<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(MARK ONE)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 For the quarter ended March 31, 1999

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 For the transition period from ................
         to ....................


                        COMMISSION FILE NUMBER 00-22383

                          TRANSCEND THERAPEUTICS, INC.
             (Exact name of registrant as specified in its charter)

           Delaware                                             04-3174575
  (State or jurisdiction of                                   (IRS Employer
incorporation or organization)                             Identification No.)


                  738 MAIN STREET, SUITE 431, WALTHAM, MA 02451
                    (Address of principal executive offices)

                                 (617) 374-1200
              (Registrant's telephone number, including area code)

Indicate by check [x] whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:

Yes  X          No 
    ---            ---

The number of shares outstanding of each of the issuer's classes of common
stock, as of April 30, 1999 was 5,922,036 shares of Common Stock, par value
$0.01 outstanding.

This quarterly report on Form 10-Q contains 11 pages, of which this is page one.



<PAGE>   2




                          TRANSCEND THERAPEUTICS, INC.
                               REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 1999



                                TABLE OF CONTENTS

                                                                          PAGE

PART I   FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS (Unaudited)

         -- Condensed Balance Sheets - March 31, 1999 and December 31,
         1998                                                              3

         -- Condensed Statements of Operations - Three months ended
         March 31, 1999 and 1998, and the period from January 1, 1993
         (Commencement of Operations) to March 31, 1999                    4

         -- Condensed Statements of Cash Flows - Three months ended
         March 31, 1999 and 1998 and the period from January 1, 1993
         (Commencement of Operations) to March 31, 1999                    5

         -- Notes to Financial Statements                                  6

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS                                         8

PART II  OTHER INFORMATION                                                 9













                                  2
<PAGE>   3




PART 1: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                     TRANSCEND THERAPEUTICS, INC.
                     (A DEVELOPMENT STAGE COMPANY)

                       CONDENSED BALANCE SHEETS
                            (IN THOUSANDS)
                              (UNAUDITED)

<TABLE>
<CAPTION>

                                             MARCH 31, 1999   DECEMBER 31, 1998
                                             --------------   -----------------
<S>                                             <C>              <C>     
ASSETS
Current assets:
   Cash and cash equivalents                    $  2,286         $  2,643
   Funds held in escrow                            7,087            7,010
   Prepaid expenses and other current            
     assets                                           92               69
   Other assets                                       --               26
                                                --------         --------
          Total Assets                          $  9,465         $  9,748
                                                ========         ========

Current liabilities:
   Accounts payable and accrued expenses        $    818         $    979

Stockholder's equity:
   Common stock                                       59               59
   Additional paid-in capital                     38,085           38,083
   Deferred compensation                            (222)            (264)
   Deficit accumulated during the                (29,275)         (29,109)
     development stage                                --               --
                                                --------          -------
          Total stockholder's equity               8,647            8,769
                                                ========         ========
          Total liabilities and
            stockholder's equity                $  9,465         $  9,748
                                                ========         ========
</TABLE>


                        See accompanying notes.






                                  3
<PAGE>   4

                     TRANSCEND THERAPEUTICS, INC.
                     (A DEVELOPMENT STAGE COMPANY)

                  CONDENSED STATEMENTS OF OPERATIONS
                              (UNAUDITED)
               (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                              PERIOD JAN. 1, 1993
                                                           THREE MONTHS        (COMMENCEMENT OF
                                                          ENDED MARCH 31,       OPERATIONS) TO
                                                      -----------------------      MARCH 31,
                                                        1999           1998          1999
                                                      --------       --------      ---------

<S>                                                   <C>            <C>            <C>     
Research and development contract revenues and        
  license fees                                        $     --       $     --       $ 11,095
Operating expenses:
   Research and development                                 50          2,224         19,830
   General and administrative                              221            883         13,817
   Loss on impairment and disposition of assets             --             --            365
                                                      --------       --------       --------
Total operating expenses                                   271          3,107         34,012
Interest income                                            104            213          1,685
Interest expense                                            --             --           (532)
                                                      --------       --------       --------

Net loss to common stockholders                       $   (167)      $ (2,894)      $(21,764)
                                                      ========       ========       ========

Net loss per common share - basic and diluted         $  (0.03)      $  (0.50)
                                                      ========       ========

</TABLE>







                        See accompanying notes.



                                  4
<PAGE>   5



                     TRANSCEND THERAPEUTICS, INC.
                     (A DEVELOPMENT STAGE COMPANY)

                  CONDENSED STATEMENTS OF CASH FLOWS
                            (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              PERIOD JAN. 1, 1993
                                                          THREE MONTHS         (COMMENCEMENT OF
                                                          ENDED MARCH 31,       OPERATIONS) TO
                                                      -----------------------      MARCH 31,
                                                        1999           1998          1999
                                                      --------       --------      ---------

<S>                                                   <C>            <C>            <C>      
OPERATING ACTIVITIES:
Net loss                                              $   (167)      $ (2,894)      $(21,765)
Adjustments to reconcile net loss to cash
provided by
(used in) operating activities:
   Depreciation and amortization                            --             23            354
   Non-cash severance expense                               --             --              8
   Loss on disposition of property and equipment            --             --             84
   Expenses incurred with related party settled
      with the issuance of common stock                     --             --            304
   Amortization of deferred compensation expense            42             68            668
   Forfeiture of compensatory stock options                 --             --           (222)
   Issuance of preferred stock in lieu of                   --             --            533
     interest
   Impairment of intangible assets                          --             --            286
   Change in operating assets and liabilities:
      Funds held in escrow                                 (77)            --         (7,087)
      Prepaid expenses and other current assets            (23)            84            (92)
      Other assets                                          26             --             --
      Accounts payable and accrued expenses               (161)           493            783
                                                      --------       --------       --------
Net cash (used in) provided by operating                  (360)            53        (26,146)
activities

INVESTING ACTIVITIES:
Purchase of equipment and improvements                      --            (47)          (229)
Proceeds from sale of equipment                             --             --             36
                                                      --------       --------       --------
Net cash used in investing activities                       --            (47)          (193)

FINANCING ACTIVITIES:
Issuance of common stock                                    --             --         16,740
Proceeds from issuance of debt                              --             --          3,170
Payment on note payable to related party                    --             --           (170)
Deferred costs of public offering                           --             --           (924)
Issuance of series A preferred stock warrants               --             --             16
Issuance of series A redeemable convertible                 --             --          6,630
preferred stock
Issuance of series C redeemable convertible                 --             --          2,000
preferred stock
Issuance of redeemable non-convertible                      --             --          1,039
preferred stock
Proceeds from exercise of stock options                      3              5            126
Purchase of treasury stock                                  --             --             (2)
                                                      --------       --------       --------
Net cash provided by financing activities                    3              5         28,625
                                                      --------       --------       --------
Increase (decrease) in cash and cash equivalents          (357)            11          2,282
Cash and cash equivalents at beginning of period         2,643         10,988             --
                                                      ========       ========       ========
Cash and cash equivalents at end of period            $  2,286       $ 10,999       $  2,286
                                                      ========       ========       ========
</TABLE>


                        See accompanying notes.



                                  5
<PAGE>   6




                     TRANSCEND THERAPEUTICS, INC.
                     (A DEVELOPMENT STAGE COMPANY)

                NOTES TO CONDENSED FINANCIAL STATEMENTS
                            MARCH 31, 1999
                              (UNAUDITED)


(1) BASIS OF PRESENTATION

     The accompanying unaudited condensed financial statements as of March 31,
1999 and for the three-month periods ended March 31, 1999 and 1998 and for the
period January 1, 1993 (commencement of operations) to March 31, 1999 have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and the rules of
the Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles to be presented for complete financial statements. In the opinion of
management, such financial information includes all adjustments (consisting only
of normal recurring adjustments) considered necessary for a fair presentation of
the financial position at such date and the operating results and cash flows for
such periods. Operating results for the three-month period ended March 31, 1999
are not necessarily indicative of the results that may be expected for the
entire year. These condensed financial statements and the related notes should
be read in conjunction with the Company's audited annual financial statements
for the year ended December 31, 1998 included in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission on March 31, 1999.


OVERVIEW

In the second quarter of 1997, the Company began a Phase III clinical trial to
determine the safety and efficacy of the Company's lead product candidate,
Procysteine(R), in the treatment of acute respiratory distress syndrome. In
March 1998, the Company suspended the Phase III clinical trial following a
recommendation of an independent Safety Monitoring Board. The Safety Monitoring
Board had determined, following a review of preliminary mortality data on a
total of 214 patients enrolled through March 18, 1998, that the incidence of
all-cause mortality in patients receiving Procysteine i.v. was higher than the
incidence in patients receiving a placebo. In May 1998, the Company announced
that it was discontinuing its Phase III clinical trial because its preliminary
review of the data uncovered no clear explanation of the lower mortality
observed in the placebo group. In August 1998, the Company and its corporate
partner Boehringer Ingelheim International, GmbH ("BI") announced results from
the unblinding of the Phase III clinical trial which showed that Procysteine
i.v. is not effective in the treatment of ARDS. No explanation for the higher
all-cause mortality observed in the Procysteine group could be identified and
the Company decided to abandon its efforts in this area.

In August 1998, Transcend's Chief Executive Officer and Chief Scientific Officer
resigned and Nicholas Harvey, then Transcend's Senior Vice President and Chief
Financial Officer, was appointed as President, a director and interim Chief
Executive Officer. Since August 1998, Transcend has been reducing its staff and
currently employs two persons, one of whom is Mr. Harvey. During the same
period, Transcend pursued various strategic alternatives with respect to its
business, including strategic alliances and the sale or merger of the company.
In December 1998, the Company signed a definitive merger agreement to be
acquired by KeraVision, Inc. (NASDAQ NM: KERA), a vision correction company.
Transcend agreed under the merger agreement to wind down its operations as a
drug development company. No Transcend employees will be retained after the
closing of the transaction. In March 1999, BI and Transcend agreed to terminate
their collaboration. BI released the restrictions on the remainder of the cash
BI had invested in Transcend in return for the right to use all clinical data
obtained in the trials. Also in March 1999, Transcend signed a letter agreement
assigning its residual patent estate and its rights and obligations under
various license agreements to MassTrace, Inc., a privately held diagnostics and
pharmaceutical development tools company. In May 1999, the Securities and
Exchange Commission (the "SEC") declared effective the registration statement
relating to the KeraVision shares to be issued to Transcend stockholders
pursuant to the merger agreement. A Transcend stockholders' meeting will be held
on May 28, 1999 to approve the merger with KeraVision. The Company expects to
close the merger with KeraVision promptly after the meeting.




                                  6
<PAGE>   7

NET INCOME (LOSS) PER SHARE

The following table sets forth the computation of net income (loss)
per share:

<TABLE>
<CAPTION>
                                                                             MARCH 31,
                                                                   -----------------------------
                                                                       1999             1998
                                                                   -----------       -----------
<S>                                                                <C>               <C>         
Numerator:
Net income (loss):                                                 $  (167,000)      $(2,894,000)
Accretion of redeemable nonconvertible preferred stock                      --                --
                                                                   -----------       -----------
Numerator for basic earnings per share - net income (loss) to         (167,000)       (2,894,000)
common stockholders
Numerator for diluted earnings per share - net income
   (loss) to common stockholders after assumed conversion             (167,000)       (2,894,000)
                                                                   -----------       -----------

Denominator:
   Denominator for diluted earnings per share -
   adjusted weighted-average shares and assumed conversions          5,921,706         5,761,159
                                                                   -----------       -----------
Basic earnings per share                                           $     (0.03)      $     (0.50)
                                                                   -----------       -----------
Diluted earnings per share                                         $     (0.03)      $     (0.50)
                                                                   -----------       -----------
</TABLE>

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

As of January 1, 1998, the Company adopted Financial Accounting Standard 130,
Reporting Comprehensive Income ("Statement 130"). Statement 130 establishes new
rules for the reporting and display of comprehensive income and its components.
Statement 130 requires unrealized gains or losses on the Company's
available-for-sale securities, which prior to adoption were reported separately
in shareholder's equity to be included in other comprehensive income. During the
first quarters of 1999 and 1998, total comprehensive income was not materially
different from net income (loss).












                                  7
<PAGE>   8


ITEM 2    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS, IN ADDITION TO HISTORICAL
INFORMATION, FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES.
THE FOLLOWING DISCUSSION CONSTITUTES FORWARD LOOKING STATEMENTS INSOFAR AS IT
RELATES TO EXPECTED CASH EXPENDITURES AND EXPENSE LEVELS AND THE ADEQUACY OF THE
COMPANY'S AVAILABLE RESOURCES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN SUCH FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, THE AVAILABILITY OF FUNDS AND OTHER FACTORS DISCUSSED BELOW AND IN
THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 (FILE NO. 333-22817), AS
AMENDED AND THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1998. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF THIS FORM 10-Q.
THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY
REVISIONS TO THESE FORWARD-LOOKING STATEMENTS WHICH MAY BE MADE TO REFLECT
EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS FORM 10-Q OR TO REFLECT THE
OCCURRENCE OF UNANTICIPATED EVENTS.


RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1999

     The Company earned no revenues in the three-month periods ended March 31,
1999 and 1998.

     The Company's total operating expenses for the three-month periods ended
March 31, 1999 and 1998 were approximately $0.3 million and $3.1 million,
respectively. Research and development expenses decreased to approximately
$50,000 for the three months ended March 31, 1999 from approximately $2.2
million for the three months ended March 31, 1998. This decrease was due to the
termination of the Procysteine drug development program and assignment of the
Company's residual patent estate and various patent license agreements to a
third party in March 1999 in return for the assumption of certain patent
expenses and minimum royalty obligations owed by the Company.

     General and administrative expenses decreased to approximately $0.2 million
for the three months ended March 31, 1999 from approximately $0.9 million for
the three months ended March 31, 1998. The decrease is due primarily to the
winding down of the Company's operations pursuant to the KeraVision merger
agreement signed on December 22, 1998. As of April 30, 1999, the Company
employed 2 full-time staff, neither of whom will continue as employees following
the completion of the merger.

     Other income (expense) for each of the three-month periods ended March 31,
1999 and 1998 consists of interest income. Interest income for each of the
three-month periods ended March 31, 1999 and 1998 was $104,000 and $213,000,
respectively. The decrease in interest income was due to lower average cash
balances.

     For the three-month periods ended March 31, 1999 and 1998, the Company had
a net loss of $0.2 million and $2.9 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

     The Company had cash and cash equivalents of approximately $9.4 million at
March 31, 1999, compared to $9.7 million at December 31, 1998. These balances
included funds held in escrow pursuant to the merger agreement of approximately
$7.09 million and $7.01 million, respectively. Pursuant to the KeraVision Merger
Agreement entered in December 1998, the Company placed $7.0 million in an escrow
account pending completion of the merger.

     Since its inception through March 31, 1999, the Company has financed its
operations primarily with $30.3 million from the sale of equity securities and
convertible notes, $11.1 million in contract research and license fee payments,
and $1.7 million in interest income.



                                       8
<PAGE>   9
PART II:  OTHER INFORMATION

ITEM 2   Changes in Securities and Use of Proceeds

         (d) USE OF PROCEEDS

         (1)        The effective date of the registration statement on Form S-1
                    (the "Registration Statement") for the Company's initial
                    public offering of shares of its common stock, $.01 par
                    value per share, was July 2, 1997, and the commission file
                    number of the Registration Statement is 333-22817.

         (2)(vii)   From July 2, 1997, the effective date of the Registration
                    Statement, to March 31, 1999, the Company has used the net
                    offering proceeds to the Company as follows:

         Payment of operating expenses .............................. $5,809,000
         Payment of financial advisory fees ......................... $  275,000
         Payment of professional fees related to the BI Agreement.... $  150,000
         Accrued contract research payment .......................... $  133,000
         Total ...................................................... $6,367,000

                    Payment of expenses were to persons other than directors,
                    officers, general partners of the Company or their
                    associates, persons owning 10% or more of the equity
                    securities of the Company or affiliates of the Company.

ITEM 6  Exhibits and Reports on Form 8-K

         (a)  See Exhibit Index

         (b)  During the three months ended March 31, 1999, the Company filed 
         one Current Report on Form 8-K under the Securities Exchange Act of
         1934, as amended (Commission File No. 000-22383, filed January 8,
         1999), disclosing under Item 5 thereof (Other Events), its signing on
         December 22, 1998 of a definitive merger agreement to be acquired by
         KeraVision, Inc.









                                       9
<PAGE>   10




                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                    TRANSCEND THERAPEUTICS, INC.
                                    (Registrant)

Date  May 12, 1999                  By: /s/ B. Nicholas Harvey
                                    --------------------------------------------
                                    B. Nicholas Harvey
                                    President, interim Chief Executive Officer
                                    and Chief Financial Officer (Principal
                                    Financial and Accounting Officer)






















                                       10
<PAGE>   11





                                  EXHIBIT INDEX


        ITEM      DESCRIPTION
        ----      -----------

         3.1      Second Amended and Restated Certificate of Incorporation of
                  the Registrant is incorporated herein by reference to Exhibit
                  3.2 to the Registrant's registration statement on Form S-1
                  (File No. 333-22817) under the Securities Act of 1933, as
                  amended, as declared effective on July 2, 1997 (the "S-1).

         3.2      Amended and Restated By-Laws of the Registrant are
                  incorporated herein by reference to Exhibit 3.3 to the S-1.


        10.1      Termination Agreement with Boehringer Ingelheim International
                  GmbH and the Registrant dated March 2, 1999.


        27.1      Financial Data Schedule (period ended March 31, 1999)




























                                       11