<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)
     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                For the quarterly period ended September 30, 2001

     [_] 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: 000-30267

                            ORCHID BIOSCIENCES, INC.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                       22-3392819
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

             4390 US ROUTE ONE, PRINCETON, NJ                    08540
         (Address of principal executive offices)              (Zip Code)

       Registrant's telephone number, including area code: (609) 750-2200


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

The number of shares outstanding of the registrant's Common Stock, $.001 par
value, as of November 1, 2001, was 39,543,124.

                                       1
<PAGE>

                    ORCHID BIOSCIENCES, INC. AND SUBSIDIARIES
                               INDEX TO FORM 10-Q

PART I FINANCIAL INFORMATION...............................................  3

Item 1. Financial Statements...............................................  3

Condensed Consolidated Balance Sheets as of September 30, 2001
(unaudited) and December 31, 2000..........................................  3

Condensed Consolidated Statements Of Operations for the three and nine
months ended September 30, 2001 and 2000 (unaudited).......................  4

Condensed Consolidated Statements Of Cash Flows for the nine months ended
September 30, 2001 and 2000 (unaudited)....................................  5

Notes To Condensed Consolidated Financial Statements (unaudited)...........  6

Item 2. Management's Discussion and Analysis Of Financial Condition
And Results Of Operations.................................................. 12

Item 3. Quantitative and Qualitative Disclosures About Market Risk......... 19

PART II OTHER INFORMATION.................................................. 20

Item 1. Legal Proceedings.................................................. 20

Item 2. Changes In Securities And Use Of Proceeds.......................... 20

Item 3. Defaults Upon Senior Securities.................................... 20

Item 4. Submission Of Matters To A Vote Of Security Holders................ 21

Item 5. Other Information.................................................. 21

Item 6. Exhibits And Reports On Form 8-K................................... 21

                                       2
<PAGE>

PART I  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           ORCHID BIOSCIENCES, INC.
                               AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                (In thousands except share and per share data)

<TABLE>
<CAPTION>
                                                                                        September 30,       December 31,
Assets                                                                                      2001                2000
                                                                                      ------------------  -----------------
                                                                                          (unaudited)
<S>                                                                                   <C>                 <C>
Current assets:
      Cash and cash equivalents                                                                $  18,812          $  14,558
      Short-term investments                                                                      33,924             51,857
      Accounts receivable, net                                                                     6,285              5,510
      Inventory                                                                                    2,655              3,526
      Other current assets                                                                         1,770              2,065
                                                                                      ------------------  -----------------
         Total current assets                                                                     63,446             77,516

Equipment and leasehold improvements, net                                                         26,079             19,657
Goodwill, net                                                                                        541             28,977
Other intangibles, net                                                                            19,413             14,936
Other assets                                                                                       1,830              1,241
                                                                                      ------------------  -----------------
         Total assets                                                                          $ 111,309          $ 142,327
                                                                                      ==================  =================

Liabilities and stockholders' equity
Current liabilities:
      Current portion of long-term debt                                                        $   2,371          $   2,337
      Accounts payable                                                                             4,470              5,492
      Accrued expenses                                                                             4,785              4,034
      Deferred revenue                                                                               988              1,009
                                                                                      ------------------  -----------------
         Total current liabilities                                                                12,614             12,872

Long-term debt, less current portion                                                               5,249              6,152

Commitments and contingencies


Stockholders' equity
      Preferred stock, $.001 par value, authorized 5,000,000 shares, no shares
         issued or outstanding                                                                        --                 --
      Common stock, $.001 par value, authorized
         100,000,000 shares, issued and outstanding 39,539,053 and 33,195,096
         at September 30, 2001 and December 31, 2000, respectively                                    40                 33
      Additional paid-in capital                                                                 267,653            234,692
      Deferred compensation                                                                       (8,559)           (13,374)
      Accumulated other comprehensive income                                                         585                577
      Accumulated deficit                                                                       (166,273)           (98,625)
                                                                                      ------------------  -----------------

         Total stockholders' equity                                                               93,446            123,303
                                                                                      ------------------  -----------------

         Total liabilities and stockholders' equity                                            $ 111,309          $ 142,327
                                                                                      ==================  =================
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                            ORCHID BIOSCIENCES, INC.
                                AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands except share and per share data)
                                   (unaudited)

<TABLE>
<CAPTION>


                                                                   Three months ended                  Nine months ended
                                                                      September 30,                      September 30,
                                                                      -------------                      -------------
                                                                  2001             2000             2001             2000
                                                              ------------     ------------     ------------     ------------
<S>                                                           <C>              <C>              <C>              <C>
Revenues:
      Products revenue                                              $1,801             $826           $4,020           $1,756
      Services revenue                                               5,027            2,950           13,348            9,110
      Collaboration, license and other revenues                        603            1,155            2,416            2,125
                                                              ------------     ------------     ------------     ------------

         Total revenues                                              7,431            4,931           19,784           12,991
                                                              ------------     ------------     ------------     ------------
Operating expenses:
      Cost of products revenue                                       1,106              644            2,791            1,254
      Cost of services revenue                                       3,596            2,175            9,327            7,010
      Selling, general and administrative                            7,969            8,056           24,541           21,232
      Impairment of goodwill                                        27,256               --           27,256               --
      Research and development                                       9,731            4,198           25,427           20,940
                                                              ------------     ------------     ------------     ------------

         Total operating expenses                                   49,658           15,073           89,342           50,436
                                                              ------------     ------------     ------------     ------------

         Operating loss                                            (42,227)         (10,142)         (69,558)         (37,445)
                                                              ------------     ------------     ------------     ------------
Other income (expense):
      Interest income                                                  549            1,177            2,449            3,267
      Interest expense                                                (205)             (21)            (572)            (279)
      Other expense                                                     33             --                 33              (76)
                                                              ------------     ------------     ------------     ------------

         Total other income (expense)                                  377            1,156            1,910            2,912
                                                              ------------     ------------     ------------     ------------

         Net loss                                                  (41,850)          (8,986)         (67,648)         (34,533)
Beneficial conversion feature of preferred stock                        --               --               --          (29,574)
                                                              ------------     ------------     ------------     ------------

         Net loss allocable to common stockholders                $(41,850)         $(8,986)        $(67,648)        $(64,107)
                                                              ============     ============     ============     ============

Basic and diluted net loss per share allocable to common
      stockholders (note 2)                                         $(1.06)          $(0.27)          $(1.89)          $(3.61)
                                                              ============     ============     ============     ============

Shares used in computing basic and diluted net loss per
      share allocable to common stockholders (note 2)           39,531,965       33,175,076       35,854,843       17,769,069
                                                              ============     ============     ============     ============
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                    ORCHID BIOSCIENCES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                Nine months ended
                                                                                                   September 30,
                                                                                                   -------------
                                                                                              2001              2000
                                                                                          ------------      ------------
<S>                                                                                       <C>               <C>
Cash flows from operating activities:
      Net loss                                                                                $(67,648)         $(34,533)
      Adjustments to reconcile net loss to net cash used in operating activities:
         Noncash research and development expense                                                   --             4,775
         Noncash compensation expense                                                            2,210             6,187
         Depreciation and amortization                                                           5,838             4,246
         Impairment of goodwill                                                                 27,256                --
         Changes in assets and liabilities:
              Accounts receivable                                                                 (775)           (2,636)
              Inventory                                                                          1,041            (3,614)
              Other current assets                                                                 295              (425)
              Other assets                                                                        (589)              (38)
              Accounts payable                                                                    (730)              638
              Due to related party                                                                  --               (64)
              Accrued expenses                                                                     751            (1,275)
              Deferred revenue                                                                     (21)             (500)
                                                                                          ------------      ------------

                  Net cash used in operating activities                                        (32,372)          (27,239)
                                                                                          ------------      ------------

Cash flows from investing activities:

      Cash paid to acquire Cellmark, including acquisition costs                                (2,909)               --
      Acquisition of Affymetrix patent and license                                              (3,005)               --
      Capital expenditures                                                                      (7,343)           (8,602)
      Decrease in restricted cash                                                                   --               400
      Sales of short-term investments                                                          110,720            19,378
      Purchase of short-term investments                                                       (93,047)          (78,999)
                                                                                             ---------         ---------

                  Net cash provided by (used in) investing activities                            4,416           (67,823)
                                                                                             ---------         ---------

Cash flows from financing activities:
      Net proceeds from issuance of Series E mandatorily redeemable
         convertible preferred stock                                                                --            29,574
      Repayment of debt on lines of credit                                                      (1,731)           (1,947)
      Proceeds from issuance of debt from line of credit                                           862                --
      Net proceeds from issuance of common stock                                                33,325            48,512
                                                                                          ------------      ------------

                  Net cash provided by financing activities                                     32,456            76,139
                                                                                          ------------      ------------

Effect of foreign currency translation on cash and cash equivalents                               (246)               --
                                                                                          ------------      ------------
Net increase in cash and cash equivalents                                                        4,254           (18,923)
Cash and cash equivalents at beginning of period                                                14,558            33,804
                                                                                          ------------      ------------

Cash and cash equivalents at end of period                                                     $18,812           $14,881
                                                                                           ===========       ===========

Supplemental disclosure of noncash financing and investing activities:
      Changes in deferred compensation from grant, forfeiture and
         remeasurement of common stock options                                                  $2,605           $15,123
      Conversion of mandatorily redeemable convertible preferred stock and
         convertible preferred stock into common stock                                              --           118,521
      Issuance of common stock for technology licenses                                              --             4,775
      Issuance of common stock in connection with supply agreement                                  --             1,500
      Issuance of common stock in connection with the acquisition of Cellmark                    2,019                --
      Issuance of common stock for services                                                        229                --
      Other comprehensive income                                                                     8               230
Supplemental disclosure of cash flow information:
      Cash paid during the period for interest                                                     559               279
------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>

                    ORCHID BIOSCIENCES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           September 30, 2001 and 2000
                 (Dollars in thousands except per share data)
                                   (unaudited)

(1)      Basis of Presentation

         The accompanying unaudited condensed consolidated financial statements
of Orchid BioSciences, Inc. and its subsidiaries (the "Company") have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
annual financial statements. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, considered necessary for a fair
presentation have been included. Interim results are not necessarily indicative
of results that may be expected for a full year.

         The accompanying unaudited condensed consolidated financial statements
include the results of the Company and its wholly owned subsidiaries. All
intercompany accounts and transactions have been eliminated.

         The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2000, as filed with the Securities and Exchange
Commission.

         The Company has not yet achieved profitable operations or positive cash
flow from operations. There is no assurance that profitable operations, if ever
achieved, could be sustained on a continuing basis. In addition, development and
commercialization activities will require significant additional financing. The
Company's accumulated deficit aggregated $166,273 through September 30, 2001 and
it expects to incur substantial losses in future periods.

(2)      Net Loss Per Share

         Net loss per share is computed in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share," by
dividing the net loss allocable to common stockholders by the weighted average
number of shares of common stock outstanding. During each period presented, the
Company has certain options, warrants, convertible preferred stock and/or
mandatorily redeemable convertible preferred stock, which have not been used in
the calculation of diluted net loss per share because to do so would be
anti-dilutive. As such, the numerator and the denominator used in computing both
basic and diluted net loss per share allocable to common stockholders for each
period are equal. The Company has reflected $29,574 as a beneficial conversion
feature in the net loss allocable to common stockholders for the nine months
ended September 30, 2000 for the 5,971,903 shares of Series E mandatorily
redeemable convertible preferred stock ("Series E stock") sold in January 2000.
The amount of the beneficial conversion feature was calculated as the difference
between the fair value of the Company's common stock on the commitment date of
$11.75 per share over the conversion price of $4.50 per share, with a limitation
that the beneficial conversion feature can not exceed the gross proceeds
received from the issuance of the stock.

(3)      Acquisition of Cellmark Diagnostics and Genotyping Collaboration
Agreement with AstraZeneca

         On February 12, 2001, the Company completed its acquisition of certain
assets of AstraZeneca's business division, Cellmark Diagnostics ("Cellmark"), a
leading provider of genetic diversity testing services in the United Kingdom
("UK") which also sells kits for and conducts tests for genetic diseases,
including cystic fibrosis. The acquisition has been accounted for under the
purchase method of accounting and, accordingly, the assets and liabilities
acquired have been recorded at their fair values. Assets acquired included
intangibles of approximately $2,700. The purchase price, including acquisition
costs, was comprised of $2,909 in cash and 222,980 shares of the Company's
common stock valued at $2,019.

         As part of the agreement to purchase the Cellmark assets from
AstraZeneca, the Company entered into an Investor Rights Agreement with
AstraZeneca, pursuant to which the Company agreed to register 222,980 shares of
the Company's common stock issued to AstraZeneca. The shares issued to
AstraZeneca as part of the purchase were registered with the Securities and
Exchange Commission on May 10, 2001, which registration became effective on May
18, 2001.

         The results of operations of Cellmark have been included in the
Company's condensed consolidated statement of

                                       6
<PAGE>

operations since the date of acquisition by the Company on February 12, 2001 .
The acquisition of Cellmark is reflected in the accompanying condensed
consolidated balance sheet as of September 30, 2001.

         In addition, on February 12, 2001, the Company entered into a
multi-year agreement with AstraZeneca to conduct a variety of studies using
SNPs. The genotyping agreement also allows AstraZeneca access to the Company's
SNP databases, the development by the Company of proprietary SNP panels, and the
use of these panels in genetic association and linkage studies. In the second
quarter of 2001, the Company recognized revenue related to the accomplishment of
a milestone under this agreement.

(4)      Increase in Authorized Shares of Common Stock and Common Stock
Underlying the Stock Plan

         In 2001, the Board of Directors and stockholders approved an increase
of the Company's authorized shares of common stock to 100,000,000 shares. The
Board and the stockholders also approved an increase in the number of shares
available for grants of stock or stock options under the Company's 2000
Employee, Director and Consultant Stock Plan by 3,000,000 shares.

(5)      Shelf Registration Statement and Issuance of Common Stock

         On May 10, 2001, the Company filed a shelf registration statement on
Form S-3 with the Securities and Exchange Commission. This will permit the
Company, from time to time, to offer and sell various types of securities, up to
a total value of $75,000, of which $39,300 remains available for use. The
Company filed the registration statement to gain additional flexibility in
accessing capital markets for general corporate business purposes. In June,
2001, the Company sold 5,950,000 shares to a group of new and existing
stockholders at a price of $6.00 per share. The shares of common stock were
offered through a prospectus supplement pursuant to the Company's effective
shelf registration statement. The offering raised net proceeds of approximately
$33,284 which will be used for general corporate business purposes.

(6)      Stockholder Rights Plan

         On May 16, 2001, the Company's Board of Directors (the "Board") adopted
a Stockholder Rights Plan ("Rights Plan"), which is designed to protect the
Company's stockholders in the event of any takeover offer. On May 16, 2001, the
Company's Board declared a dividend of one preferred stock purchase right (a
"Right") for each outstanding share of the Company's common stock to
stockholders of record at the close of business on May 31, 2001 (the "Record
Date"). Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
$0.001 par value per share, at an initial purchase price of $40.00 in cash,
subject to adjustment.

         Initially, the Rights will be attached to all common stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the common stock and a
Distribution Date, as defined in the Rights Plan, will occur if certain events
as described below transpire. Rights will also be attached to all shares of
common stock issued following the Record Date but prior to the Distribution
Date. The Rights are not exercisable until the Distribution Date and will expire
at the close of business on May 16, 2011, unless earlier redeemed by the
Company. The Distribution Date has not occurred as of September 30, 2001.

         In the event that a person or a group of affiliated or associated
persons becomes the beneficial owner of more than 15% of the then outstanding
shares of common stock (except pursuant to an offer for all outstanding shares
of common stock which the Board determines to be fair to, and otherwise in the
best interests of, the Company and its stockholders), each holder of a Right
will thereafter have the right to receive, upon exercise, that number of shares
of common stock (or, in certain circumstances, cash, property or other
securities of the Company) which equals the exercise price of the Right divided
by one-half of the current market price (as defined in the Rights Plan) of the
common stock at the date of the occurrence of the event. However, Rights are not
exercisable following the occurrence of any of the events set forth above until
such time as the Rights are no longer redeemable by the Company. In the event
that the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, or, more than
50% of the Company's assets or earning power is sold or transferred, each holder
of a Right shall thereafter have the right to receive, upon exercise, that
number of shares of common stock of the acquiring company which equals the
exercise price of the Right divided by one-half of the current market price (as
defined in the Rights Plan) of such common stock at the date of the occurrence
of the event.

(7)      Affymetrix Agreement

         In July 2001, the Company completed a series of agreements that replace
its existing collaboration agreement with Affymetrix entered into in November
1999, which combines the Company's primer extension technology with the
Affymetrix

                                       7
<PAGE>

GeneChip(R) GenFlex(TM) Tag Array in the Company's SNPcode genotyping kits. In
addition, the Company also acquired from Affymetrix exclusive ownership of U.S.
Patent No. 5,856,092 and its foreign counterparts. The Company has capitalized
costs associated with this patent and license from Affymetrix which are being
amortized over their estimated useful lives. Under the terms of these
agreements, Affymetrix will supply GenFlex arrays to the Company that the
Company will use to provide SNPcode-based genotyping services to its customers
and distribute GenFlex arrays in connection with SNPcode reagents to its
customers to conduct primer extension-based genotyping using the Affymetrix
GeneChip system. Also, Affymetrix granted the Company a non-exclusive license to
make and sell products incorporating Affymetrix's proprietary universal Tag
sequences.

(8)      Inventory Inventory is comprised of the following at September 30, 2001
and December 31, 2000, respectively:

                           September 30, 2001         December 31, 2000
                           ------------------         -----------------
Raw materials                    $1,915                     $3,074
Work in progress                    659                        452
Finished goods                       81                         --
                                 ------                     ------
                                 $2,655                     $3,526
                                 ======                     ======

Raw materials consist mainly of reagents, enzymes, chemicals and plates used in
SNP scoring, genotyping, and to manufacture SNPware consumables.

(9)      Segment Information

         The Company operates in two segments, each of which are strategic
businesses that are managed separately because each business develops,
manufactures and sells distinct products and services. The segments and a
description of each of them are as follows: (i) the business which markets
equipment and consumables for SNP scoring analysis ("Products"); and (ii) the
business which performs genotyping including DNA laboratory analysis for
paternity, transplantation and forensic testing and SNP scoring services
("Services"). The Company allocates the majority of its corporate and other
general and administrative expenses to its Products segment. During 2001, the
chief operating decision maker of the Company measured segment profit/(loss)
using operating loss, which excludes other income (expense).

         In 2001, the Company changed its basis of segmentation from "Orchid"
and "GeneScreen" to "Products" and "Services" to reflect how the chief operating
decision maker now views the business. This change has had no material impact on
the previously reported segment information. Also, the Company changed its
method of measuring profitability in the fourth quarter of 2000 to operating
loss from net loss. Segment information as of and for the three and nine months
ended September 30, 2001 and 2000 is as follows:

<TABLE>
<CAPTION>
               -----------------------------------------------------------------------------------------------
               Three months ended September 30, 2001                Products     Services       Total
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               <S>                                                  <C>          <C>            <C>
               Revenues from external customers                       $1,801       $5,630       $7,431
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Segment operating loss                                 (9,399)     (32,828)     (42,227)
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Nine months ended September 30, 2001
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Revenues from external customers                        4,020       15,764       19,784
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Segment operating loss                                (24,634)     (44,924)     (69,558)
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Total assets                                           30,767       80,542      111,309
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Three months ended September 30, 2000
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Revenues from external customers                        1,981        2,950        4,931
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Segment net loss                                       (7,635)      (1,351)      (8,986)
               -----------------------------------------------------------------------------------------------
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>
               -----------------------------------------------------------------------------------------------
               Nine months ended September 30, 2000
               -----------------------------------------------------------------------------------------------
               <S>                                                  <C>          <C>            <C>
               -----------------------------------------------------------------------------------------------
               Revenues from external customers                        3,881        9,110       12,991
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Segment net loss                                      (31,295)      (3,238)     (34,533)
               -----------------------------------------------------------------------------------------------

               -----------------------------------------------------------------------------------------------
               Total assets                                          110,483       37,470      147,953
               -----------------------------------------------------------------------------------------------
</TABLE>

(10)     Contingencies

         Effective January 2000, the Company entered into three-year employment
agreements with two executives of the Company. In certain cases, the Company may
be obligated to pay the executives' salary and benefits for up to eighteen
months after leaving the Company.

         The Company has been engaged in discussions with St. Louis University
of St. Louis, Missouri regarding the University's belief that the Company's SNP
scoring technology infringes certain claims under U.S. patent 5846710, which is
controlled by the University. Although the Company is confident that its SNP
scoring technology does not infringe any claims under the University's patent,
the Company nonetheless entered into discussions with the University regarding
the scope of these claims in the hope of resolving the issue. Upon the failure
to reach agreement with the University, in August 2000 the Company filed a
lawsuit against the University in the U.S. District Court for the Southern
District of California, Case No. 00CV1558L (JFS), seeking declaratory judgment
of non-infringement, invalidity and non-enforceability with respect to the
University's patent. While the Company believes that its position in this action
is strong, patent litigation is complex and might result in claims against the
Company, including patent infringement. As a result, the outcome of this action
is uncertain. Furthermore, while the Company is seeking declaratory judgment in
this action, the lawsuit could take significant time, be expensive and divert
the attention of the Company's management from other business concerns.

         The Company had been engaged in discussions with Motorola, Inc.
("Motorola") in an attempt to resolve certain areas of disagreement that arose
under the existing collaboration in the area of microfluidics, which discussions
have now been resolved.

         GeneScreen, Inc., the Company's wholly owned subsidiary, has carried,
in increasing increments of limit, commercial and professional liability
insurance with a self-insured retention. However, GeneScreen may, as a result of
insurance contract limitations, be self-insured for risk of loss that might
arise out of GeneScreen's operations and testing results. Management estimates
future litigations costs based on historical litigation exposure. The accrued
litigation reserve for self-insured risk at September 30, 2001 and December 31,
2000 was $156.

(11)     Comprehensive Income (Loss)

         SFAS No. 130, "Reporting Comprehensive Income" ("SFAS 130") requires
reporting and displaying comprehensive income (loss) and its components which,
for the Company, includes net loss and unrealized gains and losses on available-
for-sale securities and foreign currency translation gains and losses. In
accordance with SFAS 130, the accumulated balance of other comprehensive income
(loss) is displayed as a separate component of stockholders' equity. The
following table reconciles net loss to comprehensive loss for the three and nine
months ended September 30, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                                 Three months ended         Nine months ended
                                                                                    September 30,             September 30,
                                                                                    -------------             -------------

                                                                                  2001         2000         2001         2000
                                                                                  ----         ----         ----         ----
<S>                                                                             <C>           <C>         <C>          <C>
Net loss                                                                        $(41,850)     $(8,986)    $(67,648)    ($64,107)
Other comprehensive income (loss):
         Unrealized holding gain (loss) on available-for-sale securities             116          230         (260)         230
         Foreign currency translation adjustments                                    428           --          268           --
                                                                                --------     --------     --------     --------
         Subtotal                                                                    544          230            8          230
                                                                                --------     --------     --------     --------

         Comprehensive loss                                                     $(41,305)     $(8,756)    $(67,640)    $(63,877)
                                                                                ========     ========     ========     ========
</TABLE>

                                       9
<PAGE>

(12)     Debt Covenants

         Pursuant to the Company's line of credit which was amended in December
2000, the Company is required to provide a cash security deposit or letter of
credit equal to $2,150 plus 50% of any future draw amount no later than June 30,
2001, unless the Company has completed a follow-on offering resulting in at
least $50,000 in net unrestricted proceeds. During the quarter ended June 30,
2001, the Company did complete a follow-on offering as described in note 5
above. However, the net unrestricted proceeds from this offering were less than
the minimum amount required under the line of credit. The Company has received
written notice from the lender stating that the lender waived the requirement of
a pledge of cash security deposit or letter of credit under this agreement.

(13)     Impairment of Goodwill

         During the quarter ended September 30, 2001, the Company recorded an
impairment charge of approximately $27,256 to write-down goodwill which was
recorded when the Company acquired GeneScreen on December 30, 1999. Subsequent
to September 30, 2001, the Company announced its intention to acquire Lifecodes
(see note 14). Lifecodes operates primarily in the same industry and provides
the same services as GeneScreen. Based primarily on the acquisition price for
Lifecodes, among other matters, the Company determined that a triggering event
occurred for which an impairment review would be required pursuant to SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" ("SFAS 121"). The impairment charge was recorded based on the
fair value of GeneScreen as computed using a discounted cash flow valuation
model. This charge reduced the unamortized goodwill recorded in the acquisition
of GeneScreen to zero. This charge relates to the "services" segment of the
Company's business.

(14)     Subsequent Events

         On October 1, 2001, the Company announced an agreement with Lifecodes
Corporation ("Lifecodes") to acquire all of the outstanding shares of common
stock of Lifecodes in exchange for consideration of between 6,500,000 and
approximately 6,622,951 shares of the Company's common stock and repayment of
approximately $5.0 million of Lifecodes' debt. The Company may also be required
to issue options and/or warrants to certain Lifecodes option and warrant
holders. If consummated, the acquisition will be accounted for under the
purchase method of accounting and, accordingly, the assets and liabilities
acquired will be recorded at their fair values. The Company has filed a
Registration Statement on Form S-4 with the Securities and Exchange Commission
which became effective on November 5, 2001. If the stockholders of Lifecodes
approve the acquisition, Lifecodes will become a wholly owned subsidiary of
Orchid. The acquisition is expected to be consummated during the fourth quarter
of 2001.

(15)     Recent Accounting Pronouncements

         In July 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations" ("SFAS 141"), and SFAS No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001
as well as all purchase method business combinations completed after June 30,
2001. SFAS 141 also specifies criteria intangible assets acquired in a purchase
method business combination must meet to be recognized and reported apart from
goodwill, noting that any purchase price allocable to an assembled workforce may
not be accounted for separately. SFAS 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of SFAS 142. SFAS 142 will also require that intangible assets with
estimable useful lives be amortized over their respective estimated useful lives
to their estimated residual values, and reviewed for impairment in accordance
with SFAS No. 121.

         The Company is required to adopt the provisions of SFAS 141 immediately
and SFAS 142 effective January 1, 2002. Furthermore, goodwill and intangible
assets determined to have an indefinite useful life acquired in a purchase
business combination completed after June 30, 2001, but before SFAS 142 is
adopted in full will not be amortized, but will continue to be evaluated for
impairment in accordance with the appropriate pre-SFAS 142 accounting
literature. Goodwill and intangible assets acquired in business combinations
completed before July 1, 2001 will continue to be amortized and tested for
impairment in accordance with the appropriate pre-SFAS 142 accounting
requirements prior to the adoption of SFAS 142.

         SFAS 141 will require upon adoption of SFAS 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in SFAS 141 for recognition apart from
goodwill. Upon adoption of SFAS 142, the Company will be required to reassess
the useful lives and residual values of all intangible assets acquired, and make
any necessary amortization period adjustments by the end of the first interim
period after adoption. In addition, to the extent an intangible

                                      10
<PAGE>

asset is identified as having an indefinite useful life, the Company will be
required to test the intangible asset for impairment in accordance with the
provisions of SFAS 142 within the first interim period. Any impairment loss will
be measured as of the date of adoption and recognized as the cumulative effect
of a change in accounting principle in the first interim period.

         In connection with SFAS 142's transitional goodwill impairment
evaluation, the statement will require the Company to perform an assessment of
whether there is an indication that goodwill is impaired as of the date of
adoption. To accomplish this, the Company must identify its reporting units and
determine the carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. The Company will then have up to six
months from the date of adoption to determine the fair value of each reporting
unit and compare it to the reporting unit's carrying amount. To the extent a
reporting unit's carrying amount exceeds its fair value, an indication exists
that the reporting unit's goodwill may be impaired and the Company must perform
the second step of the transitional impairment test. In the second step, the
Company must compare the implied fair value of the reporting unit's goodwill,
determined by allocating the reporting unit's fair value to all of its assets
(recognized and unrecognized) and liabilities in a manner similar to a purchase
price allocation in accordance with SFAS 141, to its carrying amount, both of
which would be measured as of the date of adoption. This second step is required
to be completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's statement of
operations.

         As of the date of adoption, the Company expects to have unamortized
goodwill in the amount of approximately $527 and unamortized identifiable
intangible assets in the amount of approximately $18,881, all of which will be
subject to the transition provisions of SFAS 141 and 142. These asset balances
are based on amounts as of September 30, 2001 which excludes any goodwill or
intangible assets which might be recorded in connection with the pending
Lifecodes acquisition which is expected to be consummated in the fourth quarter
of 2001. Amortization expense related to goodwill was $2,074 and $1,582 for the
year ended December 31, 2000 and the nine months ended September 30, 2001,
respectively, which includes amortization of goodwill resulting from the
GeneScreen acquisition in December 1999 of approximately $2,066 and
approximately $1,549, respectively. Because of the extensive effort needed to
comply with adopting SFAS 141 and 142, it is not practicable to reasonably
estimate the impact of adopting these statements on the Company's consolidated
financial statements at the date of this report, including whether it will be
required to recognize any transitional impairment losses as the cumulative
effect of a change in accounting principle.

                                      11
<PAGE>

ORCHID BIOSCIENCES, INC.

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

     This Management's Discussion and Analysis of Financial Condition as of
September 30, 2001 and the Results of Operations for the three and nine months
ended September 30, 2001 and 2000 should be read in conjunction with our
Condensed Consolidated Financial Statements, including the Notes thereto,
included elsewhere in this Quarterly Report on Form 10-Q. This Form 10-Q
contains forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended. For a more detailed discussion of such forward looking
statements and the potential risks and uncertainties that may impact upon the
accuracy of such statements in this section, see the "Forward Looking
Statements" section of this quarterly report on Form 10-Q and also the potential
risks and uncertainties set forth in the "Overview" section hereof and in the
"Risk Factors" section of our Registration Statement on Form S-4 filed with the
Securities and Exchange Commission which became effective November 5, 2001.
Except as required by law, we undertake no obligation to update any
forward-looking statements. You should also carefully consider the factors set
forth in other reports or documents that we file from time to time with the
Securities and Exchange Commission.

OVERVIEW

         We are engaged in the development and commercialization of genetic
diversity technologies, products and services. Since we began operations in
March 1995, we have devoted substantially all of our resources to the
development and application of a portfolio of products and services using our
proprietary biochemistry for scoring single nucleotide polymorphisms, or SNPs,
as well as microfluidics technologies for applications, principally in the field
of high volume SNP scoring and pharmacogenetics analysis. Since late 1999,
following our acquisition of GeneScreen and, subsequently, our business
division, Cellmark, in 2001, we also have been a leading provider of DNA testing
services in the paternity, forensics and HLA transplantation typing fields.

         A major focus of our current activities and resources is the
commercialization of our SNP scoring products and services that apply our
proprietary SNP-IT(TM) primer extension technology. We currently have revenues
from the sale of our SNPstream(R) instrument systems, our SNPware(TM) consumable
kits and SNP genotyping and pharmacogenetic services provided in our high
throughput MegaSNPatron(TM) facilities. We also expect each SNPstream system we
place will generate an additional recurring revenue stream from the sale of our
SNPware consumables. We also are beginning to generate revenue from sales of
SNPware consumables designed to work on the platforms of various manufacturers,
and from SNP-IT license fees and royalties.

         Our ability to achieve profitability will depend, in part, on our
ability to successfully develop and commercialize our proprietary SNP scoring
technologies in the form of products and services for pharmaceutical,
biotechnology and diagnostic companies and research institutions. We introduced
our SNPstream 25K SNP scoring system, SNPware consumables and related services
in late 1999. In September, 2001, we also introduced the SNPstream MT (formerly
referred to as SNPstream 5K) solution with lower throughput capabilities for use
on the Luminex LABMAP(TM) platform. Because our proprietary SNP-IT primer
extension technology is very adaptable to other hardware platforms, we intend to
expand our offerings of SNPware consumables for use on instruments made or sold
by other companies and to obtain license fees and royalties by licensing our
SNP-IT technology for incorporation in the consumable kits of others. Our
collaborations with Affymetrix, Amersham Pharmacia Biotech, Applied Biosystems
and PerkinElmer are examples of this Platform Propagation(TM) strategy. Before
the end of the year, we expect to launch a SNP-IT-based kit that is designed for
use with the simple 96-well plate readers found in most laboratories or without
instrumentation. We expect that we will launch this SNP-IT-based kit in
partnership with an industry leader. We also provide SNP-IT-based high quality
SNP scoring to a variety of customers on a fee-for service basis. Our
MegaSNPatron facility currently offers high throughput SNP genotyping services
to such customers as Lilly, AstraZeneca, Ellipsis and The SNP Consortium on two
different platforms, the SNPstream 25K system and our SNPcode platform. We
intend to add our ultra-high throughput SNPstream UHT system to the MegaSNPatron
in early 2002, giving us the broadest range of SNP scoring options available to
service customers in the industry. We expect fee-for-service SNP scoring will be
an attractive option for many customers, and that it can provide us with the
opportunity to develop higher value content and intellectual property.

         Our GeneShield/Pharmaceutical Value Creation(TM) strategy is based on
the creation of proprietary rights covering the identification of SNPs and their
associations to medically important attributes of patients. GeneShield is also
developing a number of innovative programs designed to accelerate the adoption
of pharmacogenetics into routine health care. These programs are focused on
health outcomes and may include a number of health system participants,
including providers, patients and payers. GeneShield expects to announce its
first major collaboration in 2002. We are developing intellectual

                                       12
<PAGE>

property rights in this area through collaborations with members of
our Clinical Genetics Network, and we intend also to develop intellectual
property rights to medical uses of SNPs through our collaborations with
pharmaceutical and biotechnology companies. We intend to develop proprietary
rights around both diagnostic and therapeutic uses of SNPs. We do not expect
royalties from commercial sales or license of intellectual property rights
generated by using our technologies for at least several years, if at all.

         On February 12, 2001, we acquired Cellmark Diagnostics, a division of
AstraZeneca, in an asset acquisition, for a combination of cash and 222,980
shares of our common stock. Cellmark is a leading provider of genetic testing
services in the UK and sells kits and conducts testing for genetic diseases,
including cystic fibrosis. We agreed to prepare and file a registration
statement on Form S-3 with the Securities and Exchange Commission to register
for resale the 222,980 shares of common stock issued to AstraZeneca in partial
consideration for our purchase of the assets of Cellmark. The shares issued to
AstraZeneca as part of the purchase were registered with the Securities and
Exchange Commission on May 10, 2001, which registration became effective on May
18, 2001.

         On October 1, 2001, we announced an agreement with Lifecodes
Corporation ("Lifecodes") to acquire all of the outstanding shares of common
stock of Lifecodes in exchange for consideration of between 6,500,000 and
approximately 6,622,951 shares of our common stock and repayment of
approximately $5.0 million of Lifecodes' debt We also may be required to issue
options and/or warrants to certain Lifecodes option or warrant holders. If
consummated, the acquisition will be accounted for under the purchase method of
accounting and, accordingly, the assets and liabilities acquired will be
recorded at their fair values. We filed a Registration Statement on Form S-4
with the Securities and Exchange Commission which became effective on November
5, 2001. If the stockholders of Lifecodes approve the acquisition, Lifecodes
will become a wholly owned subsidiary of Orchid. The acquisition is expected to
be consummated during the fourth quarter of 2001.

         GeneScreen's, Cellmark's, and Lifecodes' business in paternity testing
and forensics supports our goal of extending our business in genetic diversity.
We intend to apply our ultra-high throughput SNP scoring technology to the
paternity and forensics businesses of GeneScreen, Cellmark, and Lifecodes in
order to significantly reduce the cost of providing these identity genomics
services. We also plan to use the accredited laboratories at GeneScreen,
Cellmark, and Lifecodes to offer clinical quality pharmacogenetic SNP scoring of
patient samples for clinical association studies and pharmaceutical clinical
trials. We also plan to use these laboratories to conduct pharmacogenetic SNP
scoring services that we may eventually offer to physicians and patients through
a number of distribution channels, including the Internet. Each of GeneScreen's,
Cellmark's and Lifecodes' DNA testing businesses is dependent upon its
successful competitive bidding and qualifications for contracts with various
governmental entities to provide paternity and forensics testing services. We
expect revenues from the respective forensics businesses of GeneScreen,
Cellmark, and Lifecodes to increase as DNA analyses are increasingly being used
by the criminal justice system to identify perpetrators and exonerate the
innocent.

         In prior years, we have recorded deferred compensation resulting from
the granting of stock options to employees, directors or consultants with
exercise prices below the fair value of the underlying common stock at the date
of their grant. During 2001, all stock options were granted with grant prices
equal to the fair value of our common stock at the grant date. Net of prior
amortization, and remeasurement related to options previously granted to
consultants, deferred compensation of approximately $8.6 million at September
30, 2001 will be amortized over the vesting periods of the respective options,
typically four years.

         We anticipate recording total compensation charges resulting from the
amortization in future periods of the deferred compensation as of September 30,
2001 as follows, in millions:

          Three months ending
              December 31,                  Year ending December 31,
              ------------                  ------------------------
                  2001              2002              2003             2004
                  ----              ----              ----             ----

                  $1.0              $3.9              $3.6             $0.1

         The portion of these amounts which results from grants to consultants
is subject to remeasurement at the end of each reporting period based upon the
changes in the fair value of our common stock until the consultant completes
performance under his or her respective option agreement. A reduction of
deferred compensation of approximately $2.6 million was recorded in the nine
months ended September 30, 2001 related to such remeasurements. Also, certain
grants of performance-based options have been made for which no deferred
compensation expense has been recorded and for which compensation expense will
be measured at the time the performance criteria is met as the difference
between the fair value of the common stock and the exercise price and will be
immediately recorded as compensation expense.

                                       13
<PAGE>

         We have incurred losses since inception, and, as of September 30, 2001,
we had total stockholders' equity of approximately $93.4 million, including an
accumulated deficit of approximately $166.3 million. We anticipate incurring
additional losses over at least the next several years. We expect these losses
to continue as we expand the commercialization of our products and services and
we fully implement our proprietary SNP value creation business strategies. We
expect this expansion to result in some increases in research and development,
marketing and sales, and general and administrative expenses. Payments under
strategic alliances, collaborations and licensing arrangements will be subject
to significant fluctuation in both timing and amount and therefore our results
of operations for any period may not be comparable to the results of operations
for any other period.

Sources of Revenues and Revenue Recognition

         We have had, and expect in the future to have, several sources of
revenues. Prior to our acquisitions of GeneScreen and Cellmark, we derived
substantially all of our revenues from research and development collaborations,
technology grants and awards from several governmental agencies. In 2001, we
derived our first revenues from the sale of testing kits and laboratory DNA
testing services from our Cellmark business in the UK. In 2000, we derived our
first revenues from the performance of laboratory DNA testing services from
GeneScreen, our wholly owned subsidiary in the US. In 1999, we derived our first
revenues from the placement of our first commercial SNPstream hardware system,
and throughout 2000 and 2001, we derived increased amounts of revenues from the
sale of SNP-IT-based consumables. We also derived significant license revenue
beginning in 2000. Our services segment also includes SNP scoring analyses.

         In connection with the research and development collaborations that
provided the majority of our revenues in the early years of our corporate
history, we recognize revenues when related research expenses are incurred and
when we satisfy specific performance obligations under the terms of the
respective research contracts. Up-front licensing fees obtained in connection
with such agreements are deferred and amortized over the estimated performance
period of the respective research contract. Milestone payments are recognized as
revenues upon the completion of the milestone event or requirement.

         DNA laboratory and SNP scoring services revenues are recognized on a
completed contract basis at the time test results are reported. Deferred
revenues represent the unearned portion of payments received in advance of tests
being completed.

         To date, we have offered our SNPstream system hardware in two basic
types of transactions, either a purchase and sale transaction or an arrangement
in which the customer takes possession of the system and pays an access fee for
its use. Revenues on the sale of the hardware are recorded upon transfer of
title and after we have met all of our significant performance obligations.
Access fee payments, which are received when a system is initially placed, are
deferred and revenues are recognized on a straight-line basis over the term of
the agreement.

         Revenues from the sale of SNPware consumables are recognized upon the
transfer of title, generally when the SNPware products are shipped to our
customers from our facility.

         Revenues from license arrangements, including license fees creditable
against potential future royalty obligations of the licensee, are recognized
when an arrangement is entered into if we have no significant continuing
involvement under the terms of the arrangement. If we have significant
continuing involvement under such an arrangement, license fees are deferred and
recognized over the estimated performance period.


RESULTS OF OPERATIONS

Three Months Ended September 30, 2001 and 2000

         Revenues. Revenues for the three months ended September 30, 2001 of
approximately $7.4 million represents an increase of approximately $2.5 million
as compared to revenues of approximately $4.9 million for the corresponding
period of 2000. The increase in revenues was primarily attributable to
placements of SNPstream 25K instruments and sales of SNPware consumable kits and
to an increase in revenues earned following our acquisition of Cellmark on
February 12, 2001.

         Cost of products revenue. Cost of products revenue for the three months
ended September 30, 2001 was approximately $1.1 million compared to
approximately $0.6 million for the corresponding period of 2000. The increase
was directly attributable to the costs associated with the SNPstream instrument
placements and consumables sold during the three months ended September 30,
2001.

         Cost of services revenue. Cost of services revenue was approximately
$3.6 million for the three months ended

                                       14
<PAGE>

September 30, 2001 compared to approximately $2.2 million in the corresponding
period of 2000. The increase was directly attributable to the increase in
services revenue, including revenues earned by our Cellmark division which we
acquired on February 12, 2001.

         Selling, general and administrative expenses. Selling, general and
administrative expenses consist primarily of salaries and related expenses for
executive, finance and other administrative personnel, recruiting expenses,
professional fees, legal expenses resulting from intellectual property
prosecution and protection, and other corporate expenses including business
development and general legal activities. Selling, general and administrative
expenses for the three months ended September 30, 2001 were approximately $8.0
million, a decrease of approximately $0.1 million, as compared to approximately
$8.1 million for the corresponding period of 2000. A decrease in amortization of
deferred compensation of approximately $1.2 million and a decrease in other
miscellaneous expenses of approximately $0.9 million were offset by various
increases in general and administration expenses related to the expansion of
administration facilities and the hiring of additional personnel as we increased
our executive and administrative staffing in anticipation of supporting our
growth. During the quarter ended September 30, 2001, there was an increase in
salaries and related expenses of approximately $0.6 million, an increase in
expenses relating to the expansion of facilities of approximately $0.5 million,
and an increase in selling, general and marketing expenses of approximately $1.1
million relating to our Cellmark division.

         Research and development expenses. Research and development expenses
consist primarily of salaries and related personnel costs, fees paid to
consultants and outside service providers for chip development, laboratory
supplies for prototypes and test units, and other expenses related to the
design, development, testing and enhancement of our products. Research and
development expenses for the three months ended September 30, 2001 were
approximately $9.7 million, compared to approximately $4.2 million for the
corresponding period of 2000. The increase in research and development of $5.5
million was primarily attributable to increased purchases of material and
laboratory supplies of approximately $3.3 million, increased expenses as we
hired additional research and development personnel of approximately $1.1
million, and increased facilities expenses in connection with the expansion of
our internal and collaborative research efforts, including our collaboration
with The SNP Consortium, of approximately $1.4 million. These various increases
in research and development expenses were offset by a decrease in amortization
of deferred compensation during the three months ended September 30, 2001 of
approximately $0.4 million. We expect future research and development expenses
to increase as we continue to hire additional personnel and we continue to
expand research and development facilities to accommodate our strategic
collaborations and internal research.

         Impairment of goodwill. During the quarter ended September 30, 2001, we
recorded an impairment charge of approximately $27.3 million to write-down
goodwill which was recorded when we acquired GeneScreen on December 30, 1999.
Subsequent to September 30, 2001, we announced our intention to acquire
Lifecodes (as discussed above). Lifecodes operates primarily in the same
industry and provides the same services as GeneScreen. Based primarily on the
acquisition price for Lifecodes, among other matters, we determined that a
triggering event occurred for which an impairment review would be required
pursuant to SFAS 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of". The impairment charge was recorded
based on the fair value of Genescreen as computed using a discounted cash flow
valuation model. This charge reduced the unamortized goodwill recorded in the
acquisition of GeneScreen to zero. This charge relates to the "services" segment
of our business.

         Interest income. Interest income for the three months ended September
30, 2001 was approximately $0.5 million, compared to approximately $1.2 million
for the corresponding period of 2000. This decrease was primarily due to
interest received in 2000 on larger cash, cash equivalent and short-term
investment balances which we held as a result of our receipt of proceeds from
our Series E private placement in December 1999 and January 2000 and our initial
public offering in May 2000, offset by amounts used to fund operating
activities. The decrease is also attributable to lower interest rates during the
quarter ended September 30, 2001 compared to the corresponding period in 2000.

         Interest expense. Interest expense for the three months ended September
30, 2001 was approximately $0.2 million compared to approximately $0 in the
corresponding period in 2000. This increase was due to borrowings made during
late 2000 and in May, 2001 on our equipment line of credit.

         Net loss allocable to common stockholders. Due to the factors discussed
above, for the three months ended September 30, 2001, we reported a net loss
allocable to common stockholders of approximately $41.9 million as compared to
approximately $9.0 million in the corresponding period in 2000. Net loss
allocable to common stockholders for the quarter ended September 30, 2001
included a goodwill impairment charge of approximately $27.3 million.

                                       15
<PAGE>

Nine Months Ended September 30, 2001 and 2000

         Revenues. Revenues for the nine months ended September 30, 2001 of
approximately $19.8 million represents an increase of approximately $6.8 million
as compared to revenues of approximately $13.0 million for the corresponding
period of 2000. The increase in revenues was primarily attributable to the
successful completion of the first milestone under our genotyping agreement with
AstraZeneca, placements of SNPstream 25K instruments and sales of SNPware
consumable kits, and to an increase in revenues following our acquisition of
Cellmark on February 12, 2001.

         Cost of products revenue. Cost of product revenues for the nine months
ended September 30, 2001 was approximately $2.8 million compared to
approximately $1.3 million for the corresponding period of 2000. The increase
was directly attributable to the costs associated with SNPstream instrument
placements and consumables sold during the nine months ended September 30, 2001.

         Cost of services revenue. Cost of services revenue was approximately
$9.3 million for the nine months ended September 30, 2001 compared to
approximately $7.0 million in the corresponding period of 2000. The increase was
directly attributable to the increase of services revenue, including revenues
earned by our Cellmark division which we acquired on February 12, 2001.

         Selling general and administrative expenses. Selling, general and
administrative expenses consist primarily of salaries and related expenses for
executive, finance and other administrative personnel, recruiting expenses,
professional fees, legal expenses resulting from intellectual property
prosecution and protection, and other corporate expenses including business
development and general legal activities. Selling, general and administrative
expenses for the nine months ended September 30, 2001 were approximately $24.5
million, an increase of approximately $3.3 million, as compared to approximately
$21.2 million for the corresponding period of 2000. We attribute this increase
primarily to the expansion of administration facilities and the hiring of
additional personnel as we increased our executive and administrative staffing
in anticipation of an supporting our growth. During the nine months ended
September 30, 2001, there was increase in the expenses relating to the expansion
of facilities of approximately $1.1 million and an increase in salaries and
related expenses of approximately $1.3 million as well as an increase in
selling, general and marketing expenses of approximately $2.5 million relating
to our Cellmark division. There were also increases in travel expenses of
approximately $0.5 million and insurance expenses of approximately $0.5 million.
These various increases in general and administrative expenses were offset by a
decrease in amortization of deferred compensation during the nine months ended
September 30, 2001 of approximately $3.0 million.

         Research and development expenses. Research and development expenses
consist primarily of salaries and related personnel costs, fees paid to
consultants and outside service providers for chip development, laboratory
supplies for prototypes and test units, and other expenses related to the
design, development, testing and enhancement of our products. Research and
development expenses for the nine months ended September 30, 2001 were
approximately $25.4 million, compared to approximately $20.9 million for the
corresponding period of 2000. The increase in research and development of
approximately $4.5 million included an offset to a prior year transaction with
Sarnoff Corporation whereby we recorded an approximate $7.8 million charge
related to approximately a $3.0 million cash payment made to and the fair value
of 350,000 shares of common stock and five-year warrants to purchase 75,000
shares of common stock issued to Sarnoff Corporation as an advance on the
issuances that would have been owed in December 2000 under a License and Option
Agreement and an amendment of that Agreement. As this licensed technology under
this agreement had not reached technological feasibility and had no alternative
uses, the $7.8 million was charged to research and development. Excluding this
transaction, research and development expense during the nine months ended
September 30, 2001 increased by approximately $12.3 million. This increase was
attributable to increased expenses as we hired additional research and
development personnel of approximately $4.0 million, increased purchases of
laboratory supplies of approximately $5.7 million, increased equipment
depreciation of approximately $0.5 million, and increased facilities expenses in
connection with the expansion of our internal and collaborative research
efforts, including our collaboration with The SNP Consortium, of approximately
$2.6 million. These various increases in research and development expenses were
offset by a decrease in amortization of deferred compensation during the nine
months ended September 30, 2001 of approximately $1.0 million. We expect future
research and development expenses to increase as we continue to hire additional
personnel and continue to expand research and development facilities to
accommodate our strategic collaborations and internal research.

         Impairment of goodwill. During the nine months ended September 30,
2001, we recorded an impairment charge of approximately $27.3 million to
write-down goodwill which was recorded when we acquired GeneScreen on December
30, 1999. Subsequent to September 30, 2001, we announced our intention to
acquire Lifecodes (as discussed above). Lifecodes operates primarily in the same
industry and provides the same services as GeneScreen. Based primarily on the
acquisition price for Lifecodes, among other matters, we determined that a
triggering event occurred for which an impairment review would be required
pursuant to SFAS 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets

                                       16
<PAGE>

to be Disposed of". The impairment charge was recorded based on the fair value
of GeneScreen as computed using a discounted cash flow valuation model. This
charge reduced the unamortized goodwill recorded in the acquisition of
GeneScreen to zero. This charge relates to the "services" segment of our
business.

         Interest income. Interest income for the nine months ended September
30, 2001 was approximately $2.4 million, compared to approximately $3.3 million
for the corresponding period of 2000. This decrease was primarily due to
interest received in 2000 on larger cash, cash equivalent and short-term
investment balances which we held as a result of our receipt of proceeds from
our Series E private placement in December 1999 and January 2000 and our initial
public offering in May 2000, offset by amounts used to fund operating
activities. The decrease is also attributable to lower interest rates during the
nine months ended September 30, 2001 compared to the corresponding period in
2000.

         Interest expense. Interest expense for the nine months ended September
30, 2001 was approximately $0.6 million compared to approximately $0.3 million
in the corresponding period in 2000. This increase was due to borrowings made in
during 2000 and in May, 2001 on our equipment line of credit.

         Net loss allocable to common stockholders. Due to the factors discussed
above, for the nine months ended September 30, 2001, we reported a net loss
allocable to common stockholders of approximately $67.6 million as compared to
approximately $64.1 million in the corresponding period in 2000. Net loss
allocable to common stockholders for the nine months ended September 30, 2001
included a goodwill impairment charge of approximately $27.3 million. Net loss
allocable to common stockholders for 2000 included a beneficial conversion
feature on preferred stock of approximately $29.6 million.

LIQUIDITY AND CAPITAL RESOURCES

         Since our inception, we have financed our operations primarily through
research and development funding from collaborative partners, from our two
private placements of equity securities of approximately $102.0 million that
closed in March 1998 and in December 1999 and January 2000, $48.4 million from
our initial public offering which closed in May 2000, and approximately $33.3
million from our follow-on offering of common stock in June 2001. Our sale of
series E mandatorily redeemable convertible preferred stock in December 1999
resulted in an approximate $44.6 million beneficial conversion feature which was
included in net loss allocable to common stockholders in 1999. The closing of
our sale of series E mandatorily redeemable convertible preferred stock in
January 2000 resulted in an additional $29.6 million beneficial conversion
feature which was included in net loss allocable to common stockholders in 2000.
In December 1998, we obtained a secured $6.0 million equipment line of credit,
for the purchase of plant and equipment at our corporate headquarters and
research and development laboratories whose availability expired in 1999. In
December 2000, this agreement was amended to establish a new borrowing base of
an additional $8.0 million. At September 30, 2001, we had borrowings of
approximately $7.6 million outstanding, and approximately $2.8 million available
to be borrowed under this facility through 2001. We lease our corporate and
primary research facility under operating leases, which expire in 2006 and 2008,
respectively. Pursuant to our line of credit which was amended in December 2000,
we are required to provide a cash security deposit or letter of credit equal to
$2.1 million plus 50% of any future draw amount no later than June 30, 2001,
unless we have completed a follow-on offering of at least $50.0 million in net
unrestricted proceeds. During the quarter ended June 30, 2001, we did complete a
follow-on offering, which raised net proceeds of $33.3 million. However, the net
unrestricted proceeds from this offering were less than the minimum amount
required under this line of credit. We have received written notice from the
lender stating that the lender waived the requirement of a pledge of cash
security deposit or letter of credit under this agreement. On May 10, 2001, we
filed a Registration Statement on Form S-3 with the Securities and Exchange
Commission. Subject to our ongoing obligations under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, the
Registration Statement permits us to offer and sell various types of securities,
up to an aggregate value of approximately $75.0 million, of which approximately
$39.3 million remains available for future use. The sale of common stock in
June, 2001 for gross proceeds of $35.7 million was registered under this
Registration Statement.

         As of September 30, 2001, we had approximately $52.7 million in cash
and cash equivalents and short-term investments, compared to approximately $66.4
million as of December 31, 2000. This decrease is due to increased operating
expenses related to the expansion of our genotyping and pharmaceutical value
creation facilities, cash paid to acquire Cellmark and the Affymetrix patent and
license, and to fund our operations during the nine months ended September 30,
2001, offset by proceeds received from our offering of common stock in June,
2001.

         Net cash used in operations for the nine months ended September 30,
2001 was approximately $32.4 million compared with approximately $27.2 million
for the comparable period in 2000. Non-cash charges in the nine months ended
September 30, 2001 included a goodwill impairment charge of approximately $27.3
million, depreciation and amortization

                                       17
<PAGE>

expense of approximately $5.8 million and compensation expense of approximately
$2.2 million. Investing activities included capital expenditures of
approximately $7.3 million, approximately $2.9 million in cash paid related to
our acquisition of Cellmark, approximately $3.0 million related to our
acquisition of the Affymetrix patent and license, and approximately $17.7
million of net proceeds from sales, net of purchases, of short term investments.
Financing activities primarily consisted of approximately $33.3 million of net
proceeds from our offering of common stock in June 2001.

         Working capital decreased to approximately $50.8 million at September
30, 2001 from approximately $64.7 million at December 31, 2000. This decrease is
due to operating expenses related to the expansion of our genotyping and
pharmaceutical value creation facilities, cash paid to acquire Cellmark and the
Affymetrix patent and license, and to fund operations of the Company during the
nine months ended September 30, 2001.

         We believe that our cash reserves and expected short-term revenue will
be sufficient to fund our operations through at least the next 12-18 months. We
may need to access the capital markets for additional financing to operate our
ongoing business activities.

         As of December 31, 2000, our net operating loss carry forwards were
approximately $87.0 million and approximately $83.0 million for Federal and
state income tax purposes, respectively. If not utilized, our Federal and state
tax loss carry forwards will begin to expire in 2003 and 2002, respectively.
Utilization of our net operating losses to offset future taxable income, if any,
may be substantially limited due to "change of ownership" provisions in the
Internal Revenue Code of 1986. We have not yet determined the extent to which
limitations were triggered as a result of past financings or may be triggered as
a result of future financings. This annual limitation is likely to result in the
expiration of certain net operating losses prior to their use.

         We cannot assure you that our business or operations will not change in
a manner that would consume available resources more rapidly than anticipated.
We also cannot assure you that we will not require substantial additional
funding before we can achieve profitable operations. Our capital requirements
depend on numerous factors, including the following:


     .    our ability to enter into strategic alliances or make acquisitions;

     .    regulatory changes and competing technological and market
          developments;

     .    changes in our existing collaborative relationships;

     .    the cost of filing, prosecuting, defending and enforcing patent claims
          and other intellectual property rights;

     .    the development of our SNPware consumables, SNPstream and software
          product lines and associated reagent consumables;

     .    our ability to successfully secure contracts for high volume
          genotyping services from pharmaceutical, biotechnology and
          agricultural companies;

     .    the success rate of establishing new contracts, and renewal rate of
          existing contracts, for DNA testing services in the areas of
          paternity, forensics and transplantation;

     .    the progress of our existing and future milestone and royalty
          producing activities; and

     .    the availability of additional funding, if necessary, and if at all,
          on favorable terms.

Recent Pronouncements

         In July 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS 141 requires that the purchase method of accounting be used for
all business combinations initiated after June 30, 2001 as well as all purchase
method business combinations completed after June 30, 2001. SFAS 141 also
specifies criteria intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from goodwill, noting
that any purchase price allocable to an assembled workforce may not be accounted
for separately. SFAS 142 will require that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of SFAS 142. SFAS
142 will also require that intangible assets with estimable useful lives be
amortized over their respective estimated useful lives to their estimated
residual values, and reviewed for impairment in accordance with SFAS No. 121,
"Accounting

                                       18
<PAGE>

for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of".

         We are required to adopt the provisions of SFAS 141 immediately and
SFAS 142 effective January 1, 2002. Furthermore, goodwill and intangible assets
determined to have an indefinite useful life acquired in a purchase business
combination completed after June 30, 2001, but before SFAS 142 is adopted in
full will not be amortized, but will continue to be evaluated for impairment in
accordance with the appropriate pre-SFAS 142 accounting literature. Goodwill and
intangible assets acquired in business combinations completed before July 1,
2001 will continue to be amortized and tested for impairment in accordance with
the appropriate pre-SFAS 142 accounting requirements prior to the adoption of
SFAS 142.

         SFAS 141 will require upon adoption of SFAS 142, that we evaluate its
existing intangible assets and goodwill that were acquired in a prior purchase
business combination, and to make any necessary reclassifications in order to
conform with the new criteria in SFAS 141 for recognition apart from goodwill.
Upon adoption of SFAS 142, we will be required to reassess the useful lives and
residual values of all intangible assets acquired, and make any necessary
amortization period adjustments by the end of the first interim period after
adoption. In addition, to the extent an intangible asset is identified as having
an indefinite useful life, we will be required to test the intangible asset for
impairment in accordance with the provisions of SFAS 142 within the first
interim period. Any impairment loss will be measured as of the date of adoption
and recognized as the cumulative effect of a change in accounting principle in
the first interim period.

         In connection with SFAS 142's transitional goodwill impairment
evaluation, the statement will require that we are to perform an assessment of
whether there is an indication that goodwill is impaired as of the date of
adoption. To accomplish this, we must identify its reporting units and determine
the carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. We will then have up to six months
from the date of adoption to determine the fair value of each reporting unit and
compare it to the reporting unit's carrying amount. To the extent a reporting
unit's carrying amount exceeds its fair value, an indication exists that the
reporting unit's goodwill may be impaired and we must perform the second step of
the transitional impairment test. In the second step, we must compare the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all of our assets (recognized and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with SFAS 141, to its carrying amount, both of which would be
measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in our statement of operations.

         As of the date of adoption, we expect to have unamortized goodwill in
the amount of approximately $0.5 million and unamortized identifiable intangible
assets in the amount of approximately $18.9 million all of which will be subject
to the transition provisions of SFAS 141 and 142. These asset balances are based
on amounts as of September 30, 2001 which excludes any goodwill or intangible
assets which might be recorded in connection with the pending Lifecodes
acquisition which is expected to be consummated in the fourth quarter of 2001.
Amortization expense related to goodwill was approximately $2.1 million and
approximately $1.6 million for the year ended December 31, 2000 and the nine
months ended September 30, 2001, respectively which includes amortization of
goodwill resulting from the GeneScreen acquisition in December 1999 of
approximately $2.1 million and approximately $1.6 million, respectively. Because
of the extensive effort needed to comply with adopting SFAS 141 and 142, it is
not practicable to reasonably estimate the impact of adopting these statements
on our consolidated financial statements at the date of this report, including
whether it will be required to recognize any transitional impairment losses as
the cumulative effect of a change in accounting principle.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Our exposure to market risk is principally confined to our cash
equivalents and short-term investments, which are conservative in nature, with a
focus on preservation of capital and all of which have maturities of less than
one year which limit their exposure to market fluctuations. We maintain a
non-trading investment portfolio of investment grade, liquid debt securities
that limit the amount of credit exposure to any one issue, issuer or type of
instrument.

         Market risk refers to the risk of loss arising from adverse changes in
foreign currency exchange rates. As a result of the acquisition of our business
division, Cellmark, in February 2001, and a limited number of foreign
investments, we may be affected by fluctuations in currency exchange rates.

         We have a minimal amount of long-term debt recorded on our books. The
interest rates applicable to such debt are not variable with respect to market
conditions.

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<PAGE>

FORWARD LOOKING STATEMENTS

         This report may contain forward-looking statements. Such statements are
based on management's current expectations and are subject to a number of
factors and uncertainties that could cause actual results or outcomes to differ
materially from those described in such forward-looking statements. These
statements address or may address the following subjects: our expectation that
we will launch the SNP-IT-based kit in strategic partnership with an industry
leader; our expectation that SNPstream systems we place will generate additional
recurring revenue stream from the sale of our SNPware consumables; our plan to
provide a variety of SNP genotyping and pharmacogenetics services to the
pharmaceutical and biotechnology industries through our high throughput
MegaSNPatron facility; our intention to expand our offerings of SNPware
consumables for use on instruments made or sold by other companies and to obtain
access fees and royalties by licensing our SNP- IT technology for incorporation
in consumable kits of others; our intention to develop intellectual property
rights through our collaborations with pharmaceutical and biotechnology
companies; our intention to develop proprietary rights around both diagnostic
and therapeutic uses of SNPs; our plan to use accredited laboratories at
GeneScreen, Cellmark and Lifecodes to offer clinical quality pharmacogenetics
SNP scoring services for clinical association studies and pharmaceutical
clinical trials and to physicians and patients via the Internet as well as other
distribution channels; our expectation that revenues from the respective
forensics businesses of GeneScreen, Cellmark and Lifecodes to increase as DNA
analysis are increasingly being used by the criminal justice system; our
expectation of expanding our operations that may lead to increases in expenses;
our expectation of having several sources of revenue in the future; our belief
that our cash reserves and expected short-term revenue will be sufficient to
fund operations through at least the next 12-18 months; our intention to add the
ultra-high throughput SNPstream UHT system to the MegaSNPatron in early 2002;
our expectation that fee-for-service SNP scoring will be an attractive option
for many customers, and that it can provide us with the opportunity to develop
higher value content and intellectual property; GeneShield's expectation of
announcing its first major collaboration in 2002; our intention to apply our
ultra-high throughput SNP scoring technology to the identity genomics, that is,
the paternity and forensics businesses of GeneScreen and Cellmark in order to
significantly reduce the cost of providing these services; our expectation that
we will close and integrate the Lifecodes acquisition in the fourth quarter of
2001; our belief that our position is strong with respect to the dispute with
St. Louis University; and our belief that the issue with Motorola has been
resolved, or similar subjects. We caution investors that there can be no
assurance that actual results, outcomes or business conditions will not differ
materially from those projected or suggested in such forward-looking statements
as a result of various factors, including, among others, our limited operating
history, unpredictability of future revenues and operating results, and
competitive pressures. For further information, refer to the more specific
factors and uncertainties discussed throughout this report and in the "Risk
Factors" section of our Registration Statement on Form S-4 filed with the
Securities and Exchange Commission which became effective on November 5, 2001.


PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         We have been in discussions with St. Louis University of St. Louis,
Missouri regarding the University's belief that our SNP scoring technology
infringes certain claims under US patent 5846710, which is controlled by the
University. Although we are confident that our SNP scoring technology does not
infringe any claims under the University's patent, we nonetheless entered into
discussions with the University regarding the scope of these claims in the hope
of resolving the issue. Upon our failure to reach agreement with the University,
in August 2000 we filed a lawsuit against the University in the US District
Court for the Southern District of California, Case No. 00CV1558L (JFS), seeking
declaratory judgment of non-infringement, invalidity and non-enforceability with
respect to the University's patent. While we believe that our position in this
action is strong, patent litigation is complex and might result in claims
against us, including patent infringement. As a result, the outcome of this
action is uncertain. Furthermore, while we are seeking declaratory judgment in
this action, the lawsuit could take significant time, be expensive and divert
our management's attention from other business concerns.

         We had been engaged in discussions with Motorola in an attempt to
resolve certain areas of disagreement that arose under our existing
collaboration in the area of microfluidics, which discussions have now been
resolved.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

                                       20
<PAGE>

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

Not applicable.

ITEM 5.  OTHER INFORMATION.

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

       (a)  Exhibits

       The following is a list of exhibits filed as part of this Quarterly
Report on Form 10-Q.

Exhibit
Number      Description
------      -----------

3.1         Restated Certificate of Incorporation (filed as Exhibit 3.2 to the
            Registrant's Registration Statement on Form S-1, No. 333-30774, and
            incorporated herein by reference)

3.2         Certificate of Amendment to the Restated Certificate of
            Incorporation of the Registrant dated June 12, 2001 (filed as
            Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for
            the period ended June 30, 2001 and incorporated herein by
            reference).

3.3         Certificate of Designation, Preferences, and Rights of Series A
            Junior Participating Preferred Stock of the Registrant dated August
            1, 2001 (filed as Exhibit 3.3 to the Registrant's Quarterly Report
            on Form 10-Q for the period ended June 30, 2001 and incorporated
            herein by reference).

3.4         Amended and Restated Bylaws of the Registrant (filed as Exhibit 3.4
            to the Registrant's Registration Statement on Form S-1, No.
            333-30774, and incorporated herein by reference).

4.1         Specimen Stock Certificate.

4.2         Rights Agreement, dated as of July 27, 2001, between the Registrant
            and American Stock Transfer & Trust Company, which includes the form
            of Certificate of Designations setting forth the terms of the Series
            A Junior Participating Preferred Stock, $0.001 par value as Exhibit
            A, the form of the Rights Certificate as Exhibit B and the Summary
            of Rights to Purchase Series A Junior Participating Preferred Shares
            as Exhibit C. Pursuant to the Rights Agreement, printed Rights
            Certificates will not be mailed until after the Distribution Date
            (as defined in the Rights Agreement) (filed as Exhibit 4.1 to the
            Registrant's Registration Statement on Form 8-A and incorporated
            herein by reference).

       (b)  Reports on Form 8-K

       None.

                                       21
<PAGE>

                                   SIGNATURES

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

                                ORCHID BIOSCIENCES, INC.

Date: November 13, 2001         By: /s/ Donald R. Marvin}
                                    -----------------------

                                    DONALD R. MARVIN
                                    Senior Vice President, Chief Operating
                                    Officer, Chief Financial Officer
                                    (principal financial and accounting officer)

                                      22
<PAGE>

                                  Exhibit Index

Exhibit
Number                  Description
-------                 -----------

3.1         Restated Certificate of Incorporation (filed as Exhibit 3.2 to the
            Registrant's Registration Statement on Form S-1, No. 333-30774, and
            incorporated herein by reference)

3.2         Certificate of Amendment to the Restated Certificate of
            Incorporation of the Registrant dated June 12, 2001 (filed as
            Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for
            the period ended June 30, 2001 and incorporated herein by
            reference).

3.3         Certificate of Designation, Preferences, and Rights of Series A
            Junior Participating Preferred Stock of the Registrant dated August
            1, 2001 (filed as Exhibit 3.3 to the Registrant's Quarterly Report
            on Form 10-Q for the period ended June 30, 2001 and incorporated
            herein by reference).

3.4         Amended and Restated Bylaws of the Registrant (filed as Exhibit 3.4
            to the Registrant's Registration Statement on Form S-1, No.
            333-30774, and incorporated herein by reference).

4.1         Specimen Stock Certificate.

4.2         Rights Agreement, dated as of July 27, 2001, between the Registrant
            and American Stock Transfer & Trust Company, which includes the form
            of Certificate of Designations setting forth the terms of the Series
            A Junior Participating Preferred Stock, $0.001 par value as Exhibit
            A, the form of the Rights Certificate as Exhibit B and the Summary
            of Rights to Purchase Series A Junior Participating Preferred Shares
            as Exhibit C. Pursuant to the Rights Agreement, printed Rights
            Certificates will not be mailed until after the Distribution Date
            (as defined in the Rights Agreement) (filed as Exhibit 4.1 to the
            Registrant's Registration Statement on Form 8-A, No. 000-30267, and
            incorporated herein by reference).

                                       23