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  March 31, 2001
                                     ---------------

|_|  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 PHARMACEUTICAL CORPORATION
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified on its Charter)


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

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

Registrant's Telephone Number,
Including Area Code                                    (212) 702-4315
                                            ------------------------------------


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 ___

The number of shares of registrant's common stock, $0.01 par value,  outstanding
as of April 30, 2001 was 13,144,040.

<PAGE>



                        CADUS PHARMACEUTICAL CORPORATION

                                      INDEX

                                                                        Page No.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS                              3

                    PART I - CONDENSED FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements

             Condensed Balance Sheets - March 31, 2001 (unaudited)
             and December 31, 2000 (audited)                                   4

             Condensed Statements of Operations - Three Months ended
             March 31, 2001 and 2000 (unaudited)                               5

             Condensed Statements of Cash Flows - Three Months Ended
             March 31, 2001 and 2000 (unaudited)                               6

             Notes to Condensed Financial Statements (unaudited)           7 - 8

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                        8 - 10

Item 3.  Quantitative and Qualitive Disclosures About Market Risk             10


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                    10

Item 2.  Changes in Securities and Use of Proceeds                            10

Item 3.  Defaults Upon Senior Securities                                      10

Item 4.  Submission of Matters to a Vote of Security Holders                  10

Item 5.  Other Information                                                    10

Item 6.  Exhibits and Reports on Form 8K                                      10

SIGNATURES                                                                    11

EXHIBIT INDEX                                                                 12

                        2

<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 21E of the Securities
Exchange Act of 1934, as amended. 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,  uncertainties  regarding the Company's
future acquisition and in-licensing of technologies, 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 prospectus dated July 17, 1996.

                                       3
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION
                            CONDENSED BALANCE SHEETS

                                     ASSETS

                                                       MARCH 31,    DECEMBER 31,
                                                         2001          2000
                                                      -----------   -----------
                                                      (Unaudited)    (Audited)
Current assets
    Cash and cash equivalents                         $24,763,068   $24,383,352
    Prepaid and other current assets                       45,916        81,250
                                                      -----------   -----------
        Total current assets                           24,808,984    24,464,602

Investment in other ventures                              162,342       162,528
Other assets, net                                       1,061,301     1,081,527
                                                      -----------   -----------
        Total assets                                  $26,032,627   $25,708,657
                                                      ===========   ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Accrued expenses and other current liabilities    $    87,350   $    36,244
                                                      -----------   -----------
        Total current liabilities                          87,350        36,244
                                                      -----------   -----------
        Total liabilities                                  87,350        36,244
                                                      -----------   -----------

Stockholders' equity
    Common stock                                          132,857       132,857
    Additional paid-in capital                         59,844,355    59,844,355
    Accumulated deficit                               (33,731,860)  (34,004,724)
    Treasury stock                                       (300,075)     (300,075)
                                                      -----------   -----------
        Total stockholders' equity                     25,945,277    25,672,413
                                                      -----------   -----------
        Total liabilities and stockholders' equity    $26,032,627   $25,708,657
                                                      ===========   ===========


            See accompanying notes to condensed financial statements

                                        4
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

                       CONDENSED STATEMENTS OF OPERATIONS

                                                          Three Months Ended
                                                               March 31,
                                                          2001          2000
                                                      -----------   -----------
                                                      (Unaudited)   (Unaudited)

License and maintenance fees                          $   100,000   $   700,000
                                                      -----------   -----------
        Total revenues                                    100,000       700,000
                                                      -----------   -----------
Costs and expenses
    General and administrative expenses                   241,266       852,462
    Loss of equity in other ventures                          186       360,354
    Gain on sale of equipment                                  --      (100,000)
                                                      -----------   -----------
        Total costs and expenses                          241,452     1,112,816
                                                      -----------   -----------
Operating loss                                           (141,452)     (412,816)
                                                      -----------   -----------

Other income
    Interest income                                       294,700        71,697
    Net reimbursement of SIBIA litigation costs           125,616            --
                                                      -----------   -----------
        Total other income                                420,316        71,697
                                                      -----------   -----------
Income (loss) before income taxes                         278,864      (341,119)
Income taxes                                                6,000            --
                                                      -----------   -----------
        Net income (loss)                             $   272,864   ($  341,119)
                                                      ===========   ===========
Basic and diluted income (loss) per share             $      0.02   ($     0.03)
                                                      ===========   ===========

Weighted average shares of common stock
 outstanding - basic and diluted                       13,144,040    13,102,340
                                                      ===========   ===========


            See accompanying notes to condensed financial statements

                                       5
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

                       CONDENSED STATEMENTS OF CASH FLOWS


                                                          Three Months Ended
                                                               March 31,
                                                          2001          2000
                                                      -----------   -----------
                                                      (Unaudited)   (Unaudited)

Cash flows from operating activities
    Net income (loss)                                 $   272,864   ($  341,119)
    Adjustments to reconcile net income (loss)
      to net cash provided by operating activities:
        Amortization of patent costs                       20,226        20,226
        Loss of equity in other ventures                      186       360,354
        Gain on sale of equipment                              --      (100,000)
        Reserve for litigation damages                         --       244,789
    Changes in assets and liabilities
        Decrease in due from officer and director              --       284,496
        Decrease (increase) in prepaid and other
          current assets                                   35,334       (37,177)
        Decrease in accounts payable                           --       (17,644)
        Increase in accrued expenses and other
          current liabilities                              51,106       465,081
                                                      -----------   -----------
Net cash provided by operating activities                 379,716       879,006
                                                      -----------   -----------
Cash flows from investing activities
    Increase in restricted cash                                --      (231,223)
                                                      -----------   -----------
Net cash used in investing activities                          --      (231,223)
                                                      -----------   -----------
Cash flows from financing activities
    Proceeds from issuance of common stock
      upon exercise of stock options                           --       155,660
                                                      -----------   -----------
Net cash provided by financing activities                      --       155,660
                                                      -----------   -----------
Net increase in cash and cash equivalents                 379,716       803,443
Cash and cash equivalents - beginning of period        24,383,352     5,082,212
                                                      -----------   -----------
Cash and cash equivalents - end of period             $24,763,068   $ 5,885,655
                                                      ===========   ===========


            See accompanying notes to condensed financial statements

                                       6
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

                     NOTES TO CONDENSED FINANCIAL STATEMENTS


Note - 1  ORGANIZATION AND BASIS OF PREPARATION

          The information presented as of March 31, 2001 and for the three month
          period then ended, is unaudited, but includes all adjustments
          (consisting only of normal recurring accruals) that the Company's
          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 generally accepted accounting principles have been
          omitted pursuant to the requirements of the Securities and Exchange
          Commission, although the Company believes that the disclosures
          included in these financial statements are adequate to make the
          information not misleading. The December 31, 2000 balance sheet was
          derived from audited financial statements. These financial statements
          should be read in conjunction with the Company's annual report on Form
          10-K for the year ended December 31, 2000.

          The results of operations for the three month period ended March 31,
          2001 are not necessarily indicative of the results to be expected for
          the year ending December 31, 2001.

Note - 2  NET INCOME (LOSS) PER SHARE

          For the three month periods ended March 31, 2001 and 2000 basic net
          income (loss) per share is computed by dividing the net income (loss)
          by the weighted average number of common shares outstanding. Diluted
          net income (loss) per share is the same as basic net income (loss) per
          share since the inclusion of 719,976 shares of potential common stock
          equivalents (stock options and warrants) in the computation at March
          31, 2001 would be anti-dilutive.

Note - 3  PATENT LITIGATION

          In July 1996, SIBIA Neurosciences, Inc. ("SIBIA") (which was acquired
          by Merck and Co. in 1999) commenced a patent infringement action
          against the Company alleging infringement by the Company of a patent
          concerning the use of cells, engineered to express any type of cell
          surface receptor and a reporter gene, used to report results in the
          screening of compounds against target assays, and seeking injunctive
          relief and monetary damages. On December 18, 1998, the jury issued a
          verdict in favor of SIBIA and awarded SIBIA $18.0 million in damages.
          On January 29, 1999 the United States District Court granted
          injunctive relief that precluded the Company from using the method
          claimed in SIBIA's patent. The Company appealed the judgment and
          deposited $18.5 million in escrow to secure payment of the judgment in
          the event the Company were to lose the appeal and recorded a reserve
          for litigation damages. Interest earned on the escrow account was
          added to the reserve for litigation damages. On September 6, 2000 the
          Court of Appeals ruled in favor of the Company stating the claims of
          the SIBIA patent asserted against the Company

                                       7
<PAGE>


          were invalid. On October 30, 2000, the U.S. District Court set aside
          the $18.0 million judgment in favor of SIBIA and vacated the
          injunction against the Company. The Company obtained the release of
          the cash escrow of $19.9 million representing the original $18.5
          million and interest that accumulated thereon. The reserve for
          litigation of $18,841,489 (net of direct legal costs of $1 million)
          was reversed and credited to the statement of operations for the year
          ended December 31, 2000. Pursuant to a court order, the Company
          received in February 2001 a $155,402 reimbursement of SIBIA litigation
          costs offset by legal costs incurred of $29,786.

Note - 4  NON-EXCLUSIVE LICENSE OF YEAST TECHNOLOGY

          In February 2000, the Company licensed to OSI Pharmaceuticals Inc.
          ("OSI"), on a non- exclusive basis, its yeast technologies, including
          various reagents and its library of over 30,000 yeast strains, and its
          bioinformatics software. OSI paid to the Company a license fee of
          $100,000 and an access fee of $600,000, which has been recorded as
          license fee revenue as of March 31, 2000. OSI also paid an annual
          maintenance fee of $100,000 in February 2001 which it is obligated to
          pay until the earlier of 2010 or the termination of the license and a
          supplemental license fee of $250,000 which was paid in December 2000
          when the injunction obtained by SIBIA was dissolved. OSI may terminate
          the license at any time on 30 days prior written notice.


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.  The Company  terminated all
employees  who were not  hired by the  purchaser  of its  assets  or who did not
voluntarily  resign except for the Chief Executive Officer who resigned in April
2000.

The Company has incurred  operating losses in each year since its inception.  At
March 31, 2001, the Company had an accumulated  deficit of  approximately  $33.7
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 MARCH 31, 2001 AND MARCH 31, 2000

                                       8
<PAGE>


REVENUES

Revenues for the three months  ended March 31, 2001  decreased to $100,000  from
$700,000 for the same period in 2000. This decrease was  attributable  primarily
to the Company not receiving a licensing fee similar to the $600,000 it received
in February 2000 in connection with its licensing agreement with OSI.

OPERATING EXPENSES

General and  administrative  expense  decreased to $241,266 for the three months
ended March 31, 2001 from  $852,462 for the same period in 2000.  The expense in
fiscal 2000 includes $580,000 in compensation  (including $497,500 in severance)
paid to the  Company's  former  Chief  Executive  Officer.  The Company does not
currently  compensate its Chief Executive  Officer.  General and  administrative
expense  for the three  months  ended March 31, 2001  principally  consisted  of
patent maintenance costs, professional fees and insurance costs.

OTHER INCOME

Interest  income for the three months ended March 31, 2001 increased to $294,700
from $71,697 for the same period in 2000. The increase is attributable primarily
to the  increase  in the  Company's  unrestricted  cash  equivalent  balances as
compared  to the same  period in 2000 as a result of the  release  of funds that
were held in escrow in connection with the SIBIA litigation.

Pursuant  to a court  order,  the Company  received in February  2001 a $155,402
reimbursement  of SIBIA  litigation  costs  offset by legal  costs  incurred  of
$29,786.

EQUITY IN OTHER VENTURES

For the three months  ended March 31, 2001 the Company  recognized a net loss of
$186 in its investment in Laurel Partners Limited  Partnership  ("Laurel").  The
loss for the same period in 2000 was $360,354  representing losses in Laurel and
Axiom  Biotechnologies,  Inc. ("Axiom").  The Company's  investment in Axiom was
written down to zero in the year 2000.

NET INCOME (LOSS)

Net income for the three months ended March 31, 2001  increased to $272,864 from
a net  loss of  $341,119  for the same  period  in 2000.  This  increase  can be
attributed  to the decrease in general and  administrative  expenses and loss on
equity  in other  ventures  and an  increase  in  interest  income,  offset by a
decrease in revenues.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2001 the Company held cash and cash  equivalents  of $24.8 million.
The Company's working capital at March 31, 2001 was $24.7 million.

In February 2000, the Company  licensed to OSI, on a  non-exclusive  basis,  its
yeast  technologies.  OSI has paid to the Company a license fee of $100,000,  an
access fee of $600,000 and 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

                                       9
<PAGE>


the termination of the license.  The Company received $100,000 in February 2001.
OSI may terminate the license at any time on 30 days prior written notice.

The Company believes that its existing capital resources, together with interest
income,  will be sufficient to support its  operations  through the end of 2002.
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  technologies  or products or to acquire or invest in companies  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.


PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

          Nothing to report.

Item 2.   Changes in Securities and Use of Proceeds

          Nothing to report.

Item 3.   Defaults Upon Senior Securities

          Nothing to report

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

          Nothing to report

Item 5.   Other Information

          Nothing to report

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

          (a)  Exhibits.

               None

          (b)  Reports on Form 8-K.

               None

                                       10
<PAGE>


                                   SIGNATURES

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

                                       CADUS PHARMACEUTICAL CORPORATION
                                       (REGISTRANT)


Date: May 11, 2001                     By:
                                          --------------------------------------
                                          Russell D. Glass
                                          President and Chief Executive Officer
                                          (Authorized Officer and Principal
                                          Financial Officer)

                                       11
<PAGE>


                                  EXHIBIT INDEX


There are no exhibits being filed as part of this Quarterly Report on Form 10-Q.


                                       12