UNITED STATES
 
 SECURITIES AND EXCHANGE COMMISSIONWashington, 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 MARCH 31, 2000
 
 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
 
 EXCHANGE ACT OF 1934
 
 FOR THE TRANSITION PERIOD FROM
            TO
            
 ________________ Commission File Number    0-23223  CURAGEN CORPORATION(Exact name of registrant as specified in its charter)


|Delaware(State or other jurisdiction of
   
   incorporation or organization) | 06-1331400(I.R.S. EmployerIdentification No.)
|----------------------------------------------------------------------------- | ---------------------------------------------
|                                                                              |                                              

|555 Long Wharf Drive, 11th Floor, New Haven, Connecticut | 06511     
|-------------------------------------------------------- | ----------
|(Address of principal executive offices)                 | (Zip 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 [ ]

The number of shares outstanding of the Registrant's
   voting common stock and non-voting common stock as of April 30, 2000 was
   36,528,148 and 1,955,272, respectively.



|PART
     I.  | Financial Information |                                                                                                                | Page
|------------- | --------------------- | -------------------------------------------------------------------------------------------------------------- | ----
|              |                       |                                                                                                                |     
|              | Item 1.               | Financial Statements                                                                                           |     
|              |                       |                                                                                                                |     
|              |                       | Condensed Balance Sheets,
   
   March 31, 2000 (unaudited) and December 31,
     1999                         |     
|              |                       |                                                                                                                |     
|              |                       | Condensed Statements of Operations,
   
   for the Three Months Ended March 31, 2000 and 1999
     (unaudited) |     
|              |                       |                                                                                                                |     
|              |                       | Condensed Statements of Cash Flows,
   
   for the Three Months Ended March 31, 2000 and 1999(unaudited)       |     
|              |                       |                                                                                                                |     
|              |                       | Notes to Condensed Financial Statements
     (unaudited)                                                       |     
|              |                       |                                                                                                                |     
|              | Item 2.               | Management's Discussion and Analysis of Financial
   
   Condition and Results of Operations                   |     
|              |                       |                                                                                                                |     
|PART II.      | Other Information     |                                                                                                                |     
|              |                       |                                                                                                                |     
|              | Item 2.               | Changes in Securities and Use of Proceeds                                                                      |     
|              |                       |                                                                                                                |     
|              | Item 6.               | Exhibits and Reports on Form 8-K                                                                               |     
|              |                       |                                                                                                                |     
|Signatures    |                       |                                                                                                                |     
|              |                       |                                                                                                                |     
|Exhibit Index |                       |                                                                                                                | 13  
|              |                       |                                                                                                                |     
|              |                       |                                                                                                                |     
|              |                       |                                                                                                                |     





CURAGEN CORPORATION CONDENSED BALANCE SHEETS

|                                                                                            |              |  |             
|------------------------------------------------------------------------------------------- | ------------ |  | ------------
|                                                                                            | March 31,    |  | December 31,
|                                                                                            | 2000         |  | 1999        
|                                                                                            |              |  |             
|                                                                                            | (unaudited)  |  | (audited)   
|ASSETS                                                                                      |              |  |             
|Current assets:                                                                             |              |  |             
|Cash and cash equivalents                                                                   | $222,480,632 |  | $76,374,571 
|Grants receivable                                                                           | -            |  | 25,019      
|Accounts receivable                                                                         | 3,060,000    |  | 767,606     
|Other current assets                                                                        | 73,695       |  | 73,752      
|Prepaid expenses                                                                            | 1,203,411    |  | 1,135,248   
|                                                                                            |              |  |             
|Total current assets                                                                        | 226,817,738  |  | 78,376,196  
|                                                                                            |              |  |             
|                                                                                            |              |  |             
|Property and equipment, net                                                                 | 14,426,335   |  | 15,077,370  
|Notes receivable - related parties                                                          | 146,500      |  | 96,500      
|Other assets                                                                                | 359,963      |  | 246,049     
|Intangible assets, net                                                                      | 4,917,902    |  | 98,161      
|                                                                                            |              |  |             
|Total assets                                                                                | $246,668,438 |  | $93,894,276 
|                                                                                            |              |  |             
|                                                                                            |              |  |             
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                        |              |  |             
|Current liabilities:                                                                        |              |  |             
|Accounts payable                                                                            | $1,659,777   |  | $1,843,675  
|Accrued bonuses                                                                             | 125,000      |  | 335,000     
|Accrued expenses                                                                            | 1,038,148    |  | 1,514,227   
|Interest payable, short term                                                                | 1,500,000    |  | -           
|Deferred revenue                                                                            | 5,069,792    |  | 3,982,632   
|Deferred rent                                                                               | 74,059       |  | 77,726      
|Current portion of obligations under capital leases                                         | 2,686,940    |  | 2,732,393   
|                                                                                            |              |  |             
|Total current liabilities                                                                   | 12,153,716   |  | 10,485,653  
|                                                                                            |              |  |             
|Long-term liabilities:                                                                      |              |  |             
|Deferred rent, net of current portion                                                       | 96,585       |  | 110,152     
|Interest payable, long term                                                                 | 21,000       |  | 21,000      
|Convertible debt                                                                            | 150,000,000  |  | -           
|Obligations under capital leases, net of current
     portion                               | 7,402,573    |  | 8,278,842   
|                                                                                            |              |  |             
|Total long-term liabilities                                                                 | 157,520,158  |  | 8,409,994   
|                                                                                            |              |  |             
|Commitments and contingencies                                                               |              |  |             
|Stockholders' equity:                                                                       |              |  |             
|Common Stock - Voting; $.01 par value, issued and
     outstanding                          |              |  |             
|35,894,016 shares at March 31, 2000, and 16,421,538 shares
     at
   
   December 31, 1999 | 358,940      |  | 164,215     
|Common Stock - Non-Voting; $.01 par value, issued and
     outstanding                      |              |  |             
|1,955,272 shares at March 31, 2000, and 977,636 shares at
     December 31, 1999            | 19,553       |  | 9,776       
|Additional paid-in capital                                                                  | 136,634,700  |  | 129,841,950 
|Accumulated deficit                                                                         | (59,741,764) |  | (54,702,268)
|Unamortized stock based compensation                                                        | (276,865)    |  | (315,044)   
|                                                                                            |              |  |             
|Total stockholders' equity                                                                  | 76,994,564   |  | 74,998,629  
|                                                                                            |              |  |             
|Total liabilities and stockholders' equity                                                  | $246,668,438 |  | $93,894,276 
|                                                                                            |              |  |             
|                                                                                            |              |  |             

See accompanying notes to condensed financial statements.





CURAGEN CORPORATION
 
 CONDENSED STATEMENTS OF OPERATIONS
 
 (unaudited)

|                                                    |                          |  |                       
|--------------------------------------------------- | ------------------------ |  | ----------------------
|                                                    | Three Months Ended      
|                                                    | March 31,               
|                                                    |                         
|                                                    | 2000                     |  | 1999                  
|                                                    |                          |  |                       
|Revenue:                                            |                          |  |                       
|Grant revenue                                       | $         
            - |  | $        577,464      
|Collaboration revenue                               | 5,640,340                |  | 2,094,479             
|                                                    |                          |  |                       
|Total revenue                                       | 5,640,340                |  | 2,671,943             
|                                                    |                          |  |                       
|                                                    |                          |  |                       
|Operating expenses:                                 |                          |  |                       
|Grant research                                      | -                        |  | 380,611               
|Collaborative research and development              | 7,650,543                |  | 6,591,459             
|General and administrative                          | 3,499,830                |  | 3,209,067             
|                                                    |                          |  |                       
|Total operating expenses                            | 11,150,373               |  | 10,181,137            
|                                                    |                          |  |                       
|Loss from operations                                | (5,510,033)              |  | (7,509,194)           
|Interest income, net                                | 470,537                  |  | 302,267               
|                                                    |                          |  |                       
|Net loss                                            | $ (5,039,496)            |  | $ (7,206,927)         
|                                                    |                          |  |                       
|Basic and diluted net loss per share                | $         
     (0.14)   |  | $         
     (0.27)
|                                                    |                          |  |                       
|Weighted average number of shares used in computing |                          |  |                       
|basic and diluted net loss per share                | 36,058,153               |  | 26,804,842            
|                                                    |                          |  |                       
|                                                    |                          |  |                       

See accompanying notes to condensed financial statements.



CURAGEN CORPORATIONCONDENSED STATEMENTS OF CASH FLOWS (unaudited)



|                                                     |                    |             
|---------------------------------------------------- | ------------------ | ------------
|                                                     | Three Months Ended
|                                                     | March 31,         
|                                                     |                   
|                                                     | 2000               | 1999        
|                                                     |                    |             
|Cash flows from operating activities:                |                    |             
|Net loss                                             | ($5,039,496)       | ($7,206,927)
|Adjustments to reconcile net loss to net cash        |                    |             
|used in operating activities:                        |                    |             
|Depreciation and amortization                        | 1,345,920          | 1,322,647   
|Loss on disposition of fixed assets                  | 105,506            | -           
|Non-monetary compensation                            | 38,178             | 84,751      
|Stock-based 401(k) Employer Plan Match               | 98,521             | 64,539      
|Changes in assets and liabilities:                   |                    |             
|Grants receivable                                    | 25,019             | 173,271     
|Accounts receivable                                  | (2,292,394)        | (18,396)    
|Other current assets                                 | 57                 | 11,116      
|Prepaid expenses                                     | (68,163)           | (49,351)    
|Other assets                                         | (160,606)          | (56,650)    
|Accounts payable                                     | (183,898)          | 1,183,405   
|Accrued bonuses                                      | (210,000)          | (305,512)   
|Accrued expenses                                     | (476,079)          | 31,456      
|Interest payable                                     | 1,500,000          | -           
|Deferred revenue                                     | 1,087,160          | 41,667      
|Deferred rent                                        | (17,234)           | (25,851)    
|                                                     |                    |             
|Net cash used in operating activities                | (4,247,509)        | (4,749,835) 
|                                                     |                    |             
|Cash flows from investing activities:                |                    |             
|Acquisitions of property and equipment               | (828,295)          | (4,320,703) 
|(Loans to) repayments from - related parties         | (50,000)           | 3,500       
|                                                     |                    |             
|Net cash used in investing activities                | (878,295)          | (4,317,203) 
|                                                     |                    |             
|Cash flows from financing activities:                |                    |             
|Payments on capital lease obligations                | (925,777)          | (532,458)   
|Proceeds from sale of fixed assets                   | 175,550            | -           
|Proceeds from exercise of stock options              | 1,430,053          | 146,600     
|Proceeds from exercise of warrants                   | 5,527,546          | -           
|Proceeds from issuance of convertible debt           | 150,000,000        | -           
|Payments of stock issuance costs                     | (54,810)           | -           
|Payments of financing costs                          | (4,920,696)        | -           
|                                                     |                    |             
|Net cash provided by (used in) financing activities  | 151,231,865        | (385,858)   
|                                                     |                    |             
|                                                     |                    |             
|Net increase (decrease) in cash and cash equivalents | 146,106,061        | (9,452,896) 
|Cash and cash equivalents, beginning of period       | 76,374,571         | 43,293,995  
|                                                     |                    |             
|Cash and cash equivalents, end of period             | $222,480,632       | $33,841,099 
|                                                     |                    |             
|Supplemental cash flow information:                  |                    |             
|Interest paid                                        | $439,808           | $248,931    
|                                                     |                    |             

See accompanying notes to condensed financial statements.







CURAGEN CORPORATION
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 
 (unaudited)

> The accompanying unaudited condensed 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.
>    In the opinion of our management, the accompanying unaudited condensed
>    financial statements include all adjustments, consisting of only normal
>    recurring accruals, necessary to present fairly the financial position,
>    results of operations and cash flows. Interim results are not necessarily
>    indicative of the results that may be expected for the entire year. The
>    accompanying condensed financial statements should be read in conjunction
>    with the audited financial statements and notes thereto included in our
>    Annual Report on Form 10-K for the year ended December 31, 1999.

> On February 2, 2000, we completed an offering for $125,000,000 of
>    6% convertible subordinated debentures due 2007 and received net proceeds of
>    approximately $121,250,000. In addition, on February 16, 2000, the initial
>    purchasers exercised their option to purchase an additional $25,000,000 of
>    6% convertible subordinated debentures due 2007, providing us with
>    additional net proceeds of approximately $24,308,000. The debentures may be
>    resold by the initial purchasers to qualified institutional buyers under
>    Rule 144A of the Securities Act and to non-U.S. persons outside the United
>    States under Regulation S under the Securities Act. The debentures are
>    convertible into our common stock at any time prior to their maturity at a
>    conversion price of $63.8275 per share. In addition, prior to February 2,
>    2003, if our common stock price reaches specified levels, we have the right
>    to redeem the debentures at a premium by converting the debentures into
>    common stock. Pursuant to our obligations under the convertible subordinated
>    debenture agreement, we filed a registration statement with the SEC on March
>    17, 2000 for the resale of the debentures and any shares issued as a result
>    of the conversion of the debentures. Two of our stockholders who can require
>    us to register their shares of common stock have requested that we include
>    an aggregate of 3,000,000 shares of common stock in the registration
>    statement. As of the date of this filing, the SEC has not yet declared such
>    registration effective.

> On March 2, 2000, we announced a two-for-one split on
>    both our voting common stock and our non-voting common stock, each payable
>    to our stockholders in the form of a stock dividend. On March 30, 2000, our
>    stockholders of record received one additional share of our voting common
>    stock for every share of voting common stock and one additional share of
>    nonvoting common stock for every share of nonvoting common stock each
>    stockholder owned at the close of business on March 15, 2000. The effects of
>    the two-for-one stock split have been reflected throughout this report,
>    including the calculations of basic and diluted loss per share for all
>    periods presented.

> In March 2000, we entered into a renewable two-year
>    collaboration with Gemini Genomics plc ("Gemini"). Under this
>    agreement, our scientists will work together with Gemini scientists to
>    associate thousands of our human genetic variants with disease traits
>    derived from Gemini's database of clinical populations, in order to validate
>    genes and genetic variants that contribute to the onset of complex
>    diseases.

5.     Genentech
   Collaboration Renewal

> In March 2000, we renewed our collaboration with Genentech, Inc.
>    ("Genentech") for a minimum of an additional two and one-half
>    years. The collaboration involves the application of our high-throughput
>    functional genomic technologies and disease expertise to advance the
>    discovery of novel protein therapeutics and antibodies. Under the terms of
>    this extension, Genentech will pay us research fees for access to our
>    functional genomic technologies and databases. In return, Genentech will
>    retain the rights to license, develop, and market therapeutics derived from
>    these research efforts. We will also receive milestone and royalty payments
>    based upon the development and sales of products that result from this
>    collaboration.







This Management's Discussion and Analysis of Financial Condition and
   Results of Operations as of March 31, 2000 and for the three month periods
   ended March 31, 2000 and 1999 should be read in conjunction with the
   sections of our audited financial statements and notes thereto as well as
   our "Management's Discussion and Analysis of Financial Condition and
   Results of Operations"that are included in our Annual Report on
   Form 10-K for the year ended December 31, 1999.OverviewWe are a biotechnology company focusing on the application of
   genomics to the systematic discovery of genes, gene sequences, variations in
   gene sequences, biological pathways and drug candidates in order to
   accelerate the discovery and development of the therapeutic, agricultural
   and diagnostic products to improve human and animal health and the vitality
   of agriculture. We were incorporated in November 1991 and, until March 1993,
   were engaged primarily in organizational activities, research and
   development of our technology, grant preparation and obtaining financing. We
   have incurred losses since inception, principally as a result of research
   and development and general and administrative expenses in support of our
   operations. As of March 31, 2000, we had an accumulated deficit of
   $59,741,764. We anticipate incurring additional losses over at least the
   next several years as we expand our collaborative gene discovery efforts and
   internal discovery and development to discover genes, biological pathways
   and drug candidates, continue development of our technology and expand our
   operations. We expect that losses will fluctuate from quarter to quarter and
   that such fluctuations may be substantial.Results of OperationsThree Months Ended March 31, 2000 and 1999Revenue.Collaboration revenue for the three months ended March 31, 2000
   was $5,640,340, an increase of $3,545,861, or 169%, as compared to
   $2,094,479 for the corresponding period in 1999. The increase was largely
   due to revenue recorded during the first quarter of 2000 under our
   arrangements with Abgenix, Inc. ("Abgenix"),COR Therapeutics, Inc.,Genentech, Inc. ("Genentech"), Glaxo Wellcome, Inc.,Hoffmann-La Roche Inc., and Roche Vitamins Inc.The revenue we recognize under our collaborative arrangements is
   generally based upon work performed on behalf of collaborators by our
   employees, or based upon our attainment of certain benchmarks specified in
   the related agreements. We expect that collaboration revenues will continue
   to increase as we add additional collaborations.Grant revenue for the three months ended March 31, 2000
   decreased $577,464, or 100%, compared to the same period in
   1999,due to the completion of two federal grants during the first and
   second quarters of 1999.As a result of the completion of such federal grants,
   we foresee no additional grant revenue in future periods, unless additional
   grant awards are received.Operating Expenses.Collaborative research and development expenses for the three
   months ended March 31, 2000 were $7,650,543, compared to $6,591,459 for the
   three months ended March 31, 1999. The increase of $1,059,084 for the three
   months ended March 31, 2000, or 16%, was primarily attributable to our
   obligations to fulfill research requirements under new and existing
   collaborations, in addition to internal research efforts, which resulted in
   increased personnel costs, increased purchases of lab supplies and reagents,
   research funding payments to Abgenix in accordance with our collaborative
   arrangement, and depreciation expense on lab equipment. Future collaborative
   research and development expenses are expected to increase as additional
   personnel are hired and research and development facilities are expanded to
   accommodate our collaborations and internal research.
 
 Grant research expenses for the three months ended March 31, 2000 of $0
   represented a decrease of $380,611, or 100%, compared to the three months
   ended March 31, 1999. The decrease in grant research expenses was
   attributable to the completion of our federal grants during the first and
   second quarters of 1999.As a result of the completion of such federal grants,
   we foresee no additional grant research expenses in future periods, unless
   additional grant awards are received.



General and administrative expenses for the three months ended
   March 31, 2000 increased 9% to $3,499,830 as compared to $3,209,067 for the
   three months ended March 31, 1999. The increase was primarily attributable
   to increased payroll costs, upgrades to our administration facilities, the
   incurrence of related depreciation expense, as well as legal expenses in
   support of the development of our intellectual property portfolios.Over the next several years, we anticipate that the
   percentage increases in general and administrative expenses will continue to
   be similar to percentage increases in collaborative research and development
   expenses.Interest Income, Net. Net interest income for the three months ended March
   31, 2000 of $470,537 increased $168,270, or 56%, compared to $302,267 for
   the same period in 1999. The increase was primarily due to higher cash and
   cash equivalent balances as a result of funds received from the recent
   completion of our convertible debt offering, our private placements during
   1999 with Pequot Partners Fund, L.P. and Pequot International Fund, Inc.
   (collectively ''Pequot'') and Abgenix, and from the drawdown and
   simultaneous conversion of loans from Biogen, Inc. and Genentech during
   1999, offset by the interest expense associated with the completion of our
   recent convertible debt offering. Gross interest expense for the three
   months ended March 31, 2000 of $1,905,048 represented an increase of
   $1,652,363, or 654%, compared to $252,685 for the same period in 1999. This
   increase in gross interest expense was primarily attributable to accrued
   interest to be paid to the holders of our convertible debt.
 Net Loss. For the three months ended March 31, 2000, the Company
   reported a net loss of $5,039,496, or $0.14 per share, as compared to
   $7,206,927, or $0.27 per share for the same quarter of 1999. Since
   inception, we have incurred operating losses, and as of March 31, 2000, we
   had an accumulated deficit of $59,741,764 and therefore, have not paid any
   federal income taxes. Realization of deferred tax assets is dependent on
   future earnings, if any, the timing and amount of which are uncertain.
   Accordingly, valuation allowances in amounts equal to the deferred income
   tax assets have been established to reflect these uncertainties in all
   periods presented.
 Liquidity and Capital ResourcesAs of March 31, 2000, we had $222.4 million in cash and cash equivalents,
   compared to $76.3 million as of December 31, 1999. This increase represents
   the receipt of proceeds from our recent convertible debt offering, proceeds
   from stock option and warrant exercises, and interest income. We have
   financed our operations since inception primarily through our initial public
   offering of Common Stock, collaborative research and development
   arrangements, private placements of equity securities, government grants,
   capital leases and our recent convertible debt offering. As of March 31,
   2000, we had recognized $42,180,986 of cumulative sponsored research
   revenues from government grants and collaborative research arrangements. To
   date, inflation has not had a material effect on our business.
 
 On February 2, 2000, we completed an offering for $125,000,000 of 6%
   convertible subordinated debentures due 2007 and received net proceeds of
   approximately $121,250,000. In addition, on February 16, 2000, the initial
   purchasers exercised their option to purchase an additional $25,000,000 of
   6% convertible subordinated debentures due 2007, providing us with
   additional net proceeds of approximately $24,308,000. The debentures may be
   resold by the initial purchasers to qualified institutional buyers under
   Rule 144A of the Securities Act and to non-U.S. Persons outside the United
   States under Regulation S under the Securities Act. The debentures are
   convertible into our common stock at any time prior to their maturity at a
   conversion price of $63.8275 per share. In addition, prior to February 2,
   2003, if our common stock price reaches specified levels, we have the right
   to redeem the debentures at a premium by converting the debentures into
   common stock. Pursuant to our obligations under the convertible subordinated
   debenture agreement, we filed a registration statement with the SEC on March
   17, 2000 for the resale of the debentures and any shares issued as a result
   of the conversion of the debentures. Two of our stockholders who can require
   us to register their shares of common stock have requested that we include
   an aggregate of 3,000,000 shares of common stock in the registration
   statement. As of the date of this filing, the SEC has not yet declared such
   registration effective.On March 2, 2000, we announced a two-for-one split of our voting and nonvoting
   common stock, each payable to our stockholders in the form of a stock
   dividend. On March 30, 2000, our stockholders of record received one
   additional share of our voting common stock for every share of voting common
   stock and one additional share of nonvoting common stock for every share of
   nonvoting common stock each stockholder owned at the close of business on
   March 15, 2000.The effects of the two-for-one stock split have been
   reflected in the calculations of basic and diluted loss per share for all
   periods presented.

Our investing activities have consisted primarily of acquisitions
   of equipment and expenditures for leasehold improvements. At March 31, 2000,
   our gross investment in equipment, computers and leasehold improvements was
   $22,252,036. At March 31, 2000, equipment with a gross book value of
   $12,091,632 secures our equipment financing facility for equipment and
   tenant improvements in support of the laboratory expansions at the New Haven
   and Branford, Connecticut locations. We had no material commitments for
   capital expenditures at March 31, 2000.In accordance with our investment policy, we are
   utilizing the following investment objectives for cash and cash equivalents:
   (1) investment decisions are made with the expectation of minimum risk of
   principal loss, even with a modest penalty in yield; (2) appropriate cash
   balances and related short-term funds are maintained for immediate liquidity
   needs, and appropriate liquidity is available for medium-term cash needs;
   and (3) maximum after-tax yield is achieved.
 
 Net cash used in operating activities was $4,247,509 for the three months
   ended March 31, 2000, compared to $4,749,835 for the same period ended March
   31, 1999. Cash outflows for operating activities for the three months ended
   March 31, 2000 consisted primarily of prepaid insurance payments, payments
   to vendors and accrued payroll costs. Cash used in investing activities
   during the three months ended March 31, 2000 primarily included acquisitions
   of property and equipment. Cash outflows for financing activities during the
   three months ended March 31, 2000 primarily included payments of financing
   costs and payments on capital lease obligations, while cash inflows included
   proceeds from the issuance of our recent convertible debt, and proceeds from
   stock option and warrant exercises.
 
 As of March 31, 2000, we have federal and Connecticut net operating loss
   carryforwards for income tax purposes of approximately $97,000,000 and
   $86,000,000, respectively. Federal net operating loss carryforwards expire
   beginning in 2008, and Connecticut net operating loss carryforwards began
   expiring in 1998. We also have federal and Connecticut research and
   development tax credit carryforwards for income tax purposes of
   approximately $3,300,000 and $3,000,000, respectively at March 31, 2000.
 Recently Enacted Pronouncements
 
 In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
   Instruments and Hedging Activities." SFAS No. 133 modifies the
   accounting for derivatives and hedging activities and is effective for the
   quarterly periods beginning after June 15, 2000. We have not determined the
   effects, if any, that SFAS No. 133 will have on our financial statements.
 Certain Factors That May Affect Results of Operations

This report may contain forward-looking statements that are subject to
   certain risks and uncertainties. These statements include statements
   regarding the expected future levels of losses, potential quarterly
   fluctuations in the levels of losses, the expected future increases in
   collaboration revenues, net interest income, capital lease obligations, and
   collaborative research and development and general and administrative
   expenses. Such statements are based on management's current expectations and
   are subject to a number of factors and uncertainties that could cause actual
   results to differ materially from those described in the forward-looking
   statements. We caution investors that there can be no assurance that actual
   results or business conditions will not differ materially from those
   projected or suggested in such forward-looking statements as a result of
   various factors, including, but not limited to, the following: our early
   stage of development, technological uncertainty and product development
   risks, uncertainty of additional funding, reliance on research
   collaborations, competition, our ability to protect our patents and
   proprietary rights and uncertainties relating to commercialization rights.
   For further information, refer to the more specific risk and uncertainties
   discussed throughout this discussion and analysis.



Part II - Other Information

Item 2. Changes in Securities and Use of ProceedsOn March 2, 2000, we announced a two-for-one split of
   our voting and nonvoting common stock, each payable to our stockholders in
   the form of a stock dividend. On March 30, 2000, our stockholders of record
   received one additional share of our voting common stock for every share of
   voting common stock and one additional share of nonvoting common stock for
   every share of nonvoting common stock each stockholder owned at the close of
   business on March 15, 2000.

Item 6. Exhibits and Reports on Form 8-K

A.Exhibits

|Exhibit 4.1 |   | Indenture dated as of February 2, 2000 between the
     Registrant and The Chase Manhattan Bank, as trustee, is incorporated
     herein by reference from the Form S-3, file No. 333-32756 filed with the
     Securities and Exchange Commission on March 17, 2000                                                                                                    
|----------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |   |                                                                                                                                                                                                                                                                                                                                                                         
|Exhibit 4.2 |   | Registration Rights Agreement dated as of February 2, 2000
     among the Registrant and Lehman Brothers Inc., Morgan Stanley & Co.
     Incorporated and Dain Rauscher Incorporated, as the initial purchasers, is
     incorporated herein by reference from the Form S-3, file No. 333-32756
     filed with the Securities and Exchange Commission on March 17, 2000
|            |   |                                                                                                                                                                                                                                                                                                                                                                         
|Exhibit 11  | - | Computation of Net Loss Per Share                                                                                                                                                                                                                                                                                                                                       
|            |   |                                                                                                                                                                                                                                                                                                                                                                         
|Exhibit 27  | - | Financial Data Schedule                                                                                                                                                                                                                                                                                                                                                 
|           
|            |   |                                                                                                                                                                                                                                                                                                                                                                         

> On January 28, 2000, we filed a report on Form 8-K in connection
>    with the completion of an offering for $125,000,000 of 6% convertible
>    subordinated debentures, due 2007. The debentures may be resold by the
>    initial purchasers to qualified institutional buyers under Rule 144A of the
>    Securities Act and to non-U.S. persons outside the United States under
>    Regulation S under the Securities Act. The debentures are convertible into
>    our common stock.

> On February 15, 2000, we filed a report on Form 8-K announcing
>    that the initial purchasers of our convertible subordinated debentures
>    exercised their option to purchase an additional $25,000,000 of the 6%
>    convertible subordinated debentures, due 2007.

> On March 2, 2000, we filed a report on Form 8-K in connection with
>    the two-for-one split of our voting and nonvoting common stock, each payable
>    to our stockholders in the form of a stock dividend on March 30, 2000.










|Dated: May 12, 2000 | CuraGen Corporation                                     
|------------------- | --------------------------------------------------------
|                    |                                                         
|                    | By: /s/ Jonathan M. Rothberg,
     Ph.D.                
|                    | Jonathan M. Rothberg, Ph.D.                             
|                    | Chief Executive Officer, President
     and             
|                    | Chairman of the Board                                   
|                    |                                                         
|                    |                                                         
|                    | By: /s/ David M. Wurzer                                 
|                    | David M. Wurzer                                         
|                    | Executive Vice-President, Treasurer                     
|                    | and Chief Financial Officer,
     (principal            
|                    | financial and accounting officer of the
     registrant)





|
|

|No. |                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1 | Indenture dated as of February 2, 2000 between the
     Registrant and The Chase Manhattan Bank, as trustee, is incorporated
     herein by reference from the Form S-3, file No. 333-32756 filed with the
     Securities and Exchange Commission on March 17, 2000                                                                                                    
|4.2 | Registration Rights Agreement dated as of February 2, 2000
     among the Registrant and Lehman Brothers Inc., Morgan Stanley & Co.
     Incorporated and Dain Rauscher Incorporated, as the initial purchasers, is
     incorporated herein by reference from the Form S-3, file No. 333-32756
     filed with the Securities and Exchange Commission on March 17, 2000
|11  | Computation of Net Loss Per Share                                                                                                                                                                                                                                                                                                                                       

|27 | Financial Data Schedule
|-- | -----------------------