<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  ------------

                                    FORM 10-Q

             [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    FOR THE TRANSITION PERIOD FROM ___ TO ___

                        COMMISSION FILE NUMBER 000-23541

                                  NANOGEN, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                 DELAWARE                                    33-0489621
      (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                    Identification No.)


       10398 PACIFIC CENTER COURT, SAN DIEGO, CA              92121
       (Address of principal executive offices)            (Zip code)


                                 (858) 410-4600
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                          YES     X            NO
                               -------             -------


AS OF NOVEMBER 1, 1999, 19,084,461 SHARES OF THE REGISTRANT'S COMMON STOCK WERE
OUTSTANDING.


<PAGE>


                                  NANOGEN, INC.
                                    FORM 10-Q
                                      INDEX

<TABLE>
<CAPTION>

                                                                                                   PAGE
                                                                                                   ----
<S>                                                                                                <C>
PART I.           FINANCIAL INFORMATION

Item 1.           Financial Statements:

                  Consolidated Balance Sheets at September 30, 1999
                    and December 31, 1998...........................................................3

                  Consolidated Statements of Operations for the Three and
                    Nine Months ended September 30, 1999 and 1998...................................4

                  Consolidated Statements of Cash Flows for the Nine
                    Months ended September 30, 1999 and 1998........................................5

                  Notes to Consolidated Financial Statements........................................6

Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations...............................................8

Item 3.           Quantitative and Qualitative Disclosures About Market Risk........................16


PART II:          OTHER INFORMATION

Item 2.           Changes in Securities and Use of Proceeds.........................................17

Item 6.           Exhibits and Reports on Form 8-K..................................................17

SIGNATURES..........................................................................................18

EXHIBIT INDEX.......................................................................................19

</TABLE>


                                                                               2
<PAGE>



                          PART I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                                  NANOGEN, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                           SEPTEMBER 30,         DECEMBER 31,
                                                                                1999                 1998
                                                                          ---------------       -------------
                                                                           (unaudited)
<S>                                                                       <C>                   <C>
                                 ASSETS
Current assets:
  Cash and cash equivalents                                               $   44,579            $   62,245
  Receivables and other current assets                                         3,610                 2,933
                                                                          --------------        -------------
Total current assets                                                          48,189                65,178

Property and equipment, net                                                    6,596                 6,980
Restricted cash                                                                  214                   270
Other assets                                                                     226                   276
                                                                          --------------        -------------
                                                                          $   55,225            $   72,704
                                                                          --------------        -------------
                                                                          --------------        -------------


                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                                        $      762            $    1,066
  Accrued liabilities                                                          2,268                 1,433
  Deferred revenue                                                             3,029                 3,065
  Due to joint venture                                                            78                     -
  Current portion of capital lease obligations                                 2,139                 1,913
                                                                          --------------        -------------
Total current liabilities                                                      8,276                 7,477

Capital lease obligations, less current portion                                3,348                 4,176

Stockholders' equity:
  Convertible preferred stock, $.001 par value, 5,000,000 shares
    authorized; no shares issued and outstanding at September 30, 1999
    and December 31, 1998                                                          -                     -

  Common stock, $.001 par value, 50,000,000 shares authorized;
    19,070,701 and 18,835,461 shares issued and outstanding
    at September 30, 1999 and December 31, 1998, respectively                     19                    19
  Additional paid-in capital                                                 113,408               111,489
  Deferred compensation                                                       (2,212)               (1,512)
  Notes receivable from officers                                              (1,572)               (1,514)
  Accumulated deficit                                                        (66,042)              (47,431)
                                                                          --------------        -------------
Total stockholders' equity                                                    43,601                61,051
                                                                          --------------        -------------
                                                                          $   55,225            $   72,704
                                                                          --------------        -------------
                                                                          --------------        -------------

</TABLE>


                             See accompanying notes.

                                                                               3
<PAGE>


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

<TABLE>
<CAPTION>

                                                    THREE MONTHS ENDED SEPTEMBER 30,      NINE MONTHS ENDED SEPTEMBER 30,
                                                   -----------------------------------   -----------------------------------
                                                        1999               1998               1999                1998
                                                   ---------------    ----------------   ----------------    ---------------
<S>                                                <C>                <C>                <C>                 <C>
Revenues:
  Sponsored research                                  $  1,234            $  1,366           $  4,153            $  3,638
  Contract and grant revenue                               712                 498              1,928               1,595
                                                   ---------------    ----------------   ----------------    ---------------
Total revenues                                           1,946               1,864              6,081               5,233

Operating expenses:
  Research and development                               5,406               5,722             19,042              15,434
  General and administrative                             2,161               1,733              6,158               4,685
  Acquired in-process technology                             -                   -                  -               1,193
                                                   ---------------    ----------------   ----------------    ---------------
Total operating expenses                                 7,567               7,455             25,200              21,312
                                                   ---------------    ----------------   ----------------    ---------------
Loss from operations                                    (5,621)             (5,591)           (19,119)            (16,079)

Interest income, net                                       480                943               1,551               1,907
Loss on disposition of fixed assets                          -                  -                 (30)                  -
Equity in loss of joint venture                            (78)              (610)             (1,013)               (610)
                                                   ---------------    ----------------   ----------------    ---------------
Net loss                                              $ (5,219)          $ (5,258)          $ (18,611)          $ (14,782)
                                                   ---------------    ----------------   ----------------    ---------------
                                                   ---------------    ----------------   ----------------    ---------------

Net loss per share -
  basic and diluted                                   $  (0.29)          $  (0.30)          $  (1.03)           $  (1.27)
                                                   ---------------    ----------------   ----------------    ---------------
                                                   ---------------    ----------------   ----------------    ---------------

Number of shares used in computing
  net loss per share - basic and diluted                18,244             17,534             17,991              11,605
                                                   ---------------    ----------------   ----------------    ---------------
                                                   ---------------    ----------------   ----------------    ---------------

</TABLE>

                             See accompanying notes.


                                                                               4
<PAGE>

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

<TABLE>
<CAPTION>

                                                                             NINE MONTHS ENDED SEPTEMBER 30,
                                                                          -----------------------------------
                                                                              1999                  1998
                                                                          --------------        -------------
<S>                                                                       <C>                   <C>
Cash flows from operating activities:
Net loss                                                                   $ (18,611)            $ (14,782)
Adjustments to reconcile net loss to net cash
  used in operating activities:
  Acquisition of in-process technology                                             -                 1,193
  Depreciation and amortization                                                1,246                   776
  Amortization of deferred compensation                                        1,120                 1,818
  Loss on disposition of fixed assets, net                                        30                     -
  Equity in loss of joint venture                                              1,013                   610
  Interest on notes receivables from officers                                    (58)                  (44)
  Changes in operating assets and liabilities:
    Accounts payable                                                            (304)                  913
    Accrued liabilities                                                          835                    73
    Deferred revenue                                                             (36)                  903
    Receivables and other current assets                                        (590)               (1,071)
    Due to joint venture                                                          78                     -
                                                                          --------------        -------------
Net cash used in operating activities                                        (15,277)               (9,611)

Cash flows from investing activities:
Purchase of equipment                                                            (34)                    -
Investment in joint venture                                                   (1,013)                 (610)
                                                                          --------------        -------------
Net cash used in investing activities                                         (1,047)                 (610)

Cash flows from financing activities:
Restricted cash                                                                   56                    93
Principal payments on capital lease obligations                               (1,497)               (1,062)
Issuance of common stock, net of repurchases                                      99                60,030
Other assets                                                                       -                   (58)
                                                                          --------------        -------------
Net cash provided by (used in) financing activities                           (1,342)               59,003

Increase/(decrease) in cash and cash equivalents                             (17,666)               48,782
Cash and cash equivalents at beginning of period                              62,245                19,498
                                                                          --------------        -------------
Cash and cash equivalents at end of period                                  $ 44,579              $ 68,280
                                                                          --------------        -------------
                                                                          --------------        -------------

Supplemental disclosure of cash flow information:
    Interest paid                                                         $      445            $      319
                                                                          --------------        -------------
                                                                          --------------        -------------
Supplemental schedule of noncash investing and
    financing activities:
    Equipment acquired under capital leases                                $     859             $   5,475
                                                                          --------------        -------------
                                                                          --------------        -------------
    Common stock issued in exchange for notes
      receivables from officers                                           $          -          $      310
                                                                          --------------        -------------
                                                                          --------------        -------------
    Issuance of convertible preferred stock and
      warrants in exchange for in-process technology                      $          -           $   1,193
                                                                          --------------        -------------
                                                                          --------------        -------------

Deferred compensation related to stock options and awards                   $  1,820             $   1,371
                                                                          --------------        -------------
                                                                          --------------        -------------

</TABLE>


                             See accompanying notes.


                                                                               5
<PAGE>


                                  NANOGEN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                               SEPTEMBER 30, 1999


1.  BASIS OF PRESENTATION

    The accompanying unaudited consolidated financial statements have been
    prepared in accordance with generally accepted accounting principles 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 generally accepted accounting
    principles for complete financial statements. The consolidated balance sheet
    as of September 30, 1999, consolidated statements of operations for the
    three and nine months ended September 30, 1999 and 1998, and the
    consolidated statements of cash flows for the nine months ended September
    30, 1999 and 1998 are unaudited, but include all adjustments (consisting of
    normal recurring adjustments) which the Company considers necessary for a
    fair presentation of the financial position, results of operations and cash
    flows for the periods presented. The results of operations for the three and
    nine months ended September 30, 1999 shown herein are not necessarily
    indicative of the results that may be expected for the year ended December
    31, 1999.

    For more complete financial information, these financial statements, and
    notes thereto, should be read in conjunction with the audited consolidated
    financial statements for the year ended December 31, 1998 included in the
    Nanogen, Inc. Form 10-K filed with the Securities and Exchange Commission.

2.  NET LOSS PER SHARE

    The Company computes net income per share in accordance with SFAS No. 128,
    "Earnings per Share" and SEC Staff Accounting Bulletin No. 98 ("SAB 98").
    Under the provisions of SFAS No. 128 and SAB 98, basic net income per share
    is computed by dividing the net income available to common stockholders for
    the period by the weighted average number of common shares outstanding
    during the period. Diluted net income per share is computed by dividing the
    net income for the period by the weighted average number of common shares
    outstanding during the period and dilutive potential common shares
    outstanding. Weighted average common shares outstanding during the period
    does not include shares issued pursuant to the exercise of stock options
    prior to vesting. Due to the losses incurred by the Company during the three
    and nine months ended September 30, 1999 and 1998, common stock equivalents
    resulting from the assumed exercise of outstanding stock options and
    warrants have been excluded from the computation of diluted net loss per
    share as their effect would be anti-dilutive.

3.  RESTRICTED STOCK AWARDS

    On July 27, 1999, the Board of Directors authorized the issuance of an
    aggregate of 251,000 shares of the Company's common stock to certain
    officers and key employees at a price per share of par value ($.001). All of
    these shares were purchased by the respective officers and key employees and
    are subject to repurchase if the officer or key employee leaves the Company
    prior to July 26, 2001. Repurchase rights as to certain of the shares lapse
    upon the attainment of certain performance milestones or upon a change in
    control. Deferred compensation has been recorded for the excess of the fair
    market value of the stock on the date of the award over the purchase price
    per share and is being amortized over the restricted period.

4.  AVENTIS RESEARCH AND TECHNOLOGIES

    On September 28, 1999, the Company announced the expansion of its drug
    discovery collaboration with Aventis Research and Technologies ("Aventis").
    Two new technology development programs were added to the current program
    which is focused on the development of molecular recognition arrays. These
    new projects will focus on the development of gene expression tools
    utilizing electronic bioarrays and the development of high throughput
    screening tools for kinase analyses. In total, the two new programs will
    provide a maximum of $12.0 million in additional funding to the Company
    through December 31, 2001, including an up-front initiation fee of $2.0
    million which was received subsequent to September 30, 1999.


                                                                               6
<PAGE>


5.  BECTON, DICKINSON AND COMPANY PARTNERSHIP

    The Company entered into a Master Agreement with Becton, Dickinson and
    Company ("Becton Dickinson") in October 1997 to develop and commercialize
    products in the field of IN VITRO nucleic acid-based diagnostic and
    monitoring technologies. Pursuant to this Master Agreement, Becton Dickinson
    and Nanogen agreed to form The Nanogen/Becton Dickinson Partnership (the
    "Partnership"). Pursuant to a General Partnership Agreement, Becton
    Dickinson and Nanogen have contributed to the Partnership their respective
    rights under a Collaborative Research and Development Agreement established
    in May 1997, certain Intellectual Property Licenses and, as of September 30,
    1999 cash in the amount in aggregate of approximately $8.3 million, of which
    approximately $6.8 million was paid by Becton Dickinson and approximately
    $1.5 million was paid by Nanogen. In addition, at September 30, 1999,
    approximately $311,000 was due to the Partnership, of which approximately
    $233,000 was due from Becton Dickinson and approximately $78,000 was due
    from Nanogen. The amounts paid and due to the Partnership by Nanogen during
    the nine months ended September 30, 1999 have been recorded as Nanogen's
    share of the joint venture's loss for that period. The partners are
    considering modifications to the joint venture to take advantage of
    potential third party opportunities on technology developed to date. The
    partners are also considering field changes which would allow the joint
    venture access to additional technologies or content in areas more
    strategically aligned with business opportunities. Further joint venture
    funding will be determined based upon a final decision regarding such
    modifications and field changes.


                                                                               7
<PAGE>


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

    This report includes forward-looking statements about our business and
results of operations that are subject to risks and uncertainties that could
cause our actual results to vary materially from those reflected in the
forward-looking statements. Words such as "believes," "anticipates," "plans,"
"estimates," "future," "could," "may," "should," "expect," "envision,"
"potentially," variations of such words and similar expressions are intended to
identify such forward-looking statements. Factors that could cause or contribute
to these differences include those discussed below under the caption "Factors
that May Affect Results" and elsewhere in this Form 10-Q. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof. We disclaim any intent or obligation to update these
forward-looking statements.


OVERVIEW

    Since commencing operations in 1993, we have applied substantially all of
our resources to our research and development programs. We have incurred losses
since inception and, as of September 30, 1999, had an accumulated deficit of
approximately $66.0 million. We expect to incur significant losses over at least
the next several years as we expand our research and product development efforts
and attempt to commercialize our products.

    We currently have no products available for sale and no revenues have been
generated from the sale of products arising out of our technology. We anticipate
our main sources of revenues during at least 1999 will be payments from
contracts, grants and sponsored research. We believe our future operating
results may be subject to quarterly fluctuations due to a variety of factors,
including the achievement of milestones under our collaborative agreements,
whether and when new products are successfully developed and introduced by us or
our competitors, and market acceptance of products under development. Payments
under contracts, grants and sponsored research agreements will be subject to
significant fluctuations in both timing and amount and therefore our results of
operations for any period may not be comparable to the results of operations for
any other period.


RESULTS OF OPERATIONS

    REVENUES. For the three and nine months ended September 30, 1999, revenue
from sponsored research totaled approximately $1.2 million and $4.2 million,
compared to approximately $1.4 million and $3.6 million for the three and nine
months ended September 30, 1998, respectively. Revenues are recorded under these
arrangements as expenses are incurred. Payments received in advance under these
arrangements are recorded as deferred revenue until the expenses are incurred.
Sponsored research revenue recognized during the three and nine months ended
September 30, 1999 and 1998, was earned in connection with our joint venture
collaboration with Becton Dickinson, our research and development agreement with
Aventis Research and Technology ("Aventis", an affiliate of Hoechst AG), and our
nonexclusive research and development agreement with Elan Corporation, plc
("Elan"). Nanogen and Becton Dickinson are considering modifications to the
joint venture to take advantage of potential third party opportunities on
technology developed to date, as well as field changes which would allow the
joint venture access to additional technologies or content in areas more
strategically aligned with business opportunities. Further joint venture funding
will be determined based upon a final decision regarding such modifications and
field changes. Nanogen and Aventis have added two new technology development
programs to the existing molecular recognition array development program. The
two new programs will provide a maximum of $12.0 million in additional funding
to the Company through December 31, 2001, including an up-front initiation fee
of $2.0 million which was received subsequent to September 30, 1999. Nanogen and
Elan have not yet agreed upon specific program objectives with respect to the
nonexclusive research and development agreement.

    Revenue from contracts and grants totaled approximately $712,000 and $1.9
million for the three and nine months ended September 30, 1999, compared to
approximately $498,000 and $1.6 million for the three and nine months ended
September 30, 1998. The Company funds some of its research and development
efforts through contracts and grants awarded by various federal and state
agencies. As of September 30, 1999, the Company had five active contracts and
grants, compared to four such at September 30, 1998. Revenues are recognized
under these contracts and grants as expenses are incurred.


                                                                               8
<PAGE>


    Continuation of sponsored research agreements, contracts and grants is
dependent upon us achieving specific contractual milestones. The recognition of
revenue under sponsored research agreements, contracts and grants may vary from
quarter to quarter and may result in significant fluctuations in operating
results from year to year.

    RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses were
approximately $5.4 and $5.7 million, respectively for the three months ended
September 30, 1999 and 1998. Research and development expenses include salaries,
lab supplies, consulting, travel, facilities, product design and prototype
development, and other expenditures relating to research and product
development. The decrease in research and development expenditures for the three
months ended September 30, 1999, compared to the same period in 1998, can be
attributed to the timing of expenditures associated with the design and
development phase of our research system. Research and development expenses were
approximately $19.0 and $15.4 million, respectively, for the nine months ended
September 30, 1999 and 1998. The increase in research and development
expenditures for the nine months ended September 30, 1999, compared to the same
period in 1998, can be primarily attributed to costs associated with the
development and refinement of engineering prototypes as we move toward
commercialization of our first product. Additionally, the increases from year to
year are attributable to the continued growth of research and product
development efforts, including hiring of additional scientific, engineering and
operations personnel, increased purchases of laboratory supplies, equipment and
services to support our sponsored research programs, and expansion of research
and development facilities. Research and development spending may increase over
the next several years as our research and product development efforts continue.

    GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
totaled approximately $2.2 and $6.2 million for the three and nine months ended
September 30, 1999, compared to approximately $1.7 and $4.7 million for the
three and nine months ended September 30, 1998. This increase was principally
due to increased legal costs associated with enhancing and maintaining the
Company's intellectual property portfolio, the expansion of activities related
to marketing the Company's potential products, and to increased costs associated
with operating as a public company. The increase was partially offset by a
decrease in deferred compensation expense recognized in the first nine months of
1999 compared to what was recorded during the same period in 1998. Deferred
compensation represents the excess of the fair value over the exercise price for
common stock issuable on exercise of stock options. General and administrative
expenses are expected to continue to increase as we continue to expand our sales
and marketing and general and administrative organizations and as we continue to
enhance our intellectual property portfolio.

    ACQUIRED IN-PROCESS TECHNOLOGY. During the first quarter of 1998, the
Company issued 200,000 shares of its Series D Convertible Preferred Stock at
$6.00 per share in exchange for all of the outstanding shares of Nanotronics,
Inc. This Series D Preferred Stock converted into 132,334 shares of common stock
at the Company's initial public offering. The in-process technology, which was
acquired, relates generally to nanotechnology and molecular electronics. We
recorded $1.2 million in expenses relating to acquired in-process technology
during the nine months ended September 30, 1998.

    INTEREST INCOME, NET. Net interest income during the three and nine months
ended September 30, 1999 was approximately $480,000 and $1.6 million,
respectively, compared to net interest income of approximately $943,000 and $1.9
million for the same periods in 1998. The decrease in net interest income for
the three and nine months ended September 30, 1999 compared to the same periods
in 1998 can be attributed to the lower cash balances available during 1999
compared to 1998 as a result of cash used for operations. In addition, interest
rates were lower in 1999 as compared to 1998. Interest expense during both the
three and nine months ended September 30, 1999 was greater than interest expense
during the same period in 1998, due to a greater amount of equipment under
capital leases in 1999.

    EQUITY IN LOSS OF JOINT VENTURE. The Company recognized a loss of
approximately $78,000 and $1.0 million for the three and nine months ended
September 30, 1999 from the joint venture with Becton Dickinson, based on the
loss allocation described in the Partnership Agreement stating that losses will
be allocated in proportion to and not to exceed required cash contributions. A
loss of $610,000 was recognized during the three and nine months ended September
30, 1998.


                                                                               9
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

    We have financed our operations to date primarily through private placements
of equity securities totaling approximately $65.1 million, as well as through
our initial public offering in April 1998, which generated net proceeds of
approximately $38.7 million.

    To date we have funded most of our equipment acquisitions and leasehold
improvements through capital leasing or secured debt facilities. During the
first nine months of 1999, we received proceeds from equipment financing of
approximately $859,000. This compares to $5.5 million received for equipment
acquisitions and leasehold improvements during the same period in 1998 which was
primarily related to the expansion of our research and administrative facility.
We anticipate that we will continue to use capital equipment leasing or debt
facilities to fund most of our equipment acquisitions and leasehold
improvements.

    Net cash used in operating activities was approximately $15.3 million and
$9.6 million for the nine months ended September 30, 1999 and 1998,
respectively. Cash used for operations was primarily related to costs associated
with developing prototypes of our initial product, the support of our expanding
operations, including higher personnel costs, and legal fees relating to
establishing and maintaining our intellectual property rights.

    At September 30, 1999, we had approximately $44.6 million in cash and cash
equivalents. We expect that our existing capital resources, combined with
anticipated revenues from potential product sales, sponsored research
agreements, contracts and grants will be sufficient to support our planned
operations into the year 2001. This estimate of the period for which we expect
our available sources of liquidity to be sufficient to meet our capital
requirements is a forward-looking statement that involves risks and
uncertainties, and actual results may differ materially. Our future liquidity
and capital funding requirements will depend on numerous factors including, but
not limited to, the extent to which our products under development are
successfully developed and gain market acceptance, the timing of regulatory
actions regarding our potential products, the costs and timing of expansion of
sales, marketing and manufacturing activities, prosecution and enforcement of
patents important to our business, the results of clinical trials, competitive
developments, and our ability to maintain existing collaborations and to enter
into additional collaborative arrangements. We have incurred negative cash flow
from operations since inception and do not expect to generate positive cash flow
to fund our operations for at least the next several years. We may need to raise
additional capital to fund our research and development programs, to scale up
manufacturing activities and expand our sales and marketing efforts to support
the commercialization of our products under development. Additional capital may
not be available on terms acceptable to us, or at all. If adequate funds are not
available, we may be required to curtail our operations significantly or to
obtain funds through entering into collaborative agreements or other
arrangements on unfavorable terms. Our failure to raise capital on acceptable
terms when needed could have a material adverse effect on our business,
financial condition or results of operations.


YEAR 2000 ISSUES

    The Year 2000 issue arises from the fact that many existing computer
software programs use only the last two digits to refer to a specific year,
instead of all four digits. As a result, computer programs that have
date-sensitive software, or operate with date-sensitive data, may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculation causing disruptions in operations, including,
among other things, the temporary inability to process transactions or engage in
normal business activities.

    We have assembled a Year 2000 task force to ensure that we are Year 2000
compliant by December 31, 1999. Our task force, assisted by third parties, has
completed the assessment and testing of our computer systems, software
applications, equipment and facilities infrastructure to ensure that all systems
will function properly with respect to dates in the Year 2000 and thereafter. We
have completed all required modifications and conversions of existing software
and hardware that were identified during this assessment and testing procedure.

    We have verified the readiness of our significant suppliers of products and
services and key business partners through the distribution of a questionnaire.
Based on responses to the questionnaire, we are not currently aware of any Year
2000 problems encountered by suppliers or business partners which could have a
significant effect on our


                                                                              10
<PAGE>


operations. In the event that any of our significant suppliers do not
successfully achieve Year 2000 compliance in a timely manner, our results of
operations could be adversely affected. There can be no assurance that the
systems of other companies on which our systems rely will be converted on a
timely basis and would not have an adverse effect on our results of
operations.

    Although no significant issues have arisen during our assessment and testing
procedures, we have in place a contingency plan that would allow us to continue
operating the major functional areas of our business if such issues should
arise. We have determined that a reasonable "worst case" scenario relates to
Year 2000 compliance problems of our suppliers of products and services and
other external organizations which if not remedied could adversely affect our
results of operations.

    The cost we have incurred to date and expect to incur to achieve Year 2000
compliance for our internal systems, equipment and facilities infrastructure are
not expected to exceed $150,000.


FACTORS THAT MAY AFFECT RESULTS

OUR PRODUCTS MAY NOT BE SUCCESSFULLY DEVELOPED, WHICH WOULD ADVERSELY AFFECT US

    All of our products are under development. Our products may not be
successfully developed or commercialized on a timely basis, or at all. If we are
unable, for technological or other reasons, to complete the development,
introduction or scale-up of manufacturing of our new products, or if our
products do not achieve a significant level of market acceptance, we would be
adversely affected.

    Our success will depend upon our ability to overcome significant
technological challenges and successfully introduce products into the
marketplace. A number of applications envisioned by us will require significant
enhancements in our basic technology platform.

LACK OF MARKET ACCEPTANCE OF OUR TECHNOLOGY WOULD ADVERSELY AFFECT US

    We may not be able to develop commercially viable products. Even if a
product is developed it may not be accepted in the marketplace. If we are unable
to achieve market acceptance, we would be adversely affected. Market acceptance
will depend on many factors, including demonstrating to customers that our
technology platform is a viable alternative to currently available technologies.
In addition, our technology platform could be adversely affected by limited
funding available for capital acquisitions by our customers, as well as internal
obstacles to customer approvals of purchases of our products.

OUR DEPENDENCE ON COLLABORATIVE ALLIANCES COULD ADVERSELY AFFECT US

    The development and commercialization of our products in a number of
applications depends on the formation of alliances and licensing arrangements.
We may not be successful in entering into or maintaining collaborations to
develop these commercial applications. Failure to do so could have an adverse
impact on us. We may have limited or no control over the time, effort or
financial resources that any partner may devote to the development or marketing
of our products.

    We may be materially and adversely affected if:

     -  A partner develops competitive technologies;

     -  We are precluded from entering into competitive arrangements with other
        potential partners;

     -  Disputes arise over ownership rights to any intellectual property,
        know-how or technologies developed with a partner; or

     -  An agreement is terminated early, or by a failure by a partner to devote
        sufficient resources to the development and commercialization of our
        products.


                                                                              11
<PAGE>


    We currently have agreements with Becton Dickinson, Aventis and Elan that
contemplate the commercialization of products resulting from research and
development collaboration agreements between the parties. These collaborations
may not be successful. Nanogen and Becton Dickinson are considering
modifications to their joint venture to take advantage of potential third party
opportunities on technology developed to date, as well as field changes which
would allow the joint venture access to additional technologies or content in
areas more strategically aligned with business opportunities. Further joint
venture funding will be determined based upon a final decision regarding such
modifications and field changes. Nanogen and Elan have not yet agreed upon
specific program objectives with respect to the nonexclusive research and
development agreement.

OUR HISTORY OF LOSSES AND OUR ANTICIPATION OF FUTURE LOSSES MAY ADVERSELY AFFECT
US

    At September 30, 1999, we had an accumulated deficit of approximately $66.0
million. We anticipate that we will continue to incur operating losses for at
least the next several years. We may never attain profitability or become
profitable on a quarterly or annual basis in the future. We currently have no
products available for sale and to date no revenues have been generated from
commercialization of products arising out of our technology.

    To develop and sell our products successfully, we will need to increase our
spending levels in research and development, as well as in selling, marketing,
and administration. We will have to incur these increased spending levels before
knowing whether our products can be sold successfully.

    Our anticipated increases in operating expenses may adversely affect our
financial prospects.

FAILURE TO RAISE ADDITIONAL CAPITAL MAY ADVERSELY AFFECT US

    We have incurred negative cash flow from operations since inception. We do
not expect to generate positive cash flow to fund our operations for at least
the next several years. We may need to raise additional capital to fund our
research and development programs, to scale up manufacturing activities and
establish our sales and marketing capability. Our current collaborations will,
and future collaborations may, require us to commit substantial amounts of
capital. We may not be able to make these capital contributions.

    If adequate funds are not available, we may be required to curtail our
operations significantly or to obtain funds by entering into collaborative
agreements or other arrangements on less favorable terms. Our failure to raise
capital on acceptable terms when needed could have a material adverse effect on
us. Our liquidity and capital funding requirements will depend on numerous
factors, including:

     -  The extent to which our products under development are successfully
        developed and gain market acceptance;

     -  The timing of regulatory actions regarding our potential products;

     -  The costs and timing of expansion of sales, marketing and manufacturing
        activities;

     -  Prosecution and enforcement of patents important to our business;

     -  The results of clinical trials, competitive developments, and our
        ability to enter into additional collaborative arrangements.

    Additional capital may not be available on terms acceptable to us, or at
all. Any additional equity financing may be dilutive to stockholders, and debt
financing, if available, may include restrictive covenants.

COMPETING TECHNOLOGIES MAY ADVERSELY AFFECT US

    We expect to encounter intense competition from a number of companies that
offer products in our targeted application areas. We anticipate that our
competitors in these areas will include:


                                                                              12
<PAGE>


     -  Health care companies that manufacture laboratory-based tests and
        analyzers,

     -  Diagnostic and pharmaceutical companies, and

     -  Companies developing drug discovery technologies.

    To the extent we are successful in developing products in these areas, we
will face competition from established companies and numerous development-stage
companies that continually enter these markets.

    In many instances, our competitors have substantially greater financial,
technical, research and other resources and larger, more established marketing,
sales, distribution and service organizations than us. Moreover, these
competitors may offer broader product lines and have greater name recognition
than us, and may offer discounts as a competitive tactic.

    In addition, several development stage companies are currently making or
developing products that compete with or will compete with our potential
products. Our competitors may succeed in developing or marketing technologies or
products that are more effective or commercially attractive than our potential
products, or that render our technologies and potential products obsolete.

    Also, we may not have the financial resources, technical expertise or
marketing, distribution or support capabilities to compete successfully in the
future.

THE UNCERTAINTY OF PATENT AND PROPRIETARY TECHNOLOGY PROTECTION AND OUR
POTENTIAL INABILITY TO LICENSE TECHNOLOGY FROM THIRD PARTIES MAY ADVERSELY
AFFECT US

    Our success will depend in part on obtaining and maintaining meaningful
patent protection on our inventions, technologies and discoveries. Our ability
to compete effectively will depend on our ability to develop and maintain
proprietary aspects of our technology, and to operate without infringing the
proprietary rights of others, or to obtain rights to third-party proprietary
rights, if necessary. Our pending patent applications may not result in the
issuance of patents. Our patent applications may not have priority over others'
applications, and even if issued, any of our patents may not offer protection
against competitors with similar technologies. Any patents issued to us may be
challenged, invalidated or circumvented and the rights created thereunder may
not afford us a competitive advantage.

    Our commercial success also depends in part on us neither infringing valid,
enforceable patents or proprietary rights of third parties, nor breaching any
licenses that may relate to our technologies and products. We are aware of
third-party patents that may relate to our technology. It is possible that we
may unintentionally infringe these patents or other patents or proprietary
rights of third parties. We have received and may in the future receive notices
claiming infringement from third parties as well as invitations to take licenses
under third-party patents. Any legal action against us or our collaborative
partners claiming damages and seeking to enjoin commercial activities relating
to our products and processes affected by third-party rights, may require us or
our collaborative partners to obtain licenses in order to continue to
manufacture or market the affected products and processes. In addition, these
actions may subject us to potential liability for damages. We or our
collaborative partners may not prevail in an action and any license required
under a patent may not be made available on commercially acceptable terms, or at
all.

    There are a significant number of U.S. and foreign patents and patent
applications held by third parties in our areas of interest, and we believe that
there may be significant litigation in the industry regarding patent and other
intellectual property rights. If we become involved in litigation, it could
consume a substantial portion of our managerial and financial resources, which
could have a material adverse effect on us. Additionally, the defense and
prosecution of interference proceedings before the U.S. Patent and Trademark
Office ("USPTO") and related administrative proceedings would result in
substantial expense to us and significant diversion of effort by our technical
and management personnel. We may in the future become subject to USPTO
interference proceedings to determine the priority of inventions. In addition,
laws of some foreign countries do not protect intellectual property to the same
extent as do laws in the U.S., which may subject us to additional difficulties
in protecting our intellectual property in those countries.


                                                                              13
<PAGE>


    We also rely upon trade secrets, technical know-how and continuing
inventions to develop and maintain our competitive position. Others may
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to our trade secrets or disclose our
technology and we may not be able to meaningfully protect our trade secrets, or
be capable of protecting our rights to our trade secrets. We seek to protect our
technology and patents, in part, by confidentiality agreements with our
employees and contractors. Our employees may breach their existing Proprietary
Information, Inventions, and Dispute Resolution Agreements and these agreements
may not protect our intellectual property. This could have a material adverse
effect on us.

FAILURE TO OBTAIN REGULATORY APPROVALS WOULD ADVERSELY AFFECT US

    We anticipate that the manufacturing, labeling, distribution and marketing
of a number of our diagnostic products will be subject to regulation in the U.S.
and other countries. We may not be able to obtain necessary regulatory approvals
or clearances for our products on a timely basis, or at all. Delays in receipt
of or failure to receive approvals or clearances, the loss of previously
received approvals or clearances, limitations on intended uses imposed as a
condition of approvals or clearances, or failure to comply with existing or
future regulatory requirements would have a material adverse effect on us.

    In the U.S., the Food and Drug Administration ("FDA") regulates, as medical
devices, most diagnostic tests and IN VITRO reagents that are marketed as
finished test kits and equipment. Pursuant to the Federal Food, Drug, and
Cosmetic Act, the FDA regulates the preclinical and clinical testing, design,
efficacy, safety, manufacture, labeling, distribution and promotion of medical
devices. We will not be able to commence marketing or commercial sales in the
U.S. of these products until we receive clearance or approval from the FDA,
which can be a lengthy, expensive and uncertain process. We have not applied for
FDA or other regulatory approvals with respect to any of our products under
development. We may experience difficulties that could delay or prevent the
successful development, introduction and marketing of new products. Regulatory
clearance or approval or clearance of any new products may not be granted by the
FDA or foreign regulatory authorities on a timely basis, if at all.

    Noncompliance with applicable FDA requirements can result in:

     -  Administrative sanctions or judicially imposed sanctions such as
        injunctions,

     -  Civil penalties, recall or seizure of products,

     -  Total or partial suspension of production, failure of the government to
        grant premarket clearance or premarket approval for devices,

     -  Withdrawal of marketing clearances or approvals, and

     -  Criminal prosecution.

    The FDA also has the authority to request recall, repair, replacement or
refund of the cost of any device manufactured or distributed by us. Any devices
manufactured or distributed by us pursuant to FDA clearance or approvals are
subject to pervasive and continuing regulation by the FDA and certain state
agencies.

OUR DEPENDENCE ON SUPPLIERS MAY ADVERSELY AFFECT US

    Key components and raw materials used in the manufacture of our products are
provided from limited sources or in some cases by single-source vendors.
Although we believe that alternative sources for these components and raw
materials are available, any supply interruption in a sole-sourced component of
raw material would have a material adverse effect on our ability to manufacture
our products until a new source of supply is qualified and, as a result, could
have a material adverse effect on us. In addition, an uncorrected impurity or
supplier's variation in a raw material, either unknown to us or incompatible
with our manufacturing process, could have a material adverse effect on our
ability to manufacture products. We may be unable to find a sufficient
alternative supply channel in a reasonable time period, or on commercially
reasonable terms, if at all. Failure to obtain a supplier for the manufacture of
components of our future products, if any, could have a material adverse effect
on us.


                                                                              14
<PAGE>


OUR LIMITED MANUFACTURING EXPERIENCE AND POTENTIAL INABILITY TO SCALE UP
MANUFACTURING COULD ADVERSELY AFFECT US

    We have no experience manufacturing products for commercial purposes. We
rely on subcontractors to manufacture the limited quantities of semiconductor
microchips and other components we require for internal and collaborative
purposes, as well as for use in clinical trials and prototype products.

    Manufacturing, supply and quality control problems may arise as we either
alone or with subcontractors attempt to scale up manufacturing procedures.
Scale-up may not be achieved in a timely manner or at a commercially reasonable
cost. Any failure to surmount problems could lead to delays or pose a threat to
the ultimate commercialization of our products and result in a material adverse
effect on us.

    If we or any of our contract manufacturers encounter manufacturing
difficulties, including:

         -  The ability to scale up manufacturing capacity,

         -  Production yields,

         -  Quality control and assurance, or

         -  Shortages of components or qualified personnel,it could have a
            material adverse effect on us.

    Our manufacturing facilities and those of our contract manufacturers are or
will be subject to periodic regulatory inspections by the FDA and other federal
and state regulatory agencies and these facilities are subject to Quality System
Regulation ("QSR") requirements of the FDA. Failure by us or our third-party
manufacturers to maintain its facilities in accordance with QSR regulations,
other international quality standards or other regulatory requirements would
have a material adverse effect on us.

OUR LIMITED MARKETING AND SALES CAPABILITY COULD ADVERSELY AFFECT US

    We have limited product marketing and sales capabilities. In attracting,
establishing and maintaining a marketing and sales force, or entering into
third-party marketing or distribution arrangements with other companies, we
expect to incur significant additional expenses. We may not be able to
successfully establish a sales and marketing capability or enter into
third-party marketing or distribution arrangements or be successful in achieving
marketplace acceptance for our products. This failure would have a material
adverse affect on us.

A FAILURE TO MANAGE OUR GROWTH MAY ADVERSELY AFFECT US

    We expect to continue to experience growth in the number of our employees
and the scope of our operating and financial systems. This growth has resulted
in an increase in responsibilities for both existing and new management
personnel. Our ability to manage growth effectively will require us to continue
to implement and improve our operational, financial and management information
systems and to recruit, train, motivate and manage our employees. We may not be
able to manage our growth and expansion, and a failure to do so could have a
material adverse effect on us.

OUR PRODUCT LIABILITY EXPOSURE AND THE INADEQUACY OR UNAVAILABILITY OF INSURANCE
COVERAGE COULD ADVERSELY AFFECT US

    The testing, manufacturing and marketing of our products entails an inherent
risk of product liability claims. Any claims against us could have a material
adverse effect on us. We may not be able to obtain insurance on acceptable terms
with adequate coverage, or at reasonable costs. Potential product liability
claims may exceed the amount of our insurance coverage or may be excluded from
coverage under the terms of the policy. Our insurance once obtained may not be
renewed at a cost and level of coverage comparable to that then in effect.


                                                                              15
<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company invests its excess cash primarily in U.S. government securities and
marketable debt securities of financial institutions and corporations with
strong credit ratings. These instruments have maturities of ninety days or less
when acquired. We do not utilize derivative financial instruments, derivative
commodity instruments or other market risk sensitive instruments, positions or
transactions in any material fashion. Accordingly, we believe that, while the
instruments we hold are subject to changes in the financial standing of the
issuer of such securities, we are not subject to any material risks arising from
changes in interest rates, foreign currency exchange rates, commodity prices,
equity prices or other market changes that affect market risk sensitive
instruments.


                                                                              16
<PAGE>


                                   NANOGEN, INC.
                             PART II - OTHER INFORMATION


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

        (a) Not applicable.

        (b) Not applicable.

        (c) Not applicable.

        (d) On April 13, 1998, our Registration Statement on Form S-1 (File No.
            333-42791) was declared effective by the Securities and Exchange
            Commission (the "IPO Registration Statement"). The IPO Registration
            Statement registered a total of 3,900,000 shares of common stock,
            all of which were issued and sold by us (the "Offering") upon the
            termination of the Offering in April 1998. The Offering was led by a
            group consisting of Morgan Stanley Dean Witter, Lehman Brothers and
            SBC Warburg Dillion Read Inc. The shares sold by us were sold at an
            aggregate offering price of $42.9 million, netting proceeds of
            approximately $38.7 million to us after underwriting fees of
            approximately $3.0 million and other offering expenses of
            approximately $1.2 million. None of these fees and expenses were
            paid to any director, officer, or 10% or greater stockholder of the
            Company or an affiliate of these persons.

            Since the effective date of the IPO Registration Statement, the net
            offering proceeds have been applied to the following uses in the
            following approximate amounts:

<TABLE>

                    <S>                                <C>
                    Repayment of indebtedness          $ 3,500,000
                    Working capital                    $30,393,000
                    Temporary investments              $ 4,807,000

</TABLE>

            The temporary investments specified above consist primarily of
            highly liquid investments, which include marketable debt securities
            of financial institutions and corporations with strong credit
            ratings with maturities of ninety days or less when acquired. None
            of the payments noted above have been paid to any director, officer,
            or 10% or greater stockholder of the Company or an affiliate of
            these persons.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits

        10.1 Collaborative Research and Development Agreement by and between
             Aventis Research & Technologies GMBH & Co. KG and Nanogen, Inc.
             dated as of September 27, 1999.+

        27.1 Financial Data Schedule.

___________________
+ Confidential Treatment has been requested with respect to certain portions
  of this agreement.

    (b) Reports on Form 8-K

        No Reports on Form 8-K were filed during the three months ended
September 30, 1999.


                                                                              17
<PAGE>


                                  NANOGEN, INC.

                                   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.


                                             NANOGEN, INC.



        DATE        NOVEMBER 15, 1999        /s/ Howard C. Birndorf
                 ------------------------    ----------------------------------
                                             HOWARD C. BIRNDORF
                                             CHAIRMAN OF THE BOARD AND CHIEF
                                             EXECUTIVE OFFICER
                                             (PRINCIPAL EXECUTIVE OFFICER)


        DATE        NOVEMBER 15, 1999        /s/ Kieran T. Gallahue
                 ------------------------    ----------------------------------
                                             KIERAN T. GALLAHUE
                                             VICE PRESIDENT, CHIEF FINANCIAL
                                             OFFICER
                                             (PRINCIPAL FINANCIAL OFFICER)







                                                                             18
<PAGE>



                                  NANOGEN, INC.
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

   EXHIBIT NO.                                    DESCRIPTION

<S>                 <C>

10.1                Collaborative Research and Development Agreement by and between
                    Aventis Research & Technologies GMBH & Co. KG and Nanogen, Inc.
                    dated as of September 27, 1999.+ ................................................

27.1                Financial Data Schedule..........................................................


</TABLE>

___________________
+ Confidential Treatment has been requested with respect to certain portions
  of this agreement.



                                                                             19