                                                        ====================  ==============  ========================= ============
  Balance at December 31, 1999                            20,183       $  1     $ 148,862               -       $   -    $  (69,049)
                                                        ====================  ==============  ========================= ============

</TABLE>

<TABLE>
<CAPTION>

                                                                 ACCUMULATED
                                                                    OTHER                TOTAL
                                                                COMPREHENSIVE        STOCKHOLDERS'
                                                                 INCOME (LOSS)            EQUITY
                                                               ------------------   -----------------
<S>                                                            <C>                   <C>
  Balance at December 31, 1996                                     $     (499)           $   75,501
  Comprehensive income (loss):
       Net loss                                                                              (1,728)
       Translation adjustment                                            (689)                 (689)
                                                                                     -----------------
       Comprehensive loss                                                                    (2,417)
  Acquisition of  treasury stock                                                                 (1)
  Retirement of treasury stock                                                                    -
  Issuance of common stock in  private placements, net                                        6,861
  Issuance of common stock for exercise of stock
  options                                                                                       201
  Issuance of common stock in employee stock purchase
     plan                                                                                       235
  Issuance of common stock for 401(k) matching                                                  216
                                                                ------------------   -----------------
  Balance at December 31, 1997                                         (1,188)               80,596
  Comprehensive income (loss):
       Net loss                                                                             (10,163)
       Translation adjustment                                             725                   725
                                                                                     -----------------
       Comprehensive loss                                                                    (9,438)
  Acquisition of  treasury stock                                                                 (1)
  Retirement of treasury stock                                                                    -
  Issuance of common stock for exercise of stock
  options                                                                                       502
  Issuance of common stock in employee stock purchase
     plan                                                                                       298
  Issuance of common stock for 401(k) matching                                                  260
                                                                ------------------   -----------------
  Balance at December 31, 1998                                           (463)               72,217
  Comprehensive income (loss):
       Net income                                                                             3,771
       Translation adjustment                                            (478)                (478)
       Unrealized loss on marketable securities                          (127)                (127)
                                                                                     -----------------
       Comprehensive income                                                                   3,166
  Issuance of common stock for exercise of stock                                              1,762
  options                and warrants
  Issuance of common stock in employee stock purchase
     plan                                                                                       767
  Issuance of common stock for 401(k) matching                                                  834
                                                                ==================   =================
  Balance at December 31, 1999                                     $   (1,068)           $   78,746
                                                                ==================   =================
</TABLE>


       See accompanying notes to these consolidated financial statements.

                                     - 34 -

<PAGE>


                               PHARMACOPEIA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                          YEAR ENDED DECEMBER 31,
                                                                                  1999             1998              1997
                                                                             ----------------- ---------------  ----------------
<S>                                                                                <C>            <C>                <C>
      CASH FLOWS FROM OPERATING ACTIVITIES
           Net income (loss)                                                       $  3,771       $ (10,163)         $ (1,728)
           Adjustments to reconcile net loss to net cash used in operations
              Depreciation                                                            5,431           4,110             3,599
              Amortization                                                            2,237           1,881             2,162
              Contribution of stock to 401(k) members                                   834             260               216
              Changes in assets and liabilities:
                   Accounts receivable                                               (3,529)         (3,015)           (3,246)
                   Prepaid and other current assets                                     (13)         (1,435)             (258)
                   Other assets                                                        (324)            708               353
                   Accounts payable                                                  (1,679)            926             1,856
                   Accrued liabilities                                               (3,018)          3,309             3,316
                   Deferred revenue                                                    (915)         (7,508)             (314)
                   Other                                                               (236)            227                37
                                                                             ----------------- ---------------  ----------------
                        Net cash provided by (used in) operating activities           2,559         (10,700)            5,993
      CASH FLOWS FROM INVESTING ACTIVATES
          Capital expenditures                                                       (3,093)         (5,283)            7,549)
          Purchases of marketable securities                                        (66,513)        (62,987)          (90,373)
          Proceeds from sales of marketable securities                               58,746          91,783            81,765
          Effect of MSI KK consolidation                                                  -          (1,113)                -
          Acquisition of distribution rights and joint venture interest             (10,566)              -                 -
          Increase in capitalized software development costs                         (1,730)         (1,322)           (1,923)
                                                                             ----------------- ---------------  ----------------
                       Net cash provided by (used in) investing activities          (23,156)         21,078           (18,080)

      CASH FLOWS FROM FINANCING ACTIVATES
           Proceeds from issuance of common stock                                     2,529             799             7,261
           Principal payments on notes payable                                       (1,311)         (1,774)           (1,506)
                                                                             ----------------- ---------------  ----------------
                      Net cash provided by (used in) financing activities             1,218            (975)            5,755
      Exchange rate effect on cash and equivalents                                     (327)            725              (627)
                                                                             ----------------- ---------------  ----------------
      Net increase (decrease) in cash and equivalents                               (19,706)         10,128            (6,959)
      Effect of cash from MSI KK purchase transaction                                     -           2,126                 -
      Cash and equivalents, beginning of period                                      36,863          24,609            31,568
                                                                             ================= ===============  ================
      Cash and equivalents, end of period                                          $ 17,157       $  36,863          $ 24,609
                                                                             ================= ===============  ================
      SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
      Cash paid during the period for:
           Interest                                                                $     81       $     333          $    379
                                                                             ================= ===============  ================
           Income taxes                                                            $    395       $   1,277          $  1,555
                                                                             ================= ===============  ================

</TABLE>

       See accompanying notes to these consolidated financial statements.

                                     - 35 -

<PAGE>


                               PHARMACOPEIA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


1.  ORGANIZATION AND DESCRIPTION OF BUSINESS

      Pharmacopeia, Inc. (the "Company") designs, develops, markets and supports
science and technology-based products and services that improve and accelerate
the processes of drug discovery and chemical development.

2.  SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

      These consolidated financial statements include the accounts of
Pharmacopeia and its majority-owned subsidiaries. All material intercompany
balances and transactions have been eliminated in consolidation.

BASIS OF PRESENTATION

      In 1999 the Company revised the format of its statement of operations to
segregate costs of revenues from operating costs and expenses, and to report
gross margin from revenue. This change in presentation resulted from a 1999
change in the Company's primary business focus, from drug research to the sale
of science and technology-based products and services. The Company believes that
the new format better presents results of operations considering this change in
focus. Certain prior year amounts have been reclassified to conform to the new
presentation.

      On June 12, 1998 the Company acquired Molecular Simulations Inc. (MSI) in
a business combination accounted for as a pooling of interests. The Company's
consolidated financial statements for all periods prior to the acquisition have
been restated to include MSI's financial position, results of operations and
cash flows.

FINANCIAL STATEMENT PREPARATION

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses, and the disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.

CASH, EQUIVALENTS

      The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. The Company invests its
cash with major financial institutions in money market funds, U.S. Treasury
securities and other investment grade securities such as prime rated commercial
paper.

MARKETABLE SECURITIES

      Marketable securities consist of fixed income investments with an original
maturity of greater than three months such as United States treasury securities,
obligations of United States government agencies and other investment grade
securities such as prime rated commercial paper and corporate bonds. The Company
applies Statement of Financial Accounting Standards No. 115 "Accounting for
Certain Investments in Debt and Equity Securities" (SFAS 115) to its investments
in marketable securities. As a result of the Company's strategic acquisition
intentions, the Company transferred the classification of its marketable
securities of $64,029 from held-to-maturity to available-for-sale, effective
June 30, 1998. At the date of the transfer unrealized gains or losses were not
material. Marketable


                                     - 36 -
<PAGE>


securities classified as available-for-sale are recorded at estimated fair
value with unrealized gains or losses reported in stockholders' equity. At
December 31, 1998 marketable securities totaled $44.2 million of which $36.2
million was invested in U.S. government securities and $8.0 million was
invested in U.S. corporate debt securities. At December 31, 1998 the cost of
marketable securities approximated fair value.

At December 31, 1999, marketable securities consisted of the following:

<TABLE>
<CAPTION>

                                                             AMORTIZED           MARKET          UNREALIZED
                                                                COST             VALUE           GAIN (LOSS)
                                                          ----------------- ----------------- ------------------
        <S>                                               <C>               <C>               <C>
        U.S. treasury securities and obligations of
             U.S. Government agencies                            $ 29,262          $ 29,190             $ (72)
        U.S. corporate debt securities                             22,740            22,685               (55)
                                                          ----------------- ----------------- ------------------
                                                                 $ 52,002           $51,875            $ (127)
                                                          ================= ================= ==================

</TABLE>

Available for sale marketable securities by contractual maturity are as follows:

<TABLE>
<CAPTION>

                                                                DECEMBER 31,
                                                                   1999
                                                            ------------------
        <S>                                                 <C>
        Due within one year                                         $ 42,745
        Due after one year through two years                           9,130
                                                            ------------------
                                                                    $ 51,875
                                                            ==================

</TABLE>

PROPERTY AND EQUIPMENT

      Property and equipment is stated at cost. Depreciation is provided on the
straight-line method over the estimated useful lives of the related assets,
which range from three to ten years. Assets under capital leases are amortized
over their estimated useful life or the applicable lease period, whichever
period is shorter. The Company amortizes leasehold improvements over the shorter
of their estimated useful lives or the remaining term of the related lease.
Repair and maintenance costs are charged to expense as incurred.

RESEARCH AND DEVELOPMENT COSTS

      The Company capitalizes software development costs in accordance with
Statement of Financial Accounting Standards No. 86, "Accounting for the Cost of
Computer Software to be Sold, Leased or Otherwise Marketed" (SFAS 86). Such
costs are stated at the lower of cost or net realizable value. Capitalized
software costs are comprised of development costs incurred in the research and
development of new software products and enhancements to existing software
products after technological feasibility has been established. The Company
amortizes capitalized costs over the estimated product life, not to exceed three
years from the date on which the product is available for general release.

      All research and development costs not subject to capitalization under
SFAS 86 are charged to operations as incurred.

REALIZATION OF ASSETS

      The Company periodically re-evaluates the original assumptions and
rationale utilized in the establishment of the carrying value and estimated life
of its long-lived assets. The criteria used for these evaluations include
management's estimates of the assets continuing ability to generate income from
operations and positive cash flow in future periods, as well as the strategic
significance of its assets to the Company's business objectives.


                                     - 37 -
<PAGE>


FOREIGN CURRENCY TRANSLATION

      The Company translates certain of its accounts and the financial
statements of its foreign operations in accordance with Statement of Financial
Accounting Standards No. 52, "Foreign Currency Translation" (SFAS 52). The
financial statements of the Company's international operations are translated
into U.S. dollars using period-end exchange rates for assets and liabilities and
average exchange rates during the period for revenues and expenses. Cumulative
translation gains and losses are excluded from results of operations and
recorded as a separate component of comprehensive income (loss) within
stockholders' equity. Gains and losses resulting from foreign currency
transactions are included in the consolidated statement of operations.

CONCENTRATIONS OF RISK

      The Company's software products operate primarily on the Silicon Graphics
version of the Unix operating system. Any disruption of supply could cause a
temporary adverse effect in the Company's revenues while its software is ported
to alternative systems.

      In 1999, one Drug Discovery Services customer accounted for 12% of
consolidated revenue.

      The Company's international sales are generally denominated in foreign
currencies. Conversion of foreign-denominated receivables into U.S. dollars
could have a material adverse effect on the Company's financial statements. The
Company conducts business in Europe and in the Asia/Pacific region, primarily in
Japan. Any significant decline in the economies or the value of the currencies
in these regions could have a material adverse impact on the Company.

REVENUE RECOGNITION

      Revenue from Drug Discovery Services is recognized primarily using the
percentage of completion method. Accordingly, revenue is recognized as research
and development labor is expended against a total research and development plan.
Payments received prior to the completion of the related work are recorded as
deferred revenue. Non-refundable milestone payments and up-front fees are
recognized as revenue when received when they are not subject to future
performance obligations. Otherwise, such milestone payments and up-front fees
are deferred and amortized into revenue over the term of the agreement in
accordance with SEC Staff Accounting Bulletin 101.

      The Company recognizes revenue from licenses of computer software provided
that the customer has signed a non-cancelable license agreement, the software
and related documentation has been shipped, no material uncertainties regarding
customer acceptance exist, collection of the resulting receivable is deemed
probable and no other significant obligations by the Company exist. Prepaid post
contract support and maintenance ("PCS") revenue bundled with software license
agreements is unbundled using objective, vendor specific evidence. PCS revenue
is recognized pro-rata over the related license period, which is generally one
year. Revenue generated from consulting, training and software customization
sold separately from license agreements is recognized as the services are
performed.

      The Company earns revenue under consortia agreements wherein several
unrelated parties enter into a joint software development agreement with the
Company. These agreements are generally one to three years in length, require an
annual membership fee and contain best efforts development milestones. Customers
receive a consortia membership, a software library and related software and
maintenance support. The portion of consortia fees associated with the initial
software library is recognized upon delivery, while consortia fees associated
with consortia membership and software maintenance are recognized on a
straight-line basis over the term of the agreement. The Company is not required
to deliver specified products under the agreements and the consortia fees are
generally non-refundable. If the Company is successful in developing software
under the consortia agreement described above, a non-transferable license is
typically awarded to the consortia members.


                                     - 38 -
<PAGE>


      Under certain circumstances, the Company sells computer hardware to a
licensee of the Company's software products. In these instances, the Company
typically orders the hardware from an unrelated vendor and recognizes revenue
upon shipment of the hardware to the licensee by the vendor.

STOCK BASED COMPENSATION

      As permitted by Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123), the Company elected to
follow Accounting Principal Board Opinion No. 25, "Accounting for Stock Issued
to Employees" (APB 25) and related interpretations in accounting for its
employee stock option plans. Under APB 25, no compensation expense is recognized
at the time of option grant because the exercise price of the Company's employee
stock option equals the fair market value of the underlying common stock on the
date of grant.

NET INCOME (LOSS) PER SHARE

      Basic net income (loss) per share is based on net income (loss) for the
year divided by the weighted average number of common shares outstanding during
the year. Diluted net income (loss) per share is computed by dividing net income
(loss) by the weighted average number of common shares outstanding, including
the effect of dilutive securities. Dilutive securities such as convertible
preferred stock, stock options and warrants are not included in loss years
because their effect is anti-dilutive.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

      In January 1999, the American Institute of Certified Public Accountants
issued Statement of Position No. 98-9, "Modification of SOP 97-2, Software
Revenue Recognition, with Respect to Certain Transactions." SOP (98-9). This SOP
amends SOP 98-4 to extend the deferral of the application of certain passages of
SOP 97-2 that appear in SOP 98-4. The adoption of SOP 98-9 did not have a
significant impact on the Company's consolidated financial position or results
of operations.

      In March 1998, the AICPA issued SOP 98-1, "Accounting For the Costs of
Computer Software Developed For or Obtained for Internal Use" (SOP 98-1). The
Company adopted SOP 98-1 effective January 1, 1999. The SOP requires the
capitalization of certain costs incurred after the date of adoption in
connection with developing or obtaining software for internal use. Previous to
the adoption of SOP 98-1 the Company expensed all such costs as incurred. The
adoption of SOP 98-1 did not have a significant impact on the Company's
consolidated financial position or results of operations.

      In June 1998, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standards No. 133 "Accounting for Derivative Financial
Instruments and for Hedging Activities" (SFAS 133), which will be adopted by the
Company in 2001. The statement establishes accounting and reporting standards
requiring that every derivative instrument, including derivative instruments
embedded in other contracts, be recorded in the balance sheet either as an asset
or liability measured at its fair value. The statement also requires that
changes in the derivative's fair value be recognized in earnings unless specific
hedge accounting criteria are met. SFAS 133 is not anticipated to have a
significant impact on operating results or financial condition when adopted
because the Company's derivative instruments are not material.

3. BUSINESS COMBINATIONS

MERGER WITH MOLECULAR SIMULATIONS INC.

      In June 1998, the Company completed a merger with MSI through the issuance
of approximately 7.1 million shares of common stock for all of the capital stock
of MSI. The merger was accounted for as a pooling-of-interests


                                     - 39 -
<PAGE>


and, accordingly, the Company's financial statements for the periods prior to
the merger have been restated to include MSI. In connection with the merger, the
Company recorded merger-related charges of approximately $8.0 million in 1998.
Such charges consisted of transaction costs, principally investment banking and
professional fees.

      The following table summarizes 1998 information on a separate company
basis for Pharmacopeia and MSI prior to the completion of the merger:

<TABLE>
<CAPTION>

                                                         PERIOD FROM            YEAR ENDED
                                                      JANUARY 1, 1998 TO       DECEMBER 31,
                                                        JUNE 12, 1998              1997
                                                    ----------------------- -------------------
                  <S>                               <C>                     <C>
                  Total revenue:
                       Pharmacopeia                         $  12,322           $  24,523
                       MSI                                     20,437              56,674
                  Net income (loss):
                       Pharmacopeia                         $  (3,588)          $  (6,678)
                       MSI                                     (1,483)              5,450

</TABLE>

ACQUISITION OF JAPANESE DISTRIBUTION RIGHTS AND REMAINING JOINT VENTURE INTEREST

      In March 1999, the Company completed the re-purchase of certain
distribution rights to MSI software in Japan and acquired the remaining 50%
interest of its Japanese joint venture from a third party for a total cash
purchase price of approximately $10.6 million. The joint venture, renamed as MSI
KK, markets, distributes, and supports the Company's software products in the
Asia/Pacific region. As a result of the transaction, Company ownership of MSI KK
became 100%. The acquisition has been accounted for by the purchase method of
accounting and, accordingly, the assets acquired and liabilities assumed have
been recorded at their estimated fair values. The excess of cost over the
estimated fair value of the net assets acquired was allocated to goodwill in the
amount of $9.4 million, which is being amortized on a straight-line basis over
20 years.

      Pro forma results of operations presented as if the acquisition of the
remaining joint venture interest had taken place as of the beginning of the
periods presented would not materially affect reported revenues and would not
materially change net loss or net loss per share from the figures presented in
the accompanying statements of operations.

4.  COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

Property and equipment consist of the following:

<TABLE>
<CAPTION>

                                                           DECEMBER 31,
                                                      1999             1998
                                                -----------------------------------
<S>                                                      <C>           <C>
      Laboratory equipment                             $  9,147        $  8,477
      Furniture, fixtures and equipment                   5,134           4,553
      Computers and software                              9,513           8,287
      Leasehold improvements                              6,176           5,780
      Other                                                 356             453
                                                -----------------------------------
                                                         30,326          27,550
      Accumulated depreciation and amortization         (18,964)        (13,850)
                                                -----------------------------------
      Property and equipment, net                      $ 11,362        $ 13,700
                                                ===================================

</TABLE>


                                     - 40 -
<PAGE>


Accrued liabilities consist of the following:

<TABLE>
<CAPTION>

                                                          DECEMBER 31,
                                                     1999              1998
                                               ------------------------------------
      <S>                                             <C>               <C>
      Payroll and other compensation                  $ 8,529           $ 8,984
      Royalties                                         1,173               946
      Merger related and restructuring costs            1,096             3,867
      Taxes                                             4,142             5,108
      Other                                             3,014             2,977
                                               ------------------------------------
                                                      $18,409           $21,427
                                               ====================================

</TABLE>

5.  INCOME TAXES

      The Company accounts for income taxes using the asset and liability
method. Under the asset and liability method, deferred income taxes are
recognized for the tax consequences of "temporary differences" by applying
enacted statutory tax rates applicable to future years to differences between
the financial carrying amounts and the tax basis of existing assets and
liabilities.

      Significant components of the Company's deferred tax assets and
liabilities as of December 31, are as follows:

<TABLE>
<CAPTION>

                                                                            1999             1998
                                                                       ---------------- ----------------
                  <S>                                                  <C>               <C>
                  Deferred tax assets:
                     Net operating loss carryforwards                       $ 18,500         $ 17,873
                     Unused tax credits                                        2,637            2,261
                     Accruals and reserves                                     3,095            2,628
                     Other                                                         -              258
                                                                       ---------------- ----------------
                     Gross deferred tax asset                                 24,232           23,020

                  Deferred tax liabilities:
                     Fixed assets and intangibles                                757              948
                                                                       ---------------- ----------------

                  Net asset before valuation allowance                        23,475           22,072
                  Valuation allowance                                        (23,475)         (22,072)
                                                                       ---------------- ----------------

                  Net deferred tax asset                                    $     --         $     --
                                                                       ================ ================

</TABLE>

      As of December 31, 1999, approximately $1,576 of the valuation allowance
for deferred tax assets relates to pre-acquisition tax deductions which, when
recognized, will be allocated directly to goodwill.


                                     - 41 -
<PAGE>


The provision for income taxes consists of the following:

<TABLE>
<CAPTION>

                                                           1999             1998             1997
                                                     ---------------------------------------------------
<S>                                                            <C>            <C>             <C>
                 Current:
                    Federal                                   $  50           $   --          $ 1,603
                    State                                        70              310              480
                    Foreign                                     380              599              913

                 Deferred:
                    Federal                                      --               --               --
                    State                                        --               --               --
                    Foreign                                      --               --               --
                                                     ---------------------------------------------------
                 Total                                        $ 500           $  909          $ 2,996
                                                     ===================================================

</TABLE>

The following reconciles income taxes computed at the U.S. statutory federal tax
rate to income tax expense:

<TABLE>
<CAPTION>

                                                                     1999             1998            1997
                                                               --------------------------------------------------
         <S>                                                   <C>               <C>              <C>
         Tax expense (benefit) at U.S. statutory rate               $  1,495          $(3,146)         $ 431
         State income taxes, net of Federal income tax
         benefit                                                          70              205            317
         Nondeductible merger costs                                       --            1,788             --
         Foreign taxes                                                   380              (12)           975
         Alternative minimum tax                                          50               --             --
         Change in valuation allowance and other                       (1,495)          2,074          1,273
                                                               --------------------------------------------------
         Income tax expense                                            $ 500           $  909        $ 2,996
                                                               ==================================================

</TABLE>

      Pretax income (loss) before extraordinary item from the Company's domestic
operations totaled approximately $838, $(10,900) and $1,400 in 1999, 1998 and
1997, respectively. Pretax income (loss) from the Company's foreign operations
totaled approximately $3,433, $1,800 and $(200) in 1999, 1998 and 1997,
respectively.

      As of December 31, 1999, the Company has Federal net operating loss
carryforwards of approximately $48.3 million, and credit carryforwards of
approximately $1.3 million. The federal net operating losses and credits begin
to expire in 2008 through 2018, if not fully utilized. Realization is dependent
on generating sufficient taxable income prior to expiration of the loss
carryforwards. As of December 31, 1999 the Company also has foreign net
operating losses of approximately $4.2 million, which will begin to expire in
2004, unless previously utilized.

      As a result of certain transactions involving the Company's stock, the
Company believes an ownership change, as defined in Section 382 of the Internal
Revenue Code, has occurred. Consequently, future utilization of the Company's
federal net operating loss carryforwards may be subject to limitations.

6.  STOCK PLANS

      The Company has three Stock Plans, the 1994 Incentive Stock Plan, the 1995
Employee Stock Purchase Plan and the 1995 Director Option Plan.

      In accordance with the 1994 Incentive Stock Plan (the "Plan"), the Company
may grant up to 3,700 shares of both incentive or non-qualified stock options or
stock purchase rights to officers, directors, employees, sales representatives
and consultants of the Company. The term of each incentive and non-qualified
stock option and stock


                                     - 42 -
<PAGE>


purchase right is generally ten years. Vesting generally occurs over a period of
not greater than five years. At December 31, 1999, there were 627 shares
available for future grants under the 1994 Incentive Stock Plan.

      In 1995, the Company adopted the 1995 Employee Stock Purchase Plan
("ESPP") under Section 423 of the Internal Revenue Code. A total of 250 shares
of common stock are reserved for offering under the ESPP. In 1999, 100 shares of
common stock were purchased at prices ranging from $7.54 to $7.81 per share. At
December 31, 1999, there were 92 shares available for future purchase under the
ESPP.

      In accordance with the 1995 Directors Option Plan, the Company may grant
up to 150 options to purchase shares of common stock to non-employee members of
the Board. The exercise price of the stock options shall be equal to the fair
market value per share of common stock on the option grant date. Each option has
a term of ten years from the option grant date and shall become exercisable in a
series of three equal and successive annual installments. In 1999, 30 options
were granted at an exercise price of $10.06. At December 31, 1999, there were 30
shares available for future grants under the Directors Option Plan.

      The Company applies APB 25 in accounting for its stock option programs
described above. The option price under the option plans equals or exceeds the
fair market value on of the common shares on the date of grant, and,
accordingly, no compensation cost has been recognized under the provisions of
APB 25. SFAS 123, requires pro forma information regarding net income and
earnings per share as if the Company had accounted for its employee stock
options and warrants granted subsequent to December 31, 1994 and shares of
common stock purchased by employees in connection with the ESPP ("equity
awards") under the fair value method of SFAS 123. The fair value of these equity
awards was estimated at the date of grant using a Black-Scholes option pricing
model with the following weighted average assumptions for 1999, 1998 and 1997,
respectively: risk-free interest rates of 6.5%, 4.5% and 5.4%; expected
volatility of 111%, 81% and 47%; expected option life of 4.9, 5.9 and 5.8 years
from vesting and an expected dividend yield of 0.0%.

      For purposes of pro forma disclosures, the estimated fair value of the
equity awards is amortized to expense over the options' vesting period. The
Company's pro forma income (loss) and per share information is as follows:

<TABLE>
<CAPTION>

                                                              1999               1998               1997
                                                        ----------------- -------------------- ----------------
<S>                                                         <C>                 <C>              <C>
         Net income (loss):
             As reported                                    $  3,771            $(10,163)        $ (1,728)
             Pro forma                                        (6,619)            (17,209)          (5,224)
         Basic net income (loss) per common share:
             As reported                                    $   0.19            $  (0.54)        $  (0.09)
             Pro forma                                         (0.34)              (0.91)           (0.28)
         Diluted net income (loss) per common share:
             As reported                                    $   0.19            $  (0.54)        $  (0.09)
             Pro forma                                         (0.33)              (0.91)           (0.28)

</TABLE>


                                     - 43 -
<PAGE>


A summary of the Company's stock option activity and weighted average exercise
prices follows:

<TABLE>
<CAPTION>

                                          1999                              1998                               1997
                               ----------------------------    -------------------------------    --------------------------------
                                                Weighted                           Weighted                           Weighted
                                 Common          Average        Common              Average          Common            Average
                                  Stock         Exercise         Stock             Exercise           Stock           Exercise
                                 Options          Price         Options              Price           Options            Price
                               ------------    ------------    ------------     --------------    -------------     --------------
   <S>                         <C>             <C>             <C>              <C>               <C>               <C>
   Outstanding at beginning
   of year                          3,725          $ 9.54            3,164           $ 8.19       2,650                  $ 6.41
   Granted                          1,270            9.27            1,218            12.45              779              13.94
   Exercised                        (886)            2.70            (296)             2.42            (109)               3.32
   Expired                          (445)           13.44            (361)            13.01            (156)               9.01
                               ------------                    ------------                       -------------
   Outstanding at end of year       3,664           10.73            3,725             9.54            3,164               8.19
                               ============                    ============                       =============

   Exercisable at end of year       1,739                            1,853                             1,450
                               ============                    ============                       =============
   Weighted average fair
   value  of options granted
   during the year                                  $8.65                             $6.52                              $10.58

</TABLE>

A summary of stock options outstanding and exercisable as of December 31, 1999,
follows:

<TABLE>
<CAPTION>

                                                            OPTIONS OUTSTANDING                 OPTIONS EXERCISABLE
                                                     ----------------------------------    -------------------------------
                                                     Weighted Average     Weighted                             Weighted
                                                        Remaining          Average                             Average
          Range of                  Options            Life (years)    Exercise Price           Number         Exercise
       Exercise Prices            Outstanding                                                Exercisable        Price
   ------------------------    ------------------    ----------------- ----------------    ----------------- -------------
   <S>                         <C>                   <C>               <C>                 <C>               <C>
       $0.00 -  $ 0.48                      64             0.5                 $0.47                  64          $0.47
       $ 1.24 - $19.00                   3,318             7.7                  9.99               1,458           8.95
       $19.01 - $26.75                     282             6.9                 21.77                 217          22.04
   ------------------------    ------------------    ----------------- ----------------    ----------------- -------------
       $ 0.00 - $26.75                   3,664             7.5                 10.73               1,739          10.27

</TABLE>

7.  SEGMENT INFORMATION

      The Company operates in two industry segments. The Company's Drug
Discovery Services Segment provides drug discovery services to pharmaceutical
and biotechnology companies based on proprietary combinatorial chemistry and
high throughput screening technologies. The Company's Software Segment provides
molecular modeling and simulation software that facilitates the discovery and
development of new drug and chemical products and processes in the
pharmaceutical, biotechnology, chemical, petrochemical and materials industries.

      Summarized financial information concerning the industry segments and
geographic revenues follows:

<TABLE>
<CAPTION>

                                   1999                                  1998                                    1997
                     ---------------------------------- -------------------------------------  -------------------------------------
                                   Drug                                   Drug                                 Drug
                                 Discovery                              Discovery                            Discovery
                     Software    Services     Total      Software       Services       Total     Software    Services      Total
                     ---------- ----------- ----------- -----------   ------------  ---------  -------------------------------------
<S>                  <C>        <C>         <C>         <C>           <C>           <C>        <C>          <C>            <C>
  REVENUE:
  Drug discovery
     services         $    --     $34,581    $  34,581     $     -       $ 29,677     $ 29,677    $     -     $ 24,523     $ 24,523
  Software license
     service and       60,943           -       60,943      54,420              -       54,420     49,108            -       49,108
     other
  Hardware              8,435           -        8,435       8,114              -        8,114      7,566            -        7,566
                     ---------------------------------  --------------------------------------- ------------------------------------
  Total revenue       $69,378     $34,581    $ 103,959     $62,534       $ 29,677     $ 92,211    $56,674     $ 24,523     $ 81,197
                     ================================== ======================================= ====================================
  DEPRECIATION AND
     AMORTIZATION     $ 3,798     $ 3,870    $   7,668     $ 2,733       $  3,258     $  5,991    $ 2,985     $  2,776     $  5,761

</TABLE>



                                     - 44 -
<PAGE>


<TABLE>

<S>                  <C>        <C>         <C>         <C>           <C>           <C>        <C>          <C>            <C>
  OPERATING INCOME    $ 8,520   $ (8,371)    $    149     $ 1,090    $ (14,546)   $ (13,456)     $ 7,820     $(10,844)   $  (3,024)
  (LOSS)(1)
  CAPITAL
     EXPENDITURES     $ 1,173   $  1,920     $  3,093     $ 1,878    $   3,405    $   5,283      $ 2,216     $  5,333    $   7,549

                      $59,985   $ 66,274     $126,259     $52,889    $  74,976    $ 127,865      $44,364     $ 95,687    $ 140,051

  TOTAL ASSETS
  REVENUES (2)
    U.S.                                     $ 70,249                             $  58,601                              $  62,444
    Europe                                     23,348                                22,739                                 18,753
    Asia-Pacific                               10,362                                10,871                                      -
                                           -----------                           ----------                             -----------
  Total                                      $103,959                             $  92,211                              $  81,197
                                           ===========                           ===========                            ===========

</TABLE>

(1) Includes $8.0 million of merger related costs in 1998.
(2) Revenue in the U.S. category includes export sales of laboratory services
and software. Export sales from the U.S. to Europe totaled $5,485, $18,308 and
$26,327 in 1999, 1998 and 1997, respectively and export sales to Asia Pacific
totaled $1,969, $2,303 and $5,257 in 1999, 1998 and 1997, respectively.

8.   COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

      The Company has several operating leases or sub-leases for office and
laboratory space, which expire at various dates through 2006. The leases for the
Company's primary facilities in San Diego and New Jersey provide for scheduled
rent increases, an option to extend the lease for five years with certain
changes to the terms of the lease agreement, and a refurbishment allowance. Rent
expense under operating leases for 1999, 1998 and 1997 was approximately $4,803,
$4,435 and $3,793, respectively.

Future minimum lease commitments at December 31, 1999 are as follows:

<TABLE>

                  <S>                          <C>
                  2000                                   $ 4,757
                  2001                                     4,982
                  2002                                     4,959
                  2003                                     4,937
                  2004                                     4,805
                  Thereafter                               7,313
                                               --------------------
                                                         $31,753
                                               ====================

</TABLE>

ROYALTIES

      The Company pays royalties to approximately forty-five partners for
worldwide licenses to enhance and market certain software developed at
universities, corporations and other institutions. A majority of the royalty
agreements are long term or perpetual in nature and the royalty obligations
thereunder are generally based on a percentage of revenues derived from certain
software licenses plus associated revenues from post contract support and
maintenance. The royalty agreements require quarterly payments and generally do
not limit the maximum royalty amount under the agreement. Certain agreements
contain provisions for quarterly and annual minimum royalty payments that total
approximately $450 on an annual basis. In 1999, 1998 and 1997 the Company
incurred related royalty expense of $2,273, $1,623 and $1,304, respectively.
Based on existing royalty agreements, the Company expects to incur significant
future royalty obligations. Additionally, the Company has a license agreement
that grants to the Company an exclusive, worldwide license to certain technology
for making and using combinatorial chemical libraries. The agreement requires
the Company to


                                     - 45 -
<PAGE>


pay annual license fees and certain royalties. In 1999, 1998, and 1997 the
Company paid related royalties and license fees of $100, $514 and $550,
respectively.

LITIGATION

      In the ordinary course of business, the Company is subject to claims and,
from time to time, is named in various legal proceedings. In the opinion of
management, the amount of ultimate liability, if any, with respect to any
pending actions will not materially affect the financial position or results of
operations of the Company.

9.       SUBSEQUENT EVENTS

ACQUISITION OF SYNOPSYS

      On February 29, 2000, the Company acquired Synopsys Scientific Systems
Ltd. (Synopsys), a U.K.-based company providing chemical data base software,
chemical data content and systems integration services to the pharmaceutical,
biotechnology and chemical industries. The Company paid $25 million for
Synopsys, consisting primarily of cash, and will account for the acquisition as
a purchase.

EQUITY FINANCING

      On March 8, 2000, the Company completed the sale of 1,860,000 shares of
its common stock to selected institutional investors for net proceeds of
approximately $110 million. The shares were sold at their fair value on the date
of the transaction for $63 per share.

                                     - 46 -
<PAGE>

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1)  Financial Statements

The following Consolidated Financial Statements are included:

        Report of Independent Auditors
        Consolidated Balance Sheets as of December 31, 1998 and 1999
        Consolidated Statements of Operations for the years ended December 31,
          1997, 1998 and 1999
        Consolidated Statements of Stockholders' Equity for the years ended
          December 31, 1997, 1998 and 1999
        Consolidated Statements of Cash Flows for the years ended December 31,
          1997, 1998 and 1999
        Notes to Consolidated Financial Statements

(a)(2)  Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable,
or not required, or because the required information is included in the
financial statements or notes thereto.

(a)(3)    Exhibits:

3.1  (6)                   Restated Certificate of Incorporation of the
                           Registrant.

3.3  (6)                   Bylaws of the Registrant, as amended.

3.3(a)  (8)                Amendment to Bylaws of Pharmacopeia dated July 31,
                           1997.

4.3  (1)                   Stockholders Rights Agreement, dated February 15,
                           1995.

10.1  (1)                  Series A and Series B Preferred Stock Purchase
                           Agreement, dated July 21, 1993.

10.2  (1)                  Series B Preferred Stock Purchase Agreement, dated
                           March 11, 1994.

10.3  (1)                  Series C Preferred Stock Purchase Agreement, dated
                           December 22, 1994.

10.4  (1)                  Series D Preferred Stock Purchase Agreement, dated
                           February 15, 1995.

10.5  (2)#                 Amended 1994 Incentive Stock Plan.

10.5(a)  (7)#              Amendment No. 3 to the 1994 Incentive Stock Plan
                           dated May 9, 1997.

10.6  (1)#                 1995 Employee Stock Purchase Plan.

10.7  (1)#                 1995 Director Option Plan.



                                     - 47 -
<PAGE>


10.8  (1)+                 Library Collection Agreement, dated as of October 1,
                           1995, between Pharmacopeia and Novartis Corporation.

10.9  (1)+                 Research, License, and Royalty Agreement, dated as of
                           February 15, 1995, between Pharmacopeia and Berlex
                           Laboratories, Inc.

10.9(a)  (7)+              Amendment No. 1 to Research, License and Royalty
                           Agreement between the Company and Berlex
                           Laboratories, Inc. dated November 27, 1996.

10.9(b)  (7)+              Amendment No. 2 to Research, License and Royalty
                           Agreement between the Company and Berlex
                           Laboratories, Inc. dated June 30, 1997.

10.9(c)  (9)+              Amendment No.3 to Research, License and Royalty
                           Agreement between the Company and Berlex
                           Laboratories, Inc. dated November 21, 1997.

10.10  (1)+                License Agreement, dated as of October 6, 1995, among
                           Pharmacopeia, the Trustees of Columbia University in
                           the City of New York and Cold Spring Harbor
                           Laboratory.

10.11  (1)+                Collaboration Agreement, dated as of December 22,
                           1994, between Pharmacopeia and Schering Corporation
                           and Schering-Plough, Ltd.

10.11(b)  (7)+             Amendment No. 2 to Collaboration Agreement and Random
                           Library Agreement between the Company and Schering
                           Corporation and Schering-Plough, Ltd. dated as of
                           April 22, 1996.

10.11(c)  (7)+             Amendment No. 3 to Collaboration Agreement and Random
                           Library Agreement between the Company and Schering
                           Corporation and Schering-Plough, Ltd. dated as of
                           April 21, 1997.

10.12  (1)+                Random Library Agreement, dated as of December 22,
                           1994, between Pharmacopeia and Schering Corporation
                           and Schering-Plough, Ltd.

10.13  (1)                 Lease Agreement between Pharmacopeia and Eastpark at
                           8A.

10.13(a)  (2)              Amendment dated as of January 22, 1996 to Lease
                           Agreement between Pharmacopeia and Eastpark at 8A.

10.13(b)  (4)              Third Amendment to Lease Agreement dated March 31,
                           1996 between Pharmacopeia and Eastpark at 8A.

10.14  (1)                 Sublease, dated as of December 7, 1994, between
                           Pharmacopeia and Enichem Americas, Inc.

10.15  (1)                 Lease, dated as of May 2, 1994, between Pharmacopeia
                           and College Road Associates Limited, as amended.

10.15(a)  (2)              Lease dated as of December 1, 1995 between
                           Pharmacopeia and College Road Associates, as amended.

10.15(b)  (4)              Third Execution and Modification of lease dated June
                           7, 1996, between Pharmacopeia and College Road
                           Associates Limited.

10.17  (1)#                Employment Agreement, dated October 4, 1994, between
                           the Company and Lewis J. Shuster.

10.18  (9)#                Employment Agreement effective November 1, 1997
                           between the Company and Joseph A. Mollica, Ph.D.


                                     - 48 -
<PAGE>


10.19  (12)#               Employment Agreement, dated January 30, 1998, between
                           the Company and Richard Walsh

10.20  (1)#                Employment Agreement, dated June 3, 1993, between the
                           Company and John J. Baldwin, Ph.D.

10.21  (1)#                Employment Agreement, dated December 2, 1993, between
                           the Company and Nolan H. Sigal, M.D., Ph.D.

10.22  (1)#                Consulting Agreement, dated April 30, 1993, between
                           the Company and W. Clark Still, Ph.D.

10.23  (1)                 Warrant to purchase Common Stock issued to Columbia
                           University.

10.24  (1)                 Warrant to purchase Common Stock issued to Cold
                           Spring Harbor Laboratory.

10.25  (2)+                Collaboration Agreement effective as of December 31,
                           1995 between Pharmacopeia and Bayer.

10.26  (2)+                Random Library Agreement effective as of December 31,
                           1995 between Pharmacopeia and Bayer.

10.27  (11)#               Employment Agreement effective November 30, 1995
                           between Molecular Simulations Incorporated and
                           Michael J. Savage.

10.27(a) (12)#             Amendment No. 1 to Employment Agreement between
                           Molecular Simulations Incorporated and Michael J.
                           Savage dated as of October 1, 1997.

10.28  (11)#               Employment Agreement effective November 30, 1995
                           between Molecular Simulations Incorporated and Saiid
                           Zarrabian.

10.28(a) (12)#             Amendment No. 1 to Employment Agreement between
                           Molecular Simulations Incorporated and Saiid
                           Zarrabian dated as of October 1, 1997.

10.30  (3)+                Collaborative Agreement dated as of March 29, 1996
                           with Daiichi Pharmaceutical Co., Ltd.

10.30(a)  (7)+             Amendment No. 1 to Collaboration Agreement between
                           the Company and Daiichi Pharmaceutical Co., Ltd.
                           dated April 14, 1997.

10.31  (4)+                Research Agreement, between Pharmacopeia, Inc. and
                           N.V. Organon dated May 31, 1996.

10.32  (5)#                Employment Agreement, dated June 20, 1996, between
                           the Company and Stephen A. Spearman, Ph.D.

10.33  (5)                 Lease Agreement, dated June 21, 1996, between
                           Pharmacopeia and South Brunswick Rental I, Ltd.

10.34  (10)+               Collaboration and License Agreement between
                           Pharmacopeia, Inc. and Bristol-Myers Squibb Company
                           dated November 26, 1997.

10.35  (12)+               Joint Venture Agreement dated February 14, 1992
                           between Polygen Corporation and Teijin Limited.

10.36  (12)                Amendment No. 1 to Joint Venture Agreement dated
                           March 30, 1998 between Teijin Limited and Molecular
                           Simulations Incorporated.


                                     - 49 -
<PAGE>


10.37  (12)+               Distributorship Agreement dated April 1, 1992 between
                           Polygen Corporation and Teijin Molecular Simulations
                           Incorporated

10.38  (12)                Amendment to Distributorship Agreement dated October
                           17, 1994 between Molecular Simulations Incorporated
                           and Teijin Molecular Simulations Incorporated.

10.39  (12)+               Amendment No. 2 to Distributorship Agreement dated
                           September 30, 1996 between Molecular Simulations
                           Incorporated and Teijin Molecular Simulations
                           Incorporated.

10.40  (13)+               Amended and Restated Distributorship Agreement, dated
                           March 1, 1998, between Molecular Simulations
                           Incorporated and Teijin Molecular Simulations
                           Incorporated.

10.41  (13)                Indemnity Agreement, dated March 1, 1998, between
                           Molecular Simulations Incorporated and Teijin
                           Molecular Simulations Incorporated.

10.42  (13)                Lease Agreement, dated February 26, 1987, as amended,
                           between Sorrento Tech Limited and Biosym
                           Technologies, Inc.

10.43  (14)+               Collaboration and License Agreement, dated as of
                           October 29, 1998, between Pharmacopeia, Inc. and
                           Schering-Plough Ltd.

10.44  (14)+               Collaboration and License Agreement, dated as of
                           October 29, 1998, between Pharmacopeia, Inc. and
                           Schering Corporation.

10.45  (14)                Guarantee, dated as of October 29, 1998, between
                           Pharmacopeia, Inc. and Schering-Plough Corporation.

10.46  (14)#               Employment Agreement, dated December 17, 1998,
                           between the Company and Lewis Shuster

10.47  (14)                Lease dated November 12, 1998 between Molecular
                           Simulations Inc. and San Diego Tech Center, LLC

10.48  (14)#               Indemnity Agreement dated July 21, 1997 between
                           Molecular Simulations Inc. and C. Peter W. Booth

10.49  (15)                Lease Agreement, dated May 1, 1999, between
                           Pharmacopeia and South Brunswick Rental I, LTD.

10.50  (16)                Amendment No. 1, effective April 15, 1999, to
                           Collaboration and License Agreements, dated as of
                           October 29, 1998, between Pharmacopeia, Inc.,
                           Schering-Plough Ltd. and Schering Corporation.

10.51  (16)++              Amendment No. 2, effective October 1, 1999, to
                           Collaboration and License Agreements, dated as of
                           October 29, 1998, between Pharmacopeia, Inc.,
                           Schering-Plough Ltd. and Schering Corporation.

11.1   (1)                 Statement re Computation of Per Share Earnings.

21.1   (16)                Subsidiaries of Pharmacopeia, Inc.

23.1*                      Consent of Ernst & Young LLP.

23.2*                      Consent of Arthur Andersen LLP.

24.1   (16)                Powers of Attorney (See signature page)

27.1   (16)                Financial Data Schedule

27.2   (13)                Restated Financial Data Schedule as of June 30, 1997


                                     - 50 -
<PAGE>


(1)   Incorporated by reference to the same numbered exhibit filed with the
      Company's Registration Statement on Form S-1 No. 33-93460.

(2)   Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-K for the year ended December 31, 1995.

(3)   Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-Q for the quarter ended March 31, 1996.

(4)   Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-Q for the quarter ended June 30, 1996.

(5)   Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-Q for the quarter ended September 30, 1996.

(6)   Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-K for the year ended December 31, 1996.

(7)   Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-Q for the quarter ended June 30, 1997.

(8)   Incorporated by reference to the same numbered exhibit filed with the
      Company's form 10-Q for the quarter ended September 30, 1997.

(9)   Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-K for the year ended December 31, 1997.

(10)  Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-K/A-2 for the year ended December 31, 1997.

(11)  Incorporated by reference to Exhibit 10.15 and 10.16 to Molecular
      Simulations Incorporated's Registration Statement on Form S-1
      (Registration No. 333-21427) listed on February 10, 1997.

(12)  Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-Q for the quarter ended June 30, 1998.

(13)  Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-Q for the quarter ended September 30, 1998.

(14)  Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-K for the year ended December 31, 1998.

(15)  Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-Q for the quarter ended June 30, 1999.

(16)  Incorporated by reference to the same numbered exhibit filed with the
      Company's Form 10-K for the year ended December 31, 1999.

+   Confidential treatment granted.
++  Confidential treatment requested.
#   Represents a management contract or compensatory plan or arrangement.
*   Filed herewith.

(b)  Reports on Form 8-K

     There were no reports on Form 8-K required to be filed for the quarter
ended December 31, 1999.

(c)  Exhibits

     See Item 14 (a)(3) above.

(d)  Financial Statement Schedule

     See Item 14(a)(2) above.


                                     - 51 -
<PAGE>


                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                               PHARMACOPEIA, INC.


                               By:  /s/ Bruce C. Myers
                                  -----------------
                                   Bruce C. Myers
                                   Senior Vice President and
                                   Chief Financial Officer
                                   (Principal Financial and Accounting Officer)

                               Date:  April 5, 2000


                     [Rest of Page intentionally left blank]



                                     - 52 -
<PAGE>


      Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>

SIGNATURES                            TITLE                               DATE
<S>                                   <C>                                 <C>


/s/ Joseph A. Mollica, Ph.D.          Chairman of the Board, President    April 5, 2000
------------------------------------  and Chief Executive Officer
Joseph A. Mollica, Ph.D.              (Principal Executive Officer)

/s/ Bruce C. Myers                    Senior Vice President and Chief     April 5, 2000
------------------------------------  Financial Officer (Principal
Bruce C. Myers                        Financial and Accounting Officer)

*                                     Director                            April 5, 2000
------------------------------------
Frank Baldino, Jr.

*                                     Director                            April 5, 2000
------------------------------------
Paul A. Bartlett, Ph.D.

                                      Director                            April 5, 2000
------------------------------------
C. Peter W. Booth

*                                     Director                            April 5, 2000
------------------------------------
Gary E. Costley, Ph.D.

                                      Director                            April 5, 2000
------------------------------------
Edith W. Martin, Ph.D.

*                                     Director                            April 5, 2000
------------------------------------
James J. Marino

*                                     Director                            April 5, 2000
------------------------------------
Charles A. Sanders, M.D.

</TABLE>


*  Joseph A. Mollica, pursuant to a Power of Attorney executed by each of the
   directors and officers noted above and included in the Signature page of the
   Form 10-K of the Registrant, by signing his name hereto, does hereby sign
   and execute this Report on behalf of each of the persons noted above in the
   capacities indicated, and does hereby sign and execute this Report on his
   own behalf, in the capacities indicated.

/s/ Joseph A. Mollica, Ph.D.
------------------------------------
 Joseph A. Mollica, Ph.D.

                                     - 53 -