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 March 31, 1998

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

                                 (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  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 May 5, 1998, there were 10,697,957 shares of the registrant's Common Stock
outstanding.


<PAGE>



                       SYNAPTIC PHARMACEUTICAL CORPORATION

   INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998


                          PART I. FINANCIAL INFORMATION

                                                                         Page
                                                                         ----
Item 1. Financial Statements                                               1

Balance Sheets at March 31, 1998 and December 31, 1997                     1

Statements of Operations and Comprehensive Income (Loss) for
  the three months ended March 31, 1998 and 1997                           2

Statements of Cash Flows for the three months ended
  March 31, 1998 and 1997                                                  3

Notes to Financial Statements                                              4

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


                           PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds                          8

Item 5. Other Information                                                  9

Item 6. Exhibits and Reports on Form 8-K                                  10

Signatures                                                                11






























                                       (i)


<PAGE>



                          PART I. FINANCIAL INFORMATION


Item 1. Financial Statements


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


                                     ASSETS

                                                       March 31,  December 31,
                                                         1998          1997
                                                      ----------  -----------
                                                      (Unaudited)   (Audited)
Current assets:
 Cash and cash equivalents                               $10,112      $23,113
 Restricted cash                                             600          600
 Marketable securities--current maturities                 8,712       10,010
 Revenue receivable under collaborative agreement            160           40
 Other current assets                                      1,480          674
                                                         -------      -------
  Total current assets                                    21,064       34,437

Property and equipment, net                                4,811        4,682

Marketable securities                                     43,266       28,977

Patent and patent application costs,
  net of accumulated amortization                          1,222        1,306
                                                         -------      -------
                                                         $70,363      $69,402
                                                         =======      =======



                      LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities:
 Accounts payable                                        $   258      $   811
 Accrued liabilities                                         597          547
 Accrued compensation                                        120          340
                                                         -------      -------
  Total current liabilities                                  975        1,698

Stockholders' equity:
 Preferred Stock, $.01 par value; authorized--
  1,000,000 shares; issued--none                              --           --
 Common Stock, $.01 par value; authorized--
  25,000,000 shares; issued and outstanding--
  10,675,570 shares in 1998 and 10,526,585 shares
  in 1997;                                                   107          105
 Additional paid-in capital                               98,375       97,049
 Deferred compensation                                      (136)        (160)
 Accumulated deficit                                     (28,887)     (29,316)
 Accumulated other comprehensive (loss) income--
  net unrealized (losses) gains on securities                (71)          26
                                                         -------      -------
  Total stockholders' equity                              69,388       67,704
                                                         -------      -------
                                                         $70,363      $69,402
                                                         =======      =======











                       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
                                                      ended March 31,
                                                     1998         1997
                                                   -------      -------
Revenues:
 Contract revenue                                  $ 2,165      $ 2,555
 License revenue                                     2,000           --
 Grant revenue                                          90          140
                                                   -------      -------
  Total revenues                                     4,255        2,695

Expenses:
 Research and development                            3,661        3,348
 General and administrative                          1,083          965
                                                   -------      -------
  Total expenses                                     4,744        4,313
                                                   -------      -------
Loss from operations                                  (489)      (1,618)

Other income, net:
 Interest income                                       918          485
 Interest expense                                       --           (3)
                                                   -------      -------
  Other income, net                                    918          482
                                                   -------      -------
Net income (loss)                                  $   429      $(1,136)
                                                   =======      =======


Comprehensive income (loss):

Net income (loss)                                  $   429      $(1,136)

Other comprehensive (loss) income--unrealized
 holding (losses) gains arising during period          (97)         168
                                                   -------      -------
Comprehensive income (loss)                        $   332      $  (968)
                                                   =======      =======




Basic net income (loss) per share                   $ 0.04       $(0.15)
                                                    ======       ======

Diluted net income (loss) per share                 $ 0.04       $(0.15)
                                                    ======       ======

Shares used in computation of basic
 net income (loss) per share                    10,645,281    7,634,760
                                                ==========    =========
Shares used in computation of diluted
 net income (loss) per share                    10,907,940    7,634,760
                                                ==========    =========
















                       See notes to financial statements.

                                        2


<PAGE>



                       SYNAPTIC PHARMACEUTICAL CORPORATION
                            STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)
                                                        For the three months
                                                          ended March 31,
                                                        1998          1997
                                                       -------      -------
Operating activities:

Net income (loss)                                      $   429      $(1,136)
Adjustments to reconcile net income (loss) to
 net cash used in operating activities:
Depreciation and amortization                              327          270
Amortization of premiums/(discounts) on securities          19          (50)
Amortization of deferred compensation                       24           33
Changes in operating assets and liabilities:
Increase in other current assets                          (806)        (917)
Decrease in accounts payable, accrued liabilities
  and accrued compensation                                (723)        (155)
Increase in collaborative agreement
  revenue receivable                                      (120)          --
                                                       -------      -------
Net cash used in operating activities                     (850)      (1,955)


Investing activities:

Sale or maturity of investments                         14,300        4,400
Purchase of investments                                (27,407)      (2,243)
Purchases of property and equipment                       (372)      (1,055)
                                                       -------      -------
Net cash (used in) provided by investing activities    (13,479)       1,102


Financing activities:

Issuance of common stock, net of repurchases             1,328            3
Payments on capital lease                                   --          (22)
                                                       -------      -------
Net cash provided by (used in) financing activities      1,328          (19)
                                                       -------      -------

Net decrease in cash and cash equivalents              (13,001)        (872)


Cash and cash equivalents at beginning of period        23,113        4,589
                                                       -------      -------

Cash and cash equivalents at end of period             $10,112      $ 3,717
                                                       =======      =======
























                       See notes to financial statements.

                                        3


<PAGE>



                       SYNAPTIC PHARMACEUTICAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 1998


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, 1997, and
notes  thereto  included in the Company's  1997 Annual Report on Form 10-K.  The
results of  operations  for the fiscal  quarter  ended March 31,  1998,  are not
necessarily  indicative of the results of operations to be expected for the full
year.


Note 2 -- New Accounting Standard

         In June 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 130, "Reporting  Comprehensive  Income."
This  pronouncement,  which is required to be adopted effective January 1, 1998,
requires the presentation of a statement of comprehensive income.  Comprehensive
income is  defined as the  change in equity of a  business  enterprise  during a
period  resulting  from  transactions  and other events and  circumstances  from
nonowner sources.  Comprehensive  income (loss) for the Company,  in addition to
net income (loss), includes unrealized gains and losses on marketable securities
held for sale, currently recorded in stockholders' equity.


Note 3 -- Basic and Diluted Net Income (Loss) per Share

         A  reconciliation  of the number of shares used in the  computation  of
basic  net  income  (loss)  per  share  to the  number  of  shares  used  in the
computation of diluted net income (loss) per share is as follows:

                                            For the Three Months Ended
                                                    March 31,
                                                1998          1997
                                             ----------    ----------
Shares used in the computation of Basic
 Net Income (Loss) per Share--Weighted
 average common shares outstanding           10,645,281     7,634,760

Weighted average shares underlying
 common stock options outstanding               255,401            -- (1)

Weighted average shares underlying
 common stock warrants outstanding                7,258            -- (1)
                                             ----------    ----------
Shares used in the computation of
 Diluted Net Income (Loss) per Share         10,907,940     7,634,760
                                             ==========    ==========


(1) Common  equivalent  shares from stock options and warrants are excluded from
the calculation of diluted net loss per share as their effect is anti-dilutive.


















                                        4


<PAGE>



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

Overview

         Synaptic Pharmaceutical  Corporation is a biotechnology company engaged
in the  development  of a broad platform of enabling  technology  which it calls
"human   receptor-targeted   drug  design  technology."  It  is  utilizing  this
technology  both to  discover  and clone the genes that code for human  receptor
subtypes  associated  with specific  disorders and to design  compounds that can
potentially be developed as drugs for treating these  disorders.  The Company is
engaged in  collaborative  agreements with five  pharmaceutical  companies:  Eli
Lilly and Company  ("Lilly"),  Merck & Co., Inc.  ("Merck"),  Novartis Pharma AG
("Novartis"),  The Warner-Lambert Company ("Warner-Lambert") and Grunenthal GmbH
("Grunenthal").  The Company has also  licensed  certain  patent rights to Glaxo
Group Limited ("Glaxo") under a license agreement.  Since inception, the Company
has financed its operations  primarily through the sale of stock,  through funds
provided  by  its  collaborative   partners  Lilly,  Merck  and  Novartis  under
collaborative agreements,  through funds provided by its licensee, Glaxo under a
license  agreement and through  interest income and capital gains resulting from
its investments. The Company also receives revenues from government grants under
the  Small  Business  Innovative  Research  ("SBIR")  program  of  the  National
Institutes of Health.

         Under its agreements with Lilly,  Merck,  Novartis,  Warner-Lambert and
Glaxo,  the Company may  receive one or two types of revenue:  contract  revenue
and/or license revenue.  Contract revenue includes research funding to support a
specified  number of the Company's  scientists and payments upon the achievement
of specified  research and development  milestones.  Research funding revenue is
recognized  ratably over the period of the  agreement to which it relates and is
based  upon  predetermined  funding  requirements.  Research  milestone  payment
revenue is recognized when the related research  milestone is achieved.  License
revenue represents  non-refundable  payments for a license to one or more of the
Company's  patents or a license to one or more of the Company's  technology  and
drug discovery systems.  Non-refundable  payments for licenses are recognized at
such time as they are received or, if earlier, become guaranteed. In addition to
contract revenue and/or license  revenue,  if a drug is developed as a result of
any of its agreements with Lilly, Merck, Novartis,  Warner-Lambert or Glaxo, the
Company is  entitled  to receive  royalty  payments  based upon the sale of such
drugs.  Under its agreement with  Grunenthal,  the Company would receive revenue
from the sale in its  territories  (as  defined) of drugs,  if any,  that may be
developed as a result of the collaboration.

         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
the Company's technologies.  The Company has been historically  unprofitable and
had an accumulated deficit of $28,887,000 at March 31, 1998. The Company expects
to continue to incur operating losses for a significant  number of years and may
not become profitable, if at all, until it begins to receive royalty revenue. To
date,  the Company has not received  any royalty  revenue and does not expect to
receive such revenue for a significant number of years, if at all.

Results of Operations

Comparison of the Three Months Ended March 31, 1998 and 1997

         Revenues.  The Company  recognized revenue of $4,255,000 and $2,695,000
for the three months ended March 31, 1998 and 1997,  respectively.  The increase
of $1,560,000 was  attributable  primarily to: an increase in license revenue of
$2,000,000.  This  increase in license  revenue was offset by a net  decrease in
contract  revenue  of  $390,000  which  is  primarily  due to the  reduction  in
full-time  equivalents  scientists  being funded under one of the  collaborative
arrangements from which the Company is receiving funding.

         Research and Development  Expenses.  The Company incurred  research and
development  expenses of  $3,661,000,  and $3,348,000 for the three months ended
March 31,  1998 and 1997,  respectively.  The  increase of  $313,000,  or 9%, in
research and development expenses was attributable  primarily to: an increase of
$230,000 in compensation expense resulting from a net average headcount increase
of 11 research  personnel as well as annual salary  increases for the scientific
staff; and an increase of $82,000 in facility related costs.

         General and Administrative  Expenses.  The Company incurred general and
administrative  expenses of  $1,083,000  and $965,000 for the three months ended
March 31, 1998 and 1997,  respectively.  The increase of  $118,000,  or 12%, was
attributable  primarily  to an  increase  of  $60,000  in  compensation  expense
resulting  from a net average  headcount  increase as well as annual  salary and
bonus increases for the administrative  staff; and a net increase of $58,000 for
all other administrative costs.

                                        5


<PAGE>



         Other Income,  Net. The Company  recorded  other income of $918,000 and
$482,000 for the three months ended March 31, 1998 and 1997,  respectively.  The
increase of $436,000 was  primarily  due to higher  cash,  cash  equivalent  and
marketable  securities  balances  during 1998 which resulted from the receipt of
net proceeds  from a public  offering of its common stock  completed in November
1997.

         Net Income  (Loss) and Basic Net Income  (Loss) Per Share.  The Company
had net income of $429,000 or basic net income per share of $0.04,  and incurred
a net loss of  $1,136,000  or basic net loss per share of  ($0.15)for  the three
months  ended March 31, 1998 and 1997,  respectively.  The increase in basic net
income per share of $0.19 resulted  primarily  from higher license  revenues and
higher interest income during the first quarter of 1998.

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

Liquidity and Capital Resources

         At March 31, 1998 and December 31, 1997,  cash,  cash  equivalents  and
marketable securities aggregated $62,090,000 and $62,100,000,  respectively.  In
addition to the cash,  cash  equivalents  and  marketable  securities  described
above, the Company had $600,000 in restricted cash recorded in its balance sheet
at March 31, 1998.  This restricted cash secures lease payments to the Company's
landlord for one full year.

         To date, the Company has met its cash requirements  through the sale of
its stock, through contract and license revenue, through SBIR grants and through
interest  income and capital gains resulting from its  investments.  As of March
31,  1998,  the Company had  received:  $97,600,000  from the sale of its stock;
$54,800,000 in licensing fees, research funding and milestone payments under its
collaborative and license agreements;  $3,500,000 in SBIR grants; and $6,800,000
in other income, net. To date, the portion of these funds that has been expended
by the Company has been used  principally to fund research and  development,  to
purchase fixed assets used primarily in its research  activities,  to create its
patent estate and to pay general and administrative support costs.

         At March 31, 1998, the Company was involved in collaborative agreements
with Lilly,  Merck,  Novartis,  Warner-Lambert  and  Grunenthal and had licensed
certain  patent  rights to Glaxo  under a license  agreement.  Lilly,  Merck and
Novartis  are  providing  research  funding  to the  Company  during  1998.  The
aggregate  amount of research  funding under these  agreements which the Company
expects to receive during the remainder of 1998 is approximately $4,800,000. The
Company's  agreement with  Warner-Lambert  does not provide any research funding
during 1998 and the agreements with Grunenthal and Glaxo do not provide research
funding.  Research  funding under the Lilly  agreement is scheduled to expire on
December 31, 1998.  Research  funding under the Merck  agreement is scheduled to
expire  on  November  30,  1998  but  Merck  has  the  right  to  terminate  the
collaboration  and such funding earlier by giving 90 days' prior written notice.
Research funding under the Novartis  agreements is scheduled to expire on August
3, 1998.

         At March 31, 1998,  the Company had invested an aggregate of $8,800,000
in property and equipment.  The Company leases  laboratory and office facilities
under an agreement  expiring on December 31, 2015.  The minimum  annual  payment
under the lease is currently $674,000.

         At March 31, 1998 the Company had $62,090,000 in cash, cash equivalents
and marketable securities.  The Company intends to utilize these funds primarily
to  conduct  its  current  and future  research  programs,  for  patent  related
expenditures,  for general corporate purposes and to make leasehold improvements
to its facilities  beyond the level which existed on March 31, 1998. The Company
expects to continue to incur operating losses for a significant  number of years
and will  require the use of cash to finance its capital  programs.  The Company
believes  that its cash on hand,  together  with the funds  that it  expects  to
receive from its  collaborative  partners,  interest  income and funds  received
under SBIR grants,  will be  sufficient to fund an increased  operating  expense
level and increased level of capital spending through the year 2000.

         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
"expect,"  "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 under the captions "Patents,  Proprietary Technology and
Trade  Secrets,"  "Competition"  and  "Government  Regulation"  in the Company's
Annual Report on Form

                                        6


<PAGE>



10-K for the fiscal year ended  December 31, 1997 (the "1997 Form 10-K") as well
as those risks and  uncertainties  disclosed  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" as
"Cautionary  Statements"  in the 1997 Form 10-K 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 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.

































































                                        7


<PAGE>



                           PART II. OTHER INFORMATION


Item 2.  Changes in Securities and Use of Proceeds


         Securities Act Rule 229.463 ("Rule 463") required  issuers to report on
Form SR their use of proceeds,  following an initial public offering, within ten
days of the first three months  following the effective date of the registration
statement,  and every six months  thereafter,  until the application of all such
proceeds was  complete.  Effective  September  2, 1997,  pursuant to Release No.
34-38850,  the Securities and Exchange  Commission  ("SEC")  amended Rule 463 to
eliminate  Form SR and now  requires  a  first-time  registrant  to  report  the
application  of proceeds in each of its periodic  reports filed  pursuant to the
requirements  under the Exchange Act until the  application  of such proceeds is
complete. Prior to September 2, 1997, the Company utilized Form SR to report the
application  of proceeds  received by the Company  following its initial  public
offering.

         The information  provided below represents a reasonable estimate of the
cumulative  application,  through  March  31,  1998,  of  the  net  proceeds  of
$25,194,000 which were received  following the Company's initial public offering
on December 13, 1995:


Construction of plant, building and facilities                       $   327,000

Purchase and installation of machinery and equipment                 $ 3,580,000

Working capital used to fund operations                              $16,528,000


         Except for payments described in the following sentence, the cumulative
application of the net offering proceeds listed above represents direct payments
to others. No payments were made to directors or officers or to their associates
except for payments made in the ordinary  course of business which include,  but
may not be limited to, the payment of officer  salaries,  fringe  benefits,  and
expense reimbursements or compensation paid to directors for their attendance at
board  meetings or for their services  provided to the Company under  consulting
arrangements, if any.

         At March 31, 1998, the status of proceeds pending final application are
as follows:


Temporary investment of proceeds in marketable securities            $ 4,759,000



































                                        8


<PAGE>



Item 5.  Other Information


         The Company, in collaboration with Lilly, is currently  conducting drug
discovery  programs  focused  on a number of  serotonin  receptor  subtypes  and
therapeutic applications.  With respect to the drug discovery program focused on
the  identification and development of serotonin 1A antagonists which ameliorate
the withdrawal symptoms  associated with smoking cessation,  a compound has been
selected by Lilly for possible  development and is undergoing  late  preclinical
testing.

         The  Company,  in  collaboration  with  Merck,  is  conducting  a  drug
discovery  program to develop alpha 1a adrenergic  antagonists for the treatment
of benign prostatic hyperplasia.  Merck is currently conducting Phase I clinical
trials in Europe with a compound identified as part of the collaboration.  Other
compounds selected by Merck are undergoing early or late preclinical testing.

         For a general  description  of Phase I clinical  trials,  the early and
late  preclinical  stages of  testing  and other  stages of drug  discovery  and
development, see the Company's 1997 Form 10-K.





























































                                        9


<PAGE>



Item 6.  Exhibits and Reports on Form 8-K


(a) Exhibits

Exhibit
  No.       Description
-------     -----------

10.1        Employment Agreement dated as of April 1, 1998, between the
             Company and Theresa A. Branchek (filed herewith)

27                Financial Data Schedule


(b)               Reports on Form 8-K

On January 9, 1998, the Company filed a Current  Report on Form 8-K  summarizing
the status of certain drug discovery  programs it is conducting in collaboration
with Lilly.




























































                                       10


<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
                                                  (Registrant)



Date: May 8, 1998                       By:/s/ Kathleen P. Mullinix
                                        -----------------------------
                                        Name: Kathleen P. Mullinix
                                        Title: Chairman, President &
                                                Chief Executive Officer



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






















































                                       11