<PAGE>

________________________________________________________________________________
________________________________________________________________________________

                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.   20549
                           ________________________
                                  FORM 10-K

      ( X )  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
             EXCHANGE ACT OF 1934 

                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.

      (   )  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
                        _______________________________

                            CV THERAPEUTICS, INC.
            (Exact name of Registrant as specified in its charter)

                 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) 812-0585

       Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK,
                               $.001 PAR VALUE

   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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained to the best Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. /   /  

   The approximate aggregate market value of the Common Stock held by
nonaffiliates of the Registrant, based upon the last sale price of the
Common Stock reported on the Nasdaq Stock Market was $66,784,852 as of March
9, 1999.

   The number of shares of Common Stock outstanding as of March 9, 1999 was 
11,246,044.

                     DOCUMENTS INCORPORATED BY REFERENCE 

Certain exhibits filed with the Registrant's Registration Statement on Form
S-3 (Registration No. 333-54735), as amended, the Registrant's Proxy
Statement in connection with the Registrant's 1999 Annual Meeting to be
filed in accordance with Regulation 14A under the Securities Exchange Act of
1934, as amended, and certain exhibits filed with the Registrant's
Registration Statement on Form S-8 (Registration No. 333-44717) are
incorporated herein by reference into Part III and IV of this report.

________________________________________________________________________________
________________________________________________________________________________

<PAGE>

                                    PART I

ITEM 1. BUSINESS

OVERVIEW

   CV Therapeutics is a biopharmaceutical company focused on the application
of molecular cardiology to the discovery, development and commercialization
of novel, small molecule drugs for the treatment of cardiovascular diseases.
Molecular cardiology was developed, in part, by our scientists and is based
upon the application of molecular biology and genetics to cardiovascular
diseases. This discipline has yielded new insights into the mechanisms
underlying chronic cardiovascular diseases.  It has also enhanced the search
for innovative cardiovascular drugs by providing an increasing number of new
molecular targets for drug discovery. 

   Three of our drug candidates are in clinical trials:

      *      ranolazine for the potential treatment of angina
      *      CVT-510 for the potential treatment of atrial arrhythmias
      *      Adentri TM (CVT-124) for the potential treatment of congestive
             heart failure (CHF)

    In October 1997, we initiated a Phase III clinical trial of ranolazine,
a novel small molecule, for the potential treatment of angina. The trial is
a placebo controlled, double-blind, cross-over trial of a sustained release
("SR") formulation of ranolazine in approximately 150 patients with chronic
stable angina.  As of February 1999, we are recruiting patients in this
trial in the United States, Canada, Poland and the Czech Republic. 
Ranolazine was licensed from Syntex in March 1996. Its novel metabolic
mechanism of action was discovered, in part, by cardiovascular researchers
now at or associated with us. 

    In Phase I and Phase II clinical trials conducted by Syntex, an
immediate release ("IR") formulation of ranolazine was administered to over
1,200 patients. These clinical trials have indicated that ranolazine IR may
improve exercise tolerance in angina patients without adversely affecting
heart rate or decreasing blood pressure, a clinical profile absent from
currently available drugs. 

    In the United States, in 1998, approximately 7.2 million patients
suffered from angina. Approximately one-third, or 2.4 million patients were
either diagnosed with both angina and CHF or remain symptomatic despite
maximal doses of currently available anti-anginal drugs.

    In September 1998, we initiated a Phase I clinical trial for CVT-510, a
selective adenosine A1 receptor agonist.  This Phase I clinical trial is an
open label, single-dose, dose-escalation trial of intravenous CVT-510 in
patients undergoing electrophysiologic study. 

    Atrial arrhythmias, including atrial fibrilation, atrial flutter and
atrial tachycardias, are involved in approximately 1.9 million primary and
secondary hospital diagnoses in the U.S.  CVT-510 may offer a new approach
to rapid and sustained control of emergent atrial arrhythmias by reducing
heart rate without affecting blood pressure.  In 1998, the U.S. Patent and
Trademark Office issued a composition of matter patent for our proprietary
series of selective adenosine A1 receptor agonists, including CVT-510. 

    Adentri, the third product in clinical trials, is the result of our
research into improved therapies for CHF with a focus on adenosine. 
Adenosine is a naturally-occurring hormone that mediates key functions of
major organs, including the heart and kidney.  In March 1997 we entered into
agreements granting Biogen an exclusive world-wide license to develop,
manufacture and commercialize Adentri for all indications.  In the second
quarter of 1998, we completed a Phase II trial in CHF patients.  Results
indicated that Adentri:

      *      may,  compared to placebo, produce increases (p <  0.05) in
             urine and sodium excretion with evidence of only potentially
             minimal potassium excretion;
      *      may produce no decrease in the filtration function of the
             kidneys, or GFR, in contrast to treatment with the diuretic,
             furosemide, which was associated with a reduction in GFR; and
      *      may not have an effect on blood pressure, heart rate or EKG 
             parameters.

<PAGE>

    The trial evaluated 12 patients with moderately severe CHF in a
randomized, double-blind, placebo-controlled trial of intravenous Adentri in
comparison to an open-label dose of the commonly prescribed diuretic,
furosemide.  Biogen is currently conducting a placebo-controlled Phase II
trial evaluating various doses of Adentri in comparison to and in
combination with the diuretic, furosemide.

    As of January 1999, we have received from Biogen $20.5 in payments in
connection with Adentri, including $4.5 million in a loan facility received
in December 1998.  We may receive additional milestone payments upon
clinical progress and royalties from sales. In addition, for as long as
Biogen retains its license for Adentri, Biogen is responsible for funding
all development and commercialization expenses related to Adentri. 

    Approximately 4.9 million people in the United States in 1998 suffer
from CHF, with an estimated 400,000 new cases each year. Approximately
875,000 patients in 1995 were hospitalized in the United States with a
primary diagnosis of CHF.  CHF is the leading cause of hospital admissions
among patients over 65.

    In addition to ranolazine, CVT-510 and Adentri, we have several product
candidates that are currently in preclinical studies in the areas of:

      *      cell cycle inhibition
      *      cardiac metabolism
      *      cholesterol transport
      *      molecular mechanisms of atherosclerosis
      *      chronic inflammation in the cardiovascular system and
      *      selective adenosine receptor agents

   These programs form the platform from which new therapeutics may be
discovered. 

   In September 1998, we established a collaboration with Incyte
Pharmaceuticals, Inc. to develop a prototype gene expression database in the
area of cardiovascular biology. The collaboration with Incyte highlights our
commitment to utilize cutting edge technologies to understand diseases and
improve their treatments.  Utilizing tools available from Incyte, we hope to
establish model systems in cells and animals, as well as patients, to follow
the expression patterns of tens of thousands of genes simultaneously in
response to perturbations associated with blood vessel injury, cholesterol
overload, heart failure and other biological processes involved in
cardiovascular disease.

RISK FACTORS

   In this section, we summarize certain risks regarding our business and
industry that you should consider.  These risks are discussed in greater
detail below, and are discussed in context in other sections of this report.

   THE DEVELOPMENT OF CVT'S PRODUCTS WILL TAKE SEVERAL YEARS, AND CVT CANNOT
BE CERTAIN THAT THESE PRODUCTS WILL BE SUCCESSFULLY DEVELOPED, MARKETED AND
MANUFACTURED. 

   Since our inception in 1990, substantially all of our resources have been
dedicated to research and development, and we have not generated any product
revenue. Because all of our potential products are in research, preclinical
or clinical development, product revenues will not be realized for at least
several years, if at all.

   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, certain of our compounds
within our cell cycle inhibition, cardiac metabolism, cholesterol transport
and selective adenosine receptor agents programs are in the early stages of
research and development, and we have not commenced clinical trials for
these new compounds.  We cannot be certain when these clinical trials will
commence.  Because these compounds are in the early stages of product
development, we could abandon further development efforts before they reach
clinical trials.

<PAGE>

   We cannot be certain that any of our product development efforts will be
successfully completed or that any of our products will be safe and
effective.  Even if we believe that any product is safe and effective, 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.

   CVT MAY BE UNABLE TO SATISFY CERTAIN REGULATORY REQUIREMENTS FOR CLINICAL 
TRIALS.

   All of our products require additional development, preclinical studies,
clinical trials and regulatory approval prior to commercialization. Any
delays in our clinical trials would delay market launch and would increase
our cash requirements.

   We currently have only three products in clinical development,
ranolazine, CVT-510 and Adentri. Completion of our clinical trials may be
delayed by many factors, including: 

      *      slower than anticipated patient enrollment
      *      difficulty in finding a sufficient number of patients fitting
             the appropriate trial profile 
      *      difficulty in obtaining sufficient supplies of clinical trial
             materials or 
      *      adverse events occurring during the clinical trials.

    For example, the first Phase III clinical trial of ranolazine has
challenging enrollment criteria.  These criteria require patients who suffer
from angina to stop taking all of their other anti-anginal medications and
receive only placebo during certain segments of the clinical trial. This
means that they will receive no medication to treat their angina when they
are receiving placebo.  Given the difficulty of identifying patients willing
to completely stop taking anti-anginal medications, enrollment for this
trial was slower than anticipated.  We have added additional study centers
in the U.S. and in different countries, including centers in Poland, the
Czech Republic and Canada to identify additional patients that meet the
enrollment criteria. However, we cannot be certain that we will be able to
complete this trial on the revised schedule.

    In addition, data obtained from preclinical and clinical activities are
susceptible to different interpretations, which could delay, limit or
prevent regulatory approval. Delays or rejections may be based upon many
factors, including changes in regulatory policy during the period of product
development.  We may be unable to maintain our proposed schedules for IND
and clinical protocol submissions to the FDA, initiations of clinical
studies and completions of clinical trials as a result of FDA reviews or
complications that may arise in any phase of the clinical trial program.

    Furthermore, even if our clinical trials occur on schedule, the results
from preclinical studies and early clinical trials may be different than
those achieved in later clinical trials. Clinical trials may not demonstrate
sufficient safety and efficacy to obtain the requisite approvals. For
example, in November 1995, based on unfavorable efficacy data from a Phase
II trial, we terminated our development program for the CVT-1 product for
treatment of primary hypercholesterolemia.

    CVT'S BUSINESS DEPENDS ON ATTRACTING AND RETAINING COLLABORATORS AND 
LICENSORS.

    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
responsibilities.  If we fail to obtain and maintain such arrangements, the
development 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 development internally, our future capital requirements will increase
substantially. 

    For example, under our collaborative arrangement with Biogen, Biogen is
responsible for pursuing all aspects of commercialization of Adentri,
including but not limited to manufacturing clinical quantities of Adentri,
conducting additional clinical trials, pursuing regulatory approvals,
scaling-up manufacturing processes and establishing marketing and sales
capabilities. Subject to only limited conditions, Biogen determines the
level of resources it will spend on Adentri.  Decisions made by Biogen which
we cannot control can cause development of

<PAGE>

Adentri to be slower than expected.  Moreover, Biogen may terminate its
relationship with us uponnotice ranging from 60 to 90 days.

    Certain of 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 which our collaborative
partners devote to our programs. If a collaborative partner fails to
successfully develop or commercialize any product, product launch of that
product would be delayed. In addition, collaborators may pursue competing
technologies or product candidates.

    Under our collaborative arrangements we may also have to meet certain
milestones. If we fail to meet our obligations under our collaborative
arrangements our collaborators could terminate their arrangements or we
could lose rights to the compounds under development. For example, under our
agreement with the University of Florida Research Foundation, Inc. in the
area of adenosine receptors, we are required to reach certain preclinical
and clinical milestones within defined time periods.  If we fail to reach
these milestones, we may lose exclusive rights under the license.  Under our
agreement with Biogen, in order for us to receive certain development
milestone payments, certain development milestones must be met by Biogen.
Under our agreement with Syntex for ranolazine, we are required to make a
milestone payment to Syntex upon FDA approval of ranolazine.

    In addition, collaborative arrangements in our industry are extremely
complex, particularly with respect to intellectual property rights. 
Disputes may arise in the future with respect to 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 certain product
candidates.  Such disputes could also result in litigation or arbitration,
which is time consuming and expensive. See "Business--Licenses and 
Collaborations."

    CVT EXPECTS 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. As of
December 31, 1998, we had an accumulated deficit of $69.6 million. The
process of developing our products requires significant additional research
and development, preclinical testing and clinical trials, as well as
regulatory approvals. These activities, together with our general and
administrative expenses, are expected to result in operating losses for the
foreseeable future.  See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

    CVT MUST SECURE ADDITIONAL FINANCING TO MEET ITS FUTURE NEEDS.

    We will require substantial additional funding in order to complete our
research and development activities and commercialize any products. In the
past, we have financed our operations primarily through the sale of equity
securities, payments from our collaborators, equipment and leasehold
improvement financing and other debt financing. We have generated no product
revenue, and none is expected for at least several years. We anticipate that
our existing resources and projected interest income will enable us to
maintain our current and planned operations through the second quarter of
2000.   However, we may require additional funding prior to that time.

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

      *      have to delay, scale back or eliminate some or all of our
             research or development programs.
      *      lose rights under existing licenses.
      *      have to relinquish more of, or all of, our rights to product
             candidates at an earlier stage of development or on less
             favorable terms than we would otherwise seek.
      *      be unable to operate as a going concern.

<PAGE>

   Our future capital requirements will depend on many factors, including:

      *      scientific progress in our research and development programs
      *      the size and complexity of such 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 or obtaining preclinical and clinical
             material 

    There may be additional factors that could affect our need for
additional financing.  Many of these factors are not within our control. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

    CVT'S PRODUCTS, ONCE APPROVED BY THE FDA OR OTHER FOREIGN REGULATORY
AGENCIES,  MAY NOT BE ACCEPTED AS SAFE, EFFECTIVE AND COST-EFFECTIVE BY THE
PHYSICIANS, INSURERS OR PATIENTS.

    If any of our products that receive FDA or other foreign regulatory
approval and that are successfully commercialized fail to achieve market
acceptance, our future profitability will be adversely affected.  We believe
that market acceptance will depend on the ability to provide acceptable
evidence of safety, efficacy and cost effectiveness.  In addition, we
believe market acceptance depends on the effectiveness of our marketing
strategy. In addition, third party payors can indirectly affect the demand
for our products by regulating the maximum amount of reimbursement that will
be provided.

    THE MARKET FOR CARDIOVASCULAR DRUGS IS EXTREMELY COMPETITIVE.

    The pharmaceutical and biopharmaceutical industries are intensely
competitive.  If regulatory approvals are received, some of our products
will compete with well-established, FDA approved, proprietary and generic
cardiovascular therapies that have generated substantial sales over a number
of years.  These therapies are reimbursed from government health
administration authorities and private health insurers.

     In addition, we are aware of companies which are developing products
that will compete in the same disease markets as our products. Many of these
competitors and potential competitors have substantially greater product
development capabilities and financial, scientific, marketing and sales
resources.  Other companies may succeed in developing products earlier or
obtain approvals for such products from the FDA more rapidly than us and our
corporate partners.  Competitors may also develop products that are safer or
more effective than 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. See "Business--Competition."

    CVT MAY BE UNABLE TO EFFECTIVELY PROTECT ITS INTELLECTUAL PROPERTY.

    Our success will depend to a significant degree on our ability to:

      *      Obtain patents and licenses to patent rights
      *      Maintain trade secrets
      *      Operate without infringing on the proprietary rights of others.

    We cannot be certain that patents will issue from any of our pending or
future patent applications or that any issued patent will be sufficient to
protect our technology.

    Patent applications in the United States 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.

<PAGE>

    Competitors may have filed applications for, or may have received
patents and may obtain additional patents and proprietary rights relating
to, compounds, products or processes 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 U.S.  In
addition, litigation may be necessary to enforce any patents issued to us or
to determine the scope and validity of the proprietary rights of third
parties.  Litigation and interference proceedings, even if they are
successful, are expensive 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 issued to competitors and not breach the licenses that
might cover technology used in our potential products. If certain
competitors own or have rights to technology that we need in our product
development efforts, we will need to obtain a license to those rights. If we
fail to obtain any necessary licenses, we may be unable to complete product 
development.

    We also rely on trade secrets to develop and maintain our competitive
position. Although we protect our proprietary technology in part by
confidentiality agreements with employees, consultants, collaborators,
advisors and corporate partners, these agreements may be breached.  In that
event, we may not have adequate remedies for any breach.  In addition, it is
possible that our trade secrets will otherwise become known or be discovered
independently by our competitors. See "Business--Patents and Proprietary 
Technology."

    CVT MAY BE UNABLE TO ATTRACT AND RETAIN PERSONNEL.

    We are highly dependent on certain members of our management and
scientific staff. In addition, we rely on consultants and advisors.  If we
lose any of these persons, our product development efforts could be delayed
while we search for additional personnel.  In addition, our stock price
could decline as a result of the loss of any key personnel.

    In order to pursue our research and product development plans, we will
be required to attract and retain additional qualified scientific and other
personnel. These skilled persons are in high demand by pharmaceutical and
biopharmaceutical companies and by universities and other research
institutions. The failure to successfully attract and retain qualified
personnel, consultants and advisors may impede the achievement of
development objectives.

    CVT HAS NO MANUFACTURING EXPERIENCE.

    We do not currently operate manufacturing facilities for clinical or
commercial production of our products under development. We have no
experience in manufacturing, 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 our products. For example, Biogen is responsible for the
manufacture of Adentri to supply clinical trials. In addition, we are
negotiating an agreement with a third party manufacturer for clinical scale
production of ranolazine's active pharmaceutical ingredient sufficient to
support the remainder of the Phase III clinical program, registration and
commercialization. We cannot be certain that we will be able to enter into
an agreement for ranolazine active ingredient.  If we are unable to do so,
our Phase III trials of ranolazine will be delayed.  We have entered into an
agreement with third party manufacturers for clinical scale production of
ranolazine SR tablets sufficient to support the remainder of the Phase III
clinical program and are negotiating with them for registration and
commercialization supply of ranolazine SR tablets. If we are unable to
negotiate an agreement to supply ranolazine SR tablets, commercial launch of
ranolazine may be delayed.  In addition, because we have used various
manufacturers for ranolazine in different clinical trials prior to FDA
approval of ranolazine, we will be required to demonstrate to the FDA's
satisfaction the bioequivalence of the multiple sources of ranolazine used
in our clinical trials.

    CVT HAS NO MARKETING OR SALES EXPERIENCE.

    We currently have no sales, marketing or distribution capability. We may
promote our products in collaboration with marketing partners or rely on
relationships with one or more companies with established

<PAGE>

distribution systems and direct sales forces. In particular, Biogen is
responsible for establishing marketing and sales activities for Adentri. 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 may
have little control.

    If we are unable to reach and maintain agreement with one or more
pharmaceutical companies or collaborative partners, we may be required to
market our products directly.  We may elect to establish our own specialized
sales force and marketing organization to market our products to
cardiologists.   In order to do this, we would have to develop a 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.  See "Business--Marketing and Sales." 

    CVT MAY BE UNABLE TO SATISFY GOVERNMENTAL REGULATIONS RELATING TO THE
DEVELOPMENT OF DRUG PRODUCTS AND MAY BE UNABLE TO OBTAIN NECESSARY
REGULATORY APPROVALS.

    The research, testing, manufacture 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:

      *      warning letters
      *      civil penalties
      *      injunctions
      *      product seizure or detention 
      *      product recalls
      *      total or partial suspension of production
      *      FDA refusal to approve pending NDAs or supplements to approved
             NDAs. 

    We have not applied for or received regulatory approval in the United
States or any foreign jurisdiction for the commercial sale of any of our
products. 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, such approval process is extremely expensive and
uncertain. We cannot guarantee that any of our products under development
will be approved for marketing by the FDA. Even if regulatory 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 those products. 

    Even if we obtain regulatory approval, we may be required to undertake
postmarketing studies. In addition, identification of certain side effects
after a drug is on the market or the occurrence of manufacturing problems
could cause subsequent withdrawal of approval, reformulation of the drug,
additional preclinical testing or clinical trials and changes in labeling of
the product.

    If regulatory approval is obtained, we will also be subject to ongoing
FDA obligations and continued regulatory review. In particular, we or our
third party manufacturer will be required to adhere to regulations setting
forth current good manufacturing practices.  The regulations require that we
manufacture our products and maintain our records in a prescribed manner
with respect to manufacturing, testing and quality control activities.
Furthermore, we or our third party manufacturer must pass a preapproval
inspection of its manufacturing facilities by the FDA before obtaining
marketing approval.  See "Business--Government Regulation."

    CVT MAY BE UNABLE TO OBTAIN ADEQUATE REIMBURSEMENT.

    Our ability and the ability of our existing and future corporate
partners to market and sell our products will depend in part on the extent
to which reimbursement for the cost of such potential products and related
treatments will be available from government health administration
authorities, private health insurers and other organizations. Third party
payors are increasingly challenging the price of medical products and services.
Significant uncertainty exists as to the reimbursement status of newly
approved health care products. In addition,

<PAGE>

for sales of our products in Europe, we will be required to seek reimbursement
on a country-by-country basis.  We cannot be certain that any products approved
for marketing will be considered cost effective or that reimbursement will be
available. In addition, payors' reimbursement policies could adversely affect
our or any corporate partner's ability to sell such products on a profitable
basis.

    BECAUSE CVT IS DEVELOPING PHARMACEUTICAL PRODUCTS, IT MAY ENCOUNTER
PRODUCT LIABILITY CLAIMS, AND IT HAS ONLY LIMITED PRODUCT LIABILITY INSURANCE.

    We currently have only limited product liability insurance for clinical
trials and no 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, difficult to obtain 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 results of
operations and our need for and the timing of additional financing.  See
"Business--Product Liability Insurance."

    DELAWARE LAW AND CVT'S CHARTER COULD MAKE THE ACQUISITION OF CVT BY
ANOTHER COMPANY MORE DIFFICULT.

    Certain provisions of the our Amended and Restated Certificate of
Incorporation may have the effect of delaying or preventing changes in
control or management or limit the price that certain investors may be
willing to pay in the future for shares of our common stock.  In addition,
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 such a transaction more difficult.  In
addition, the board of directors has the authority to issue up to 5,000,000
shares of preferred stock without stockholders' approval.  The rights of the
holders of common stock will be subject to, and may be materially adversely
affected by, the rights of the holders of any preferred stock that may be
issued in the future. The issuance of preferred stock could have the effect
of making it more difficult for a third party to acquire a majority of our
outstanding voting stock.  

   Furthermore, in February 1999, the Board of Directors enacted certain
protections against anti-takeover provisions, including a Stockholder Rights
Plan and severance agreements in the event of a change of control for
certain key executives.

BACKGROUND

    The cardiovascular system is comprised of the heart, the blood vessels,
the kidneys and the lungs. Together, the components of the cardiovascular
system deliver oxygen and other nutrients to the tissues of the body and
remove waste products. The heart propels blood through a network of arteries
and veins. The kidneys closely regulate the blood volume and the balance of
electrolytes (such as sodium, potassium and chloride) in the blood, and the
lungs oxygenate the blood and remove carbon dioxide. To accomplish these
tasks, the cardiovascular system must maintain adequate blood flow, or
cardiac output. Cardiac output is determined by such factors as heart rate
and blood pressure, which in turn are controlled by a variety of hormones
such as adrenaline, angiotensin and adenosine. These hormones are small
molecules, which exert their effects by binding to specific receptors on the
surfaces of a variety of cell types in the heart, lungs, blood vessels and
kidneys. Any significant disruption of this system results in cardiovascular 
disease.

    Cardiovascular disease is the leading cause of death in the United
States, claiming more than 960,000  lives in 1995. The American Heart
Association projects the total cost of cardiovascular medications in the
United States for 1998 at $14.8 billion.

    Chronic cardiovascular diseases, including atherosclerosis, which is the
hardening of the arteries, hypertension, which is high blood pressure, and
others, may cause permanent damage to the heart and blood vessels, leading
to CHF, angina and myocardial infarction.  In 1998 in the U.S., there were
4.9 million patients with CHF, 7.2 million patients with angina and 1.1
million patients with myocardial infarction.  CHF occurs when the heart
becomes weakened and, as a result, can no longer maintain adequate blood
circulation throughout the

<PAGE>

body. The kidneys respond to this decrease in blood flow by increasing the
retention of salt and water, leading to chronic symptoms such as shortness of
breath and edema (fluid retention) in the legs and lungs.

    Over the past twenty years, drugs such as nitrates, beta blockers,
calcium channel blockers and ACE inhibitors have been developed to treat
cardiovascular diseases. These drugs have contributed to an increase in the
survival of patients who suffer from chronic cardiovascular disease. 
However, these drugs also can cause a variety of undesirable side effects,
including fatigue, depression, impotence, headaches, palpitations and edema.
Molecular cardiology has provided new insight into the mechanisms underlying
chronic cardiovascular diseases, thus creating the opportunity for improved 
therapies.

    Patients that have severe cardiovascular conditions, including those
that are intolerant or refractory to traditional therapeutic options and
those that have concurrent diseases, are generally treated by cardiologists.
There are approximately 20,000 cardiologists in the United States and these
physicians are generally concentrated in metropolitan communities near major
medical centers.  This limited physician subspecialty is responsible for
approximately half of the patient visits associated with prescriptions
written for these cardiovascular conditions.

DRUG DISCOVERY PLATFORM

    Our drug discovery platform supports several programs, including those
focused on:

      *      the cell cycle
      *      cardiac metabolism
      *      molecular mechanisms of atherosclerosis
      *      chronic inflammation in the cardiovascular system.
      *      the adenosine A1 receptor

    These programs have produced compounds currently in clinical or
preclinical development or outlicensed for use in third party drug discovery
programs. Our expertise in molecular cardiology and drug development has
been critical to the identification of these drug candidates.

    We believe that our drug discovery platform allows us to efficiently
select novel, clinically relevant drug candidates with commercial potential.
We first identify new targets through a multi-disciplinary effort which now
may include genomic information derived from the collaboration with Incyte. 
We then evaluate new targets with respect to clinical relevance and
suitability for small molecule inhibition. We then utilize a highly
integrated, multidisciplinary approach to produce novel small molecules as
drug candidates for these targets. We combine molecular modeling and
combinatorial chemistry to assemble targeted libraries of new chemical
entities.  We believe this approach expedites the identification of
potential drug leads. We have developed a comprehensive proprietary database
correlating biological activity of candidate drugs with their structures.
From this database, we identify final lead compounds based on predetermined
development criteria including:

      *      potency
      *      specificity
      *      manufacturability
      *      pharmacologic activity in animal and in vitro models.

   We determine the proper selection of cell-based assays and animal models
of disease to enhance development of the drug candidate based on our
projected use in the clinical setting.

PRODUCTS UNDER DEVELOPMENT

RANOLAZINE

   Ranolazine is a novel small molecule, which is in Phase III clinical
trials for the potential treatment of angina. The compound fits our criteria
for development candidates, as it is a small molecule, which works through a
novel mechanism of action. We obtained a license for ranolazine from Syntex
in March 1996. We are developing ranolazine to potentially treat angina
because we believe ranolazine may significantly improve exercise tolerance

<PAGE>

but not significantly impair blood pressure or heart rate and may have an
improved tolerability profile as compared to currently available therapies.

   Ranolazine is believed to act by modulating the body's metabolism to
shift the source of energy for the heart from fatty acid toward glucose.
Ranolazine may decrease the heart's oxygen demand for a given level of
cardiac work because less oxygen is required to produce an equivalent amount
of energy from glucose than from fatty acids.

POTENTIAL INDICATIONS

   Angina.  Angina is a clinical syndrome manifested by chest pain caused by
insufficient blood flow to the heart muscle due to blockage of the coronary
arteries. Patients usually experience chest pain on exertion, which can
become more severe over time. 

   In the United States, approximately 7.2 million patients in 1998 are
currently diagnosed with angina. Based on a published multicenter study
involving over 5,000 angina patients, we estimate over half of the 7.2
million patients are currently being treated with multiple medications,
including nitrates, beta blockers and calcium channel blockers. Drugs used
for angina accounted for over $1.5 billion in U.S. sales in 1997.
Approximately one-third, or 2.4 million, of angina patients are either
diagnosed with both angina and CHF or are refractory to currently available 
treatments.

   All currently available drugs to treat angina reduce the heart's oxygen
demand by reducing cardiac work via hemodynamic mechanisms such as reduction
of pump function, heart rate, and/or blood pressure. These hemodynamic
effects can limit or prevent the use of currently available drugs in
patients whose blood pressure or cardiac function is already decreased.
These effects can be particularly pronounced when these drugs are used in
combination. Additional adverse effects include lower extremity edema
associated with calcium channel blockers,  impotence and depression
associated with beta blockers and headaches associated with nitrates.
Consequently, for some patients, presently available medical treatment may
not provide complete relief of angina without unacceptable adverse effects.

   Ranolazine has been tested in more than 1,300 US and European patients in
Phase I and Phase II clinical trials.  In three Phase II studies, results
indicated that, compared to placebo, ranolazine treatment may be associated
with  increases (p < 0.05) in the exercise duration of angina patients
during exercise treadmill testing, both when ranolazine was given alone and
in combination with beta blockers or calcium channel blockers.

   In initial clinical trials, ranolazine IR was administered on a three
times daily schedule. To achieve a more commercially attractive product with
a twice-daily dosing schedule, Syntex developed ranolazine SR. Results in
volunteer trials conducted by Syntex, may indicate that the SR formulation
maintains ranolazine plasma concentrations in the range associated with
increased exercise times in the stable angina trials of ranolazine IR.

CLINICAL STATUS

   In October 1997, we initiated our first Phase III clinical trials of
ranolazine SR for the potential treatment of angina. In this first clinical
trial, patients will undergo treadmill exercise to induce angina with the
primary endpoint being duration of exercise. This trial in approximately 150
stable angina patients consists of the following criteria:

      *      randomized 
      *      double blind 
      *      placebo controlled
      *      monotherapy
      *      four period crossover 

   As of February 1999 we are recruiting patients for this trial in the
U.S., Canada, Poland and the Czech Republic.  In the second trial, which is
expected to begin in 1999, we plan to enroll approximately 450 angina
patients.  These patients will receive one other anti-anginal medication and
add either placebo or ranolazine to

<PAGE>

their therapy. Additional clinical pharmacology, open label and safety studies
are anticipated to be conducted before the filing of an NDA with the FDA.

   Our current estimate of the commencement of various clinical trials
included in this Report are forward-looking statements that involve risks
and uncertainties. The actual clinical trial dates could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including timing and results of earlier clinical trials and
other factors set forth under "Risk Factors" and elsewhere in this Report.
There can be no assurance that ranolazine will prove to be safe or
efficacious in humans or that ranolazine will obtain FDA approval or other
regulatory or foreign marketing approval for any indication.

CVT-510

   In 1998, another drug candidate from our adenosine program, CVT-510,
began Phase I clinical trials.  CVT-510 is intended for the potential
treatment of atrial arrhythmias.  It is an adenosine A1 agonist which may
act selectively on the conduction system of the heart to slow electrical
impulses.  CVT-510 may offer a new approach to rapid and sustained control
of emergent atrial arrhythmias by reducing heart rate without affecting
blood pressure.

POTENTIAL INDICATIONS

   Atrial arrhythmias - including atrial fibrilation, atrial flutter and
atrial tachycardias - are involved in approximately 1.9 million primary and
secondary hospital diagnosis.  In addition, they are a major complication of
heart attacks, heart failure and cardiac surgery.  These arrhythmias are
rapid, often irregular heartbeats that spread from the atria through the AV
node to the ventricles, severely compromising heart function.  Potentially
damaging consequences include low blood pressure and damage to the brain,
heart and other vital organs.  Thus, these arrhythmias can be life-
threatening and are severe enough to require rapid treatment

   Because of the severity of these conditions and the need to treat
patients quickly, intravenous therapies are typically used. Current medical
therapies aim to slow the heart to a normal rate but have significant
limitations in the acute care setting. Digitalis is effective in controlling
heart rate, but requires a long time to take effect. This can be dangerous
in patients with a failing heart. Calcium channel blockers, beta blockers
and adenosine act quickly but are themselves associated with hypotension and
depressed cardiac function.  These drugs could potentially exacerbate the
condition of patients already experiencing cardiac dysfunction as a
complication of the arrhythmia.

   Our broad understanding of the adenosine receptor system could offer a
new approach to this major medical problem. By selectively stimulating the
adenosine A1 receptor - which slows heart rate - without significantly
stimulating the adenosine A2 receptor - which lowers blood pressure -
CVT-510 may be able to intervene immediately in the arrhythmia process,
without unwanted cardiovascular effects.  This could offer cardiac patients
and clinicians a therapeutic alternative. We were issued a composition of
matter patent in 1998 by the U.S. Patent and Trademark Office on a class of
compounds including CVT-510.

CLINICAL STATUS

    An IND for CVT-510 was submitted in August 1998, and a Phase I clinical
study began in September 1998.  This open-label dose-escalation safety study
is designed to measure the response of the cardiac conduction system to
CVT-510.  We hope to gain some preliminary indication of the potential for
CVT-510 to treat  the atrial arrhythmias.  We plan to conclude the Phase I
study and begin a Phase II study with CVT-510 in 1999.

    Our current estimate of the commencement of various clinical trials
included in this Report are forward-looking statements that involve risks
and uncertainties. The actual clinical trial dates could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including the timing and results of earlier clinical trials
and the other factors set forth under "Risk Factors" and elsewhere in this
Report.  There can be no assurance that CVT-510 will prove to be safe or
efficacious in humans or that CVT-510 will obtain FDA or other regulatory or
foreign marketing approval for any indication.

<PAGE>

ADENTRI (CVT-124) 

    Adentri is a potent and selective adenosine A1 receptor antagonist.
Preclinical studies and clinical trials indicate that Adentri may increase
sodium excretion. Thus, we believe that Adentri has the potential to be a
new therapy for treatment of edema due to CHF.

    Adenosine is a naturally occurring hormone that modulates different
functions of the heart, brain, kidney and blood vessels. Its actions are
mediated in these organs by two classes of receptors, A1 and A2.  They each
stimulate very different physiological effects that can be separately
targeted in drug development.  Adenosine A1 receptors are located on the
proximal tubules of the kidney where they stimulate reabsorption of sodium
and hence of water.  We believe that we were among the first to identify the
presence of these adenosine A1 receptors in the proximal tubule of the
kidney. In contrast to A1 receptors, adenosine A2 receptors stimulate the
dilation of blood vessels in the heart, muscles and kidney, thereby lowering
blood pressure.

    Adentri was identified in our adenosine A1 receptor program. This
program is focused on the development of agents that are highly selective
for the adenosine A1 receptor and has produced both antagonists and agonists
to this class of receptors. We continue to explore additional applications
of the technology developed in the adenosine A1 receptor program.

    We have focused on creating an adenosine A1 receptor antagonist specific
enough to avoid blocking the A2 receptor and thus avoiding unintended side
effects. This concept was developed based on our insight into the newly
discovered role of the A1 receptor on the proximal tubule cell of the kidney
and its potential importance in treatment of edema states, such as CHF,
which are characterized by excessive accumulation of sodium and water in the 
body.

    In March 1997, we entered into two research collaboration and license
agreements with Biogen granting Biogen an exclusive worldwide license to
develop and commercialize Adentri for all indications.  As of January 1999,
we had received from Biogen $20.5 in payments, including a $4.5 million
credit facility received in December 1998.  We may receive an additional
loan facility, milestone payments upon clinical progress, and royalties from 
sales.

POTENTIAL INDICATIONS

    Congestive Heart Failure.  Approximately 4.9 million people in the
United States in 1998 suffer from CHF, with an estimated 400,000 new cases
each year. Approximately 875,000 patients in 1995 were hospitalized in the
United States with a primary diagnosis of CHF.  CHF is the leading cause of
hospital admissions among patients over 65.

    Fluid accumulates in the body because of adaptations by the kidney
during CHF. Each kidney is comprised of approximately one million tiny blood
filtering units called nephrons. Normally in each nephron, blood is filtered
at the renal glomerulus.  Sodium and water are reabsorbed by the kidney at
three locations further along the nephron. Fifty to seventy percent of the
filtered sodium is reabsorbed at the proximal tubule, the portion of the
nephron closest to the glomerulus. Up to 40% is reabsorbed at the loop of
Henle, and the remaining portion, usually less than 10%, is reabsorbed at
the distal tubule. The filtered, non-reabsorbed impurities wash out into the
urine. In patients suffering from CHF, blood flow through the kidney
decreases because of the poor pumping function of the heart. The kidney
interprets this event as blood loss and attempts to increase its retention
of salt and water to maintain blood pressure. It does this by shifting more
(up to 99%) of its reabsorption of sodium to the proximal tubule. The result
is the harmful build-up of salt and water in the body.

    Current treatment of CHF consists of therapy designed to improve the
pumping function of the heart combined with the administration of diuretics
to eliminate excess sodium and water from the body by blocking reabsorption
in the kidney.  However, current diuretic therapies inhibit sodium
reabsorption either at the loop of Henle (furosemide) or the distal tubule
(thiazides and spironolactone), where as little as one percent of
reabsorption of sodium can take place in patients with advanced CHF. Since
increasing amounts of sodium are reabsorbed proximally as CHF worsens,
distally acting drugs are correspondingly less effective over time and
patients become more symptomatic. Approximately one quarter of hospitalized
CHF patients exhibit resistance to current intravenous diuretic therapies
due to excessive fluid reabsorption in the proximal tubule, and no therapy

<PAGE>

currently exists which targets this site of the disease process.  The dosage
for the most commonly prescribed diuretics for CHF are often increased as
the disease progresses, which can be associated with toxic side effects. 
One side effect is potassium loss, which may lead to an increased incidence
of cardiac arrhythmias if potassium is not monitored and replaced.  A second
side effect is uric acid build-up, which may lead to gout.

    Our preclinical studies indicate that Adentri may act as a potent
diuretic by blocking the adenosine A1 receptors in the proximal tubule that
would ordinarily stimulate sodium reabsorption at that site. These studies
also indicated that Adentri may act at the distal tubule to reduce sodium
reabsorption and minimize potassium excretion.

CLINICAL STATUS 

    Phase II clinical studies conducted by us and completed in May 1998
indicated that Adentri may produce increases (p < 0.05) in urine volume and
urinary sodium excretion in CHF patients with evidence of only potentially
minimal potassium loss, and without decreasing the function of the kidney
(the glomerular filtration rate, or GFR).  Biogen is currently conducting a
placebo-controlled Phase II trial evaluating various doses of Adentri in
comparison to, and in combination with, the diuretic, furosemide.

    Our current estimate of the commencement of various clinical trials
included in this Report are forward-looking statements that involve risks
and uncertainties. The actual clinical trial dates could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including the timing and results of earlier clinical trials
and the other factors set forth under "Risk Factors" and elsewhere in this
Report.  There can be no assurance that Adentri will prove to be safe or
efficacious in humans or that Adentri will obtain FDA or other regulatory or
foreign marketing approval for any indication.

RESEARCH

    We have pre-clinical research programs in the areas of:

      *      cell cycle inhibition
      *      cardiac metabolism
      *      chronic inflammation
      *      cholesterol transport  
      *      selective adenosine receptor agents

    These programs form the platform from which new therapeutics may be
discovered.  We are focusing on the role of adenosine receptors in the
heart, kidney and blood vessels to identify new product opportunities by
modulating the activity of selective adenosine receptor subtypes.  We are
also investigating the ability of cell cycle inhibitors to prevent blood
vessel closure where excessive cell proliferation leads to obstruction of
blood vessels.  We have synthesized an improved class of inhibitor compounds
which are being evaluated in pre-clinical models of coronary angioplasty,
stent deployment, vascular bypass and other diseases.  We are also
evaluating how metabolic modulators such as ranolazine allow the heart
muscle to perform more efficiently when under conditions of stress or when
damaged by heart disease. This research may expand the potential therapeutic
use of ranolazine for cardioprotection and increasing the mechanical
performance of the heart.  It may also form the basis for the discovery of
novel agents.  We are also studying the ways in which excess cholesterol is
removed from the walls of blood vessels, in an effort to prevent or reverse
the buildup of artery plaques that cause heart attacks.

    In 1998, we established a collaboration with Incyte to develop a
prototype gene expression database in the area of cardiovascular biology.
Utilizing tools available from Incyte, we hope to establish model systems in
cells and animals, as well as patients, to follow the expression patterns of
tens of thousands of genes simultaneously, as opposed to one gene at a time,
in response to perturbations associated with blood vessel injury,
cholesterol overload, heart failure and other biological processes involved
in cardiovascular disease.

<PAGE>

LICENSES AND COLLABORATIONS

    We have established, and intend to establish, strategic partnerships to
expedite development and commercialization of our drug candidates. For those
pre-clinical programs with potential application outside of cardiovascular
disease, we intend to identify additional corporate partners. In addition,
we have licensed certain chemical compounds from academic collaborators and
other companies and has applied our drug discovery strategies to analog and
optimize these structures and to identify applications for preclinical and
clinical development. Our collaborations and licenses currently in effect 
include:

    BIOGEN

    In March 1997, we entered into two research collaboration and license
agreements with Biogen. The agreements grant Biogen the exclusive worldwide
right to develop and commercialize Adentri for all indications. In exchange,
we received a $16.0 million upfront payment consisting of cash, an equity
investment and funding under a loan facility. In addition, Biogen agreed to
make significant milestone payments, equity investments and provide funding
under a general purpose loan facility, all of which are subject to
achievement of certain clinical development and commercialization
milestones. In December 1998, Biogen released an additional $4.5 million
under the loan facility.  Biogen will also pay royalties on any future
product sales. Biogen has control and responsibility for conducting, funding
and pursuing all aspects of the development, submissions for regulatory
approvals, manufacture and commercialization of the technology.

    In connection with the agreements, Biogen purchased 669,857 shares of
common stock for a total purchase price of $7.0 million. In addition, we
received advance funding of a milestone payment.

    Biogen may terminate the agreements for any reason upon 90 days notice
until a certain clinical milestone is achieved, and then upon 60 days
thereafter.  If Biogen terminates the agreements, all rights in the
technology would revert to us. There can be no assurance that Biogen will
not terminate the agreements. Any such termination would require us to seek
alternative sources of financing to replace funds expected under this 
collaboration.

    UNIVERSITY OF FLORIDA RESEARCH FOUNDATION

    In June 1994, we entered into a license agreement with the University of
Florida Research Foundation, Inc. ("UFRFI") under which we received
exclusive worldwide rights to develop adenosine A1 receptor antagonists for
the detection, prevention and treatment of human and animal diseases. In
consideration for the license, we paid UFRFI an initial license fee and are
obligated to pay royalties based on net sales of products which utilize the
licensed technology. Pursuant to the agreement, we must exercise
commercially reasonable efforts to develop and commercialize one or more
products covered by the licensed technology and are obligated to meet
milestones in completing certain preclinical work. In the event we fail to
reach those milestones, UFRFI may convert the exclusive license into a
non-exclusive license.

    SYNTEX/ROCHE

    In March 1996, we entered into a license agreement with Syntex for
United States and foreign patent rights to a compound having the generic
name of ranolazine for products treating angina and certain other
cardiovascular indications.  Pursuant to the agreement, Syntex provided
certain quantities of the compound to us.  The license agreement is
exclusive and worldwide except for the following countries which Syntex
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 the license agreement, we paid an initial license fee. In
addition, we are obligated to make a payment upon FDA approval of an NDA for
ranolazine and to make royalty payments based on net sales of products which
utilize the licensed technology. We are required to use commercially
reasonable efforts to develop the compound for angina within certain
milestone guidelines. The license agreement also sets milestones within
which we must launch products in each country covered by the license or lose
exclusivity in such territories. We

<PAGE>

paid $1.5 million to Syntex in 1997 in a combination of cash and common
stock and will owe an additional milestone payment upon FDA approval of an
NDA for ranolazine.

    INCYTE

    In September 1998, we entered into a joint research collaboration
agreement with Incyte to develop a prototype gene expression database in the
area of cardiovascular biology.  We will contribute our molecular cardiology
expertise and Incyte will contribute its genomics capabilities.  Incyte will
own the data produced, and we will receive a perpetual, non-exclusive
license to use the data in our drug development efforts.  Each party will
bear its own costs of the research.

MARKETING AND SALES

    We currently have no sales, marketing or distribution capability. We may
promote our products in collaboration with marketing partners or rely on
relationships with one or more companies with established distribution
systems and direct sales force. In particular, Biogen is responsible for
establishing marketing and sales activities for Adentri. Alternatively, we
may elect to establish our own specialized sales force and marketing
organization to market our products to cardiologists. In the event that we
elect to market our products directly, we will be required to develop a
marketing and sales force with technical expertise and with supporting
distribution capability. There can be no assurance that we will be able to
establish in-house sales and distribution capabilities or relationships with
third parties, or that we will be successful in commercializing any of our
potential products. To the extent that we enter into co-promotion or other
licensing arrangements, any revenues received by us will depend upon the
efforts of third parties, and there can be no assurance that such efforts
will be successful.

MANUFACTURING

    We do not currently operate manufacturing facilities for clinical or
commercial production of our proposed products. We have no experience in
manufacturing, and currently lack the resources and capability to
manufacture any of our proposed products on a clinical or commercial scale.
Accordingly, we are, and will continue to be, dependent on corporate
partners, licensees or other third parties for clinical and commercial scale
manufacturing. For example, Biogen is responsible for the manufacture of
Adentri to supply clinical trials. We are negotiating with third party
manufacturers for clinical scale production of ranolazine SR active
ingredient and tablets sufficient to support the remainder of the Phase III
clinical program, registration and commercialization. In March 1998, we
entered into a manufacturing agreement with Catalytica for the clinical
scale production of ranolazine SR tablets.

    We do have experience in the transfer of synthetic technology from
discovery to scale-up manufacturing facilities, having successfully executed
technology transfer for the manufacture of clinical supplies of one orally
administered agent and one intravenously administered agent. There can be no
assurance that we will be able to reach or maintain agreements with any
third parties or that such parties will be able to develop adequate
manufacturing capabilities. In addition, prior to approval of an NDA for
ranolazine, we will be required to demonstrate to the FDA's satisfaction the
equivalence of the multiple sources of supply used in our clinical trials.

PATENTS AND PROPRIETARY TECHNOLOGY

    Patents and other proprietary rights are important to our business. Our
policy is to file patent applications and to protect technology, inventions
and improvements to inventions that are commercially important to the
development of our business. We also rely on trade secrets, confidentiality
agreements and other protective measures to protect our technology and
proposed products. Our failure to obtain patent protection or otherwise
protect our proprietary technology or proposed products may have a material
adverse effect on our competitive position and business prospects.

<PAGE>

    We own several issued United States patents and pending United States
and foreign patent applications relating to our technology.  Specifically,
we own:

      *      two issued United States patents related to an inflammatory 
             factor
      *      one issued U.S. patent and several foreign pending patent
             applications related to a series of compounds that are
             potential A1 agonists
      *      one issued U.S. patent, two pending U.S. patent applications,
             and several foreign patent applications related to a cell cycle
             inhibitor and other purine inhibitors
      *      one issued U.S. patent, one pending U.S. patent application and
             a Patent Cooperation Treaty patent application related to
             indanone inhibitors
      *      one pending U.S. patent application and one pending PCT
             application related to  -ketoamideinhibitors
      *      one U.S. provisional application relating to ranolazine
             sustained release formulation.  

    In addition, we have acquired, and in turn have granted to Biogen, an
exclusive license to two U.S. issued patents, one U.S. pending application
and corresponding foreign applications related to Adentri. We also have
acquired a license which is exclusive in certain territories to three United
States issued patents, one United States patent application, and
corresponding foreign patent applications related to ranolazine.

    The evaluation of the patentability of United States and foreign patent
applications can take several years to complete and can entail considerable
expense. There is no assurance that patents will issue from any of our
currently pending applications.  There is also no assurance that, if patents
do issue, that the claims allowed will be sufficient to protect our
technology. One of the primary patents relating to ranolazine will expire in
May 2003 unless we are granted an extension based upon delays in the FDA
approval process.

    Patent applications in the United States are maintained in secrecy until
a patent issues, and we cannot 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 that is the subject of such patent
application. Competitors may have filed applications for, or may have
received patents and may obtain additional patents and proprietary rights
relating to, compounds, products or processes that block or compete with our
compounds, products or processes. There can be no assurance that third
parties will not assert patent or other intellectual property infringement
claims against us with respect to our products or technology or other
matters. There may be third party patents and other intellectual property
relevant to our products and technology which are not known to us.

    Patent litigation is becoming more widespread in the biopharmaceutical
industry. Litigation may be necessary to:

      *      defend against or assert claims of infringement
      *      to enforce our issued patents
      *      to protect our trade secrets or know-how
      *      to determine the scope and validity of the proprietary rights
             of third parties.

    Although no third party has asserted that we are infringing such third
party's patent rights or other intellectual property, third parties may
still initiate litigation asserting such claims.  We may not prevail in any
such litigationand we may not be able to obtain any necessary licenses on
reasonable terms, if at all.

    Any such 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 and to resolve. If other companies prepare and file
patent applications in the United States that claim technology also claimed
by us, we may have to participate in interference proceedings to determine
priority of invention, which could result in substantial cost to us even if
the outcome if favorable to us.

<PAGE>

    We also rely on trade secrets, confidentiality agreements and other
protective measures to protect our technology and proposed products. In
spite of this, any of the following may occur:

      *      third parties may independently develop equivalent proprietary
             information or techniques
      *      third parties may gain access to our trade secrets 
      *      third parties may disclose such technology to the public. 

    We typically require our employees, consultants, collaborators, advisors
and corporate partners to execute confidentiality agreements upon
commencement of employment or other relationships us. There can be no
assurance, however, that these agreements will provide meaningful protection
or adequate remedies for our technology in the event of unauthorized use or
disclosure of such information.  There can also be no assurance that the
parties to such agreements will not breach such agreements. See "Risk
Factors   CVT may be unable to effectively protect its intellectual property."

GOVERNMENT REGULATION 

    FDA Requirements for Drug Compounds.  The research, testing, manufacture
and marketing of drug products are extensively regulated by numerous
governmental authorities in the United States and other countries. In the
United States, drugs are subject to rigorous regulation by the FDA. The
Federal Food, Drug and Cosmetic Act, and other federal and state statutes
and regulations, govern, among other things, the research, development,
testing, manufacture, storage, recordkeeping, labeling, promotion and
marketing and distribution of pharmaceutical products. Failure to comply
with applicable regulatory requirements may subject a company to
administrative or judicially imposed sanctions such as:

      *      warning letters
      *      criminal prosecution
      *      injunctions
      *      product seizure
      *      product recalls
      *      total or partial suspension of production
      *      FDA refusal to approve pending NDA applications or NDA
             supplements to approved applications.

    The steps ordinarily required before a new pharmaceutical product may be
marketed in the United States include:

      *      preclinical laboratory tests, in vivo preclinical studies and
             formulation studies
      *      the submission to the FDA of an IND, which must become
             effective before clinical testing may commence
      *      adequate and well-controlled clinical trials to establish the
             safety and  effectiveness of the drug for each indication
      *      the submission of an NDA to  the FDA
      *      FDA review and approval of the NDA prior to any commercial sale
             or shipment of the drug. 

    Preclinical tests include laboratory evaluation of product chemistry and
formulation, as well as animal studies to assess the potential safety and
efficacy of the product. Preclinical tests must be conducted in compliance
with Good Laboratory Practice regulations and compounds for clinical use
must be formulated according to cGMP requirements. The results of
preclinical testing are submitted to the FDA as part of an IND. 

    A 30-day waiting period after the filing of each IND is required prior
to the commencement of clinical testing in humans. If the FDA has not
commented on or questioned the IND within this 30-day period, clinical
studies may begin. If the FDA has comments or questions, the questions must
be answered to the satisfaction of the FDA before initial clinical testing
can begin. In addition, the FDA may, at any time, impose a clinical hold on
ongoing clinical trials. If the FDA imposes a clinical hold, clinical trials
cannot commence or recommence without FDA authorization and then only under
terms authorized by the FDA. In some instances, the IND application process
can result in substantial delay and expense.

<PAGE>

    Clinical trials involve the administration of the investigational new
drug to healthy volunteers or patients under the supervision of a qualified
principal investigator. Clinical trials are conducted in accordance with
Good Clinical Practice, under protocols detailing the objectives of the
study, the parameters to be used in monitoring safety and the effectiveness
criteria to be evaluated.  Each protocol must be submitted to the FDA as
part of the IND.

    Clinical trials to support NDAs are typically conducted in three
sequential phases, but the phases may overlap.  In Phase I, the initial
introduction of the drug into healthy human subjects or patients, the drug
is tested to assess metabolism, pharmacokinetics and pharmacological actions
and safety, including side effects associated with increasing doses. Phase
II usually involves studies in a limited patient population to:

      *      determine the efficacy of the drug in specific, targeted 
             indications
      *      determine dosage tolerance and optimal dosage 
      *      identify possible adverse effects and safety risks. 

    If a compound is found to be effective and to have an acceptable safety
profile in Phase II evaluations, Phase III trials are undertaken to further
evaluate clinical efficacy and to further test for safety within an expanded
patient population at geographically dispersed clinical study sites. There
can be no assurance that Phase I, Phase II or Phase III testing will be
completed successfully within any specified time period, if at all, with
respect to any of our products subject to such testing.

    After completion of the required clinical testing, generally an NDA is
submitted. FDA approval of the NDA is required before marketing may begin in
the United States. The NDA must include the results of extensive clinical
and other testing and the compilation of data relating to the product's
chemistry, pharmacology and manufacture.  The cost of the NDA is substantial.

    Once the submission is accepted for filing, the FDA begins an in-depth
review of the NDA. Under the FDC Act, the FDA has 180 days in which to
review the NDA and respond to the applicant. The review process is often
significantly extended by FDA requests for additional information or
clarification regarding information already provided in the submission. The
FDA may refer the application to the appropriate advisory committee,
typically a panel of clinicians, for review, evaluation and a recommendation
as to whether the application should be approved. The FDA is not bound by
the recommendation of an advisory committee. 

    If FDA evaluations of the NDA and the manufacturing facilities are
favorable, the FDA may issue either an approval letter or an approvable
letter.  Either letter usually contains a number of conditions that must be
met in order to secure final approval of the NDA. When and if those
conditions have been met to the FDA's satisfaction, the FDA will issue an
approval letter.  The approval letter authorizes commercial marketing of the
drug for certain indications. As a condition of NDA approval, the FDA may
require postmarketing testing and surveillance to monitor the drug's safety
or efficacy.

    If the FDA's evaluation of the NDA submission or manufacturing
facilities is not favorable, the FDA may refuse to approve the NDA or issue
a not approvable letter.  The not approvable letter outlines the
deficiencies in the submission and often requires additional testing or
information. Notwithstanding the submission of any requested additional data
or information in response to an approvable or not approvable letter, the
FDA ultimately may decide that the application does not satisfy the
regulatory criteria for approval. Once granted, product approvals may be
withdrawn if compliance with regulatory standards is not maintained or
problems occur following initial marketing.

    Manufacturing.  Each domestic drug manufacturing facility must be
registered with FDA. Domestic drug manufacturing establishments are subject
to periodic inspection by the FDA and must comply with cGMP. Further, we or
our third party manufacturer must pass a preapproval inspection of its
manufacturing facilities by the FDA before obtaining marketing approval of
any products. To supply products for use in the United States, foreign
manufacturing establishments must comply with cGMP and are subject to
periodic inspection by the FDA or corresponding regulatory agencies in
countries under reciprocal agreements with the FDA. Drug product
manufacturing establishments located in California must be licensed by the
State of California in compliance with local regulatory requirements, and
other states may have comparable regulations. We use and will continue to
use

<PAGE>

third party manufacturers to produce our products in clinical and
commercial quantities. There can be no guarantee that future FDA inspections
will proceed without any compliance issues requiring the expenditure of
money or other resources.

    Foreign Regulation of Drug Compounds.  Whether or not FDA approval has
been obtained, approval of a product by comparable regulatory authorities
may be necessary in foreign countries prior to the commencement of marketing
of the product in such countries. The approval procedure varies among
countries and, can involve additional testing.  The time required may differ
from that required for FDA approval. Although there are some procedures for
unified filings for certain European countries with the sponsorship of the
country which first granted marketing approval, in general each country has
its own procedures and requirements, many of which are time consuming and
expensive. Thus, there can be substantial delays in obtaining required
approvals from foreign regulatory authorities after the relevant
applications are filed. 

    In Europe, marketing authorizations may be submitted at a centralized, a
decentralized or a national level. The centralized procedure is mandatory
for the approval of biotechnology products and provides for the grant of a
single marketing authorization which is valid in all European Union member
states. As of January 1995, a mutual recognition procedure is available at
the request of the applicant for all medicinal products which are not
subject to the centralized procedure. We will choose the appropriate route
of European regulatory filing to accomplish the most rapid regulatory
approvals. There can be no assurance that the chosen regulatory strategy
will secure regulatory approvals on a timely basis or at all.

    Hazardous Materials.  Our research and development processes involve the
controlled use of hazardous materials, chemicals and radioactive materials
and produce waste products. We are subject to federal, state and local laws
and regulations governing the use, manufacture, storage, handling and
disposal of such materials and waste products. Although we believe that our
safety procedures for handling and disposing of such materials comply with
the standards prescribed by such laws and regulations, the risk of
accidental contamination or injury from these materials cannot be eliminated
completely. In the event of such an accident, we could be held liable for
any damages that result.  Such liability could exceed our resources.
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.

COMPETITION

    The pharmaceutical and biopharmaceutical industries are subject to
intense competition and rapid and significant technological change. While
several of our products target diseases for which there are presently no
effective therapies, we nevertheless are aware of companies which are
developing products that will compete for the same disease markets. For
example, Kyowa Hakko Co., Ltd., Fujisawa Pharmaceutical, Japan and Discovery
Therapeutics, Inc., are each developing adenosine A1 receptor antagonists.
In addition, Novartis AG and GlaxoWellcome PLC both have adenosine A1
receptor agonists under development.  If regulatory approvals are received,
ranolazine may compete with several classes of existing drugs for the
treatment of angina, some of which are available in generic form, including
calcium channel blockers, beta blockers and nitrates. There are also
non-pharmacologic treatments such as coronary artery bypass grafting
("CABG") and percutaneous transluminal coronary angioplasty  ("PTCA").
However, for those patients who do not respond adequately to existing
therapies and remain symptomatic despite maximal treatment with existing
anti-anginal drugs and who are not candidates for CABG or PTCA, there is no
currently effective treatment. In refractory patients who are candidates for
CABG or PTCA, there is no effective pharmacologic treatment available.

<PAGE>

    We believe that the principal competitive factors in the markets for
ranolazine and Adentri will include:

      *      the length of time to receive regulatory approval
      *      product performance
      *      product price
      *      product supply
      *      marketing and sales capability 
      *      enforceability of patent and other proprietary rights. 

   We believe that we and our collaborative partners are or will be
competitive with respect to these factors. Nonetheless, because our 
products are still under development, our relative competitive position  in
the future is difficult to predict.

   We expect that the pharmaceutical and biopharmaceutical industries will
continue to experience rapid technological development which may render our
potential products non-competitive or obsolete. Many current and potential
competitors have substantially greater product development capabilities and
financial, marketing, scientific, and human resources than we do. Other
companies may succeed in developing products earlier than we do.  Other
companies may obtain approvals for such products from the FDA more rapidly
than we do.  Other companies may develop products that are safer and more
effective than those under development or proposed to be developed by us.

   While we will seek to expand our technological capabilities in order to
remain competitive, there can be no assurance that research and development
by others will not render our technology or potential products obsolete or
non-competitive or result in treatments or cures superior to any therapy
developed by us.  There can be no assurance that therapy developed by us
will be preferred to any existing or newly developed technologies.

PRODUCT LIABILITY INSURANCE

   The manufacture and sale of human therapeutic products involve an
inherent risk of product liability claims and associated adverse publicity.
The Company has only limited product liability insurance for clinical trials
and no commercial product liability insurance. There can be no assurance
that it will be able to maintain existing or obtain additional product
liability insurance on acceptable terms or with adequate coverage against
potential liabilities. Such insurance is expensive, difficult to obtain and
may not be available in the future on acceptable terms, or at all. An
inability to obtain sufficient insurance coverage on reasonable terms or to
otherwise protect against potential product liability claims could prevent
or inhibit the commercialization of the Company's potential products. A
product liability claim brought against the Company in excess of its
insurance coverage, if any, or a product withdrawal could have a material
adverse effect upon the Company's business, financial condition and results
of operations.

EMPLOYEES

   As of December 31, 1998, CVT employed 62 individuals full-time, including
19 who hold doctoral degrees. Of the Company's full-time work force, 46
employees are engaged in or directly support research and development
activities and 16 are engaged in business development, finance and
administrative activities. The Company's employees are not represented by a
collective bargaining agreement.  The Company believes its relations with
its employees are good.

ITEM 2. PROPERTIES

   The Company currently leases a 61,081 square foot building in Palo Alto,
California, of which 30,283 square feet are subleased to a third party. The
initial term of the lease expires in February 2002 with an option to renew
for five years, and the subleases expire in March 1999 and April 1999,
respectively. CVT believes that this facility will be adequate to meet the
Company's needs for the foreseeable future.

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

   The Company is not a party to any material legal proceedings.

<PAGE>

                                   PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

   Prior to the effectiveness of the Company's Registration Statement on
Form S-1, No. 333-12675, on November 19, 1996, there had been no established
public trading market for the Company's common stock. Since that date, the
Company's common stock has traded on the Nasdaq National Market under the
symbol "CVTX." 

   The following table sets forth for the periods indicated the high and low
price per share of the common stock on the Nasdaq National Market.

<TABLE>
<CAPTION>
                                                                     High           Low
                                                                   ---------     ---------
 <S>      <C>                                                      <C>           <C>
          Fiscal Year Ended December 31, 1996
          November 19, 1996 to December 31, 1996                   $  8.000      $  6.250

          Fiscal Year Ended December 31, 1997
          First Quarter ended March 31, 1997                       $ 10.750      $  6.500
          Second Quarter ended June 30, 1997                       $  8.875      $  6.875
          Third Quarter ended September 30, 1997                   $ 10.000      $  6.875
          Fourth Quarter ended December 31, 1997                   $ 12.500      $  8.125

          Fiscal Year Ended December 31, 1998
          First Quarter ended March 31, 1998                       $  9.875      $  8.250
          Second Quarter ended June 30, 1998                       $ 10.625      $  8.375
          Third Quarter ended September 30, 1998                   $  9.000      $  5.750
          Fourth Quarter ended December 31, 1998                   $  7.125      $  4.250

</TABLE>

   On March 9, 1999, the closing price for the Company's common stock was
$6.0625 per share. As of March 9, 1999, the Company had 202 holders of
record of its common stock.

DIVIDENDS

   The Company has never declared or paid any cash dividends on its capital
stock. The Company currently intends to retain any future earnings to
finance the growth and development of its business and therefore, does not
anticipate paying any cash dividends in the foreseeable future.

USE OF PROCEEDS

   On November 19, 1996, the Securities and Exchange Commission declared the
Company's registration statement (file number 2-12675) effective. The
offering commenced on November 19, 1996 and terminated following the sale of
all securities registered. J.P. Morgan Securities Inc., Invemed Associates,
Inc. and UBS Securities LLC served as the managing underwriters. The Company
registered, for its own account, 1,750,000 shares of common stock for an
aggregate offering price of $14,000,000 and sold 1,750,000 shares of common
stock for an aggregate sales price of $14,000,000. In connection with the
offering, the Company incurred the following expenses and made direct or
indirect payments to others: $980,000 for underwriting discounts and
commissions and $1,050,000 for other expenses for a total of $2,030,000 in
expenses. Following the deduction of such expenses, the Company received net
offering proceeds of $11,970,000. The Company used $9,584,000 of the net
proceeds for operating activities, $1,738,000 for repayment of debt and
$648,000 for capital expenditures.

<PAGE>

   On January 4, 1998, the Company filed a registration statement with the
Securities and Exchange Commission for a follow-on public offering. The
follow-on public offering closed on January 27, 1998 and the Company
received net proceeds of $19,624,000. As of December 31, 1998, the Company
has used all of the net proceeds from the follow-on public offering for
temporary investments, including money market and short- and long-term
funds. 

RECENT SALES OF UNREGISTERED SECURITIES

   From January 1, 1997 through December 31, 1998, the Company sold and
issued the following unregistered securities:

   (1) In October 1997, the Company issued in a private placement 1,397,147
shares of common stock to Biotech Target S.A., a wholly owned subsidiary of
BB Biotech AG, at $8.80 per share.  The issuance was deemed to be exempt
from registration under the Securities Act of 1933, as amended, by virtue of
Regulation S promulgated thereunder.

   (2) In March 1997, the Company issued in a private placement 669,857
shares of common stock to Biogen. The issuance was deemed to be exempt from
registration under the Securities Act of 1933, as amended, by virtue of
Regulation D promulgated thereunder.

   Appropriate legends are affixed to the stock certificates issued in the
aforementioned transactions. Similar legends were imposed in connection with
any subsequent sales of any such securities. All recipients received
adequate information about the Company or had access, through employment or
other relationships, to such information.

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

   The data set forth below is not necessarily indicative of the results of
future operations and should be read in conjunction with the consolidated
financial statements and notes thereto included elsewhere in this document
and also with "Management's Discussion and Analysis of Financial Condition
and Results of Operations". No dividends were declared or paid for any
periods presented.

<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                         ------------------------------------------------------------------
                                                            1998          1997          1996          1995          1994
                                                         ----------    ----------    ----------    ----------    ----------
                                                                       (in thousands, except per share data)
<S>                                                      <C>           <C>           <C>           <C>           <C>
Statements of Operations Data
Collaborative research revenue                            $  4,509      $  2,578      $    250      $      -      $      -
Operating expenses:
  Research and development                                  14,578        10,568         7,141        12,856         8,823
  General and administrative                                 4,158         4,169         2,917         3,402         2,802
                                                         ----------    ----------    ----------    ----------    ----------
Total operating expenses                                    18,736        14,737        10,058        16,258        11,625
                                                         ----------    ----------    ----------    ----------    ----------
Loss from operations                                       (14,227)      (12,159)       (9,808)      (16,258)      (11,625)
Interest income                                              2,749         1,760           587           416           526
Interest and other expense                                  (1,124)         (926)       (1,144)         (882)         (268)
                                                         ----------    ----------    ----------    ----------    ----------
  Net loss                                                $(12,602)     $(11,325)     $(10,365)     $(16,724)     $(11,367)
                                                         ==========    ==========    ==========    ==========    ==========
Basic and diluted net loss per share (1)                  $  (1.16)     $  (1.58)     $  (9.83)     $ (49.92)     $ (45.83)
                                                         ==========    ==========    ==========    ==========    ==========
Shares used in computing basic and diluted net loss per
  share (1)                                                 10,905         7,157         1,054           335           248
                                                         ==========    ==========    ==========    ==========    ==========

</TABLE>

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                        ----------------------------------------------------------------
                                                           1998          1997          1996          1995          1994
                                                        ----------    ----------    ----------    ----------    ----------
                                                                                  (in thousands)
<S>                                                     <C>           <C>           <C>           <C>           <C>
Balance Sheet Data
Cash, cash equivalents and marketable securities         $ 44,804      $ 38,090      $ 21,568      $  5,569      $  9,743
Working capital                                          $ 40,698      $ 32,904      $ 20,278      $    271      $  7,686
Total assets                                             $ 49,330      $ 42,644      $ 26,139      $ 11,448      $ 16,099
Long-term portion of debt and capital lease obligation   $  7,838      $  5,052      $  5,000      $  3,402      $  2,698
Accumulated deficit                                      $(69,553)     $(56,951)     $(45,626)     $(35,261)     $(18,537)
Total stockholders' equity                               $ 34,738      $ 26,557      $ 18,676      $  1,804      $ 10,561

</TABLE>
______________________
(1)  See Note 1 of Notes to Consolidated Financial Statements for a
description of the shares used in calculating basic and diluted net loss per 
share.

<PAGE>

ITEM 7.  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 which involve risks and uncertainties. The Company's 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."

OVERVIEW

   CVT is an early stage biopharmaceutical company focused on the
application of molecular cardiology to the discovery, development and
commercialization of novel small molecule drugs for the treatment of
cardiovascular disease. Since its inception in December 1990, substantially
all of the Company's resources have been dedicated to research and
development. To date, CVT has not generated any product revenue and does not
expect to generate any such revenues for at least several years. As of
December 31, 1998, the Company had an accumulated deficit of $69.6 million.
The Company expects its sources of revenue, if any, for the next several
years to consist of payments under corporate partnerships and interest
income. The process of developing the Company's products will require
significant additional research and development, preclinical testing and
clinical trials, as well as regulatory approval. These activities, together
with the Company's general and administrative expenses, are expected to
result in operating losses for the foreseeable future. The Company will not
receive product revenue unless it or its collaborative partners complete
clinical trials and successfully commercialize one or more of its products.

   CVT is subject to risks common to biopharmaceutical companies, including
risks inherent in its research and development efforts and clinical trials,
reliance on collaborative partners, enforcement of patent and proprietary
rights, the need for future capital, potential competition and uncertainty
of regulatory approval. In order for a product to be commercialized, it will
be necessary for CVT and, in some cases, its collaborators, to conduct
preclinical tests and clinical trials, demonstrate efficacy and safety of
the Company's product candidates, obtain regulatory clearances and enter
into manufacturing, distribution and marketing arrangements, as well as
obtain market acceptance. There can be no assurance that the Company will
generate revenues or achieve and sustain profitability in the future.

RESULTS OF OPERATIONS

   Years Ended December 31, 1998 and 1997 

   Collaborative Research Revenues.  The Company recognized collaborative
research revenues of $4.5 million for the year ended December 31, 1998,
compared to $2.6 million during year ended December 31, 1997. The increase
was primarily the result of $4.0 million of deferred revenue being
recognized during 1998, in conjunction with  the Company's completion of the
research component of its collaboration with Biogen, Inc.

   Research and Development Expenses.  The Company's research and
development expenses increased to $14.6 million for the year ended December
31, 1998, compared to $10.6 million for the year ended December 31, 1997.
The increase during 1998 was primarily due to increased outside service
expenses associated with ranolazine clinical trials. The Company expects
research and development expenses to increase significantly over the next
several years as the Company expands research and product development
efforts. The Company has taken, and is continuing to take, extra measures to
stimulate faster enrollment in its ongoing Phase III monotherapy clinical
trial of ranolazine due to slower than originally projected enrollment.
These measures resulted in an increase in enrollment in the second half of
1998, and are expected to result in further enrollment increases, and hence
an increase in clinical trial expenses. Two other Phase III clinical trials
with ranolazine are expected to begin in 1999, which will likely result in a
further increase in research and development expenses. Research and
development expenses will also increase due to activities associated with
CVT-510, which entered a Phase I clinical trial in September 1998.

<PAGE>

   General and Administrative Expenses.  General and administrative expenses
were $4.2 million for the year ended December 31, 1998, which were the same
as for the year ended December 31, 1997. The Company expects general and
administrative expenses to increase in the future in support of the
Company's research and development activities.

   Interest and Other Income (Expense), Net.  Interest and other income
(expense), net increased to $1.6 million for the year ended December 31,
1998, compared to $834,000 for the year ended December 31, 1997. The
increase in 1998 was due to higher average investment balances as a result
of net proceeds of $19.6 million from the Company's follow-on public
offering of 2,575,000 shares of common stock that was completed in January
1998. The increase was partially offset by a $303,000 charge for the early
retirement of a capital lease obligation. The Company expects that interest
and other income, net will fluctuate with average investment balances.

   Taxes.  The Company has not generated taxable income to date. At December
31, 1998, the net operating losses available to offset future taxable income
for federal income tax purposes were approximately $61.5 million. Because
the Company has experienced ownership changes, future utilization of the
carryforwards may be limited in any one fiscal year pursuant to Internal
Revenue Code regulations.  The carryforwards expire at various dates
beginning in 2008 through 2018 if not utilized. As a result of the annual
limitation, a portion of these carryforwards may expire before becoming
available to reduce the Company's federal income tax liabilities.

   Years Ended December 31, 1997 and 1996 

   Collaborative Research Revenues.  The Company recognized collaborative
research revenues of $2.6 million for the year ended December 31, 1997,
compared to $250,000 during year ended December 31, 1996. Collaborative
research revenue for the year ended December 31, 1997 was earned in
connection with the Company's collaboration with Biogen for the development
and commercialization of Adentri.

   Research and Development Expenses.  The Company's research and
development expenses increased to $10.6 million for the year ended December
31, 1997, compared to $7.1 million for the year ended December 31, 1996. The
higher expenses in 1997 were primarily due to increased activity associated
with the development of ranolazine as well as a $1.0 million milestone
payment to Syntex payable under the original license agreement for
ranolazine and the issuance of shares of the Company's common stock to
Syntex valued at $544,000 under an amendment to the license agreement. 
These expenses were partially offset by a decrease in the use of outside
contract services by the Company.

   General and Administrative Expenses  General and administrative expenses
increased to $4.2 million for the year ended December 31, 1997, compared to
$2.9 million for the year ended December 31, 1996, primarily due to the
amortization of deferred compensation expense, personnel recruiting expenses
and new administrative expenses associated with becoming a public company.

   Interest and Other Income (Expense), Net.  Interest and other income
(expense), net increased to  $834,000 for the year ended December 31, 1997,
compared to $(557,000) for the year ended December 31, 1996. The increase in
1997 was a result of higher average investment balances resulting from the
proceeds of the Company's initial public offering completed in November
1996, payments received in connection with the Company's collaboration and
license agreements with Biogen entered into in March 1997 and proceeds from
the private placement of shares of common stock with Biotech Target S.A., an
affiliate of BB Biotech AG of Switzerland ("BB Biotech"), in October 1997.
In contrast, during the year ended December 31, 1996, the Company had lower
average investment balances and incurred prepayment penalties associated
with a restructuring of the Company's debt.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

   The Company has financed its operations since inception primarily through
private placements of preferred and common stock, public offerings of common
stock, equipment and leasehold improvement financing, other debt financing
and payments under corporate collaborations. In November 1996, the Company
completed an initial public offering and raised net proceeds of
approximately $12.0 million. On March 7, 1997, the Company entered into two
research collaboration and license agreements with Biogen that together
resulted in cash receipts of $16.0 million. In addition, Biogen agreed to
make development milestones and equity investments and provide funding under
a general purpose loan facility, all of which are subject to achievement of
certain clinical development and commercialization milestones. Biogen will
also pay royalties from any future product sales. On October 7, 1997, the
Company raised net proceeds of $12.3 million in a private placement of
equity securities with BB Biotech. In January 1998, the Company completed a
follow-on public offering of 2,575,000 shares of the Company's common stock
and raised net proceeds of approximately $19.6 million. In September 1998,
the Company arranged equipment financing in the amount of $443,000 resulting
in the establishment of a new capital lease. In December 1998, the Company
drew down an additional $4.5 million under the general purpose loan facility
with Biogen.

   Cash, cash equivalents and marketable securities at December 31, 1998
totaled $44.8 million compared to $38.1 million at December 31, 1997. The
increase in 1998 was due to the receipt of $19.6 million in net proceeds
from the follow-on public offering that was completed in January 1998 and
the $4.5 million in additional funding provided under the general purpose
loan facility with Biogen in December 1998. The increase was partially
offset by a $1.4 million payment in March 1998, for the early retirement of
a capital lease obligation.

   Net cash used in operations for the year ended December 31, 1998 was
$13.9 million compared to $3.5 million for the year ended December 31, 1997.
The difference in cash used in operating activities in 1998 as compared to
1997 was primarily the result of the $7.0 million up-front payment received
in 1997 under the collaboration with Biogen, Inc. and which was treated as
deferred revenue as of December 31, 1997. The remaining increase of $3.4
million was primarily due to increased research and development efforts.

   As of December 31, 1998, the Company had invested $7.3 million in
property and equipment, of which approximately $4.8 million was financed
through equipment and leasehold financings at various times.

   The Company will require substantial additional funding in order to
complete its research and development activities and commercialize any
potential products.  The Company currently estimates that its existing
resources and projected interest income will enable the Company to maintain
its current and planned operations through the first half of 2000. However,
there can be no assurance that the Company will not require additional
funding prior to such time or that additional financing will be available on
acceptable terms or at all.

   The Company's forecast of the period of time through which its financial
resources will be adequate to support its operations is a forward-looking
statement that involves risks and uncertainties, and actual results could
vary as a result of a number of factors, including those described in "Risk
Factors   CVT must secure additional financing to meet its future needs" and
elsewhere in this Report. The Company's future capital requirements will
depend on many factors, including scientific progress in its research and
development programs, the size and complexity of such programs, the scope
and results of preclinical studies and clinical trials, the ability of the
Company 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 the Company's control. There can be no
assurance that such additional financing to meet the Company's capital
requirements will be available on acceptable terms or at all. Insufficient
funds may require the Company to delay, scale back or eliminate some or all
of its research or development programs, to lose rights under existing
licenses or to relinquish greater or all rights to product candidates at an
earlier stage of development or on less favorable terms than the Company
would otherwise choose or may adversely affect the Company's ability to
operate as a going concern. If additional funds are raised by issuing equity
securities, substantial dilution to existing stockholders may result.

<PAGE>

YEAR 2000

   Many computer systems, applications, information technologies and
equipment containing computer related components (generally "computer
systems and equipment") are unable to differentiate between the year 2000
and the year 1900 because they were programmed with two-digit, rather than
four-digit, date fields. Accordingly, older computer systems that have
time-sensitive applications may not properly recognize the year 2000 and
beyond ("Year 2000 issue"). This could cause system or equipment shut downs,
failures or miscalculations resulting in inaccuracies in computer output or
disruptions of operations, including, among other things, inaccurate
processing of financial information and/or temporary inabilities to process
transactions, manufacture products, or engage in similar normal business 
activities.

   The Company has formed a committee to assess the impact of the problem on
the Company's operations; however, the committee's assessment of the Year
2000 issue is not yet complete. The Company has tested its key computer
systems and equipment (including financial, informational and operational
systems) and determined that these systems are largely Year 2000 compliant.
The Company expects to complete upgrades to its systems which are not Year
2000 compliant by the end of 1999. The Company believes that with these
upgrades, the Year 2000 issue will not pose significant operational problems
for its computer systems and equipment. However, if such upgrades are not
made or are not completed in a timely fashion, the Year 2000 issue might
have an adverse impact on the operations of the Company, the precise degree
of which cannot be known at this time. The Company currently has no
contingency plans to deal with major Year 2000 failures.

   In addition to risks associated with the Company's own computer systems
and equipment, the Company has relationships with, and is to varying degrees
dependent upon, a large number of third parties that provide information,
goods and services to the Company. These include financial institutions,
suppliers, vendors, research partners and governmental entities. If
significant numbers of these third parties experience failures in their
computer systems, or equipment due to the Year 2000 issue, these failures
could affect the Company's ability to process transactions, manufacture
products, or engage in similar normal business activities. While some of
these risks are outside of the Company's control, the Company has instituted
programs, including internal records review and use of external
questionnaires, to identify key third parties, assess their level of Year
2000 compliance, update contracts and address any non-compliance issues.

   The total cost of the Year 2000 systems assessment and upgrades is funded
through operating cash flows and the Company is expensing these costs. The
Company has created a mechanism to trace certain of the costs related to the
Year 2000 issue and budgeted funds to address the issues of assessment
conversion. The financial impact of making the required systems changes
cannot be known precisely at this time, but it is currently expected to be
less than $100,000. The actual financial impact could, however, exceed this
estimate. These costs are not expected to be material to the Company's
financial position, results of operations or cash flows.

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   The Company's exposure to market rate risk for changes in interest rates
relates primarily to the Company's investment portfolio. The Company does
not use derivative financial instruments in its investment portfolio. The
Company places its investments with high quality issuers and, by policy,
limits the amount of credit exposure to any one issuer. The Company is
averse to principal loss and ensures the safety and preservation of its
invested funds by limiting default, market and reinvestment risk. The
Company classifies its 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, corporate bonds, and certificates of deposit.
The Company classifies its 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.
These "variable-rate" investments primarily included money market accounts.
The table below presents the amounts and related weighted interest rates of
the Company's investment portfolio as December 31, 1998:

<TABLE>
<CAPTION>
                                                  Average
         (in thousands)                        Interest Rate    Cost      Fair Value
                                               ------------- ---------    ----------
<S>      <C>                                      <C>        <C>          <C>
         Cash equivalents
           Variable rate                           5.10%      $11,931      $11,931
         Marketable securities
           Fixed rate                              5.74%      $33,091      $32,850

</TABLE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

   The Company's Financial Statements and notes thereto appear beginning on
page F-1 of this Report.

<PAGE>

                                   PART III

   The information required in Part III of this report is incorporated by
reference to the Registrant's Proxy Statement in connection with the
Registrant's 1999 Annual Meeting to be filed in accordance with Regulation
14A under the Securities Exchange Act of 1934, as amended.

<PAGE>

                                  PART IV  

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K 

   (a)(1) Index to Financial Statements and Report of Ernst &Young LLP,
Independent Auditors 

   The Consolidated Financial Statements required by this item are submitted
in a separate section beginning on page F-1 of this report.

                                                                            PAGE

Report of Ernst & Young LLP, Independent Auditors                            F-1
Consolidated Balance Sheets                                                  F-2
Consolidated Statements of Operations                                        F-3
Consolidated Statement of Stockholders' Equity                               F-4
Consolidated Statements of Cash Flows                                        F-6
Notes to Consolidated Financial Statements                                   F-7

   (a)(2) Index to Financial Statements Schedules

   All financial statement schedules are omitted because they are not
applicable, or the information is included in the financial statements or
notes thereto.

   (a)(3) Exhibits:

 EXHIBIT
 NUMBER

   3.1     Amended and Restated Certificate of Incorporation of the
           Registrant.  (1)

   3.2     Restated Bylaws of the Registrant.  (1)

   4.1     Reference is made to Exhibits 3.1 and 3.2.  (1)

   4.2     Specimen Common Stock Certificate.  (1)

  10.1*    1992 Stock Option Plan, as amended.  (1)

  10.2*    1994 Equity Incentive Plan, as amended.  (6)

  10.3     Non-Employee Directors' Stock Option Plan, as amended.  (1)

  10.4*    Form of Incentive Stock Option Grant.  (1)

  10.5*    Form of Non-Incentive Stock Option Grant.  (1)

  10.6     Form of Non-Statutory Stock Option Grant under Non-Employee
           Directors' Stock Option Plan.  (2)

  10.7*    Employee Stock Purchase Plan.  (1)

  10.8*    Amended and Restated Promissory Note for $500,000 between
           Registrant and Louis G. Lange, M.D., Ph.D., effective as of
           September 23, 1996.  (1)

  10.9*    Amended and Restated Promissory Note for $37,500 between
           Registrant and Louis G. Lange, M.D., Ph.D., effective as of
           September 23, 1996.  (1) 

  10.10*   Amended and Restated Promissory Note for $25,000 between
           Registrant and Louis G. Lange, M.D., Ph.D., effective as of
           September 23, 1996.  (1)

  10.11*   Amended and Restated Promissory Note for $25,000 between
           Registrant and Louis G. Lange, M.D., Ph.D., effective as of
           September 23, 1996.  (1)

  10.12*   Amended and Restated Promissory Note between Registrant and
           George F. Schreiner, M.D., Ph.D., effective as of September 23,
           1996.  (1)

<PAGE>

 EXHIBIT
 NUMBER

  10.13*   Amended and Restated Promissory Note between Registrant and
           Thomas L. Gutshall, effective as of  September 23, 1996.  (1)

  10.14    Separation and Consulting Agreement between Registrant and Thomas
           L. Gutshall, effective as of September 2, 1996.  (1)

  10.15*   Form of Indemnification Agreement between Registrant and its
           directors and officers.  (1)

  10.16    Amended and Restated Investor Rights Agreement between Registrant
           and the stockholders named therein, dated May 29, 1996.  (1)

  10.17    Form of Series A Preferred Stock Warrant, and amendment thereto.  (1)

  10.18    Amended and Restated Series B Preferred Stock Warrant to Genta
           Incorporated.  (1)

  10.19    Form of Series D Preferred Stock Warrant to Alex Brown & Sons
           Incorporated.  (1)

  10.20    Form of Amended and Restated Series D Preferred Stock Warrant.  (1)

  10.21    Form of Series E Preferred Stock Warrant.  (1)

  10.22    Series E Preferred Stock Warrant to Cooley Godward LLP.  (1)

  10.23    Series E Preferred Stock Warrant to Syntex (U.S.A.) Inc.  (1)

  10.24    Form of Common Stock Warrant exercisable immediately, dated
           September 27, 1996.  (1)

  10.25    Form of Common Stock Warrant, dated September 17, 1996.  (1)

  10.26**  License Agreement between Registrant and University of Florida
           Research Foundation, Inc., dated June 7, 1994.  (1)

  10.27**  Research Agreement between Registrant and University of Florida,
           dated June 27, 1994.  (1)

  10.28**  License Agreement between Registrant and Syntex (U.S.A.) Inc.,
           dated March 27,1996. (1)

  10.29**  License Agreement between Registrant and Bayer A.G., dated May 7,
           1996.  (1)

  10.30    Lease Agreement between Registrant and Matadero Creek, dated
           August 6, 1993 and addendum thereto; Letter Amendment to Lease
           Agreement, dated June 30, 1994 and SecondAmendment to Lease
           Agreement, dated June 30, 1994.  (1) 

  10.31    Master Lease Agreement between Registrant and Hambrecht & Quist
           Guaranty Finance, LLC, dated September 27, 1996.  (1)

  10.32    Finance Agreement between Registrant and Hambrecht & Quist
           Guaranty Finance, LLC, dated September 27, 1996.  (1)

  10.33    Business Loan Agreement between Registrant and Hambrecht & Quist
           Guaranty Finance, LLC, dated September 27, 1996.  (1)

  10.34    Business Loan Agreement between Registrant and Hambrecht & Quist
           Transition Capital, LLC, dated September 27, 1996.  (1)

  10.35    Promissory Note between Registrant and Hambrecht & Quist Guaranty
           Finance, LLC, dated September 27, 1996.  (1)

  10.36    Promissory Note between Registrant and Hambrecht & Quist
           Transition Capital, LLC, dated September 27, 1996.  (1)

  10.37    Security Agreement between Registrant and Hambrecht & Quist
           Guaranty Finance, LLC, dated September 27, 1996.  (1)

  10.38    Security Agreement between Registrant and Hambrecht & Quist
           Transition Capital, LLC, dated September 27, 1996.  (1)

<PAGE>

 EXHIBIT
 NUMBER

  10.39**  Research Collaboration and License Agreement (U.S.) between the
           Registrant and Biogen, Inc., dated March 7, 1997.  (3)

  10.40**  Research Collaboration and License Agreement (Europe) between the
           Registrant and Biogen Manufacturing Ltd., dated March 7, 1997.  (3)

  10.41**  Common Stock Purchase Agreement between the Registrant and
           Biotech Manufacturing Ltd., dated March 7, 1997.  (3)

  10.42**  Loan Agreement between the Registrant and Biotech Manufacturing
           Ltd., dated March 7, 1997.  (3)

  10.43**  Letter Agreement, dated March 7, 1997, between Registrant and the
           University of Florida Research Foundation, Inc.  (4)

  10.44**  Amendment to License Agreement, effective as of July 3, 1997,
           between the Registrant and Syntex (U.S.A.), Inc.  (4)

  10.45    Common Stock Purchase Agreement, dated October 7, 1997, by and
           between CV Therapeutics, Inc. and Biotech Target S.A.  (5)

  10.46    Letter Agreement between CV Therapeutics, Inc. and Michael M.
           Wick, M.D., Ph.D., dated April 30, 1997.  (5)

  10.47    Transition Agreement between CV Therapeutics, Inc. and Kathy
           Stafford dated September 15, 1997.  (5)

  10.48    First Amendment to Security Agreement, dated as of March 7, 1997,
           by and between Hambrecht & Quist Guaranty Finance, LLC and CV
           Therapeutics, Inc.  (5)

  10.49    First Amendment to Security Agreement, dated as of March 7, 1997,
           by and between Hambrecht & Quist Transition Capital, LLC and CV
           Therapeutics, Inc.  (5)

  10.50    First Amendment to Business Loan Agreement, dated as of March 7,
           1997, by and between Hambrecht & Quist Transition Capital, LLC
           and CV Therapeutics, Inc.  (5)

  10.51    First Amendment to Master Lease Agreement, dated as of March 7,
           1997, by and between Hambrecht & Quist Guaranty Finance, LLC and
           CV Therapeutics, Inc.  (5)

  10.52    Second Amendment to Security Agreement dated as of May 19, 1997,
           by and between Hambrecht & Quist Guaranty Finance, LLC and CV
           Therapeutics, Inc.  (5)

  10.53    Second Amendment to Security Agreement dated as of May 19, 1997,
           by and between Hambrecht & Quist Transition Capital, LLC and CV
           Therapeutics, Inc.  (5)

  10.54    Amendment to Research Collaboration and License Agreement (U.S.),
           dated June 12, 1998, between Biogen, Inc. and CV Therapeutics,
           Inc.  (7)

  10.55    Amendment No. 1 to Loan Agreement, dated as of June 12, 1998,
           between Biotech Manufacturing Ltd. and CV Therapeutics, Inc.  (7)

  10.56**  Letter agreement regarding termination of research program of the
           Research Collaboration and License Agreement, dated June 12,
           1998, between Biogen, Inc. and CV Therapeutics, Inc.  (7)

  23.1     Consent of Ernst & Young LLP, Independent Auditors.

  24.1     Power of Attorney (included on page 35).

  27.1     Financial Data Schedule for Year Ended December 31, 1998.
______________________

(1)  Incorporated by reference to Exhibits filed with the Registrant's
Registration Statement on Form S-1, No. 333-12675, as amended, which became
effective November 19, 1996.

(2)  Incorporated by reference to Exhibits filed with the Registrant's
Registration Statement on Form S-8, No. 333-19389, which became effective
January 8, 1997.

(3)  Incorporated by reference to Exhibits filed with the Registrant's
Quarterly Report on Form 10-Q, for the First Quarter 1997.

<PAGE>

(4)  Incorporated by reference to Exhibits filed with the Registrant's
Quarterly Report on Form 10-Q, for the Second Quarter 1997.

(5)  Incorporated by reference to Exhibits filed with the Registrant's
Quarterly Report on Form 10-Q, for the Third Quarter 1997.

(6)  Incorporated by reference to Exhibits filed with the Registrant's
Registration Statement on Form S-8 No. 333-44717, which became effective
January 22, 1998.

(7)  Incorporated by reference to Exhibits filed with the Registrant's
Quarterly Report on Form 10-Q, for the Third Quarter 1998.

  *  Management contract or compensatory plan or arrangement.

 **  Confidential treatment has previously been granted for portions of this 
exhibit.

   (b)   The Registrant filed no reports on Form 8-K during the last quarter
of the fiscal year ended December 31, 1998.

   (c)   See Exhibits listed under Item 14(a)(3).

   (d)   The financial statement schedules required by this Item are listed
under 14(a)(2).

<PAGE>

                                  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 on Form
10-K to  be signed on its behalf, by the undersigned, thereunto duly
authorized, in the  City of Palo Alto, County of Santa Clara, State of
California, on March 22,1999.

                                        CV THERAPEUTICS, INC.

                                        By:     /s/ LOUIS G.LANGE, M.D., PH.D.
                                           -----------------------------------
                                               Louis G. Lange, M.D., Ph.D.
                                        Chairman of the Board of CV Therapeutics
                                                Chief Executive Officer

                              POWER OF ATTORNEY 

   KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Louis G. Lange, M.D., Ph.D. and Daniel K.
Spiegelman, or any of them, his or her attorney-in-fact, each with the power
of substitution, for him or her in any and all capacities, to sign any
amendments to this Report, and to file the same, with exhibits thereto and
other documents  in connections therewith, with the Securities and Exchange
Commission, hereby  ratifying and confirming all that each of said
attorneys-in-fact, or his or her  substitute or substitutes, may do or cause
to be done by virtue hereof.

   PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN
THE  CAPACITIES AND ON THE DATES INDICATED.


              SIGNATURE                    TITLE                        DATE

/s/ LOUIS G. LANGE, M.D., PH.D.    Chairman of the Board & Chief  March 22, 1999
---------------------------------   Executive Officer (Principal
    Louis G. Lange, M.D., Ph.D.     Executive Officer)

/s/ DANIEL K. SPIEGELMAN           Chief Financial Officer        March 22, 1999
---------------------------------   (Principal Financial and
    Daniel K. Spiegelman            Accounting Officer

/s/ THOMAS L. GUTSHALL             Director                       March 22, 1999
---------------------------------
    Thomas L. Gutshall

/s/ BARBARA J. MCNEIL, M.D.,PH.D.  Director                       March 22, 1999
---------------------------------
    Barbara J. McNeil, M.D.,Ph.D.

/s/ COSTA G. SEVASTOPOULOS,PH.D.   Director                       March 22, 1999
---------------------------------
    Costa G. Sevastopoulos,Ph.D.

/s/ J. LEIGHTON READ, M.D.         Director                       March 22, 1999
---------------------------------
    J. Leighton Read, M.D.

/s/ ISAAC STEIN                    Director                       March 22, 1999
---------------------------------
    Isaac Stein

/s/ DAVID P. HOLVECK               Director                       March 22, 1999
---------------------------------
    David P. Holveck

<PAGE>

              REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS 


The Board of Directors and Stockholders of CV Therapeutics, Inc.  

   We have audited the accompanying consolidated balance sheets of CV
Therapeutics, Inc. as of December 31, 1998 and 1997, and the related
consolidated statements of operations, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.  

   We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

   In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of CV Therapeutics, Inc. at December 31, 1998 and 1997, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1998 in conformity with
generally accepted accounting principles.                                     


                                        /s/ Ernst & Young LLP

Palo Alto, California
February 26, 1999

<PAGE>

                                         CV THERAPEUTICS, INC.
                                      CONSOLIDATED BALANCE SHEETS
                          (in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                              -------------------------
                                                                                 1998            1997
                                                                              ---------       ---------
<S>                                                                          <C>             <C>
                                               ASSETS
Current assets:
  Cash and cash equivalents                                                   $ 11,954        $  6,286
  Marketable securities                                                         32,850          31,804
  Other current assets                                                           1,236           1,249
                                                                              ---------       ---------
Total current assets                                                            46,040          39,339
Notes receivable from related parties                                              450             413
Property and equipment, net                                                      2,664           2,277
Intangible and other assets                                                        176             615
                                                                              ---------       ---------

Total Assets                                                                  $ 49,330        $ 42,644
                                                                              =========       =========

                                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                            $  1,001        $    683
  Accrued liabilities                                                            2,761           1,572
  Current portion of long-term debt                                              1,500           1,500
  Current portion of capital lease obligation                                       80             680
  Deferred revenue                                                                   -           2,000
                                                                              ---------       ---------
Total current liabilities                                                        5,342           6,435
Long-term debt                                                                   7,500           4,500
Capital lease obligation                                                           338             552
Deferred revenue                                                                 1,000           4,009
Other liabilities                                                                  412             591
                                                                              ---------       ---------
Total liabilities                                                               14,592          16,087
Commitments
Stockholders' equity:
  Preferred stock, $0.001 par value, 5,000,000 shares authorized, none
       issued and outstanding                                                        -               -
  Common stock, $0.001 par value, 30,000,000 shares authorized, 11,209,078
       and 8,458,063 shares issued and outstanding at December 31, 1998 and
       1997, respectively; at amounts paid in                                  104,211          84,037
  Warrants to purchase common stock                                              1,225           1,225
  Notes receivable issued for stock                                               (108)           (108)
  Deferred compensation                                                         (1,049)         (1,649)
  Accumulated deficit                                                          (69,553)        (56,951)
  Cumulative other comprehensive income                                             12               3
                                                                              ---------       ---------
Total stockholders' equity                                                      34,738          26,557
                                                                              ---------       ---------

Total Liabilities and Stockholders' Equity                                    $ 49,330        $ 42,644
                                                                              =========       =========

</TABLE>
                                       See accompanying notes

<PAGE>

                                         CV THERAPEUTICS, INC.
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                               (in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                                       Year ended December 31,
                                                               -----------------------------------------
                                                                  1998            1997            1996
                                                               ---------       ---------       ---------
<S>                                                           <C>             <C>             <C>
Revenues:
  Collaborative research                                       $  4,509        $  2,578        $    250
Operating expenses:
  Research and development                                       14,578          10,568           7,141
  General and administrative                                      4,158           4,169           2,917
                                                               ---------       ---------       ---------
Total operating expenses                                         18,736          14,737          10,058
                                                               ---------       ---------       ---------
Loss from operations                                            (14,227)        (12,159)         (9,808)
Interest income                                                   2,749           1,760             587
Interest and other expense                                       (1,124)           (926)         (1,144)
                                                               ---------       ---------       ---------
Net loss                                                       $(12,602)       $(11,325)       $(10,365)
                                                               =========       =========       =========
Basic and diluted net loss per share                           $  (1.16)       $  (1.58)       $  (9.83)
                                                               =========       =========       =========
Shares used in computing basic and diluted
  net loss per share                                             10,905           7,157           1,054
                                                               =========       =========       =========

</TABLE>
                                        See accompanying notes

<PAGE>

<TABLE>
<CAPTION>
                                                       CV THERAPEUTICS, INC.
                                           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                            YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
                                         (in thousands, except share and per share amounts)

                                                                   Convertible                                           Warrants to
                                                                 Preferred Stock                 Common Stock              Purchase
                                                            --------------------------     ---------------------------      Common
                                                               Shares          Amount        Shares           Amount         Stock
                                                            ------------      --------    ------------      ----------     --------
<S>                                                         <C>               <C>          <C>              <C>            <C>

Balances at December 31, 1995                                25,471,045       $36,388         368,081       $     258      $   544
Issuance of units consisting of one share of Series E
  preferred stock and one warrant to purchase half of one
  share of Series E preferred stock at $2.00 per share          375,000           750               -               -            -
Issuance of units consisting of one share of Series G
  preferred stock and one warrant to purchase 0.15 of one
  share of common stock at $20.00 per share, net of
  issuance costs of $80                                       6,535,970        12,992               -               -            -
Issuance of common stock, net of repurchases                          -             -       2,578,489          12,704            -
Convertible preferred stock converted to common stock
  upon the initial public offering                          (32,382,015)      (50,130)      3,238,201          50,130            -
Issuance of warrants                                                  -             -               -               -          681
Notes receivable from officers for exercise of certain
  stock options                                                       -             -               -               -            -
Compensation related to certain stock options                         -             -               -           2,322            -
Amortization of deferred compensation                                 -             -               -               -            -
Net loss                                                              -             -               -               -            -
                                                            ------------      --------    ------------      ----------     --------
Balances at December 31, 1996                                         -             -       6,184,771          65,414        1,225
Issuance of common stock, net of repurchases                          -             -       2,273,292          18,276            -
Unrealized gain on investments                                        -             -               -               -            -
Compensation expense related to certain stock options                 -             -               -              51            -
Reduction of initial public offering issuance costs                   -             -               -              58            -
Deferred compensation related to grants of certain non-
  qualified stock options                                             -             -               -             564            -
Repayment of notes receivable for exercise of certain
  stock options                                                       -             -               -               -            -
Amortization and reduction of deferred compensation                   -             -               -            (326)           -
Net loss                                                              -             -               -               -            -
                                                            ------------      --------    ------------      ----------     --------
Balances at December 31, 1997                                         -             -       8,458,063          84,037        1,225
Issuance of common stock, net of repurchases                          -             -       2,751,015          20,025            -
Unrealized gain on investments                                        -             -               -               -            -
Deferred compensation related to grants of certain
  stock options                                                       -             -               -             274            -
Amortization and reduction of deferred compensation                   -             -               -            (125)           -
Net loss                                                              -             -               -               -            -
                                                            ------------      --------    ------------      ----------     --------
Balances at December 31, 1998                                         -       $     -      11,209,078       $ 104,211      $ 1,225
                                                            ============      ========    ============      ==========     ========

</TABLE>
                                                      See accompanying notes

<PAGE>

<TABLE>
<CAPTION>
                                                       CV THERAPEUTICS, INC.
                                     CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Continued)
                                            YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
                                         (in thousands, except share and per share amounts)

                                                                                                         Cumulative
                                                                Notes                                      Other         Total
                                                             Receivable     Deferred     Accumulated   Comprehensive  Stockholders'
                                                            From Officers Compensation     Deficit         Income        Equity
                                                              --------      --------      ---------       --------      ---------
<S>                                                           <C>           <C>            <C>            <C>           <C>

 Balances at December 31, 1995                                   (125)      $     -        (35,261)       $     -       $  1,804
 Issuance of units consisting of one share of Series E
   preferred stock and one warrant to purchase half of one
   share of Series E preferred stock at $2.00 per share             -             -              -              -            750
 Issuance of units consisting of one share of Series G
   preferred stock and one warrant to purchase 0.15 of one
   share of common stock at $20.00 per share, net of
   issuance costs of $80                                            -             -              -              -         12,992
 Issuance of common stock, net of repurchases                       -             -              -              -         12,704
 Convertible preferred stock converted to common stock
   upon the initial public offering                                 -             -              -              -              -
 Issuance of warrants                                               -             -              -              -            681
 Notes receivable from officers for exercise of certain
   stock options                                                  (46)            -              -              -            (46)
 Compensation related to certain stock options                      -        (2,322)             -              -              -
 Amortization of deferred compensation                              -           156              -              -            156
 Net loss                                                           -             -        (10,365)             -        (10,365)
                                                              --------      --------      ---------       --------      ---------
 Balances at December 31, 1996                                   (171)       (2,166)       (45,626)             -         18,676
 Issuance of common stock, net of repurchases                       -             -              -              -         18,276
 Unrealized gain on investments                                     -             -              -              3              3
 Compensation expense related to certain stock options              -             -              -              -             51
 Reduction of initial public offering issuance costs                -             -              -              -             58
 Deferred compensation related to grants of certain non-
   qualified stock options                                          -          (564)             -              -              -
 Repayment of notes receivable for exercise of certain
   stock options                                                   63             -              -              -             63
 Amortization and reduction of deferred compensation                -         1,081              -              -            755
 Net loss                                                           -             -        (11,325)             -        (11,325)
                                                              --------      --------      ---------       --------      ---------
 Balances at December 31, 1997                                   (108)       (1,649)       (56,951)             3         26,557
 Issuance of common stock, net of repurchases                       -             -              -              -         20,025
 Unrealized gain on investments                                     -             -              -              9              9
 Deferred compensation related to grants of certain
   stock options                                                    -          (274)             -              -              -
 Amortization and reduction of deferred compensation                -           874              -              -            749
 Net loss                                                           -             -        (12,602)             -        (12,602)
                                                              --------      --------      ---------       --------      ---------
 Balances at December 31, 1998                                   (108)      $(1,049)       (69,553)       $    12       $ 34,738
                                                              ========      ========      =========       ========      =========

</TABLE>
                                                      See accompanying notes

<PAGE>

                                            CV THERAPEUTICS, INC.
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               (in thousands)

<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                      -----------------------------------------
                                                                         1998            1997            1996
                                                                      ---------       ---------       ---------
<S>                                                                   <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                              $(12,602)       $(11,325)       $(10,365)
Adjustments to reconcile net loss to net cash used in operating
  activities:
  Amortization of deferred compensation                                    750             755             156
  Depreciation and amortization                                          1,184           1,101           1,127
  Warrant issued under capital lease                                         -               -             160
  Issuance of capital stock and warrants for payment of license fees         -             544             750
  Change in assets and liabilities:
    Other current assets                                                    13            (795)            556
    Intangible and other assets                                            439            (208)           (461)
    Accounts payable                                                       318             278               -
    Accrued and other liabilities                                        1,010             140            (249)
    Deferred revenue                                                    (5,009)          6,009               -
                                                                      ---------       ---------       ---------
Net cash used in operating activities                                  (13,897)         (3,501)         (8,326)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments                                               (27,752)        (44,417)         (1,993)
Maturities of investments                                               26,365          14,609               -
Capital expenditures                                                    (1,221)           (143)            (64)
Notes receivable from officers and employees                               (37)            125             104
                                                                      ---------       ---------       ---------
Net cash used in investing activities                                   (2,645)        (29,826)         (1,953)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under capital lease obligations                                 443               -               -
Payments on capital lease obligations                                   (1,257)           (788)           (356)
Borrowings under long-term debt                                          4,500           3,000           5,000
Repayments of long-term debt                                            (1,500)            (15)         (6,576)
Net proceeds from issuance of common stock (and bridge loans
  subsequently converted into common stock), net of repurchases         20,024          17,841          12,346
Proceeds from issuance of warrant                                            -               -             879
Proceeds from issuance of convertible preferred stock                        -               -          12,992
                                                                      ---------       ---------       ---------
Net cash provided by financing activities                               22,210          20,038          24,285
                                                                      ---------       ---------       ---------
Net increase (decrease) in cash and cash equivalents                     5,668         (13,289)         14,006
Cash and cash equivalents at beginning of year                           6,286          19,575           5,569
                                                                      ---------       ---------       ---------
Cash and cash equivalents at end of year                              $ 11,954        $  6,286        $ 19,575
                                                                      =========       =========       =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest                                                $    758        $    647        $    912
                                                                      =========       =========       =========
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Notes receivable issued to officers in connection with exercise of
  certain stock options                                               $      -        $      -        $     46
                                                                      =========       =========       =========
Issuance of warrants in connection with debt financing                $      -        $      -        $    681
                                                                      =========       =========       =========

</TABLE>
                                            See accompanying notes

<PAGE>

                            CV THERAPEUTICS, INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   The Company

   CV Therapeutics is a biopharmaceutical company focused on the application
of molecular cardiology to the discovery, development and commercialization
of novel small molecule drugs for the treatment of cardiovascular disease.
Since its inception in December 1990, substantially all of the Company's
resources have been dedicated to research and development activities,
including a portion performed on behalf of collaborators.

   Principles of Consolidation

   The financial statements include the accounts of the Company and its
wholly-owned subsidiary, CV Therapeutics International, which was
incorporated in December 1993 in the Cayman Islands and dissolved in October
1998. All significant intercompany balances, prior to the dissolution, have
been eliminated.

   Use of Estimates

   The preparation of financial statements in conformity with generally
accepted accounting principles 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.

   Reclassifications

   Certain prior period balances have been reclassified to conform to the
1998 presentation.

   Research and Development

   Research and development expenses include direct and research and
development-related overhead expenses.

   Cash Equivalents and Investments

   The Company considers all highly liquid debt investments with a maturity
from date of purchase of three months or less to be cash equivalents. Cash
equivalents consist primarily of money market funds. All other liquid
investments are classified as marketable securities. The Company limits its
concentration of risk by diversifying its investments among a variety of 
issuers.

   Management determines the appropriate classification of investment
securities at the time of purchase and reaffirms such designation as of each
balance sheet date. At December 31, 1998 and 1997, all investment securities
are designated as available-for-sale. Available-for-sale securities are
carried at fair value, with the unrealized gains and losses reported in
stockholders' equity as a component of other comprehensive income (loss).
The amortized cost of debt securities in this category is adjusted for
amortization of premiums and accretion of discounts to maturity. Such
amortization is included in interest income.  The cost of securities sold is
based on the specific identification method. Realized gains and losses on
available-for-sale securities are included in the statement of operations,
if any. There have been no realized gains or losses through December 31, 1998.

   Depreciation and Amortization

   Property and equipment are stated at cost, less accumulated depreciation
and amortization. Depreciation is provided using the straight-line method
over the estimated useful lives of the respective assets, generally three to
five years. Leasehold improvements are amortized over the lesser of the
lease term or the estimated useful lives of the related assets. Debt
issuance costs are amortized over the life of the associated loan.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   Revenue Recognition 

   Revenue under the Company's collaborative research arrangements is
recognized based on the performance requirements of the contract. Payments
received, which are still subject to future performance requirements, are
recorded as deferred revenue until earned.

   Net Loss Per Share

   Effective December 31, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" ("SFAS 128"). SFAS 128
requires the presentation of basic earnings (loss) per share and diluted
earnings per share, if more dilutive, for all periods presented. Diluted net
loss per share has not been presented as, given the Company's net loss
position, the result would be anti-dilutive.

   In accordance with SFAS 128, basic net loss per share has been computed
using the weighted average number of shares of common stock outstanding
during the period.

   A reconciliation of the shares used in the calculation of basic and
diluted net loss per share follows:

<TABLE>
<CAPTION>
                                                                          Year ended December 31,
                                                                 -----------------------------------------
                                                                    1998            1997            1996
                                                                 ---------       ---------       ---------
                                                                      (in thousands, except per share
                                                                               amounts)
<S>                                                             <C>             <C>             <C>
Net loss                                                          (12,602)        (11,325)        (10,365)
Weighted average shares of common stock outstanding                10,905           7,157           1,054
                                                                 =========       =========       =========
Basic and diluted net loss per share                                (1.16)          (1.58)          (9.83)
                                                                 =========       =========       =========

</TABLE>

   Had the Company been in a net income position, diluted earnings per share
would have been presented and would have included the shares used in
computation of basic net loss per share as well as an additional 852,000
shares for the year ended December 31, 1996, relating to outstanding options
and warrants (prior to the application of the treasury stock method) and
stock subject to repurchase. The 1996 net loss per share excludes the
effects of preferred stock which converted to common stock upon the
Company's initial public offering. Had the preferred stock been included in
the 1996 calculation from the date of issuance, the net loss per share would
have been $2.77.

   Stock-Based Compensation

   The Company accounts for stock options granted to employees using the
intrinsic-value method and, thus, recognizes no compensation expense for
options granted with exercise prices equal to the fair market value of the
Company's common stock on the date of the grant.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   New Accounting Pronouncements

   As of January 1, 1998, the Company adopted Statement 130 ("SFAS 130"),
"Reporting Comprehensive Income." SFAS 130 establishes new rules for the
reporting and display of comprehensive income and its components; however,
the adoption of SFAS 130 had no impact on the Company's net loss or
stockholders' equity. SFAS 130 requires unrealized gains or losses on the
Company's available-for-sale securities, which prior to adoption were
reported separately in stockholders' equity, to be included in other
comprehensive income. The components of comprehensive income (loss) for the
years ended December 31 are as follows:

<TABLE>
<CAPTION>
                                                        1998            1997            1996
                                                     ---------       ---------       ---------
<S>                                                 <C>             <C>             <C>
(in thousands)
Net loss                                             $(12,602)       $(11,325)       $(10,365)
Unrealized gains on securities                              9               3               -
                                                     ---------       ---------       ---------
Comprehensive loss                                   $(12,593)       $(11,322)       $(10,365)
                                                     =========       =========       =========

</TABLE>

2. LICENSE AND COLLABORATION AGREEMENTS

   University of Florida Research Foundation, Inc. 

   In June 1994, the Company entered into a license agreement with the
University of Florida Research Foundation, Inc. ("UFRFI") under which the
Company received exclusive worldwide rights to develop adenosine A1 receptor
antagonists for the detection,  prevention and treatment of human and animal
diseases. In consideration for the license, the Company paid UFRFI an
initial license fee and is obligated to pay royalties based on net sales of
products, which utilize the licensed technology. Pursuant to the agreement,
the Company must exercise commercially reasonable efforts to develop and
commercialize one or more products covered by the licensed technology and is
obligated to meet milestones in completing certain preclinical work. In the
event the Company fails to reach those milestones, UFRFI may convert the
exclusive license into a non-exclusive license.

   Syntex (U.S.A.) Inc. 

   In March 1996, the Company entered into a license agreement with Syntex
(U.S.A.) Inc. ("Syntex"), which is an indirect subsidiary of Roche Holding
Limited, for the United States and foreign patent rights to a compound
having the generic name of ranolazine for products treating angina and
certain other cardiovascular indications.  Pursuant to the agreement, Syntex
provided certain quantities of the compound to the Company. The license
agreement is exclusive and worldwide except for certain countries in Asia.
As consideration for the licensee agreement, the Company issued 37,500
shares of its common stock and a five year warrant to purchase 18,750 shares
of its common stock at $20.00 per share and recognized research and
development expenses of $750,000. In addition, the Company is obligated to
make payments on the achievement of certain development milestones and to
make royalty payments based on net sales of products which utilize the
licensed technology. The Company is required to use commercially reasonable
efforts to develop the compound for angina within certain milestone
guidelines. The license agreement also sets milestones within which the
Company must launch products in each country covered by the license or lose
exclusivity in such territories. The Company paid $1.5 million to Syntex in
1997 in a combination of cash and common stock and will owe an additional
milestone payment upon FDA approval of an NDA for ranolazine.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. LICENSE AND COLLABORATION AGREEMENTS (CONTINUED)

   Biogen

   In March 1997, the Company entered into two research collaboration and
license agreements with Biogen, Inc. The agreements grant Biogen the
exclusive worldwide right to develop and commercialize Adentri for all
indications. In exchange, the Company received up-front cash payments
totaling $16.0 million. Of this amount $820,000 was recognized as revenue
immediately, $7.0 million was deferred subject to Biogen achieving  specific
milestones and the Company fulfilling its research obligations, $5.2 million
was for the purchase of 669,857 shares of the Company's common stock and
$3.0 million was funding under a credit facility.  Of the $7.0 million of
deferred revenue, $1.8 million represents a premium over the $5.2 million
market value that was paid for the 669,857 shares of the Company's common
stock. Approximately $1.0 million of the deferred revenue was recognized in
1997 which approximated costs for research services. In February 1998, CVT
terminated the research component of the agreements and, as a result,
approximately $4.0 million of deferred revenue was recognized as there were
no further research obligations related to this funding. In December 1998
the Company borrowed an additional $4.5 million in connection with the final
study report from an earlier phase II study of Adentri, which was jointly
prepared by the Company and Biogen. Under the agreements, the Company may
receive milestone payments ($1.0 million of which has been pre-funded by
Biogen and included in deferred revenue), equity investments, and access to
a general purpose loan facility (see Note 5) based on achievements of
certain development milestones. In addition, the Company will receive
royalties from any future product sales.

3. INVESTMENTS 

   Following is a summary of available-for-sale securities at fair value.
Fair value is based on quoted market prices for these investments.

<TABLE>
<CAPTION>
                                                                       December 31,
                                                                 -----------------------
                                                                   1998          1997
                                                                 ---------     ---------
                                                                     (in thousands)
 <S>      <C>                                                    <C>           <C>
          Cash equivalents
            Money market funds                                   $ 11,931      $  3,353
            Commercial paper                                            -           998
            Corporate bonds                                             -         1,900
                                                                 ---------     ---------
                                                                 $ 11,931      $  6,251
                                                                 =========     =========
          Marketable securities
            US Government securities                             $      -      $  2,000
            Certificates of deposit                                     -         1,000
            Corporate bonds                                        32,850        28,804
                                                                 ---------     ---------
                                                                 $ 32,850      $ 31,804
                                                                 =========     =========

</TABLE>

   As of December 31, 1998 and 1997, the difference between the fair value
and the amortized cost of available-for-sale securities was insignificant.
As of December 31, 1998, the Company had marketable securities with
maturities of less than one year of $24.9 million and greater than one year
of $7.9 million. The average contractual maturity as of December 31, 1998
was approximately seven months, with no single investment's maturity
exceeding 17 months.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. PROPERTY AND EQUIPMENT

   Property and equipment are recorded at cost and consist of the following:

<TABLE>
<CAPTION>
                                                                      December 31,
                                                                 ---------------------
                                                                   1998         1997
                                                                 --------     --------
                                                                    (in thousands)
 <S>      <C>                                                    <C>          <C>
          Machinery and equipment                                $ 3,623      $ 2,556
          Furniture and fixtures                                     576          573
          Leasehold improvements                                   3,149        2,997
                                                                 --------     --------
                                                                   7,348        6,126
          Less accumulated depreciation and amortization          (4,684)      (3,849)
                                                                 --------     --------
                                                                 $ 2,664      $ 2,277
                                                                 ========     ========

</TABLE>

   Property and equipment include $443,000 and $4.3 million recorded under
capital leases at December 31, 1998 and 1997, respectively. Accumulated
amortization related to leased assets totaled $30,000 and $2.9 million at
December 31, 1998 and 1997, respectively (see Note 6).

5. LONG-TERM DEBT

   Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                      December 31,
                                                                                 ---------------------
                                                                                   1998         1997
                                                                                 --------     --------
                                                                                      (in thousands)
 <S>      <C>                                                                    <C>          <C>
          Biogen loan agreement at prime plus 1.0% with interest due
            annually on March 10th; first $3.0 million of principal due in
            equal installments beginning March 10, 2000 through February
            10, 2005; remaining $4.5 million to be deducted from future royalty  $ 7,500      $ 3,000
            payments or repaid through the issuance of common stock
          Loan at 9.0%, principal payments in equal installments
            monthly beginning April 1, 1998 through September 1, 1999.
            Interest due monthly, subject to the Company's rights of payment
            deferral                                                               1,500        3,000
                                                                                 --------     --------
                                                                                   9,000        6,000
          Less current portion                                                    (1,500)      (1,500)
                                                                                 --------     --------
          Long-term portion                                                      $ 7,500      $ 4,500
                                                                                 ========     ========

</TABLE>

   The carrying value of the Company's loans approximates fair value at
December 31, 1998 and 1997. The fair value of the Company's loans was
estimated using discounted cash flow analysis, based on the incremental
borrowing rates currently available to the Company for borrowings with
similar terms and maturity.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM DEBT (CONTINUED)

   On March 7, 1997, the Company entered into an unsecured loan agreement
with Biotech Manufacturing in association with the Biogen Agreements (see
Note 2). Under the terms of the Biotech Manufacturing loan agreement,
Biotech Manufacturing shall make available to CVT for general purposes an
amount not to exceed $12.0 million. Upon the effective date of the Biogen
Agreements, the Company drew down $3.0 million of the loan. The Company drew
down an additional $4.5 million in December 1998 in connection with the
final study report from an earlier phase II study of Adentri, which was
jointly prepared by the Company and Biogen. Additional funding under the
terms of the loan is subject to achievement of certain clinical developments
and commercialization milestones. The Company is obligated to repay $3.0
million of the current outstanding principal portion of the credit facility,
which bears interest on the outstanding principal at a rate equal to prime
plus one percent (1%) (8.75% at December 31. 1998), by February 2005. The
remaining $4.5 million will be repaid through a reduction of royalties, owed
by Biogen to the Company, beginning eighteen months after the first
commercial sale of Adentri. The Company, at its option, may issue common
stock at fair market value as of the date of repayment as an alternative to
the royalty reduction. Upon termination of the Biogen Agreements prior to
repayment of the $4.5 million through royalty reduction, CVT, at its option,
shall repay the loan in cash or issue its common stock at fair value as of
the date of repayment.

   In September 1996, the Company completed a refinancing of its existing
debt obligations with $5.0 million of debt financing from entities
associated with Hambrecht & Quist Group ("H&Q Debt Financings"). The H&Q
Debt Financings consist of a $3.0 million term loan which bears interest at
the rate of 9.0% per annum, secured by all of the assets of the Company, and
has a final maturity in September 1999, and a $2.0 million term loan, which
bore interest at 9.0% per annum and was due January 1, 1997. The remaining
outstanding principal balance is $1.5 million at December 31, 1998

6. LEASES

   The Company leases certain equipment under a noncancellable capital
lease. A previous capital lease was retired in March 1998. The early
retirement payment included $303,000 in excess of recorded liability and
required the acceleration of $68,000 for the amortization of debt issuance
costs which would have otherwise been recognized over the following eighteen 
months.

    The Company leases its facilities under noncancellable operating leases.
The facilities lease expires February 2002 and includes an option to renew
the lease for an additional five years. In November 1995 and April 1997, the
Company entered into two noncancellable sublease agreements whereby it
leased excess space to a separate company, which sublease agreements will
expire in March 1999 and April 1999 respectively. Aggregate future minimum
rentals to be received by the Company as of December 31, 1998 totaled $235,000.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


6. LEASES (CONTINUED)

   Following is a schedule of future minimum lease payments at December 31, 
1998:

<TABLE>
<CAPTION>
                                                                  Operating     Capital
                                                                   Leases       Leases
                                                                   --------     -------
                                                                     (in thousands)
 <S>      <C>                                                      <C>          <C>
          Year ending December 31,
            1999                                                   $ 1,244      $ 111
            2000                                                     1,254        112
            2001                                                     1,284        111
            2002                                                       215        163
                                                                   --------     ------
          Total minimum payments                                   $ 3,997      $ 497
          Less amount representing interest                        ========       (79)
                                                                                ------
          Present value of future lease payments                                  418
          Less current portion                                                    (80)
                                                                                ------
          Long-term portion                                                     $ 338
                                                                                ======

</TABLE>

   Rent expense, net of sublease rentals, for the years ended December 31,
1998, 1997, and 1996 was $396,000, $339,000 and $451,000, respectively.

7. RELATED PARTY TRANSACTIONS

   From 1992 through 1998, the Company issued loans to certain of the
Company's officers and employees related to relocation, purchases of stock
and other purposes of which loans aggregating $571,000 and $521,000 were
outstanding at December 31, 1998 and 1997, respectively. These loans bear
interest at 4.51% to 6.53% per annum. The amounts are repayable on various
dates through January 1, 2004. As of December 31, 1998 and 1997, loans for
$108,000 related to the purchase of common stock have been included in
stockholders' equity.

8. STOCKHOLDERS' EQUITY

   Employee Stock Purchase Plan 

   In September 1996, the board of directors adopted the Employee Stock
Purchase Plan (the "Purchase Plan") covering an aggregate of 150,000 shares
of the Company's common stock. The Purchase Plan is designed to allow
eligible employees of the Company or an affiliate of the Company to purchase
shares of the Company's common stock at quarterly intervals through their
periodic payroll deductions, which may not exceed 15 percent of any
employee's compensation, at a price not less than the lesser of an amount
equal to 85 percent of the fair market value of the Company's common stock
at quarterly dates within the offering period or an amount equal to 85
percent of the fair market value of the Company's common stock on the
purchase date.  Employees may end their participation in the offering at any
time during the offering period, and participation ends automatically on
termination of employment with the Company. The Company has issued 36,748
shares under the Purchase Plan through December 31, 1998.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)

   Stock Option Plans

   The Company reserved 345,000 shares of common stock for issuance under
its amended and restated 1992 Stock Option Plan, which provides for common
stock options to be granted to employees, consultants, officers, and
directors. The board of directors will not grant additional options under
the 1992 Stock Option Plan.

   The Company reserved 1,800,000 shares of common stock for issuance under
its amended and restated 1994 Equity Incentive Plan. The Equity Incentive
Plan provides for common stock options to be granted to employees of and
consultants to the Company and its affiliates. The Plan allows for the grant
of incentive stock options, non-statutory stock options, stock bonuses, and
rights to purchase restricted stock and stock appreciation rights. Options
and rights granted under this plan expire no later than 10 years from the
date of grant. The exercise price of each incentive stock option shall be
not less than 100% of the fair market value of the stock subject to the
option on the date the option is granted. The exercise price of each
non-statutory option shall be not less than 85% of the fair market value of
the stock subject to the option on the date the option is granted. The
vesting provisions of individual options may vary but in each case will
provide for vesting of at least 20% of the total number of shares subject to
the option per year.

   The Company's Non-Employee Directors' Stock Option Plan was amended and
restated in 1996 to allow the granting of up to 250,000 shares of common
stock to directors of the Company who are not otherwise an employee of, or
consultant to the Company or any affiliate of the Company. Options granted
under this plan expire no later than 10 years from the date of grant. The
exercise price of each option shall be the fair market value of the stock
subject to such option on the date such option is granted. The options
generally vest in increments over a period of three years from the date of 
grant.

   Outside of the Company's stock option plans, from May 1993 through June
1995, the Company granted options to purchase 85,500 shares of common stock
to employees and consultants. The exercise prices ranged from $0.80 to $2.50
per share, which exercise prices represented the fair value of the common
stock at the respective grant dates as determined by the board of directors.
The stock option terms vary between the individual grants and were approved
by the board of directors.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.STOCKHOLDERS' EQUITY (CONTINUED)

   The following table summarizes option activity under all option plans:

<TABLE>
<CAPTION>
                                                              Outstanding Options
                                               -------------------------------------------------
                                                 Shares      Number                         Weighted
                                               Available       of         Price per         Average
                                               for Grant     Shares         Share        Exercise Price
                                                -------     -------    ----------------    ---------
                                                   (in thousands, except per share amounts)
 <S>                                            <C>         <C>         <C>                 <C>
 Balance at December 31, 1995                      111         709      $0.80 - $ 2.50      $1.98
 Shares authorized                                 529           -            -                -
 Options granted                                  (356)        356      $         2.50      $2.50
 Options forfeited                                 189        (186)     $0.80 - $ 2.50      $2.19
 Options exercised                                   -         (71)     $0.80 - $ 2.50      $1.65
                                                -------     -------
 Balance at December 31, 1996                      473         808      $0.80 - $ 2.50      $2.18
 Shares authorized                               1,000           -            -                -
 Options granted                                  (447)        447      $6.88 - $10.88      $8.25
 Options forfeited                                  52         (52)     $0.80 - $ 8.50      $2.89
 Options exercised                                   -        (126)     $0.80 - $ 2.50      $1.72
                                                -------     -------
 Balance at December 31, 1997                    1,078       1,077      $0.80 - $10.88      $4.72
 Options granted                                  (533)        533      $4.75 - $10.38      $9.04
 Options forfeited                                 116        (116)     $0.80 - $10.00      $4.91
 Options exercised                                   -         (79)     $0.80 - $ 8.50      $2.45
                                                -------     -------
 Balance at December 31, 1998                      661       1,415      $0.80 - $10.88      $6.48
                                                =======     =======

</TABLE>

   In March and June 1996, options to purchase a total of 8,835 and 40,505
shares of common stock, respectively, were granted at an exercise price of
$2.50 per share. Deferred compensation of $172,000 was recorded on these
option grants based on the deemed fair value of common stock of
approximately $6.25. In September 1996, the Company granted options to
purchase a total of 296,500 shares of common stock at an exercise price of
$2.50 per share and additional deferred compensation of approximately  $2.2
million was recorded based on the deemed fair value of common stock of
approximately $9.75.

   The following table summarizes information about stock options
outstanding at December 31, 1998:

<TABLE>
<CAPTION>
                                           Outstanding Options
----------------------------------------------------------------------------------------------------------
                                                Weighted                           Exercisable Options
                                                Average                         --------------------------
                                Shares         Remaining         Weighted      Number of     Weighted
                             Outstanding    Contractual Life Average Exercise   Shares    Average Exercise
Range of Exercise Prices    (in thousands)    (in years)          Price     (in thousands)    Price
------------------------       -------           -----            ------        ------        -------
<S>                            <C>               <C>              <C>           <C>           <C>
$0.80 - $ 2.50                    494             7.0             $2.28           401         $ 2.23
$4.75 - $ 9.00                    496             8.7             $8.07           164         $ 7.90
$9.13 - $10.88                    425             8.7             $9.52            58         $10.34
                               -------                                          ------
$0.80 - $10.88                  1,415             8.1             $6.48           623         $ 4.48
                               =======                                          ======

</TABLE>

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)

   Pro Forma Information--Stock-Based Compensation 

   The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" ("APB 25") and related
interpretations, in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under
FASB Statement No. 123,  "Accounting for Stock-Based Compensation," ("SFAS
123") requires use of option valuation models that were not developed for
use in valuing employee stock options. Under APB 25, if the exercise price
of the Company's employee stock options equals the fair market value of the
underlying stock on the date of grant, no compensation expense is recognized.

   Pro forma information regarding net loss and loss per share is required
by SFAS 123 for awards granted after December 31, 1994 as if the Company had
accounted for its stock-based awards to employees under the fair value
method of SFAS 123. The fair value of the Company's stock-based awards to
employees was estimated using a Black-Scholes option pricing model (minimum
value model for awards prior to the Company's initial public offering). The
Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are
fully transferable. In addition, the Black-Scholes model requires the input
of highly subjective assumptions including the expected stock price
volatility. Because the Company's stock-based awards to employees have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its
stock-based awards to employees. The fair value of the Company's stock-based
awards to employees was estimated assuming no expected dividends and the
following weighted-average assumptions:

<TABLE>
<CAPTION>
                                                                           Options
                                                                     --------------------
                                                                     1998    1997    1996
                                                                     ----    ----    ----
 <S>      <C>                                                        <C>     <C>     <C>
          Expected life (years)                                      4.9     4.6     5.1
          Expected volatility (After November 19, 1996, the initial
            public offering)                                         .54     .67     .70
          Risk-free interest rate                                    5.5%    6.3%    6.4%

</TABLE>

   For pro forma purposes, the estimated fair value of the Company's
stock-based awards to employees is amortized over the options' vesting
period. The Company's pro forma information follows (in thousands except for
loss per share information):

<TABLE>
<CAPTION>
                                                            1998          1997          1996
                                                         ---------     ---------     ---------
 <S>      <C>                                            <C>           <C>           <C>
          Net loss:
            As reported                                  $(12,602)     $(11,325)     $(10,365)
                                                         =========     =========     =========
            Pro forma                                    $(13,691)     $(12,225)     $(10,771)
                                                         =========     =========     =========
          Net loss per share:
            As reported                                  $  (1.16)     $  (1.58)     $  (9.83)
                                                         =========     =========     =========
            Pro forma                                    $  (1.25)     $  (1.71)     $ (10.22)
                                                         =========     =========     =========

</TABLE>

   Because SFAS 123 is applicable only to awards granted subsequent to
December 31, 1994, its pro forma effect will not be fully reflected until 1999.

   The weighted-average fair value of options granted with exercise prices
at and below fair value of the Company's common stock during 1998, 1997 and
1996 were:

<TABLE>
<CAPTION>
                                                                1998      1997      1996
                                                               ------    ------    ------
 <S>      <C>                                                 <C>       <C>       <C>
          Fair value at grant:                                 $4.63     $5.34     $ -
          Below fair value at grant date:                      $ -       $5.39     $7.45

</TABLE>

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)

   Warrants

   The following table summarizes warrants to purchase the Company's common
stock which were issued in connection with various financing, lending and
equipment lease arrangements as of December 31, 1998:

<TABLE>
<CAPTION>
                                                           Exercise     Number of
 Date of Issuance                                            Price       Shares      Expiration Date
 ----------------                                          --------     ---------    ---------------
 <S>                                                       <C>         <C>           <C>
 April 1993                                                 $25.00       100,000      April 2003
 March and April 1994                                       $20.00        21,926      March 1999
 April 1995                                                 $ 8.90        40,000      April 2005
 September and November 1995                                $20.00       196,078      September 2000
 December 1995                                              $20.00         3,750      December 2000
 March 1996                                                 $20.00        18,750      September 2000
 September 1996                                             $20.00        84,500      September 2001
                                                                        ---------
 Total                                                                   465,004
                                                                        =========

</TABLE>

   The Company has reserved 465,004 shares of its common stock for issuance
upon the issuance of the above warrants.

9. INCOME TAXES

   As of December 31, 1998, the Company had federal net operating loss
carryforwards of approximately $61.5 million. The Company also had federal
research and development tax credit carryforwards of approximately $2.5
million. The difference between the federal net operating loss carryforwards
and the accumulated deficit relates primarily to losses generated by the
Company's wholly-owned subsidiary, CV Therapeutics International. The net
operating loss and credit carryforwards will expire at various dates
beginning in 2008 through 2018, if not utilized.

   Utilization of the net operating losses and credits may be subject to an
annual limitation due to the ownership change limitations provided by the
Internal Revenue Code of 1986 and similar state provisions. The annual
limitation may result in the expiration of net operating losses and credits
before utilization.

   Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting and the amount used for income tax purposes. Significant
components of the Company's deferred tax assets as of December 31, 1998 are
as follows:

<TABLE>
<CAPTION>
                                                                  1998          1997
                                                               ---------     ---------
                                                                   (in thousands)
 <S>      <C>                                                  <C>           <C>
          Net operating loss carryforwards                     $ 22,210      $ 17,800
          Research credits (expiring 2008-2018)                   3,580         2,700
          Capitalized research and development                    2,610         2,200
          Other, net                                              1,590           990
                                                               ---------     ---------
          Total deferred tax assets                              29,990        23,690
          Valuation allowance for deferred tax assets           (29,990)      (23,690)
                                                               ---------     ---------
          Total                                                $      -      $      -
                                                               =========     =========

</TABLE>

   The valuation allowance increased by $4.9 million and $4.6 million during
the years ended December 31, 1997, and 1996, respectively.

<PAGE>

                            CV THERAPEUTICS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. SUBSEQUENT EVENTS

   In February 1999, the Company announced that the board of directors
approved the adoption of a Stockholders Rights Plan under which all
stockholders of record as of February 23, 1999 will receive rights to
purchase shares of a new series of preferred stock.

   The Rights Plan is designed to enable all CVT shareholders to realize the
full value of their investment and to provide for fair and equal treatment
for all stockholders in the event that an unsolicited attempt is made to
acquire CVT. The adoption of the Rights Plan in intended as a means to guard
against abusive takeover tactics and was not in response to any particular 
proposal.

   The rights will be distributed as a non-taxable dividend and will expire
in ten years from the Record Date. The rights will be exercisable only if a
person or group acquires 20 percent or more of the CVT common stock or
announces a tender offer of CVT's common stock. If a person acquires 20
percent or more of CVT's common stock, all rightsholders except the buyer
will be entitled to acquire CVT common stock at discount. The effect will be
to discourage acquisitions of more than 20 percent of CVT's common stock
without negotiations with the Board.