** **

**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON, D.C.  20549**

 

**FORM 10-Q**

 

 

 

**ý            Quarterly Report Pursuant to Section13 or 15(d) of the Securities Exchange Act of 1934 for the Period EndedSeptember 30, 2001.**

 

**or**

 

**o            Transition Report Pursuant toSection 13 or 15(d) of the Securities Exchange Act of 1934 for the TransitionPeriod From _____________ to __________________.**

 

**Commissionfile number 0-27436**

 

 

**TitanPharmaceuticals, Inc.**

(Exact name of registrantas specified in its charter)

 

| **Delaware**                     |   | **94-3171940**      |
|----------------------------------|--------|---------------------|
| (State or Other  Jurisdiction of |   | (I.R.S. Employer    |
| Incorporation or  Organization)  |   | Identification No.) |

 

**400 Oyster Point Blvd., Suite 505,South San Francisco, California 94080**

(Address of PrincipalExecutive Offices including zip code)

 

**(650) 244-4990**

(Registrant's TelephoneNumber, Including Area Code)

 

 

Indicate by check markwhether the Registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act during the preceding 12 months (or forsuch 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  ý  No  o

 

 

There were 27,651,081shares of the Registrant’s Common Stock issued and outstanding on November 2,2001.

 

 

**TitanPharmaceuticals, Inc**.

**Index toForm 10-Q**

 

 

 
| **Part I.**    | **Financial Information**                                                                                  |   |
|----------------|------------------------------------------------------------------------------------------------------------|--------|
|           |                                                                                                       |   |
|           | Item 1.   Condensed Financial Statements (unaudited)                                                  |   |
|           |                                                                                                       |   |
|           | Condensed  Consolidated Balance Sheets September 30, 2001 and December 31, 2000                            |   |
|           |                                                                                                       |   |
|           | Condensed  Consolidated Statements of Operations Three and Nine Months Ended September  30, 2001 and 2000  |   |
|           |                                                                                                       |   |
|           | Condensed  Consolidated Statements of Cash Flows Three and Nine Months Ended September  30, 2001 and 2000  |   |
|           |                                                                                                       |   |
|           | Notes  to Condensed Consolidated Financial Statements                                                      |   |
|           |                                                                                                       |   |
|           | Item  2.  Management’s Discussion and  Analysis of Financial Condition and Results of Operations |   |
|           |                                                                                                       |   |
|           | Item  3.  Quantitative and Qualitative  Disclosures About Market Risk                                 |   |
|           |                                                                                                       |   |
| **Part II.**   | **Other Information**                                                                                      |   |
|           |                                                                                                       |   |
|           | Item  1.  Legal Proceedings                                                                           |   |
|           |                                                                                                       |   |
|           | Item  4.  Submission of Matters to a Vote of Security Holders                                         |   |
|           |                                                                                                       |   |
|           | Item 6.  Exhibits and Reports on Form 8-K                                                             |   |
|           |                                                                                                       |   |
| **SIGNATURES** |                                                                                                       |

 

##### **Part I.  Financial Information**

 

**TITAN PHARMACEUTICALS, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(in thousands of dollars)**

** **
|                                                           |   | **September 30,** |    | **December 31,** |   |
|----------------------------------------------------------------|--------|-------------------|---------|------------------|--------|
|                                                           |   | **2001**          |    | **2000**         |   |
|                                                           |   | **(unaudited)**   |    | **(Note A)**     |   |
| **Assets**                                                     |   |              |    |             |   |
| Current assets                                                 |   |              |    |             |   |
| Cash and cash equivalents                                      |   | $                 | 6,232   |             | $      | 20,300 |   |
| Marketable securities                                          |   | 102,681           |    | 97,223           |   |
| Prepaid expenses,  receivables, and other current assets       |   | 979               |    | 326              |   |
| Total current assets                                           |   | 109,892           |    | 117,849          |   |
| Furniture and equipment,  net                                  |   | 596               |    | 593              |   |
|                                                           |   | $                 | 110,488 |             | $      | 118,442 |   |
| **Liabilities  and Stockholders' Equity**                      |   |              |    |             |   |
| Current liabilities                                            |   |              |    |             |   |
| Accounts payable                                               |   | $                 | 590     |             | $      | 1,304 |   |
| Accrued clinical trials  expenses                              |   | 987               |    | 432              |   |
| Other accrued liabilities                                      |   | 943               |    | 727              |   |
| Total current liabilities                                      |   | 2,520             |    | 2,463            |   |
| Minority interest - Series  B preferred stock of Ingenex, Inc. |   | 1,241             |    | 1,241            |   |
| Stockholders' equity                                           |   |              |    |             |   |
| Common stock, at amounts  paid in                              |   | 191,613           |    | 190,763          |   |
| Additional paid-in capital                                     |   | 8,785             |    | 8,744            |   |
| Deferred compensation                                          |   | (797              | )       | (1,254           | )      |
| Accumulated deficit                                            |   | (95,346           | )       | (84,206          | )      |
| Accumulated other  comprehensive income                        |   | 2,472             |    | 691              |   |
| Total stockholders' equity                                     |   | 106,727           |    | 114,738          |   |
|                                                           |   | $                 | 110,488 |             | $      | 118,442 |   |

 

Note A:  The balance sheet hasbeen derived from the audited financial statements at that date but does notinclude all of the information and footnotes required by generally acceptedaccounting principles for complete financial statements presentation.

 

See Notes to Condensed Consolidated Financial Statements

 

**TITAN PHARMACEUTICALS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(unaudited)**

**(in thousands of dollars, except pershare amount)**

** **
|                                                                                   |   | **Three Months Ended September 30,** |          | **Nine Months Ended September 30,** |          |
|----------------------------------------------------------------------------------------|--------|--------------------------------------|---------------|-------------------------------------|---------------|
|                                                                                   |   | **2001**                             |          | **2000**                            |          | **2001** |   | **2000** |   |
|                                                                                   |   |                                 |          |                                |          |   |   |   |   |
| Contract revenue                                                                       |   | $                                    | 303           |                                | $             | 280 |   | $ | 924 |   | $ | 841 |   |
| Grant revenue                                                                          |   | 227                                  |          | -                                   |          | 559 |   | 55 |   |
| License revenue                                                                        |   | -                                    |          | 415                                 |          | 2,500 |   | 415 |   |
| Total revenue                                                                          |   | 530                                  |          | 695                                 |          | 3,983 |   | 1,311 |   |
|                                                                                   |   |                                 |          |                                |          |   |   |   |   |
| Operating expenses:                                                                    |   |                                 |          |                                |          |   |   |   |   |
| Research and development                                                               |   | 5,756                                |          | 4,576                               |          | 16,096 |   | 11,887 |   |
| Acquired in-process  research and development                                          |   | -                                    |          | 4,969                               |          | - |   | 4,969 |   |
| General and administrative                                                             |   | 1,312                                |          | 1,247                               |          | 4,107 |   | 2,808 |   |
| Total operating expenses                                                               |   | 7,068                                |          | 10,792                              |          | 20,203 |   | 19,664 |   |
| Loss from operations                                                                   |   | (6,538                               | )             | (10,097                             | )             | (16,220 | ) | (18,353 | ) |
|                                                                                   |   |                                 |          |                                |          |   |   |   |   |
| Other income (expense):                                                                |   |                                 |          |                                |          |   |   |   |   |
| Interest income, net                                                                   |   | 1,770                                |          | 1,392                               |          | 5,172 |   | 3,605 |   |
| Other expense                                                                          |   | (19                                  | )             | (6                                  | )             | (92 | ) | (34 | ) |
| Other income, net                                                                      |   | 1,751                                |          | 1,386                               |          | 5,080 |   | 3,571 |   |
| Net loss                                                                               |   | $                                    | (4,787        | )                                   | $             | (8,711 | ) | $ | (11,140 | ) | $ | (14,782 | ) |
|                                                                                   |   |                                 |          |                                |          |   |   |   |   |
| Basic and diluted net loss  per share                                                  |   | $                                    | (0.17         | )                                   | $             | (0.34 | ) | $ | (0.40 | ) | $ | (0.59 | ) |
|                                                                                   |   |                                 |          |                                |          |   |   |   |   |
| Weighted average shares  used in computing  basic and diluted net loss  per share |   | 27,643                               |     | 25,872                              |     | 27,577 |     | 25,171 |     |
|                                                                                   |   |                                 |          |                                |          |   |   |   |   |

 

See Notes to Condensed Consolidated Financial Statements

 

**TITANPHARMACEUTICALS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(unaudited)**

**(in thousands of dollars)**

** **
|                                                                                       |   | **Nine Months Ended September 30,** |    |
|--------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                                                       |   | **2001**                            |    | **2000** |   |
| **Cash  flows from operating activities:**                                                 |   |                                |    |   |   |
| Net loss                                                                                   |   | $                                   | (11,140 | ) | $ | (14,782 | ) |
| Adjustments to reconcile  net loss to net cash provided by (used in) operating activities: |   |                                |    |   |   |
| Depreciation and  amortization                                                             |   | 413                                 |    | 119 |   |
| Non-cash compensation  related to stock options                                            |   | 498                                 |    | 291 |   |
| Acquired in-process  research and development                                              |   | -                                   |    | 4,969 |   |
| Changes in operating  assets and liabilities:                                              |   |                                |    |   |   |
| Prepaid expenses,  receivables and other current assets                                    |   | (865                                | )       | 191 |   |
| Accounts payable and other  accrued liabilities                                            |   | 57                                  |    | (261 | ) |
| Unearned contract revenue                                                                  |   | -                                   |    | 30 |   |
| Net cash used in operating  activities                                                     |   | (11,037                             | )       | (9,443 | ) |
|                                                                                       |   |                                |    |   |   |
| **Cash  flows from investing activities:**                                                 |   |                                |    |   |   |
| Purchases of furniture and  equipment, net                                                 |   | (204                                | )       | (245 | ) |
| Purchases of marketable  securities                                                        |   | (61,299                             | )       | (100,555 | ) |
| Maturities and sales of  marketable securities                                             |   | 57,622                              |    | 27,278 |   |
| Net cash used in investing  activities                                                     |   | (3,881                              | )       | (73,522 | ) |
|                                                                                       |   |                                |    |   |   |
| **Cash  flows from financing activities:**                                                 |   |                                |    |   |   |
| Issuance of common stock,  net                                                             |   | 850                                 |    | 42,845 |   |
| Net cash provided by  financing activities                                                 |   | 850                                 |    | 42,845 |   |
|                                                                                       |   |                                |    |   |   |
| **Net  decrease in cash and cash equivalents**                                             |   | (14,068                             | )       | (40,120 | ) |
| Cash and cash equivalents  at beginning of period                                          |   | 20,300                              |    | 46,454 |   |
| Cash and cash equivalents  at end of period                                                |   | 6,232                               |    | 6,334 |   |
| Marketable securities at  end of period                                                    |   | 102,681                             |    | 73,463 |   |
| **Cash,  cash equivalents and marketable securities at end of period**                     |   | $                                   | 108,913 |   | $ | 79,797 |   |

 

See Notes to Condensed Consolidated Financial Statements

 

**TITAN PHARMACEUTICALS, INC.**

### **NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(unaudited)**

 

**1.        Organizationand Summary of Significant Accounting Policies**

 

***The Company***

                We are abiopharmaceutical company developing proprietary therapeutics for the treatmentof central nervous system disorders, cancer, and other serious and lifethreatening diseases.  We conduct asmall portion of our operations through two subsidiaries: Ingenex, Inc.and ProNeura, Inc.  At September 30,2001, we owned 81% of Ingenex (assuming the conversion of all preferred stockto common stock) and 79% of ProNeura. We operate in one business segment, the development of biopharmaceuticalproducts.

 

***Basis of Presentation***

 

Theaccompanying unaudited condensed consolidated financial statements include theaccounts of Titan and its subsidiaries after elimination of all significantintercompany accounts and transactions. Certain prior year balances have been reclassified to conform to thecurrent year presentation. These financial statements have been prepared in accordancewith generally accepted accounting principles in the United States for interimfinancial information and with the instructions to Form 10-Q and Article 10 ofRegulation S-X.  Accordingly, they donot include all of the information and footnotes required by generally acceptedaccounting principles for complete financial statements. In the opinion ofmanagement, all adjustments (consisting of normal recurring adjustments)considered necessary for a fair presentation have been included.  Operating results for the nine-month periodended September 30, 2001 are not necessarily indicative of the results that maybe expected for the year ending December 31, 2001.

 

Theseunaudited condensed consolidated financial statements should be read inconjunction with the audited consolidated financial statements and footnotesthereto included in the Titan Pharmaceuticals, Inc. annual report on Form 10-Kfor the year ended December 31, 2000.

 

***Revenue Recognition***

                Revenueunder collaborative agreements is recorded when earned as defined under theterms of the respective agreements and collectibility is reasonablyassured.  Payments for our research anddevelopment efforts under contractual arrangements are recognized ratably overthe period in which the related work is performed.  Nonrefundable license fees, with respect to which we have nofuture performance obligations, are recognized upon receipt.  Government grants, which support our researchefforts in specific projects, generally provide for reimbursement of approvedcosts as defined in the grant documents. Grant revenues are recognized when subsidized project costs areincurred.

 

**2.     Net Loss PerShare**

 

Wecalculate net loss per share using the weighted average common sharesoutstanding for the period.  For the periodsended September 30, 2001 and 2000, the effect of an additional 4,662,448 and5,595,246 shares, respectively, related to our convertible preferred stock,options and warrants were not included in the computation of diluted earningsper share because they are anti-dilutive.

 

**3.        ComprehensiveIncome (Loss)**

 

Comprehensive income(loss) is comprised of net income (loss) and other comprehensive income(loss).  The only component of othercomprehensive income (loss) is unrealized gains and losses from our marketablesecurities.  Comprehensive loss for thethree and nine months ended September 30, 2001 were $3.9 million and $9.4million, respectively, and for the three and nine months ended September 30,2000 were $8.4 million and $14.6 million, respectively.

 

**4.     Loan to Officer**

                In February 2001, we provided a loan to an officer.  The loan bears a fixed interest rate of8.50% per year and is due and payable in February 2002.  As of September 30, 2001, the amountoutstanding on the loan was $0.4 million.

 

**5.     IloperidoneSublicense Agreement for the Japanese Market**

                In April 2001, we entered into an amendment to ouragreement with Novartis Pharma AG for the development and commercialization ofiloperidone in Japan.  Iloperidone is anovel antipsychotic agent that is currently in a world-wide Phase IIIdevelopment program.  This amendmentexpands upon Titan and Novartis’ previously executed and ongoing agreement forworldwide development, manufacturing, and marketing of iloperidone outsideJapan.  Under the amendment, in exchangefor rights to iloperidone in Japan, Titan received a $2.5 million license feein May 2001, and will receive future payments contingent upon the achievementof certain regulatory milestones as well as royalties on product sales in Japanconsistent with the previous agreement. We recognized the $2.5 million as license revenue as we have no furtherperformance obligations under the original agreement or this amendment.

 

**6.     StockOption Plans**

                In August 2001, we adopted the2001 Employee Non-Qualified Stock Option Plan (the “2001 NQ Plan”) pursuant towhich 1,000,000 shares of common stock were reserved and authorized forissuance for option grants to employees and consultants who are neitherofficers nor directors of Titan.  Weissued options to purchase an aggregate of 338,310 shares of common stock underthe 2001 NQ Plan to employees at an exercise price of $11.63 per share.  In addition, in August 2001, we issuedoptions under our 1998 Stock Option Plan to members of management and the Boardof Directors.

 

**Item 2.                    Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

 

*Thefollowing discussion contains certain forward-looking statements, within themeaning of the "safe harbor" provisions of the Private SecuritiesReform Act of 1995, the attainment of which involves various risks anduncertainties. Forward-looking statements may be identified by the use offorward-looking terminology such as "may," "will,""expect," "believe," "estimate,""anticipate," "continue," or similar terms, variations ofthose terms or the negative of those terms. Our actual results may differmaterially from those described in these forward-looking statements due to,among other factors, the results of ongoing research and development activitiesand pre-clinical testing, the results of clinical trials and the availabilityof additional financing through corporate partnering arrangements orotherwise.  Additional factors includeour ability to protect our patents and proprietary rights, ability to complywith extensive government regulations, and other factors and risks detailedunder the caption "Risk Factors" in the Company's 2000 Annual Reporton Form 10-K and other filings with the U.S. Securities and ExchangeCommission.  Stockholders andprospective investors in the Company should carefully consider these riskfactors. The Company disclaims any obligation to update these statements forsubsequent events.*

 

*                Spheramine®,CeaVac®, TriAb®, TriGem®, Pivanex® and CCMTM are trademarks of TitanPharmaceuticals, Inc.*

 

***Overview***

 

We are a biopharmaceutical company developing proprietarytherapeutics for the treatment of central nervous system disorders, cancer, andother serious and life threatening diseases. Our product development programs focus on large pharmaceutical marketswith significant unmet medical needs and commercial potential.  We currently have nine products indevelopment, seven of which are in clinical development, with two products inlate stage human trials for safety and efficacy, known as Phase III clinicaltrials.  We have five products inpreliminary trials for human safety and efficacy, known as Phase I/II and PhaseII clinical trials.  In addition tothese programs, we have two products in preclinical development.  We are independently developing our productcandidates and also utilizing strategic partnerships, including collaborationswith Novartis Pharma AG and Schering AG, as well as collaborations with severalgovernment-sponsored clinical cooperative groups.  These collaborations help fund product development and enable usto retain significant economic interest in our products.

 

*Our Clinical Development Programs*

The following table sets forth our products inclinical development:

 
| **Product**        |   | **Potential  Indication(s)**                                    |   | **Status**                                       |   | **Marketing  Rights**  |
|--------------------|--------|-----------------------------------------------------------------|--------|--------------------------------------------------|--------|------------------------|
| Iloperidone        |   | Schizophrenia,  psychosis                                       |   | Phase III                                        |   | Novartis Pharma  AG    |
| Spheramine         |   | Parkinson’s  disease                                       |   | Phase I/II                                       |   | Schering AG            |
| CeaVac             |   | Colorectal,  gastrointestinal and pancreatic cancer             |   | Phase III  (colorectal cancer)                   |   | Titan  Pharmaceuticals |
| TriAb              |   | Breast and  ovarian cancer                                      |   | Phase II (breast  cancer)                        |   | Titan  Pharmaceuticals |
| TriGem             |   | Small cell lung  cancer, melanoma                               |   | Phase II  (melanoma)                             |   | Titan  Pharmaceuticals |
| Bivalent           |   | Metastatic  breast, non-small cell lung , and colorectal cancer |   | Phase II                                         |   | Titan  Pharmaceuticals |
| Pivanex            |   | Non-small cell  lung cancer                                     |   | Phase II                                         |   | Titan  Pharmaceuticals |
| Gallium  Maltolate |   | Myeloma,  prostate and bladder cancer, lymphoma, HIV            |   | Phase II  (prostate cancer and multiple myeloma) |   | Titan  Pharmaceuticals |

*** ***

***Results of Operations***

Revenues for thethird quarter of 2001 were approximately$0.5 million, compared to $0.7 million for the same quarter in 2000.  For the first nine months of 2001, revenueswere $4.0 million, compared to $1.3 million for the same nine-month period in2000.  The increase in revenue for thenine-month period was primarily due to a $2.5 million license fee received fromNovartis Pharma AG for the development and commercialization of iloperidone inJapan, and higher SBIR grant revenues from the National Institutes of Health insupport of the development of Spheramine, our novel treatment for Parkinson'sdisease.

 

Research anddevelopment expenses for the third quarter 2001 were $5.8 million, compared to$4.6 million for the same quarter in 2000. For the first nine months of 2001,research and development expenses were $16.1 million, compared to $11.9 millionfor the same nine-month period in 2000. (The figures for 2000 do not include aone-time $5.0 million charge related to the acquisition of worldwide rights togallium maltolate in the third quarter). Excluding the one-time charge in 2000, the planned increase in researchand development is associated with our ongoing randomized, placebo-controlledPhase III clinical study of CeaVac in Dukes D colorectal cancer, as well asexpenses associated with ongoing clinical trials with TriAb and GalliumMaltolate.  Research and developmentexpenses are expected to continue to increase moderately in the future.  The rate of increasedepends on a number of factors including progress in preclinical programs andclinical trials.

 

General and administrative expenses for the thirdquarter 2001 were $1.3 million compared to $1.2 million for the same quarter in2000.  For the first nine months of2001, general and administrative expenses were $4.1 million, compared to $2.8million for the same nine-month period in 2000.  The increase was in support of our expanded clinical andpreclinical operations, organizational development and certain stock optionrelated non-cash compensation charges.

 

Other income, net, for the third quarter 2001 was $1.8million compared to $1.4 million for the same quarter in 2000.  For the first nine months of 2001, otherincome, net, was $5.1 million compared to $3.6 million for the same nine-month periodin 2000.  The increase, primarily ininterest income, was a result of our significantly larger cash and marketablesecurities position.

 

As a result of theforegoing, we had a net loss for the third quarter 2001 of $4.8 million, or$0.17 per share, compared to $8.7 million, or $0.34 per share, for the samequarter in 2000.  For the first ninemonths of 2001, our net loss was $11.1 million, or $0.40 per share, compared to$14.8 million, or $0.59 per share, for the same nine-month period in 2000.

 

***Liquidity andCapital Resources***

                Wefunded our operations since inception primarily through an initial publicoffering and private placements of our securities, as well as proceeds fromwarrant and option exercises, corporate licensing and collaborative agreements,and government sponsored research grants. At September 30, 2001, we had $108.9 million of cash, cash equivalents,and marketable securities.

 

                InNovember 2000, we completed a private placement of 1.2 million shares of ourcommon stock for net proceeds of approximately $40.9 million, after deductingfees and commissions and other expenses of the offering.

 

                InMarch 2000, we completed a private placement of 1.2 million shares ofour common stock for net proceeds of approximately $38.8 million, after deductingfees and commissions and other expenses of the offering.

 

                Our operatingactivities used $11.0 million of cash in the first nine months of 2001 and $9.4million in the first nine months of 2000. Uses of cash in operating activities were primarily to fund productdevelopment programs and administrative expenses.  We have entered into various agreements with researchinstitutions, universities, and other entities for the performance of researchand development activities and for the acquisition of licenses related to thoseactivities.  The aggregate commitmentswe have under these agreements, including minimum license payments, for thenext 12 months is approximately $0.6 million.  Certain of the licenses require us to payroyalties on future product sales, if any. In addition, in order to maintain license and other rights whileproducts are under development, we must comply with customary licenseeobligations, including the payment of patent related costs and diligent effortsin product development.

 

                Weexpect to continue to incur substantial additional operating losses from costsrelated to continuation and expansion of product and technology development,clinical trials, and administrative activities.  We believe that we currently have sufficient working capital tosustain our currently planned operations through 2005.

 

 

**Item 3.                    Quantitativeand Qualitative Disclosures About Market Risk**

 

                Our market risk disclosures set forth in our Form 10-Kfor the period ended December 31, 2000, have not changed significantly.

 

**PART II**

**Item 1.        Legal Proceedings**

 

                There were nomaterial changes to the proceeding disclosed in our Form 10-K for the periodended December 31, 2000.

 

**Item 4.**                    **Submission of Matters to a Vote ofSecurity Holders**

                OnAugust 9, 2001, the Company held its Annual Meeting of Stockholders.  Matters voted upon at the meeting and thenumber of affirmative votes, negative votes, withheld votes and abstentionscast with respect to each such matter were as follows:
|   |                                       |   | **Affirmative** |   | **Withheld** |   |
|--------|--------------------------------------------|--------|-----------------|--------|--------------|--------|
|   |                                       |   | **Votes**       |   | **Votes**    |   |
| 1.     | Election of the  Company’s Directors: |   |            |   |         |   |
|   | Louis R. Bucalo, M.D.                      |   | 19,050,580      |   | 1,715,055    |   |
|   | Ernst-Gunter Afting, M.D., Ph.D.           |   | 20,510,489      |   | 255,146      |   |
|   | Victor J. Bauer, Ph.D.                     |   | 19,010,480      |   | 1,755,155    |   |
|   | Eurelio M. Cavalier                        |   | 17,379,959      |   | 3,385,676    |   |
|   | Michael K. Hsu                             |   | 20,474,689      |   | 290,946      |   |
|   | Hubert Huckel, M.D.                        |   | 20,510,489      |   | 255,146      |   |
|   | Ley S. Smith                               |   | 19,213,882      |   | 1,551,753    |   |
|   | Konrad M. Weis, Ph.D.                      |   | 20,510,389      |   | 255,246      |   |

 

 
|   |   |                                                                          |   | **Affirmative** |   | **Against** |   |            |   |
|--------|--------|-------------------------------------------------------------------------------|--------|-----------------|--------|-------------|--------|-----------------|--------|
|   |   |                                                                          |   | **Votes**       |   | **Votes**   |   | **Abstentions** |   |
|   |   |                                                                          |   |            |   |        |   |            |   |
| 2.     |   | Approval of the  appointment of Ernst & Young LLP as independent auditors |   | 20,494,812      |   | 268,909     |   | 1,914           |   |

 

                As aresult of the foregoing, each of the nominees was elected director of theCompany until the next annual meeting of stockholders or until their successorwas elected and qualified, and Ernst & Young LLP was appointed as theCompany's independent auditors.

 

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

 

(b)   Reports on Form 8-K

We filed a currentreport on Form 8-K with the Securities Exchange Commission on July 24, 2001 toannounce Titan and Novartis Pharma AG’s plan to conduct additional clinicaltrials to further strengthen the profile of iloperidonefor the treatment of schizophrenia.

**SIGNATURES**

In accordance with therequirements of the Exchange Act, the registrant caused this report to besigned on its behalf by the undersigned, thereunto duly authorized.

 
|              | **TITAN  PHARMACEUTICALS, INC.** |
|-------------------|----------------------------------|
|              |                             |   |
| November 14, 2001 | By:                              | /s/ Louis R. Bucalo,  M.D. |
|              |                             | Louis  R. Bucalo, M.D. |
|              |                             | Chairman,  President and Chief Executive Officer |
|              |                             |   |
| November 14, 2001 | By:                              | /s/ Robert E. Farrell |
|              |                             | Robert E. Farrell |
|              |                             | Executive Vice President and Chief Financial Officer |

** **