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, 2003
                                         -------------------

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

     For the transition period from                     to
                                    -------------------    ---------------------

                         Commission File Number 0-28674

                                CADUS CORPORATION
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified on its Charter)


              Delaware                                        13-3660391
---------------------------------------------------- ---------------------------
    (State of Other Jurisdiction of                        (I.R.S. Employer
     Incorporation or Organization)                       Identification No.)

  767 Fifth Avenue, New York, New York                           10153
---------------------------------------------------- ---------------------------
(Address of Principal Executive Offices)                      (Zip Code)

Registrant's Telephone Number, Including Area Code          (212) 702-4367
                                                     ---------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                          Yes __X__           No _____

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12-b-2 of the Exchange Act).

                          Yes _____           No __X__

The number of shares of registrant's common stock, $0.01 par value,  outstanding
as of October 31, 2003 was 13,144,040.

                                       1
<PAGE>


                                CADUS CORPORATION

                                      INDEX
                                                                        PAGE NO.

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS                              4

              PART I - CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements

            Condensed Consolidated Balance Sheets - September 30, 2003
            (unaudited) and December 31, 2002 (audited)                        5

            Condensed Consolidated Statements of Operations - Three
            Months Ended September 30, 2003 and 2002 (unaudited)               6

            Condensed Consolidated Statements of Operations -
            Nine Months Ended September 30, 2003 and 2002 (unaudited)          7

            Condensed Consolidated Statements of Cash Flows -
            Nine Months Ended September 30, 2003 and 2002 (unaudited)          8

            Notes to Condensed Consolidated Financial
            Statements (unaudited)                                        9 - 11

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                       12 - 14

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           14

Item 4.  Controls and Procedures                                              14

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                    14

Item 2.  Changes in Securities and Use of Proceeds                            14

Item 3.  Defaults Upon Senior Securities                                      15

Item 4.  Submission of Matters to a Vote of Security Holders                  15

Item 5.  Other Information                                                    15

Item 6.  Exhibits and Reports on Form 8-K                                     15

SIGNATURES                                                                    16

                                       2
<PAGE>


                                                                        PAGE NO.

EXHIBIT INDEX                                                                 17


                                       3
<PAGE>


SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain   statements  in  this   Quarterly   Report  on  Form  10-Q   constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities  Exchange Act of 1934, as amended.
All statements  other than  statements of historical  fact are  "forward-looking
statements" for purposes of federal and stated  securities  laws,  including any
projections  or  expectations  of  earnings,   revenue,  financial  performance,
liquidity and capital  resources or other financial  items; any statement of our
plans,  strategies  and  objectives  for our future  operations;  any statements
regarding future economic  conditions or performance;  any statements of belief;
and  any   statements   of   assumption   underlying   any  of  the   foregoing.
Forward-looking  statements  may  include  the words  "may,"  "will,"  "should,"
"could," "would," "predicts," "potential," "continue," "expects," "anticipates,"
"future," "intends," "plans,"  "believes,"  "estimates" and other similar words.
Although  the  Company   believes  that  the   expectations   reflected  in  our
forward-looking  statements  are  reasonable,  such  forward-looking  statements
involve  known and unknown  risks,  uncertainties,  and other  factors which may
cause the actual  results,  performance,  or  achievements  of the Company to be
materially  different  from any  future  results,  performance  or  achievements
expressed  or implied by such  forward-looking  statements.  Factors  that could
cause  or  contribute  to such  differences  include,  but are not  limited  to,
technological  uncertainties  regarding  the Company's  technologies,  risks and
uncertainties  relating to the Company's  ability to license its technologies to
third parties, the Company's ability to acquire and operate other companies, the
Company's capital needs and uncertainty of future funding, the Company's history
of operating losses, the Company's dependence on proprietary  technology and the
unpredictability of patent protection, intense competition in the pharmaceutical
and biotechnology industries, rapid technological development that may result in
the  Company's  technologies  becoming  obsolete,  as well as  other  risks  and
uncertainties  discussed in the Company's  other filings with the Securities and
Exchange  Commission.  The  forward-looking  statements  made in this  Quarterly
Report on Form 10-Q are made only as of the date hereof and the Company does not
have  or  undertake  any  obligation  to  publicly  update  any  forward-looking
statements  to  reflect  subsequent  events or  circumstances  unless  otherwise
required by law.

                                       4
<PAGE>


ITEM 1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                CADUS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                    SEPTEMBER 30,   DECEMBER 31,
                                                         2003           2002
                                                     -----------    -----------
                                                     (Unaudited)     (Audited)
Current assets:
    Cash and cash equivalents                        $24,309,125    $24,923,071
    License fee receivable                               120,000             --
    Prepaid and other current assets                      88,296         79,053
    Investment in marketable securities                1,425,871        794,603
                                                     -----------    -----------

        Total current assets                          25,943,292     25,796,727

Investment in other ventures                             162,484        164,922
Other assets, net                                        848,161        908,841
                                                     -----------    -----------
        Total assets                                 $26,953,937    $26,870,490
                                                     ===========    ===========



                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
    Accrued expenses and other current liabilities   $    29,094    $   227,810
    Deferred gain on exchange of equity interest              --        184,833
                                                     -----------    -----------
    Total current liabilities                             29,094        412,643
                                                     -----------    -----------

Stockholders' equity:
    Common stock                                         132,857        132,857
    Additional paid-in capital                        59,844,355     59,844,355
    Accumulated deficit                              (33,041,787)   (33,005,871)
    Accumulated other comprehensive income (loss)        289,493    (   213,419)
    Treasury stock                                   (   300,075)   (   300,075)
                                                     -----------    -----------
        Total stockholders' equity                    26,924,843     26,457,847
                                                     -----------    -----------
        Total liabilities and stockholders' equity   $26,953,937    $26,870,490
                                                     ===========    ===========


     See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>


                                CADUS CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                         Three Months Ended
                                                            September 30,
                                                        2003            2002
                                                    -----------     -----------
                                                    (Unaudited)     (Unaudited)
License and maintenance fees                        $   120,000     $        --
                                                    -----------     -----------
                        Total revenues                  120,000              --
                                                    -----------     -----------
Costs and expenses:
    General and administrative expenses                 169,447         191,536
    (Gain) loss from equity in other ventures       (       337)          2,699
                                                    -----------     -----------
        Total costs and expenses                        169,110         194,235
                                                    -----------     -----------
Operating loss                                      (    49,110)    (   194,235)
                                                    -----------     -----------

Other income:
    Interest income                                      36,443          81,816
    Realized gain on marketable securities              313,189         823,189
                                                    -----------     -----------
        Total other income                              349,632         905,005
                                                    -----------     -----------

Income before income taxes                              300,522         710,770
Income taxes                                                 --              --
                                                    -----------     -----------
        Net income                                  $   300,522     $   710,770
                                                    ===========     ===========
Basic and diluted income per weighted average
share of common stock outstanding                   $      0.02     $      0.05
                                                    ===========     ===========
Weighted average shares of common stock
outstanding - basic and diluted                      13,144,040      13,144,040
                                                    ===========     ===========


     See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>


                                CADUS CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                         Nine Months Ended
                                                            September 30,
                                                        2003            2002
                                                    -----------     -----------
                                                    (Unaudited)     (Unaudited)
License and maintenance fees                        $   220,000     $   100,000
                                                    -----------     -----------
        Total revenues                                  220,000         100,000
                                                    -----------     -----------
Costs and expenses:
    General and administrative expenses                 703,517         733,081
    Loss from equity in other ventures                    2,438           1,292
                                                    -----------     -----------
        Total costs and expenses                        705,955         734,373
                                                    -----------     -----------
Operating loss                                      (   485,955)    (   634,373)
                                                    -----------     -----------

Other income:
    Interest income                                     136,850         262,003
    Realized gain on marketable securities              313,189         823,189
                                                    -----------     -----------
        Total other income                              450,039       1,085,192
                                                    -----------     -----------

(Loss ) income before income taxes                  (    35,916)        450,819

Income taxes                                                 --              --
                                                    -----------     -----------
        Net (loss) income                           ($   35,916)    $   450,819
                                                    ===========     ===========
Basic and diluted (loss) income per weighted
average share of common stock outstanding           ($     0.00)    $      0.03
                                                    ===========     ===========
Weighted average shares of common stock
outstanding - basic and diluted                      13,144,040      13,144,040
                                                    ===========     ===========


     See accompanying notes to condensed consolidated financial statements.

                                       7
<PAGE>


                                CADUS CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         Nine Months Ended
                                                            September 30,
                                                        2003            2002
                                                    -----------     -----------
                                                    (Unaudited)     (Unaudited)
Cash flows from operating activities:

  Net (loss) income                                 ($   35,916)    $   450,819

  Adjustments to reconcile net (loss) income
    to net cash used in operating activities:

      Amortization of patent costs                       60,680          60,680

      Realized gain on marketable securities        (   313,189)    (   823,189)

      Loss from equity in other ventures                  2,438           1,292

  Changes in assets and liabilities:

      (Increase) decrease in license fee
        receivable                                  (   120,000)        500,000

      Increase in prepaid and other
        current assets                              (     9,243)    (    75,598)

      Decrease in accrued expenses and other
        current liabilities                         (   198,716)    (   688,604)
                                                    -----------     -----------
Net cash used in operating activities               (   613,946)    (   574,600)
                                                    -----------     -----------
Net decrease in cash and cash equivalents           (   613,946)    (   574,600)
Cash and cash equivalents - beginning of period      24,923,071      24,469,357
                                                    -----------     -----------
Cash and cash equivalents - end of period           $24,309,125     $23,894,757
                                                    ===========     ===========


     See accompanying notes to condensed consolidated financial statements.

                                       8
<PAGE>


                                CADUS CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note - 1    ORGANIZATION AND BASIS OF PREPARATION

            Cadus Pharmaceutical Corporation changed its name to Cadus
            Corporation ("Cadus") on June 20, 2003. The change in name was
            approved by the stockholders of Cadus at Cadus' Annual Meeting of
            Stockholders held on June 18, 2003.

            The information presented as of September 30, 2003 and for the three
            and nine month periods then ended, is unaudited, but includes all
            adjustments (consisting only of normal recurring accruals) that
            Cadus' management believes to be necessary for the fair presentation
            of results for the periods presented. Certain information and
            footnote disclosures normally included in financial statements
            prepared in accordance with accounting principles generally accepted
            in the United States of America have been omitted pursuant to the
            requirements of the Securities and Exchange Commission, although
            Cadus believes that the disclosures included in these financial
            statements are adequate to make the information not misleading. The
            December 31, 2002 balance sheet was derived from audited
            consolidated financial statements. These financial statements should
            be read in conjunction with Cadus' annual report on Form 10-K for
            the year ended December 31, 2002.

            The consolidated financial statements include the accounts of the
            Cadus and its wholly owned subsidiary Cadus Technologies, Inc.
            (collectively with Cadus, the "Company"), organized in December
            2001. All inter-company balances and transactions have been
            eliminated in consolidation.

            The results of operations for the nine month period ended September
            30, 2003 are not necessarily indicative of the results to be
            expected for the year ending December 31, 2003.

Note - 2    NET (LOSS) INCOME PER COMMON SHARE

            For the three and nine month periods ended September 30, 2003 and
            2002 basic net (loss) income per share is computed by dividing the
            net (loss) income by the weighted average number of common shares
            outstanding. Diluted net (loss) income per share is the same as
            basic net (loss) income per share since the inclusion of 434,307
            shares of potential common stock equivalents (stock options and
            warrants) in the computation for the three and nine- month periods
            ended September 30, 2003 would be anti-dilutive. Diluted net income
            per share is the same as basic net income per share since the
            inclusion of 609,309 shares of potential common stock equivalents in
            the computation for the three and nine-month periods ending
            September 30, 2002 would be anti-dilutive.

                                       9
<PAGE>


                                CADUS CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note - 3    LICENSING AGREEMENTS

            In December 2001, the Company licensed its yeast-based drug
            discovery technologies on a non-exclusive basis to a major
            pharmaceutical company. Under the licensing agreement, the Company
            received an up-front non-refundable fee of $500,000 that was
            recorded as revenue in the December 31, 2001 consolidated statement
            of operations as the Company has no further involvement with the
            development of the product. The Company received payment in January
            2002. The Company received an additional licensing fee in 2002 of
            $1,000,000 upon the licensee achieving a research milestone. The
            licensee is entitled to use the technologies for five years from the
            date of the agreement. Following the initial five year term, the
            licensee may renew the license annually upon payment of an annual
            licensing fee of $250,000. On September 12, 2003, the parties
            entered into an addendum to the agreement pursuant to which the
            Company extended the license to an affiliate of the licensee in
            consideration for the licensee agreeing to pay $120,000 to the
            Company.

            In February 2000, Cadus licensed to OSI Pharmaceuticals, Inc.
            ("OSI"), on a non-exclusive basis, its yeast-based drug discovery
            technologies, including various reagents and its library of over
            30,000 yeast strains, and its bioinformatics software. OSI paid to
            Cadus a license fee of $100,000 and an access fee of $600,000 and in
            December 2000 a supplemental license fee of $250,000. OSI is also
            obligated to pay an annual maintenance fee of $100,000 until the
            earlier of 2010 or the termination of the license. OSI may terminate
            the license at any time on 30 days prior written notice. During the
            nine-month period ended September 30, 2003 and 2002, the Company
            recognized $100,000 of license revenue related to this agreement.

Note - 4    INVESTMENT IN MARKETABLE SECURITIES

            The Company had an equity interest in Axiom Biotechnologies, Inc.
            ("Axiom"). Due to Axiom's operating losses, the Company's investment
            was written down to $0 at December 31, 2001. On August 30, 2002,
            Axiom entered into a merger agreement with a wholly- owned
            subsidiary of Sequenom, Inc. which is publicly traded on the Nasdaq
            National Market. The Company received 441,446 common shares of
            Sequenom, Inc. in exchange for its shares in Axiom.

            Pursuant to the merger, 102,685 of the Company's 441,446 common
            shares of Sequenom, Inc. were held in escrow (the "Escrow Shares")
            for a one-year period. The Escrow Shares were held to secure rights
            to indemnification, compensation and reimbursement of Sequenom, Inc.
            and other indemnities as defined in the merger agreement. The value
            of the Escrow Shares received was recorded as a deferred gain on
            exchange of equity interest on the consolidated balance sheet as of
            December 31, 2002. On August 30, 2003, the escrow

                                       10
<PAGE>


                                CADUS CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


            shares were released and, accordingly, the Company recorded a
            realized gain on marketable securities of $313,189 in the
            three-month period ended September 30, 2003.

            Pursuant to the provisions of Statement of Financial Accounting
            Standards No. 115, "Accounting for Certain Debt and Equity
            Securities" management deems its investment in Sequenom, Inc. to be
            available for sale and reports its investment at fair value with net
            unrealized gains or losses reported in accumulated other
            comprehensive income (loss) within stockholders' equity. The
            Company's unrealized gain of $289,493 as of September 30, 2003 on
            shares received is reflected in accumulated other comprehensive
            income (loss).

Note - 5    ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

            In December 2002, the Financial Accounting Standards Board (FASB)
            issued Statement of Financial Accounting Standards No. 148,
            "Accounting for Stock-Based Compensation - Transition and
            Disclosure" ("SFAS 148"). SFAS 148 provides alternative methods of
            transition for a voluntary change to the fair value method of
            accounting for stock-based employee compensation as originally
            provided by SFAS No. 123 "Accounting for Stock-Based Compensation".
            Additionally, SFAS 148 amends the disclosure requirements of SFAS
            123 to require prominent disclosure in both the annual and interim
            financial statements about the method of accounting for stock-based
            compensation and the effect of the method used on reported results.
            Pro forma net (loss) would be the same as the reported net (loss)
            for the three and nine months ended September 30, 2003 and 2002 had
            the fair-value-based method been applied to all outstanding awards,
            which were fully vested as of December 31, 1999. Therefore, the
            application of the disclosure portion of this standard had no impact
            on our consolidated financial statements as of September 30, 2003
            and for the three and nine months ended September 30, 2003.

            On April 22, 2003, the FASB determined that stock-based compensation
            should be recognized as a cost in the financial statements and that
            such cost be measured according to the fair value of the stock
            options. The FASB has not as yet determined the methodology for
            calculating fair value and plans to issue an exposure draft and
            final statement in 2004. We will continue to monitor communications
            on this subject from the FASB in order to determine the impact on
            the Company's consolidated financial statements.


                                       11
<PAGE>


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

OVERVIEW

The  Company  was  incorporated  in  1992  and  until  July  30,  1999,  devoted
substantially  all of its resources to the  development and application of novel
yeast-based and other drug discovery technologies. On July 30, 1999, the Company
sold its drug discovery assets and ceased its internal drug discovery operations
and research efforts for collaborative partners.

At September 30, 2003, the Company had an accumulated  deficit of  approximately
$33.0  million.  The  Company's  losses  have  resulted  principally  from costs
incurred in connection  with its research and  development  activities  and from
general and administrative costs associated with the Company's operations. These
costs have exceeded the Company's  revenues and interest income.  As a result of
the sale of its drug  discovery  assets and the  cessation of its internal  drug
discovery  operations  and  research  efforts for  collaborative  partners,  the
Company ceased to have research funding revenues and  substantially  reduced its
operating expenses.  The Company expects to generate revenues in the future only
if it is able to license its technologies.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2003 AND SEPTEMBER 30, 2002

REVENUES

There was $120,000 of license fee revenue for the three  months ended  September
30, 2003 due to an addendum to a license agreement pursuant to which the Company
extended the license to an affiliate of the licensee. There were no revenues for
the three months ended September 30, 2002.

COSTS AND EXPENSES

General and  administrative  expenses decreased to $169,447 for the three months
ended September 30, 2003 from $191,536 for the same period in 2002. The decrease
can be attributed primarily to a decrease in professional and directors fees and
insurance costs.

For the three months ended September 30, 2003, the Company  recognized a gain of
$337 in its investment in Laurel Partners Limited  Partnership  ("Laurel").  The
loss for the same period in 2002 was $2,699.

OTHER INCOME

Interest  income for the three  months  ended  September  30,  2003 was  $36,443
compared  to  interest  income of  $81,816  for the same  period  in 2002.  This
decrease is  attributable  primarily to lower  interest rates earned on invested
funds.

On August 30, 2002, the Company's equity interest in Axiom Biotechnologies, Inc.
("Axiom")  was  converted  into 441,446  shares of Sequenom,  Inc.  ("Sequenom")
pursuant to the merger of Axiom and Sequenom.  Upon closing of the  transaction,
the Company  recorded a realized gain of $823,189  related to the 338,761 common
shares  received in the condensed  consolidated  statement of operations for the
three months ended September

                                       12
<PAGE>


30, 2002. The remaining  value of the 102,685 shares held in escrow was recorded
as a deferred gain on exchange of equity  interest on the  consolidated  balance
sheet.  On August 30,  2003,  102,685  shares  were  released  from  escrow and,
accordingly, the Company recorded a gain on marketable securities of $313,189 in
the three-month period ended September 30, 2003.

NET  INCOME

Net income for the three months ended  September 30, 2003 was $300,522  compared
to net income of  $710,770  for the same  period in 2002.  This  decrease in net
income can be attributed primarily to a decrease in interest income and realized
gains on marketable securities, offset by an increase in license fee revenues.


NINE MONTHS ENDED SEPTEMBER 30, 2003 AND SEPTEMBER 30, 2002

REVENUES

Revenues increased to $220,000 for the nine months ended September 30, 2003 from
$100,000 for the same period in 2002. The increase is  attributable to a fee due
in  connection  with an  addendum to a license  agreement  pursuant to which the
Company extended the license to an affiliate of the licensee.

COSTS AND EXPENSES

General and  administrative  expenses  decreased to $703,517 for the nine months
ended September 30, 2003 from $733,081 for the same period in 2002. The decrease
can be attributed primarily to a decrease in license, professional and directors
fees offset by an increase in shareholder relations.

For the nine months ended  September 30, 2003, the Company  recognized a loss of
$2,438 in its  investment  in Laurel.  The loss for the same  period in 2002 was
$1,292.

OTHER INCOME

Interest  income for the nine  months  ended  September  30,  2003 was  $136,850
compared  to  interest  income of  $262,003  for the same  period in 2002.  This
decrease is  attributable  primarily to lower  interest rates earned on invested
funds.

On August 30, 2002,  the Company's  equity  interest in Axiom was converted into
441,446  shares of Sequenom  pursuant to the merger of Axiom and Sequenom.  Upon
closing of the  transaction,  the Company  recorded a realized  gain of $823,189
related to the 338,761  common  shares  received in the  condensed  consolidated
statement of  operations  for the nine months  ended  September  30,  2002.  The
remaining  value of the 102,685 shares held in escrow was recorded as a deferred
gain on exchange  of equity  interest on the  consolidated  balance  sheet as of
December 31, 2002. On August 30, 2003,  102,685 shares were released from escrow
and,  accordingly,  the  Company  recorded a gain on  marketable  securities  of
$313,189 in the nine-month period ended September 30, 2003.

NET (LOSS) INCOME

Net loss for the nine months ended  September  30, 2003 was $35,916  compared to
net income of $450,819 for the same period in 2002.  This decrease in net income
can be attributed primarily to the decrease in

                                       13
<PAGE>


interest  income  and  realized  gains on  marketable  securities,  offset by an
increase in license fee  revenues  and a decrease in general and  administrative
expenses.

LIQUIDITY AND CAPITAL RESOURCES

At  September  30,  2003 the  Company  held cash and cash  equivalents  of $24.3
million. The Company's working capital at September 30, 2003 was $25.9 million.

The Company believes that its existing capital resources, together with interest
income,  will be sufficient to support its  operations  through the end of 2004.
This  forecast  of the  period of time  through  which the  Company's  financial
resources  will be  adequate  to support  its  operations  is a  forward-looking
statement that may not prove accurate and, as such, actual results may vary. The
Company's  capital  requirements  may vary as a result of a number  of  factors,
including  the  transactions,  if any,  arising  from the  Company's  efforts to
acquire or invest in companies and  income-producing  assets and the expenses of
pursuing such transactions.

Item 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's earnings and cash flows are subject to fluctuations due to changes
in interest  rates  primarily  from its investment of available cash balances in
money  market funds with  portfolios  of  investment  grade  corporate  and U.S.
government securities.  The Company does not believe it is materially exposed to
changes in interest rates.  Under its current  policies the Company does not use
interest  rate  derivative  instruments  to manage  exposure  to  interest  rate
changes.

Item 4.     CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Based on the  evaluation of the  Company's  disclosure  controls and  procedures
conducted as of the period  covered by this report on Form 10-Q,  the  Company's
President  and Chief  Executive  Officer,  who also  performs the functions of a
principal  financial officer,  concluded that the Company's  disclosure controls
and procedures (as defined in Rules  13a-15(e) and 15d-15(e)  promulgated  under
the Securities Exchange Act of 1934) are effective.

CHANGES IN INTERNAL CONTROLS

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their  evaluation,  nor were any  corrective  actions  required  with  regard to
significant deficiencies and material weaknesses.


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         None.

Item 2.  Changes in Securities and Use of Proceeds

         None.

                                       14
<PAGE>


Item 3.  Defaults Upon Senior Securities

         None.

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

         None.

Item 5.  Other Information

         None.

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

         (a) The  Exhibit  listed  in the  Exhibit  Index are  included  in this
             report.

         (b) Reports on Form 8-K.

             None.

                                       15
<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.

                           CADUS CORPORATION
                           (REGISTRANT)


Date: November 13, 2003    By: /s/ Michele A. Paige
                              --------------------------------------------------
                               Michele A. Paige
                               President and Chief Executive Officer (Authorized
                               Officer and Principal Financial Officer)

                                       16
<PAGE>


                                  EXHIBIT INDEX


The following exhibits are filed as part of this Quarterly Report on Form 10-Q:

EXHIBIT NO.                                DESCRIPTION

31                                         Certifications

32                                         Certification Pursuant to 18 U.S.C.
                                           Section 1350, as Adopted Pursuant to
                                           Section 906 of the Sarbanes-Oxley Act
                                           of 2002


                                       17