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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2002.

For the transition period from            to            .

Commission file number: 0-21643

CV THERAPEUTICS, INC.

(Exact name of Registrant as specified in its charter)

3172 Porter Drive, Palo Alto, California 94304

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (650) 384-8500

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 Par Value

Indicate by check whether the Registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes  x    No  ¨

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, was $476,995,671 as of June 30, 2002.

The number of shares of Common Stock outstanding as of February 28, 2003 was 27,563,307.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant’s Definitive Proxy Statement in connection with the Registrant’s 2003 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this report.

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CV THERAPEUTICS, INC.

FORM 10-K

TABLE OF CONTENTS

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PART I

Item 1.    Business

Overview

CV Therapeutics, Inc., headquartered in Palo Alto, CA, is a biopharmaceutical company focused on the discovery, development and commercialization of new small molecule drugs for the treatment of cardiovascular diseases. The Company, a pioneer in a new biomedical discipline called molecular cardiology, applies advances in molecular biology and genetics to identify new mechanisms of cardiovascular diseases and new targets for drug discovery.

Building on the experience and expertise of the Company’s scientific staff, we use molecular cardiology to focus our research and development efforts on molecular targets that can be identified as directly linked to potentially relevant physiological and clinical criteria such as alterations in blood pressure, heart rate or cardiac output that produce disease symptoms. We are building a pipeline of novel small molecule product candidates that are designed to offer improved efficacy or reduced side effects compared to existing therapies.

Our new drug application (NDA) for Ranexa^™ (ranolazine) for the treatment of chronic angina has recently been filed by the United States Food and Drug Administration (FDA). Ranexa is the first in a new class of compounds that partially inhibit fatty acid oxidation (pFOX). If approved by the FDA, Ranexa would represent the first new class of anti-anginal therapy in the United States in more than 20 years. Tecadenoson (CVT-510), an A₁-adenosine receptor agonist, is being developed for the potential reduction of rapid heart rate during atrial arrhythmias. CVT-3146, an A_2A-adenosine receptor agonist, is being developed for the potential use as a pharmacologic agent in cardiac perfusion imaging studies. Adentri^™, an A₁-adenosine receptor antagonist, is being developed by our partner, Biogen, Inc., for the potential treatment of acute and chronic congestive heart failure (CHF). In addition, we have several research and preclinical development programs designed to bring additional drug candidates into human clinical testing.

Cardiovascular Disease Background

Despite the development during the past 25 years of significant new therapies for patients with cardiovascular disease, heart disease remains the leading cause of death in the United States, claiming almost 1,000,000 lives in 2000. Molecular cardiology is providing new insight into the mechanisms underlying cardiovascular diseases, thus creating the opportunity for improved therapies.

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

Cardiovascular diseases, including atherosclerosis (hardening of the arteries), hypertension (high blood pressure), ischemia (imbalance between oxygen demand and oxygen supply in the heart), and others, may cause permanent damage to the heart and blood vessels, leading to CHF, angina and myocardial infarction (heart attack). According to the American Heart Association’s 2003 Heart and Stroke Statistical Update, in the United States, there were 6.6 million patients with angina and 4.9 million patients with CHF. In 2000, there were 2.8 million hospital diagnoses of acute atrial arrhythmias in the United States. More than 20 years ago, drugs such as nitrates, beta-blockers, calcium channel blockers and angiotensin converting enzyme (ACE) inhibitors were developed to treat cardiovascular diseases. These drugs have contributed to an increase in the survival of

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patients who suffer from cardiovascular disease. However, these drugs also can cause a variety of undesirable side effects, including fatigue, depression, impotence, headaches, palpitations and edema. They may also be less effective in various groups of patients with cardiovascular disease.

Business Strategy

The key elements of our business strategy are as follows:

Identify and develop new drugs within a single therapeutic area—Cardiovascular disease

By focusing on one therapeutic area, cardiovascular disease, we believe that we can be relatively efficient in our drug discovery, development and commercialization efforts. Our concentrated focus on cardiovascular disease enhances our efforts in the following areas:

Focus on small molecule drug candidates

Small molecule therapeutics can frequently be administered orally on an outpatient basis. By contrast, to date, “large molecule” therapeutics, such as proteins or monoclonal antibodies, can very rarely be formulated to accommodate oral outpatient administration. In addition, our emphasis on small molecule therapeutics means that our drug candidates can be produced by conventional pharmaceutical manufacturing methods, using the established production capabilities of the contract pharmaceutical manufacturing industry.

Commercialize products, in part, through a concentrated sales and marketing effort targeted to cardiologists

A focused commercialization effort can provide sales and marketing cost efficiencies. Patients that have severe cardiovascular conditions are often treated by cardiologists. In 2002, there were approximately 24,000 cardiologists in the United States. Cardiologists are often concentrated in metropolitan communities near major medical centers. We believe that this relatively small number of specialists is responsible for a significant portion of the patient visits associated with prescriptions written for important cardiovascular conditions such as angina. These market dynamics make it possible to market and sell our products with a focused commercialization effort.

Participate in the U.S. sales and marketing of at least some of the drugs we develop

In the biopharmaceutical industry, a substantial percentage of the profits generated from successful drug development are typically retained by the entity directly involved in the sales and marketing of the drug. Licensing our drug candidates to a third party who will complete development and provide sales and marketing resources in exchange for a sales royalty may reduce some of our risks. However, we believe that the risk-return tradeoff typically favors developing and then marketing and selling products ourselves. Therefore, a key element of our business strategy is to be involved, when practical, in the sales and marketing of our products in the United States. Though we may become involved in direct sales and marketing activities in other parts of the world, our initial direct efforts will be in the United States.

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Product Portfolio

We have the following portfolio of product candidates:

In the table, under the heading “Development Status,” NDA filed indicates that an NDA has been submitted to the FDA and has been accepted for review; Phase III indicates evaluation of clinical efficacy and safety within an expanded patient population at geographically dispersed clinical trial sites; Phase II indicates clinical safety testing, dosage testing and initial efficacy testing in healthy volunteers and/or a limited patient population; Phase I indicates initial clinical safety testing in healthy volunteers or a limited patient population, or studies directed toward understanding the mechanisms of the drug; Preclinical indicates lead compound selected for possible development based on predetermined criteria for toxicity, pharmacologic activity, potency, specificity and manufacturability; and Research indicates lead candidate being tested against predetermined criteria.

Ranexa^™ (ranolazine)

Ranexa^™ (ranolazine) is a novel small molecule for the potential treatment of angina. Preclinical research indicates that Ranexa causes a partial shift in the source of energy for the heart from fatty acid toward glucose, a more oxygen-efficient energy source. We are developing Ranexa for the potential treatment of angina because we believe Ranexa is safe and effective in treating angina and may reduce the frequency of painful angina attacks. In addition, unlike current anti-anginal medicines, Ranexa does not appear to produce clinically meaningful changes in blood pressure or heart rate, and as a result, Ranexa may provide significant benefits for some patients. We licensed exclusive rights to Ranexa in the United States and specified foreign territories for use in all cardiovascular indications, including angina, from Syntex (U.S.A.), Inc. in March 1996.

Chronic Angina

Chronic angina is a serious and debilitating heart condition, usually associated with coronary artery disease (CAD) and marked by repeated and sometimes unpredictable attacks of chest pain. The condition can significantly compromise patients’ lifestyles. As a result, patients often must limit their activities to avoid an attack.

Angina attacks occur when the heart does not receive sufficient oxygen to function effectively due to CAD, which is characterized by a buildup of fatty, cholesterol-containing plaques in coronary arteries. The

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accumulation of plaques in coronary arteries reduces the flow of oxygen-rich blood to the heart. When the blood supply to the heart is inadequate and cannot provide enough oxygen to meet the heart muscle’s demand, myocardial ischemia ensues and an angina attack may occur. Risk factors for the development of CAD, ischemia and chronic angina include high cholesterol, smoking, high blood pressure, diabetes, age, gender and family history.

Triggers of an angina attack include physical activity, stressful or emotional situations, eating, smoking and cold temperatures. When attacks occur, patients experience a wide range of physical symptoms, which can vary from person to person and from attack to attack. Some patients experience mild symptoms such as feeling faint and/or nauseous or breaking out in a cold sweat. Some patients experience severe pain or chest pressure. Still other patients describe attacks as a vise-like crushing or squeezing sensation behind the breastbone or sternum, which also may radiate to the jaw, teeth, shoulders or back.

Chronic angina is a growing health problem, affecting millions of people, generally over the age of 55. Annually, it costs the nation tens of billions of dollars in healthcare services and lost work. According to the American Heart Association’s 2003 Heart and Stroke Statistical Update, 6.6 million people in the U.S. live with chronic angina, with an additional 400,000 people newly diagnosed each year. The U.S. Census Bureau projects that the 55-plus age group—the group most at-risk for angina—will increase by 80 percent over the next 30 years.

Current Approaches to Chronic Angina Treatment

Currently available drugs to treat chronic angina include beta-blockers, calcium channel blockers and long-acting nitrates. These drugs decrease the heart’s demand for oxygen by reducing the work it performs, by lowering heart rate, blood pressure and/or the strength of the heart’s contraction. These hemodynamic effects can limit or prevent the use of currently available drugs in patients whose blood pressure or cardiac function is already decreased. These limiting effects can be particularly pronounced when these drugs are used in combination.

Despite the use of these therapies, about two-thirds of patients still have angina symptoms. Some patients on multiple drugs continue to experience on average two attacks per week. Additional adverse effects include lower extremity edema associated with calcium channel blockers, impotence and depression associated with beta-blockers, and headaches associated with nitrates. Consequently, for some patients and physicians, presently available medical treatment may not relieve angina without unacceptable effects.

Ranexa and pFOX Inhibition—A Potential New Approach

Cardiac metabolism is the process by which the heart extracts the energy it needs from fat or glucose by combining each with oxygen. Under normal conditions, cardiac metabolism uses both fat and glucose in a ratio of roughly 60% fat to 40% glucose. If fatty acid oxidation (combining fat and oxygen to make energy) is inhibited, then cardiac metabolism shifts to oxidize more glucose. Since the heart gets more energy from a unit of oxygen combined with glucose than it does from that same unit of oxygen combined with fat, shifting cardiac metabolism from fat to glucose should improve cardiac efficiency. However, a complete shift away from fatty acid oxidation could potentially lead to unwanted side effects. Consequently, only a partial inhibition of fatty acid oxidation is likely to be desirable.

Preclinical research indicates that Ranexa partially and reversibly inhibits fatty acid oxidation (pFOX). Because inhibition of fatty acid oxidation indirectly stimulates glucose oxidation, more energy is produced per unit of available oxygen, thereby increasing cardiac oxygen efficiency. Ranexa therefore may help correct the imbalance between oxygen demand and oxygen supply in the ischemic heart, by reducing oxygen demand without reducing cardiac work.

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In our Phase III clinical trials of Ranexa, Ranexa did not produce clinically meaningful reductions in heart rate or blood pressure. Consequently, patients taking Ranexa may be able to maintain these hemodynamic measures at or near baseline levels, which they are unable to do if they take any of the currently available anti-anginal medications, alone or in combination.

Ranexa Development Status

Our Ranexa NDA seeking FDA approval for the treatment of chronic angina has recently been filed by the FDA. The NDA consists of more than 300,000 pages in over 1,100 volumes, and contains data from more than 3,300 angina patients and subjects, and from over 25,000 electrocardiograms. Our two Phase III trials of Ranexa, MARISA and CARISA, were randomized, double-blind, placebo controlled trials. MARISA evaluated Ranexa as monotherapy when used in patients who were not receiving other anti-anginal drugs. CARISA evaluated Ranexa when used in patients who were receiving either a beta-blocker or a calcium channel blocker. In both of these trials, Ranexa statistically significantly increased patients’ symptom-limited exercise duration at trough drug concentrations compared to placebo. This endpoint has historically been the primary efficacy endpoint for the evaluation of anti-anginal therapies that have been approved by the FDA. Additionally, in CARISA, Ranexa significantly reduced the frequency of angina attacks. In both of these trials, Ranexa had no clinically meaningful impact on heart rate or blood pressure, either at rest or following exercise. In these trials, the most common adverse events included dizziness, asthenia or weakness and nausea. Adverse event frequency increased as dose increased. In addition, small but statistically significant increases in QTc, an electrocardiographic measurement, were observed compared to placebo. While we believe that the safety and efficacy of Ranexa have been well characterized as part of our clinical development program, the final determination of the safety and efficacy of Ranexa will be made by the FDA. Ranexa has not been determined by the FDA or any other regulatory authorities to be safe or effective in humans for any use.

Commercialization of Ranexa

In May 1999, we entered into a sales and marketing agreement with Innovex, Inc., a subsidiary of Quintiles Transnational Corp. and a provider of sales and marketing services to the worldwide pharmaceutical industry. Under the agreement, if Ranexa is approved for sale in the United States by the FDA, Innovex is responsible for hiring and training a dedicated sales force for Ranexa, and assisting in funding marketing expenses for up to five years after launch. We will receive 100% of the revenues of Ranexa, and we will pay Innovex a fee equal to up to an average of 33% of our revenues related to the sale of Ranexa in the first two years of sales, which fee will decline to a maximum of 25% of revenues by the fourth and fifth years. Further, in exchange for giving us the option to retain this trained sales force at the end of the contract, we will pay Innovex a royalty on sales of 7% in the sixth and 4% in the seventh years after launch.

Tecadenoson (CVT-510)

We are developing tecadenoson (CVT-510) for the potential reduction of rapid heart rate during acute atrial arrhythmias. Atrial arrhythmias are abnormally rapid heart rates, and include the conditions of atrial fibrillation, atrial flutter and paroxysmal supraventricular tachycardias (PSVT). Tecadenoson is an A₁-adenosine receptor agonist which may act selectively on the conduction system of the heart to slow electrical impulses. Tecadenoson may offer a new approach to rapid and sustained control of acute atrial arrhythmias by reducing heart rate without lowering blood pressure. We have completed a Phase III trial of tecadenoson in patients with PSVT and we have been conducting a Phase II development program aimed at identifying an appropriate commercial dosing regimen for tecadenoson in patients with atrial fibrillation and atrial flutter.

Acute Atrial Arrhythmias

Atrial arrhythmias occur when the atria of the heart beat rapidly, or uncontrollably, sending multiple electrical impulses to the ventricles of the heart. An excessive increase in ventricular rate reduces the heart’s

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cardiac output due to inadequate filling and emptying of the left ventricle. Potentially damaging consequences include low blood pressure and damage to the brain, heart and other vital organs; therefore, these rhythm disturbances often require immediate treatment. Prompt slowing of the heart rate is the goal of acute therapy. Because of the need to treat patients quickly, intravenous therapies allow for rapid stabilization of the patient while the underlying condition is diagnosed and treated.

Each year more than 2.8 million U.S. hospital admissions occur with patients who report symptoms such as palpitations, chest pain and/or shortness of breath caused by an atrial arrhythmia. Atrial arrhythmias can occur spontaneously or can arise following heart attacks, heart failure, cardiac surgery or other procedures that require opening the chest.

Cardiac Conduction System

During an atrial arrhythmia, the atria of the heart beat too rapidly, sending excessive electrical impulses to the ventricles of the heart. The electrical impulses, which initiate in the atria, reach the ventricles by passing through another set of specialized cells known as the atrio-ventricular (AV) node. It is this AV node which controls the rate of transmission of the electrical impulses to the ventricles. Since the rate at which electrical impulses pass through the AV node determines ventricular heart rate, slowing AV nodal transmission will result in a reduction in the ventricular heart rate. Since ventricular rate is a primary determinant of cardiac output, prompt slowing of rapid AV nodal conduction is one treatment approach to slowing the abnormally rapid heart rate of atrial arrhythmias.

Current Approaches to Acute Heart Rate Control During Atrial Arrhythmias

Current medical therapies for acute atrial arrhythmias, which include digoxin, calcium channel blockers, beta-blockers and Adenocard^®, aim to slow the heart to a normal rate, but have significant limitations in the acute care setting. Digoxin is effective in controlling heart rate, but requires time to take effect. This is a significant negative feature in patients whose condition requires prompt heart rate control to restore normal cardiac output. Calcium channel blockers, beta-blockers and Adenocard^® act quickly but reduce blood pressure and depress cardiac function. As a result, these drugs could potentially exacerbate the condition of patients already experiencing cardiac dysfunction as a complication of the arrhythmia. Furthermore, the effect of Adenocard^® persists only for a few seconds, so this product is approved for conversion of PSVT to normal sinus rhythm but is not approved for treatment in patients with atrial fibrillation or flutter.

Potential Treatment by Tecadenoson

Tecadenoson is designed to selectively stimulate the A₁-adenosine receptor. Stimulation of the A₁-adenosine receptor in the AV node slows the speed of electrical conduction across the AV node, which in turn reduces the number of electrical impulses that reach the ventricle. Stimulation of the A₂-adenosine receptor may lower blood pressure. Since tecadenoson is designed to selectively stimulate the A₁-adenosine receptor without significantly stimulating the A₂-adenosine receptor, it may be possible to use tecadenoson to intervene quickly in the arrhythmia process without unwanted blood pressure reductions. Tecadenoson may offer cardiac patients and clinicians with an alternative to current therapies that are either relatively slow to act or that reduce blood pressure.

Tecadenoson Development Status

In November 2002, at the Late Breaking Clinical Trial Sessions of the American Heart Association Scientific Sessions 2002, we announced results from TEMPEST (Trial to Evaluate the Management of PSVT during Electrophysiologic Study with Tecadenoson). In this Phase III trial, all five dosing regimens of tecadenoson converted patients with PSVT back into a normal heart rhythm (p<0.0005 vs. placebo). The most frequent adverse symptom was paresthesia, a tingly sensation. Other less frequent adverse symptoms included

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flushing, tachycardia, headache and dyspnea. There was no apparent dose-dependent increase in any adverse symptom following administration of tecadenoson. As expected, based on the pharmacology of the study drug, dose-dependent, transient and clinically insignificant AV block was observed shortly after conversion across the highest three doses of tecadenoson. Hemodynamic parameters such as blood pressure and heart rate were not adversely affected by tecadenoson.

In an earlier open-label, dose ranging Phase II clinical trial in patients with atrial fibrillation or flutter, tecadenoson consistently reduced heart rate from baseline (p<0.05) without clinically meaningful changes in blood pressure. We have been conducting a Phase II development program aimed at identifying an appropriate commercial dosing regimen for tecadenoson in individuals with atrial fibrillation and atrial flutter. Tecadenoson has not been determined by the FDA or any other regulatory authorities to be safe or effective in humans for any use.

CVT-3146

We are developing CVT-3146 for the potential use as a pharmacologic agent in cardiac perfusion imaging studies. Cardiac perfusion imaging studies offer physicians a non-invasive tool to identify areas of poor blood flow to the heart muscle, which may be caused by coronary blockages. Some of these studies identify areas of limited blood flow by administering pharmacologic agents that increase blood flow in normal coronary arteries much more than in diseased arteries. CVT-3146 is an A_2A-adenosine receptor agonist which may act selectively on the heart to cause coronary vasodilation and thus increase coronary blood flow. Therefore, CVT-3146 may provide doctors with an alternative pharmacologic agent for cardiac perfusion imaging studies that may have fewer unwanted side effects. We have entered into a collaboration with Fujisawa Healthcare, Inc. to develop and market CVT-3146 in North America.

Cardiac Perfusion Imaging Studies

During cardiac perfusion imaging studies, two sets of images of the heart are obtained, one following exercise, the other at rest. Patients begin the procedure by exercising on a treadmill. When they reach their maximum level of exercise, a small amount of radiotracer is injected into the bloodstream. The radiotracer mixes with the blood and is taken up by the heart muscle cells. The patient then lies under a camera that can visualize the radiotracer and produce images of the areas of the heart where the radiotracer has been taken up. Rest images are taken several hours later.

By comparing images taken during exercise (stress) to images at rest, physicians can identify areas of the heart with insufficient blood flow, indicating potentially narrowed or blocked coronary arteries requiring further medical attention. For example, if the test shows a normal image at rest but not at exercise, the heart is ischemic during stress because it is not getting enough blood when it must work harder.

In cases where the patient cannot exercise on the treadmill, the patient typically receives a pharmacologic agent that simulates the conditions of treadmill exercise test on the heart. Approximately 2.9 million patients a year, more than a third of those needing these imaging tests, require a pharmacologic agent to generate maximum coronary blood flow, because peripheral vascular disease, arthritis or other limiting medical conditions prevent them from exercising on the treadmill.

Current Approaches to Increasing Coronary Blood Flow During Cardiac Imaging Studies

Current pharmacologic agents used in cardiac imaging testing include dipyridamole and Adenoscan^®, the brand name for adenosine. These agents are administered to patients intravenously with an infusion pump. Adenoscan^® is the naturally occurring agent that causes coronary vasodilation and has a short half-life. However, because Adenoscan^® activates all four adenosine receptor subtypes, it can cause unwanted side effects including flushing, dyspnea and headache, and it should not be used in asthma patients. Another current cardiac imaging

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agent, dipyridamole, acts by increasing adenosine levels and has a longer half-life. Patients must be closely monitored after administration of dipyridamole, and the most prevalent side effects include chest pain, headache and dizziness in patients.

Potential Treatment by CVT-3146

CVT-3146 is a selective A_2A-adenosine receptor agonist, which is designed to act on the coronary arteries to cause coronary vasodilation and thereby increase coronary blood flow. By selective stimulation of the A_2A-adenosine receptor, CVT-3146 may avoid unwanted effects such as reduced heart rate, heart block and bronchoconstriction, which may occur when other adenosine receptor sub-types are stimulated. CVT-3146 may dilate coronary arteries at doses which do not dilate other arteries, thereby possibly avoiding major and sustained decreases in blood pressure (hypotension). Since CVT-3146 can be administered as a bolus, an infusion pump may not be needed. This potentially can make it easier and faster to administer the pharmacologic agent and perform the imaging test.

CVT-3146 Development Status

In November 2002, at the annual meeting of the American Heart Association, we announced results from a Phase II trial in which CVT-3146 produced a dose dependent increase in coronary blood flow velocity. This open label study was designed to evaluate the effect of a single rapid intravenous bolus of CVT-3146 on coronary blood flow velocity at various doses. At all doses studied, CVT-3146 caused a rapid increase in coronary blood flow velocity that was at or near peak within 30-40 seconds. We have identified doses of intravenous CVT-3146 that caused a maximal response that was similar to that caused by intracoronary adenosine. CVT-3146 was generally well-tolerated, and drug-related adverse events, including chest discomfort, increased heart rate, hypotension, flushing and shortness of breath, were mild and self-limited. In this trial, CVT-3146 achieved CV Therapeutics’ target profile for coronary blood flow increase for a potential pharmacologic stress agent. Based on the results of this Phase II study, we plan to advance CVT-3146 into a Phase III clinical trial. CVT-3146 has not been determined by the FDA or any other regulatory authorities to be safe or effective in humans for any use.

Adentri^™ Program

Patients with CHF have limited heart pumping function, and the corresponding reduction in blood flow impairs the kidney’s ability to clear fluid wastes from the body. Current therapies for CHF tend to negatively impact other activities of the kidneys. Preclinical and clinical trials indicate that A₁-adenosine receptor antagonists may increase the kidney’s ability to clear fluid wastes without decreasing other functions of the kidneys. Thus, we believe that A₁-adenosine receptor antagonists have the potential to be a new therapy for the treatment of CHF.

In March 1997, we licensed the rights to our A₁-adenosine receptor antagonist technology, patents and compounds (including CVT-124) to Biogen, Inc. Biogen’s efforts in this area are referred to as the Adentri^™ program. As a result of the agreements we signed, Biogen has an exclusive worldwide license to develop, manufacture and commercialize any A₁-adenosine receptor antagonists developed either by Biogen or us based on our patents or our technology. Under the license, Biogen is responsible for funding all development and commercialization expenses related to the Adentri program.

Biogen has conducted Phase I and Phase II studies of BG9928, a backup licensed compound, in both oral and intravenous formulations for the potential treatment of acute and chronic CHF.

Congestive Heart Failure

CHF occurs when the heart muscle is weakened by disease so it cannot adequately pump blood throughout the body. As a result of this pump failure, fluid accumulates throughout the body, including in the lungs. This results in shortness of breath. Fluid also accumulates in the body because of adaptations by the kidneys during CHF.

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According to the AHA’s 2003 Heart and Stroke Statistical Update, approximately 4.9 million people in the United States suffered from CHF and an estimated 550,000 new cases arise each year. Almost one million patients in 2000 were hospitalized in the United States with a primary diagnosis of CHF.

Current Approaches to Treating Congestive Heart Failure

Many current treatments for CHF are designed to improve the pumping function of the heart, and involve the administration of diuretics to eliminate excess sodium and water from the body by blocking reabsorption in the kidneys. However, approximately one quarter of hospitalized CHF patients eventually become resistant to current intravenous diuretic therapies such as furosemide, thiazides and spironolactone. The dosage of the most commonly prescribed diuretics for CHF are often increased as the disease progresses. One potential side effect of such dosage increases is potassium loss, which may lead to an increased incidence of cardiac arrhythmias if potassium is not monitored and replaced. A decline in kidney function may also result. Furosemide, which is currently the most commonly used treatment for fluid overload caused by CHF, has been shown in prior trials to be associated with a reduction in the filtration function of the kidneys.

Potential Treatment by A₁-Adenosine Receptor Antagonists

A₁-adenosine receptor antagonists block the action of the A₁-adenosine receptors. Since the A₁-adenosine receptor plays an important role in causing the kidneys to retain sodium and fluids, blocking the action of this receptor may reduce the amount of fluid that the kidneys retain. In addition, clinical trials to date indicate that A₁-adenosine receptor antagonists may be able to treat fluid overload without an associated reduction in the filtration function of the kidneys.

Adentri Development Status

Biogen has conducted Phase I and Phase II studies of BG9928, a backup licensed compound, in both oral and intravenous formulations for the potential treatment of acute and chronic CHF. Under the Adentri program to date, no licensed compound has been determined by the FDA or any other regulatory authorities to be safe or effective in humans for any use.

Preclinical Pipeline

Our research and development team is creating new product opportunities through our expertise in molecular cardiology. We have preclinical research programs in the areas of:

Adenosine Receptor Research

Adenosine is a naturally occurring small molecule that elicits pharmacological responses that tend to compensate for the imbalance in oxygen supply relative to demand that occurs when blood vessels are partially

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blocked by cardiovascular disease. We continue to explore the biology of adenosine through selective activation or inhibition of its four receptor subtypes, A₁, A_2A, A_2B and A₃. Our adenosine receptor research program has discovered proprietary compounds that selectively elicit the desired effects of adenosine receptor stimulation for the treatment of certain electrical conductance disturbances, such as atrial arrhythmias, and regulate the mechanisms of new blood vessel growth, or angiogenesis.

- Cardiac Conduction

Electrical impulses within the heart muscle play a key role in causing the heart muscle to sequentially expand and then contract, which is required for the heart to pump blood throughout the body in a controlled rhythm. Failure of this electrical system to function properly will result in a poorly pumping heart, such as in atrial arrhythmias.

We have discovered a series of novel, proprietary, orally bio-available partial A₁-adenosine receptor agonists, including CVT-3619, that selectively slow the electrical conductance in the heart to adjust the rate of a beating heart into the normal range. These compounds are similar to tecadenoson (which is being developed for the acute care of atrial arrhythmias), and are targeted for the continued care of patients with chronic atrial arrhythmias.

- Vascular Disease

Our scientists have led the effort to fully characterize the role of adenosine in the initiation, maintenance, and growth of new vessels in vascular beds that are deprived of oxygen due to cardiovascular disease. We have discovered the receptor that is responsible for regulation of the proteins such as vascular endothelial growth factor and fibroblast growth factor, and have discovered small molecule antagonists of this process. The goal of these programs, which includes compounds such as CVT-3634, is to harness this naturally occurring process for the potential treatment of peripheral vascular disease or aberrant angiogenesis that causes diabetic eye conditions such as retinopathy and macular degeneration.

- Lipid Metabolism

High levels of plasma free fatty acid are often associated with high triglyceride levels, insulin resistance and diabetes, which are three important cardiovascular risk factors. Adenosine receptor stimulation in fat cells is known to decrease free fatty acids and the subsequent production of triglycerides. We have discovered compounds, such as CVT-3619, that positively regulate lipid metabolism to reduce these potentially harmful metabolic intermediates. The goal of the adenosine receptor research of lipid metabolism is to develop novel, orally bioavailable compounds that reduce free fatty acid and triglyceride levels and increase insulin sensitivity.

Cardiac Metabolism

In order for the heart to adequately pump blood, fuel (in the form of fatty acids and glucose) is metabolized with oxygen to yield ATP (a key molecule involved in the expenditure of cellular energy). When oxygen is in limited supply, for example when the vessels that feed the heart are blocked from coronary artery disease, a compound that partially inhibits fatty acid oxidation (pFOX), could be beneficial, because the heart gets more energy from a unit of oxygen combined with glucose than it does from the same unit of oxygen combined with fat.

The goals of our cardiac metabolism program are to further characterize the therapeutic potential of ranolazine in the treatment of indications other than angina, and to discover new, proprietary second generation pFOX products. For example, in a preclinical model of congestive heart failure, ranolazine increased work output by the heart without increasing the consumption of oxygen. In other words, cardiac performance and cardiac efficiency were improved. We have also discovered several novel, proprietary compounds, including CVT-4325, that are potential second generation pFOX compounds.

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Atherosclerosis

The goal of our HDL drug discovery program is to study the ways in which the body removes excess cholesterol from the walls of blood vessels, in an effort to prevent or reverse the buildup of arterial plaques that cause heart attacks. Roughly half of heart attacks occur in patients with low levels of high density lipoproteins (HDL), known as the “good” form of cholesterol. Patients with the genetic disorder called Tangier disease have virtually no HDL in their blood, and are at a greatly increased risk for developing cardiovascular disease. Our scientists have used a new strategy combining gene expression microarrays and biochemical techniques to identify the gene that is defective in patients with Tangier disease. We have targeted this gene as part of a drug discovery program to identify novel, proprietary compounds that may increase reverse cholesterol transport and thus the amount of HDL in the blood.

Vascular Stenosis

The goal of our cell cycle inhibition program is to develop new therapeutics that suppress abnormal cellular proliferation. Excessive proliferation of cardiovascular connective tissue cells or vascular smooth muscle cells causes the scarring and loss of function that is characteristic of chronic diseases of the heart, blood vessels and kidneys. As part of our drug discovery strategy, we have focused upon enzymes called cell cycle enzymes that regulate cellular growth and development. CVT-2584 is one of a series of novel compounds that selectively inhibit CDK2, a critical cell cycle enzyme. Preclinical studies with CVT-2584 have shown a substantial reduction of blockages after vascular injury.

Cardiovascular Genomics

Our cardiovascular genomics program is working to utilize the latest tools of genomics and gene expression microarray technology to identify novel gene and protein targets for drug discovery. We have focused on evaluating the expression of tens of thousands of human genes that are involved in the accumulation of lipids in the vascular wall and in the response of blood vessels to injury. In this way, we are seeking to identify novel approaches to reduce the risk of heart attacks and to reduce the occurrence of restenosis following interventional vascular treatments such as angioplasty or bypass surgery.

Collaborations and Licenses

We have established, and intend to continue to establish, strategic partnerships to potentially expedite the development and commercialization of our drug candidates. In addition, we have licensed chemical compounds from academic collaborators and other companies. Our key collaborations and licenses currently in effect include:

University of Florida Research Foundation

In June 1994, we entered into a license agreement with the University of Florida Research Foundation, Inc. under which we received exclusive worldwide rights to develop A₁-adenosine receptor antagonists and agonists for the detection, prevention and treatment of human and animal diseases. In consideration for the license, we paid an initial license fee and are obligated to pay royalties based on net sales of products that utilize the licensed technology. Under this agreement, we must exercise commercially reasonable efforts to develop and commercialize one or more products covered by the licensed technology. In the event we fail to reach certain milestones under the agreement, the licensor may convert the exclusive license into a non-exclusive license. In March 1997, we sublicensed our rights under this license that relate to A₁-adenosine receptor antagonists to Biogen.

Syntex

In March 1996, we entered into a license agreement with Syntex (U.S.A.) Inc. to obtain United States and foreign patent rights to Ranexa for the treatment of angina and other cardiovascular indications. Syntex provided

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initial quantities of the compound for use in clinical trials and related development activities. The license agreement is exclusive and worldwide except for the following countries which Syntex has licensed exclusively to Kissei Pharmaceuticals, Ltd. of Japan: Japan, Korea, China, Taiwan, Hong Kong, the Philippines, Indonesia, Singapore, Thailand, Malaysia, Vietnam, Myanmar, Laos, Cambodia and Brunei.

Under our license agreement, we paid an initial license fee, and are obligated to make certain milestone payments to Syntex, upon receipt of the first and second product approvals for Ranexa in any of certain major market countries (consisting of France, Germany, Italy, the United States and the United Kingdom). Unless the agreement is terminated, in connection with the first such product approval, we will pay Syntex, on or before March 31, 2005, $7.0 million plus interest accrued thereon from May 1, 2002, until the date of payment. Unless the agreement is terminated, if the second product approval in one of the major market countries occurs before May 1, 2004, we will pay Syntex, on or before March 31, 2006, $7.0 million plus interest accrued thereon from the date of approval until the date of payment, and if the second such product approval occurs after May 1, 2004, but before March 31, 2006, we will pay Syntex, on or before March 31, 2006, $7.0 million plus interest accrued thereon from May 1, 2004, until the date of payment. Unless the agreement is terminated, if the second product approval in one of the major market countries has not occurred by March 31, 2006, we will pay Syntex $3.0 million on or before March 31, 2006, and if we receive the second product approval after March 31, 2006, we will pay Syntex $4.0 million within thirty (30) days after the date of such second product approval. No amounts have been accrued to date in relation to these milestones. In addition, we will make royalty payments based on net sales of products that utilize the licensed technology. We are required to use commercially reasonable efforts to develop and commercialize the product for angina.

We or Syntex may terminate the license agreement for material uncured breach, and we have the right to terminate the license agreement at any time on 120 days written notice if we decide not to continue to develop and commercialize Ranexa.

Biogen

In March 1997, we entered into research collaboration and license agreements with Biogen which grant Biogen the exclusive worldwide right to develop and commercialize any products which are produced based on our A₁-adenosine receptor antagonist patents or technologies (including our rights under the University of Florida Research Foundation license) for all indications. Biogen’s efforts in this area are referred to as the Adentri^™ program. In February 2000, based on results of a Phase II clinical trial, Biogen announced its intention to continue with the Adentri^™ program, but with a backup licensed compound. Biogen owes certain milestone payments in connection with development and commercialization of licensed products, and is obligated to pay royalties on any sales of products covered by the agreements. Biogen has control and responsibility for conducting, funding and pursuing all aspects of the development, submissions for regulatory approvals, manufacture and commercialization of A₁-adenosine receptor antagonist products under the agreements.

Biogen may terminate the agreements for any reason upon 60 days written notice. If Biogen terminates the agreements, all rights to the technology we licensed to Biogen will revert to us. In addition, we will receive a non-exclusive license to certain technology of Biogen, and we will owe Biogen a royalty on future sales of any A₁-adenosine receptor antagonist products under the agreements.

Innovex

In May 1999, we entered into a sales and marketing services agreement with Innovex, a subsidiary of Quintiles Transnational Corp. Under this agreement, if Ranexa is approved for sale in the United States by the FDA, Innovex is responsible for hiring and training a dedicated sales force for Ranexa, and assisting in funding marketing expenses for up to five years after launch. We will receive 100% of the revenues from sales of Ranexa and we will pay Innovex a share of those revenues.