<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, 2001.

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

           FOR THE TRANSITION PERIOD FROM __________ TO __________
                       COMMISSION FILE NUMBER: 0-21643
       _______________________________________________________________

                            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) 384-8500

       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 aggregate market value of the Common Stock held by non-affiliates of
the Registrant, based upon the last sale price of the Common Stock reported
on the Nasdaq Stock Market was $792,423,704 as of February 28, 2002.

    The number of shares of Common Stock outstanding as of February 28, 2002
was 25,524,057.

                     DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant's Proxy Statement in connection with the
Registrant's Annual Meeting of Stockholders are incorporated herein by
reference into Part III of this report.

________________________________________________________________________________
________________________________________________________________________________

<PAGE>

                                    PART I

ITEM 1. BUSINESS

OVERVIEW

    CV Therapeutics, Inc., headquartered in Palo Alto, CA, is a
biopharmaceutical company focused on applying molecular cardiology to the
discovery, development and commercialization of novel, small molecule drugs
for the treatment of cardiovascular diseases. We currently have four
compounds in clinical trials. Ranolazine, the first in a new class of
compounds known as partial fatty acid oxidation (pFOX) inhibitors, is being
developed for the potential treatment of chronic angina. CVT-510
(tecadenoson), an A1 adenosine receptor agonist, is being developed for the
potential reduction of rapid heart rate during atrial arrhythmias. CVT-3146,
an A2A adenosine receptor agonist, is being developed for the potential use
as a pharmacologic agent in cardiac perfusion imaging studies. Adentri(TM),
an A1 adenosine receptor antagonist, is being developed by our partner
Biogen, Inc., for the potential treatment of acute and chronic congestive
heart failure (CHF). In addition, we have several research and preclinical
development programs designed to bring additional drug candidates into human
clinical testing.

Ranolazine for the potential treatment of chronic angina

    We recently completed the second of two pivotal Phase III trials for
ranolazine, a potential treatment for chronic angina, and we plan on
submitting a New Drug Application (NDA) to the United States Food and Drug
Administration (FDA) for ranolazine for this indication. Chronic angina is
marked by repeated and sometimes unpredictable attacks of cardiac pain that
result from a shortage of oxygen-rich blood available to the heart relative
to the oxygen required for the amount of work the heart needs to do. For
many patients, this oxygen shortage occurs even when their hearts only need
to do the minimal work necessary to support routine activities such as
climbing stairs or carrying groceries from the car. Typically, this oxygen
shortage is the result of obstructions in the coronary arteries that prevent
proper circulation of oxygen-rich blood. According to the American Heart
Association's 2001 Heart and Stroke Statistical Update, approximately 6.4
million patients in the United States suffer from angina.

    The key to treating angina is to bring the heart's need for oxygen into
balance with its available supply. Current pharmaceutical therapies, such as
beta blockers, calcium channel blockers and long-acting nitrates, all
achieve this result by forcing a reduction in the demand for oxygen by
lowering heart rate, blood pressure and/or the strength of contraction of
the heart muscle. Patients on these therapies may be unable to tolerate
sufficient reductions in heart rate, blood pressure or strength of
contraction to treat their condition, and therefore, current therapies may
prove unsatisfactory.

    We believe ranolazine balances the oxygen supply/demand equation by
causing the heart to use oxygen more efficiently. In other words, ranolazine
may allow a diseased heart to do more work with a limited supply of oxygen.
By improving the heart's oxygen efficiency, ranolazine may be able to treat
angina without forcing a reduction in the amount of work that the heart can
do. This may allow patients to reduce their angina attacks without lowering
heart rate, blood pressure or cardiac contraction strength, an outcome not
currently available to patients.

    In November 2001, we announced initial results from our second pivotal
Phase III trial of ranolazine for the potential treatment of chronic angina,
at a Late Breaking Clinical Trial plenary session of the 2001 American Heart
Association Scientific Sessions. The results of the trial, called
Combination Assessment of Ranolazine in Stable Angina, or CARISA, indicated
that in patients on a background anti-anginal therapy, ranolazine
statistically significantly increased patients' symptom-limited exercise
duration at trough drug concentrations compared to placebo, the primary
endpoint for this trial. These results were statistically significant at the
98.8% level, or what is commonly referred to as p = 0.012. This means that,
applying widely-used statistical methods, the chance that these results
could have occurred by accident is less than 1 in 80. These results were
comparable

<PAGE>

to the results from our other pivotal Phase III trial of
ranolazine for chronic angina, called Monotherapy Assessment of Ranolazine
in Stable Angina, or MARISA, which we announced in August 1999.

CVT-510 (tecadenoson)  for potential reduction of rapid heart rate during
atrial arrhythmias

    CVT-510 (tecadenoson) is currently being developed for the potential
reduction of rapid heart rate during acute atrial arrhythmias. A Phase III
trial of CVT-510 is being conducted in patients with paroxysmal
supraventricular tachycardia (PSVT), and a Phase IIb trial is being
conducted in patients with atrial fibrillation. When a patient experiences
an atrial arrhythmia, the heart beats too fast to accommodate effective
pumping of blood throughout the body. According to hospital audit reports,
atrial arrhythmias were involved in approximately 2.8 million hospital
diagnoses in the United States in 2000.

    Current therapies to control heart rate during atrial arrhythmias may
entail a number of undesirable features. Digoxin may not work quickly
enough. Beta blockers and calcium channel blockers may reduce blood pressure
in patients whose blood pressure is already dangerously low due to the
arrhythmia itself. Finally, Adenocard(R), a brand of adenosine, also reduces
blood pressure and may slow heart rate for too brief a time to be effective
in treating many arrhythmias.

    CVT-510 is a new small molecule drug that we believe may address the
shortcomings of current therapies. CVT-510 selectively stimulates the A1
adenosine receptor, which may slow heart rate. However, CVT-510 does not
stimulate the A2 adenosine receptor, which may lower blood pressure. Thus,
CVT-510 may offer alternatives to current therapies that are either
relatively slow to act or that reduce blood pressure.

CVT-3146 for potential use in cardiac perfusion imaging studies

    CVT-3146 is currently in a Phase II clinical trial for the potential use
as a pharmacologic agent in cardiac perfusion imaging studies. Cardiac
perfusion imaging studies help detect and characterize coronary artery
disease by identifying areas of insufficient blood flow in the heart. In
1999, approximately 6.5 million cardiac perfusion imaging studies were
performed in the United States, of which approximately 2.4 million were
conducted using a pharmacologic agent.

      In July 2000, we entered into a collaboration with Fujisawa
Healthcare, Inc. (FHI) to develop and market second generation pharmacologic
cardiac stress agents. Under this agreement, FHI received exclusive North
American rights to CVT-3146, a short acting selective A2A adenosine receptor
agonist, and a backup compound. FHI reimburses us for 75% of the development
costs, makes payments upon the achievement of research and clinical
development milestones and, if approved by the FDA, we will receive a
royalty based on product sales of CVT-3146 and may receive a royalty on
another product sold by FHI.

Research and preclinical programs

    We also have a number of preclinical and research programs in the areas
of adenosine receptor research, cardiac metabolism, atherosclerosis and cell
cycle inhibition. Our cardiovascular genomics program is designed to take
advantage of the advances in genomics for the discovery of new therapeutic
targets. In each of these programs, we are working to translate new
molecular mechanisms into new pharmacology that will ultimately offer new
hope and help for people with cardiovascular disease.

CARDIOVASCULAR DISEASE BACKGROUND

    Cardiovascular disease is the leading cause of death in the United
States, claiming almost one million lives in 1999. The American Heart
Association (AHA) estimated the total amount spent on cardiovascular disease
and stroke related drugs and other medical durables in the United States in
2001 at $27.1 billion.

<PAGE>

    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 volume of blood in the body and
the balance of chemicals, such as sodium, potassium and chloride, in the
blood, and the lungs put oxygen in 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 factors such
as heart rate and blood pressure, which in turn are controlled by a variety
of hormones such as adrenaline, angiotensin and adenosine. These hormones
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 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, or heart attack. According to the
AHA's 2001 Heart and Stroke Statistical Update, in the United States, there
were 6.4 million patients with angina and 4.7 million patients with CHF. In
2000, there were 2.8 million hospital diagnoses of acute atrial arrhythmias
in the United States. More than 20 years ago, drugs such as nitrates, beta
blockers, calcium channel blockers and ACE inhibitors were developed to
treat cardiovascular diseases. These drugs have contributed to an increase
in the survival of patients who suffer from cardiovascular disease. However,
these drugs also can cause a variety of undesirable side effects, including
fatigue, depression, impotence, headaches, palpitations and edema. They also
may lack effectiveness in various segments of the cardiovascular market.
Molecular cardiology has provided new insight into the mechanisms underlying
cardiovascular diseases, thus creating the opportunity for improved therapies.

BUSINESS STRATEGY

    The key elements of our business strategy are as follows:

    Identify and develop new drugs for the treatment of cardiovascular
diseases a single therapeutic area

    By focusing on one therapeutic area, cardiovascular disease, we believe
that we can be relatively efficient in our drug discovery, development and
commercialization efforts. Our concentrated focus on cardiovascular disease
may add to our efficiency over a variety of areas, for example:

    *       Research focus is on the molecular mechanisms of the
            cardiovascular system;

    *       Regulatory discussions are with a single FDA division;

    *       Clinical investigators investigators in one trial may be
            candidates for future trials;

    *       Consultants thought leaders are engaged for numerous internal
            programs;

    *       Clinical need key employees are experienced in cardiovascular
            and/or clinical science; and

    *       Sales force efficiency detailing may be to the same
            cardiologists and other prescribing doctors.

    Focus on small molecule drug candidates

    Small molecule therapeutics can frequently be administered orally on an
outpatient basis. By contrast, to date, "large molecule" therapeutics, such
as proteins or monoclonal antibodies, can very rarely be formulated to
accommodate oral outpatient administration. In addition, our emphasis on
small molecule therapeutics means that our drug candidates can be produced
by conventional pharmaceutical manufacturing methods, by using the outside
production capabilities of the established contract pharmaceutical
manufacturing industry.

<PAGE>

    Commercialize products, in part, through a concentrated marketing effort
targeted to cardiologists

    A focused commercialization effort can provide marketing cost
efficiencies. Patients that have severe cardiovascular conditions are
generally treated by cardiologists. In 1998, there were approximately 20,000
cardiologists in the United States. Cardiologists are generally concentrated
in metropolitan communities near major medical centers. We believe that this
relatively small number of subspecialists is responsible for a significant
portion of the patient visits associated with prescriptions written for
severe cardiovascular conditions. These market dynamics make it possible to
sell the drugs in our pipeline with a focused sales force, like the one to
be provided for ranolazine through our sales and marketing services
agreement with Innovex, Inc.

    Participate in the sales and marketing in the United States of at least
some of the drugs we develop

    In the biopharmaceutical industry, a substantial percentage of the
profits generated from successful drug development are typically retained by
the entity directly involved in the sales and marketing of the drug.
Licensing our drug candidates to a third party who will complete development
and provide sales and marketing resources in exchange for a sales royalty
may reduce some of our risks. However, we believe that the risk-return
tradeoff typically favors developing and then marketing and selling products
ourselves. Therefore, a key element of our business strategy is to be
involved, when practical, in the sales and marketing of our products in the
United States. Though we may eventually become involved in direct sales and
marketing activities in other parts of the world, our initial direct efforts
will be in the United States.

PRODUCT PORTFOLIO

    We have the following portfolio of product candidates:

<TABLE>
<S>           <C>                                    <C>                                         <C>
PRODUCT                       TARGET                             AREAS OF DEVELOPMENT            DEVELOPMENT
                                                                                                 STATUS

Ranolazine    Fatty acid oxidation inhibition        Angina                                      Preparing for
                                                                                                 NDA submission
CVT-510       A1 adenosine receptor in the heart     Acute heart rate control during atrial      Phase III
                                                     arrhythmias-PSVT
                                                     Acute heart rate control during atrial      Phase IIb
                                                     arrhythmias-atrial fibrillation
CVT-3146      A2A adenosine receptor in the heart    Cardiac imaging                             Phase II
Adentri TM    A1 adenosine receptor in the kidney    Congestive heart failure                    Phase II
CVT-3619      A1 adenosine receptor in the heart     Chronic heart rate control during atrial    Preclinical
                                                     arrhythmias
CVT-4325      Fatty acid oxidation inhibition        Angina/CHF                                  Preclinical
CVT-2584      Inhibition of cell cycle enzyme (CDK2) Vascular stenosis                           Preclinical
CVT-3634      A2B Adenosine receptor                 Vascular disease                            Preclinical
Cholesterol   Tangier disease gene/HDL elevation     Atherosclerosis                             Research
Transport
</TABLE>

    In the table, under the heading "Development Status," "Phase III"
indicates evaluation of clinical efficacy and safety within an expanded
patient population at geographically dispersed clinical trial sites. "Phase
II" indicates safety testing and initial efficacy testing in healthy
volunteers and/or a limited patient population. "Phase I" indicates initial
safety testing in healthy volunteers and a limited patient population.
"Preclinical" indicates lead compound selected for possible development
which meets predetermined criteria for potency,

<PAGE>

specificity, manufacturability, toxicity and pharmacologic activity in animal
and/or in vitro models. "Research" indicates lead candidate being tested
against predetermined criteria.

RANOLAZINE

    Ranolazine is a novel small molecule for the potential treatment of
angina. Animal research indicates that ranolazine may cause a partial shift
in the source of energy for the heart from fatty acid toward glucose, a more
oxygen-efficient energy source. We are developing ranolazine for the
potential treatment of angina because we believe ranolazine may
significantly improve exercise tolerance, the standard clinical measurement
for angina treatment. However, unlike current anti-anginal medicines,
ranolazine may allow blood pressure and heart rate to remain essentially
unchanged, and as a result, ranolazine may have an improved tolerability
profile compared to currently available therapies. We licensed exclusive
rights to ranolazine in the United States and specified foreign territories
for use in cardiovascular indications, including angina, from Syntex
(U.S.A.), Inc. in March 1996.

    We have recently completed the second of two pivotal Phase III trials
for ranolazine for the potential treatment of angina, and we plan on
submitting an NDA to the FDA.

    Potential Indication Angina

    Chronic angina is marked by repeated and sometimes unpredictable attacks
of cardiac pain. These attacks are typically triggered by physical exertion
or emotional stress. Angina is caused when the heart muscle does not get
enough oxygen-carrying blood to meet its needs, generally because of
obstructions in the coronary arteries feeding blood to the heart. These
obstructions typically are caused by a buildup of cholesterol deposits in
the coronary arteries. All the body's organs and tissues need oxygen to
extract energy from the foods we eat. The heart also needs oxygen in order
to fuel its mechanical work of pumping blood throughout the body. Angina
occurs when the blood supply cannot provide enough oxygen to meet the heart
muscle's demand.

    According to the American Heart Association's 2001 Heart and Stroke
Statistical Update, approximately 6.4 million patients in the United States
suffer from angina. Based on published data, we estimate that over half of
these patients are currently being treated with multiple medications,
including nitrates, beta blockers and calcium channel blockers.

    Current Approaches to Angina Treatment

    Currently available drugs to treat angina include beta blockers, calcium
channel blockers and long-acting nitrates. These drugs decrease the heart's
demand for oxygen by reducing the work it is asked to perform, by lowering
heart rate, blood pressure and/or the strength of the heart's contraction.
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 relieve angina without unacceptable effects.

    pFOX Inhibition A Potential New Approach by Ranolazine

    Cardiac metabolism is the process by which the heart extracts the energy
it needs to pump blood from fat or glucose by combining them with oxygen.
Under normal conditions, cardiac metabolism uses both fat and glucose in a
ratio of roughly 60% fat to 40% glucose. If fatty acid oxidation, which is
the combination of fatty acids and oxygen into energy, is inhibited, then
cardiac metabolism shifts to utilizing more glucose. Since the heart gets
more energy from a unit of oxygen combined with glucose than it does from
that same unit of oxygen combined with fat, causing a shift in cardiac
metabolism from fat to glucose should improve cardiac efficiency. However, a

<PAGE>

complete shift away from metabolizing fatty acids could potentially lead to
unwanted side effects. Consequently, only a partial inhibition of fatty acid
oxidation is likely to be desirable.

    Animal studies indicate that ranolazine is a partial and reversible
inhibitor of fatty acid oxidation, or a pFOX inhibitor. Inhibition of fatty
acid oxidation indirectly stimulates glucose oxidation, which produces more
energy per unit of available oxygen thereby increasing cardiac efficiency.
Ranolazine therefore may correct the imbalance between oxygen demand and
oxygen supply.

    As a pFOX inhibitor, ranolazine appears to operate via a completely
different pathway than the existing anti-anginal drugs. Based on the CARISA
and MARISA trial results, ranolazine does not appear to produce clinically
meaningful lowering of heart rate or blood pressure. Consequently patients
taking ranolazine may be able to maintain these hemodynamic measures at or
near baseline levels, which they are unable to do if they take any of the
currently available anti-anginal medications.

    The following table sets forth the mechanisms and effects of ranolazine
and anti-anginal drugs.


<TABLE>
<S>                                   <C>                       <C>                     <C>
                                                Heart                    Blood          Mechanism
                                                 Rate                   Pressure



Ranolazine:                                       -                        -            Improves oxygen
pFOX Inhibitor                                                                          metabolism in heart muscle


Beta                                         [DOWN ARROW]             [DOWN ARROW]      Decreased
Blockers                                                                                pump function


Calcium                                      [DOWN ARROW]             [DOWN ARROW]      Decreased
Channel                                                                                 pump function,
Blockers                                                                                vasodilation


Long-Acting                                 [UPWARD ARROW]            [DOWN ARROW]      Vasodilation
Nitrates
</TABLE>


      For the above table, the data and the reflected mechanism of action
indicated for ranolazine is based on animal and clinical trials to date.
Unlike beta blockers, calcium channel blockers and long-acting nitrates,
ranolazine has not yet been approved by the FDA as safe or effective for any
use.

    Ranolazine Clinical Trial Status

      We have completed two pivotal Phase III trials for ranolazine. We are
preparing an NDA for submission to the FDA, seeking approval to market
ranolazine in the United States for chronic angina. To date, ranolazine has
been tested in over 2,000 patients and volunteers.

      In November 2001, we announced initial results from our second pivotal
Phase III trial of ranolazine at a Late Breaking Clinical Trial plenary
session of the American Heart Association Scientific Sessions 2001. CARISA
(Combination Assessment of Ranolazine In Stable Angina) was a Phase III
multi-national, randomized, double-blind, placebo-controlled, parallel group
trial of the safety and efficacy of a sustained release formulation of
ranolazine. The clinical trial randomized 823 patients to assess the
anti-anginal effects of 12 weeks of treatment

<PAGE>

with ranolazine in chronic angina patients also receiving a background
anti-anginal medication. Patients received one of three background therapies
(atenolol 50 mg, diltiazem CD 180 mg, or amlodipine 5 mg) and were randomized
to twice daily doses of ranolazine 750 mg, ranolazine 1000 mg or placebo.
Exercise testing was performed at trough (12 hours after dosing) and peak (four
hours after dosing) plasma concentrations. The results of the trial are
summarized below:

      *           The CARISA prospectively defined primary efficacy endpoint
                  was symptom-limited exercise duration at trough for all
                  ranolazine patients compared to placebo at 12 weeks. At
                  trough, ranolazine plasma concentrations are at their
                  lowest point during the dosing cycle. In both ranolazine
                  dose groups combined, symptom-limited exercise duration at
                  trough plasma concentrations increased on ranolazine
                  compared to placebo. These results were statistically
                  significant at the 98.8% level, or what is commonly
                  referred to as p = 0.012. This means that, applying widely
                  used statistical methods, the chance that these results
                  could have occurred by accident is less than 1 in 80. The
                  CARISA primary efficacy endpoint of symptom-limited
                  exercise duration at trough has historically been the
                  primary endpoint that the FDA reviews when considering
                  anti-anginal therapies.

      *           For each ranolazine dose considered independently,
                  symptom-limited exercise duration at trough plasma
                  concentrations increased on ranolazine compared to placebo
                  (p<= 0.03). The increases in exercise times on ranolazine
                  were not significantly different among the three
                  background therapies; insignificantly greater increases
                  were seen over diltiazem and amlodipine-than over atenolol.

      *           Statistically significant effects of ranolazine were also
                  observed in other secondary efficacy endpoints. Ranolazine
                  at doses of 750 mg and 1000 mg reduced the frequency of
                  angina by an average of 1.3 and 1.7 attacks per week,
                  respectively, compared to an average decrease of 0.6
                  attacks per week on placebo (p<=0.01 for each dose versus
                  placebo). Compared to placebo, ranolazine at doses of 750
                  mg and 1000 mg increased the average time to
                  electrocardiographic evidence of ischemia; those increases
                  approached statistical significance at trough (p<=0.1) and
                  achieved statistical significance at peak (p<0.005). In
                  addition, compared to placebo, ranolazine at both doses
                  statistically significantly increased the average time to
                  onset of angina at both peak (p<=0.003) and trough (p<=
                  0.05).

      *           The lack of clinically relevant hemodynamic effects was
                  consistent with results observed in MARISA and in prior
                  clinical trials of a different formulation of ranolazine.
                  While increases in exercise duration were observed,
                  ranolazine had no clinically meaningful impact on heart
                  rate or blood pressure, either at rest or following exercise.

      *           Adverse events, including dizziness, asthenia or weakness,
                  and nausea were consistent with those observed in MARISA
                  and in prior trials of a different formulation of
                  ranolazine. Adverse event frequency increased as dose
                  increased.

      *           The rate of serious adverse events was 6% on placebo and
                  7% on each ranolazine dose group.

      *           Small (<10 msec, similar to MARISA) but statistically
                  significant (p<=0.002) increases in QTc, an
                  electrocardiographic measurement, were observed compared
                  to placebo.

      In August 1999, we completed our Monotherapy Assessment of Ranolazine
In Stable Angina, or MARISA trial. MARISA was a randomized, double-blind,
placebo-controlled trial of a sustained release formulation of ranolazine
used in patients who were not receiving other anti-anginal drugs. Patients
were evaluated by treadmill exercise testing during treatment with placebo
and each of three doses of ranolazine, 500mg twice daily, 1000mg twice
daily, and 1500mg twice daily. The results of the trial are summarized below:

<PAGE>

      *           The MARISA primary endpoint was treadmill exercise
                  duration approximately 12 hours after the previous dose
                  and just before the next dose. At this time, ranolazine
                  plasma concentrations are at their lowest point during the
                  dosing cycle, or at trough. Data from 175 patients appear
                  to show that compared to placebo, ranolazine taken twice a
                  day increased exercise duration at trough plasma
                  concentrations, at all three active doses studied. These
                  results were statistically significant at the 99.5% or
                  greater level, or what is commonly referred to as p <
                  0.005. This means that, applying widely used statistical
                  methods, the chance that these results could have occurred
                  by accident is less than 1 in 200.

      *           Key secondary endpoints, exercise time to onset of angina
                  and exercise time to the electrocardiographic appearance
                  of ischemia were increased at all three ranolazine doses
                  studied compared to placebo. These results were
                  statistically significant at the 99.5% or greater level,
                  or p < 0.005.

      *           While increases in exercise duration were observed,
                  ranolazine had no clinically meaningful impact on heart
                  rate or blood pressure, either at rest or following exercise.

      *           Adverse events, including dizziness, asthenia or weakness,
                  and nausea, and the electrocardiographic changes observed
                  in this trial, were consistent with those observed in
                  prior trials of an immediate release formulation of
                  ranolazine. Adverse event frequency increased as dose
                  increased.

      In addition, three Phase II trials completed by Syntex prior to 1994
indicated that an immediate release formulation of ranolazine statistically
significantly increased the exercise duration of angina patients during
exercise testing at peak dosage levels, compared to placebo. This result was
observed both when ranolazine was given alone and in combination with beta
blockers or calcium channel blockers. In these trials, ranolazine was
administered on a three times daily schedule. To achieve a more commercially
attractive product with a twice-daily dosing schedule, a sustained release
formulation of ranolazine was developed, which we tested in both our Phase
III clinical trials. To date, ranolazine has been tested in more than 2,000
patients and volunteers.

      Commercialization of Ranolazine

      In May 1999, we entered into a sales and marketing agreement with
Innovex, Inc., a subsidiary of Quintiles Transnational Corp. and a provider
of sales and marketing services to the pharmaceutical industry worldwide.
Under the agreement, if ranolazine is approved for sale in the United States
by the FDA, Innovex will hire and train a dedicated sales force for
ranolazine and assist in funding marketing expenses for up to five years
after launch. We will receive 100% of the revenues of ranolazine, and we
will pay Innovex a fee that will not exceed 33% of those revenues in the
first two years, and will decline to a maximum of 25% by the fourth and
fifth years. Further, in exchange for giving us the option to retain this
trained sales force at the end of the contract, we will pay Innovex a
royalty on sales of 7% in the sixth and 4% in the seventh years after launch.

CVT-510 (TECADENOSON)

      We are developing CVT-510 (tecadenoson) for the potential reduction of
rapid heart rate during acute atrial arrhythmias. Atrial arrhythmias are
abnormally rapid heart rates, and include the conditions of atrial
fibrillation, atrial flutter and paroxysmal supraventricular tachycardias
(PSVT). CVT-510 is an A1 adenosine receptor 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
acute atrial arrhythmias by reducing heart rate without lowering blood
pressure. We are currently conducting a Phase III trial of CVT-510 in
patients with PSVT and a Phase IIb trial in patients with atrial
fibrillation.

<PAGE>

      Potential Indication Acute Heart Rate Control During Atrial Arrhythmias

      Atrial arrhythmias occur when the atria of the heart beat rapidly, or
uncontrollably, sending multiple electrical impulses to the ventricles of
the heart. An excessive increase in ventricular rate reduces the heart's
cardiac output due to inadequate filling and emptying of the left ventricle.
Potentially damaging consequences include low blood pressure and damage to
the brain, heart and other vital organs; therefore, these rhythm
disturbances often require immediate treatment. Prompt slowing of the heart
rate is the goal of acute therapy. Because of the need to treat patients
quickly, intravenous therapies allow for rapid stabilization of the patient
while the underlying condition is treated.

      In the United States, atrial arrhythmias are involved in approximately
2.8 million hospital diagnoses annually. Atrial arrhythmias are a major
complication of heart attacks, heart failure and cardiac surgery. The acute
treatment of atrial arrhythmias involves slowing the heart rate. Later, when
the heart rate is controlled, additional steps can be taken to reverse the
abnormal electrical activity in the atria which underlie these arrhythmias.

      Current Approaches to Acute Heart Rate Control During Atrial Arrhythmias

      Current medical therapies, which include digoxin, calcium channel
blockers, beta blockers and Adenocard(R), aim to slow the heart to a normal
rate but have significant limitations in the acute care setting. Digoxin is
effective in controlling heart rate, but requires a long time to take
effect. This can be dangerous in patients whose condition requires prompt
heart rate control to restore normal cardiac output. Calcium channel
blockers, beta blockers and Adenocard(R) act quickly but reduce blood
pressure and depress cardiac function. These drugs could potentially
exacerbate the condition of patients already experiencing cardiac
dysfunction as a complication of the arrhythmia. Furthermore, the effect of
Adenocard(R) persists only for a few seconds, and as a result, this product
is not indicated for treatment in patients with atrial fibrillation or flutter.

      Cardiac Conduction System

      During an atrial arrhythmia, the atria of the heart beat too rapidly,
sending excessive electrical impulses to the ventricles of the heart. These
electrical impulses are initiated at a set of specialized cells in the
atria, known as the sinus node, and then run to another set of specialized
cells known as the atrio-ventricular (AV) node. It is this AV node which
controls the transmission of the electrical impulses to the ventricles.
Since the rate at which electrical impulses pass through the AV node
determines ventricular heart rate, slowing AV nodal transmission will result
in a reduction in the ventricular heart rate. Since ventricular rate is a
primary determinant of cardiac output, prompt slowing of rapid AV nodal
conduction is one treatment approach to slowing the abnormally rapid heart
rate of an atrial arrhythmia.

      Potential Treatment by CVT-510

      CVT-510 is designed to selectively stimulate the A1 adenosine
receptor. Stimulation of the A1 adenosine receptor in the AV node slows the
speed of electrical conduction across the AV node, which in turn reduces the
number of electrical impulses that reach the ventricle. Stimulation of the
A2 adenosine receptor may lower blood pressure. Since CVT-510 is designed to
selectively stimulate the A1 adenosine receptor without significantly
stimulating the A2 adenosine receptor, it may be possible to use CVT-510 to
intervene quickly in the arrhythmia process without the unwanted effect of
lowering blood pressure. CVT-510 may offer cardiac patients and clinicians
alternatives to current therapies that are either relatively slow to act or
that reduce blood pressure.

      CVT-510 Clinical Trial Status

      In November 2001, we announced that in an open-label, dose ranging
Phase II clinical trial in patients with atrial fibrillation or flutter,
CVT-510 consistently reduced heart rate from baseline (p<0.05) without
clinically

<PAGE>

meaningful changes in blood pressure. We have embarked on a Phase
IIb development program aimed at defining an optimized dosage regimen in
patients with this complex cardiac disease.

      In addition, in November 2000, at the annual meeting of the American
Heart Association, we announced results from a Phase II trial of CVT-510
indicating that CVT-510 terminated paroxysmal supraventricular tachycardia
(PSVT) without adversely affecting blood pressure. In this open-label, dose
escalation study, CVT-510 was given as one or two bolus injections at least
two minutes apart to 37 patients with inducible PSVT undergoing
electrolphysiological study. The results indicated that in 32 of 37
patients, or 86%, the PSVT was terminated and normal sinus rhythm was
restored. CVT-510 was well tolerated in these patients with no adverse
effects on blood pressure, and no high-grade AV block or other serious
adverse events were observed. Based on the results of this trial, we
initiated a Phase III clinical trial of CVT-510 in patients with PSVT in
June 2001.

CVT-3146

      We are developing CVT-3146 for the potential use as a pharmacologic
agent in cardiac perfusion imaging studies. Cardiac perfusion imaging
studies are used to detect and characterize coronary artery disease, by
identifying areas of insufficient blood flow in the heart. Some of these
studies are conducted using pharmacologic agents. CVT-3146 is an A2A
adenosine receptor agonist which may act selectively on the heart to cause
coronary vasodilation and thus increase coronary blood flow. Therefore,
CVT-3146 may provide doctors with an alternative agent for cardiac perfusion
imaging studies without unwanted side effects. We have entered into a
collaboration with Fujisawa Healthcare to develop and market CVT-3146 in
North America. We are currently in a Phase II trial for CVT-3146.

      Potential Indication A Pharmacologic Agent in Cardiac Perfusion
Imaging Studies

       During cardiac perfusion imaging studies, the heart is subjected to a
period of stress to stimulate maximal blood flow. Myocardial perfusion, or
blood flow, is measured during stress and compared to myocardial perfusion
when patients are at rest. Areas of relatively poor perfusion during stress
as compared to rest indicates which areas of the heart may be affected by
narrowed coronary arteries.

      To stress the heart sufficiently to perform the test, many patients
exercise on a treadmill. However, more than a third of the patients who take
the test are unable to exercise adequately because of medical conditions
such as peripheral vascular disease or arthritis. For those patients, a
pharmacologic agent that temporarily increases coronary blood flow is used
to create the increase in blood flow which would otherwise be caused by
exercise. In 1999, approximately 6.5 million cardiac perfusion imaging
studies were performed in the United States, of which approximately 2.4
million were conducted using a pharmacologic agent.

      Current Approaches to Increasing Coronary Blood Flow During Cardiac
Imaging Studies

      Current pharmacologic therapies used in cardiac imaging testing are
dipyridamole and Adenoscan(R), the brand name for adenosine. Adenoscan(R) is
used for cardiac imaging because it is the naturally occurring agent that
causes coronary vasodilation and it has a short half-life. However, because
Adenoscan(R) activates all four adenosine receptor subtypes, it can cause
side effects including flushing, dyspnea and headache, and should not be
used in asthma patients. Another current cardiac imaging agent,
dipyridamole, is known to increase levels of adenosine by inhibiting its
transport into cells. Due to its longer half-life, coronary vasodilation
persists for long periods of time, and therefore, patients must be closely
monitored at the completion of the test. In addition, one of the main side
effects of dipryridamole is dizziness.

      Potential Treatment by CVT-3146

      CVT-3146 has been designed to selectively activate the A2A adenosine
receptor in the heart, in order to elicit the coronary vasodilation response
while avoiding many of the side effects of Adenoscan(R) or dipyridamole.

<PAGE>

      CVT-3146 Clinical Trial Status

      In May 2001, we announced that results from our Phase I trial of
CVT-3146 met our previously established primary objective of providing data
on safety and tolerability over a broad range of doses administered to
healthy volunteers. Based on the results of this trial, we initiated a Phase
II clinical trial of CVT-3146 in August 2001. The purpose of the Phase II
trial is to determine the tolerability of CVT-3146 and its effect on
coronary blood flow in patients undergoing a clinically indicated cardiac
catheterization.

ADENTRI(TM) PROGRAM

      Patients with congestive heart failure (CHF) have limited heart
pumping function, and the corresponding reduction in blood flow impairs the
kidney's ability to clear fluid wastes from the body. Current therapies for
CHF tend to negatively impact other activities of the kidneys. Preclinical
studies and clinical trials indicate that A1 adenosine receptor antagonists
may increase the kidney's ability to clear fluid wastes without decreasing
other functions of the kidneys. Thus, we believe that A1 adenosine receptor
antagonists have the potential to be a new therapy for the treatment of CHF.

      In March 1997, we licensed the rights to our A1 adenosine receptor
antagonist technology, patents and compounds, including CVT-124, to Biogen,
Inc. Collectively, Biogen's efforts in this area are referred to as the
AdentriTM program. As a result of the agreements we signed, Biogen has an
exclusive worldwide license to develop, manufacture and commercialize
CVT-124 and any other A1 adenosine receptor antagonists developed either by
Biogen or us based on our patents or our technology. As long as Biogen
retains its license for our A1 adenosine receptor antagonist technology and
patents, Biogen is responsible for funding all development and
commercialization expenses related to these compounds.

      In February 2000, Biogen announced that it had successfully completed
a Phase II trial of CVT-124 in patients with moderate-to-severe CHF.
However, Biogen also announced its intention to continue the AdentriTM
program with a new molecule. Biogen is currently in Phase II clinical trials
with the new molecule.

      Potential Indication Congestive Heart Failure

      CHF occurs when the heart muscle is weakened by disease so it cannot
adequately pump blood throughout the body. As a result of this pump failure,
fluid accumulates throughout the body, including in the lungs. This results
in shortness of breath. Fluid also accumulates in the body because of
adaptations by the kidneys during CHF.

      According to the AHA's 2001 Heart and Stroke Statistical update,
approximately 4.7 million people in the United States suffered from CHF and
an estimated 550,000 new cases arise each year. Almost one million patients
in 2000 were hospitalized in the United States with a primary diagnosis of
CHF.

      Current Approaches to Treating Congestive Heart Failure

      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 kidneys. However, current diuretic therapies such as furosemide,
thiazides and spironolactone become less effective over time as the disease
progresses. Approximately one quarter of hospitalized CHF patients are
resistant to current intravenous diuretic therapies. The dosage of the most
commonly prescribed diuretics for CHF are often increased as the disease
progresses, which can be associated with toxic side effects. One such side
effect is potassium loss, which may lead to an increased incidence of
cardiac arrhythmias if potassium is not monitored and replaced, and another
is a decline in kidney function.

<PAGE>

      Potential Treatment by A1 Adenosine Receptor Antagonists

      An A1 adenosine receptor antagonist blocks the action of the A1
adenosine receptors. Since the A1 adenosine receptor plays an important role
in the kidneys to cause the kidneys to retain sodium and fluids, blocking
the action of this receptor may reduce the amount of fluid that the kidneys
retain.

      Clinical Trial Experience

      In Phase I and Phase II trials, CVT-124 appeared to be generally well
tolerated and produced increases in urine, sodium and chloride excretion
compared to placebo. This was observed both in healthy volunteers and in
moderately severe CHF patients. Moreover, trials to date indicate that
CVT-124 may be able to treat fluid overload without an associated reduction
in the filtration function of the kidneys. Furosemide, which is currently
the most commonly used treatment for fluid overload caused by CHF, has been
shown in prior trials to be associated with a reduction in the filtration
function of the kidneys.

      Program Status

      Biogen is developing Adentri for acute and chronic CHF and is
currently in Phase II clinical trials.

PRECLINICAL PIPELINE

      Our research and development team is creating new product
opportunities through our expertise in molecular cardiology. We have
preclinical research programs in the areas of:

      *           Adenosine Receptor Research
                  - Cardiac conduction
                  - Angiogenesis

      *           Metabolism
                  - Cardiac energetics

      *           Atherosclerosis
                  - Increase HDL, "the good cholesterol"

      *           Cell Cycle Inhibition

      *           Cardiovascular Genomics

Adenosine Receptor Research

      Adenosine is a naturally occurring small molecule that elicits
pharmacological responses that tend to compensate for the imbalance in
oxygen supply relative to demand that occurs when blood vessels are
partially blocked by cardiovascular disease. Our adenosine receptor research
program has discovered proprietary compounds that selectively elicit the
desired effects of adenosine receptor stimulation for the treatment of
certain electrical conductance disturbances, such as atrial arrhythmias, and
regulate the mechanisms of new blood vessel growths, or angiogenesis.

<PAGE>

 - Cardiac Conduction

      Electrical impulses within the heart muscle play a key role in causing
the heart muscle to sequentially expand and then contract, which is required
for the heart to pump blood throughout the body in a controlled rhythm.
Failure of this electrical system to function properly will result in a
poorly pumping heart, such as in atrial arrhythmias.

      We have discovered a series of novel, proprietary, orally
bio-available, partial A1 adenosine receptor agonists, including CVT-3619,
that selectively slow the electrical conductance in the heart to adjust the
rate of a beating heart into the normal range. These compounds are similar
to CVT-510, which is being developed for the acute care of atrial
arrhythmias, but are targeted for the continued care of patients with
chronic atrial arrhythmias.

 - Angiogenesis

      Our scientists have led the effort to fully characterize the role of
adenosine in the initiation, maintenance, and growth of new vessels in
vascular beds that are deprived of oxygen due to cardiovascular disease. We
have discovered the receptor that is responsible for regulation of the known
mitogens such as vascular endothelial growth factor and fibroblast growth
factor, and have discovered small molecule agonists and antagonists of this
process. The goal of these programs, which includes compounds such as
CVT-3634, is to harness this naturally occurring process for the potential
treatment of peripheral vascular disease or aberrant angiogenesis that
causes diabetic retinopathy and macular degeneration.

Metabolism

      In order for the heart to adequately pump blood, fuel in the form of
fat, or fatty acids, and sugar, in the form of glucose, are metabolized with
oxygen to yield ATP (a key molecule involved in th expenditure of cellular
energy), water and carbon dioxide. When oxygen is in limited supply, for
example when the vessels that feed the heart are blocked from
atherosclerosis and cardiovascular disease, the normal utilization of
glucose becomes impaired. This metabolic imbalance in favor of fatty acid
oxidation (compared to glucose) can be partially restored by inhibiting
fatty acid metabolism with a partial fatty acid oxidation (pFOX) inhibitor.

      The goals of our cardiac metabolism program are to further
characterize the therapeutic potential of ranolazine in the treatment of
indications other than angina, and to discover new, proprietary second
generation ranolazine products. For example, in an animal model of
congestive heart failure, ranolazine increased work output by the heart
without increasing the consumption of oxygen. In other words, cardiac
performance and cardiac efficiency were improved. We have also discovered
several series of novel, proprietary pFOX inhibitors, including CVT-4325,
that are potential second generation compounds to ranolazine.

Atherosclerosis

      The goal of our HDL drug discovery program is to study the ways in
which the body removes excess cholesterol from the walls of blood vessels,
in an effort to prevent or reverse the buildup of arterial plaques that
cause heart attacks. Roughly half of heart attacks occur in patients with
low levels of high density lipoproteins, known as the "good" form of
cholesterol, or HDL. Patients with the genetic disorder called Tangier
disease have virtually no HDL in their blood, and are at a greatly increased
risk for developing cardiovascular disease. Our scientists have used a new
strategy combining gene expression microarrays and biochemical techniques to
identify the gene that is defective in patients with Tangier disease. Having
identified the gene that is responsible for the genetic disorder in Tangier
disease patients, we have targeted this gene as part of a drug discovery
program to identify novel, proprietary, small molecules that may increase
reverse cholesterol transport and thus HDL.

<PAGE>

Cell Cycle Inhibition

      The goal of our cell cycle inhibition program is to develop new
therapeutics that suppress abnormal cellular proliferation. Excessive
proliferation of cardiovascular connective tissue cells or vascular smooth
muscle cells causes the scarring and loss of function that is characteristic
of chronic diseases of the heart, blood vessels and kidneys. As part of our
drug discovery strategy, we have focused upon enzymes called cell cycle
enzymes that regulate cellular proliferation. CVT-2584 is a new compound
that selectively inhibits CDK2, a critical cell cycle enzyme. Animal studies
with CVT-2584 have shown a substantial reduction of blockages after vascular
injury.

Cardiovascular Genomics

      Our cardiovascular genomics program is working to utilize the latest
tools of genomics and gene expression microarray technology to identify
novel gene and protein targets for drug discovery. We have focused on
evaluating the expression of tens of thousands of human genes that are
involved in the accumulation of lipids in the vascular wall and in the
response of blood vessels to injury. In this way, we are seeking to identify
novel approaches to reduce the risk of heart attacks and to reduce the
occurrence of restenosis following interventional vascular treatments such
as angioplasty or bypass surgery.

COLLABORATIONS AND LICENSES

      We have established, and intend to continue to establish, strategic
partnerships to potentially expedite the development and commercialization
of our drug candidates. For those programs with potential application
outside of cardiovascular disease, we intend to identify additional
corporate partners. In addition, we have licensed chemical compounds from
academic collaborators and other companies. Our collaborations and licenses
currently in effect include:

      University of Florida Research Foundation

      In June 1994, we entered into a license agreement with the University
of Florida Research Foundation, Inc. under which we received exclusive
worldwide rights to develop A1 adenosine receptor antagonists and agonists
for the detection, prevention and treatment of human and animal diseases. In
consideration for the license, we paid an initial license fee and are
obligated to pay royalties based on net sales of products that utilize the
licensed technology. Under this agreement, we must exercise commercially
reasonable efforts to develop and commercialize one or more products covered
by the licensed technology. In the event we fail to reach certain milestones
under the agreement, the licensor may convert the exclusive license into a
non-exclusive license. We sublicensed our rights under this license that
relate to A1 adenosine receptor antagonists to Biogen in March 1997.

      Syntex

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

      Under the license agreement, we paid an initial license fee. In
addition, we are obligated to make certain milestone payments to Syntex,
upon receipt of the first and second product approvals for ranolazine in any
of certain major market countries (consisting of France, Germany, Italy, the
United States and the United Kingdom). Unless the agreement is terminated,
if the first product approval in one of the major market countries occurs

<PAGE>

before May 1, 2002, we will pay Syntex, on or before March 31, 2005, $7.0
million plus interest accrued thereon from the date of approval until the
date of payment, and if the first such product approval occurs after May 1,
2002, we will pay Syntex, on or before March 31, 2005, $7.0 million plus
interest accrued thereon from May 1, 2002 until the date of payment. Unless the

agreement is terminated, if the second product approval in one of the
major market countries occurs before May 1, 2004, we will pay Syntex, on or
before March 31, 2006, $7.0 million plus interest accrued thereon from the
date of approval until the date of payment, and if the second such product
approval occurs after May 1, 2004 but before March 31, 2006, we will pay
Syntex, on or before March 31, 2006, $7.0 million plus interest accrued
thereon from May 1, 2004 until the date of payment. Unless the agreement is
terminated, if the second product approval in one of the major market
countries has not occurred by March 31, 2006, we will pay Syntex $3.0
million on or before March 31, 2006, and if we receive the second product
approval after March 31, 2006, we will pay Syntex $4.0 million within thirty
(30) days after the date of such second product approval. No amounts have
been accrued to date in relation to these milestones. In addition, we will
make royalty payments based on net sales of products that utilize the
licensed technology. We are required to use commercially reasonable efforts
to develop and commercialize the product for angina.

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

    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 any products which are produced based on
our A1 adenosine receptor antagonist patents or technologies (including our
rights under the University of Florida Research Foundation license) for all
indications. In exchange, we received a $16.0 million payment consisting of
research related funding, an equity investment and $3.0 million in funding
under a general purpose loan facility. Biogen agreed to make milestone
payments and equity investments, as well as the loan facility, all of which
are subject to their achievement of clinical development and
commercialization milestones. In February 1998, we 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, Biogen released an
additional $4.5 million under the loan facility. In February 2000, based on
results of their Phase II clinical trial, Biogen announced its intention to
proceed with the AdentriTM program, but with a backup compound, and
subsequently paid us $6.5 million, consisting of a $2.0 million milestone
payment and $4.5 million under the loan facility. In March 2001, based on
Biogen's initiation of a Phase I oral development program, we recognized a
$1.0 million milestone payment. Biogen will also make milestone payments in
connection with development and commercialization of licensed products, and
pay royalties on any future sales of products covered by the agreement.
Biogen has control and responsibility for conducting, funding and pursuing
all aspects of the development, submissions for regulatory approvals,
manufacture and commercialization of A1 adenosine receptor antagonist
products under the agreement.

    In March 2000, we repaid the initial $3.0 million installment under the
loan facility. In October 2000, we exercised our right to convert $9.0
million in debt under the loan facility into 118,932 shares of our common
stock at a price of $75.67 per share, in full repayment of the entire
principal amount under this loan facility. In December 2000, we repaid all
accrued and unpaid interest on the loan facility.

    Biogen may terminate the agreements for any reason upon 60 days written
notice. If Biogen terminates the agreements, all rights to the technology
will revert to us, and we will pay Biogen a royalty on future sales of any
A1 adenosine receptor antagonist.

<PAGE>

    Incyte

    In July 1998, we entered into a joint research collaboration agreement
with Incyte Genomics, Inc. to develop a prototype gene expression database
in the area of cardiovascular biology. We contribute our molecular
cardiology expertise and Incyte contributes its genomics capabilities.
Incyte owns the data produced, and we receive a perpetual, non-exclusive
license to use the data in our drug development efforts. Each party bears
its own costs of the research and neither party makes any payments to the
other. Either party may terminate the agreement on 60 days written notice.
In August 2001, we expanded the scope of our 1998 research collaboration, to
focus on identifying genes involved in the development of atherosclerosis
and coronary artery disease.

    Innovex

    In May 1999, we entered into a sales and marketing services agreement
with Innovex, a subsidiary of Quintiles Transnational Corp. Under this
agreement, if ranolazine is approved for sale in the United States by the
FDA, Innovex will hire and train a dedicated sales force for ranolazine and
assist in funding marketing expenses for up to five years after launch. We
will receive 100% of the revenues from sales of ranolazine and we will pay
Innovex a share of those revenues.

    The agreement calls for Innovex to conduct pre-launch activities, hire
and train a dedicated cardiology sales force to launch and promote
ranolazine, and provide post-launch marketing and sales services. To fund
pre-launch activities, Quintiles will provide us with a $10 million credit
facility at the time we file with the FDA for approval. We are required to
spend a minimum of $10 million on ranolazine pre-launch marketing activities
so long as Quintiles provides advances under the credit facility. Upon FDA
approval, Quintiles will make a $10 million milestone payment to us, which
we are obligated to use to repay any amounts outstanding under the credit
facility. Should we file for FDA approval and draw down the credit facility,
but never receive FDA approval, we are obligated to repay the loan within 10
years of the date we received the loan.

    Innovex has agreed to provide services for at least three years after
launch and to provide services in years four and five after launch if
minimum sales levels are met. The agreement also specifies the minimum
number of sales representatives and the minimum level of dollars to be spent
on marketing by Innovex during the first two years of the contract,
regardless of sales levels. The minimum size of the sales force and the
marketing expenses in year three or any subsequent year must be maintained
by Innovex as long as minimum sales levels are met.

    In exchange for providing these sales and marketing services, Innovex
will receive a fee equal to up to an average of 33% of our revenues related
to the sale of ranolazine in the first two years of sales, up to 30% of
revenues for the third year and up to 25% of revenues in years four and
five. Also, for giving us the option to retain this trained sales force at
the end of the contract, Innovex will receive a royalty on sales of 7% in
the sixth year and 4% in the seventh year after launch.

    In connection with the agreement, Quintiles purchased 1,043,705 shares
of our common stock for a total purchase price of $5.0 million.

    We or Innovex may terminate the agreement in the event of material
uncured breach, bankruptcy or insolvency, our decision to not file an NDA
for ranolazine or to terminate development of the product, notice from the
United States Food and Drug Administration that it will not approve the
product for marketing, or failure to achieve certain minimum sales levels.
In addition, we or Innovex (subject to certain notice and response
provisions) may terminate the agreement if product launch will not occur by
a specific date. The agreement will terminate automatically if we no longer
retain our license rights to ranolazine.

<PAGE>

    Fujisawa Healthcare

    In July 2000, we entered into a collaboration with Fujisawa Healthcare,
Inc. (FHI) to develop and market second generation pharmacologic cardiac
stress agents. Under this agreement, FHI received exclusive North American
rights to CVT-3146, a short acting selective A2A adenosine receptor agonist,
and to a backup compound. We received $10.0 million from FHI consisting of a
$6.0 million up-front payment, which will be recognized as revenue over the
expected term of the agreement, and the purchase of 54,270 shares of our
common stock for a total purchase price of $4.0 million. In September 2001,
based on initiating a Phase II clinical trial for CVT-3146, FHI paid us a
$2.0 million milestone payment. We may receive up to an additional $22.0
million in cash based on development and regulatory milestones such as
initiation of clinical studies and certain regulatory filings and approval.
FHI reimburses us for 75% of the development costs, and if the product is
approved by the FDA, we will receive a royalty based on product sales of
CVT-3146 and may receive a royalty on another product sold by FHI. The
amount reimbursed for development costs was $0, $996,000 and $2.8 million
for 1999, 2000 and 2001, respectively.

      FHI may terminate the agreement for any reason on 90 days written
notice, and we may terminate the agreement if FHI fails to launch a product
within a specified period after marketing approval. In addition, we or FHI
may terminate the agreement in the event of material uncured breach, or
bankruptcy or insolvency.

MARKETING AND SALES

      Except for our sales and marketing services agreement with Innovex, we
currently have no sales or distribution capabilities, and have only limited
marketing capabilities. 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 forces. For example,
Innovex will provide sales and marketing for ranolazine in the United
States. For our other products, and for ranolazine at the end of the term of
our agreement with Innovex, we may elect to establish our own specialized
sales force and marketing organization to market our products to cardiologists.

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. We have entered into several manufacturing agreements
relating to ranolazine, including for commercial scale-up of production of
bulk active pharmaceutical ingredient, tableting and supply of a raw
material component of the product.

      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. 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 and their equivalence to the
product to be commercially supplied.

PATENTS AND PROPRIETARY TECHNOLOGY

      Patents and other proprietary rights are important to our business.
Our policy is to file patent applications in the United States and
internationally in order to protect our technology, including inventions and
improvements to inventions that are commercially important to the
development of our business. The evaluation of the patentability of United
States and foreign patent applications can take several years to complete
and can entail considerable expense.

<PAGE>

      We own multiple patents issued by and/or patent applications pending
with the United States Patent and Trademark Office and foreign patents or
patent applications relating to our technology, including related to our
clinical programs, ranolazine, CVT-510 and CVT-3146. We also have acquired a
license, which is exclusive in specified territories, to specified patents
issued by the United States Patent and Trademark Office (US PTO) and foreign
corresponding patents and patent applications related to ranolazine. The
United States composition of matter patent relating to ranolazine will
expire in 2003 unless we are granted an extension based upon the
Waxman-Hatch Act, which we anticipate would extend the patent protection for
an additional five years; however, in 2001 we received an issued patent from
the US PTO for a method of using sustained release formulations of
ranolazine, including the formulation used in the MARISA and CARISA trials,
for the treatment of chronic angina. This patent expires in 2019.

      In addition, we have acquired, and in turn have granted to Biogen, an
exclusive license to issued patents and pending patent applications relating
to A1 adenosine receptor antagonists.

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 a variety of administrative or
judicially imposed sanctions.

      The steps ordinarily required before a new pharmaceutical product may
be marketed in the United States include preclinical laboratory tests,
animal tests and formulation studies, the submission to the FDA of an
Investigational New Drug Application (or IND), which must become effective
before clinical testing may commence, and adequate and well-controlled
clinical trials to establish the safety and effectiveness of the drug for
each indication for which it is being tested.

      Preclinical tests include laboratory evaluation of product chemistry
and formulation, as well as animal trials to assess the potential safety and
efficacy of the product. The conduct of the preclinical tests and
formulation of compounds for testing must comply with federal regulations
and 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
trials may begin. If the FDA has comments or questions, the applicant must
answer the questions to the FDA's satisfaction 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 the FDA authorizes. In some instances, the IND
application process can result in substantial delay and expense.

      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 must be conducted in compliance with
federal regulations and requirements, under protocols detailing the
objectives of the trial, 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. The study protocol and informed consent
information for patients in clinical trials must also be approved by the
institutional review board at each institution where the trials will be
conducted.

<PAGE>

      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 trials in a limited patient population, to determine
dosage tolerance and optimal dosage, identify possible adverse effects and
safety risks, and provide preliminary support for the efficacy of the drug
in the indication being studied.

      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 trial
sites. There can be no assurance that Phase I, Phase II or Phase III testing
of our product candidates will be completed successfully within any
specified time period, if at all.

      After completion of the required clinical testing, generally a
marketing application called a New Drug Application (NDA) is prepared and
submitted to the FDA. FDA approval of the NDA is required before marketing
of the product 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.

      The FDA has 60 days from its receipt of the NDA to determine whether
the application will be accepted for filing based on the agency's threshold
determination that the NDA is sufficiently complete to permit substantive
review. Once the submission is accepted for filing, the FDA begins an
in-depth review of the NDA. Under federal law, 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 typically will 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 an approval letter, or, in some cases, an
approvable letter followed by an approval letter. Both letters usually
contain 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 specific indications. As a
condition of NDA approval, the FDA may require postmarketing testing and
surveillance to monitor the drug's safety or efficacy, or impose other
conditions. Once granted, product approvals may be withdrawn if compliance
with regulatory standards is not maintained or problems occur following
initial marketing.

      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. The
FDA ultimately may decide that the application does not satisfy the
regulatory criteria for approval.

      Foreign Regulation of Drug Compounds

      Approval of a product by comparable regulatory authorities may be
necessary in foreign countries prior to the commencement of marketing of the
product in those countries, whether or not FDA approval has been obtained.
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 some 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.

<PAGE>

      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. If we decide to pursue European
approval for our clinical candidates, we will choose an 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 disposing of hazardous
materials and waste products.

COMPETITION

      The pharmaceutical and biopharmaceutical industries are subject to
intense competition and rapid and significant technological change. If
regulatory approvals are received, ranolazine may compete with several
classes of existing drugs for the treatment of angina, some of which,
including calcium channel blockers, beta blockers and nitrates, are
available in relatively inexpensive generic form. Surgical treatments such
as coronary artery bypass grafting and percutaneous transluminal coronary
angioplasty can be another option for angina patients. In addition, we are
aware of companies that are developing products that may compete with our
other drug candidates. For example, we believe that Aderis Pharmaceuticals
and Fujisawa Healthcare have A1 adenosine receptor agonists under
development which could compete with CVT-510. We believe King
Pharmaceuticals Inc., Aderis Pharmaceuticals, DuPont Pharmaceuticals
Company, and Adenosine Therapeutics LLC have A2A adenosine receptor agonists
under development which could compete with CVT-3146. Finally, we believe
Fujisawa Pharmaceutical Co., Ltd. and Aderis Pharmaceuticals are each
developing A1 adenosine receptor antagonists which could compete with
Biogen's AdentriTM program.

      We believe that the principal competitive factors in the potential
markets for ranolazine, CVT-510, CVT-3146 and AdentriTM will include:

      *           the length of time to receive regulatory approval;

      *           product performance;

      *           product price;

      *           product supply;

      *           marketing and sales capability; and

      *           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.

<PAGE>

EMPLOYEES

    As of January 31, 2002, we employed 222 individuals full-time, including
52 who hold doctoral degrees. Of our full-time work force, 171 employees are
engaged in or directly support research and development activities and 51
are engaged in business development, finance and administrative activities.
Our employees are not represented by a collective bargaining agreement. We
believe that our relations with our employees are good.

RISK FACTORS

    OUR PRODUCT CANDIDATES WILL TAKE AT LEAST SEVERAL YEARS TO DEVELOP, AND
WE CANNOT ASSURE YOU THAT WE WILL SUCCESSFULLY DEVELOP, MARKET AND
MANUFACTURE THESE PRODUCTS.

    Since our inception in 1990, we have dedicated substantially all of our
resources to research and development. We do not have any marketed products,
and we have not generated any product revenue. Because

all of our potential products are in research, preclinical or clinical
development, we will not realize product revenues for at least several years,
if at all.

    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. All of our product candidates are either in clinical trials under
an Investigational New Drug, or IND, or applicable foreign authority
submission, or are in preclinical research and development. We have not
submitted an NDA to the FDA or an equivalent application to any other
foreign regulatory authorities for any of our product candidates, and the
products have not been determined to be safe or effective in humans for
their intended uses.

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

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

    We cannot be certain that any of our product development efforts will be
completed or that any of our products will be shown to be safe and
effective. 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.

    IF WE ARE UNABLE TO SATISFY THE REGULATORY REQUIREMENTS FOR OUR CLINICAL
TRIALS, WE WILL NOT BE ABLE TO COMMERCIALIZE OUR DRUG CANDIDATES.

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

    We currently have only four products in clinical development:
ranolazine, CVT-510 (tecadenoson), CVT-3146 and AdentriTM. On June 29, 2001,
we announced that we initiated a Phase III trial of CVT-510 in patients with
paroxysmal supraventricular tachycardia. On August 21, 2001, we announced
that we commenced a Phase II clinical trial of CVT-3146. On November 19,
2001, we announced that in an open-label, dose-ranging Phase II

<PAGE>

clinical trial in patients with atrial fibrillation or flutter, CVT-510
consistently reduced patients' heart rate from baseline (p<0.05) without
clinically meaningful changes in blood pressure. We subsequently embarked on a
Phase IIb development program aimed at defining an optimized dosage regimen in
patients with this complex cardiac disease.

    Many factors could delay completion of our clinical trials, including:

    *       slower than anticipated patient enrollment;

    *       difficulty in obtaining sufficient supplies of clinical trial
            materials; and

    *       adverse events occurring during the clinical trials.

    For example, our first Phase III clinical trial of ranolazine, called
Monotherapy Assessment of Ranolazine In Stable Angina or MARISA, had
challenging enrollment criteria. As a result, enrollment for this trial was
slower than anticipated.

    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 regulatory requests for additional analyses, data and/or
studies, regulatory questions regarding data and results, and/or changes in
regulatory policy during the period of product development. For example, the
initial clinical trials with ranolazine used an immediate release
formulation of ranolazine, while a sustained release formulation was used in
the MARISA and CARISA trials. The NDA for ranolazine will contain data from
trials using two different formulations, which is subject to interpretation
by the FDA. An unfavorable interpretation could delay potential approval.
Furthermore, regulatory attitudes towards the data and results required to
demonstrate safety and efficacy change over time. We cannot be sure whether
future changes to the regulatory environment will be favorable or
unfavorable to our business prospects.

    We may be unable to maintain our proposed schedules for IND applications
and clinical protocol submissions to the FDA, initiations of clinical trials
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
may differ from those obtained in preclinical studies and earlier clinical
trials. Clinical trials may not demonstrate sufficient safety and efficacy
to obtain the necessary approvals. For example, in November 1995, based on
unfavorable efficacy data from a Phase II trial, we terminated a prior
development program.

    IF WE ARE UNABLE TO SATISFY GOVERNMENTAL REGULATIONS RELATING TO THE
DEVELOPMENT OF OUR DRUG CANDIDATES, WE MAY BE UNABLE TO OBTAIN OR MAINTAIN
NECESSARY REGULATORY APPROVALS TO COMMERCIALIZE OUR PRODUCTS.

    The research, testing, manufacturing and marketing of drug products are
subject to extensive regulation by numerous regulatory authorities in the
United States and other countries. Failure to comply with FDA or other
applicable regulatory requirements may subject a company to administrative
or judicially imposed sanctions. These include:

    *       warning letters;

    *       civil penalties;

    *       criminal penalties;

<PAGE>

    *       injunctions;

    *       product seizure or detention;

    *       product recalls;

    *       total or partial suspension of manufacturing; and

    *       FDA refusal to review or approve pending NDAs or supplements to
            approved NDAs.

    The process of obtaining FDA and other required regulatory approvals,
including foreign approvals, often takes many years and can vary
substantially based upon the type, complexity and novelty of the products
involved. Furthermore, this approval process is extremely expensive and
uncertain. We cannot guarantee that any

of our products under development will be approved for marketing by the FDA or
corresponding foreign regulatory authorities. Even if marketing approval of a
product is granted, we cannot be certain that we will be able to obtain the
labeling claims necessary or desirable for the promotion of those products.

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

    If we receive marketing approval, we will also be subject to ongoing FDA
obligations and continued regulatory review, such as continued safety
reporting requirements, and we may also be subject to additional FDA
post-marketing obligations. In addition, we or our third party manufacturers
will be required to adhere to federal regulations setting forth current good
manufacturing practices, known as cGMP. The regulations require, among other
things,  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 manufacturers must pass a
preapproval inspection of manufacturing facilities by the FDA and
corresponding foreign regulatory authorities before obtaining marketing
approval, and will be subject to periodic inspection by the FDA and
corresponding foreign regulatory authorities under reciprocal agreements
with the FDA. We cannot guarantee that such inspections will not result in
compliance issues that could prevent or delay marketing approval, or require
us to expend money or other resources to correct. In addition, drug product
manufacturing facilities in California must be licensed by the State of
California, and other states may have comparable requirements. We cannot
assure you that we will be able to obtain such licenses.

    If we receive marketing approval and if any of our products or services
become reimbursable by a government health care program, such as Medicare or
Medicaid, we will become subject to certain federal and state health care
fraud and abuse and reimbursement laws. These laws include the federal
"Anti-Kickback Statute," "False Claims Act," "Prescription Drug Marketing
Act," and "Physician Self-Referral Law," and their state counterparts. If
and when we become subject to such laws, our arrangements with third
parties, including health care providers, physicians, vendors, distributors,
wholesalers and Innovex, will need to comply with these laws, as applicable.
We do not know whether our existing or future arrangements will be found to
be compliant. Violations of these statutes could result in substantial
criminal and civil penalties and exclusion from governmental health care
programs.

    In addition, the regulatory environment in which our regulatory
submissions may be reviewed changes over time. For example, average review
times at the FDA for marketing approval applications have fluctuated
substantially over the last 10 years, with review times for marketing
applications for new chemical entities having recently increased from 12 to
15 months after having declined previously. In addition, review times at the
FDA can be impacted by a variety of factors, including federal budget and
funding levels and statutory and regulatory changes. For example, the
current federal statutory and regulatory framework for funding of FDA
reviews under

<PAGE>

the Prescription Drug User Fee Act (PDUFA) is set to expire in 2002,
unless further Congressional action and regulatory implementation
occurs, and a delay in such actions could negatively impact review times at
the FDA.

    OUR PRODUCTS, EVEN IF APPROVED BY THE FDA OR FOREIGN REGULATORY
AGENCIES, MAY NOT BE ACCEPTED BY PHYSICIANS, INSURERS OR PATIENTS.

    If any of our products, after receiving FDA or other foreign regulatory
approval, fail to achieve market acceptance, our ability to become
profitable in the future will be adversely affected. We believe that market
acceptance will depend on our ability to provide acceptable evidence of
safety, efficacy and cost effectiveness. In addition, we believe that market
acceptance depends on the effectiveness of our marketing strategy and the
availability of government and private insurance reimbursement for our
products.

    WE HAVE NO MARKETING OR SALES EXPERIENCE, AND IF WE ARE UNABLE TO ENTER
INTO OR MAINTAIN COLLABORATIONS WITH MARKETING PARTNERS OR IF WE ARE UNABLE
TO DEVELOP OUR OWN SALES AND MARKETING CAPABILITY, WE MAY NOT BE SUCCESSFUL
IN COMMERCIALIZING OUR PRODUCTS.

    We currently have no sales or distribution capability and only limited
marketing capability. As a result, we depend on collaborations with third
parties, such as Innovex, Biogen and Fujisawa, which have established
distribution systems and direct sales forces. To the extent that we enter
into co-promotion or other licensing arrangements, our revenues will depend
upon the efforts of third parties, over which we may have little control.
For instance, we have entered into a sales and marketing services agreement
with Innovex with respect to ranolazine. Innovex will market and sell
ranolazine in the United States using a dedicated sales force if and when
the FDA approves the marketing of ranolazine. Our successful
commercialization of ranolazine depends on Innovex performing their
contractual obligations. Similarly, Biogen is responsible for worldwide
marketing and sales of any product that results from the AdentriTM program,
and Fujisawa is responsible for marketing and sales of CVT-3146 in North
America.

    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.

    IF WE ARE UNABLE TO ATTRACT AND RETAIN COLLABORATORS, LICENSORS AND
LICENSEES, THE DEVELOPMENT OF OUR PRODUCTS COULD BE DELAYED AND OUR FUTURE
CAPITAL REQUIREMENTS COULD INCREASE SUBSTANTIALLY.

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

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

<PAGE>

    Under our collaborative arrangements, we or our collaborative partners
may also have to meet performance milestones. If we fail to meet our
obligations under our collaborative arrangements, our collaborators could
terminate their arrangements or we could lose our rights to the compounds
under development. For example, under our agreement with Innovex, we are
required to launch the product by a specific date. If we fail to reach this
milestone, Innovex will no longer be obligated to provide sales and
marketing services for ranolazine. Under our agreement with Biogen, in order
for us to receive development milestone payments, Biogen must meet
development milestones. Under our license agreement with Syntex for
ranolazine, we are required to use commercially reasonable efforts to
develop and commercialize ranolazine for angina, and have related milestone
payment obligations. Under our agreement with Fujisawa, we are responsible
for development activities and must meet development milestones in order to
receive development milestone payments.

    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 product
candidates. These disputes could also result in litigation or arbitration,
which is time consuming and expensive.

    WE EXPECT TO CONTINUE TO OPERATE AT A LOSS AND MAY NEVER ACHIEVE
PROFITABILITY.

    We cannot be certain that we will ever achieve and sustain
profitability. Since our inception, we have been engaged in research and
development activities. We have generated no product revenues. As of
December 31, 2001, we had an accumulated deficit of $210.8 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.

    IF WE ARE UNABLE TO SECURE ADDITIONAL FINANCING, WE MAY BE UNABLE TO
COMPLETE OUR RESEARCH AND DEVELOPMENT ACTIVITIES OR COMMERCIALIZE ANY PRODUCTS.

    We may require substantial additional funding in order to complete our
research and development activities and commercialize any of our products.
In the past, we have financed our operations primarily through the sale of
equity and debt securities, payments from our collaborators, equipment and
leasehold improvement financing and other debt financing. We have generated
no product revenue and do not expect to 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 for at least the
next 24 months. 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, among other things:

    *       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; and

    *       be unable to operate as a going concern.

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

    *       scientific progress in our research and development programs;

<PAGE>

    *       the size and complexity of our 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; and

    *       the cost of manufacturing or obtaining preclinical and clinical
            material.

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

    IF WE ARE UNABLE TO COMPETE SUCCESSFULLY IN OUR MARKET, IT WILL HARM OUR
BUSINESS.

    The pharmaceutical and biopharmaceutical industries, and the market for
cardiovascular drugs in particular, are intensely competitive. If our
products receive marketing approvals, they will often compete with
well-established, proprietary and generic cardiovascular therapies that have
generated substantial sales over a number of years. Many of 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 may compete in the same markets as our products. Many of these
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
from the FDA more rapidly than either we or our corporate partners are able
to achieve. 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.

    IF WE ARE UNABLE TO EFFECTIVELY PROTECT OUR INTELLECTUAL PROPERTY, WE
MAY BE UNABLE TO COMPLETE DEVELOPMENT OF ANY PRODUCTS AND WE MAY BE PUT AT A
COMPETITIVE DISADVANTAGE; AND IF WE ARE INVOLVED IN AN INTELLECTUAL PROPERTY
RIGHTS DISPUTE, WE MAY NOT PREVAIL AND MAY BE SUBJECT TO SIGNIFICANT
LIABILITIES OR REQUIRED TO LICENSE RIGHTS FROM A THIRD PARTY.

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

    *       obtain patents and licenses to patent rights;

    *       maintain trade secrets; and

    *       operate without infringing on the proprietary rights of others.

    In 2001, we received an issued patent from the U.S. Patent and Trademark
Office for a method of using ranolazine sustained release formulations,
including the formulation used in the MARISA and CARISA trials, for the
treatment of chronic angina. However, in general we cannot be certain that
patents will issue from any of our pending or future patent applications,
that any issued patent will not be lost through an interference or
opposition proceeding, reexamination request, infringement litigation or
otherwise, that any issued patent will be sufficient

<PAGE>

to protect our technology and investments, or that we will be able to obtain
extensions of patents beyond the initial term.

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

    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 United States. 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 or breach the licenses that might
cover technology used in our potential products. If our 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. We cannot assure you that
we will be able to obtain such licenses on economically reasonable terms. If
we fail to obtain any necessary licenses, we may be unable to complete
product development.

    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. We cannot
assure you that the parties to these agreements will not breach them or that
these agreements will provide meaningful protection or adequate remedies in
the event of unauthorized use or disclosure of our proprietary technology.
In that event, we may not have adequate remedies for any breach. As a
result, third parties may gain access to our trade secrets, and our trade
secrets and confidential technology may become public. In addition, it is
possible that our trade secrets will otherwise become known or be discovered
independently by our competitors.

    Patent litigation is widespread in the biopharmaceutical industry.
Although no third party has asserted a claim of infringement against us, we
cannot assure you that third parties will not assert patent or other
intellectual property infringement claims against us with respect to our
products or technology or other matters. If they do, we may not prevail and,
as a result, may be subject to significant liabilities to third parties or
may be required to license the disputed rights from the third parties or
cease using the technology. 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.

    WE HAVE NO MANUFACTURING EXPERIENCE AND WILL DEPEND ON THIRD PARTIES TO
MANUFACTURE OUR PRODUCTS.

    We do not currently operate manufacturing facilities for clinical or
commercial production of our products under development. We have no
experience in manufacturing and 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, we have entered into agreements with third party
manufacturers for clinical scale production of ranolazine's active
pharmaceutical ingredient and for ranolazine tableting, which we believe are
sufficient to

<PAGE>

support the remainder of the clinical program to support
filing of an NDA for ranolazine for chronic angina. In addition, we have
entered into several other manufacturing agreements relating to ranolazine,
including for commercial scale or scale-up of bulk active pharmaceutical
ingredient, tableting, and supply of a raw material component of the
product. However, the commercial launch of ranolazine is dependent on these
third party arrangements, and could be affected by delays or difficulties in
performance. In addition, because we have used different manufacturers for
ranolazine in different clinical trials and for potential commercial supply
prior to FDA approval of ranolazine, in order to obtain marketing approval
we will be required to demonstrate to the FDA's satisfaction the
bioequivalence of the multiple sources of ranolazine used in our clinical
trials and their bioequivalence to the product to be commercially supplied.
An unfavorable regulatory interpretation by the FDA could delay potential
approval.

    FAILURE TO OBTAIN ADEQUATE REIMBURSEMENT FROM GOVERNMENT HEALTH
ADMINISTRATION AUTHORITIES, PRIVATE HEALTH INSURERS AND OTHER ORGANIZATIONS
COULD MATERIALLY ADVERSELY AFFECT OUR FUTURE BUSINESS, RESULTS OF OPERATIONS
AND FINANCIAL CONDITION.

    Our ability and the ability of our existing and future corporate
partners to market and sell our products will depend in part on the extent
to which reimbursement for the cost of our products and related treatments
will be available from government health administration authorities, private
health insurers and other organizations. Third party 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, 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 or that
allowed reimbursement in foreign countries will be adequate. In addition,
payors' reimbursement policies could adversely affect our or any corporate
partner's ability to sell our products on a profitable basis.

    OUR BUSINESS DEPENDS ON CERTAIN KEY EXECUTIVES, THE LOSS OF WHOM COULD
WEAKEN OUR MANAGEMENT TEAM, AND ON ATTRACTING AND RETAINING QUALIFIED
PERSONNEL.

    The growth of our business and success depends in large part on our
ability to attract and retain key management, technical, sales and marketing
and other operating personnel. We cannot assure you that we will be able to
attract and retain the qualified personnel or develop the expertise in these
areas as needed for our business. Although we have entered into executive
severance agreements with certain executives, we have not entered into any
employment agreements with key executives. The loss of the services of one
or more members of these groups or the inability to attract and retain
additional personnel and develop expertise as needed could limit our ability
to develop and commercialize our existing drugs and future drug candidates.
Such persons are in high demand and often receive competing employment offers.

    OUR OPERATIONS INVOLVE HAZARDOUS MATERIALS, WHICH COULD SUBJECT US TO
SIGNIFICANT LIABILITY.

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

<PAGE>

that our operations, business or assets will not be materially adversely
affected by current or future environmental laws or regulations.

    WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS IF OUR PRODUCTS HARM
PEOPLE, AND WE HAVE ONLY LIMITED PRODUCT LIABILITY INSURANCE.

    The manufacture and sale of human therapeutic products involve an
inherent risk of product liability claims and associated adverse publicity.
We currently have only limited product liability insurance for clinical
trials and 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 and may not be available on
acceptable terms. 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.

    IF THE MARKET PRICE OF OUR STOCK CONTINUES TO BE HIGHLY VOLATILE, THE
VALUE OF YOUR INVESTMENT IN OUR COMMON STOCK MAY DECLINE.

    Within the last 12 months, our common stock has traded between $23.75
and $60.85. The market price of the shares of common stock for our company
has been and may continue to be highly volatile. Announcements may have a
significant impact on the market price of our common stock. These
announcements may include:

    *       results of our clinical trials and preclinical studies, or those
            of our corporate partners or our competitors;

    *       our operating results;

    *       developments in our relationships with corporate partners;

    *       developments affecting our corporate partners;

    *       negative regulatory action or regulatory approval with respect
            to our announcement or our competitors' announcement of new
            products;

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

    *       developments related to our patents or other proprietary rights
            or those of our competitors;

    *       changes in the position of securities analysts with respect to
            our stock;

    *       operating results below the expectations of public market
            analysts and investors ; and

    *       market conditions for biopharmaceutical or biotechnology stocks
            in general.

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

<PAGE>

    PROVISIONS OF DELAWARE LAW AND IN OUR CHARTER, BY-LAWS AND OUR RIGHTS
PLAN MAY PREVENT OR FRUSTRATE ANY ATTEMPT BY OUR STOCKHOLDERS TO REPLACE OR
REMOVE OUR CURRENT MANAGEMENT AND MAY MAKE THE ACQUISITION OF OUR COMPANY BY
ANOTHER COMPANY MORE DIFFICULT.

    In February 1999, our board of directors adopted a stockholder rights
plan and authorized executive severance benefit agreements in the event of a
change of control for key executives, into which severance agreements we
have subsequently entered. The board of directors amended the stockholders
rights plan in July 2000 to lower the triggering ownership percentage and
increase the exercise price. Our rights plan and these agreements may delay
or prevent a change in our current management team and may render more
difficult an unsolicited merger or tender offer.

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

    We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, an anti-takeover law, which could delay a merger, tender
offer or proxy contest or make a similar transaction more difficult. In
general, the statute prohibits a publicly held Delaware corporation from
engaging in a business combination with an interested stockholder for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is
approved in a prescribed manner.

    IF SHARES OF COMMON STOCK ARE SOLD IN OUR EQUITY LINE OF CREDIT
ARRANGEMENT, EXISTING COMMON STOCKHOLDERS WILL EXPERIENCE IMMEDIATE DILUTION
AND, AS A RESULT, OUR STOCK PRICE MAY GO DOWN.

    We have entered into a common stock purchase agreement with Acqua
Wellington North American Equities Fund, Ltd. pursuant to which Acqua
Wellington may purchase shares of our common stock at a discount between
4.0% and 6.0%, to be determined based on our market capitalization at the
start of the draw-down period, unless we agree with Acqua Wellington to a
different discount. As a result, our existing common stockholders will
experience immediate dilution upon the purchase of any shares of our common
stock by Acqua Wellington. The purchase agreement with Acqua Wellington
provides that, at our request, Acqua Wellington will purchase a certain
dollar amount of shares, with the exact number of shares to be determined
based on the per share market price of our common stock over the draw-down
period for such purchase. As a result, if the per share market price of our
common stock declines over the draw-down period, Acqua Wellington will
receive a greater number of shares for its purchase price, thereby resulting
in further dilution to our stockholders and potential downward pressure of
the price of our stock.

ITEM 2. PROPERTIES

    We currently lease two buildings in Palo Alto, California. The first
building has 61,081 square feet and a lease with an initial term that
expires in April 2012 with an option to renew for thirteen years. In
November and December 2000, we entered into two lease agreements for the
second building, which has 73,172 square feet. The first of these two
agreements is a sublease with a term that expires in February 2005. The
second agreement is

<PAGE>

with the master landlord and has a term from March 2005
through April 2012. Both buildings are used for general administration,
research and development. We believe that these facilities will be adequate
to meet our needs through 2002. We are currently investigating additional
properties to meet our needs beyond this period.

ITEM 3. LEGAL PROCEEDINGS

    We are not a party to any material pending legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

    None.

<PAGE>

                                   PART II

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

MARKET INFORMATION

    Our common stock trades 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, 1999
         First Quarter ended March 31, 1999                     $   7.250       $   3.688
         Second Quarter ended June 30, 1999                     $   6.375       $   4.000
         Third Quarter ended September 30, 1999                 $  21.000       $   5.375
         Fourth Quarter ended December 31, 1999                 $  27.875       $  10.375

         Fiscal Year Ended December 31, 2000
         First Quarter ended March 31, 2000                     $  69.000       $  22.500
         Second Quarter ended June 30, 2000                     $  75.625       $  26.500
         Third Quarter ended September 30, 2000                 $  82.750       $  49.750
         Fourth Quarter ended December 31, 2000                 $  93.125       $  58.875

         Fiscal Year Ended December 31, 2001
         First Quarter ended March 31, 2001                     $  70.016       $  21.078
         Second Quarter ended June 30, 2001                     $  57.750       $  23.750
         Third Quarter ended September 30, 2001                 $  57.000       $  36.430
         Fourth Quarter ended December 31, 2001                 $  60.850       $  31.880

</Table>

    On February 28, 2002, the closing price for our common stock was $38.64
per share. As of February 28, 2001, we had approximately 87 holders of
record of our common stock.

DIVIDENDS

    We have never declared or paid any cash dividends on our capital stock.
We currently intend to retain any future earnings to finance the growth and
development of our business and therefore, do not anticipate paying any cash
dividends in the foreseeable future.

<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,
                                                       ------------------------------------------------------------------
                                                          1997          1998          1999          2000          2001
                                                       ----------    ----------    ----------    ----------    ----------
                                                                     (in thousands, except per share data)
<S>                                                    <C>           <C>           <C>           <C>           <C>
 Statements of Operations Data
 Revenues:
   Collaborative research                               $  2,578      $  4,509      $      -      $  3,309      $  6,762
 Operating expenses:
   Research and development                               10,568        14,578        20,342        40,761        81,196
   General and administrative                              4,169         4,158         4,659         7,601        13,756
                                                       ----------    ----------    ----------    ----------    ----------
 Total operating expenses                                 14,737        18,736        25,001        48,362        94,952
                                                       ----------    ----------    ----------    ----------    ----------
 Loss from operations                                    (12,159)      (14,227)      (25,001)      (45,053)      (88,190)
 Interest income                                           1,760         2,749         2,795        15,785        19,184
 Interest expense                                           (875)         (759)         (892)       (8,993)      (10,464)
 Other expense, net                                          (51)         (365)          (24)         (119)         (227)
                                                       ----------    ----------    ----------    ----------    ----------
   Net loss                                             $(11,325)     $(12,602)     $(23,122)     $(38,380)     $(79,697)
                                                       ==========    ==========    ==========    ==========    ==========
 Basic and diluted net loss per share (1)               $  (1.58)     $  (1.16)     $  (1.75)     $  (2.06)     $  (3.74)
                                                       ==========    ==========    ==========    ==========    ==========
 Shares used in computing basic and
   diluted net loss per share (1)                          7,157        10,905        13,207        18,664        21,308
                                                       ==========    ==========    ==========    ==========    ==========

</Table>

<Table>
<Caption>
                                                                                 December 31,
                                                      --------------------------------------------------------------------
                                                         1997          1998          1999          2000            2001
                                                      ----------    ----------    ----------    ----------      ----------
                                                                                (in thousands)
<S>                                                   <C>           <C>           <C>           <C>             <C>
 Balance Sheet Data
 Cash, cash equivalents and marketable securities      $ 38,090      $ 44,804      $ 91,257      $ 296,193       $ 478,425
 Working capital                                       $ 32,904      $ 40,698      $ 88,038      $ 285,590       $ 470,412
 Total assets                                          $ 42,644      $ 49,330      $ 96,907      $ 311,633       $ 507,244
 Long-term debt                                        $  5,052      $  7,838      $  7,855      $ 197,815       $ 197,036
 Accumulated deficit                                   $(56,951)     $(69,553)     $(92,675)     $(131,055)      $(210,752)
 Total stockholders' equity                            $ 26,557      $ 34,738      $ 82,147      $  91,782       $ 288,393

</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>

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

    The following table sets forth the quarterly results of operations for
the year ended December 31, 2000:

<Table>
<Caption>
                                                        Quarter       Quarter       Quarter       Quarter
                                                         Ended         Ended         Ended         Ended
(in thousands, except per share amounts)                Mar. 31       Jun. 30       Sep. 30       Dec. 31
                                                       ----------    ----------    ----------    ----------

<S>                                                    <C>           <C>           <C>           <C>
Revenues:
  Collaborative research                                $      -      $  2,000      $    469      $    840
Operating expenses:
  Research and development                                 6,694         9,346         9,994        14,727
  General and administrative                               1,532         1,585         2,366         2,118
                                                       ----------    ----------    ----------    ----------
Total operating expenses                                   8,226        10,931        12,360        16,845
                                                       ----------    ----------    ----------    ----------
Loss from operations                                      (8,226)       (8,931)      (11,891)      (16,005)
Interest income                                            2,048         4,265         4,513         4,959
Interest expense                                            (894)       (2,711)       (2,766)       (2,622)
Other expense, net                                           (11)           (6)           (9)          (93)
                                                       ----------    ----------    ----------    ----------
Net loss                                                $ (7,083)     $ (7,383)     $(10,153)     $(13,761)
                                                       ==========    ==========    ==========    ==========
Basic and diluted net loss per share                    $  (0.39)     $  (0.40)     $  (0.54)     $  (0.71)
                                                       ==========    ==========    ==========    ==========
Shares used in computing basic and diluted
  net loss per share                                      18,247        18,379        18,667        19,364
                                                       ==========    ==========    ==========    ==========

</Table>

    The following table sets forth the quarterly results of operations for
the year ended December 31, 2001:

<Table>
<Caption>
                                                        Quarter       Quarter       Quarter       Quarter
                                                         Ended         Ended         Ended         Ended
(in thousands, except per share amounts)                Mar. 31       Jun. 30       Sep. 30       Dec. 31
                                                       ----------    ----------    ----------    ----------

<S>                                                    <C>           <C>           <C>           <C>
Revenues:
  Collaborative research                                $  1,818      $  1,014      $  2,862      $  1,068
Operating expenses:
  Research and development                                16,858        19,479        20,502        24,357
  General and administrative                               2,299         2,927         3,285         5,245
                                                       ----------    ----------    ----------    ----------
Total operating expenses                                  19,157        22,406        23,787        29,602
                                                       ----------    ----------    ----------    ----------
Loss from operations                                     (17,339)      (21,392)      (20,925)      (28,534)
Interest income                                            4,916         4,676         4,731         4,861
Interest expense                                          (2,625)       (2,618)       (2,613)       (2,608)
Other expense, net                                           (32)          (37)          (37)         (121)
                                                       ----------    ----------    ----------    ----------
Net loss                                                $(15,080)     $(19,371)     $(18,844)     $(26,402)
                                                       ==========    ==========    ==========    ==========
Basic and diluted net loss per share                    $  (0.77)     $  (0.96)     $  (0.85)     $  (1.13)
                                                       ==========    ==========    ==========    ==========
Shares used in computing basic and diluted
  net loss per share                                      19,653        20,172        22,114        23,290
                                                       ==========    ==========    ==========    ==========

</Table>

<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. Our actual results may
differ materially from the results discussed in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, those discussed in "Risk Factors".

OVERVIEW

    CV Therapeutics is a biopharmaceutical company engaged in the discovery,
development and commercialization of new small molecule drugs for the
treatment of cardiovascular diseases. Since our inception in December 1990,
substantially all of our resources have been dedicated to research and
development. To date, we have not generated any product revenues and do not
expect to generate any product revenues for at least several years. As of
December 31, 2001, we had an accumulated deficit of $210.8 million. We
expect our sources of revenues, if any, to consist of payments under
corporate partnerships and interest income until such point that one of our
products receives marketing approval. The process of developing our products
requires significant additional research and development, preclinical
testing and clinical trials, as well as marketing approvals. These
activities, together with our general and administrative expenses, are
expected to result in substantial operating losses for the foreseeable
future. We will not receive product revenues unless and until we or our
collaborative partners complete clinical trials, obtain marketing approval,
and successfully commercialize one or more of our products.

    We are subject to risks common to biopharmaceutical companies, including
risks inherent in our research 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 us and, in some cases, our collaborators, to conduct
preclinical tests and clinical trials, demonstrate efficacy and safety of
our product candidates, obtain regulatory clearances, enter into
manufacturing, distribution and marketing arrangements and obtain market
acceptance. We cannot provide assurance that we will generate revenues or
achieve and sustain profitability in the future.

CRITICAL ACCOUNTING POLICIES AND THE USE OF ESTIMATES

    We believe the only critical accounting policy which presently involves
our more significant judgements and estimates used in the preparation of our
consolidated financial statements is our policy regarding revenue recognition.

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

<PAGE>

RESULTS OF OPERATIONS

    Years Ended December 31, 2001 and 2000

    Collaborative Research Revenues.  Collaborative research revenues were
$6.8 million for the year ended December 31, 2001, compared to $3.3 million
for the year ended December 31, 2000. The increase was primarily due to
greater amortization of up-front payments and reimbursement of certain
development costs related to our collaboration with Fujisawa which began in
July 2000. Milestones recognized for the year ended December 31, 2001,
included $2.0 million from Fujisawa which was earned in conjunction with our
initiation of a Phase II clinical trial for CVT-3146, and $1.0 million from
Biogen which was earned in conjunction with their initiation of a Phase I
oral development program for AdentriTM.

    Research and Development Expenses.  Research and development expenses
increased to $81.2 million for the year ended December 31, 2001, compared to
$40.8 million for the year ended December 31, 2000. The increase was due to
greater external costs associated with our continued development of
ranolazine and our other clinical programs in addition to hiring additional
employees to provide support for an increased level of activity in our
research, development and clinical programs. We expect research and
development expenses to continue to increase in the future as we further
expand product development efforts and clinical trials.

    Management categorizes research and development expenditures into
amounts related to pre-clinical research and amounts related to clinical
development programs. During the year ended December 31, 2001, we allocated
approximately 82% of our research and development expenditures, or
approximately $66.5 million, on three clinical development programs, listed
in rank order of estimated expenditures: ranolazine, CVT-510 (tecadenoson)
and CVT-3146. The remaining 18% of our research and development
expenditures, or $14.7 million, was spent on pre-clinical research programs.
By comparison, during the year December 31, 2000, we allocated approximately
78% of our research and development expenditures, or $31.9 million, on the
same three clinical development programs, listed in rank order of estimated
expenditures: ranolazine, CVT-510 (tecadenoson) and CVT-3146.  The remaining
22% of our research and development expenditures, or $8.9 million, was spent
on pre-clinical research programs. The increased allocation of resources to
development projects compared to pre-clinical research reflects the
increased costs of advancing all three clinical programs into later stage
clinical development.

    According to industry statistics, it generally takes 10 to 15 years to
research, develop and bring to market a new prescription medicine in the
United States. Drug development in the U.S. is a process that includes
multiple steps defined by the FDA under applicable statutes, regulations and
guidance documents. After the pre-clinical research process of identifying,
selecting and testing in animals a potential pharmaceutical compound, the
clinical development process begins with the filing of an Initial Drug
Application (or IND).  If successful, an IND allows opportunity for clinical
study of the potential new medicine. Clinical development typically involves
three phases of study: Phase I, II, and III. The most significant costs
associated with clinical development are the Phase III trials, which tend to
be the longest and largest studies conducted during the drug development
process. After the completion of a successful preclinical and clinical
development program, a New Drug Application (NDA) must be filed with the
FDA, which includes among other things very large amounts of preclinical and
clinical data and results and manufacturing-related information necessary to
support requested approval of the product. The NDA must be reviewed by the
FDA.  In light of the steps and complexities involved, the successful
development of our products is highly uncertain. Actual product timelines
and costs are subject to enormous variability and are very difficult to
predict, as our clinical development programs are updated and changed to
reflect the most recent clinical and pre-clinical data and other relevant
information. In addition, various statutes and regulations also govern or
influence the manufacturing, safety reporting, labeling, storage,
recordkeeping and marketing of each product. The lengthy process of seeking
these regulatory reviews and approvals, and the subsequent compliance with
applicable statutes and regulations, require the expenditure of substantial
resources. Any failure by us to obtain, or any delay in obtaining,
regulatory approvals could materially adversely affect our business. In
responding to an NDA submission, the FDA may grant marketing approval, may
request additional information,

<PAGE>

may deny the application if it determines
that the application does not provide an adequate basis for approval, and
may also refuse to review an application that has been submitted if it
determines that the application does not provide an adequate basis for
filing and review. We can not assure you that any approval required by the
FDA will be obtained on a timely basis, if at all. For additional discussion
of the regulatory processes for pharmaceuticals and of risks and uncertainties
associated with completing development of potential products, see "Government
Regulations", above, and the "Risk Factors" entitled "Our product candidates
will take at least several years to develop, and we cannot assure you that we
will successfully develop, market and manufacture these products"; "If we are
unable to satisfy the regulatory requirements for our clinical trials, we will
not be able to commercialize our drug candidates"; "If we are unable to satisfy
governmental regulations relating to the development of our drug candidates, we
may be unable to obtain or maintain necessary regulatory approvals to
commercialize our products"; and "We have no manufacturing experience and will
depend on third parties to manufacture our products".

    General and Administrative Expenses.  General and administrative
expenses increased to $13.8 million for the year ended December 31, 2001,
compared to $7.6 million for the year ended December 31, 2000. The increase
was due to fees paid in connection with outside consulting services and
additional personnel and facility expenses to support our increased research
and development efforts. We expect general and administrative expenses to
increase in the future in line with our research, development and
commercialization activities.

    Interest Income.  Interest income increased to $19.2 million for the
year ended December 31, 2001, compared to $15.8 million for the year ended
December 31, 2000. The increase was due to higher average investment
balances as the result of the sale of convertible subordinated notes in
March 2000 and the proceeds received from our follow-on public offerings in
June 2001 and December 2001, offset by lower average interest rates. We
expect that interest income will fluctuate with average investment balances
and market interest rates.

    Interest and Other Expense.  Interest and other expense increased to
$10.7 million for the year ended December 31, 2001, compared to $9.1 million
for the year ended December 31, 2000. The increase was due to interest
expense related to the convertible subordinated notes issued in March 2000
which equaled $9.3 million in 2001 and $7.6 million in 2000. We expect that
interest and other expense will fluctuate with average loan balances.

    Taxes.  We have not generated taxable income to date. At December 31,
2001, the net operating losses potentially available to offset future
taxable income for federal and California income tax purposes were
approximately $214 million and $40 million, respectively. Because we have
experienced ownership changes, future utilization of these carryforwards are
likely to be limited in any one fiscal year pursuant to Internal Revenue
Code regulations. The federal carryforwards expire at various dates
beginning in 2006 through 2021 if not utilized. The California carryforwards
expire at various dates beginning in 2002 through 2006 if not utilized. As a
result of the annual limitation, a portion of these carryforwards may expire
before becoming available to reduce our federal and California income tax
liabilities.

    Years Ended December 31, 2000 and 1999

    Collaborative Research Revenues.  Collaborative research revenues were
$3.3 million for the year ended December 31, 2000, while there were none for
the year ended December 31, 1999. The collaborative research revenues for
the year ended December 31, 2000 included a $2.0 million milestone payment
from our partner, Biogen Inc., which was released in connection with its
completion of a Phase II trial of AdentriTM and its decision to continue
with the A1 adenosine receptor antagonist program. The remaining revenues
relate to our collaboration with Fujisawa Healthcare, Inc. and consisted of
both the amortization of up-front payments and the reimbursement of certain
development costs.

    Research and Development Expenses.  Research and development expenses
increased to $40.8 million for the year ended December 31, 2000, compared to
$20.3 million for the year ended December 31, 1999. The increase

<PAGE>

was primarily due to greater external costs associated with ranolazine and
CVT-510 clinical trials, in addition to hiring additional employees to
provide support for an increased level of activity in our research,
development and clinical programs.

    General and Administrative Expenses.  General and administrative
expenses increased to $7.6 million for the year ended December 31, 2000,
compared to $4.7 million for the year ended December 31, 1999. The increase
was primarily due to greater use of outside consultants for general business
matters.

    Interest Income.  Interest income increased to $15.8 million for the
year ended December 31, 2000, compared to $2.8 million for the year ended
December 31, 1999. The increase was primarily due to higher average
investment balances as the result of our follow-on public offering in
October 1999 and the sale of convertible subordinated notes in March 2000.

    Interest and Other Expense.  Interest and other expense increased to
$9.1 million for the year ended December 31, 2000, compared to $916,000 for
the year ended December 31, 1999. The increase was primarily due to interest
expense related to the convertible subordinated notes issued in March 2000,
which totaled $7.6 million for the year.

RECENT ACCOUNTING PRONOUNCEMENTS

    In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS
No. 141 requires that all business combinations be accounted for by the
purchase method of accounting and changes the criteria for recognition of
intangible assets acquired in a business combination. The provisions of SFAS
No. 141 apply to all business combinations initiated after June 30, 2001. We
do not expect that the adoption of SFAS No. 141 will have a material effect
on our financial position or results of operations. SFAS No. 142 requires
that goodwill and intangible assets with indefinite useful lives no longer
be amortized; however, these assets must be reviewed at least annually for
impairment. Intangible assets with finite useful lives will continue to be
amortized over their respective useful lives. The standard also establishes
specific guidance for testing for impairment of goodwill and intangible
assets with indefinite useful lives. The provisions of SFAS No. 142 will be
effective for our fiscal year 2002. We do not expect that the adoption of
SFAS No. 142 will have a material effect on our financial statements.

    In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 amends existing
accounting guidance on asset impairment and provides a single accounting
model for long-lived assets to be disposed of. Among other provisions, the
new rules change the criteria for classifying an asset as held-for-sale. The
standard also broadens the scope of businesses to be disposed of that
qualify for reporting as discontinued operations, and changes the timing of
recognizing losses on such operations. The provisions of SFAS No. 144 will
be effective for our fiscal year 2002. We do not expect that the adoption of
SFAS No. 144 will have a material effect on our financial statements.

LIQUIDITY AND CAPITAL RESOURCES

    We have financed our operations since inception primarily through
private placements and public offerings of debt and equity securities,
equipment and leasehold improvement financing, other debt financing and
payments under corporate collaborations. For at least the next 24 months,
operations will be funded from our cash, cash equivalents and marketable
securities which totaled $478.4 million as of December 31, 2001.

    In May 1999, we entered into a sales and marketing services agreement
with Innovex Inc. pursuant to which Innovex's parent, Quintiles
Transnational Corp., purchased 1,043,705 shares of our common stock for a
total investment of $5.0 million. In addition, we entered into two
promissory notes with Quintiles. The first promissory note in the amount of
$10.0 million may be drawn down by us upon filing an NDA for ranolazine.

<PAGE>

The second promissory note shall be for an amount to be determined after
commercial launch of ranolazine. Both notes are convertible into shares of
common stock at the option of Quintiles upon the occurrence of certain events.

    In October 1999, we completed a follow-on public offering and raised net
proceeds of approximately $64.3 million.

    In March 2000, we entered into a purchase agreement pursuant to which we
sold to certain purchasers $196.3 million in aggregate principal amount of
convertible subordinated notes. The offering of the notes was made to
qualified institutional buyers under Rule 144A of the Securities Act of
1933, as amended. Interest on the notes will accrue at a rate of 4.75% per
year, subject to adjustment in certain circumstances. The notes will mature
on March 7, 2007 and are convertible into shares of our common stock at a
conversion price of $63.84 per share, subject to adjustment in certain
circumstances. We may, at our option, redeem the notes at any time after
March 7, 2003, or earlier if our stock price reaches certain defined levels.

    In March 2000, we repaid the initial $3.0 million installment under a
general purpose loan facility with Biogen, Inc., bringing the outstanding
balance to $4.5 million. In August 2000, we drew down an additional $4.5
million under this Biogen loan facility, bringing the outstanding balance to
$9.0 million. In October 2000, we exercised our right to convert $9.0
million in debt from the Biogen loan facility into 118,932 shares of our
common stock at a price of $75.67 per share, in full repayment of the entire
principal amount under this loan facility. In December 2000, we repaid all
accrued and unpaid interest on the loan facility, in full repayment of the
loan facility.

    In July 2000, we entered into a collaboration with Fujisawa to develop
and market second generation pharmacologic cardiac stress agents. In
connection with the signing of this agreement, we received $10.0 million
from Fujisawa consisting of an up-front payment and the purchase of our
common stock. In September 2001, we received a $2.0 million milestone
payment under this collaboration for initiating a Phase II clinical trial
for CVT-3146.

    In August 2000, we entered into a financing arrangement with Acqua
Wellington to purchase up to $120.0 million of our common stock through
November 2002 under the terms of a common stock purchase agreement. Under
the purchase agreement, as presently amended, we may sell a total of $149.0
million of our common stock to Acqua Wellington through December 2003. The
purchase agreement provides that from time to time, in our sole discretion,
we may present Acqua Wellington with draw down notices constituting offers
to sell our common stock for specified total proceeds over a specified
trading period. Once presented with a draw down notice, Acqua Wellington is
required to purchase a pro rata portion of shares of our common stock as
allocated on each trading day during the trading period on which the daily
volume weighted average price for our common stock exceeds a threshold price
that we determine and state in the draw down notice. The per share price
then equals the daily volume weighted average price on each date during the
pricing period, less a 4% to 6% discount (based on our market
capitalization). However, if the daily volume weighted average price falls
below the threshold price on any day in the pricing period, Acqua Wellington
is not required to purchase the pro rata portion of shares allocated to that
day, but can elect to buy that pro rata portion of shares at the threshold
price less the applicable 4% to 6% discount.

    Further, if during a draw down pricing period we enter into an agreement
with a third party to issue common stock or securities convertible into
common stock (excluding, stock or options granted pursuant to our stock
option, stock purchase or shareholder rights plans, common stock or warrants
issued in connection with licensing agreements and/or collaborative
agreements and warrants issued in connection with equipment financings) at a
net discount to the then current market price, if we issue common stock with
warrants (other than provided in the prior parenthetical), or if we
implement a mechanism for the reset of the purchase price of our common
stock below the then current market price, then Acqua Wellington can elect
to purchase the shares so requested by us in

<PAGE>

the draw down notice at the price established pursuant to the prior paragraph,
to purchase such share at the third party's price, net of discount or fees, or
to not purchase our common stock during that draw down pricing period.

    The purchase agreement also provides that from time to time, in our sole
discretion, we may grant Acqua Wellington a right to exercise one or more
call options to purchase additional shares of our common stock during

a drawn down pricing period, in an amount and for a threshold price that we
determine and state in the draw down notice. However, the total call amount
for any given draw down cannot exceed a specified maximum amount, and the
amount of proceeds we may receive by exercise of a call option for any given
trading day is also limited. If Acqua Wellington exercises the call option,
we will issue and sell the shares of our common stock subject to the call
option at a price equal to the greater of the daily volume weighted average
price of our common stock on the day Acqua Wellington exercises its call
option, or the threshold price for the call option that we have determined,
less a 4% to 6% discount (based on our market capitalization).

    The combined total value of shares that we may sell to Acqua Wellington
through draw downs and call option exercises may not exceed $149.0 million.
As of December 31, 2001, we have issued 1,161,873 shares representing $59.0
million under this arrangement.

    In June 2001, we sold 2,020,203 shares of our common stock in an
underwritten public offering at a price to the public of $49.50 per share
pursuant to a prospectus supplement under a shelf registration statement. We
intend to use the net proceeds of approximately $95.9 million for general
corporate purposes, which may include funding research, development and
product manufacturing, increasing our working capital, reducing
indebtedness, acquisitions or investments in businesses, products or
technologies that are complementary to our own, and capital expenditures.

     In December 2001, we sold 2,875,000 shares of our common stock in an
underwritten public offering at a price to the public of $52.50 per share
pursuant to a prospectus supplement under a shelf registration statement. We
intend to use the net proceeds of approximately $143.3 million for general
corporate purposes, which may include funding research, development and
product manufacturing, development of clinical trials, preparation and
filing of a new drug application, product commercialization, increasing our
working capital, reducing indebtedness, acquisitions or investments in
businesses, products or technologies that are complementary to our own, and
capital expenditures.

    Cash, cash equivalents and marketable securities at December 31, 2001
totaled $478.4 million compared to $296.2 million at December 31, 2000. The
increase was due to raising $239.2 million from the follow-on public
offerings and $29.0 million from Acqua Wellington, partially offset by
utilizing $81.0 million to fund operations and $11.9 million for capital
expenditures.

    Net cash used in operations for the year ended December 31, 2001 was
$81.0 million compared to $24.3 million for the year ended December 31,
2000. The increase was primarily due to increased research and development
efforts.

    As of December 31, 2001, we have invested $21.5 million in property and
equipment with the rate of investment having increased as we expand our
facilities and in line with increased research and development efforts. We
expect to continue to make investments in property and equipment to support
our growth.

    We may require substantial additional funding in order to complete our
research and development activities and commercialize any potential
products. We currently estimate that our existing resources and projected
interest income, including the proceeds from our offering of convertible
subordinated notes and recently completed common stock financings, will
enable us to maintain our current and planned operations for at least the
next 24 months. However, we cannot assure you that we will not require
additional funding prior to then or that additional financing will be
available on acceptable terms or at all.

<PAGE>

    Our future capital requirements will depend on many factors, including
scientific progress in our research and development programs, the size and
complexity of these programs, the scope and results of preclinical studies
and clinical trials, our ability to establish and maintain corporate
partnerships, the time and costs involved in obtaining regulatory approvals,
the costs involved in filing, prosecuting and enforcing patent claims,
competing technological and market developments, the cost of manufacturing
preclinical and clinical material and other factors not within our control.
We cannot guarantee that the additional financing to meet our capital
requirements will be available on acceptable terms or at all. Insufficient funds
may require us to delay, scale back or eliminate some or all of our research 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 we would otherwise choose or may adversely
affect our ability to operate as a going concern. If additional funds are raised
by issuing equity securities, substantial dilution to existing stockholders may
result.

CONTRACTUAL OBLIGATIONS AND SIGNIFICANT COMMERCIAL COMMITMENTS

    The following summarizes our contractual obligations for the years ended
December 31, 2002 through December 31, 2006 and thereafter:

<Table>
<Caption>
                                   2002         2003         2004         2005         2006       Thereafter      Total
                                 --------     --------     --------     --------     --------     ---------     ---------
                                                                       (in thousands)

<S>                              <C>          <C>          <C>          <C>          <C>          <C>           <C>
 Convertible subordinated notes   $ 9,322      $ 9,322      $ 9,322      $ 9,322      $ 9,322      $197,959      $244,569
 Capital leases                       885          448          410            -            -             -         1,743
 Operating leases                  10,928       11,918       12,298        9,795       13,256        76,019       134,214
                                 --------     --------     --------     --------     --------     ---------     ---------
                                  $21,135      $21,688      $22,030      $19,117      $22,578      $273,978      $380,526
                                 ========     ========     ========     ========     ========     =========     =========

</Table>

    Our other material commitments relate to our license agreement with
Syntex. Under the license agreement, we paid an initial license fee. In
addition, we are obligated to make certain milestone payments to Syntex,
upon receipt of the first and second product approvals for ranolazine in any
of certain major market countries (consisting of France, Germany, Italy, the
United States and the United Kingdom). Unless the agreement is terminated,
if the first product approval in one of the major market countries occurs
before May 1, 2002, we will pay Syntex, on or before March 31, 2005, $7.0
million plus interest accrued thereon from the date of approval until the
date of payment, and if the first such product approval occurs after May 1,
2002, we will pay Syntex, on or before March 31, 2005, $7.0 million plus
interest accrued thereon from May 1, 2002 until the date of payment. Unless
the agreement is terminated, if the second product approval in one of the
major market countries occurs before May 1, 2004, we will pay Syntex, on or
before March 31, 2006, $7.0 million plus interest accrued thereon from the
date of approval until the date of payment, and if the second such product
approval occurs after May 1, 2004 but before March 31, 2006, we will pay
Syntex, on or before March 31, 2006, $7.0 million plus interest accrued
thereon from May 1, 2004 until the date of payment. Unless the agreement is
terminated, if the second product approval in one of the major market
countries has not occurred by March 31, 2006, we will pay Syntex $3.0
million on or before March 31, 2006, and if we receive the second product
approval after March 31, 2006, we will pay Syntex $4.0 million within thirty
(30) days after the date of such second product approval. No amounts have
been accrued to date in relation to these milestones. In addition, we will
make royalty payments based on net sales of products that utilize the
licensed technology. We are required to use commercially reasonable efforts
to develop and commercialize the product for angina. We or Syntex may
terminate the license agreement for material uncured breach, and we have the
right to terminate the license agreement at any time on 120 days notice if
we decide not to continue to develop and commercialize ranolazine.

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

    Our long-term debt includes $196,250,000 of 4.75% convertible
subordinated notes due March 7, 2007. Interest on the notes is fixed and
payable semi-annually on March 7th and September 7th each year. The notes
are convertible into shares of our common stock at any time prior to
maturity, unless previously redeemed or repurchased, subject to adjustment
in certain events. The market value of our long-term-debt will fluctuate
with movements of interest rates and with movements in the value of our
common stock.

    The table below presents the amounts and related average interest rates
of our investment portfolio and our long-term debt:

<Table>
<Caption>
                                                             Average       Market
        ($ in thousands)                                  Interest Rate    Value
                                                          -------------  ----------
<S>     <C>                                                 <C>          <C>
        Cash equivalents:
          Variable rate                                       2.22%       $ 50,901
          Fixed rate                                          1.82%       $ 29,968
        Marketable securities:
          Fixed rate (mature in 2002)                         5.58%       $ 98,311
          Fixed rate (mature in 2003)                         5.34%       $238,478
          Fixed rate (mature in 2004)                         4.63%       $ 60,725
        Long-term debt:
          Subordinated convertible notes (mature in 2007)     4.75%       $204,740

</Table>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    Our Financial Statements and notes thereto appear beginning on page F-1
of this Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

    None.

<PAGE>

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    Information required by this item, insofar as it relates to directors
and officers, will be contained under the captions "Election of Directors",
"Management" and "Compliance with Section 16(a) of the Securities Exchange
Act of 1934" in the Company's definitive proxy statement with respect to the
Company's 2001 Annual Meeting of Stockholders (the "Proxy Statement"), which
we anticipate will be filed no later than 120 days after the end of our
fiscal year pursuant to Regulation 14A, and is hereby incorporated by
reference thereto.

ITEM 11. EXECUTIVE COMPENSATION

    The information required by this item will be contained in the Proxy
Statement, which we anticipate will be filed no later than 120 days after
the end of our fiscal year pursuant to Regulation 14A, under the caption
"Executive Compensation", and is hereby incorporated by reference thereto.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information required by this item will be contained in the Proxy
Statement, which we anticipate will be filed no later than 120 days after
the end of our fiscal year pursuant to Regulation 14A, under the caption
"Security Ownership of Certain Beneficial Owners and Management", and is
hereby incorporated by reference thereto.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information required by this item will be contained in the Proxy
Statement, which we anticipate will be filed no later than 120 days after
the end of our fiscal year pursuant to Regulation 14A, under the caption
"Security Ownership of Certain Beneficial Owners and Management", and is
hereby incorporated by reference thereto.

<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-5
Notes to Consolidated Financial Statements                                F-6

    (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, incorporated by reference to Exhibit 3.1 filed
              with the Registrant's Annual Report on Form 10-K, for the year
              ended December 31, 1999.

    3.2       Amendment No. 1 to the Amended and Restated Certificate of
              Incorporation, incorporated by reference to Exhibit 4.2 filed
              with the Registrant's Registration Statement on Form S-3 No.
              333-53206.

    3.3       Restated Bylaws of the Registrant, incorporated by reference
              to Exhibit 3.5 filed with the Registrant's Registration
              Statement on form S-1, No 333-12675, as amended.

   10.1*      1992 Stock Option Plan, as amended, incorporated by reference
              to Exhibit 10.1 filed with the Registrant's Registration
              Statement on Form S-1, No 333-12675, as amended.

   10.2*      1994 Equity Incentive Plan, as amended, incorporated by
              reference to Exhibit 10.46 filed with the Registrant's
              Statement of Form S-8 No. 333-44717.

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

   10.4*      Form of Incentive Stock Option Grant, incorporated by
              reference to Exhibit 10.4 filed with the Registrant's
              Registration Statement on Form S-1, No 333-12675, as amended.

   10.5*      Form of Non-Incentive Stock Option Grant, incorporated by
              reference to Exhibit 10.5 filed with the Registrant's
              Registration Statement on Form S-1, No 333-12675, as amended.

   10.6       Form of Non-Statutory Stock Option Grant under Non-Employee
              Directors' Stock Option Plan, incorporated by reference to
              Exhibit 99.6 filed with the Registrant's Registration
              Statement on Form S-8, No 333-19389.

<PAGE>

   EXHIBIT
   NUMBER

   10.7*      Employee Stock Purchase Plan, as amended, incorporated by
              reference to Exhibit 10.7 filed with the Registrant's Annual
              Report on Form 10-K, for the year ended December 31, 2000.

   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, incorporated by reference to Exhibit 10.7
              filed with the Registrant's Amendment No. 3 to Registration
              Statement on Form S-1, No 333-12675, as amended.

   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, incorporated by reference to Exhibit 10.26
              filed with the Registrant's Amendment No 3 to Registration
              Statement on Form S-1, No. 333-12675, as amended.

   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, incorporated by reference to Exhibit 10.27
              filed with the Registrant's Amendment No. 3 to Registration
              Statement on Form S-1, No 333-12675, as amended.

   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, incorporated by reference to Exhibit 10.28
              filed with the Registrant's Amendment No 3 to Registration
              Statement on Form S-1, No. 333-12675, as amended.

   10.12*     Form of Indemnification Agreement between Registrant and its
              directors and officers, incorporated by reference to Exhibit
              10.10 filed with the Registrant's Registration Statement on
              Form S-1, No. 333-12675, as amended.

   10.13      Amended and Restated Investor Rights Agreement between
              Registrant and the stockholders named therein, dated May 29,
              1996, incorporated by reference to Exhibit 10.11 filed with
              the Registrant's Registration Statement on Form S-1, No.
              333-12675, as amended.

   10.14**    License Agreement between Registrant and University of Florida
              Research Foundation, Inc., dated June 7, 1994, incorporated by
              reference to Exhibit 10.21 filed with the Registrant's
              Registration Statement on Form S-1, No. 333-12675, as amended.

   10.15**    Research Agreement between Registrant and University of
              Florida, dated June 27, 1994, incorporated by reference to
              Exhibit 10.22 filed with the Registrant's Registration
              Statement on Form S-1, No 333-12675, as amended.

   10.16**    License Agreement between Registrant and Syntex (U.S.A.) Inc.,
              dated March 27,1996, incorporated by reference to Exhibit
              10.25 to Amendment No. 2 to Registrant's Statement  No
              333-59318, as amended.

   10.17      Lease Agreement between Registrant and Matadero Creek, dated
              August 6, 1993 and addendum thereto; Letter Amendment to Lease
              Agreement, dated June 30, 1994 and Second Amendment to Lease
              Agreement, dated June 30, 1994, incorporated by reference to
              Exhibit 10.25 filed with the Registrant's Registration
              Statement on Form S-1, No. 333-12675, as amended.

   10.18**    Research Collaboration and License Agreement (U.S.) between
              the Registrant and Biogen, Inc., dated March 7, 1997,
              incorporated by reference to Exhibit 10.39 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 1997.

   10.19**    Research Collaboration and License Agreement (Europe) between
              the Registrant and Biogen Manufacturing Ltd., dated March 7,
              1997, incorporated by reference to Exhibit 10.40 filed with
              the Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 1997.

<PAGE>

   EXHIBIT
   NUMBER

   10.20      Common Stock Purchase Agreement between the Registrant and
              Biotech Manufacturing Ltd., dated March 7, 1997.

   10.21      Loan Agreement between the Registrant and Biotech
              Manufacturing Ltd., dated March 7, 1997.

   10.22**    Letter Agreement, dated March 7, 1997, between the Registrant
              and the University of Florida Research Foundation, Inc.,
              incorporated by reference to Exhibit 10.43 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the Second
              Quarter 1997.

   10.23**    First amendment to License Agreement, effective as of July 3,
              1997, between the Registrant and Syntex (U.S.A.), Inc.,
              incorporated by reference to Exhibit 10.32 to Amendment No. 2
              to Registration Statement No. 333-59318.

   10.24      Common Stock Purchase Agreement, dated October 7, 1997,
              between the Registrant and Biotech Target S.A., incorporated
              by reference to Exhibit 10.45 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Third Quarter 1997.

   10.25      Transition Agreement between the Registrant and Kathy Stafford
              dated September 15, 1997, incorporated by reference to Exhibit
              10.47 filed with the Registrant's Quarterly Report on Form
              10-Q, for the Third Quarter 1997.

   10.26      Amendment to Research Collaboration and License Agreement
              (U.S.), dated June 12, 1998, between the Registrant and
              Biogen, Inc., incorporated by reference to Exhibit 10.54 filed
              with the Registrant's Quarterly Report on Form 10-Q, for the
              Second Quarter 1998.

   10.27      Amendment No. 1 to Loan Agreement, dated as of June 12, 1998,
              between the Registrant and Biotech Manufacturing Ltd.,
              incorporated by reference to Exhibit 10.55 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the Second
              Quarter 1998.

   10.28**    Letter agreement regarding termination of research program of
              the Research Collaboration and License Agreement, dated June
              12, 1998, between the Registrant and Biogen, Inc.,
              incorporated by reference to Exhibit 10.56 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the Second
              Quarter 1998.

   10.29*     Executive Severance Benefits Agreement between the Registrant
              and Louis G. Lange, M.D., Ph.D., dated February 2, 1999,
              incorporated by reference to Exhibit 10.57 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 1999.

   10.30*     Executive Severance Benefits Agreement between the Registrant
              and Daniel K. Spiegelman, dated February 2, 1999, incorporated
              by reference to Exhibit 10.58 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the First Quarter 1999.

   10.31*     Executive Severance Benefits Agreement between the Registrant
              and Andrew A. Wolff, M.D., dated February 2, 1999,
              incorporated by reference to Exhibit 10.59 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 1999.

   10.32*     Executive Severance Benefits Agreement between the Registrant
              and Cynthia L. Clark, Esq., dated February 2, 1999,
              incorporated by reference to Exhibit 10.60 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 1999.

   10.33*     Executive Severance Benefits Agreement between the Registrant
              and Brent K. Blackburn, Ph.D., dated February 2, 1999,
              incorporated by reference to Exhibit 10.61 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 1999.

   10.34*     Executive Severance Benefits Agreement between the Registrant
              and Richard M. Lawn, Ph.D., dated February 2, 1999,
              incorporated by reference to Exhibit 10.62 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 1999.

<PAGE>

   EXHIBIT
   NUMBER

   10.35*     Executive Severance Benefits Agreement between the Registrant
              and Luiz Belardinelli, M.D., dated February 2, 1999,
              incorporated by reference to Exhibit 10.63 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 1999.

   10.36*     Executive Severance Benefits Agreement between the Registrant
              and Stephen J. Grana, dated February 2, 1999, incorporated by
              reference to Exhibit 10.64 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the First Quarter 1999.

   10.37      Stock Purchase Agreement dated May 5, 1999 between the
              Registrant and Quintiles Transnational Corp., incorporated by
              reference to Exhibit 10.65 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Second Quarter 1999.

   10.38**    Sales and Marketing Services Agreement dated May 5, 1999
              between the Registrant, Innovex Inc. and Quintiles
              Transnational Corp., incorporated by reference to Exhibit
              10.66 filed with the Registrant's Quarterly Report on Form
              10-Q, for the Second Quarter 1999.

   10.39**    Loan Agreement dated May 5, 1999 between the Registrant and
              Quintiles Transnational Corp, incorporated by reference to
              Exhibit 10.67 filed with the Registrant's Quarterly Report on
              Form 10-Q, for the Second Quarter 1999.

   10.40      Security Agreement dated May 5, 1999 between the Registrant
              and Quintiles Transnational Corp., incorporated by reference
              to Exhibit 10.68 filed with the Registrant's Quarterly Report
              on Form 10-Q, for the Second Quarter 1999.

   10.41      Promissory Note dated May 5, 1999 to Quintiles in principal
              amount of $10.0 million, incorporated by reference to Exhibit
              10.69 filed with the Registrant's Quarterly Report on Form
              10-Q, for the Second Quarter 1999.

   10.42      Promissory Note dated May 5, 1999 to Quintiles Transnational
              in principal amount specified therein, incorporated by
              reference to Exhibit 10.70 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Second Quarter 1999.

   10.43      Amendment to Loan Agreement dated April 30, 1999 between the
              Registrant and Biotech Manufacturing Ltd., incorporated by
              reference to Exhibit 10.71 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Second Quarter 1999.

   10.44      Indenture dated March 7, 2000 between the Registrant and
              Norwest Bank Minnesota, incorporated by reference to Exhibit
              10.72 filed with the Registrant's Quarterly Report on Form
              10-Q, for the First Quarter 2000.

   10.45      Convertible subordinated note dated March 7, 2000,
              incorporated by reference to Exhibit 10.73 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 2000.

   10.46      Purchase agreement dated March 1, 2000 between the Registrant
              and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
              Incorporated, J.P. Morgan Securities Inc., FleetBoston
              Robertson Stephens Inc. and SG Cowen Securities Corporation as
              Representatives(s) of the several Initial Purchasers,
              incorporated by reference to Exhibit 10.74 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 2000.

   10.47      Resale Registration Rights agreement dated March 7, 2000
              between the Registrant and Merrill Lynch & Co., Merrill Lynch,
              Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities
              Inc., FleetBoston Robertson Stephens Inc. and SG Cowen
              Securities Corporation as Representatives(s) of the several
              Initial Purchasers, incorporated by reference to Exhibit 10.75
              filed with the Registrant's Quarterly Report on Form 10-Q, for
              the First Quarter 2000.

<PAGE>

   EXHIBIT
   NUMBER

   10.48*     2000 Equity Incentive Plan, as amended.

   10.49      First Amended and Restated Rights Agreement dated July 19,
              2000 between the Registrant and Wells Fargo Bank Minnesota,
              N.A., incorporated by reference to Exhibit 10.77 filed with
              the Registrant's Quarterly Report on Form 10-Q, for the Second
              Quarter 2000.

   10.50      Certificate of Designation of Series A Junior Participating
              Preferred Stock dated February 2, 1999, incorporated by
              reference to Exhibit 10.78 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Second Quarter 2000.

   10.51      Form of Right Certificate dated July 19, 2000, incorporated by
              reference to Exhibit 10.79 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Second Quarter 2000.

   10.52      Summary of Rights to Purchase Preferred Shares dated July 19,
              2000, incorporated by reference to Exhibit 10.80 filed with
              the Registrant's Quarterly Report on Form 10-Q, for the Second
              Quarter 2000.

   10.53*     Executive Severance Benefits Agreement between the Registrant
              and David McCaleb dated October 15, 1999, incorporated by
              reference to Exhibit 10.81 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Third Quarter 2000.

   10.54      Stock Purchase Agreement between the Registrant and Fujisawa
              Healthcare, Inc. dated as of July 10, 2000, incorporated by
              reference to Exhibit 10.82 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Third Quarter 2000.

   10.55**    Collaboration and License Agreement between the Registrant and
              Fujisawa Healthcare, Inc. dated as of July 10, 2000,
              incorporated by reference to Exhibit 10.83 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the Third
              Quarter 2000.

   10.56*     Executive Severance Benefits Agreement between the Registrant
              and Tricia Borga Suvari dated August 31, 2000, incorporated by
              reference to Exhibit 10.84 filed with the Registrant's
              Quarterly Report on Form 10-Q, for the Third Quarter 2000.

   10.57      Sublease Agreement between the Registrant and Systemix, Inc.
              dated as of November 1, 2000, incorporated by reference to
              Exhibit 10.68 filed with the Registrant's Annual Report on
              Form 10-K, for the year ended December 31, 2000.

   10.58      Lease between the Registrant and Kaiser Marquardt, Inc. dated
              as of December 1, 2000, incorporated by reference to Exhibit
              10.69 filed with the Registrant's Annual Report on Form 10-K,
              for the year ended December 31, 2000.

   10.59*     2000 Nonstatutory Incentive Plan, as amended.

   10.60      Amended and Restated Common Stock Purchase Agreement, dated as
              of August 7, 2000, between the Registrant and Acqua Wellington
              North American Equities Fund, Ltd., incorporated by reference
              to Exhibit 4.6 filed with the Registrant's Registration
              Statement on Form S-3 No. 333-59318.

   10.61      Third Amendment to Lease, dated February 16, 2001, between the
              Registrant and Jack R. Wheatley dba Matadero Creek.,
              incorporated by reference to Exhibit 10.72 filed with the
              Registrant's Quarterly Report on Form 10-Q, for the First
              Quarter 2001.

   10.62      Amendment No. 2 to License Agreement, effective as of November
              30, 1999, between the Registrant and Syntex (U.S.A.), Inc.,
              incorporated by reference to Exhibit 10.73 to Amendment No. 2
              to Registration Statement No. 333-59318.

<PAGE>

   EXHIBIT
   NUMBER

   10.63      Underwriting agreement, dated June 6, 2001, by and between the
              Registrant and SG Cowen Securities Corporation, incorporated
              by reference to Exhibit 1.1 to the Current Report on Form 8-K,
              Filed by the Registrant on June 12, 2001.

   10.64      Underwriting agreement, dated December 3, 2001, by and between
              the Registrant and JP Morgan Securities Inc., incorporated by
              reference to Exhibit 1.2 to the Current Report on Form 8-K,
              filed by the Registrant on December 4, 2001.

   23.1       Consent of Ernst & Young LLP, Independent Auditors.
_____________________

  *   Management contract or compensatory plan or arrangement.

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

    (b)   Reports on Form 8-K

     The Registrant filed current reports on Form 8-K with the Commission;

    *     on October 5, 2001 with respect to the sale of 212,593 shares of
          its common stock to Acqua Wellington North American Equities Fund,
          Ltd.,

    *     on October 31, 2001 with respect to a press release dated October
          30, 2001,

    *     on November 19, 2001 with respect to press releases dated November
          12, 2001, November 14, 2001 and November 19, 2001,

    *     on December 4, 2001 with respect to an Underwriting Agreement,
          dated December 3, 2001, by and between the Registrant and J.P.
          Morgan Securities Inc. and a press release dated December 4, 2001,
          and

    *     on December 10, 2001 with respect to a press release dated
          December 6, 2001.

    (c)   Exhibits

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

    (d)   Financial Statements and Schedules

     The financial statement schedules required by this Item are listed
under 14(a)(1) and (2) above.

<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 27, 2002.

                                                         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


    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 29, 2002
    Louis G. Lange, M.D., Ph.D.     Executive Officer (Principal
                                    Executive Officer)

/s/ DANIEL K. SPIEGELMAN           Chief Financial Officer       March 29, 2002
    Daniel K. Spiegelman            (Principal Financial and
                                    Accounting Officer)

/s/ SANTO J. COSTA                 Director                      March 29, 2002
    Santo J. Costa

/s/ R. SCOTT GREER                 Director                      March 29, 2002
    R. Scott Greer

/s/ JOHN GROOM                     Director                      March 29, 2002
    John Groom

/s/ THOMAS L. GUTSHALL             Director                      March 29, 2002
    Thomas L. Gutshall

/s/ PETER BARTON HUTT, ESQ.        Director                      March 29, 2002
    Peter Barton Hutt, Esq.

/s/ KENNETH B. LEE, JR.            Director                      March 29, 2002
    Kenneth B. Lee, Jr.

/s/ BARBARA J. MCNEIL, M.D., PH.D. Director                      March 29, 2002
    Barbara J. McNeil, M.D., Ph.D.

/s/ COSTA G. SEVASTOPOULOS, PH.D.  Director                      March 29, 2002
    Costa G. Sevastopoulos, Ph.D.

<PAGE>

             REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Stockholders
CV Therapeutics, Inc.

    We have audited the accompanying consolidated balance sheets of CV
Therapeutics, Inc. as of December 31, 2000 and 2001, and the related
consolidated statements of operations, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 2001. 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 auditing standards generally
accepted in the United States. 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, 2000 and 2001, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States.


                                             /s/ Ernst & Young LLP
Palo Alto, California
February 13, 2002

<PAGE>

                                         CV THERAPEUTICS, INC.
                                      CONSOLIDATED BALANCE SHEETS
                          (in thousands, except share and per share amounts)
<Table>
<Caption>
                                                                                   December 31,
                                                                            --------------------------
                                                                               2000            2001
                                                                            ----------      ----------
<S>                                                                        <C>             <C>
                                               ASSETS
Current assets:
  Cash and cash equivalents                                                 $  54,028       $  80,911
  Marketable securities                                                       242,165         397,514
  Other current assets                                                          5,739           9,938
                                                                            ----------      ----------
Total current assets                                                          301,932         488,363
Notes receivable from related parties                                             303             951
Property and equipment, net                                                     3,400          12,889
Other assets                                                                    5,998           5,041
                                                                            ----------      ----------

Total assets                                                                $ 311,633       $ 507,244
                                                                            ==========      ==========

                                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                          $   5,206       $   5,529
  Accrued liabilities                                                           9,343          10,614
  Current portion of capital lease obligations                                    764             779
  Current portion of deferred revenue                                           1,029           1,029
                                                                            ----------      ----------
Total current liabilities                                                      16,342          17,951
Capital lease obligations                                                       1,565             786
Convertible subordinated notes                                                196,250         196,250
Deferred revenue                                                                5,659           3,630
Other liabilities                                                                  35             234
                                                                            ----------      ----------
Total liabilities                                                             219,851         218,851
Commitments
Stockholders' equity:
  Preferred stock, $0.001 par value, 5,000,000 shares authorized, none
       issued and outstanding                                                       -               -
  Common stock, $0.001 par value, 85,000,000 shares authorized, 19,523,045
       and 25,482,343 shares issued and outstanding at December 31, 2000 and
       2001, respectively; at amounts paid in                                 222,223         494,604
  Deferred compensation                                                          (589)           (194)
  Accumulated deficit                                                        (131,055)       (210,752)
  Cumulative other comprehensive income                                         1,203           4,735
                                                                            ----------      ----------
Total stockholders' equity                                                     91,782         288,393
                                                                            ----------      ----------

Total liabilities and stockholders' equity                                  $ 311,633       $ 507,244
                                                                            ==========      ==========

</Table>
                                       See accompanying notes

<PAGE>

                                         CV THERAPEUTICS, INC.
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                               (in thousands, except per share amounts)
<Table>
<Caption>
                                                                      Year ended December 31,
                                                              -------------------------------------
                                                                 1999          2000          2001
                                                              ---------     ---------     ---------
<S>                                                          <C>           <C>           <C>
Revenues:
  Collaborative research                                      $      -      $  3,309      $  6,762
Operating expenses:
  Research and development                                      20,342        40,761        81,196
  General and administrative                                     4,659         7,601        13,756
                                                              ---------     ---------     ---------
Total operating expenses                                        25,001        48,362        94,952
                                                              ---------     ---------     ---------
Loss from operations                                           (25,001)      (45,053)      (88,190)
Interest income                                                  2,795        15,785        19,184
Interest expense                                                  (892)       (8,993)      (10,464)
Other expense, net                                                 (24)         (119)         (227)
                                                              ---------     ---------     ---------
Net loss                                                      $(23,122)     $(38,380)     $(79,697)
                                                              =========     =========     =========
Basic and diluted net loss per share                          $  (1.75)     $  (2.06)     $  (3.74)
                                                              =========     =========     =========
Shares used in computing basic and diluted
  net loss per share                                            13,207        18,664        21,308
                                                              =========     =========     =========

</Table>
                                        See accompanying notes

<PAGE>

<Table>

<Caption>

                                                       CV THERAPEUTICS, INC.
                                           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                (in thousands, except share amounts)

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

 Balances at December 31, 1998      11,209,078      $105,436      $ (108)    $ (1,049)     $ (69,553)     $     12      $ 34,738
 Issuance of common stock,
   net of repurchases                6,948,183        69,972           -            -              -             -        69,972
 Deferred compensation related to
   grants of certain stock options           -           374           -         (374)             -             -             -
 Repayment of notes receivable               -             -          21            -              -             -            21
 Amortization and reduction of
   deferred compensation                     -            (5)          -          732              -             -           727
 Comprehensive loss:
   Net loss                                  -             -           -            -        (23,122)            -       (23,122)
   Unrealized losses on investments          -             -           -            -              -          (189)         (189)
                                                                                                                        ---------
 Total comprehensive loss                                                                                                (23,311)
                                   ------------    ----------    ----------  ----------    ----------     ----------    ---------
 Balances at December 31, 1999      18,157,261       175,777         (87)        (691)       (92,675)         (177)       82,147
 Issuance of common stock,
   net of repurchases                1,365,784        45,945           -            -              -             -        45,945
 Deferred compensation related to
   grants of certain stock options           -           516           -         (516)             -             -             -
 Repayment of notes receivable               -             -          87            -              -             -            87
 Amortization and reduction of
   deferred compensation                     -           (15)          -          618              -             -           603
 Comprehensive loss:
   Net loss                                  -             -           -            -        (38,380)            -       (38,380)
   Unrealized gains on investments           -             -           -            -              -         1,380         1,380
                                                                                                                        ---------
 Total comprehensive loss                                                                                                (37,000)
                                   ------------    ----------    ----------  ----------    ----------     ----------    ---------
 Balances at December 31, 2000      19,523,045       222,223           -         (589)      (131,055)        1,203        91,782
 Issuance of common stock,
   net of repurchases                5,959,298       271,605           -            -              -             -       271,605
 Compensation related to grants
   of certain stock options                  -           995           -            -              -             -           995
 Amortization and reduction of
   deferred compensation                     -          (219)          -          395              -             -           176
 Comprehensive loss:
   Net loss                                  -             -           -            -        (79,697)            -       (79,697)
   Unrealized gains on investments           -             -           -            -              -         3,532         3,532
                                                                                                                        ---------
 Total comprehensive loss                                                                                                (76,165)
                                   ------------    ----------    ----------  ----------    ----------     ----------    ---------
 Balances at December 31, 2001      25,482,343      $494,604      $    -     $   (194)     $(210,752)     $  4,735      $288,393
                                   ============    ==========    ==========  ==========    ==========     ==========    =========

</Table>
                                                      See accompanying notes

<PAGE>

                                            CV THERAPEUTICS, INC.
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               (in thousands)
<Table>
<Caption>
                                                                               Year Ended December 31,
                                                                       -------------------------------------
                                                                          1999          2000          2001
                                                                       ---------     ---------     ---------
<S>                                                                    <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                               $(23,122)     $(38,380)     $(79,697)
Adjustments to reconcile net loss to net cash used in operating
  activities:
  Gain on the sale of investments                                             -             -        (1,695)
  Loss on the disposal of fixed assets                                        -             -            84
  Non cash stock compensation                                               727           603         1,171
  Depreciation and amortization                                           1,437         1,505         3,605
  Change in assets and liabilities:                                           -             -             -
    Other current assets                                                 (1,211)       (3,292)       (4,199)
    Other assets                                                             97             -             -
    Accounts payable                                                        540         3,665           323
    Accrued and other liabilities                                           293         5,912         1,470
    Deferred revenue                                                          -         5,688        (2,029)
                                                                       ---------     ---------     ---------
Net cash used in operating activities                                   (21,239)      (24,299)      (80,967)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments                                                (65,392)     (239,590)     (386,464)
Maturities of investments                                                27,246        54,576       172,613
Sales of investments                                                          -        15,431        63,388
Capital expenditures                                                       (136)         (655)      (11,880)
Notes receivable from related parties                                        23           232          (648)
                                                                       ---------     ---------     ---------
Net cash used in investing activities                                   (38,259)     (170,006)     (162,991)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on capital lease obligations                                      (165)         (424)         (764)
Borrowings under convertible subordinated debt, net of issuance costs         -       189,549             -
Borrowings under long-term debt                                               -         4,500             -
Repayments of long-term debt                                             (1,500)       (3,000)            -
Net proceeds from issuance of common stock,
  net of repurchases                                                     69,972        36,945       271,605
                                                                       ---------     ---------     ---------
Net cash provided by financing activities                                68,307       227,570       270,841
                                                                       ---------     ---------     ---------
Net increase in cash and cash equivalents                                 8,809        33,265        26,883
Cash and cash equivalents at beginning of year                           11,954        20,763        54,028
                                                                       ---------     ---------     ---------
Cash and cash equivalents at end of year                               $ 20,763      $ 54,028      $ 80,911
                                                                       =========     =========     =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest                                                 $    551      $  6,611      $ 10,464

SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Equipment purchased under financing arrangements                       $  1,000      $  1,500      $      -
Conversion of long-term debt into common stock                         $      -      $  9,000      $      -

</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 our inception in December 1990, substantially
all of our 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, CVT Adenosine Company, which was incorporated in
February 1999 in the Cayman Islands. The subsidiary was dissolved in
December 2000. All significant intercompany balances 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.

    Recent Accounting Pronouncements

    In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS
No. 141 requires that all business combinations be accounted for by the
purchase method of accounting and changes the criteria for recognition of
intangible assets acquired in a business combination. The provisions of SFAS
No. 141 apply to all business combinations initiated after June 30, 2001. We
do not expect that the adoption of SFAS No. 141 will have a material effect
on our financial position or results of operations. SFAS No. 142 requires
that goodwill and intangible assets with indefinite useful lives no longer
be amortized; however, these assets must be reviewed at least annually for
impairment. Intangible assets with finite useful lives will continue to be
amortized over their respective useful lives. The standard also establishes
specific guidance for testing for impairment of goodwill and intangible
assets with indefinite useful lives. The provisions of SFAS No. 142 will be
effective for our fiscal year 2002. We do not expect that the adoption of
SFAS No. 142 will have a material effect on our financial statements.

    In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 amends existing
accounting guidance on asset impairment and provides a single accounting
model for long-lived assets to be disposed of. Among other provisions, the
new rules change the criteria for classifying an asset as held-for-sale. The
standard also broadens the scope of businesses to be disposed of that
qualify for reporting as discontinued operations, and changes the timing of
recognizing losses on such operations. The provisions of SFAS No. 144 will
be effective for our fiscal year 2002. We do not expect that the adoption of
SFAS No. 144 will have a material effect on our financial statements.

<PAGE>

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

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    Cash Equivalents and Investments

    We consider all highly liquid debt investments with a maturity from date
of purchase of three months or less to be cash equivalents. Cash equivalents
consist of money market funds and commercial paper. All other liquid
investments are classified as marketable securities. We limit concentration
of risk by diversifying investments among a variety of issuers. No one
issuer or group of issuers from the same holding company is to exceed 10% of
market value of the portfolio except for securities issued by the U.S.
treasury or by one of its agencies. We also limit risk by specifying a
minimum credit quality of A1/P1 for commercial paper and A-/A3 for all other
investments.

    We determine the appropriate classification of investment securities at
the time of purchase and reaffirm such designation as of each balance sheet
date. At December 31, 2000 and 2001, all investment securities are
designated as available-for-sale. We view our available for sale portfolio
as available for use in current operations. Accordingly, we have classified
all investments as short term, even though the stated maturity date may be
one year or more beyond the current balance sheet date. Available-for-sale
securities are carried at fair value, with 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 and accretion is included in interest income.
The cost of securities sold is based on the specific identification method.
Realized gains on available-for-sale securities included in the statement of
operations were $0, $50,000 and $1.7 million for 1999, 2000 and 2001,
respectively, while realized losses were $0, $29,000 and $49,000.

    Other Assets

    Other assets include $4,962,000 of issuance costs, net of related
amortization, associated with the sale of $196,250,000 aggregate principal
amount of convertible subordinated notes in March 2000 (see Note 7). These
issuance costs are being amortized to interest expense over the seven-year
life of the notes.

    Comprehensive Income

    Statement of Financial Accounting Standards No. 130 "Reporting
Comprehensive Income" ("SFAS 130"), established standards for the reporting
and display of comprehensive income and its components. SFAS 130 requires
unrealized gains or losses on our available-for-sale securities, which prior
to adoption were reported separately in stockholders' equity, to be included
in other comprehensive income (loss).

    Revenue Recognition

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

<PAGE>

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

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    Stock-Based Compensation

    We account for stock options granted to employees using the
intrinsic-value method and, thus, recognize no compensation expense for
options granted with exercise prices equal to the fair market value of our
common stock on the date of the grant. We recognize compensation for options
granted to consultants based on the Black-Scholes option pricing model in
accordance with Emerging Issues Task Force Consensus No. 96-18.

    Deferred compensation is recorded when stock options are granted to
employees at prices lower than the fair market value. The amount is
amortized to expense over the vesting period of the related options.

    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.

    Research and Development

    Research and development expenses include related salaries, contractor
fees, administrative expenses and allocations of administrative overhead
costs. License and milestone obligations due prior to regulatory approval to
market the product are charged to research and development expense. Such
obligations due at, or following regulatory approval, if any, will be
capitalized and amortized to expense over the estimated life of the product.

    Net Loss Per Share

    In accordance with Statement of Financial Accounting Standards No. 128
"Earnings Per Share" ("SFAS 128"), basic and diluted net loss per share has
been computed using the weighted average number of shares of common stock
outstanding during the period.

    Had we been in a net income position for the years ended December 31,
1999, 2000 and 2001, diluted earnings per share would have included the
shares used in the computation of basic net loss per share, as well as the
dilutive effect of 1,753,000, 2,153,000 and 3,692,000 stock options and
443,078, 40,000 and 0 warrants to purchase common stock (prior to the
application of the treasury stock method). We have excluded the impact of
our convertible subordinated notes from the computation of diluted shares
outstanding because the impact of an assumed conversion of these notes into
3,074,091 shares of our common stock is anti-dilutive for all periods
presented.

<PAGE>

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

2.  LICENSE AND COLLABORATION AGREEMENTS

    University of Florida Research Foundation

    In June 1994, we entered into a license agreement with the University of
Florida Research Foundation, Inc. under which we received exclusive
worldwide rights to develop A1 adenosine receptor antagonists and agonists
for the detection, prevention and treatment of human and animal diseases. In
consideration for the license, we paid an initial license fee and are
obligated to pay royalties based on net sales of products that utilize the
licensed technology. Under this agreement, we must exercise commercially
reasonable efforts to develop and commercialize one or more products covered
by the licensed technology. In the event we fail to reach certain milestones
under the agreement, the licensor may convert the exclusive license into a
non-exclusive license. We sublicensed our rights under this license that
relate to A1 adenosine receptor antagonists to Biogen in March 1997.

    Syntex

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

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

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

<PAGE>

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

2.  LICENSE AND COLLABORATION AGREEMENTS (CONTINUED)

    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 any products which are produced based on
our A1 adenosine receptor antagonist patents or technologies (including our
rights under the University of Florida Research Foundation license) for all
indications. In exchange, we received a $16.0 million payment consisting of
research related funding, an equity investment and $3.0 million in funding
under a general purpose loan facility. Biogen agreed to make milestone
payments and equity investments, as well as the loan facility, all of which
are subject to their achievement of clinical development and
commercialization milestones. In February 1998, we 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, Biogen released an
additional $4.5 million under the loan facility. In February 2000, based on
results of their Phase II clinical trial, Biogen announced its intention to
proceed with the AdentriTM program, but with a backup compound, and
subsequently paid us $6.5 million, consisting of a $2.0 million milestone
payment and $4.5 million under the loan facility. In March 2001, based on
Biogen's initiation of a Phase I oral development program, we recognized a
$1.0 million milestone payment. Biogen will also make milestone payments in
connection with development and commercialization of licensed products, and
pay royalties on any future sales of products covered by the agreement.
Biogen has control and responsibility for conducting, funding and pursuing
all aspects of the development, submissions for regulatory approvals,
manufacture and commercialization of A1 adenosine receptor antagonist
products under the agreement.

    In March 2000, we repaid the initial $3.0 million installment under the
loan facility. In October 2000, we exercised our right to convert $9.0
million in debt under the loan facility into 118,932 shares of our common
stock at a price of $75.67 per share, in full repayment of the entire
principal amount under this loan facility. In December 2000, we repaid all
accrued and unpaid interest on the loan facility.

    Biogen may terminate the agreements for any reason upon 60 days written
notice. If Biogen terminates the agreements, all rights to the technology
will revert to us, and we will pay Biogen a royalty on future sales of any
A1 adenosine receptor antagonist.

    Incyte

    In July 1998, we entered into a joint research collaboration agreement
with Incyte Genomics, Inc. to develop a prototype gene expression database
in the area of cardiovascular biology. We contribute our molecular
cardiology expertise and Incyte contributes its genomics capabilities.
Incyte owns the data produced, and we receive a perpetual, non-exclusive
license to use the data in our drug development efforts. Each party bears
its own costs of the research and neither party makes any payments to the
other. Either party may terminate the agreement on 60 days written notice.
In August 2001, we expanded the scope of our 1998 research collaboration to
focus on identifying genes involved in the development of atherosclerosis
and coronary artery disease.

<PAGE>

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

2.  LICENSE AND COLLABORATION AGREEMENTS (CONTINUED)

    Innovex

    In May 1999, we entered into a sales and marketing services agreement
with Innovex, a subsidiary of Quintiles Transnational Corp. Under this
agreement, if ranolazine is approved for sale in the United States by the
FDA, Innovex will hire and train a dedicated sales force for ranolazine and
assist in funding marketing expenses for up to five years after launch. We
will receive 100% of the revenues from sales of ranolazine and we will pay
Innovex a share of those revenues.

    The agreement calls for Innovex to conduct pre-launch activities, hire
and train a dedicated cardiology sales force to launch and promote
ranolazine, and provide post-launch marketing and sales services. To fund
pre-launch activities, Quintiles will provide us with a $10 million credit
facility at the time we file with the FDA for approval. We are required to
spend a minimum of $10 million on ranolazine pre-launch marketing activities
so long as Quintiles provides advances under the credit facility. Upon FDA
approval, Quintiles will make a $10 million milestone payment to us, which
we are obligated to use to repay any amounts outstanding under the credit
facility. Should we file for FDA approval and draw down the credit facility,
but never receive FDA approval, we are obligated to repay the loan within 10
years of the date we received the loan.

    Innovex has agreed to provide services for at least three years after
launch and to provide services in years four and five after launch if
minimum sales levels are met. The agreement also specifies the minimum
number of sales representatives and the minimum level of dollars to be spent
on marketing by Innovex during the first two years of the contract,
regardless of sales levels. The minimum size of the sales force and the
marketing expenses in year three or any subsequent year must be maintained
by Innovex as long as minimum sales levels are met.

    In exchange for providing these sales and marketing services, Innovex
will receive a fee equal to up to an average of 33% of our revenues related
to the sale of ranolazine in the first two years of sales, up to 30% of
revenues for the third year and up to 25% of revenues in years four and
five. Also, for giving us the option to retain this trained sales force at
the end of the contract, Innovex will receive a royalty on sales of 7% in
the sixth year and 4% in the seventh year after launch.

    In connection with the agreement, Quintiles purchased 1,043,705 shares
of our common stock for a total purchase price of $5.0 million.

    We or Innovex may terminate the agreement in the event of material
uncured breach, bankruptcy or insolvency, our decision to not file an NDA
for ranolazine or to terminate development of the product, notice from the
United States Food and Drug Administration that it will not approve the
product for marketing, or failure to achieve certain minimum sales levels.
In addition, we or Innovex (subject to certain notice and response
provisions) may terminate the agreement if product launch will not occur by
a specific date. The agreement will terminate automatically if we no longer
retain our license rights to ranolazine.

<PAGE>

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

2.  LICENSE AND COLLABORATION AGREEMENTS (CONTINUED)

    Fujisawa Healthcare

      In July 2000, we entered into a collaboration with Fujisawa
Healthcare, Inc. (FHI) to develop and market second generation pharmacologic
cardiac stress agents. Under this agreement, FHI received exclusive North
American rights to CVT-3146, a short acting selective A2A adenosine receptor
agonist, and to a backup compound. We received $10.0 million from FHI
consisting of a $6.0 million up-front payment, which will be recognized as
revenue over the expected term of the agreement, and the purchase of 54,270
shares of our common stock for a total purchase price of $4.0 million. In
September 2001, based on initiating a Phase II clinical trial for CVT-3146,
FHI paid us a $2.0 million milestone payment. We may receive up to an
additional $22.0 million in cash based on development and regulatory
milestones such as initiation of clinical studies and certain regulatory
filings and approval. FHI reimburses us for 75% of the development costs,
and if the product is approved by the FDA, we will receive a royalty based
on product sales of CVT-3146 and may receive a royalty on another product
sold by FHI. The amount reimbursed for development costs was $0, $996,000
and $2.8 million for 1999, 2000 and 2001, respectively.

    FHI may terminate the agreement for any reason on 90 days written
notice, and we may terminate the agreement if FHI fails to launch a product
within a specified period after marketing approval. In addition, we or FHI
may terminate the agreement in the event of material uncured breach, or
bankruptcy or insolvency.

3.  INVESTMENTS

    Following is a summary of available-for-sale securities at December 31,
2000:

<Table>
<Caption>
                                                                           Gross         Gross
                                                        Amortized        Unrealized    Unrealized     Market
                                                        Cost Basis         Gains         Losses       Value
                                                        ----------       ---------     ---------    ----------
                                                                            (in thousands)
 <S>     <C>                                            <C>              <C>           <C>          <C>
         Cash equivalents:
           Money market funds                           $  29,266        $     -       $     -      $  29,266
           Commercial paper                                24,744              -             -         24,744
                                                        ----------       ---------     ---------    ----------
                                                        $  54,010        $     -       $     -      $  54,010
                                                        ==========       =========     =========    ==========
         Marketable securities:
           Commercial paper                             $  34,545        $    36       $     -      $  34,581
           US government securities                        10,042             80             -         10,122
           Asset backed securities                         13,970             81             -         14,051
           Corporate bonds                                177,418          1,046            16        178,448
           Foreign bonds                                    4,987              -            24          4,963
                                                        ----------       ---------     ---------    ----------
                                                        $ 240,962        $ 1,243       $    40      $ 242,165
                                                        ==========       =========     =========    ==========

</Table>

    As of December 31, 2000, we had marketable securities with maturities of
one year or less of $74.5 million and greater than one year of $167.7
million. The average contractual maturity as of December 31, 2000 was
approximately fifteen months, with no single investment's maturity exceeding
thirty-six months.

<PAGE>

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

3.  INVESTMENTS (CONTINUED)

    Following is a summary of available-for-sale securities at December 31,
2001:

<Table>
<Caption>
                                                                           Gross         Gross
                                                        Amortized        Unrealized    Unrealized     Market
                                                        Cost Basis         Gains         Losses       Value
                                                        ----------       ---------     ---------    ----------
                                                                            (in thousands)
 <S>     <C>                                            <C>              <C>           <C>          <C>
         Cash equivalents:
           Money market funds                           $  50,901        $     -       $     -      $  50,901
           Commercial paper                                29,968              -             -         29,968
                                                        ----------       ---------     ---------    ----------
                                                        $  80,869        $     -       $     -      $  80,869
                                                        ==========       =========     =========    ==========
         Marketable securities:
           Commercial paper                             $   8,941        $     9       $     -      $   8,950
           US government securities                       100,794            654            18        101,430
           Asset backed securities                         13,588             91             -         13,679
           Corporate bonds                                260,971          4,280           262        264,989
           Foreign bonds                                    8,485              -            19          8,466
                                                        ----------       ---------     ---------    ----------
                                                        $ 392,779        $ 5,034       $   299      $ 397,514
                                                        ==========       =========     =========    ==========

</Table>

    As of December 31, 2001, we had marketable securities with maturities of
one year or less of $98.3 million and greater than one year of $299.2
million. The average contractual maturity as of December 31, 2001 was
approximately eighteen months, with no single investment's maturity
exceeding thirty-six months.

4.  PROPERTY AND EQUIPMENT

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

<Table>
<Caption>
                                                                  December 31,
                                                             --------------------
                                                                2000       2001
                                                             --------    --------
                                                                 (in thousands)
 <S>     <C>                                                  <C>        <C>
         Machinery and equipment                              $5,682     $ 8,228
         Furniture and fixtures                                  833       1,328
         Leasehold improvements                                4,124      11,910
                                                             --------    --------
                                                              10,639      21,466
         Less accumulated depreciation and amortization       (7,239)     (8,577)
                                                             --------    --------
                                                              $3,400     $12,889
                                                             ========    ========

</Table>

    Property and equipment include $2.9 million recorded under capital
leases at December 31, 2000 and 2001. Accumulated amortization related to
leased assets totaled $950,000 and $1.9 million at December 31, 2000 and
2001, respectively (see Note 6).

    Depreciation expense, including depreciation of assets under capital
leases, was $608,000, $670,000 and $1.2 million for 1999, 2000 and 2001,
respectively. Amortization expense for leasehold improvements was $517,000,
$761,000 and $1.1 million for 1999, 2000 and 2001, respectively.

<PAGE>

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

5.  ACCRUED LIABILITIES

    Accrued liabilities consists of the following:

<Table>
<Caption>
                                                                   December 31,
                                                             ---------------------
                                                                2000        2001
                                                             --------    ---------
                                                                 (in thousands)
 <S>     <C>                                                  <C>         <C>
         Accrued interest                                     $2,952      $ 2,952
         Compensation related accruals                         1,456        3,651
         Accrued research obligation                             308            -
         Clinical trials                                       1,562          364
         Other                                                 3,065        3,647
                                                             --------    ---------
                                                              $9,343      $10,614
                                                             ========    =========

</Table>

6.  LEASES

    We lease some of our fixed assets under four capital leases.

    We lease two facilities under noncancellable operating leases. The lease
for one facility expires in April 2012. The lease for the second facility
incorporates a sublease which expires in February 2005 and a master lease
which expires in April 2012.

    Following is a schedule of future minimum lease payments:

<Table>
<Caption>
                                                                Operating     Capital
                                                                 Leases        Leases
                                                                ---------     ------
                                                                  (in thousands)
 <S>     <C>                                                    <C>           <C>
         Year ending December 31,
           2002                                                 $ 10,928      $ 885
           2003                                                   11,918        448
           2004                                                   12,298        410
           2005                                                    9,795          -
           2006                                                   13,256          -
           2007 and thereafter                                    76,019          -
                                                                ---------     ------
         Total minimum payments                                 $134,214      1,743
                                                                =========
         Less amount representing interest                                     (178)
                                                                              ------
         Present value of future lease payments                               1,565
         Less current portion                                                  (779)
                                                                              ------
         Long-term portion                                                    $ 786
                                                                              ======

</Table>

    Rent expense for the years ended December 31, 1999, 2000, and 2001 was
$1.4 million, $1.7 million and $8.7 million, respectively, net of sublease
rental income of $1.0 million, $567,000 and $1.2 million, respectively.

<PAGE>

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

7.  CONVERTIBLE SUBORDINATED NOTES

    In March 2000, we completed a private placement of $196,250,000
aggregate principal amount of 4.75% convertible subordinated notes due March
7, 2007. The notes are unsecured and subordinated in right of payment to all
existing and future senior debt as defined in the indenture governing the
notes. We pay interest semi-annually on March 7th and September 7th of each
year. The conversion rate is 15.66 shares of common stock per $1,000
principal amount of notes. This is equivalent to a conversion price of
$63.84 per share.

    The conversion price is subject to adjustment upon the occurrence of the
following events:

    *       if we pay a dividend or make a distribution to the holders of
            our common stock in shares of our common stock, then the
            conversion price will be reduced;

    *       if we subdivide or combine the outstanding shares of our common
            stock, then the conversion price then in effect will be
            proportionately reduced or increased, respectively;

    *       if we issue rights or warrants (other than as described in the
            next bullet points below) to all holders of our outstanding
            common stock entitling them to subscribe for or purchase more
            shares of our common stock (or securities convertible into our
            common stock) at a price per share (or with a conversion price
            per share) less than the current market price of our common
            stock, then the conversion price will be reduced;

    *       if we distribute to all holders of our common stock shares of
            capital stock (other than any dividends or distributions covered
            by the first bullet point above) or evidence of our
            indebtedness, cash or other assets, including securities, but
            excluding:

            *      any rights or warrants referred to above,

            *      any stock, securities or other property or assets distributed
                   in connection with a reclassification, change, merger,
                   consolidation, statutory share exchange, combination, sale or
                   conveyance to which the indenture's recapitalization
                   provisions apply, and

            *      dividends and distributions paid exclusively in cash,

            then, in each such case, and subject to certain limitations, the
            conversion price will be reduced;

    *       if we distribute to all our common stockholders cash (excluding
            cash distributed upon a reclassification, change, merger,
            consolidation, statutory share exchange, combination, sale or
            conveyance to which the indenture's recapitalization provisions
            apply) in an aggregate amount that, combined with:

            *      the aggregate amount of any other cash distributions to all
                   of our common stockholders made within the preceding 12
                   months and for which no adjustment pursuant to this bullet
                   point has been made, and

<PAGE>

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

7.  CONVERTIBLE SUBORDINATED NOTES (CONTINUED)

            *      the aggregate of any cash plus the fair market value (as
                   determined by our board of directors), as of the expiration
                   of the tender or exchange offer referred to below, of
                   consideration payable in respect of any tender or exchange
                   offer by us for all or any portion of our common stock
                   concluded within the preceding 12 months and for which no
                   adjustment pursuant to the bullet point below has been made,

            exceeds 10% of the product of the then current market price of
            our common stock times the number of shares of common stock then
            outstanding, then the conversion price will be reduced;

    *       if a tender or exchange offer made by us expires and such offer
            requires that we pay stockholders an aggregate consideration
            having a fair market value (as determined by our board of
            directors) that combined with:

            *      the aggregate of the cash plus the then fair market value (as
                   determined by our board of directors) of consideration
                   payable in respect of any other tender or exchange offers by
                   us expiring within the preceding 12 months and for which no
                   adjustment pursuant to this bullet point has been made, and

            *      the aggregate amount of any distributions to all holders of
                   our common stock made in cash within the preceding 12 months
                   and for which no adjustment pursuant to the fifth bullet
                   point above,

            exceeds 10% of the product of the then current market price
            times the number of shares of then outstanding common stock
            (including any tendered or exchanged shares), then the
            conversion price will be reduced;

    *       if our board of directors determines it advisable to avoid or
            diminish any income tax to holders of common stock or rights to
            purchase common stock resulting from any dividend or
            distribution of stock (or rights to acquire stock) or from any
            event treated as such for income tax purposes, then the
            conversion price will be reduced; and

    *       if the distribution date for the rights provided in our rights
            agreement, if any, occurs prior to the date a security is
            converted, the holder of the security who converts such security
            after the distribution date will not be entitled to receive the
            rights that would otherwise be attached (but for the date of
            conversion) to the shares of common stock received upon such
            conversion; provided, however, that an adjustment will be made
            to the conversion price pursuant to the second bullet point
            above as if the rights were being distributed to our common
            stockholders prior to such conversion.

    We have reserved 3,074,091 shares of authorized common stock for
issuance upon conversion of the notes. We may redeem the notes on or after
March 7, 2003 and prior to maturity, at a premium or earlier if our stock
price reaches certain defined levels. We incurred issuance costs related to
this private placement of approximately $6,701,000 which have been recorded
as other assets and are being amortized to interest expense over the
seven-year life of the notes.

    The fair value of our convertible subordinated notes, based upon the
last publicly-traded price for the notes at December 31, 2001, approximates
$204,740,000.

<PAGE>

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

8.  RELATED PARTY TRANSACTIONS

    From 1992 through 2001, we issued loans to certain of our officers,
employees and a consultant related to relocation and other purposes. Such
loans aggregating $358,000 and $951,000 were outstanding at December 31,
2000 and 2001, respectively. These loans bear interest at 4.13% to 10.00%
per annum. The amounts are repayable on various dates through November 20,
2006. Loans outstanding at December 31, 2001 in the amount of $801,000, are
secured by secondary deeds of trust.

9.  STOCKHOLDERS' EQUITY

    Equity Line of Credit and Significant Equity Transactions

    In August 2000, we entered into a financing arrangement with Acqua
Wellington to purchase up to $120.0 million of our common stock through
November 2002 under the terms of a common stock purchase agreement. Under
the purchase agreement, as presently amended, we may sell a total of $149.0
million of our common stock to Acqua Wellington through December 2003. The
purchase agreement provides that from time to time, at our sole discretion,
subject to a minimum per share market price specified in the agreement, we
may present Acqua Wellington with draw down notices constituting offers to
sell our common stock for specified total proceeds over a specified trading
period, both subject to limits specified in the agreement. Once presented
with a draw down notice, Acqua Wellington is required to purchase a pro rata
portion of shares of our common stock as allocated on each trading day
during the trading period on which the daily volume weighted average price
for our common stock exceeds a threshold price that we determine and state
in the draw down notice. The per share price then equals the daily volume
weighted average price on each date during the pricing period, less a 4% to
6% discount (based on our market capitalization). However, if the daily
volume weighted average price falls below the threshold price on any day in
the pricing period, Acqua Wellington is not required to purchase the pro
rata portion of shares allocated to that day, but can elect to buy that pro
rata portion of shares at the threshold price less the applicable 4% to 6%
discount.

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

    The purchase agreement also provides that from time to time, in our sole
discretion, we may grant Acqua Wellington a right to exercise one or more
call options to purchase additional shares of our common stock during a
drawn down pricing period, in an amount and for a threshold price that we
determine and state in the draw down notice. However, the total call amount
for any given draw down cannot exceed a specified maximum amount, and the
amount of proceeds we may receive by exercise of a call option for any given
trading day is also limited. If Acqua Wellington exercises the call option,
we will issue and sell the shares of our common stock subject to the call
option at a price equal to the greater of the daily volume weighted average
price of our common stock on the day Acqua Wellington exercises its call
option, or the threshold price for the call option that we have determined,
less a 4% to 6% discount (based on our market capitalization).

<PAGE>

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

9.  STOCKHOLDERS' EQUITY (CONTINUED)

    Equity Line of Credit and Significant Equity Transactions (Continued)

    The combined total value of shares that we may sell to Acqua Wellington
through draw downs and call option exercises may not exceed $149.0 million.
As of December 31, 2001, we have issued 1,161,873 shares representing $59.0
million under this arrangement.

    In June 2001, we sold 2,020,203 shares of our common stock in an
underwritten public offering at a price to the public of $49.50 per share
pursuant to a prospectus supplement under a shelf registration statement. We
intend to use the net proceeds of approximately $95.9 million for general
corporate purposes, which may include funding research, development and
product manufacturing, increasing our working capital, reducing
indebtedness, acquisitions or investments in businesses, products or
technologies that are complementary to our own, and capital expenditures.

     In December 2001, we sold 2,875,000 shares of our common stock in an
underwritten public offering at a price to the public of $52.50 per share
pursuant to a prospectus supplement under a shelf registration statement. We
intend to use the net proceeds of approximately $143.3 million for general
corporate purposes, which may include funding research, development and
product manufacturing, development of clinical trials, preparation and
filing of a new drug application, product commercialization, increasing our
working capital, reducing indebtedness, acquisitions or investments in
businesses, products or technologies that are complementary to our own, and
capital expenditures.

    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 our common stock. In May 2000, our stockholders approved an additional
75,000 shares for the Purchase Plan with annual increases through 2005 in an
amount equal to the least of (i) one-half of one percent of the number of
outstanding shares of our common stock, (ii) 100,000 shares, or (iii) a
smaller number of shares determined by the board of directors. The Purchase
Plan is designed to allow eligible employees of ours or an affiliate of ours
to purchase shares of our 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 our common stock at the
beginning of the offering period or an amount equal to 85 percent of the
fair market value of our common stock on each 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 us. Shares in the amount of 323,889 have been authorized for issuance
and 198,818 shares have been issued under the Purchase Plan through December
31, 2001.

    Stock Option Plans

    We reserved 345,000 shares of common stock for issuance under our
amended and restated 1992 Stock Option Plan, which provided for common stock
options to be granted to employees, consultants, officers, and directors. No
additional grants will be made under the 1992 Stock Option Plan.

<PAGE>

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

9.  STOCKHOLDERS' EQUITY (CONTINUED)

    Stock Option Plans (Continued)

    We reserved 1,800,000 shares of common stock for issuance under our
amended and restated 1994 Equity Incentive Plan which provided for common
stock options to be granted to employees of and consultants to us and our
affiliates. No additional grants will be made under the 1994 Equity
Incentive Plan.

    Our 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 our
directors who are not otherwise an employee of, or consultant of ours or any
affiliate of ours. In May 2000, our stockholders approved an additional
150,000 shares for this plan. 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. In August 2000, the board of directors
approved amending the plan to increase the number of shares automatically
granted to new members of the board of directors. The options covered by
such initial grants generally vest in increments over a period of three
years from the date of grant for new directors. Also in August 2000, the
board of directors approved amending the plan to increase the number of
shares automatically granted each year to existing members of the board of
directors as replenishment grants. This amendment also modified the vesting
schedule for all new replenishment grants, from the previous full vesting
one year from the date of grant to vesting in increments over a period of
one year from the date of grant.

    In May 2000, our stockholders approved the 2000 Equity Incentive Plan
and the issuance of up to 1,500,000 shares of common stock under the plan.
The 2000 Equity Incentive Plan provides for common stock options to be
granted to our employees and consultants and those of our affiliates. This
Plan (as amended by the board of directors in February 2002-see Note 12)
allows for the grant of incentive stock options and nonstatutory stock
options. Options granted under this plan expire no later than 10 years from
the date of grant. The exercise price of each incentive stock option and
nonstatutory 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,
unless granted to a person who owns 10% or more of the total of voting stock
of the company and its affiliates, in which case the exercise price shall be
not less than 110% of the fair market value of the stock subject to the
option on the date of grant. 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.

    In July 2000, the board of directors approved the 2000 Nonstatutory
Incentive Plan and the issuance of up to 250,000 shares of common stock
under the plan. In February 2001, July 2001, December 2001 and February 2002
(see Note 12), the board of directors approved the issuance of up to an
additional 350,000, 250,000, 285,325 and 200,000 shares of common stock,
respectively, for a total of up to 1,335,325 shares under the plan. The 2000
Nonstatutory Incentive Plan provides for common stock options to be granted
to our employees and consultants and those of our affiliates. The Plan (as
amended by the board of directors in February 2002-see Note 12) allows for
the grant of nonstatutory stock options. Options granted under this plan
expire no later than 10 years from the date of grant. The exercise price of
each nonstatutory 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 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.

<PAGE>

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

9.  STOCKHOLDERS' EQUITY (CONTINUED)

    Stock Option Plans (Continued)

    The following table summarizes option activity under all option plans:

<Table>
<Caption>
                                                              Outstanding Options
                                                            -----------------------
                                               Shares        Number        Weighted
                                             Available         of          Average
                                             for Grant       Shares     Exercise Price
                                              -------       -------       ---------
                                            (in thousands, except per share amounts)
 <S>                                          <C>            <C>           <C>
 Balance at December 31, 1998                    661         1,415         $6.45
 Options granted                                (472)          472         $7.41
 Options forfeited                                52           (52)        $6.16
 Options exercised                                 -           (82)        $3.45
                                              -------       -------
 Balance at December 31, 1999                    241         1,753         $6.86
 Shares authorized                             1,900             -           -
 Options granted                                (900)          900         45.75
 Options forfeited                                51           (51)        25.95
 Options exercised                                 -          (449)         5.15
                                              -------       -------
 Balance at December 31, 2000                  1,292         2,153         23.02
 Shares authorized                               885             -           -
 Options granted                              (1,844)        1,844         45.84
 Options forfeited                                62           (62)        35.68
 Options exercised                                 -          (268)         7.44
                                              -------       -------
 Balance at December 31, 2001                    395         3,667         35.43
                                              =======       =======

</Table>

    The following table summarizes information about stock options
outstanding at December 31, 2001:

<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 - $14.63                1,003              6.3                 $ 7.77           767        $ 7.72
$15.88 - $40.61                1,159              8.9                 $37.34           258        $36.70
$40.85 - $55.15                  923              9.2                 $45.81            59        $48.29
$56.75 - $86.56                  582              9.5                 $62.82            71        $72.05
                              -------                                                ------
$ 0.80 - $86.56                3,667              8.4                 $35.43         1,155        $20.21
                              =======                                                ======

</Table>

<PAGE>

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

9.  STOCKHOLDERS' EQUITY (CONTINUED)

    Pro Forma Information Stock-Based Compensation

    We have elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and related
interpretations, in accounting for our 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 our 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 as if we had accounted for our stock-based awards to employees
under the fair value method of SFAS 123. The fair value of our stock-based
awards to employees was estimated using a Black-Scholes option pricing
model. 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 our 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 our opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of our
stock-based awards to employees. The fair value of our stock-based awards to
employees was estimated assuming no expected dividends and the following
weighted-average assumptions:

<Table>
<Caption>
                                                                        Options
                                                                  --------------------
                                                                  1999    2000    2001
                                                                  ----    ----    ----
 <S>     <C>                                                      <C>     <C>     <C>
         Expected life (years)                                    5.1     4.9     5.2
         Expected volatility                                      .60     .65     .65
         Risk-free interest rate                                  5.5%    6.5%    4.5%

</Table>

    For pro forma purposes, the estimated fair value of our stock-based
awards to employees is amortized over the options' vesting period. Our pro
forma information follows for the years ended December 31 (in thousands
except for per share information):

<Table>
<Caption>
                                                         1999          2000          2001
                                                      ---------     ---------     ---------
 <S>     <C>                                          <C>           <C>           <C>
         Net loss:
           As reported                                $(23,122)     $(38,380)     $(79,697)
                                                      =========     =========     =========
           Pro forma                                  $(24,336)     $(45,055)     $(97,554)
                                                      =========     =========     =========
         Net loss per share:
           As reported                                $  (1.75)     $  (2.06)     $  (3.74)
                                                      =========     =========     =========
           Pro forma                                  $  (1.84)     $  (2.41)     $  (4.58)
                                                      =========     =========     =========

</Table>

    The weighted-average fair value of options granted with exercise prices
at fair value of our common stock during 1999, 2000 and 2001 was $4.18,
$24.00 and $24.77, respectively.

<PAGE>

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

9.  STOCKHOLDERS' EQUITY (CONTINUED)

    Stockholders Rights Plan

    In February 1999, we 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 received and all stockholders receiving newly
issued shares after that date have or 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 is intended as a means
to guard against abusive takeover tactics and was not in response to any
particular proposal.

    The rights were 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 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.

    In July 2000, the board of directors approved certain amendments to our
stockholders rights plan, including lowering the trigger percentage from 20
percent to 15 percent, and raising the exercise price for each right from
$35.00 to $500.00.

10.         INCOME TAXES

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

<Table>
<Caption>
                                                               2000          2001
                                                            ---------     ---------
                                                                (in thousands)
 <S>     <C>                                                <C>           <C>
         Deferred tax assets:
           Net operating loss carryforwards                 $ 40,430      $ 77,020
           Research credits                                    5,400         4,150
           Capitalized research and development expenses       2,260         6,010
           Other                                               3,670         7,030
                                                            ---------     ---------
         Subtotal                                             51,760        94,210
         Valuation allowance                                 (51,760)      (92,320)
                                                            ---------     ---------
         Total deferred tax assets                                 -         1,890

         Deferred tax liabilities:
           Unrealized gain on equity investments                   -         1,890
                                                            ---------     ---------

         Net deferred tax assets:                           $      -      $      -
                                                            =========     =========

</Table>

<PAGE>

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

10.         INCOME TAXES (CONTINUED)

    Realization of deferred tax assets is dependent upon future earnings, if
any, the timing and amount of which are uncertain. Accordingly, the net
deferred tax assets have been fully offset by a valuation allowance. The
valuation allowance increased by $11.6 million and $40.6 million during 2000
and 2001, respectively. Approximately $10.0 million of the valuation
allowance is related to the benefit of the stock option deductions, which,
when recognized, will be allocated to paid in capital.

    As of December 31, 2001, we had federal and California net operating
loss carryforwards of approximately $214.0 million and $40.0 million,
respectively. We also had federal and California research and development
tax credits of approximately $4.9 million and $3.4 million, respectively.
The federal net operating loss and credit carryforwards will expire at
various dates beginning in the year 2006 through 2021, if not utilized. The
state of California net operating loss carryforwards will expire at various
dates beginning in the year 2002 through 2006, if not utilized. The federal
research tax credits will expire at various dates beginning in the year 2008
through 2021, if not utilized. The California research tax credits can be
carried forward indefinitely.

    Utilization of the our net operating loss may be subject to substantial
annual limitation due to ownership change limitations provided by the
Internal Revenue Code and similar California provisions. Such an annual
limitation could result in the expiration of the net operating loss before
utilization.

11.         401K PLAN

    Our 401K plan covers all of our eligible employees. Under the plan,
employees may contribute up to 15% of their eligible compensation, subject
to certain Internal Revenue Service restrictions. We may match a portion of
employee contributions with company stock, up to a maximum of 5% of each
employee's eligible compensation. The match (if any) is effective December
31 of each year and is fully vested if and when made. We issued 0 shares for
the 1999 match, a total of 6,965 shares for the 2000 match, and 10,837
shares for the 2001 match with a value of $0, $299,000 and $533,000,
respectively.

12.         EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT (UNAUDITED)

    In February of 2002, we amended our 2000 Nonstatutory Incentive Plan,
2000 Equity Incentive Plan and Non-Employee Directors' Stock Option Plan. We
amended our 2000 Nonstatutory Incentive Plan to: (i) increase the number of
shares of common stock authorized and reserved for issuance under the Plan
by two hundred thousand (200,000) shares, such that after giving effect to
such increase, the aggregate number of shares of common stock authorized and
reserved to be issued under the Amended and Restated Nonstatutory Incentive
Plan is one million three hundred and thirty-five thousand three hundred and
twenty-five (1,335,325), (ii) disallow the granting of stock bonuses and
rights to acquire restricted stock under the Nonstatutory Incentive Plan,
and (iii) provide that the board of directors cannot, without approval of
our stockholders, amend any outstanding option granted under the
Nonstatutory Incentive Plan to reduce its exercise price or cancel and
replace any outstanding option with grants having a lower exercise price.

<PAGE>

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

12.         EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT (UNAUDITED-CONTINUED)

    We amended our 2000 Equity Incentive Plan to: (i) disallow the granting
of stock bonuses and rights to acquire restricted stock under the Equity
Incentive Plan, and (ii) provide that the board of directors cannot, without
the approval of our stockholders, amend any outstanding option granted under
the Equity Incentive Plan to reduce its exercise price or cancel and replace
any outstanding option with grants having a lower exercise price.

    Finally, we amended our Non-Employee Directors' Stock Option Plan to:
(i) permit the exercise of options granted thereunder through the "cashless
exercise" program described in the Directors' Option Plan without regard to
the number of shares being acquired in connection with such exercise, and
(ii) provide that the board of directors may amend outstanding options under
the Directors' Option Plan; provided that such amendments be consented to in
writing to the extent they impair the existing rights of optionees, and
provided further that the board cannot, without the approval of our
stockholders, amend any outstanding option granted under the Directors'
Option Plan to reduce its exercise price or cancel and replace any
outstanding option with grants having a lower exercise price.

    In March of 2002, we sold 209,645 shares of common stock for net proceeds of
$8.4 million under the financing commitment from Acqua Wellington North American
Equities, Ltd. We have now issued shares representing a total of $67.4 million
under this commitment.