<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 March 31, 1999,

                                       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 
             --------                                    ----------
     (State of Incorporation)                         (I.R.S. Employer
                                                     Identification No.)

                             9393 Towne Centre Drive
                           San Diego, California 92121
                    (Address of principal executive offices)

                                 (619) 450-7100
                         (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 4,997,322 shares outstanding as of March 31, 1999.



                                                                               1
<PAGE>   2

                                CYTEL CORPORATION
                                QUARTERLY REPORT
                                    FORM 10-Q

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
COVER PAGE...................................................................  1

TABLE OF CONTENTS............................................................  2

PART I.  FINANCIAL INFORMATION

         ITEM 1.    Financial Statements

                    Condensed Consolidated Balance Sheets as of
                    March 31, 1999 and December 31, 1998.....................  3

                    Condensed Consolidated Statements of Operations
                    For the Three Months Ended March 31, 1999 and 1998.......  4

                    Condensed Consolidated Statements of Cash Flows
                    For the Three Months Ended March 31, 1999 and 1998.......  5

                    Notes to Condensed Consolidated Financial Statements.....  6

         ITEM 2.    Management's Discussion and Analysis of Financial
                    Condition and Results of Operations...................... 10

         ITEM 3.    Quantitative and Qualitative Disclosures about Market 
                    Risk.....................................................  *

PART II. OTHER INFORMATION

         ITEM 1.    Legal Proceedings........................................  *

         ITEM 2.    Changes in Securities and Use of Proceeds................  *

         ITEM 3.    Defaults upon Senior Securities..........................  *

         ITEM 4.    Submission of Matters to a Vote of Security Holders......  *

         ITEM 5.    Other Information........................................  *

         ITEM 6.    Exhibits and Reports on Form 8-K......................... 21

         SIGNATURE........................................................... 22
</TABLE>

*  NO INFORMATION PROVIDED DUE TO INAPPLICABILITY OF ITEM.



                                                                               2
<PAGE>   3

PART I.  FINANCIAL INFORMATION
ITEM I.  FINANCIAL STATEMENTS


                                CYTEL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                              MARCH 31,        DECEMBER 31,
                                                                1999               1998
                                                             -----------       ------------
ASSETS                                                       (unaudited)
<S>                                                          <C>               <C>      
Current assets:
  Cash and cash equivalents                                   $   5,787         $   2,594
  Short-term investments                                          9,073             9,217
  Prepaids and other current assets                                 574             1,657
  Assets held for sale                                              250                --
                                                              ---------         ---------
    Total current assets                                         15,684            13,468

Restricted short-term investment                                    472               472
Property and equipment, net                                         610             2,879
Patents and other assets                                          2,206             4,211
                                                              ---------         ---------
    Total assets                                              $  18,972         $  21,030
                                                              =========         =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued liabilities                    $   3,499         $   2,289
   Deferred contract revenues                                        --               515
  Accrued restructuring cost                                      2,967                --
  Accrued payroll and related expenses                              329               416
  Current portion of obligations under equipment
   loans and notes payable                                          583               493
                                                              ---------         ---------
    Total current liabilities                                     7,378             3,713

Equipment loans and notes payable                                   610             1,606

Commitments

Minority interest in consolidated subsidiary                      1,594             1,735

Stockholders' equity:
  Preferred stock, $.01 par value, 10,000,000 shares
    authorized, 659,898 shares issued and outstanding
    at December 31, 1998 and 1997, respectively                       7                 7
  Common stock, $.01 par value, 75,000,000 shares
    authorized at December 31, 1998; 4,997,322 shares
    and 4,987,453 shares issued and outstanding at
    March 31, 1999 and December 31, 1998, respectively               50                50
  Additional paid-in capital                                    142,836           142,642
  Accumulated deficit                                          (133,471)         (128,723)
  Unrealized (loss) on available-for-sale securities                (32)               --
                                                              ---------         ---------
Total stockholders' equity                                        9,390            13,976
                                                              ---------         ---------
                                                              $  18,972         $  21,030
                                                              =========         =========
</TABLE>

See accompanying notes.



                                                                               3
<PAGE>   4

                                CYTEL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED MARCH 31,
                                                                   1999                1998
                                                                -----------         -----------
<S>                                                             <C>                 <C>        
REVENUES
Research and development revenues                               $       929         $       470
                                                                -----------         -----------
                                                                        929                 470

COST AND EXPENSES
Research and development                                              4,279               3,786
General and administrative                                            1,238               1,106
Restructuring costs                                                   3,700                  --
                                                                -----------         -----------
  Total costs and expenses                                            9,217               4,892

  Loss from operations                                               (8,288)             (4,422)

Minority interest in net loss of consolidated subsidiary                141                  25
Interest income, net                                                    103                 278
Gain on disposal of assets                                            3,296                  --
                                                                -----------         -----------
Net loss                                                        $    (4,748)        $    (4,119)
                                                                ===========         ===========

Net loss per share - basic and diluted                          $     (0.95)        $     (0.88)
                                                                ===========         ===========

Shares used in computing net loss per share - basic
and diluted                                                       4,991,531           4,656,399
                                                                ===========         ===========
</TABLE>


See accompanying notes.



                                                                               4
<PAGE>   5

                                CYTEL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                                                          MARCH 31,
                                                                    1999             1998
                                                                  --------         --------
<S>                                                               <C>              <C>      
OPERATING ACTIVITIES
Net loss                                                          $ (4,748)        $ (4,119)
Adjustments to reconcile net loss to net cash used in
  operating activities:
    Depreciation and amortization                                      179              168
    Deferred rent                                                       --              (75)
    Deferred revenue                                                  (515)              46
    Gain on disposal of assets                                      (3,296)              --
    Minority interest in consolidated subsidiary                      (141)             (25)
    Accrued restructuring costs                                      3,700               --
    Net change in operating assets and liabilities; net of
      divestitures:
      Other current assets                                             992             (236)
      Accounts payable and accrued liabilities                       1,076               95
      Accrued payroll and related expenses                             (87)               7
                                                                  --------         --------
Net cash used in operating activities                               (2,840)          (4,139)

INVESTING ACTIVITIES
Purchases of available-for-sale securities                          (1,963)          (7,754)
Maturities of available-for-sale securities                            967            4,774
Sales of available-for-sale securities                               1,108            3,673
Proceeds from the sale of property and equipment                     3,195               --
Proceeds from the sale of patents (net of fees)                      2,914               --
Purchase of property and equipment                                    (282)            (479)
Deposits and other assets                                               10             (221)
                                                                  --------         --------
Net cash provided by (used in) investing activities                  5,949               (7)

FINANCING ACTIVITIES
Principal payments under equipment notes payable and note
  payable to bank                                                     (110)            (119)
Restricted cash released as note payable collateral                     --               43
Net proceeds from issuance of preferred stock                           --            9,700
Net proceeds from issuance of common stock                             194               49
                                                                  --------         --------
Net cash provided by financing activities                               84            9,673

Increase in cash and cash equivalents                                3,193            5,527
Cash and cash equivalents at beginning of year                       2,594            6,187
                                                                  --------         --------
Cash and cash equivalents at end of period                        $  5,787         $ 11,714
                                                                  ========         ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid                                                     $     69         $     21
                                                                  ========         ========

DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Unrealized losses on available-for-sale securities                $    (32)        $     (6)
                                                                  ========         ========
Issued common stock for non-exclusive license agreement
  for patent rights                                               $     --         $    900
                                                                  ========         ========
Asset write down in accrued restructuring charge                  $    736         $     --
                                                                  ========         ========
Assumption of debt                                                $    868         $     --
                                                                  ========         ========
</TABLE>

See accompanying notes



                                                                               5
<PAGE>   6

                                CYTEL CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                 MARCH 31, 1999

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 adjustments, 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, 1998.

     The condensed consolidated financial statements include the accounts of
Cytel Corporation and its majority-owned subsidiary Epimmune Inc. ("Epimmune").
All significant intercompany accounts and transactions have been eliminated. The
minority interest calculation is based on third parties' ownership percentage in
Epimmune of 13.4% during the first quarter of 1999. The calculation does not
include the potential additional ownership interest that would result from the
conversion of the Cytel preferred stock held by G.D. Searle & Co. ("Searle"), a
wholly-owned subsidiary of Monsanto Co., which is convertible into Epimmune
common stock. As of March 31, 1999, Cytel owned 74.6%, Epimmune employees owned
13.8%, and Searle owned 11.6% of the outstanding capital stock of Epimmune.

     Unless otherwise indicated, all references to "Cytel" are to Cytel
Corporation, all references to "Epimmune" are to Epimmune Inc., and all
references to the "Company" are to the combined entity of Cytel and Epimmune.

     A one-for-seven reverse split of Cytel's common stock was effected on
November 13, 1998. The reverse split was approved by Cytel's Board of Directors
on November 2, 1998 pursuant to authority granted to the Board of Directors by
Cytel's stockholders at a special meeting held on October 30, 1998. All common
share balances and net loss per share amounts presented in these financial
statements have been retroactively adjusted to reflect the reverse stock split.

     Basic and diluted net loss per share is computed using the weighted average
number of common shares outstanding during the period. All potential common
shares have been excluded from the diluted net loss per share calculations as
they are antidilutive.



                                                                               6
<PAGE>   7

2.  RESULTS OF CYLEXIN CLINICAL TRIAL

     On March 29, 1999, Cytel announced the results from the Cylexin Phase
II/III clinical trials. The results of these trials indicated that Cylexin,
Cytel's lead therapeutic compound, showed no benefit over placebo in the
clinical trial. Accordingly, Cytel terminated its therapeutic anti-inflammatory
business and recorded a charge of $3.4 million as of December 31, 1998,
representing the book value of its cell adhesion patent portfolio. This charge
was recorded in accordance with SFAS 121 after Cytel determined that its
intangible assets were permanently impaired.

     Based on the determination to terminate Cytel's businesses and focus future
operations on Epimmune, Cytel recorded a restructuring charge of $3.7 million in
the first quarter 1999. Such charge includes $1.2 million for minimum
commitments for leased facilities that Cytel will abandon, $827,000 for employee
severance, $628,000 for exit costs of operations, $575,000 for the write-down to
fair value for certain assets held for sale and $470,000 for other loss
contingencies.


3.   SALE OF THE GLYTEC CARBOHYDRATE SYNTHESIS AND MANUFACTURING BUSINESS

     In the first quarter of 1999, Cytel completed the sales of its Glytec
carbohydrate synthesis and manufacturing business, including the sale of fixed
assets and intellectual property, and assignment of certain liabilities and
transfer of certain personnel relating to the business. The sales of the fixed
and intangible assets of this business raised approximately $6.2 million, net of
fees, the proceeds of which will be used to fund the restructuring efforts of
the Company. Cytel recorded a gain of approximately $3.3 million in connection
with the two transactions, as discussed further below.

     On February 28, 1999, Cytel licensed its proprietary carbohydrate synthesis
and manufacturing intellectual property assets to Baxter Healthcare
Corporation's Nextran unit ("Nextran") for exclusive use in xenotransplantation.
Cytel received total consideration of $4.0 million, of which $3.2 million was
cash and $0.8 million assignment of certain liabilities to Nextran.
Additionally, Nextran assumed the facility lease and certain personnel and fixed
assets related to this manufacturing operation.

     On March 26, 1999, Cytel sold the remainder of its Glytec carbohydrate
synthesis and manufacturing intellectual property assets to Neose Technologies,
Inc. ("Neose"). Neose paid Cytel $3.5 million cash and paid an additional $1.5
million into escrow, the release of which is conditioned on Cytel's satisfaction
of certain matters relating to the patents and licenses acquired by Neose. Neose
may pay Cytel up to an additional $1.6 million contingent on potential payments
and revenues realized by Neose in connection with certain future corporate
collaborations. Cytel has recorded the gain relating to the initial cash
consideration and will record subsequent gains as they are realized, if at all.



                                                                               7
<PAGE>   8

4.   MANAGEMENT'S PLAN FOR FUTURE OPERATIONS

     Following the termination of Cytel's anti-inflammatory therapeutic business
and the sale of its Glytec business, Cytel is terminating its employees, selling
its fixed assets and intellectual property, and focusing all subsequent
development efforts on Epimmune's technology. Epimmune is developing novel
vaccines that stimulate the body's immune system to treat and prevent cancer and
infectious diseases.

     Cytel plans to use the proceeds from the disposition of the Glytec
carbohydrate synthesis and manufacturing business, together with existing cash
resources, to meet its financial obligations, including restructuring and
termination costs of its non-Epimmune operations. There can be no assurance,
however, that Cytel's available cash (excluding Epimmune) will be sufficient to
satisfy all of its financial obligations.

5.   ADDITIONAL INFORMATION

     As a result of the events described above, the Company is presenting
additional information related to the operation and financial position of
Epimmune and Cytel. Epimmune was formed in October 1997 as a wholly-owned
subsidiary with separate management and financing. As of March 31, 1999, Cytel
owned approximately 75% of the outstanding stock of Epimmune.

                                CYTEL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        THREE MONTHS ENDED MARCH 31, 1999
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                         Cytel         Epimmune      Consolidating
                                      Corporation         Inc.          Entries         Total
                                      ---------------------------------------------------------
<S>                                   <C>              <C>           <C>                <C>    
     REVENUES
        Research and
        development revenues            $   525         $   404         $    --         $   929
                                        -------         -------         -------         -------
                                            525             404              --             929
     COSTS AND EXPENSES:
        Research and development          3,042           1,237              --           4,279
        General and administrative          871             367              --           1,238
        Restructuring costs               3,700              --              --           3,700
                                        -------         -------         -------         -------
     Total costs and expenses             7,613           1,604              --           9,217

     Loss from operations                (7,088)         (1,200)                         (8,288)

     Minority interest in net
     loss of consolidated subsidiary         --              --             141             141
     Interest income, net                   (43)            146              --             103
     Gain on disposal of assets           3,296              --              --           3,296
                                        -------         -------         -------         -------
     Net loss                           $(3,835)        $(1,054)        $   141         $(4,748)
                                        =======         =======         =======         =======
</TABLE>



                                                                               8
<PAGE>   9

                                CYTEL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)
                                 MARCH 31, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                               Cytel        Epimmune   Consolidating
                                            Corporation       Inc.        Entries         Total
                                           -------------    --------   -------------     --------
<S>                                        <C>              <C>        <C>               <C>     
Assets
    Cash, cash equivalents and short-
    term investments                          $  5,106      $  9,754      $     --       $ 14,860
    Other current assets                           413           391            20            824
                                              --------      --------      --------       --------
  Total current assets                           5,519        10,145            20         15,684
    Restricted cash                                 --           472            --            472
    Property and equipment, net                     --           610            --            610
    Investment in consolidated
    subsidiary                                  11,742            --       (11,742)            --
    Patents and other non-current assets            --         2,206            --          2,206
                                              --------      --------      --------       --------
Total assets                                  $ 17,261      $ 13,433      $(11,722)      $ 18,972
                                              ========      ========      ========       ========

Liabilities and stockholders' equity
Current liabilities:
  Accounts payable and accrued
  liabilities                                 $  2,780      $  1,028      $     20          3,828
  Accrued restructuring costs                    2,967            --            --          2,967
  Current portion of obligations under
  equipment loans and notes payable                555            28            --            583
                                              --------      --------      --------       --------
Total current liabilities                        6,302         1,056            20          7,378

Long-term obligations under
    equipment loans and notes payable              398           211            --            610
Minority interest in consolidated
    subsidiary                                      --            --         1,594          1,594
Stockholders' equity                            10,561        12,166       (13,336)         9,390
                                              --------      --------      --------       --------
Total liabilities and
stockholders' equity                          $ 17,261      $ 13,433      $(11,722)      $ 18,972
                                              ========      ========      ========       ========
</TABLE>



                                                                               9
<PAGE>   10

PART I.       FINANCIAL INFORMATION

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATION

        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 below under "Risks and
Uncertainties" and those discussed in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998. The Company undertakes no
obligation to release publicly the results of any revisions to these forward
looking statements to reflect events or circumstances arising after the date
hereof.

        Unless otherwise indicated, all references to "Cytel" are to Cytel
Corporation, all references to "Epimmune" are to Epimmune Inc., a majority-owned
subsidiary of Cytel, and all references to the "Company" are to the combined
entity of Cytel and Epimmune.

        Since its inception in July 1987, the Company has devoted substantially
all of its resources to the discovery and development of its potential
therapeutic products. To date, the Company 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
March 31, 1999, the Company's accumulated deficit was approximately $133.5
million.

        In the first quarter of 1999, Cytel completed the sales of its Glytec
carbohydrate synthesis and manufacturing business resulting in net proceeds of
approximately $6.2 million (see Note 3 in financial statements). Additionally,
Cytel announced the results from the Cylexin Phase II/III clinical trial. The
results of this trial indicated that Cylexin, Cytel's lead therapeutic compound,
showed no benefit over placebo. Accordingly, Cytel terminated its therapeutic
anti-inflammatory business and, as a result, Cytel recorded a restructuring
charge of $3.7 million as of March 31, 1999 (see Note 2 in financial
statements). Cytel will focus all subsequent development efforts on Epimmune's
vaccine research and development technology.

        Cytel plans to use the proceeds from the disposition of the Glytec
carbohydrate synthesis and manufacturing business, together with existing cash
resources, to meet its financial obligations, including restructuring and
termination costs of its non-Epimmune operations. There can be no assurance,
however, that Cytel's available cash (excluding Epimmune) will be sufficient to
satisfy all of its financial obligations.



                                                                              10

<PAGE>   11

LIQUIDITY AND CAPITAL RESOURCES

Cytel and Epimmune on a Consolidated Basis

        The following discussion reflects financial information for Cytel and
Epimmune on a consolidated basis. Financial information for Epimmune alone is
provided in the section entitled "Epimmune" below.

        The Company has financed operations since inception primarily through
private placements of its equity securities, two public common stock offerings,
revenues under collaborative research and development agreements, grant
revenues, certain asset divestitures and interest income. Through March 1999,
the Company has raised approximately $145.1 million from the sale of equity
securities. The Company has financed its laboratory equipment and research and
office facilities primarily through capital and operating lease arrangements.

        The Company had net working capital of $8.3 million as of March 31, 1999
compared to $9.8 million as of December 31, 1998. The decrease was primarily due
to recording of the accrued restructuring liability, partially offset by an
increase in cash from the sale of fixed and intangible assets. As of March 31,
1999, the Company's cash, cash equivalents, restricted cash and short-term
investments increased to $15.3 million from $12.3 million at December 31, 1998.
The increase was due to proceeds from the sale of assets discussed above,
partially offset by cash used for Epimmune operations and the winddown of Cytel
operations. Excluding Epimmune, as of March 31, 1999, Cytel had $5.1 million of
cash available to fund its operations, which it plans to use to meet its
financial obligations, including corporate restructuring and termination costs
of all its non-Epimmune operations. There can be no assurance, however, that
Cytel's cash resources (excluding Epimmune) will be sufficient to satisfy all of
its financial obligations.

        Capital expenditures totaled $0.3 million for the three months ended
March 31, 1999, primarily for laboratory equipment, compared to $.5 million in
the first quarter of 1998, primarily for manufacturing and laboratory equipment
additions for Cytel's carbohydrate manufacturing facility. The Company has sold
its Glytec carbohydrate synthesis and manufacturing business and has terminated
its anti-inflammatory therapeutic business. Future capital expenditures will be
in support of Epimmune's vaccine business.

        The Company's cash, cash equivalents and short-term investments are
expected to decline primarily due to Epimmune's ongoing vaccine research
programs and the payments associated with the termination of Cytel's therapeutic
anti-inflammatory business. Cytel raised approximately $6.2 million in the first
quarter of 1999 through the sale of its Glytec carbohydrate synthesis and
manufacturing business, the proceeds of which will be used to fund the
restructuring efforts of Cytel.

Epimmune

        The following discussion reflects financial information for Epimmune
alone. Epimmune's financial information is also included on a consolidated basis
with Cytel in the preceding section.



                                                                              11

<PAGE>   12

        Since inception in October 1997, Epimmune has financed its operations
through private offerings of its equity securities, NIH grant revenues, capital
and operating lease transactions and investment income. From inception through
March 1999, Epimmune has raised approximately $16.7 million from sales of equity
securities. Total cash proceeds of sales of private equity securities since
inception were $10.4 million and $6.1 million from Cytel and Searle,
respectively, and $175,000 from exercise of options.

        In August 1998, Epimmune entered into a $750,000 term credit facility
with Silicon Valley Bank to provide secured financing for future laboratory,
office and tenant improvement additions. As of March 31, 1999, Epimmune had
$511,000 available to finance future capital equipment and tenant improvements
by August 1999. In addition, Epimmune leases its laboratory and office
facilities under operating leases. In November 1998, Epimmune entered into a
10-year lease related to the construction of a new laboratory and office
facility, which was completed and occupied in April 1999.

        Epimmune's working capital balance decreased to $9.1 million as of March
31, 1999 from $10.1 million at the end of 1998. The decrease is attributable to
cash used for ongoing operating activity. For the same reasons, cash, cash
equivalents, short-term investments and restricted cash decreased to $10.2
million at March 31, 1999 from $11.1 million at December 31, 1998. Epimmune
primarily invests its cash in United States government and investment grade
corporate debt securities.

        Epimmune believes that its available cash, cash equivalents, marketable
securities and existing sources of funding will be adequate to satisfy its
anticipated capital requirements through December 31, 2000. The estimate for the
period for which Epimmune expects its available cash balances and existing
sources of funding to be sufficient to meet its capital requirements is a
forward-looking statement that involves risks and uncertainties as set forth
herein and in the Company's Form 10-K for the year ended December 31, 1998.

RESULTS OF OPERATIONS

        Three months ended March 31, 1999 ("1999"), as compared with three
months ended March 31, 1998 ("1998").

        The Company had total revenues of $929,000 for 1999, compared to
$470,000 in 1998. Total revenues increased $459,000 in 1999 from 1998 primarily
due to revenue recognized in connection with the sale of Cytel's Glytec
carbohydrate synthesis and manufacturing business.

        In 1999, research and development expenses increased to $4.3 million
from $3.8 million in 1998. The increase was due to increased research personnel
at Epimmune. General and administrative expenses increased slightly to $1.2
million in 1999 from $1.1 million in 1998.

        The restructuring charge of $3.7 million recorded in 1999 relates to the
termination of its non-Epimmune operations, and also recorded a gain on disposal
of assets of $3.3 million related to the sale of Cytel's Glytec carbohydrate
synthesis and manufacturing business, as discussed above.

        Net interest income was $103,000 in 1999 compared to $278,000 in 1998.
The slight decrease is due to a lower average cash balance.



                                                                              12
<PAGE>   13

        The Company expects to incur 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 received and expenses incurred, and such fluctuations may be
substantial.

Future Capital Needs

        The Company expects to incur substantial additional research and
development expenditures, including costs related to preclinical testing,
clinical trials and manufacturing, as well as marketing and distribution
expenses. 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.

        The Company's future capital requirements depend on many factors,
including continued scientific progress in its drug discovery programs, the
magnitude of these programs, 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, 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'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 Company's inability to fund clinical
development of such products, or 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.

Year 2000

        Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. These date code
fields will need to accept four digit entries to distinguish 21st century dates
from 20th century dates. As a result, many companies' software and computer
systems may need to be upgraded or replaced in order to comply with year 2000
requirements. The impact of the year 2000 issue may affect other systems that
utilize imbedded computer chip technology, including building controls, security
systems or laboratory equipment. It may also impact the ability to obtain
products or services if the provider encounters and fails to resolve year 2000
related problems.



                                                                              13
<PAGE>   14

        In 1999, the Company established an active program to identify and
resolve year 2000 related issues. This program includes the review and
assessment of the Company's information technology and non-information
technology systems, as well as third parties with whom the Company has material
relationships. This program consists of four phases: inventory, risk assessment,
problem validation and problem resolution. The inventory phase identified
potential risks we face. They include among others computer software, computer
hardware, telecommunications systems, laboratory equipment, facilities systems
(security, environment control, alarm), service providers, and other third
parties. The risk assessment phase categorizes and prioritizes each risk by its
potential impact. The problem validation phase tests each potential risk,
according to priority, to determine if an action risk exists. In the case of
critical third parties, this step will include a review of their year 2000 plans
and activities. The problem resolution phases will, for each validated risk,
determine the method/strategy for alleviating the risk. It may include anything
from replacement of hardware or software to process modification to selection of
alternative vendors. This step also includes the development of contingency
plans.

        The inventory and risk assessment phases will be completed in second
calendar quarter 1999. The problem validation phase will be completed in third
calendar quarter 1999 for all areas, except for evaluating specific pieces of
research equipment and the assessment of some protocol third parties. The
Company expects that it will complete the last portion of the problem validation
and resolution phase by the end of the third calendar quarter of 1999.
Contingency plans are being developed. The Company expects to have those plans
completed by the end of the third quarter 1999.

        The Company is actively correcting problems as they are identified.
These corrections include the replacement of hardware and software systems, the
identification of alternative service providers and the creation of contingency
plans. The Company currently estimates that the cost of identified problems will
be approximately $130,000 for hardware and software upgrades or modifications.
In addition, the Company will incur approximately $10,000 of internal personnel
costs to complete the remaining phases of the project. The Company does not
believe that the costs of these actions will have a material adverse effect on
its business. The Company expects to be able to resolve any problems identified
of the project as part of normal operating expenses.

        Any failure to be year 2000 compliant within the Company's internal
computer systems or of third party equipment or software it uses, or of systems
maintained by its suppliers, may adversely affect the Company's business.

RISKS AND UNCERTAINTIES

The Company wishes to caution readers that the following important factors,
among others, in some cases have affected the Company's results and in the
future could cause actual results and needs of the Company to vary materially
from forward-looking statements made from time to time by the Company on the
basis of management's then-current expectations. The business in which the
Company is engaged is in rapidly changing and competitive markets and involves a
high degree of risk, and accuracy with respect to forward-looking projections is
difficult.



                                                                              14
<PAGE>   15

Disappointing results of the Phase II/III clinical trial of Cylexin, Cytel's
lead cell adhesion inhibitor compound, has led to the termination of the
therapeutic anti-inflammatory business. Accordingly, Cytel is terminating its
employees, selling its fixed assets and intellectual property, and focusing all
subsequent development efforts on Epimmune's vaccine technology. During the
first quarter of 1999, Cytel sold its Glytec carbohydrate synthesis and
manufacturing business and plans to use the proceeds from such sale, together
with existing cash resources, to meet its financial obligations, including
corporate restructuring and termination costs of all of its non-Epimmune
operations. There can be no assurance, however, that Cytel's cash resources
(excluding Epimmune) will be sufficient to satisfy all of its financial
obligations.

Future Capital Needs; Uncertainty of Additional Funding. Excluding Epimmune, as
of March 31, 1999, Cytel had approximately $5.1 million of cash available. As of
March 31, 1999, Epimmune had $10.2 million in cash, cash equivalents, restricted
cash and short-term investments. The Company is considering various alternatives
in light of its financial position and the recent sales of its carbohydrate
synthesis and manufacturing business and decision to terminate the therapeutic
anti-inflammatory program. The Company's future capital requirements will depend
on many factors, including: the ability of the Company to establish and maintain
collaborative arrangements; 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 its existing research
relationships; 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. Epimmune intends to seek
additional funding through collaborative arrangements or equity or debt
financings. If additional financing is not available, Epimmune anticipates its
existing available cash, cash equivalents, restricted cash and short-term
investments will be adequate to fund its operations through the end of 2000. The
estimate for the period for which Epimmune expects its available cash balances,
investment income and estimated cash flow from collaborative agreements and
research grants to be sufficient to meet its capital requirements is a
forward-looking statement that involves risks and uncertainties as set forth
herein and in Item 2, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this Report on Form 10-Q.
There can be no assurance that any financing or transaction through which the
Company seeks to obtain additional funding will be available on favorable terms,
if at all, or that any collaboration agreements to which the Company is or may
become a party will successfully reduce the Company's funding requirements. The
suspension or termination of the Company's collaborations with its existing
corporate partners or the inability to enter into new collaborations, the
failure of any such collaborations to be successful or the delay in their
development or commercialization of products could have a material adverse
effect on the Company's business, financial condition and results of operations.
If additional funds are raised by issuing securities, further dilution to
existing stockholders may result. If adequate funds are not available, the
Company will be required to delay, scale back or eliminate one or more of its
drug discovery or development programs; obtain funds through arrangements with
collaborative partners or others that may require the Company to relinquish
rights to or sell certain of its technologies, product candidates or products
that the Company would not otherwise relinquish or sell; sell itself or certain
of its technologies or other assets to a third party; cease operations; or
declare bankruptcy.



                                                                              15
<PAGE>   16

Early Stage of Development; Absence of Products. The Company is a research and
development focused company. It has not completed the development of any product
and, accordingly, has not begun to market or generate revenues from the
commercialization of products. The Company does not expect to market any
therapeutic or prophylactic products for a number of years. The Company's
products under development will require significant time-consuming and costly
research, development, preclinical studies, clinical testing, regulatory
approval and significant additional investment prior to their commercialization,
which may never occur. There can be no assurance that the Company's research and
development programs will be successful. In particular, Cytel completed its
Phase II/III clinical trial of Cylexin, its lead cell adhesion inhibitor
compound, in March 1999. Based on disappointing results from this Phase II/III
clinical trial, Cytel announced that it has halted clinical trials of Cylexin
and is discontinuing its cell adhesion programs. Further, there can be no
assurance that the Company will be able to manufacture any products in
commercial quantities in compliance with regulatory requirements at an
acceptable cost, that any of its products under development will be successfully
commercialized or will prove to be safe and efficacious in clinical trials or
that the Company or its collaborators will be successful in obtaining market
acceptance of any of its products. The Company or its collaborators may
encounter problems and delays relating to research and development, regulatory
approval, manufacturing and marketing. The failure by the Company to address
such problems and delays successfully would have a material adverse effect on
the Company's business, financial condition and results of operations.

Reliance on Collaborative Partners. The Company expects to rely on collaborative
arrangements both to develop and commercialize pharmaceutical products. The
Company has relied on certain established pharmaceutical companies interested in
its technology to fund a portion of its research and development expenses for
pharmaceutical product candidates. There can be no assurance that the Company
will be able to enter into collaborative arrangements in the future, that any
such collaborative arrangements or its existing collaborative arrangements will
continue or be successful or that the Company will receive royalty revenues,
license fees or milestone payments from any of such collaborative arrangements.
In addition, collaborative partners may pursue alternative technologies or
develop alternative compounds either on their own or in collaboration with
others, including the Company's competitors, as a means of developing treatments
for the disease targeted by any collaborative program of the Company.

Epimmune has entered into a research and development collaboration with Searle
with respect to the production, use and sale of pharmaceutical products derived
from Epimmune's cancer epitopes and the use thereof in therapeutic vaccines.
Such collaboration is Epimmune's only significant collaboration to date, and
Epimmune is substantially dependent upon it. The success of the collaboration
will depend, in significant part, on Searle's development, competitive marketing
and strategic considerations, including the relative advantages of alternative
products being developed or marketed by competitors. Epimmune expects that
substantially all of its revenues for the foreseeable future will result from
payments under its existing, and any future, collaborations, including royalties
on product sales and interest income. There can be no assurance that Searle will
perform its obligations as expected or that any future milestone payments or
other amounts will be received by Epimmune. The suspension or termination of the
Epimmune collaboration with Searle, the failure of such collaboration to be
successful or the delay in the development or commercialization of
pharmaceutical products pursuant to such collaboration could have a material
adverse effect on the Company's business, financial condition and results of
operations.



                                                                              16
<PAGE>   17

In addition, the Company may be required to enter into licenses or other
collaborative agreements with third parties in order to access technologies that
may be necessary to successfully develop certain of its products. There can be
no assurance that the Company will be able to successfully negotiate acceptable
licenses or other collaborative arrangements that allow it to access such
technology. In addition, there can be no assurance that any technology accessed
through such licenses or other collaborations will successfully meet the
Company's requirements.

Continuing Operating Losses; Accumulated Deficit. The Company has experienced
significant operating losses since its inception in 1987. As of March 31, 1999,
the Company had an accumulated deficit of approximately $133.5 million. The
Company expects to incur substantial additional operating losses as the
Company's research and development and clinical trial efforts continue. All of
the Company's revenues to date have consisted of contract research and
development revenues, license and milestone payments, research grants, certain
asset divestitures and interest income. To achieve profitable operations, the
Company, alone or with others, must identify, develop, register, manufacture and
market proprietary products. There can be no assurance that the Company will be
successful in its efforts to achieve profitable operations.

Manufacturing Limitations. To be successful, the Company's products and products
of its partners must be manufactured in commercial quantities in compliance with
regulatory requirements and at an acceptable cost. The Company has not
commercialized any products, nor has it demonstrated its ability to manufacture
commercial quantities of its or its partners' product candidates in accordance
with regulatory requirements. If the Company is unable to develop itself or
contract with a third-party manufacturing capabilities to produce suitable
quantities of its or its partners' products in accordance with regulatory
standards, the ability of the Company or its partners to conduct clinical
trials, obtain regulatory approvals and market such products may be adversely
affected, which could adversely affect the Company's competitive position and
its chances of achieving profitability. There can be no assurance that such
products can be manufactured by the Company or any other party at a cost or in
quantities which are commercially viable.

Government Regulation; Uncertainty Associated with Clinical Trials. The
production and marketing of the Company's products and its ongoing research and
development activities are subject to regulation by numerous governmental
authorities in the United States, Canada and other countries. Before any drug
developed by the Company can be marketed, it will undergo rigorous preclinical
and clinical testing and an extensive regulatory approval process mandated by
the Food and Drug Administration ("FDA") and equivalent foreign authorities,
including the Canadian Health Protection Branch ("HPB"). These processes can
take a number of years and require the expenditure of substantial resources. The
time required for completing such testing and obtaining such approvals is
uncertain and approval itself may not be obtained. The FDA, the HPB or the
Company and its collaborators may decide to discontinue or suspend clinical
trials at any time if the subjects or patients who are participating in such
trials are being exposed to unacceptable health risks or if the results show no
or limited benefit in patients treated with the drug compared to patients in the
control group. In particular, Cytel completed its Phase II/III clinical trial of
Cylexin, its lead cell adhesion inhibitor compound, in March 1999. Cytel
announced that it halted clinical trials of Cylexin based on disappointing
results that indicated that Cylexin showed no benefit over placebo for the
treatment of reperfusion injury in infants undergoing Cardiopulmonary bypass
("CPB") to facilitate the surgical repair of heart defects.



                                                                              17
<PAGE>   18

Cytel has recently discontinued human clinical testing of its lead product
candidate, Cylexin, in infants undergoing surgery to correct congenital heart
defects. This trial was terminated in March 1999 after a determination that the
drug was safe, but that there was no increased efficacy seen in patients treated
with Cylexin compared to those patients in the placebo control group. Testing of
the Company's other product candidates in research and development may reveal
undesirable and unintended side effects or other characteristics that may
prevent or limit their commercial use. There can be no assurance that the
Company will not encounter problems in clinical trials of other product
candidates that will cause the FDA, or the Company to delay or suspend clinical
trials. Furthermore, there can be no assurance that any of the Company's
products will be approved by the FDA or foreign regulatory agency for any
indication. Products, if any, resulting from the Company's research and
development programs are not expected to be commercially available for a number
of years. Even if regulatory approval of a drug is granted, such approval may
entail limitations on the indicated uses for which the drug may be marketed. In
addition, a marketed drug, its manufacturer and the facilities in which the drug
is manufactured are subject to continual review and periodic inspections. Later
discovery of previously unknown problems with a product, manufacturer or
facility may result in restrictions on such product or manufacturer, including
withdrawal of the product from the market.

Technological Change and Competition. The Company is engaged in a highly
competitive industry. The Company competes with many public and private
companies, including pharmaceutical companies, chemical companies, specialized
biotechnology companies and academic institutions. Many of the Company's
competitors have substantially greater financial, scientific and technical
resources, and manufacturing and marketing experience and capabilities than the
Company. In addition, many of the Company's competitors have significantly
greater experience conducting preclinical studies and clinical trials of new
pharmaceutical products, and in obtaining regulatory approvals for
pharmaceutical products. Competitors of the Company and its collaborators may
develop and commercialize such products more rapidly than the Company and its
collaborators. There can be no assurance that the Company's competitors will not
succeed in developing technologies and products that are more effective than any
being developed by the Company, or that would render the Company's technology
and products obsolete or noncompetitive. The Company is aware of companies that
are pursuing the development of novel pharmaceuticals which target the same
diseases that the Company is targeting. There can be no assurance that these and
other efforts by potential competitors will not be successful, or that other
technologies will not be developed to compete with the Company's technologies.

The Company's products under development address a range of markets. The
Company's competition will be determined in part by the potential indications
for which the Company's compounds are developed and ultimately approved by
regulatory authorities. For certain of the Company's potential products, an
important factor in competition may be the timing of market introduction of its
or competitive products. Accordingly, the relative speed with which the Company
can develop products, complete the clinical trials and approval processes and
supply commercial quantities of the products to the market are expected to be
important competitive factors. The Company expects that competition among
products approved for sale will be based, among other things, on product
effectiveness, safety, reliability, availability, price and patent position.



                                                                              18
<PAGE>   19

Patents and Proprietary Rights. The Company's success will depend in part on its
ability to obtain patent protection for its products and processes, both in the
United States and other countries. The patent position of biotechnology and
pharmaceutical companies is highly uncertain and involves complex legal and
factual questions. There is no consistent policy regarding the breadth of claims
allowed in biotechnology patents. The Company intends to file applications and
pursue patent prosecution as appropriate for patents covering both its products
and processes. There can be no assurance that patents will issue from any of the
patent applications owned or licensed by the Company or that, if patents do
issue, that claims allowed will be sufficiently broad to protect the Company's
products and processes. In addition, there can be no assurance that any patents
issued to the Company will not be challenged, invalidated or circumvented, or
that the rights granted thereunder will provide proprietary protection to the
Company.

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. 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.
Litigation, which could result in substantial costs to the Company, may also be
necessary to enforce any patents issued to the Company or to determine the scope
and validity of others' proprietary rights. In addition, the Company may have to
participate in interference proceedings declared by the United States Patent and
Trademark Office which could result in substantial costs to the Company to
determine the priority of inventions.

The Company also protects its proprietary technology and processes in part by
confidentiality agreements with its collaborative partners, employees and
consultants. 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 independently
discovered by competitors.

Absence of Sales and Marketing Experience. The Company has no experience in
sales, marketing or distribution. Before it can market any of its products
directly, the Company must develop a substantial marketing and sales force with
technical expertise and supporting distribution capability. Alternatively, the
Company may obtain the assistance of a pharmaceutical company with a large
distribution system and a large direct sales force. Other than its agreements
with Searle and Takara, the Company does not have any existing distribution
arrangements with any pharmaceutical company for its products under development.
There can be no assurance that the Company will be able to establish sales and
distribution capabilities or be successful in gaining market acceptance for its
products.

Dependence on Reimbursement. The Company's ability to commercialize its products
successfully may depend in part on the extent to which reimbursement for the
cost of such products and related treatment 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, and there can be no
assurance that adequate third-party coverage will be available to enable the
Company to maintain price levels sufficient to realize an appropriate return on
its investment in product development.



                                                                              19
<PAGE>   20

Dependence on Key Personnel. The Company is highly dependent on the principal
members of its scientific and management staff. The Company does not maintain
key person life insurance on the life of any employee. The Company's future
success also will depend in part on the continued service of its key scientific
personnel and its ability to identify, hire and retain additional qualified
personnel.

There is intense competition for qualified personnel in the areas of the
Company's activities, and there can be no assurance that the Company will be
able to continue to attract and retain such personnel necessary for the
development of the Company's business. Because of the intense competition, there
can be no assurance that the Company will be successful in adding technical
personnel as needed to meet the staffing requirements of additional
collaborative relationships. Failure to attract and retain key personnel could
have a material adverse effect on the Company.

Product Liability and Insurance. The Company's business exposes it to potential
product liability risks which are inherent in the testing, manufacturing and
marketing of human therapeutic products. While the Company currently has product
liability insurance, there can be no assurance that it will be able to maintain
such insurance on acceptable terms or that insurance will provide adequate
coverage against potential liabilities.

Use of Hazardous Materials. The Company's research and development involves the
controlled use of hazardous materials, chemicals and radioactive compounds.
Although the Company believes that its safety procedures for handling and
disposing of such materials comply with the standards prescribed by state and
federal regulations, the risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident, the
Company could be held liable for any damage that results, which liability could
exceed the resources of the Company. The Company may incur substantial cost to
comply with environmental regulations if the Company develops commercial
manufacturing capacity.

Although the Company believes that it is in compliance in all material respects
with applicable environmental laws and regulations and currently does not expect
to make material capital expenditures for environmental control facilities in
the near term, 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.

Volatility of Common Stock Price.The market price for securities of
biotechnology companies, including the Company, have historically been highly
volatile, and the market from time to time has experienced significant price and
volume fluctuations that are unrelated to the operating performance of such
companies. Factors such as announcements of technological innovations or new
commercial therapeutic products by the Company or others, governmental
regulation, developments in patent or other proprietary rights, developments in
the Company's relationships with its collaborative partners, public concern as
to the clinical results and/or, the safety of drugs developed by the Company or
others and general market conditions may have a significant effect on the market
price of the Company's common stock. Fluctuations in financial performance from
period to period also may have a significant impact on the market price of the
common stock.

Absence of Dividends. The Company has never paid any cash dividends and does not
anticipate paying cash dividends in the foreseeable future.



                                                                              20
<PAGE>   21

PART II.      OTHER INFORMATION

ITEM 6.A      Exhibits

              Exhibit 2.1    Asset Purchase Agreement between the Company and 
                             Neose Technologies, Inc. dated March 26, 1999 (1)

              Exhibit 2.2    Escrow Agreement between the Company and Neose
                             Technologies, Inc. dated March 26, 1999 (1)

              Exhibit 27.1   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.

ITEM 6.B      REPORTS ON FORM 8-K

              The Company filed a Report of Form 8-K on April 9, 1999 relating
              to the sale of the Company's carbohydrate manufacturing and
              synthesis intellectual property assets to Neose Technologies, Inc.



                                                                              21
<PAGE>   22

                                CYTEL CORPORATION

                                    SIGNATURE



        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: May 17, 1999                    By: /s/ ROBERT L. ROE
                                         ---------------------------------------
                                         Robert L. Roe
                                            Acting President and Chief Operating
                                            Officer (Duly Authorized Officer and
                                            Acting Principal Financial Officer)



                                                                              22