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, 2002
                                             -------------------

|_|      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
   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) 702-4315
                                                        --------------


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 October 31, 2002 was 13,144,040.


<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
                                                                                      Page No.
                                                                                      --------

<S>                                                                                    <C>
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, 2002 (unaudited)
              and December 31, 2001 (audited)                                             5

              Condensed Consolidated Statements of Income - Three
              Months Ended September 30, 2002 and 2001 (unaudited)                        6

              Condensed Consolidated Statements of Income - Nine Months
              Ended September 30, 2002 and 2001 (unaudited)                               7

              Condensed Consolidated Statements of Cash Flows - Nine Months
              Ended September 30, 2002 and 2001 (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                                                 14

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
</TABLE>





                                       2
<PAGE>


<TABLE>
<CAPTION>
                                                                                      Page No.
                                                                                      --------

<S>                                                                                    <C>
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002                                                                         17 - 18

EXHIBIT INDEX                                                                            19
</TABLE>











                                       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 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,  risks and uncertainties  relating to the
Company's  ability to realize value from its assets,  the  Company's  ability to
license its technologies to third parties,  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.







                                       4
<PAGE>


ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                        CADUS PHARMACEUTICAL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS

                                                                  SEPTEMBER 30,   DECEMBER 31,
                                                                      2002            2001
                                                                  ------------    ------------
                                                                   (Unaudited)     (Audited)
<S>                                                               <C>             <C>
Current assets
         Cash and cash equivalents                                $ 23,894,757    $ 24,469,357
         License fee receivable                                           --           500,000
         Prepaid and other current assets                              150,598          75,000
         Investment in marketable securities                           679,827            --
                                                                  ------------    ------------
                     Total current assets                           24,725,182      25,044,357

Investment in other ventures                                           164,322         165,614
Other assets, net                                                      929,942         990,622
                                                                  ------------    ------------
                     Total assets                                 $ 25,819,446    $ 26,200,593
                                                                  ============    ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
         Accrued expenses and other current liabilities           $    156,428    $     95,032
         Arbitration settlement                                           --           750,000
         Deferred gain on marketable securities                        158,135            --
                                                                  ------------    ------------
                     Total current liabilities                         314,563         845,032
                                                                  ------------    ------------
Stockholders' equity
         Common stock                                                  132,857         132,857
         Additional paid-in capital                                 59,844,355      59,844,355
         Accumulated deficit                                       (33,870,757)    (34,321,576)
         Other comprehensive income                                   (301,497)           --
         Treasury stock                                               (300,075)       (300,075)
                                                                  ------------    ------------
                     Total stockholders' equity                     25,504,883      25,355,561
                                                                  ------------    ------------
                     Total liabilities and stockholders' equity   $ 25,819,446    $ 26,200,593
                                                                  ============    ============
</TABLE>


      See accompanying notes to condensed consolidated financial statements




                                       5
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                              September 30,
                                                                          2002             2001
                                                                      ------------    ------------
                                                                       (Unaudited)     (Unaudited)

<S>                                                                   <C>             <C>
License and maintenance fees                                          $       --      $       --
                                                                      ------------    ------------
                        Total revenues                                        --              --
                                                                      ------------    ------------
Costs and expenses:
         General and administrative expenses                               191,536         163,639
         Loss (gain) from equity in other ventures                           2,699          (1,826)
                                                                      ------------    ------------
                        Total costs and expenses                           194,235         161,813
                                                                      ------------    ------------
Operating loss                                                            (194,235)       (161,813)
                                                                      ------------    ------------
Other income:
           Interest income                                                  81,816         185,346
           Realized gain on marketable securities                          823,189            --
                                                                      ------------    ------------
             Total other income                                            905,005         185,346
                                                                      ------------    ------------

Income before income taxes                                                 710,770          23,533

Income taxes                                                                  --              --
                                                                      ------------    ------------
                        Net income                                    $    710,770    $     23,533
                                                                      ============    ============
Basic and diluted income per weighted average share of common
stock outstanding                                                     $       0.05    $       0.00
                                                                      ============    ============
Weighted average shares of common stock outstanding - basic and
diluted                                                                 13,144,040      13,144,040
                                                                      ============    ============
</TABLE>





      See accompanying notes to condensed consolidated financial statements





                                       6
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                        Nine Months Ended
                                                                           September 30,
                                                                       2002            2001
                                                                  ------------    ------------
                                                                  (Unaudited)     (Unaudited)

<S>                                                               <C>             <C>
License and maintenance fees                                      $    100,000    $    100,000
                                                                  ------------    ------------
                        Total revenues                                 100,000         100,000
                                                                  ------------    ------------
Costs and expenses:
         General and administrative expenses                           733,081         812,547
         Loss (gain) from equity in other ventures                       1,292          (3,805)
                                                                  ------------    ------------
                        Total costs and expenses                       734,373         808,742
                                                                  ------------    ------------
Operating loss                                                        (634,373)       (708,742)
                                                                  ------------    ------------
Other income:
         Interest income                                               262,003         714,840
         Net reimbursement of SIBIA litigation costs                      --           125,616
         Realized gain on marketable securities                        823,189            --
                                                                  ------------    ------------
                        Total other income                           1,085,192         840,456
                                                                  ------------    ------------

Income before income taxes                                             450,819         131,714

Income taxes                                                              --              --
                                                                  ------------    ------------
                        Net income                                $    450,819    $    131,714
                                                                  ============    ============
Basic and diluted income per weighted average share of common
stock outstanding                                                 $       0.03    $       0.01
                                                                  ============    ============
Weighted average shares of common stock outstanding - basic and
diluted                                                             13,144,040      13,144,040
                                                                  ============    ============
</TABLE>





      See accompanying notes to condensed consolidated financial statements





                                       7
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                            Nine Months Ended
                                                                               September 30,
                                                                           2002            2001
                                                                       ------------    ------------
                                                                        (Unaudited)    (Unaudited)

<S>                                                                    <C>             <C>
Cash flows from operating activities:

       Net income                                                      $    450,819    $    131,714

       Adjustments to reconcile net income
             to net cash (used in) provided by operating activities:
             Amortization of patent costs                                    60,680          60,679
             Realized gain on marketable securities                        (823,189)           --
             Loss (gain) from equity in other ventures                        1,292          (3,805)

       Changes in assets and liabilities:
             Decrease in license fee receivable                             500,000            --
             Increase in prepaid and other current assets                   (75,598)        (34,472)
             (Decrease) increase in accrued expenses and other
                current liabilities                                        (688,604)        115,652
                                                                       ------------    ------------
Net cash (used in) provided by operating activities                        (574,600)        269,768
                                                                       ------------    ------------
Net (decrease) increase in cash and cash equivalents                       (574,600)        269,768

Cash and cash equivalents - beginning of period                          24,469,357      24,383,352
                                                                       ------------    ------------
Cash and cash equivalents - end of period                              $ 23,894,757    $ 24,653,120
                                                                       ============    ============
</TABLE>





      See accompanying notes to condensed consolidated financial statements





                                       8
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note - 1          ORGANIZATION AND BASIS OF PREPARATION

                  The information presented as of September 30, 2002 and for the
                  three and nine month  periods 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 accounting  principles  generally  accepted in
                  the United States of America 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, 2001 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, 2001.

                  The consolidated  financial statements include the accounts of
                  the   Company   and  its   wholly   owned   subsidiary   Cadus
                  Technologies,   Inc.,   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,  2002  are not  necessarily  indicative  of the
                  results to be expected for the year ending December 31, 2002.

Note - 2          NET INCOME PER COMMON SHARE

                  For the three and nine month periods ended  September 30, 2002
                  and 2001 basic net income per share is  computed  by  dividing
                  the net income by the weighted average number of common shares
                  outstanding. 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   (stock  options  and
                  warrants) in the  computation  at September  30, 2002 would be
                  anti-dilutive.

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 income as the Company has no further
                  involvement  with the development of the product.  The Company
                  received  payment in January 2002. The Company will receive an
                  additional   licensing  fee  of  $1,000,000  if  the  licensee
                  achieves a research milestone. The licensee is entitled to use
                  the technologies for five years from the date of the agreement
                  if it makes such $1,000,000 payment. If the $1,000,000 payment
                  is not made by February 2003, the Company has the



                                       9
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                  right to terminate 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.

                  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. OSI is also obligated to pay an annual
                  maintenance  fee of $100,000  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, after the lifting of
                  the   injunction   obtained  by  SIBIA   Neurosciences,   Inc.
                  ("SIBIA"),  and  recorded  as  license  fee  revenue.  OSI may
                  terminate  the  license at any time on 30 days  prior  written
                  notice.  During each of the nine month periods ended September
                  30,  2002 and  2001,  Cadus  recognized  $100,000  of  license
                  revenue related to this agreement.

Note - 4          ARBITRATION AWARD

                  In March 2002,  the arbitrator in the  arbitration  proceeding
                  commenced  against  Cadus by Philip  N.  Sussman,  the  former
                  Senior Vice President,  Finance and Corporate Development, and
                  Chief  Financial  Officer  of  Cadus,  ruled  in  favor of Mr.
                  Sussman and awarded him  approximately  $750,000 in  severance
                  pay, interest and attorneys and other costs and fees. A charge
                  of $750,000  was  recorded in the  consolidated  statement  of
                  income for the year ended  December 31,  2001.  The payment to
                  Mr. Sussman was made during the quarter ended June 30, 2002.

Note - 5          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.  ("Sequenom") whose
                  shares  of  common  stock are  publicly  traded on the  Nasdaq
                  National Market.  Pursuant to the merger, the Company received
                  441,446  common shares of Sequenom with a fair market value of
                  $2.43 per share, in exchange for its shares in Axiom.

                  Pursuant  to the  merger,  102,685  of the  Company's  441,446
                  common  shares of  Sequenom  are held in escrow  (the  "Escrow
                  Shares") for a one-year period.  The Escrow Shares are held to
                  secure   rights   to    indemnification,    compensation   and
                  reimbursement of Sequenom and other  indemnities as defined in
                  the merger agreement.

                  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 income




                                       10
<PAGE>


                        CADUS PHARMACEUTICAL CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                  for the three months ended  September 30, 2002.  The remaining
                  value of the Escrow Shares received was recorded as a deferred
                  gain on marketable  securities in the  accompanying  condensed
                  consolidated balance sheet.

                  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
                  to be available  for sale and reports its  investment  at fair
                  value  with net  unrealized  gains or losses  reported  within
                  shareholders'   equity.  The  Company's   unrealized  loss  of
                  $301,497   on   shares   received   is   reflected   in  other
                  comprehensive  income as of September 30, 2002.  The Company's
                  unrealized  loss of $91,390 for escrow  shares is reflected as
                  an offset to the deferred gain on marketable  securities as of
                  September 30, 2002.


Note - 6      ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

                 Statement of Financial  Accounting Standards No. 142, "Goodwill
                 and Other Intangible Assets" ("SFAS 142"), addresses the method
                 of  identifying  and  measuring  goodwill and other  intangible
                 assets,   eliminates  further   amortization  of  goodwill  and
                 intangible  assets  that  have  indefinite  useful  lives,  and
                 requires   periodic   evaluations  of  impairment  of  goodwill
                 balances and  intangible  assets.  SFAS 142 also  requires that
                 intangible  assets with definite useful lives be amortized over
                 their  respective  estimated  useful  lives to their  estimated
                 residual  values and reviewed for impairment in accordance with
                 SFAS No. 121,  "Accounting  for the  Impairment  of  Long-Lived
                 Assets and for Long-Live Assets to be Disposed Of." SFAS 142 is
                 effective for fiscal years  beginning  after December 15, 2001.
                 There was no impact on the Company  financial  statements  from
                 the adoption of this statement on January 1, 2002.

                 Statement   of   Financial   Accounting   Standards   No.  144,
                 "Accounting  for  the  Impairment  or  Disposal  of  Long-Lived
                 Assets"  ("SFAS  144"),   addresses  financial  accounting  and
                 reporting for the impairment or disposal of long-lived  assets.
                 SFAS  144  supercedes   SFAS  No.  121,   "Accounting  for  the
                 Impairment of Long-Lived Assets and for Long-Lived Assets to Be
                 Disposed Of" and is effective for financial  statements  issued
                 for fiscal years beginning  after December 15, 2001.  There was
                 no impact on the Company financial statements from the adoption
                 of this statement on January 1, 2002.






                                       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.

The Company has incurred  operating losses in each year since its inception.  At
September  30, 2002,  the Company had an  accumulated  deficit of  approximately
$34.0  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, 2002 AND SEPTEMBER 30, 2001

REVENUES

There were no revenues for the three months ended September 30, 2002 and 2001.

COSTS AND EXPENSES

General and  administrative  expenses  were  $191,536 for the three months ended
September  30,  2002  compared  to  $163,639  for the same  period in 2001.  The
increase  is  primarily   attributable  to  an  increase  in  patent  costs  and
professional fees.

For the three months ended September 30, 2002, the Company  recognized a loss of
$2,699 in Laurel Partners Limited Partnership ("Laurel"), compared to income for
the same period in 2001 of $1,826.

OTHER INCOME

Interest  income for the three  months  ended  September  30,  2002 was  $81,816
compared  to  interest  income of  $185,346  for the same  period in 2001.  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 income for the three
months ended  September 30, 2002. The remaining value of the 102,685 shares held
in escrow  was  recorded  as a deferred  gain on  marketable  securities  in the
accompanying condensed consolidated balance sheet.




                                       12
<PAGE>


NET  INCOME

Net income for the three months ended  September 30, 2002 was $710,770  compared
to the net income of $23,533 for the same period in 2001.  This  increase in net
income can be attributed primarily to the realized gain on marketable securities
offset by a decrease in interest income.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2001

REVENUES

Revenues  for the nine months ended  September  30, 2002 and for the nine months
ended September 30, 2001 were $100,000 which is the annual  maintenance fee from
OSI.

COSTS AND EXPENSES

General and  administrative  expenses  were  $733,081  for the nine months ended
September  30,  2002  compared  to  $812,547  for the same  period in 2001.  The
decrease is attributable primarily to a decrease in insurance, professional fees
and  shareholder  relations  offset by increases  in patent costs and  directors
fees.

For the nine months ended  September 30, 2002, the Company  recognized a loss of
$1,292 in its  investment  in Laurel  compared  to income for the same period in
2001 of $3,805.

OTHER INCOME

Interest  income for the nine  months  ended  September  30,  2002 was  $262,003
compared  to  interest  income of  $714,840  for the same  period in 2001.  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 income 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
marketable securities in the accompanying condensed consolidated balance sheet.

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.

NET  INCOME

Net income for the nine months ended September 30, 2002 was $450,819 compared to
net  income of  $131,714  for the same  period  in 2001.  This  increase  can be
attributed  primarily to a realized gain on marketable  securities offset by the
decrease  in  interest  income  and  the  receipt,  only  in  2001,  of the  net
reimbursement of SIBIA litigation costs.




                                       13
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

At  September  30,  2002 the  Company  held cash and cash  equivalents  of $23.9
million. The Company's working capital at September 30, 2002 was $24.4 million.

The Company believes that its existing capital resources, together with interest
income,  will be sufficient to support its  operations  through the end of 2003.
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.

Item 4.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Based on the  evaluation of the  Company's  disclosure  controls and  procedures
conducted  within 90 days of the date of filing  this  report on Form 10-Q,  the
Company's  President and Chief Executive  Officer,  who also performs  functions
similar to those of a principal financial officer,  concluded that the Company's
disclosure   controls  and  procedures  (as  defined  in  Rules   13a-14(c)  and
15(d)-14(c)   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

         Nothing to report.

Item 2.  Changes in Securities and Use of Proceeds

         Nothing to report.

Item 3.  Defaults Upon Senior Securities

         Nothing to report




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<PAGE>


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) The Exhibit listed in the Exhibit Index is included in this report.

         (b) Reports on Form 8-K.

             None










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<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: November 14, 2002          By: /s/ Russell D. Glass
                                     ------------------------------------
                                     Russell D. Glass
                                     President and Chief Executive Officer
                                     (Authorized Officer and Principal Financial
                                     Officer)















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<PAGE>


     CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,  Russell  D.  Glass,   President  and  Chief   Executive   Officer  of  Cadus
Pharmaceutical Corporation, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Cadus  Pharmaceutical
     Corporation.

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

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report.

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities particularly during the period in which this quarterly report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and  procedure as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and




                                       17
<PAGE>


     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls.

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  November 14, 2002


                                  /s/ Russell D. Glass
                                  ----------------------------------------------
                                  Russell D. Glass
                                  President and Chief Executive Officer (Chief
                                  Executive Officer and Chief Financial Officer)














                                       18
<PAGE>


                                  EXHIBIT INDEX


The following exhibit is filed as part of this Quarterly Report on Form 10-Q:

Exhibit No.                         Description
-----------                         -----------
99.1                                Certification    Pursuant   to   18   U.S.C.
                                    Section   1350,   as  Adopted   Pursuant  to
                                    Section  906  of the  Sarbanes-Oxley  Act of
                                    2002














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