**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C.  20549**

 

**FORM 10-Q**

 

| **ý****          Quarterly  Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**                                                                                                                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                |
| **for  the Period Ended March 31, 2003.**                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                |
| **or**                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                |
| **o****          Transition  Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                |
| **for  the Transition Period  From                         to                         .** |

 

**Commissionfile number 0-27436**

 

**TitanPharmaceuticals, Inc.**

(Exact name ofregistrant as specified in its charter)

 

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

 

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

(Address ofPrincipal Executive Offices including zip code)

 

**(650) 244-4990**

(Registrant’sTelephone Number, Including Area Code)

 

Indicate by checkmark whether 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

 

Indicate by check markwhether the registrant is an accelerated filer (as defined on Rule 12B-2 of theExchange Act).  Yes  oNo ý

 

There were27,642,085 shares of the Registrant’s Common Stock issued and outstanding onMay 6, 2003.

 

 

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**Titan Pharmaceuticals, Inc**.

**Index to Form 10-Q**

 
| **Part I.**        | **Financial Information**                                                                                  |   |
|--------------------|------------------------------------------------------------------------------------------------------------|--------|
|               |                                                                                                       |   |
|               | Item 1.  Condensed Financial Statements (unaudited)                                                   |   |
|               |                                                                                                       |   |
|               | Condensed  Consolidated Balance Sheets  March 31, 2003 and December 31, 2002                               |   |
|               |                                                                                                       |   |
|               | Condensed  Consolidated Statements of Operations  Three months ended March 31, 2003 and 2002               |   |
|               |                                                                                                       |   |
|               | Condensed  Consolidated Statements of Cash Flows  Three months ended March 31, 2003 and 2002               |   |
|               |                                                                                                       |   |
|               | 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                                 |   |
|               |                                                                                                       |   |
|               | Item 4.  Controls and Procedures                                                                      |   |
|               |                                                                                                       |   |
| **Part II.**       | **Other Information**                                                                                      |   |
|               |                                                                                                       |   |
|               | Item 6.  Exhibits and Reports on Form 8-K                                                             |   |
|               |                                                                                                       |   |
| **SIGNATURES**     |
|               |                                                                                                       |   |
| **CERTIFICATIONS** |
|                    |                                                                                                            |        |  |

 

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**PartI.  Financial Information**

 

**TITAN PHARMACEUTICALS, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(in thousands)**

 
|                                                          |   | **March 31,  2003** |   | **December  31,  2002** |   |
|---------------------------------------------------------------|--------|---------------------|--------|-------------------------|--------|
|                                                          |   | **(unaudited)**     |   | **(Note A)**            |   |
| **Assets**                                                    |   |                |   |                    |   |
| Current assets                                                |   |                |   |                    |   |
| Cash and cash equivalents                                     |   | $                   | 8,431  |                    | $      | 7,155 |   |
| Marketable securities                                         |   | 57,649              |   | 66,295                  |   |
| Related party receivables                                     |   | 160                 |   | 316                     |   |
| Prepaid expenses, receivables, and other current assets       |   | 1,857               |   | 881                     |   |
| Total current assets                                          |   | 68,097              |   | 74,647                  |   |
| Property and equipment, net                                   |   | 896                 |   | 979                     |   |
| Investment in other companies                                 |   | 300                 |   | 300                     |   |
|                                                          |   | $                   | 69,293 |                    | $      | 75,926 |   |
| **Liabilities and Stockholders’ Equity**                 |   |                |   |                    |   |
| Current liabilities                                           |   |                |   |                    |   |
| Accounts payable                                              |   | $                   | 1,897  |                    | $      | 1,901 |   |
| Accrued clinical trials expenses                              |   | 969                 |   | 1,203                   |   |
| Other accrued liabilities                                     |   | 1,069               |   | 841                     |   |
| Total current liabilities                                     |   | 3,935               |   | 3,945                   |   |
| Minority interest - Series B preferred stock of Ingenex, Inc. |   | 1,241               |   | 1,241                   |   |
| Stockholders’ equity                                     |   |                |   |                    |   |
| Common stock, at amounts paid in                              |   | 191,680             |   | 191,680                 |   |
| Additional paid-in capital                                    |   | 9,187               |   | 9,161                   |   |
| Deferred compensation                                         |   | (553                | )      | (621                    | )      |
| Accumulated deficit                                           |   | (136,382            | )      | (129,852                | )      |
| Accumulated other comprehensive income                        |   | 185                 |   | 372                     |   |
| Total stockholders’ equity                               |   | 64,117              |   | 70,740                  |   |
|                                                          |   | $                   | 69,293 |                    | $      | 75,926 |   |

 

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NoteA: The balance sheet has been derived from the audited financial statements atthat date but does not include all of the information and footnotes required bygenerally accepted accounting principles in the United States for completefinancial statement presentation.

 

See Notes to CondensedConsolidated Financial Statements

 

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**TITAN PHARMACEUTICALS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OFOPERATIONS**

**(unaudited)**

**(in thousands, except per shareamount)**

 
|                                                                            |   | **Three  Months Ended March 31,** |   |
|---------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                            |   | **2003**                          |   | **2002** |   |
| Revenue:                                                                        |   |                              |   |   |   |
| License and contract revenue                                                    |   | $                                 | 26     |   | $ | 2,151 |   |
| Grant revenue                                                                   |   | —                            |   | 196 |   |
| Total revenue                                                                   |   | 26                                |   | 2,347 |   |
|                                                                            |   |                              |   |   |   |
| Operating expenses:                                                             |   |                              |   |   |   |
| Research and development                                                        |   | 5,643                             |   | 7,486 |   |
| General and administrative                                                      |   | 1,382                             |   | 1,210 |   |
| Total operating expenses                                                        |   | 7,025                             |   | 8,696 |   |
| Loss from operations                                                            |   | (6,999                            | )      | (6,349 | ) |
|                                                                            |   |                              |   |   |   |
| Other income (expense):                                                         |   |                              |   |   |   |
| Interest income, net                                                            |   | 472                               |   | 1,407 |   |
| Other expense                                                                   |   | (3                                | )      | (8 | ) |
| Other income, net                                                               |   | 469                               |   | 1,399 |   |
| Net loss                                                                        |   | $                                 | (6,530 | ) | $ | (4,950 | ) |
|                                                                            |   |                              |   |   |   |
| Basic and diluted net loss per share                                            |   | $                                 | (0.24  | ) | $ | (0.18 | ) |
|                                                                            |   |                              |   |   |   |
| Weighted average shares used in computing basic and diluted net loss  per share |   | 27,642                            |   | 27,642 |   |

 

See Notes to CondensedConsolidated Financial Statements

 

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**TITAN PHARMACEUTICALS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OFCASH FLOWS**

**(unaudited)**

**(in thousands)**

 
|                                                                                       |   | **Three  Months Ended March 31,** |   |
|--------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                       |   | **2003**                          |   | **2002** |   |
| **Cash flows from operating activities:**                                                  |   |                              |   |   |   |
| Net loss                                                                                   |   | $                                 | (6,530 | ) | $ | (4,950 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in)  operating activities: |   |                              |   |   |   |
| Depreciation and amortization                                                              |   | 659                               |   | 350 |   |
| Non-cash compensation related to stock options                                             |   | 94                                |   | 67 |   |
| Changes in operating assets and liabilities:                                               |   |                              |   |   |   |
| Prepaid expenses, receivables, and other current assets                                    |   | (1,372                            | )      | (945 | ) |
| Accounts payable and other accrued liabilities                                             |   | (11                               | )      | (292 | ) |
| Unearned contract revenue                                                                  |   | —                            |   | (2,000 | ) |
| Net cash used in operating activities                                                      |   | (7,160                            | )      | (7,770 | ) |
|                                                                                       |   |                              |   |   |   |
| **Cash flows from investing activities:**                                                  |   |                              |   |   |   |
| Purchases of furniture and equipment, net                                                  |   | (23                               | )      | (191 | ) |
| Purchases of marketable securities                                                         |   | (24,856                           | )      | (8,623 | ) |
| Proceeds from maturities of marketable securities                                          |   | 33,315                            |   | 8,325 |   |
| Proceeds from sales of marketable securities                                               |   | —                            |   | 7,088 |   |
| Net cash provided by investing activities                                                  |   | 8,436                             |   | 6,599 |   |
|                                                                                       |   |                              |   |   |   |
| **Cash flows from financing activities:**                                                  |   |                              |   |   |   |
| Issuance of common stock, net                                                              |   | —                            |   | 1 |   |
| Net cash provided by financing activities                                                  |   | —                            |   | 1 |   |
|                                                                                       |   |                              |   |   |   |
| **Net decrease in cash and cash equivalents**                                              |   | 1,276                             |   | (1,170 | ) |
| Cash and cash equivalents at beginning of period                                           |   | 7,155                             |   | 5,772 |   |
| Cash and cash equivalents at end of period                                                 |   | 8,431                             |   | 4,602 |   |
| Marketable securities at end of period                                                     |   | 57,649                            |   | 91,411 |   |
| **Cash, cash equivalents and marketable securities at  end of period**                     |   | $                                 | 66,080 |   | $ | 96,013 |   |

 

See Notes to CondensedConsolidated Financial Statements

 

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**TITAN PHARMACEUTICALS, INC.**

### **NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS**

**(unaudited)**

 

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

 

***The Company***

 

We are a biopharmaceutical company developingproprietary therapeutics for the treatment of central nervous system disorders,cancer, and other serious and life threatening diseases.  We operate in one business segment, thedevelopment of biopharmaceutical products.

 

***Basis ofPresentation***

 

The accompanying unaudited condensed consolidatedfinancial statements include the accounts of Titan and its subsidiaries afterelimination of all significant intercompany accounts and transactions. Certainprior year balances have been reclassified to conform to the current yearpresentation.  These financialstatements have been prepared in accordance with generally accepted accountingprinciples in the United States for interim financial information and with theinstructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of theinformation and footnotes required by generally accepted accounting principlesfor a complete financial statements presentation. In the opinion of management,all adjustments (consisting of normal recurring adjustments) considerednecessary for a fair presentation have been included.  Operating results for the three-month period ended March 31, 2003are not necessarily indicative of the results that may be expected for the yearending December 31, 2003.

 

The preparation of financialstatements in conformity with accounting principles generally accepted in theUnited States requires management to make estimates and assumptions that affectthe amounts reported in the financial statements and accompanying notes.  Actual results could differ from thoseestimates.

 

These unaudited condensed consolidated financialstatements should be read in conjunction with the audited consolidatedfinancial statements and footnotes thereto included in the Titan Pharmaceuticals,Inc. annual report on Form 10-K for the year ended December 31, 2002.

 

***Revenue Recognition***

 

Contract revenue for research and development isrecorded as earned based on the performance requirements of the contract.  Revenue associated with performancemilestones, considered “at-risk” until the milestones are completed, isrecognized based on the achievement of the milestones as defined in therespective agreements.  Governmentgrants, which support our research effort in specific projects, generally providefor reimbursement of approved costs as defined in the grant documents, andrevenue is recognized when associated project costs are incurred.

 

***OperatingSubsidiaries***

 

We conduct a small portion of our operations throughtwo subsidiaries: Ingenex, Inc. and ProNeura, Inc.  At March 31 2003, we owned 81% of Ingenex(assuming the conversion of all preferred stock to common stock) and 79% ofProNeura.

 

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***Recent AccountingPronouncements***

 

In January 2003, theFASB issued Interpretation No. 46 (or FIN 46), *“Consolidationof Variable Interest Entities.”* FIN 46 requires a variable interest entity to be consolidated by acompany if that company is subject to a majority of the risk of loss from thevariable interest entity’s activities or entitled to receive a majority of theentity’s residual returns or both.  Avariable interest entity is a corporation, partnership, trust, or any otherlegal structures used for business purposes that either (a) does not have equityinvestors with voting rights or (b) has equity investors that do not providesufficient financial resources for the entity to support its activities.  A variable interest entity often holdsfinancial assets, including loans or receivables, real estate or otherproperty.  A variable interest entitymay be essentially passive or it may engage in research and development orother activities on behalf of another company. The consolidation requirements of FIN 46 apply immediately to variableinterest entities created after January 31, 2003.  The consolidation requirements apply to older entities in thefirst fiscal year or interim period beginning after June 15, 2003.  The adoption of FIN 46 is not expected to have a material impact on ourfinancial position and results of operations.

 

**2.   StockOption Plans**

 

We have elected to continue to follow Accounting Principles BoardOpinion No. 25 (or APB 25), *“Accounting forStock Issued to Employees,”* rather than the alternative method ofaccounting prescribed by Statement of Financial Accounting Standards No. 123(or SFAS 123), *“Accounting for Stock-BasedCompensation.”*   Under APB25, no compensation expense is recognized when the exercise price of ouremployee stock options equals the market price of the underlying stock on thedate of grant.  The following tableillustrates the effect on our net loss and net loss per share if Titan hadapplied the provisions of SFAS 123 to estimate and recognize compensationexpense for our stock-based employee compensation.

 

|                                                                                                                                   |   | **Three Months Ended  March 31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                                                                   |   | **2003**                          |   | **2002** |   |
| Net loss, as reported                                                                                                                  |   | $                                 | (6,530 | ) | $ | (4,950 | ) |
| Add:  Stock-based employee compensation expense  included in reported net loss                                                    |   | 94                                |   | 67 |   |
| Deduct:  Estimated stock-based employee  compensation expense determined in accordance with SFAS 123 for all stock  option grants |   | (892                              | )      | (1,973 | ) |
| Pro forma net loss                                                                                                                     |   | $                                 | (7,328 | ) | $ | (6,856 | ) |
|                                                                                                                                   |   |                              |   |   |   |
| Basic and diluted net  loss per share, as reported                                                                                     |   | $                                 | (0.24  | ) | $ | (0.18 | ) |
| Pro forma basic and  diluted net loss per share                                                                                        |   | $                                 | (0.27  | ) | $ | (0.25 | ) |

 

**3.   NetLoss Per Share**

 

We calculate netloss per share using the weighted average common shares outstanding for theperiod.  For periods ended March 31,2003 and 2002, the effect of an additional 8,385,477 and 5,218,968 shares,respectively, related to our authorized and issued convertible preferred stockand options, were not included in the computation of diluted earnings per sharebecause they are anti-dilutive.

 

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**4.   ComprehensiveIncome**

 

Comprehensiveincome is comprised of net loss and other comprehensive income.  The only component of other comprehensiveincome is unrealized gains and losses on our marketable securities.  Comprehensive loss for the three monthsended March 31, 2003 and 2002 were $6.7 million and $6.0 million, respectively.

 

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**Item 2.       Management’s Discussion and Analysis of Financial Conditionand Results of Operations**

 

*The following discussion should be read in conjunctionwith the Consolidated Financial Statements and Notes thereto beginning on pageF-1 in this report.*

 

*The following discussion contains certainforward-looking statements, within the meaning of the “safe harbor” provisionsof the Private Securities Reform Act of 1995, the attainment of which involvesvarious risks and uncertainties. Forward-looking statements may be identifiedby the use of forward-looking terminology such as “may,” “will,” “expect,”“believe,” “estimate,” “plan,” “anticipate,” “continue,” or similar terms,variations of those terms or the negative of those terms. Our actual resultsmay differ materially from those described in these forward-looking statementsdue to, among other factors, the results of ongoing research and developmentactivities and pre-clinical testing, the results of clinical trials and theavailability of additional financing through corporate partnering arrangementsor otherwise.*

 

*Spheramine®, Pivanex®, ProbuphineTM, CeaVac®, TriAb®,TriGemTM and CCMTM are trademarks of Titan Pharmaceuticals, Inc.*

 

**Overview**

 

We are a biopharmaceutical company developing proprietary therapeuticsfor the treatment of central nervous system disorders, cancer, and otherserious and life threatening diseases. Our product development programs focus on large pharmaceutical marketswith significant unmet medical needs and commercial potential.

 

Our internal resources are currently focused primarily on clinicaldevelopment of the following products:

 

•        Spheramine for the treatment of latestage Parkinson’s disease

•        Pivanex for the treatment of non-smallcell lung cancer

•        Gallium maltolate for the treatment ofseveral cancers

•        Probuphine for the treatment of opiateaddiction

 

We are directly developing our product candidates and also utilizingcorporate partnerships, including a collaboration with Schering AG, Germany(Schering) for the development of Spheramine to treat Parkinson’s disease.  Spheramine development is primarily fundedby Schering.  Iloperidone is licensed toNovartis Pharma AG (Novartis) for development and commercialization in thetreatment of schizophrenia and schizoaffective disorders.  Novartis continues to evaluate the nextsteps for the development of iloperidone, including sublicensing the compoundto another company, continuing development, or returning product rights toTitan.

 

At this time, we are not devoting any additional internal resources tothe monoclonal antibodies CeaVac, TriAb, and TriGem. These treatments arecurrently being studied in certain cancers by national oncology cooperativegroups funded by the National Cancer Institute.

 

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The followingtable provides summary status of our products in development:

### ** **

| **Product**         |   | **Potential  Indication(s)**                                                         |   | **Phase of  Development**             |   | **Marketing  Rights** |
|---------------------|--------|--------------------------------------------------------------------------------------|--------|---------------------------------------|--------|-----------------------|
| Spheramine          |   | Parkinson’s  Disease                                                            |   | Phase IIb                             |   | Schering AG           |
| Pivanex             |   | Non-small cell  lung cancer                                                          |   | Phase IIb                             |   | Titan                 |
| Gallium  Maltolate  |   | Myeloma,  prostate and bladder cancer, lymphoma, bone disease associated with cancer |   | Phase I/II                            |   | Titan                 |
| Probuphine          |   | Opiate addiction                                                                     |   | Phase I (to be  initiated mid-2003)   |   | Titan                 |
| Iloperidone         |   | Schizophrenia,  psychosis                                                            |   | Phase III*                            |   | Novartis Pharma  AG   |
| CeaVac &  TriAb |   | Limited stage  non-small cell lung cancer                                            |   | Phase II  (co-operative group study)* |   | Titan                 |
| CeaVac &  TriAb |   | Resected Dukes D  colorectal cancer                                                  |   | Phase II  (co-operative group study)* |   | Titan                 |
| TriGem &  TriAb |   | Small cell lung  cancer                                                              |   | Phase II  (co-operative group study)* |   | Titan                 |

### ** **

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### ***Further development under review**

 

Our products areat various stages of development and may not be successfully developed orcommercialized. We do not currently have any products being commerciallysold.  Our proposed products willrequire significant further capital expenditures, development, testing, andregulatory clearances prior to commercialization.  We may experience unanticipated problems relating to productdevelopment and cannot predict whether we will successfully develop andcommercialize any products.  Anestimation of product completion dates and completion costs can vary significantlyfor each product and are difficult to predict. Various statutes and regulations also influence our product developmentprogress and the success of obtaining approval is highly uncertain.  For a full discussion of risks anduncertainties in our product development, see “Risk Factors – Our products are at various stages ofdevelopment and may not be successfully developed or commercialized” in our2002 annual report on  Form 10-K.

 

**Results of Operations**

 

Revenues for the first quarter 2003 were approximately $26,000 compared to $2.3 million for the same quarterin 2002.  Revenue for the first quarter2002 primarily consisted of a one-time $2.0 million milestone payment fromSchering following successful completion of the Phase I/II study of Spheraminein the treatment of late-stage Parkinson’s disease, and Schering’s decision toinitiate randomized clinical testing of Spheramine for the treatment ofpatients with late-stage Parkinson’s disease.

 

Research anddevelopment expenses for the first quarter 2003 were $5.6 million, compared to$7.5 million for the same quarter in 2002, a decrease of 25%.  This decrease resulted primarily from thecompletion of the Phase III clinical study of CeaVac in Dukes’ D colorectalcancer, and our planned strategic focus on the clinical development of fourproduct programs: Spheramine, Pivanex, gallium maltolate and Probuphine.

 

General andadministrative expenses for the first quarter 2003 were $1.4 million comparedto $1.2 million for the same quarter in 2002. The slight increase resulted primarily from increased insurance costs.

 

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Other income, netof amortization and other expenses, for the first quarter 2003 was $0.5 millioncompared to $1.4 million in the first quarter 2002.  The decrease, primarily in interest income, was a result of lowerinterest rates and a lower balance of cash and marketable securities.

 

Our net loss forthe first quarter 2003 was $6.5 million, or $0.24 per share, compared to $5.0million, or $0.18 per share, for the same quarter in 2002.

 

**Liquidity and Capital Resources**

 

We have funded our operations since inception through our 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 March 31, 2003, we had $66.1 million of cash, cash equivalents, andmarketable securities.

 

Our operating activities used $7.2 million and $7.8 million of cash inthe first quarter 2003 and 2002, respectively. 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 $0.9 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.

 

We expect to continue to incur substantial additional operating lossesfrom costs related to continuation and expansion of product and technologydevelopment, clinical trials, and administrative activities.  We believe that we currently have sufficientworking capital to sustain our planned operations through 2005.

 

**Item3.       Quantitative and QualitativeDisclosures About Market Risk**

 

Our market riskdisclosures set forth in our Form 10-K for the period ended December 31, 2002,have not changed significantly.

 

**Item 4.       Controls and Procedures**

 

Based on theevaluation by Titan under the supervision and with the participation of ourmanagement, including our Chief Executive Officer and Chief Financial Officer,of the effectiveness of the design and operation of Titan’s disclosure controlsand procedures pursuant to Rule 13a-14 of the Securities and Exchange Act of1934, as amended (the Exchange Act), as of a date within 90 days of the filingdate of this quarterly report, our Chief Executive Officer and Chief FinancialOfficer have concluded that the disclosure controls and procedures areeffective in ensuring that information required to be disclosed by Titan in thereports we file or submit under the Exchange Act is recorded, processed,summarized and reported within the time period specified by the Securities andExchange Commission’s rules and forms.

 

Subsequent to thedate of their evaluation, there were no significant changes in Titan’s internalcontrols or in other factors that could significantly affect these controls norwere any corrective actions required with regard to significant deficienciesand material weaknesses.

 

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**PARTII**

 

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

 

(b)                                 Exhibits

 

99.0                           Section906 Certifications

 

(c)                                  Reportson Form 8-K

 

There were no current reports on Form 8-K filed for the quarter endedMarch 31, 2003.

 

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**SIGNATURES**

 

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

 
|         | **TITAN PHARMACEUTICALS, INC.** |
|--------------|---------------------------------|
|         |                            |   |
|         |                            |   |
| May 15, 2003 | By:                             | /s/ Louis R. Bucalo |   |
|         |                            | Louis R. Bucalo,  M.D. |
|         |                            | Chairman,  President and Chief Executive Officer |
|         |                            |   |
|         |                            |   |
| May 15, 2003 | By:                             | /s/ Robert E. Farrell |   |
|         |                            | Robert E.  Farrell |
|         |                            | Executive Vice  President and Chief Financial Officer |

 

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**CERTIFICATIONS**

 

I, Louis R.Bucalo, M.D., Chairman, President and Chief Executive Officer of TitanPharmaceuticals, Inc., certify that:

 

1.               Ihave reviewed this quarterly report on Form 10-Q of Titan Pharmaceuticals,Inc.;

 

2.               Basedon my knowledge, this quarterly report does not contain any untrue statement ofa material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this quarterlyreport;

 

3.               Basedon my knowledge, the financial statements, and other financial informationincluded in this quarterly report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this quarterly report;

 

4.               Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

a)         designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this quarterly report is being prepared;

 

b)        evaluatedthe effectiveness of the registrant’s disclosure controls and procedures as ofa date within 90 days prior to the filing date of this quarterly report (the“Evaluation Date”); and

 

c)         presentedin this quarterly report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the EvaluationDate;

 

5.               Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors:

 

a)         allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b)        any fraud,whether or not material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.               Theregistrant’s other certifying officers and I have indicated in this quarterlyreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 
| Date: May 15, 2003 |   | /s/ Louis R. Bucalo                              |   |
|--------------------|--------|--------------------------------------------------|--------|
|               |   | Louis R. Bucalo, M.D.                            |
|               |   | Chairman, President and  Chief Executive Officer |

 

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I, Robert E.Farrell, J.D., Executive Vice President and Chief Financial Officer of TitanPharmaceuticals, Inc., certify that:

 

1.               Ihave reviewed this quarterly report on Form 10-Q of Titan Pharmaceuticals,Inc.;

 

2.               Basedon my knowledge, this quarterly report does not contain any untrue statement ofa material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this quarterlyreport;

 

3.               Basedon my knowledge, the financial statements, and other financial informationincluded in this quarterly report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this quarterly report;

 

4.               Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

a)         designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this quarterly report is being prepared;

 

b)        evaluatedthe effectiveness of the registrant’s disclosure controls and procedures as ofa date within 90 days prior to the filing date of this quarterly report (the“Evaluation Date”); and

 

c)         presentedin this quarterly report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the EvaluationDate;

 

5.               Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors:

 

a)         allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b)        any fraud,whether or not material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.               Theregistrant’s other certifying officers and I have indicated in this quarterlyreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 
| Date: May 15, 2003 |   | /s/ Robert E. Farrell                                 |   |
|--------------------|--------|-------------------------------------------------------|--------|
|               |   | Robert E. Farrell, J.D.                               |
|               |   | Executive Vice  President and Chief Financial Officer |

 

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