<SUBMISSION>
<ACCESSION-NUMBER>0001157523-04-007528
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20040729
<ITEMS>12
<ITEMS>7
<FILING-DATE>20040809
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACCELRYS, INC.
<CIK>0001002388
<ASSIGNED-SIC>7372
<IRS-NUMBER>330557266
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0331
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-27188
<FILM-NUMBER>04960849
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>9685 SCRANTON ROAD
<CITY>SAN DIEGO
<STATE>CA
<ZIP>92121-3752
<PHONE>(858) 799-5000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>9685 SCRANTON ROAD
<CITY>SAN DIEGO
<STATE>CA
<ZIP>92121-3752
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>PHARMACOPEIA INC
<DATE-CHANGED>19951018
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a4697365.htm
<DESCRIPTION>ACCELRYS, INC. 8-K
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>UNITED STATES<BR>SECURITIES
AND EXCHANGE COMMISSION<BR></B></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Washington, D.C. 20549</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>FORM 8-K</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CURRENT REPORT</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date
of Report (Date of earliest event reported): July 29, 2004 </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ACCELRYS, INC.</B>
<BR>(Exact name of registrant as specified in its charter)</FONT></p>

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     <TD ALIGN=CENTER WIDTH="250"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Delaware<BR>(State or other jurisdiction of<BR>incorporation or organization)</FONT></TD>
     <TD ALIGN=CENTER WIDTH="125"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0-27118<BR>(Commission<BR>File Number)</FONT></TD>
     <TD ALIGN=CENTER WIDTH="225"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">33-0557266<BR>(I.R.S. Employer<BR>Identification No.)</FONT></TD></TR>
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     <TD ALIGN=CENTER WIDTH="250"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><BR>9685 Scranton Road, San Diego, California<BR>(Address of principal executive offices)</FONT></TD>
     <TD ALIGN=CENTER WIDTH="125"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD ALIGN=CENTER WIDTH="225"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><BR>92121-1761<BR>(Zip Code)</FONT></TD></TR>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>(858) 799-5000<BR>(Registrant&#146;s telephone number, including area code)</FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>Former Name:
Pharmacopeia, Inc.<BR>(Former name, former address and former
fiscal year, if changed since last report) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Item 7.&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL STATEMENTS AND EXHIBITS</font></p>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c)&nbsp;&nbsp;&nbsp;&nbsp; Exhibits. </FONT></P>
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     <TD WIDTH="50"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="100"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Exhibit Number</U><BR><BR>99.1<BR><BR>99.2</FONT></TD>
     <TD WIDTH="50"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="400"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Description</U><BR><BR>Press Release dated July 29, 2004<BR><BR>
Transcript of the earnings conference call held July 29, 2004<BR> for the quarter ended June 30, 2004</FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>Item 12.&nbsp;&nbsp;&nbsp;&nbsp;RESULTS OF OPERATIONS AND FINANCIAL CONDITION</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On July 29, 2004, Accelrys issued a
press release announcing the financial results for the quarter ended June 30, 2004. A copy
of Accelrys&#146; press release is furnished as an exhibit to this report. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On July 29, 2004, Accelrys held a
conference call in connection with the announcement of its financial results for the
quarter ended June 30, 2004. A copy of the transcript of Accelrys&#146; conference
call is furnished as an exhibit to this report. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>Signatures</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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. </FONT></P>
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     <TD WIDTH="300"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="300"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">ACCELRYS, INC.<BR><BR>
<U>By:  /s/ John J. Hanlon&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>John J. Hanlon,<BR>Executive Vice President and<BR>Chief Financial Officer</FONT></TD></TR>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: August 5, 2004 </FONT></P>

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<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a4697365ex991.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Accelrys Reports
Fiscal 2005 First-Quarter Financial Results </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SAN DIEGO, CA; July 29, 2004
&#150; Accelrys, Inc. (NASDAQ: ACCL)</B> today reported results for the first quarter of
fiscal 2005, ended June 30, 2004. Revenues in the June 2004 quarter were $14.2 million
compared to $19.1 million reported in the June 2003 quarter. Orders booked in the June
2004 quarter were flat, at about $15 million, when compared to the June 2003 quarter,
excluding a contract renewal that was booked in the June 2003 quarter but renewed in the
March 2004 quarter at the request of a customer. The lower revenue in the June 2004
quarter was attributed to the change in revenue recognition for annual and multi-year
licenses, the earlier renewal of the contract noted above, lower consulting and consortia
revenues, and lower maintenance revenues when compared to the same period in 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As previously reported, the change in
revenue recognition to subscription accounting will continue to dramatically affect
reported revenue through the next three to four quarters when compared to the equivalent
periods in the prior year. During this transition, orders booked in the period are a key
indicator of the Company&#146;s performance. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consulting
and consortia revenues were lower as the company has discontinued performing unprofitable
consulting projects and various consortia were closed in the prior period. Having launched
the new Nanotech Consortium on July 1, 2004, the company expects revenues from such
upcoming consortia to be reported in future periods. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash flow from operations was lower
in the June 2004 quarter when compared to the June 2003 quarter principally as a result of
the payment of accrued expenses related to the spin-off of Pharmacopeia Drug Discovery
which was completed on April 30, 2004. Consistent with the introduction of subscription
accounting, the balance of deferred revenues was $28.1 million at June 30, 2004 compared
to $21.9 million at June 30, 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cost of revenues were $1.2 million
lower in the June 2004 quarter compared to the June 2003 quarter and total operating
expenses were $2.1 million lower in 2004 compared to 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A net loss of ($6.2) million or
($.25) per share was reported for the June 2004 quarter compared to a net loss of ($3.8)
million or ($.16) per share recognized in the June 2003 quarter. The results for the June
2004 quarter included a net loss from discontinued Pharmacopeia Drug Discovery (PDD)
operations of ($1.1) million. The comparable net loss from the discontinued PDD operations
in the June 2003 quarter was ($345) thousand. The loss from discontinued operations
represented ($.05) per share in 2004 and ($.01) per share in 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>With regard to guidance, John Hanlon,
CFO said, &#147;We expect orders to increase modestly in fiscal 2005 when compared to the
twelve months ended March 31, 2004. Revenues for fiscal 2005 will be substantially lower
as Accelrys customers adopt our new license offering that requires subscription
accounting. Deferred revenues, which will be recorded as revenue in future periods, will
increase in relation to the decrease in reported revenues. Accelrys has elected to close
its year on March 31 rather than December 31. As a result, the three months ended March
31, 2004 will be reported in future periods as a &#147;transition period&#148; per SEC
guidelines.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">At 5:00 p.m. EDT today, Accelrys will
conduct a conference call to discuss its fiscal 2005 first quarter financial results. Mark
Emkjer, CEO, will host the call. To participate, please dial 800-299-9086 [+1-617-786-2903
outside the United States] and enter the access code, 79632078, approximately 15 minutes
before the scheduled start of the call. The conference call will also be accessible live
on the Investor Relations section of the Accelrys website at </FONT> <FONT FACE="Times New Roman, Times, Serif" SIZE="2" COLOR="#0000FF">www.accelrys.com </FONT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A replay of the conference call will
be available online at www.accelrys.com and via telephone by dialing 888-286-8010
[+1-617-801-6888 outside the United States] and entering access code 76642531 from 1:00
p.m. EDT July 30, through 11:59 p.m. EDT, August 13. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>About Accelrys, Inc. </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Accelrys, Inc. (NASDAQ: ACCL) is a
leading provider of software for computation, simulation, and the management and mining of
scientific data used by biologists, chemists and materials scientists, including
nanotechnology researchers, for product design as well as drug discovery and development.
Accelrys technology and services are designed to meet the needs of today&#146;s leading
research organizations. The company is headquartered in San Diego, California. For more
information about Accelrys, visit its website at http://www.accelrys.com/. </FONT></P>

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<P ALIGN=CENTER>###</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>When used anywhere in this
document, the words expects, believes, anticipates, estimates, and similar expressions are
intended to identify forward-looking statements. Forward-looking statements herein may
include statements addressing future financial and operating results of Accelrys. Accelrys
has based these forward-looking statements on its current expectations about future
events. Such statements are subject to risks and uncertainties including, but not limited
to, the successful implementation of Accelrys&#146; strategic plans, the acceptance of new
products, the obsolescence of existing products, the resolution of existing and potential
future patent issues, additional competition, changes in economic conditions, and other
risks described in documents Accelrys has filed with the Securities and Exchange
Commission, including its most recent report on Form 10-K and subsequent reports on Form
10-Q. All forward-looking statements in this document are qualified entirely by the
cautionary statements included in this document and such filings. These risks and
uncertainties could cause actual results to differ materially from results expressed or
implied by forward-looking statements contained in this document. These forward-looking
statements speak only as of the date of this document. Accelrys disclaims any undertaking
to publicly update or revise any forward-looking statements contained herein to reflect
any change in its expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.</I> </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Contact:</U><BR>
John J. Hanlon<BR>
Chief Financial Officer<BR>
(609) 452-3600<BR>
<U>jhanlon@accelrys.com</U></FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Press Inquiries:</U><BR>
Ian Clements<BR>
Public Relations<BR>
(858) 799-5440<BR>
<U>iclements@accelrys.com</U></FONT></P>

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<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><BR>This
press release is available on the website </FONT><FONT FACE="Times New Roman, Times, Serif" SIZE="2" COLOR="#0000FF"><I>http://www.accelrys.com</I> </FONT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">. </FONT> </P>
<BR><BR><BR>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ACCELRYS, INC.<BR>
SELECTED CONSOLIDATED FINANCIAL DATA<BR>(Dollars in thousands, except share data)<BR>
Statements of Operations</FONT></H1>
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<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>For the Three Months<BR>Ended June 30,</FONT></TH></TR>
<TR>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=6><HR></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT></TH></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
</TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="76%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Revenue</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  14,181</FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  19,090</FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cost of revenue</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,786</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,014</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
</TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gross Margin</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,395</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14,076</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>&nbsp;Research and development</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,123</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,586</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Sales, general and administrative</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11,778</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13,432</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating costs and expenses</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15,901</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>18,018</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operating loss from continuing operations</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5,506</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,942</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Interest and other income, net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>585</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>899</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from continuing operations before provision for income taxes</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4,921</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,043</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Provision for income taxes</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>135</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>376</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Loss from continuing operations</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5,056</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,419</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Discontinued operations:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Loss from Discontinued Operations</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,117</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(345</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD>
     <TD COLSPAN="1"></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net Loss</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  (6,173</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  (3,764</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Loss from continuing operations per share:</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD colspan=7 ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;- Basic and diluted</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   (0.21</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   (0.14</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Loss from Discontinued Operatios per share:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;- Basic and diluted</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   (0.05</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   (0.01</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Net loss per share:</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD colspan=7 ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;- Basic and diluted</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   (0.25</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   (0.16</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Weighted average number of common stock outstanding:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;- Basic and diluted</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24,323</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23,707</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD>
     <TD COLSPAN="1"></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
</TABLE>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ACCELRYS, INC.<BR>SELECTED
CONSOLIDATED FINANCIAL DATA<BR>(Dollars in thousands)<BR>Balance Sheets </FONT></H1>

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<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>June 30,<BR>2004</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>December 31,<BR>2003</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD><TD></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="78%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash, restricted cash, cash equivalents and</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;marketable securities</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  83,826</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 133,531</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Trade receivables, net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,943</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>39,780</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other assets, net</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>56,971</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>55,304</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Assets of Discontinued Operations</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11,052</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD><TD></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total assets</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 151,740</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 239,667</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Current liabilities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  41,081</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  45,264</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Long-term liabilities and reserves</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,576</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,924</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Liabilities of Discontinued Operations</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,744</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total stockholders' equity</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>104,083</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>182,735</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total liabilities and stockholders' equity</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 151,740</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 239,667</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=Black SIZE=2></TD><TD></TD>
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<H1 ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FINAL TRANSCRIPT </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Conference
Call Transcript</B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ACCL &#151; Q1 2005 Accelrys Inc. Earnings Conference Call</B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Event Date/Time: Jul. 29. 2004 / 5:00PM ET<BR>Event Duration: N/A</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&copy; 2004 Thomson Financial.
Republished with permission. No part of this publication may be reproduced or transmitted
in any form or by any means without the prior written consent of Thomson Financial. </FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CORPORATE PARTICIPANTS</B> </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Mark
Emkjer</B><BR><I>Accelrys, Inc. &#151; President and CEO</I></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John
Hanlon</b><BR>
<I>Accelrys,
Inc. &#151; CFO</I></FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CONFERENCE CALL
PARTICIPANTS </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>John
Woolford</B><BR><I>Legg Mason &#151; Analyst</I></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Ben
Nahum</B><BR><I>David Green &#151; Analyst</I></FONT></P>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PRESENTATION </FONT></H1>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operator </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Thank
you for standing by and welcome to the Accelrys first quarter 2005 earnings results
conference call. At this time we&#146;ve placed all attendee lines in a listen-only mode.
After the speakers&#146; remarks, we&#146;ll open the call to a Q&amp;A session. If at any
time during this call you require assistance, key star 0 on your tone dial phone and an
operator will be happy to assist you. We&#146;ll remind you this call is being web cast
and recorded for replay. I would now like to turn the call over to your conference host,
Mark Emkjer, President and CEO. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Thank you
and good afternoon everyone. Joining me today is John Hanlon, our CFO. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We released first quarter fiscal 2005
results earlier today and, during this call, we will be discussing future events. As
always, I caution you that actual results or events in the future may differ from
projections contained in our forward-looking statements. We refer you to today&#146;s
earnings press release, as well as our periodic SEC filings for a more in-depth analysis
of the company. We disclaim any responsibility to update forward-looking statements. We
reported lower revenue today when comparing the June, 2004 quarter to the June, 2003
quarter. However, it is important to note that orders books by our worldwide sales force
were virtually flat year-on-year when adjusted for 1 renewal order, which was booked in
June, 2003, but pulled into March, 2004 at the request of the customer. It is also worth
noting that orders booked in the June quarter were substantially higher than last quarter,
validating our comment then that the March quarter is not predictive of our full-year
performance. Our expenses were lower in the current quarter when compared to last year,
which demonstrates that we continue to focus on cost containment as we strive to deliver
positive operating results at Accelrys. At this time, I will turn the call over to John
for a recap of our Q1 numbers. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John
Hanlon &#151; Accelrys, Inc. &#151; CFO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Thank you,
Mark. For our first quarter ended June 30, 2004, revenue was $14.2m. This compares to the
$19.1m reported in the same period of 2003. Orders booked by our worldwide sales force for
software licenses, maintenance and services were flat to a year ago at about $15m when we
exclude a major contract that was renewed in June, 2003, but pulled in to March, 2004 at
the request of the customer. The decline in revenue then was attributed to the change in
revenue recognition as we transitioned to subscription accounting. The earlier booking of
the contract noted previously lowered consulting revenue as a result of our decision to
cease unprofitable projects and lower consortia and maintenance revenues. Subscription
accounting accounted for over $2m of the difference in revenue. Our cost of revenue was
$1.2m lower in the June, 2004 quarter compared to 2003 principally due to the finalization
of the amortization of acquired technology in September of 2003, and lower royalties. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>R&amp;D expenses were $453,000 lower
in the June, 2004 quarter, compared to 2003, as we have restructured our development
group; both in relation to our mix of scientists and engineers, and in terms of
geographical locale. We have accomplished this while improving delivery time and quality.
In the quarter, the development group delivered 12 new releases for our customers. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Sales, marketing and administrative
expenses were $1.7m lower in the June, 2004 quarter, compared to 2003. Lower head count
and a reduced corporate burden resulting from the spin-off of Pharmacopeia Drug Discovery
are driving lower expense levels. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our loss from continuing operations
then was $5.5m in 2004, compared to $3.9m in 2003. Interest and other income was $585,000
in this quarter compared to $899,000 in the June, 2003 quarter; as a result of lower
interest rates and lower cash balances. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our provision for income taxes is
based on our estimate of full-year results. We have reported tax expense of $135,000 in
2004 compared to $345,000 in 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As a result of the spin-off of the
drug discovery unit on April 30, 2004, we are reporting their April results as
discontinued operations in the current period and for all prior periods. In the June, 2004
quarter, we are reporting a loss from discontinued operations of $1.1m compared to a loss
of $345,000 in the June, 2003 quarter. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In 2004, our net loss from continuing
operations was $.21 per share. In 2003, our net loss from continuing operations was $.14
per share. Including discontinued operations, our net loss in 2004 was $6.2m, or $.25 per
share compared to $3.8m loss in the quarter ended June of 03, or $.16 per share. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Deferred revenues, which will be
recognized in future periods, increased substantially to $28.1m at June 30, 2004; from
$21.9m at June 30, 2003. This is principally attributed to the transition to subscription
accounting which we introduced via a new license agreement in January, 2004. This
transition will result in lower reported revenues for potentially the next 3 - 4
quarters. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our balance of cash and marketable
securities was $83.8m at June 30, 2004, and $141.3m at June 30, 2003. At April 30, 2004,
in conjunction with the spin-off of Pharmacopeia Drug Discovery, Accelrys made a capital
contribution to that division of $46.5m. In addition, transaction costs due to lawyers,
accountants and others were paid in connection with that spin. Other recent 1-time cash
outflows included severance payments and the funding of the retirement of our former chief
executives. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>With regard to guidance, we expect
orders to increase modestly in fiscal 2005 when compared to the 12 months ended March 31,
2004. Revenues for fiscal 2005 will be substantially lower as Accelrys customers adopt our
new license offering that requires subscription accounting. Deferred revenues which will
be recorded as revenue in future periods, will increase in relation to the decrease of
reported revenues. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Note that Accelrys has elected to
close its year on March 31, rather than December 31. As a result, the 3 months ended March
31, 2004 will be reported in future periods as a transition period per SEC guidelines. I
will now turn the call back to Mark. Mark. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Thank you,
John. A number of activities in the quarter were encouraging, and they included 12 new
releases from our development group, key wins in sales, significant momentum in corporate
development, the launch of our Nanotechnology Consortium, continued cost containment and
the completion of our management team. In fact, we have just received the acceptances of a
new VP of Marketing and a VP General Counsel. A news release on both of these executives
will be issued soon. At this time, I will tell you that I am elated that we have attracted
such high caliber talent. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our R&amp;D group issued 12 new
released during the June quarter across all of our product lines. These releases provide
new science and enhanced functionality for our customers. I am particularly pleased by our
quality metrics, which are demonstrating substantial improvement over last year; and thus
far, are exceeding our objectives for fiscal 2005. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The sales force closed a number of
wins in a very competitive environment this quarter. These contracts included a
significant services agreement with Northrop Grumman. In addition, contracts were signed
with Bayer Health Care and Serono, where both companies increased their investment in our
products over last year. Finally, we secured a major contract with the National Institute
of Health whereby 27 of their sites will have access to our life science, modeling and
simulation technology. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our corporate development group was
very active during the quarter, closing 7 deals with both academic and commercial
institutions; most of which will provide valuable new functionality in future software
releases. One such deal licensed from Boston University called RDOCK/ZDOCK will provide
protein-to-protein docking functionality for our customers. We will continue to increase
our scientific collaborations around the world to deliver incremental, new and novel
functionality to our customer base. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Nanotechnology Consortium was
launched July 1st, and we will soon be announcing a fall road show and the date or our
inaugural meeting. Our pipeline of potential members includes an impressive array of
leading scientific and commercial institutions. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In closing, I remain absolutely
committed to improving our financial performance. We will continue to restrain our
spending, implement quality systems and drive revenue growth &#151; organically and
through new business development and M&amp;A activity. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We will now open the call to
questions. I&#146;d like to encourage investors and analysts on the call to ask questions
now, rather than later, at individual phone calls. As you know, in light of SEC
guidelines, we will be unable to answer questions of a material nature on an individual
basis. For those of you listening to this call via the web cast, or for those of you with
access to replay, please feel free to contact us to review any topics discussed on this
call. I&#146;ll now allow the call to be opened for questions. Ron. </FONT></P>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TRANSCRIPT </FONT></H1>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operator </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>And,
if you do have a question, key star 1 on your touchtone phone. If you want to withdraw the
question, key star 2. Again, star 1 for questions. And, our first question will come from
John Woolford from Legg Mason. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John
Woolford &#151; Legg Mason &#151; Analyst</b></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Hi,
good afternoon.</FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Hey, John.</FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John Woolford
&#151; Legg Mason &#151; Analyst</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Just
2 quick questions. Now that you&#146;ve been out there using the new subscription license
and presenting that to your customers, I was wondering if you could tell us a little bit
of &#151; exactly what is the reaction you&#146;re getting from customers. And then,
second of all, can you just talk a little about the market in general. What are you seeing
in terms of some of the different segments as &#151; is Pharma still stable, are they
increasing seats; and how about biotech. I mean, we have to raise some money in the
biotech area, so I&#146;m wondering if you&#146;re starting to see any of that. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Sure. Regarding the licensure, what&#146;s interesting is we are seeing quite an
          uptake in it in terms of the subscription model. What the model does &#151; or
          the licensure does is it allows clients to basically swap products throughout
          the use of the &#151; or during the duration of the subscription period. And, in
          fact John, we&#146;ve seen so much interest that we&#146;re finding some of our
          clients who purchased perpetual licenses earlier in our maintenance, are
          inquiring as to switching to subscription models that gives them the ability to
          move between applications. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Relative to the market, my own
opinion Pharma is good news compared to last year at this time. Last year at this time, we
were seeing reductions in budget, as so we saw very aggressive attempts by our customers
to cut prices, to scale back, etc. This year I would say, from my perspective, it&#146;s
more flat. The budgets are flat; we&#146;re not seeing declines. We&#146;re seeing much
more stability. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Relative to biotech, we&#146;re not
seeing the uptake yet, but I would tell you this; our funnel is building in the biotech
sector and as we look out to visibility in Q3, we&#146;re feeling very good about the
uptake there. So, perhaps that funding takes 6 months to a year to move downstream and to
where it shows up in our order intake line. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the industrial-chemical, the
materials side, we&#146;re seeing a lot of interest in the material science product
offering that we have. Also, Nano-Technology is spurring quite a bit of interest.
We&#146;re seeing Nano centers being started in many places throughout the world. So, if I
had to rank it overall, I&#146;d say the materials area looks very strong; Pharma appears
to be at least flat to perhaps starting to move up; and biotech, in my opinion, appears to
be coming on 3 to 6 months out. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John
Woolford &#151; Legg Mason &#151; Analyst</b></FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Great.&nbsp;Thanks. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Thank you, John.</FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operator</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Again, its
star 1 for questions, and our next question will come from Ben Nahum from David Green. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben
Nahum &#151; D.J. Green &#151; Analyst</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Hi Mark and John. How are you. You&#146;re going to have to excuse my questions. My brain is
a little fried after 8 conference calls today. But, to the point of both guidance for
subscription revenues, I&#146;m not clear of what you&#146;re saying, John, on the
guidance. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John
Hanlon &#151; Accelrys, Inc. &#151; CFO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We haven&#146;t given out numbers, Ben. </FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben Nahum &#151; D.J. Green &#151; Analyst</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>That&#146;s why I&#146;m not clear.</FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John Hanlon &#151; Accelrys, Inc. &#151; CFO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exactly;
precisely. And, in fact, so much depends on the mix of licenses that come in in the
December quarter which, as you know, is substantial; by far our biggest quarter, and
that&#146;ll be our Q3, of course. But, I have said that we can see a down side of
$10-$12m fact as it were. But, it really will depend on the mix of business in the
December quarter. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben
Nahum &#151; D.J&gt; Green &#151; Analyst</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Down 10-12,
what&#146;s the absolute number though. What&#146;s the benchmark; down from what &#150;
80/88 or something. I don&#146;t remember the number. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John
Hanlon &#151; Accelrys, Inc. &#151; CFO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Well, what
was said is that orders will be up slightly to a year ago. If you &#151; you can run the
numbers like anyone else. Our 12 month ended March 04 revenues were about $79.4m. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben
Nahum &#151; D.J. Green &#151; Analyst</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Oh,
okay. That&#146;s what I wanted to know. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John
Hanlon &#151; Accelrys, Inc. &#151; CFO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>But,
I think that&#146;ll give you the metrics. </FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben Nahum
&#151; D.J. Green &#151; Analyst</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Oh,
okay &#151; fine. How the next thing is on the cost side, Mark, at this point you&#146;ve
got to be reluctant to engage in further cost containment because it sounds like
you&#146;re at an inflection point. Should we figure that total OPX at around $15.5 a
quarter is a good level in order to keep the muscle in the organization to capitalize on
what seems like a gradual, but emerging recovery. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
would say generally, yes; although there will be some fluctuation based on quarters. I
mean, our Q3 Ben, as you know, is huge. This year could be as much as half of our order
uptake and so commissions, etc. associated with that would be higher then. But, I also
agree with your assumption that we are at an inflection point and that we feel our expense
base is at the right level. We are feeling very good about the visibility as we look out
into Q3 and Q4. You heard about 7 new business development deals that we licensed during
the quarter. It takes us between 1 and 3 quarters to commercialize those and start rolling
those out. We had 12 releases last quarter. We are scheduling 16 this quarter. So, we feel
that this level of expense is the appropriate level to grow this business, and I would add
1 other comment. I also believe that we can, with the level of employee base that we plan
this year, that we can grow this business at probably 20% without adding on additional or
incremental employees as we go forward. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben
Nahum &#151; D.J. Green &#151; Analyst</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>So,
is the break &#151; is the cash break even around $17.5m a quarter? </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>John
Hanlon &#151; Accelrys, Inc. &#151; CFO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We
have said that our break-even point is at about $82.5m, and that&#146;s not cash.
That&#146;s P&amp;L, and that compares to about $103m in 02. So, I think that&#146;s the
level that we&#146;re talking about, Ben &#151; that off of that $82.5m with the mix of
employees in our plan, we could support a very substantial revenue base. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben
Nahum &#151; D.J. Green &#151; Analyst</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On
the acquisition side Mark, one of the things that I&#146;m always concerned about is that
when the business gets better, the asking prices go up; so why not strike while properties
are still rationally priced. Do you have any comment on that &#151; your willingness to
move while you&#146;re still burning cash. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Sure
Ben. I&#146;ll tell you what we have told the market and I&#146;m going to have to be very
succinct here; and that is &#151; we are very engaged and active at this point in time.
And we&#146;ve also told you that it is part of our growth strategy not only organic
growth, but also new business development which we&#146;re demonstrating; but the 3rd
prong of that is M&amp;A activity. We are active. </FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben
Nahum &#151; D.J. Green &#151; Analyst</b></FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Okay.&nbsp;What about my commentary that
prices are rational now. Is that, in fact true; or
          did I &#151; would you comment on how... </FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
think prices are, in general, more rational than they were back in 2000 and 2001, before
the bubble hit. But, I also think that every deal is different. It depends if you&#146;re
buying real estate, if you&#146;re buying something that&#146;s strategic that&#146;s
beginning in a nascent stage market that has a lot of growth; the multipliers may be
higher, where something that&#146;s more mature and saturated could be less. But it&#146;s
deal-by-deal. But yes, I would agree with you. I think that the prices are certainly more
rational than I experienced 3 years ago. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben
Nahum &#151; D.J. Green &#151; Analyst</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Last question,
Mark. Cash cushion that you don&#146;t want to go below. Can you give us a sense of where
that is. Is it $30m; is it 2 quarters of cash OPX; just how do you think about &#151;
where the sort of [tank]... </FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Visceral
feel &#151; $40-$50m.</FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ben
Nahum &#151; D.J. Green &#151; Analyst</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$40-$50m.&nbsp;Okay, got you. All right,
those are my questions. Good luck gentlemen. I hope we
          are, in fact, at that inflection point; we need it. </FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Thanks
Ben.</FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operator </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>And
we&#146;ll prompt once more for questions. If you have a question, key star 1. Stand by.
And, gentlemen, there are no other questions in the queue. I&#146;ll hand it back over to
you for closing. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Mark
Emkjer &#151; Accelrys, Inc. &#151; President and CEO</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Thank you,
Ron. Again, thank you for participating in our call. We look forward to updating you on
our progress at the end of our 2d quarter. As always, we thank you for your continued
support of Accelrys. </FONT></P>

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