<PAGE>   1

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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

(Mark One)

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

        FOR THE QUARTERLY PERIOD ENDED March 31, 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 0-23317

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

                                 GENE LOGIC INC.

             (Exact name of registrant as specified in its charter)

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

             DELAWARE                                   06-1411336
   (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                  Identification No.)


                             708 QUINCE ORCHARD ROAD
                          GAITHERSBURG, MARYLAND 20878
                    (Address of principal executive offices)
                                 (301) 987-1700
                (Registrant's phone 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 [ ]

The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, was 19,783,358 as of April 30, 1999.


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


<PAGE>   2

                                 GENE LOGIC INC.


                                TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

<TABLE>
<S>                                                                                        <C>
Item 1. Financial Statements

Consolidated Balance Sheets at March 31, 1999 and December 31, 1998.........................3
Consolidated Statements of Operations for the Three Months Ended
        March 31, 1999 and 1998.............................................................4
Consolidated Statements of Cash Flows for the Three Months Ended
        March 31, 1999 and 1998.............................................................5
Notes to Consolidated Financial Statements..................................................6

Item 2. Management's Discussion and Analysis
        of Financial Condition and Results of Operations....................................9

Item 3. Quantitative and Qualitative Disclosure About Market Risk..........................15
</TABLE>

PART II OTHER INFORMATION

<TABLE>
<S>                                                                                        <C>
Item 1. Legal Proceedings..................................................................15

Item 2. Changes in Securities and Use of Proceeds..........................................15

Item 3. Defaults Upon Senior Securities....................................................15

Item 4. Submission of Matters to a Vote of Security Holders................................15

Item 5. Other Information..................................................................15

Item 6. Exhibits and Reports on Form 8-K...................................................16

Signatures.................................................................................17
</TABLE>




                                       2.
<PAGE>   3

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                 GENE LOGIC INC.
                           CONSOLIDATED BALANCE SHEETS
              (IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PAR VALUE)

<TABLE>
<CAPTION>
                                                                          MARCH 31,         DECEMBER 31,
                                                                            1999                1998
                                                                          ---------         ------------
                                                                         (Unaudited)
<S>                                                                       <C>                 <C>      
                                                 ASSETS

Current Assets:
    Cash and cash equivalents ..................................          $  11,936           $  16,191
    Marketable securities available-for-sale ...................             14,774              14,791
    Due from collaborators .....................................              3,028               3,779
    Prepaid expenses ...........................................                972                 842
    Other current assets .......................................              1,030                 875
                                                                          ---------           ---------
        Total Current Assets ...................................             31,740              36,478
Property and Equipment, net ....................................             10,394              10,189
Goodwill, net ..................................................              6,868               7,249
Intangible and Other Assets, net ...............................              1,839               1,650
                                                                          ---------           ---------
        Total Assets ...........................................          $  50,841           $  55,566
                                                                          =========           =========

                                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts payable ..........................................          $   2,520           $   2,123
     Accrued expenses ..........................................              1,381               2,963
     Accrued restructuring .....................................                 88                 184
     Current portion of capital lease obligation ...............                127                 124
     Current portion of long-term debt .........................              1,269               1,292
     Deferred revenue ..........................................              4,523               3,219
                                                                          ---------           ---------
         Total Current Liabilities .............................              9,908               9,905
Capital Lease Obligation .......................................                 67                 100
Long-Term Debt .................................................              3,474               3,789
Other Noncurrent Liabilities ...................................                506                 484
                                                                          ---------           ---------
            Total Liabilities ..................................             13,955              14,278
                                                                          ---------           ---------
Commitments and Contingencies

Stockholders' Equity:

     Common Stock, $.01 par value; 60,000,000 shares authorized;
       19,771,270 and 19,651,756 shares issued and outstanding
       as of March 31, 1999 and December 31, 1998,
       respectively ............................................                198                 197
     Preferred Stock, $.01 par value; 10,000,000 shares
       authorized; no shares issued and outstanding as of
       March  31, 1999 and December 31, 1998 ...................                 --                  --
     Additional paid-in capital ................................            102,858             102,670
     Deferred compensation on stock options, net ...............             (3,611)             (3,986)
     Accumulated other comprehensive loss ......................                (63)                (46)
     Accumulated deficit .......................................            (62,496)            (57,547)
                                                                          ---------           ---------
        Total Stockholders' Equity .............................             36,886              41,288
                                                                          ---------           ---------
        Total Liabilities and Stockholders' Equity .............          $  50,841           $  55,566
                                                                          =========           =========
</TABLE>



                             See accompanying notes.



                                       3.
<PAGE>   4

                                 GENE LOGIC INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED
                                                                      MARCH 31,
                                                             ---------------------------
                                                               1999              1998
                                                             --------           --------
<S>                                                          <C>                <C>     
Revenues ..........................................          $  4,067           $  2,196
Expenses:
  Research and development ........................             7,031              3,237
  General and administrative ......................             1,773              1,596
  Amortization of goodwill ........................               381                 --
                                                             --------           -------- 
      Total expenses ..............................             9,185              4,833
                                                             --------           -------- 
      Loss from operations ........................            (5,118)            (2,637)
Interest income, net ..............................               239                607
Other income (expense) ............................                30                (81)
                                                             --------           -------- 
      Loss before income tax expense ..............            (4,849)            (2,111)
Income tax expense ................................               100                 --
                                                             --------           -------- 
      Net loss ....................................          $ (4,949)          $ (2,111)
                                                             ========           ========
Basic and Diluted Net Loss Per Common Share .......          $  (0.25)          $  (0.15)
                                                             ========           ========
Shares Used In Computing Basic and Diluted Net Loss
  Per Common Share ................................            19,710             13,900
                                                             ========           ========
</TABLE>



                             See accompanying notes.



                                       4.
<PAGE>   5

                                 GENE LOGIC INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                       MARCH 31,
                                                              ---------------------------
                                                                1999               1998
                                                              --------           --------
<S>                                                           <C>                <C>      
 Cash Flows From Operating Activities:
 Net loss ..........................................          $ (4,949)          $ (2,111)
 Adjustments to reconcile net loss to net cash flows
   from operating activities:
     Depreciation and amortization .................               707                292
     Amortization of goodwill ......................               381                 --
     Amortization of deferred compensation .........               375                433
     Loss on disposal of property and equipment ....                --                 81
Changes in operating assets and liabilities:
     Due from collaborators ........................               751                647
     Prepaid expenses ..............................              (130)                10
     Other current assets ..........................              (155)              (247)
     Intangibles and other assets ..................              (225)              (156)
     Accounts payable ..............................               397                445
     Accrued expenses ..............................            (1,582)             1,511
     Accrued restructuring .........................               (96)                --
     Deferred revenue ..............................             1,304             (1,843)
     Other noncurrent liabilities ..................                22                 30
                                                              --------           --------
        Net Cash Flows From Operating Activities ...            (3,200)              (908)
                                                              --------           --------
 Cash Flows From Investing Activities:
     Purchases of property and equipment ...........              (876)            (3,760)
     Purchase of marketable securities
        available-for-sale .........................                --             (4,266)
                                                              --------           --------
        Net Cash Flows From Investing Activities ...              (876)            (8,026)
                                                              --------           --------
 Cash Flows From Financing Activities:
     Proceeds from issuance of common stock ........               189                 --
     Repayments of financing agreement .............               (48)               (44)
     Repayments of capital lease obligation and
      equipment loans ..............................              (320)               (89)
                                                              --------           --------
        Net Cash Flows From Financing Activities ...              (179)              (133)
                                                              --------           --------
 Net Decrease in Cash and Cash Equivalents .........            (4,255)            (9,067)
 Cash and Cash Equivalents, beginning of period ....            16,191             46,522
                                                              --------           --------
 Cash and Cash Equivalents, end of period ..........          $ 11,936           $ 37,455
                                                              ========           ========
 Supplemental Disclosure:
     Interest expense paid .........................          $    112           $     34
                                                              ========           ========
</TABLE>



                             See accompanying notes.


                                       5.
<PAGE>   6

                                 GENE LOGIC INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999
                                   (UNAUDITED)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

        The unaudited consolidated financial statements include the accounts of
Gene Logic Inc. and its wholly owned subsidiary (the "Company"). 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. The consolidated balance sheet as of March 31, 1999, consolidated
statements of operations for the three months ended March 31, 1999 and 1998 and
the consolidated statements of cash flows for the three months ended March 31,
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, operating results and cash flows for the
periods presented. Although the Company believes that the disclosures in these
financial statements are adequate to make the information presented not
misleading, certain information and footnote information normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission.

        Results for any interim period are not necessarily indicative of results
for any future interim period or for the entire year. The accompanying unaudited
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1998.

Comprehensive Loss

        The Company accounts for comprehensive loss as prescribed by Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS No. 130"). Comprehensive income is the total net income (loss) plus all
changes in equity during the period except those changes resulting from
investment by owners and distribution to owners. The Company's other
comprehensive loss includes unrealized holding losses from marketable securities
available-for-sale for the three months ended March 31, 1999 and 1998 as
follows:

<TABLE>
<CAPTION>
                                                                         MARCH 31,
                                                                 -------------------------
                                                                  1999              1998
                                                                 -------           -------
                                                                       (in thousands)
<S>                                                              <C>               <C>     
        Net Loss ......................................          $(4,949)          $(2,111)
        Other comprehensive loss, net of tax:
          Unrealized losses on marketable securities ..              (17)               (6)
          Less - Reclassification adjustment for losses               --                 2
                                                                 -------           -------
            Total other comprehensive loss ............              (17)               (4)
                                                                 -------           -------
        Comprehensive loss ............................          $(4,966)          $(2,115)
                                                                 =======           =======
</TABLE>



                                       6.
<PAGE>   7

Marketable Securities Available-for-Sale

        All marketable securities are classified as available-for-sale.
Available-for-sale securities are carried at fair value with accumulated
unrealized gains and losses reported as a separate component of stockholders'
equity in the accompanying consolidated balances sheets. Realized gains and
losses and declines in value judged to be other than temporary for
available-for-sale securities are included in other income.

Goodwill

        Goodwill, from the acquisition of Oncormed, Inc. ("Oncormed") in
September 1998, represents the excess of the purchase price over the fair market
value of the net assets acquired. Goodwill is being amortized over five years at
a rate of approximately $1.5 million per year. Amortization expense was $381,000
for the three months ended March 31, 1999. Accumulated amortization of goodwill
was $762,000 at March 31, 1999.

Revenue Recognition

        Technology and database access fees are recognized evenly over the term
of the Company's collaboration agreements. Revenues from research and
development support are recognized when they are earned which is ordinarily when
the work is performed or costs are incurred. Milestone payments are recognized
as revenue in accordance with the applicable performance requirements and
contractual terms. Revenues from pharmacogenomic services are recognized upon
completion of the services. Revenues for such amounts are deferred until earned.

        Nonrefundable upfront payments received for the value of transferred
technology or other contractual rights that are not contingent upon future
performance under the terms of the collaboration agreements are recognized as
revenue upon execution of the agreements. Under collaboration agreements in
which the Company creates a research database in exchange for a fixed fee,
revenues from such collaborations are recognized on the percentage-of-completion
method, primarily based on man-months incurred to date compared with total
estimated man-months for development of such database.

NOTE 2. ACCRUED RESTRUCTURING

        In connection with the acquisition of Oncormed, the Company recorded a
restructuring liability of approximately $1.6 million. The objective of the
restructuring plan was to eliminate redundant general and administrative
employees of Oncormed and terminate contracts that the Company deemed to have no
on-going economic value to the Company. The restructuring liability consisted of
$373,000 in costs associated with the involuntary termination of ten Oncormed
employees and approximately $1.2 million in contract termination costs. This
liability was included in the purchase price allocation performed in connection
with the acquisition. Management anticipates the restructuring activities as a
result of the acquisition will be substantially completed in 1999.




                                       7.
<PAGE>   8

        The following table details the major components of the restructuring
liability relating to the Oncormed acquisition:

<TABLE>
<CAPTION>
                                                                   CONTRACT
                                                                 TERMINATION
                                                PERSONNEL           COSTS             TOTAL
                                                ---------        -----------         -------
                                                               (in thousands)
<S>                                              <C>               <C>               <C>    
        Restructuring liability .......          $   373           $ 1,224           $ 1,597
        1998 activity .................             (239)           (1,174)           (1,413)
                                                 -------           -------           -------
        Balance at December 31, 1998 ..              134                50               184
        Activity through March 31, 1999              (96)               --               (96)
                                                 =======           =======           =======
        Balance at March 31, 1999 .....          $    38           $    50           $    88
                                                 =======           =======           =======
</TABLE>


NOTE 3. COMMITMENTS AND CONTINGENCIES

        In January 1999, the Company entered into a three year agreement with
Affymetrix, Inc. ("Affymetrix"), pursuant to which Affymetrix will supply its
GeneChip(R) probe arrays to the Company for the development of gene expression
databases. Under the terms of the agreement, the Company will pay Affymetrix
subscription fees for access to the probe arrays, purchase the probe arrays and
related instrumentation and software, and pay royalties to Affymetrix on
revenues generated from certain database subscriptions fees.

        The Company's commitments under other research and license agreements do
not represent a significant expenditure in relation to the Company's total
research and development expense.

NOTE 4. SEGMENT INFORMATION

        At December 31, 1998, the Company adopted Statement of Financial
Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and
Related Information" ("SFAS No. 131"). SFAS No. 131 established standards for
reporting information about operating segments in annual and interim financial
statements and related disclosures about its products, services geographic areas
and major customers. The Company's operations are treated as one operating
segment, genomic information products, software and research services, as the
Company only reports loss information on an aggregate basis to chief operating
decision makers of the Company. Approximately 95% of the revenues for the three
months ended March 31, 1999 were derived from four collaborators, each
contributing approximately 38%, 27%, 16% and 14%. For the three months ended
March 31, 1998, three collaborators contributed 100% of the revenues, each
contributing approximately 53%, 24% and 23%. Although the Company operates
exclusively in the United States, the Company recorded revenue for the three
months ended March 31, 1999 from major customers in Japan, Europe and the United
States of 38%, 30% and 27%, respectively, and for the three months ended March
31, 1998 of 53%, 24%, and 23%, respectively.




                                       8.
<PAGE>   9

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

        The following Management's Discussion and Analysis of Financial
Condition and Results of Operations contains forward-looking statements,
including statements as to the timing of availability of products under
development, the ability to commercialize products developed under
collaborations, the performance and utility of the Company's products and
services, and the adequacy of capital resources. Such statements reflect
management's current views of future events and are subject to risks and
uncertainties that could cause actual results to differ materially from those
projections. These risks and uncertainties include, but are not limited to, the
extent of utilization of genomic information by the pharmaceutical industry in
both research and development, risks relating to the development of genomic
database products and their use by existing and potential collaborators and
customers of the Company, the Company's ability to manage and maintain multiple,
concurrent collaborations, the Company's reliance on collaborators for
development and commercialization of products, the impact of technological
advances and competition, the Company's ability to enforce its intellectual
property rights, the impact of the intellectual property rights of others and
the Company's ability to enter into arrangements with new collaborators and to
maintain new and existing collaborations, the ability of the Company to
implement in a timely manner the programs and actions related to the Year 2000
issue, as well as other risks and uncertainties included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998 filed with the
Securities and Exchange Commission.

        GeneExpress(TM) and Flow-thru Chip(TM) are trademarks of the Company.
GeneChip(R) is a registered trademark of Affymetrix, Inc.

OVERVIEW

        The Company was incorporated in September 1994 and has devoted
substantially all of its resources to the development of its genomics
technologies, bioinformatics systems and database products for use in
pharmaceutical, diagnostic and agricultural product research and development.
The Company has collaborations with the American Home Products Corp.'s
Wyeth-Ayerst Laboratories, Hoechst Schering AgrEvo GmbH, Japan Tobacco Inc.,
Merck & Company Inc., NV Organon, a business unit of Akzo Nobel NV, Procter &
Gamble Pharmaceuticals, Rhone-Poulenc Rorer Inc., Schering-Plough Corp. and
SmithKline Beecham PLC.

        These agreements provide the Company with various combinations of
nonrefundable upfront payments, recurring technology and database access fees,
research funding and fees for pharmacogenomic services, certain additional
payments upon the attainment of research and product development milestones and
royalty payments based on sales of any products resulting from the
collaborations. Technology and database access fees are recognized evenly over
the term of the Company's collaboration agreements. Revenues from research and
development support are recognized when they are earned which is ordinarily when
the work is performed or costs are incurred, milestone payments and royalties
are recognized when they are earned in accordance with the applicable
performance requirements and contractual terms. Revenues from pharmacogenomic
services are recognized upon completion of the services. Revenues for such
amounts are deferred until earned. Nonrefundable upfront payments received for
the value of transferred technology or other contractual rights that are not
contingent upon future performance under the terms of the collaboration
agreements are recognized as revenue upon execution of the agreements. The loss
of revenues from any individual material collaboration agreement, if terminated,
could have a material adverse effect on the Company's business, financial
condition and results of operations.

        In an effort to address the growing needs of research and development in
the pharmaceutical industry, the Company is investing significant resources in
building its GeneExpress databases. These databases will contain expression
information from a wide variety of tissues from healthy, diseased and
drug-treated patients and from experimental animals. The initial GeneExpress
database will incorporate data obtained from GeneChip probe arrays under an
agreement with Affymetrix.  




                                       9.
<PAGE>   10
During 1999, the Company expects to commence marketing the GeneExpress
databases broadly to pharmaceutical companies and later in the year expects to
receive subscriptions fees from such database users.

        Gene Logic's future profitability will depend in part on the successful
establishment of collaborations which include various combinations of genomic
databases, bioinformatics software and genomics technology and the successful
commercialization of its GeneExpress databases. Payments through collaborations
and subscriptions to the GeneExpress databases are expected to be the Company's
only sources of revenue for the foreseeable future. Significant royalties or
other revenues from commercial sales of products developed from any therapeutic,
diagnostic or agricultural product identified using the Company's technologies
are not expected for several years, if at all. Through March 31, 1999, royalties
or other revenues from commercial sales of products paid to Gene Logic were
immaterial. Revenues under collaborations may be subject to significant
fluctuation in both timing and amount, and, therefore, the Company's results of
operations for any period may not be comparable to the results of operations for
any other period. Furthermore, the generation of significant revenues and
profitability will depend upon the Company's ability to enter into additional
collaborations and successfully commercialize its GeneExpress databases. There
can be no assurance that the Company will enter into additional collaborations
on acceptable terms, if at all, or that current or future collaborations will be
successful or that the Company will be able to successfully commercialize its
GeneExpress databases.

        The Company has incurred operating losses in each year since its
inception. At March 31, 1999, excluding the $35.2 million non-recurring charge
incurred in connection with the acquisition of Oncormed, the Company had
accumulated operating losses of approximately $27.3 million. The Company's
losses have resulted principally from costs incurred in research and development
and from general and administrative costs associated with the Company's
operations, in addition to the charge incurred in connection with the
acquisition of Oncormed. These costs have exceeded the Company's revenues which
to date have been generated principally from collaborations. The Company expects
to incur additional operating losses at least through 1999 primarily as a result
of increases in its expenses for research and development.

        The Company's quarterly operating results may fluctuate significantly as
a result of a variety of factors, including changes in the demand for the
Company's technologies and products, variations in revenues under
collaborations, including milestone payments, royalties, license fees and other
contract revenues, and the timing of new product introductions, if any, by the
Company. The Company's quarterly operating results may also fluctuate
significantly depending on changes in the research and development budgets of
the Company's collaborative partners, the introduction of new products by the
Company's competitors and other competitive factors, adoption of new
technologies, and the cost, quality and availability of cell and tissue samples
and related reagents.

UPDATE ON IN-PROCESS RESEARCH AND DEVELOPMENT

        In connection with the acquisition of Oncormed in September 1998, the
Company allocated $35.2 million of the $39.2 million purchase price to
in-process research and development projects. This allocation represents the
estimated fair value based on discounted cash flow related to the incomplete
research and development projects. At the time of acquisition, the progress of
these projects had not yet reached technological feasibility and had no
alternative future uses. Accordingly, these costs were expensed as of the
acquisition date. The in-process research and development value consists of four
technology projects that involve either the development of technologies for
genomic databases or pharmacogenomics.

        At March 31, 1999, additional progress had been achieved on each of the
four technology projects that were underway as of the acquisition. In general,
the Company believes that these research 




                                      10.
<PAGE>   11

and development projects are on track with management's plans at the time the
acquisition occurred. Through March 31, 1999, no significant adjustments have
been made in the economic assumptions or expectations that underlie the
Company's acquisition decision and related purchase accounting. All four
in-process research and development projects are active, and the Company is
advancing the technology at a rate consistent with originally-projected
completion dates. Specifically, the SNP Analysis Project and Recognizer Project
are substantially completed and the Gene Chip / Gene Expression Database
Development Project and Biorepository Project are expected to be substantially
completed during 1999. Because these technologies are interrelated with respect
to the development of genomic database and pharmacogenomic products, the Company
does not expect to derive any significant economic benefits from them until late
1999.

        Remaining development efforts for the projects which are still
incomplete are highly complex and include the development and validation of the
necessary biochemistry, molecular biology and bioinformatic tools and
information, as well as small-scale deployment and commercial introduction.
Funding for such projects has been and is expected to continue from existing
cash balances.  The Company estimates the costs to complete the remaining
projects at approximately $1.1 million for the remainder of 1999. Total costs to
complete the projects from the date of acquisition are estimated to be
approximately $3.3 million.

        Although the Company has substantially completed two of the projects and
intends to complete the development of the remaining in-process technologies and
although management believes in the likelihood of their feasibility, there can
be no assurance that such remaining projects will be completed successfully, or
that any of the in-process technologies will achieve commercial success. If, at
a later date, the Company decides to no longer pursue one or all of these
technologies, decides to indefinitely postpone the research effort related to
one or all of the technologies, or determines that the discounted expected cash
flows will no longer meet projections, it will disclose that fact to
investors--explaining why it will not pursue commercialization or why the
research has been postponed (and when the research is expected to resume) and
how much of the purchase price the technologies (or projects) represent. If
these technologies are not successfully developed or commercially successful,
future results of operations of the Company may be adversely affected.
Additionally, the value of other intangible assets acquired may become impaired.

        Descriptions of the Company's estimates used to determine the value
assigned to the in-process technologies and costs, timing and anticipated
benefits of completing the development of the in-process technologies are
forward-looking statements that involve risks and uncertainties. The Company's
actual costs and timing to complete development of the remaining technologies
and any benefits derived therefrom or from completed technologies will depend on
many factors, including the Company's ability to complete development of the
remaining technologies successfully, to overcome remaining technical obstacles
and competing technologies, to gain market acceptance of products using such
technologies and to adapt to market developments and the availability to the
Company of adequate capital resources to commercialize such technologies. If the
Company is unsuccessful in developing or commercializing such technologies, the
Company will not achieve the benefits expected from acquiring such technologies
or obtain a return on its investment in connection with the acquisition and
would likely discontinue its operations with respect to such technologies.
Additionally, even if successfully completed, these projects will require
maintenance research and development after they have reached a state of
technological and commercial feasibility.

RESULTS OF OPERATIONS

        Three Months Ended March 31, 1999 and March 31, 1998

        Revenue increased to $4.1 million for the three months ended March 31,
1999 from $2.2 million for the same period in 1998. The increase in revenues was
the result of the addition of new customers and expansion of prior customer
relationships. Of the 1999 revenues, thirty-eight percent (38%) were received





                                      11.
<PAGE>   12

from Japan Tobacco; twenty-seven percent (27%) were received from Procter &
Gamble; sixteen percent (16%) were received from Organon; and fourteen percent
(14%) were received from AgrEvo. Revenues received from other sources were not
material.

        Research and development expenses increased to $7.0 million for the
three months ended March 31, 1999 from $3.2 million for the same period in 1998.
The increase in research and development expenses was primarily attributable to
approximate increases of: (i) forty percent (40%) in research agreement
expenses, (ii) twenty-five percent (25%) in personnel expenses, (iii) fifteen
percent (15%) in laboratory supplies and (iv) ten percent (10%) in depreciation
expense. The increase in research and development expenses primarily relates to
the Company's efforts in building its GeneExpress databases which started in
1999, expansion of its target discovery and bioinformatics businesses to
accommodate new and expanded collaborations, and further development of its
Flow-thru Chip program. The Company expects research and development expenses to
increase as the Company expands its GeneExpress databases, maintains new and
expanding target discovery and bioinformatic collaborations, and further
develops the Flow-thru Chip.

        General and administrative expenses increased to $1.8 million for the
three months ended March 31, 1999 from $1.6 million for the same period in 1998.
The increase in general and administrative expenses was attributable to the
Company's expansion of its business development efforts through additional new
hires and other general costs. The increases in these costs were somewhat offset
by a decrease in facility costs and legal expenses due to the delivery of the
new office and research facility in the first quarter of 1998 and the timing of
corporate activity. The Company expects that general and administrative expenses
will increase as the Company expands its product line and business development
efforts.

        Amortization of goodwill was $381,000 for the three months ended March
31, 1999 as a result of the acquisition of Oncormed in September 1998.

        Net interest income decreased to $239,000 for the three months ended
March 31, 1999 from $607,000 for the same period in 1998 primarily due to the
smaller cash and investment balance on hand as a result of funding the Company's
operating losses through March 31, 1999.

LIQUIDITY AND CAPITAL RESOURCES

        From inception through March 31, 1999, the Company financed its
operations through the sale of equity securities, payments under collaborative
agreements and equipment financing. In connection with its collaboration with
Procter & Gamble, the Company holds a promissory note of $500,000 that is due in
December 1999. The Company has also obtained $471,000 of capital lease financing
and $5.8 million under equipment loans. As of March 31, 1999, the Company had
approximately $26.7 million in cash and marketable securities, compared to $31.0
million as of December 31, 1998.

        In connection with the acquisition of Oncormed, the Company acquired
in-process research and development, which is comprised of several technology
projects. The Company expects to spend approximately $3.3 million in total to
develop commercially viable products using such technologies and to begin to
generate revenues from them. Costs to complete the development of these
remaining technologies are estimated to be $1.1 million for the remainder of
1999. Funding for such efforts has been and is expected to continue to be
obtained from internally generated sources. These estimates are subject to
change, given the uncertainties of the development process, and no assurance can
be given that deviations from these estimates will not occur.

        In connection with the acquisition of Oncormed, the Company recorded a
restructuring liability of approximately $1.6 million. The objective of the
restructuring plan was to eliminate redundant general and administrative
employees of Oncormed and terminate contracts that the Company deemed to have no
on-going economic value to the Company. The restructuring liability consisted of
$373,000 in costs 




                                      12.
<PAGE>   13

associated with the involuntary termination of ten Oncormed employees and
approximately $1.2 million in contract termination costs. At March 31, 1999,
approximately $38,000 and $50,000 of the restructuring charge remained unpaid
relating to involuntary employment and contract terminations, respectively.
Management anticipates the restructuring activities as a result of the
acquisition will be substantially completed in 1999.

        Net cash used in operating activities was $3.2 million for the three
months ended March 31, 1999, as compared to $908,000 for the three months ended
March 31, 1998. The Company has primarily used cash during 1999 and 1998 to fund
the Company's operating losses in addition to expenditures relating to
intangibles and other assets.

        During the three months ended March 31, 1999 and 1998, the Company had
expenditures relating to intangibles and other assets of approximately $225,000
and $156,000, respectively. These expenditures were primarily for patent costs
and license fees. The Company amortizes such patent costs to research and
development expense over the useful life of the underlying patent upon its
issuance. License fees are amortized to research and development expense over
periods of approximately one to seventeen years. These expenditures are
necessary and are expected to increase to protect the Company's intellectual
property and to secure rights to current technology.

        The Company's investing activities, other than purchases of
available-for-sale securities, consisted of capital expenditures,
which totaled $876,000 and $3.8 million for the three months ended March 31,
1999 and 1998, respectively. The decrease from year to year was primarily due to
the funding of tenant improvements and furniture purchases in the first quarter
of 1998 relating to the completion of the Company's new office and research
laboratory facility. The Company expects to have additional capital expenditures
in 1999 as it expands its facility requirements and acquires laboratory and
computer equipment to support expanding research and development activities. The
Company's capital expenditures in 1999 are expected to be less than those in
1998.

        Net cash used in financing activities was $179,000 and $133,000 for the
three months ended March 31, 1999 and 1998, respectively. The increase in 1999
was due to increased repayments under an equipment financing which was offset by
the issuance of common stock under the Company's equity plans.

        In June 1998, the Company entered into a loan agreement for the
financing of laboratory, computer and office equipment. Under the loan
agreement, the Company may borrow up to $5.0 million through June 1999. At March
31, 1999, the Company had borrowed approximately $4.8 million. The Company
expects to increase the borrowing under the loan agreement or obtain financing
from additional sources in 1999.

        In January 1999, the Company entered into a three year agreement with
Affymetrix, pursuant to which Affymetrix will supply its GeneChip probe
arrays to the Company for the development of gene expression databases. Under
the terms of the agreement, the Company will pay Affymetrix subscription fees
for access to the probe arrays, purchase the probe arrays and related
instrumentation and software, and pay royalties to Affymetrix on revenues
generated from certain database subscriptions fees. The Company's commitments
under other research and license agreements do not represent a significant
expenditure in relation to the Company's total research and development expense.

        To date, all revenue received by the Company has been generated
principally from its collaborations. The Company expects that substantially all
revenue for the foreseeable future will come from collaborative partners and
subscriptions to its GeneExpress databases. Furthermore, the Company's ability
to achieve profitability will be dependent upon the ability of the Company to
enter into additional collaborations and successfully commercialize its
GeneExpress databases. There can be no assurance that the Company will be able
to negotiate additional collaborations in the future on acceptable terms, if at
all, 




                                      13.
<PAGE>   14

or that current or future collaborations will be successful and provide the
Company with expected benefits or that the Company will be able to successfully
commercialize its GeneExpress databases.

        The Company believes that existing cash and marketable securities and
anticipated cash flow from its current collaborations will be sufficient to
support the Company's operations until the end of the year 2000. The estimate
for the period for which the Company expects its available cash balances and
estimated cash flow from its current collaborations to be sufficient to meet its
capital requirements is a forward-looking statement that involves risks and
uncertainties. The Company's actual future capital requirements and the adequacy
of its available funds, will depend on many factors, including progress of its
discovery programs, the number and breadth of these programs, the ability of the
Company to establish and maintain additional collaboration and licensing
arrangements, the commercial success of the in-process technologies acquired in
the acquisition of Oncormed and the progress of the development and
commercialization efforts of the Company's collaborative partners. These factors
also include the level of the Company's activities relating to its independent
discovery programs and to the development and commercialization rights it
retains in its collaboration arrangements, competing technological and market
developments, the costs associated with obtaining access to tissue samples and
related information and the costs involved in preparing, filing, prosecuting,
maintaining and enforcing patent claims and other intellectual property rights.
The Company expects that it will require significant additional financing in the
future, which it may seek to raise through public or private equity offerings,
debt financing or additional collaboration and licensing arrangements. No
assurance can be given that additional financing or collaboration and licensing
arrangements will be available when needed, if at all, or that, if available,
will be obtained on terms favorable to the Company and its stockholders. To the
extent that the Company raises additional capital by issuing equity or
convertible debt securities, ownership dilution to stockholders will result. If
adequate financing is not available when needed, the Company may be required to
curtail significantly one or more of its research and development programs or to
obtain funds through arrangements with collaborative partners or others that may
require the Company to relinquish rights to certain of its technologies,
discoveries or potential products, or to grant licenses on terms that are not
favorable to the Company, any of which could have a material adverse effect on
the Company's business, financial condition and results of operations. In the
event that adequate funds are not available, the Company's business would be
adversely affected.

YEAR 2000 COMPLIANCE

        Many computer systems and software products are coded to accept two
digit entries in the date code field. These date code fields will need to accept
four digit entries to distinguish 21st century dates from 20th century dates. As
a result, at the end of this year, computer systems and software used by many
companies may need to be upgraded to comply with such "Year 2000" requirements.
The Company uses a significant number of computer software programs and
operating systems in connection with its database products, services and
internal operations. Such software and systems were purchased and installed with
a view towards Year 2000 compliance. Nevertheless, Year 2000 problems could
affect the Company's research and development, financial, administrative and
communication operations.

        The Company has implemented a program designed to address Year 2000
problems. A cross-functional Year 2000 project team has performed a
comprehensive review of internal computer systems, electronic devices and
software. In addition, the Company has identified material third parties which
the Company relies upon for its operations. The Company is performing internal
and external compliance audits and Year 2000 validation testing. The Company is
in the process of receiving Year 2000 certifications from third parties the
Company has material agreements with and formulating contingency plans. Systems
critical to the Company's business that are not Year 2000 compliant are being
replaced or corrected as they are identified through programming modifications
and/or software upgrades. The Company expects these projects to be successfully
completed in the second half of 1999. The estimated timing of completion of
these efforts is a forward-looking statement that involves risk and
uncertainties, including the risk that such efforts will not adequately address
such Year 2000 problems and that, as a result, the Company's business will be
adversely affected. 




                                      14.
<PAGE>   15

        External and internal costs specifically associated with modifying
internal software for Year 2000 compliance are expensed as incurred. To date,
costs have not been material and are not expected to be in the future. Such
costs do not include normal system upgrades and replacements. Based on the
Company's current plans and efforts to date, the Company believes that changes
mandated by the Year 2000 issue will not cause any material adverse effects on
the Company's business, financial condition and results of operations. There is
no guarantee, however, that all problems will be foreseen and corrected, or that
no material disruption of the Company's business will occur.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

        The Company does not hold any financial instruments subject to
significant market risk.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        The Company is not a party to any legal proceedings.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

        Recent Sales of Unregistered Securities

        During the quarter ended March 31, 1999, the Company has sold and issued
the following securities which were not registered under the Securities Act of
1933, as amended (the "Securities Act"):

        On March 12, 1999, the Company sold 8,812 shares of the Company's common
stock to Comdisco, Inc. ("Comdisco") pursuant to Comdisco's exercise of a
warrant dated April 15, 1997, at a purchase price of $2.20 per share. The sale
and issuance of the securities to Comdisco were deemed to be exempt from
registration under the Securities Act by virtue of Section 4(2) promulgated
thereunder.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.

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

        None.

ITEM 5. OTHER INFORMATION

        None.




                                      15.
<PAGE>   16

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

            A)          EXHIBITS:

       ++++ 10.50       Agreement, dated January 1, 1999, between Registrant and
                        Affymetrix, Inc.

            11.1        Statement regarding computation of net loss per share

            27.1        Financial Data Schedule

------------

++++    Confidential treatment has been requested with respect to certain
        portions of this exhibit. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

            B)          REPORTS ON FORM 8-K:

                No reports on Form 8-K were filed during the three months ended
March 31, 1999.




                                      16.
<PAGE>   17

                                   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.


                                        GENE LOGIC INC.


Date:   May 14, 1999                     By: /s/ Michael J. Brennan, M.D., Ph.D.
                                           -------------------------------------
                                           Michael J. Brennan, M.D., Ph.D.
                                           Chief Executive Officer and Director
                                           (Principal Executive Officer)


Date:   May 14, 1999                     By: /s/ Mark D. Gessler
                                           -------------------------------------
                                           Mark D. Gessler
                                           President, Chief Operating Officer,
                                           Chief Financial Officer and Secretary
                                           (Principal Financial and Accounting
                                           Officer)



                                      17.