<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549


                                  FORM 10-K/A

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934
                  For the fiscal year ended December 31, 1999

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______

                          Commission File No. 0-12943

                           CYPRESS BIOSCIENCE, INC.
            (Exact name of registrant as specified in its charter)
                                _______________

                   Delaware                                22-2389839
       (State or other jurisdiction of                 (I.R.S. Employer
        incorporation or organization)                Identification No.)


       4350 Executive Drive, Suite 325
            San Diego, California                             92121
       (Address of principal executive                     (Zip Code)
                   offices)

      Registrant's telephone number, including area code:  (858) 452-2323

       SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  NONE
          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                          Common Stock $.02 Par Value
                        Common Stock Purchase Warrants
                    Units Consisting of Three (3) Shares Of
            Common Stock And One (1) Common Stock Purchase Warrant
                               (Title of Class)

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 __
                                         --

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of March 1, 2000 was $175,868,304.*

The number of shares outstanding of the Registrant's common stock as of March 1,
2000 was 48,178,062.

DOCUMENTS INCORPORATED BY REFERENCE:  None
______________________
* Calculated based on 37,024,906 shares of common stock held as of March 1, 2000
by nonaffiliates and a per share market price of $4.75. Excludes 11,153,156
shares of common stock held by directors and executive officers and stockholders
whose ownership exceeds five percent of the common stock outstanding at March 1,
2000. Exclusion of such shares should not be construed to indicate that any such
person possesses the power, direct or indirect, to direct or cause the direction
of the management or policies of the Registrant or that such person is
controlled by or under common control with the Registrant.

<PAGE>

                         STOCK PRICE PERFORMANCE GRAPH

Comparison of Cumulative Return on Investment

     The following Stock Price Performance Graph compares the Company's
cumulative total stockholder return on the Company's common stock for the
periods indicated with the cumulative total return of the NASDAQ OTC Index and
the NASDAQ Pharmaceuticals Stock Index. The Company has not declared any
dividends since its inception.  The Board and the Committee recognize that the
market price of the Company's common stock is influenced by many factors, only
one of which is Company performance.  The historical stock price performance
shown on the Stock Price Performance Graph is not necessarily indicative of
future stock price performance.

<TABLE>
<CAPTION>
                               94      95       96       97      98       99
                          --------------------------------------------------
<S>                         <C>     <C>      <C>      <C>     <C>      <C>
NASDAQ OTC                    100   141.3    173.9    213.1   300.4    556.0
CYPRESS BIOSCIENCE, INC.      100   125.0     86.7     63.2   132.0     79.7
NASDAQ PHARMACEUTICAL         100   183.4    184.0    190.0   241.7    449.8
</TABLE>

The above comparison assumes $100 was invested in the Company's common stock and
each index on December 31, 1994.

                                       28
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                                         Cypress Bioscience, Inc.
                                         By:  /s/ Jay D. Kranzler
                                              -------------------------------
                                              Jay D. Kranzler, M.D., Ph. D.
                                              Chief Executive Officer,
                                              Chief Financial Officer, and
                                              Chairman of the Board
                                              (Principal Executive Officer and
                                              Principal Financial and Accounting
                                              Officer)

Date:  May 8, 2000

                               POWER OF ATTORNEY



     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the Registrant
and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
Signature                                     Title                                                   Date
---------                                     -----                                                   ----
<S>                                           <C>                                                     <C>
/s/ Jay D. Kranzler                           Chief Executive Officer, Chief Financial Officer and    May 8, 2000
-----------------------------------------     Chairman of the Board (Principal Executive Officer
Jay D. Kranzler, M.D., Ph.D.                  and Principal Financial and Accounting Officer)


/s/ Larry J. Kessel, M.D.*                    Director                                                May 8, 2000
-----------------------------------------
Larry J. Kessel, M.D.


/s/ Mark C. Rogers, M.D.*                     Director                                                May 8, 2000
-----------------------------------------
Mark C. Rogers, M.D.


/s/ Jack H. Vaughn*                           Director                                                May 8, 2000
-----------------------------------------
Jack H. Vaughn


/s/ Samuel D. Anderson*                       Director                                                May 8, 2000
-----------------------------------------
Samuel D. Anderson


/s/ David Golde, M.D.*                        Director                                                May 8, 2000
-----------------------------------------
David Golde, M.D.


*By:    /s/ Jay D. Kranzler
-----------------------------------------
   Jay D. Kranzler, M.D., Ph.D.
         Attorney-in-fact
</TABLE>

                                       33
<PAGE>

price of the options was $1.50 per share, reflecting the price per share of
stock sold in the private placement of approximately 8,500,000 shares on the
same date. The Company recorded $1,559,934 of deferred compensation expense on
such date, and such amount has been fully amortized as of December 31, 1999.

6.   LONG-TERM OBLIGATIONS

7% Convertible Debentures

     At December 31, 1999 and 1998, the Company had $400,000 of 7% Convertible
Debentures outstanding which are due March 2001.  The 7% Convertible Debentures
were originally issued in April 1994.  Interest is payable in cash or shares of
common stock at the option of the Company.  During the years ended December 31,
1999 and 1998, the Company recorded related interest expense of $28,000 which
has been paid in cash.  The conversion price for the principal amount is $2.88
per share of registered common stock, the fair market value on the date of
closing.  The conversion price for the interest is the lower of $4.00 per share
of common stock or the average closing price for the 10 days prior to the annual
April 30th interest payment date.  The debentures are redeemable by the Company
at a redemption price of 104% of the principal amount which reduces to 102% in
April 2000.

Note Payable

     In March 1998, the Company received a loan totaling $440,000 to finance the
purchase of fixed assets of which approximately $105,000 is outstanding at
December 31, 1999. In accordance with the terms, the line matures in March 2002
and interest is accrued at the bank's prime rate plus 0.5% (9.0% at December 31,
1999). The loan is fully collateralized by the fixed assets financed with the
line of credit with a net book value of approximately $83,000 at December 31,
1999.

Term Loan

     In September 1999, Cypress signed a $5.0 million term loan agreement with a
financing company of which $2.0 million was drawn down immediately.  An
additional $1.0 million was drawn in December 1999.  The remaining $2.0 million
may be drawn down at the option of the Company subject to Cypress meeting
certain financial criteria.  The initial loan is repayable in six monthly
installments of interest only at 13.29% per annum.  Thereafter, the loan is
payable in twenty-four equal monthly payments of principal and interest.
Repayment terms for the remaining loan tranches are similar to the initial loan.
The loan is secured by certain assets of the Company.  In connection with this
agreement, Cypress granted the lender a five-year warrant to purchase 168,851
shares of the Company's common stock at an exercise price of $2.96 per share.
The warrant was valued in accordance with SFAS No. 123 and is being amortized as
additional interest expense over the term of the loan.

<TABLE>
<CAPTION>
                                                                                 December 31
                                                                        1999                         1998
                                                             -----------------------      ------------------------
          <S>                                                <C>                          <C>
          7% Convertible Debentures due March 2001                    $  400,000                      $400,000
          Term loan, payable through July 2002                         3,000,000                             -
          Note Payable, payable through March 2001                       104,511                       144,804
                                                             -----------------------      ------------------------
                                                                       3,504,511                       544,804
          Less current portion                                          (843,941)                            -
                                                             -----------------------      ------------------------
                                                                      $2,660,570                      $544,804
                                                             =======================      ========================
</TABLE>

          Maturities of long-term obligations at December 31, 1999 are as
follows:

                  2000                                  $  843,941
                  2001                                   1,961,698
                  2002                                     698,872
                                             --------------------------
                                                        $3,504,511
                                             ==========================


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