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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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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: 0-21643



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CV THERAPEUTICS, INC.

(Exact name of Registrant as specified in its charter)



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|Delaware                 |  | 43-1570294                          
|------------------------ |  | ------------------------------------
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)



3172 Porter Drive,
Palo Alto, California 94304

(Address of principal executive offices, including zip code)



Registrants telephone number, including area code: (650) 384-8500



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Indicate by check whether the Registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities and 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 12b-2 of the Exchange
Act).    Yes  x    No ̈



The number of shares of Common Stock, $0.001 par value, outstanding as of
November 3, 2003 was 29,055,240.

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CV THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)



|                                                                                                                                                                                                    |  | December 31,2002 |          |   | September 30,2003 |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | -------- | - | ----------------- | -
|                                                                                                                                                                                                    |  | (A)              |          |   | (unaudited)       |  
|ASSETS                                                                                                                                                                                              |  |                  |          |   |                   |  
|Current assets:                                                                                                                                                                                     |  |                  |          |   |                   |  
|Cash and cash equivalents                                                                                                                                                                           |  | $                | 18,767   |   |                   | $
|Marketable securities                                                                                                                                                                               |  |                  | 392,146  |   |                   |  
|Other current assets                                                                                                                                                                                |  |                  | 8,952    |   |                   |  
|                                                                                                                                                                                                    |  |                  |          |   |                   |  
|Total current assets                                                                                                                                                                                |  |                  | 419,865  |   |                   |  
|Notes receivable from related parties                                                                                                                                                               |  |                  | 1,120    |   |                   |  
|Property and equipment, net                                                                                                                                                                         |  |                  | 15,934   |   |                   |  
|Other assets                                                                                                                                                                                        |  |                  | 4,083    |   |                   |  
|                                                                                                                                                                                                    |  |                  |          |   |                   |  
|Total assets                                                                                                                                                                                        |  | $                | 441,002  |   |                   | $
|                                                                                                                                                                                                    |  |                  |          |   |                   |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                |  |                  |          |   |                   |  
|Current liabilities:                                                                                                                                                                                |  |                  |          |   |                   |  
|Accounts payable                                                                                                                                                                                    |  | $                | 5,542    |   |                   | $
|Accrued liabilities                                                                                                                                                                                 |  |                  | 13,943   |   |                   |  
|Current portion of capital lease obligations                                                                                                                                                        |  |                  | 393      |   |                   |  
|Current portion of deferred revenue                                                                                                                                                                 |  |                  | 1,029    |   |                   |  
|                                                                                                                                                                                                    |  |                  |          |   |                   |  
|Total current liabilities                                                                                                                                                                           |  |                  | 20,907   |   |                   |  
|Capital lease obligations                                                                                                                                                                           |  |                  | 393      |   |                   |  
|Convertible subordinated notes                                                                                                                                                                      |  |                  | 196,250  |   |                   |  
|Deferred revenue                                                                                                                                                                                    |  |                  | 2,601    |   |                   |  
|Other liabilities                                                                                                                                                                                   |  |                  | 1,886    |   |                   |  
|                                                                                                                                                                                                    |  |                  |          |   |                   |  
|Total liabilities                                                                                                                                                                                   |  |                  | 222,037  |   |                   |  
|Stockholders equity:                                                                                                                                                                               |  |                  |          |   |                   |  
|Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding                                                                                                         |  |                  |         |   |                   |  
|Common stock, $0.001 par value, 85,000,000 shares authorized, 27,116,805 and 29,049,175 shares issued and outstanding at December
31, 2002 and September 30, 2003, respectively; at amounts paid in |  |                  | 533,522  |   |                   |  
|Accumulated deficit                                                                                                                                                                                 |  |                  | (318,525 | ) |                   |  
|Accumulated other comprehensive income                                                                                                                                                              |  |                  | 3,968    |   |                   |  
|                                                                                                                                                                                                    |  |                  |          |   |                   |  
|Total stockholders equity                                                                                                                                                                          |  |                  | 218,965  |   |                   |  
|                                                                                                                                                                                                    |  |                  |          |   |                   |  
|Total liabilities and stockholders equity                                                                                                                                                          |  | $                | 441,002  |   |                   | $
|                                                                                                                                                                                                    |  |                  |          |   |                   |  

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|(A) |  | Derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2002
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------



See accompanying notes



2



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CV THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)



|                                                              |  | Three months endedSeptember 30, |         |   | Nine months endedSeptember 30, |  
|------------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | -
|                                                              |  | 2002                            |         |   | 2003                           |  
|Revenues:                                                     |  |                                 |         |   |                                |  
|Collaborative research                                        |  | $                               | 1,179   |   |                                | $
|Operating expenses:                                           |  |                                 |         |   |                                |  
|Research and development                                      |  |                                 | 20,764  |   |                                |  
|Sales & marketing                                             |  |                                 | 3,301   |   |                                |  
|General and administrative                                    |  |                                 | 3,357   |   |                                |  
|                                                              |  |                                 |         |   |                                |  
|Total operating expenses                                      |  |                                 | 27,422  |   |                                |  
|                                                              |  |                                 |         |   |                                |  
|Loss from operations                                          |  |                                 | (26,243 | ) |                                |  
|Interest income                                               |  |                                 | 4,079   |   |                                |  
|Interest expense                                              |  |                                 | (2,620  | ) |                                |  
|Other expense, net                                            |  |                                 | (39     | ) |                                |  
|                                                              |  |                                 |         |   |                                |  
|Net loss                                                      |  | $                               | (24,823 | ) |                                | $
|                                                              |  |                                 |         |   |                                |  
|Basic and diluted net loss per share                          |  | $                               | (0.95   | ) |                                | $
|                                                              |  |                                 |         |   |                                |  
|Shares used in computing basic and diluted net loss per share |  |                                 | 26,162  |   |                                |  
|                                                              |  |                                 |         |   |                                |  



See accompanying notes



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CV THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)



|                                                                               |  | Nine months endedSeptember 30, |         
|------------------------------------------------------------------------------ |  | ------------------------------ | --------
|                                                                               |  | 2002                           |         
|CASH USED IN OPERATING ACTIVITIES                                              |  |                                |         
|Net loss                                                                       |  | $                              | (78,412 
|Adjustments to reconcile net loss to net cash used in operating activities:    |  |                                |         
|Gains on the sale of investments                                               |  |                                | (321    
|Foregiveness of note                                                           |  |                                |        
|Non cash expense associated with issuance of stock, stock options and warrants |  |                                | 159     
|Depreciation and amortization                                                  |  |                                | 6,587   
|Change in assets and liabilities:                                              |  |                                |         
|Other current assets                                                           |  |                                | 3,895   
|Other assets                                                                   |  |                                |        
|Accounts payable                                                               |  |                                | (3,202  
|Accrued and other liabilities                                                  |  |                                | 459     
|Deferred revenue                                                               |  |                                | (772    
|                                                                               |  |                                |         
|Net cash used in operating activities                                          |  |                                | (71,607 
|CASH USED IN INVESTING ACTIVITIES                                              |  |                                |         
|Purchases of investments                                                       |  |                                | (393,874
|Sales of investments                                                           |  |                                | 334,891 
|Maturities of investments                                                      |  |                                | 57,430  
|Capital expenditures                                                           |  |                                | (5,866  
|Notes receivable from officers and employees                                   |  |                                | (168    
|                                                                               |  |                                |         
|Net cash used in investing activities                                          |  |                                | (7,587  
|CASH FLOWS FROM FINANCING ACTIVITIES                                           |  |                                |         
|Payments on capital lease obligations                                          |  |                                | (584    
|Borrowings under convertible subordinated debt, net of issuance costs          |  |                                |        
|Net proceeds from issuance of common stock                                     |  |                                | 23,543  
|                                                                               |  |                                |         
|Net cash provided by financing activities                                      |  |                                | 22,959  
|                                                                               |  |                                |         
|Net increase (decrease) in cash and cash equivalents                           |  |                                | (56,235 
|Cash and cash equivalents at beginning of period                               |  |                                | 80,911  
|                                                                               |  |                                |         
|Cash and cash equivalents at end of period                                     |  | $                              | 24,676  
|                                                                               |  |                                |         



See accompanying notes



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NOTES TO FINANCIAL STATEMENTS



1.     Summary of Significant Accounting Policies



Basis of Presentation



The accompanying financial statements of CV Therapeutics, Inc. (the Company) have been prepared in accordance with generally
accepted accounting principles, are unaudited and reflect all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary to present fairly the financial position at, and the results of
operations for, the interim periods presented. 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 entire year ending December 31, 2003, or of future
operating results for any interim period. The financial information included herein should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2002, which includes the audited consolidated financial
statements and the notes thereto.



Principles of
Consolidation



The financial statements include the
accounts of the Company and its wholly-owned subsidiary. All significant intercompany transactions and balances have been eliminated.



Reclassification



Certain reclassifications of prior period amounts have been made to conform to the current period presentation. Prior to the end of 2002, sales and
marketing expenses were included in research and development expenses. All prior period amounts have been reclassified to conform to the current presentation.



Use of Estimates



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



Comprehensive Income



Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS 130), established standards for the reporting and
display of comprehensive income and its components. SFAS 130 requires unrealized gains or losses on our available-for-sale securities to be included in other comprehensive income (loss) as an element of stockholders equity. At each balance
sheet date presented, our accumulated other comprehensive income consists solely of unrealized gains and losses on available-for-sale investment securities. Comprehensive loss was $22.6 million and $33.2 million for the quarters ended September 30,
2002 and September 30, 2003, respectively, and $78.8 million and $78.5 million for the nine-months ended September 30, 2002 and September 30, 2003, respectively.



Revenue Recognition



Revenue under our collaborative research arrangements is recognized based on the performance requirements of each contract. Amounts received under such
arrangements consist of up-front license and periodic milestone payments and reimbursements for research activities. Up-front or milestone payments, which are subject to future performance requirements, are recorded as deferred revenue and are
recognized over the performance period. The performance period is estimated at the inception of the arrangement and is periodically reevaluated. The reevaluation of the performance period may shorten or lengthen the period during which the deferred
revenue is recognized. We evaluate the appropriate period based on research progress attained and events such as changes in the regulatory and competitive environment. Payments received related to substantive, performance-based at-risk milestones
are recognized upon achievement of the scientific or regulatory event specified in the underlying agreement. Payments received for research activities are recognized as the related research effort is performed.



Stock-Based Compensation



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 amends SFAS 123, Accounting for Stock-Based Compensation, to provide alternative
methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require more prominent disclosures in both
annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.



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We have elected to continue to account for stock options granted to employees using the intrinsic-value
method as prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and thus recognize no compensation expense for options granted with exercise prices equal to the fair market value of our
common stock on the date of grant. We recognize compensation for options granted to consultants based on the Black-Scholes option pricing model in accordance with Emerging Issues Task Force Consensus No. 96-18, Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring or in conjunction with Selling, Goods or Services (EITF 96-18). Deferred compensation is recorded when stock options are granted to employees at prices lower than the fair
market value. The amount is amortized to expense over the vesting period of the related options.



For purposes of disclosures pursuant to SFAS 123, as amended by SFAS 148, the estimated fair value of options is amortized to expense over the
options vesting period.



The following table illustrates
the effect on reported net loss and net loss per share if we had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation for the periods presented (in thousands, except per share amounts):



|                                                                                                                    |  | Three months endedSeptember 30, |         |   | Nine months endedSeptember 30, |  
|------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | -
|                                                                                                                    |  | 2002                            |         |   | 2003                           |  
|Net loss:                                                                                                           |  |                                 |         |   |                                |  
|As reported                                                                                                         |  | $                               | (24,823 | ) |                                | $
|Deduct: Total stock-based employee compensation expense determined under the fair value based method for all
awards |  |                                 | (6,457  | ) |                                |  
|                                                                                                                    |  |                                 |         |   |                                |  
|Pro forma net loss                                                                                                  |  | $                               | (31,280 | ) |                                | $
|                                                                                                                    |  |                                 |         |   |                                |  
|Net loss per share basic and diluted:                                                                               |  |                                 |         |   |                                |  
|As reported                                                                                                         |  | $                               | (0.95   | ) |                                | $
|                                                                                                                    |  |                                 |         |   |                                |  
|Pro forma                                                                                                           |  | $                               | (1.20   | ) |                                | $
|                                                                                                                    |  |                                 |         |   |                                |  



The weighted-average
fair values of options granted with exercise prices at fair market value of our common stock were $10.44 and $15.04 during the quarters ended September 30, 2002 and September 30, 2003, respectively, and $13.30 and $14.24 during the nine-months ended
September 30, 2002 and September 30, 2003, respectively.



The
fair value of our stock-based awards to employees was estimated assuming no expected dividends and the following weighted-average assumptions:



|                        |  | Three months ended September 30, |   |  | Nine months ended September 30, |  
|----------------------- |  | -------------------------------- | - |  | ------------------------------- | -
|                        |  | 2002                             |   |  | 2003                            |  
|Expected life (years)   |  | 5.2                              |   |  | 5.3                             |  
|Expected volatility     |  | 65                               | % |  | 65                              | %
|Risk-free interest rate |  | 3.5                              | % |  | 2.5                             | %



Net Loss Per Share



In accordance with SFAS 128, Earnings per
share, basic and diluted net loss per share has been computed using the weighted-average number of common shares outstanding. Common equivalent shares have been excluded from the computation, as their effect is antidilutive. Had we been in a
net income position, diluted earnings per share would have included the impact of outstanding options, warrants and convertible subordinated notes and debentures.



Recent Accounting Pronouncements



In November 2002, the FASB issued Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on the existing disclosure requirements for most guarantees, including residual value guarantees issued in conjunction with operating lease
agreements. It also clarifies that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee and must disclose that information in its interim and
annual financial statements. The initial recognition and measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements are effective for financial statements of interim or
annual periods ending after December 15, 2002. Our adoption of FIN 45, in January 2003, did not have a material effect on our results of operations and financial position.



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In November 2002, the Emerging Issues Task Force (EITF) reached a consensus on Issue No. 00-21,
Revenue Arrangements with Multiple Deliverables. EITF Issue No. 00-21 provides guidance on how to account for arrangements that involve the delivery or performance of multiple products, services and/or rights to use assets. The
provisions of EITF Issue No. 00-21 apply to revenue arrangements entered into in fiscal periods beginning after June 15, 2003. Our adoption of EITF Issue No. 00-21 did not have a material effect on our results of operations and financial position.



In January 2003, the FASB issued Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entitys activities
or entitled to receive a majority of the entitys residual returns or both. A variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors
with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. A variable interest entity often holds financial assets, including loans or receivables, real estate or other
property. A variable interest entity may be essentially passive or it may engage in research and development or other activities on behalf of another company. The consolidation requirements of FIN 46 apply immediately to variable interest entities
created after January 31, 2003. As amended, the consolidation requirements apply to older entities in the first fiscal year or interim period ending after December 15, 2003. Certain disclosure requirements apply to all financial statements issued
after January 31, 2003, regardless of when the variable interest entity was established. Our adoption of FIN 46 did not have a material effect on our results of operations and financial position.



In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150), which provides guidance for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 150
is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Certain requirements under SFAS 150 pertaining to
non-controlling interests have been deferred indefinitely. Our adoption of SFAS 150 did not have a material effect on our results of operations and financial position.



2.     Senior Subordinated Convertible Debentures



In June 2003, we completed a private placement of $100.0 million aggregate principal amount of 2.0% senior subordinated
convertible debentures due May 16, 2023. The holders of the debentures may require us to purchase all or a portion of their debentures on May 16, 2010, May 16, 2013 and May 16, 2018, in each case at a price equal to the principal amount of the
debentures to be purchased, plus accrued and unpaid interest, if any, to the purchase date. The debentures are unsecured and subordinated in right of payment to all existing and future senior debt, as defined in the indenture governing the
debentures, equal in right of payment to our future senior subordinated debt and senior in right of payment to our existing and future subordinated debt. We pay interest semi-annually on May 16 and November 16 of each year. The initial conversion
rate, which is subject to adjustment in certain circumstances, is 21.0172 shares of common stock per $1,000 principal amount of debentures. This is equivalent to an initial conversion price of $47.58 per share. We may, at our option, redeem all or a
portion of the debentures at any time on or after May 16, 2006 at pre-determined prices from 101.143% to 100.000% of the face value of the debentures per $1,000 of principal amount, plus accrued and unpaid interest to the date of redemption.



We have reserved 2,101,720 shares of authorized common stock
for issuance upon conversion of the debentures. We incurred issuance costs related to this private placement of approximately $3.0 million, which have been recorded as other assets and are being amortized to interest expense over the life of the
debentures. Additionally, in connection with the private placement, we have restricted cash of approximately $6.0 million, of which approximately $2.0 million is included in other current assets and approximately $4.0 million in other assets. The
restricted cash secures the first six interest payments due on the debentures.



Holders may convert their debentures into shares of our common stock only under any of the following circumstances: (1) during any calendar quarter after the quarter ended September 30, 2003, if the sale price of our
common stock, for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the previous calendar quarter, is greater than or equal to 120% of the conversion price per share of our common stock, (2)
during the five business-day period after any five consecutive trading-day period in which the trading price per debenture for each day of that period was less than 97% of the product of the sale price of our common stock and the conversion rate on
each such day, (3) if the debentures have been called for redemption by us, or (4) upon the occurrence of specified corporate transactions.



In October 2003, we filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission for the resale of the debentures and the
common stock issuable upon conversion of the debentures. Once the shelf registration statement is declared effective by the SEC, we have agreed to keep the shelf registration statement effective until June 18, 2005. If we do not comply with these
registration obligations, we will be required to pay liquidated damages to the holders of the debentures or the common stock issuable upon conversion of the debentures.



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3.     Commitments and Contingencies



We lease our two primary facilities under noncancellable operating leases.
The lease for one facility expires in April 2014 with an option to renew for eleven years. The lease for the second facility incorporates a sublease that expires in February 2005, and a master lease that expires in April 2012. In addition, we have
leased certain fixed assets under capital leases with expiration dates through 2004.



We have entered into certain manufacturing-related agreements in connection with the potential future commercial production of Ranexa. Below is a table that presents minimum payments under these commitments as of September 30, 2003.



|                                       |  | ManufacturingAgreements |        | OperatingLeases |   | CapitalLeases | 
|-------------------------------------- |  | ----------------------- | ------ | --------------- | - | ------------- | 
|                                       |  | (in thousands)          |       
|Year ending December 31,               |  |                         |        |                 |   |               | 
|2003                                   |  | $                       | 2,452  |                 | $ | 2,727         | 
|2004                                   |  |                         | 2,912  |                 |   | 10,993        | 
|2005                                   |  |                         | 2,250  |                 |   | 8,339         | 
|2006                                   |  |                         | 2,250  |                 |   | 13,085        | 
|2007                                   |  |                         | 2,250  |                 |   | 13,038        | 
|2008 and thereafter                    |  |                         |       |                 |   | 69,029        | 
|                                       |  |                         |        |                 |   |               | 
|Total minimum payments                 |  | $                       | 12,114 |                 | $ | 117,211       | 
|                                       |  |                         |        |                 |   |               | 
|Less amount representing interest      |  |                         |        |                 |   |               | 
|                                       |  |                         |        |                 |   |               | 
|Present value of future lease payments |  |                         |        |                 |   |               | 
|Less current portion                   |  |                         |        |                 |   |               | 
|                                       |  |                         |        |                 |   |               | 
|Long-term portion                      |  |                         |        |                 |   |               | 
|                                       |  |                         |        |                 |   |               | 



Under the
manufacturing-related agreements, additional payments above the specified minimums will be required if the FDA approves Ranexa, and in connection with the manufacture of Ranexa.



4.     Litigation



We and certain of our officers and directors are named as defendants in a purported securities class action lawsuit filed in the United States District
Court for the Northern District of California captioned David Crossen, et al. v. CV Therapeutics, Inc., et al. The lawsuit is brought on behalf of a purported class of purchasers of our securities, and seeks unspecified damages. As is typical
in this type of litigation, several other purported securities class action lawsuits containing substantially similar allegations have since been filed against the defendants, and we expect that additional lawsuits containing substantially similar
allegations may be filed in the near future. We expect that all of the substantially similar securities class actions will be consolidated into a single action. In addition, the Companys directors and certain of its officers have been named as
defendants in a derivative lawsuit in California Superior Court, Santa Clara County, captioned Kangos v. Lange, et al., which names the Company as a nominal defendant. The plaintiff in this action is a Company stockholder who seeks to bring
derivative claims on behalf of the Company against the defendants. The lawsuit alleges breaches of fiduciary duty and related claims based on purportedly misleading statements concerning our new drug application (NDA) for Ranexa. As with any
litigation proceeding, we cannot predict with certainty the eventual outcome of pending litigation.



5.     Stockholders Equity



In January and March 2003, we sold 378,089 and 700,000 shares, respectively, of our common stock for net cash proceeds of $6.9 and $11.8 million, respectively, under a now terminated financing arrangement with Acqua
Wellington North American Equities Fund, Ltd (Acqua Wellington).



On July 3, 2003, we entered into a new financing arrangement with Acqua Wellington which provides that Acqua Wellington is committed to purchase up to $100.0 million of our common stock, or the number of shares which is one less than twenty
percent of the



8



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issued and outstanding shares of our common stock as of July 3, 2003, whichever occurs first, over the 28-month term of
this new purchase agreement. In September 2003, we sold 587,489 shares of our common stock to Acqua Wellington for net cash proceeds of approximately $15.0 million; this transaction is the first and only sale of our common stock to date under the
new financing arrangement with Acqua Wellington.



On July 9,
2003, we and Quintiles Transnational Corp. modified our commercialization agreement for Ranexa. The modified agreement provides us with complete commercialization rights for Ranexa, including the opportunity to hire and train a dedicated
cardiovascular sales force. Quintiles and its commercial sales and marketing subsidiary, Innovex Inc., will continue to have a commercialization services relationship with us relating to Ranexa and also will become a preferred provider of their full
range of pharmaceutical services to us. In addition, pursuant to the modified agreement, Quintiles received a fully vested, non-forfeitable warrant, with a five-year term, to purchase 200,000 shares of our common stock at an exercise price of $32.93
per share. In accordance with EITF 96-18, the warrant was valued using the Black-Scholes model; the assumptions used were a term of five years, a risk-free interest rate of 2.5% and volatility of 65%, resulting in a charge to sales and marketing
expense of approximately $3.7 million in the quarter ended September 30, 2003.



6.     Subsequent Events



In October 2003, we filed a registration statement on Form S-3 to offer and sell any or all of the registered common or preferred stock, debt securities, and/or warrants to purchase our equity or debt securities in one or more offerings up
to a total amount of $300.0 million. We have no current commitments to offer or sell any securities that may be offered or sold pursuant to such registration statement.



In October 2003, we filed a registration statement on Form S-3 to register the resale of the 2.0% senior subordinated
convertible debentures, and the common stock issuable upon conversion of the debentures, that we issued and sold in June 2003.



On October 28, 2003, we announced that we had initiated a pivotal Phase III clinical trial of CVT-3146. CVT-3146 is a selective A2A-adenosine receptor agonist being jointly developed with Fujisawa Healthcare, Inc. for potential use as a pharmacologic stress
agent in cardiac perfusion imaging studies. Commencement of the study triggered a $3.0 million milestone payment from Fujisawa to the Company.



On October 30, 2003, we announced that we received an approvable letter from the United States Food and Drug Administration, or FDA, for our NDA for
Ranexa for the treatment of chronic angina. In the approvable letter, the FDA indicated that there is evidence that Ranexa is an effective anti-anginal, and that additional clinical information is needed prior to approval. The Cardiovascular and
Renal Drugs Advisory Committee is scheduled to publicly review Ranexa on December 9, 2003. The advisory committee review of Ranexa can be rescheduled or cancelled by the FDA at any time. We understand, based on discussions with the FDA, that the
purpose of the advisory committee meeting is to determine whether the committee considers the current NDA sufficient to support approval of Ranexa. We understand that the FDA may be prepared to reevaluate the requirement for additional clinical
information prior to approval based on the results of the advisory committee review. The FDA is not required to follow the recommendations of the advisory committee.



|Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- |  | -------------------------------------------------------------------------------------



This Managements Discussion and Analysis of Financial Condition and Results of Operations and other parts of this
Report contain forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future clinical or product development or financial performance. In some cases, you can identify forward-looking
statements by terminology such as may, will, should, expects, plans, anticipates, believes, estimates, predicts, potential or
continue or the negative of those terms and other comparable terminology. If one or more of these risks or uncertainties materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may
vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might
cause such a difference include, but are not limited to, those discussed in Risk Factors as well as such other risks and uncertainties detailed in our other Securities and Exchange Commission reports and filings. We disclaim any intent
or obligation to update these forward-looking statements.



Overview



CV Therapeutics is a biopharmaceutical company focused on
the discovery, development and commercialization of new small molecule drugs for the treatment of cardiovascular diseases. Since our inception in December 1990, substantially all of our resources have been dedicated to research and development. To
date, we have not generated any product revenues and do not expect to generate any product revenues until we receive marketing approval and launch of one of our products, if at all. Until that time, we expect our sources of revenues, if any, to
consist of payments under corporate partnerships and interest income. As of September 30, 2003, we had an accumulated deficit of $394.4 million. The process of developing and commercializing our products requires significant



9



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research and development, preclinical testing and clinical trials, manufacturing arrangements as well as marketing
approvals. These activities, together with our sales and marketing expenses and our general and administrative expenses, are expected to result in substantial operating losses for the foreseeable future. We will not receive product revenues unless
and until we or our collaborative partners complete clinical trials, obtain marketing approval, and successfully commercialize one or more of our products.



We are subject to risks common to biopharmaceutical companies, including risks inherent in our research, development and commercialization efforts,
preclinical testing, clinical trials, uncertainty of regulatory and marketing approvals, reliance on collaborative partners, enforcement of patent and proprietary rights, the need for future capital, potential competition, use of hazardous materials
and retention of key employees. In order for a product to be commercialized, it will be necessary for us and, in some cases, our collaborators, to conduct preclinical tests and clinical trials, demonstrate efficacy and safety of our product
candidates to the satisfaction of regulatory authorities, obtain marketing approval, enter into manufacturing, distribution and marketing arrangements, obtain market acceptance and, in many cases, obtain adequate reimbursement from government and
private insurers. We cannot provide assurance that we will generate revenues or achieve and sustain profitability in the future.



Critical Accounting Policies and the Use of Estimates



We believe the following critical accounting policies presently involve more significant judgments, assumptions and estimates used in the preparation of
our consolidated financial statements:



Valuation of
Marketable Securities



We invest our excess cash balances
primarily in short-term and long-term marketable debt securities for use in current operations. Accordingly, we have classified all investments as short term, even though the stated maturity date may be one year or more beyond the current balance
sheet date. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported in stockholders equity as a component of other comprehensive income (loss). Estimated fair value is based upon quoted market prices
for these or similar instruments.



Clinical Trial Accruals



Our accruals for clinical trials are based on estimates
of the services received and efforts expended pursuant to contracts with numerous clinical trial centers and clinical research organizations. In the normal course of business we contract with third parties to perform various clinical trial
activities in the on-going development of potential products. The financial terms of these agreements are subject to negotiation and variation from contract to contract and may result in uneven payment flows. Payments under the contracts depend on
factors such as the achievement of certain events, the successful enrollment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our accrual policy is to match the recording of expenses in our
financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical trials are recognized based on our estimate of the degree of completion of the event or events specified in the specific
clinical study or trial contract.



Revenue Recognition



Revenue under our collaborative research arrangements is
recognized based on the performance requirements of the contract. Amounts received under such arrangements consist of up-front license and periodic milestone payments. Up-front or milestone payments which are still subject to future performance
requirements are recorded as deferred revenue and are amortized over the performance period. The performance period is estimated at the inception of the arrangement and is periodically reevaluated. The reevaluation of the performance period may
shorten or lengthen the period during which the deferred revenue is recognized. We evaluate the appropriate period based on research progress attained and events such as changes in the regulatory and competitive environment. Payments received
related to substantive, performance-based at-risk milestones are recognized upon achievement of the scientific or regulatory event specified in the underlying agreement. Payments received for research activities are recognized as the related
research effort is performed.



Results of Operations



Collaborative Research Revenues. Collaborative research revenues
increased to $2.2 million for the quarter ended September 30, 2003, compared to $1.2 million for the quarter ended September 30, 2002. Collaborative research revenues increased to $5.7 million for the nine-month period ended September 30, 2003,
compared to $3.5 million for the nine-month period ended September 30, 2002. The increases for the quarterly and nine-month periods ended September 30, 2003, compared to the same periods in 2002, were due to greater reimbursable development costs
related to our collaboration with Fujisawa for the development of CVT-3146.



Research and Development Expenses. Research and development expenses decreased to $19.5 million for the quarter ended September 30, 2003, compared to $20.8 million for the quarter ended September 30, 2002.
Research and development expenses



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decreased to $53.6 million for the nine-month period ended September 30, 2003, compared to $67.2 million for the
nine-month period ended September 30, 2002. The decreases for the quarterly and nine-month periods ended September 30, 2003, compared to the same periods in 2002, were primarily due to reduced outside service expenses of approximately $2.0 million
and $14.5 million, respectively, for our three clinical development programs: Ranexa, CVT-3146 and tecadenoson (CVT-510). These decreases were partially offset by increased headcount and associated expenses of $800,000 and $2.1 million,
respectively, in these periods.



Management categorizes
research and development expenditures into amounts related to preclinical research and amounts related to our three clinical development programs. During the quarter ended September 30, 2003, we incurred approximately 77% of our research and
development expenditures, or approximately $15.0 million, in connection with clinical development programs, and the remaining 23% of our research and development expenditures, or $4.5 million, in connection with preclinical research programs. By
comparison, during the quarter ended September 30, 2002, we incurred approximately 80% of our research and development expenditures, or approximately $16.7 million, in connection with clinical development programs, and the remaining 20% of our
research and development expenditures, or $4.1 million, in connection with preclinical research programs. During the nine-month period ended September 30, 2003, we incurred approximately 78% of our research and development expenditures, or
approximately $41.6 million, in connection with clinical development programs, and the remaining 22% of our research and development expenditures, or $12.0 million, in connection with preclinical research programs. In comparison, for the nine-month
period ended September 30, 2002, we incurred approximately 81% of our research and development expenditures, or approximately $54.2 million, in connection with clinical development programs and the remaining 19% of our research and development
expenditures, or $13.0 million, in connection with preclinical research programs.



Sales and Marketing Expenses. Sales and marketing expenses increased to $9.5 million for the quarter ended September 30, 2003, compared to $3.3 million for the quarter ended September 30, 2002. Sales and
marketing expenses increased to $15.5 million for the nine-month period ended September 30, 2003, compared to $7.2 million for the nine-month period ended September 30, 2002. The increases for the quarterly and nine-month periods ended September 30,
2003, compared to the same periods in 2002, were primarily due to a non-cash expense of approximately $3.7 million, which was charged to sales and marketing as a result of the warrant issued to Quintiles for 200,000 shares of our common stock in
conjunction with modifying our commercialization agreement for Ranexa with Quintiles and increased headcount and related expenses of $1.9 million and $2.7 million, respectively, in these periods. If we obtain FDA marketing approval for Ranexa and
subsequently launch Ranexa, our sales and marketing expenses will increase substantially. Sales and marketing expenses in prior years were included in research and development expenses, and all prior period amounts have been reclassified to conform
to the current year presentation.



General and
Administrative Expenses.General and administrative expenses increased to $4.8 million for the quarter ended September 30, 2003, compared to $3.4 million for the quarter ended September 30, 2002. General and administrative expenses increased to
$12.8 million for the nine-month period ended September 30, 2003, compared to $11.6 million for the nine-month period ended September 30, 2002. The increase for the quarter was primarily due to increases in outside professional services and
increased headcount and associated expenses in conjunction with our commercialization efforts. The increase for the nine-month period was primarily due to increased headcount and associated expenses. We expect general and administrative expenses to
increase in the future in conjunction with our research, development and commercialization activities.



Interest Income. Interest income decreased to $2.4 million for the quarter ended September 30, 2003, compared to $4.1 million for the quarter ended
September 30, 2002. Interest income decreased to $8.8 million for the nine-month period ended September 30, 2003, compared to $11.9 million for the nine-month period ended September 30, 2002. The decreases for the quarterly and nine-month periods
ended September 30, 2003, compared to the same periods in 2002, were primarily due to lower average interest rates. We expect that interest income will continue to fluctuate with average investment balances, market interest rates and recognized
gains or losses on securities sold.



Interest Expense.Interest expense increased to $3.2 million for the quarter ended September 30, 2003, compared to $2.6 million for the quarter ended September 30, 2002. Interest expense for the nine-month period ended September 30, 2003 increased to $8.4
million, compared to $7.8 million for the nine-month period ended September 30, 2002. The increases for the quarterly and nine-month periods ended September 30, 2003 were primarily due to amortization of debt issuance costs and interest associated
with the June 2003 placement of our 2.0% senior subordinated convertible debentures. Our 4.75% subordinated convertible notes issued in March 2000 accounted for $2.3 million of the interest expense in each quarter, which increased by $500,000 to
$2.8 million in the quarter ended September 30, 2003 as a result of interest expense due to the issuance of our 2.0% senior subordinated convertible debentures in June 2003. We expect that interest expense will fluctuate with average loan balances.



Liquidity and Capital Resources



We have financed our operations since inception primarily through private
placements and public offerings of debt and equity securities, equipment and leasehold improvement financing, other debt financing and payments under corporate collaborations. For at least the next 24 months, we expect to be able to fund our
operations from our cash, cash equivalents and marketable securities, which totaled $461.9 million as of September 30, 2003.



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In March 2000, we completed a private placement of $196.3 million aggregate principal amount of 4.75%
convertible subordinated notes due March 7, 2007. The notes are unsecured and subordinated in right of payment to all existing and future senior debt, as defined in the indenture governing the notes, including our 2.0% senior subordinated
convertible debentures issued in June 2003. Interest on the notes accrues at a rate of 4.75% per year, subject to adjustment in certain circumstances. We pay interest semi-annually on March 7 and September 7 of each year. The initial conversion
rate, which is subject to adjustment in certain circumstances, is 15.6642 shares of common stock per $1,000 principal amount of notes. This is equivalent to an initial conversion price of $63.84 per share. We may, at our option, redeem all or a
portion of the notes at any time at pre-determined prices from 102.714% to 100.679% of the face value of the notes per $1,000 of principal amount, plus accrued and unpaid interest to the date of redemption.



In August 2000, we entered into a financing arrangement with Acqua Wellington
to purchase our common stock. As of April 4, 2003, we and Acqua Wellington mutually agreed to terminate the financing arrangement in accordance with the terms of the purchase agreement. Under the purchase agreement, as amended, we had the ability to
sell up to $149.0 million of our common stock to Acqua Wellington through December 2003. Applicable Nasdaq National Market rules limited the number of shares of common stock that we could issue under our purchase agreement with Acqua Wellington to
approximately 3,703,000 shares. As of April 4, 2003, we issued an aggregate of 3,687,366 shares of common stock in exchange for aggregate net cash proceeds of $113.7 million under this arrangement, including $18.7 million during the nine-month
period ended September 30, 2003. Since we effectively reached the Nasdaq limit, as of April 4, 2003, the purchase agreement was terminated in accordance with its terms.



In July 2003, we entered into a new financing arrangement with Acqua Wellington to purchase our common stock. Under the new
purchase agreement, we have the ability to sell up to $100.0 million of our common stock, or the number of shares which is one less than twenty percent (20.0%) of the issued and outstanding shares of our common stock as of July 3, 2003, whichever
occurs first, to Acqua Wellington through November 2005. The purchase agreement provides that from time to time, in our sole discretion, we may present Acqua Wellington with draw down notices constituting offers to sell our common stock for
specified total proceeds over a specified trading period. Once presented with a draw down notice, Acqua Wellington is required to purchase a pro rata portion of shares of our common stock as allocated on each trading day during the trading period on
which the daily volume weighted-average price for our common stock exceeds a threshold price that we have determined and stated in the draw down notice. The per share price then equals the daily volume weighted-average price on each date during the
pricing period, less a 3.8% to 5.8% discount (based on our market capitalization). However, if the daily volume weighted-average price falls below the threshold price on any day in the pricing period, Acqua Wellington is not required to purchase the
pro rata portion of shares allocated to that day, but may elect to buy that pro rata portion of shares at the threshold price less the applicable 3.8% to 5.8% discount. Upon each sale of our common stock to Acqua Wellington under the purchase
agreement, we have also agreed to pay Alder Creek Capital, L.L.C., Member NASD/SIPC, a placement fee equal to one fifth of one percent of the aggregate dollar amount of common stock purchased by Acqua Wellington.



Further, if during a draw down pricing period we enter into an agreement with
a third party to issue common stock or securities convertible into common stock (excluding stock or options granted pursuant to our stock option, stock purchase or shareholder rights plans, common stock or warrants issued in connection with
licensing agreements and/or collaborative agreements and warrants issued in connection with equipment financings) at a net discount to the then current market price, if we issue common stock with warrants (other than as provided in the prior
parenthetical), or if we implement a mechanism for the reset of the purchase price of our common stock below the then current market price, then Acqua Wellington may elect to purchase the shares so requested by us in the draw down notice at the
price established pursuant to the prior paragraph, to purchase such shares at the third partys price, net of discount or fees, or to not purchase our common stock during that draw down pricing period.



The purchase agreement also provides that from time to time, in our sole
discretion, we may grant Acqua Wellington a right to exercise one or more call options to purchase additional shares of our common stock during a drawn down pricing period, in an amount and for a threshold price that we determine and state in the
draw down notice. However, the total call amount for any given draw down cannot exceed a specified maximum amount, and the amount of proceeds we may receive by exercise of a call option for any given trading day is also limited. If Acqua Wellington
exercises the call option, we are obligated to issue and sell the shares of our common stock subject to the call option at a price equal to the greater of the daily volume weighted-average price of our common stock on the day Acqua Wellington
exercises its call option, or the threshold price for the call option that we determine, less a 3.8% to 5.8% discount (based on our market capitalization).



The combined total value of shares that we have the ability to sell to Acqua Wellington through draw downs and call option exercises under the financing
arrangement cannot exceed $100.0 million or the number of shares which is one less than twenty percent (20.0%) of the issued and outstanding shares of our common stock as of July 3, 2003, whichever occurs first. As of September 30, 2003, we had
issued 587,489 shares of our common stock to Acqua Wellington under this financing arrangement for net cash proceeds of approximately $15.0 million.



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In June 2003, we completed a private placement of $100.0 million aggregate principal amount of 2.0%
senior subordinated convertible debentures due May 16, 2023. The holders of the debentures may require us to purchase all or a portion of their debentures on May 16, 2010, May 16, 2013 and May 16, 2018, in each case at a price equal to the principal
amount of the debentures to be purchased, plus accrued and unpaid interest, if any, to the purchase date. The debentures are unsecured and subordinated in right of payment to all existing and future senior debt, as defined in the indenture governing
the debentures, equal in right of payment to our future senior subordinated debt and senior in right of payment to our existing and future subordinated debt, including our 4.75% convertible subordinated notes issued in March 2000. We pay interest
semi-annually on May 16 and November 16 of each year. The initial conversion rate, which is subject to adjustment in certain circumstances, is 21.0172 shares of common stock per $1,000 principal amount of debentures. This is equivalent to an initial
conversion price of $47.58 per share. We may, at our option, redeem all or a portion of the debentures at any time on or after May 16, 2006 at pre-determined prices from 101.143% to 100.000% of the face value of the debentures per $1,000 of
principal amount, plus accrued and unpaid interest to the date of redemption.



Cash, cash equivalents and marketable securities at September 30, 2003 totaled $461.9 million, compared to $410.9 million at December 31, 2002. The increase was primarily due to gross proceeds from the issuance of
$100.0 million of 2.0% senior subordinated convertible debentures in June 2003, and $36.1 million raised from the issuance of our common stock during the current fiscal year, including net proceeds of $18.7 million of common stock issued pursuant to
our now-terminated financing arrangement with Acqua Wellington and approximately $15.0 million of common stock issued pursuant to our current financing arrangement with Acqua Wellington, partially offset by $71.7 million utilized to fund operations
and $2.7 million utilized for capital expenditures.



Net cash
used in operations for the nine-month period ended September 30, 2003 was $71.7 million, compared to $71.6 million for the nine-month period ended September 30, 2002.



As of September 30, 2003, we have invested $25.9 million in property and equipment, with the rate of investment having
increased in line with increased research, development and commercialization efforts and as we expand our facilities. We expect to continue to make investments in property and equipment to support our growth.



In March 1996, we entered into a license agreement with Syntex (U.S.A.) Inc.
to obtain United States and foreign patent rights to Ranexa for the treatment of angina and other cardiovascular indications. Syntex provided initial quantities of the compound for use in clinical trials and related development activities. The
license agreement is exclusive and worldwide except for the following countries which Syntex has licensed exclusively to Kissei Pharmaceuticals, Ltd. of Japan: Japan, Korea, China, Taiwan, Hong Kong, the Philippines, Indonesia, Singapore, Thailand,
Malaysia, Vietnam, Myanmar, Laos, Cambodia and Brunei.



Under
our license agreement, we paid an initial license fee, and are obligated to make certain milestone payments to Syntex, upon receipt of the first and second product approvals for Ranexa in any of certain major market countries (consisting of France,
Germany, Italy, the United States and the United Kingdom). Unless the agreement is terminated, in connection with the first such product approval, we will pay Syntex, on or before March 31, 2005, $7.0 million plus interest accrued thereon from May
1, 2002, until the date of payment. Unless the agreement is terminated, if the second product approval in one of the major market countries occurs before May 1, 2004, we will pay Syntex, on or before March 31, 2006, $7.0 million plus interest
accrued thereon from the date of approval until the date of payment, and if the second such product approval occurs after May 1, 2004, but before March 31, 2006, we will pay Syntex, on or before March 31, 2006, $7.0 million plus interest accrued
thereon from May 1, 2004, until the date of payment. Unless the agreement is terminated, if the second product approval in one of the major market countries has not occurred by March 31, 2006, we will pay Syntex $3.0 million on or before March 31,
2006, and if we receive the second product approval after March 31, 2006, we will pay Syntex $4.0 million within thirty (30) days after the date of such second product approval. No amounts have been accrued to date in relation to these milestones.
In addition, we will make royalty payments based on net sales of products that utilize the licensed technology, and we are required to use commercially reasonable efforts to develop and commercialize the product for angina.



We or Syntex may terminate the license agreement for material uncured breach,
and we have the right to terminate the license agreement at any time on 120 days written notice if we decide not to continue to develop and commercialize Ranexa.



We may require substantial additional funding in order to complete our research and development activities and commercialize
any potential products. We currently estimate that our existing resources, projected interest income and future payments, if any, under our collaboration arrangements will be sufficient to meet our operating and capital requirements for at least the
next 24 months. However, we cannot assure you that we will not require additional funding prior to then or that additional financing will be available on acceptable terms or at all.



In October 2003, we filed a registration statement on Form S-3 to offer and sell any or all of the registered common or
preferred stock, debt securities, and warrants to purchase our equity or debt securities in one or more offerings up to a total amount of $300.0 million. We have no current commitments to offer or sell any securities that may be offered or sold
pursuant to such registration statement.



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Our future capital requirements will depend on many factors, including the cost of launching our
products, the cost of commercializing our products, including marketing, promotional and sales costs, the amount of revenue, if any, that we are able to obtain from any approved products and the time and costs required to achieve those revenues,
scientific progress in our research and development programs, the size and complexity of these programs, the timing, scope and results of preclinical studies and clinical trials, our ability to establish and maintain corporate partnerships, the time
and costs involved in obtaining regulatory approvals, the costs involved in filing, prosecuting and enforcing patent claims, competing technological and market developments, the cost of manufacturing preclinical and clinical material and other
factors not within our control. We cannot guarantee that the additional financing to meet our capital requirements will be available on acceptable terms or at all. Insufficient funds may require us to delay, scale back or eliminate some or all of
our research, development or commercialization programs, to lose rights under existing licenses or to relinquish greater or all rights to product candidates on less favorable terms than we would otherwise choose, or may adversely affect our ability
to operate as a going concern. If we issue equity securities to raise additional funds, substantial dilution to existing stockholders may result.



Risk Factors



Our product candidates may take at least several years to develop, and we cannot assure you that we will successfully develop, market and manufacture
these products.



Since our inception in 1990, we have
dedicated substantially all of our resources to research and development. Because none of our potential products have been approved by any regulatory authorities, we have not generated any product revenues to date, and do not expect to generate any
product revenues until we receive marketing approval and launch one of our products, if at all.



We have applied for our first product approval in the United States, but we have not received any product approvals in the United States for the
commercial sale of any of our products. We have not applied for or received any regulatory approvals in any foreign jurisdiction for the commercial sale of any of our products. All of our product candidates are either in clinical trials under an
Investigational New Drug application, or IND, or applicable foreign regulatory authority submission, or are in preclinical research and development. We have submitted a New Drug Application, or NDA, to the United States Food and Drug Administration,
or FDA, for Ranexa for the potential treatment of chronic angina, but we have not submitted any other NDAs or equivalent applications to any foreign regulatory authorities for any of our product candidates. None of our products have been determined
to be safe or effective in humans for any use.



Conducting
clinical trials is a lengthy, time-consuming and expensive process. Before obtaining regulatory approvals for the commercial sale of any products, we must demonstrate to regulatory authorities through preclinical testing and clinical trials that our
product candidates are safe and effective for use in humans. We will continue to incur substantial expense for, and devote a significant amount of time to, preclinical testing and clinical trials.



Drug discovery methods based upon molecular cardiology are relatively new. We
cannot be certain that these methods will lead to commercially viable pharmaceutical products. In addition, some of our compounds within our adenosine receptor research, metabolism, atherosclerosis and vascular stenosis programs are in the early
stages of research and development. We have not submitted IND applications or commenced clinical trials for these new compounds. We cannot be certain when these clinical trials will commence, if at all. Because these compounds are in the early
stages of product development, we could abandon further development efforts before they reach clinical trials.



We cannot be certain that any of our product development efforts will be completed or that any of our products will be shown to be safe and effective.
Regulatory authorities have broad discretion to interpret safety and efficacy data in granting approval and making other regulatory decisions. Even if we believe that a product is safe and effective, we cannot assure you that regulatory authorities
will interpret the data the same way and we may not obtain the required regulatory approvals. Furthermore, we may not be able to manufacture our products in commercial quantities or market any products successfully.



If we are unable to satisfy the regulatory requirements for our products,
we will not be able to commercialize our drug candidates.



All of our products may require additional development, preclinical studies and/or clinical trials, and will require regulatory approval, prior to commercialization. One potential cause of a delay in product development is a delay in
clinical trials. Any delays in our clinical trials would delay market launch, increase our cash requirements, increase the volatility of our stock price and result in additional operating losses. Many factors could delay completion of our clinical
trials, including without limitation:



| |  |  | slower than anticipated patient enrollment;
| | - |  | -------------------------------------------



| |  |  | difficulty in obtaining sufficient supplies of clinical trial materials; and
| | - |  | ----------------------------------------------------------------------------



| |  |  | adverse events occurring during the clinical trials.
| | - |  | ----------------------------------------------------



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In addition, data obtained from preclinical and clinical activities are subject to different
interpretations, which could delay, limit or prevent regulatory approval of our products. For example, some drugs that prolong the electrocardiographic QT interval carry an increased risk of serious cardiac rhythm disturbances, or arrhythmias, while
other drugs that prolong the QT interval do not carry an increased risk of arrhythmias. Small but statistically significant mean increases in the QT interval were observed in clinical trials of Ranexa. QT interval measurements are not precise and
there are different methods of calculating the corrected QTc interval. This uncertainty in the measurement and calculation of QT and QTc intervals can lead to different interpretations of these data. The clinical significance of the changes in QTc
interval observed in clinical trials of Ranexa remains unclear, and other clinical and preclinical data do not suggest that Ranexa significantly pre-disposes patients to arrhythmias. Regulatory authorities such as the FDA may interpret the Ranexa
data differently, which could delay, limit or prevent regulatory approval of Ranexa.



Delays in approvals or rejections of marketing applications may be based upon many factors, including regulatory requests for additional analyses, reports, data and/or studies, regulatory questions regarding data and
results, changes in regulatory policy during the period of product development and/or the emergence of new information regarding our products or other products. For example, on October 30, 2003 we received an approvable letter from the FDA for our
NDA for Ranexa for the treatment of chronic angina. In this letter, the FDA indicated that there is evidence that Ranexa is an effective anti-anginal, and that additional clinical information is needed prior to approval. The Cardiovascular and Renal
Drugs Advisory Committee is scheduled to publicly review Ranexa on December 9, 2003. The advisory committee review of Ranexa can be rescheduled or cancelled by the FDA at any time. We understand, based on discussions with the FDA, that the purpose
of the advisory committee meeting is to determine whether the committee considers the current NDA sufficient to support approval of Ranexa. We understand that the FDA may be prepared to reevaluate the requirement for additional clinical information
prior to approval, based on the results of the advisory committee review. The FDA is not required to follow the recommendations of the advisory committee. If the advisory panel does not vote in favor of Ranexa, we expect that any potential approval
of Ranexa in the United States would be substantially delayed or could be prevented altogether. Similarly, regardless of the committee vote, if the FDA does not reevaluate and eliminate the requirement for additional clinical information prior to
approval of Ranexa, we expect that any potential approval of Ranexa in the United States would be substantially delayed or could be prevented altogether.



Similarly, as a routine part of the evaluation of any potential drug, clinical studies are generally conducted to assess the potential for drug-drug
interactions that could impact potential product safety. While we believe that the interactions between Ranexa and other drugs have been well characterized as part of our clinical development program, the data are subject to regulatory
interpretation and an unfavorable interpretation could delay, limit or prevent regulatory approval of Ranexa. Furthermore, regulatory attitudes towards the data and results required to demonstrate safety and efficacy change over time and can be
affected by many factors, including the emergence of new information (including on other products), changing policies and agency funding, staffing and leadership. We cannot be sure whether future changes to the regulatory environment will be
favorable or unfavorable to our business prospects.



We may be
unable to maintain our proposed schedules for IND and equivalent foreign applications and clinical protocol submissions to the FDA and other regulatory authorities, and our proposed schedules for initiation and completion of clinical trials, as a
result of FDA or other regulatory action or other factors such as lack of funding or complications that may arise in any phase of a clinical trial program.



Furthermore, even if our clinical trials occur on schedule, the results may differ from those obtained in preclinical studies and earlier clinical trials.
Clinical trials may not demonstrate sufficient safety or efficacy to obtain the necessary approvals.



If we are unable to satisfy governmental regulations relating to the development and commercialization of our drug candidates, we may be unable to
obtain or maintain necessary regulatory approvals to commercialize our products.



The research, testing, manufacturing and marketing of drug products are subject to extensive regulation by numerous regulatory authorities in the United States and other countries. Failure to comply with FDA or other
applicable regulatory requirements may subject a company to administrative or judicially imposed sanctions. These include without limitation:



| |  |  | warning letters;
| | - |  | ----------------



| |  |  | civil penalties;
| | - |  | ----------------



| |  |  | criminal penalties;
| | - |  | -------------------



| |  |  | injunctions;
| | - |  | ------------



| |  |  | product seizure or detention;
| | - |  | -----------------------------



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| |  |  | product recalls;
| | - |  | ----------------



| |  |  | total or partial suspension of manufacturing; and
| | - |  | -------------------------------------------------



| |  |  | FDA refusal to review or approve pending NDAs or supplements to approved NDAs.
| | - |  | ------------------------------------------------------------------------------



The process of obtaining FDA and other required regulatory approvals, including foreign approvals, often takes many years and can vary substantially
based upon the type, complexity and novelty of the products involved. Furthermore, this approval process is extremely expensive and uncertain. We may not be able to maintain our proposed schedules for the submission of an NDA or foreign applications
for any of our products. If we submit an NDA to the FDA for any of our products, the FDA must decide whether to either accept or reject the submission for filing. We cannot guarantee that any of our NDA submissions will be accepted for filing and
review by the FDA. We cannot guarantee that we will be able to respond to FDA review requests in a timely manner without delaying potential regulatory action. We also cannot guarantee that any of our products under development (including Ranexa)
will receive a favorable recommendation from any FDA advisory committee or be approved for marketing by the FDA or foreign regulatory authorities. Even if marketing approval of a product is granted, we cannot be certain that we will be able to
obtain the labeling claims necessary or desirable for the promotion of the product.



In addition, the regulatory environment in which our regulatory submissions may be reviewed changes over time. For example, average review times at the FDA for marketing approval applications have fluctuated over the
last 10 years, and we cannot predict the review time for any of our submissions. In addition, review times at the FDA can be affected by a variety of factors, including federal budget and funding levels and statutory, regulatory and policy changes.



Even if we obtain a marketing approval for any or our
products, we may be required to undertake post-marketing clinical trials or other risk management programs. The scope, complexity, cost and duration of any such clinical trials or risk management programs could vary substantially; consequently, any
post-marketing trials or risk management programs could adversely affect the market acceptance of our products and the revenues and profitability of any product sales that we may obtain. In addition, identification of side effects or potential
safety or dosing or other compliance issues after a drug is on the market, or the occurrence of manufacturing-related problems, could cause or require subsequent withdrawal of approval, reformulation of the drug, additional preclinical testing or
clinical trials, changes in labeling of the product, and/or additional regulatory approvals.



If we receive a marketing approval for any of our products, we will also be subject to ongoing FDA post-marketing obligations and continued regulatory review, such as continued safety reporting requirements. In
addition, we or our third party manufacturers will be required to adhere to stringent federal regulations setting forth current good manufacturing practices for pharmaceuticals, known as cGMP regulations. These regulations require, among other
things, that we manufacture our products and maintain our records in a carefully prescribed manner with respect to manufacturing, testing and quality control activities.



If we receive marketing approval and if any of our products or services become reimbursable by a government health care
program, such as Medicare or Medicaid, we will become subject to certain federal and state health care fraud and abuse and reimbursement laws. These laws include the federal Medicare and Medicaid Fraud and Abuse Act, False Claims
Act, and Prescription Drug Marketing Act, and their many state counterparts. When we become subject to such laws, our arrangements with third parties, including health care providers, physicians, vendors, distributors, wholesalers
and others, will need to comply with these laws, as applicable. We do not know whether our existing or future arrangements will be found to be compliant. Our efforts to comply with these laws may be time-consuming and expensive. Violations of these
statutes may result in substantial criminal and civil penalties and exclusion from governmental health care programs.



Our products, even if approved by the FDA or foreign regulatory agencies, may not achieve market acceptance.



If any of our products, after receiving FDA or foreign regulatory approvals,
fail to achieve market acceptance, our ability to become profitable in the future will be adversely affected. We believe that market acceptance will depend on our ability to provide acceptable evidence of safety, efficacy and cost effectiveness. If
the data from our programs do not provide this evidence, market acceptance of our products will be adversely affected.



In addition, we believe that the level of market acceptance of our products will depend in part on our ability to obtain favorable labeling claims from
regulatory authorities. Regulatory authorities have broad discretion in approving the labeling for products. Approved labeling (if any) would have a direct impact on our marketing, promotional and sales programs. Unfavorable labeling would restrict
our marketing, promotional and sales programs, which would adversely affect market acceptance of our products.



We also believe that the level of market acceptance of our products will depend in part on whether regulatory authorities impose risk management programs
on our products. Risk management programs vary widely in scope and complexity, and can include



16



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education and outreach programs, controls on the prescribing, dispensing or use of the product, and/or restricted access
systems. If any of our products are subject to risk management programs, the market acceptance of our products may be impaired.



We have no marketing or sales experience, and if we are unable to develop our own sales and marketing capability or if we are unable to enter into or
maintain collaborations with marketing partners, we may not be successful in commercializing our products.



Our successful commercialization of Ranexa, if approved, will depend on our ability to establish an effective sales and marketing organization. We
currently have no distribution capability and only limited sales and marketing capabilities. With the recent amendment to our sales and marketing services agreement with Innovex, we will now market Ranexa, if approved, directly in the United States.
In order to do this, we will have to develop our own marketing and sales force with technical expertise and with supporting distribution capability. Developing a marketing and sales force is expensive and time consuming and could delay any product
launch. We cannot be certain that we will be able to develop this capacity.



Our successful commercialization of Ranexa, if approved, will also depend on the performance of numerous third-party vendors. For example, we will rely on third-party vendors to help recruit an effective sales force,
to manufacture and distribute Ranexa, and to administer our physician sampling program. Our level of success in commercializing Ranexa will depend in part on the efforts of these third parties.



We also depend on collaborations with third parties, such as Biogen and
Fujisawa, which have established distribution systems and direct sales forces. To the extent that we enter into co-promotion or other licensing arrangements, our revenues will depend upon the efforts of third parties, over which we have little
control. For instance, we have entered into agreements under which Biogen is responsible for worldwide marketing and sales of any product that results from the Adentriprogram, and Fujisawa is responsible for marketing and sales of CVT-3146 in North America.



We are spending significant amounts of capital preparing for the potential
commercialization of Ranexa prior to FDA approval of Ranexa.



The significant amounts of capital that we are spending to provide and/or enhance infrastructure, headcount and inventory in preparation for the potential launch of Ranexa could be lost if we do not receive FDA marketing approval for
Ranexa. Our Ranexa commercialization efforts involve building our sales and marketing infrastructure, increasing our marketing communications efforts, expanding our manufacturing activities to have inventory of commercial supplies of Ranexa, and
planning for the hiring and training of a national sales force. These activities involve significant current expenditures and future commitments of capital. If the FDA does not approve Ranexa, these expenditures and commitments could be lost. In
addition, if FDA approval of Ranexa is delayed, we will incur additional commercialization expenses at a later date to prepare for a delayed launch of Ranexa. If the FDA does approve Ranexa, we expect that our operating expenses will increase
substantially.



If we are unable to compete successfully in
our market, it will harm our business.



Our ability to
compete successfully in our market will directly affect the market acceptance of our products. The pharmaceutical and biopharmaceutical industries, and the market for cardiovascular drugs in particular, are intensely competitive. If our products
receive regulatory approvals, they will often compete with well-established, proprietary and generic cardiovascular therapies that have generated substantial sales over a number of years and are widely used by health care practitioners. Even if our
products have no direct competition, the promotional efforts for our products will have to compete against the promotional efforts of other products in order to be noticed by physicians and patients. Moreover, the level of promotional effort in the
pharmaceutical and biopharmaceutical markets has increased substantially. Market acceptance of our products will be affected by the level of promotional effort that we are able to provide for our products. The level of our promotional efforts will
depend in part on our ability to recruit, train and deploy an effective sales and marketing organization. We cannot assure you that the level of promotional effort that we will be able to provide for our products will be sufficient to obtain market
acceptance of those products.



In addition, we are aware of
companies that are developing products that may compete in the same markets as our products. There may also be potentially competitive products of which we are not aware. Many of these potential competitors may have substantially greater product
development capabilities and financial, scientific, marketing and sales resources. Other companies may succeed in developing products earlier or obtaining approvals from regulatory authorities more rapidly than either we or our corporate partners
are able to achieve. Potential competitors may also develop products that are safer, more effective or have other potential advantages compared to those under development or proposed to be developed by us and our corporate partners. In addition,
research and development by others could render our technology or our products obsolete or non-competitive.



17



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Failure to obtain adequate reimbursement from government health administration authorities, private
health insurers and other organizations could materially adversely affect our future business, market acceptance of our products, results of operations and financial condition.



Our ability and the ability of our existing and future corporate partners to market and sell our products will depend
significantly on the extent to which reimbursement for the cost of our products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Third party payers and
governmental health administration authorities are increasingly attempting to limit and/or regulate the price of medical products and services, especially branded prescription drugs. Even if our products are deemed to be safe and effective by
regulatory authorities, third party payers and governmental health administration authorities may direct patients to generic products or other lower-priced therapeutic alternatives.



Significant uncertainty exists as to the reimbursement status of newly approved health care products. In addition, for sales
of our products in Europe, we will be required to seek reimbursement approvals on a country-by-country basis. We cannot be certain that any products approved for marketing will be considered cost effective, that reimbursement will be available, or
that allowed reimbursement will be adequate. In addition, payers reimbursement policies could adversely affect our or any corporate partners ability to sell our products on a profitable basis.



If we are unable to attract and retain collaborators, licensors and
licensees, the development of our products could be delayed and our future capital requirements could increase substantially.



We may not be able to retain current or attract new corporate and academic collaborators, licensors, licensees and others. Our business strategy requires
us to enter into various arrangements with these parties, and we are dependent upon the success of these parties in performing their obligations. If we fail to obtain and maintain these arrangements, the development and/or commercialization of our
products would be delayed. We may be unable to proceed with the development, manufacture or sale of products or we might have to fund development of a particular product candidate internally. If we have to fund the development and commercialization
of substantially all of our products internally, our future capital requirements will increase substantially.



The collaborative arrangements that we may enter into in the future may place responsibility on the collaborative partner for preclinical testing and
clinical trials, manufacturing and preparation and submission of applications for regulatory approval of potential pharmaceutical products. We cannot control the amount and timing of resources that our collaborative partners devote to our programs.
If a collaborative partner fails to successfully develop or commercialize any product, product launch would be delayed. In addition, our collaborators may pursue competing technologies or product candidates.



Under our collaborative arrangements, we or our collaborative partners may
also have to meet performance milestones. If we fail to meet our obligations under our collaborative arrangements, our collaborators could terminate their arrangements or we could lose our rights to the compounds under development. For example,
under our agreement with Fujisawa for CVT-3146, we are responsible for development activities and must meet development milestones in order to receive development milestone payments. Under our agreement with Biogen for Adentri, in order for us to
receive development milestone payments, Biogen must meet development milestones. Under our license agreement with Syntex for Ranexa, we are required to use commercially reasonable efforts to develop and commercialize ranolazine for angina, and have
related milestone payment obligations.



In addition,
collaborative arrangements in our industry are extremely complex, particularly with respect to intellectual property rights, financial provisions, and other provisions such as the parties respective rights with respect to decision making.
Disputes may arise in the future with respect to these issues, such as the ownership of rights to any technology developed with or by third parties. These and other possible disagreements between us and our collaborators could lead to delays in the
collaborative research, development or commercialization of product candidates. These disputes could also result in litigation or arbitration, which is time consuming, expensive and uncertain.



We expect to continue to operate at a loss and may never achieve
profitability.



We cannot be certain that we will ever
achieve and sustain profitability. Since our inception, we have been engaged in research and development activities. We have generated no product revenues. Even if we generate product revenues, we may never achieve profitability. As of September 30,
2003, we had an accumulated deficit of $394.4 million. The process of developing and commercializing our products requires significant additional research and development, preclinical testing and clinical trials, as well as regulatory approvals and
marketing and sales efforts. These activities, together with our general and administrative expenses, are expected to result in operating losses for the foreseeable future. Even if we are able to obtain marketing approvals and generate product
revenues, we may not achieve profitability.





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If we are unable to secure additional financing, we may be unable to complete our research and
development activities or successfully commercialize any products.



We may require substantial additional funding in order to complete our research and development activities and commercialize any of our products. In the past, we have financed our operations primarily through the sale of equity and debt
securities, payments from our collaborators, equipment and leasehold improvement financing and other debt financing. We have generated no product revenue and do not expect to do so until we receive marketing approval and launch one of our products,
if at all. We believe that our existing resources, projected interest income and future payments, if any, from our collaboration arrangements, will be sufficient to meet our operating and capital requirements for at least the next 24 months.
However, we may require additional funding prior to that time.



Our need for additional funding will depend on many factors, including, without limitation:



| |  |  | the amount of revenue, if any, that we are able to obtain from any approved products, and the time and costs required to achieve those revenues;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the timing, scope and results of preclinical studies and clinical trials;
| | - |  | -------------------------------------------------------------------------



| |  |  | the size and complexity of our programs;
| | - |  | ----------------------------------------



| |  |  | the time and costs involved in obtaining regulatory approvals;
| | - |  | --------------------------------------------------------------



| |  |  | the cost of launching our products;
| | - |  | -----------------------------------



| |  |  | the costs of commercializing our products, including marketing, promotional and sales costs;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | the cost of manufacturing or obtaining preclinical, clinical and commercial materials;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | our ability to establish and maintain corporate partnerships;
| | - |  | -------------------------------------------------------------



| |  |  | competing technological and market developments;
| | - |  | ------------------------------------------------



| |  |  | the costs involved in filing, prosecuting and enforcing patent claims; and
| | - |  | --------------------------------------------------------------------------



| |  |  | scientific progress in our research and development programs.
| | - |  | -------------------------------------------------------------



Additional financing may not be available on acceptable terms or at all. If we are unable to raise additional funds, we may, among other things:



| |  |  | have to delay, scale back or eliminate some or all of our research and/or development programs;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | have to delay, scale back or eliminate some or all of our commercialization activities;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | lose rights under existing licenses;
| | - |  | ------------------------------------



| |  |  | have to relinquish more of, or all of, our rights to product candidates on less favorable terms than we would otherwise seek; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | be unable to operate as a going concern.
| | - |  | ----------------------------------------



If additional funds are raised by issuing equity securities, our existing stockholders will experience dilution. There may be additional factors that
could affect our need for additional financing. Many of these factors are not within our control.



If we are unable to effectively protect our intellectual property, we may be unable to complete development of any products and we may be put at a
competitive disadvantage; and if we are involved in an intellectual property rights dispute, we may not prevail and may be subject to significant liabilities or required to license rights from a third party, or cease one or more product programs.



Our success will depend to a significant degree on our
ability to, among other things:



| |  |  | obtain patents and licenses to patent rights;
| | - |  | ---------------------------------------------



| |  |  | maintain trade secrets;
| | - |  | -----------------------



| |  |  | obtain trademarks; and
| | - |  | ----------------------



| |  |  | operate without infringing on the proprietary rights of others.
| | - |  | ---------------------------------------------------------------



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However, in general we cannot be certain that patents will issue from any of our pending or future patent
applications, that any issued patent will not be lost through an interference or opposition proceeding, reexamination request, litigation or otherwise, that any issued patent will be sufficient to protect our technology and investments, or that we
will be able to obtain any extensions of patents beyond the initial term.



Although United States patent applications are now published 18 months after their filing date, as provided by federal legislation enacted in 1999, this statutory change applies only to applications filed on or after
November 29, 2000. Applications filed in the United States prior to this date are maintained in secrecy until a patent issues. As a result, we can never be certain that others have not filed patent applications for technology covered by our pending
applications or that we were the first to invent the technology. There may be third party patents, patent applications, trademarks and other intellectual property relevant to our compounds, products, services and technology which are not known to us
and that block or compete with our compounds, products, services or technology.



Competitors may have filed applications for, or may have received or in the future may receive, patents, trademarks and/or other proprietary rights relating to compounds, products, services or technology that block or
compete with ours. We may have to participate in interference proceedings declared by the Patent and Trademark Office. These proceedings determine the priority of invention and, thus, the right to a patent for the technology in the United States. We
may also become involved in opposition proceedings in connection with foreign patent filings. In addition, litigation may be necessary to enforce any patents or trademarks issued to us, or to determine the scope and validity of the proprietary
rights of third parties. Litigation, interference and opposition proceedings, even if they are successful, are expensive, time-consuming and risky to pursue, and we could use a substantial amount of our limited financial resources in either case.



Just as it is important to protect our proprietary rights, we
also must not infringe patents or trademarks of others that might cover our compounds, products, services or technology. If third parties own or have proprietary rights to technology or other intellectual property that we need in our product
development and commercialization efforts, we will need to obtain licenses to those rights. We cannot assure you that we will be able to obtain such licenses on economically reasonable terms. If we fail to obtain any necessary licenses, we may be
unable to complete product development and commercialization.



We also rely on proprietary technology including trade secrets to develop and maintain our competitive position. Although we seek to protect all of our proprietary technology, in part by confidentiality agreements with employees,
consultants, collaborators, advisors and corporate partners, these agreements may be breached. We cannot assure you that the parties to these agreements will not breach them or that these agreements will provide meaningful protection or adequate
remedies in the event of unauthorized use or disclosure of our proprietary technology. We may not have adequate remedies to protect our proprietary technology including trade secrets. As a result, third parties may gain access to our trade secrets
and other proprietary technology, or our trade secrets and other proprietary technology may become public. In addition, it is possible that our proprietary technology will otherwise become known or be discovered independently by our competitors.



In addition, we may also become subject to claims that we are
using trade secrets of others without having the right to do so. Such claims can result in litigation, which can be expensive, time-consuming and risky to defend.



Litigation and disputes related to intellectual property are widespread in the biopharmaceutical industry. Although no third
party has asserted a claim of infringement against us, we cannot assure you that third parties will not assert patent or other intellectual property infringement claims against us with respect to our compounds, products, services, technology or
other matters. If they do, we may not prevail and, as a result, may be subject to significant liabilities to third parties, may be required to license the disputed rights from the third parties, or may be required to cease using the technology or
developing or selling the compounds or products. We may not be able to obtain any necessary licenses on economically reasonable terms, if at all. Any intellectual property-related claims against us, with or without merit, as well as claims initiated
by us against third parties, can be time-consuming and expensive to defend or prosecute.



We have no manufacturing experience and will depend on third parties to manufacture our products.



We do not currently operate manufacturing facilities for clinical or commercial production of our products under development. We have no experience in
manufacturing commercial quantities of an approved product, and we currently lack the resources or capability to manufacture any of our products on a clinical or commercial scale. As a result, we are dependent on corporate partners, licensees or
other third parties for the manufacturing of clinical and commercial scale quantities of all of our products.



For example, we have entered into several agreements with third party manufacturers relating to Ranexa, including for commercial scale or scale-up of bulk
active pharmaceutical ingredient, tableting, packaging and supply of a raw material component



20



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of the product. We currently rely on a single supplier at each step in the production cycle of Ranexa. The commercial
launch of Ranexa is thus dependent on these third party arrangements, and could be affected by any delays or difficulties in performance on the part of any of our third party manufacturers for Ranexa. In addition, because we have used different
manufacturers for elements of the Ranexa supply chain in different clinical trials and for potential commercial supply, in order to obtain marketing approval from any regulatory authorities (including the FDA) we will be required to demonstrate to
the regulatory authorities satisfaction the bioequivalence or therapeutic equivalence of the multiple sources of Ranexa used in our clinical trials to the product to be commercially supplied. An unfavorable interpretation by any regulatory
authority could delay or prevent regulatory approval for the product.



Furthermore, we and our third party manufacturers, laboratories and clinical testing sites must pass preapproval inspections of facilities by the FDA and corresponding foreign regulatory authorities before obtaining marketing approvals. In
addition, manufacturing facilities are subject to inspection by the FDA and other domestic and foreign regulatory authorities. We cannot guarantee that any such inspections will not result in compliance issues that could prevent or delay marketing
approval, or require us to expend money or other resources to correct. In addition, drug product manufacturing facilities in California must be licensed by the State of California, and other states may have comparable requirements. We cannot assure
you that we will be able to obtain such licenses.



Our
business depends on certain key personnel, the loss of whom could weaken our management team, and on attracting and retaining qualified personnel.



The growth of our business and our success depends in large part on our ability to attract and retain key management, research and development, sales and
marketing and other operating and administrative personnel. In particular, the successful and timely launch of Ranexa will depend in large part on our ability to recruit and train an effective sales and marketing organization in a timely fashion. We
cannot assure you that we will be able to attract and retain the qualified personnel or develop the expertise needed to launch Ranexa or to continue to advance our other research and development programs. Our ability to attract and retain key
employees in a competitive recruiting environment is dependent on our ability to offer competitive compensation packages, which typically include stock option grants. Current and proposed changes in laws, regulations, corporate governance standards,
listing requirements and accounting treatments regarding stock options and other common compensation features, such as loans, may limit or impair our ability to attract and retain key personnel. Although we have entered into executive severance
agreements and have a severance plan as well, we have not entered into any employment agreements with key executives. The loss of the services of one or more members of these groups or the inability to attract and retain additional personnel and
develop expertise as needed could limit our ability to develop and commercialize our existing drugs and future drug candidates. Such persons are in high demand and often receive competing employment offers.



Our failure to manage our rapid growth could harm our business.



We have experienced rapid growth and expect to continue
to expand our operations over time. As we prepare for the potential commercialization of Ranexa, continue to conduct clinical trials for our product candidates and expand our drug discovery efforts, we have added personnel in many areas, including
operations, sales, marketing, regulatory, clinical, finance and information systems. For example, we expect significant growth in our sales and marketing organization in preparation for the launch of Ranexa. We may not manage this growth
effectively, which would harm our business and cause us to incur higher operating costs. If rapid growth continues, it may strain our operational, managerial and financial resources.



If there is an adverse outcome in our pending litigation, such as the securities class action litigation that has been
filed against us, our business may be harmed.



We and
certain of our officers and directors are named as defendants in a purported securities class action lawsuit filed in the United States District Court for the Northern District of California captioned David Crossen, et al. v. CV Therapeutics,
Inc., et al. The lawsuit is brought on behalf of a purported class of purchasers of our securities, and seeks unspecified damages. As is typical in this type of litigation, several other purported securities class action lawsuits containing
substantially similar allegations have since been filed against the defendants, and we expect that additional lawsuits containing substantially similar allegations may be filed in the near future. We expect that all of the substantially similar
securities class actions will be consolidated into a single action. In addition, the Companys directors and certain of its officers have been named as defendants in a derivative lawsuit in California Superior Court, Santa Clara County,
captioned Kangos v. Lange, et al., which names the Company as a nominal defendant. The plaintiff in this action is a Company stockholder who seeks to bring derivative claims on behalf of the Company against the defendants. The lawsuit alleges
breaches of fiduciary duty and related claims based on purportedly misleading statements concerning our NDA for Ranexa.



As with any litigation proceeding, we cannot predict with certainty the eventual outcome of pending litigation. Furthermore, we may have to incur
substantial expenses in connection with these lawsuits. In the event of an adverse outcome, our business could be harmed.



21



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Our operations involve hazardous materials, which could subject us to significant liability.



Our research and development and manufacturing activities
involve the controlled use of hazardous materials, including hazardous chemicals, radioactive materials and pathogens, and the generation of waste products. Accordingly, we are subject to federal, state and local laws governing the use, handling and
disposal of these materials. We may have to incur significant costs to comply with additional environmental and health and safety regulations in the future. Although we believe that our safety procedures for handling and disposing of hazardous
materials comply in all material respects with regulatory requirements, we cannot eliminate the risk of accidental contamination or injury from these materials. In the event of an accident or environmental discharge, we may be held liable for any
resulting damages, which may exceed our financial resources and may materially adversely affect our business, financial condition and results of operations. Although we believe that we are in compliance in all material respects with applicable
environmental laws and regulations, there can be no assurance that we will not be required to incur significant costs to comply with environmental laws and regulations in the future. There can also be no assurance that our operations, business or
assets will not be materially adversely affected by current or future environmental laws or regulations.



We may be subject to product liability claims if our products harm people, and we have only limited product liability insurance.



The manufacture and sale of human drugs and other therapeutic products
involve an inherent risk of product liability claims and associated adverse publicity. We currently have only limited product liability insurance for clinical trials and only limited commercial product liability insurance. We do not know if we will
be able to maintain existing or obtain additional product liability insurance on acceptable terms or with adequate coverage against potential liabilities. This type of insurance is expensive and may not be available on acceptable terms or at all. If
we are unable to obtain or maintain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims, we may be unable to commercialize our products. A successful product liability claim brought
against us in excess of our insurance coverage, if any, may require us to pay substantial amounts. This could adversely affect our cash position and results of operations.



Our insurance policies are expensive and protect us only from some business risks, which will leave us exposed to
significant, uninsured liabilities.



We do not carry
insurance for all categories of risk that our business may encounter. For example, we do not carry earthquake insurance. In the event of a major earthquake in our region, our business could suffer significant and uninsured damage and loss. In
addition, we do not know if we will be able to maintain existing directors and officers insurance with adequate levels of coverage. The premiums for our directors and officers insurance policy have increased significantly,
and this type of insurance may not be available on acceptable terms or at all. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations.



The market price of our stock will continue to be highly volatile, and the
value of an investment in our common stock may decline.



Within the last 12 months, our common stock has traded between $15.73 and $41.50. The market price of the shares of our common stock has been and may continue to be highly volatile. Announcements and other events may have a significant
impact on the market price of our common stock. For example, on October 23, 2003 we announced that the Cardiovascular and Renal Drugs Advisory Committee is scheduled to publicly review Ranexa on December 9, 2003. We understand, based on discussions
with the FDA, that the purpose of the advisory committee meeting is to determine whether the committee considers the current NDA sufficient to support approval of Ranexa. On October 30, 2003 we announced that we had received an approvable letter
from the FDA for our NDA for Ranexa for the treatment of chronic angina. In this letter, the FDA indicated that there is evidence that Ranexa is an effective anti-anginal, and that additional clinical information is needed prior to approval. We
understand that the FDA may be prepared to reevaluate this requirement based on the results of the advisory committee review. The FDA is not required to follow the recommendations of the advisory committee. There was significant volatility in the
market price of our common stock after both our October 23, 2003 and October 30, 2003 announcements.



We anticipate that there may be substantial volatility in the market price of our common stock before and after the December 9, 2003 advisory committee
meeting. Typically the day before an advisory committee meeting, briefing packages submitted to the advisory committee from the sponsor company and from the FDA are made public. The release of this information often causes substantial volatility as
market participants react to the information in the briefing packages. Furthermore, after the meeting is completed, we expect further volatility in the market price of our common stock.



In addition, it is not uncommon for trading in a companys common stock to be halted during the advisory committee
review of a companys important product until results of the committee review are made widely publicly available. In the event of a trading halt, there may be a substantial gap in the closing price on the day before the committee meeting and
when the market reopens after the trading halt.



Other
announcements and events that can impact the market price of the shares of common stock of our company include, without limitation:



| |  |  | results of our clinical trials and preclinical studies, or those of our corporate partners or our competitors;
| | - |  | --------------------------------------------------------------------------------------------------------------



22



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| |  |  | negative regulatory actions with respect to our new products or regulatory approvals with respect to our competitors new products;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | achievement of other research or development milestones, such as completion of enrollment of a clinical trial or making a regulatory filing;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our operating results;
| | - |  | ----------------------



| |  |  | developments in our relationships with corporate partners;
| | - |  | ----------------------------------------------------------



| |  |  | developments affecting our corporate partners;
| | - |  | ----------------------------------------------



| |  |  | government regulations, reimbursement changes and governmental investigations or audits related to us or to our products;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in regulatory policy or interpretation;
| | - |  | -----------------------------------------------



| |  |  | developments related to our patents or other proprietary rights or those of our competitors;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | changes in the ratings of our securities by securities analysts;
| | - |  | ----------------------------------------------------------------



| |  |  | operating results or other developments below the expectations of public market analysts and investors;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | market conditions for biopharmaceutical or biotechnology stocks in general; and
| | - |  | -------------------------------------------------------------------------------



| |  |  | general economic and market conditions.
| | - |  | ---------------------------------------



In addition, if we fail to reach an important research, development or commercialization milestone or result by a publicly expected deadline, even if by
only a small margin, there could be a significant impact on the market price of our common stock. For example, in January 2001, we announced that additional patients would need to be enrolled in our Phase III CARISA trial of Ranexa to meet a
protocol requirement, thereby delaying completion of enrollment of the trial by a number of months. The price of our common stock decreased significantly after this announcement.



The stock market has from time to time experienced extreme price and volume fluctuations, which have particularly affected
the market prices for emerging biotechnology and biopharmaceutical companies, and which have often been unrelated to their operating performance. These broad market fluctuations may adversely affect the market price of our common stock. In addition,
sales of substantial amounts of our common stock in the public market could lower the market price of our common stock.



Provisions of Delaware law and in our charter, by-laws and our rights plan may prevent or frustrate any attempt by our stockholders to replace or
remove our current management and may make the acquisition of our company by another company more difficult.



In February 1999, our board of directors adopted a stockholder rights plan, which was amended in July 2000 to lower the triggering ownership percentage
and increase the exercise price. In addition, in February 1999, our board of directors authorized executive severance benefit agreements for certain executives in the event of a change of control. We entered into these severance agreements with
these executives. Subsequently, in November 2002 the board approved additional as well as amended executive severance agreements and a severance plan. Our rights plan and these severance arrangements may delay or prevent a change in our current
management team and may render more difficult an unsolicited merger or tender offer.



The following provisions of our Amended and Restated Certificate of Incorporation, as amended, and our by-laws, may have the effects of delaying or preventing a change in our current management and making the
acquisition of our company by a third party more difficult: our board of directors is divided into three classes with approximately one third of the directors to be elected each year, necessitating the successful completion of two proxy contests in
order for a change in control of the board to be effected; any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of the stockholders and may not be effected by a consent in
writing; advance written notice is required for a stockholder to nominate a person for election to the board of directors and for a stockholder to present a proposal at any stockholder meeting; directors may be removed only for cause by a vote of a
majority of the stockholders and vacancies on the board of directors may only be filled by a majority of the directors in office. In addition, our board of directors has the authority to issue up to 5,000,000 shares of preferred stock without
stockholders approval, which also could make it more difficult for stockholders to replace or remove our current management and for another company to acquire us. We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, an anti-takeover law, which could delay a merger, tender offer or proxy contest or make a similar transaction more difficult. In general, the



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statute prohibits a publicly held Delaware corporation from engaging in a business combination with an interested
stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.



Our indebtedness and debt service obligations may adversely affect our
cash flow, cash position and stock price.



In March 2000,
we sold $196.3 million aggregate principal amount of 4.75% convertible subordinated notes due in March 2007. Our annual debt service obligation on these notes is approximately $9.3 million per year in interest payments. In June 2003, we sold $100.0
million aggregate principal amount of 2.0% senior subordinated convertible debentures due in May 2023. The holders of the debentures may require us to purchase all or a portion of their debentures on May 16, 2010, May 16, 2013 and May 16, 2018, in
each case at a price equal to the principal amount of the debentures to be purchased, plus accrued and unpaid interest, if any, to the purchase date. Our annual debt service obligation on these debentures is approximately $2.0 million per year in
interest payments. As of September 30, 2003, we have approximately $296.3 million in long term debt. We may add additional lease lines to finance capital expenditures and/or may obtain additional long-term debt and lines of credit. If we issue other
debt securities in the future, our debt service obligations will increase further.



We intend to fulfill our debt service obligations from our existing cash and investments. In the future, if we are unable to generate cash or raise additional cash through financings sufficient to meet these
obligations and need to use existing cash or liquidate investments in order to fund these obligations, we may have to delay or curtail research, development and commercialization programs.



The notes and the debentures are convertible, at the option of the holders,
into shares of our common stock at initial conversion rates of 15.6642 shares of common stock per $1,000 principal amount of notes and 21.0172 shares of common stock per $1,000 principal amounts of debentures, respectively, each subject to
adjustment in certain circumstances. If the notes are all converted at their initial conversion rate, we would be required to issue approximately 3,074,100 shares of our common stock. If the debentures are all converted at their initial conversion
rate, we would be required to issue approximately 2,101,720 shares of our common stock. We have reserved shares of our authorized common stock for issuance upon conversion of the notes and the debentures. If either or both of the notes and the
debentures are converted into shares of our common stock, our existing stockholders will experience immediate dilution and our common stock price may be subject to significant downward pressure. If either or both of the notes and the debentures are
not converted into shares of our common stock before their respective maturity dates, we will have to pay the holders of such notes or debentures the full aggregate principal amount of the notes or debentures then outstanding. Any such payment would
have an adverse effect on our cash position. Alternatively, we might need to try to modify the terms of the notes and/or the debentures in ways that could be dilutive to our stockholders.



Our indebtedness could have significant additional negative consequences, including, without limitation:



| |  |  | requiring the dedication of a substantial portion of our expected cash flow to service our indebtedness, thereby reducing the amount of our expected cash flow available for other
purposes, including funding our research and development programs and other capital expenditures;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increasing our vulnerability to general adverse economic conditions;
| | - |  | --------------------------------------------------------------------



| |  |  | limiting our ability to obtain additional financing; and
| | - |  | --------------------------------------------------------



| |  |  | placing us at a possible competitive disadvantage to less leveraged competitors and competitors that have better access to capital resources.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



If shares of common stock are sold in our equity line of credit
arrangement, existing common stockholders will experience immediate dilution and, as a result, our stock price may go down.



We have entered into a common stock purchase agreement with Acqua Wellington, pursuant to which we may sell to Acqua Wellington up to $100.0 million of
our common stock, or the number of shares which is one less than twenty percent (20%) of the issued and outstanding shares of our common stock as of July 3, 2003, whichever occurs first, at a discount of 3.8% to 5.8%, to be determined based on our
market capitalization at the start of the draw-down period, unless we agree with Acqua Wellington to a different discount. Upon each sale of our common stock to Acqua Wellington under the purchase agreement, we have also agreed to pay Alder Creek
Capital, L.L.C., Member NASD/SIPC, a placement fee equal to one fifth of one percent of the aggregate dollar amount of common stock purchased by Acqua Wellington. As a result, our existing common stockholders will experience immediate dilution upon
the purchase of any shares of our common stock by Acqua Wellington. The purchase agreement with Acqua Wellington provides that, at our request, Acqua Wellington will purchase a certain dollar amount of shares, with the exact number of shares to be
determined based on the per share market price of our common stock over the draw-down period for said purchase. As a result, if the



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per share market price of our common stock declines over the draw-down period, Acqua Wellington will receive a greater
number of shares for its purchase price, thereby resulting in further dilution to our stockholders and potential downward pressure of the price of our stock.



|Item 3. |  | Market Risk
|------- |  | -----------



Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio and our long-term debt. We do not use
derivative financial instruments in our investment portfolio. We place our investments with high quality issuers and, by policy, limit the amount of credit exposure to any one issuer. We are averse to principal loss and strive to ensure the safety
and preservation of our invested funds by limiting default, market and reinvestment risk. We classify our cash equivalents and marketable securities as fixed-rate if the rate of return on such instruments remains fixed over their term.
These fixed-rate investments include U.S. government securities, commercial paper, asset backed securities, corporate bonds, and foreign bonds. Fixed-rate securities may have their fair market value adversely affected due to a rise in
interest rates and we may suffer losses in principal if forced to sell securities that have declined in market value due to a change in interest rates. We classify our cash equivalents and marketable securities as variable-rate if the
rate of return on such investments varies based on the change in a predetermined index or set of indices during their term.



Our long-term debt includes $196.3 million of 4.75% convertible subordinated notes due March 7, 2007. Interest on the notes is fixed and payable
semi-annually on March 7 and September 7 each year. The notes are convertible into shares of our common stock at any time prior to maturity, unless previously redeemed or repurchased, subject to adjustment in certain events. Our long-term debt also
includes $100.0 million of 2.0% senior subordinated convertible debentures due May 16, 2023. Interest on the debentures is fixed and payable semi-annually on May 16 and November 16 each year. The debentures are convertible into shares of our common
stock during certain periods prior to maturity, unless previously redeemed or repurchased, subject to adjustment in certain events. The market value of our long-term-debt will fluctuate with movements of interest rates and with movements in the
value of our common stock.



|Item 4. |  | Controls and Procedures
|------- |  | -----------------------



We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act of
1934 reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, and that such information is accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and utilized, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating disclosure controls and procedures.



As of September 30, 2003, the end of the quarter covered by
this report, our Chief Executive Officer and our Chief Financial Officer, with the participation of our management, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the
foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level. There has been no change in our internal controls over financial reporting
during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.



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PART II. OTHER INFORMATION



|Item 1. |  | Legal Proceedings
|------- |  | -----------------



In August 2003, the Company and certain of its officers and directors were named as defendants in a purported securities class action lawsuit filed in the
United States District Court for the Northern District of California captioned David Crossen, et al. v. CV Therapeutics, Inc., et al. The lawsuit is brought on behalf of a purported class of purchasers of our securities, and seeks unspecified
damages. As is typical in this type of litigation, several other purported securities class action lawsuits containing substantially similar allegations have since been filed against the defendants, and we expect that additional lawsuits containing
substantially similar allegations may be filed in the near future. We expect that all of the substantially similar securities class actions will be consolidated into a single action.



In August 2003, the Companys directors and certain of its officers were named as defendants in a derivative lawsuit.
This action, which is captioned Kangos v. Lange, et al., was filed in California Superior Court, Santa Clara County, and names the Company as a nominal defendant. The plaintiff in this action is a Company stockholder who seeks to bring
derivative claims on behalf of the Company against the defendants. The lawsuit alleges breaches of fiduciary duty and related claims based on purportedly misleading statements concerning the Companys NDA for Ranexa. At the appropriate time,
the Company expects to file a motion to dismiss this action due to the plaintiffs unexcused failure to make a demand on the Company before filing the action.



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



| | (a) |  | Exhibits required by Item 601 of Regulation S-K
| | --- |  | -----------------------------------------------



|ExhibitNumber |  |                                                                                                                                                 
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|31.1          |  | Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|              | 
|31.2          |  | Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|              | 
|32.1          |  | Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|              | 
|32.2          |  | Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------



CV Therapeutics filed current reports on Form 8-K with the Commission:



| |  |  | On July 3, 2003 with respect to the Company entering into an equity line of credit arrangement with Acqua Wellington North American Equities Fund, Ltd.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On July 8, 2003 with respect to a press release dated July 7, 2003 announcing that the FDA informed the Company that its New Drug Application for Ranexa (ranolazine) for the
potential treatment of chronic angina was scheduled for review by the FDA Cardiovascular and Renal Drugs Advisory Committee during its September 15-16, 2003 meeting.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On July 11, 2003 with respect to a press release dated July 10, 2003 announcing that the Company and Quintiles Transnational Corp. modified their commercialization agreement for
Ranexa.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On July 17, 2003 with respect to a press release dated July 17, 2003 announcing certain financial results for the quarter ended June 30, 2003.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On August 4, 2003 with respect to a press release dated August 1, 2003 announcing that the Company reached agreement with the FDA to cancel the review of Ranexa (ranolazine) by the
Cardiovascular and Renal Drugs Advisory Committee in September 2003.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On August 11, 2003 with respect to a press release dated August 8, 2003 announcing that the Company, and certain of its officers and directors, have been named as defendants in a
purported shareholder class action lawsuit alleging violations of federal securities laws.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On September 17, 2003 with respect to the sale of 587,489 shares of the Companys common stock to Acqua Wellington North American Equities Fund, Ltd.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | On October 17, 2003 with respect to a press release dated October 17, 2003 announcing certain financial results for the quarter ended September 30, 2003.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On October 23, 2003 with respect to a press release dated October 23, 2003 announcing that the FDA announced on October 23, 2003 that the Cardiovascular and Renal Drugs Advisory
Committee is scheduled to review Ranexa (ranolazine) for the treatment of chronic angina on December 9, 2003.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On October 29, 2003 with respect to a press release dated October 29, 2003 announcing that the Company has initiated a pivotal phase III clinical trial of CVT-3146.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On October 31, 2003 with respect to a press release dated October 30, 2003 announcing that the Company received an approvable letter from the FDA for the Companys NDA for
Ranexa.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) 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.



|                        |  |  |  | CV THERAPEUTICS, INC.
|----------------------- |  |  |  | ---------------------
|                        |  |  | 
|Date: November 12, 2003 |  |  |  | By:                  
|                        |  |  |  |                      



|                        |  |  | 
|----------------------- |  |  | 
|Date: November 12, 2003 |  |  | 
|                        |  |  | 





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