This filing is made pursuant to Rule 424(b)(3)
under the Securities Act of 1933
Registration No. 333-147849

PROSPECTUS

6,426,098 Shares

SGX PHARMACEUTICALS, INC.

Common Stock

     This prospectus relates to the offer and sale, from time to time, of up to 6,426,098 shares of our common stock, $0.001 par value per share, held by the selling stockholders named in this prospectus. Of those shares, 1,482,944 are issuable upon the exercise of warrants held by the selling stockholders at an exercise price of $5.77 per share. The selling stockholders acquired the common stock and warrants to purchase the common stock from us in a private placement that closed in November 2007 and that is more fully described on pages 4-6 of this prospectus under “Selling Stockholders.”

     The selling stockholders may resell or dispose of the shares of our common stock, or interests therein, at fixed prices, at prevailing market prices at the time of sale or at prices negotiated with purchasers, to or through underwriters, broker-dealers, agents, or through any other means described in this prospectus under “Plan of Distribution.” The selling stockholders will bear all commissions and discounts, if any, attributable to the sale or disposition of the shares, or interests therein. We will bear all costs, expenses and fees in connection with the registration of the shares. We will not receive any of the proceeds from the sale of these shares of our common stock by the selling stockholders.

     Our common stock is traded on the NASDAQ Global Market under the symbol “SGXP.” The last reported sale price of our common stock on December 11, 2007 was $5.07 per share.

     INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE THE SECTION ENTITLED “RISK FACTORS” IN OUR MOST RECENT ANNUAL REPORT ON FORM 10-K OR QUARTERLY REPORT ON FORM 10-Q FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AS UPDATED BY ANY SUBSEQUENT FILING WITH THE COMMISSION THAT IS INCORPORATED BY REFERENCE HEREIN.

 

     Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is December 14, 2007

TABLE OF CONTENTS
 

	Page
PROSPECTUS SUMMARY		1
RISK FACTORS		2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		2
USE OF PROCEEDS		3
SELLING STOCKHOLDERS		4
PLAN OF DISTRIBUTION		7
LEGAL MATTERS		9
EXPERTS		9
WHERE YOU CAN FIND MORE INFORMATION		9
INCORPORATION BY REFERENCE		9

     You should rely only on the information contained or incorporated by reference in this prospectus and any applicable prospectus supplement. We have not, and the selling stockholders have not, authorized anyone to provide you with information different from that contained or incorporated by reference in this prospectus and any applicable prospectus supplement. You must not rely on any unauthorized information or representation. The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock, but only under circumstances and in jurisdictions where it is lawful to do so.

     The information contained in this prospectus is accurate only as of the date on the front of this prospectus and information appearing in any applicable prospectus supplement is accurate only as of the date of the applicable prospectus supplement. Additionally, any information we have incorporated by reference in this prospectus or any applicable prospectus supplement is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any sale of our common stock. Our business, financial condition, results of operations and prospectus may have changed since that date.

PROSPECTUS SUMMARY
 

     The following summary highlights selected information contained elsewhere or incorporated by reference in this prospectus. This summary does not contain all the information about us that you should consider before investing in our common stock. You should carefully read this entire prospectus, the financial statements and related notes and other information incorporated by reference in this prospectus and any prospectus supplement, and the additional information described under the captions “WHERE YOU CAN FIND MORE INFORMATION” and “INCORPORATION BY REFERENCE” on page 9, before making an investment decision. Whenever we refer to “SGX Pharmaceuticals,” “we,” “our” or “us” in this prospectus or in any prospectus supplement, we mean SGX Pharmaceuticals, Inc., unless the context indicates otherwise.

SGX Pharmaceuticals, Inc.

Overview

     We are a biotechnology company focused on the discovery, development and commercialization of innovative cancer therapeutics. Our oncology pipeline includes drug candidates from our FAST ™ drug discovery platform, such as next generation BCR-ABL inhibitors being developed by us and in partnership with Novartis and MET tyrosine kinase inhibitors, including SGX523, and potent JAK2 inhibitors.

     We were incorporated in Delaware on July 16, 1998. Our principal executive offices are located at 10505 Roselle Street, San Diego, CA, 92121, and our telephone number at that address is (858) 558-4850. Our website address is http://www.sgxpharma.com. The information contained on, or accessible through, our website is not incorporated by reference into and does not form a part of this prospectus.

The Offering

Common stock to be offered by the selling stockholders	6,426,098 (1) shares
Common stock outstanding as of November 28, 2007	21,959,626 (2) shares
Use of proceeds	We will not receive any proceeds from the sale of the shares of common stock covered by this prospectus.
NASDAQ Global Market Symbol	SGXP

(1)	Includes 1,482,944 shares of common stock that may be issued upon the exercise of warrants held by the selling stockholders.
(2)	Based upon the estimated maximum number of shares of common stock that may be sold by the selling stockholders, after giving effect to the exercise of warrants to purchase up to an aggregate of 1,482,944 shares of common stock and excluding shares of common stock to be issued upon the exercise of other outstanding warrants and options.

1

RISK FACTORS

     An investment in our common stock involves a high degree of risk. Prior to making a decision about investing in our common stock, you should consider carefully the specific risk factors discussed in the sections entitled “Risk Factors” contained in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission, or SEC, which is incorporated herein by reference in its entirety, as well as any amendment or updates to our risk factors reflected in subsequent filings with the SEC. These risks and uncertainties are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us, or that we currently view as immaterial, may also impair our business. If any of the risks or uncertainties described in our SEC filings or any additional risks and uncertainties actually occur, our business, financial condition, results of operations and cash flow could be materially and adversely affected. In that case, the trading price of our common stock could decline and you might lose all or part of your investment.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 

     This prospectus and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements are subject to the “safe harbor” created by Section 27A of the Securities Act and Section 21 E of the Exchange Act and may include, but are not limited to, statements concerning our possible or assumed future results of operations, business strategies, capital requirements and financing plans, competitive position, industry environment, potential growth opportunities, the progress of our research and development programs, receipt of regulatory clearances and approvals, the effects of future regulation and the effects of competition.

     In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” the negative of these words and words or similar expressions intended to identify forward-looking statements. These statements reflect our views as of the date on which they were made with respect to future events and are based on assumptions and subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by such statements. We discuss these risks in greater detail under the heading “Risk Factors” in our SEC filings. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this prospectus, any applicable prospectus supplement and the documents incorporated by reference herein and therein, represent our estimates and assumptions only as of the date of the document containing the applicable statement.

     You should rely only on information contained or incorporated by reference in this prospectus and any prospectus supplement, and the registration statement of which this prospectus is a part, including the exhibits that we have filed with the registration statement. You should understand that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in the foregoing documents by these cautionary statements.

     Except as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect new information or future events or developments. You should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. Before deciding to purchase our common stock, you should carefully consider the risk factors discussed or incorporated by reference in this prospectus and any prospectus supplement.

2

USE OF PROCEEDS

     We will not receive any proceeds from the sale of shares of our common stock currently owned by the selling stockholders, but we may receive proceeds from the exercise of outstanding warrants owned by the selling stockholders if such warrants are exercised. However, the warrants contain provisions for cashless exercise under specified circumstances, in which case, we would not receive any proceeds from the exercise of the warrants from the selling stockholders. The warrants entitle the selling stockholders to purchase shares of our common stock at an exercise price of $5.77 per share. Any such proceeds will be used primarily to advance our research, development and commercialization of innovative cancer therapeutics, as well as for general corporate purposes.

     The proceeds from the sale of the common stock offered pursuant to this prospectus are solely for the accounts of the selling stockholders or their pledgees, donees, transferees or other successors-in-interest.

     Each selling stockholder will pay any underwriting discounts and commissions and expenses incurred by the selling stockholder for brokerage, accounting, tax or legal services or any other expenses incurred by the selling stockholder in disposing of the shares. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares covered by this prospectus, including, without limitation, all registration and filing fees and fees and expenses of our counsel and our accountants.

3

SELLING STOCKHOLDERS

     On November 23, 2007, we issued an aggregate of 4,943,154 shares of our common stock and warrants to purchase an additional aggregate of 1,482,944 shares of our common stock in a private placement to the selling stockholders for an aggregate purchase price of approximately $25 million. Pursuant to the securities purchase agreement related to this private placement and dated November 19, 2007 by and among us and each of the selling stockholders, we are registering a total of 6,426,098 shares of our common stock, including 1,482,944 shares of common stock issuable upon the exercise of the warrants, to permit each of the selling stockholders and their donees, pledgees, transferees or other successors-in-interest that receive their shares after the date of this prospectus to resell or otherwise dispose of the shares, or interests therein, as well as any stock that we may issue or may be issuable by reason of any stock split, stock dividend or similar transaction involving these shares, in the manner contemplated under “Plan of Distribution.”

     The table below, including the footnotes, presents information regarding the selling stockholders and the shares of our common stock that were sold to the selling stockholders under the securities purchase agreement or that may be issuable upon exercise of the warrants sold to the selling stockholders under the securities purchase agreement, and that the selling stockholders may offer and sell from time to time under this prospectus, although the shares of our common stock issuable upon exercise of the warrants will not be eligible to be offered pursuant to this prospectus until the warrants become exercisable.

     Except as set forth below, none of the selling stockholders nor any of their respective affiliates, officers, directors or principal equity holders has held any position or office or had any other material relationship with us or our affiliates within the past three years.

     This table and the accompanying footnotes are prepared based in part on information supplied to us beginning on November 19, 2007 by the selling stockholders. The number of shares in the column “Number of Shares Being Offered” represents all of the shares of our common stock, including the shares of our common issuable upon exercise of the warrants, that a selling stockholder may offer under this prospectus. The table and footnotes assume that the selling stockholders will sell all of such shares, including the shares issuable upon exercise of the warrants. However, because the selling stockholders may sell all or some of their shares under this prospectus from time to time, or in another permitted manner, we cannot assure you as to the actual number of shares that will be sold by the selling stockholders or that will be held by the selling stockholders after completion of any sales. We do not know how long the selling stockholders will hold the shares before selling them. Information concerning the selling stockholders may change from time to time and changed information will be presented in a supplement to this prospectus if and when necessary and required.

										Shares Beneficially
	Shares Beneficially Owned					Number of				Owned
	Prior to Offering (1)					Shares Being Offered				After Offering (1)(2)
								Warrant
Selling Stockholders (3)	Number		Percent			Shares		Shares		Number		Percent
Funds affiliated with OrbiMed Advisors, LLC:
Stichting PensioenFonds ABP (4)		871,000		4.2	%		670,000		201,000		—		—
Caduceus Capital Master Fund Limited (4)		870,100		4.2	%		630,000		189,000		51,100			*
Caduceus Capital II, L.P. (4)		553,400		2.7	%		400,000		120,000		33,400			*
UBS Eucalyptus Fund, L.L.C. (4)		512,700		2.5	%		370,000		111,000		31,700			*
Summer Street Life Sciences Hedge Fund Investors LLC (4)		221,400		1.2	%		160,000		48,000		13,400			*
PW Eucalyptus Fund, Ltd. (4)		62,300			*		45,000		13,500		3,800			*
Total for funds affiliated with OrbiMed Advisors, LLC		3,090,900		14.6	%		2,275,000		682,500		133,400			*

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										Shares Beneficially
	Shares Beneficially Owned					Number of				Owned
	Prior to Offering (1)					Shares Being Offered				After Offering (1)(2)
								Warrant
Selling Stockholders (3)	Number		Percent			Shares		Shares		Number		Percent
Funds affiliated with Great Point Partners, LLC:
Biomedical Value Fund, L.P. (5)		863,668		4.2	%		664,360		199,308		—		—
Biomedical Offshore Value Fund Ltd. (5)		678,596		3.3	%		521,997		156,599		—		—
Total for funds affiliated with Great Point Partners, LLC		1,542,264		7.4	%		1,186,357		355,907		—		—
Funds affiliated with Arnhold and S. Bleichroeder Advisers, LLC:
First Eagle Value in Biotechnology Master Fund, Ltd. (6)		289,130		1.4	%		138,408		41,522		109,200		*
DEF Associates – MMK (7)		211,524		1.0	%		98,864		29,660		83,000		*
21 April Fund, Ltd. (7)		180,677			*		75,136		22,541		83,000		*
21 April Fund, L.P. (7)		113,845			*		23,727		7,118		83,000		*
First Eagle Value in Biotechnology Fund, L.P. (6)		79,555			*		29,658		8,897		41,000		*
First Eagle Contrarian Value Master Fund, Ltd. (6)		66,056			*		29,659		8,897		27,500		*
Total for funds affiliated with Arnhold and S. Bleichroeder Advisers, LLC.		940,787		4.6	%		395,452		118,635		426,700		2.1	%
Funds affiliated with DAFNA Capital Management, LLC:
DAFNA LifeScience Select Ltd. (8)		420,983		2.0	%		248,100		74,430		98,453		*
DAFNA LifeScience Ltd. (8)		132,134			*		77,200		23,160		31,774		*
DAFNA LifeScience Market Neutral Ltd.  (8)		119,460			*		70,200		21,060		28,200		*
Total for funds affiliated with DAFNA Capital Management, LLC		672,577		3.3	%		395,500		118,650		158,427		*
Innovis Investments L.P. (9)		514,087		2.5	%		395,452		118,635		—		—
Capital Ventures International (10)(11)		254,010		1.2	%		195,393		58,617		—		—
Camber Capital Fund L.P. (12)		130,000			*		100,000		30,000		—		—

*	Less than 1%.
(1)	Shares beneficially owned include shares of our common stock and shares of common stock issuable upon exercise of the warrants. Percentages are based on 20,476,682 shares of our common stock that were outstanding on November 28, 2007. In calculating the percentage for each selling stockholder, the shares of common stock issuable upon exercise of the warrants are treated as shares outstanding for that selling stockholder but are not treated as outstanding for any other person. In calculating the percentage for each group of affiliated funds, the shares of common stock issuable upon exercise of the warrants held by each of the affiliated funds are treated as outstanding for that group.
(2)	The selling stockholders may offer and sell all or a part of the common stock being offered pursuant to this prospectus, but no estimates can be made as to the amount of shares of common stock that will be held by the selling stockholders after the completion of this offering.

5

(3)	Based on the information received by SGX Pharmaceuticals from each known holder of the securities, except as disclosed below, no selling stockholder is an affiliate of any registered broker-dealer.
(4)	OrbiMed Advisors, LLC serves as the investment adviser for each of these selling stockholders and, in such capacity, has the discretionary authority to vote over and dispose of the shares held by these selling stockholders and may be deemed to be the beneficial owner of these shares. Samuel D. Isaly, in his capacity as Managing Partner of OrbiMed Advisors, LLC, also has discretionary authority to vote over and dispose of the shares held by these selling stockholders, and may be deemed to be the beneficial owner of these shares.
(5)	Jeffrey R. Jay, M.D., a Managing Partner and the Portfolio Manager of Great Point Partners, LLC, which serves as the investment manager for each of these selling stockholders, has discretionary authority to vote over and dispose of the shares held by these selling stockholders, and may be deemed to be the beneficial owner of these shares.
(6)	Dan DeClue, a Portfolio Manager of Arnhold and S. Bleichroeder Advisers, LLC, which serves as the investment manager for each of these selling stockholders, has discretionary authority to vote over and dispose of the shares held by these selling stockholders, and may be deemed to be the beneficial owner of these shares.
(7)	Michael Keller, a Vice Chairman of Arnhold and S. Bleichroeder Advisers, LLC, which serves as the investment manager for each of these selling stockholders, has discretionary authority to vote over and dispose of the shares held by these selling stockholders, and may be deemed to be the beneficial owner of these shares.
(8)	Nathan Fischel, MD, CFA, the Chief Executive Officer of DAFNA Capital Management LLC, the investment adviser for each of these selling stockholders, has discretionary authority to vote over and dispose of the shares held by these selling stockholders, and may be deemed to be the beneficial owner of these shares. Dr. Fischel disclaims any such beneficial ownership of the shares.
(9)	Hans Peter Bissinger, a General Partner of this selling stockholder, has discretionary authority to vote over and dispose of the shares held by this selling stockholder, and may be deemed to be the beneficial owner of these shares.
(10)	Heights Capital Management, Inc., the authorized agent of Capital Ventures International, has discretionary authority to vote over and dispose of the shares held by Capital Venture International and may be deemed to be the beneficial owner of these shares. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., also has discretionary authority to vote over and dispose of the shares held this selling stockholder, and may be deemed to be the beneficial owner of these shares. Mr. Kobinger disclaims any such beneficial ownership of the shares.
(11)	Capital Ventures International has identified itself as being under the common control of one or more NASD members, and it has represented to us that none of such NASD members have participated in the offering. In addition, Capital Ventures International has identified itself as being affiliated with one or more registered broker-dealers, and has represented to us that it has purchased the shares in the ordinary course of business and, at the time of purchase, with no arrangement or understanding, directly or indirectly, with any persons regarding the distribution of such shares.
(12)	Stephen DuBois, the managing member of Camber Capital Partners, LLC, the general partner of Camber Capital Fund L.P., has discretionary authority to vote over and dispose of the shares held by this selling stockholder and may be deemed to be the beneficial owner of these shares. Mr. DuBois disclaims any such beneficial ownership of the shares.

6

PLAN OF DISTRIBUTION

     The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock issued to the selling stockholders or issuable upon the exercise of the warrants issued to the selling stockholders, or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, directly or through one or more underwriters, broker-dealers or agents, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded, in the over-the-counter market, or in private transactions. These dispositions may be at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to prevailing market prices, at varying prices determined at the time of sale or at prices otherwise negotiated. The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. After the registration statement of which this prospectus is a part has been declared effective by the SEC, the selling stockholders may sell the shares of common stock using one or more, or a combination of the following methods:

• on the NASDAQ Global Market (or any other exchange on which the shares may be listed);

• on the over-the-counter market;

• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

• block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker-dealer as principal and resale by the broker or dealer for its account;

• an exchange distribution in accordance with the rules of the applicable exchange;

• privately negotiated transactions;

• short sales;

• through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

• through the distribution of the common stock by any selling stockholders to its partners, members or stockholders;

• through one or more underwritten offerings on a firm commitment or best efforts basis;

• broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

• a combination of any such methods of sale; and

• any other method permitted pursuant to applicable law.

     Any shares that qualify for sale pursuant to Rule 144 promulgated under the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus.

     The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under a supplement to this prospectus under Rule 424(b) or under any applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors-in-interest as selling stockholders under this prospectus. The selling stockholders also may transfer or donate the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors-in-interest will be the selling beneficial owners for purposes of this prospectus. To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution.

7

     In connection with distributions of the shares of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which institutions may, in turn, engage in short sales of shares of our common stock in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also sell the shares of our common stock short and redeliver these shares to close out the selling stockholders’ short positions provided the selling stockholders have met their prospectus delivery obligations at the time of the short sale. The selling stockholders may also loan or pledge shares of our common stock to broker-dealers or other financial institutions that may in turn sell these shares under this prospectus as supplemented. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares of our common stock offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

     The aggregate proceeds to the selling stockholders from the sale of the shares of common stock offered by them will be the purchase price of the shares less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from the sale of the shares by the selling stockholders.

     The selling stockholders may engage brokers and dealers, and any brokers or dealers may arrange for other brokers or dealers to participate in effecting sales of the shares. These brokers, dealers or underwriters may act as principals, or as an agent of a selling stockholder. Broker-dealers may agree with a selling stockholder to sell a specified number of the shares at a stipulated price per security. If the broker-dealer is unable to sell shares acting as agent for a selling stockholder, it may purchase as principal any unsold shares at the stipulated price. Broker-dealers who acquire shares as principals may thereafter resell the shares from time to time in transactions in any stock exchange on which the shares are then listed, at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or at prices set in negotiated transactions. Broker-dealers may use block transactions and sales to and through broker-dealers, including transactions of the nature described above.

     To the extent required under the Securities Act, the aggregate amount of selling stockholders’ shares being offered and the terms of the offering, the names of any agents, brokers, dealers or underwriters and any applicable commission with respect to a particular offer will be set forth in an accompanying prospectus supplement or a post-effective amendment to the registration statement that includes this prospectus. Any underwriters, dealers, brokers or agents participating in the distribution of the shares may receive compensation in the form of underwriting discounts, concessions, commissions or fees from a selling stockholder or purchasers of selling stockholders’ shares, for whom they may act (which compensation as to a particular broker-dealer might be in excess of customary commissions).

     To the extent that any selling stockholder or any underwriter, broker-dealer or agent that participates in the sale of the shares of common stock or interests therein by a selling stockholder is deemed to be an “underwriter” within the meaning of Section 2(11) of the Securities Act, any discount, commission, concession or profit earned on any resale of the shares may be underwriting discounts and commissions under the Securities Act. To our knowledge, none of the selling stockholders is an “underwriter” with respect to the shares being offered hereby; however, in the event that any selling stockholder is deemed to be an “underwriter” within the meaning of Section 2(11) of the Securities Act, the selling stockholder will be subject to the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act. To our knowledge and based upon information we received from the selling stockholders, each selling stockholder that is affiliated with a broker-dealer acquired the shares of common stock being registered hereunder in the ordinary course of business, and, at the time such selling stockholder acquired the shares being registered hereunder, such selling stockholder did not have any agreement or understanding, directly or indirectly, with any person to distribute such shares. To our knowledge, none of the selling stockholders received any shares as underwriting compensation.

8

     We will bear all of the costs, expenses and fees in connection with the registration of the shares of common stock, other than any commissions, discounts or other fees payable to broker-dealers in connection with any sale of shares, which will be borne by the selling stockholder selling such shares of common stock. We have agreed to indemnify the selling stockholders against certain liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus.

     In order to comply with the securities laws of some states, if applicable, the shares of common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In some states the shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

      We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares of our common stock in the market and to the activities of the selling stockholders and their affiliates. These rules may limit the timing of purchases and sales of the shares by such selling stockholders. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.

     There can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part.

LEGAL MATTERS

     The validity of the common stock being offered hereby will be passed upon by Cooley Godward Kronish LLP, San Diego, California.  

EXPERTS

     The consolidated financial statements of SGX Pharmaceuticals, Inc. appearing in its Annual Report on Form 10-K for the year ended December 31, 2006 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

     We are a reporting company and file annual, quarterly and current reports, proxy statements and other information with the SEC. We have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the common stock offered for resale by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits which are part of the registration statement. For further information with respect to us and the common stock offered for resale by this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. You may read and copy any document we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. Our SEC filings are also available at the SEC’s website at www.sec.gov. We maintain a website at www.sgxpharma.com. Information contained in or accessible through our website does not constitute a part of this prospectus.

INCORPORATION BY REFERENCE

     The SEC allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Information in this prospectus supersedes information incorporated by reference that we filed with the SEC prior to the date of this prospectus, while information that we file later with the SEC will automatically update and supersede the information in this prospectus. We incorporate by reference into this registration statement and prospectus the documents listed below, and any future filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus but prior to

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the termination of the offering of the shares covered by this prospectus (other than Current Reports or portions thereof furnished under Item 2.02 or Item 7.01 of Form 8-K):

• our Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 30, 2007;

• our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007, filed with the SEC on May 15, 2007, August 14, 2007 and November 13, 2007, respectively;

• our Current Reports on Form 8-K filed with the SEC on January 31, 2007, September 10, 2007, November 20, 2007, December 12, 2007 and December 13, 2007; and

• the description of our common stock contained in our Registration Statement on Form S-1 filed with the SEC on January 31, 2006, including any amendments or reports filed for the purposes of updating this description.

     You may obtain a copy of all of the documents that have been incorporated by reference in this prospectus, including exhibits to these documents, without charge by requesting them from us. You should direct any written or oral requests for any of the foregoing documents to:

W. Todd Myers
SGX Pharmaceuticals, Inc.
10505 Roselle Street
San Diego, California 92121
(858) 558-4850

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