UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q


(X)    QUARTERLY  REPORT  PURSUANT  TO  SECTION 13 OR 15(d) OF THE
       SECURITIES  EXCHANGE ACT OF 1934 FOR THE  QUARTERLY  PERIOD
       ENDED MARCH 31, 1997

                                OR

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


       Commission File Number: 0-21022


                   SHAMAN PHARMACEUTICALS, INC.
      (Exact name of registrant as specified in its charter)


                     Delaware                                     94-3095806
(State or other jurisdiction of incorporation of organization) (I.R.S. Employer
                                                          Identification Number)

213 East Grand Avenue, South San Francisco, California             94080
         (Address of principal executive offices)                (ZIP Code)


Registrant's telephone number, including area code:    415-952-7070


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

                      Yes               X                No

Number of shares of Common Stock, $.001 par value, outstanding as of April 30, 
1997: 17,526,310

                              
<PAGE>



                    SHAMAN PHARMACEUTICALS, INC.

                         INDEX FOR FORM 10-Q

                           March 31, 1997

<TABLE>
<CAPTION>

                                                                          PAGE
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                                                         NUMBER

PART I                FINANCIAL INFORMATION

Item 1.               Financial Statements and Notes

                      Condensed  Balance Sheets as of March 31, 1997 and   3
                      December 31, 1996

                      Condensed Statements of Operations for the           4
                      three months ended March 31, 1997 and March
                      31, 1996

                      Condensed Statements of Cash Flows for the           5
                      three months ended March 31, 1997 and March
                      31, 1996

                      Notes to Condensed Financial Statements              6

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


PART II               OTHER INFORMATION

Item 1.               Legal Proceedings                                   13

Item 2.               Changes in Securities                               13

Item 3.               Defaults in Senior Securities                       13

Item 4.               Submission  of Matters  to a Vote of  Security      13
                      Holders

Item 5.               Other Information                                   13

Item 6.               Exhibits and Reports on Form 8-K                    13


SIGNATURES                                                                14      
  
                                 2.
</TABLE>



<PAGE>


PART I   FINANCIAL INFORMATION

      Item 1.  Financial Statements and Notes

<TABLE>
<CAPTION>

                          SHAMAN PHARMACEUTICALS, INC.
                            CONDENSED BALANCE SHEETS

<S>                                                     <C>                <C>
                                                    March 31,      December 31,
                                                      1997              1996
                                                   -----------     ------------
                                                   (Unaudited)        (Note)
   
   ASSETS

   Current assets: 
     Cash and cash equivalents                     $ 16,012,857    $ 16,051,251
     Short-term investments                           1,480,015         481,677
     Prepaid expenses and other current assets          819,242         938,872
                                                   ------------    ------------
                                            
                                                                   
Total current assets                                 18,312,114      17,471,800
                                                    -----------    ------------
                                                                   
Property and equipment, net                           4,511,667       4,776,925
                                                   
                                                                   
Other assets                                            128,080         128,080
                                                   ------------    ------------
                                                 
Total assets                                       $ 22,951,861    $ 22,376,805
                                                   ============    ============
                                                   

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable and othe accrued expenses       $ 1,490,843     $ 1,445,616      
   Accrued clinical trial costs                       1,046,625       1,233,014
   Accrued professional fees                            654,740         689,216
   Accrued compensation                                 316,435         332,738
   Advances - contract research                       1,008,605       1,883,605
   Current installments of long-term obligations      2,210,109       2,246,795
                                                   ------------    ------------                                               
Total current liabilities                             6,727,357       7,830,984

Long-term obligations, excluding                      2,060,923       2,568,931
current installments

Stockholders' equity:
   Series A preferred stock                                 400             400
   Common stock                                          15,921          13,921
   Additional paid-in capital                       103,117,239      94,604,455
   Deferred compensation and other adjustments         (366,594)        (20,250)
   Accumulated deficit                              (88,603,385)    (82,621,636)
                                                   ------------    ------------                                                
Total stockholders' equity                           14,163,581      11,976,890
                                                   ------------    ------------

Total liabilities and stockholders'equity          $ 22,951,861    $ 22,376,805
                                                   ============    ============
                                                                                   
</TABLE>

   NOTE:  The balance  sheet at  December  31,  1996 has been  derived  from the
   audited  financial  statements  at that date but does not  include all of the
   information  and  footnotes   required  by  generally   accepted   accounting
   principles for complete financial statements.

   See Notes to condensed financial statements.


                                   3.
<PAGE>





                          SHAMAN PHARMACEUTICALS, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                   Three Months Ended March 31,
                                                -------------------------------

                                                     1997              1996
                                                 ------------      ------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Revenue from collaborative agreements               $  875,000       $  500,000

Operating expenses:
  Research and development                           6,015,368        4,798,371
  General and administrative                           991,099          868,203
                                                    ----------       ----------
Total operating expenses                             7,006,467        5,666,574
                                                    ----------       ----------
Loss from operation                                 (6,131,467)      (5,166,574)

Other income (expense):

  Interest income                                      251,112          318,104
  Interest expense                                    (101,394)        (162,265)
                                                    ----------       ----------
Net loss                                          $ (5,981,749)    $ (5,010,735)
                                                   ===========      ===========
                                                 
Net loss per share                                       (0.39)           (0.38)
                                                  ============     ============
                                                                               
Shares used in calculation of                       15,455,000       13,334,000
   net loss per shar                              ============     ============
                                        
</TABLE>




See Notes to condensed financial statements.



                                   4.
<PAGE>


<TABLE>
<CAPTION>

                          SHAMAN PHARMACEUTICALS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents
                                   (Unaudited)


                                                  Three Months Ended March 31,
                                               --------------------------------

<S>                                                 <C>                <C> 
                                                    1997               1996
                                               -------------      -------------

Operating activities:

Net loss                                           $ (5,981,749)   $ (5,010,735)

Adjustments to reconcile net loss to net cash  
   used in operating activities:

    Depreciation and amortization                       557,663         656,589

Changes in operating assets and liabilities:

    Prepaid expenses, other current assets
    and other assets                                    119,630         115,687

    Accounts payable, accrued expenses and
    contract research advances                       (1,066,941)       (652,303)
                                                   ------------    ------------
Net cash used in operating activities                (6,371,397)     (4,890,762)
                                                   ------------    ------------

Investing activities:

  Purchases of short-term investments                (1,024,373)     (6,388,869)

  Maturities of available-for-sale investments               --      10,333,314

  Capital expenditures                                 (210,057)       (408,793)
                                                   ------------    ------------
Net cash provided by investing activities            (1,234,430)      3,535,652
                                                   ------------    ------------

Financing activities:

  Proceeds from issuance of common stock              8,112,127         109,544

  Proceeds from long-term obligations                        --         600,000

  Principal payments on long-term obligations          (544,694)       (185,985)
                                                   ------------    ------------
Net cash provided by financing activities             7,567,433         523,559
                                                   ------------    ------------

Net decrease in cash and cash equivalents               (38,394)       (831,551)

Cash and cash equivalents at beginning of period     16,051,251       9,210,123
                                                   ------------    ------------
Cash and cash equivalents at end of period         $ 16,012,857     $ 8,378,572
                                                   ============    ============


</TABLE>




See Notes to condensed financial statements.




                                   5.
<PAGE>





                          SHAMAN PHARMACEUTICALS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                                 March 31, 1997
                                   (Unaudited)

1.    Basis of Presentation

      Shaman  is a  leader  in  the  identification  and  development  of  novel
pharmaceutical  products  for  the  treatment  of  human  diseases  through  the
isolation and  optimization of active  compounds found in tropical  plants.  The
Company has three compounds in clinical development: Provir, an oral product for
the treatment of watery diarrhea;  Virend, a topical antiviral for the treatment
of herpes;  and  nikkomycin Z, an oral  antifungal  for the treatment of endemic
mycoses.  Shaman has  collaborations  for the  development of its diabetes drugs
with Lipha s.a., a  wholly-owned  subsidiary of Merck KGaA,  Darmstadt,  Germany
("Lipha/Merck"), and with Ono Pharmaceutical Co., Ltd. ("Ono") of Osaka, Japan.

      The  accompanying  unaudited  condensed  financial  statements  have  been
prepared in accordance with generally accepted accounting principles for interim
financial  information and in accordance with the  instructions to Form 10-Q and
Rule  10-01 of  Regulation  S-X.  Accordingly,  they do not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting only of normal  recurring  adjustments)  considered  necessary for a
fair presentation have been included.  The results of operations for the interim
periods shown herein are not necessarily indicative of operating results for the
entire year.

      This  unaudited  financial  data  should be read in  conjunction  with the
audited financial  statements and notes thereto included in the Company's Annual
Report on Form 10-K/A,  for the fiscal year ended December 31, 1996,  filed with
the Securities and Exchange Commission on March 13, 1997.

2.    Common Stock Equity Financing

      In January  1997,  the Company  sold  2,000,000  shares of Common Stock at
$4.50 per share in a registered  direct  public  offering for gross  proceeds of
$9.0 million. The net proceeds of approximately $8.11 million from this offering
will be used for continued  research and clinical  development  of the Company's
existing product candidates.

3.    Loss per Share

     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128,  Earnings  per Share,  which is required to be adopted on December  31,
1997. Under the new requirements for calculating primary earnings per share, the
dilutive  effect  of  stock  options  will be  excluded.  The  Company  does not
anticipate any material


                                   6.
<PAGE>


impact on the  calculated  loss per share because stock options and warrants are
currently excluded from the computation as their effect is antidilutive.

4.    Subsequent Event

      Equity Financing

      In April 1997, the Company sold 1,600,000  shares of Common Stock at $4.97
per  share in a  registered  direct  public  offering,  marketed  solely  by the
Company,  which yielded gross proceeds of $7.95 million.  The offering price was
based on a 20-day volume weighted  average closing sale price of Shaman's Common
Stock. The net proceeds of  approximately  $7.75 million from this offering will
be used for the  continued  research and clinical  development  of the Company's
existing  product  candidates.  Proceeds from this offering are not reflected in
the March 31, 1997 cash balance.



                                   7.
<PAGE>



                          SHAMAN PHARMACEUTICALS, INC.

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

Overview

      Shaman  is a  leader  in  the  identification  and  development  of  novel
pharmaceutical  products  for  the  treatment  of  human  diseases  through  the
isolation and  optimization of active  compounds found in tropical  plants.  The
Company has three compounds in clinical development: Provir, an oral product for
the treatment of watery diarrhea;  Virend, a topical antiviral for the treatment
of herpes;  and  nikkomycin Z, an oral  antifungal  for the treatment of endemic
mycoses.  Shaman has  collaborations  for the  development of its diabetes drugs
with Lipha s.a., a  wholly-owned  subsidiary of Merck KGaA,  Darmstadt,  Germany
("Lipha/Merck"), and with Ono Pharmaceutical Co., Ltd. ("Ono") of Osaka, Japan.

      The Company began  operations in March 1990. To date,  Shaman has not sold
any  products  and does not  anticipate  receiving  product  revenue in the near
future. The Company's  accumulated  deficit at March 31, 1997, was approximately
$88.6 million.  Shaman expects to continue to incur  substantial  and increasing
losses over the next several years,  due primarily to the expense of preclinical
studies,  clinical trials and its ongoing research program.  The Company expects
that losses will  fluctuate  from quarter to quarter and that such  fluctuations
could  be  substantial.  Shaman  has  financed  its  research,  development  and
administrative  activities  through  various  private  placements  of its equity
securities,  an initial  public  offering  of Common  Stock in January  1993,  a
follow-on  offering in December  1993, a registered  direct  public  offering in
January 1997, a registered  direct public offering in April 1997,  collaborative
agreements with pharmaceutical  companies and, to a lesser extent, through loans
and equipment and leasehold improvement financings.

Results of Operations for the Quarters Ended March 31, 1997 and 1996

      The Company recorded  collaborative  revenues of $875,000 and $500,000 for
the  quarters  ended March 31,  1997 and 1996,  respectively.  Revenues  for the
three-month  period ended March 31, 1997 resulted  from the  Company's  ongoing
research funding from Ono and research funding from Shaman's  collaboration with
Lipha/Merck.  Revenues for the three-month  period ended March 31, 1996 resulted
solely  from the  Company's  ongoing  research  funding  from Ono.  The Company
expects that revenues from  collaborative  agreements will continue to fluctuate
in the future as development of its various compounds  proceeds and new products
are partnered for development and commercialization.

      The Company incurred research and development expenses of $6.0 million and
$4.8 million for the quarters ended March 31, 1997 and 1996, respectively.  This
increase  is  primarily  attributable  to the  Company's  increased  spending on
Provir,  partially offset by decreased  funding of the development of nikkomycin
Z. Research and development  expenses are likely to increase in 1997 as products
continue  through  development  while the Company  maintains an active  diabetes
research program.


                                   8.
<PAGE>



      General and  administrative  expenses  were  $991,000 and $868,000 for the
quarters ended March 31, 1997 and 1996, respectively. This increase is primarily
attributable  to costs  associated  with  adjustment in  compensation as well as
increased legal fees due to the Company's  financing  activities.  The Company's
expanded   research  and  clinical   activities  are  not  expected  to  require
commensurate increases in general and administrative support and expense.

      Interest income was $251,000 and $318,000 for the quarters ended March 31,
1997 and 1996,  respectively.  Interest  income  decreased  for the period ended
March 31, 1997,  compared  with the period  ended March 31,  1996,  due to lower
average  cash and  investment  balances  as the  Company  continues  to fund its
operations.  Interest  expense  decreased  for the period  ended March 31, 1997,
compared with the period ended March 31, 1996 due to lower average debt balance.

Liquidity and Capital Resources

      In April 1997, the Company sold 1,600,000  shares of Common Stock at $4.97
per  share in a  registered  direct  public  offering,  marketed  solely  by the
Company,  which yielded gross proceeds of $7.95  million,  the proceeds of which
are not  reflected in the March 31, 1997 cash  balance.  The offering  price was
based on a 20-day volume weighted  average closing sale price of Shaman's Common
Stock. The net proceeds of  approximately  $7.75 million from this offering will
be used for the  continued  research and clinical  development  of the Company's
existing product candidates.

      In January 1997,  the Company sold  2,000,000  shares of Common Stock in a
registered  direct public  offering for gross proceeds of $9.0 million.  The net
proceeds of approximately  $8.11 million from this offering will be used for the
continued  research and clinical  development of the Company's  existing product
candidates.

      As of March 31, 1997, the Company's cash, cash equivalents, and short-term
investments  totaled $17.5 million,  compared with $16.5 million at December 31,
1996,  with an average  investment  maturity of five  months at both dates.  The
Company  invests excess cash  according to its  investment  policy that provides
guidelines  with regard to  liquidity,  type of  investment,  credit  rating and
concentration limits.

      In September  1996,  the Company  entered  into a five-year  collaborative
agreement with Lipha/Merck to jointly develop Shaman's  antihyperglycemic drugs.
In exchange for development and marketing  rights in all countries except Japan,
South Korea,  and Taiwan (which are covered under an earlier  agreement  between
Shaman  and Ono),  Lipha/Merck  will  provide  up to $9.0  million  in  research
payments and up to $10.5 million in equity  investments  priced at a 20% premium
to a multi-day  volume weighted  average price of the Company's  Common Stock at
the time of purchase.  Complete  research  funding  under the  collaboration  is
dependent upon the initiation of human clinical  trials of at least one compound
by September 23, 1998. The agreement  also provides for  additional  preclinical
and clinical  milestone  payments to the Company in excess of $10.0  million per
compound  for  each   antihyperglycemic   drug  developed  and   commercialized.
Lipha/Merck   will  bear  all  preclinical,   clinical,   regulatory  and  other
development expenses associated with the compounds selected under the agreement.
In addition, as products are commercialized, Shaman will



                                   9.
<PAGE>


receive  royalties on all product  sales outside the United States and up to 50%
of the profits (if the Company  exercises its co-promotion  rights) or royalties
on all product sales in the United States.  Certain  milestone  payments will be
credited against future royalty payments,  if any, due to the Company from sales
of products developed pursuant to the agreement.

      In July 1996,  the Company  closed a private  placement (the "1996 Private
Placement")  pursuant to Regulation S under the Securities Exchange Act of 1933,
as amended,  in which it received gross proceeds of $3.3 million for the sale of
400,000 shares of Series A Convertible Preferred Stock and for the issuance of a
six-year  warrant to purchase 550,000 shares of the Company's Common Stock at an
exercise price of $10.184 per share.  In addition to the sale of Preferred Stock
and  warrant,  the  Company  has the right,  from time to time during the period
beginning January 1997 and ending July 2000, to sell up to 1,200,000  additional
shares of Common Stock to the  investor at a formula  price of 100% or 101% of a
multi-day  average of the  Company's  Common Stock price at the time of sale. If
the Company  exercises  this right,  the investor has the option to increase the
shares purchased by up to an aggregate of 527,500 shares.

      The Company expects to incur substantial  additional costs relating to the
continued   preclinical  and  clinical  testing  of  its  products,   regulatory
activities and research and development programs.  The Company believes that its
cash, cash equivalents and investment balances of approximately $17.5 million at
March 31, 1997, the  collaborative  revenue  committed by  Lipha/Merck  and Ono,
Lipha/Merck's  commitment to purchase  additional  equity,  Shaman's  additional
rights to sell Common Stock under the 1996 Private Placement,  and proceeds from
its  April  1997  registered  direct  public  offering  (see  Note 4 to Notes to
Condensed  Financial  Statements --  Subsequent  Event) will be adequate to fund
operations,  including  payments due under  long-term  obligations,  through the
third quarter of 1998.  Milestone  payments which may be received by the Company
from Ono and  Lipha/Merck  would  extend the  Company's  capacity to finance its
operations  beyond that time.  However,  there can be no  assurances  that these
milestones will be achieved,  nor that additional  funding,  if needed,  will be
available on reasonable terms, or at all.

Future Outlook

In  addition  to  historical  information,  this  report  contains  predictions,
estimates,  and other  forward-looking  statements within the meaning of Section
27A of the  Securities  Exchange Act of 1933,  as amended and Section 21E of the
Securities  Exchange  Act of 1934,  as  amended.  Actual  results  could  differ
materially from any future  performance  suggested in this report as a result of
the risk factors set forth below under the caption "Risk  Factors" and elsewhere
in this report and in the Company's Annual Report on Form 10-K/A, for the fiscal
year ended December 31, 1996, filed with the Securities and Exchange  Commission
on March 13, 1997.

Risk Factors

     History  of  Operating  Losses;  Products  Still  in  Development;   Future
Profitability  Uncertain.  Shaman's  potential  products  are  in  research  and
development.  In order to generate  revenues or profits,  the Company,  alone or
with others, must successfully


                                   10.
<PAGE>


develop,  test, obtain regulatory approval and market its potential products. No
assurance  can  be  given  that  these  product   development  efforts  will  be
successful,  that required  regulatory  approvals will be obtained,  or that the
products, if developed and introduced,  will be successfully marketed or achieve
market acceptance.

      Additional Financing Requirements and Uncertain Access to Capital Markets.
The Company has significant  long-term  capital  requirements  and, in the event
Shaman  receives  regulatory  approval  for any of its  products,  it will incur
substantial   expenditures  to  develop   manufacturing,   sales  and  marketing
capabilities. The Company will need to raise additional funds for these purposes
through  additional equity or debt financings,  collaborative  arrangements with
corporate  partners or from other  sources.  No assurance can be given that such
additional  funds will be available to the Company to finance its development on
acceptable terms, if at all.

      No Assurance of FDA Approval for  Marketing;  Government  Regulation.  The
Company's activities with respect to research, preclinical development, clinical
trials, manufacturing and marketing in the United States and other countries are
subject to extensive regulation by numerous governmental  authorities including,
but not limited  to, the Food and Drug  Administration  ("FDA").  The process of
obtaining FDA and other  required  regulatory  approvals is lengthy and requires
the expenditure of substantial resources. Success cannot be assured. In order to
obtain FDA approval,  the Company must perform  clinical tests to demonstrate to
the FDA's  satisfaction  that a product is safe and  effective  for its intended
uses.  The Company may encounter  problems in clinical  trials which could cause
the FDA or the Company to delay or suspend clinical trials. Further, the Company
must  demonstrate  that it is  capable  of  manufacturing  bulk  product  to the
relevant  standards.  There can be no assurance that any of the Company's future
studies will demonstrate their intended result, that the Company's products will
not have  undesirable  side effects  that may prevent or limit their  commercial
use, or that the FDA will otherwise approve any of the Company's products.

      Dependence on Sources of Supply.  The Company currently imports all of the
plant  materials from which its products are derived from countries in South and
Latin America, Africa and Southeast Asia. To the extent that its products cannot
be economically  synthesized or otherwise produced, the Company will continue to
be dependent upon a supply of raw plant  material.  While Shaman believes it has
good  relationships  with the local  governments  and  suppliers  of these plant
materials,  the Company does not have formal agreements in place with all of its
suppliers.

      Limited  Manufacturing and Marketing Experience and Capacity.  The Company
currently produces products only in quantities necessary for clinical trials and
partner  requirements,  and does not  currently  have  the  staff or  facilities
necessary to manufacture  products in commercial  quantities.  As a result,  the
Company  may  rely  on  collaborative  partners  or  third-party   manufacturing
facilities, which may not be available on commercially acceptable terms adequate
for Shaman's  long-term needs.  The Company  currently has no marketing or sales
staff.  To the  extent  that the  Company  does not or is unable  to enter  into
co-promotion  agreements  or to  arrange  for third  party  distribution  of its
products,  significant  additional  resources  will be  required  to  develop  a
marketing and sales force.


                                  11.
<PAGE>


      Rapid Technological Change and Substantial Competition. The pharmaceutical
industry is subject to rapid and substantial technological change. Technological
competition  from   pharmaceutical   companies,   biotechnology   companies  and
universities  is intense.  Many of these  entities  have  significantly  greater
research  and  development  capabilities,  as  well  as  substantial  marketing,
manufacturing,  financial and managerial  resources,  and represent  significant
competition  for the Company.  There can be no assurance  that  developments  by
others will not render the Company's products or technologies  noncompetitive or
that the Company will be able to keep pace with technological developments.

      Uncertainty  Regarding  Patents  and  Proprietary  Rights.  The  Company's
success  depends in part on its  ability  to obtain  patent  protection  for its
products and to preserve its trade  secrets.  No assurance can be given that the
Company's patent  applications  will be approved,  that any patents will provide
the Company with  competitive  advantages for its products or that they will not
be  successfully  challenged or circumvented  by the Company's  competitors.  In
addition,  patents do not necessarily prevent others from developing competitive
products.  The Company has not  conducted  an  exhaustive  patent  search and no
assurance  can be given that  patents  do not exist or could not be filed  which
would have an adverse effect on the Company's ability to market its products.

      Uncertainty of Health Care  Reimbursement and Reform.  Shaman's ability to
successfully  commercialize  its  products  may  depend in part on the extent to
which reimbursement for the cost of such products and related treatments will be
available from  government  health  administration  authorities,  private health
insurers  and  other  organizations.  Significant  uncertainty  exists as to the
pricing, availability of distribution channels and reimbursement status of newly
approved healthcare products.

      Possible  Volatility  of Stock Price.  The market  price of the  Company's
common stock,  like the stock prices of many publicly traded  biotechnology  and
smaller  pharmaceutical  companies,  has  been  and may  continue  to be  highly
volatile.

      Environmental  Regulation. In connection with its research and development
activities  and its periodic  manufacturing  of clinical  trial  materials,  the
Company is subject to federal,  state and local  laws,  rules,  regulations  and
policies  governing the use,  generation,  manufacture,  storage,  air emission,
effluent  discharge,  handling  and  disposal of certain  materials  and wastes.
Although  the  Company  believes  that  it has  complied  with  these  laws  and
regulations  in all  material  respects  and has not been  required  to take any
action to correct any noncompliance,  there can be no assurance that the Company
will not be required to incur significant costs to comply with environmental and
health and safety regulations in the future.



                                   12.
<PAGE>


<TABLE>
<CAPTION>

<S>     <C>    <C>    <C>    <C>    <C>    <C>


PART II    OTHER INFORMATION


Item 1.    Legal Proceedings

           None.

Item 2.    Changes in Securities

           None.

Item 3.    Defaults in Senior Securities

           None.

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

           None.

Item 5.    Other information

           The Company accepted the resignation of Ms. Barbara J. Goodrich, Vice
           President and Chief Financial Officer, effective February 28, 1997.

Item 6.    Exhibits and Reports on Form 8-K

(a)        Exhibits

           Exhibit No.         Description

           27                  Financial Data Schedule

(b)        No current reports on Form 8-K were filed during the quarter ended
           March 31, 1997.

</TABLE>
                                   13.
<PAGE>





                                   SIGNATURES



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

Dated:  May 7, 1997


                               Shaman Pharmaceuticals, Inc.
                               (Registrant)



                               /s/   Lisa A. Conte
                               Lisa A. Conte
                               President, Chief Executive Officer and Chief
                               Financial Officer
                               (principal executive officer & principal
                               financial and accounting officer)



                                   14.