<PAGE>


                                    UNITED STATES
                          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 September 30, 1996

                                          or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                           Commission File Number:  0-27118

                                  PHARMACOPEIA, INC.
--------------------------------------------------------------------------------
                (Exact name of registrant as specified in its charter)

         Delaware                           33-0557266
--------------------------------------------------------------------------------
(State or other jurisdiction of        (I.R.S. Employer Identification No.)
incorporation or organization)

        101 College Road East, Princeton, New Jersey            08540
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip code)

                                    (609) 452-3600
--------------------------------------------------------------------------------
                 (Registrant's telephone number, including area code)

                                    Not Applicable
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

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
                                         ---     ---

                                                                Outstanding at
                      Class                                    October 31, 1996
---------------------------------------------                 ------------------
Common Stock, $.0001 par value                                    10,976,462


<PAGE>

                                  PHARMACOPEIA, INC.
                                      FORM 10-Q
                                  TABLE OF CONTENTS

ITEM                                                                       Page
PART I.  FINANCIAL INFORMATION                                                 

Item 1.     Financial Statements:

            Balance Sheets-September 30, 1996 and December 31, 1995         3

            Statements of Operations-Three and Nine Months Ended
            September 30, 1996 and 1995                                     4

            Statements of Cash Flows-Nine Months Ended
            September 30, 1996 and 1995                                     5

            Notes to Financial Statements                                   6

Item 2.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations                             6

PART II.  OTHER INFORMATION                                                 

Item 6.     Exhibits and Reports on Form 8-K                                9

SIGNATURE                                                                  11

INDEX TO EXHIBITS                                                          12


                                         -2-

<PAGE>

                                        PART I
                                FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                  PHARMACOPEIA, INC.

                                    BALANCE SHEETS
                           (IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                        September 30,      December 31,
                                                                                            1996               1995
                                                                                       --------------   -----------------
                                                                                        (Unaudited)

<S>                                                                                    <C>              <C>
ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                                                         $   32,731          $   28,612
     Marketable securities                                                                 44,223              32,288
     Prepaid expenses and other current assets                                              1,026               1,155
                                                                                       ----------          ----------

TOTAL CURRENT ASSETS                                                                       77,980              62,055
     Property and equipment, net                                                            7,823               2,928
     Intangible assets, net                                                                    32                  63
     Other assets                                                                             767                 495
                                                                                       ----------          ----------
                                                                                       $   86,602          $   65,541
                                                                                       ----------          ----------
                                                                                       ----------          ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable                                                                  $      786          $      500
     Accrued liabilities                                                                    1,960               1,741
     Notes payable and capital lease obligations, current portion                             709                 398
     Deferred revenue                                                                      14,885               7,599
                                                                                       ----------          ----------
TOTAL CURRENT LIABILITIES                                                                  18,340              10,238

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS, LONG-TERM PORTION                              1,576                 969

COMMITMENTS

STOCKHOLDERS' EQUITY:
     Preferred stock, $.0001 par value, 2,000,000 shares authorized; none issued and
       outstanding
     Common stock, $.0001 par value; 40,000,000 shares authorized; 10,969,913 and
       10,272,527 shares issued and outstanding at September 30, 1996 and December 31,
       1995, respectively                                                                       1                   1
     Additional paid-in capital                                                            92,400              73,745
     Accumulated deficit                                                                  (25,715)            (19,412)
                                                                                       ----------          ----------
TOTAL STOCKHOLDERS' EQUITY                                                                 66,686              54,334
                                                                                       ----------          ----------
                                                                                       $   86,602          $   65,541
                                                                                       ----------          ----------
                                                                                       ----------          ----------

</TABLE>


                  See notes to these unaudited financial statements.


                                         -3-

<PAGE>

                                  PHARMACOPEIA, INC.

                               STATEMENTS OF OPERATIONS
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                             Three Months Ended September 30,         Nine Months Ended September 30,
                                            ----------------------------------      ----------------------------------
                                                    1996             1995                   1996             1995     
                                            ----------------  ----------------      ----------------  ----------------
                                                               (In thousands except share data)
<S>                                          <C>               <C>                  <C>               <C>
Contract revenue                             $     4,652       $    1,541             $     9,506       $    3,648
Operating expenses:
    Research and development
       Collaborative                                3,751            1,541                   8,638            3,706
       Proprietary                                  2,227            1,357                   5,967            3,866
    General and administrative                      1,361              882                   3,931            2,607
                                              -----------       ----------             -----------       ----------
Operating loss                                     (2,687)          (2,239)                 (9,030)          (6,531)
Interest income                                     1,036              145                   2,920              536
Interest expense                                      (78)             (28)                   (192)             (60)
                                              -----------       ----------             -----------       ----------
Net loss                                      $    (1,729)      $   (2,122)            $    (6,302)      $   (6,055)
                                              -----------       ----------             -----------       ----------
                                              -----------       ----------             -----------       ----------
Net loss per share                            $      (.16)      $     (.79)            $      (.59)      $    (2.26)
                                              -----------       ----------             -----------       ----------
                                              -----------       ----------             -----------       ----------
Weighted-average number of common shares
outstanding during the period                  10,967,630        2,677,489              10,770,825        2,677,489
                                              -----------       ----------             -----------       ----------
                                              -----------       ----------             -----------       ----------

</TABLE>


                  See notes to these unaudited financial statements


                                         -4-

<PAGE>

                                  PHARMACOPEIA, INC.

                               STATEMENTS OF CASH FLOWS

                                    (IN THOUSANDS)
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                                      Nine Months Ended September 30,
                                                                      -------------------------------
                                                                          1996              1995
                                                                      ------------      -------------
<S>                                                                   <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                              $  (6,302)        $  (6,055)
Adjustments to reconcile net loss to net cash provided by 
  (used in) operating activities:
    Depreciation                                                          1,032               323
    Amortization                                                             30                30
    Changes in operating assets and liabilities:
       (Increase) decrease in prepaid expenses and other 
         current assets                                                     129              (265)
       (Increase) in other assets                                          (272)             (216)
       Increase (decrease) in accounts payable                              286               (17)
       Increase in accrued liabilities                                      220                38
       Increase (decrease) in deferred revenue                            7,286            (1,586)
                                                                      ---------         ---------
Net cash provided by (used in) operating activities                   $   2,409         $  (7,748)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures                                                     (5,927)           (1,957)
Purchase of marketable securities                                       (74,463)           (9,103)
Proceeds from sales of marketable securities                             62,528            13,109
                                                                      ---------         ---------
Net cash provided by (used in) investing activities                   $ (17,862)        $   2,049
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock                               18,655                 1
Net proceeds from issuance of convertible preferred stock                                   3,500
Acquisition of treasury stock                                                                  (2)
Increase in notes payable                                                 1,344               782
Repayments of note payable                                                 (427)             (136)
                                                                      ---------         ---------
Net cash provided by financing activities                                19,572             4,145
                                                                      ---------         ---------
Increase (decrease) in cash and cash equivalents                          4,119            (1,554)
Cash and cash equivalents at beginning of period                         28,612             9,485
                                                                      ---------         ---------
Cash and cash equivalents at end of period                            $  32,731         $   7,931
                                                                      ---------         ---------
                                                                      ---------         ---------

</TABLE>


                  See notes to these unaudited financial statements


                                         -5-

<PAGE>

                                  PHARMACOPEIA, INC.

                            NOTES TO FINANCIAL STATEMENTS
                                     (UNAUDITED)


NOTE (1) -- BASIS OF PRESENTATION

      The unaudited financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information. 
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements. 
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. 
Interim results are not necessarily indicative of the results that may be
expected for the year.  For further information, refer to the financial
statements and footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995.

NOTE (2) -- NET LOSS PER COMMON SHARE

      Net loss per common share is based on net loss for the relevant period
divided by the weighted average number of shares issued and outstanding during
the period.  Stock options and common stock issuable upon conversion of warrants
are not reflected as their effect would be antidilutive for both primary and
fully diluted earnings per share computations.

NOTE (3) -- COLLABORATION AND STOCK PURCHASE AGREEMENTS

      On May 31, 1996, the Company entered into a Collaboration Agreement and 
Common Stock Purchase Agreement with N.V. Organon ("Organon"). Organon 
purchased 168,623 shares of the Company's common stock for $4,165,000 and 
under the terms of the Collaboration Agreement will provide research 
funding, license fees and future milestone payments as products are developed.

NOTE (4) -- LONG-LIVED ASSETS

      On January 1, 1996, the Company adopted SFAS No. 121, "Accounting For the
Impairment of Long-Lived Assets and for Long-Lived Asssets to be Disposed Of."
The Company records impairment losses on long-lived assets used in operations
and intangible assets, when events and circumstances indicate that the assets 
might be impaired and the undiscounted cash flow estimated to be generated by 
those assets are less than the carrying amounts of those assets.  The 
adoption of SFAS 121 had no material impact on the Company's financial 
condition or results of operations. 

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
        OF OPERATIONS

OVERVIEW

      Pharmacopeia, Inc. ("Pharmacopeia" or the "Company") was incorporated 
in March 1993 and is engaged in research and development and chemical library 
production for collaborations and for its own use.  The Company's research 
and development has focused on efficient, cost effective, high throughput 
systems for synthesizing and screening large libraries of chemicals for new 
drug discovery and optimization.  The Company has incurred losses since 
inception and, as of September 30, 1996 had an accumulated deficit of $25.7 
million.  The Company anticipates incurring additional losses over at least 
the next several years as it expands its research and development and 
chemical library production efforts.  The Company expects that its losses 
will fluctuate from quarter to quarter and that such variations may be 
substantial.

                                         -6-

<PAGE>

RESULTS OF OPERATIONS

      The Company expects that its revenue sources for at least the next
several years will be limited to future collaboration payments from Schering
Corporation and Schering-Plough Ltd. ("Schering-Plough"), Berlex Laboratories,
Inc. ("Berlex"), Sandoz Pharma, Ltd. ("Sandoz"), Bayer Corporation ("Bayer"),
Daiichi Pharmaceutical Co., Ltd. ("Daiichi"), N.V. Organon ("Organon") and 
from other customers under arrangements that may be entered into in the 
future.  The timing and amounts of such revenues, if any, will likely 
fluctuate. Historical results should not be viewed as indicative of future 
operating results.  The Company will be required to conduct significant 
research, development and production activities during the next several years 
to fulfill its obligations under the Schering-Plough, Berlex, Sandoz, Bayer, 
Daiichi, and Organon collaborative agreements and to develop other 
collaborations and technologies.  The Company does not anticipate having net 
income in the next several years.

      THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

      Revenues totaled $4.6 million and $1.5 million in the three months 
ended September 30, 1996 and 1995, respectively. The increase of $3.1 million 
primarily reflects expanded efforts in the Company's collaborations with 
Schering-Plough, Berlex, Sandoz, Bayer, Daiichi and Organon. The 1995 
revenues were attributable entirely to the Schering-Plough and Berlex 
collaborations.

      The Company incurred research and development expenses of $6.0 million 
and $2.9 million in the three months ended September 30, 1996 and September 
30, 1995, respectively.  These increased amounts primarily reflect increased 
salaries and personnel expenses inasmuch as the Company continued to hire 
additional research and development personnel, equipment depreciation and 
facilities expenses, and laboratory supplies purchased in connection with the 
expansion of the Company's chemical library production and screening efforts 
for collaborations and for its own use.

      General and administrative expenses increased by $0.5 million to $1.4 
million for the three months ended September 30, 1996 from the three months 
ended September 30, 1995.  The increase is primarily attributable to 
increased payroll and personnel expenses inasmuch as the Company continued 
to hire additional management and administrative personnel and the increased 
legal, insurance and other professional fees incurred in connection with the 
overall scale up of the Company's operations.

      The Company had interest income of $1.0 million and $0.1 million in the 
three months ended September 30, 1996 and 1995, respectively.  The increase 
in interest income resulted from higher balances of cash and investment 
securities from the public offering of common stock and to a lesser extent, 
from research collaboration payments. Interest expense for both periods is a 
result of increases in notes payable and capital lease obligations.

      NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

      Revenues totaled $9.5 million and $3.6 million in the nine months ended 
September 30, 1996 and 1995, respectively. The increase of $5.9 million 
primarily reflects expanded efforts in the Company's collaborations with 
Schering-Plough, Berlex, Sandoz, Bayer, Daiichi and Organon. The 1995 
revenues were attributable entirely to the Schering-Plough and Berlex 
collaborations.

      The Company incurred research and development expenses of $14.6 million 
and $7.6 million in the nine months ended September 30, 1996 and September 
30, 1995, respectively. These increased amounts primarily reflect increased 
salaries and personnel expenses inasmuch as the Company continued to hire 
additional research and development personnel, equipment depreciation and 
facilities expenses, and laboratory supplies purchased in connection with the 
expansion of the Company's chemical library production and screening efforts 
for collaborations and for its own use.

                                         -7-

<PAGE>

      Research and development expenses are expected to continue to increase 
as the Company further expands its activities and incurs, among other things, 
expenses related to staff increases, increased rent for expanded facilities, 
and increased equipment and reagent purchases.

      General and administrative expenses increased by $1.3 million to $3.9 
million for the nine months ended September 30, 1996 from the nine months 
ended September 30, 1995.  The increase is primarily attributable to 
increased payroll and personnel expenses inasmuch as the Company continued to 
hire additional management and administrative personnel and increased legal, 
insurance and other professional fees incurred in connection with the overall 
scale up of the Company's operations.

      The Company had interest income of $2.9 million and $0.5 million in the 
nine months ended September 30, 1996 and 1995, respectively.  The increase in 
interest income resulted from higher balances of cash and investment 
securities from the public offering of common stock and to a lesser extent, 
from research collaboration payments. Increases in interest expense for both 
periods is a result of increases in notes payable and capital lease 
obligations.

LIQUIDITY AND CAPITAL RESOURCES

      As of September 30, 1996, the Company had working capital of $59.6 
million.  The Company has funded its activities through September 30, 1996 
primarily through the sale of equity securities, funding under collaborative 
arrangements and equipment financing.  From inception through September 30, 
1996, the Company received $92.4 million in net proceeds from equity 
financing, received $26.8 million in research and development and license 
fees under collaborative agreements, and utilized $3.0 million of equipment 
financing.

      In connection with the Company's agreement with the Trustees of 
Columbia University and Cold Spring Harbor Laboratory, the Company is 
required to pay annual license fees and, in addition, expend $3.0 million and 
$4.0 million for the one year periods ending mid-July 1996 and 1997, 
respectively, in development and commercialization of the licensed 
technology. The $3.0 million expenditure requirement for 1996 has been met by 
the Company.  The Company is also required to pay to Columbia University 
certain royalties.  In addition, as of September 30, 1996, the Company had 
outstanding commitments for construction and equipment purchases totaling 
$1.1 million.  The Company anticipates that its capital requirements will 
increase over the next two years as the Company expands its research and 
development activities.  In connection with such expansion, the Company 
expects to incur substantial expenditures for hiring additional management, 
scientific and administrative personnel and for planned expansion of its 
facilities and replacement of laboratories currently subleased, including 
acquisition of additional equipment.

      The Company anticipates that its existing capital resources will be 
adequate to fund the Company's operations at least through 1998.  There can 
be no assurance that changes will not occur that would consume available 
capital resources before such time.  The Company's capital requirements 
depend on numerous factors, including the ability of the Company to enter 
into additional collaborative arrangements, competing technological and 
market developments, changes in the Company's existing collaborative 
relationships, the cost of filing, prosecuting, defending and enforcing 
patent claims and other intellectual property rights, the purchase of 
additional capital equipment, the progress of the Company's drug discovery 
programs and the progress of the Company's customers' milestone and royalty 
producing activities. There can be no assurance that additional funding, if 
necessary, will be available on favorable terms, if at all.  The Company's 
forecasts of the period of time through which its financial resources will be 
adequate to support its operations is forward looking information, and actual 
results could vary.  The factors described earlier in this paragraph will 
impact the Company's future capital requirements and the adequacy of its 
available funds.

                                         -8-

<PAGE>

                                       PART II

                                  OTHER INFORMATION











                                         -9-

<PAGE>

      ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

      (a)    Exhibits:

      3.1*           Restated Certificate of Incorporation of the Company.
      3.3*           Bylaws of the Company.
      4.3*           Stockholders Rights Agreement, dated February 15, 1995.
      10.1*          Series A and Series B Preferred Stock Purchase Agreement,
                     dated July 21, 1993.
      10.2*          Series B Preferred Stock Purchase Agreement, dated
                     March 11, 1994.
      10.3*          Series C Preferred Stock Purchase Agreement, dated
                     December 22, 1994.
      10.4*          Series D Preferred Stock Purchase Agreement, dated
                     February 15, 1995.
      10.5**         Amended 1994 Incentive Stock Plan.
      10.6*          1995 Employee Stock Purchase Plan.
      10.7*          1995 Director Option Plan.
      10.8*+         Library Collection Agreement, dated as of October 1, 1995,
                     between Pharmacopeia and Sandoz Pharma Ltd.
      10.9*+         Research, License, and Royalty Agreement, dated as of
                     February 15, 1995, between Pharmacopeia and Berlex
                     Laboratories, Inc.
      10.10*+        License Agreement, dated as of October 6, 1995, among
                     Pharmacopeia, the Trustees of Columbia University in the
                     City of New York and Cold Spring Harbor Laboratory.
      10.11*+        Collaboration Agreement, dated as of December 22, 1994,
                     between Pharmacopeia and Schering Corporation and
                     Schering-Plough, Ltd.
      10.12*+        Random Library Agreement, dated as of December 22, 1994,
                     between Pharmacopeia and Schering Corporation and
                     Schering-Plough, Ltd.
      10.13*         Lease Agreement between Pharmacopeia and Eastpark at 8A.
      10.13(a)**     Amendment dated January 22, 1996 to Lease Agreement
                     between Pharmacopeia and Eastpark at 8A
      10.13(b)****   Third Amendment to Lease Agreement dated March 31, 1996
                     between Pharmacopeia and Eastpark at 8A
      10.14*         Sublease, dated as of December 7, 1994, between
                     Pharmacopeia and Enichem Americas, Inc.
      10.15*         Lease, dated as of May 2, 1994, between Pharmacopeia and
                     College Road Associates Limited, as amended.
      10.15(a)**     Lease, dated as of December 1, 1995, between Pharmacopeia
                     and College Road Associates Limited, as amended.
      10.15(b)****   Third Execution and Modification of Lease dated June 7th,
                     1996, between Pharmacopeia and College Road Associates
                     Limited.
      10.16*         Sublease Agreement, dated as of October 29, 1993, between
                     Pharmacopeia and Cytogen Corporation.
      10.17*         Employment Agreement, dated October 4, 1994, between the
                     Company and Lewis J. Shuster.
      10.18*         Employment Agreement, dated January 18, 1994, between the
                     Company and Joseph A. Mollica, Ph.D.
      10.19*         Employment Agreement, dated May 18, 1993, between the
                     Company and John C. Chabala, Ph.D.



                                         -9-

<PAGE>


      10.20*         Employment Agreement, dated June 3, 1993, between the
                     Company and John J. Baldwin, Ph.D.
      10.21*         Employment Agreement, dated December 2, 1993, between the
                     Company and Nolan H. Sigal, M.D., Ph.D.
      10.22*         Consulting Agreement, dated April 30, 1993, between the
                     Company and W. Clark Still, Ph.D.
      10.23*         Warrant to purchase Common Stock issued to Columbia
                     University.
      10.24*         Warrant to purchase Common Stock issued to Cold Spring
                     Harbor Laboratory.
      10.25**+       Collaboration Agreement effective as of December 31, 1995
                     between Pharmacopeia and Bayer
      10.26**+       Random Library Agreement effective as of December 31, 1995
                     between Pharmacopeia and Bayer
      10.29**        Employment Agreement, dated January 24, 1996, between the
                     Company and Nancy M. Gray, Ph.D.
      10.30***++     Collaborative Agreement dated as of March 29, 1996 with
                     Daiichi Pharmaceutical Co., Ltd.
      10.31****++    Research Agreement between Pharmacopeia, Inc. and N.V. 
                     Organon dated May 31, 1996
      10.32          Employment Agreement, dated June 20, 1996, between the 
                     Company and Stephen A. Spearman, Ph.D.
      10.33          Lease Agreement, dated June 21, 1996, between 
                     Pharmacopeia and South Brunswick Rental I, Ltd.
      11.1*          Statement re Computation of Per Share Earnings
      27.1           Financial Data Schedule
--------------------------------
*  Incorporated by reference to the same numbered exhibit filed with the
Company's Registration Statement on Form S-1 No. 33-93460.
**  Incorporated by reference to the same numbered exhibit filed with the
Company's Form 10-K for the year ended December 31, 1995.
***  Incorporated by reference to the same numbered exhibit filed with the 
Company's Form 10-Q for the quarter ended March 31, 1996.
**** Incorporated by reference to the same numbered exhibit filed with the 
Company's Form 10-Q for the quarter ended June 30, 1996.
 + Confidential treatment granted.
++ Confidential treatment requested.

      (b)    Reports on Form 8-K

             None


                                         -10-

<PAGE>

                                      SIGNATURES


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


                                       PHARMACOPEIA, INC.


                                       By:   /s/ Lewis J. Shuster
                                             -----------------------------------
                                             Lewis J. Shuster
                                             Chief Financial Officer
                                             (Duly Authorized Officer and 
                                               Chief Accounting Officer)

                                       Date:  November 12, 1996



                                         -11-
<PAGE>

                              PHARMACOPEIA, INC.
                              INDEX TO EXHIBITS


EXHIBIT NUMBER     EXHIBIT NAME                                           PAGE

    10.32          Employment Agreement, dated June 20, 1996,
                   between the Company and Stephen A. Spearman, Ph.D.

    10.33          Lease Agreement, dated June 21, 1996, between
                   Pharmacopeia and South Brunswick Rental I, Ltd.

    27.1           Financial Data Schedule


                                     -12-