8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):

APRIL 24, 2003

KOSAN BIOSCIENCES INCORPORATED

(Exact name of registrant specified in its charter)

Delaware	000-31633	94-3217016
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employee Identification No.)

3832 Bay Center Place Hayward, Ca	94545
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone, Including Area Code: (510) 732-8400

Item 7. FINANCIAL STATEMENTS AND EXHIBITS.

(c) EXHIBITS

Exhibit	Description
99.1	Press Release dated April 24, 2003, relating to the Company’s financial results for the quarter ended March 31, 2003.

Item 9. REGULATION FD DISCLOSURE.

In accordance with SEC Release No. 33-8216, the information in this Current Report on Form 8-K is being furnished to, but not filed with, the Securities and Exchange Commission solely under Item 12 of Form 8-K, “Results of Operations and Financial Condition.”

Item 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On April 24, 2003, Kosan Biosciences Incorporated (the “Company”) announced via a press release the results of its operations for the quarter ended March 31, 2003. A copy of the Company’s press release is attached hereto as Exhibit 99.1.

SIGNATURE

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 hereunto duly authorized.

KOSAN BIOSCIENCES INCORPORATED (Registrant)
By:	/s/    DANIEL V. SANTI, M.D., PH.D
	Daniel V. Santi, M.D., Ph.D Chairman and Chief Executive Officer

Dated: April 25, 2003

EXHIBIT INDEX

Exhibit	Description
99.1	Press Release dated April 24, 2003, relating to the Company’s financial results for the quarter ended March 31, 2003.

EX-99.1

Exhibit 99.1

[LOGO]

Contact:
Kosan Biosciences Susan M. Kanaya Chief Financial Officer 510-732-8400 ext. 5227	Vida, LLC Stephanie Diaz (Investors) (415) 885-2298 Tim Brons (Media) 646-319-8981

FOR IMMEDIATE RELEASE

Kosan Reports First Quarter Financial Results

3-Fold Revenue Increase Over Prior Year Narrows Net Loss

HAYWARD, CA. April 24, 2003 – Kosan Biosciences Incorporated (Nasdaq: KOSN) today reported financial results for the quarter ended March 31, 2003. For the quarter, Kosan reported a net loss of $2.6 million, or $0.10 per share, compared to $3.9 million, or $0.16 per share, in the same period last year, a 33% reduction year-to-year. At March 31, 2003, cash, cash equivalents and marketable securities totaled $79.2 million compared to $80.5 million at December 31, 2002.

Kosan reported revenues of $5.3 million for the first quarter of 2003, compared to $1.7 million in the same period last year. The $3.6 million increase primarily reflects funding associated with the Company’s agreement with Roche, which was signed in September 2002, to co-develop and commercialize Kosan’s lead product candidate, KOS-862.

Total operating expenses were $8.1 million for the quarter, compared to $7.2 million in the same period last year. This increase was primarily attributable to the expansion of the clinical development program for KOS-862, currently in three Phase I clinical trials and reimbursed by Roche, and further investment supporting our 17-AAG/geldanamycin analog program and other internally funded programs.

Kosan Biosciences Incorporated is a biotechnology company that has proprietary genetic engineering technologies to develop drug candidates from polyketides, a rich source of pharmaceuticals. Kosan is currently focused on the creation of new polyketides and the improvement of existing drugs for the treatment of cancer and infectious disease.

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Q1 Earnings – Page 2

This press release contains “forward-looking” statements. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of Kosan to differ materially from those indicated by these forward-looking statements, including, among others, risks detailed from time to time in the Company’s SEC reports, including its Annual Report on Form 10-K for the year ended December 31, 2002, and other periodic filings with the SEC. Kosan does not undertake any obligation to update forward-looking statements.

FINANCIAL TABLE FOLLOWS

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Q1 Earnings – Page 3

Selected Financial Information

Condensed Statements of Operations

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended March 31,
	2003			2002
Revenues:
Contract revenue	$	4,347		$	925
Grant revenue		911			737
Total revenues		5,258			1,662
Operating expenses:
Research and development		6,881			5,947
General and administrative		1,248			1,260
Total operating expenses		8,129			7,207
Loss from operations		(2,871	)		(5,545	)
Net interest income		289			621
Realized gain on investment		—			990
Net loss	$	(2,582	)	$	(3,934	)
Basic and diluted net loss per common share	$	(0.10	)	$	(0.16	)
Shares used in computing basic and diluted net loss per common share		25,317			24,633

Condensed Balance Sheets

(in thousands)

	March 31, 2003		December 31, 2002
	(unaudited)
Cash, cash equivalents and marketable securities	$	79,234	$	80,538
Total assets	$	89,865	$	91,590
Deferred revenue	$	11,517	$	11,771
Total liabilities	$	21,469	$	20,750
Total liabilities and stockholders’ equity	$	89,865	$	91,590
Shares issued and outstanding		25,565		25,392

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