<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the quarterly period ended September 30, 1997, or

[ ]  Transition Period Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 for the Transition Period From __ to __.


                         Commission file number 0-19591

                                CYTEL CORPORATION
             (Exact name of Registrant as specified in its charter)


          Delaware                                          33-0245076

                             3525 John Hopkins Court
                           San Diego, California 92121
                    (Address of principal executive offices)


                                 (619) 552-3000
                         (Registrant's telephone number)


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

                                   Yes X No __


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

     Common Stock: $.01 par value, 27,214,886 shares outstanding as of September
30, 1997



<PAGE>   2
                                CYTEL CORPORATION

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>      <C>                                                              <C>
PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Condensed Consolidated Balance Sheets as of
                  September 30, 1997 and December 31, 1996..................1

                  Condensed Consolidated Statements of Operations
                  for the Three and Nine Months Ended
                  September 30, 1997 and 1996...............................2

                  Condensed Consolidated Statements of Cash Flows
                  for the Nine Months Ended September 30, 1997 and 1996.....3

                  Notes to Condensed Consolidated Financial Statements......4

         Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.......................6


PART II.  OTHER INFORMATION

          Items 1 to 6......................................................10

          Signatures........................................................11
</TABLE>



<PAGE>   3
PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                                CYTEL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                           September 30,      December 31,
                                                                                               1997               1996
                                                                                           -------------      -------------
                                                                                            (Unaudited)          (Note)
<S>                                                                                        <C>                <C>          
ASSETS
Current assets:
       Cash and cash equivalents                                                           $   4,832,000      $   3,231,000
       Short-term investments                                                                 10,229,000         20,645,000
       Current portion of restricted cash                                                        375,000            375,000
       Prepaids and other current assets                                                       1,325,000          1,422,000
                                                                                           -------------      -------------
Total current assets                                                                          16,761,000         25,673,000

Restricted cash                                                                                  750,000          1,031,000
Property and equipment, net                                                                    1,561,000          2,935,000
Deposits and other assets                                                                      6,061,000          4,651,000
                                                                                           -------------      -------------

Total assets                                                                               $  25,133,000      $  34,290,000
                                                                                           =============      =============



LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
       Accounts payable and accrued liabilities                                            $   1,332,000      $   1,991,000
       Deferred contract revenues                                                                574,000            732,000
       Accrued payroll and related expenses                                                      390,000            650,000
       Line of credit                                                                            375,000            375,000
       Current portion of obligations under capital leases and equipment notes payable            81,000            341,000
                                                                                           -------------      -------------
Total current liabilities                                                                      2,752,000          4,089,000

Deferred rent payable                                                                          1,463,000          1,640,000

Equipment notes payable                                                                             --               40,000
Line of credit                                                                                   750,000          1,031,000


Stockholders' equity:
       Preferred stock, $.01 par value, 10,000,000 shares
         authorized, none issued or outstanding                                                     --                 --
       Common stock, $.01 par value, 50,000,000 shares
         authorized, 27,214,886 and 25,091,309 shares issued and
         outstanding at September 30, 1997 and December 31, 1996, respectively                   272,000            251,000
       Additional paid-in capital                                                            123,119,000        120,095,000
       Accumulated deficit                                                                  (103,178,000)       (92,792,000)
       Unrealized losses on available-for-sale securities                                        (45,000)           (64,000)
                                                                                           -------------      -------------
Total stockholders' equity                                                                    20,168,000         27,490,000
                                                                                           -------------      -------------

Total liabilities and stockholders' equity                                                 $  25,133,000      $  34,290,000
                                                                                           =============      =============
</TABLE>


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

See notes to condensed consolidated financial statements.



                                       1
<PAGE>   4
PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                                CYTEL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                                   Three months ended September 30,           Nine months ended September 30,
                                                   ---------------------------------         ---------------------------------
                                                       1997                 1996                 1997                 1996
                                                   ------------         ------------         ------------         ------------
                                                              (Unaudited)                               (Unaudited)
<S>                                                <C>                  <C>                  <C>                  <C>         
REVENUES
Research and development                           $  1,625,000         $  1,611,000         $  2,750,000         $  6,031,000
Research grants and other income                        196,000              574,000            1,131,000            1,701,000
                                                   ------------         ------------         ------------         ------------
                                                      1,821,000            2,185,000            3,881,000            7,732,000


OPERATING EXPENSES
Research and development                              3,807,000            4,568,000           12,305,000           16,032,000
General and administrative                              950,000              906,000            2,577,000            2,661,000
                                                   ------------         ------------         ------------         ------------
                                                      4,757,000            5,474,000           14,882,000           18,693,000

Interest income, net                                    169,000              323,000              615,000            1,160,000
                                                   ------------         ------------         ------------         ------------


Net loss                                           $ (2,767,000)        $ (2,966,000)        $(10,386,000)        $ (9,801,000)
                                                   ============         ============         ============         ============

Net loss per share                                 $      (0.11)        $      (0.12)        $      (0.41)        $      (0.40)
                                                   ============         ============         ============         ============

Shares used in computing net loss per share          25,445,269           24,893,972           25,228,790           24,795,598
                                                   ============         ============         ============         ============
</TABLE>


See notes to condensed consolidated financial statements.



                                       2
<PAGE>   5
PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                                CYTEL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                       Nine months ended September 30,
                                                                                      ---------------------------------
                                                                                          1997                 1996
                                                                                      ------------         ------------
                                                                                                 (Unaudited)
<S>                                                                                   <C>                  <C>          
OPERATING ACTIVITIES
Net loss                                                                              $(10,386,000)        $ (9,801,000)
Adjustments to reconcile net loss to net cash used in operating activities:
          Depreciation and amortization                                                    664,000            1,163,000
          Deferred rent                                                                   (177,000)            (144,000)
          Amortization of deferred compensation                                               --                140,000
          Deferred revenue                                                                (158,000)          (2,135,000)
          Gain on sale of equipment                                                        (35,000)                --
          Changes in operating assets and liabilities:
              Receivable under collaborative agreement                                        --              2,000,000
              Other current assets                                                          97,000             (271,000)
              Accounts payable and accrued liabilities                                    (659,000)             569,000
              Accrued payroll and related expenses                                        (260,000)             (81,000)
                                                                                      ------------         ------------
Net cash used in operating activities                                                  (10,914,000)          (8,560,000)

INVESTING ACTIVITIES
Purchases of available-for-sale securities                                             (23,923,000)         (91,712,000)
Maturities of available-for-sale securities                                             17,764,000           57,332,000
Sales of available-for-sale securities                                                  16,594,000           44,093,000
Proceeds from the sale of equipment                                                         35,000                 --
Proceeds from the sale of assets of subsidiary                                             211,000                 --
Property and equipment                                                                    (240,000)          (1,603,000)
Deposits and other assets                                                                 (671,000)            (679,000)
                                                                                      ------------         ------------
Net cash provided by investing activities                                                9,770,000            7,431,000

FINANCING ACTIVITIES
Principal payments under capital lease obligations and equipment notes payable            (300,000)            (663,000)
Principal payments under line of credit obligations                                       (281,000)                --
Restricted cash for line of credit collateral                                              281,000                 --
Net proceeds from issuance of common stock                                               3,045,000            1,337,000
                                                                                      ------------         ------------
Net cash provided by investing activities                                                2,745,000              674,000

Increase (decrease) in cash and cash equivalents                                         1,601,000             (455,000)
Cash and cash equivalents at beginning of period                                         3,231,000           10,543,000
                                                                                      ------------         ------------
Cash and cash equivalents at end of period                                            $  4,832,000         $ 10,088,000
                                                                                      ============         ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid                                                                         $     95,000         $    166,000
                                                                                      ============         ============

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Unrealized gains (losses) on available-for-sale securities                            $     19,000         $   (169,000)
                                                                                      ============         ============
Promissory note and stock received for sale of assets of subsidiary                   $    800,000         $       --
                                                                                      ============         ============
</TABLE>


See notes to condensed consolidated financial statements.



                                       3
<PAGE>   6
PART 1.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


                                CYTEL CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   Basis of Presentation

     The interim unaudited condensed consolidated financial statements contained
herein have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In management's opinion, the
unaudited information includes all adjustments, consisting only of normal
recurring accruals, necessary for a fair presentation of the financial position,
results of operations and cash flows for the periods presented. Interim results
are not necessarily indicative of results to be expected for the full year. The
financial statements should be read in conjunction with the audited consolidated
financial statements and footnotes thereto included in the Registrant's Form
10-K for the year ended December 31, 1996.

     The condensed consolidated financial statements include the accounts of
Cytel Corporation and its subsidiaries ("Cytel" or the "Company"). All
significant intercompany accounts and transactions have been eliminated.

     Net loss per share is computed using the weighted average number of common
shares outstanding during the period. In February 1997, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards No.
128, Earnings per Share, which supersedes APB Opinion No. 15. Statement No. 128
replaces the presentation of primary Earnings per Share (EPS) with "Basic EPS"
which includes no dilution and is based on weighted-average common shares
outstanding for the period. Companies with complex capital structures will also
be required to present "Diluted EPS" that reflects the potential dilution of
securities like employee stock options. Statement No. 128 is effective for
financial statements issued for periods ending after December 15, 1997. The
impact of Statement No. 128 will not be material to the consolidated financial
statements of the Company.


2.   Research and Development Agreements

     In September 1997, the Company signed a letter of intent with G.D. Searle
("Searle") to collaborate to develop new cancer therapies through its
newly-formed subsidiary, Epimmune Inc. ("Epimmune"). As part of the agreement,
Searle made a $5 million investment in Cytel common stock.

     In September 1996, the Company entered into a collaborative agreement with
Baxter Healthcare Corporation's Nextran unit ("Nextran") to develop a
carbohydrate product for use in xenotransplantation. Under the agreement, the
Company will manufacture and sell a carbohydrate which Nextran will incorporate
into a xenotransplant product. Nextran made an up-front payment of $500,000 and
purchased 158,228 shares of the Company's common stock at $6.32 per share for
the right to enter into an exclusive supply agreement. Nextran will make
additional payments to



                                       4
<PAGE>   7
PART 1.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


the Company upon option exercise, achievement of milestones and supply of
carbohydrate. In January 1997, the Company achieved a milestone with delivery of
the initial batch of a bioactive carbohydrate to Nextran. As a result, Nextran
made the first milestone payment in the amount of $500,000.

     In December 1995, the Company entered into a collaborative agreement with
Abbott Laboratories ("Abbott") to develop manufacturing processes for the
production of certain carbohydrates for use in nutritional products. Abbott paid
a $2 million up-front fee in January 1996 for an option to obtain a worldwide
license for limited applications under the Company's patents and know-how in the
area of carbohydrate synthesis. Abbott will make milestone payments to the
Company upon achievement of production and commercial milestones and will pay
royalties on the volume of product sold. In December 1996, Abbott made the first
milestone payment to the Company in the amount of $2 million.

     In May 1995, the Company entered into a collaborative agreement with
Schwarz Pharma AG ("Schwarz") for the development and marketing of carbohydrate
selectin blockers, including Cylexin. Under the terms of the agreement, Schwarz
made an up-front license payment and purchased 241,546 shares of the Company's
common stock at $8.28 per share. Schwarz funded 75% of clinical development
costs associated with the Phase II acute myocardial infarction trial from 1995
until termination of the agreement. In December 1995, Schwarz made the first
milestone payment to the Company in the form of the purchase of an additional
241,546 shares of the Company's common stock at $8.28 per share. In April 1997,
the Company and Schwarz agreed to terminate their collaboration.

     Under two agreements with Takara Shuzo Co., Ltd. Biomedical Group
("Takara"), the Company's Theradigm technology is being applied to fungal
disease targets and cellular therapy for the treatment of cancer. Under the
anti-fungal collaboration initiated in June 1994, Takara obtained rights to any
anti-fungal products resulting from the collaboration for commercialization in
Japan. The Company has the right to develop products in North America, and the
companies share rights in the rest of the world. As part of the anti-fungal
collaboration, Takara supported research at the Company for 18 months, and in
September 1994, purchased 400,000 shares of the Company's common stock at $7.50
per share. Research in the anti-fungal field, using Cytel technology, is now
being conducted independently by Takara in Japan. Under the cellular therapy
collaboration initiated in October 1994, Takara obtained rights to the Company's
technology relevant to the development of ex vivo cellular therapies for the
treatment of cancer in Japan. The Company retains all rights to ex vivo cellular
therapy outside Japan. Takara will pay royalties on sales from products
resulting from collaboration under both agreements.

     In October 1991, the Company entered into a five-year collaborative
agreement with Sumitomo Pharmaceuticals Co., Ltd. ("Sumitomo") to develop drugs
based on the Company's technology for the treatment of white blood cell-mediated
diseases. Under the terms of the agreement, Sumitomo provided research support
payments of $15 million. In October 1996, the agreement was extended for three
months and Sumitomo paid $375,000. In January 1997, the collaborative research
agreement expired. Sumitomo has certain rights and obligations with respect to
development of compounds which resulted from the collaboration for Pacific Rim
markets. Sumitomo is obligated to make payments if certain milestones are met
and pay royalties to the Company on sales of such products. Total option fees
and milestone payments will not exceed $25 million. The Company has retained
worldwide manufacturing rights and all rights to sell drugs resulting from the
collaboration in the United States and other markets.



                                       5
<PAGE>   8
PART 1.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


     In October 1994, Sumitomo completed its equity investment in the Company
with the purchase of 1,408,450 shares of the Company's common stock at $3.55 per
share. In October 1992 and December 1994, Sumitomo exercised its option to
license candidate compounds and made milestone payments of $0.5 million and $1.0
million, respectively. In 1995, Sumitomo exercised its option on all additional
compounds to be generated within the collaboration and made an additional
milestone payment of $1.0 million.



PART 1.  FINANCIAL INFORMATION
ITEM 2.  MANAGEMENT'S DISCUSSION


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Except for the historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed here. Factors that could cause or contribute to such differences
include, without limitation, those discussed in this section and those discussed
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996.

     Since its inception in July 1987, Cytel has devoted substantially all of
its resources to the discovery and development of its potential
immunotherapeutic products and development of its proprietary carbohydrate
manufacturing technology. To date, Cytel has not received any revenues from the
sale of products. The Company has funded its research and development primarily
from equity-derived working capital and through strategic alliances with other
companies. The Company has been unprofitable since its inception and expects to
incur substantial operating losses for the next several years. As of September
30, 1997, the Company's accumulated deficit was $103.2 million.


RESULTS OF OPERATIONS

     Revenues for the three and nine months ended September 30, 1997 were $1.8
million and $3.9 million as compared to $2.2 million and $7.7 million,
respectively, for the same periods in 1996. The Company earned research and
development revenues in the third quarter of 1997 from Abbott and from the $5
million sale of equity at a premium over market to Searle pursuant to the letter
of intent between Searle and Cytel. Revenues in the third quarter of 1996
included development funding from a collaboration agreement with Schwarz, as
well as research support from Sumitomo. Due to the expiration and termination of
the collaboration agreements with Sumitomo and Schwarz, respectively, in January
and April of 1997, there are substantially lower research and development
revenues from existing collaborations in 1997 as compared to 1996. Additional
research and development revenues for 1997 are dependent upon the achievement of
milestones under existing collaboration agreements with Abbott and Nextran, the
achievement of milestones by Sumitomo under the license agreement with Sumitomo,
or the initiation of new collaborative research and development, supply or
licensing relationships. There can be no assurance that the Company will be able
to establish or maintain any such relationships. Research grant revenues for the
three and nine months ended September 30, 1997 decreased from the comparable
periods in 1996 due to a lesser number of active grants in 1997 as compared to



                                       6
<PAGE>   9
PART 1. FINANCIAL INFORMATION 
ITEM 2. MANAGEMENT'S DISCUSSION


1996. Three additional grants expired during the second and third quarters of
1997. Total grant revenue for 1997 will be lower than 1996 but offset by the
award of two new research grants effective for the fourth quarter of 1997.

     Research and development expenses for the three and nine month periods
ended September 30, 1997 decreased by $0.8 million and $3.7 million from the
same periods in 1996. The decreases reflect lower costs associated with the
Company's ongoing clinical program for Cylexin, lower costs associated with the
Company's Theradigm-HBV clinical program which has been completed, as well as
reduced expenditures for manufacturing supplies and lower depreciation expense.

     In January 1997, the Company sold certain assets of Receptor Laboratories,
Inc. ("RLI"), a wholly-owned subsidiary, for aggregate consideration valued at
approximately $950,000. The sale of RLI represents cost savings of approximately
$200,000 per quarter of research and development expenses and reduced
depreciation expense, for an expected annual cost savings of approximately
$800,000 for 1997 as compared to 1996.

     General and administrative expenses increased slightly for the three months
ended September 30, 1997 as compared to the three months in 1996 and decreased
slightly for the nine month period ended September 30, 1997 compared to the same
period in 1996.

     Net interest income decreased $0.2 million and $0.5 million for the three
and nine month periods ended September 30, 1997 as compared to the same periods
in 1996. Lower interest income is primarily attributable to lower average cash
balances in 1997.

     During April 1997, the Company announced the restructuring of operations
and the spin out of its vaccine program to form a new company, Epimmune Inc. The
formation of Epimmune, as a wholly-owned subsidiary was completed in October
1997. The Company invested approximately $6.5 million in cash and $1.5 million
of the assets relating to the vaccine technology program. This transaction
followed the $5 million investment by Searle in September 1997 to purchase Cytel
common stock pursuant to the letter of intent between the Company and Searle to
establish a collaboration focused on developing a new class of cancer therapies.
Cytel will focus on building its Glytec carbohydrate manufacturing business and
on the discovery, development and commercialization of therapeutics for
inflammatory diseases including Cylexin.

     The Company expects to incur substantial operating losses over the next
several years due to continuing expenses associated with its research and
development programs, including preclinical testing and clinical trials.
Operating losses may fluctuate from quarter to quarter as a result of
differences in the timing of revenues and expenses, and such fluctuations may be
substantial.


LIQUIDITY AND CAPITAL RESOURCES

     The Company had net working capital of $14.0 million at September 30, 1997
compared to $21.6 million at December 31, 1996. Cash, cash equivalents,
short-term investments and restricted cash decreased to $16.2 million at
September 30, 1997 as compared to $25.3 million at December 31, 1996. For the
three months ended September 30, 1997, cash, cash equivalents, short-term
investments and restricted cash increased by $0.7 million due to the $5 



                                       7
<PAGE>   10
PART 1. INFORMATION 
ITEM 2. MANAGEMENT'S DISCUSSION


million investment by Searle offset by third quarter operating losses. Net cash
used in operating activities was $10.9 million and $8.6 million, respectively,
for the nine months ended September 30, 1997 and 1996. The increase in net cash
used in operating activities was due primarily to lower revenues in 1997 as
compared to the prior year and the pay down of current liabilities in 1997
versus the net increase in accounts payable and accrued liabilities for the same
period in 1996. For the nine months ended September 30, 1997, the Company
acquired an aggregate of $0.2 million in capital equipment compared to $1.6
million for the same period in 1996.

     The Company has invested $6.5 million of cash to fund Epimmune's
operations following the equity investment by Searle of $5 million to purchase
Cytel common stock. The Company plans no further investments in Epimmune.

     The Company's cash, cash equivalents and short-term investments are
expected to decline primarily due to the continued clinical development of
Cylexin and the conduct of its research programs. While the Company's
investments may periodically reflect unrealized losses, management attempts to
schedule the maturities of the Company's investments to coincide with the
Company's expected cash requirements.

     The Company expects to incur substantial additional research and
development expenditures, including costs related to preclinical testing,
clinical trials and manufacturing. It is the Company's intention to seek
additional collaborative research and development relationships with suitable
corporate partners. There can be no assurance that any agreements that may
result from these discussions will successfully reduce the Company's funding
requirements. Additional equity or debt financing will be required, and there
can be no assurance that these funds will be available on favorable terms, if at
all. If adequate funds are not available, the Company may be required to delay,
scale back or eliminate one or more of its drug discovery or development
programs or obtain funds through arrangements with collaborative partners or
others that may require the Company to relinquish rights to certain of its
technologies, product candidates or products that the Company would not
otherwise relinquish.

     If additional financing is not available, Cytel anticipates its existing
available cash, cash equivalents and short-term investments, investment income
and research and development funding from collaborative agreements and research
grants will be adequate to satisfy its capital requirements and fund operating
losses through at least the middle of 1998. The Company's future capital
requirements depend on many factors, including the ability of the Company to
establish and maintain collaborative arrangements, particularly with respect to
commercial application of the Company's carbohydrate manufacturing technology,
progress with preclinical testing and clinical trials, the time and costs
involved in obtaining regulatory approvals, the costs involved in filing,
prosecuting and enforcing patent claims, competing technological and market
developments, changes in the existing collaborative research relationships, the
ability of the Company to establish and maintain development arrangements,
continued scientific progress in its drug discovery programs, the magnitude of
these programs, the cost of manufacturing scale-up and effective
commercialization activities and arrangements.

     As is typical in the biotechnology industry, the commercial success of the
Company will depend in part on the Company neither infringing patents issued to
competitors nor breaching the technology licenses upon which the Company's
products might be based. The Company is aware of third party patent applications
and issued patents that may require the Company to alter products or processes,
obtain licenses or cease certain activities. Based on preliminary investigation,
the Company believes that its compound, Cylexin, which is currently in Phase II
clinical trials for infants undergoing surgery to correct congenital heart
defect, may infringe one or more claims of a patent issued to a third party. The
Company is continuing to investigate the validity and scope of 



                                       8
<PAGE>   11
PART 1. FINANCIAL 
ITEM 2. MANAGEMENT'S DISCUSSION


the patent. Subject to this further investigation, the Company believes that it
may be required to either obtain a license from the third party in order to
manufacture and market Cylexin or, alternatively, to shift its development
effort to another compound with attendant delay. There can be no assurance the
Company will be able to obtain any necessary license at a reasonable cost.
Failure by the Company to obtain a license to any technology that it requires to
commercialize its products, or to develop an alternative compound and obtain FDA
approval within an acceptable period of time if required to do so, would have a
material adverse effect on the Company.

     The Company's business is also subject to other significant risks,
including the uncertainties associated with the lengthy regulatory approval
process and with potential competition from other products. Even if the
Company's products appear promising at an early stage of development, they may
not reach the market for a number of reasons. Such reasons include, but are not
limited to, the possibilities that the potential products will be found
ineffective during clinical trials, fail to receive necessary regulatory
approvals, be difficult to manufacture on a large scale, or be uneconomical to
market.

     The timing and activities contemplated by the proposed restructuring of the
Company may differ significantly from those discussed in the forward-looking
statements due to a variety of legal, tax and operational uncertainties,
including risks associated with creating and financing new companies.



                                       9
<PAGE>   12
PART II. OTHER INFORMATION


1.   Legal Proceedings

     The Company is not a party to any legal proceedings.


2.   Change in Securities

     On September 18, 1997, the Company issued an aggregate of 2,000,000 shares
     of Common Stock to G.D. Searle & Co. in connection with the signing of a
     letter of intent to collaborate to develop new cancer therapies through the
     Company's wholly-owned subsidiary, Epimmune Inc. The Company received
     aggregate consideration of $5,000,000 in cash as payment for the shares.
     The shares were issued in a transaction exempt from registration under
     Section 4(2) of the Securities Act of 1933 as amended.


3.   Defaults Upon Senior Securities

     None.


4.   Submission of Matters to a Vote of Security Holders

     None.


5.   Other Information

     None.


6.   Exhibits and Reports on Form 8-K

     (a)   Exhibits.

           Exhibit 10.52  Letter of Intent, between the Registrant and G.D.
           Searle & Co., dated September 5, 1997 (with certain confidential
           portions deleted). (1)

           Exhibit 10.53  Stock Purchase Agreement, between the Registrant and
           G.D. Searle & Co., dated September 18, 1997.

           Exhibit 27.  Financial Data Schedule

           (1)  Certain confidential portions deleted subject to the Application
                for Confidential Treatment pursuant to Rule 24b-2 under the
                Securities Exchange Act of 1934 filed by the Registrant with the
                Commission concurrently herewith.

     (b)   Reports on Form 8-K.

           None.





                                       10
<PAGE>   13
                                CYTEL CORPORATION


                                   SIGNATURES



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


                                        CYTEL CORPORATION


Date: November 14, 1997                 By: /s/ Virgil Thompson
                                           --------------------------------
                                           Virgil Thompson
                                           President and Chief Executive 
                                           Officer, and Chief Financial Officer
                                           (Duly Authorized Officer and 
                                           Principal Financial Officer)


Date: November 14, 1997                 By: /s/ Paula Moody
                                           --------------------------------
                                           Paula Moody
                                           Controller
                                           (Principal Accounting Officer)






                                      11