Delaware		94-3297098
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

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PART I.		FINANCIAL INFORMATION
Item 1.		Financial Statements		3
		Condensed Consolidated Statements of Operations For the three and nine months ended September 30, 2002 and 2001 (unaudited)		3
		Condensed Consolidated Balance Sheets As of September 30, 2002 (unaudited) and December 31, 2001		4
		Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2002 and 2001 (unaudited)		5
		Notes to Condensed Consolidated Financial Statements (unaudited)		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3.		Quantitative and Qualitative Disclosures about Market Risk		30
Item 4.		Controls and Procedures		31
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings		32
Item 2.		Changes in Securities and Use of Proceeds		32
Item 3.		Defaults Upon Senior Securities		32
Item 4.		Submission of Matters to a Vote of Security Holders		32
Item 5.		Other Information		32
Item 6.		Exhibits and Reports on Form 8-K		33
		(a) Exhibits		33
		(b) Reports on Form 8-K		33
Signatures				33
Certifications				34

		Three months ended September 30,								Nine months ended September 30,
		2002				2001				2002				2001
Revenue, net		$	1,783			$	1,841			$	5,179			$	4,928
Cost of goods sold(1)			721				963				2,285				2,548
Gross profit			1,062				878				2,894				2,380
Operating expenses:
Research and development			7,571				7,206				23,744				16,680
Selling, general and administrative			2,225				2,305				6,989				6,339
Amortization of intangible assets			335				555				1,005				1,290
Stock-based compensation(1)			338				750				1,375				2,605
Acquired in-process research and development			—				—				—				14,030
Total operating expenses			10,469				10,816				33,113				40,944
Loss from operations			(9,407	)			(9,938	)			(30,219	)			(38,564	)
Other income (expense):
Interest income			428				1,096				1,737				3,960
Interest expense			(71	)			(92	)			(232	)			(238	)
Net other income			357				1,004				1,505				3,722
Net loss		$	(9,050	)		$	(8,934	)		$	(28,714	)		$	(34,842	)
Net loss per share, basic and diluted		$	(0.19	)		$	(0.19	)		$	(0.60	)		$	(0.76	)
Shares used in computing basic and diluted net loss per share			48,161				46,906				48,006				46,120
(1) Stock-based compensation related to the following:
Cost of goods sold		$	15			$	31			$	61			$	118
Research and development			219				503				943				1,798
Selling, general and administrative			119				247				432				807
		$	353			$	781			$	1,436			$	2,723

		September 30, 2002				December 31, 2001
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	18,228			$	12,596
Short-term investments			27,283				42,608
Accounts receivable, net			901				818
Inventories			1,583				1,864
Prepaid expenses and other current assets			1,430				2,325
Total current assets			49,425				60,211
Property and equipment, net			12,242				13,136
Goodwill			4,716				4,716
Intangible assets, net			4,456				5,462
Long-term investments			3,635				18,016
Restricted investments			2,879				3,402
Total assets		$	77,353			$	104,943
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	691			$	2,003
Accrued liabilities			3,047				2,140
Accrued construction in progress			—				342
Contract research liability			1,378				580
Equipment financing obligations, current portion			483				523
Bonds payable, current portion			160				160
Total current liabilities			5,759				5,748
Equipment financing obligations, noncurrent portion			221				581
Bonds payable, noncurrent portion			1,415				1,415
Other long-term liabilities			212				151
Commitments and contingencies
Stockholders’ equity:
Common stock			4				4
Additional paid-in capital			189,689				189,396
Notes receivable from stockholders			(495	)			(597	)
Deferred compensation			(1,055	)			(2,551	)
Deferred royalties and commercial rights			(13,480	)			(13,480	)
Accumulated other comprehensive income			180				659
Accumulated deficit			(105,097	)			(76,383	)
Total stockholders’ equity			69,746				97,048
Total liabilities and stockholders’ equity		$	77,353			$	104,943

		Nine months ended September 30,
		2002				2001
Cash flows from operating activities
Net loss		$	(28,714	)		$	(34,842	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			3,139				2,248
Non-cash charges related to stock-based compensation			1,436				2,723