<Page>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

/X/            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2002

                                       OR

            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: 000-21589

                         TRIANGLE PHARMACEUTICALS, INC.
             (Exact name of Registrant as specified in its charter)

                  DELAWARE                                   56-1930728
         (State or other jurisdiction                     (I.R.S. Employer
         of incorporation or organization)                Identification No.)

         4 University Place
         4611 University Drive
         Durham, North Carolina                           27707
     (Address of principal executive offices)             (zip code)

       Registrant's telephone number, including area code: (919) 493-5980

     Indicate by check mark 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 / /

     As of June 30, 2002, there were 76,861,837 shares of Triangle
Pharmaceuticals, Inc. Common Stock outstanding.

<Page>

                         TRIANGLE PHARMACEUTICALS, INC.

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                         Page No.
                                                                                                         --------
<S>                                                                                                       <C>
Part I.  Financial Information

         Item 1.  Financial Statements

                  Condensed Consolidated Balance Sheets -
                      June 30, 2002 (unaudited) and December 31, 2001........................................ 3

                  Condensed Consolidated Statements of Operations (unaudited) -
                      Three and Six Months Ended June 30, 2002 and June 30, 2001
                      and Period From Inception (July 12, 1995) Through June 30, 2002........................ 4

                  Condensed Consolidated Statements of Cash Flows (unaudited) -
                      Six Months Ended June 30, 2002 and June 30, 2001 and
                      Period From Inception (July 12, 1995) Through June 30, 2002............................ 5

                  Condensed Consolidated Statements of Stockholders' Equity -
                      Period From Inception (July 12, 1995) Through
                      June 30, 2002 (unaudited)............................................................ 6-7

                  Notes to Condensed Consolidated Financial Statements (unaudited)........................ 8-10

         Item 2.  Management's Discussion and Analysis of Financial
                      Condition and Results of Operations................................................ 11-28

         Item 3.  Quantitative and Qualitative Disclosures About Market Risk................................ 29

Part II. Other Information

         Item 4.  Submission of Matters to a Vote of Security Holders....................................... 30

         Item 6.  Exhibits and Reports on Form 8-K.......................................................... 31

         Signatures......................................................................................... 32
</Table>

                                        2
<Page>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
         --------------------

                         TRIANGLE PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                                                                   JUNE 30,          DECEMBER 31,
                                                                                     2002                2001
                                                                               ---------------     ---------------
                                                                                 (UNAUDITED)
<S>                                                                            <C>                 <C>
ASSETS
------

Current assets:
     Cash and cash equivalents.............................................    $        43,872     $        64,994
     Investments...........................................................             29,690              21,280
     Interest receivable...................................................                736                 798
     Receivable from collaborative partner.................................                549                 480
     Prepaid expenses......................................................                406                 641
                                                                               ---------------     ---------------
        Total current assets...............................................             75,253              88,193
Property, plant and equipment, net.........................................              3,334               4,091
Investments................................................................              8,628              21,881
                                                                               ---------------     ---------------

        Total assets.......................................................    $        87,215     $       114,165
                                                                               ===============     ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
     Accounts payable......................................................    $         4,735     $        11,884
     Payable to collaborative partner......................................              1,293               2,645
     Debt-current..........................................................              1,285               1,454
     Accrued expenses......................................................             15,004              13,923
     Deferred revenue......................................................              4,139               4,139
                                                                               ---------------     ---------------
        Total current liabilities..........................................             26,456              34,045
Debt-noncurrent............................................................              1,097               1,680
Deferred revenue...........................................................             12,417              14,487
                                                                               ---------------     ---------------
        Total liabilities..................................................             39,970              50,212
                                                                               ---------------     ---------------
Commitments and contingencies (See notes 4, 5 and 7).......................                 --                  --
Stockholders' equity:
     Convertible Preferred Stock, $0.001 par value; 10,000 shares
        authorized; 0 shares issued and outstanding........................                 --                  --
     Common Stock, $0.001 par value; 175,000 shares authorized;
        76,862 and 76,829 shares issued and outstanding, respectively......                 77                  77
     Additional paid-in capital............................................            470,633             470,478
     Accumulated deficit during development stage..........................           (423,615)           (406,895)
     Accumulated other comprehensive income................................                150                 293
                                                                               ---------------     ---------------
        Total stockholders' equity.........................................             47,245              63,953
                                                                               ---------------     ---------------

        Total liabilities and stockholders' equity.........................    $        87,215     $       114,165
                                                                               ===============     ===============
</Table>

   The accompanying notes are an integral part of these condensed consolidated
                              financial statements.

                                        3
<Page>

                         TRIANGLE PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                                                                                                 PERIOD FROM
                                                                                                                  INCEPTION
                                           THREE MONTHS ENDED JUNE 30,         SIX MONTHS ENDED JUNE 30,       (JULY 12, 1995)
                                        --------------------------------    -------------------------------       THROUGH
                                             2002              2001              2002             2001          JUNE 30, 2002
                                        --------------    --------------    --------------   --------------    ---------------
<S>                                     <C>               <C>               <C>              <C>               <C>
Revenue:
  Collaborative revenue...............  $        1,035    $        1,744    $        2,070   $        3,489    $       15,158

Operating expenses:
  License fees........................             109               858               218            1,953            26,780
  Development.........................          14,808            20,798            26,771           42,638           367,396
  Purchased research and development..              --                --                --               --            18,178
  Selling, general and administrative.           1,612             2,251             3,015            4,959            60,417
  Restructuring.......................              --                --                --               --             2,342
                                        --------------    --------------    --------------   --------------    --------------
    Total operating expenses..........          16,529            23,907            30,004           49,550           475,113
                                        --------------    --------------    --------------   --------------    --------------
Loss from operations..................         (15,494)          (22,163)          (27,934)         (46,061)         (459,955)
Gain (loss) on investments, net.......               2               (13)                5               67            (1,355)
Interest income, net..................             558             1,013             1,209            1,973            27,695
Other income..........................              --                --            10,000               --            10,000
                                        --------------    --------------    --------------   --------------    --------------

Net loss..............................  $      (14,934)   $      (21,163)   $      (16,720)  $      (44,021)   $     (423,615)
                                        ==============    ==============    ==============   ==============    ==============

Basic and diluted net loss per common
  share...............................  $        (0.19)   $        (0.45)   $        (0.22)  $        (0.99)
                                        ==============    ==============    ==============   ==============
Shares used in computing basic and
  diluted net loss per common share...          76,855            47,331            76,846           44,326
                                        ==============    ==============    ==============   ==============
</Table>

   The accompanying notes are an integral part of these condensed consolidated
                              financial statements.

                                        4
<Page>

                         TRIANGLE PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                                                        PERIOD FROM
                                                                                                         INCEPTION
                                                                     SIX MONTHS ENDED JUNE 30,        (JULY 12, 1995)
                                                               ----------------------------------         THROUGH
                                                                     2002               2001           JUNE 30, 2002
                                                               ---------------    ---------------     ---------------
<S>                                                            <C>                <C>                 <C>
Cash flows from operating activities:
Net loss..................................................     $       (16,720)   $       (44,021)    $      (423,615)
Adjustments to reconcile net loss to net
  cash used by operating activities:
  Depreciation and amortization...........................                 756                994               7,083
  (Gain) loss from disposal of property, plant
    and equipment.........................................                  (9)                 1                 154
  (Gain) loss on investments..............................                  (5)               (67)              1,356
  Purchased research and development......................                  --                 --              18,178
  Stock-based compensation................................                  45                 --               2,114
  Change in assets and liabilities:
    Receivables...........................................                  (7)               758              (1,285)
    Prepaid expenses......................................                 235               (622)               (406)
    Accounts payable......................................              (8,501)            (2,759)              6,028
    Accrued expenses......................................               1,081              5,040              15,004
    Deferred revenue......................................              (2,070)            (3,489)             16,556
                                                               ---------------    ---------------     ---------------
Net cash used by operating activities.....................             (25,195)           (44,165)           (358,833)
                                                               ---------------    ---------------     ---------------
Cash flows from investing activities:
  Purchase of investments.................................              (7,749)            (7,281)           (354,020)
  Proceeds from sale and maturity of investments..........              12,454             36,520             314,496
  Proceeds from sale of property, plant
    and equipment.........................................                  77                  1                 751
  Purchase of property, plant and equipment...............                 (67)              (456)            (11,146)
  Acquisition of Avid Corporation, net of cash acquired...                  --                 --              (3,053)
                                                               ---------------    ---------------     ---------------
Net cash provided (used) by investing activities..........               4,715             28,784             (52,972)
                                                               ---------------    ---------------     ---------------
Cash flows from financing activities:
  Sale of stock, net of related issuance costs............                  60             54,493             452,220
  Sale of options under salary investment option
    grant program.........................................                  49                 47                 432
  Proceeds from stock options/warrants exercised..........                   1                286                 909
  Proceeds from notes payable.............................                  --                 --               3,793
  Equipment financing.....................................                  47                 --                 401
  Principal payments on capital lease obligations
    and notes payable.....................................                (799)                (7)             (2,078)
                                                               ---------------    ---------------     ---------------
Net cash (used) provided by financing activities..........                (642)            54,819             455,677
                                                               ---------------    ---------------     ---------------
Net (decrease) increase in cash and cash equivalents......             (21,122)            39,438              43,872
Cash and cash equivalents at beginning of period..........              64,994             14,055                  --
                                                               ---------------    ---------------     ---------------
Cash and cash equivalents at end of period................     $        43,872    $        53,493     $        43,872
                                                               ===============    ===============     ===============
</Table>

   The accompanying notes are an integral part of these condensed consolidated
                              financial statements.

                                        5
<Page>

                         TRIANGLE PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<Table>
<Caption>
                                            CONVERTIBLE
                                          PREFERRED STOCK                             COMMON STOCK           ADDITIONAL
                                     ------------------------                   ------------------------       PAID-IN
                                       SHARES        AMOUNT        WARRANTS       SHARES        AMOUNT         CAPITAL
                                     ----------    ----------     ----------    ----------    ----------     ----------
<S>                                  <C>           <C>            <C>           <C>           <C>            <C>
Initial sale of stock............           933    $        1     $       --         1,175    $        1     $      710
Additional sale of stock.........         4,249             4             --         1,495             2          3,137
Stock-based compensation.........            --            --             --            --            --             12
Comprehensive loss:
  Net loss.......................            --            --             --            --            --             --
                                     ----------    ----------     ----------    ----------    ----------     ----------
Balance, December 31, 1995.......         5,182             5             --         2,670             3          3,859
Sale of stock....................         3,756             4             --         4,943             5         59,506
Stock-based compensation.........            --            --            152           700             1          1,127
Stock options exercised..........            --            --             --           317            --             57
Conversion of Preferred to
  Common Stock...................        (8,938)           (9)            --         8,938             9             --
Comprehensive loss:
  Net loss.......................            --            --             --            --            --             --
                                     ----------    ----------     ----------    ----------    ----------     ----------
Balance, December 31, 1996.......            --            --            152        17,568            18         64,549
Sale of stock....................            --            --             --         2,014             2         29,521
Acquisition of Avid Corp.........            --            --             --           400            --          8,117
Sale of stock options............            --            --             --            --            --             70
Stock-based compensation.........            --            --            (38)           --            --             --
Stock options exercised..........            --            --             --            13            --              3
Comprehensive loss:
  Net loss.......................            --            --             --            --            --             --
                                     ----------    ----------     ----------    ----------    ----------     ----------
Balance, December 31, 1997.......            --            --            114        19,995            20        102,260
Sale of stock....................           170            --             --         8,868             9        116,325
Sale of stock options............            --            --             --            --            --             97
Stock-based compensation.........            --            --             --            --            --             --
Stock options exercised..........            --            --             --             8            --              1
Comprehensive loss:
  Change in unrealized
   gains/(losses) on
   investments...................            --            --             --            --            --             --
  Net loss.......................            --            --             --            --            --             --
                                     ----------    ----------     ----------    ----------    ----------     ----------
Balance, December 31, 1998.......           170            --            114        28,871            29        218,683
Sale of stock....................            --            --             --         6,605             7        116,211
Sale of stock options............            --            --             --            --            --             95
Stock-based compensation.........            --            --             --             6            --            101
Stock options/warrants
  exercised......................            --            --           (114)          296            --            479
Conversion of Preferred to
  Common Stock...................          (170)           --             --         1,700             2             (2)
Purchased in-process
  research and development
  costs..........................            --            --             --           100            --          1,247
Comprehensive loss:
  Reclassification  adjustment
   for gains/(losses) in net
   loss..........................            --            --             --            --            --             --
  Change in unrealized
   gains/(losses) on
   investments...................            --            --             --            --            --             --
  Net loss.......................            --            --             --            --            --             --
                                     ----------    ----------     ----------    ----------    ----------     ----------
Balance, December 31, 1999.......            --    $       --     $       --        37,578    $       38     $  336,814

<Caption>
                                                                        ACCUMULATED
                                                      COMPREHENSIVE        OTHER
                                      ACCUMULATED        INCOME        COMPREHENSIVE       DEFERRED
                                        DEFICIT          (LOSS)        INCOME/(LOSS)     COMPENSATION          TOTAL
                                      -----------     -------------    -------------     ------------       -----------
<S>                                   <C>              <C>              <C>              <C>                <C>
Initial sale of stock............     $        --      $                $        --      $        --        $       712
Additional sale of stock.........              --                                --               --              3,143
Stock-based compensation.........              --                                --              (12)                --
Comprehensive loss:
  Net loss.......................            (967)            (967)              --               --               (967)
                                      -----------      -----------      -----------      -----------        -----------
Balance, December 31, 1995.......            (967)            (967)              --              (12)             2,888
Sale of stock....................              --                                --               --             59,515
Stock-based compensation.........              --                                --             (141)             1,139
Stock options exercised..........              --                                --              (26)                31
Conversion of Preferred to
  Common Stock...................              --                                --               --                 --
Comprehensive loss:
  Net loss.......................         (10,917)         (10,917)              --               --            (10,917)
                                      -----------      -----------      -----------      -----------        -----------
Balance, December 31, 1996.......         (11,884)         (10,917)              --             (179)            52,656
Sale of stock....................              --                                --               --             29,523
Acquisition of Avid Corp.........              --                                --               --              8,117
Sale of stock options............              --                                --               --                 70
Stock-based compensation.........              --                                --               48                 10
Stock options exercised..........              --                                --                6                  9
Comprehensive loss:
  Net loss.......................         (37,668)         (37,668)              --               --            (37,668)
                                      -----------      -----------      -----------      -----------        -----------
Balance, December 31, 1997.......         (49,552)         (37,668)              --             (125)            52,717
Sale of stock....................              --                                --               --            116,334
Sale of stock options............              --                                --               --                 97
Stock-based compensation.........              --                                --               48                 48
Stock options exercised..........              --                                --                7                  8
Comprehensive loss:
  Change in unrealized
   gains/(losses) on
   investments...................              --               18               18               --                 18
  Net loss.......................         (67,271)         (67,271)              --               --            (67,271)
                                      -----------      -----------      -----------      -----------        -----------
Balance, December 31, 1998.......        (116,823)         (67,253)              18              (70)           101,951
Sale of stock....................              --                                --               --            116,218
Sale of stock options............              --                                --               --                 95
Stock-based compensation.........              --                                --               58                159
Stock options/warrants
  exercised......................              --                                --               12                377
Conversion of Preferred to
  Common Stock...................              --                                --               --                 --
Purchased in-process
  research and development
  costs..........................              --                                --               --              1,247
Comprehensive loss:
  Reclassification  adjustment
   for gains/(losses) in net
   loss..........................              --              (21)             (21)              --                (21)
  Change in unrealized
   gains/(losses) on
   investments...................              --             (132)            (132)              --               (132)
  Net loss.......................        (104,621)        (104,621)              --               --           (104,621)
                                      -----------      -----------      -----------      -----------        -----------
Balance, December 31, 1999.......     $  (221,444)     $  (104,774)     $      (135)     $        --        $   115,273
</Table>

(CONTINUED)

                                        6
<Page>

                         TRIANGLE PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<Table>
<Caption>
                                            CONVERTIBLE
                                          PREFERRED STOCK                                 COMMON STOCK            ADDITIONAL
                                      ------------------------                     -------------------------        PAID-IN
                                        SHARES        AMOUNT         WARRANTS        SHARES         AMOUNT          CAPITAL
                                      ---------     ----------      ----------     ----------     ----------      ----------
<S>                                   <C>           <C>             <C>            <C>            <C>             <C>
(CONTINUED)
Sale of stock....................            --     $       --      $       --            326     $        1      $    1,608
Sale of stock options............            --             --              --             --             --              52
Stock-based compensation.........            --             --              --             --             --             348
Stock options/warrants
  exercised......................            --             --              --            225             --             378
Purchased in-process research
  and development costs..........            --             --              --            400             --           5,350
Comprehensive loss:
  Reclassification adjustment
   for gains/(losses) in net
   loss..........................            --             --              --             --             --              --
  Change in unrealized
   gains/(losses) on
   investments...................            --             --              --             --             --              --
  Net loss.......................            --             --              --             --             --              --
                                      ---------     ----------      ----------     ----------     ----------      ----------
Balance, December 31, 2000.......            --             --              --         38,529             39         344,550
Sale of stock....................           200             --              --         36,058             36         125,070
Sale of stock options............            --             --              --             --             --              68
Stock-based compensation.........            --             --              --             --             --             183
Stock options/warrants
  exercised......................            --             --              --            142             --             289
Purchased in-process research
  and development costs..........            --             --              --            100             --             320
Conversion of Preferred to
  Common Stock...................          (200)            --              --          2,000              2              (2)
Comprehensive loss:
  Reclassification adjustment
   for gains/(losses) in net
   loss..........................            --             --              --             --             --              --
  Change in unrealized
   gains/(losses) on
   investments...................            --             --              --             --             --              --
  Net loss.......................            --             --              --             --             --              --
                                      ---------     ----------      ----------     ----------     ----------      ----------
Balance, December 31, 2001.......            --             --              --         76,829             77         470,478
(UNAUDITED)
Sale of stock....................            --             --              --             22             --              60
Sale of stock options............            --             --              --             --             --              49
Stock-based compensation.........            --             --              --             --             --              45
Stock options/warrants
 exercised.......................            --             --              --             11             --               1
Comprehensive loss:
  Reclassification adjustment
   for gains/(losses) in net
   loss..........................            --             --              --             --             --              --
  Change in unrealized
   gains/(losses) on
   investments...................            --             --              --             --             --              --
  Net loss.......................            --             --              --             --             --              --
                                      ---------     ----------      ----------     ----------     ----------      ----------
Balance, June 30, 2002...........            --     $       --      $       --         76,862     $       77      $  470,633
                                      =========     ==========      ==========     ==========     ==========      ==========

<Caption>
                                                                      ACCUMULATED
                                                    COMPREHENSIVE       OTHER
                                      ACCUMULATED      INCOME        COMPREHENSIVE     DEFERRED
                                        DEFICIT        (LOSS)        INCOME/(LOSS)   COMPENSATION      TOTAL
                                      -----------    ------------    -------------   ------------   -----------
<S>                                   <C>            <C>              <C>            <C>            <C>
(CONTINUED)
Sale of stock....................     $        --    $                $        --    $        --    $     1,609
Sale of stock options............              --                              --             --             52
Stock-based compensation.........              --                              --             --            348
Stock options/warrants
  exercised......................              --                              --             --            378
Purchased in-process research
  and development costs..........              --                              --             --          5,350
Comprehensive loss:
  Reclassification adjustment
   for gains/(losses) in net
   loss..........................              --            133              133             --            133
  Change in unrealized
   gains/(losses) on
   investments...................              --            163              163             --            163
  Net loss.......................        (109,525)      (109,525)              --             --       (109,525)
                                      -----------    -----------      -----------    -----------    -----------
Balance, December 31, 2000.......        (330,969)      (109,229)             161             --         13,781
Sale of stock....................              --                              --             --        125,106
Sale of stock options............              --                              --             --             68
Stock-based compensation.........              --                              --             --            183
Stock options/warrants
  exercised......................              --                              --             --            289
Purchased in-process research
  and development costs..........              --                              --             --            320
Conversion of Preferred to
  Common Stock...................              --                              --             --             --
Comprehensive loss:
  Reclassification adjustment
   for gains/(losses) in net
   loss..........................              --            (57)             (57)            --            (57)
  Change in unrealized
   gains/(losses) on
   investments...................              --            189              189             --            189
  Net loss.......................         (75,926)       (75,926)              --             --        (75,926)
                                      -----------    -----------      -----------    -----------    -----------
Balance, December 31, 2001..             (406,895)       (75,794)             293             --         63,953
(UNAUDITED)
Sale of stock....................              --                              --             --             60
Sale of stock options............              --                              --             --             49
Stock-based compensation.........              --                              --             --             45
Stock options/warrants
  exercised......................              --                              --             --              1
Comprehensive loss:
  Reclassification adjustment
   for gains/(losses) in net
   loss..........................              --            (42)             (42)            --            (42)
  Change in unrealized
   gains/(losses) on
   investments...................              --           (101)            (101)            --           (101)
  Net loss.......................         (16,720)       (16,720)              --             --        (16,720)
                                      -----------    -----------      -----------    -----------    -----------
Balance, June 30, 2002...........     $  (423,615)   $   (16,863)     $       150    $        --    $    47,245
                                      ===========    ===========      ===========    ===========    ===========
</Table>

   The accompanying notes are an integral part of these condensed consolidated
                              financial statements.

                                        7
<Page>

                         TRIANGLE PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1.        BASIS OF PRESENTATION

          The accompanying unaudited condensed consolidated financial statements
of Triangle Pharmaceuticals, Inc. and its wholly-owned subsidiary (the "Company"
or "Triangle") have been prepared in accordance with generally accepted
accounting principles and applicable Securities and Exchange Commission
regulations for interim financial information. These financial statements do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. It is presumed that
users of this interim financial information have read or have access to the
audited financial statements for the preceding fiscal year contained in the
Company's Annual Report on Form 10-K. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for fair presentation have been included. Operating results for the interim
periods presented are not necessarily indicative of the results that may be
expected for the full year.

          The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

2.        PRINCIPLES OF CONSOLIDATION

          The condensed consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiary. All significant intercompany
accounts and transactions have been eliminated in consolidation.

3.        NET LOSS PER COMMON SHARE

          Basic net loss per common share is computed using the weighted average
number of shares of Common Stock outstanding during the period. Diluted net loss
per common share is computed using the weighted average number of shares of
common and dilutive potential common shares outstanding during the period.
Potential common shares consist of stock options, warrants and convertible
preferred stock using the treasury stock method and are excluded if their effect
is antidilutive. For the three and six month periods ended June 30, 2002 and
2001, the weighted average shares outstanding used in the calculation of net
loss per common share do not include potential shares outstanding because they
have the effect of reducing net loss per common share.

4.        LICENSING AGREEMENTS

          As of June 30, 2002, the Company has multiple license agreements for
its drug candidates as well as a collaborative agreement to assist in the
identification and development of other novel drug candidates. In the aggregate,
these agreements may require future payments of up to $57,250 contingent upon
the achievement of development milestones, up to $30,000 upon the achievement of
sales milestones, and $1,563 of future research and development payments. The
Company is also obligated to issue 250 shares of common stock if development
milestones are achieved regarding compounds for the treatment of hepatitis B
obtained in the Avid Corporation acquisition. Additionally, the Company will pay
royalties ranging from 7.5% to 23.25% of net sales of each licensed product
depending on drug candidate and net sales volume. The Company's license
agreements also require minimum royalty payments commencing three years after
regulatory approval of the licensed compound. Milestone payments are typically
contingent on completing phases of clinical trials and receiving registrations
for compounds. Depending on the Company's success and timing in obtaining
regulatory approval, aggregate annual minimum royalties and annual license
preservation fees could range from $50 (if only a single drug candidate is
approved for one indication) to $47,000 (if all drug candidates are approved for
all indications) under the Company's existing license agreements.

                                        8
<Page>

                         TRIANGLE PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

5.        CONTINGENCIES

          The Company is indirectly involved in several opposition and
interference proceedings with Shire BioChem, Inc. and Shire Pharmaceuticals
Group plc, (collectively, "Shire") and one lawsuit filed in Australia regarding
the patent rights related to its licensed drug candidate, amdoxovir. Although
the Company is not a named party in any of these proceedings, it is obligated to
reimburse its licensors for certain legal expenses associated with these
proceedings. In one of these patent opposition proceedings, on November 8, 2000,
the Australian Patent Office held that several patent claims of Emory University
("Emory") directed to amdoxovir are not patentable over an earlier opposing
patent. Emory has appealed this decision of the Australian Patent Office to the
Australian Federal Court. If Emory and the Company are unsuccessful in the
appeal, then the Company will not be able to sell amdoxovir in Australia without
a license, which may not be available on reasonable terms or at all. Shire has
also opposed Emory's and the University of Georgia Research Foundation, Inc.'s
("University of Georgia") granted claims on amdoxovir and its use to treat HIV
at the European Patent Office. The Company cannot predict the outcome of these
proceedings. The Company believes that an adverse judgment would not result in a
material financial obligation to the Company, nor would the Company have to
recognize an impairment under Statement of Financial Accounting Standards
("SFAS") No. 144, "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED
ASSETS" as no amounts have been capitalized related to this drug candidate.
However, any development in these proceedings adverse to the Company's interests
could have a material adverse effect on the Company's future operations.

6.        RECENT ACCOUNTING PRONOUNCEMENTS

          In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, "BUSINESS COMBINATIONS" and SFAS No. 142, "GOODWILL AND OTHER
INTANGIBLE ASSETS." SFAS No. 141 eliminates the pooling-of-interests method of
accounting for business combinations except for qualifying business combinations
that were initiated prior to July 1, 2001. SFAS No. 142 changes the accounting
for goodwill and indefinite lived intangible assets from an amortization method
to an impairment-only approach.

          In August 2001, the FASB issued SFAS No. 143, "ACCOUNTING FOR ASSET
RETIREMENT OBLIGATIONS." The objectives of SFAS No. 143 are to establish
accounting standards for the recognition and measurement of an asset retirement
obligation and its associated asset retirement cost. SFAS No. 143 is effective
for fiscal years beginning after June 15, 2002.

          In October 2001, the FASB issued SFAS No. 144, "ACCOUNTING FOR THE
IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS." This statement supersedes SFAS No.
121, "ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED
ASSETS TO BE DISPOSED of" and Accounting Principles Board Opinion No. 30,
"REPORTING THE RESULTS OF OPERATIONS - REPORTING THE EFFECTS OF DISPOSAL OF A
SEGMENT OF BUSINESS, AND EXTRAORDINARY, UNUSUAL AND INFREQUENTLY OCCURRING
EVENTS AND TRANSACTIONS." The provisions of SFAS No. 144 are effective for
fiscal years beginning after December 15, 2001.

          The Company adopted SFAS Nos. 142 and 144 as of January 1, 2002, and
expects to adopt SFAS No. 143 as of January 1, 2003, as required. Adoption of
SFAS Nos. 142 and 144 did not have a significant impact, and the Company does
not expect SFAS 143 to have a significant impact, on its consolidated financial
position, results of operations and cash flows.

7.        SUBSEQUENT EVENTS

          On July 26, 2002, the Company entered into a Binding Material Terms
Agreement with Shire, Emory, and the University of Georgia in which Shire agreed
to enter into an exclusive royalty bearing license agreement with Emory and the
University of Georgia covering Shire's patent rights in amdoxovir, that will be
exclusively sublicensed to the Company. Emory, the University of Georgia and the
Company also agreed to grant Shire an exclusive license to their respective
patent rights in Shire's drug development candidate, BCH-13520. The parties
are in the process of completing final license agreements. The remaining
terms of the

                                        9
<Page>

                         TRIANGLE PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

agreements will be submitted for binding arbitration if the parties are unable
to resolve them. In addition, Shire agreed to withdraw all adversarial
proceedings against Emory's and the University of Georgia's patent rights
covering amdoxovir and Emory agreed to withdraw all adversarial proceedings
against Shire's patent rights covering amdoxovir. On July 29, 2002, Emory
withdrew its appeal of the Opposition Decision of the European Patent Office of
March 4, 1999 in which the Opposition Division ruled that Shire's European
patent covering amdoxovir is valid. Amdoxovir and BCH-13520 are structurally
similar and, if approved, are expected to directly compete in the HIV market.

          On July 30, 2002, the Company terminated its alliance with Abbott
Laboratories ("Abbott"). In connection with this termination, the Company:
reacquired all rights previously granted to Abbott for Coviracil(R) for the
treatment of HIV and hepatitis B, amdoxovir, and clevudine; will no longer be
required to provide Abbott a right of first discussion on all future compounds
developed; will have access to two unsecured lines of credit totaling $42,500,
subject to certain terms and conditions; executed a new manufacturing and supply
agreement whereby Abbott will manufacture Coviracil; will forego rights to all
remaining milestone payments and its right to co-promote Abbott's HIV product;
granted a 1% royalty to Abbott on the first $200,000 of cumulative, worldwide
Coviracil sales. In addition, this termination will result in all but $2,000 of
remaining deferred revenue being recognized in the Company's third quarter 2002
results, resignation of Abbott's representative on the Board of Directors and
termination of Abbott's right to purchase additional Triangle Common Stock.

          On August 5, 2002, Daniel G. Welch was appointed Chairman and Chief
Executive Officer of the Company.

                                       10
<Page>

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

          This Quarterly Report on Form 10-Q may contain projections, estimates
and other forward-looking statements that involve a number of risks and
uncertainties, including those discussed below at "--Risk and Uncertainties."
While this outlook represents management's current judgment on the future
direction of the business, risks and uncertainties could cause actual results to
differ materially from any future performance suggested below.

          The following discussion and analysis should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in our 2001 Annual Report on Form 10-K as well as with our
condensed consolidated financial statements and notes appearing elsewhere in
this Quarterly Report on Form 10-Q.

OVERVIEW

          Triangle is engaged in the development of new drug candidates
primarily for serious viral diseases. Since our inception on July 12, 1995, our
operating activities have related primarily to developing our drug candidates,
raising working capital, negotiating license and option arrangements for our
drug candidates and recruiting personnel. We have not received any revenues from
the sale of products and do not believe it likely that any of our drug
candidates will be commercially available before the year 2003. As of June 30,
2002, our accumulated deficit was approximately $423.6 million.

          We require substantial working capital to fund the development and
potential commercialization of our drug candidates. We will require significant
expenditures to fund preclinical testing, clinical research studies, drug
synthesis and manufacturing, license obligations, development of a sales and
marketing infrastructure and ongoing administrative support before receiving
regulatory approvals for our drug candidates. These approvals may be delayed or
not granted at all. We have been unprofitable since our inception and expect to
incur substantial losses for the next several years. Because of the nature of
our business, we expect that losses will fluctuate from period to period and
that fluctuations may be substantial.

          You should consider the operating and financial risks associated with
drug development activities when evaluating our prospects. To address these
risks we must, among other things, successfully develop and commercialize our
drug candidates, secure and maintain all necessary proprietary rights, respond
to a rapidly changing competitive market, obtain additional financing and
continue to attract, retain and motivate qualified personnel. We cannot assure
you that we will be successful in addressing these risks.

          Our operating expenses are difficult to predict and will depend on
several factors. Development expenses, including expenses for drug synthesis and
manufacturing, preclinical testing and clinical research activities, will depend
on the ongoing requirements of our drug development programs, availability of
capital and direction from regulatory agencies, which are difficult to predict.
Management may in some cases be able to control the timing of development
expenses in part by accelerating or decelerating preclinical testing and
clinical trial activities, but many of these expenditures will occur
irrespective of whether our drug candidates are approved when anticipated or at
all. Additionally, selling, general and administrative expenses will depend on
the level and method of our commercialization activities. As a result of these
factors, we believe that period to period comparisons are not necessarily
meaningful and you should not rely on them as an indication of future
performance. Due to all of the foregoing factors, it is possible that our
consolidated operating results will be below the expectations of market analysts
and investors. In such event, the prevailing market price of our common stock
could be materially adversely affected.

                                       11
<Page>

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2002 AND 2001
-----------------------------------------

COLLABORATIVE REVENUE

          Revenue totaled $1.0 million for the three months ended June 30, 2002
as compared to $1.7 million for the same period in 2001. Revenue is solely
related to collaborative revenue associated with our strategic alliance with
Abbott Laboratories, the Abbott Alliance, and arises from $31.7 million of
non-contingent research and development expense reimbursement, which is being
amortized over the anticipated research and development arrangement period. The
decrease in 2002 collaborative revenue, as compared to 2001, reflects an
extension of the anticipated research and development period in which this
reimbursement is to be recognized.

          We expect our collaboration revenue to increase significantly in the
third quarter of 2002, as all but $2.0 million of the remaining deferred revenue
associated with non-contingent research and development expense reimbursement
will be recognized in association with the July 30, 2002 termination of the
Abbott Alliance described below. As the entire $31.7 million reimbursement was
received in prior fiscal years, there will be no cash inflows associated with
future recognition of deferred revenue. See "--Subsequent Events".

LICENSE FEES

          License fees totaled $109,000 for the three months ended June 30, 2002
as compared to $858,000 for the same period in 2001. The decrease in 2002
license fee expense, as compared to 2001, is related to the timing and magnitude
of milestone obligations and preservation payments under our license and option
agreements for our portfolio of drug candidates, and has been impacted by the
recent termination of several license agreements. Future license fees may
consist of milestone payments or preservation payments under our license
agreements, the amount of which could be substantial and the timing of which
will depend on a number of factors that we cannot predict. These factors
include, among others, the success of our drug development programs, the amount
of capital available for allocation to individual drug candidates in our
portfolio, the timing of regulatory submissions and the extent to which we may
in-license or out-license drug candidates.

DEVELOPMENT EXPENSES

          Development expenses totaled $14.8 million for the three months ended
June 30, 2002 as compared to $20.8 million for the same period in 2001. The
decrease in 2002 development expenses, as compared to 2001, is due primarily to
the discontinuation of certain development projects and moderated development
spending associated with our restructuring in August of 2001 as well as a
significant reduction in patent expense.

          Our future development expenses will depend on the results and
magnitude of our clinical and preclinical activities, our targeted future cash
usage, availability of capital to simultaneously fund multiple drug candidate
development programs and requirements imposed by regulatory agencies. In
addition, we occasionally enter into collaborative arrangements with
governmental and other parties to assist in conducting the clinical trials
necessary for the development of our compounds. This practice allows us to
benefit from the experience of the collaborative party in conducting such trials
and to share some of the financial and administrative burden of these trials. To
date, we have entered into collaborative clinical trial arrangements for our
Coviracil and amdoxovir drug candidates. Accordingly, our development expenses
may fluctuate significantly from period to period. In addition, if we in-license
or out-license rights to drug candidates our development expenses may fluctuate
significantly from prior periods.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

          Selling, general and administrative expenses totaled $1.6 million for
the three months ended June 30, 2002 as compared to $2.3 million for the same
period in 2001. The decrease in 2002 selling, general and administrative
expenses, as compared to 2001, is primarily related to decreased 2002 sales and
marketing spending for the period. Our selling, general and administrative
expenses may fluctuate from period to period and such fluctuations may be
significant. Future selling, general and administrative expenses will depend on
the level of our future development

                                       12
<Page>

and commercialization activities, and the commercial availability of our
products. We expect that our selling, general and administrative expenses will
increase in future periods that immediately precede and follow our first product
launch.

GAINS (LOSSES) ON INVESTMENTS, NET

          Gains on investments totaled $2,000 for the three months ended June
30, 2002 as compared to $13,000 of losses for the same period in 2001. These
gains and losses represent normal realized gains and losses on our general
investment portfolio.

INTEREST INCOME, NET

          Net interest income totaled $558,000 for the three months ended June
30, 2002 as compared to $1.0 million for the same period in 2001. The
significant decrease in 2002 interest income, as compared to 2001, is due to
much lower interest rates on low-risk investments in the second quarter of 2002.
Future interest income will depend on our future cash and investment balances
and the return on these investments. See "--Liquidity and Capital Resources."

SIX MONTHS ENDED JUNE 30, 2002 AND 2001
---------------------------------------

COLLABORATIVE REVENUE

          Revenue totaled $2.1 million for the six months ended June 30, 2002 as
compared to $3.5 million for the same period in 2001. Revenue is solely related
to collaborative revenue associated with the Abbott Alliance and arises from
$31.7 million of non-contingent research and development expense reimbursement,
which is being amortized over the anticipated research and development
arrangement period. The decrease in 2002 collaborative revenue, as compared to
2001, reflects an extension of the anticipated research and development period
in which this reimbursement is to be recognized.

LICENSE FEES

          License fees totaled $218,000 for the six months ended June 30, 2002
as compared to $2.0 million for the same period in 2001. License fees for 2002
and 2001 relate to the recognition of milestone obligations and/or preservation
fees under our license and option agreements for our portfolio of drug
candidates. The decrease in 2002 license fee expense, as compared to 2001, is
related to the timing and magnitude of milestone obligations and preservation
payments under our license and option agreements for our portfolio of drug
candidates, and has been impacted by the termination of license agreements
associated with our restructuring in August 2001. Future license fees may
consist of milestone payments or preservation payments under our license
agreements, the amount of which could be substantial and the timing of which
will depend on a number of factors that we cannot predict. These factors
include, among others, the success of our drug development programs, the timing
of regulatory submissions, the amount of capital available for allocation to
individual drug candidates in our portfolio, and the extent to which we may
in-license or out-license drug candidates.

DEVELOPMENT EXPENSES

          Development expenses totaled $26.8 million for the six months ended
June 30, 2002 as compared to $42.6 million for the same period in 2001.
Development expenses for 2002 consisted primarily of expenses for clinical
trials, employee compensation, drug synthesis, and preclinical/toxicology
testing. Development expenses for 2001 consisted primarily of expenses for
clinical trials, drug synthesis, employee compensation, amounts paid for
professional services, patent costs and preclinical/toxicology testing. The
substantial decrease in 2002 development expenses, as compared to 2001, is the
result of significantly reduced spending on non-core development ("Other")
programs and reduced indirect costs as a result of our restructuring in August
2001, as well as substantially reduced manufacturing expenses for amdoxovir.
Development expenses in 2002 and 2003 will continue to be heavily weighted to
Coviracil for HIV infection as we finish our last HIV pivotal phase III trial
(FTC-301), submit a New Drug Application by the end of the third quarter of
2002, and manufacture inventory in anticipation of a 2003 product launch.

                                       13
<Page>

Development expenses by major project for the six months ended June 30, 2002 and
2001 are shown below (dollars in thousands).

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------------------
                COMPOUND                     INDICATION       2002 COSTS      %       2001 COSTS     %    DIFFERENCE      %
------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>              <C>            <C>       <C>          <C>    <C>           <C>
Coviracil                                    HIV              $   12,495      47       $ 13,261      31    $   (766)      (6)
------------------------------------------------------------------------------------------------------------------------------
Amdoxovir                                    HIV                     724       3          7,542      18      (6,818)     (90)
------------------------------------------------------------------------------------------------------------------------------
Clevudine                                    Hepatitis B             568       2          1,640       4      (1,072)     (65)
------------------------------------------------------------------------------------------------------------------------------
Emtricitabine (FTC)                          Hepatitis B           2,069       8          2,176       5        (107)      (5)
------------------------------------------------------------------------------------------------------------------------------
Immunostimulatory sequences candidate        Hepatitis B             630       2          1,438       3        (808)     (56)
------------------------------------------------------------------------------------------------------------------------------
Other drug candidates                                                473       1          4,614      11      (4,141)     (90)
------------------------------------------------------------------------------------------------------------------------------
Indirect (unallocated) development costs                           9,812      37         11,967      28      (2,155)     (18)
------------------------------------------------------------------------------------------------------------------------------
Total                                                         $   26,771     100       $ 42,638     100    $(15,867)     (37)
------------------------------------------------------------------------------------------------------------------------------
</Table>

          Our future development expenses will depend on the results and
magnitude of our clinical and preclinical/toxicology activities, our targeted
future cash usage, availability of capital to simultaneously fund multiple drug
candidate development programs and requirements imposed by regulatory agencies.
In addition, we occasionally enter into collaborative arrangements with
governmental and other parties to assist in conducting the clinical trials
necessary for the development of our compounds. This practice allows us to
benefit from the experience of the collaborative party in conducting such trials
and to share some of the financial and administrative burden of these trials. To
date, we have entered into collaborative clinical trial arrangements for our
Coviracil and amdoxovir drug candidates. Accordingly, our development expenses
may fluctuate significantly from period to period. In addition, if we in-license
or out-license rights to drug candidates our development expenses may fluctuate
significantly from prior periods.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

          Selling, general and administrative expenses totaled $3.0 million for
the six months ended June 30, 2002 as compared to $5.0 million for the same
period in 2001. Selling, general and administrative expenses for 2002 and 2001
consisted primarily of employee compensation, amounts paid for outside
professional services, and rent expense. The decrease in 2002 selling, general
and administrative expenses, as compared to 2001, is primarily related to
decreased 2002 sales and marketing spending for the period including the
reduction in compensation and related costs associated with our restructuring in
August 2001. Our selling, general and administrative expenses may fluctuate from
period to period and such fluctuations may be significant. Future selling,
general and administrative expenses will depend on the level of our future
development and commercialization activities and the commercial availability of
our products. We expect that our selling, general and administrative expenses
will increase in future periods that immediately precede and follow our first
product launch.

GAINS (LOSSES) ON INVESTMENTS, NET

          Gains on investments totaled $5,000 for the six months ended June 30,
2002 as compared to $67,000 of gains for the same period in 2001. These gains
represent normal realized gains and losses on our general investment portfolio.

INTEREST INCOME, NET

          Net interest income totaled $1.2 million for the six months ended June
30, 2002 as compared to $2.0 million for the same period in 2001. The
significant decrease in 2002 interest income, as compared to 2001, is due to
much lower interest rates on low-risk investments in 2002. Future interest
income will depend on our future cash and investment balances and the return on
these investments. See "--Liquidity and Capital Resources."

                                       14
<Page>

OTHER INCOME

          Other income totaled $10.0 million for the six months ended June 30,
2002, as compared to no income or expense for the same period in 2001. In
January 2002, our Chief Executive Officer and Chairman of the Board, Dr. David
W. Barry, died unexpectedly. We subsequently received a $10.0 million payment
under a key-man insurance policy.

LIQUIDITY AND CAPITAL RESOURCES

          We have financed our operations since inception (July 12, 1995)
through June 30, 2002 primarily with the net proceeds received from private
placements of equity securities, which have provided aggregate net proceeds of
approximately $353.1 million, from public offerings of common stock, which have
provided aggregate net proceeds of approximately $97.7 million, as well as $31.5
million of net non-contingent research and development reimbursement proceeds
from the Abbott Alliance and receipt of a $10.0 million key-man insurance policy
payment.

          At June 30, 2002, we had net working capital of $48.8 million, a
decrease of approximately $5.3 million from December 31, 2001. The decrease in
working capital is principally due to the use of funds for our normal operating
expenses offset by the receipt of a $10.0 million key-man insurance policy
payment received in March 2002. Our principal sources of liquidity at June 30,
2002 were $43.9 million in cash and cash equivalents, $37.3 million in
investments which are considered "available-for-sale," and $1.0 million of
strategic corporate investments, reflecting a $26.0 million decrease of cash,
cash equivalent and investment balances over those at December 31, 2001.

          Our working capital requirements may fluctuate in future periods
depending on many factors, including the efficiency of manufacturing processes
developed on our behalf by third parties, the cost of drugs supplied by third
party contractors, the magnitude, scope and timing of our drug development
programs, the cost, timing and outcome of regulatory reviews and changes in
regulatory requirements, costs under the license agreements relating to our drug
candidates, including the costs of obtaining patent protection for our drug
candidates, the timing and terms of business development activities related to
current and new drug candidates, the rate of technological advances relevant to
our operations, the timing, method and cost of the commercialization of our drug
candidates, the level of required administrative and legal support, the
availability of capital to support multiple drug candidate development programs
and the potential expansion of facility space.

          Amounts payable by us in the future under our existing license and
research agreements are uncertain due to a number of factors, including the
progress of our drug development programs, our ability to obtain regulatory
approval to commercialize drug candidates and the commercial success of approved
drugs. As of June 30, 2002, our existing license and research agreements may
require future cash payments of up to $57.3 million contingent on the
achievement of development milestones, up to $30.0 million on the achievement of
sales milestones, and $1.6 million of future research and development payments.
As of June 30, 2002, we are also obligated to issue 250,000 shares of common
stock if development milestones are achieved regarding compounds for the
treatment of hepatitis B obtained in the Avid Corporation acquisition, although
we are not currently developing these compounds. Additionally, we are obligated
to pay royalties ranging from 7.5% to 23.25% of net sales of each licensed
product incorporating drug candidates currently in our portfolio. Most of our
license agreements require minimum royalty payments commencing three years after
regulatory approval of the licensed compound. Depending on our success and
timing in obtaining regulatory approval, aggregate annual minimum royalties and
license preservation fees under our existing license agreements could range from
$50,000 if only a single drug candidate is approved for one indication, to $47.0
million if all drug candidates are approved for all indications. In addition, we
have license and collaboration agreements that allow us to obtain licenses on
additional drug candidates in the future. If these collaborative arrangements
identify additional drug candidates, our license obligations would increase.

          We believe that our existing cash, cash equivalents and investments
will be adequate to satisfy our anticipated working capital requirements through
the second quarter of 2003. In addition, we expect that upon approval of
Coviracil for the treatment of HIV in the United States and Europe, additional
liquidity will be provided by the Abbott lines of credit (See "--Subsequent
Events.") which would extend our ability to satisfy our anticipated working
capital requirements. We expect that we will be required to raise additional
capital to fund our future operations through equity or debt financings or from
other sources. Our future financing needs will depend on the

                                       15
<Page>

results of clinical trials, size of drug candidate portfolio, timing of
regulatory submissions and approvals, commercial potential of our drug
candidates and our ability to successfully commercialize our drug candidates. We
may also consider modifying the timing or scope of our clinical programs or
out-licensing one or more of our compounds which may impact our anticipated
capital requirements. Additional funding may not be available on favorable terms
from any of these sources or at all. Our liquidity projections are subject to
several risks including unanticipated cost overruns, the need to expand the
magnitude or scope of existing development programs, the need to change the
number or timing of clinical trials, unanticipated regulatory requirements, the
timing and costs related to the Food and Drug Administration's review and
preparation for the commercial launch of Coviracil, the timing of regulatory
approvals and our ability to access the Abbott lines of credit (See
"--Subsequent Events."), and other factors described under the caption "Risk and
Uncertainties" elsewhere in this Form 10-Q.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

          Our condensed consolidated financial statements require us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues, expenses and related disclosure of contingent assets and liabilities.
We evaluate our estimates, judgments and the policies underlying these estimates
on a periodic basis as the situation changes, and regularly discuss financial
events, policies, and issues with members of our audit committee and our
independent accountants. We routinely evaluate our estimates and policies
regarding clinical trial, preclinical/toxicology and manufacturing liabilities;
patent related liabilities; license milestone obligations; revenue recognition;
inventory; intangible assets and deferred tax assets.

          We generally enter into contractual agreements with third-party
vendors to provide clinical, preclinical/toxicology and manufacturing services
in the ordinary course of business. Many of these contracts are subject to
milestone based invoicing and the contract could extend over several years. We
record liabilities under these contractual commitments when we determine an
obligation has been incurred, regardless of the timing of the invoice. Patent
related and license milestone liabilities are recorded based upon various
assumptions or events that we believe are the most reasonable to each individual
circumstance, as well as based upon historical experience. License milestone
liabilities and the related expense are recorded when the milestone criterion
achievement or license preservation payment is probable. We have not recognized
any assets for inventory, intangible items or deferred taxes as we have yet to
submit a New Drug Application or its equivalent or receive regulatory approval
for any of our drug candidates. Any potential asset that could be recorded in
regards to any of these items is fully reserved. We currently recognize revenue
based upon the amortization of non-contingent reimbursed research and
development payments that have been received from the Abbott Alliance. The
amortization period utilized to recognize this revenue is based upon the terms
of the Abbott Alliance. As a result of the termination of the Abbott Alliance on
July 30, 2002 (See "--Subsequent Events."), we will recognize all but $2.0
million of the remaining deferred revenue associated with the Abbott Alliance in
our third quarter 2002 results.

          In all cases, actual results may differ from our estimates under
different assumptions or conditions.

LITIGATION AND OTHER CONTINGENCIES

          As discussed in footnotes 5 and 7 of the condensed consolidated
financial statements and below in "Risk and Uncertainties," we are indirectly
involved in several patent opposition and adversarial proceedings and one
lawsuit filed in Australia regarding the patent rights related to our licensed
drug candidate, amdoxovir, as well as one Opposition Proceeding in Europe
pertaining to amdoxovir. Although we are not a named party in any of these
proceedings, we are obligated to reimburse our licensors for legal expenses
associated with these proceedings. In one of these patent opposition
proceedings, on November 8, 2000, the Australian Patent Office held that several
patent claims of Emory University directed to amdoxovir are not patentable over
an earlier Shire BioChem, Inc., Shire Pharmaceuticals Group plc, Shire, patent.
Emory has appealed this decision of the Australian Patent Office to the
Australian Federal Court. On July 26, 2002, we entered into a Binding Material
Terms Agreement with Shire, Emory and the University of Georgia Research
Foundation, Inc., University of Georgia, in which Shire agreed to enter into an
exclusive royalty bearing license agreement with Emory and the University of
Georgia covering Shire's patent rights in amdoxovir, that will be exclusively
sublicensed to us. Triangle, Emory and the University of Georgia agreed to grant
Shire an exclusive license to their respective patent rights in Shire's drug
development candidate, BCH-13520. If Shire, Emory, the University of Georgia
and Triangle do not finalize these license agreements, the parties have
agreed to submit any unresolved issues to binding arbitration. We cannot
predict the outcome of this or any of the other proceedings. We believe that
an adverse judgment rendered against us in Australia would not result in a
material financial obligation, nor would we have to

                                       16
<Page>

recognize an impairment under Statement of Financial Accounting Standards, SFAS,
No. 144, "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS as no
amounts have been capitalized related to this drug candidate. However, any
development in these proceedings adverse to our interests, including any adverse
development related to the patent rights licensed to us for this drug candidate
or our related rights or obligations could have a material adverse effect on our
future operations.

SUBSEQUENT EVENTS

     On July 30, 2002, we reacquired full product rights, including rights to
all profits, from Abbott for four of our drug development programs in clinical
development. We have entered into a series of agreements with Abbott terminating
the Abbott Alliance. A summary of significant terms between Triangle and Abbott
associated with the reacquisition of product rights includes the following. We

     -    reacquired all rights previously granted to Abbott, which
          includes the rights to all profits, for Coviracil for the
          treatment of HIV and hepatitis B, amdoxovir, and clevudine;
     -    will no longer be required to provide Abbott a right of first
          discussion on all future compounds which we develop;
     -    will have access to two unsecured lines of credit totaling $42.5
          million, subject to certain terms and conditions. Upon approval
          of Coviracil for the treatment of HIV in the United States,
          Abbott will make available to us an unsecured line of credit of
          $30 million. Upon approval of Coviracil for the treatment of HIV
          in Europe, Abbott will make available to us an unsecured line of
          credit of $12.5 million. The lines of credit may be reduced by
          certain types of non-dilutive financing we receive from other
          parties;
     -    executed a new manufacturing and supply agreement under which
          Abbott will manufacture launch quantities of Coviracil expected
          to be sufficient for approximately the first year's sales, and
          Abbott will provide manufacturing capabilities through July 31,
          2005 at our request. Abbott will also provide resources and
          facilitate the transfer of the Coviracil manufacturing process to
          a third-party manufacturer.
     -    will forego rights to all remaining milestone payments and our
          right to co-promote Abbott's HIV product, Kaletra(R).
     -    granted a 1% royalty to Abbott on the first $200 million of
          cumulative, worldwide Coviracil sales.

     Termination of the Abbott Alliance will result in all but $2.0 million of
our remaining deferred revenue being recognized in our third quarter 2002
results as we will no longer have development obligations to Abbott for any of
our drug candidates. In addition, Abbott's representative on our Board of
Directors has resigned and Abbott's right to purchase additional Triangle common
stock has terminated.

     On August 5, 2002, Daniel G. Welch was appointed our Chairman and Chief
Executive Officer succeeding Dr. David Barry who passed away in January 2002.

RISK AND UNCERTAINTIES

     IN ADDITION TO THE OTHER INFORMATION CONTAINED HEREIN, THE FOLLOWING RISKS
AND UNCERTAINTIES SHOULD BE CAREFULLY CONSIDERED IN EVALUATING US AND OUR
BUSINESS.

ALL OF OUR DRUG CANDIDATES ARE IN DEVELOPMENT AND WE MAY NEVER SUCCESSFULLY
COMMERCIALIZE THEM.

     Some of our drug candidates are at an early stage of development and all of
our drug candidates will require expensive and lengthy testing and regulatory
clearances before we may commercialize them. We do not expect any of our drug
candidates to be commercially available before the year 2003. There are many
reasons that we may fail in our efforts to develop or commercialize our drug
candidates, including that:

                                       17
<Page>

          -    our drug candidates may be ineffective, toxic or may not
               receive regulatory clearances,
          -    our drug candidates may be too expensive to manufacture or
               market or may not achieve broad market acceptance,
          -    third parties may hold proprietary rights that preclude us
               from developing or marketing our drug candidates, or
          -    third parties may market equivalent or superior products.

          The success of our business depends on our ability to successfully
develop and market our drug candidates.

WE HAVE INCURRED LOSSES SINCE INCEPTION AND MAY NEVER ACHIEVE PROFITABILITY.

          We formed Triangle in July 1995 and have incurred losses since our
inception. At June 30, 2002, our accumulated deficit was $423.6 million. Our
historical costs relate primarily to the acquisition and development of our drug
candidates and selling, general and administrative costs. We have not generated
any revenue from the sale of our drug candidates to date, and do not expect to
do so before the year 2003. In addition, we expect annual losses to continue
over the next several years as a result of our drug development and
commercialization efforts. To become profitable, we must successfully develop
and obtain regulatory approval for our drug candidates and effectively
manufacture, market and sell any products we develop. We may never generate
significant revenue or achieve profitability.

IF WE NEED ADDITIONAL FUNDS AND ARE UNABLE TO RAISE THEM, WE WILL HAVE TO
CURTAIL OR CEASE OPERATIONS.

          Our drug development programs and our efforts to commercialize our
drug candidates require substantial working capital, including expenses for:

          -    preclinical testing,
          -    chemical synthetic scale-up,
          -    manufacture of drug substance for clinical trials,
          -    toxicology studies,
          -    clinical trials of drug candidates,
          -    sales and marketing,
          -    payments to our licensors, and
          -    potential commercial launch of our drug candidates.

          Our future working capital needs will depend on many factors,
including:

          -    the progress, magnitude and success of our drug development
               programs,
          -    the scope and results of preclinical testing and clinical trials,
          -    the cost, timing and outcome of regulatory submissions and
               reviews,
          -    the costs under current and future license agreements for our
               drug candidates, including the costs of obtaining and enforcing
               patent protection for our drug candidates,
          -    the costs of acquiring any additional drug candidates,
          -    the out-licensing of existing drug candidates,
          -    the rate of technological advances by us and other companies,
          -    the commercial potential of our drug candidates,
          -    the magnitude of our administrative and legal expenses,
          -    the costs of establishing sales and marketing functions, and
          -    the costs of establishing third party arrangements for
               manufacturing.

          We have incurred negative cash flow from operations since we
incorporated Triangle and do not expect to generate positive cash flow from our
operations for at least the next several years. We believe that our existing
cash, cash equivalents and investments will be adequate through the second
quarter of 2003. We expect that we will need

                                       18
<Page>

additional future financings to fund our operations. We may not be able to
obtain adequate financing to fund our operations, any additional financing we
obtain may be on terms that are not favorable to us and we may not be able to
access the lines of credit made available to us by Abbott. In addition, any
future financings could substantially dilute our stockholders. If adequate funds
are not available, we will be required to delay, reduce or eliminate one or more
of our drug development programs or to enter into new collaborative arrangements
on terms that may not be favorable to us. These collaborative arrangements or
modifications could result in the transfer of valuable rights to third parties.
In addition, we may acquire technologies and drug candidates that would increase
our working capital requirements.

PROJECTED DEVELOPMENT COSTS ARE DIFFICULT TO ESTIMATE AND MAY CHANGE FREQUENTLY
PRIOR TO REGULATORY APPROVAL.

          While all new compounds require standard regulated phases of testing,
the actual type and scope of testing can vary significantly among different drug
candidates which may result in significant disparities in the total costs
required to complete the respective development programs.

          The number and type of studies that may be required by the Food and
Drug Administration, FDA, for a particular compound are based on the compound's
clinical profile compared to existing therapies for the targeted patient
population. Factors that affect the costs of a clinical trial include:

          -    the number of patients required to participate in clinical trials
               to demonstrate statistical significance for a drug's safety and
               efficacy,
          -    the time required to enroll the targeted number of patients in
               clinical trials, which may vary depending on the size and
               availability of the targeted patient population and the perceived
               benefit to study participants, and
          -    the number and type of required laboratory tests supporting
               clinical trials.

          Other activities required before submitting a New Drug Application
include regulatory preparation for submission, biostatistical analyses, scale-up
synthesis, and the production of a required amount of commercial grade drug
product inventory which meets current Good Manufacturing Practice standards.

          In addition, ongoing development programs and associated costs are
subject to frequent, significant and unpredictable changes due to a number of
factors, including:

          -    data collected in preclinical or clinical studies may prompt
               significant changes or enhancements to an ongoing development
               program,
          -    the FDA may direct the sponsor to change or enhance its ongoing
               development program based on developments in the testing of
               similar compounds or related compounds,
          -    unexpected regulatory requirements or interim reviews by
               regulatory agencies may cause delays or changes to development
               programs, and
          -    anticipated manufacturing costs may change significantly due to
               required changes in manufacturing processes or variances from
               anticipated manufacturing process yields.

BECAUSE WE MAY NOT SUCCESSFULLY COMPLETE CLINICAL TRIALS REQUIRED FOR REGULATORY
APPROVAL OF OUR DRUG CANDIDATES, OUR BUSINESS MAY NEVER ACHIEVE PROFITABILITY.

          No regulatory authority has approved any of our drug candidates. To
obtain regulatory approvals needed for the sale of our drug candidates, we must
demonstrate through preclinical testing and clinical trials that each drug
candidate is safe and effective. The clinical trial process is complex and
uncertain and the regulatory environment varies widely from country to country.
Positive results from preclinical testing and early clinical trials do not
ensure positive results in pivotal clinical trials. Many companies in our
industry have suffered significant setbacks in pivotal clinical trials, even
after promising results in earlier trials. Any of our drug candidates may
produce undesirable side effects in humans. These side effects, or side effects
from other drugs in a trial, could cause us or regulatory authorities to
interrupt, delay or halt clinical trials of a drug candidate, or could result in
regulatory authorities refusing to approve the drug candidate for any and all
targeted indications. We, the FDA, or foreign

                                       19
<Page>

regulatory authorities may suspend or terminate clinical trials at any time if
we or they believe the trial participants face unacceptable health risks.

CLINICAL TRIALS MAY TAKE LONGER TO COMPLETE AND COST MORE THAN WE EXPECT, WHICH
WOULD ADVERSELY AFFECT OUR ABILITY TO COMMERCIALIZE DRUG CANDIDATES AND ACHIEVE
PROFITABILITY.

          Clinical trials are lengthy and expensive. They require adequate
supplies of drug substance and sufficient patient enrollment. Patient enrollment
is a function of many factors, including:

          -    the size of the patient population,
          -    the nature of the protocol,
          -    the proximity of patients to clinical sites,
          -    the eligibility criteria for the clinical trial, and
          -    the perceived benefit of participating in a clinical trial.

          Delays in patient enrollment can result in increased costs and longer
development times. Even if we successfully complete clinical trials, we may not
be able to submit any required regulatory submissions in a timely manner and we
may not receive regulatory approval for the drug candidate. In addition, if the
FDA or foreign regulatory authorities require additional clinical trials we
could face increased costs and significant development delays.

          We conduct clinical trials in many countries around the world and are
subject to the risks and uncertainties of doing business internationally.
Disruptions in communication and transportation, changes in governmental
policies, civil unrest and currency exchange rates may affect the time and costs
required to complete clinical trials in other countries.

          Changes in regulatory policy or new regulations could also result in
delays or rejections of our applications for approval of our drug candidates.
Drug candidates designated as "fast track" products may not, however, continue
to qualify for expedited review and our other drug candidates may fail to
qualify for fast track development or expedited review. Even though some of our
drug candidates have qualified for expedited review, the FDA may not approve
them at all or any sooner than other drug candidates that do not qualify for
expedited review.

IF WE OR OUR LICENSORS ARE NOT ABLE TO OBTAIN AND MAINTAIN ADEQUATE PATENT
PROTECTION FOR OUR DRUG CANDIDATES, WE MAY BE UNABLE TO COMMERCIALIZE OUR DRUG
CANDIDATES OR PREVENT OTHER COMPANIES FROM USING OUR TECHNOLOGY IN COMPETITIVE
PRODUCTS.

          Our success will depend on our ability and the ability of our
licensors to obtain and maintain patents and proprietary rights for our drug
candidates and to avoid infringing the proprietary rights of others, both in the
United States and in foreign countries. We have no patents solely in our own
name and we have a small number of patent applications of our own pending. We
have several patents and patent applications which are jointly owned with other
entities. We have licensed, or have an option to license, patents, patent
applications and other proprietary rights from third parties for each of our
drug candidates. If we breach our licenses, we may lose rights to important
technology and drug candidates.

          Our patent position on some of our drug candidates, like that of many
pharmaceutical companies, is uncertain and involves complex legal and factual
questions for which important legal principles are unresolved. We may not
develop or obtain rights to products or processes that are patentable. Even if
we do obtain patents, they may not adequately protect the technology we own or
have licensed. In addition, others may challenge, seek to invalidate, infringe
or circumvent any patents we own or license. If they do so successfully, rights
we receive under those patents may not provide competitive advantages to us.
Further, the manufacture, use or sale of our products or processes may infringe
the patent rights of others.

          Several pharmaceutical and biotechnology companies, universities and
research institutions have filed patent applications or received patents that
cover our technologies or technologies similar to ours. Others have filed patent
applications and received patents that conflict with patents or patent
applications we own or have licensed, either by claiming the same methods or
compounds or by claiming methods or compounds that could dominate

                                       20
<Page>

those owned by or licensed to us. In addition, we may not be aware of all
patents or patent applications that may impact our ability to make, use or sell
any of our drug candidates. For example, United States patent applications are
confidential while pending in the Patent and Trademark Office, and patent
applications filed in foreign countries are often first published six months or
more after filing. Any conflicts resulting from third party patent applications
and patents could significantly reduce the coverage of our patents and limit our
ability to obtain meaningful patent protection. If other companies obtain
patents with conflicting claims, we may be required to obtain licenses to these
patents or to develop or obtain alternative technology. We may not be able to
obtain any license on acceptable terms or at all. Any failure to obtain licenses
could delay or prevent us from pursuing the development or commercialization of
our drug candidates, which would adversely affect our ability to achieve
profitability.

          On July 26, 2002, we entered into a Binding Material Terms Agreement
with Shire, Emory, and the University of Georgia, in which Shire agreed to enter
into an exclusive royalty bearing license agreement with Emory and the
University of Georgia covering Shire's patent rights in amdoxovir, that will be
sublicensed to us. The term sheet provides that under the license agreement the
parties are currently finalizing, we will pay Shire a royalty on sales of
amdoxovir. When the license agreement with Shire is executed, we will be able to
rely on and enforce the Shire patents as well as the Emory and the University of
Georgia patents against third party infringers of claims covering amdoxovir.
Though the parties intend the Binding Material Terms Agreement to be
enforceable, the final license agreement has not yet been completed. The parties
have agreed that any unresolved terms of the license agreement will be submitted
to binding arbitration.

          We simultaneously entered into an agreement with Emory and the
University of Georgia that reduces the royalty to Emory and the University of
Georgia on all sales of amdoxovir. In addition, Shire agreed to withdraw all
adversarial proceedings against Emory's and the University of Georgia's patent
rights covering amdoxovir and Emory agreed to withdraw all adversarial
proceedings against Shire's patent rights covering amdoxovir. Emory, the
University of Georgia and Triangle also agreed to grant Shire an exclusive
license to their respective patent rights in Shire's drug development candidate,
BCH-13520. BCH-13520 is structurally similar to amdoxovir and, if approved,
BCH-13520 is expected to directly compete with amdoxovir in the HIV market.

          If the Binding Material Terms Agreement with Shire covering amdoxovir
is not finalized into an exclusive license agreement, our patent position
regarding the use of amdoxovir to treat HIV and/or hepatitis B would remain
highly uncertain and involve numerous complex legal and factual questions that
are unknown or unresolved. If any of these questions is resolved in a manner
that is not favorable to us, we would not have the right to commercialize
amdoxovir in the absence of a license from one or more third parties, which may
not be available on acceptable terms or at all. Even if any of these questions
is resolved in our favor, we may still attempt to obtain licenses from one or
more third parties to reduce the risks of challenges to our patent positions.
These licenses may not be available on acceptable terms or at all.

          AMDOXOVIR (FORMERLY KNOWN AS DAPD)

          We obtained our rights to amdoxovir under a license from Emory and the
University of Georgia. Our rights to amdoxovir include a number of issued United
States patents that cover:

          -    composition of matter,
          -    a method for the synthesis of amdoxovir,
          -    methods for the use of amdoxovir alone or in combination with
               several other agents for the treatment of hepatitis B, and
          -    a method to treat HIV with amdoxovir.

          We also have rights to several foreign patents and patent applications
that cover methods for the use of amdoxovir alone or in combination with other
anti-hepatitis B agents for the treatment of hepatitis B. Additional foreign
patent applications are pending which contain claims for the use of amdoxovir to
treat HIV. Emory and the University of Georgia filed patent applications
claiming these inventions in the United States in 1990 and 1992.

          Shire filed a patent application in the United States in 1988 on a
group of nucleosides in the same general class as amdoxovir and their use to
treat HIV, and has filed corresponding patent applications in foreign countries.
The Patent and Trademark Office issued a patent to Shire in 1993 covering a
class of nucleosides that includes

                                       21
<Page>

amdoxovir and its use to treat HIV. Corresponding patents have been issued
to Shire in many foreign countries. Emory has filed an opposition to patent
claims granted to Shire by the European Patent Office based, in part, on Emory's
assertion that Shire's patent does not disclose how to make amdoxovir. In a
patent opposition hearing held at the European Patent Office on March 4, 1999,
the Opposition Division ruled that the Shire European patent covering amdoxovir
is valid. Emory appealed this decision to the European Patent Office Technical
Board of Appeal. As a result of the Binding Material Terms Agreement entered
into with Shire on July 26, 2002, Emory withdrew its appeal of the decision of
the Opposition Division, and therefore, the Shire patent in Europe remains in
force.

          Shire has opposed Emory's and the University of Georgia's granted
claims on amdoxovir in Europe. According to the terms of the Binding Material
Terms Agreement, Shire will withdraw these oppositions following execution of an
exclusive license agreement. If the license agreement is not finalized or Shire
does not withdraw its Opposition, the European Patent Office may conclude that
Emory's and the University of Georgia's granted patent on amdoxovir in Europe is
not valid, and we would lose patent protection on the drug in Europe.

          Shire has also opposed patent claims granted to Emory on both
amdoxovir and DXG, the parent drug into which amdoxovir is converted in the
body, in the Australian Patent Office.

          In a decision dated November 8, 2000, the Australian Patent Office
held that Emory's patent claims directed to amdoxovir are not patentable over an
earlier Shire patent. Emory has appealed this decision of the Australian Patent
Office to the Australian Federal Court. Shire's separate opposition to Emory's
patent claims on DXG in Australia is proceeding in the Australian Patent Office.
Under the terms of the Binding Material Terms Agreement, Shire will withdraw its
opposition to Emory's and the University of Georgia's patent claims following
execution of an exclusive license agreement covering amdoxovir in both
proceedings, however, Emory and the University of Georgia will still be required
to defend the validity of its claims to the Australian Federal Court and to the
Australian Patent Office. If Emory and the University of Georgia are
unsuccessful in convincing the Australian tribunals that their claims are valid,
Emory and the University of Georgia will lose their patent on amdoxovir in
Australia. If the Binding Material Terms Agreement on amdoxovir is not finalized
into an exclusive license agreement, we will submit any unresolved terms to
binding arbitration. We cannot predict how these proceedings, if they occur,
will resolve the remaining terms of the agreements.

          IMMUNOSTIMULATORY SEQUENCE PRODUCT CANDIDATES

          In March 2000, we entered into a licensing and collaborative agreement
with Dynavax Technologies Corporation to develop immunostimulatory
polynucleotide sequence product candidates for the prevention and/or treatment
of serious viral diseases, which became effective in April 2000.
Immunostimulatory sequences, ISS, are polynucleotides which stimulate the immune
system, and could potentially be used in combination with our small molecule
product candidates to increase the body's ability to defend against viral
infection.

          There are a number of companies which have patent applications and
issued patents, both in the United States and in other countries, that cover ISS
and their uses. Coley Pharmaceuticals, Inc. has filed several patent
applications in this area and has in addition exclusively licensed a number of
patent applications on this subject from the University of Iowa and Isis
Pharmaceuticals, Inc. A number of these patent applications have been issued. A
number of companies have also filed patent applications and have or are expected
to receive patents on a number of polynucleotides and methods for their use and
manufacture. These patents, if granted, could prevent us from making, using or
selling any ISS that is covered by a patent issued to a third party unless we
obtain a license from that party which may not be available on acceptable terms
or at all.

          With respect to any of our drug candidates, litigation, patent
opposition and adversarial proceedings, including the currently pending
proceedings, could result in substantial costs to us. The costs of the currently
pending proceedings are significant and may increase significantly during the
next several years. We anticipate that additional litigation and/or proceedings
will be initiated to enforce any patents we own or license, or to determine the
scope, validity and enforceability of our or other parties' proprietary rights
and the priority of an invention. Any of these activities could result in
substantial costs and/or delays to us. The outcome of any of these proceedings
may significantly affect our rights to develop and commercialize drug candidates
and technology.

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<Page>

          United States patents carry a presumption of validity and generally
can be invalidated only through clear and convincing evidence. A court or
administrative body may not hold our licensed patents valid or may not find an
alleged infringer to be infringing. Further, the license and option agreements
with Emory, the University of Georgia and Dynavax provide that each of these
licensors is primarily responsible for any patent prosecution activities, such
as litigation, patent conflict proceeding, patent opposition or other actions,
for the technology licensed to us. These agreements also provide that we
generally must reimburse these licensors for the costs they incur in performing
these activities. Similarly, Yale University and the University of Georgia, the
licensors of clevudine to Bukwang Pharm. Ind. Co., Ltd., are primarily
responsible for patent prosecution activities with respect to clevudine at our
expense. As a result, we generally do not have the ability to institute or
determine the conduct of any patent proceedings unless our licensors elect not
to institute or to abandon the proceedings. If our licensors elect to institute
and prosecute patent proceedings, our rights will depend in part on the manner
in which these licensors conduct the proceedings. In any proceedings they elect
to initiate and maintain, these licensors may not vigorously pursue or defend or
may decide to settle on terms that are unfavorable to us. An adverse outcome of
these proceedings could subject us to significant liabilities to third parties,
require disputed rights to be licensed from third parties or require us to cease
using technology, any of which could adversely affect our business. Moreover,
the mere uncertainty resulting from the initiation and continuation of any
technology related litigation or adversarial proceeding could adversely affect
our business pending resolution of the disputed matters.

BECAUSE WE MAY NOT BE ABLE TO MAINTAIN THE CONFIDENTIALITY OF OUR TRADE SECRETS
AND KNOW-HOW, WE MAY LOSE A COMPETITIVE ADVANTAGE.

          We also rely on unpatented trade secrets and know-how to maintain our
competitive position, which we seek to protect, in part, by confidentiality
agreements with employees, consultants and others. These parties may breach or
terminate these agreements, and we may not have adequate remedies for any
breach. Our trade secrets may also be independently discovered by competitors.
We rely on technologies to which we do not have exclusive rights or which may
not be patentable or proprietary and may be available to competitors. We have
filed applications for, but have not obtained, trademark registrations for
various marks in the United States and other jurisdictions. We have received
U.S. trademark registrations for our corporate name and our corporate name and
logo, as well as the mark Coviracil(R). We have received a Canadian trademark
registration for the mark Coviracil(R). We have also received a registration in
the European Union for our corporate logo. Our application in the European Union
for the mark Coviracil(TM) has been denied by the Office for Harmonization in
the Internal Market; however, we are in the process of filing an appeal with
this office. If our appeal is not granted, we will need to adopt a different
product name for emtricitabine in Europe. Several other companies use trade
names that are similar to our name for their businesses. If we are unable to
obtain any licenses that may be necessary for the use of our corporate name, we
may be required to change our name. Our management personnel were previously
employed by other pharmaceutical companies. The prior employers of these
individuals may allege violations of trade secrets and other similar claims
relating to their drug development activities for us.

THE COSTS AND TIME REQUIRED TO COMPLY WITH EXTENSIVE GOVERNMENT REGULATIONS
COULD PREVENT OR DELAY THE COMMERCIALIZATION OF OUR DRUG CANDIDATES.

          In addition to preclinical testing, clinical trials and other approval
procedures for human pharmaceutical products, we are subject to numerous
domestic and international regulations covering the development, registration,
and commercialization of pharmaceutical products. These regulations affect:

          -    manufacturing,
          -    safety,
          -    labeling,
          -    storage,
          -    record keeping,
          -    reporting, and
          -    marketing and promotion.

          We must also comply with regulations governing non-clinical and
clinical laboratory practices, safe working conditions, and the use and disposal
of hazardous substances, including radioactive compounds and

                                       23
<Page>

infectious disease agents we use in connection with our development work. The
requirements vary widely from country to country and some requirements may vary
from state to state in the United States. We expect the process of obtaining
these approvals and complying with appropriate government regulations to be time
consuming and expensive. Even if our drug candidates receive regulatory
approval, we may still face difficulties in marketing and manufacturing those
drug candidates. Any approval may be contingent on postmarketing studies or
other conditions. The approval of any of our drug candidates may limit the
indicated uses of the drug candidate. A marketed product, its manufacturer and
the manufacturer's facilities are subject to continual review and periodic
inspections. The discovery of previously unknown problems with a product,
manufacturer or facility may result in restrictions on the product or
manufacturer, including withdrawal of the product from the market. The failure
to comply with applicable regulatory requirements can, among other things,
result in:

          -    fines,
          -    suspended regulatory approvals,
          -    refusal to approve pending applications,
          -    refusal to permit exports from the United States,
          -    product recalls,
          -    seizure of products,
          -    injunctions,
          -    operating restrictions, and
          -    criminal prosecutions.

          In addition, adverse clinical results by others could negatively
impact the development and approval of our drug candidates. Some of our drug
candidates are intended for use as combination therapy with one or more other
drugs, and adverse safety, effectiveness or regulatory developments in
connection with the other drugs will also have an adverse effect on our
business.

INTENSE COMPETITION MAY RENDER OUR DRUG CANDIDATES NONCOMPETITIVE OR OBSOLETE.

          We are engaged in segments of the drug industry that are highly
competitive and rapidly changing. Any of our current drug candidates that we
successfully develop will compete with numerous existing therapies. In addition,
many companies are pursuing novel drugs that target the same diseases we are
targeting. We believe that a significant number of drugs are currently under
development and will become available in the future for the treatment of HIV and
hepatitis B. We anticipate that we will face intense and increasing competition
as new products enter the market and advanced technologies become available. Our
competitors' products may be more effective, or more effectively marketed and
sold, than any of our products. Competitive products may render our products
obsolete or noncompetitive before we can recover the expenses of developing and
commercializing our drug candidates. Furthermore, the development of a cure or
new treatment methods for the diseases we are targeting could render our drug
candidates noncompetitive, obsolete or uneconomical. Many of our competitors:

          -    have significantly greater financial, technical and human
               resources than we have and may be better equipped to develop,
               manufacture and market products,
          -    have extensive experience in preclinical testing and clinical
               trials, obtaining regulatory approvals and manufacturing and
               marketing pharmaceutical products, and
          -    have products that have been approved or are in late stage
               development and operate large, well-funded research and
               development programs.

          Smaller companies may also prove to be significant competitors,
particularly through collaborative arrangements with large pharmaceutical and
biotechnology companies. Academic institutions, governmental agencies and other
public and private research organizations are also becoming increasingly aware
of the commercial value of their inventions and are more actively seeking to
commercialize the technology they have developed.

          If we successfully develop and obtain approval for our drug
candidates, we will face competition based on many factors including:

                                       24
<Page>

          -    the safety and effectiveness of our products,
          -    the timing and scope of regulatory approvals,
          -    the availability of supply,
          -    marketing and sales capability,
          -    reimbursement coverage,
          -    price, and
          -    patent position.

          Our competitors may develop or commercialize more effective or more
affordable products, or obtain more effective patent protection, than we do.
Accordingly, our competitors may commercialize products more rapidly or
effectively than we do, which could hurt our competitive position.

IF OUR LICENSORS TERMINATE THEIR AGREEMENTS WITH US, WE COULD LOSE OUR RIGHTS TO
OUR DRUG CANDIDATES.

          We have licensed or obtained an option to license our drug candidates
under agreements with our licensors. These agreements permit our licensors to
terminate the agreements in circumstances such as our failure to achieve
development milestones or the occurrence of an uncured material breach by us.
The termination of any of these agreements would result in the loss of our
rights to a drug candidate. On the termination of most of our license
agreements, we are required to return the licensed technology to our licensors.
In addition, most of these agreements provide that we generally must reimburse
our licensors for the costs they incur in performing any patent prosecution
activities such as litigation, patent conflict, patent opposition or other
actions, for the technology licensed to us. We believe that these costs as well
as other costs under our license and option agreements will be substantial and
may increase significantly during the next several years. Our inability or
failure to pay any of these costs with respect to any drug candidate could
result in the termination of the license or option agreement for the drug
candidate.

IF WE ARE NOT ABLE TO SUCCESSFULLY MANUFACTURE OUR DRUG CANDIDATES, OUR BUSINESS
MAY NEVER ACHIEVE PROFITABILITY.

          We do not have any internal manufacturing capacity and we rely on
third party manufacturers for the manufacture of all of our clinical trial and
commercial material. We plan to use our existing relationships and to establish
relationships with additional third party manufacturers for products that we
develop. For instance, Abbott has agreed to manufacture an initial quantity of
Coviracil, assist us in the transfer of the Coviracil manufacturing process to
another third party and provide auxiliary manufacturing capability for Coviracil
upon our request. We will need to enter into additional arrangements for future
production of products. We may be unable to establish or maintain relationships
with manufacturers on acceptable terms, and manufacturers may be unable to
manufacture products in commercial quantities on a cost effective basis for all
of our products. Our dependence on third parties for the manufacture of our
products may adversely affect our profit margins and our ability to develop and
commercialize products on a timely and competitive basis. Further, third party
manufacturers may encounter manufacturing or quality control problems in
manufacturing our products and may be unable to maintain the necessary
governmental licenses and approvals to continue manufacturing our products.

BECAUSE WE NEED TO ESTABLISH OR OBTAIN ADDITIONAL SALES AND MARKETING RESOURCES
AND CAPABILITIES, WE MAY BE UNABLE TO SUCCESSFULLY MARKET, SELL OR DISTRIBUTE
PRODUCTS WE DEVELOP.

          We do not have an established sales force to market and distribute any
products we successfully develop. We will have to develop a sales force and/or
rely on arrangements with third parties for the marketing, distribution and sale
of our products. We may be unable to establish marketing or sales capabilities
or to enter into new arrangements with third parties to perform those activities
on favorable terms. In addition, third parties may have significant control or
influence over important aspects of the commercialization of our drug
candidates, including market identification, marketing methods, pricing,
composition of sales force and promotional activities. We may have limited
control over the amount and timing of resources that a third party devotes to
our products and may be unable to prevent any third party from pursuing
alternative products that could result in the development of products that
compete with our products, or their withdraw of support for our programs.
Further, any internal capabilities or third party arrangements may not be
successful. Our business may never achieve profitability if we fail to establish
or maintain a sales force and marketing, sales and distribution capabilities.

                                       25
<Page>

BECAUSE WE DEPEND ON THIRD PARTIES FOR THE DISCOVERY AND DEVELOPMENT OF DRUG
CANDIDATES, WE MAY NOT SUCCESSFULLY ACQUIRE ADDITIONAL DRUG CANDIDATES OR
DEVELOP OUR CURRENT DRUG CANDIDATES.

          We do not currently intend to engage in drug discovery. Our strategy
for obtaining additional drug candidates is to utilize the relationships of our
management team and scientific consultants to identify drug candidates for
in-licensing from companies, universities, research institutions and other
organizations. We may not succeed in acquiring additional drug candidates on
acceptable terms or at all.

          Because we have engaged and intend to continue to engage third party
contract research organizations and other third parties to help us develop our
drug candidates, many important aspects of our drug development programs have
been and will continue to be outside of our direct control. In addition, the
contract research organizations may not perform all of their obligations under
arrangements with us. If the contract research organizations do not perform
clinical trials in a satisfactory manner or breach their obligations to us, the
development and commercialization of any drug candidate may be delayed or
precluded.

BECAUSE WE MAY NOT BE ABLE TO ATTRACT AND RETAIN KEY PERSONNEL AND ADVISORS, WE
MAY NOT SUCCESSFULLY DEVELOP OUR DRUG CANDIDATES OR ACHIEVE OUR OTHER BUSINESS
OBJECTIVES.

          We are highly dependent on our senior management and scientific staff.
The loss of the services of any member of our senior management or scientific
staff may significantly delay or prevent the achievement of product development
and other business objectives. In order to pursue our drug development programs
and marketing plans, we will need to hire additional qualified scientific and
management personnel. Competition for qualified individuals is intense and we
face competition from numerous pharmaceutical and biotechnology companies,
universities and other research institutions. If we are not able to attract and
retain these individuals we may not be able to successfully commercialize our
drug candidates.

HEALTH CARE REFORM MEASURES AND THIRD PARTY REIMBURSEMENT PRACTICES ARE
UNCERTAIN AND MAY DELAY OR PREVENT THE COMMERCIALIZATION OF OUR DRUG CANDIDATES.

          The efforts of governments and third party payors to contain or reduce
the cost of health care will continue to affect the business and financial
condition of drug companies. A number of legislative and regulatory proposals to
change the health care system have been considered in recent years. In addition,
an increasing emphasis on managed care in the United States has and will
continue to increase pressure on drug pricing. Legislative or regulatory
proposals or changes in managed care systems may be adopted that may have a
negative effect on our business. The announcement and/or adoption of proposals
could have an adverse effect on our ability to earn profits and financial
condition. Sales of prescription drugs depend significantly on the availability
of reimbursement to the consumer from third party payors, such as government and
private insurance plans. These third party payors frequently require that drug
companies give them predetermined discounts from list prices, and they are
increasingly challenging the prices for medical products and services. Present
combination treatment regimens for the treatment of HIV are expensive and costs
may increase as new combinations are developed. These costs have resulted in
limitations in the reimbursement available from third party payors for the
treatment of HIV infection, and we expect these limitations will continue in the
future. Third party payors may not consider products we may bring to the market
cost effective and may not reimburse the consumer sufficiently to allow us to
sell our products on a profitable basis.

IF OUR DRUG CANDIDATES DO NOT ACHIEVE MARKET ACCEPTANCE, OUR BUSINESS MAY NEVER
ACHIEVE PROFITABILITY.

          Our success will depend on the market acceptance of any products we
develop. The degree of market acceptance will depend on a number of factors,
including:

          -    the receipt and scope of regulatory approvals,
          -    the establishment and demonstration in the medical community of
               the safety and effectiveness of our products and their potential
               advantages over existing treatment methods, and
          -    reimbursement policies of government and third party payors.

                                       26
<Page>

          Physicians, patients, payors or the medical community in general may
not accept or utilize any product that we may develop.

WE MAY NOT HAVE ADEQUATE INSURANCE PROTECTION AGAINST PRODUCT LIABILITY.

          Our business exposes us to potential product liability risks that are
inherent in the testing of drug candidates and the manufacturing and marketing
of drug products and we may face product liability claims in the future. We
currently have only limited product liability insurance. We may be unable to
maintain our existing insurance and/or obtain additional insurance in the future
at a reasonable cost or in sufficient amounts to protect against potential
losses. A successful product liability claim or series of claims brought against
us could require us to pay substantial amounts that would decrease our
profitability, if any.

WE MAY INCUR SUBSTANTIAL COSTS RELATED TO OUR USE OF HAZARDOUS MATERIALS.

          We use hazardous materials, chemicals, viruses and various radioactive
compounds in our drug development programs. Although we believe that our
handling and disposing of these materials comply with state and federal
regulations, the risk of accidental contamination or injury still exists. We
could be held liable for any damages or fines that result from any accidental
contamination or injury and the liability could exceed our resources.

OUR CONTROLLING STOCKHOLDERS MAY MAKE DECISIONS YOU DO NOT CONSIDER TO BE IN
YOUR BEST INTEREST.

          As of July 31, 2002, our directors, executive officers and their
affiliates, excluding Warburg Pincus Private Equity VIII, L.P., Warburg Pincus,
owned approximately 11.1% of our outstanding common stock. Warburg Pincus owned
approximately 30.4% of our outstanding common stock. In addition, Abbott owned
approximately 10.3% of our outstanding common stock. For so long as Warburg
Pincus continues to own at least 5,846,222 shares of our common stock and at
least 10% of our outstanding common stock, Warburg Pincus has the right to
participate in any sales of equity securities by Triangle, other than sales in
connection with a registered underwritten offering, a merger or similar
transaction or a stock option or similar plan, in proportion to the percentage
of all outstanding securities of Triangle held by Warburg Pincus at the time of
the transaction. Warburg Pincus has the right to designate two people to serve
as members of our Board of Directors. As a result, our controlling stockholders
are able to significantly influence all matters requiring stockholder approval,
including the election of directors and the approval of significant corporate
transactions. This concentration of ownership could also delay or prevent a
change in control of Triangle that may be favored by other stockholders.

THE MARKET PRICE OF OUR STOCK MAY FALL AS A RESULT OF MARKET VOLATILITY AND
FUTURE DEVELOPMENTS IN OUR INDUSTRY.

          The market price of our common stock is likely to be volatile and
could fluctuate widely in response to many factors, including:

          -    announcements of the results of clinical trials by us or our
               competitors,
          -    announcements of the timing of regulatory submissions and/or
               approvals by us or our competitors,
          -    developments with respect to patents or proprietary rights,
          -    announcements of technological innovations by us or our
               competitors,
          -    announcements of new products or new contracts by us or our
               competitors,
          -    actual or anticipated variations in our operating results,
               including targeted cash usage, due to the level of development
               expenses and other factors,
          -    changes in financial estimates by securities analysts and whether
               our earnings meet or exceed analysts' estimates,
          -    conditions and trends in the pharmaceutical and other industries,
          -    new accounting standards,
          -    general economic, political and market conditions and other
               factors,
          -    low transaction volume due to high concentrations of ownership,
               and
          -    the occurrence of any of the risks described in these "Risk and
               Uncertainties."

                                       27
<Page>

          In the past, following periods of volatility in the market price of
the securities of companies in our industry, securities class action law suits
have often been brought against those companies. If we face litigation in the
future, it would result in substantial costs and a diversion of management
attention and resources, which would negatively impact our business.

APPROXIMATELY 34,750,000 SHARES OF OUR COMMON STOCK MAY BE SOLD WITHOUT
RESTRICTION AND APPROXIMATELY 35,500,000 SHARES ARE REGISTERED FOR SALE. SALES
OF A LARGE NUMBER OF OUR SHARES MAY CAUSE OUR STOCK PRICE TO FALL EVEN IF OUR
BUSINESS IS DOING WELL.

          If our stockholders, including Abbott, sell a substantial number of
shares of our common stock in the public market, the market price of our common
stock could decline. As of July 31, 2002, there were 76,861,837 shares of common
stock outstanding, of which approximately 34,750,000 were immediately eligible
for resale in the public market without restriction. Holders of approximately
42,100,000 shares have rights to cause us to register their shares for sale to
the public. We have filed registration statements to register the sale of
approximately 35,500,000 of these shares.

          Declines in our stock price might harm our ability to issue equity or
secure other types of financing arrangements. The price at which we issue shares
is generally based on the market price of our common stock and a decline in our
stock price would result in our needing to issue a greater number of shares to
raise a given amount of funds or acquire a given amount of goods or services.
For this reason, a decline in our stock price might also result in increased
ownership dilution to our stockholders.

PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD DELAY OR PREVENT A
CHANGE IN MANAGEMENT OR A TAKEOVER ATTEMPT THAT YOU CONSIDER TO BE IN YOUR BEST
INTEREST.

          We have adopted a number of provisions that could deter an acquisition
of Triangle which was not approved by our Board of Directors. We have adopted a
preferred stock purchase rights plan, commonly referred to as a "poison pill."
The rights plan is intended to deter an attempt to acquire Triangle in a manner
or on terms not approved by the Board of Directors. The rights plan will not
prevent an acquisition of Triangle which is approved by the Board of Directors.
Our charter authorizes the Board of Directors to determine the terms of any
shares of undesignated preferred stock and issue them without stockholder
approval. The issuance of preferred stock may make it more difficult for a third
party to acquire, or may discourage a third party from acquiring, voting control
of Triangle.

          Provisions in our charter and bylaws, as well as some provisions of
Delaware law could delay or prevent the removal of incumbent directors and could
make more difficult a merger, tender offer or proxy contest involving Triangle,
even if the events could be beneficial to our stockholders. For example, our
bylaws divide the Board of Directors into three classes of directors with each
class serving a three-year term. These provisions could also limit the price
that investors might be willing to pay for our common stock.

                                       28
<Page>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Triangle is exposed to various market risks, including changes in
foreign currency exchange rates, investment market value and interest rates.
Market risk is the potential loss arising from adverse changes in market rates
and prices, such as foreign currency exchange and interest rates. We may enter
into forward foreign currency contracts or purchase investments in foreign
currencies to hedge foreign currency commitments. We have, however, established
policies and procedures for market risk assessment and the approval, reporting
and monitoring of derivative financial instrument activities. The following
discusses our exposure to risks related to changes in interest rates, foreign
currency exchange rates and investment market value.

INTEREST RATE SENSITIVITY

          We are subject to interest rate risk on our investment portfolio. We
maintain an investment portfolio consisting primarily of high quality money
market instruments, and government and corporate bonds. Our portfolio has a
current average maturity of less than 12 months. We attempt to mitigate default
risk by investing in high credit quality securities and by monitoring the credit
rating of investment issuers. Our investment portfolio includes only marketable
securities with active secondary or resale markets to help ensure portfolio
liquidity and we have implemented guidelines limiting the duration of
investments. These available-for-sale securities are subject to interest rate
risk and will decrease in value if market interest rates increase. If market
rates were to increase by 10 percent from levels at June 30, 2002, we expect
that the fair value of our investment portfolio would decline by an immaterial
aggregate amount primarily due to the relatively short maturity of the
portfolio. At June 30, 2002, our portfolio consisted of approximately $29.7
million of investments maturing within one year and approximately $7.6 million
of investments maturing after one year but within 30 months. Additionally, we
generally have the ability to hold our fixed income investments to maturity and
therefore do not expect that our consolidated operating results, financial
position or cash flows will be affected by a significant amount due to a sudden
change in interest rates.

FOREIGN CURRENCY EXCHANGE RISK

          The majority of our transactions occur in U.S. dollars and we do not
have significant subsidiaries or investments in foreign countries. Therefore, we
are not subject to significant foreign currency exchange risk. We have, however,
established policies and procedures for market risk assessment, including a
foreign currency-hedging program. The goal of our hedging program is to
establish fixed exchange rates on firm foreign currency cash outflows and to
minimize the impact to us of foreign currency fluctuations. These policies
specifically provide for the hedging of firm commitments and prohibit the
holding of derivative instruments for speculative or trading purposes. At June
30, 2002, we had no forward foreign currency contracts, but had investments in
foreign currencies totaling approximately $210,000 used to hedge foreign
currency commitments. The purchase and the holding of foreign currencies are
governed by established corporate policies and procedures and are entered into
when management determines this methodology to be in our best interests. These
investments are subject to both foreign currency risk and interest rate risk.
The hypothetical loss associated with a 10 percent devaluation of these foreign
currencies would not materially affect our consolidated operating results,
financial position or cash flow.

STRATEGIC INVESTMENT RISK

          In addition to our normal investment portfolio, we have a strategic
investment in Dynavax valued at $1.0 million. This investment represents
unregistered preferred stock and is subject to higher investment risk than our
normal investment portfolio due to the lack of an active resale market for the
investment.

                                       29
<Page>

                           PART II - OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
          ---------------------------------------------------

a.        The 2002 Annual Meeting of Stockholders of Triangle Pharmaceuticals,
          Inc., the Meeting, was held on May 23, 2002. The holders of 59,132,909
          of the 76,850,837 shares of the Company's common stock outstanding on
          the record date were present at the Meeting in person or by proxy.

b.        At the Meeting, Anthony B. Evnin, Ph.D., James L. Tyree and Chris A.
          Rallis, J.D. were duly nominated and properly elected as Directors of
          the Company to serve until the 2005 annual meeting of stockholders or
          until their successors are elected and have qualified. The number of
          votes cast for and withheld with respect to each nominee for office
          are indicated below:

<Table>
<Caption>
                                                                        AGAINST/
                                              FOR                       WITHHELD
                                          ------------                -----------
          <S>                              <C>                         <C>
          Anthony B. Evnin, Ph.D.          58,298,729                    834,180
          James L. Tyree                   57,844,540                  1,288,369
          Chris A. Rallis, J.D.            57,756,644                  1,376,265
</Table>

          The terms of office of Standish M. Fleming, Dennis B. Gillings, Ph.D.,
          Henry G. Grabowski, Ph.D., Stewart J. Hen, Jonathan S. Leff and George
          McFadden as directors of the Company continued after the Meeting.

          At the Meeting, a proposal to approve an amendment to the 1996 Stock
          Incentive Plan was approved. The proposal included amendments to the
          Company's 1996 Stock Incentive Plan of (i) increasing the number of
          shares of common stock authorized for issuance under the plan in 2002
          by 1,962,329 shares and (ii) providing for automatic annual increases
          during the term of the plan, beginning in 2003, so that the number of
          authorized shares available for new grants under the plan on each
          January 1 will equal the lesser of 4.5% of the total number of shares
          of Triangle common stock outstanding on the preceding December 31st or
          5,000,000 shares. The number of votes cast for, against and to abstain
          on the proposal are indicated below:

<Table>
<Caption>
                 FOR                     AGAINST                  ABSTENTIONS
          -----------------         -----------------         ------------------
              <S>                        <C>                        <C>
              41,169,185                 11,130,038                 41,639
</Table>

          At the Meeting, a proposal to amend the Company's Employee Stock
          Purchase Plan by increasing the number of shares of common stock
          authorized for issuance under the plan by 250,000 shares was approved.
          The number of votes cast for, against and to abstain on the proposal
          are indicated below:

<Table>
<Caption>
                 FOR                     AGAINST                  ABSTENTIONS
          -----------------         -----------------         ------------------
               <S>                       <C>                        <C>
               50,285,180                2,017,298                  38,384
</Table>

          At the Meeting, a proposal to ratify the appointment of
          PricewaterhouseCoopers LLP as the Company's independent accountants
          for the fiscal year ending December 31, 2002 was approved. The number
          of votes cast for, against and to abstain on the proposal are
          indicated below:

<Table>
<Caption>
                 FOR                     AGAINST                  ABSTENTIONS
          -----------------         -----------------         ------------------
               <S>                        <C>                        <C>
               58,870,063                 253,942                    8,904
</Table>

                                       30
<Page>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

a.        Exhibits

          10.1 Second Amendment to Triangle Pharmaceuticals, Inc. 1996 Stock
Incentive Plan (as amended and restated through March 27, 1998) dated May 23,
2002.

          10.2 First Amendment to Triangle Pharmaceuticals, Inc. Employee Stock
Purchase Plan dated May 23, 2002.

          10.3 First Amendment to Triangle Pharmaceuticals, Inc. Stockholder
Rights Agreement, dated July 30, 2002.

          10.4 Letter Agreement regarding lines of Credit, dated July 30, 2002.

          10.5 Employment Agreement for Daniel G. Welch, dated August 5, 2002.


b.        Reports on Form 8-K

          On May 2, 2002, we filed a current report on Form 8-K announcing our
first quarter results.

                                       31
<Page>

                         TRIANGLE PHARMACEUTICALS, INC.
                                   SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                       TRIANGLE PHARMACEUTICALS, INC.


Date:  August 13, 2002                   By: /s/ Chris A. Rallis
                                             ------------------------------
                                         Chris A. Rallis
                                         President and Chief Operating Officer


                                       TRIANGLE PHARMACEUTICALS, INC.


Date:  August 13, 2002                   By: /s/ Thomas R. Staab, II
                                             ------------------------------
                                         Thomas R. Staab, II
                                         Treasurer

                                       32