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SECURITIES
  AND EXCHANGE COMMISSION WASHINGTON,
  D.C. 20549

FORM
  10-Q

(Mark
  One)

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



FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

TRANSITION
          REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
          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****(State or other
      jurisdiction
      of incorporation or organization)    | 22-3392819
      (I.R.S. Employer Identification No.)
|----------------------------------------------------------------------------------------- | -----------------------------------------------------
|                                                                                          |                                                      
|4390
        US ROUTE ONE, PRINCETON, NJ
        (Address of principal executive offices) | 08540
      (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 |  | No
|--- |  | --

Indicate by check mark
  whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
  the Exchange Act).

|Yes |  | No
|--- |  | --

The number
  of shares outstanding of the registrant's Common Stock, $.001 par value, as
  of May 1, 2003, was55,738,781.



---

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|ORCHID
      BIOSCIENCES, INC. AND SUBSIDIARIES |                                                                                      
|----------------------------------------------- | -------------------------------------------------------------------------------------
|INDEX
      TO FORM 10-Q                        |                                                                                      
|                                                |                                                                                      
|                                                | PAGE                                                                                 
|                                                |                                                                                      
|PART
        I FINANCIAL INFORMATION            | 3                                                                                    
|                                                |                                                                                      
|Item
      1.                                   | Financial
      Statements                                                           
|                                                |                                                                                      
|                                                | Condensed
      Consolidated Balance Sheets as of March 31, 2003                     
|                                                | (unaudited)
      and December 31, 2002                                              
|                                                |                                                                                      
|                                                | Condensed
      Consolidated Statements of Operations for the three                  
|                                                | months
      ended March 31, 2003 and 2002 (unaudited)                               
|                                                |                                                                                      
|                                                | Condensed
      Consolidated Statements of Cash Flows for the three months ended     
|                                                | March
      31, 2003 and 2002 (unaudited)                                            
|                                                |                                                                                      
|                                                | Notes
      to Condensed Consolidated Financial Statements (unaudited)               
|                                                |                                                                                      
|Item
      2.                                   | Management's Discussion and Analysis of Financial ConditionAnd Results Of Operations.
|                                                |                                                                                      
|Item
      3.                                   | Quantitative and Qualitative Disclosures about Market Risk                           
|                                                |                                                                                      
|Item
      4.                                   | Controls
      and Procedures                                                        
|                                                |                                                                                      
|PART
      II OTHER INFORMATION.                | 27                                                                                   
|                                                |                                                                                      
|Item
      1.                                   | Legal Proceedings.                                                                   
|                                                |                                                                                      
|Item
      2.                                   | Changes
      in Securities and Use of Proceeds                                      
|                                                |                                                                                      
|Item
      3.                                   | Defaults
      upon Senior Securities.                                               
|                                                |                                                                                      
|Item
      4.                                   | Submission
      of Matters to a Vote of Security Holders                            
|                                                |                                                                                      
|Item
      5.                                   | Other
      Information                                                              
|                                                |                                                                                      
|Item
      6.                                   | Exhibits
      and Reports on Form 8-K                                               

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PART I.   FINANCIAL INFORMATION

ITEM
  I.   FINANCIAL STATEMENTS

ORCHID
  BIOSCIENCES, INC.AND SUBSIDIARIESCondensed
  Consolidated Balance Sheets 
  (In thousands, except share and per share data)

|Assets                                                                                                                              |  |   | March
        31,
        2003 |   |   | December
        31,
        2002 |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | - | ------------------------------ | - | - | --------------------------------- | -
|                                                                                                                                    |  |   |                                |   |   |                                   |  
|                                                                                                                                    |  |   | (unaudited)                    |   |   |                                   |  
|Current assets:                                                                                                                     |  |   |                                |   |   |                                   |  
|Cash
      and cash equivalents                                                                                                     |  | $ | 12,433                         |   | $ | 9,985                             |  
|Restricted
      cash                                                                                                               |  |   | 1,522                          |   |   | 1,522                             |  
|Stock
      subscription receivable                                                                                                 |  |   | 7,450                          |   |   |                                  |  
|Accounts
      receivable, net                                                                                                      |  |   | 10,527                         |   |   | 10,716                            |  
|Inventory                                                                                                                           |  |   | 1,190                          |   |   | 944                               |  
|Other
      current assets                                                                                                          |  |   | 1,167                          |   |   | 1,623                             |  
|Assets
      of a business component held for sale                                                                                  |  |   | 10,594                         |   |   | 10,497                            |  
|                                                                                                                                    |  |   |                                |   |   |                                   |  
|Total
      current assets                                                                                                          |  |   | 44,883                         |   |   | 35,287                            |  
|Fixed assets, net                                                                                                                   |  |   | 12,298                         |   |   | 13,244                            |  
|Goodwill, net                                                                                                                       |  |   | 3,048                          |   |   | 3,072                             |  
|Other intangibles, net                                                                                                              |  |   | 16,098                         |   |   | 16,585                            |  
|Restricted cash                                                                                                                     |  |   | 1,863                          |   |   | 1,863                             |  
|Other assets                                                                                                                        |  |   | 383                            |   |   | 383                               |  
|                                                                                                                                    |  |   |                                |   |   |                                   |  
|Total
      assets                                                                                                                  |  | $ | 78,573                         |   | $ | 70,434                            |  
|                                                                                                                                    |  |   |                                |   |   |                                   |  
|Liabilities
      and Stockholders Equity                                                                                          |  |   |                                |   |   |                                   |  
|Current liabilities:                                                                                                                |  |   |                                |   |   |                                   |  
|Current
      portion of long-term debt                                                                                             |  | $ | 2,860                          |   | $ | 8,510                             |  
|Accounts
      payable                                                                                                              |  |   | 3,467                          |   |   | 3,405                             |  
|Accrued
      expenses                                                                                                              |  |   | 12,879                         |   |   | 11,677                            |  
|Deferred
      revenue                                                                                                              |  |   | 2,043                          |   |   | 1,642                             |  
|Liabilities
      of a business component held for sale                                                                             |  |   | 2,643                          |   |   | 2,497                             |  
|                                                                                                                                    |  |   |                                |   |   |                                   |  
|Total
      current liabilities                                                                                                     |  |   | 23,892                         |   |   | 27,731                            |  
|Long-term debt, less current
      portion                                                                                          |  |   | 2,098                          |   |   | 2,299                             |  
|Other liabilities                                                                                                                   |  |   | 1,667                          |   |   | 1,711                             |  
|Redeemable Convertible
      Series A preferred stock.                                                                              |  |   |                                |   |   |                                   |  
|Designated
      1,680 shares; $.001 par value; 1,675 and 0 shares issued and                                                       |  |   |                                |   |   |                                   |  
|outstanding
      as of March 31, 2003 and December 31, 2002, respectively;                                                         |  |   |                                |   |   |                                   |  
|stated
      and liquidation value of $16,750,000; minimum redemption                                                               |  |   |                                |   |   |                                   |  
|value
      of $20,937,500                                                                                                          |  |   | 12,977                         |   |   |                                  |  
|Commitments and contingencies                                                                                                       |  |   |                                |   |   |                                   |  
|Stockholders equity:                                                                                                               |  |   |                                |   |   |                                   |  
|Preferred
      stock, $.001 par value. Authorized 5,000,000 shares;                                                                |  |   |                                |   |   |                                   |  
|1,675
        and 0 shares issued and outstanding as of March 31, 2003 and December 31,
        2002, respectively (reported above) |  |   |                                |   |   |                                   |  
|Series
      A junior participating preferred stock, $.001 par value.                                                               |  |   |                                |   |   |                                   |  
|Designated
      1,000,000 shares; no shares issued or outstanding                                                                  |  |   |                                |   |   |                                   |  
|Common
      stock, $.001 par value. Authorized 150,000,000 shares;                                                                 |  |   |                                |   |   |                                   |  
|issued
      and outstanding 55,738,781 at March 31, 2003 and                                                                       |  |   |                                |   |   |                                   |  
|December
      31, 2002, respectively                                                                                               |  |   | 56                             |   |   | 56                                |  
|Additional
      paid-in capital                                                                                                    |  |   | 306,597                        |   |   | 303,953                           |  
|Deferred
      compensation                                                                                                         |  |   | (1,312                         | ) |   | (2,305                            | )
|Accumulated
      other comprehensive income                                                                                        |  |   | 278                            |   |   | 389                               |  
|Accumulated
      deficit                                                                                                           |  |   | (267,680                       | ) |   | (263,400                          | )
|                                                                                                                                    |  |   |                                |   |   |                                   |  
|Total
      stockholders equity                                                                                                    |  |   | 37,939                         |   |   | 38,693                            |  
|                                                                                                                                    |  |   |                                |   |   |                                   |  
|Total
      liabilities and stockholders equity                                                                                    |  | $ | 78,573                         |   | $ | 70,434                            |  
|                                                                                                                                    |  |   |                                |   |   |                                   |  

See accompanying
  notes to condensed consolidated financial statements.

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ORCHID
  BIOSCIENCES, INC. 
  AND SUBSIDIARIESCondensed
  Consolidated Statements of Operations 
  Three months ended March 31, 2003 and 2002 
  (In thousands, except share and per share data)
  (unaudited)

|                                                                   |   |            |   |   |            |  
|------------------------------------------------------------------ | - | ---------- | - | - | ---------- | -
|                                                                   |   | 2003       |   |   | 2002       |  
|                                                                   |   |            |   |   |            |  
|Revenues:                                                          |   |            |   |   |            |  
|Product
      revenues                                             | $ |           |   | $ | 723        |  
|Service
      revenues                                             |   | 12,541     |   |   | 10,189     |  
|Other
      revenues                                               |   | 197        |   |   | 789        |  
|                                                                   |   |            |   |   |            |  
|Total
      revenues                                               |   | 12,738     |   |   | 11,701     |  
|                                                                   |   |            |   |   |            |  
|Operating
      expenses:                                          |   |            |   |   |            |  
|Cost
      of product revenues                                     |   |           |   |   | 248        |  
|Cost
      of service revenues                                     |   | 6,997      |   |   | 6,490      |  
|Research
      and development                                     |   | 1,205      |   |   | 5,624      |  
|Marketing
      and sales                                          |   | 1,868      |   |   | 2,164      |  
|General
      and administrative                                   |   | 5,960      |   |   | 8,357      |  
|Amortization
      of intangible assets                            |   | 455        |   |   | 746        |  
|                                                                   |   |            |   |   |            |  
|Total
      operating expenses                                     |   | 16,485     |   |   | 23,629     |  
|                                                                   |   |            |   |   |            |  
|Operating
      loss                                               |   | (3,747     | ) |   | (11,928    | )
|Other income
      (expense):                                      |   |            |   |   |            |  
|Interest
      income                                              |   | 13         |   |   | 280        |  
|Interest
      expense                                             |   | (156       | ) |   | (137       | )
|Other
         income/(expense)                                    |   | 153        |   |   | (140       | )
|                                                                   |   |            |   |   |            |  
|Total
      other income, net                                      |   | 10         |   |   | 3          |  
|                                                                   |   |            |   |   |            |  
|Loss
      from continuing operations before income taxes          |   | (3,737     | ) |   | (11,925    | )
|Income tax
      (expense)/benefit                                 |   | (344       | ) |   | 894        |  
|                                                                   |   |            |   |   |            |  
|Loss
      from continuing operations                              |   | (4,081     | ) |   | (11,031    | )
|Discontinued
      operations:                                     |   |            |   |   |            |  
|Income/(loss)
      from operations of a business held for sale    |   | (199       | ) |   | 514        |  
|                                                                   |   |            |   |   |            |  
|Net
      loss                                                     |   | (4,280     | ) |   | (10,517    | )
|Beneficial
      conversion feature of redeemable preferred stock  |   | (744       | ) |   |           |  
|                                                                   |   |            |   |   |            |  
|Net
      loss allocable to common stockholders                    | $ | (5,024     | ) | $ | (10,517    | )
|                                                                   |   |            |   |   |            |  
|Basic and
      diluted loss from continuing operations            |   |            |   |   |            |  
|per
      share allocable to common stockholders                   | $ | (0.09      | ) | $ | (0.22      | )
|Basic and
      diluted income/(loss) from discontinued operations |   |            |   |   |            |  
|per
      share                                                    | $ | (0.00      | ) | $ | 0.01       |  
|Basic and
      diluted net loss per share allocable to            |   |            |   |   |            |  
|common
      stockholders                                          | $ | (0.09      | ) | $ | (0.21      | )
|                                                                   |   |            |   |   |            |  
|Shares used
      in computing basic and diluted net               |   |            |   |   |            |  
|loss
      per share allocable to common                           |   |            |   |   |            |  
|stockholders                                                       |   | 55,738,781 |   |   | 49,418,418 |  

See accompanying notes to condensed consolidated financial statements.

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ORCHID
  BIOSCIENCES, INC.AND
  SUBSIDIARIESCondensed
  Consolidated Statements of Cash Flows 
  Three months ended March 31, 2003 and 2002
  (In thousands) 
  (unaudited)

|                                                                                                                 |   | 2003   |   |   | 2002    |  
|---------------------------------------------------------------------------------------------------------------- | - | ------ | - | - | ------- | -
|                                                                                                                 |   |        |   |   |         |  
|Cash flows
      from operating activities:                                                                      |   |        |   |   |         |  
|Loss
      from continuing operations                                                                            | $ | (4,081 | ) | $ | (11,031 | )
|Income/(loss)
      from discontinued operations                                                                 |   | (199   | ) |   | 514     |  
|Adjustments
        to reconcile net loss to net cash provided by/(used in)operating
        activities:         |   |        |   |   |         |  
|Cash
      provided by discontinued operations                                                                   |   | 49     |   |   | 197     |  
|Noncash
      compensation expense                                                                               |   | 481    |   |   | 602     |  
|Depreciation
      and amortization                                                                              |   | 1,618  |   |   | 2,160   |  
|Warrants
      issued to third party as a financing fee                                                          |   | 133    |   |   |        |  
|Changes
      in assets and liabilities:                                                                         |   |        |   |   |         |  
|Accounts
      receivable                                                                                        |   | 189    |   |   | 289     |  
|Inventory                                                                                                        |   | (246   | ) |   | (1,041  | )
|Other
      current assets                                                                                       |   | 456    |   |   | 726     |  
|Other
      assets                                                                                               |   |       |   |   | (265    | )
|Accounts
      payable                                                                                           |   | 62     |   |   | 757     |  
|Accrued
      expenses                                                                                           |   | 1,202  |   |   | (716    | )
|Deferred
      revenue                                                                                           |   | 401    |   |   | 140     |  
|Other
      liabilities                                                                                          |   | (44    | ) |   | (44     | )
|                                                                                                                 |   |        |   |   |         |  
|Net
      cash provided by/(used in) operating activities                                                        |   | 21     |   |   | (7,712  | )
|                                                                                                                 |   |        |   |   |         |  
|Cash flows
      from investing activities:                                                                      |   |        |   |   |         |  
|Capital
      expenditures                                                                                       |   | (217   | ) |   | (1,187  | )
|Maturities
      of short-term investments                                                                       |   |       |   |   | 13,755  |  
|                                                                                                                 |   |        |   |   |         |  
|Net
      cash provided by/(used in) investing activities                                                        |   | (217   | ) |   | 12,568  |  
|                                                                                                                 |   |        |   |   |         |  
|Cash flows
      from financing activities:                                                                      |   |        |   |   |         |  
|Net
      proceeds from issuance of common stock                                                                 |   |       |   |   | 21,262  |  
|Net
      proceeds from issuance of redeemable convertible preferred stock                                       |   | 8,550  |   |   |        |  
|Repayment
      of debt from line of credit                                                                      |   | (5,851 | ) |   | (733    | )
|Payments
      of patent obligation                                                                              |   |       |   |   | (100    | )
|                                                                                                                 |   |        |   |   |         |  
|Net
      cash provided by financing activities                                                                  |   | 2,699  |   |   | 20,429  |  
|                                                                                                                 |   |        |   |   |         |  
|Effect of
      foreign currency translation on cash and cash equivalents                                        |   | (55    | ) |   | (131    | )
|                                                                                                                 |   |        |   |   |         |  
|Net
      increase in cash and cash equivalents                                                                  |   | 2,448  |   |   | 25,154  |  
|Cash and
      cash equivalents at beginning of period                                                           |   | 9,985  |   |   | 10,746  |  
|                                                                                                                 |   |        |   |   |         |  
|Cash and
      cash equivalents at end of period                                                                 | $ | 12,433 |   | $ | 35,900  |  
|                                                                                                                 |   |        |   |   |         |  
|Supplemental
      disclosure of noncash financing and investing activities:                                     |   |        |   |   |         |  
|Reversal
      of deferred compensation from forfeiture of common stock options                                  | $ | 512    |   | $ |        |  
|Issuance
      of common stock warrants to investors of the redeemable preferred stock                           |   | 2,903  |   |   |        |  
|Issuance
        of units of redeemable preferred stock to placement agent as a financing
        fee            |   | 750    |   |   |        |  
|Issuance
        of common stock warrants to placement agent of the redeemable preferred
        stock           |   | 120    |   |   |        |  
|Stock subscription
          receivable                                                                          |   | 7,450  |   |   |        |  
|Beneficial
      conversion feature of redeemable preferred stock                                                |   | 744    |   |   |        |  
|Changes
        in deferred compensation for grant, forfeiture and remeasurement of common
        stock options |   |       |   |   | 324     |  
|                                                                                                                 |   |        |   |   |         |  
|                                                                                                                 |   |        |   |   |         |  
|Supplemental
      disclosure of cash flow information:                                                          |   |        |   |   |         |  
|Cash
      paid during the period for interest                                                                   | $ | 148    |   | $ | 75      |  

See accompanying
  notes to condensed consolidated financial statements.

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ORCHID
  BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES
  TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSMarch
  31, 2003 and 2002(in thousands
  except share and per share data)
  (unaudited)

|(1) | Basis
      of Presentation, Organization and Liquidity
|--- | -------------------------------------------------------

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 (US)
  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 US
  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 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,
  2002, as filed with the Securities and Exchange Commission.

Certain reclassifications were made to prior year amounts to conform to the current year presentation.

On December 30, 1999, the Company acquired GeneScreen, Inc. (GeneScreen), which operates genetic diversity testing laboratories in Dallas, Texas and Dayton, Ohio. GeneScreen performs DNA laboratory analyses for paternity, transplantation and forensic testing. GeneScreens primary source of revenue is paternity testing under contracts with various state and county government agencies.

During 2001, the Company consummated two acquisitions. On February 12, 2001, the Company acquired Cellmark Diagnostics (Cellmark), a division of AstraZeneca. Cellmark is a leading provider of genetic testing services in the United Kingdom (UK) which also sells kits and conducts testing for genetic diseases, including cystic fibrosis. On December 5, 2001, the Company acquired Lifecodes Corporation (Lifecodes). Lifecodes is a leading provider of genetic testing for forensics and paternity in the US, as well as donor transplantation matching.

The Company has not achieved
    profitable operations or positive cash flow from operations. There is no
    assurance that profitable operations and positive cash flows can be achieved
    or, if ever achieved, could be sustained on a continuing basis. The Companys
    accumulated deficit aggregated $267,680 at March 31, 2003. During the first
    quarter of 2003, the Company consummated a financing transaction that it
    expects to be sufficient, coupled with existing cash on hand and the availability
    to the Companys $10 million line of credit, to fund the Companys
    operations at least through December 31, 2003. In addition, the Company holds
    its Diagnostic
    business
    for sale
    and
    expects
    that the sale
    of its Diagnostics business will generate incremental cash resources in 2003.
    The Company may be unable to raise additional funds or raise funds on terms
    that are acceptable to the Company. If future financing is not available
    to the Company, or is not available on terms acceptable to the Company, it
    may not be able to fund its future needs. If the Company raises funds through
    equity or convertible securities, the Companys stockholders may experience
    dilution and the Companys stock price may decline.

The Company has received a
  notice from the Nasdaq National Stock Market indicating that the Company has
  failed to comply with the $1.00 minimum bid price required for continued listing
  by Marketplace Rule 4450(a)(5) and that its common stock is subject to delisting
  from the Nasdaq. The Company filed a request for a hearing before the Nasdaq
  Qualifications Panel (the Panel) to appeal the staff determination which occurred
  on February 19, 2003. On March 26, 2003, the Panel determined to continue listing
  of the Companys common stock on the Nasdaq National Market through June
  24, 2003. On April 15, 2003, the Company held a special shareholders meeting
  at which the shareholders approved implementation of a reverse stock split in
  an attempt to comply with the minimum bid price above $1.00 before June 24,
  2003. The Companys Board of Directors has discretion to implement the
  approved reverse stock split at any time before June 12, 2003.

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There can be
  no assurance that the Panel will decide to allow the Company to remain listed
  or that the Companys actions will prevent the delisting of its common
  stock from the Nasdaq National Market after June 24, 2003.

|(2) | Inventory
|--- | ---------

Inventory is
  comprised of the following at March 31, 2003 and December 31, 2002:

|                       |   | March
      31, 2003 |  |   | December
      31, 2002 | 
|---------------------- | - | -------------------- |  | - | ----------------------- | 
|                       |  
|Raw materials          | $ | 770                  |  | $ | 691                     | 
|Work in
      progress |   | 273                  |  |   | 227                     | 
|Finished
      goods   |   | 147                  |  |   | 26                      | 
|                       |   |                      |  |   |                         | 
|                       | $ | 1,190                |  | $ | 944                     | 

Raw materials
  consist mainly of reagents, enzymes, chemicals and plates used in SNP scoring,
  genotyping and to manufacture consumables. Work in progress consists mainly
  of case work not yet completed and kits that are in the production process.
  Finished goods consist mainly of kits that have been produced, but have not
  been shipped.

|(3) | Goodwill
      and Other Intangible Assets
|--- | ------------------------------------------

The following
  table sets forth the Companys other intangible assets at March 31, 2003
  and December 31, 2002:

|                           |   | March
      31, 2003 |                                |   | December
      31, 2002 |    
|-------------------------- | - | -------------------- | ------------------------------ | - | ----------------------- | ---
|                           |  
|Cost                       |   |                      | Accumulated
      Amortization |   |                         | Net
|                           |   |                      |                                |   |                         |    
|Base technology            | $ | 5,980                |                                | $ | (1,651                  | )  
|Customer
      list        |   | 5,040                |                                |   | (1,405                  | )  
|Trademark/tradename        |   | 3,946                |                                |   | (702                    | )  
|Patents
      and know-how |   | 4,895                |                                |   | (248                    | )  
|Other                      |   | 547                  |                                |   | (304                    | )  
|                           |   |                      |                                |   |                         |    
|                           |   |                      |                                |   |                         |    
|Totals                     | $ | 20,408               |                                | $ | (4,310                  | )  

The Companys
  expected future amortization expense related to intangible assets over the next
  five years is as follows:

|Nine months
      ending December 31, 2003 | $ | 1,389 | 
|------------------------------------------ | - | ----- | 
|2004                                       |   | 1,798 | 
|2005                                       |   | 1,699 | 
|2006                                       |   | 1,699 | 
|2007                                       |   | 1,699 | 

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There were no changes to goodwill during the quarter ended March 31, 2003 other than the effects of foreign currency translation which was $24 during the first quarter of 2003.

|(4) | Debt
|--- | ----

On December 23,
  2002, the Company consummated a line of credit with a commercial bank for a
  maximum of $10,000. Any amounts outstanding pursuant to this line of credit
  are secured by substantially all of the Companys assets. The borrowing
  base is based on 80% of eligible accounts receivable (as defined in the agreement).
  Borrowings pursuant to the line of credit bear interest at a range of prime
  plus 0.5% to 2.5% based on the liquidity ratio of the Company (as defined in
  the agreement). The line of credit agreement contains certain financial and
  non-financial covenants with which the Company was in compliance as of March
  31, 2003. The agreement also contains a material adverse changes clause which,
  if triggered, would constitute an event of default. Pursuant to the terms of
  the line of credit, the Company also issued 215,000 warrants to purchase common
  stock of the Company at an exercise price of $0.64 per share. The warrants are
  immediately exercisable and have a five-year term. The Company calculated the
  $88 fair value of the warrants using the Black Scholes option pricing model.
  This value was recorded as debt issuance costs and is being amortized over the
  term of the debt. The line of credit expires in one year but contains automatic
  renewal provisions at the banks option. As of March 31, 2003, the Company
  had no amounts outstanding under the line of credit.

The Company
  also maintains amounts outstanding pursuant to another line of credit with another
  commercial bank which was entered into in December 1998 and amended in December
  2000. The availability under this line of credit has expired. As of March 31,
  2003, the Company had $4,777 outstanding under this line of credit. Pursuant
  to this line of credit, if the Company does not maintain minimum unrestricted
  cash, as defined in the agreement, equal to the greater of $35,000 or twelve
  months cash needs (calculated by taking the trailing three months net
  cash used in operations multiplied by four), the Company is required to provide
  a cash security deposit or letter of credit equal to an amount defined in the
  agreement, not to exceed 50% of outstanding amounts on draws made in or subsequent
  to December 2000. The Company was also required to provide a cash security deposit
  or obtain a letter of credit equal to $2,150 plus 50% of any future draw amount
  no later than June 30, 2001, unless the Company completed a follow-on equity
  offering of at least $50,000 in net unrestricted proceeds. During 2001, the
  Company did complete a follow-on offering, however, the net unrestricted proceeds
  from the offering were less than the minimum amount required under the loan
  line. The Company 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. In addition, subsequent to March 31, 2002, the Company
  did not maintain the minimum unrestricted cash as defined in the Agreement.
  The Company also received written notice from the lender stating that the lender
  waived the financial covenant violation as a result of not maintaining a pledge
  of cash security deposit or letter of credit under this agreement for the period
  of non-compliance through June 19, 2002. On June 19, 2002, the Company obtained
  a letter of credit in the amount of $2,682 as required by the amended line of
  credit, which was supported by a cash restriction on certain securities held
  by the Company. As such, this cash restriction, in addition to cash restricted
  under two of the Companys operating leases is reflected as restricted
  cash in the condensed consolidated balance sheets as of March 31, 2003 and December
  31, 2002 of $3,385, of which $1,863 is classified as a long term asset.

|(5) | Issuance
      and Sale of Series A Redeemable Convertible Preferred Stock and Warrants
|--- | ---------------------------------------------------------------------------------------

On March 31, 2003, the Company
     completed the issuance and sale of 1,600 units (Units) to certain investors

  (each an Investor and collectively, the Investors). Each Unit consists of (i)
     one share of the Companys newly created Series A Redeemable Convertible
      Preferred Stock, $.001 par value per share (the Series A Preferred Stock),
     convertible
  into approximately 22,222.22 shares of common stock, and (ii) a warrant (Warrant)
      to purchase approximately 6,666.67 shares of common stock. Each Unit had
     a purchase
  price of $10, providing the Company with $16,000 in net proceeds after $750
      was allocated to bankers fees (see below). As of March 31, 2003, the Company

  received $8,550 of the total $16,000 which was anticipated on the closing of
      the financing transaction. The remaining $7,450 has been reflected as a
     stock
  subscription receivable in the accompanying condensed consolidated balance
     sheet  as of March 31, 2003 and was collected in full on April 1, 2003.
     The Company also issued an additional 75 Units to a banker
  as a fee for this transaction and will pay certain other banker fees and expenses
      in connection with the transaction. The $750 which
     relates to the bankers fee which was taken in 75 Units was recorded as a
     reduction
     to the
     carrying
     value
      of the Series A Preferred Stock in the condensed consolidated balance sheet
  as of March 31, 2003. The Warrants associated with the 75 units issued to the banker in this transaction
  were  valued at $120, based on the Black-Scholes option pricing model, and
  were also
  recorded as a reduction to the carrying value of the Series A Preferred Stock
   in the condensed consolidated balance sheet as of March 31, 2003. The Warrants
    associated with the Units sold to the Investors were valued at $2,903, based
   on the Black-Scholes option pricing model, and recorded as a reduction in
  the
  carrying amount of the Series A Preferred Stock that was issued and an increase
  to additional paid-in capital. As a result of the financing transaction, the
  Company recorded a beneficial conversion
  feature
  of $744 in the net loss allocable to common stockholders for the three months
   ended March 31, 2003. The beneficial conversion feature was calculated as
  the
  difference between the Companys per share value as of the commitment
  date  and the per share value of the Series A Preferred Stock transaction after
  giving
  effect to the value associated with the Investors Warrants.

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The Series A Preferred Stock is convertible into common stock, at the Investors discretion, at a per share conversion price of $0.45, provided, however, that no Investor is allowed to convert Series A Preferred Stock if the conversion would result in such Investor beneficially owning more than 4.99% of the Companys outstanding common stock (the Cap Amount), and it is entitled to vote on all matters submitted to a vote of the Companys stockholders on an as-converted basis, subject again to the Cap Amount. The Series A Preferred Stock bears cumulative dividends, payable quarterly, at an initial annual rate of 6% for the first nine quarters. After the ninth quarter, the dividend rate will increase by 2% for each quarter thereafter, to a maximum of 12% per year. If, however, the common stock ceases to be listed on either the Nasdaq (the National Market or SmallCap) (collectively, the NASDAQ), the New York Stock Exchange (the NYSE)
 or the American Stock Exchange (the AMEX), the dividend rate will automatically increase to 14% per year until the common stock is subsequently listed on one of the aforementioned markets or exchanges. Dividends are payable, at the Companys option, in cash or shares of common stock, valued at the average closing sales price of the common stock for the five trading day period prior to the dividend date. The proceeds from this financing can be used for general and corporate purposes and working capital, but is restricted as to certain other uses.

The holders
  of the Series A Preferred Stock have the right to require the Company to repurchase
  for cash the then outstanding shares of Series A Preferred Stock upon the occurrence
  of certain events, including:

| |  | if the common stock is
      not listed on either the NYSE, AMEX, NASDAQ, the OTCBB or the Bulletin Board
      Exchange for a total of ten days in any nine month period;                                                                                                                                                                                                                                                                                    
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | the institution of bankruptcy,
      insolvency, reorganization or liquidation proceedings by or against the
      Company, an assignment for the benefit of creditors by the Company or the
      appointment of a receiver or trustee for the Company;                                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | a change of control of
      the Company as defined in the certificate of designations;                                                                                                                                                                                                                                                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | the Companys failure
      to pay in full dividends on the Series A Preferred Stock on any two consecutive
      dividend dates;                                                                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | a registration statement
      required to be filed by the Company to register common shares underlying
      the Series A Preferred Stock and Warrants is not declared effective within
      a certified period, as defined in the certificate of designations or after
      being declared effective, cannot be utilized by the holders of the Series
      A Preferred Stock for resale of all of their shares for more than a total
      of 45 days; or
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | failure by the Company
      to convert the Series A Preferred Stock when requested by the holders.                                                                                                                                                                                                                                                                                                                                                           

The redemption
  amount that the Company is required to pay equals 125% of the purchase price
     of the Series A Preferred Stock and the accrued and unpaid dividends, except

  that in the case of a change of control, the redemption equals 150% of such
     amount. The Series A Preferred Stock is also entitled to a liquidation preference

  equal to the purchase price plus all accrued and unpaid dividends. Due to the
     redemption characteristics of the Series A Preferred Stock, the Company
    has
  classified the carrying value of the Series A Preferred outside of stockholders
  equity in the accompanying condensed consolidated balance sheet as of March
   31, 2003. The Company will not accrete the carrying value of the Series A
  Preferred
  Stock to the redemption value until an event that would require redemption
  becomes  probable. As of March 31, 2003, the redemption of the Series A Preferred
  Stock
  is not probable and the Series A Preferred Stock has been recorded at its original
  carrying value in the accompanying condensed consolidated balance sheet as
  of March
  31,
  2003, accordingly.

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If certain requirements as
  defined in the agreement are met after the second anniversary of the financing,
  the Company may at its option redeem the Series A Preferred Stock in whole or
  in part for 125% of the original purchase price. If the Company stock price
  exceeds certain levels for certain periods of time, as defined in the agreement,
  or the Company consummates an underwritten public offering of its common stock
  at certain levels, as defined in the agreement, the Company may at its option
  redeem the Series A Preferred Stock in an amount equal to the original purchase
  price.

The Warrants are exercisable
    at any time after the first anniversary of the issuance date through the
    fifth anniversary of the issuance date at an exercise price equal to $0.45
    per share. In addition, the Warrants are exercisable via a cashless exercise
    from the second anniversary of the issuance date through the fifth anniversary
    of the issuance date.

The Company is currently
    in the process of negotiating the terms of a consulting arrangement with
    the Investors pursuant to which the Investors will provide strategic and
    financial services to the Company.

|(6) | Discontinued
      Operations
|--- | -----------------------------

During
      the year ended December 31, 2002, management with the appropriate authority
      made the decision to sell the Diagnostics business unit. This decision was
      made after an internal evaluation of the strategic direction of the Company
      was performed. The Company decided to focus its efforts on the services
      businesses where it offers paternity, forensics and public health testing.
      The Company expects this sale to occur in 2003. In accordance with the provisions
      of Statement of Financial Accounting Standards (SFAS) No. 144,Accounting
      for the Impairment or Disposal of Long-Lived Assets,
      the Company has not included the results of operations of its Diagnostics
      business held for sale in the results from continuing operations. The results
      of operations for this business unit held for sale have been reflected in
      discontinued operations. The $199 of loss and $514 of income from discontinued
      operations for the three months ended March 31, 2003 and 2002, respectively,
      consists of the following:

|                                              |   | 2003  |   |   | 2002  |  
|--------------------------------------------- | - | ----- | - | - | ----- | -
|                                              |  
|Revenues                                      | $ | 2,690 |   | $ | 4,129 |  
|Costs of
      products and services revenues |   | 1,788 |   |   | 2,322 |  
|                                              |   |       |   |   |       |  
|Gross margin                                  |   | 902   |   |   | 1,807 |  
|Research
      and development                |   | 373   |   |   | 85    |  
|Selling
      and marketing                   |   | 541   |   |   | 57    |  
|General
      and administrative              |   | 190   |   |   | 842   |  
|Amortization
      of intangible assets       |   | -     |   |   | 231   |  
|                                              |   |       |   |   |       |  
|Operating
      income/(loss)                 |   | (202  | ) |   | 592   |  
|Other income/(expenses)                       |   | 3     |   |   | (78   | )
|                                              |   |       |   |   |       |  
|Net
      income/(loss)                       | $ | (199  | ) | $ | 514   |  

The assets and liabilities of the business held for sale has been reflected as such in the condensed consolidated balance sheet as of March 31, 2003 and December 31, 2002. As the Company expects to sell this business within the next year, all of the assets and liabilities for both periods presented have been reflected as current. The components of these assets and liabilities are as follows:

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|                                            |   | March
      31,
      2003 |  |   | December
      31,
      2002 | 
|------------------------------------------- | - | -------------------------- |  | - | ----------------------------- | 
|                                            |  
|Accounts
      receivable                   | $ | 1,393                      |  | $ | 1,321                         | 
|Inventory                                   |   | 2,320                      |  |   | 2,388                         | 
|Other current
      assets                  |   | 218                        |  |   | 222                           | 
|                                            |   |                            |  |   |                               | 
|Current
      assets                        |   | 3,931                      |  |   | 3,931                         | 
|Fixed assets                                |   | 3,142                      |  |   | 3,045                         | 
|Intangible
      assets                     |   | 3,521                      |  |   | 3,521                         | 
|Other long
      term assets                |   |                           |  |   |                              | 
|                                            |   |                            |  |   |                               | 
|Total
      assets                          |   | 10,594                     |  |   | 10,497                        | 
|Accounts
      payable and accrued expenses |   | 2,615                      |  |   | 2,459                         | 
|Other liabilities                           |   | 28                         |  |   | 38                            | 
|                                            |   |                            |  |   |                               | 
|Total
      liabilities                     |   | 2,643                      |  |   | 2,497                         | 
|                                            |   |                            |  |   |                               | 
|Net
      assets                            | $ | 7,951                      |  | $ | 8,000                         | 

|    |                         
|--- | ------------------------
|(7) | Stock-Based Compensation

The Company accounts for its
  stock-based compensation to employees and members of the board of directors
  in accordance with the provisions of Accounting Principles Board (APB) Opinion
  No. 25,Accounting
  for Stock Issued to Employees,
  and related interpretations. As such, compensation is recorded on the date of
  issuance or grant as the excess of the current market price (estimated fair
  value prior to the initial public offering in May 2000 (IPO)) of the underlying
  stock over the purchase or exercise price. Any deferred compensation is amortized
  over the respective vesting periods of the equity instruments, if any. The Company
  has adopted the disclosure provisions of SFAS No. 123,Accounting
  for Stock-Based Compensation,
  (SFAS 123) which permits entities to provide pro forma net loss and net loss
  per share disclosures for stock-based compensation as if the fair value method
  defined in SFAS 123 had been applied. Had the Company determined compensation
  cost for options based on the fair value method at the measurement
  date for its stock options under SFAS 123, the Companys net loss allocable
  to common stockholders and net loss per share allocable to common stockholders
  would have been increased to the pro forma amounts indicated below:

|                                                                             |   | Three
      MonthsendedMarch 31, |  
|---------------------------------------------------------------------------- | - | -------------------------------- | -
|                                                                             |   |                                  |  
|                                                                             |   | 2003                             |  
|                                                                             |   |                                  |  
|Net loss allocable to
      common stockholders:                             |   |                                  |  
|As reported                                                                  | $ | (5,024                           | )
|Add:
      Stock-based employee compensation expense included in reported    |   |                                  |  
|net
      loss allocable to common stockholders                              |   | 481                              |  
|Deduct:
      Total stock-based employee compensation expense determined     |   |                                  |  
|under
      the fair value method for all awards                             |   | (701                             | )
|                                                                             |   |                                  |  
|Pro
      forma under SFAS 123                                               | $ | (5,244                           | )
|                                                                             |   |                                  |  
|Basic and diluted net
      loss per share allocable to common stockholders: |   |                                  |  
|As reported                                                                  | $ | (0.09                            | )
|Pro
      forma under SFAS 123                                               |   | (0.09                            | )

In determining the fair value for grants of common stock options, the Company used the following
assumptions:

|                        |  | Three
      MonthsendedMarch 31, |  
|----------------------- |  | -------------------------------- | -
|                        |  |                                  |  
|                        |  | 2003                             |  
|                        |  |                                  |  
|Risk-free interest rate |  | 4.85                             | %
|Volatility              |  | 90                               | %
|Expected option life    |  | 5.5 years                        |  
|Expected dividend yield |  | 0                                | %

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|(8) | Comprehensive
      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 months ended March 31, 2003 and 2002:

|                                           |   | Three
      months ended |     
|------------------------------------------ | - | ------------------------ | ----
|March
      31,                           
|                                           |   |                          |     
|2003                                       |   |                          | 2002
|                                           |  
|Net loss                                   | $ | (4,280                   | )   
|Other comprehensive
      loss:            |   |                          |     
|Unrealized
      holding loss              |   |                          |     
|arising
      during the period            |   |                         |     
|Less
      reclassification adjustment for |   |                          |     
|gains
      included in net loss           |   |                         |     
|                                           |   |                          |     
|Unrealized
      holding loss on           |   |                          |     
|available-for-sale
      securities        |   |                         |     
|Foreign
      currency translation         |   |                          |     
|Adjustments                                |   | (111                     | )   
|                                           |   |                          |     
|Other comprehensive
      loss             |   | (111                     | )   
|                                           |   |                          |     
|Comprehensive
      loss                   | $ | (4,391                   | )   

|    |                          
|--- | -------------------------
|(9) | Segment
      Information

In early 2002, the Company completed an internal process of realigning its business into four business units. These business units consisted of Orchid Identity Genomics, Orchid GeneShield, Orchid Diagnostics and Orchid Life Sciences. A brief description of all of the business units which were determined to be reportable segments is as follows:

| |  | Orchid Identity Genomics
      provides DNA testing for paternity and forensics determinations to state
      and local governmental authorities as well as to individuals and organizations,
      through Orchid GeneScreen and Orchid Cellmark;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | Orchid GeneShield is developing
      programs designed to accelerate the adoption and use of personalized medicine
      by patients and physicians;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | Orchid Diagnostics provides
      products and services for genetic testing, including HLA genotyping, disease
      susceptibility testing and immunogenetics, or the study of the relationship
      between an individuals immune response and their genetic makeup, to
      individuals; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | Orchid Life Sciences
        developed  and marketed products, services and technologies for SNP genotyping,
        or
      scoring, and genetic diversity analyses to life sciences and biomedical
         researchers as well as pharmaceutical, agricultural, diagnostic and
        biotechnology
      companies. Orchid Life Sciences also performs scrapie susceptibility testing
         primarily for the UK government through Orchid Europe with the goal
        of breeding sheep
      genetically resistant to the disease scrapie. The product portion of this
         business unit was divested in 2002 and the SNP genotyping service business

      has been considered a non-core business for the Company. The scrapie susceptibility
         testing business is still considered to be part of the core focus of
        the
      Company on an ongoing basis and the Company has accordingly renamed the
         Orchid Life Sciences business unit to Orchid Public Health.

The Board of
  Directors of the Company committed to sell the Companys Diagnostic business
   unit during 2002 and expects to complete the sale in 2003. As a result of
  this
  decision, the segment information for the Diagnostics business unit has been
   excluded below. Note 6 depicts the operations of that business which is reflected

  as discontinued operations and the assets and liabilities of that business
  unit  are considered as held for sale. The chief operating decision
  maker  of the Company measures segment profit/(loss) using operating income/(loss),

  which excludes other income (expense) and allocation of corporate expenditures.
   These corporate costs which include treasury, human resources, finance, restructuring

  costs and certain other corporate functions, are included in corporate and
  all  other. All other also reflects the operations of Orchid GeneShield
   during the three months ended March 31, 2003 and 2002 which the Company considers

  to be insignificant from a segment reporting perspective. Goodwill has been
   allocated to each reportable segment as shown below. Prior period information

  presented below has been restated to conform to the current segment presentation.

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|                                                       |   | Identity
      Genomics |   | Public
      Health (1) |        |   | Corporate
      and all
      other |        |   | Total |        
|------------------------------------------------------ | - | ----------------------- | - | ----------------------- | ------ | - | ----------------------------------- | ------ | - | ----- | -------
|                                                       |   |                         |   |                         |        |   |                                     |        |   |       |        
|As of and for three months
      ended March 31, 2003: |   |                         |   |                         |        |   |                                     |        |   |       |        
|Revenues
      from external customers                 | $ | 10,671                  |   | $                       | 1,776  |   | $                                   | 291    |   | $     | 12,738 
|Segment
      operating income/(loss)                  |   | 1,934                   |   |                         | 721    |   |                                     | (6,402 | ) |       | (3,747 
|Goodwill                                               |   | 3,048                   |   |                         |       |   |                                     |       |   |       | 3,048  
|                                                       |   |                         |   |                         |        |   |                                     |        |   |       |        
|Total
      assets from continuing operations          |   | 36,016                  |   |                         | 2,601  |   |                                     | 29,362 |   | $     | 67,979 
|Total
      assets from discontinued operations        |   |                         |   |                         |        |   |                                     |        |   |       | 10,594 
|                                                       |   |                         |   |                         |        |   |                                     |        |   |       |        
|Total
      assets                                     |   |                         |   |                         |        |   |                                     |        |   | $     | 78,573 
|                                                       |   |                         |   |                         |        |   |                                     |        |   |       |        
|As of and for three months
      ended March 31, 2002: |   |                         |   |                         |        |   |                                     |        |   |       |        
|Revenues
      from external customers                 | $ | 9,186                   |   | $                       | 2,515  |   | $                                   |       |   | $     | 11,701 
|Segment
      operating loss                           |   | (266                    | ) |                         | (4,224 | ) |                                     | (7,438 | ) |       | (11,928
|Goodwill                                               |   | 2,269                   |   |                         |       |   |                                     |       |   |       | 2,269  
|                                                       |   |                         |   |                         |        |   |                                     |        |   |       |        
|Total
      assets from continuing operations          |   | 38,441                  |   |                         | 27,822 |   |                                     | 47,604 |   | $     | 113,867
|Total
      assets from discontinued operations        |   |                         |   |                         |        |   |                                     |        |   |       | 16,640 
|                                                       |   |                         |   |                         |        |   |                                     |        |   |       |        
|Total
      assets                                     |   |                         |   |                         |        |   |                                     |        |   | $     | 130,507

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The three
      months ended March 31, 2003, as depicted above, reflects the Public Health
        testing business related to scrapie susceptibility testing, which is
        what
      the Company refers to as Public Health testing. Included in the amounts
        reflected for the three months ended March 31, 2002 includes the results
        of operations of the public health business in addition to the products,
        services and technologies for SNP genotyping, or scoring, and genetic
        diversity
      analyses (SNP Genotyping). The SNP Genotyping business had historically
        incurred significant losses due to its research and development activities.
        The product related assets of SNP Genotyping were sold to a third party
        in 2002 and therefore these activities are not included in the three
        months ended March 31, 2003. Revenues and operating income for public
        health on
        a standalone basis for the three months ended March 31, 2002 were $589
        and
      $77, respectively.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                    
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------
|(10)                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Commitments
      and Contingencies
|                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                    
|In
      connection with the Companys acquisition of certain patents in 2002
      and 2001, the Company assumed obligations to pay future amounts over the
      next two to three years. The obligations have been recorded in the accompanying
      consolidated balance sheet as of March 31, 2003, at the net present value
      of the future obligations. The payments which are to be made to the original
      patent holders are as follows:



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|2003                                                            | $ | 1,618 |  
|--------------------------------------------------------------- | - | ----- | -
|2004                                                            |   | 1,593 |  
|2005                                                            |   | 310   |  
|                                                                |   |       |  
|Total                                                           |   | 3,521 |  
|Less
      amount that represents interest                      |   | (255  | )
|                                                                |   |       |  
|Present
      value of future obligations                       |   | 3,266 |  
|Less
      current portion                                      |   | 1,618 |  
|                                                                |   |       |  
|Present
      value of future obligations, less current portion | $ | 1,648 |  

The Company
  is also obligated to pay minimum royalties related to these patents of $1,200
    in 2005, $1,600 in 2006, and $1,900 in 2007 until the expiration
  of the agreement.

In connection with sale of the Life Sciences product related assets, the Company is committed to purchase materials and supplies in the amount of $1,300 in 2003 and $1,300 in 2004.

Pursuant to the terms of the May 2001 contribution and license agreement with the founders of GeneShield, if the Companys common stock is delisted from the Nasdaq National Market for a period of 90 days, subject to certain cure periods, the founders may terminate the contribution and license agreement.

On February 13, 2002 the Company
    received a Notice of Lawsuit and Request for Waiver of Service of Summons
    and a copy of the complaint filed in the United States District Court for
    the Southern District of New York in connection with a class action lawsuit.
    The complaint purportedly was filed on behalf of persons purchasing the Companys
    stock between May 4, 2000 and December 6, 2000, and alleged violations of
    Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, and
    Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule
    10b-5 promulgated thereunder. The complaint alleged that, in connection with
    the Companys May 5, 2000 initial public offering, the defendants failed
    to disclose additional and excessive commissions purportedly solicited by
    and paid to the underwriter defendants in exchange for allocating shares
    of the Companys stock to preferred customers and alleged agreements
    among the un derwriter defendants and preferred customers tying the allocation
    of IPO shares to agreements to make additional aftermarket purchases at pre-determined
    prices. Plaintiffs claim that the failure to disclose these alleged arrangements
    made the Companys registration statement on Form S-1 filed with the
    SEC in May 2000 and the prospectus, a part of the registration statement,
    materially false and misleading. Plaintiffs seek unspecified damages. On
    February 19, 2003, the Company received notice of the courts decision
    to dismiss the Section 10(b) claims against the Company. The claims against
    individuals
    officers named as defendants were earlier dismissed without prejudice, subject
    to a tolling agreement. There is currently a draft settlement agreement in
    review by defendant issuers. The Company has not reserved any amount related
    to this case as it believes that the allegations are without merit and it
    intends to vigorously defend itself against the plaintiffs claims.

The Company had been in a
    litigation with St. Louis University of St. Louis, Missouri regarding its
    belief that the Companys SNP scoring technology infringes certain claims
    under US patent 5,846,710, which was controlled by the University. On August
    7, 2002, the parties dismissed the litigation and the Company acquired the
    subject patent. St. Louis University conditionally assigned both the patent
    and all license agreements related thereto to us. On March 13, 2003, St.
    Louis University notified the Company that it was unable to obtain a required
    consent to assign the patent to the Company. Pursuant to the terms of the
    Companys settlement agreement with St. Louis University, the failure
    to obtain such consent  results in the automatic grant to the Company of
    an exclusive license under the patent. The Company is currently in discussions
    with St. Louis University regarding the terms of such license and the restructuring
    of the Companys obligations to St. Louis University.

The Company
  is a co-defendant in litigation commenced by Enzo Biochem, Inc, and Enzo Life
  Sciences, Inc. against ten defendants. The complaint asserts that the Company
  purchased materials from plaintiffs authorized distributor and resold
  those materials in a manner not authorized by the related distribution agreements.
  The complaint, therefore, seeks money damages based primarily on alleged patent
  infringement by the Company. The Company has asserted a cross-claim for indemnification
  against the distributor. The litigation currently is in fact discovery and no
  expert discovery has occurred. As a result, it is not possible for the Company
  to provide an opinion on the likely outcome of the various claims, but the Company
  intends to vigorously defend against plaintiffs claims and believes that
  the claims are without merit.

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Prior to the Companys acquisition of Lifecodes, which occurred on December 5, 2001, Lifecodes sold Medical Molecular Diagnostics GmbH, (MMD), a wholly owned subsidiary of Lifecodes based in Dresden, Germany to Duetsche Knochenmarkspenderdatei gemeinnutzige Gesellschaft mbH, (DKMS), pursuant to a Stock Purchase Agreement dated November 15, 2002 (SPA). Upon the acquisition of Lifecodes, the Company assumed Lifecodes obligations to DKMS under the SPA.

The Company is in a dispute
    with and anticipates receiving notification in the near future that DKMS
    has filed a suit against it for damages under the SPA for the full amount
    of their cost to acquire MMD. DKMS is anticipated to claim defects in the
    MMD lab. The Company has not reserved any amount related to this case and
    believes that the allegations are without merit and intends to vigorously
    defend against these anticipated claims. Legal proceedings are likely to
    occur no earlier than the fall 2003. In addition, in December 2002, the Company
    filed a claim in Germany against DKMS for significant unpaid accounts receivable
    that accrued during the year ended December 31, 2002. The accounts receivable
    amounts were for HLA typing conducted by the Diagnostics business unit, which
    the Company currently plans to sell. The services performed by the Companys
    Diagnostics business unit were exclusively upon DKMS request. Legal
    proceedings for the Companys outstanding accounts receivable are expected
    to take place in Germany by summer 2003.

Additionally, the Company has other certain claims against it arising from the normal course of its business. The ultimate resolution of such matters, including those cases disclosed above, in the opinion of management, will not have a material effect on the Companys financial position or results of operations.

|(11)                                                                                                                                                                                                                     | Income Tax (Expense)/Benefit
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------
|                                                                                                                                                                                                                         |                             
|During the
      three months ended March 31, 2003, the Company recorded $344 in foreign
      income tax expense associated with the Companys operations in Europe
      which is currently generating taxable income.

The Company participates
  in the State of New Jersey's corporation business tax benefit certificate transfer
  program (the Program), which allows certain high technology and biotechnology
  companies to sell unused net operating loss carryovers to other New Jersey corporation
  business taxpayers. During 2000, the Company submitted an application to the
  New Jersey Economic Development Authority (the EDA) to participate in the Program,
  and the application was approved. The EDA then issued a certificate certifying
  the Company's ability to participate in the Program and the amount of New Jersey
  net operating loss carryovers the Company has available to transfer. Since New
  Jersey law provides that net operating losses can be carried over for up to
  seven years, the Company may be able to transfer its New Jersey net operating
  losses from the last seven years. The Program requires that the purchaser pay
  at least 75% of the amount of the surrendered tax benefit.

During January
  2002, the Company completed the sale of approximately $11,000 of its New Jersey
  tax loss carryforwards and received $894, which was recorded as an income tax
  benefit.

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Item
  2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
  AND RESULTS
  OF OPERATION

This Management's
  Discussion and Analysis of Financial Condition as of March 31, 2003 and the
  Results of Operations for the three months ended March 31, 2003 and 2002 should
  be read in conjunction with our Condensed Consolidated Financial Statements
  and related Notes to Condensed Consolidated Financial Statements included elsewhere
  in this Quarterly Report on Form 10-Q.

OVERVIEW

We are engaged in the provision of services and products for profiling genetic uniqueness. Since we began operations in March 1995, we have devoted substantially all of our resources to the provision of DNA testing and 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.

In 2001, our business focused on our SNP scoring products and services that used our proprietary primer extension technology, and on our identity genomics services in paternity and forensics. Since late 1999, following our acquisition of GeneScreen, Inc. (GeneScreen) and, our subsequent acquisitions of Cellmark and Lifecodes, both in 2001, we have been a leading provider of DNA testing services in the paternity, forensics and human leukocyte antigen, or HLA, transplantation typing fields.

During 2002, we conducted
    a strategic review of our business and, as a result, we are focusing on our
    high growth services businesses where we are a market leader in profiling
    genetic uniqueness, including forensics, paternity and public health testing
    as well as personalized medicine. In December 2002, we disposed of our SNP
    genotyping instruments and related consumables assets offered by our Orchid
    Life Sciences business unit. The only remaining portion of the Orchid Life
    Sciences business unit is the scrapie susceptibility testing primarily performed
    for the UK government with the goal of breeding sheep genetically resistant
    to
    the
    disease
    scrapie.
    This business unit has been renamed to Orchid Public Health.
    We intend to continue to leverage our leading SNP technology in providing
    genoprofiling services offered by our other business units. During 2002 we
    also decided to sell our Diagnostics business unit. This business unit offers
    diagnostic testing consumables for laboratories throughout the US and Europe
    as well as HLA testing for organ transplantation and cystic fibrosis testing.
    Our Diagnostic business unit is considered to be a non-core asset that we
    expect to sell and, therefore, has been reflected as a discontinued operation
    in our consolidated results of operations.

Our ability to achieve profitability will depend largely on our ability to continue to grow revenues and increase gross margins in genoprofiling services for the forensics, paternity, public health, and personalized healthcare markets. Our provision of genoprofiling services depends, in part, on our ability to leverage our leading SNP technology where it provides us a competitive advantage.

We have incurred losses since
    inception, and, as of March 31, 2003, we had total stockholders equity
    of approximately $37.9 million, including an accumulated deficit of approximately
    $267.7 million. We anticipate incurring additional losses at least through
    the third quarter of 2003. During 2002, we secured a $10 million line of
    credit with a commercial lender which expires in December 2003 but contains
    automatic renewal provisions at the commercial lenders option. In 2003,
    we issued and sold an aggregate of 1,600 units, each unit consisting of one
    share of our Series A convertible preferred stock and one warrant to purchase
    our common stock for aggregate net proceeds of $16.0 million (see Liquidity
    and Capital Resources below). In addition, we are also evaluating other
    sources of cash including our commitment to sell and divest non-core assets
    such as the Diagnostics business unit. We cannot make any assurance that
    any of these prospective arrangements to secure cash to fund future operations
    will be successful.

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Acquisition, Divestitures and Establishment of New Businesses

On December 30, 1999, we acquired GeneScreen, Inc., which operates DNA testing laboratories in Dallas, Texas and Dayton, Ohio. Orchid GeneScreen performs DNA laboratory analyses for paternity and forensic testing. Orchid GeneScreens primary source of revenue is paternity testing under contracts with various state and county government agencies.

On February 12, 2001, we acquired Cellmark Diagnostics, a division of AstraZeneca, in an asset acquisition. Cellmark is a leading provider of genetic testing services in the UK and sells kits and conducts testing for genetic diseases, including cystic fibrosis.

On December 5, 2001, we acquired
    all of the outstanding equity securities of Lifecodes Corporation. Lifecodes
    is a leading provider of DNA testing for forensics and paternity in the US
    as well as transplantation testing. We acquired Lifecodes in order to strengthen
    our position in the clinical grade testing market. Lifecodes also maintains
    a diagnostic kit business which, subsequent to our sale of the Orchid Life
    Sciences product related assets, comprises our only products business and
    which is currently held for sale as part of Orchid Diagnostics. We believe
    that this acquisition, in addition to the two previous acquisitions of GeneScreen
    and Cellmark, are  significant steps in providing cost efficient, high throughput
    clinical testing businesses which form the core focus of our company.

The GeneScreen, Cellmark, and Lifecodes businesses in paternity and forensics testing support our goal of extending our genoprofiling business. We intend to apply our SNP technology to the paternity and forensics businesses of GeneScreen, Cellmark, and Lifecodes where it enables us to reduce the cost of providing genotyping services. Our DNA testing business is dependent upon our ability to successfully and competitively bid and qualify for contracts with various governmental entities to provide paternity and forensics testing services. We expect revenues from our respective forensics businesses of GeneScreen, Cellmark, and Lifecodes to increase as DNA analyses are increasingly being used by the authorities within the criminal justice system to identify perpetrators and exonerate the innocent.

Our GeneShield business, established in 2001, is developing a number of innovative pharmacogenetic-based programs designed to accelerate the adoption of personalized medicine. These programs are focused on health outcomes, specifically how a persons individual genetic makeup can affect responses to many prescription and over-the-counter medicines. Orchid GeneShield expects to launch the commercialization of one of its programs, RxShield, in 2003.

In December 2002, as part of our strategic restructuring, we sold the products related assets of the Orchid Life Sciences business to Beckman Coulter, Inc. for a combination of cash payments and Beckman Coulters assumption of certain debt. In addition, we have committed to sell the Orchid Diagnostics business unit. We believe that our acquisitions, establishment of our business focus and selected divestitures will allow us to focus on key portions of our business and allow us to move closer to achieving profitability.

Compensation Charges

In prior years, we recorded deferred compensation resulting from the granting of stock options to employees, directors, or consultants with exercise prices below the fair market value of the underlying common stock at the date of their grant. During 2001 and 2002, all stock options were granted with grant prices equal to the fair value of our common stock at the grant date. The portion of these deferred compensation amounts which resulted from grants to consultants is subject to re-measurement 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.

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Critical
  Accounting Policies

Our critical
  accounting policies are as follows:

| |  | revenue recognition                                              
| | - | -----------------------------------------------------------------
| |   |                                                                  
| |  | valuation of long-lived
      and intangible assets and goodwill.

Revenue
  Recognition

We have several sources of
    revenues. Prior to our acquisitions of GeneScreen, Cellmark, and Lifecodes,
    we derived substantially all of our revenues from research and development
    collaborations, technology grants and awards from several governmental agencies.
    In 1999, we derived our first revenues from the placement of our first commercial
    SNPstream hardware system, and through 2002, we derived revenues from the
    sale of SNP-IT-based consumables. As a result of the sale of assets to Beckman
    Coulter, we will no longer have revenues from placements of SNPstream systems
    or SNPware-based consumables in the future. We also derived license revenues
    beginning in 2000. In 2000, we derived our first revenues from the performance
    of laboratory DNA testing services by GeneScreen, our wholly owned subsidiary,
    in the US. In 2001, we derived our first revenues from the sale of testing
    kits and laboratory DNA testing services from our Cellmark division in the
    UK.

In connection
  with the research and development collaborations that provided the majority
  of our revenues in the early years of our corporate history, we recognized revenues
  when related research expenses were incurred and when we satisfied specific
  performance obligations under the terms of the respective research contracts.
  We deferred up-front licensing fees obtained in connection with such agreements
  and amortized them over the estimated performance period of the respective research
  contract. We recognized milestonepayments
  as revenues upon the completion of the milestone event or requirement, if it
  represented the achievement of a significant step in research and development
  or performance process.

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

We 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. We recorded revenues on the sale of the hardware upon transfer of title and after we had met all of our significant performance obligations. We deferred access fee payments that we received when a system was initially placed with a customer, and recognized revenues on a straight-line basis over the term of the agreement.

Revenues from the sale of consumables were recognized upon the transfer of title, generally when our products were shipped to our customers from our facilities.

Revenues from license arrangements, including license fees creditable against future royalty obligations of the licensee, were recognized when an arrangement is entered into if we had no significant continuing involvement under the terms of the arrangement. If we had significant continuing involvement under such an arrangement, license fees were deferred and recognized over the estimated performance period. Management has made estimates and assumptions relating to the performance period which are subject to change. Changes in these estimates and assumptions could affect the amount of revenues from licenses reported in any given period.

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Valuation of Long-Lived and Intangible Assets and Goodwill

We assess the
  impairment of amortizable identifiable intangibles, including goodwill, and
  long-lived assets whenever events or changes in circumstances indicate that
  the carrying value may not be recoverable. Factors we consider important which
  could trigger an impairment review include the following:

| |  | significant underperformance
      relative to expected historical or projected future operating results;                
| | - | -------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                          
| |  | significant changes in
      the manner of our use of the acquired assets or the strategy for our overall
      business;
| |   |                                                                                                                          
| |  | significant negative industry
      or economic trends; and                                                              
| |   |                                                                                                                          
| |  | significant decrease in
      market value of assets.                                                                    

When we determine
  that the carrying value of amortizable intangibles and other long-lived assets
  may not be recoverable based upon the existence of one or more of the above
  indicators of impairment, we measure any impairment based on a projected discounted
  cash flow method using a discount rate determined by our management to be commensurate
  with the risk inherent in our current business. Net amortizable intangible assets
  and long-lived assets, excluding goodwill, amounted to $16.1 million as of March
  31, 2003. Goodwill is subject to at least an annual recoverability assessment
  pursuant to the provisions of Statement of Financial Accounting Standards No.
  142, Goodwill and Other Intangible Assets.

The Nasdaq National Marketing Listing

We received a notice from the
  Nasdaq National Stock Market indicating that we have failed to comply with the
  $1.00 minimum bid price required for continued listing by Marketplace Rule 4450(a)(5)
  and that our common stock is subject to delisting from the Nasdaq. We filed
  a request for a hearing before the Nasdaq Qualifications Panel (the Panel) to
  appeal the staff determination, which occurred on February 19, 2003. On March
  26, 2003, the Panel determined to continue listing of our common stock on the
  Nasdaq National Market through June 24, 2003. We have implemented a number of
  actions during the past several months which are designed to enhance our overall
  business, reduce our operating losses and strengthen our cash position. We expect
  that these actions, as well as further initiatives currently being pursued,
  will help increase our share price above $1.00 before June 24, 2003. We have
  also sought and obtained stockholder approval to implement a reverse stock split
  in an attempt to comply with the minimum bid price requirement. There can be
  no assurance that the Panel will decide to allow us to remain listed or that
  our actions will prevent the delisting of our common stock from the Nasdaq National
  Market after June 24, 2003.

RESULTS OF OPERATIONS

Three months ended March 31, 2003 and 2002

The Diagnostic business unit
    is considered to be a non-core asset which we expect to and have committed
    to sell and, therefore, has been reflected as a discontinued operation. Accordingly,
    we have not included the results of operations of the Diagnostics business
    held for sale in the results of continuing operations in any period presented.
    The results of operations for this business unit have been reflected in discontinued
    operations for all periods presented. The assets and liabilities of the Diagnostics
    business held for sale have been reflected as such in the condensed consolidated
    balance sheets as of March 31, 2003 and December 31, 2002. As we expect to
    sell this business within the next year, all of the assets and liabilities
    have been reflected as current.

Revenues

Revenues for
  the three months ended March 31, 2003 of approximately $12.7 million represents
  an increase of approximately $1.0 million as compared to revenues of approximately
  $11.7 million for the comparable period of 2002. This increase is primarily
  attributable to an increase of approximately $2.4 million in service revenues,
  which primarily relates to an increase in our UK based service business which
  grew to approximately $4.6 million during the three months ended March 31, 2003
  compared to approximately $2.2 million during the comparable period of prior
  year. Our UK business performs paternity and forensics testing as well as public
  health SNP genotyping services. During the three months ended March 31, 2003,
  we did not recognize any product revenues which is directly related to the our
  decision to sell the Diagnostics business unit and the sale of our Life Sciences
  product related assets in 2002. We also recognized approximately $0.2 million
  in other revenues, specifically license and grant revenues, during the three
  months ended March 31, 2003, compared to approximately $0.8 million during the
  comparable period of the prior year. This decline relates to various technology
  licensing arrangements entered into in 2002 which did not occur in 2003. As
  a result of the strategic refocusing of our business, we anticipate entering
  into fewer licensing arrangements than in prior years as we focus on the services
  businesses.

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Cost
  of Product Revenues

There were no cost of product revenues for the three months ended March 31, 2003 compared to approximately $0.2 million of cost of product revenues for the comparable period of the prior year. This is directly related to our decision to sell our Diagnostics business unit and the sale of our Life Sciences product related assets in 2002.

Cost of Service Revenues

Cost of service revenues was approximately $7.0 million, or 56% of services revenues, for the three months ended March 31, 2003 compared to approximately $6.5 million, or 64% of service revenues for the comparable period of the prior year. The increase in cost of service revenues, in dollars, relates to the significant increase in service revenues during the three months ended March 31, 2003. The decrease in cost of service revenues as a percent of service revenues is attributed to better utilization of our domestic and UK laboratories as testing volumes increased during 2003 versus 2002.

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 development, laboratory
  supplies, and other expenses related to the design, development, testing, and
  enhancement of our products and services. Research and development expenses
  for the three months ended March 31, 2003 were approximately $1.2 million, a
  decrease of approximately $4.4 million, as compared to approximately $5.6 million
  for the comparable period of the prior year. The decrease in research and development
  expenses for the three months ended March 31, 2003 as compared to the comparable
  previous year was primarily attributable to a reduction in the research and
  development efforts undertaken by our Life Sciences business unit in 2002. Life
  Sciences incurred significant research and development cost in completing its
  collaboration with the SNP Consortium, which was completed in the first quarter
  of 2002. The Life Sciences business unit was also active in developing and commercializing
  the Ultra High Throughput (UHT) genotyping platform. During the three months
  ended March 31, 2003 as compared to the three months ended March 31, 2002 there
  was a reduction in lab supplies, salaries and related personnel benefits, depreciation
  and consulting which all relate to the various restructuring efforts taken by
  us during 2002.

Marketing and Sales Expenses

Marketing and
  sales expenses consist of salaries and benefits for salespeople within our company
  and all related costs of selling and marketing our products and services. These
  costs include travel, advertising, market research costs, and certain professional
  fees. Marketing and sales expense for the three months ended March 31, 2003
  was approximately $1.9 million as compared to approximately $2.2 million during
  the comparable period of the prior year. The decrease in these costs of approximately
  $0.3 million was substantially related to reduced marketing initiatives while
  we completed the financing at the end of the first quarter of 2003. During the
  prior year quarter ended March 31, 2002, we had also been accruing for bonuses
  related to sales and marketing personnel which is not being accrued for in 2003.

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General
  and Administrative Expenses

General and administrative
    expenses consist primarily of salaries and related expenses for executive,
    finance and administrative personnel, professional fees, general legal and
    intellectual property and other corporate expenses. General and administrative
    expenses for the three months ended March 31, 2003 were approximately $6.0
    million, a decrease of approximately $2.4 million, as compared to approximately
    $8.4 million for the comparable period of the prior year. We attribute the
    decrease in overall general and administrative expenses to the restructuring
    efforts taken in 2002. General and administrative costs, specifically personnel
    related, have decreased by approximately $2.0 million during the three months
    ended March 31, 2003 as compared with the comparable period of 2002. Facility
    costs, which mainly includes rent, utilities and depreciation has also decreased
    by approximately $1.2 million for the three months ended March 31, 2003 as
    compared with the comparable period of 2002. Also, we incurred approximately
    $0.8 million in the general and administrative expenses for the three months
    ended March 31, 2003, which we do not expect to continue during the remainder
    of 2003, consisting of approximately $0.5 million associated
    with a third party banker who assisted us in our preparation to obtain the
    financing
    which
    was
    consummated in March 2003 and an additional $0.3 million in
    legal costs associated with strategic corporate activities.

Amortization of Intangible Assets

During the three months ended
    March 31, 2003, we recorded approximately $0.5 million of amortization of
    intangible assets as compared to approximately $0.7 million during 2002.
    During the three months ended March 31, 2003 we had a lower amount of amortization
    due to the impairment charge related to intangible assets of our Life Sciences
    business unit which we recorded in the forth quarter of 2002. We expect that
    our amortization of intangible assets will continue to be approximately $0.5
    million on a quarterly basis for the remaining nine months of 2003.

Interest Income

Interest income for the three months ended March 31, 2003 was less than $0.1 million, compared to approximately $0.3 million during the comparable period of the prior year. This decrease was primarily due to interest received on less cash, cash equivalent, and short-term investment balances than we had held during the first quarter of 2002.

Interest Expense

Interest expense for the three months ended March 31, 2003 was approximately $0.2 million compared to approximately $0.1 million during the comparable period of the prior period. Interest expense during these years was comparable because of the comparable level of long term debt.

Income Tax (Expense)/Benefit

During the three months ended March 31, 2003, we recorded income tax expense of approximately $0.3 million which was directly related our UK business which is generating taxable income from operations. During the three months ended March 31, 2002, we recorded an income tax benefit of approximately $0.9 million. This was related to the sale of some of our state net operating loss carryforwards to another company, which was authorized by the New Jersey Economic Development Authority.

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Discontinued Operations

We consider our Diagnostic
  business unit to be a non-core asset which we expect to and have committed to
  sell and therefore, has been reflected as a discontinued operation. The results
  of operations for this business unit have been reflected in discontinued operations.
  We recorded approximately $0.2 million of losses during the three months
  ended March 31, 2003 and $0.5 million of income from the discontinuance of the
  Diagnostic business during the three months ended March 31, 2002. A contributing
  factor for the loss during the first quarter of 2003 is a direct result of the
  loss of a German customer for which our Diagnostic business had historically
  performed a significant amount of service work. Revenues associated with this
  customer have been reduced dramatically due to the current litigation with this
  customer.

Net Loss and Net Loss Allocable to Common Stockholders

Due to the factors described above, during the three months ended March 31, 2003, we reported a net loss of approximately $4.3 million compared to a net loss of approximately $10.5 million for the comparable period of the prior year. We also recorded a beneficial conversion feature of approximately $0.7 million which was included in our net loss allocable to common stockholders of approximately $5.0 million. The beneficial conversion feature related to our Series A preferred financing was calculated as the difference between our per share value as of the commitment date and the per share value of the transaction after giving effect to the value associated with the investors warrants to purchase common stock. (See Liquidity and Capital Resources below for a further discussion of the financing).

LIQUIDITY AND CAPITAL RESOURCES

On March 31, 2003, we completed
    the issuance and sale of 1,600 units (Units) to certain investors (each an
    Investor and collectively, the Investors). Each Unit consists of (i) one
    share of our newly created Series A Convertible Preferred Stock, $.001 par
    value per share (the Series A Preferred Stock), convertible into approximately
    22,222.22 shares of our common stock, and (ii) a warrant (Warrant) to purchase
    approximately 6,666.67 shares of our common stock. Each Unit had a purchase
    price of $10,000, providing us with $16.0 million in gross proceeds. We also
    issued an additional 75 Units to our banker as a fee for this transaction
    and will pay certain other banker fees and expenses in connection with the
    transaction.

The Series A
  Preferred Stock is convertible into our common stock, at the Investors
  discretion, at a per share conversion price of $0.45, provided, however, that
  no Investor is allowed to convert Series A Preferred Stock if the conversion
  would result in such Investor beneficially owning more than 4.99% of our outstanding
  common stock (the Cap Amount), and it is entitled to vote on all matters submitted
  to a vote of our stockholders on an as-converted basis, subject again to the
  Cap Amount. The Series A Preferred Stock bears cumulative dividends, payable
  quarterly, at an initial annual rate of 6% for the first nine quarters. After
  the ninth quarter, the dividend rate will increase by 2% for each quarter thereafter,
  to a maximum of 12% per year. If, however, our common stock ceases to be listed
  on either the Nasdaq (the National Market or SmallCap) (collectively, the NASDAQ),
  the New York Stock Exchange (the NYSE) or the American Stock Exchange (the AMEX),
  the dividend rate will automatically increase to 14% per year until our common
  stock is subsequently listed on one of the aforementioned markets or exchanges.
  Dividends are payable, at our option, in cash or shares of our common stock,
  valued at the average closing sales price of our common stock for the five trading
  day period prior to the dividend date. The proceeds of this financing can be
  used for general and corporate purposes and working capital, but is restricted
  as to certain other uses.

The holders of the Series
    A Preferred Stock have the right to require us to repurchase for cash the
    then outstanding shares of Series A Preferred Stock upon the occurrence of
    certain events, including:

| |  | if our common stock is
      not listed on either the NYSE, AMEX, NASDAQ, the OTCBB or the Bulletin Board
      Exchange for a total of ten days in any nine month period;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | the institution of bankruptcy,
      insolvency, reorganization or liquidation proceedings by or against us,
      an assignment for the benefit of creditors by us or the appointment of a
      receiver or trustee for us;                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | a change of control of
      our company, as defined in the certificate of designations;                                                                                                                                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | our failure to pay in
      full dividends on the Series A Preferred Stock on any two consecutive dividend
      dates;                                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | a registration statement
      required to be filed by the Company to register common shares underlying
      the Series A Preferred Stock and Warrants is not declared effective within
      a certain period, as defined in the certificate of designations or after
      being declared effective, cannot be utilized by the holders of the Series
      A Preferred Stock for resale of all of their shares for more than a total
      of 45 days; or
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | our failure to convert
      the Series A Preferred Stock when requested by the holders, as defined in
      the agreement.                                                                                                                                                                                                                                                                                                                                 

The
  redemption amount that we are required to pay equals 125% of the purchase price
     of the Series A Preferred Stock and the accrued and unpaid dividends, except

  that in the case of a change of control, the redemption equals 150% of such
     amount. The Series A Preferred Stock is also entitled to a liquidation preference

  equal to the purchase price plus all accrued and unpaid dividends. Due to the
     redemption characteristics of the Series A Preferred Stock, we have classified

  the carrying value of the Series A Preferred outside of stockholders equity
   in the accompanying condensed consolidated balance sheet as of March 31, 2003.

  We will not accrete the carrying value of the Series A Preferred Stock to the
   redemption value until an event that would require redemption becomes probable.

  As of March 31, 2003, the redemption of the Series A Preferred Stock is not
   probable and the Series A Preferred Stock has been recorded at its original
  carrying
  value in the accompanying condensed consolidated balance sheet as of March
  31,  2003, accordingly.

If
  certain requirements as defined in the agreement are met after the second anniversary
  of the financing, we at our option may redeem the Series A Preferred Stock in
  whole or in part for 125% of the original purchase price. If our stock price
  exceeds certain levels for certain periods of time, as defined in the agreement,
  or we consummate an underwritten offering at certain levels as defined in the
  agreement, we may at our option redeem the Series A Preferred Stock in an amount
  equal to the original purchase price.

Stockholder approval is normally required
    for financings similar to the one described above. However, we sought and
    obtained a financial viability exception from the National Association
    of Securities Dealers (NASD) stockholder approval requirement pursuant
    to NASD Marketplace Rule 4350(i)(2). On March 20, 2003, in accordance with
    NASD Marketplace Rule 4350(i)(2), we mailed to our stockholders a notice
    (the Notice) that we had requested and received from Nasdaq a financial
    viability exception to the stockholder approval requirements of NASD
    Marketplace Rule 4350(i)(1)(D). In accordance with the terms of NASD Marketplace
    Rule 4350(i)(2), we closed the financing at least ten days after the mailing
    of the Notice.

We are currently in the
    process of negotiating the terms of a consulting arrangement with the Investors
    pursuant to which the Investors will provide us with strategic and financial
    services.

On December 23, 2002, we consummated
    a line of credit with a commercial bank for a maximum of $10 million. The
    borrowing base is based on 80% of eligible accounts receivable (as defined
    in the agreement). Borrowings pursuant to the line of credit bear interest
    at a range of prime plus 0.5% to 2.5% based on our liquidity ratio as defined).
    The line of credit contains certain financial and non-financial covenants
    with which we were in compliance as of March 31, 2003. This agreement also
    contains a material adverse change clause which, if triggered, would constitute
    an event of default. The line of credit expires in one year but contains
    automatic renewal provisions at the banks option.



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In March 2002,
  we completed a follow-on offering of our common stock for approximately $21.3
  million. At March 31, 2003, we had borrowings of approximately $4.8 million
  outstanding related to a loan which was entered into primarily for equipment
  financing. If we do not maintain minimum unrestricted cash, as defined in the
  loan agreement, equal to the greater of $35.0 million or twelve months
  cash needs (calculated by taking the trailing three months net cash used in
  operations multiplied by four), we are required to provide a cash security deposit
  or letter of credit equal to an amount defined in the loan agreement, not to
  exceed 50% of outstanding amounts on draws made in or subsequent to December
  2000. As of December 31, 2001, and just prior to our March 2002 equity offering
  we did not maintain the minimum unrestricted cash defined in the loan agreement.
  We received a waiver from our lender regarding our noncompliance with this covenant
  for this period. Subsequent to March 31, 2002, we did not maintain the minimum
  cash defined in the loan agreement. We have also received written notice from
  the lender stating that the lender waived the financial covenant violation as
  a result of not maintaining a pledge of cash security deposit or letter or credit
  under this loan agreement for the period of noncompliance through June 19, 2002.
  On June 19, 2002, we obtained a letter of credit in the amount of approximately
  $2.7 million as required by the loan agreement, which was supported by a cash
  restriction on certain securities held by us. As such, this cash restriction,
  in addition to cash restricted under two of our operating leases is reflected
  as restricted cash in the condensed consolidated balance sheet as of March 31,
  2003 of $3.4 million, of which approximately $1.9 million is classified as a
  long term asset.

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 $16.8 million
    remains available for future use. The sale of common stock in June 2001 for
    gross proceeds of approximately $35.7 million was registered under this Registration
    Statement. The subsequent sale of common stock in February and March 2002
    for gross proceeds of approximately $22.5 million was also registered under
    a Prospectus Supplement to this Registration Statement. The availability
    to offer and sell various types of securities under the shelf registration
    statement expires in May 2003. To issue securities registered on this registration
    statement we must either have an aggregate market value of the voting and
    non-voting common equity excluding shares held by our affiliates of $75 million
    or more, or we must file a post effective amendment to the registration statement
    on Form S-2 or S-1.

As of March 31, 2003, we had approximately $19.9 million in cash and cash equivalents and stock subscription receivables as compared to approximately $10.0 million as of December 31, 2002. Working capital increased to approximately $21.0 million at March 31, 2003 from approximately $7.6 million at December 31, 2002. This increase in working capital is due to the $16 million in financing which was completed on March 31, 2003.

Net cash provided by operations
  for the three months ended March 31, 2003 was less than $0.1 million compared
  with cash used in operations of approximately $7.7 million for the comparable
  period of the prior year. Investing activities included capital expenditures
  of approximately $0.2 million. Financing activities primarily consisted of approximately
  $8.6 million of net proceeds from our offering of redeemable convertible preferred
  stock in March of 2003 and repayment of debt of approximately $5.9 million,
  which includes $5.2 million which was repaid on our $10 million credit facility.
  In addition to the $8.6 million which was received on March 31, 2003, the
  remaining $7.4 million from the redeemable convertible preferred stock offering
  was collected on April 1, 2003.

We expect our restructuring efforts taken in 2002 will reduce future cash expenditures. We believe that the result of these efforts coupled with anticipated divestitures of certain non-core assets, expected increases in both revenues and gross margins in our remaining core business units and our financing in 2003 will enable us to operate our ongoing business activities until we reach operating profitability and positive cashflows, expected in late 2003.

We believe that our existing
    cash on hand, with the inclusion of the 2003 financing and the availability
    of our line of credit as described above, will be sufficient to fund our
    operations through at least
    December
    31, 2003.
    We may need to access the capital markets for additional financing to operate
    our ongoing business activities after that time if our future results of
    operations fall below our expectations. We may be unable to raise additional
    funds or raise funds on terms that are acceptable to us. If future financing
    is not available to us, or is not available on terms acceptable to us, we
    may not be able to fund our future needs. If we raise funds through equity
    or convertible securities, our stockholders may experience dilution and our
    stock price may decline.

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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;                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                              
| |  | our ability to divest
      non-core assets;                                                                                                                                                 
| |   |                                                                                                                                                                                              
| |  | 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 application of our
      SNP technologies to our other business areas, including paternity, forensics,
      and pharmacogenetic testing;                                                
| |   |                                                                                                                                                                                              
| |  | 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 identity genomics
      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 at favorable terms, if necessary.                                                                                                               

As of December
  31, 2002, our net operating loss carry forwards were approximately $178.0 million
  and approximately $161.5 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 2005. 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.

CONTRACTUAL COMMITMENTS

We maintain multiple contractual commitments as of March 31, 2003, which will support our future business operations. Such commitments relate to noncancelable operating lease arrangements, long-term debt, minimum supply purchases, and future patent and minimum royalty obligations. We have identified and quantified the significant commitments in the following table.

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Payments
  due by period(In
  thousands)



|                               | Year
      ending December 31 (nine months for 2003) |       |  |       |  |      
|------------------------------ | ---------------------------------------------------- | ----- |  | ----- |  | -----
|                               |                                                      |       |  |       |  |      
|                               |                                                      | 2003  |  | 2004  |  | 2005 
|                               |                                                      |       |  |       |  |      
|Contractual
      obligations: |                                                      |       |  |       |  |      
|Noncancelable                  |                                                      |       |  |       |  |      
|operating
      lease          |                                                      |       |  |       |  |      
|arrangements(1)                | $                                                    | 2,918 |  | 3,433 |  | 3,072
|Long-term
      debt(2)        |                                                      | 2,659 |  | 1,702 |  | 597  
|Future patent                  |                                                      |       |  |       |  |      
|obligations(3)                 |                                                      | 1,618 |  | 1,593 |  | 310  
|Minimum
      purchase         |                                                      |       |  |       |  |      
|commitments(4)                 |                                                      | 1,300 |  | 1,300 |  |     
|Future minimum                 |                                                      |       |  |       |  |      
|royalties
      (5)            |                                                      |      |  |      |  | 1,240
|                               |                                                      |       |  |       |  |      
|                               |                                                      |       |  |       |  |      
|Total
      contractual        |                                                      |       |  |       |  |      
|obligations                    | $                                                    | 8,495 |  | 8,028 |  | 5,219

---

|(1) | Such
      amounts represent future minimum rental commitments for office space leased
      under noncancelable operating lease arrangements. We lease approximately
      208,000 square feet for operations in the US and approximately 75,000 square
      feet in Abingdon, UK to support foreign operations.                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Such
      amounts primarily consist of amounts payable pursuant to our line of credit
      and equipment loan line. Also included in such amounts are capital lease
      obligations for certain machinery and equipment (including interest).                                                                                   
|(3) | Such
      amounts represent obligations to pay future amounts over the next three
      years in conjunction with our acquisition of US Patent No. 5,856,092 and
      its foreign counterparts from Affymetrix in July 2001 as well as our obligation
      to pay St. Louis University in connection with our patent acquisition.
|(4) | Such
      amounts represent minimum purchase commitments of materials and supplies
      from Beckman Coulter Inc. as a result of the OEM Supply Agreement dated
      December 19, 2002.                                                                                                                                          
|(5) | In
      connection with our acquisition of US Patent No. 5,856,092, we are also
      obligated to pay future minimum royalties as shown and $1.9 million until
      the expiration of the agreement related to these patents.                                                                                                    

ITEM
  3.QUANTITATIVE
  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure
  to market risk is principally confined to our cash equivalents, which are conservative
  in nature, with a focus on preservation of capital.

Market risk
  refers to the risk of loss arising from adverse changes in foreign currency
  exchange rates. As a result of the acquisition of Cellmark, in February 2001,
  the acquisition of Lifecodes in December 2001, and a limited number of agreements
  with foreign companies, we may be affected by fluctuations in currency exchange
  rates.

We have a certain
  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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ITEM 4.   CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure
    Controls and Procedures. The Companys principal executive officer and
    principal financial officer, after evaluating the effectiveness of the Companys
    disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c)
    and 15d-14(c)) as of a date within 90 days of the filing of this Quarterly
    Report on Form 10-Q, have concluded that, based on such evaluation, the Companys
    disclosure controls and procedures were adequate and effective to ensure that
    material information relating to the Company, including its consolidated
    subsidiaries, was made known to them by others within those entities, particularly
    during the period in which this Quarterly Report on Form 10-Q was being prepared.

(b) Changes
  in Internal Controls. There were no significant changes in the Companys
  internal controls or in other factors that could significantly affect these
  controls subsequent to the date of their evaluation, nor were there any significant
  deficiencies or material weaknesses in the Companys internal controls.Accordingly,
  no corrective actions were required or undertaken.

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; the expectation that our forensics business will generate increasing
    revenues and that revenues generally will increase; the expected uses for,
    the timing of the introduction of, and the implementation of our and GeneShields
    products and services; the anticipation of incurring additional losses at
    least through the third quarter of 2003; the expected timing and outcome
    of litigation; the expectation of selling the Diagnostics business unit in
    2003 and the expectation of generating incremental cash resources from the
    sale in 2003; the expectation of becoming profitable in late 2003;  the expectation
    of reaching operating profitability and positive cash flows in late 2003;
    the expectation that our actions and initiatives will increase our share
    price and ability to remain listed on the Nasdaq National Market; the expectation
    that restructuring efforts in 2002 will reduce cash expenditures; the expected
    amounts of future expenses; the planned uses of our laboratories; the intention
    of continuing to leverage our SNP technologies in our paternity, forensics,
    public health and pharmacogentic businesses; the intention to vigorously
    defend lawsuits; the belief that our acquisitions, establishment of new businesses,
    selected divestitures and increases in revenues and gross margins will allow
    us to focus on key portions of our business and allow us to move closer to
    achieving profitability; the anticipation of entering into fewer licensing
    arrangements; the expected amortization of intangible assets; our anticipation
    of entering into a consulting arrangement with the Investors; and the belief
    that our existing cash reserves with the inclusion of the 2003
    financing
    and our line of credit will be sufficient to fund our operations through
    at least December 31, 2003. For further information,
    refer to the more specific factors and uncertainties discussed throughout
    our Annual Report or Form 10-K and in the Risk Factors section
    thereof. Except as required by law, we undertake no obligations 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.

PART
  II   OTHER INFORMATION

ITEM
  1.   LEGAL PROCEEDINGS

On
  February 13, 2002 the Company received a Notice of Lawsuit and Request for Waiver
  of Service of Summons and a copy of the complaint filed in the United States
  District Court for the Southern District of New York in connection with a class
  action lawsuit. The complaint purportedly was filed on behalf of persons purchasing
  the Companys stock between May 4, 2000 and December 6, 2000, and alleged
  violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as
  amended, and Section 10(b) of the Securities Exchange Act of 1934, as amended,
  and Rule 10b-5 promulgated thereunder. The complaint alleged that, in connection
  with the Companys May 5, 2000 initial public offering, the defendants
  failed to disclose additional and excessive commissions purportedly solicited
  by and paid to the underwriter defendants in exchange for allocating shares
  of the Companys stock to preferred customers and alleged agreements among
  the underwriter defendants and preferred customers tying the allocation of IPO
  shares to agreements to make additional aftermarket purchases at pre-determined
  prices. Plaintiffs claim that the failure to disclose these alleged arrangements
  made the Companys registration statement on Form S-1 filed with the SEC
  in May 2000 and the prospectus, a part of the registration statement, materially
  false and misleading. Plaintiffs seek unspecified damages. On February 19, 2003,
  the Company received notice of the courts decision to dismiss the Section
  10(b) claims against the Company. The claims against individuals officers named
  as defendants were earlier dismissed without prejudice, subject to a tolling
  agreement. There is currently a draft settlement agreement in review by defendant
  issuers. The Company has not reserved any amount related to this case as it
  believes that the allegations are without merit and intend to vigorously defend
  against the plaintiffs claims.

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The
  Company had been in a litigation with St. Louis University of St. Louis, Missouri
  regarding its belief that our SNP scoring technology infringes certain claims
  under US patent 5,846,710, which was controlled by the University. On August
  7, 2002, the parties dismissed the litigation and the Company acquired the subject
  patent. St. Louis University conditionally assigned both the patent and all
  license agreements related thereto to us. On March 13, 2003, St. Louis University
  notified the Company that it was unable to obtain a required consent to assign
  the patent to the Company. Pursuant to the terms of the Companys settlement
  agreement with St. Louis University, the failure to obtain such consent results
  in the automatic grant to the Company of an exclusive license under the patent.
  The Company is currently in discussions with St. Louis University regarding
  the terms of such license and the restructuring of the Companys obligations
  to St. Louis University.

The Company is a co-defendant in litigation commenced by Enzo Biochem, Inc, and Enzo Life Sciences, Inc. against ten defendants. The complaint asserts that the Company purchased materials from plaintiffs authorized distributor and resold those materials in a manner not authorized by the related distribution agreements. The complaint, therefore, seeks money damages based primarily on alleged patent infringement by the Company. The Company has asserted a cross-claim for indemnification against the distributor. The litigation currently is in fact discovery and no expert discovery has occurred. As a result, it is not possible for the Company to provide an opinion on the likely outcome of the various claims, but the Company intends to vigorously defend against plaintiffs claims and believes that the claims are without merit.

Prior to the Companys acquisition of Lifecodes, which occurred on December 5, 2001, Lifecodes sold Medical Molecular Diagnostics GmbH, (MMD), a wholly owned subsidiary of Lifecodes based in Dresden, Germany to Duetsche Knochenmarkspenderdatei gemeinnutzige Gesellschaft mbH, (DKMS), pursuant to a Stock Purchase Agreement dated November 15, 2002 (SPA). Upon the acquisition of Lifecodes, the Company assumed Lifecodes obligations to DKMS under the SPA.

The
    Company is in a dispute with and anticipates receiving notification in the
    near future that DKMS has filed a suit against it for damages under the SPA
    for the full amount of their cost to acquire MMD. DKMS is anticipated to
    claim defects in the MMD lab. The Company has not reserved any amount related
    to this case and believes that the allegations are without merit and intends
    to vigorously defend against these anticipated claims. Legal proceedings
    are likely to occur no earlier than the fall 2003. In addition, in December
    2002, the Company filed a claim in Germany against DKMS for significant unpaid
    accounts receivable that accrued during the year ended December 31, 2002.
    The accounts receivable amounts were for HLA typing conducted by the Diagnostics
    business unit, which the Company currently plans to sell. The services performed
    by the Diagnostics business unit were exclusively upon DKMS request. Legal
    proceedings for the Companys outstanding accounts receivable are expected
    to take place in Germany by summer 2003.

Additionally, the Company has other certain claims against it arising from the normal course of its business. The ultimate resolution of such matters, including those cases discussed above, in the opinion of management, will not have a material effect on the Companys financial position or results of operations.

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ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

On March 31, 2003, we completed the issuance and sale of 1,600 units (Units) to certain private institutional investors (each an Investor and collectively, the Investors). Each Unit consists of (i) one share of our newly created Series A Convertible Preferred Stock, $.001 par value per share (the Series A Preferred Stock), convertible into approximately 22,222.22 shares of our common stock, and (ii) a warrant (Warrant) to purchase approximately 6,666.67 shares of our common stock. Each Unit had a purchase price of $10,000, providing us with $16.0 million in gross proceeds. We also issued an additional 75 Units to our banker as a fee for this transaction and will pay certain other banker fees and expenses in connection with the transaction.

The Series A Preferred Stock is convertible into our common stock, at the Investors discretion, at a per share conversion price of $0.45, provided, however, that no Investor is allowed to convert Series A Preferred Stock if the conversion would result in such Investor beneficially owning more than 4.99% of our outstanding common stock. The Warrants are exercisable at any time after the first anniversary of the issuance date through the fifth anniversary of the issuance date at an exercise price equal to $0.45 per share. In addition, the Warrants are exercisable via a cashless exercise from the second anniversary of the issuance date through the fifth anniversary of the issuance date.

No underwriters were involved in the foregoing offers and sales of securities. Such offers and sales were made in reliance upon an exemption from the registration provisions of the Securities Act of 1933, as amended (the Securities Act), set forth in Section 4(2) thereof relative to sales by an issuer not involving any public offering or the rules and regulations thereunder. All of the foregoing securities are deemed restricted securities for purposes of the Securities Act.

ITEM
  3.   DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

Not applicable.

ITEM
  5.   OTHER INFORMATION

Not Applicable.



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ITEM
  6.EXHIBITS
  AND REPORTS ON FORM 8-K

(a)   Exhibits

The following
  documents are filed as part of this Quarterly Report on Form 10-Q.

|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                           
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1           |  | Restated
      Certificate of Incorporation of the Registrant, dated May 10, 2000 (filed
      as Exhibit 3.1 to the Registrants Quarterly Report on Form 10-Q for
      the quarter ended June 30, 2002 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 quarter ended June 30, 2002 and incorporated
      herein by reference)

|3.3  |  | Certificate
      of Amendment to the Restated Certificate of Incorporation of the Registrant,
      dated June 17, 2002 (filed as Exhibit 3.3 to the Registrants Quarterly
      Report on Form 10-Q for the quarter ended June 30, 2002 and incorporated
      herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.4  |  | Certificate
      of Designation, Preferences, and Rights of Series A Junior Participating
      Preferred Stock of the Registrant, dated August 1, 2001 (filed as Exhibit
      3.4 to the Registrants Quarterly Report on Form 10-Q for the quarter
      ended June 30, 2002 and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                
|3.5  |  | Certificate
      of Designations, Preferences and Rights of Series A Convertible Preferred
         Stock of the Registrant, dated March 31, 2003 (filed as Exhibit 3.5
        to the
      Registrants Current Report on Form 8-K for the March 31, 2003 event)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.6  |  | Second Amended
      and Restated Bylaws of the Registrant (filed as Exhibit 3.4 to the Registrant's
      Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated
      herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.1  |  | Specimen
      certificate for shares of common stock (filed as Exhibit 4.1 to the Registrant's
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 and
      incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.2  |  | Rights Agreement,
      dated as of July 27, 2001, by and 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 rights certificate
      as Exhibit B and the summary of rights to purchase Series A Junior Participating
      Preferred Stock 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)
|4.3  |  | First Amendment
      to Rights Agreement by and between the Registrant and American Stock Transfer
      & Trust Company, as rights agent, dated as of March 31, 2003 (filed
      as Exhibit 10.3 to the Registrants Current Report on Form 8-K for
      the March 31, 2003 event)                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.4  |  | Form of
      Warrant dated March 31, 2003 issued to investors (filed as Exhibit 4.1 to
      the Registrants Current Report on Form 8-K for the March 31, 2003
      event)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.1 |  | Securities
      Purchase Agreement by and among the Registrant and the purchasers set forth
      on the execution pages thereof, dated as of March 31, 2003 (filed as Exhibit
      10.1 to the Registrants Current Report on Form 8-K for the March 31,
      2003 event)                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.2 |  | Registration
      Rights Agreement, dated as of March 31, 2003 (filed as Exhibit 10.2 to the
      Registrants Current Report on Form 8-K for the March 31, 2003 event)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|99.1 |  | Certification
      of the Chairman of the Board and Chief Financial Officer under Section 906
      of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

(b)   Reports
  on Form 8-K

The Company filed the following reports on form 8-K with the Securities and Exchange Commission during the quarter ended March 31, 2003:

| | Form 8-K
      filed January 7, 2003 announcing that on December 19, 2002, the Company
      reached a definitive agreement with Beckman Coulter, Inc for the sale of
      its Life Science products related assets.                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                   
| | Form 8-K
      filed March 21, 2003 announcing that on March 20, 2003 the Company mailed
      to its shareholders a notice that it had requested and received from Nasdaq
      a financial viability exception to the shareholder approval requirements
      of Marketplace Rule 4350(i)(1)(D).



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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:
      May 14, 2003 | By:/s/
      ANDREWP. SAVADELISAndrew
      P. SavadelisSr.
      Vice President and Chief Financial
      Officer
|------------------------ | ------------------------------------------------------------------------------------------------------------------



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Certification

I, George Poste, Chairman of the Board of Directors of Orchid BioSciences, Inc., (the Registrant) certify that:

| | 1. | I
      have reviewed this quarterly report on Form 10-Q of the Registrant;                                                                                                                                                                                                                                                                                                                                           
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Based
      on my knowledge, this quarterly report does not contain any untrue statement
      of a material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this quarterly
      report;                                                          
| | 3. | Based
      on my knowledge, the financial statements, and other financial information
      included in this quarterly report, fairly present in all material respects
      the financial condition, results of operations and cash flows of the Registrant
      as of, and for, the periods presented in this quarterly report;                                                                                   
| | 4. | The
      Registrants other certifying officer and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act Rules 13a-14 and 15d-14) for the Registrant and we have:                                                                                                                                                                            
| |    | a.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | b.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | c.                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 5. | The
      Registrants other certifying officer and I have disclosed, based on
      our most recent evaluation, to the Registrants auditors and the audit
      committee of Registrants board of directors (or persons performing
      the equivalent functions):                                                                                                                                                
| |    | a.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | b.                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 6. | The
      Registrants other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any corrective
      actions with regard to significant deficiencies and material weaknesses.



|Date:
      May 14, 2003 | /s/GEORGEPOSTE                     
|------------------------ | -----------------------------------
|                         | George Poste,
      DVM, Ph.D.     
|                         | Chairman
      of the Board        
|                         | (Principal
      Executive Officer)



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Certification

I, Andrew P. Savadelis, Senior Vice President and Chief Financial Officer of Orchid BioSciences, Inc., (the Registrant) certify that:

| | 1. | I
      have reviewed this quarterly report on Form 10-Q of the Registrant;                                                                                                                                                                                                                                                                                                                                           
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Based
      on my knowledge, this quarterly report does not contain any untrue statement
      of a material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this quarterly
      report;                                                          
| | 3. | Based
      on my knowledge, the financial statements, and other financial information
      included in this quarterly report, fairly present in all material respects
      the financial condition, results of operations and cash flows of the Registrant
      as of, and for, the periods presented in this quarterly report;                                                                                   
| | 4. | The
      Registrants other certifying officer and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act Rules 13a-14 and 15d-14) for the Registrant and we have:                                                                                                                                                                            
| |    | a.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | b.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | c.                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 5. | The
      Registrants other certifying officer and I have disclosed, based on
      our most recent evaluation, to the Registrants auditors and the audit
      committee of Registrants board of directors (or persons performing
      the equivalent functions):                                                                                                                                                
| |    | a.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | b.                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 6. | The
      Registrants other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any corrective
      actions with regard to significant deficiencies and material weaknesses.



|Date: May
      14, 2003 | /s/
      ANDREWP. SAVADELIS                           
|------------------------ | -------------------------------------------------------
|                         | Andrew P.
      Savadelis                              
|                         | Senior Vice
      President and Chief Financial Officer
|                         | (Principal
      Financial Officer)                    



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|Exhibits                                                                                                
|--------------------------------------------------------------------------------------------------------
|The
        following is a list of exhibits filed as part of this Quarterly Report
        on Form 10-Q.
|Exhibit                                                                                                 
|Number                                                                                                  
|                                                                                                        
|3.1                                                                                                     
|3.2                                                                                                     
|3.3                                                                                                     
|3.4                                                                                                     
|3.5                                                                                                     
|3.6                                                                                                     
|4.1                                                                                                     
|4.2                                                                                                     
|4.3                                                                                                     
|4.4                                                                                                     
|10.1                                                                                                    
|10.2                                                                                                    
|99.1                                                                                                    





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