SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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 quarter ended June 30, 2001

                                       OR

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


                         Commission File Number 0-27324


                       SYNAPTIC PHARMACEUTICAL CORPORATION
             (Exact name of registrant as specified in its charter)


                    Delaware                             22-2859704
          (State or other jurisdiction      (I.R.S. Employer Identification No.)
       of incorporation or organization)

                215 College Road                                      07652
                  Paramus, NJ                                      (Zip Code)
    (Address of principal executive offices)

                                 (201) 261-1331
              (Registrant's telephone number, including area code)


     Indicate by check mark  whether the  registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934,  as amended,  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


     As of August 1, 2001,  there  were  10,942,222  shares of the  registrant's
Common Stock outstanding.


<PAGE>



                       SYNAPTIC PHARMACEUTICAL CORPORATION

          INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED
                                  JUNE 30, 2001



                          PART I. FINANCIAL INFORMATION

                                                                           Page
                                                                           ----
Item  1.   Financial Statements (unaudited)..............................    1

           Balance Sheets at June 30, 2001 and December 31, 2000.........    1

           Statements of Operations and Comprehensive Income (Loss)
            for the three months ended June 30, 2001 and 2000,
            and for the six months ended June 30, 2001 and 2000..........    2

           Statements of Cash Flows for the six months ended
           June 30, 2001 and 2000........................................    3

           Notes to Financial Statements.................................    4

Item  2.   Management's Discussion and Analysis of
            Financial Condition and Results of Operations................    5

Item  3.   Quantitative and Qualitative Disclosures About Market Risk....   10



                           PART II. OTHER INFORMATION


Item  1.   Legal Proceedings.............................................   11

Item  4.   Submission of Matters to a Vote of Security Holders...........   12

Item  6.   Exhibits and Reports on Form 8-K..............................   13



           Signatures....................................................   14





                                       (i)

<PAGE>


                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                       SYNAPTIC PHARMACEUTICAL CORPORATION
                                 BALANCE SHEETS
             (in thousands, except share and per share information)


                                                          June 30, December 31,
Assets                                                       2001         2000
--------------------------------------------------------------------------------
                                                          (Unaudited)  (Audited)
Current assets:
Cash and cash equivalents                                   $ 9,990     $ 2,037
Marketable securities--current maturities                     7,467      20,627
Other current assets                                            855         814
--------------------------------------------------------------------------------
Total current assets                                         18,312      23,478

Property and equipment, net                                   4,541       4,781

Marketable securities                                         6,066       8,938

Patent and patent application costs, net                         76         227

Other assets                                                    237         147
--------------------------------------------------------------------------------
                                                           $ 29,232    $ 37,571
================================================================================


Liabilities and Stockholders' Equity
--------------------------------------------------------------------------------
Current liabilities:
Accounts payable                                            $ 1,689     $ 1,128
Accrued liabilities                                             957         648
Accrued compensation                                            174         348
Deferred revenue                                                771         354
--------------------------------------------------------------------------------
Total current liabilities                                     3,591       2,478

Deferred rent obligation                                        704         564

Stockholders' equity:
Preferred Stock, $.01 par value; authorized--1,000,000 shares    -            -
Common Stock, $.01 par value; authorized--25,000,000 shares
issued and outstanding--10,940,222 shares in 2001 and
10,935,772 shares in 2000                                      109          109
Additional paid-in capital                                  99,413       99,392
Accumulated other comprehensive income--net unrealized
 gains (losses) on securities                                   76        (183)
Accumulated deficit                                        (74,661)    (64,789)
--------------------------------------------------------------------------------
Total stockholders' equity                                  24,937      34,529
--------------------------------------------------------------------------------
                                                          $ 29,232    $ 37,571
================================================================================

                         See notes to financial statements.

                                       1

<PAGE>


                       SYNAPTIC PHARMACEUTICAL CORPORATION
            STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

             (in thousands, except share and per share information)
                                   (Unaudited)



                               For the three months       For the six months
                                  ended June 30,            ended June 30,
                                 2001         2000         2001         2000
--------------------------------------------------------------------------------
Revenues:
 Contract revenue              $   290      $   271      $   577      $   485
 License revenue                    83           83          166           83
--------------------------------------------------------------------------------
  Total revenues                   354          354          743          568

Expenses:
 Research and development        4,087        3,540        8,100        6,679
 General and administrative      1,757        1,474        3,547        2,838
--------------------------------------------------------------------------------
  Total expenses                 5,844        5,014       11,647        9,517
--------------------------------------------------------------------------------
Loss from operations            (5,471)      (4,660)     (10,904)      (8,949)

Other income, net:
 Interest income                   356          556          778        1,134
 Other                             123           10          254           17
--------------------------------------------------------------------------------
  Other income, net                479          566        1,032        1,151
--------------------------------------------------------------------------------
Net loss                       $(4,992)     $(4,094)     $(9,872)     $(7,798)
================================================================================


Comprehensive loss:

Net loss                       $(4,992)     $(4,094)     $(9,872)     $(7,798)

Unrealized (losses) gains
 arising during period             (70)          46          259           70
--------------------------------------------------------------------------------
Comprehensive loss             $(5,062)     $(4,048)     $(9,613)     $(7,728)
================================================================================


Basic and diluted net loss
 per share                      $(0.46)      $(0.38)      $(0.90)      $(0.72)
================================================================================
Shares used in computation
 of net loss per share      10,938,949   10,843,647   10,938,331   10,814,183
================================================================================







                       See notes to financial statements.

                                        2

<PAGE>


                       SYNAPTIC PHARMACEUTICAL CORPORATION
                            STATEMENTS OF CASH FLOWS

                                 (in thousands)
                                   (Unaudited)


For the six months ended June 30, 2001 and 2000

                                                       2001            2000
--------------------------------------------------------------------------------
Operating activities:
Net loss                                            $ (9,872)       $ (7,798)
Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation and patent amortization                     693             778
Amortization of premiums (discounts) on
securities                                               201             237
Deferred rent, net                                        50             164
Changes in operating assets and liabilties:
Increase in other current assets                         (41)            (43)
Increase in accounts payable,
accrued liabilities and accrued compensation             696             179
Increase in deferred revenue                             417           1,083
--------------------------------------------------------------------------------
Net cash (used in) operating activities               (7,856)         (5,400)

Investing activities:
Proceeds from sale or maturity of investments         18,090           3,487
Purchases of investments                              (2,000)             --
Purchases of property and equipment                     (318)           (650)
Proceeds from sale of equipment                           16              --
--------------------------------------------------------------------------------
Net cash provided by investing activities             15,788           2,837

Financing activities:
Issuance of common stock                                  21             520
--------------------------------------------------------------------------------
Net cash provided by financing activities                 21             520
--------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents   7,953          (2,043)
Cash and cash equivalents at beginning of period       2,037           6,236
--------------------------------------------------------------------------------
Cash and cash equivalents at end of period           $ 9,990         $ 4,193
================================================================================








                        See notes to financial statement.

                                        3
<PAGE>

                       SYNAPTIC PHARMACEUTICAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS

                                  June 30, 2001


    Note 1 -- Basis of Presentation

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance  with  the  instructions  to  Form  10-Q  and  may  not  include  all
information  and  footnotes  required  for a  presentation  in  accordance  with
generally accepted  accounting  principles.  In the opinion of the management of
Synaptic Pharmaceutical Corporation (the "Company"),  these financial statements
include all normal and recurring  adjustments  necessary for a fair presentation
of the financial  position and the results of  operations  and cash flows of the
Company  for  the  interim  periods  presented.   For  more  complete  financial
information,  these financial  statements should be read in conjunction with the
audited  financial  statements  for the fiscal year ended December 31, 2000, and
notes  thereto  included in the Company's  2000 Annual Report on Form 10-K.  The
results of  operations  for the fiscal  quarter  ended  June 30,  2001,  are not
necessarily  indicative of the results of operations to be expected for the full
year.

Note 2 - Subsequent Event

     On August 3, 2001, the Company sold to investors (the "purchasers"),  9,438
shares of its newly designated Series B Senior Convertible  Preferred Stock (the
"Series B Preferred  Stock") in a private equity placement led by Warburg Pincus
LLC, for  $9,438,000.  These shares of Series B Preferred  Stock are convertible
into  2,176,760  shares of common stock and have voting rights equal to those of
the common stock on an as-converted  basis. Each share of the Series B Preferred
Stock has a liquidation  preference of $1,000 and is redeemable at the Company's
option under certain market  conditions that may occur after August 3, 2003. The
purchasers also acquired  certain  anti-dilution  and registration  rights.  Net
proceeds,  after giving effect to underwriting  discounts and estimated offering
expenses, were approximately $8,450,000.

     Additionally,   the  Company  is  seeking  shareholder  approval  to  issue
additional  preferred stock in an amount and at a price that, when combined with
the Series B Preferred Stock described above, would result in the total issuance
of preferred  stock which would be convertible  into 7,564,584  shares of common
stock at a  weighted-average  price of $5.42 per common  share.  The  additional
preferred  stock would be pari passu in all material  respects with the Series B
Preferred Stock.















                                        4

<PAGE>


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

Overview

Synaptic  Pharmaceutical  Corporation  ("Synaptic"  or the  "Company") is a drug
discovery company utilizing G protein-coupled receptors ("GPCRs") as targets for
novel  therapeutics.  The Company is utilizing  its large  portfolio of patented
GPCR  targets as a basis for the  creation  of  improved  drugs that act through
these targets.  The Company and its licensees are first utilizing these receptor
targets to discover their  function in the body and thus specific  physiological
disorders with which they may be associated,  and secondly,  to design compounds
that can potentially be developed as drugs.

     The Company is currently  collaborating with Grunenthal GmbH ("Grunenthal")
and  Kissei   Pharmaceutical  Co.,  Ltd.   ("Kissei").   Concurrently  with  the
establishment of the  collaborative  arrangement  with  Grunenthal,  the Company
granted a license to certain of its technology and patent rights.

     In addition to ongoing  collaborative  arrangements,  other  pharmaceutical
companies  have licenses to certain of our  technology  and patent  rights.  For
convenience of reference, the agreements pursuant to which the licenses referred
to in  this  paragraph  and  the  preceding  paragraph  have  been  granted  are
collectively referred to as the "License Agreements."

     Since inception,  the Company has financed its operations primarily through
the sale of its stock, through contract and license revenue under certain of its
License Agreements, and through interest income and capital gains resulting from
its investments.  We also have received monies through  government  grants under
the  Small  Business  Innovative  Research  ("SBIR")  program  of  the  National
Institutes  of Health and through the sale of a portion of New Jersey  State net
operating losses carryforwards.

     Under the  License  Agreements,  the Company may receive one or more of the
following types of revenue:  license revenue,  contract revenue, royalty revenue
or revenue from the sales of drugs.  License revenue  represents  non-refundable
payments  for a license  to one or more of our  patents  and/or a license to our
technology.  Payments for licenses  are  recognized  as they are received or, if
earlier,  when they become  guaranteed,  provided  they are  independent  of any
continuing research activity, otherwise, they are recognized pro-rata during the
term of the related  research  agreement  in  accordance  with Staff  Accounting
Bulletin No. 101 "Revenue Recognition in Financial Statements". Contract revenue
includes research funding to support a specified number of Synaptic's scientists
and  payments  upon  the  achievement  of  specified  research  and  development
milestones.  Research  funding revenue is recognized  ratably over the period of
the  collaboration to which it relates and is based upon  predetermined  funding
requirements.  Research and development  milestone payment revenue is recognized
when the related  research or development  milestone is achieved.  Under each of
the License Agreements (other than the Grunenthal Agreement), we are entitled to
receive  royalty  payments  based upon the sales of drugs that may be  developed
using our technology or that may be covered by our patents. Under the Grunenthal
Agreement, Synaptic has development and marketing rights in certain geographical
areas with respect to drugs, if any, that are jointly  identified as part of the
collaboration with Grunenthal. Accordingly, we may receive revenue from sales in
our geographical areas (as defined) of drugs if we market them independently, or
we may receive  royalty  payments if we license our marketing  rights to a third
party.  To date, we have not received either royalty revenue or revenue from the
sales of drugs and we do not expect to  receive  such  revenues  for a number of
years, if at all.

     To date, the Company's  expenditures have been for research and development
related  expenses,  general and  administrative  related  expenses,  fixed asset
purchases and various  patent  related  expenditures  incurred in protecting our
technologies. Synaptic has been historically unprofitable and had an accumulated
deficit  of  $74,661,000  at June 30,  2001.  We  expect  to  continue  to incur
operating losses for a number of years and may not become profitable, unless and
until we receive  royalty  revenue  or  revenue  from sales of drugs that may be
developed with the use of our technology or patent rights.


Results of Operations

Comparison of the Three Months Ended June 30, 2001 and 2000

     Revenues.  The Company  recognized revenue of $373,000 and $354,000 for the
three months ended June 30, 2001 and 2000, respectively.

     Research  and  Development  Expenses.  The Company  incurred  research  and
development  expenses of  $4,087,000,  and $3,540,000 for the three months ended
June 30, 2001 and 2000,  respectively.  The  increase of  $547,000,  or 15%, was
attributable  primarily to an increase in  preclinical  testing costs  partially
offset by a reduction in supply costs.

     General  and  Administrative  Expenses.  The Company  incurred  general and
administrative  expenses of $1,757,000 and $1,474,000 for the three months ended
June 30, 2001 and 2000,  respectively.  The  increase of  $283,000,  or 19%, was
attributable  primarily  to  legal  expenses  related  to the  Company's  patent
infringement lawsuit with Panlabs, Inc.

     Other  Income,  Net.  The Company  recorded  other  income of $479,000  and
$566,000 for the three months  ended June 30, 2001 and 2000,  respectively.  The
decrease  of $87,000  was  primarily  due to lower  cash,  cash  equivalent  and
marketable  securities  balances  during 2001 as a result of the  utilization of
these resources to fund the Company's operations partially offset by an increase
in rental income from the Company's sublessees.

     Net Loss and Basic and Diluted Net Loss Per Share. The net loss incurred by
the Company was $4,992,000  ($0.46 per share),  and $4,094,000 ($0.38 per share)
for the three months ended June 30, 2001 and 2000, respectively. The increase in
net loss per share of $0.08 resulted  primarily  from higher  expenses and lower
other income during the second quarter of 2001 as described above.

Comparison of the Six Months Ended June 30, 2001 and 2000

     Revenues.  The Company  recognized revenue of $743,000 and $568,000 for the
six months ended June 30, 2001 and 2000,  respectively.  The increase in revenue
of $175,000 resulted from revenue derived under the second year of the Company's
agreement with Kissei.

     Research  and  Development  Expenses.  The Company  incurred  research  and
development expenses of $8,100,000, and $6,679,000 for the six months ended June
30,  2001 and 2000,  respectively.  The  increase  of  $1,421,000,  or 21%,  was
attributable  primarily to increases in preclinical  testing costs and temporary
staffing costs.

     General  and  Administrative  Expenses.  The Company  incurred  general and
administrative  expenses of $3,547,000  and  $2,838,000 for the six months ended
June 30, 2001 and 2000,  respectively.  The  increase of  $709,000,  or 25%, was
attributable primarily to legal expenses related to the Company's lawsuit and an
increase in fringe  benefit  expense  resulting  from an increase in  healthcare
claims.

     Other Income,  Net. The Company  recorded  other income of  $1,032,000  and
$1,151,000  for the six months ended June 30, 2001 and 2000,  respectively.  The
decrease of  $119,000  was  primarily  due to lower cash,  cash  equivalent  and
marketable  securities  balances  during 2001 as a result of the  utilization of
these resources to fund the Company's operations offset by an increase in rental
income from the Company's sublessees.

     Net Loss and Basic and Diluted Net Loss Per Share. The net loss incurred by
the Company was $9,872,000  ($0.90 per share),  and $7,798,000 ($0.72 per share)
for the six months ended June 30, 2001 and 2000,  respectively.  The increase in
net loss per share of $0.18 resulted  primarily  from higher  expenses and lower
other income  partially  offset by higher revenues during the first half of 2001
as described above.

Operating Trends

     Revenues  may vary from  period to period  depending  on  numerous  factors
including the timing of revenue earned under the License  Agreements and revenue
that  may be  earned  under  future  collaborative  and/or  license  agreements.
Synaptic will recognize revenue under its research and licensing  agreement with
Kissei  Pharmaceutical Co., Ltd. during 2001 and expects to recognize additional
revenues  under this  agreement  during 2002.  Under the terms of certain of the
License  Agreements,  revenues  may be  recognized  if  certain  milestones  are
achieved. We continue to assess the opportunity for obtaining additional funding
under new collaborative and/or license agreements as well as obtaining financing
through equity transactions.  We continue to monitor our spending level in order
to insure that we have enough cash to last at least through the year 2002.

     Since  late  2000,  we  have  been  pursuing  a new  business  strategy  of
increasing our internal drug discovery efforts. This new strategy requires us to
hire  additional  employees  with  drug  development   expertise  and  to  incur
additional  preclinical  expenses  as well as to  incur  costs  associated  with
clinical trials. If we obtain the anticipated net proceeds of the sale of shares
to be sold at the second closing,  we will increase our drug development efforts
thereby  incurring a greater level of  expenditures.  If the stockholders do not
approve  the sale of the shares to be sold in the second  closing,  expenditures
related to our implementation of this strategy will increase at a slower rate.

     Legal  expenses are expected to be a significant expense as a  result  of a
suit filed by the Company. See "Legal Proceedings" in PART II, Item 1, hereof.

     If the  stockholders  do not  approve  the sale of shares to be sold at the
second closing (see Note 2 - Subsequent Event in Part I, Item 1, hereof),  other
income,  net is expected to decline  over the  remainder  of 2001 and in 2002 as
existing  funds,  including  funds  received from the sale of Series B Preferred
Stock on August 3, 2001, are utilized to support the Company's operations.  This
decline  will be partially  offset by rental  income that we expect to recognize
under our existing sublease agreements.

     The  Company is  pursuing  further  sales of its State net  operating  loss
("NOL")  carryforwards and its State research and development  credits under the
State of New Jersey's Technology Business Tax Certificate  Transfer Program (the
"Program").  No  assurance  can  be  given,  however,  as to the  amount  of NOL
carryforwards  that may be sold  under the  Program  in any one  year.  External
factors  that may have an  effect  on  future  NOL  sales  are  such  items  as:
limitations imposed by State law, the availability of buyers and related demand.

     Property and equipment spending may vary from period to period depending on
numerous  factors,  including  the  number  of  collaborations  in  which we are
involved at any given time and replacement due to normal wear and  obsolescence.
Equipment spending in 2001 is expected to decline from that of 2000.

     At June 30, 2001, the Company held marketable  securities with an estimated
fair value of $13,533,000.  The Company's primary interest rate exposure results
from  changes in  short-term  interest  rates.  The  Company  does not  purchase
financial instruments for trading or speculative purposes. All of the marketable
securities held by the Company are classified as available-for-sale  securities.
The following table provides information about marketable securities held by the
Company at June 30, 2001:
                                                                 Estimated
       Principal Amount and Weighted Average Stated Rate           Fair
                   by Expected Maturity                           Value
   ----------------------------------------------------         ---------
   (000's)      2001    2002     2003     2004   Total           (000's)
   ----------------------------------------------------         ---------
   Principal   $7,350  $2,500  $1,500  $2,000  $13,350          $13,533

   Weighted
    Average
    Stated
    Rates       9.03%   6.50%   6.20%    5.25%    7.67%              --
   ----------------------------------------------------        ---------

     The  stated  rates  of  interest  expressed  in the  above  table  may  not
approximate the actual yield of the securities which the Company currently holds
since the Company has purchased some of its marketable  securities at other than
face value. Additionally,  some of the securities represented in the above table
may be called or redeemed,  at the option of the issuer, prior to their expected
due dates.  If such early  redemptions  occur,  the  Company  may  reinvest  the
proceeds  realized on such calls or  redemptions in marketable  securities  with
stated  rates of  interest  or  yields  that are  lower  than  those of  current
holdings, affecting both future cash interest streams and future earnings.

     In addition to  investments  in marketable  securities,  the Company places
some of its cash in money market  funds in order to keep cash  available to fund
operations  and to hold  cash  pending  investments  in  marketable  securities.
Fluctuations  in short  term  interest  rates  will  affect  the yield on monies
invested in such money market  funds.  Such  fluctuations  can have an impact on
future cash interest streams and future earnings of the Company,  but the impact
of such fluctuations are not expected to be material.

     The Company does not believe that  inflation  has had a material  impact on
its results of operations.

Liquidity and Capital Resources

     At June 30,  2001  and  December  31,  2000,  cash,  cash  equivalents  and
marketable securities aggregated $23,523,000 and $31,602,000, respectively. This
decrease  was a  result  of the  utilization  of  these  resources  to fund  the
Company's operations.

     To date,  Synaptic  has met its cash  requirements  through the sale of its
stock,  through contract and license revenue,  through interest income and gains
resulting  from its  investments,  through SBIR grants and through the sale of a
portion of its State NOL  carryforwards.  If the  current  public  biotechnology
financing  environment  remains  unfavorable,  raising additional capital in the
public markets may be difficult.

     Synaptic  leases  laboratory  and  office  facilities  under  an  agreement
expiring on December 31, 2015.  The minimum  annual  payment  under the lease is
currently $2,249,000.  The lease provides for fixed escalations in rent payments
in the years 2005 and 2010.

     At June 30, 2001, the Company had $23,523,000 in cash, cash equivalents and
marketable  securities.  On August 3, 2001, the Company received net proceeds of
approximately  $8,450,000  from the sale of  Series B  Preferred  Stock.  If the
stockholders  approve the issuance of shares of preferred  stock,  we anticipate
that we will receive net  proceeds of  approximately  $29,150,000  and that this
closing will occur in the third or fourth quarter of 2001. The Company currently
intends to utilize these funds primarily for clinical  trials,  to move our drug
discovery  programs  forward,  for  patent  related  expenditures,  for  general
corporate  purposes,  to make  leasehold  improvements  to its facilities and to
purchase property and equipment. We expect to continue to incur operating losses
for a number of years.  We believe that cash,  cash  equivalents  and marketable
securities  on hand,  including  cash  received from the closing of the Series B
Preferred  Stock  sold on August  3,  2001,  and cash that we expect to  receive
through interest payments on investments, will be sufficient to fund operations,
as well  as to  support  our  share  of  certain  development  costs  under  the
Grunenthal Agreement, through at least the year 2002.

     As of December 31,  2000,  the Company had NOL  carryforwards  ("NOL's") of
approximately  $57,000,000  for  Federal  income tax  purposes  that will expire
principally  in the years 2002  through  2020.  In  addition,  the  Company  had
research and development credit carryforwards of approximately $1,610,000, which
will  expire  principally  in 2002  through  2018.  Also at December  31,  2000,
Synaptic had NOL carryforwards of approximately $41,637,000 for State income tax
purposes and State research and development  credit  carryforwards  of $475,000.
For financial reporting  purposes,  a valuation allowance has been recognized to
offset the  deferred  tax  assets  related  to these  carryforwards.  Due to the
limitations  imposed  by  the  Tax  Reform  Act of  1986,  and  as a  result  of
significant changes in the Company's ownership in 1993 and 1997, the utilization
of $25,000,000 of Federal NOL carryforwards is subject to annual limitation. The
utilization of the research and development credits is similarly limited. If the
stockholders  approve  the sale of the shares to be sold in the second  closing,
there would not be an ownership  change that would further limit the utilization
of these NOL's at the time of such closing.


Recent Accounting Pronouncements

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting Standards No. 133, "Accounting for Derivatives and Hedging
Activities" ("SFAS 133"), which establishes  accounting and reporting  standards
for derivative instruments, including certain derivative instruments embedded in
other  contracts  (collectively  referred  to as  derivatives)  and for  hedging
activities. SFAS 133, as amended, is effective for all fiscal quarters of fiscal
years  beginning  after June 15, 2000. The adoption of SFAS 133 had no effect on
Synaptic's results of operations, financial position or cash flows.

     This Report on Form 10-Q contains "forward looking  statements"  within the
meaning of Section  27A of the  Securities  Act of 1933,  and Section 21E of the
Securities  Exchange Act of 1934. Such statements  include,  but are not limited
to, those relating to future cash and spending plans, amounts of future research
funding,  and any other statements  regarding future growth,  future cash needs,
future  operations,   business  plans  and  financial  results,  and  any  other
statements which are not historical facts. When used in this document, the words
"expects," "may,"  "believes," and similar  expressions are intended to be among
the words that identify  forward-looking  statements.  Such  statements  involve
risks  and  uncertainties,  including,  but not  limited  to,  those  risks  and
uncertainties  detailed  in the  Company's  Annual  Report  on Form 10-K for the
fiscal year ended December 31, 2000 (the "2000 Form 10-K"),  including in Item 1
of the 2000 Form 10-K under the captions  "Patents,  Proprietary  Technology and
Trade  Secrets,"  "Competition"  and  "Government  Regulation" as well as in the
section entitled  "Disclosure  Regarding  Forward-Looking  Statements" under the
captions  "Early  Stage  of  Product  Development;  Technological  Uncertainty,"
"Dependence on Collaborative Partners and Licensees for Development,  Regulatory
Approvals,  Manufacturing,  Marketing and Other  Resources"  and  "Uncertainties
Related to Clinical Trials" or detailed from time to time in filings the Company
makes  with  the  SEC.  Should  one or  more of  these  risks  or  uncertainties
materialize,  or should underlying assumptions prove incorrect,  actual outcomes
may vary materially from those indicated. Although the Company believes that the
expectations  reflected in the forward-looking  statements  contained herein are
reasonable,  it can give no assurance  that such  expectations  will prove to be
correct.  The Company  expressly  disclaims  any  obligation or  undertaking  to
disseminate any updates or revisions to any forward-looking  statement contained
herein to reflect any change in the Company's  expectations  with regard thereto
or any change in events, conditions or circumstances on which any such statement
is based.



































                                       10

<PAGE>


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         Quantitative and qualitative disclosures about market risk (i.e.,
interest rate risk) are included in Item 2 of this Report.












































                                       11


<PAGE>


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     On June 5, 2000, the Company filed suit in the United States District Court
for the  District of New Jersey  against  M.D.S.  Panlabs,  Inc.,  a  Washington
corporation,  and Panlabs  Taiwan Ltd., a Taiwanese  corporation  (collectively,
"Panlabs").  The suit  alleges that Panlabs has  infringed  several  issued U.S.
Patents owned by the Company,  which relate to cloned human  receptors and their
use in binding  assays.  The suit also alleges that Panlabs has been  importing,
selling and offering to sell  products of the Company's  patented  binding assay
processes  to  pharmaceutical  companies  and  others in the  United  States and
particularly in New Jersey.

     In the suit, the Company seeks an injunction  against  Panlabs'  infringing
activities,  an award of damages for the Company's lost profits, the destruction
of data obtained by the infringement of its patents, and other relief.

     Company  management  believes  that its complaint  against  Panlabs is well
founded  and  necessary  to  protect  the  value  of its  intellectual  property
portfolio.

     Management  believes that the ultimate resolution of the above matter could
have  a  material  impact  on  the  Company's  financial  position,  results  of
operations and cash flows.



























                                       12
<PAGE>


Item 4.  Submission of Matters to a Vote of Security Holders

     On May 10, 2001,  the Company held its annual meeting of  stockholders  for
the  following  purposes:  (i) to  elect a Class  II  director  to the  Board of
Directors  (Proposal No. 1); and (ii) to ratify the  appointment by the Board of
Directors  of Ernst & Young LLP as the  independent  auditors of the Company for
the fiscal year ending December 31, 2001 (Proposal No. 2).

     The stockholders  elected the person named below, the Company's nominee for
director, as a Class II director of the Company,  casting votes for such nominee
or withholding votes as indicated:

                                 VOTES FOR                  VOTES WITHHELD
John E. Lyons........            8,217,348                        44,311


         The stockholders approved Proposal No. 2 as follows:

VOTES FOR     VOTES AGAINST      VOTES ABSTAINED        BROKER NON-VOTES
8,247,690       11,031                2,938                  N/A






























                                       13


<PAGE>


Item 6.  Exhibits and Reports on Form 8-K


(a)       Exhibits

         None

(b)      Reports on Form 8-K

         None





































                                       14


<PAGE>


                                 SIGNATURE PAGE


     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.

                                    SYNAPTIC PHARMACEUTICAL CORPORATION

Date: August 14, 2001               By:   /s/ Kathleen P. Mullinix
                                          -----------------------------
                                          Name: Kathleen P. Mullinix
                                          Title: Chairman, President and
                                                  Chief Executive Officer



                                    By:   /s/ Robert L. Spence
                                          ------------------------------
                                          Name: Robert L. Spence
                                          Title: Senior Vice President,
                                                  Chief Financial Officer &
                                                  Treasurer





























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