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                                 UNITED STATES
                       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, 1997

  / /    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 or other jurisdiction of       (IRS Employer Identification No.)
       incorporation or organization)

                 3172 PORTER DRIVE, PALO ALTO, CALIFORNIA 94304
          (Address of principal executive offices, including zip code)

                                 (650) 812-0585
              (Registrant's telephone number, including area code)

        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 mark whether the Registrant (1) has filed all reports
required 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 of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

    The approximate aggregate market value of the Common Stock held by
nonaffiliates of the Registrant, based upon the last sale price of the Common
Stock reported on the Nasdaq Stock Market was $101,310,440 as of March 10, 1998.

    The number of shares of Common Stock outstanding as of March 10, 1998 was
11,047,323.

                      DOCUMENTS INCORPORATED BY REFERENCE

    Certain exhibits filed with the Registrant's Registration Statement on Form
S-3 (Registration No. 333-54735), as amended, the Registrant's Proxy Statement
in connection with the Registrant's 1998 Annual Meeting to be filed in
accordance with Regulation 14A under the Securities Exchange Act of 1934, as
amended, and certain exhibits filed with the Registrant's Registration Statement
on Form S-8 (Registration No. 333-44717) are incorporated herein by reference
into Part III and IV of this report.

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                                     PART I

ITEM 1. BUSINESS

OVERVIEW

    CV Therapeutics, Inc. ("CVT" or "the Company") 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 chronic cardiovascular diseases. Molecular cardiology was
developed, in part, by CVT scientists and their academic collaborators and is
based upon the application of molecular biology and genetics to cardiovascular
diseases. This discipline has yielded new insights into the mechanisms
underlying chronic cardiovascular diseases and has enhanced the search for
innovative cardiovascular drugs by providing an increasing number of new
molecular targets for drug discovery. Two of the Company's drug candidates,
ranolazine for the treatment of angina and CVT-124 for the treatment of edema
due to congestive heart failure ("CHF"), are in clinical trials.

    In October 1997, the Company initiated a Phase III clinical trial of
ranolazine, a novel small molecule, for the treatment of angina. The trial is a
placebo-controlled, double-blind, cross-over trial of a sustained release ("SR")
formulation of ranolazine in approximately 150 patients with chronic stable
angina. Ranolazine was licensed from Syntex (USA), Inc. ("Syntex"), an indirect
subsidiary of Roche Holding Limited ("Roche"), in March 1996. Its novel
metabolic mechanism of action was discovered, in part, by cardiovascular
researchers now at or associated with CVT. In Phase I and Phase II clinical
trials conducted by Syntex, an immediate release ("IR") formulation of
ranolazine was administered to over 1,200 patients. These clinical trials have
indicated that ranolazine IR improved exercise tolerance in angina patients
without adversely affecting heart rate or decreasing blood pressure, a clinical
profile absent from currently available drugs. The Company believes ranolazine
could particularly benefit angina patients who also suffer from CHF or remain
symptomatic despite maximal doses of currently available anti-anginal drugs. In
the United States, approximately 7.1 million patients are currently diagnosed
with angina. Based on published studies, approximately one-third, or 2.3
million, are either diagnosed with both angina and CHF or are resistant to
currently available treatments. The Company believes these patients would
represent the initial target market for ranolazine.

    CVT-124, which is currently in Phase II clinical trials, is an adenosine
A(1) receptor antagonist discovered by CVT through its application of molecular
cardiology. Adenosine A(1) receptor antagonists block certain actions of
adenosine, a hormone that modulates different functions of the cardiovascular
system. CVT-124 has potential applications in the treatment of edema (fluid
accumulation) associated with CHF and the prevention and treatment of acute
renal failure. A recently completed Phase II trial in moderately severe CHF
patients indicated that CVT-124 is generally well-tolerated and produces
clinically useful and statistically significant increases in urine, sodium and
chloride excretion compared to placebo, with clinically minimal increases in
potassium excretion. This is an improved clinical profile compared to currently
available therapies. In March 1997, the Company entered into two research
collaboration and license agreements with Biogen, Inc. and a wholly-owned
subsidiary of Biogen, Inc. (collectively "Biogen"), granting Biogen an exclusive
worldwide license to develop, manufacture and commercialize CVT-124 for all
indications. Approximately one-quarter of the 875,000 patients in the United
States hospitalized with a primary diagnosis of CHF exhibit resistance to
current diuretic treatments. The Company believes that these patients would
represent the initial target market for CVT-124 in this indication.

    In addition to ranolazine and CVT-124, the Company has several product
candidates that are currently in preclinical studies. The Company has developed
and synthesized a series of adenosine A(1) agonist compounds, including CVT-510,
that it believes may have potential application in treating supraventricular
tachycardias. Supraventricular tachycardias are among the most common cardiac
arrhythmias complicating ischemic heart disease and cardiac surgical procedures
and account for over 300,000 new hospital admissions in the United States each
year. The Company believes that compared to current therapies, CVT-510 may offer
an improved clinical profile for immediate treatment of these arrhythmias
without lowering blood pressure. CVT-313, also in preclinical studies, is a
selective inhibitor of the cell cycle enzyme, cyclin-dependent kinase 2
("CDK2"). The Company believes that CVT-313 may be useful in a variety of
cellular proliferative disorders, including the prevention of restenosis, as an
adjunct to
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coronary artery bypass surgery and as a treatment for cardiomyopathy (heart
muscle damage). CVT-634, an inhibitor of another cell cycle regulating enzyme,
is also being evaluated in animal models of chronic cardiovascular disease.

RISK FACTORS

    In this section, the Company summarizes certain risks that should be
considered by stockholders and prospective investors in the Company. These risks
are discussed in greater detail below, and are discussed in context in other
sections of this report.

UNCERTAINTIES RELATED TO EARLY STAGE OF DEVELOPMENT

    The Company is at an early stage of development and must be evaluated in
light of the uncertainties and complications present in an early stage
biopharmaceutical company. In addition, all of the Company's products are at an
early stage of development. Since the Company's inception in 1990, substantially
all of the Company's resources have been dedicated to research and development,
and the Company has not generated any product revenue. Because all of the
Company's potential products are in research, preclinical or clinical
development, product revenues will not be realized for at least several years,
if at all. Drug discovery methods based upon molecular cardiology are relatively
new, and there can be no assurance that the Company will be able to employ these
methods of drug discovery successfully or that these methods will lead to the
development of commercially viable pharmaceutical products. Certain of the
Company's compounds within the Company's cell cycle and adenosine A(1) receptor
programs are in the early stages of research and development, and the Company
cannot predict when, if ever, it will commence clinical trials for such new
compounds. There can be no assurance that any of the Company's product
development efforts will be successfully completed, that any of the Company's
products will be proven to be safe and effective, that regulatory approvals will
be obtained at all or be as broad as sought, that the Company's products will be
capable of being produced in commercial quantities or that any products, if
introduced, will achieve market acceptance.

UNCERTAINTIES RELATED TO CLINICAL TRIALS

    The Company's potential products are subject to the risks of failure
inherent in the development of pharmaceutical products and will require
additional development, preclinical studies, clinical trials and regulatory
approval prior to commercialization. The results from preclinical studies and
early clinical trials may not be predictive of results obtained in later
clinical trials, and there can be no assurance that clinical trials conducted by
the Company or its collaborators will demonstrate sufficient safety and efficacy
to obtain the requisite approvals or that marketable products will result. For
example, in November 1995, based on unfavorable efficacy data from a Phase II
trial, the Company terminated its development program for the CVT-1 product for
treatment of primary hypercholesterolemia.

    The Company currently has only two products in clinical development,
ranolazine and CVT-124. The rate of completion of the Company's clinical trials
may be delayed by many factors, including slower than anticipated patient
enrollment, difficulty in finding a sufficient number of patients fitting the
appropriate trial profile or difficulty in obtaining sufficient supplies of
clinical trial materials or adverse events occurring during the clinical trials.
Completion of testing, studies and trials may take several years, and the length
of time varies substantially with the type, complexity, novelty and intended use
of the product. There can be no assurance that the Company's drug development
efforts will progress as expected or that such efforts will lead to the further
development and regulatory approval of any product. In addition, data obtained
from preclinical and clinical activities are susceptible to varying
interpretations, which could delay, limit or prevent regulatory approval. Delays
or rejections may be encountered based upon many factors, including changes in
regulatory policy during the period of product development. No assurance can be
given that any of the Company's development programs will be successfully
completed, that any investigational new drug ("IND") applications will become
effective or that additional clinical trials will be

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allowed by the Food and Drug Administration ("FDA") or other regulatory
authorities or that clinical trials will commence as planned. As a result of FDA
reviews or complications that may arise in any phase of the clinical trial
program, there can be no assurance that the proposed schedules for IND and
clinical protocol submissions to the FDA, initiations of studies and completions
of clinical trials can be maintained. Any delays in the Company's clinical
trials would have a material adverse effect on the Company's business, financial
condition and results of operations.

DEPENDENCE ON COLLABORATIVE AND LICENSING ARRANGEMENTS

    The Company's strategy for the research, development and commercialization
of its product candidates has required, and will continue to require, the
Company to enter into various arrangements with corporate and academic
collaborators, licensors, licensees and others, and the Company will therefore
be dependent upon the success of these parties in performing their
responsibilities. There can be no assurance that the Company will be able to
enter into additional collaborative arrangements or license agreements on
acceptable terms, or at all, or that any or all of the contemplated benefits
from such collaborative arrangements or license agreements will be realized.
Failure to obtain and maintain such arrangements or agreements would result in
delays in the development of the Company's proposed products, the inability to
proceed with the development, manufacture or sale of products or the loss of
third party licenses or could require the Company to fund development of a
particular product candidate internally. If the Company were required to fund
development internally, its future capital requirements would increase
substantially. There can be no assurance that the Company could obtain
additional funds to meet such increased capital requirements on acceptable
terms, or at all.

    Under the Company's collaborative arrangement with Biogen, Biogen is
responsible for pursuing all aspects of commercialization of CVT-124, including
but not limited to manufacturing clinical quantities of CVT-124, conducting
additional clinical trials, pursuing regulatory approvals, scaling-up
manufacturing processes and establishing marketing and sales capabilities. The
Company's relationship with Biogen may be terminated by Biogen upon notice
ranging from 60 to 90 days. Any such termination would have a material adverse
effect on the Company's business, financial condition and results of operations.
In addition, certain of the collaborative arrangements that the Company 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. The Company cannot control the amount and timing of resources which
its collaborative partners devote to the Company's programs or potential
products. Should a collaborative partner fail to develop or commercialize
successfully any product candidate to which it has rights, the Company's
business, financial condition and results of operations may be materially and
adversely affected. There can be no assurance that collaborators will not pursue
competing technologies or product candidates either on their own or in
collaboration with others.

    Collaborative arrangements may also require the Company to expend funds and
to meet certain milestones, and there can be no assurance that the Company will
be successful in doing so. The Company's agreement with the University of
Florida Research Foundation, Inc. in the area of adenosine receptors requires
the Company to reach certain preclinical and clinical milestones within defined
time periods to maintain exclusive rights under the license. The Company's
agreement with Syntex for ranolazine requires it to make a milestone payment to
Syntex upon FDA approval of a New Drug Application ("NDA") for ranolazine. The
Company's agreement with Biogen requires the Company to meet certain development
milestones in order to receive or be entitled to retain certain payments.
Failure of the Company to meet its obligations under its collaborative
arrangements could result in a termination of those arrangements and the loss of
rights to the compounds under development and could have a material adverse
effect on the Company's business, financial condition and results of operations.

    There can be no assurance that disputes will not 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

                                       3
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between collaborators and the Company could lead to delays in the collaborative
research, development or commercialization of certain product candidates or
could require or result in litigation or arbitration, which would be time
consuming and expensive, and would have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business--Licenses and Collaborations."

HISTORY OF LOSSES AND EXPECTATION OF FUTURE LOSSES; UNCERTAINTY OF FUTURE
  PROFITABILITY; ACCUMULATED DEFICIT

    Since its inception, the Company has been engaged in research and
development activities and has generated no product revenues. As of December 31,
1997, the Company had an accumulated deficit of approximately $57.0 million. The
process of developing the Company's products will require significant additional
research and development, preclinical testing and clinical trials, as well as
regulatory approvals. These activities, together with the Company's general and
administrative expenses, are expected to result in operating losses for the
foreseeable future. The Company will not receive product revenues unless and
until it or its collaborative partners complete clinical trials and receive
regulatory approval for commercial sale with respect to one or more products and
successfully commercialize such products. There can be no assurance that the
Company will generate revenues or achieve and sustain profitability in the
future. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources."

NEED FOR ADDITIONAL FUTURE CAPITAL; UNCERTAINTY OF ADDITIONAL FUNDING

    The Company will require substantial additional funding in order to complete
its research and development activities and commercialize any potential
products. The Company has financed its operations primarily through the sale of
equity securities, payments from its collaborators, equipment and leasehold
improvement financing and other debt financing. The Company has generated no
product revenue, and none is expected for at least several years. The Company
anticipates that its existing resources and projected interest income will
enable the Company to maintain its current and planned operations through the
third quarter of 1999. However, there can be no assurance that the Company will
not require additional funding prior to such time. The Company's future capital
requirements will depend on many factors, including scientific progress in its
research and development programs, the size and complexity of such programs, the
timing, scope and results of preclinical studies and clinical trials conducted
by the Company or its collaborators, the ability of the Company to establish and
maintain corporate partnerships, the time and costs involved in obtaining
regulatory approvals, the costs involved in filing, prosecuting and enforcing
patent claims, competing technological and market developments, the cost of
manufacturing or obtaining preclinical and clinical material and other factors
not within the Company's control. There can be no assurance that such additional
financing to meet the Company's capital requirements will be available on
acceptable terms or at all. Insufficient funds may require the Company to delay,
scale back or eliminate some or all of its research or development programs or
to lose rights under existing licenses or to relinquish greater or all rights to
product candidates at an earlier stage of development or on less favorable terms
than the Company would otherwise seek or may adversely affect the Company's
ability to operate as a going concern. If additional funds are raised by issuing
equity secuities, substantial dilution to existing stockholders may result. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

UNCERTAINTY OF MARKET ACCEPTANCE

    The Company's future profitability is dependent on commercial acceptance of
its potential products. The Company believes that market acceptance of its
potential products will depend on the Company's or its collaborators' ability to
provide acceptable evidence of the safety, efficacy and cost effectiveness of
its products, as well as the effectiveness of its marketing strategy, which may
include its own marketing efforts

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as well as those of its collaborators. In addition, third party payors can
indirectly affect the demand for the Company's potential products by regulating
the maximum amount of reimbursement that will be provided. There can be no
assurance that potential products developed by the Company or its collaborators
will achieve market acceptance among patients, physicians or third party payors,
even if necessary regulatory and reimbursement approvals are obtained. Failure
to achieve market acceptance would have a material adverse effect on the
Company's business, financial condition and results of operations.

INTENSE COMPETITION; RAPID TECHNOLOGICAL CHANGE

    The pharmaceutical and biopharmaceutical industries are subject to intense
competition and significant, rapid technological change. If regulatory approvals
are received, certain of the Company's potential products will compete with well
established, FDA approved proprietary and generic therapies that have generated
substantial sales over a number of years and which are reimbursed from
government health administration authorities and private health insurers. In
addition, CVT is aware of companies which are developing products that will
compete in the same disease markets as its potential products. Many of the
Company's competitors and potential competitors have substantially greater
product development capabilities and financial, scientific, marketing and sales
resources than the Company. Other companies may succeed in developing products
earlier than the Company, obtaining approvals for such products from the FDA
more rapidly than the Company and its corporate partners, or developing products
that are safer or more effective than those under development or proposed to be
developed by the Company and its corporate partners. There can be no assurance
that research and development by others will not render the Company's technology
or its potential products obsolete or non-competitive. In addition, there can be
no assurance that the Company's competitors will not develop more effective or
more affordable products or achieve patent protection, regulatory approval or
product commercialization earlier than the Company. See "Business--Competition."

UNCERTAINTY OF PATENT POSITION AND PROPRIETARY RIGHTS

    The Company's success will depend to a significant degree on its ability to
obtain patents and licenses to patent rights, to maintain trade secrets and to
operate without infringing on the proprietary rights of others, both in the
United States and other countries. The Company owns one United States issued
patent related to an inflammatory factor. The Company also owns five pending
patent applications in the United States relating to the inflammatory factor,
the A(1) agonist series of compounds, CVT-313 and CVT-634, as well as four
foreign patent applications with respect to the inflammatory factor and single
patent applications filed pursuant to the Patent Cooperation Treaty (PCT) with
respect to the A(1) agonist series of compounds, CVT-313 and CVT-634. In
addition, in connection with its corporate and academic collaborations, the
Company has received licenses to a number of issued patents and patent
applications for ranolazine and CVT-124. The Company intends to continue to file
applications as appropriate for patents covering both its potential products and
processes. There can be no assurance that patents will issue from any of these
applications, that any patent will issue on technology arising from additional
research or that patents that may issue from such applications will be
sufficient to protect the Company's technology. In particular, in certain cases
the Company is dependent upon third parties for the prosecution of patents and
patent applications. Failure of these third parties to effectively prosecute
such patents could have a material adverse effect on the Company's ability to
prevent competitors from developing similar compounds. Patent applications in
the United States are maintained in secrecy until a patent issues, and the
Company cannot be certain that others have not filed patent applications for
technology covered by the Company's pending applications or that the Company was
the first to invent the technology that is the subject of such patent
applications. 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 those of the
Company. If any of its competitors have filed patent applications in the United
States that claim technology also invented by the Company, the Company may have
to participate in interference proceedings declared by the Patent and Trademark
Office in order to

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determine priority of invention and, thus, the right to a patent for the
technology in the United States, all of which could result in substantial cost
to the Company. In addition, litigation, which would result in substantial cost
to the Company, may be necessary to enforce any patents issued to the Company or
to determine the scope and validity of the proprietary rights of third parties.
There can be no assurance that any patents issued to the Company or to licensors
from whom the Company has licensed rights will not be challenged, invalidated or
circumvented, or that the rights granted thereunder will provide proprietary
protection or commercial advantage to the Company.

    The commercial success of the Company will depend in part on the Company not
infringing patents issued to competitors and not breaching the licenses that
might cover technology used in the Company's potential products. Failure by the
Company to obtain a license to any technology required to commercialize its
potential products could have a material adverse effect on the Company's
business, financial condition and results of operations.

    The Company also relies on trade secrets to develop and maintain its
competitive position. Although the Company protects its proprietary technology
in part by confidentiality agreements with its employees, consultants,
collaborators, advisors and corporate partners, there can be no assurance that
these agreements will not be breached, that the Company will have adequate
remedies for any breach or that the Company's trade secrets will not otherwise
become known or be discovered independently by its competitors. See
"Business--Patents and Proprietary Technology."

DEPENDENCE ON KEY PERSONNEL; NEED TO ATTRACT AND RETAIN KEY EMPLOYEES AND
  CONSULTANTS

    The Company is highly dependent on certain members of its management and
scientific staff. In addition, the Company relies on consultants and advisors.
The loss of any of these persons could have a material adverse effect on the
Company's business, financial condition and results of operations. In order to
pursue its research and product development plans, the Company will be required
to attract and retain additional qualified scientific and other personnel. There
can be no assurance that the Company will be successful in attracting and
retaining these skilled persons who generally are in high demand by
pharmaceutical and biopharmaceutical companies and by universities and other
research institutions. The failure to successfully attract and retain qualified
personnel, consultants and advisors may impede the achievement of development
objectives and have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, a substantial
portion of the stock options currently held by many of the Company's key
employees are vested or may be fully vested over the next several years before
the Company achieves significant revenues or profitability. The Company intends
to grant additional options and provide other forms of incentive compensation to
attract and retain such key personnel.

LIMITED MANUFACTURING; MARKETING AND SALES EXPERIENCE

    The Company does not currently operate manufacturing facilities for clinical
or commercial production of its proposed products. The Company has no experience
in manufacturing, and currently lacks the resources or capability to manufacture
any of its potential products on a clinical or commercial scale. The Company is
currently, and will continue to be, dependent on corporate partners, licensees
or other third parties for the manufacturing of clinical and commercial scale
quantities of its products. For example, Biogen is responsible for the
manufacture of CVT-124 to supply clinical trials. In addition, the Company
acquired from Syntex a sufficient quantity of ranolazine SR tablets to supply
the first Phase III trial. The Company has an agreement with a third party
manufacturer for clinical scale production of ranolazine's active pharmaceutical
ingredient sufficient to support the remainder of the Phase III clinical
program, registration and commercialization. The Company is negotiating with
third party manufacturers for clinical scale production of ranolazine SR tablets
sufficient to support the remainder of the Phase III clinical program,
registration and commercialization. There can be no assurance that the Company
will be able to maintain existing agreements for manufacturing of clinical
quantities of potential products, that it will be able to establish or maintain
agreements with other third parties or that these parties will be able to

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develop adequate manufacturing capabilities. In addition, prior to approval of
an NDA for ranolazine, the Company will be required to demonstrate to the FDA's
satisfaction the bioequivalence of the multiple sources of ranolazine used in
the Company's clinical trials.

    The Company currently has no sales, marketing or distribution capability.
The Company may promote its products in collaboration with marketing partners or
rely on relationships with one or more companies with established distribution
systems and direct sales forces. In particular, Biogen is responsible for
establishing marketing and sales activities for CVT-124. Alternatively, in the
United States the Company may elect to establish its own specialized sales force
and marketing organization to market its products to cardiologists. In the event
that the Company is unable to reach and maintain agreement with one or more
pharmaceutical companies or collaborative partners to market its products, it
may be required to market its products directly and to develop a marketing and
sales force with technical expertise and with supporting distribution
capability. There can be no assurance that the Company will be able to establish
in-house sales and distribution capabilities or relationships with third
parties, or that it will be successful in commercializing any of its potential
products. To the extent that the Company enters into co-promotion or other
licensing arrangements, any revenues received by the Company will depend upon
the efforts of third parties, and there can be no assurance that such efforts
will be successful. See "Business--Marketing and Sales."

SIGNIFICANT GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVAL

    The research, testing, manufacture and marketing of drug products are
subject to extensive regulation by numerous regulatory authorities in the United
States and other countries. Failure to comply with FDA or other applicable
regulatory requirements may subject a company to administrative or judicially
imposed sanctions such as warning letters, civil penalties, criminal
prosecution, injunctions, product seizure or detention, product recalls, total
or partial suspension of production, and FDA refusal to approve pending NDAs or
supplements to approved NDAs. The Company has not received regulatory approval
in the United States or any foreign jurisdiction for the commercial sale of any
of its products. The process of obtaining FDA and other required regulatory
approvals, including foreign approvals, often takes many years and can vary
substantially based upon the type, complexity and novelty of the products
involved. Furthermore, such approval process is extremely expensive and
uncertain. There can be no assurance that the Company's potential products will
be approved for marketing by the FDA. Even if regulatory approval of a product
is granted, there can be no assurance that the Company will be able to obtain
the labeling claims necessary or desirable for the promotion of those products.
FDA requirements prohibit the marketing or promotion of a drug for unapproved
indications. Furthermore, regulatory marketing approval may entail ongoing
requirements for postmarketing studies. If regulatory approval is obtained, the
Company will be subject to ongoing FDA obligations and continued regulatory
review. In particular, the Company or its third party manufacturer will be
required to adhere to regulations setting forth current Good Manufacturing
Practices, which require that the Company manufacture its products and maintain
its records in a prescribed manner with respect to manufacturing, testing and
quality control activities. Further, the Company or its third party manufacturer
must pass a preapproval inspection of its manufacturing facilities by the FDA
before obtaining marketing approval. Failure to comply with applicable
regulatory requirements may result in penalties such as restrictions on a
product's marketing or withdrawal of the product from the market. In addition,
identification of certain side effects after a drug is on the market or the
occurrence of manufacturing problems could cause subsequent withdrawal of
approval, reformulation of the drug, additional preclinical testing or clinical
trials and changes in labeling of the product.

    Prior to the submission of an NDA, drugs developed by the Company must
undergo rigorous preclinical and clinical testing, which may take several years
and the expenditure of substantial resources. Before commencing clinical trials
in humans, the Company must submit to the FDA and receive clearance of an IND.
There can be no assurance that submission of an IND for future clinical testing
of any products

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under development or other future products of the Company would result in FDA
permission to commence clinical trials or that the Company will be able to
obtain the necessary approvals for future clinical testing in any foreign
jurisdiction. Success in preclinical studies or early stage clinical trials does
not assure success in later stage clinical trials. Data obtained from
preclinical and clinical activities are susceptible to varying interpretations,
which could delay, limit or prevent regulatory approval. Further, there can be
no assurance that if such testing of products under development is completed,
any such drug compounds will be accepted for formal review by the FDA or any
foreign regulatory body, or approved by the FDA for marketing in the United
States or by any such foreign regulatory bodies for marketing in foreign
jurisdictions. Future federal, state, local or foreign legislation or
administrative acts could also prevent or delay regulatory approval of the
Company's products. See "Business--Government Regulation."

UNCERTAINTY OF PRODUCT PRICING AND REIMBURSEMENT

    The ability of the Company and its existing and potential corporate partners
to market and sell its potential products successfully will depend in part on
the extent to which reimbursement for the cost of such potential products and
related treatments will be available from government health administration
authorities, private health insurers and other organizations. Third party payors
are increasingly challenging the price of medical products and services.
Significant uncertainty exists as to the reimbursement status of newly approved
health care products. In addition, for sales of the Company's products in
Europe, the Company will be required to seek reimbursement on a
country-by-country basis. If the Company or any existing or potential corporate
partners succeed in bringing any products to market, there can be no assurance
that these products will be considered cost effective, that reimbursement will
be available, or if available, that the payors' reimbursement policies will not
adversely affect the Company's or any such existing or potential corporate
partner's ability to sell such products on a profitable basis.

PRODUCT LIABILITY EXPOSURE; AVAILABILITY OF INSURANCE

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

HAZARDOUS AND RADIOACTIVE MATERIALS; ENVIRONMENTAL MATTERS

    The Company's research and development processes involve the controlled use
of hazardous materials, chemicals and radioactive materials, and produce waste
products. The Company is subject to federal, state and local laws and
regulations governing the use, manufacture, storage, handling and disposal of
such materials and waste products. Although the Company believes that its safety
procedures for handling and disposing of such materials comply with the
standards prescribed by such laws and regulations, the risk of contamination or
injury from these materials cannot be eliminated completely. In such event, the
Company could be held liable for any damages that result and any such liability
could exceed the resources of the Company. Although the Company believes that it
is in compliance in all material respects with applicable environmental laws and
regulations, there can be no assurance that it will not be required to incur
significant costs to comply with environmental laws and regulations in the
future, or that the Company's

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business, financial condition or results of operations will not be materially
adversely affected by current or future environmental laws or regulations. See
"Business--Government Regulation--Hazardous Materials."

VOLATILITY OF STOCK PRICE

    The market price of the shares of Common Stock, like that of the common
stock of many other biopharmaceutical companies, is likely to continue to be
highly volatile. Factors such as the Company's operating results, developments
in the Company's relationships with corporate partners, developments affecting
the Company's corporate partners, results of preclinical studies and clinical
trials by the Company, its corporate partners or its competitors, negative
regulatory action or regulatory approval with respect to the Company or its
competitors, announcements of new products by the Company or its competitors,
developments related to patent or other proprietary rights by the Company or its
competitors, changes in the position of securities analysts with respect to the
Common Stock, and market conditions for biopharmaceutical or biotechnology
stocks in general, may cause the market price of the Common Stock to fluctuate,
perhaps substantially. In addition, in recent years the stock market in general,
and the shares of biopharmaceutical, biotechnology and healthcare companies in
particular, have experienced extreme price fluctuations. These broad market and
industry fluctuations may materially adversely affect the market price of the
Common Stock. In some future quarter the Company's operating results may be
below the expectations of public market analysts and investors, and, as a
result, the price of the Common Stock would likely be materially adversely
affected.

POTENTIAL CONTROL BY EXISTING STOCKHOLDERS; ANTI TAKEOVER EFFECTS OF CERTAIN
  CHARTER PROVISIONS AND DELAWARE LAW

    As of March 10, 1998, the Company's officers, directors and principal
stockholders beneficially owned approximately 9% of the outstanding shares of
the Common Stock. As a result, such persons may have the ability to affect the
Company's affairs and business. Such concentration of ownership may also have
the effect of delaying, deferring or preventing a change in control of the
Company. In addition, the Company's Board of Directors has the authority to
issue up to 5,000,000 shares of Preferred Stock and to determine the price,
rights, preferences and privileges of those shares without any further vote or
action by the stockholders. The rights of the holders of Common Stock will be
subject to, and may be materially adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. The issuance of
Preferred Stock could have the effect of making it more difficult for a third
party to acquire a majority of the outstanding voting stock of the Company.
Furthermore, certain provisions of the Company's Amended and Restated
Certificate of Incorporation may have the effect of delaying or preventing
changes in control or management of the Company, which could adversely affect
the market price of the Company's Common Stock. In addition, the Company is
subject to the provisions of Section 203 of the Delaware General Corporation
Law, an anti-takeover law.

BACKGROUND

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

                                       9
<PAGE>
    Cardiovascular disease is the leading cause of death in the United States,
claiming more than 950,000 lives in 1994. The American Heart Association
projects the total cost of cardiovascular medications in the United States for
1997 at $13.8 billion.

    Chronic cardiovascular diseases, including atherosclerosis (hardening of the
arteries), hypertension (high blood pressure) and others, may cause permanent
damage to the heart and blood vessels, leading to CHF (4.7 million patients
projected for 1997), angina (7.1 million patients projected for 1997) and
myocardial infarction (1.5 million patients projected for 1997). CHF occurs when
the heart becomes weakened and, as a result, can no longer maintain adequate
blood circulation throughout the body. The kidneys respond to this decrease in
blood flow by increasing the retention of salt and water, leading to chronic
symptoms such as shortness of breath and edema (fluid retention) in the legs and
lungs.

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

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

DRUG DISCOVERY PLATFORM

    CVT's drug discovery platform supports several programs, including those
focused on the adenosine A(1) receptor, the cell cycle, molecular mechanisms of
atherosclerosis and chronic inflammation in the cardiovascular system. These
programs have produced compounds currently in clinical or preclinical
development or outlicensed for use in third party drug discovery programs. CVT's
expertise in molecular cardiology and drug development has been critical to the
identification of these drug candidates.

    The Company believes that its drug discovery platform allows it to
efficiently select novel, clinically relevant drug candidates that have a
significant probability of commercial potential. CVT first evaluates new targets
with respect to clinical relevance and suitability for small molecule
inhibition. CVT then utilizes a highly integrated, multidisciplinary approach to
produce novel small molecules as drug candidates for these targets. The Company
combines molecular modeling and combinatorial chemistry to assemble targeted
libraries of new chemical entities, an approach which the Company believes
expedites the identification of potential drug leads. The Company has developed
a comprehensive proprietary database correlating biological activity of
candidate drugs with their structures. From this database, CVT identifies final
lead compounds based on predetermined development criteria including potency,
specificity, manufacturability, and pharmacologic activity in animal and IN
VITRO models. The Company determines the proper selection of cell-based assays
and animal models of disease to enhance development of the drug candidate based
on its projected use in the clinical setting.

PRODUCTS UNDER DEVELOPMENT

RANOLAZINE

    Ranolazine is a novel small molecule, which is in Phase III clinical trials
for the treatment of angina. The compound fits the Company's criteria for
development candidates, as it is a small molecule, which works through a novel
mechanism of action. The Company obtained a license for ranolazine from Syntex

                                       10
<PAGE>
in March 1996, after the acquisition of Syntex by Roche. The Company is
developing ranolazine to treat angina because the Company believes it does not
significantly impair blood pressure or heart rate and has an improved
tolerability profile as compared to currently available therapies.

    Ranolazine acts by modulating the body's metabolism to shift the source of
energy for the heart from fatty acid toward glucose. Ranolazine decreases the
heart's oxygen demand for a given level of cardiac work because less oxygen is
required to produce an equivalent amount of energy from glucose than from fatty
acids. The Company believes this effect on muscle metabolism may also benefit
patients suffering from intermittent claudication.

INDICATIONS

    ANGINA.  Angina is a clinical syndrome manifested by chest pain caused by
myocardial ischemia (insufficient blood flow to the heart muscle) due to
blockage of the coronary arteries. Patients usually experience chest pain on
exertion, which can become more severe over time. In the United States,
approximately 7.1 million patients are currently diagnosed with angina. Based on
a published multicenter study involving over 5,000 angina patients, the Company
estimates over half of the 7.1 million patients are currently being treated with
multiple medications, including nitrates, beta blockers and calcium channel
blockers. These anti-anginal drugs accounted for over $3.0 billion in U.S. sales
in 1996. Based on published studies, approximately one-third, or 2.3 million, of
angina patients are either diagnosed with both angina and CHF or are resistant
to currently available treatments. The Company believes these patients would
represent the initial target market for ranolazine.

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

    Ranolazine IR has been administered to over 200 healthy human volunteers and
over 1,200 patients with ischemic heart disease or CHF in clinical trials
conducted by Syntex. Placebo-controlled ranolazine IR trials involving treadmill
testing in patients with chronic stable angina have demonstrated statistically
significant and clinically meaningful increases in (i) exercise time to onset of
angina, (ii) total exercise duration, and (iii) exercise time to onset of an
electrocardiographic change associated with insufficient blood flow to the heart
muscle. The anti-anginal effect of ranolazine IR was observed in these trials
regardless of whether the drug was given alone or in combination with beta
blockers or calcium channel blockers, and the drug was generally well tolerated
without a significant incidence of adverse events.

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

    Although CVT intends to pursue regulatory approval for treatment of all
patients with chronic angina, the Company believes angina patients who are
resistant to currently available treatments and those with angina and CHF would
represent the initial market for ranolazine.

    INTERMITTENT CLAUDICATION.  Intermittent claudication is a clinical syndrome
manifested by pain in the legs during exercise. Like angina, this syndrome is
caused by blockage or narrowing of arteries. These patients generally either
limit their activity or in severe cases undergo vascular surgery. Over two
million

                                       11
<PAGE>
people in the United States suffer from intermittent claudication. Only one drug
is approved by the FDA to treat this condition in the United States, and
worldwide sales in 1996 were approximately $419 million.

    A pilot trial of ranolazine SR in patients with intermittent claudication
was completed by Syntex in 1994. Ranolazine SR was generally well tolerated and
exhibited a trend toward prolongation of exercise duration and time to onset of
claudication. This clinical trial was not intended to be large enough to
demonstrate statistical significance. Further trials will be required to
demonstrate the utility of ranolazine SR for this indication. However, the
Company has no current plans to conduct clinical trials for ranolazine for
intermittent claudication.

CLINICAL STATUS OF RANOLAZINE

    In October 1997, the Company initiated the first of multiple Phase III
clinical trials of ranolazine SR for the treatment of angina. In this first
clinical trial, patients will undergo treadmill exercise to induce angina with
the primary endpoint being duration of exercise. This trial is a randomized,
double blind, placebo controlled, monotherapy, four period crossover trial in
approximately 150 stable angina patients. In the second trial, which is expected
to begin in 1998, the Company plans to enroll approximately 350-450 angina
patients receiving other anti-anginal medications and add either placebo or
ranolazine to their therapy. Additional clinical pharmacology, open label and
safety studies are being planned and are anticipated to be completed before the
filing of an NDA with the FDA.

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

CVT-124

    The Company believes that CVT-124 is the most potent and selective adenosine
A(1) receptor antagonist reported to date. Preclinical studies and clinical
trials have shown statistically significant increases in sodium excretion in
response to CVT-124. Thus, the Company believes that CVT-124 has the potential
to be an effective new therapy for treatment of edema due to CHF.

    CVT-124 was identified in the Company's adenosine A(1) receptor program.
This program is focused on the development of agents that are highly selective
for the adenosine A(1) receptor and has produced both antagonists and agonists
to this class of receptors. The Company continues to explore additional
applications of the technology developed in the adenosine A1 receptor program.

    Adenosine is a naturally occurring hormone that modulates different
functions of the heart, brain, kidney and blood vessels. Its actions are
mediated in these organs by two classes of receptors, A(1) and A(2), that
stimulate very different physiological effects that can be separately targeted
in drug development. Adenosine A(1) receptors are located on the proximal
tubules of the kidney where they stimulate reabsorption of sodium and hence of
water.

    The Company believes that it was among the first to identify the presence of
these adenosine A(1) receptors in the proximal tubule of the kidney. In contrast
to A(1) receptors, adenosine A(2) receptors stimulate the dilation of blood
vessels in the heart, muscles and kidney thereby lowering blood pressure.

    CVT has focused on creating an adenosine A(1) receptor antagonist specific
enough to avoid blocking the A(2) receptor and thus avoiding unintended side
effects. This concept was developed based on the Company's insight into the
newly discovered role of the A(1) receptor on the proximal tubule cell of the

                                       12
<PAGE>
kidney and its potential importance in treatment of edema states, such as CHF,
which are characterized by excessive accumulation of sodium and water in the
body.

    In March 1997, the Company entered into two research collaboration and
license agreements with Biogen granting Biogen an exclusive worldwide license to
develop and commercialize CVT-124 for all indications. In exchange, the Company
received a $16.0 million upfront payment, including an equity investment,
advanced funding of a development milestone and funding under a loan facility.
In addition, Biogen agreed to make significant milestone payments and equity
investments and provide funding under a general purpose loan facility, all of
which are subject to the achievement of certain clinical development and
commercialization milestones. Biogen will also pay royalties from any future
product sales.

INDICATIONS

    EDEMA ASSOCIATED WITH CONGESTIVE HEART FAILURE.  Approximately 4.7 million
people in the United States suffer from CHF, with an estimated 400,000 new
diagnoses each year. These patients typically seek medical help because of
edema, an accumulation of fluid in the lungs and extremities. Approximately
875,000 patients are hospitalized each year in the United States with a primary
diagnosis of CHF, and CHF is the leading cause of hospital admissions among
patients over 65. Approximately one-quarter of these hospitalized patients
exhibit resistance to current diuretic treatments. The Company believes that
these patients would represent the initial target market for CVT-124 in this
indication.

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

    Current treatment of CHF consists of therapy designed to improve the pumping
function of the heart combined with the administration of diuretics to eliminate
excess sodium and water from the body by blocking reabsorption in the kidney.
However, current diuretic therapies inhibit sodium reabsorption either at the
loop of Henle (furosemide) or the distal tubule (thiazides and spironolactone),
where as little as one percent of reabsorption of sodium can take place in
patients with advanced CHF. Since increasing amounts of sodium are reabsorbed
proximally as CHF worsens, distally acting drugs are correspondingly less
effective over time and patients become more symptomatic. Approximately one
quarter of hospitalized CHF patients exhibit resistance to current intravenous
diuretic therapies due to excessive fluid reabsorption in the proximal tubule,
and no therapy currently exists which targets this site of the disease process.
The dosage for the most commonly prescribed diuretics for edema associated with
CHF are often increased as the disease progresses, and therefore are
increasingly associated with toxic side effects, including potassium loss, which
may lead to an increased incidence of cardiac arrhythmias if potassium is not
monitored and replaced, and uric acid build-up which may lead to gout.

    Preclinical studies conducted by the Company have indicated that CVT-124
acts as a potent diuretic by blocking the adenosine A(1) receptors in the
proximal tubule that would ordinarily stimulate sodium reabsorption at that
site. These studies also indicated that CVT-124 acted at the distal tubule to
reduce sodium reabsorption and minimize potassium excretion. This combination of
diuretic mechanisms indicates a unique clinical profile as compared to currently
available drugs and suggests that CVT-124 may be particularly useful in the
treatment of edema associated with CHF on an acute and chronic basis.

                                       13
<PAGE>
    ACUTE RENAL FAILURE.  Acute renal failure is a decline in kidney function
that may require temporary or chronic therapy with dialysis procedures. Acute
renal failure is a complication of certain general medical conditions associated
with low blood flow and certain commonly used medications or diagnostic agents,
such as cyclosporine, gentamicin, amphotericin, cisplatin, and radiocontrast dye
used in x-ray studies. Because the adenosine A(1) receptor may be relevant in
this type of kidney failure, CVT and Biogen are exploring the possibility of
conducting clinical trials in acute renal failure to assess the opportunity for
its treatment and prevention by CVT-124.

CLINICAL STATUS OF CVT-124

    In 1996, CVT completed a double-blind, placebo-controlled Phase I/II trial
of intravenous CVT-124 in 26 healthy volunteers. Data from this trial support
CVT-124's combination of diuretic mechanisms. Statistically significant,
dose-related increases in sodium excretion were observed in response to CVT-124,
amounting to at least a doubling in the excretion of sodium compared to placebo.
In contrast, mean potassium excretion did not show clinically significant
increases. Uric acid excretion was also significantly increased by CVT-124
compared to placebo. CVT-124 was generally well-tolerated.

    In October 1997, the Company and Biogen completed a randomized,
double-blind, placebo-controlled ascending dose crossover Phase II trial of
intravenous CVT-124. In 18 patients with moderately severe CHF, CVT-124
exhibited clinically useful and statistically significant increases in urine,
sodium, and chloride excretion compared to placebo. The mean increases from
baseline in both sodium and chloride excretion during the first two hours
following dosing were as high as approximately 42 mEq in patients on CVT-124
compared to approximately 6 mEq in patients on placebo. In contrast, there were
statistically significant but clinically minimal increases in potassium
excretion. CVT-124 was also generally well-tolerated by the patients, with no
evident effect on blood pressure, heart rates, EKG findings or routine
laboratory tests.

    While the Company's clinical trials to date have utilized an intravenous
formulation of CVT-124, the Company and Biogen intend to explore opportunities
to develop CVT-124 in oral formulations for the treatment of edema in
fluid-retaining states like CHF and possibly for additional indications such as
the treatment or prevention of acute renal failure. Biogen is currently planning
additional Phase II intravenous trials in severe CHF patients.

    The Company's current estimate of the commencement of various clinical
trials included in this Prospectus are forward-looking statements that involve
risks and uncertainties. The actual clinical trial dates could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including the timing and results of earlier clinical trials and
the other factors set forth under "Risk Factors" and elsewhere in this report.
There can be no assurance that CVT-124 will prove to be safe or efficacious in
humans or that CVT-124 will obtain FDA or other regulatory or foreign marketing
approval for any indication.

CVT-510

    The Company has designed and synthesized a series of adenosine A(1) agonist
compounds that the Company believes may have potential application in treating
supraventricular tachycardias, as well as additional applications. Based on
preclinical data, the Company believes CVT-510 is a very selective adenosine
A(1) receptor agonist. Preclinical studies conducted by the Company indicated
that these compounds slowed electrical impulses in the conduction tissue of the
heart by stimulating the adenosine A(1) receptor. The Company has identified
CVT-510 as a clinical candidate for the treatment of supraventricular
tachycardias.

    Supraventricular tachycardias (atrial fibrillation, atrial flutter and AV
nodal re-entrant tachycardias) are among the most common cardiac arrhythmias
complicating ischemic heart disease and cardiac surgical procedures and account
for over 300,000 new hospital admissions in the United States each year. They

                                       14
<PAGE>
originate in the atria as rapid and irregular heart beats that then spread to
the ventricles. The ventricular contractions stimulated by the atrial impulses
can be so fast and irregular that cardiac function can be severely compromised,
resulting in dangerously low blood pressure, fluid in the lungs and ischemic
damage to the heart, brain and other organs.

    Because of the severity of these conditions and the need to treat patients
quickly, intravenous therapies are typically used. Current medical therapies aim
to slow the heart to a normal rate but have significant limitations in the acute
care setting. Digitalis is effective in controlling heart rate, but requires a
long time to take effect, which can be dangerous in patients with a failing
heart. Calcium channel blockers, beta blockers and adenosine act quickly but are
themselves associated with hypotension and depressed cardiac function,
potentially exacerbating the condition of patients already experiencing cardiac
dysfunction as a complication of the tachycardia. CVT-510 may be useful in the
treatment of supraventricular tachycardias, through selective stimulation of the
A(1) receptor to slow the heart rate without significant stimulation of the A(2)
receptor which would lower blood pressure.

CVT-313 AND CVT-634

    CVT-313 and CVT-634 were designed and synthesized in the Company's cell
cycle inhibitor program. The goal of this program is to develop a new class of
therapeutics that suppresses abnormal cellular proliferation, which contributes
to progressive cardiovascular diseases. 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. Several of the Company's scientists and
scientific advisors have been among the leaders in identifying the role of cell
proliferation in causing a variety of cardiovascular diseases. As part of its
drug discovery strategy, the Company has focused upon newly discovered enzymes
referred to collectively as the cell cycle enzymes that regulate cellular
proliferation. In particular, two important targets identified by the Company,
CDK2 and the proteasomal protease, may have different clinical applications. The
Company is continuing to explore other cell cycle regulatory enzymes as
potential targets in this program. Through a research agreement with The
Cleveland Clinic Foundation, the Company will evaluate the use of these cell
cycle inhibitors in combination with drug delivery catheters and as coatings on
endoluminal stents, to attempt to reduce the occurrence of restinosis.

    CVT-313 is a novel compound, which specifically inhibits CDK2, a critical
regulatory protein which participates in the control of the cell cycle. CDK2,
whose three dimensional structure was first determined by academic collaborators
of the Company, is central to cellular proliferation and was chosen as the
Company's first target in the cell cycle inhibitor program. Preclinical studies
have shown significant reduction of restenosis after vascular injury, both
confirming the appropriate selection of the target and identifying a potential
initial clinical application.

    CVT-634, also identified in this program, has been shown in preclinical
studies to be a potent inhibitor of proteasomal protease, which regulates both
CDK2 activation and macrophage activation. Additional preclinical studies have
also shown that CVT-634 may control smooth muscle cell proliferation. This
compound is undergoing further preclinical testing.

LICENSES AND COLLABORATIONS

    The Company has established and intends to establish strategic partnerships
to expedite development and commercialization of its drug candidates. For those
pre-clinical programs with potential application outside of chronic
cardiovascular disease, the Company intends to identify additional corporate
partners. In addition, CVT has licensed certain chemical compounds from academic
collaborators and other companies and has applied its drug discovery strategies
to analog and optimize these structures and to identify applications for
preclinical and clinical development. The Company's collaborations and licenses
currently in effect include:

                                       15
<PAGE>
BIOGEN

    In March 1997, the Company entered into two research collaboration and
license agreements, one with Biogen, Inc. which covers the Americas and the
other with a wholly-owned subsidiary of Biogen, Inc., Biotech Manufacturing Ltd.
which covers the rest of the world. The agreements grant Biogen the exclusive
worldwide right to develop and commercialize CVT-124 for all indications. In
exchange, the Company received a $16.0 million upfront payment consisting of
$6.0 million in cash, a $7.0 million equity investment and $3.0 million in
funding under a loan facility. In addition, Biogen agreed to make significant
milestone payments, equity investments and provide funding under a general
purpose loan facility, all of which are subject to achievement of certain
clinical development and commercialization milestones. Biogen will also pay
royalties on any future product sales. Biogen has control and responsibility for
conducting, funding and pursuing all aspects of the development, submissions for
regulatory approvals, manufacture and commercialization of the technology.

    In connection with the agreements, Biogen paid the Company an initial
non-refundable payment of $5.0 million and Biotech Manufacturing Ltd. purchased
669,857 shares of Common Stock for a total purchase price of $7.0 million. In
addition, CVT received advance funding of a milestone payment and funding under
a credit facility totaling $4.0 million. Under the terms of the collaboration,
the Company will conduct research on aspects of the technology for a period of
up to three years, and Biotech Manufacturing Ltd. will fund such research
through purchases of the Company's Common Stock. Biogen may terminate the
agreements for any reason upon 90 days notice until a certain clinical milestone
is achieved, and then upon 60 days thereafter. In addition, Biotech
Manufacturing Ltd. may terminate its obligation to fund the research conducted
by the Company, and CVT's obligation to conduct such research, without
terminating the entire collaboration, upon 90 days notice prior to each
anniversary of the effective date. CVT may also terminate its obligation to
conduct such research, without terminating the entire collaboration, after the
achievement of a certain milestone upon 90 days notice prior to each anniversary
of the effective date, which termination has been issued by CVT and will become
effective in May 1998. If Biogen terminates the agreements, all rights to the
technology would revert to CVT. There can be no assurance that Biogen will not
terminate the agreements. Any such termination would have a material adverse
effect on the Company's business, financial condition and results of operations.

UNIVERSITY OF FLORIDA RESEARCH FOUNDATION

    In June 1994, the Company entered into a license agreement with the
University of Florida Research Foundation, Inc. ("UFRFI") under which the
Company received exclusive worldwide rights to develop adenosine A(1) receptor
antagonists for the detection, prevention and treatment of human and animal
diseases. In consideration for the license, the Company paid UFRFI an initial
license fee and is obligated to pay royalties based on net sales of products
which utilize the licensed technology. Pursuant to the agreement, the Company
must exercise commercially reasonable efforts to develop and commercialize one
or more products covered by the licensed technology and is obligated to meet
milestones in completing certain preclinical work. In the event the Company
fails to reach those milestones, UFRFI may convert the exclusive license into a
non-exclusive license. As part of the license agreement with UFRFI, the Company
entered into a research agreement with the University of Florida.

SYNTEX/ROCHE

    In March 1996, the Company entered into a license agreement with Syntex for
United States and foreign patent rights to a compound having the generic name of
ranolazine for products treating angina and certain other cardiovascular
indications. Pursuant to the agreement, Syntex provided certain quantities of
the compound to the Company. The license agreement is exclusive and worldwide
except for the following countries which Syntex licensed exclusively to Kissei
Pharmaceuticals, Ltd. of Japan: Japan, Korea, China, Taiwan, Hong Kong, the
Philippines, Indonesia, Singapore, Thailand, Malaysia, Vietnam, Myanmar, Laos,
Cambodia and Brunei. Under the license agreement, the Company paid an initial
license

                                       16
<PAGE>
fee. In addition, the Company is obligated to make payments on the achievement
of certain development milestones and to make royalty payments based on net
sales of products which utilize the licensed technology. The Company is required
to use commercially reasonable efforts to develop the compound for angina within
certain milestone guidelines. The license agreement also sets milestones within
which the Company must launch products in each country covered by the license or
lose exclusivity in such territories. The Company paid $1.5 million to Syntex in
1997 in a combination of cash and Common Stock and will owe an additional
milestone payment upon FDA approval of an NDA for ranolazine.

MARKETING AND SALES

    The Company currently has no sales, marketing or distribution capability.
The Company may promote its products in collaboration with marketing partners or
rely on relationships with one or more companies with established distribution
systems and direct sales forces. In particular, Biogen is responsible for
establishing marketing and sales activities for CVT-124. Alternatively, in the
United States, the Company may elect to establish its own specialized sales
force and marketing organization to market its products to cardiologists. In the
event that the Company elects to market its products directly, it will be
required to develop a marketing and sales force with technical expertise and
with supporting distribution capability. There can be no assurance that the
Company will be able to establish in-house sales and distribution capabilities
or relationships with third parties, or that it will be successful in
commercializing any of its potential products. To the extent that the Company
enters into co-promotion or other licensing arrangements, any revenues received
by the Company will depend upon the efforts of third parties, and there can be
no assurance that such efforts will be successful.

MANUFACTURING

    CVT does not currently operate manufacturing facilities for clinical or
commercial production of its proposed products. The Company has no experience in
manufacturing, and currently lacks the resources and capability to manufacture
any of its proposed products on a clinical or commercial scale. Accordingly, the
Company is, and will continue to be, dependent on corporate partners, licensees
or other third parties for clinical and commercial scale manufacturing. For
example, Biogen is responsible for the manufacture of CVT-124 to supply clinical
trials. In addition, the Company acquired from Syntex a sufficient quantity of
ranolazine SR tablets to supply the first Phase III trial. The Company has an
agreement with a third party manufacturer for clinical scale production of
ranolazine's active pharmaceutical ingredient sufficient to support the
remainder of the Phase III clinical program, registration and commercialization.
The Company is negotiating with third party manufacturers for clinical scale
production of ranolazine SR tablets sufficient to support the remainder of the
Phase III clinical program, registration and commercialization. The Company does
have experience in the transfer of synthetic technology from discovery to
scale-up manufacturing facilities, having successfully executed technology
transfer for the manufacture of clinical supplies of one orally administered
agent and one intravenously administered agent. There can be no assurance that
the Company will be able to reach or maintain agreements with any third parties
or that such parties will be able to develop adequate manufacturing
capabilities. In addition, prior to approval of an NDA for ranolazine, the
Company will be required to demonstrate to the FDA's satisfaction the
equivalence of the multiple sources of supply used in the Company's clinical
trials.

PATENTS AND PROPRIETARY TECHNOLOGY

    Patents and other proprietary rights are important to the Company's
business. The Company's policy is to file patent applications and to protect
technology, inventions and improvements to inventions that are commercially
important to the development of its business. The Company also relies on trade
secrets, confidentiality agreements and other protective measures to protect its
technology and proposed products. The Company's failure to obtain patent
protection or otherwise protect its proprietary technology or

                                       17
<PAGE>
proposed products may have a material adverse effect on the Company's
competitive position and business prospects.

    The Company owns one United States issued patent related to an inflammatory
factor. The Company also owns five pending patent applications in the United
States relating to the inflammatory factor, the A(1) agonist series of
compounds, CVT-313 and CVT-634, as well as four foreign patent applications with
respect to the inflammatory factor and single patent applications filed pursuant
to the Patent Cooperation Treaty (PCT) with respect to the A(1) agonist series
of compounds, CVT-313 and CVT-634. In addition, the Company has acquired and, in
turn has granted to Biogen, an exclusive license to one United States issued
patent, two United States patent applications and related foreign patent
applications related to CVT-124. The Company also has acquired a license which
is exclusive in certain territories to three United States issued patents, one
United States patent application and related foreign patent applications related
to ranolazine. The patent application process takes several years and entails
considerable expense. There is no assurance that patents will issue from these
applications or, if patents do issue, that the claims allowed will be sufficient
to protect the Company's technology. One of the primary patents relating to
ranolazine will expire in May 2003 unless the Company is granted an extension
based upon delays in the FDA approval process.

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

    Patent litigation is becoming more widespread in the biopharmaceutical
industry. Litigation may be necessary to defend against or assert claims of
infringement, to enforce patents issued to the Company, to protect trade secrets
or know-how owned by the Company, or to determine the scope and validity of the
proprietary rights of third parties. Although no third party has asserted that
the Company is infringing such third party's patent rights or other intellectual
property, there can be no assurance that litigation asserting such claims will
not be initiated, that the Company would prevail in any such litigation, or that
the Company would be able to obtain any necessary licenses on reasonable terms,
if at all. Any such claims against the Company, with or without merit, as well
as claims initiated by the Company against third parties, can be time-consuming
and expensive to defend or prosecute and to resolve. If other companies prepare
and file patent applications in the United States that claim technology also
claimed by the Company, the Company may have to participate in interference
proceedings to determine priority of invention which could result in substantial
cost to the Company even if the outcome is favorable to the Company.

    The Company also relies on trade secrets, confidentiality agreements and
other protective measures to protect its technology and proposed products. There
can be no assurance that third parties will not independently develop equivalent
proprietary information or techniques, will not gain access to the Company's
trade secrets or disclose such technology to the public, or that the Company can
maintain and protect unpatented proprietary technology. The Company typically
requires its employees, consultants, collaborators, advisors and corporate
partners to execute confidentiality agreements upon commencement of employment
or other relationships with the Company. There can be no assurance, however,
that these agreements will provide meaningful protection or adequate remedies
for the Company's technology in the event of unauthorized use or disclosure of
such information, or that the parties to such agreements will not breach such
agreements. See "Risk Factors--Uncertainty of Patent Position and Proprietary
Rights."

                                       18
<PAGE>
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, as amended (the "FDC Act"), and the regulations promulgated
thereunder, and other federal and state statutes and regulations, govern, among
other things, the research, development, testing, manufacture, storage,
recordkeeping, labeling, promotion and marketing and distribution of
pharmaceutical products. Failure to comply with applicable regulatory
requirements may subject a company to administrative or judicially imposed
sanctions such as warning letters, criminal prosecution, injunctions, product
seizure, product recalls, total or partial suspension of production, and FDA
refusal to approve pending NDA applications or NDA supplements to approved
applications.

    The steps ordinarily required before a new pharmaceutical product may be
marketed in the United States include: (i) preclinical laboratory tests, IN VIVO
preclinical studies and formulation studies; (ii) the submission to the FDA of
an IND, which must become effective before clinical testing may commence; (iii)
adequate and well-controlled clinical trials to establish the safety and
effectiveness of the drug for each indication; (iv) the submission of an NDA to
the FDA; and (v) FDA review and approval of the NDA prior to any commercial sale
or shipment of the drug. Preclinical tests include laboratory evaluation of
product chemistry and formulation, as well as animal studies to assess the
potential safety and efficacy of the product. Preclinical tests must be
conducted in compliance with Good Laboratory Practice regulations and compounds
for clinical use must be formulated according to cGMP requirements. The results
of preclinical testing are submitted to the FDA as part of an IND. A 30-day
waiting period after the filing of each IND is required prior to the
commencement of clinical testing in humans. If the FDA has not commented on or
questioned the IND within this 30-day period, clinical studies may begin. If the
FDA has comments or questions, the questions must be answered to the
satisfaction of the FDA before initial clinical testing can begin. In addition,
the FDA may, at any time, impose a clinical hold on ongoing clinical trials. If
the FDA imposes a clinical hold, clinical trials cannot commence or recommence
without FDA authorization and then only under terms authorized by the FDA. In
some instances, the IND application process can result in substantial delay and
expense.

    Clinical trials involve the administration of the investigational new drug
to healthy volunteers or patients under the supervision of a qualified principal
investigator. Clinical trials are conducted in accordance with Good Clinical
Practice, under protocols detailing the objectives of the study, the parameters
to be used in monitoring safety and the effectiveness criteria to be evaluated.
Each protocol must be submitted to the FDA as part of the IND. Further, each
clinical study must be conducted under the auspices of an Institutional Review
Board ("IRB") at the institution at which the study will be conducted. The IRB
will consider, among other things, ethical factors, the safety of human subjects
and the possible liability of the institution. Clinical trials to support NDAs
are typically conducted in three sequential phases, but the phases may overlap.
In Phase I, the initial introduction of the drug into healthy human subjects or
patients, the drug is tested to assess metabolism, pharmacokinetics and
pharmacological actions and safety, including side effects associated with
increasing doses. Phase II usually involves studies in a limited patient
population to (i) determine the efficacy of the drug in specific, targeted
indications, (ii) determine dosage tolerance and optimal dosage and (iii)
identify possible adverse effects and safety risks. If a compound is found to be
effective and to have an acceptable safety profile in Phase II evaluations,
Phase III trials are undertaken to further evaluate clinical efficacy and to
further test for safety within an expanded patient population at geographically
dispersed clinical study sites. There can be no assurance that Phase I, Phase II
or Phase III testing will be completed successfully within any specified time
period, if at all, with respect to any of the Company's products subject to such
testing.

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

                                       19
<PAGE>
pharmacology and manufacture, the cost of all of which is substantial. The FDA
reviews all NDAs submitted before it accepts them for filing and may request
additional information rather than accepting an NDA for filing. In such an
event, the NDA must be resubmitted with the additional information and, again,
is subject to review before filing. Once the submission is accepted for filing,
the FDA begins an in-depth review of the NDA. Under the FDC Act, the FDA has 180
days in which to review the NDA and respond to the applicant. The review process
is often significantly extended by FDA requests for additional information or
clarification regarding information already provided in the submission. The FDA
may refer the application to the appropriate advisory committee, typically a
panel of clinicians, for review, evaluation and a recommendation as to whether
the application should be approved. The FDA is not bound by the recommendation
of an advisory committee. If FDA evaluations of the NDA and the manufacturing
facilities are favorable, the FDA may issue either an approval letter or an
approvable letter, which usually contains a number of conditions that must be
met in order to secure final approval of the NDA. When and if those conditions
have been met to the FDA's satisfaction, the FDA will issue an approval letter,
authorizing commercial marketing of the drug for certain indications. As a
condition of NDA approval, the FDA may require postmarketing testing and
surveillance to monitor the drug's safety or efficacy. If the FDA's evaluation
of the NDA submission or manufacturing facilities is not favorable, the FDA may
refuse to approve the NDA or issue a not approvable letter, outlining the
deficiencies in the submission and often requiring additional testing or
information. Notwithstanding the submission of any requested additional data or
information in response to an approvable or not approvable letter, the FDA
ultimately may decide that the application does not satisfy the regulatory
criteria for approval. Once granted, product approvals may be withdrawn if
compliance with regulatory standards is not maintained or problems occur
following initial marketing.

    On November 11, 1997, Congress passed the Food and Drug Administration
Modernization Act of 1997. This new legislation is intended to speed the
approval of new drugs and medical devices by streamlining FDA's review
procedures to ensure timely review of applications. One of the key provisions of
the legislation reauthorizes FDA's authority to collect user fees for each new
drug application or supplement that is submitted to FDA. For fiscal year 1998,
the application fee for a new drug application will be $250,704; the fee will
increase to $267,606 in fiscal year 2001. Small businesses will be entitled to a
waiver of the application fee for the first application submitted.

    MANUFACTURING.  Each domestic drug manufacturing facility must be registered
with FDA. Domestic drug manufacturing establishments are subject to periodic
inspection by the FDA and must comply with cGMP. Further, the Company or its
third party manufacturer must pass a preapproval inspection of its manufacturing
facilities by the FDA before obtaining marketing approval of any products. To
supply products for use in the United States, foreign manufacturing
establishments must comply with cGMP and are subject to periodic inspection by
the FDA or corresponding regulatory agencies in countries under reciprocal
agreements with the FDA. Drug product manufacturing establishments located in
California must be licensed by the State of California in compliance with local
regulatory requirements, and other states may have comparable regulations. The
Company uses and will continue to use third party manufacturers to produce its
products in clinical and commercial quantities. There can be no guarantee that
future FDA inspections will proceed without any compliance issues requiring the
expenditure of money or other resources.

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

                                       20
<PAGE>
applications are filed. In Europe, marketing authorizations may be submitted at
either 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. The Company will choose the
appropriate route of European regulatory filing to accomplish the most rapid
regulatory approvals. There can be no assurance that the chosen regulatory
strategy will secure regulatory approvals on a timely basis or at all.

    HAZARDOUS MATERIALS.  The Company's research and development processes
involve the controlled use of hazardous materials, chemicals and radioactive
materials and produce waste products. The Company is subject to federal, state
and local laws and regulations governing the use, manufacture, storage, handling
and disposal of such materials and waste products. Although the Company believes
that its safety procedures for handling and disposing of such materials comply
with the standards prescribed by such laws and regulations, the risk of
accidental contamination or injury from these materials cannot be eliminated
completely. In the event of such an accident, the Company could be held liable
for any damages that result and any such liability could exceed the resources of
the Company. Although the Company believes that it is in compliance in all
material respects with applicable environmental laws and regulations, there can
be no assurance that it will not be required to incur significant costs to
comply with environmental laws and regulations in the future, or that the
operations, business or assets of the Company will not be materially adversely
affected by current or future environmental laws or regulations.

COMPETITION

    The pharmaceutical and biopharmaceutical industries are subject to intense
competition and rapid and significant technological change. While several of
CVT's products target diseases for which there are presently no effective
therapies, CVT nevertheless is aware of companies which are developing products
that will compete for the same disease markets. For example, Kyowa Hakko Co.,
Ltd., Fujisawa Pharmaceutical, Japan and Discovery Therapeutics, Inc., are each
developing adenosine A(1) receptor antagonists. In addition, Novartis AG and
GlaxoWellcome PLC both have adenosine A(1) receptor agonists under development.
If regulatory approvals are received, ranolazine may compete with several
classes of existing drugs for the treatment of angina, some of which are
available in generic form, including calcium channel blockers, beta blockers and
nitrates. There are also non-pharmacologic treatments such as coronary artery
bypass grafting ("CABG") and percutaneous transluminal coronary angioplasty
("PTCA"). However, for those patients who do not respond adequately to existing
therapies and remain symptomatic despite maximal treatment with existing
anti-anginal drugs and who are not candidates for CABG or PTCA, there is no
currently effective treatment. In refractory patients who are candidates for
CABG or PTCA, there is no effective pharmacologic treatment available.

    CVT believes that the principal competitive factors in the markets for
ranolazine and CVT-124 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. CVT
believes that it and its collaborative partners are or will be competitive with
respect to these factors. Nonetheless, because the Company's products are still
under development, the relative competitive position of the Company in the
future is difficult to predict.

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

                                       21
<PAGE>
Company will seek to expand its technological capabilities in order to remain
competitive, there can be no assurance that research and development by others
will not render its technology or potential products obsolete or non-competitive
or result in treatments or cures superior to any therapy developed by the
Company, or that therapy developed by the Company will be preferred to any
existing or newly developed technologies.

PRODUCT LIABILITY INSURANCE

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

EMPLOYEES

    As of December 31, 1997, CVT employed 44 individuals full-time, including 16
who hold doctoral degrees. Of the Company's full-time work force, 30 employees
are engaged in or directly support research and development activities and 14
are engaged in business development, finance and administrative activities. The
Company's employees are not represented by a collective bargaining agreement.
The Company believes its relations with its employees are good.

ITEM 2. PROPERTIES

    The Company currently leases a 61,081 square foot building in Palo Alto,
California, of which approximately 33,783 square feet are subleased to a third
party. The initial term of the lease expires in February 2002 with an option to
renew for five years, and the subleases expire in March 1998 and April 1999,
respectively. CVT believes that this facility will be adequate to meet the
Company's needs for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

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

                                       22
<PAGE>
                                    PART II

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

MARKET INFORMATION

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

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

<TABLE>
<CAPTION>
                                                                             HIGH        LOW
                                                                           ---------  ---------
<S>                                                                        <C>        <C>
FISCAL YEAR ENDED DECEMBER 31, 1996
November 19, 1996 to December 31, 1996...................................  $   8.000  $   6.250

FISCAL YEAR ENDED DECEMBER 31, 1997
First Quarter ended March 31, 1997.......................................  $  10.750  $   6.500
Second Quarter ended June 30, 1997.......................................  $   8.875  $   6.875
Third Quarter ended September 30, 1997...................................  $  10.000  $   6.875
Fourth Quarter ended December 31, 1997...................................  $  12.500  $   8.125
</TABLE>

    On March 10, 1998, the closing price for the Company's Common Stock was
$9.625 per share. As of March 10, 1998, the Company had approximately 270
holders of record of its Common Stock.

DIVIDENDS

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

USE OF PROCEEDS

    On November 19, 1996, the Securities and Exchange Commission declared the
Company's Registration Statement (file number 2-12675) effective. The offering
commenced on November 19, 1996 and terminated following the sale of all
securities registered. J.P. Morgan Securities Inc., Invemed Associates, Inc. and
UBS Securities LLC served as the managing underwriters. The Company registered,
for its own account, 1,750,000 shares of Common Stock for an aggregate offering
price of $14,000,000 and sold 1,750,000 shares of Common Stock for an aggregate
sales price of $14,000,000. In connection with the offering, the Company
incurred the following expenses and made direct or indirect payments to others:
$980,000 for underwriting discounts and commissions and $1,050,000 for other
expenses for a total of $2,030,000 in expenses. Following the deduction of such
expenses, the Company received net offering proceeds of $11,970,000. The Company
has used approximately $1,061,000 of the net proceeds for operating activities.
The Company has used the remainder of the net proceeds for temporary
investments, including money market and short- and long-term funds. Such
payments were direct or indirect.

RECENT SALES OF UNREGISTERED SECURITIES

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

    (1)  In October 1997, the Company issued in a private placement 1,397,147
shares of Common Stock to Biotech Target S.A., a wholly-owned subsidiary of BB
Biotech AG, at $8.80 per share. The issuance was

                                       23
<PAGE>
deemed to be exempt from registration under the Securities Act of 1933, as
amended, by virtue of Regulation S promulgated thereunder.

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

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

                                       24
<PAGE>
ITEM 6. SELECTED CONSOLIDATED 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 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        1996        1995        1994        1993
                                                        ----------  ----------  ----------  ----------  ----------
                                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                     <C>         <C>         <C>         <C>         <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
Collaborative research revenue........................  $    2,578  $      250  $   --      $   --      $   --
Operating expenses:
  Research and development............................      10,568       7,141      12,856       8,823       4,731
  General and administrative..........................       4,169       2,917       3,402       2,802         947
                                                        ----------  ----------  ----------  ----------  ----------
Total operating expenses..............................      14,737      10,058      16,258      11,625       5,678
                                                        ----------  ----------  ----------  ----------  ----------
Loss from operations..................................     (12,159)     (9,808)    (16,258)    (11,625)     (5,678)
Interest income (expense), net........................         834        (557)       (466)        258         161
                                                        ----------  ----------  ----------  ----------  ----------
  Net loss............................................  $  (11,325) $  (10,365) $  (16,724) $  (11,367) $   (5,517)
                                                        ----------  ----------  ----------  ----------  ----------
                                                        ----------  ----------  ----------  ----------  ----------
Basic and diluted net loss per share (pro forma in
  1996 and 1995)(1)...................................  $    (1.58) $    (2.77) $    (6.54)
                                                        ----------  ----------  ----------
                                                        ----------  ----------  ----------
Shares used in computing basic and diluted net loss
  per share (pro forma in 1996 and 1995)(1)...........       7,157       3,747       2,556
                                                        ----------  ----------  ----------
                                                        ----------  ----------  ----------
</TABLE>

<TABLE>
<CAPTION>
                                                                               DECEMBER 31,
                                                        ----------------------------------------------------------
                                                           1997        1996        1995        1994        1993
                                                        ----------  ----------  ----------  ----------  ----------
                                                                              (IN THOUSANDS)
<S>                                                     <C>         <C>         <C>         <C>         <C>
CONSOLIDATED BALANCE SHEET DATA
Cash, cash equivalents and short- and long-term
  investments.........................................  $   38,090  $   21,568  $    5,569  $    9,743  $    5,466
Working capital.......................................  $   12,962  $   20,278  $      271  $    7,686  $    5,196
Total assets..........................................  $   42,644  $   26,139  $   11,448  $   16,099  $    7,662
Long-term portion of debt and capital lease
  obligation..........................................  $    5,052  $    5,000  $    3,402  $    2,698  $      745
Accumulated deficit...................................  $  (56,951) $  (45,626) $  (35,261) $  (18,537) $   (7,170)
Total stockholders' equity............................  $   26,557  $   18,676  $    1,804  $   10,561  $    6,363
</TABLE>

------------------------

(1) See Note 1 of Notes to Consolidated Financial Statements for a description
    of the shares used in calculating pro forma basic and diluted net loss per
    share.

                                       25
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

    This Management's Discussion and Analysis of Financial Condition and Results
of Operations and other parts of this report contain forward-looking statements
which involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in the forward-looking statements. Factors
that might cause such a difference include, but are not limited to, those
discussed in "Risk Factors."

OVERVIEW

    CVT is an early stage biopharmaceutical company focused on the application
of molecular cardiology to the discovery, development and commercialization of
novel small molecule drugs for the treatment of chronic cardiovascular disease.
Since its inception in December 1990, substantially all of the Company's
resources have been dedicated to research and development. To date, CVT has not
generated any revenue from product sales and does not expect to generate any
such revenues for several years. As of December 31, 1997, the Company had an
accumulated deficit of approximately $57.0 million. The Company expects its
sources of revenue, if any, for the next several years to consist of payments
under corporate collaborations and interest income. The process of developing
the Company's products will require significant additional research and
development, preclinical testing and clinical trials, as well as regulatory
approval. These activities, together with the Company's general and
administrative expenses, are expected to result in operating losses for the
foreseeable future. The Company will not receive product revenue unless it or
its collaborators complete clinical trials and successfully commercialize one or
more of its products.

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

RESULTS OF OPERATIONS

    YEARS ENDED DECEMBER 31, 1997 AND 1996

    COLLABORATIVE RESEARCH REVENUES.  The Company recognized collaborative
research revenues of $2.6 million for the year ended December 31, 1997, compared
to $250,000 during the year ended December 31, 1996. Collaborative research
revenue for the year ended December 31, 1997 was earned in connection with the
Company's collaboration with Biogen for the development and commercialization of
CVT-124.

    RESEARCH AND DEVELOPMENT EXPENSES.  The Company's research and development
expenses increased to $10.6 million for the year ended December 31, 1997,
compared to $7.1 million for the year ended December 31, 1996. The higher
expenses in 1997 were primarily due to increased activity associated with the
development of ranolazine as well as a $1.0 million milestone payment to Syntex
payable under the original license agreement for ranolazine and the issuance of
shares of the Company's Common Stock to Syntex valued at $544,000 under an
amendment to the license agreement. These expenses were partially offset by a
decrease in the use of outside contract services by the Company. The Company
expects research and development expenses to increase significantly over the
next several years as the Company expands research and product development
efforts. In particular, expenses will likely increase due to the clinical trial
expenses for ranolazine.

                                       26
<PAGE>
    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
increased to $4.2 million for the year ended December 31, 1997, compared to $2.9
million for the year ended December 31, 1996, primarily due to the amortization
of deferred compensation expense, personnel recruiting expenses and new
administrative expenses associated with becoming a public company. The Company
expects general and administrative expenses to increase in the future due to
increases in the Company's research and development activities.

    INTEREST INCOME (EXPENSE), NET.  Interest income (expense), net increased to
$834,000 for the year ended December 31, 1997, compared to $(557,000) for the
year ended December 31, 1996. The increase in 1997 was a result of higher
average investment balances resulting from the proceeds of the Company's initial
public offering completed in November 1996, payments received in connection with
the Company's collaboration and license agreements with Biogen entered into in
March 1997 and proceeds from the private placement of shares of Common Stock
with Biotech Target S.A., a wholly-owned subsidiary of BB Biotech AG of
Switzerland ("BB Biotech"), in October 1997. In contrast, during the year ended
December 31, 1996, the Company had lower average investment balances and
incurred prepayment penalties associated with a restructuring of the Company's
debt. The Company expects that net interest income (expense), will fluctuate
with average investment balances and prevailing interest rates.

    The Company has not generated taxable income to date. At December 31, 1997,
the net operating losses available to offset future taxable income for federal
income tax purposes were approximately $50 million. Because the Company has
experienced ownership changes, future utilization of the carryforwards may be
limited in any one fiscal year pursuant to Internal Revenue Code regulations.
The carryforwards expire at various dates beginning in 2008 through 2012 if not
utilized. As a result of the annual limitation, a portion of these carryforwards
may expire before becoming available to reduce the Company's federal income tax
liabilities.

    YEARS ENDED DECEMBER 31, 1996 AND 1995

    COLLABORATIVE RESEARCH REVENUES.  The Company recognized collaborative
research revenues of $250,000 for the year ended December 31, 1996, due to a
non-refundable, up-front fee earned from a license agreement with Bayer AG.

    RESEARCH AND DEVELOPMENT EXPENSES.  The Company's research and development
expenses decreased to $7.1 million for the year ended December 31, 1996,
compared to $12.9 million for the year ended December 31, 1995. The higher
expenses in 1995 were largely due to higher development expenditures associated
with the CVT-1 hypercholesterolemia program, which was terminated in late 1995
and for which minimal costs were incurred in 1996. In addition, research and
development expenses decreased in 1996 as a result of a decrease in research
personnel and related expenses resulting from a reduction in headcount in
November 1995. This was partially offset by a $750,000 license fee paid in
equity securities to a collaborative partner in March 1996.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
decreased to $2.9 million for the year ended December 31, 1996, compared to $3.4
million for the year ended December 31, 1995, due to decreases in personnel and
related expenses.

    INTEREST INCOME (EXPENSE), NET.  Interest income (expense), net decreased to
$(557,000) for the year ended December 31, 1996, compared to $(466,000) for the
year ended December 31, 1995, as a result of higher loan balances and prepayment
penalties associated with a restructuring of the Company's debt, partially
offset by higher average cash balances.

LIQUIDITY AND CAPITAL RESOURCES

    The Company has financed its operations since inception primarily through
private placements of Preferred and Common Stock, public offerings of Common
Stock, equipment and leasehold improvement

                                       27
<PAGE>
financing, other debt financing and payments under corporate collaborations. In
November 1996, the Company completed an initial public offering and raised net
proceeds of approximately $12.0 million. On March 7, 1997, the Company entered
into two research collaboration and license agreements with Biogen that together
resulted in cash receipts of $16.0 million. In addition, Biogen agreed to make
significant development milestones and equity investments and provide funding
under a general purpose loan facility, all of which are subject to achievement
of certain clinical development and commercialization milestones. Biogen will
also pay royalties from any future product sales. On October 7, 1997, the
Company raised net proceeds of $12.3 million in a private placement of equity
securities with BB Biotech.

    Cash, cash equivalents and short- and long-term investments at December 31,
1997 totaled $38.1 million compared to $21.6 million at December 31, 1996. The
increase in 1997 was due to the receipt of the upfront payment of $16.0 million
associated with the Company's collaborations with Biogen and the private
placement of equity securities with BB Biotech. The Company's funds are
currently invested in short- and long-term, investment grade, interest-bearing
debt obligations. In January 1998, the Company filed a Registration Statement
with the Securities and Exchange Commission in connection with a follow-on
public offering. The total number of shares sold, including exercise of the
underwriters' option to purchase additional shares, was 2,575,000 at a price of
$8.25 per share with net proceeds to the Company of approximately $19,656,000.

    Net cash used in operations for the year ended December 31, 1997 was $3.5
million compared to $8.3 million for the year ended December 31, 1996. The
decrease in cash used in operating activities in 1997 was primarily the result
of deferred revenue of $6.0 million received in conjunction with the upfront
payment under the collaboration with Biogen.

    From inception, through December 31, 1997, the Company had invested
approximately $6.1 million in property and equipment, of which approximately
$4.3 million was financed through equipment and leasehold financings at various
times.

    The Company will require substantial additional funding in order to complete
its research and development activities and commercialize any potential
products. The Company currently estimates that its existing resources and
projected interest income will enable the Company to maintain its current and
planned operations through the third quarter of 1999. However, there can be no
assurance that the Company will not require additional funding prior to such
time.

    The Company's forecast of the period of time through which its financial
resources will be adequate to support its operations is a forward-looking
statement that involves risks and uncertainties, and actual results could vary
as a result of a number of factors, including those described in "Risk
Factors--Need for Additional Future Capital; Uncertainty of Additional Funding"
and elsewhere in this report. The Company's future capital requirements will
depend on many factors, including scientific progress in its research and
development programs, the size and complexity of such programs, the scope and
results of preclinical studies and clinical trials, the ability of the Company
to establish and maintain corporate partnerships, the time and costs involved in
obtaining regulatory approvals, the costs involved in filing, prosecuting and
enforcing patent claims, competing technological and market developments, the
cost of manufacturing preclinical and clinical material and other factors not
within the Company's control. There can be no assurance that such additional
financing to meet the Company's capital requirements will be available on
acceptable terms or at all. Insufficient funds may require the Company to delay,
scale back or eliminate some or all of its research or development programs, to
lose rights under existing licenses or to relinquish greater or all rights to
product candidates at an earlier stage of development or on less favorable terms
than the Company would otherwise choose. If additional funds are raised by
issuing equity securities, substantial dilution to existing stockholders may
result.

                                       28
<PAGE>
YEAR 2000

    Some of the Company's computer programs may have been written using two
digits rather than four to define the applicable year. As a result, those
computer programs may have time-sensitive software that recognize a date using
"00" as the year 1900 rather than the Year 2000. This could cause a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions or engage in normal
business activities.

    The Company is in the process of completing an assessment to determine if it
will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter. The total cost for the Year 2000 assessment project and modification
or replacement project, if necessary, is estimated not to have a material
adverse affect on future financial or operating results of the Company. The
projects are estimated to be completed no later than December 31, 1998, which is
prior to any anticipated impact on its operating systems. The Company believes
that with modifications to existing software and conversions to new software, if
necessary, the Year 2000 issue will not pose significant operational problems
for the computer systems. However, if such modifications and conversions are not
made, or are not completed timely, the Year 2000 issue could have a material
impact on the operations of the Company.

    The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources and other factors. However,
there can be no assurance that these estimates will be achieved and actual
results could differ materially from those anticipated. Specific factors that
might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

                                       29
<PAGE>
                                    PART III

    The information required in Part III of this report is incorporated by
reference to the Registrant's Proxy Statement in connection with the
Registrant's 1998 Annual Meeting to be filed in accordance with Regulation 14A
under the Securities Exchange Act of 1934, as amended.

                                       30
<PAGE>
                                    PART IV

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

    (a)(1) Index to Consolidated 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.

<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                -----
<S>                                                                                                          <C>
Report of Ernst & Young LLP, Independent Auditors..........................................................         F-1
Consolidated Balance Sheets................................................................................         F-2
Consolidated Statements of Operations......................................................................         F-3
Consolidated Statement of Stockholders' Equity.............................................................         F-4
Consolidated Statements of Cash Flows......................................................................         F-6
Notes to Consolidated Financial Statements.................................................................         F-7
</TABLE>

    (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:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------
<C>    <S>
  3.1  Amended and Restated Certificate of Incorporation of the Registrant. (1)

  3.2  Restated Bylaws of the Registrant. (1)

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

  4.2  Specimen Common Stock Certificate. (1)

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

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

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

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

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

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

 10.7* Employee Stock Purchase Plan. (1)

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

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

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

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

                                       31
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------
<C>    <S>
 10.12* Amended and Restated Promissory Note between Registrant and George F.
         Schreiner, M.D., Ph.D., effective as of September 23, 1996. (1)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       32
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------
<C>    <S>
 10.37 Security Agreement between Registrant and Hambrecht & Quist Guaranty
         Finance, LLC, dated September 27, 1996. (1)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 23.1  Consent of Ernst & Young LLP, Independent Auditors.

 24.1  Power of Attorney (included on page 34).

 27.1  Financial Data Schedule for Year Ended December 31, 1997.

 27.2  Restated Financial Data Schedule for Year Ended December 31, 1996.
</TABLE>

------------------------------

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

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

                                       33
<PAGE>
(3) Incorporated by reference to Exhibits filed with the Registrant's Quarterly
    Report on Form 10-Q, for the First Quarter 1997.

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

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

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

 *  Management contract or compensatory plan or arrangement.

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

    (b) The Registrant filed no reports on Form 8-K during the last quarter of
the fiscal year ended December 31, 1996.

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

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

                                       34
<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,
1997.

<TABLE>
<S>                             <C>  <C>
                                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
</TABLE>

                               POWER OF ATTORNEY

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

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

          SIGNATURE                       TITLE                    DATE
------------------------------  --------------------------  -------------------

  /s/ LOUIS G. LANGE, M.D.,     Chairman of the Board &
            PH.D.                 Chief Executive Officer
------------------------------    (Principal Executive        March 27, 1998
 Louis G. Lange, M.D., Ph.D.      Officer)

   /s/ DANIEL K. SPIEGELMAN     Chief Financial Officer
------------------------------    (Principal Financial and    March 27, 1998
     Daniel K. Spiegelman         Accounting Officer)

    /s/ SAMUEL D. COLELLA
------------------------------  Director                      March 27, 1998
      Samuel D. Colella

    /s/ THOMAS L. GUTSHALL
------------------------------  Director                      March 27, 1998
      Thomas L. Gutshall

 /s/ BARBARA J. MCNEIL, M.D.,
            PH.D.
------------------------------  Director                      March 27, 1998
Barbara J. McNeil, M.D., Ph.D.

 /s/ COSTA G. SEVASTOPOULOS,
            PH.D.
------------------------------  Director                      March 27, 1998
Costa G. Sevastopoulos, Ph.D.

  /s/ J. LEIGHTON READ, M.D.
------------------------------  Director                      March 27, 1998
    J. Leighton Read, M.D.

       /s/ ISAAC STEIN
------------------------------  Director                      March 27, 1998
         Isaac Stein

     /s/ DAVID P. HOLVECK
------------------------------  Director                      March 27, 1998
       David P. Holveck

                                       34
<PAGE>
               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

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

    We have audited the accompanying consolidated balance sheets of CV
Therapeutics, Inc. as of December 31, 1997 and 1996, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
CV Therapeutics, Inc. at December 31, 1997 and 1996, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1997 in conformity with generally accepted accounting
principles.

                                          /s/ ERNST & YOUNG LLP

Palo Alto, California
February 27, 1998

                                      F-1
<PAGE>
                             CV THERAPEUTICS, INC.
                          CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                                 DECEMBER 31,
                                                                                            ----------------------
<S>                                                                                         <C>         <C>
                                                                                               1997        1996
                                                                                            ----------  ----------
                                                      ASSETS
Current assets:
  Cash and cash equivalents...............................................................  $    6,286  $   19,575
  Short-term investments..................................................................      11,862       1,993
  Other current assets....................................................................       1,249         454
                                                                                            ----------  ----------
Total current assets......................................................................      19,397      22,022
Long-term investments.....................................................................      19,942      --
Notes receivable from related parties.....................................................         413         475
Property and equipment, net...............................................................       2,277       3,072
Intangible and other assets...............................................................         615         570
                                                                                            ----------  ----------
                                                                                            $   42,644  $   26,139
                                                                                            ----------  ----------
                                                                                            ----------  ----------

                                       LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable........................................................................  $      683  $      405
  Accrued liabilities.....................................................................       1,572       1,304
  Current portion of long-term debt.......................................................       1,500          15
  Current portion of capital lease obligation.............................................         680          20
  Deferred revenue........................................................................       2,000      --
                                                                                            ----------  ----------
Total current liabilities.................................................................       6,435       1,744
Long-term debt............................................................................       4,500       5,000
Capital lease obligation..................................................................         552      --
Deferred revenue..........................................................................       4,009      --
Other liabilities.........................................................................         591         719
Commitments
Stockholders' equity:
  Preferred Stock, $0.001 par value, 5,000,000 shares authorized, none issued and
    outstanding...........................................................................      --          --
  Common Stock, $0.001 par value, 30,000,000 shares authorized, 8,458,063 and 6,184,771
    shares issued and outstanding at December 31, 1997 and 1996, respectively; at amounts
    paid in...............................................................................      84,037      65,414
  Warrants to purchase Common Stock.......................................................       1,225       1,225
  Notes receivable issued for stock.......................................................        (108)       (171)
  Deferred compensation...................................................................      (1,649)     (2,166)
  Unrealized gain on investments..........................................................           3      --
  Accumulated deficit.....................................................................     (56,951)    (45,626)
                                                                                            ----------  ----------
Total stockholders' equity................................................................      26,557      18,676
                                                                                            ----------  ----------
                                                                                            $   42,644  $   26,139
                                                                                            ----------  ----------
                                                                                            ----------  ----------
</TABLE>

                            See accompanying notes.

                                      F-2
<PAGE>
                             CV THERAPEUTICS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED DECEMBER 31,
                                                                                ----------------------------------
<S>                                                                             <C>         <C>         <C>
                                                                                   1997        1996        1995
                                                                                ----------  ----------  ----------
Revenues:
  Collaborative research......................................................  $    2,578  $      250  $   --
Operating expenses:
  Research and development....................................................      10,568       7,141      12,856
  General and administrative..................................................       4,169       2,917       3,402
                                                                                ----------  ----------  ----------
Total operating expenses......................................................      14,737      10,058      16,258
Loss from operations..........................................................     (12,159)     (9,808)    (16,258)
Interest income...............................................................       1,760         587         416
Interest and other expense....................................................        (926)     (1,144)       (882)
                                                                                ----------  ----------  ----------
Net loss......................................................................  $  (11,325) $  (10,365) $  (16,724)
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
Basic and diluted net loss per share (pro forma in 1996 and 1995).............  $    (1.58) $    (2.77) $    (6.54)
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
Shares used in computing basic and diluted net loss per share (pro forma in
  1996 and 1995)..............................................................       7,157       3,747       2,556
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
</TABLE>

                            See accompanying notes.

                                      F-3
<PAGE>
                             CV THERAPEUTICS, INC.

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                  YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                CONVERTIBLE
                                                              PREFERRED STOCK          COMMON STOCK        WARRANTS TO
                                                           ---------------------  ----------------------    PURCHASE
                                                             SHARES     AMOUNT     SHARES      AMOUNT     COMMON STOCK
                                                           ----------  ---------  ---------  -----------  -------------
<S>                                                        <C>         <C>        <C>        <C>          <C>
Balances at December 31, 1994............................  21,549,445  $  28,591    254,197   $      37     $     495
Issuance of units consisting of one share of Series E
  Preferred Stock and one warrant to purchase half of one
  share of Series E Preferred Stock at $2.00 per share,
  net of issuance costs of $46...........................   3,921,600      7,797     --          --            --
Issuance of warrant to purchase 25,000 units consisting
  of one share of Series E Preferred Stock and one
  warrant to purchase half of one share of Series E
  Preferred Stock at $2.00 per share at $0.05 per unit...      --         --         --          --                49
Issuance of Common Stock, net of repurchases.............      --         --        113,884         221        --
Notes receivable issued to officers for exercises of
  certain stock options..................................      --         --         --          --            --
Net loss.................................................      --         --         --          --            --
                                                           ----------  ---------  ---------  -----------       ------
Balances at December 31, 1995............................  25,471,045     36,388    368,081         258           544
Issuance of units consisting of one share of Series E
  Preferred Stock and one warrant to purchase half of one
  share of Series E Preferred Stock at $2.00 per share...     375,000        750     --          --            --
Issuance of units consisting of one share of Series G
  Preferred Stock and one warrant to purchase 0.15 of one
  share of Common Stock at $20.00 per share, net of
  issuance costs of $80..................................   6,535,970     12,992     --          --            --
Issuance of Common Stock, net of repurchases.............      --         --      2,578,489      12,704        --
Convertible Preferred Stock converted to Common Stock
  upon the initial public offering.......................  (32,382,015)   (50,130) 3,238,201     50,130        --
Issuance of warrants.....................................      --         --         --          --               681
Notes receivable from officers for exercise of certain
  stock options..........................................      --         --         --          --            --
Compensation related to certain stock options............      --         --         --           2,322        --
Amortization of deferred compensation....................      --         --         --          --            --
Net loss.................................................      --         --         --          --            --
                                                           ----------  ---------  ---------  -----------       ------
Balances at December 31, 1996............................      --         --      6,184,771      65,414         1,225
Issuance of Common Stock, net of repurchases.............      --         --      2,273,292      18,276        --
Unrealized gain on investments...........................      --         --         --          --            --
Compensation expense related to certain stock options....      --         --         --              51        --
Reduction of initial public offering issuance costs......      --         --         --              58        --
Deferred compensation related to grants of certain non-
  qualified stock options................................      --         --         --             564        --
Repayment of notes receivable for exercise of certain
  stock options..........................................      --         --         --          --            --
Amortization and reduction of deferred compensation......      --         --         --            (326)       --
Net loss.................................................      --         --         --          --            --
                                                           ----------  ---------  ---------  -----------       ------
Balances at December 31, 1997............................      --      $  --      8,458,063   $  84,037     $   1,225
                                                           ----------  ---------  ---------  -----------       ------
                                                           ----------  ---------  ---------  -----------       ------
</TABLE>

                            See accompanying notes.

                                      F-4
<PAGE>
                             CV THERAPEUTICS, INC.

           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (CONTINUED)

                  YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                          NOTES                                                           TOTAL
                                                     RECEIVABLE FROM     DEFERRED      UNREALIZED GAIN  ACCUMULATED   STOCKHOLDERS'
                                                        OFFICERS       COMPENSATION    ON INVESTMENTS     DEFICIT        EQUITY
                                                     ---------------  ---------------  ---------------  ------------  -------------
<S>                                                  <C>              <C>              <C>              <C>           <C>
Balances at December 31, 1994......................     $     (25)       $  --            $  --          $  (18,537)    $  10,561
Issuance of units consisting of one share of Series
  E Preferred Stock and one warrant to purchase
  half of one share of Series E preferred Stock at
  $2.00 per share, net of issuance costs of $46....        --               --               --              --             7,797
Issuance of warrant to purchase 25,000 units
  consisting of one share of Series E Preferred
  Stock and one warrant to purchase half of one
  share of Series E Preferred Stock at $2.00 per
  share at $0.05 per unit..........................        --               --               --              --                49
Issuance of Common Stock, net of repurchases.......        --               --               --              --               221
Notes receivable issued to officers for exercises
  of certain stock options.........................          (100)          --               --              --              (100)
Net loss...........................................        --               --               --             (16,724)      (16,724)
                                                            -----          -------            -----     ------------  -------------
Balances at December 31, 1995......................          (125)          --               --             (35,261)        1,804
Issuance of units consisting of one share of Series
  E Preferred Stock and one warrant to purchase
  half of one share of Series E Preferred Stock at
  $2.00 per share..................................        --               --               --              --               750
Issuance of units consisting of one share of Series
  G Preferred Stock and one warrant to purchase
  0.15 of one share of Common Stock at $20.00 per
  share, net of issuance costs of $80..............        --               --               --              --            12,992
Issuance of Common Stock, net of repurchases.......        --               --               --              --            12,704
Convertible Preferred Stock converted to Common
  Stock upon the initial public offering...........        --               --               --              --            --
Issuance of warrants...............................        --               --               --              --               681
Notes receivable from officers for exercise of
  certain stock options............................           (46)          --               --              --               (46)
Deferred compensation related to certain stock
  options..........................................        --               (2,322)          --              --            --
Amortization of deferred compensation..............        --                  156           --              --               156
Net loss...........................................        --               --               --             (10,365)      (10,365)
                                                            -----          -------            -----     ------------  -------------
Balances at December 31, 1996......................          (171)          (2,166)          --             (45,626)       18,676
Issuance of Common Stock, net of repurchases.......        --               --               --              --            18,276
Unrealized gain on investments.....................        --               --                    3          --                 3
Compensation expense related to certain stock
  options..........................................        --               --               --              --                51
Reduction of initial public offering issuance
  costs............................................        --               --               --              --                58
Deferred compensation related to grants of certain
  non-qualified stock options......................        --                 (564)          --              --            --
Repayment of notes receivable for exercise of
  certain stock options............................            63           --               --              --                63
Amortization and reduction of deferred
  compensation.....................................        --                1,081           --              --               755
Net loss...........................................        --               --               --             (11,325)      (11,325)
                                                            -----          -------            -----     ------------  -------------
Balances at December 31, 1997......................     $    (108)       $  (1,649)       $       3      $  (56,951)    $  26,557
                                                            -----          -------            -----     ------------  -------------
                                                            -----          -------            -----     ------------  -------------
</TABLE>

                                      F-5
<PAGE>
                             CV THERAPEUTICS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED DECEMBER 31,
                                                                                ----------------------------------
<S>                                                                             <C>         <C>         <C>
                                                                                   1997        1996        1995
                                                                                ----------  ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss......................................................................  $  (11,325) $  (10,365) $  (16,724)
Adjustments to reconcile net loss to net cash used in operating activities:
  Amortization of deferred compensation.......................................         755         156      --
  Depreciation and amortization...............................................       1,101       1,127       1,102
  Warrant issued under capital lease..........................................      --             160      --
  Forgiveness of notes receivable.............................................      --          --              25
  Issuance of stock warrant for legal services received.......................      --          --              49
  Issuance of capital stock and warrants for payment of license fees..........         544         750      --
  Change in assets and liabilities:
    Other current assets......................................................        (795)        556          45
    Intangible and other assets...............................................        (208)       (461)         24
    Accounts payable..........................................................         278      --             200
    Accrued liabilities.......................................................         140        (249)      1,024
    Deferred revenue..........................................................       6,009      --          --
                                                                                ----------  ----------  ----------
Net cash used in operating activities.........................................      (3,501)     (8,326)    (14,255)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short-term investments............................................     (24,475)     (1,993)     (1,202)
Purchase of long-term investments.............................................     (19,942)     --          --
Maturity of short-term investments............................................      14,609      --           7,203
Capital expenditures..........................................................        (143)        (64)       (719)
Notes receivable from officers and employees..................................         125         104      --
                                                                                ----------  ----------  ----------
Net cash provided by (used in) investing activities...........................     (29,826)     (1,953)      5,282
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of capital lease obligations.........................................        (788)       (356)       (186)
Borrowings under long-term debt...............................................       3,000       5,000       4,148
Repayments of long-term debt..................................................         (15)     (6,576)     (1,080)
Proceeds from issuance of Common Stock (and bridge loans subsequently
  converted into Common Stock), net of repurchase.............................      17,841      12,346         121
Proceeds from issuance of warrant.............................................      --             879      --
Proceeds from issuance of Convertible Preferred Stock.........................      --          12,992       7,797
                                                                                ----------  ----------  ----------
Net cash provided by financing activities.....................................      20,038      24,285      10,800
                                                                                ----------  ----------  ----------
Net (decrease) increase in cash and cash equivalents..........................     (13,289)     14,006       1,827
Cash and cash equivalents at beginning of year................................      19,575       5,569       3,742
                                                                                ----------  ----------  ----------
Cash and cash equivalents at end of year......................................  $    6,286  $   19,575  $    5,569
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest........................................................  $      647  $      912  $      883
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Notes receivable from officers in connection with exercise of certain stock
  options.....................................................................  $      108  $      171  $      100
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
Issuance of warrants in connection with debt financing........................  $   --      $      681  $   --
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
</TABLE>

                            See accompanying notes.

                                      F-6
<PAGE>
                             CV THERAPEUTICS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    THE COMPANY

    CV Therapeutics, Inc. ("CVT" or the "Company") is a biopharmaceutical
company focused on the application of molecular cardiology to the discovery,
development and commercialization of novel small molecule drugs for the
treatment of cardiovascular disease. Since its inception in December 1990,
substantially all of the Company's resources have been dedicated to research and
development. Prior to 1997 the Company had been in the development stage.

    PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, CV Therapeutics International, which was
incorporated in December 1993 in the Cayman Islands. 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. Certain
prior period amounts may have been adjusted for consistency and presentation
purposes.

    RESEARCH AND DEVELOPMENT

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

    CASH EQUIVALENTS AND INVESTMENTS

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

    Management determines the appropriate classification of investment
securities at the time of purchase and reaffirms such designation as of each
balance sheet date. At December 31, 1997 and 1996, all investment securities are
designated as available-for-sale. Available-for-sale securities are carried at
fair value, with the unrealized gains and losses reported in stockholders'
equity. The amortized cost of debt securities in this category is adjusted for
amortization of premiums and accretion of discounts to maturity. Such
amortization is included in interest income. The cost of securities sold is
based on the specific identification method. Realized gains and losses on
available-for-sale securities are included in the statement of operations. There
have been no gains or losses through December 31, 1997.

    DEPRECIATION AND AMORTIZATION

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

                                      F-7
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    REVENUE RECOGNITION

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

    NET LOSS PER SHARE

    Effective December 31, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" ("SFAS 128"). SFAS 128
requires the presentation of basic earnings (loss) per share and diluted
earnings per share, if more dilutive, for all periods presented.

    In accordance with SFAS 128, basic net loss per share has been computed
using the weighted average number of shares of Common Stock outstanding during
the period. The Company also adopted the provisions of Securities and Exchange
Commission Staff Bulletin No. 98, which resulted in the removal of certain
shares which had been included in the calculation in the periods prior to the
Company's initial public offering. Diluted net loss per share has not been
presented as, given the Company's net loss position, the result would be
anti-dilutive.

    Pro forma basic and diluted net loss per share as presented in the
Statements of Operations for 1995 and 1996 has been computed as described above
and also gives effect to the conversion of the Convertible Preferred Stock that
automatically converted upon completion of the Company's initial public offering
(using as-if converted method) from the original date of issuance.

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

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED DECEMBER 31,
                                                                                ----------------------------------
<S>                                                                             <C>         <C>         <C>
                                                                                   1997        1996        1995
                                                                                ----------  ----------  ----------
                                                                                 (IN THOUSANDS, EXCEPT PER SHARE
                                                                                             AMOUNTS)
Net loss......................................................................  $  (11,325) $  (10,365) $  (16,724)
Weighted average shares of Common Stock outstanding...........................       7,157       1,054         335
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
Basic and diluted net loss per share..........................................  $    (1.58) $    (9.83) $   (49.92)
                                                                                ----------  ----------  ----------
                                                                                ----------  ----------  ----------
Pro forma:
Weighted average shares of Common Stock outstanding...........................                   1,054         335
Adjustment to reflect the effect of assumed conversion of Preferred Stock to
  Common Stock as of date of issuance.........................................                   2,693       2,221
                                                                                            ----------  ----------
Shares used in calculating pro forma basic and diluted net loss per share.....                   3,747       2,556
                                                                                            ----------  ----------
                                                                                            ----------  ----------
Pro forma basic and diluted net loss per share................................              $    (2.77) $    (6.54)
                                                                                            ----------  ----------
                                                                                            ----------  ----------
</TABLE>

    Had the Company been in a net income position, diluted earnings per share
would have been presented and would have included the shares used in computation
of basic net loss per share as well as an additional 852,000 and 1,305,000
shares for the years ended December 31, 1996 and 1995 respectively,

                                      F-8
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
relating to outstanding options and warrants (prior to the application of the
treasury stock method) and stock subject to repurchase.

    STOCK-BASED COMPENSATION

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

    NEW ACCOUNTING PRONOUNCEMENTS

    In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income ("SFAS 130"), which establishes standards for reporting and
display of income and its components (revenue, expenses, gains, and losses) in a
full set of general-purpose financial statements. SFAS 130 is effective January
1, 1998 and is not expected to have a material impact on the Company's results
of operations, cash flows or financial position.

    In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information" ("SFAS 131"), which changes the way public
companies report information about operating segments. The Company does not
expect SFAS 131 to have a material impact on the Company's results of
operations, cash flows or financial position.

2. LICENSE AND COLLABORATION AGREEMENTS

    UNIVERSITY OF FLORIDA RESEARCH FOUNDATION, INC.

    In June 1994, the Company entered into a license agreement with the
University of Florida Research Foundation, Inc. ("UFRFI") under which the
Company received exclusive worldwide rights to develop adenosine A(1) receptor
antagonists for the detection, prevention and treatment of human and animal
diseases. In consideration for the license, the Company paid UFRFI an initial
license fee and is obligated to pay royalties based on net sales of products,
which utilize the licensed technology. Pursuant to the agreement, the Company
must exercise commercially reasonable efforts to develop and commercialize one
or more products covered by the licensed technology and is obligated to meet
milestones in completing certain preclinical work. In the event the Company
fails to reach those milestones, UFRFI may convert the exclusive license into a
non-exclusive license. As part of the license agreement with UFRFI, the Company
entered into a research agreement with the University of Florida.

    SYNTEX (U.S.A.) INC.

    In March 1996, the Company entered into a license agreement with Syntex
(U.S.A.) Inc. ("Syntex"), which is an indirect subsidiary of Roche Holding
Limited, for United States and foreign patent rights to a compound having the
generic name of ranolazine for products treating angina and certain other
cardiovascular indications. Pursuant to the agreement, Syntex provided certain
quantities of the compound to the Company. The license agreement is exclusive
and worldwide except for certain countries in Asia. As consideration for the
license agreement, the Company issued 37,500 shares of Common Stock and a five
year warrant to purchase 18,750 shares of Common Stock at $20.00 per share and
recognized research and development expenses of $750,000. In addition, the
Company is obligated to make payments on the achievement of certain development
milestones and to make royalty payments based on net sales of

                                      F-9
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. LICENSE AND COLLABORATION AGREEMENTS (CONTINUED)
products which utilize the licensed technology. The Company is required to use
commercially reasonable efforts to develop the compound for angina within
certain milestone guidelines. The license agreement also sets milestones within
which the Company must launch products in each country covered by the license or
lose exclusivity in such territories. The Company paid $1.5 million to Syntex in
1997 in a combination of cash and Common Stock and will owe an additional
milestone payment upon FDA approval of an NDA for ranolazine.

    BIOGEN

    In March 1997, the Company entered into two research collaboration and
license agreements ("the Biogen Agreements"), one with Biogen, Inc. ("Biogen")
which covers the Americas and the other with a wholly-owned subsidiary of
Biogen, Biotech Manufacturing Limited ("Biotech Manufacturing" and together with
Biogen, the "Biogen Entities"), which covers the rest of the world. The Biogen
Agreements grant the Biogen Entities the exclusive worldwide right to develop
and commercialize CVT-124 for all indications. In exchange, the Company received
up-front payments of $16.0 million. Of this amount $0.8 million was recognized
as revenue immediately, $7.0 million was deferred and will be recognized as
revenue as Biogen achieves specific milestones and the Company fulfills its
research obligations as identified in the Biogen Agreements, $5.2 million was
for the purchase of 669,857 shares of the Company's Common Stock and $3.0
million was funding under a credit facility. Of the $7.0 million of deferred
revenue, $1.8 million represents a premium over the $5.2 million market value
that was paid for the 669,857 shares of the Company's Common Stock.
Approximately $1.0 million of the deferred revenue was recognized in 1997 which
approximated costs for the research services. In Feburary 1998, CVT terminated
the research component of the Biogen Agreements and, as a result, approximately
$4 million of deferred revenue will be recognized in the first quarter of 1998.
Under the Biogen Agreements, the Company may receive milestone payments, equity
investments, and access to a general purpose loan facility based on achievements
of certain development milestones. In addition, the Company will receive
royalties from any future product sales. The Company is obligated to repay the
current outstanding principal portion of the credit facility, which bears
interest on the outstanding principal at a rate equal to prime plus one percent
(1%) (9.5% at December 31, 1997), by February 2005.

                                      F-10
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. INVESTMENTS

    Following is a summary of available-for-sale securities at fair value. Fair
value is based on quoted market prices for these investments.
<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                                          --------------------
<S>                                                                       <C>        <C>
                                                                            1997       1996
                                                                          ---------  ---------

<CAPTION>
                                                                             (IN THOUSANDS)
<S>                                                                       <C>        <C>
Cash equivalents
  Money market funds....................................................  $   3,353  $  18,358
  Commercial paper......................................................        998        990
  Corporate bonds.......................................................      1,900     --
                                                                          ---------  ---------
                                                                          $   6,251  $  19,348
                                                                          ---------  ---------
                                                                          ---------  ---------
Short-term investments
  US Government securities..............................................  $   1,000  $   1,993
  Certificates of deposit...............................................      1,000     --
  Corporate bonds.......................................................      9,862     --
                                                                          ---------  ---------
                                                                          $  11,862  $   1,993
                                                                          ---------  ---------
                                                                          ---------  ---------
Long-term investments
  US Government securities..............................................  $   1,000  $  --
  Corporate bonds.......................................................     18,942     --
                                                                          ---------  ---------
                                                                          $  19,942  $  --
                                                                          ---------  ---------
                                                                          ---------  ---------
</TABLE>

    As of December 31, 1997 and 1996, the difference between the fair value and
the amortized cost of available-for-sale securities was insignificant. As of
December 31, 1997 the average contractual maturity was approximately seven
months, with no single investment's maturity exceeding 17 months.

4. PROPERTY AND EQUIPMENT

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

<TABLE>
<CAPTION>
                                                                               DECEMBER 31,
                                                                           --------------------
                                                                             1997       1996
                                                                           ---------  ---------
                                                                              (IN THOUSANDS)
<S>                                                                        <C>        <C>
Machinery and equipment..................................................  $   2,556  $   2,415
Furniture and fixtures...................................................        573        570
Leasehold improvements...................................................      2,997      3,063
                                                                           ---------  ---------
                                                                               6,126      6,048
Less accumulated depreciation and amortization...........................     (3,849)    (2,976)
                                                                           ---------  ---------
                                                                           $   2,277  $   3,072
                                                                           ---------  ---------
                                                                           ---------  ---------
</TABLE>

    Property and equipment include $4,327,000 and $73,000 recorded under capital
leases at December 31, 1997 and 1996, respectively. Accumulated amortization
related to leased assets totaled $2,892,000 and $63,000 at December 31, 1997 and
1996, respectively.

                                      F-11
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM DEBT

    Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                DECEMBER 31,
                                                                            --------------------
                                                                              1997       1996
                                                                            ---------  ---------
                                                                               (IN THOUSANDS)
<S>                                                                         <C>        <C>
Corporate loan agreement at prime plus 1.0%, principal payments in equal
  installments monthly beginning March 10, 2000 through February 10, 2005.
  Interest due annually on anniversary date of the loan agreement.........  $   3,000  $  --
Corporate loan at 9.0%, principal payments in equal installments monthly
  beginning April 1, 1998 through September 1, 1999. Interest due monthly,
  subject to the Company's rights of payment deferral.....................      3,000      3,000
Corporate loan at 9.0%....................................................     --          2,000
Other.....................................................................     --             15
                                                                            ---------  ---------
                                                                                6,000      5,015
Less current portion......................................................     (1,500)       (15)
                                                                            ---------  ---------
Long-term portion.........................................................  $   4,500  $   5,000
                                                                            ---------  ---------
                                                                            ---------  ---------
</TABLE>

    The carrying value of the Company's loans approximates fair value at
December 31, 1997 and 1996. The fair value of the Company's loans was estimated
using discounted cash flow analysis, based on the incremental borrowing rates
currently available to the Company for borrowings with similar terms and
maturity.

    On March 7, 1997, the Company entered into an unsecured loan agreement with
Biotech Manufacturing in association with the Biogen Agreements (see Note 2).
Under the terms of the Biotech Manufacturing loan agreement, Biotech
Manufacturing shall make available to CVT for general purposes an amount not to
exceed $12.0 million. Upon the effective date of the Biogen Agreements, the
Company drew down $3.0 million of the loan. Additional funding under the terms
of the loan is subject to achievement of certain clinical developments and
commercialization milestones. The Company is obligated to repay the current
outstanding principal portion of this credit facility, which bears interest on
the outstanding principal at a rate equal to prime plus one percent (1%) (9.5%
at December 31. 1997), by February 2005.

    In September 1996, the Company completed a refinancing of its existing debt
obligations with $5.0 million of debt financing from entities associated with
Hambrecht & Quist Group ("H&Q Debt Financings"). The H&Q Debt Financings consist
of a $3.0 million term loan which bears interest at the rate of 9.0% per annum,
secured by all of the assets of the Company, and has a final maturity in
September 1999, and a $2.0 million term loan, which bore interest at 9.0% per
annum and was due January 1, 1997. On January 1, 1997, the Company converted the
$2.0 million term loan from Hambrecht & Quist Group to an equipment lease, which
has a final maturity in September 1999 (see Note 6).

6. LEASES

    The Company leases certain equipment and furniture under noncancelable
capital leases. The Company leases its facilities under noncancelable operating
leases. The facilities lease expires February 2002 and includes an option to
renew the lease for an additional five years. In November 1995 and

                                      F-12
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LEASES (CONTINUED)
April 1997, the Company entered into two noncancelable sublease agreements
whereby it leased excess space to a separate company, which sublease agreements
will expire in March 1998 and April 1999 respectively. Aggregate future minimum
rentals to be received by the Company as of December 31, 1997 totaled $831,000.

    Following is a schedule of future minimum lease payments at December 31,
1997, net of sublease rentals:

<TABLE>
<CAPTION>
                                                                            OPERATING    CAPITAL
                                                                             LEASES      LEASES
                                                                           -----------  ---------
                                                                               (IN THOUSANDS)
<S>                                                                        <C>          <C>
Year ending December 31,
  1998...................................................................   $   1,125   $     797
  1999...................................................................       1,244         598
  2000...................................................................       1,254      --
  2001...................................................................       1,284      --
  2002...................................................................         215      --
                                                                           -----------  ---------
Total minimum payments...................................................   $   5,122   $   1,395
                                                                           -----------
                                                                           -----------
Less amount representing interest........................................                    (163)
                                                                                        ---------
Present value of future lease payments...................................                   1,232
Less current portion.....................................................                    (680)
                                                                                        ---------
Long-term portion........................................................               $     552
                                                                                        ---------
                                                                                        ---------
</TABLE>

    Rent expense, net of sublease rentals (in 1997 and 1996), for the years
ended December 31, 1997, 1996, and 1995 was approximately $339,000, $451,000 and
$870,000, respectively.

7. RELATED PARTY TRANSACTIONS

    From 1992 through 1997, the Company issued loans to certain of the Company's
officers and employees related to relocation, purchases of stock and other
purposes of which loans aggregating $521,000 and $646,000 were outstanding at
December 31, 1997 and 1996, respectively. These loans bear interest at 5.68% to
6.53% per annum. The amounts are repayable on various dates through June 8,
2005. As of December 31, 1997 and 1996, loans for $108,000 and $171,000 related
to the purchase of Common Stock have been included in stockholders' equity. The
Company forgave $109,000 of accrued interest in the year ended December 31, 1996
on several of these notes. The forgiveness was accounted for as compensation
expense to the related employees in the period in which the interest was deemed
to have been forgiven.

8. STOCKHOLDERS' EQUITY

    REVERSE STOCK SPLIT

    In September 1996, the board of directors of the Company authorized a
1-for-10 reverse stock split, in which ten shares of Common Stock were exchanged
for one share of Common Stock. The stock split was effected following
stockholder approval on October 29, 1996. As of the closing of its initial
public offering in November 1996, the Company is authorized to issue 5,000,000
shares of $0.001 par value Preferred

                                      F-13
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)
Stock and 30,000,000 shares of $0.001 par value Common Stock. All par value,
share and per share amounts, as well as the dividend and liquidation preferences
for Preferred Stock, included in the accompanying financial statements have been
retroactively adjusted to reflect the reverse stock split.

    EMPLOYEE STOCK PURCHASE PLAN

    In September 1996, the board of directors adopted the Employee Stock
Purchase Plan (the "Purchase Plan") covering an aggregate of 150,000 shares of
the Company's Common Stock. The Purchase Plan is designed to allow eligible
employees of the Company or an affiliate of the Company to purchase shares of
the Company's Common Stock at quarterly intervals through their periodic payroll
deductions, which may not exceed 15 percent of any employee's compensation, at a
price not less than the lesser of an amount equal to 85 percent of the fair
market value of the Company's Common Stock at quarterly dates within the
offering period or an amount equal to 85 percent of the fair market value of the
Company's Common Stock on the purchase date. Employees may end their
participation in the offering at any time during the offering period, and
participation ends automatically on termination of employment with the Company.
The Company has issued 3,498 shares under the Purchase Plan through December 31,
1997.

    STOCK OPTION PLANS

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

    The Company has reserved 1,800,000 shares of Common Stock for issuance under
its amended and restated 1994 Equity Incentive Plan, of which 1,000,000 were
approved by the board of directors in November 1997 and are subject to
stockholder approval at the annual meeting of Stockholders on June 6, 1998. The
Equity Incentive Plan provides for Common Stock options to be granted to
employees of and consultants to the Company and its affiliates. The Plan allows
for the grant of incentive stock options, non-statutory stock options, stock
bonuses, and rights to purchase restricted stock and stock appreciation rights.
Options and rights granted under this plan expire no later than 10 years from
the date of grant. The exercise price of each incentive stock option shall be
not less than 100% of the fair value of the stock subject to the option on the
date the option is granted. The exercise price of each non-statutory option
shall be not less than 85% of the fair 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.

    NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

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

                                      F-14
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

    As of December 31, 1997, the Company had a right to repurchase 4,230 shares
of Common Stock issued pursuant to options granted outside of, and pursuant to,
the Company's option plans described above.

    The following table summarizes option activity under all option plans:

<TABLE>
<CAPTION>
                                                                                  OUTSTANDING OPTIONS
                                                               ---------------------------------------------------------
                                                                 SHARES                                     WEIGHTED
                                                                AVAILABLE    NUMBER OF     PRICE PER         AVERAGE
                                                                FOR GRANT     SHARES         SHARE       EXERCISE PRICE
                                                               -----------  -----------  --------------  ---------------
                                                                       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                            <C>          <C>          <C>             <C>
Balance at December 31, 1994.................................          94          499   $  0.80-$ 2.50     $    1.56
Shares authorized............................................         340       --                             --
Options granted..............................................        (393)         393   $         2.50     $    2.50
Options canceled.............................................          39          (39)  $  0.80-$ 2.50     $    1.57
Options repurchased..........................................          30       --       $         2.50     $    2.50
Options exercised............................................      --             (144)  $  0.80-$ 2.50     $    2.05
                                                                    -----        -----
Balance at December 31, 1995.................................         110          709   $  0.80-$ 2.50     $    1.98
Shares authorized............................................         529       --       $     --              --
Options granted..............................................        (356)         356   $         2.50     $    2.50
Options canceled.............................................         186         (186)  $  0.80-$ 2.50     $    2.19
Options repurchased..........................................           3       --       $         2.50     $    2.50
Options exercised............................................      --              (71)  $  0.80-$ 2.50     $    1.65
                                                                    -----        -----
Balance at December 31, 1996.................................         472          808   $  0.80-$ 2.50     $    2.18
Shares authorized(1).........................................       1,000       --             --
Options granted..............................................        (447)         447   $  6.88-$10.88     $    8.25
Options canceled.............................................          52          (52)  $  0.80-$ 8.50     $    2.89
Options exercised............................................      --             (125)  $  0.80-$ 2.50     $    1.72
                                                                    -----        -----
Balance at December 31, 1997.................................       1,077        1,078   $  0.80-$10.88     $    4.72
                                                                    -----        -----
                                                                    -----        -----
</TABLE>

------------------------------

(1) Approved by the Company's board of directors in November 1997 under the 1994
    Equity Incentive Plan, subject to stockholder approval.

    In March and June 1996, options to purchase a total of 8,835 and 40,505
shares, respectively, were granted at an exercise price of $2.50 per share.
Deferred compensation of $172,000 was recorded on these option grants based on
the deemed fair value of Common Stock of approximately $6.25. In September 1996,
the Company granted options to purchase a total of 296,500 shares at an exercise
price of $2.50 per share and additional deferred compensation of approximately
$2,150,000 was recorded based on the deemed fair value of Common Stock of
approximately $9.75.

                                      F-15
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' EQUITY (CONTINUED)

    The following table summarizes information about stock options outstanding
at December 31, 1997:

<TABLE>
<CAPTION>
                                            OUTSTANDING OPTIONS
------------------------------------------------------------------------------------------------------------
                                                                                  EXERCISABLE OPTIONS
                            SHARES      WEIGHTED AVERAGE                    --------------------------------
                          OUTSTANDING       REMAINING         WEIGHTED         NUMBER OF        WEIGHTED
RANGE OF EXERCISE             (IN       CONTRACTUAL LIFE       AVERAGE          SHARES           AVERAGE
PRICES                    THOUSANDS)       (IN YEARS)      EXERCISE PRICE   (IN THOUSANDS)   EXERCISE PRICE
-----------------------  -------------  -----------------  ---------------  ---------------  ---------------
<S>                      <C>            <C>                <C>              <C>              <C>
$0.80 - $ 2.00.........          113              5.5         $    1.18              107        $    1.13
$2.50 - $ 2.50.........          523              8.5         $    2.50              332        $    2.50
$6.88 - $ 8.50.........          334              8.6         $    7.92               71        $    7.67
$8.88 - $10.88.........          108              9.8         $    9.27           --            $  --
                               -----                                                 ---
$0.80 - $10.88.........        1,077              8.3         $    4.72              510        $    2.93
                               -----                                                 ---
                               -----                                                 ---
</TABLE>

    PRO FORMA INFORMATION--STOCK-BASED COMPENSATION

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

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

<TABLE>
<CAPTION>
                                                                                         OPTIONS
                                                                           -----------------------------------
                                                                              1997         1996        1995
                                                                              -----        -----     ---------
<S>                                                                        <C>          <C>          <C>
Expected life (years)....................................................         4.6          5.1         4.5
Expected volatility (After November 19, 1996, the initial public
  offering)..............................................................         .67          .70         N/A
Risk-free interest rate..................................................         6.3%         6.4%        6.2%
</TABLE>

                                      F-16
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

<TABLE>
<CAPTION>
                                                               1997        1996        1995
                                                            ----------  ----------  ----------
<S>                                                         <C>         <C>         <C>
Net loss:
  As reported.............................................  $  (11,325) $  (10,365) $  (16,724)
                                                            ----------  ----------  ----------
                                                            ----------  ----------  ----------
  Pro forma...............................................  $  (12,225) $  (10,771) $  (16,793)
                                                            ----------  ----------  ----------
                                                            ----------  ----------  ----------
Net loss per share:
  As reported.............................................  $    (1.58) $    (2.77) $    (6.54)
                                                            ----------  ----------  ----------
                                                            ----------  ----------  ----------
  Pro forma...............................................  $    (1.71) $    (2.87) $    (6.57)
                                                            ----------  ----------  ----------
                                                            ----------  ----------  ----------
</TABLE>

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

    The weighted-average fair value of options granted with exercise prices at
and below fair value of the Company's Common Stock during 1997, 1996 and 1995
were:

<TABLE>
<CAPTION>
                                                                         1997       1996       1995
                                                                       ---------  ---------  ---------
<S>                                                                    <C>        <C>        <C>
Fair value at grant:.................................................  $    8.60  $    9.24  $    2.50
Below fair value at grant date:......................................  $    8.25  $    2.50     N/A
</TABLE>

    WARRANTS

    The following table summarizes warrants to purchase the Company's Common
Stock which were issued in connection with various financing, lending and
equipment lease arrangements as of December 31, 1997:

<TABLE>
<CAPTION>
                                                                      EXERCISE      NUMBER OF
DATE OF ISSUANCE                                                        PRICE        SHARES      EXPIRATION DATE
------------------------------------------------------------------  -------------  -----------  ------------------
<S>                                                                 <C>            <C>          <C>
April 1993........................................................    $   25.00       100,000   April 2003
March and April 1994..............................................    $   20.00        21,926   March 1999
April 1995........................................................    $    8.90        40,000   April 2005
September and November 1995.......................................    $   20.00       196,078   September 2000
December 1995.....................................................    $   20.00         3,750   December 2000
March 1996........................................................    $   20.00        18,750   September 2000
September 1996....................................................    $   20.00        84,500   September 2001
September 1996....................................................    $    2.50        84,500   September 2001
                                                                                   -----------
Total.............................................................                    549,504
                                                                                   -----------
                                                                                   -----------
</TABLE>

    The Company has reserved 549,504 shares of its Common Stock for issuance
upon the issuance of the above warrants.

                                      F-17
<PAGE>
                             CV THERAPEUTICS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES

    As of December 31, 1997, the Company had federal net operating loss
carryforwards of approximately $50,000,000. The Company also had federal
research and development tax credit carryforwards of approximately $1,900,000.
The difference between the federal net operating loss carryforwards and the
accumulated deficit relates primarily to losses generated by the Company's
wholly-owned subsidiary, CV Therapeutics International. The net operating loss
and credit carryforwards will expire at various dates beginning in 2008 through
2012, if not utilized.

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

    Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
and the amount used for income tax purposes. Significant components of the
Company's deferred tax assets as of December 31, 1997 are as follows:

<TABLE>
<CAPTION>
                                                                           1997        1996
                                                                        ----------  ----------
                                                                            (IN THOUSANDS)
<S>                                                                     <C>         <C>
Net operating loss carryforwards......................................  $   17,800  $   14,500
Research credits (expiring 2008-2012).................................       2,700       2,000
Capitalized research and development..................................       2,200       1,500
Other, net............................................................         990         800
                                                                        ----------  ----------
Total deferred tax assets.............................................      23,690      18,800
Valuation allowance for deferred tax assets...........................     (23,690)    (18,800)
                                                                        ----------  ----------
Total.................................................................  $   --      $   --
                                                                        ----------  ----------
                                                                        ----------  ----------
</TABLE>

    The valuation allowance increased by $4,600,000 and $7,200,000 during the
years ended December 31, 1996, and 1995, respectively.

10. SUBSEQUENT EVENTS

    On January 4, 1998 the Company filed a registration statement with the
Securities and Exchange Commission for a follow-on public offering. The
follow-on public offering closed on January 27, 1998 and the total number of
shares sold, including the exercise of the underwriters' option to purchase
additional shares, was 2,575,000 at a price of $8.25 per share with net proceeds
to the Company of approximately $19,656,000.

                                      F-18