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): June 2, 2006

                           Genelabs Technologies, Inc.
             (Exact Name of Registrant as Specified in its Charter)

          California                     0-19222               94-3010150
- ------------------------------   ----------------------   ----------------------
 (State or other jurisdiction         (Commission             (IRS Employer
      of incorporation)               File Number)          Identification No.)

   505 Penobscot Drive, Redwood City, California                  94063
- -------------------------------------------------------   ----------------------
      (Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code:  (650) 369-9500

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:

|_|  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

|_|  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

|_|  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

|_|  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))



Item 1.01.  Entry into a Material Definitive Agreement

         On June 2, 2006, Genelabs Technologies, Inc. entered into a License and
Research Collaboration Agreement with Novartis Institutes for BioMedical
Research, Inc., for the research, development and commercialization of
non-nucleoside compounds targeting the hepatitis C virus (HCV) NS5b polymerase.
Under the agreement, the parties will collaborate to develop one or more
compounds for the treatment of HCV. Novartis will have exclusive worldwide
rights to develop and commercialize such compounds for HCV infection and other
potential disease indications, as well as other compounds developed by Genelabs
in the research program.

         Under the collaboration, Genelabs will receive upfront payments of
$12.5 million and research funding of approximately $3 million to $4 million per
year over a planned two-year research program. The amount of the research
funding depends on the number of Genelabs' scientists working on the program.
Novartis has the right to extend the research program and funding for an
additional year. Genelabs could also receive over $175 million for achievement
of specified development, regulatory and sales milestones if multiple compounds
are commercialized and all potential clinical, regulatory and sales milestones
are met. Research under the collaboration will be overseen by a committee with
equal representation by the parties, with Novartis having the final decision
right. If a product is approved for sale, Genelabs is also eligible to receive
royalties on net sales of that product.

         In addition, Genelabs has granted Novartis an exclusive option to
negotiate, for a limited period of time, for exclusive license rights to
Genelabs' HCV NS5a program, in which compounds are currently in the lead
optimization phase. Subject to the parties' mutual obligation to negotiate in
good faith, Genelabs is not obligated to enter into a license with Novartis for
its NS5a program.

         Under the License and Research Collaboration Agreement, each party may
terminate the agreement if the other party commits an uncured material breach of
its obligations. Novartis may also terminate the agreement without cause after
the termination of the research program. In the event of a change of control of
Genelabs involving a potential competitor, Novartis has the option to either
terminate the Agreement or terminate only the research program, in which event
the other provisions of the agreement will remain in effect, including Novartis'
licenses and its obligations to make royalty and milestone payments. Novartis
may also terminate the research program if Genelabs is unable to perform its
research obligations due to lack of specified personnel or facilities.

         Lazard acted as financial advisor to Genelabs.

Forward-Looking Statements

         This report on Form 8-K contains forward-looking statements regarding
the future collaboration with Novartis and payments that may be received under
the collaboration with Novartis. These forward-looking statements are based on
Genelabs' current expectations and are subject to uncertainties and risks that
could cause actual results to differ materially from the statements made.
Uncertainties and risks include, without limitation, the failure to
commercialize multiple compounds or any compounds, that all or some of the
potential clinical, regulatory and sales milestones are not met, failures or
setbacks in Genelabs' HCV research and development programs; problems in the
collaboration with Novartis; progress and announcements by competitors regarding
their HCV programs; the potential delisting of Genelabs common stock from the
Nasdaq Capital Market, failure by Genelabs to raise additional funds, or lease
termination. Please see the information appearing in Genelabs' filings with the
Securities and Exchange Commission, including our most recent Quarterly Report
on Form 10-Q, under the captions "Item 1A - Risk Factors" and "Forward-Looking
Statements," for more discussion regarding uncertainties and risks associated
with the company's research programs, early stage of development and other risks
which may affect the company or cause actual results to differ from those
included in the forward-looking statements. Genelabs does not undertake any
obligation to update these forward-looking statements or risks to reflect events
or circumstances after the date of this report on Form 8-K.


Item 3.01.  Notice of Delisting or Failure to Satisfy a Continued Listing Rule
or Standard; Transfer of Listing

         On June 5, 2006, Genelabs received a staff determination letter from
The Nasdaq Stock Market, Inc. ("Nasdaq") stating that the minimum bid price of
Genelabs' common stock does not meet the requirements of Nasdaq Marketplace Rule
4310(c)(4). That rule, in conjunction with Rule 4310(c)(8)(D), requires that the
minimum bid price for Genelabs' common stock not remain below $1.00 per share
for a period of 30 consecutive business days. The 30 consecutive business day
period with respect to Genelabs' common stock ended on June 2, 2006, the last
trading day before Genelabs announced the HCV collaboration with Novartis
described under Item 1.01 above.

         Genelabs will regain compliance with Rule 4310(c)(4) if the bid price
of Genelabs' common stock closes at $1.00 per share or more for a minimum of 10
consecutive business days. Genelabs has until December 4, 2006 to regain
compliance or its common stock may be delisted. On each of the three business
days since Genelabs received the letter from Nasdaq, shares of Genelabs' common
stock closed with a bid price greater than or equal to $1.83 per share.


Item 7.01.  Regulation FD Disclosure

         A copy of the Company's press release announcing its License and
Research Collaboration Agreement with Novartis Institutes for BioMedical
Research, Inc. is filed herewith and attached as Exhibit 99.1.

Item 9.01.  Financial Statements and Exhibits

(c) Exhibits

Exhibit Number       Description
- --------------       -----------

99.1                 Press Release of Registrant, dated June 5, 2006, entitled
                     "Genelabs Announces Collaboration for Development and
                     Commercialization of HCV Non-Nucleoside Drug Candidates"




                                   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 hereunto duly authorized.

                                        Genelabs Technologies, Inc.

Date: June 8, 2006                      By:   /s/ Matthew M. Loar
                                             ------------------------
                                        Name:   Matthew M. Loar
                                        Title:  Chief Financial Officer



                                  EXHIBIT INDEX


Exhibit Number       Description
- --------------       -----------

99.1                 Press Release of Registrant, dated June 5, 2006, entitled
                     "Genelabs Announces Collaboration for Development and
                     Commercialization of HCV Non-Nucleoside Drug Candidates"

EX-99

                                                                   Exhibit 99.1


Contact:    Matthew M. Loar
            Chief Financial Officer
            Phone: 650-562-1424

FOR IMMEDIATE RELEASE:
- ---------------------

                        GENELABS ANNOUNCES COLLABORATION
                      FOR DEVELOPMENT AND COMMERCIALIZATION
                      OF HCV NON-NUCLEOSIDE DRUG CANDIDATES

REDWOOD CITY, Calif. - June 5, 2006 - Genelabs Technologies, Inc. (Nasdaq:GNLB)
announced today that it has entered into a license and collaboration agreement
with Novartis for the development and commercialization of compounds from
Genelabs' Hepatitis C Virus (HCV) non-nucleoside drug discovery program.

"I am delighted that Genelabs and Novartis are entering into this collaboration.
This collaboration links us with a partner that has the scope, scale, expertise
and commitment to make a major impact on the future treatment of HCV infection,"
stated James A.D. Smith, President and Chief Executive Officer. "The Genelabs
non-nucleosides covered by this collaboration have the potential to be
complementary with other HCV drugs being developed by Novartis, and I believe
Novartis is well positioned to move this project forward efficiently."

Under the terms of the agreement, Genelabs is eligible to receive approximately
$20 million over a planned two-year research program, including initial up-front
payments of $12.5 million. If all potential clinical, regulatory and sales
milestones are met, additional payments to Genelabs could exceed $175 million.
Genelabs is also entitled to a royalty on net sales of products covered by the
collaboration.

"This is the second major collaboration for Genelabs based on our HCV drug
discovery platform, and we are very pleased to have Novartis as our partner,"
stated Ronald C. Griffith, Ph.D., Chief Scientific Officer. "I am proud of the
highly skilled and dedicated scientists working at Genelabs, who have all
contributed to our HCV drug discovery successes."

About the Hepatitis C Virus
- ---------------------------
Hepatitis C is a viral liver disease caused by infection with the Hepatitis C
Virus. Worldwide, 170 million people are estimated to be infected with the
hepatitis C virus. Liver disease resulting from chronic HCV infection is now
recognized as the leading cause of liver failure and liver transplantation in
the United States. Currently, there is no vaccine that can protect against HCV
infection.

                                     -more-


Genelabs Announces Collaboration for Development and Commercialization
of HCV Non-Nucleoside Drug Candidates
Page 2



About the Collaboration
- -----------------------
Under the terms of the agreement, Genelabs is responsible for drug discovery
research and Novartis is responsible for development and commercialization.
Novartis has an option to extend the research funding for a third year and has a
right of first negotiation for Genelabs' HCV NS5a drug discovery compounds.

Lazard acted as financial advisor to Genelabs.

About Genelabs Technologies
- ---------------------------
Genelabs Technologies, Inc. is a biopharmaceutical company focused on the
discovery and development of pharmaceutical products to improve human health. We
have built drug discovery capabilities that can support various research and
development projects. Genelabs is currently concentrating these capabilities on
discovering novel compounds that selectively inhibit replication of the
hepatitis C virus and advancing preclinical development of compounds from this
hepatitis C virus drug discovery program, while also developing a late-stage
product for lupus. We believe that these high-risk, potentially high reward
programs focus our research and development expertise in areas where we have the
opportunity to generate either first-in-class or best-in-class products that
will address diseases for which current therapies are inadequate. For more
information, please visit www.genelabs.com.

Note: Genelabs(R) and the Genelabs logo are registered trademarks and
Prestara(TM) is a trademark of Genelabs Technologies, Inc.

NOTE ON FORWARD LOOKING STATEMENTS AND RISKS: This press release contains
forward-looking statements including statements regarding the progress of the
Company's HCV drug discovery programs, including the preclinical development
status and future development of compounds that may result from the
collaboration with Novartis. It also contains forward-looking statements
regarding Genelabs' NS5a program, the Company's business strategy, and payments
that may be received under the collaboration with Novartis. These
forward-looking statements are based on Genelabs' current expectations and are
subject to uncertainties and risks that could cause actual results to differ
materially from the statements made. Uncertainties and risks include, without
limitation, the potential delisting of Genelabs common stock from the Nasdaq
Capital Market; fluctuations in Genelabs' stock price; failures or setbacks in
our HCV research and development programs or in our collaboration with Gilead;
progress and announcements by competitors regarding their HCV programs;
regulatory problems or delays regarding Prestara(TM), including an adverse
response from the FDA or a determination to discontinue development of Prestara;
lease termination; increases in expenses and Genelabs' capital requirements and
history of operating losses. Please see the information appearing in Genelabs'
filings with the Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K, under the captions "Risk Factors" and
"Forward-Looking Statements" for more discussion regarding these uncertainties
and risks and others associated with the company's research programs, early
stage of development and other risks which may affect the company or cause
actual results to differ from those included in the forward-looking statements.
Genelabs does not undertake any obligation to update these forward-looking
statements or risks to reflect events or circumstances after the date of this
release.

                                      -end-