UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Commission File Number

000-50438

Myogen, Inc.

(Exact name of Registrant as specified in its charter)

7575 West 103rd Avenue, Suite 102

Westminster, Colorado 80021

(303) 410-6666

(Address, including zip code, and telephone number,

including area code, of principal executive offices)

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

(Title of Class)

     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 þ          No o

      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 of 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.     o

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

      The aggregate market value of common stock held by non-affiliates of the Registrant (based upon the closing sale price of such shares on the last business day of the registrant’s most recently completed second fiscal quarter as reported on the Nasdaq National Market) was $78,853,502. All executive officers and directors of the Registrant and all person filing a Schedule 13D with the Securities and Exchange Commission in respect to Registrant’s Common Stock have been deemed, solely for the purpose of the foregoing calculation, to be “affiliates” of the Registrant.

      As of March 9, 2005 there were 35,763,136 shares of the Registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Registrant’s definitive Proxy Statement for the 2005 Annual Meeting of Stockholders are incorporated by reference into Part III of this report on Form 10-K to the extent stated therein.

TABLE OF CONTENTS

PART I

      Unless the context requires otherwise, references in this report to “Myogen,” the “Company,” “we,” “us,” and “our” refer to Myogen, Inc.

      This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements concerning our plans to continue development of our current product candidates; conduct clinical trials with respect to our product candidates; seek regulatory approvals; address certain markets; engage third-party manufacturers to supply our clinical trial and commercial requirements; hire sales and marketing personnel; and evaluate additional product candidates for subsequent clinical and commercial development. In some cases, these statements may be identified by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These statements involve known and unknown risks and uncertainties that may cause our or our industry’s results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to such differences include, among other things, those discussed under the captions “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements not specifically described above also may be found in these and other sections of this report.

Overview

      We are a biopharmaceutical company focused on the discovery, development and commercialization of small molecule therapeutics for the treatment of cardiovascular disorders. We believe that our advanced understanding of the biology of cardiovascular disease combined with our clinical development expertise in cardiovascular therapeutics provide us with the capability to discover novel therapies, as well as identify, license or acquire products that address serious, debilitating cardiovascular disorders that are not adequately treated with existing therapies.

      We have three product candidates in late-stage clinical development: enoximone capsules for the treatment of patients with advanced chronic heart failure, ambrisentan for the treatment of patients with pulmonary arterial hypertension (PAH) and darusentan for the treatment of patients with resistant systolic hypertension. All three of our product candidates are orally administered small molecules that we believe offer advantages over currently available therapies and have the potential to address unmet needs in their respective markets.

      Through our internal research program and academic collaborations, we are developing an advanced understanding of the biological pathways of heart disease and have discovered several novel molecular targets that we believe play a key role in heart failure. In October 2003, to further advance our discovery research program, we entered into a research collaboration with the Novartis Institutes for BioMedical Research, Inc. (“Novartis”) for the discovery and development of novel drugs for the treatment of cardiovascular disease. In exchange for a $4.0 million upfront payment, a deferred payment of an additional $1.0 million that was made in October 2004 and obligations to provide research funding to us through October 2006, Novartis has the exclusive right to license drug targets and compounds developed through the collaboration.

      Upon execution of a license to a compound developed through our collaboration, Novartis is obligated to fund all further development of the licensed product candidate, make payments to us upon the achievement of certain milestones, which may total up to $17.1 million for each product candidate, and pay us royalties for sales of any products that are successfully commercialized. Upon the completion of Phase II clinical trials of any product candidate Novartis has licensed from us, we have the option to enter into a co-promotion and profit sharing agreement with them for that product candidate, subject to our payment of a portion of the development expenses up to that point plus a premium, our agreement to share the future development and marketing expenses and elimination of the royalty payable to us.

      We were incorporated in Colorado in June 1996 and we reincorporated in Delaware in May 1998. We operate as a single business segment. Our website address is www.myogen.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge through our website, http://www.myogen.com, as soon as reasonably practicable after we file them with, or furnish them to, the SEC. Additionally, you may read and copy materials that we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The Cardiovascular Market

      The term cardiovascular disease is used to describe a continuum of clinical conditions resulting primarily from three underlying chronic diseases: atherosclerosis, hypertension and diabetes. These underlying diseases cause permanent damage to the heart, blood vessels and kidneys, leading to progressively debilitating clinical conditions such as chronic heart failure, PAH, systemic hypertension, chronic renal disease, heart attack and stroke.

      Cardiovascular disease is the second leading cause of death and disability in the United States, accounting for 19% of all hospitalizations in short-stay, non-Federal hospitals and over 60% of all total mortality in 2002. The American Heart Association estimates that the total direct and indirect costs of cardiovascular disease in the United States will be approximately $394 billion in 2005, including

$46 billion in costs for drugs and related medical durables and $140 billion in hospitalization and nursing home costs. Despite improved treatments and increased awareness of preventative measures, approximately 70 million people in the United States currently suffer from one or more types of cardiovascular disease.

      Over the past 25 years, drugs such as beta-blockers, calcium channel blockers and angiotensin converting enzyme, or ACE, inhibitors have been used to treat various cardiovascular diseases. New classes of orally administered compounds such as endothelin receptor antagonists have been studied and recently approved for the treatment of PAH. An intravenous hormone, natriuretic peptide, has also been introduced as a new treatment option for acute decompensated heart failure. Several of these drugs have helped to increase the survival times of patients who suffer from cardiovascular diseases. However, many current therapies do not adequately address the underlying molecular mechanisms of cardiovascular disease. Cardiovascular disease remains progressive in a large portion of patients, many of whom continue to deteriorate even when treated with multiple drugs simultaneously. We believe that recent advances in the understanding of the molecular biology of cardiovascular diseases provide an opportunity to improve on existing therapies and to discover and develop new therapeutics to ameliorate the symptoms and perhaps to slow or reverse the progression of these diseases.

Our Strategy

      Our goal is to create an integrated biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics that address the fundamental mechanisms involved in cardiovascular disease, with an initial focus on advanced chronic heart failure, PAH and resistant systolic hypertension. The key elements of our strategy are to:

Our Product Portfolio

      Led by our academic founders, Dr. Michael Bristow, Dr. Leslie Leinwand and Dr. Eric Olson, our staff and collaborators have made significant contributions to defining the molecular bases of cardiovascular disease and improving its treatment. We believe that our expertise enables us to discover and develop therapies that address the underlying mechanisms of cardiovascular disease, evaluate and in-license product candidates and guide our clinical development efforts. We currently market one product in Europe for the treatment of acute decompensated heart failure and are developing three product candidates for three distinct cardiovascular conditions.

      Enoximone is a small organic molecule that exhibits highly selective inhibition of type-III phosphodiesterase, or PDE-III, an enzyme that is present in the heart and plays an important regulatory role in cardiac function. PDE-III inhibitors block the action of this enzyme, increasing the force of contraction of the heart, thereby increasing cardiac output. Compounds that increase the force of contraction of the heart, like enoximone, are referred to as positive inotropes. Enoximone also causes vasodilation, an increase in the diameter of blood vessels, through its effects on smooth muscle cells that surround blood vessels, which results in lower pressure against which the heart must pump. Positive inotropy and vasodilation can both be therapeutically useful in the treatment of heart failure. We are currently working to complete the clinical evaluation of enoximone capsules. If those clinical trials are successful and the required regulatory approvals are obtained, enoximone capsules would be the first PDE-III inhibitor to be commercialized in oral form for the treatment of advanced chronic heart failure. In addition, we currently market the intravenous formulation of enoximone, Perfan® I.V., in Europe. Perfan® I.V. is indicated for the treatment of acute decompensated heart failure and was first approved in Europe in 1989.

      Chronic heart failure, also referred to as congestive heart failure, is a debilitating condition that occurs as the heart becomes progressively less able to pump an adequate supply of blood throughout the body. Chronic heart failure has many causes. It generally occurs in patients with a long history of uncontrolled high blood pressure or in patients that have suffered a heart attack or some other heart-damaging event. It is estimated that half of all patients with chronic heart failure die within five years of diagnosis. Chronic heart failure is one of the largest health problems in the developed world, with annual direct and indirect healthcare costs in the United States alone exceeding $28 billion. In the United States, approximately five million patients are afflicted with chronic heart failure, with an additional 550,000 new cases reported each year.

      Following diagnosis, patients with chronic heart failure are typically treated with multiple oral medications, including ACE inhibitors, beta-blockers, vasodilators, diuretics and digoxin. ACE inhibitors and beta-blockers suppress the stress placed on the heart by increasing levels of the hormones angiotensin and norepinephrine and have demonstrated an ability to increase patient survival time. Vasodilators and

diuretics minimize the work the heart must perform by increasing the diameter of blood vessels and ridding the body of excess fluid. Digoxin is a weak positive inotrope used to increase cardiac output early in the progression of chronic heart failure.

      Although medical therapy is improving, heart failure remains a major debilitating and progressive condition characterized by high mortality, frequent hospitalization and deteriorating patient quality of life. The severity of chronic heart failure is typically classified using a system established by the New York Heart Association that assesses the patient’s degree of functional limitation based primarily on shortness of breath. This system is divided into four classes, I through IV, with Class IV being the most severe. Physicians use this system to track patients’ disease progression and responses to therapies.

      As patients enter the advanced stages of chronic heart failure, Classes III and IV, their cardiac function deteriorates, leading to an accumulation of fluid in the lungs, referred to as pulmonary congestion. Eventually, pulmonary congestion and the resulting breathlessness and fatigue reach a critical point referred to as acute decompensated heart failure. At this point the patient must be hospitalized and treated with powerful intravenous diuretics, vasodilators and positive inotropes such as dobutamine, natriuretic peptide (Natrecor®), milrinone or Perfan® I.V., all of which serve to increase the efficiency of the circulatory system, providing symptomatic relief. After stabilization and discharge from the hospital, patients often decompensate again within months and must be readmitted to the hospital for another round of intravenous treatment. As their disease progresses, the frequency of decompensation and hospitalization increases until patients must be maintained on continuous or intermittent treatment with these intravenous agents, which is both confining and costly.

      We believe that patients with advanced chronic heart failure can benefit greatly from the chronic use of an oral inotropic agent that provides the desired symptomatic relief to patients, improves quality of life and reduces the frequency of hospitalizations by delaying additional episodes of acute decompensated heart failure. An oral product with these characteristics could also be used to wean patients with severe heart failure who are currently dependent on intravenous inotropic therapy from those agents and allow them the opportunity to leave the hospital and return to a more normal daily life. We believe that as a result of these significant clinical benefits, such an agent could decrease the overall costs associated with the treatment of heart failure. Prior attempts to develop and commercialize an oral positive inotropic agent with these characteristics have been unsuccessful, primarily because of drug-related increases in adverse events, including mortality at high doses.

      Based upon our evaluation of extensive clinical research and an advanced understanding of the molecular basis of chronic heart failure, we believe that chronic oral administration of low doses of enoximone capsules has the potential to alleviate symptoms and reduce hospitalizations for patients with advanced chronic heart failure, resulting in a decrease in associated health care costs and improvement in patients’ quality of life.

      We are evaluating enoximone capsules in three Phase III trials and we completed one additional Phase III trial in February 2004. We currently plan to report preliminary results for the pivotal trials, ESSENTIAL I & II, in the middle of 2005. If our clinical program is successful and the required regulatory approvals are obtained, enoximone capsules will be the first oral inhibitor of PDE-III to be commercialized for the treatment of advanced chronic heart failure.

      In the 1980s, Merrell Dow, now part of sanofi-aventis, conducted clinical evaluation of enoximone capsules for the treatment of chronic heart failure. Enoximone capsules were evaluated in approximately 5,000 patients with chronic heart failure in multiple Phase I and Phase II clinical trials conducted in the United States, Europe and Japan. The drug was initially tested at doses that we now consider high, 100 to 300 milligrams administered three times a day. At these high doses, many patients treated with enoximone capsules demonstrated clinically significant increases in quality of life scores and maximal exercise

capacity. However, in one Phase II placebo-controlled trial involving 151 patients administered enoximone capsules or placebo capsules three times a day, there was a statistically significant increase in the mortality rate in the group of patients receiving enoximone capsules at doses of 100 milligrams three times a day compared to the group receiving placebo capsules: 36% of the patients treated with enoximone capsules at doses of 100 milligrams three times a day died during the trial versus 23% of the patients treated with placebo.

      In connection with the clinical trials conducted by Merrell Dow, Dr. Michael Bristow, our medical founder and the principal investigator for several of these trials, observed that enoximone capsules administered at lower doses appeared to retain efficacy without increasing mortality. Subsequently, Dr. Bristow demonstrated in a series of Phase II clinical trials that:

      In addition, Dr. Bristow conducted a series of open-label trials of enoximone capsules involving over 200 patients to gather additional clinical data. Based on this extensive clinical experience, we sought and successfully obtained a worldwide license from Aventis Pharmaceuticals, Inc. (formerly Hoechst Marion Roussel and successor to Merrell Dow, “Aventis”) to enoximone for the treatment of cardiovascular diseases and designed a clinical development program to advance enoximone capsules through the final stages of clinical development.

      In June 2000, we initiated our Phase III program to evaluate the safety and efficacy of enoximone capsules for the long-term treatment of patients with advanced chronic heart failure. In these studies, enoximone capsules are being used in addition to standard therapies, including diuretics, ACE inhibitors and beta-blockers. Our Phase III program includes four trials designed to collectively demonstrate that enoximone capsules at doses of 25 or 50 milligrams administered three times a day are effective in reducing hospitalizations, improving symptoms of advanced chronic heart failure, improving quality of life and reducing the need for intravenous inotropic therapy:

      We announced completion of the treatment phase of the ESSENTIAL trials on November 30, 2004. On average, patients participating in our ESSENTIAL trials received treatment for 19 months. We plan to report preliminary data for the trials in the middle of 2005. Data from the ESSENTIAL I and II trials will be combined for the analysis of the primary endpoint of cardiovascular hospitalization or death. The other two co-primary endpoints will be analyzed within each individual trial.

      We believe that if the ESSENTIAL trials are successful, the results will be adequate to support regulatory approval of enoximone capsules in the United States and in various international markets. In certain circumstances and subject to the totality of the trial data, we believe positive results relating to any one of the three co-primary endpoints could be sufficient to support approval. Although EMOTE is not intended for initial regulatory approval, we believe this study will assist in regulatory and post-approval marketing efforts. Similarly, we believe EMPOWER, if completed and successful, will assist in post-approval marketing efforts.

      Perfan® I.V. is the intravenous formulation of enoximone that we market in eight European countries. Clinical studies supporting the use of Perfan® I.V. were completed in the late 1980s, and the drug was first approved in Europe in 1989. Perfan® I.V. is used in a hospital setting to treat patients with acute decompensated heart failure and to wean patients from cardiopulmonary bypass following open-heart surgery. We believe our European sales experience helps prepare us for the potential commercial launch of future products, such as enoximone capsules, ambrisentan and darusentan.

      We recorded sales of Perfan® I.V. of $3.3 million in 2004. Additional financial information regarding our sales of Perfan®I.V. by country for each of the past three fiscal years and our concentration of customers can be found in our financial statements beginning on page F-1.

      Ambrisentan and darusentan are members of a class of therapeutic agents known as endothelin receptor antagonists, or ERAs, that can be orally administered. Endothelin is a small peptide hormone that is believed to play a critical role in the control of blood flow and cell growth. Elevated endothelin blood levels are associated with several cardiovascular disease conditions, including PAH, chronic kidney disease,

hypertension, chronic heart failure, stroke and restenosis of arteries after balloon angioplasty or stent implantation. Therefore, many scientists believe that agents that block the detrimental effects of endothelin will provide significant benefits in the treatment of these conditions. There are two classes of endothelin receptors, ETA and ETB, which play significantly different roles in regulating blood vessel diameter. The binding of endothelin to ETA receptors located on smooth muscle cells causes vasoconstriction, or narrowing of the blood vessels. However, the binding of endothelin to ETB receptors located on the vascular endothelium causes vasodilation through the production of nitric oxide and prostacyclin. The activity of the ETB receptor is thought to be counter-regulatory, protecting against excessive vasoconstriction.

      We believe that a significant opportunity exists for a new class of ERAs that bind selectively to the ETA receptor in preference to the ETB receptor. Selective ETA antagonists are likely to block the negative effects of endothelin by preventing the harmful effects of vasoconstriction and cell proliferation, while preserving the beneficial effects of the ETB receptor. We believe that the potential clinical benefits of selective ETA antagonists will position these compounds as the treatment of choice for PAH, resistant systolic hypertension and potentially other cardiovascular disorders.

      Ambrisentan and darusentan are ERAs that are selective for the ETA receptor. The compounds demonstrate high potency, high bioavailability and half-lives that we believe are suitable for once daily dosing. In addition, the compounds do not induce or inhibit the p450 metabolic pathway. We believe the selectivity and potency of our ERAs may offer significant advantages over other ERAs, including enhanced and more durable efficacy, safety and ease of use (alone or in combination with other therapies). We have initially chosen to evaluate ambrisentan in PAH and darusentan in resistant systolic hypertension.

      Ambrisentan is an ETA selective endothelin receptor antagonist being developed as an oral therapy for patients with PAH. We completed a Phase II clinical trial of ambrisentan in September 2003 and we initiated two pivotal Phase III clinical trials (ARIES 1 & 2) for this condition in January 2004. We expect to complete enrollment in ARIES-2 by the end of June 2005 and ARIES-1 in the fourth quarter of 2005. We plan to report preliminary results from each of the ARIES trials approximately six months following the completion of enrollment in each trial. In July 2004, the FDA granted orphan drug designation to ambrisentan for the treatment of PAH.

      Pulmonary arterial hypertension is a highly debilitating disease of the lungs characterized by severe constriction of the blood vessels in the lungs leading to very high pulmonary arterial pressures. These high pressures make it difficult for the heart to pump blood through the lungs to be oxygenated. Pulmonary arterial hypertension can occur with no known underlying cause, or it can occur secondary to diseases like scleroderma (an autoimmune disease of the connective tissues), cirrhosis of the liver, congenital heart defects and HIV infection. Patients with PAH suffer from extreme shortness of breath as the heart struggles to pump against these high pressures causing such patients to ultimately die of heart failure. Pulmonary arterial hypertension afflicts approximately 60,000 patients in the United States and 100,000 patients in Europe.

      Mild to moderate PAH is currently treated with calcium channel blockers, diuretics and anticoagulants. As patients advance into more severe stages of disease, moderate to severe PAH, therapeutic options become more limited. Prior to 2001, only continuous intravenous infusion of prostacyclin, epoprostenol (Flolan®), was available as a treatment for patients with more advanced stages of PAH. In mid-2002, a more stable form of prostacyclin that can be administered via continuous subcutaneous infusion, treprostinil (Remodulin®), was approved by the FDA. In late 2004, the FDA approved an intravenous formulation of treprostinil and in December 2004 the FDA approved iloprost (Ventavis®), an inhaled form of prostacyclin.

      The most significant therapeutic advance for patients with moderate to severe PAH took place in December 2001 with the approval of a twice-a-day oral formulation of bosentan (Tracleer®), a non-selective ERA. Bosentan was demonstrated in clinical trials to improve exercise capacity and quality of life and has now become first line therapy for patients with Class III PAH. In November 2004, Pfizer Inc. completed clinical trials for sildenafil (Viagra®) for the treatment of PAH and reported results of the trial at the annual conference of the American College of Chest Physicians in October 2004. The results of this study suggest that sildenafil could become a major competitor to ambrisentan and other PAH products.

      In February 2005, Encysive Pharmaceuticals, Inc. announced preliminary results of its pivotal Phase III trial (STRIDE-2) of sitaxsentan (Thelin^tm) for PAH. Like ambrisentan, sitaxsentan is an ETA receptor selective antagonist compound. The preliminary results of the STRIDE-2 trial suggest that sitaxsentan could also become a major competitor to ambrisentan and other PAH products.

      We believe that ambrisentan could have several clinical benefits over existing therapies and other ERAs under development, including:

      In September 2003, we completed a randomized, double-blind, multi-center, dose-ranging Phase II study evaluating the effect of ambrisentan on exercise capacity of patients with moderate to severe PAH. Exercise capacity was the primary efficacy endpoint and was measured as the change from baseline in the six-minute walk test distance after 12 weeks of treatment. The secondary endpoints were Borg Dyspnea Index, Patient Global Assessment, time to clinical worsening and World Health Organization, or WHO, Functional Class, which are tests used by physicians to assess the severity of PAH. Right heart and pulmonary artery hemodynamics (blood pressures and blood flow in the heart and lungs) were evaluated in a subset of patients.

      A total of 64 patients were randomized to one of four ambrisentan dose groups (1.0, 2.5, 5.0 or 10.0 milligrams). Doses were administered orally once a day for 12 weeks. After 12 weeks of treatment, patients were allowed to enter an optional 12-week open-label extension period of the study where dose adjustment was allowed. This open-label extension study was followed by an optional long-term open-label safety study that is ongoing. Since April 2003, a total of 54 patients have enrolled in the open-label study and, as of March 1, 2005, 44 patients continue to participate in the study and receive ambrisentan therapy.

      To date, the results of our Phase II trials have demonstrated:

      Abnormal elevations of liver function test (LFT) results, which are indicative of potential liver toxicity, have previously been reported as complications in trials of other endothelin receptor antagonists. LFT abnormalities were defined in our study as a confirmed serum aminotransferase level greater than three times the upper limit of the normal range. During the 12-week blinded treatment period of this trial, one patient was taken off ambrisentan due to an abnormally high LFT result (eight times the upper limit of the normal range). After halting treatment, the patient’s serum aminotransferase level returned to a normal level without apparent adverse effects on the patient’s health. During the second 12-week open-label extension period, another patient had their dose of ambrisentan reduced due to a confirmed abnormally high LFT result (three times the upper limit of the normal range). Two additional patients had LFT results that fluctuated above the normal range during the open-label extension period, and on one occasion each had an initial LFT result that was marginally above the threshold of three times the upper limit of the normal range, but upon repeat testing, the results were below the threshold. Detailed results of this trial were presented by the principal investigator, Dr. Lewis Rubin, at the annual meeting of the American Thoracic Society on May 23, 2004.

      In January 2004 we initiated two pivotal Phase III clinical trials, ARIES-1 & ARIES-2, for ambrisentan in PAH. The ARIES trials are randomized, double-blind, placebo-controlled trials of identical design except for the doses of ambrisentan and the geographic locations of the investigative sites. The study design anticipates enrolling 186 patients (62 patients per dose group) in each trial. ARIES-1 will evaluate ambrisentan doses of 5.0 milligrams and 10.0 milligrams administered orally once per day for 12 weeks. ARIES-2 will evaluate ambrisentan doses of 2.5 milligrams and 5.0 milligrams administered orally once per day for 12 weeks. The primary efficacy endpoint is exercise capacity, measured as the change from baseline in the six-minute walk test distance compared to placebo. Secondary endpoints include Borg Dyspnea Index, WHO Functional Class, a quality of life assessment and time to clinical worsening. ARIES 1 is being conducted both in the United States and abroad, while ARIES 2 is being conducted outside of the United States.

      We expect to complete enrollment in ARIES-2 by the end of June 2005 and ARIES-1 in the fourth quarter of 2005. We plan to report preliminary results from each study approximately six months following the completion of enrollment in that trial.

      In March 2004, we initiated a long-term study of patients who have participated in our pivotal Phase III clinical trials of ambrisentan. This study will examine the efficacy and safety of three doses (2.5, 5, or 10 mg) of ambrisentan for a period of 24 weeks followed by a dose adjustment period. Patients who received placebo in the Phase III studies will be randomized to receive one of three doses of ambrisentan.

      Darusentan is an ETA selective endothelin receptor antagonist being developed as an oral therapy for patients with resistant systolic hypertension.

      Hypertension affects approximately 50 million individuals in the United States and approximately one billion worldwide. Despite the availability and use of several classes of drugs (diuretics, ACE inhibitors,

angiotensin receptor blockers, beta-blockers, calcium channel blockers and vasodilators) to treat hypertension, a very significant percentage of these patients do not achieve blood pressures within the recommended range, a condition referred to as “resistant hypertension.” The “Seventh Report of the Joint National Committee on Prevention, Detection, Evaluation and Treatment of High Blood Pressure” (JNC7) defines resistant hypertension as “the failure to achieve goal blood pressure in patients who are adhering to full doses of an appropriate three-drug regimen that includes a diuretic.”

      According to JNC7, a systolic blood pressure of less than 140 mmHg and a diastolic blood pressure of less than 90 mmHg are recommended for patients with hypertension and no other compelling conditions. For patients with compelling conditions, such as diabetes and chronic renal disease, target systolic and diastolic blood pressures are more stringent — a systolic blood pressure goal of less than 130 mmHg and a diastolic pressure goal of less than 80 mmHg.

      Recent clinical studies in hypertension have shown that diastolic blood pressure can be controlled to a goal of 90 mmHg in approximately 90% of hypertensive patients. However, in these same studies, guideline-recommended goals for systolic blood pressure were achieved in only 60% of patients, even when multi-drug regimens were utilized. Clinical studies have also shown that hypertension in patients with diabetes or chronic renal disease is consistently more difficult to manage, requiring treatment with a multi-drug regime. Despite intensive, multi-drug therapy, however, only 50% of patients with diabetes or chronic renal disease are typically controlled below standard blood pressure goals, with even fewer reaching the more stringent blood pressure goals now recommended by JNC7. Moreover, data from a recent study conducted in a hypertension specialist clinic revealed that more than half of the diabetic patients examined required treatment with three or more antihypertensive drugs and only 22% of the patients achieved systolic blood pressure of less than 130 mmHg.

      Based on the available data, we believe a considerable number of hypertensive patients, especially those with diabetes or chronic renal disease, are at risk for significant progressive cardiovascular and renal complications due primarily to inadequate control of their systolic blood pressure. As a result, we believe that there is a significant opportunity for an agent that is capable of improving control of blood pressure in this patient population, leading to the potential for enhanced patient outcomes.

      In 2000, the original sponsor of darusentan evaluated the safety and efficacy of darusentan in 392 patients with moderate essential hypertension (Stage II) in a Phase II/ III randomized, double-blind, placebo-controlled, dose-ranging trial. The primary endpoint of the trial was change in sitting diastolic blood pressure after six weeks of treatment. Changes in systolic blood pressure and pulse rate were secondary endpoints.

      The results of this study demonstrated that darusentan produced statistically significant and clinically meaningful reductions in diastolic and systolic blood pressures in a dose-dependent manner. The mean placebo-corrected change from baseline in systolic blood pressure was -6.0 mmHg on 10 mg, -7.3 mmHg on 30 mg and -11.3 mmHg on 100 mg darusentan after six weeks of treatment. Significant reductions in diastolic blood pressure were also observed (-3.7, -4.9 and -8.3 mmHg, for the three dose groups, respectively). Heart rate remained unchanged in all groups. Headache was the most commonly reported adverse event, with no relevant difference among placebo and active treatment groups. Flushing and peripheral edema were seen in a dose-dependent fashion in the darusentan treatment groups. There were no treatment-related elevations in liver function tests in the study. This study was conducted in a different patient population and protocol than is being studied in our Phase IIb clinical trial and there can be no assurance that we will see the same results in our Phase IIb study as those reported in the previous study.

      In July 2004, we initiated a Phase IIb randomized, double-blind, placebo-controlled clinical trial to evaluate the safety and efficacy of darusentan in patients with resistant systolic hypertension. Approximately 105 patients will be randomized to darusentan or placebo at approximately 30 investigative

sites. Patients will undergo forced titration every two weeks through 10, 50, 100 and 150 mg of darusentan or placebo until the target dose of 300 mg once a day is achieved. The treatment period for the study is 10 weeks. We expect to complete patient treatment in this trial in the middle of 2005 and to report results of the study one or two months thereafter.

      Endothelin appears to be involved in the progression of several other cardiovascular conditions, including chronic heart failure, chronic renal disease and other forms of pulmonary hypertension. We believe that ETA selective ERAs, such as ambrisentan or darusentan, could have therapeutic potential in some of these conditions and we are currently evaluating whether to pursue any of these additional conditions.

Discovery Research

      The goal of our target and drug discovery research is to discover and develop disease-modifying drugs for chronic heart failure and related disorders. Our drug discovery programs are scientifically based on the discoveries of three prominent academic scientists who are recognized experts in the field of cardiac hypertrophy and heart failure: Dr. Michael Bristow, professor of cardiology at the University of Colorado Health Sciences Center, Dr. Leslie Leinwand, chairperson of molecular, cellular and developmental biology at the University of Colorado, and Dr. Eric Olson, chairman of molecular biology at the University of Texas Southwestern Medical Center.

      Through sponsored research programs with these investigators and licensing arrangements with their respective institutions, we have gained intellectual property rights to a series of cardiac molecular targets and signaling systems that we believe are of critical importance in cardiac muscle disease. In addition, our license agreement with the University of Colorado includes access to a human cardiac tissue library consisting of hundreds of failing and non-failing human hearts that we use to discover and validate targets for drug discovery. The rights to new discoveries are licensed to us pursuant to our agreements with these investigators’ academic institutions, creating a source of novel molecular mechanisms and targets for our drug discovery operations.

      We have built a drug discovery research team and infrastructure, which includes a 60,000 compound library and high-throughput screening robotics. In addition, we have advanced several targets through high-throughput screening. This work identified a series of promising lead structures and, in October 2003, we established a collaboration agreement with Novartis to advance this work.

      We believe our advanced understanding of the biology of cardiovascular disease combined with our clinical development expertise in cardiovascular therapeutics allows us to better identify, license and acquire products. The Novartis collaboration presently covers nearly all of our discovery research projects. However, as we progress with projects that are not funded by this partner, we may enter into collaborations with other pharmaceutical and biotechnology companies that allow us to build upon our expertise in cardiovascular disease and/or leverage our current capabilities with additional capabilities that we do not have. We will seek arrangements that improve our ability to move new compounds into the clinic and new products into the marketplace.

      Patients with chronic heart failure develop an enlargement of the heart called cardiac hypertrophy. The causes and effects of cardiac hypertrophy have been extensively documented, but the underlying molecular mechanisms that link the molecular signals to cell changes, or cardiac signaling pathways, remain poorly understood.

      We believe that the fundamental drivers of pathological remodeling of the heart (abnormal growth, shape and function of the heart) are increases in ventricular wall stress and neurohormonal and growth factor stimulation of cardiac muscle. These processes are set in motion by primary insults to the heart,

including myocardial infarction (heart attack) and chronic high blood pressure. Wall stress and associated growth promoting stimuli lead to changes in cardiomyocyte signaling pathways that ultimately produce pathological changes in gene expression in the heart.

      One of the characteristic changes that occur in a failing heart is a change in gene expression wherein fetal genes that were turned off shortly after birth are reactivated in the disease process. Although this response may initially be beneficial to a patient with chronic heart failure, it becomes harmful as the disease progresses. Our scientists and academic collaborators at the University of Colorado Health Sciences Center and the University of Colorado are focused on identifying the set of fetal genes that are reactivated in chronic heart failure, understanding the consequences of their reactivation and discovering the means to control their expression. Our work has led to the discovery of what we believe to be an important gene reactivation that occurs in the failing human heart, which appears to be responsible for weakening the contraction of the heart.

      Understanding cardiac signaling pathways is a central theme of Dr. Olson’s research at the University of Texas Southwestern Medical Center. This work has led to the discovery of several signaling pathways that appear to control cardiac hypertrophy.

      An essential component of our drug discovery strategy is to target the elements of gene expression regulation in the heart that are common to known cardiac remodeling and heart failure pathways. Of primary interest in this regard are the calcineurin, NFAT (Nuclear Factor of Activated T Cells) and MEF2 (Myocyte Enhancer Factor 2) signaling pathways and their regulation by Class II histone deacetylases (HDACs), enzymes that repress gene transcription, and other regulatory proteins. NFAT is a transcription factor (controls gene expression) that is regulated by the enzyme calcineurin in the heart and other tissues. MEF2 is a transcription factor regulated by Class II HDACs. In addition, we have discovered what we believe to be an important pathological role for Class I HDACs in pathological cardiac remodeling, and we have patented the use of HDAC inhibitors for treatment and prevention of cardiac disease.

      We have developed a series of high-throughput screening assays based on these discoveries and have identified several lead compounds that appear to inhibit cardiomyocyte hypertrophy and/or reverse abnormal fetal gene expression. These compounds are currently being studied in our laboratories in cell and animal assays to examine safety and efficacy and optimization of lead structures is underway within our collaboration with Novartis.

Sales and Marketing

      Assuming that we receive regulatory approval for our product candidates, we plan to commercialize them by building a focused sales and marketing organization complemented by co-promotion and licensing arrangements with pharmaceutical or biotechnology partners. Our sales and marketing strategy is to:

      We currently market and sell Perfan® I.V. through local distributors in Belgium, France, Germany, Ireland, Italy, Luxembourg, the Netherlands and the United Kingdom.

Licensing Agreements and Collaborations

      In October 1998, we entered into a license agreement with Aventis under which we received an exclusive worldwide license to develop and commercialize enoximone. In consideration for the license, we paid Aventis initial license fees totaling $5.5 million. In January 2005, we entered into a material amendment to the Aventis license agreement. Pursuant to the amendment, Aventis agreed to divest its rights, including all royalty rights, to all forms of enoximone in the United Kingdom and Belgium. In conjunction with such divestiture, we agreed to a modest increase in the royalty rates payable to Aventis with respect to the oral form of enoximone in European countries other than the United Kingdom and Belgium (the “Limited European Countries”). Royalties payable with respect to the intravenous formulation of enoximone (Perfan® I.V.) remained unchanged in the Limited European Countries and royalties payable with respect to all forms of enoximone remained unchanged in all countries other than the Limited European Countries.

      Subject to certain exceptions, we are obligated to pay royalties to Aventis based on net sales of enoximone for a period of ten (10) years, beginning with the first commercial sale on a country-by-country basis. Notwithstanding the foregoing, our obligation to pay royalties on the oral form of enoximone in the Limited European Countries will not commence until the second anniversary of the first product approval in any Limited European Country and such royalty obligations will continue for a period of ten (10) years from such anniversary date. In addition, if there is a claim of an issued and unexpired patent relating to an enoximone product in a country, our royalty obligations with respect to such product will generally be extended until the termination of such patent. The royalty rates payable on all forms of enoximone in all countries, other than with respect to Perfan®I.V. in the Limited European Countries, will vary depending upon certain regulatory exclusivity criteria and the existence of generic competition.

      The recent amendment to the Aventis license agreement also provides for a change in the amount of sublicense, milestone and equity fees and payments, if any, that we are required to share with Aventis in connection with an enoximone sublicense or partnership arrangement. The initial license agreement required us to share a portion of such fees and payments in excess of a certain dollar threshold. The amendment provides for a material increase in such threshold. Neither party was required to make any upfront or future (other than royalty and sublicense pass through) payments in connection with the amendment.

      If we fail to commercialize enoximone capsules in certain markets, Aventis may market the product on its own in the affected countries, paying us a royalty on its sales. The agreement is of indefinite term, although Aventis may terminate the agreement if we fail to use reasonable commercial diligence to develop and commercialize enoximone capsules. In addition, either party may terminate the agreement under certain circumstances, including a material breach of the agreement by the other.

      In October 2001, we entered into a license agreement with Abbott Laboratories, Inc. (“Abbott”) under which we received an exclusive worldwide license to develop and commercialize ambrisentan. In consideration for the license, we have paid Abbott initial license fees totaling $5.8 million, have paid a milestone fee of $1.5 million upon the initiation of the ARIES trials and have paid an additional $690,000 related to an additional feasibility and evaluation study performed on our behalf. If we successfully develop ambrisentan in PAH, we will be required to make additional milestone payments totaling $4.5 million as well as royalties based on net sales of ambrisentan. If we fail to commercialize ambrisentan in certain markets, Abbott may market the product on its own in the affected countries, paying us a royalty on its sales. We must use reasonable diligence to develop and commercialize ambrisentan and to meet milestones in completing certain clinical work. The agreement is of indefinite term, although either party may terminate the agreement under certain circumstances, including a material breach of the agreement by the other. We would be obligated to make additional milestone payments if we develop ambrisentan in

additional indications. However, in no event would we be obligated to pay more than $25.5 million in total license and milestone fees.

      In June 2003, we entered into a license agreement with Abbott under which we received an exclusive worldwide license from Abbott to develop and commercialize darusentan for all conditions except oncology. In consideration for the license, we paid Abbott initial license fees of $5.0 million and are obligated to make future milestone payments totaling $25.0 million if we successfully commercialize the drug for a single condition. Additional milestone payments would be due if we commercialize darusentan for additional conditions. However, in no event would we be obligated to pay more than $50.0 million in total license and milestone fees. In addition, we will owe royalties based on net sales of darusentan. If we seek a co-promotion arrangement for darusentan in any country or group of countries, Abbott has the right of first negotiation. Abbott also has the option to be our exclusive development and commercialization partner for darusentan in Japan, upon terms to be negotiated. If we do not commercialize darusentan in certain markets, Abbott may market the product on its own in the affected countries, paying us a royalty on its sales. We must use reasonable commercial diligence to develop and commercialize darusentan and to meet milestones in completing certain clinical work. The term of the agreement is indefinite, however, either party may terminate the agreement under certain circumstances, including a material breach of the agreement by the other.

      We also hold four other license agreements relating to intellectual property and patents. In September 1998, we entered into an exclusive license agreement, with the right to sublicense, with University License Equity Holdings, Inc., (formerly University Technology Corporation), or ULEHI, an affiliate of the University of Colorado, that allows us access to several different patents relating to the treatment of heart failure. This exclusive license may be subject to certain rights of the United States Government if any of the licensed subject matter is developed under a governmental funding agreement. We must use commercially reasonable efforts to bring one or more products to market and, in order to retain an exclusive license, must meet certain milestones, including providing forecast reports and selling a minimum amount of product. In consideration for the license, we paid ULEHI an initial fee of $5,900, and we are obligated to pay future license maintenance fees of $4,250 per annum, as well as royalties, which are based upon net sales of the licensed products. As of December 31, 2003, we incurred a $25,000 sublicense fee to ULEHI under this agreement, which was paid in February 2004. Under this license agreement, we also have the primary responsibility of applying for and maintaining any patent or intellectual property rights. ULEHI may only assume such responsibility in the event that we decide not to do so. We amended this agreement in November 2003 to modify the royalty payment timeline and to include milestone payments for any drugs developed from the licensed technology, up to a maximum of $400,000 in the case of a drug for which an application for marketing approval is filed. This agreement may be terminated by either party upon breach of the agreement, or we may cancel the agreement upon six months notice to ULEHI.

      In December 1999, we entered into a Patent and Technology License Agreement with the University of Texas System, or the University, which gives us exclusive rights, with the right to sublicense, to certain patents and technology relating to cardiac hypertrophy and heart failure. Concurrently, we entered into a Sponsored Research Agreement with the University to fund research at the University of Texas Southwestern Medical Center. Rights to inventions arising from the sponsored research are included within the exclusive license granted by the license agreement. This exclusive license, signed concurrently with a Sponsored Research Agreement, may be subject to certain rights of the United States Government if any of the licensed subject matter is developed under a governmental funding agreement. In consideration for the license, we paid an initial license fee of $50,000 and are obligated to pay future annual fees of $50,000 per year beginning the first year following termination of the Sponsored Research Agreement, a percentage of sublicense revenue and royalties based upon net sales. Additionally, we are obligated to make milestone payments for any drugs developed from the licensed technology, up to a maximum of $3.2 million in the case of a drug for which an application for marketing approval is filed. Patent prosecution and maintenance is carried out by a mutually agreed upon patent attorney, but we are obligated to reimburse the University for the associated patent costs. This license agreement will continue on a country by country basis in many cases until the last patent expires which currently is on

September 26, 2022, based on patents issued to date, although this could be extended. There are also provisions that allow termination of the license agreement upon breach of the license, upon our insolvency, or upon written mutual agreement between Myogen and the University. We must diligently attempt to commercialize a licensed or identified product or the University has certain rights to cancel the exclusivity of the license agreement if we fail to provide written evidence within sixty days of our commercialization attempts. Similarly, the University can completely terminate the license agreement in the future if we fail to provide written evidence of our commercialization attempts within sixty days.

      In January 2002, we entered into a second Patent and Technology License Agreement, which was amended in February 2004, and related Sponsored Research Agreement with the University. The license grants us exclusive rights, with the right to sublicense, to certain patents and technology relating to cardiac hypertrophy, heart disease, and heart failure, including inventions that arise during the conduct of the sponsored research. The patent and technology license is also subject to certain rights of the United States Government if any of the licensed subject matter is developed under a governmental funding agreement. In consideration for this license, we paid an initial license fee totaling $35,000 and have an obligation to pay milestone payments potentially totaling $400,000, a percentage of sublicense revenue and royalties based upon a percentage of net sales. Provided we maintain the Sponsored Research Agreement, we do not have annual fees on either this license or the 1999 license; otherwise we would be obligated to pay annual fees of $5,000 per year. In addition, we are obligated to reimburse the University for patent expenses. For most products, this agreement will terminate upon the expiration of the last patent to expire, which currently is on February 13, 2021 based on patents issued to date, although this could be extended. There are also provisions that allow termination upon breach of the license, upon insolvency of the licensee, or upon written mutual agreement between Myogen and the University. This license agreement is also subject to the terms of the Sponsored Research Agreement entered into concurrently with the Patent and Technology License Agreement, under which we currently pay $250,000 per annum through March 31, 2007. In 2003, we incurred a $162,500 sublicense fee to the University under this agreement which was paid in January 2004.

      We continue to maintain a close working relationship with three of our academic founders: Dr. Michael Bristow, professor of cardiology at the University of Colorado Health Sciences Center, Dr. Leslie Leinwand, chairperson of molecular, cellular and developmental biology at the University of Colorado and Dr. Eric Olson, chairman of molecular biology at the University of Texas Southwestern Medical Center. Dr. Bristow currently serves as our Chief Science and Medical Officer. Dr. Olson serves as an active consultant, frequently visiting our laboratories and collaborating closely both in research areas and in our discussions with larger pharmaceutical firms. In the case of both laboratories, we have an option allowing us to acquire the rights to future cardiovascular discoveries. Both universities were issued shares of our common stock in connection with the execution of certain of our license and related agreements.

      In October 2003, we entered into a research collaboration with Novartis for the discovery and development of novel drugs for the treatment of cardiovascular disease. In exchange for signing fees paid by Novartis to us totaling $5.0 million and an obligation by Novartis to provide research funding to us through October 2006, Novartis has the exclusive right to license drug targets and compounds developed through the collaboration. Upon execution of a license for a product candidate, Novartis is obligated to fund all further development of that product candidate, make payments to us upon the achievement of certain milestones (which may total up to $17.1 million for each product candidate) and pay us royalties for sales if the product is successfully commercialized. The agreement provides Novartis the right to extend the collaboration for an additional period of up to two years. Thereafter, the collaboration can be extended by mutual agreement of the parties. Novartis has the right to terminate the agreement after April 2005, subject to a termination payment. The agreement can also be terminated upon breach of the license, insolvency of either party, mutual written agreement or our sale to a competitor of Novartis. The agreement with Novartis provides that upon the completion of Phase II clinical trials of any product candidate they have licensed from us, we have an option to enter into a co-promotion and profit sharing agreement with Novartis for that product candidate in certain markets, subject to our reimbursement of

development expenses incurred through the completion of the Phase II trials, our agreement to share future development and marketing costs and elimination of the royalty payable to us.

      We also intend to selectively enter into additional collaborations with other pharmaceutical or biotechnology companies that allow us to build upon our expertise in heart disease.

Intellectual Property, Patents and Market Exclusivity

      The primary patents covering enoximone expired in 2000 in the United States and 2001 in most of the major markets in Europe. In the United States, the Hatch-Waxman Act of 1984 provides up to five years of market exclusivity from the date of marketing approval by the FDA for any new chemical entity. We believe that enoximone capsules will meet the Hatch-Waxman Act’s various criteria and therefore we expect to receive five years of marketing exclusivity in the United States, when and if enoximone capsules are approved. In Europe, similar legislative enactments provide exclusivity on the data package used by a drug sponsor to obtain registration for a product with an expired compound patent. This protection is typically awarded for six to 10 years, depending on the registration approach taken by the sponsor. It is possible that enoximone will not qualify for such exclusivity, or alternatively, the terms of the Hatch-Waxman Act, or similar foreign statutes, could be amended to our disadvantage.

      We have licensed from the University of Colorado a patent with broad claims for the use of positive inotropes, including enoximone, in conjunction with beta-blocker therapy to stabilize patients who are otherwise hemodynamically too unstable to accept beta-blocker therapy without such stabilization. The European counterpart application is currently undergoing prosecution.

      We are actively pursuing a patenting strategy which we believe will broaden and expand the enoximone portfolio and strengthen our ability to control the use of enoximone in the United States and worldwide. In addition, we plan to commission the development of a proprietary extended-release oral form of enoximone to reduce dosing frequency to once per day. We expect that this new formulation could provide market exclusivity to the extended release formulation of enoximone capsules beyond the expiration of legislative protections for immediate release enoximone capsules.