<PAGE>
   
    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 5, 2001
    
   
                                                      REGISTRATION NO. 333-52492
    
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                         ------------------------------
 
   
                                AMENDMENT NO. 1
                                       TO
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
    
                         ------------------------------
 
                          ACADIA PHARMACEUTICALS INC.
             (Exact Name of Registrant as Specified in its Charter)
 

<TABLE>
<S>                              <C>                              <C>
           DELAWARE                           2834                          06-1376651
(State or Other Jurisdiction of   (Primary Standard Industrial           (I.R.S. Employer
Incorporation or Organization)     Classification Code Number)        Identification Number)
</TABLE>

 
                         3911 SORRENTO VALLEY BOULEVARD
                              SAN DIEGO, CA 92121
                                 (858) 558-2871
         (Address, Including Zip Code, and Telephone Number, Including
            Area Code, of Registrant's Principal Executive Offices)
                         ------------------------------
 
                              ULI HACKSELL, PH.D.
                            CHIEF EXECUTIVE OFFICER
                          ACADIA PHARMACEUTICALS INC.
                         3911 SORRENTO VALLEY BOULEVARD
                              SAN DIEGO, CA 92121
                                 (858) 558-2871
           (Name, Address, Including Zip Code, and Telephone Number,
                   Including Area Code, of Agent for Service)
                         ------------------------------
 
                                   COPIES TO:
 

<TABLE>
<S>                                              <C>
                D. BRADLEY PECK                                  FAYE H. RUSSELL
                GLENN F. BAITY                                 JEFFREY C. THACKER
               CHESTON J. LARSON                                SHERRY E. SCHNELL
              Cooley Godward LLP                         Brobeck, Phleger & Harrison LLP
       4365 Executive Drive, Suite 1100                       12390 El Camino Real
              San Diego, CA 92121                              San Diego, CA 92130
                (858) 550-6000                                   (858) 720-2500
</TABLE>

 
                         ------------------------------
 
        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
   As soon as practicable after the Registration Statement becomes effective.
                         ------------------------------
 
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                         ------------------------------
 

                        CALCULATION OF REGISTRATION FEE
 
   

<TABLE>
<CAPTION>
                                                                    PROPOSED MAXIMUM     PROPOSED MAXIMUM
           TITLE OF EACH CLASS OF                  AMOUNT TO         OFFERING PRICE          AGGREGATE            AMOUNT OF
        SECURITIES TO BE REGISTERED            BE REGISTERED(1)         PER SHARE        OFFERING PRICE(1)   REGISTRATION FEE(2)
<S>                                           <C>                  <C>                  <C>                  <C>
Common Stock, $0.0001 par value.............       5,750,000             $15.00             $86,250,000            $22,613
</TABLE>

    
 
   
(1) Estimated solely for the purpose of computing the registration fee pursuant
    to Rule 457(o) under the Securities Act of 1933. Includes $11,250,000 of
    shares that the underwriters have the option to purchase to cover
    overallotments, if any.
    
 
   
(2) The Registrant has previously paid $19,800 in connection with the initial
    filing of the Registration Statement on December 21, 2000.
    
                         ------------------------------
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
                                EXPLANATORY NOTE
 
    This registration statement contains two forms of prospectus front cover
page: (a) one to be used in connection with an offering in the United States and
Canada and (b) one to be used in connection with a concurrent offering outside
of the United States and Canada. The U.S./Canadian prospectus and the
international prospectus are otherwise identical in all respects. The
international version of the front cover page is included immediately before

Part II of this registration statement.

<PAGE>
   
                 SUBJECT TO COMPLETION, DATED FEBRUARY 5, 2001
    
 
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES, IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>
                                 [ACADIA LOGO]
 
   
                                5,000,000 SHARES
                                  COMMON STOCK
    
 
   
    ACADIA Pharmaceuticals Inc. is offering 5,000,000 shares of its common
stock. This is our initial public offering and no public market currently exists
for our shares. We have applied for approval for quotation of our common stock
on the Nasdaq National Market under the symbol "ACAD." We anticipate that the
initial public offering price will be between $13.00 and $15.00 per share.
    
 
                            ------------------------
 
                 INVESTING IN OUR COMMON STOCK INVOLVES RISKS.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 5.
 
                             ---------------------
 

<TABLE>
<CAPTION>
                                                               PER SHARE        TOTAL
                                                              ------------   ------------
<S>                                                           <C>            <C>
Public Offering Price.......................................  $              $
Underwriting Discounts and Commissions......................  $              $
Proceeds to ACADIA Pharmaceuticals Inc......................  $              $
</TABLE>

 
    THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
 
   
    ACADIA Pharmaceuticals Inc. has granted the underwriters a 30-day option to
purchase up to an additional 750,000 shares of common stock to cover
overallotments.
    
 
                            ------------------------
 
ROBERTSON STEPHENS                                    U.S. BANCORP PIPER JAFFRAY
 
               THE DATE OF THIS PROSPECTUS IS             , 2001

<PAGE>
                                     CHART
 
   
    [Inside front cover: Caption "Linking Genomics and Chemistry" above three
over-lapping circles labeled "Genomics," "Chemistry" and "Biology" with side
caption on left of "Integrated Technology Platform." Downward arrow, captioned
"Drug Discovery," connects the circles to a chart depicting the progress of
ACADIA's programs, which are listed from top to bottom as "Programs": "Glaucoma
1","Chronic Pain","Schizophrenia 1", "Schizophrenia 2", "Alzheimer's Disease"
and "Glaucoma 2". To the right of the list of programs is a chart divided into
"Preclinical", "IND-Track" and "Clinical" and with an arrow for each subheading
listed above. The arrow for Glaucoma 1 extends through "Preclinical" and
"IND-Track" into "Clinical". The Chronic Pain arrow extends through
"Preclinical" into "IND-Track". The arrows for each of the other four
subheadings extend almost entirely through "Preclinical" but do not reach the
threshold for "IND-Track."]
    

<PAGE>
   
    YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO
BUY, SHARES OF OUR COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK.
    
 
    UNTIL             , 2001, WHICH IS THE 25TH DAY AFTER THE DATE OF THE FINAL
PROSPECTUS RELATED TO THIS OFFERING, ALL DEALERS THAT BUY, SELL OR TRADE OUR
COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION
TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                            ------------------------
 
                               TABLE OF CONTENTS
 
   

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Summary.....................................................    1
Risk Factors................................................    5
Note Regarding Forward Looking Statements...................   17
Use of Proceeds.............................................   18
Dividend Policy.............................................   18
Capitalization..............................................   19
Dilution....................................................   20
Selected Consolidated Financial Data........................   22

Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................   23
Business....................................................   28
Management..................................................   50
Related Party Transactions..................................   61
Principal Stockholders......................................   64
Description of Capital Stock................................   67
Shares Eligible for Future Sale.............................   69
United States Tax Consequences to Non-U.S. Holders..........   71
Underwriting................................................   74
Legal Matters...............................................   77
Experts.....................................................   77
Where You Can Find More Information.........................   77
Index to Consolidated Financial Statements..................  F-1
</TABLE>

    
 
                            ------------------------
 
                                       i

<PAGE>

                                    SUMMARY
 
    YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION IN THIS PROSPECTUS REGARDING OUR COMPANY, ESPECIALLY THE RISK
FACTORS REGARDING OUR COMPANY AND THE COMMON STOCK BEING SOLD IN THIS OFFERING,
AND OUR FINANCIAL STATEMENTS AND RELATED NOTES, BEFORE DECIDING TO INVEST IN OUR
COMMON STOCK.
 
   
                          ACADIA PHARMACEUTICALS INC.
    
 
   
    We are a genomics-based drug discovery and development company that
efficiently identifies target-specific small molecule drug candidates using our
integrated technology platform. Genomics is the study of an organism's genes and
their functions. Our proprietary approach integrates genomics, chemistry and
biology to rapidly identify and validate drug targets and discover chemistries
specific to those targets. We have successfully applied our approach to generate
a drug discovery pipeline that currently includes six advanced programs as well
as a number of earlier stage research projects. We have rapidly advanced two of
these programs to development with a collaborator. The first drug candidate, for
glaucoma treatment, is undergoing human testing designed to provide information
on safety and preliminary efficacy in patients, known as a Phase I/IIa clinical
trial. The second drug candidate has been nominated for development as a novel
treatment for chronic pain. We have four additional drug candidates in
late-stage preclinical testing. We focus on major diseases that represent some
of the largest pharmaceutical markets in the world, including schizophrenia,
Alzheimer's disease, chronic pain and glaucoma.
    
 
OUR TECHNOLOGY PLATFORM AND DRUG DISCOVERY APPROACH
 
   
    Our integrated technology platform efficiently and productively links
diverse genomic and chemical information. We use our platform to identify and
validate individual gene products, known as genomic targets, for use as drug
targets. This platform, incorporating our proprietary Receptor Selection and
Amplification Technology, or R-SAT-TM-, allows us to address most classes of
potential drug targets. We also use our technology platform to discover novel
small molecule drug candidates that are selective for these individual genomic
targets. Our discovery expertise combined with our integrated technology
platform has allowed us to discover superior drug candidates more efficiently
than traditional approaches. Since 1997, we have:
    
 
   
    - applied our technology to the functional analysis of a wide range of
      genomic targets, and have incorporated over 250 targets into our platform;
    
 
    - assembled a large and diverse screening library of more than 700,000
      distinct compounds together with a collaborator;
 
   
    - developed an ultra high throughput capacity capable of functionally
      screening over 1 million compound/target interactions per week;
    
 
   
    - developed a proprietary combinatorial chemistry technique for the largest
      class of current drug targets, the G-protein coupled receptors, known as
      GPCRs;
    
 
    - developed a method for screening genomic targets of individual patients
      for variability in their response to drugs;
 
   
    - discovered novel specific chemistries in over 200 structural classes for
      35 genomic targets; and
    
 
   
    - validated drug targets for all of our discovery programs and research
      projects together with our collaborators.
    
 
OUR PROGRAMS
 
    Our programs address major diseases that are not well served by currently
available therapies and that represent significant commercial markets. Our most
advanced program is based on a target-specific drug candidate for the treatment
of glaucoma. In collaboration with Allergan, Inc., we have identified and
validated a specific genomic target that controls pressure within the eye and
have discovered a drug candidate, AGN 195795, that demonstrates a superior
therapeutic profile in animals compared to currently used drugs. AGN 195795 is
currently in a Phase I/IIa clinical trial. We anticipate that the data analysis
from this trial will be completed in the second half of 2001.
 
                                       1

<PAGE>
   
    Our second most advanced program is based on a novel small molecule drug
candidate, AGN 197075, for the treatment of chronic pain. In collaboration with
Allergan, we identified and validated a specific genomic target and discovered a
novel drug candidate that has been shown in animal models to be highly
efficacious when administered orally. This drug candidate does not exhibit
common side effects of pain drugs including sedation and cardiovascular,
respiratory and gastrointestinal effects. Allergan has nominated AGN 197075 for
development and is conducting manufacturing, toxicology and other studies in
preparation for clinical studies.
    
 
   
    We have two internal programs in late-stage preclinical testing that address
separate genomic targets for treating different groups of schizophrenic
patients. In the first program, we discovered drug candidates that
simultaneously act on two complementary drug targets. These compounds
demonstrate activity when administered orally in animal models of psychosis. In
the second of these programs, we have identified and validated a previously
unknown therapeutic mechanism that is shared by most of the marketed
antipsychotic drugs. We have discovered drug candidates that uniquely target
this mechanism and have shown a superior therapeutic profile in animal models of
psychosis.
    
 
    We also have an advanced internal preclinical program that focuses on
treating the behavioral disorders associated with Alzheimer's disease. We have
discovered compounds that uniquely target a mechanism that has been implicated
in this disease. These compounds demonstrate activity in animal models of
psychosis believed to be predictive of symptoms observed in Alzheimer's
patients.
 
   
    Our sixth program is based on a target-specific drug candidate in
preclinical testing for glaucoma that addresses a different but complementary
drug target than our first glaucoma program. We have identified and validated
with Allergan a genomic target that controls pressure within the eye. We have
discovered compounds that are selective for this target and show a favorable
therapeutic profile in primate models of glaucoma.
    
 
    In addition to our six advanced programs, we have several research projects
in which we have identified novel targets and have discovered chemistries
specific for these targets. These projects will serve as starting points for
potential future programs in several areas, including depression, feeding and
obesity, and chronic pain.
 
   
    While we have a number of programs, drug candidates that appear promising at
early stages of development may not enter clinical testing, or even if they do,
may not become drugs that reach the market for any number of reasons.
    
 
OUR STRATEGY
 
   
    The principal elements of our business and scientific strategy include:
    
 
    - Focus on diseases with large unmet medical needs that are well suited to
      small molecule genomic approaches.
 
    - Build a large and sustainable pipeline of drug candidates to reduce the
      risks inherent in drug discovery and increase the likelihood of commercial
      success.
 
   
    - Advance selected discovery programs internally through the early clinical
      stage, which we believe optimizes our position while balancing our
      financial and technical risks.
    
 
   
    - Commercialize our drug candidates and technology platform through
      collaborations with pharmaceutical and biotechnology companies.
    
 
                             CORPORATE INFORMATION
 
   
    We were incorporated in Vermont in 1993 as Receptor Technologies, Inc. In
1997, we reincorporated in Delaware and changed our name to ACADIA
Pharmaceuticals Inc. Our principal executive offices are located at 3911
Sorrento Valley Boulevard, San Diego, California 92121, and our telephone number
at that address is (858) 558-2871. We also have a chemistry research facility
located near Copenhagen, Denmark. Our website is located at
www.acadia-pharm.com. We do not consider information contained in our website to
be part of this prospectus.
    
 
   
    "ACADIA" and "R-SAT" are trademarks of ACADIA Pharmaceuticals Inc. This
prospectus also includes trademarks and trade names owned by other parties, and
all other trademarks and trade names mentioned in this prospectus are the
property of their respective owners.
    
 
                                       2

<PAGE>
                                  THE OFFERING
 
   

<TABLE>
<S>                                                          <C>
Common stock offered by us.................................  5,000,000 shares
Common stock to be outstanding after this offering.........  15,783,382 shares
Use of proceeds............................................  For research and development, capital
                                                             expenditures, working capital and general
                                                             corporate purposes.
Proposed Nasdaq National Market symbol.....................  ACAD
</TABLE>

    
 
                            ------------------------
 
   
    The number of shares of common stock to be outstanding after this offering
is based on the number of shares outstanding at December 31, 2000.
    
 
    The number of shares of common stock to be outstanding after the offering
excludes:
 
   
    - 1,540,154 shares of common stock issuable upon exercise of options
      outstanding at December 31, 2000, at a weighted average exercise price of
      $0.81 per share;
    
 
   
    - 237,257 shares issuable upon exercise of warrants outstanding at
      December 31, 2000, at an exercise price of $12.00 per share; and
    
 
   
    - 762,729 shares available for future grant at December 31, 2000 under our
      1997 stock option plan, and an aggregate of approximately 950,000
      additional shares available for future grant under our 2000 equity
      incentive plan, 2000 nonemployee directors' stock option plan and 2000
      employee stock purchase plan, each of which will become effective upon the
      completion of this offering.
    
 
                            ------------------------
 
    Unless otherwise stated, information in this prospectus is based on the
following assumptions:
 
    - no exercise of the underwriters' overallotment option;
 
    - the conversion of all our outstanding shares of preferred stock into
      8,625,920 shares of common stock upon the closing of this offering; and
 
    - amendments to our certificate of incorporation and bylaws to be effective
      upon completion of this offering.
 
                                       3

<PAGE>
                   SUMMARY CONSOLIDATED FINANCIAL INFORMATION
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
    The following table sets forth summary consolidated financial information
for our company. You should read this information in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our financial statements and the related notes included in this
prospectus.
 
   

<TABLE>
<CAPTION>
                                                                    YEAR ENDED DECEMBER 31,
                                                      ----------------------------------------------------
                                                        1996       1997       1998       1999       2000
                                                      --------   --------   --------   --------   --------
<S>                                                   <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF
  OPERATIONS DATA:
Revenues............................................  $   438    $   835    $ 1,419    $ 2,238    $  4,312
                                                      -------    -------    -------    -------    --------
Operating expenses
  Research and development(1).......................      421      2,295      5,856      7,625      10,538
  General and administrative(2).....................      206      1,771      2,487      2,458       5,043
                                                      -------    -------    -------    -------    --------
    Total operating expenses........................      627      4,066      8,343     10,083      15,581
                                                      -------    -------    -------    -------    --------
Loss from operations................................     (189)    (3,231)    (6,924)    (7,845)    (11,269)
Interest income (expense), net......................       (3)       249        521        400       1,075
                                                      -------    -------    -------    -------    --------
Net loss............................................  $  (192)   $(2,982)   $(6,403)   $(7,445)   $(10,194)
                                                      =======    =======    =======    =======    ========
Net loss per share, basic and diluted...............  $ (0.13)   $ (1.74)   $ (3.12)   $ (3.57)   $  (4.76)
                                                      =======    =======    =======    =======    ========
Weighted average shares used in computing net loss
  per share, basic and diluted(3)...................    1,523      1,712      2,049      2,087       2,139
                                                      =======    =======    =======    =======    ========
Pro forma net loss per share, basic and diluted.....                                              $  (1.05)
                                                                                                  ========
Weighted average shares used in computing pro forma
  net loss per share, basic and diluted(3)..........                                                 9,715
                                                                                                  ========
</TABLE>

    
 
   

<TABLE>
<CAPTION>
                                                                  DECEMBER 31, 2000
                                                              -------------------------
                                                                           PRO FORMA
                                                               ACTUAL    AS ADJUSTED(4)
                                                              --------   --------------
<S>                                                           <C>        <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and investment securities............  $ 28,896       $92,896
Working capital.............................................    25,330        89,330
Total assets................................................    34,113        98,113
Long-term debt, less current portion........................     5,789         5,789
Convertible preferred stock.................................    46,502            --
Total stockholders' equity (deficit)........................   (22,508)       87,994
</TABLE>

    
 
--------------------------
 
   
(1) Includes stock-based compensation of $3, $100 and $810 for the years ended
    December 31, 1998, 1999 and 2000, respectively.
    
 
   
(2) Includes stock-based compensation of $49, $6 and $2,044 for the years ended
    December 31, 1998, 1999 and 2000, respectively.
    
 
(3) Please see Note 2 of the notes to consolidated financial statements included
    elsewhere in this prospectus for an explanation of the determination of the
    number of shares used in computing per share data.
 
   
(4) The pro forma as adjusted information in the table reflects the conversion
    of all of our outstanding shares of convertible preferred stock into shares
    of common stock and reflects the sale of 5,000,000 shares of common stock
    offered by us at an assumed initial public offering price of $14.00 per
    share, the midpoint of the range on the cover of this prospectus, after
    deducting estimated underwriting discounts and commissions and estimated
    offering expenses payable by us.
    
 
                                       4

<PAGE>

                                  RISK FACTORS
 
    ANY INVESTMENT IN SHARES OF OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING INFORMATION ABOUT THESE RISKS,
TOGETHER WITH THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, BEFORE YOU
DECIDE TO BUY OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR,
OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND FUTURE GROWTH
PROSPECTS WOULD LIKELY SUFFER. IN THESE CIRCUMSTANCES, THE MARKET PRICE OF OUR
COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF THE MONEY YOU PAID
TO BUY OUR COMMON STOCK.
 
                         RISKS RELATED TO OUR BUSINESS
 
OUR SUCCESS AS A COMPANY IS UNCERTAIN DUE TO OUR HISTORY OF OPERATING LOSSES AND
THE UNCERTAINTY OF FUTURE PROFITABILITY.
 
   
    We have not been profitable and have generated substantial operating losses
since we were incorporated in 1993. Our operating losses are due in large part
to the significant research and development costs required to identify and
validate new drug targets and to discover small molecule drug candidates. We
incurred net losses of $6.4 million for the year ended December 31, 1998,
$7.4 million for the year ended December 31, 1999 and $10.2 million for the year
ended December 31, 2000. At December 31, 2000, our accumulated losses were
approximately $27.0 million. We expect to incur losses for at least the next
several years and expect that these losses will actually increase as we expand
our research and development activities, incur significant preclinical and
clinical development costs and enhance our core technologies. Our losses are
expected to continue even if our research projects successfully identify
potential drug candidates. Currently, we generate income primarily from research
and milestone payments from collaboration agreements from one collaborator,
interest income and governmental grants. We will need to generate significant
additional revenue to achieve profitability. However, any additional revenue
will depend in large part on our ability, alone or with others, to successfully
research, develop, obtain regulatory clearance for, manufacture, market and
distribute our drug candidates. If the time required to generate revenues and
achieve profitability is longer than anticipated or if we are unable to obtain
necessary capital, we may not be able to fund and continue our operations.
    
 
BECAUSE OUR DRUG CANDIDATES ARE IN AN EARLY STAGE OF DEVELOPMENT, THERE IS A
HIGH RISK OF FAILURE.
 
    Drug candidates that appear promising at early stages of development may not
enter clinical development or reach the market for a number of reasons,
including the possibility that the drug candidates will:
 
    - be found ineffective or cause harmful side effects during preclinical
      testing or clinical trials;
 
    - fail to receive the regulatory clearances required to market them as
      drugs;
 
    - be subject to proprietary rights held by others requiring the negotiation
      of a license agreement prior to marketing;
 
    - be difficult or expensive to manufacture on a commercial scale;
 
    - not be developed rapidly enough to compete with drug candidates or other
      treatments commercialized by our competitors; or
 
    - fail to generate market acceptance.
 
   
    We or our collaborators will need to conduct significant additional
research, preclinical testing and clinical trials before we or our collaborators
file applications with the FDA for product approval of our drug candidates.
Clinical trials are expensive and have a high risk of failure. If research and
testing are not successful or our drug candidates fail to obtain regulatory
approval, we or our collaborators will be
    
 
                                       5

<PAGE>
   
unable to market and sell products derived from our drug candidates. As a
result, we may not receive product royalty revenues and milestone payments and
our ability to continue operations could be jeopardized.
    
 
BECAUSE DISCOVERING DRUGS THROUGH GENOMICS IS NEW AND SPECULATIVE, IT IS
POSSIBLE THAT OUR INTEGRATED TECHNOLOGY PLATFORM WILL NOT IDENTIFY SUCCESSFUL
DRUG CANDIDATES OR LEAD TO COMMERCIAL PRODUCTS OR SERVICES.
 
    The process of discovering drugs using genomics-based discovery is new and
evolving rapidly. We focus our genomics research primarily on complex diseases
that may be linked to several genes working in combination. We and the rest of
the general scientific and medical community have only a limited understanding
of the role of genes and their products in these diseases. To date, we have not
commercialized any drug candidates, and we may not be successful in doing so in
the future. In addition, relatively few products based on gene discoveries have
been developed and commercialized by others. Successful products will require
significant development and investment, including preclinical testing and
clinical trials, to demonstrate their cost effectiveness prior to regulatory
approval and commercialization. Rapid technological development by us or others
may result in compounds, products or processes becoming obsolete before we
recover our development expenses.
 
   
    Furthermore, our particular technology platform involves new and unproven
approaches to the identification of drug candidates with therapeutic potential.
These methods may not lead to the discovery of any candidates that will be safe
or effective in humans. In addition, applying our technology to other commercial
areas, such as the study of individual genetic variation in the responses of
patients to drugs, known as pharmacogenomics, may not be successful. In the
future, we may find it necessary to license the technology of others, or
in-license, or acquire additional product candidates to augment the results of
our internal discovery activities. We may not be able to in-license product
candidates because they may not be available to us. Even if we are able to
in-license product candidates they may prove to be unsuccessful. If we are not
able to use our technologies to discover new drugs or products with significant
commercial potential, we will not be able to achieve our objectives or build a
sustainable or profitable business.
    
 
IF WE FAIL TO OBTAIN THE CAPITAL NECESSARY TO FUND OUR OPERATIONS, WE WILL BE
UNABLE TO SUCCESSFULLY DEVELOP PRODUCTS.
 
   
    We have consumed substantial amounts of capital since our inception and we
expect to increase our operating expenses over the next several years as we
expand our research and development activities and enhance our core
technologies. Although we believe our existing cash resources plus the proceeds
of this offering and anticipated proceeds from existing corporate collaborations
will be sufficient to fund our anticipated cash requirements through 2002, we
will require significant additional financing in the future to fund our
operations. We do not know whether additional financing will be available when
needed, or, if available, that we will obtain financing on terms favorable to us
and our stockholders. Our ability to fund our operations, take advantage of
opportunities, develop drug candidates and technologies or otherwise respond to
competitive pressures could be significantly limited if adequate funds are not
available or are not available on acceptable terms. Our future capital
requirements will depend on, and could increase significantly as a result of,
many factors, including:
    
 
    - progress in, and the costs of, our research and development programs;
 
    - the scope, prioritization and number of programs;
 
    - the progress of preclinical and clinical testing;
 
    - our ability to enter into additional collaborations;
 
    - the modification or termination of any of our current or future
      collaborations;
 
                                       6

<PAGE>
    - the time and costs involved in obtaining regulatory approvals;
 
    - the costs involved in obtaining, enforcing and defending patent and other
      intellectual property rights;
 
    - competing technological and market developments;
 
    - the costs of securing manufacturing arrangements for clinical or
      commercial production; and
 
    - our acquisition and development of technologies.
 
IF OUR CURRENT COLLABORATIONS ARE UNSUCCESSFUL OR IF WE ARE UNABLE TO ENTER INTO
ADDITIONAL COLLABORATIONS IN THE FUTURE, OUR RESEARCH AND DEVELOPMENT EFFORTS
COULD BE SIGNIFICANTLY DELAYED.
 
   
    Our strategy depends upon the formation and sustainability of collaborative
arrangements with third parties. We currently rely, and will continue to rely,
on these arrangements for not only financial resources, but also for expertise
that we expect to need in the future relating to manufacturing, sales and
marketing. To date, we have entered into two collaborative arrangements with
Allergan and one with ArQule, Inc. For the year ended December 31, 2000,
approximately 97% of the total revenue we recognized was from our two
collaborations with Allergan. We expect that a similar percentage of our revenue
for the foreseeable future will be generated by collaborations. However, we do
not know if these collaborators will dedicate sufficient resources to our
programs or if any development or commercialization efforts by them will be
successful. Should a collaborator fail to develop or commercialize a compound or
product to which it has rights from us, we may not receive any future milestone
payments and will not receive any royalties associated with the compound or
product. In addition, the continuation of our collaborations is dependent on our
collaborators' periodic renewal of the governing agreements. Our existing
collaboration agreements with Allergan may be terminated before the full term of
the collaborations upon a breach or a change of control or other specified
circumstances. We may not be able to renew these collaborations on acceptable
terms, if at all, or negotiate additional collaborations on acceptable terms, if
at all. As a result, our operating results may fluctuate significantly depending
on the initiation of new collaboration agreements or the termination of existing
collaboration agreements.
    
 
IF CONFLICTS ARISE WITH OUR COLLABORATORS, THEY MAY ACT IN THEIR SELF INTEREST,
WHICH MAY BE ADVERSE TO OUR INTERESTS.
 
    Conflicts may arise between us and our collaborators, such as conflicts
concerning ownership rights to particular drug candidates. In addition, some of
our collaborators may be conducting multiple product development efforts within
each disease area that is the subject of the collaboration with us. For example,
Allergan currently markets therapeutic products to treat glaucoma and is engaged
in other research programs related to glaucoma that are independent from our two
programs in this therapeutic area. In addition, since our collaborators are
currently conducting, and may in the future conduct, the clinical trials for our
drug candidates, they control the timing of the release of results from these
trials and may decide to delay or withhold the results for their own purposes
even if the results are positive. Generally, in each of our collaborations, we
have agreed not to conduct independently, or with any third party, any research
that is competitive with the research conducted under our collaborations. Our
collaborations may have the effect of limiting the areas of research that we may
pursue, either alone or with others. Our collaborators, however, may develop,
either alone or with others, products in related fields that are competitive
with the products or potential products that are the subject of these
collaborations. Competing products, either developed by the collaborators or to
which the collaborators have rights, may result in their withdrawal of support
for our product candidates.
 
                                       7

<PAGE>
THE PROGRESS AND RESULTS OF PRECLINICAL AND CLINICAL TESTING ARE UNCERTAIN,
WHICH COULD DELAY OUR EFFORTS AND THE EFFORTS OF OUR COLLABORATORS TO
COMMERCIALIZE DRUGS.
 
    Both preclinical and clinical testing are long, expensive and uncertain
processes. It may take several years to complete the preclinical testing and
clinical development necessary to commercialize a drug, and failure can occur at
any stage. Commercialization of product candidates derived from our drug
candidates depends upon successful completion of clinical trials. Interim
results of trials do not necessarily predict final results, and success in
preclinical testing and early clinical trials does not ensure that later
clinical trials will be successful. A number of companies in the pharmaceutical
industry, including biotechnology companies, have suffered significant setbacks
in advanced clinical trials, even after promising results in earlier trials. To
date, only one of our drug candidates has advanced to the early stages of
clinical trials. We have never successfully completed clinical development of
any of our drug candidates. In addition, we do not know whether future clinical
trials will begin on time or whether they will be completed on schedule, or at
all. The length of time necessary to initiate and complete clinical trials
varies significantly and may be difficult to predict. Certain of our activities
involve drug testing in small rodents. The use of animals in research and
development and drug candidate commercialization have been the subject of
controversy and adverse publicity. Animal rights activists could protest against
us or damage our preclinical facilities, which could delay our research and
development efforts.
 
    Any drug is likely to produce some toxicities or undesirable side effects in
animals and in humans when administered at sufficiently high doses and/or for
sufficiently long periods of time. Unacceptable toxicities or side effects may
occur at any dose level and at any time in the course of studies of animals
designed to identify unacceptable effects of a drug candidate or during clinical
trials of our potential products. The appearance of any unacceptable toxicity or
side effect could cause our collaborators or regulatory authorities to
interrupt, limit, delay or abort the development of any of our drug candidates
and could ultimately prevent clearance by the required regulatory authorities of
these candidates for any or all targeted indications.
 
WE DEPEND ON THIRD PARTIES TO CONDUCT CLINICAL TRIALS, PERFORM DATA COLLECTION
AND ANALYSIS, AND MARKET AND DISTRIBUTE OUR POTENTIAL PRODUCTS, AND AS A RESULT,
WE MAY FACE ADDITIONAL COSTS AND DELAYING FACTORS OUTSIDE OF OUR CONTROL.
 
   
    We currently rely on our collaborators, and expect to contract with third
parties in the future, to manufacture drug products, conduct preclinical
studies, including studies regarding biological activity, safety, absorption,
metabolism and excretion of drug candidates, perform clinical trials for safety
and efficacy in humans and market and distribute our potential products. Our
existing collaborations and future agreements for preclinical and clinical
development services will place substantial responsibilities on third parties
for development of our drug candidates which could result in delays in or
termination of development if those parties fail to perform as expected. We may
not be able to maintain any of these existing relationships, or establish new
ones on favorable terms, if at all. We may not be able to enter into replacement
arrangements without undue delays or excessive expenditures. Furthermore, these
collaborators and third parties may not perform as we expect. Our drug discovery
and development costs will increase if there are delays in testing or approvals
or if our collaborators need to perform more or larger clinical trials than
planned. Significant delays of this type could harm our financial results and
the commercial prospects for our drug candidates.
    
 
   
WE OR OUR COLLABORATORS MUST OBTAIN REGULATORY APPROVAL TO MARKET PRODUCTS
DERIVED FROM OUR DRUG CANDIDATES.
    
 
   
    The pharmaceutical industry is subject to stringent regulation by a wide
range of authorities. Even if we obtain regulatory approval for a drug
candidate, the approval may not be obtained in a timely manner or under
technically or commercially feasible conditions. We and our collaborators cannot
    
 
                                       8

<PAGE>
   
market a pharmaceutical product in the United States until it has completed
rigorous preclinical testing and clinical trials and an extensive regulatory
clearance process implemented by the FDA. Satisfaction of regulatory
requirements typically takes many years, depends upon the type, or complexity
and novelty of the product and requires substantial resources. Of particular
significance are the FDA's requirements covering research and development,
testing, manufacturing, quality control, labeling and promotion of drugs for
human use.
    
 
   
    Outside the United States, the ability to market a product is contingent
upon receiving a marketing authorization from the appropriate regulatory
authorities. The requirements governing the conduct of clinical trials,
marketing authorization, pricing and reimbursement vary widely from country to
country. At present, foreign marketing authorizations are administered at a
national level, although within the European Community, or EC, registration
procedures are available to companies wishing to market a product in more than
one EC member state. Only after the appropriate regulatory authority is
satisfied that adequate evidence of safety, quality and efficacy has been
presented will it grant a marketing authorization. In addition, United States
and foreign government regulations control access to and use of some human or
other tissue samples in our research and development efforts. United States and
foreign government agencies may also impose restrictions on the use of data
derived from human or other tissue samples.
    
 
FAILURE TO ATTRACT, RETAIN AND MOTIVATE SKILLED PERSONNEL WILL DELAY OUR DRUG
DISCOVERY PROGRAMS AND OUR RESEARCH AND DEVELOPMENT EFFORTS.
 
    We are a small company, with under 100 employees, and our success depends on
our continued ability to attract, retain and motivate highly qualified
management and scientific personnel. In particular, our research and drug
discovery programs depend on our ability to attract and retain highly skilled
chemists, biologists and pharmacologists. We may not be able to attract or
retain qualified employees in the future due to the intense competition for
qualified personnel among biotechnology and other technology based businesses,
particularly in the San Diego, California area. If we are not able to attract
and retain the necessary personnel to accomplish our business objectives, we may
experience constraints that will impede significantly the achievement of our
research and development objectives and our ability to meet the demands of our
collaborators in a timely fashion. In addition, we will need to hire additional
personnel as we continue to expand our research and development activities.
Competition for experienced scientists and other technical personnel from
numerous companies and academic and other research institutions may limit our
ability to attract and retain qualified personnel on acceptable terms. In
addition, all of our employees are at will employees, which means that any
employee may quit at any time. In particular, if we lose Mark R. Brann, Ph.D.,
our founder, President, Chief Scientific Officer and a director, or Uli
Hacksell, Ph.D., our Chief Executive Officer and a director, we may not be able
to find a suitable replacement and our business may be harmed as a result.
 
   
IF OUR COMPETITORS DEVELOP AND MARKET PRODUCTS THAT ARE MORE EFFECTIVE THAN
PRODUCTS DERIVED FROM OUR DRUG CANDIDATES, THEY MAY REDUCE OR ELIMINATE OUR
COMMERCIAL OPPORTUNITY.
    
 
   
    The pharmaceutical and biotechnology industries have and will continue to
undergo rapid technological change. In particular, the area of gene research is
a rapidly evolving field. Because we focus on genomics as part of our business
strategy, our future success will depend on our ability to maintain a
competitive position with respect to technological advances. Rapid technological
development by others may result in our technology platform becoming obsolete.
Our commercial opportunity will be reduced or eliminated if our competitors
develop and market products that are more effective, have fewer side effects or
are less expensive than products we hope to derive from our drug candidates. Our
competitors include fully integrated pharmaceutical companies and biotechnology
companies, including our collaborators, as well as universities and public and
private research
    
 
                                       9

<PAGE>
   
institutions, that currently have drug and target discovery efforts. Our ability
to compete successfully will depend on our ability, alone or together with our
collaborators, to develop drug candidates that reach the market in a timely
manner and are technologically superior to, and/or are less expensive than,
other products on the market. However, many of the organizations competing with
us have substantially greater capital resources, larger research and development
staffs and facilities, greater experience in drug development and in obtaining
regulatory approvals and greater marketing capabilities than we do.
    
 
   
    With respect to our drug discovery programs, other companies may have
product candidates in clinical trials to treat each of the diseases for which we
are seeking to discover and develop product candidates. These competing
potential drugs may be further advanced in development than are any of the
potential products derived from our drug candidates and may result in effective,
commercially successful products. Even if our collaborators or we succeed in
developing effective drugs from our drug candidates, those drugs may not compete
effectively with our competitors' drugs.
    
 
OUR ABILITY TO COMPETE MAY DECLINE IF WE DO NOT ADEQUATELY PROTECT OUR
PROPRIETARY RIGHTS.
 
   
    Our commercial success will depend in part on our obtaining, securing and
defending patent protection on our technologies and drug candidates as well as
effectively maintaining our trade secrets. If we do not protect our intellectual
property adequately, competitors may be able to use our technologies and erode
any competitive advantage we may have from our intellectual property. The patent
positions of pharmaceutical and biotechnology companies can be highly uncertain
and involve complex legal and factual questions. For example, some of our patent
applications will cover gene sequences and their products and the uses of those
gene sequences and products. Public disclosures and patent applications related
to the Human Genome Project and other genomics efforts may limit the scope of
our claims or make unpatentable subsequent patent applications. If patents are
issued to third parties that contain competitive or conflicting claims, we and
our collaborators may be legally prohibited from pursuing research, development
or commercialization of potential products. No consistent policy regarding the
breadth of claims allowed in biotechnology patents has emerged to date.
Accordingly, the U.S. Patent and Trademark Office's standards are uncertain and
could change in the future. In addition, changes in or different interpretations
of patent laws in the United States and foreign countries may permit others to
use our discoveries or to develop and commercialize our technology and products
without providing any compensation to us. The laws of some countries do not
protect intellectual property rights to the same extent as United States laws
and those countries may lack adequate rules and procedures for defending our
intellectual property rights.
    
 
    The degree of future protection for our proprietary rights is uncertain due
to a number of factors, including:
 
    - we may not have been the first to file patent applications for the
      technologies we rely upon;
 
    - others may independently develop similar or alternative technologies or
      duplicate any of our technologies;
 
    - our disclosures in patent applications may not be sufficient to meet the
      statutory requirements for patentability in all cases;
 
    - any of our pending patent applications may not result in issued patents;
 
    - we may not seek or obtain patent protection in all countries that will
      eventually provide a significant business opportunity;
 
    - any patents issued to us or our collaborators may not provide a basis for
      commercially viable products or may not provide us with any competitive
      advantages or may be challenged by third parties;
 
                                       10

<PAGE>
    - our proprietary technologies may not be patentable; or
 
   
    - the patents of others may have an adverse effect on our ability to do
      business.
    
 
    In-licensed technology may become important to some aspects of our business.
We generally will not control the patent prosecution, maintenance or enforcement
of in-licensed technology. Accordingly, we will be unable to exercise the same
degree of control over this intellectual property as we do over our internally
developed technology. Moreover, some of our academic institution licensors,
research collaborators and scientific advisors have rights to publish data and
information to which we have rights. If we cannot maintain the confidentiality
of our technology and other confidential information in connection with our
collaborations, then our ability to receive patent protection or protect our
proprietary information will be impaired.
 
A DISPUTE CONCERNING THE INFRINGEMENT OR MISAPPROPRIATION OF OUR PROPRIETARY
RIGHTS OR THE PROPRIETARY RIGHTS OF OTHERS COULD BE TIME CONSUMING AND COSTLY
AND COULD DELAY OUR RESEARCH AND DEVELOPMENT EFFORTS.
 
   
    Our success depends partly upon our ability to avoid infringing or
misappropriating the proprietary rights of others. We could incur substantial
costs in litigation if we have to defend against patent suits brought by third
parties or if we initiate these suits. Others may have filed and in the future
are likely to file patent applications covering assays, genes, gene products or
therapeutic products that are similar or identical to ours. These patent
applications may have priority over patent applications filed by us. Any legal
action against our collaborators or us claiming damages and seeking to enjoin
commercial activities relating to the affected products and processes could, in
addition to subjecting us to potential liability for damages, require our
collaborators or us to obtain a license to continue to manufacture or market the
affected products and processes. We or our collaborators may not prevail in
these actions and any license required under any of these patents may not be
made available on commercially acceptable terms, if at all.
    
 
   
    We believe that there is significant litigation in the industry regarding
patent and other intellectual property rights. If we become involved in
litigation initiated by a third party, it could consume a substantial portion of
our managerial and financial resources, whether we win or lose. Furthermore,
parties making claims against us may be able to obtain injunctive or other
equitable relief that may effectively block our ability to further develop,
commercialize and sell products. In that event, we could encounter delays in
product introductions while we attempt to develop alternate methods or products
or be prevented from commercializing current or future products. Similarly,
third parties may infringe on or misappropriate our proprietary rights, and we
may have to institute costly legal action against them to protect our
intellectual property rights. We may not be able to afford the costs of
enforcing our intellectual property rights against these third parties.
    
 
    In addition, like many biotechnology companies, we may from time to time
hire scientific personnel formerly employed by other companies involved in one
or more areas similar to the activities conducted by us. We or these individuals
may be subject to allegations of trade secret misappropriation or other similar
claims as a result of their prior affiliations. Resolving those claims could
also result in significant expenditures of both the time of personnel and our
financial resources.
 
CONFIDENTIALITY AGREEMENTS WITH EMPLOYEES AND OTHERS MAY NOT ADEQUATELY PREVENT
DISCLOSURE OF OUR TRADE SECRETS AND OTHER PROPRIETARY INFORMATION.
 
   
    Because we operate in the highly technical field of genomics, we rely in
part on trade secret protection in order to protect our proprietary technology
and processes. However, trade secrets are difficult to protect. We execute
confidentiality agreements with our employees and consultants upon the
commencement of an employment or consulting arrangement with us. These
agreements generally require that the individual keep confidential and not
disclose to third parties all confidential
    
 
                                       11

<PAGE>
   
information developed by the individual or made known to the individual by us
during the course of the individual's relationship with us. These agreements
also generally provide that inventions conceived by the individual in the course
of rendering services to us will be our exclusive property. While we require
employees, academic collaborators and consultants to enter into confidentiality
agreements, it is possible that:
    
 
   
    - proprietary information will be disclosed;
    
 
   
    - others will independently develop substantially equivalent proprietary
      information and techniques;
    
 
   
    - others will gain access to our trade secrets or disclose this technology;
      or
    
 
   
    - these obligations of confidentiality may not be honored.
    
 
    Costly and time consuming litigation could be necessary to enforce and
determine the scope of our proprietary rights, and failure to obtain or maintain
trade secret protection could adversely affect our competitive business
position.
 
   
WE EXPECT THAT OUR RESULTS OF OPERATIONS WILL FLUCTUATE, WHICH MAY MAKE IT
DIFFICULT TO PREDICT OUR FUTURE PERFORMANCE FROM PERIOD TO PERIOD.
    
 
    Our quarterly operating results have fluctuated in the past and are likely
to do so in the future. A large portion of our expenses, including expenses for
personnel, facilities, equipment and contracted research, is relatively fixed.
In addition, we plan to significantly increase operating expenses in the near
term as we expand our internal research and development activities. Failure to
achieve anticipated levels of revenue could significantly harm our operating
results for a particular fiscal period. Due to the possibility of fluctuations
in our revenue and expenses, we believe that period to period comparisons of our
operating results are not a good indication of our future performance. Some of
the factors that could cause our operating results to fluctuate from period to
period include:
 
   
    - termination or reduction in the scope of our collaborations in one or more
      periods;
    
 
   
    - the particular timing of our collaborators' discovery and development
      efforts associated with milestones and royalties;
    
 
    - our ability to enter into new agreements with collaborators or to extend
      the terms of our existing corporate collaboration agreements;
 
   
    - the timing of our satisfaction of all applicable regulatory requirements,
      if at all;
    
 
    - the rate of expansion of our internal research and development efforts and
      related expenses; and
 
    - general and industry specific economic conditions that may affect our
      collaborators' research and development expenditures.
 
IF OUR STRATEGIC DECISIONS DO NOT YIELD COMMERCIALLY VIABLE PRODUCTS, WE MAY NOT
ACHIEVE PROFITABILITY.
 
    While we believe that our integrated drug discovery approach can be applied
to many types of diseases, due to our limited financial and managerial
resources, we have made strategic decisions to focus our current resources on
six programs that address four specific diseases:
 
    - schizophrenia;
 
    - Alzheimer's disease;
 
    - chronic pain; and
 
    - glaucoma.
 
This decision requires us to forego potential opportunities with respect to
other diseases. We may not successfully select diseases or those drug candidates
with the most potential for commercial development. Our efforts may not produce
viable commercial products and we may be precluded from other, more profitable
opportunities.
 
                                       12

<PAGE>
ANY CLAIMS RELATING TO IMPROPER HANDLING, STORAGE OR DISPOSAL OF THE BIOLOGICAL
AND HAZARDOUS MATERIALS USED IN OUR BUSINESS COULD BE COSTLY AND DELAY OUR
RESEARCH AND DEVELOPMENT EFFORTS.
 
    Our research and development activities involve the controlled use of
potentially harmful hazardous materials, including biological materials,
chemicals and various radioactive compounds. We cannot completely eliminate the
risk of accidental contamination or injury from the use, storage, handling or
disposal of these materials. In the event of contamination or injury, we could
be held liable for damages that result, and any liability could exceed our
resources. We are subject to federal, state and local laws and regulations
governing the use, storage, handling and disposal of these materials and
specified waste products. The cost of compliance with these laws and regulations
could be significant, and current or future environmental regulations may impair
our research, development or production efforts.
 
   
CONSUMERS MAY SUE US FOR PRODUCT LIABILITY, WHICH COULD RESULT IN SUBSTANTIAL
LIABILITIES THAT EXCEED OUR RESOURCES.
    
 
   
    Researching, developing and commercializing drug products entail significant
product liability risks. Liability claims may arise from our and our
collaborators use of products in clinical trials and the commercial sale of
those products. Consumers may make these claims directly and our collaborators
or others selling these products may seek contribution from us if they receive
claims from consumers. We may be held liable if any drug we develop, or any drug
which is developed with the use of any of our technologies, causes injury or is
found otherwise unsuitable during testing, manufacturing, marketing or sale. We
currently have no product liability insurance for clinical trials. When and if
we attempt to obtain product liability insurance for clinical trials, this
insurance may be prohibitively expensive, or may not fully cover our potential
liabilities. Inability to obtain sufficient insurance coverage at an acceptable
cost or otherwise to protect against potential product liability claims could
prevent or inhibit the commercialization of products that we or our
collaborators develop. Our liability could exceed our total assets if we do not
prevail in a lawsuit from any injury caused by our drug products.
    
 
WE MAY ENCOUNTER DIFFICULTIES MANAGING OUR GROWTH, WHICH COULD ADVERSELY AFFECT
OUR RESULTS OF OPERATIONS.
 
   
    We will need to expand and effectively manage our operations and facilities
in order to successfully complete our existing collaborative agreements,
facilitate additional collaborations and pursue future internal research,
development and commercialization efforts. We increased the number of our
employees from 69 at December 31, 1999 to 93 at December 31, 2000, and, based on
the availability of funding, we expect to significantly increase our rate of
growth to meet our strategic objectives. If we continue to grow, it is possible
that the number and skills of management and scientific personnel, systems and
facilities currently in place may not be adequate. Our ability to effectively
manage our operations, growth, and various projects requires us to continue to
improve our operational, financial and management controls, reporting systems
and procedures and to attract and retain sufficient numbers of talented
employees. We may not be able to successfully implement these tasks on a larger
scale and, accordingly, may not achieve our research, development and
commercialization goals.
    
 
IF ETHICAL AND OTHER CONCERNS SURROUNDING THE USE OF GENETIC INFORMATION BECOME
WIDESPREAD, WE MAY HAVE LESS DEMAND FOR OUR PRODUCTS.
 
    We have entered into a collaboration agreement designed to provide
pharmacogenomic services to pharmaceutical companies using our integrated
technology platform, including genetic testing. Genetic testing has raised
ethical issues regarding confidentiality and the appropriate uses of the
resulting information. For these reasons, governmental authorities may call for
limits on or regulation of the use of genetic testing or prohibit testing for
genetic predisposition to selected conditions. Any of these scenarios could
reduce the potential markets for our pharmacogenomic services.
 
                                       13

<PAGE>
WE FACE ADMINISTRATIVE CHALLENGES IN COORDINATING THE OPERATIONS OF OUR DANISH
SUBSIDIARY AND OUR ACTIVITIES IN CALIFORNIA.
 
   
    Our subsidiary in Denmark, ACADIA Pharmaceuticals A/S, employs approximately
29% of our total personnel, and is engaged in research and development
activities with primary responsibility for combinatorial, medicinal and
analytical chemistry. Our principal executive offices, however, are located in
California. The additional administrative expense required to monitor and
coordinate activities in both Denmark and California could divert management
resources from other important endeavors and, in turn, delay any development and
commercialization efforts. In addition, currency fluctuations involving our
Danish operations may cause foreign currency translation gains and losses. These
exchange rate fluctuations could have a negative effect on our operations. We do
not engage in currency hedging transactions.
    
 
                         RISKS RELATED TO THIS OFFERING
 
   
OUR STOCK PRICE MAY BE PARTICULARLY VOLATILE BECAUSE WE ARE A GENOMICS-BASED
DRUG DISCOVERY AND DEVELOPMENT COMPANY.
    
 
    The market prices for securities of biotechnology companies in general, and
genomics companies specifically have been highly volatile and may continue to be
highly volatile in the future. The following factors, in addition to other risk
factors described in this section, may have a significant impact on the market
price of our common stock:
 
   
    - market conditions related to biotechnology and pharmaceutical industries,
      including companies focused on genomics, or the market in general;
    
 
    - announcements of technological innovations or new commercial products by
      our competitors or us;
 
   
    - developments concerning our proprietary rights, including patents;
    
 
    - developments concerning our collaborations;
 
    - publicity regarding actual or potential medical results relating to
      products under development by our competitors or us;
 
   
    - public concern as to genetic testing or the safety of drugs and drug
      delivery techniques; or
    
 
   
    - regulatory developments in the United States and foreign countries.
    
 
   
    In addition, the market price for securities of early-stage drug discovery
companies has been particularly volatile. In the past, following periods of
volatility in the market price of a particular company's securities, securities
class action litigation has often been brought against that company. We may
become subject to this type of litigation in the future as a result of our
likelihood to experience volatility in the market price of our common stock.
Litigation of this type is often extremely expensive and diverts management's
attention.
    
 
OUR MANAGEMENT HAS BROAD DISCRETION ON THE USE OF THE PROCEEDS FROM THIS
OFFERING, AND WE MAY ALLOCATE THE PROCEEDS IN WAYS THAT YOU AND OTHER
STOCKHOLDERS MAY NOT APPROVE.
 
   
    Our management will have significant flexibility in applying the net
proceeds of this offering and could use these proceeds for corporate purposes
that do not increase our profitability or our market value, or in ways with
which our stockholders may not agree. We currently intend to use the proceeds of
this offering and our existing cash balances to fund research and development
expenses, capital expenditures, working capital and general corporate purposes.
We may also use proceeds for acquisitions or investments in complementary
businesses, technologies or products. Pending these expected uses, we will
invest the proceeds of this offering in short-term investment grade interest-
    
 
                                       14

<PAGE>
   
bearing securities that may lose value. Our management may allocate the net
proceeds among these purposes as it determines necessary. In addition, market
factors may require our management to allocate all or a portion of the net
proceeds for other purposes. You may not agree with the manner in which our
management ultimately uses the net proceeds of this offering. Accordingly, you
will be relying on the judgment of our management team with regard to the
application of the net proceeds of this offering.
    
 
IF OUR OFFICERS, DIRECTORS AND LARGEST STOCKHOLDERS CHOOSE TO ACT TOGETHER, THEY
MAY BE ABLE TO CONTROL OUR MANAGEMENT AND OPERATIONS, ACTING IN THEIR BEST
INTERESTS AND NOT NECESSARILY THOSE OF OTHER STOCKHOLDERS.
 
   
    Following completion of this offering, our directors, executive officers and
principal stockholders and their affiliates will beneficially own approximately
62.3% of our common stock, based on their beneficial ownership at December 31,
2000. Accordingly, they collectively will have the ability to affect the
election of all of our directors and to affect the outcome of most corporate
actions requiring stockholder approval, such as amendments to our certificate of
incorporation, going private transactions and other significant corporate
events. They may exercise this ability in a manner that advances their best
interests and not necessarily those of other stockholders. This concentration of
control may depress our stock price.
    
 
THERE IS NO PRIOR MARKET FOR OUR COMMON STOCK AND YOU MAY NOT BE ABLE TO RESELL
YOUR SHARES AT OR ABOVE THE INITIAL OFFERING PRICE.
 
   
    Prior to this offering, there has been no public market for shares of our
common stock. An active, liquid trading market may not develop following
completion of this offering, or if developed, may not be maintained. If you
purchase shares of our common stock in this offering, you will not pay a price
that was established in a competitive market. Rather, you will pay a price that
we negotiated with the representatives of the underwriters. This price may not
be indicative of prices that will prevail in the future in the trading market.
Among the factors to be considered in determining the initial public offering
price of the common stock, in addition to prevailing market conditions, will be:
    
 
   
    - estimates of our business potential and earnings prospects particularly in
      the areas of glaucoma, chronic pain, schizophrenia and Alzheimer's
      disease;
    
 
    - an assessment of our management; and
 
   
    - the consideration of the above factors in relation to market valuations of
      companies in genomics-based drug discovery and development related
      businesses.
    
 
    Due to the uncertainty in determining the initial public offering price and
other risk factors described in this section, the market price of the common
stock may decline below the initial public offering price, and you may not be
able to resell your shares at or above this price.
 
IF OUR STOCKHOLDERS SELL SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK AFTER THE
PUBLIC OFFERING, THE MARKET PRICE OF OUR COMMON STOCK MAY FALL.
 
   
    If our stockholders sell substantial amounts of our common stock, including
shares issued upon the exercise of outstanding options and warrants, the market
price of our common stock may fall. These sales also might make it more
difficult for us to sell equity or equity related securities in the future at a
time and price that we deem appropriate. After completion of this offering, we
will have 15,783,382 outstanding shares of common stock.
    
 
    The number of shares of common stock available for sale in the public market
is limited by restrictions under federal securities laws and under agreements
into which substantially all of our stockholders have entered with the
underwriters or with us. The lockup agreements with the
 
                                       15

<PAGE>
underwriters restrict those stockholders from selling, pledging or otherwise
disposing of their shares for a period of 180 days after the date of this
prospectus without the prior written consent of the underwriters. However, the
underwriters may, in their sole discretion, release all or any portion of the
common stock from the restrictions of the lockup agreements.
 
   
    We intend to file a registration statement on Form S-8 covering an aggregate
of 3,252,883 shares issuable upon exercise of options to purchase common stock
and common stock reserved for issuance under our stock plans in connection with
this offering.
    
 
   
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND UNDER DELAWARE LAW MAY
MAKE AN ACQUISITION OF US MORE COMPLICATED AND THE REMOVAL AND REPLACEMENT OF
OUR DIRECTORS AND MANAGEMENT MORE DIFFICULT.
    
 
   
    Provisions of our amended and restated certificate of incorporation and
bylaws, as well as provisions of Delaware law, could make it more difficult for
a third party to acquire us, even if doing so would benefit our stockholders.
These provisions may also make it difficult for stockholders to remove and
replace our board of directors and management. These provisions:
    
 
    - establish that members of the board of directors may be removed only for
      cause upon the affirmative vote of stockholders owning at least a majority
      of our capital stock;
 
    - authorize the issuance of "blank check" preferred stock that could be
      issued by our board of directors to increase the number of outstanding
      shares and prevent or delay a takeover attempt;
 
    - limit who may call a special meeting of stockholders;
 
    - prohibit stockholder action by written consent, thereby requiring all
      stockholder actions to be taken at a meeting of our stockholders;
 
    - establish advance notice requirements for nominations for election to the
      board of directors or for proposing matters that can be acted upon at
      stockholder meetings; and
 
    - provide for a board of directors with staggered terms.
 
    In addition, Section 203 of the Delaware General Corporation Law may
discourage, delay or prevent a third party from acquiring us.
 
THE PUBLIC OFFERING WILL CAUSE IMMEDIATE AND SUBSTANTIAL DILUTION TO YOUR
INVESTMENT.
 
   
    Purchasers in the public offering will experience immediate and substantial
dilution in the net tangible book value of the common stock from the initial
public offering price. Because we expect the offering price to be substantially
higher than the net tangible book value per share of the common stock, if you
purchase shares in this offering, you will incur dilution in the net tangible
book value per share of your shares of $8.42 based on an assumed initial public
offering price of $14.00. In the past, we issued options and warrants to acquire
capital stock at prices below the initial public offering price of common stock
in this offering. As a result, there likely will be further dilution to
investors upon exercise of these options and warrants.
    
 
                                       16

<PAGE>
                   NOTE REGARDING FORWARD LOOKING STATEMENTS
 
    This prospectus may contain forward looking statements. The forward looking
statements are contained principally in the sections entitled "Summary,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business." These statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performances
or achievements expressed or implied by the forward looking statements. Forward
looking statements include, but are not limited to statements about:
 
    - the progress of clinical trials involving our drug candidates;
 
    - the progress of our research and development programs;
 
    - the benefits to be derived from relationships with our collaborators;
 
    - the receipt of regulatory clearances and approvals;
 
    - our estimates of future revenue and profitability; and
 
    - our estimates regarding our capital requirements and our need for
      additional financing.
 
    In some cases, you can identify forward looking statements by terms such as
"may," "will," "should," "could," "would," "expects," "plans," "anticipates,"
"believes," "estimates," "projects," "predicts," "potential" and similar
expressions intended to identify forward looking statements. These statements
reflect our current views with respect to future events and are based on
assumptions and subject to risks and uncertainties. Given these uncertainties,
you should not place undue reliance on these forward looking statements. We
discuss many of these risks in this prospectus in greater detail under the
heading "Risk Factors." Also, these forward looking statements represent our
estimates and assumptions only as of the date of this prospectus.
 
    You should read this prospectus and the documents that we reference in this
prospectus completely and with the understanding that our actual future results
may be materially different from what we expect. We qualify all of our forward
looking statements by these cautionary statements.
 
    You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information provided by this
prospectus is accurate as of any date other than the date on the front of this
prospectus.
 
                                       17

<PAGE>

                                USE OF PROCEEDS
 
   
    The proceeds from the sale of 5,000,000 shares of common stock we are
offering are estimated to be approximately $64.0 million, or approximately
$73.8 million if the underwriters' overallotment option is exercised in full,
after deducting underwriting discounts and commissions and our estimated
offering expenses and based on an assumed initial public offering price of
$14.00 per share.
    
 
   
    We intend to use approximately $38 million of the net proceeds from this
offering to fund research and development activities, including research
expenses and preclinical and clinical development expenses associated with our
internal drug discovery programs. We also intend to use approximately
$4 million of the net proceeds for capital expenditures. We expect to use the
remaining net proceeds for working capital and general corporate purposes. We
may also use a portion of the net proceeds to acquire or invest in complementary
businesses or products or to obtain the right to use complimentary technologies;
however, we have no present plans, agreements or commitments and are not
currently engaged in any negotiations with respect to any such transactions.
Pending these uses, the proceeds of the offering will be invested in short-term
investment grade interest bearing securities.
    
 
   
    The amounts and timing of our actual expenditures will depend significantly
upon a number of factors, including the amount and timing of revenues from our
current or future collaborations and the progress in, and costs of, our internal
programs. Pending use of the net proceeds for the above purposes, we intend to
invest these funds in short-term, interest bearing investment grade securities.
    
 

                                DIVIDEND POLICY
 
    We have never paid or declared cash dividends on our capital stock. We
currently intend to retain future earnings, if any, for use in the expansion and
operation of our business and do not anticipate paying any cash dividends in the
foreseeable future.
 
                                       18

<PAGE>

                                 CAPITALIZATION
 
   
    The following table sets forth our capitalization at December 31, 2000:
    
 
   
    - on an actual basis derived from our audited consolidated financial
      statements;
    
 
    - on a pro forma basis to give effect to the conversion of all of our
      outstanding shares of convertible preferred stock into an aggregate of
      8,625,920 shares of common stock; and
 
   
    - on a pro forma as adjusted basis to also give effect to the sale of
      5,000,000 shares of common stock offered hereby at an assumed initial
      offering price of $14.00 per share, after deducting underwriting discounts
      and commissions and estimated offering expenses.
    
 
    You should read this table in conjunction with the consolidated financial
statements and the notes to those statements and the other financial information
included elsewhere in this prospectus.
 
   

<TABLE>
<CAPTION>
                                                                         DECEMBER 31, 2000
                                                         -------------------------------------------------
                                                                                               PRO FORMA
                                                          ACTUAL           PRO FORMA          AS ADJUSTED
                                                         ---------         ----------         ------------
                                                          (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                                                      <C>               <C>                <C>
Long-term obligations, less current portion............  $  5,789           $  5,789             $  5,789
                                                         --------           --------             --------
Convertible preferred stock, $0.01 par value:
  10,019,067 shares authorized, 8,625,920 shares issued
  and outstanding, actual; 5,000,000 shares authorized,
  no shares issued and outstanding, pro forma and pro
  forma as adjusted....................................    46,502                 --                   --
                                                         --------           --------             --------
Stockholders' equity (deficit):
  Common stock, $0.0001 par value: 14,218,712 shares
    authorized, 2,157,462 shares outstanding, actual;
    10,783,382 shares issued and outstanding, pro
    forma; 50,000,000 shares authorized, 15,783,382
    shares issued and outstanding, pro forma as
    adjusted...........................................        --                  1                    2
  Additional paid-in capital...........................     6,801             53,302              117,301
  Accumulated deficit..................................   (26,999)           (26,999)             (26,999)
  Unearned stock-based compensation....................    (2,616)            (2,616)              (2,616)
  Accumulated other comprehensive income...............       306                306                  306
                                                         --------           --------             --------
    Total stockholders' equity (deficit)...............   (22,508)            23,994               87,994
                                                         --------           --------             --------
      Total capitalization.............................  $ 29,783           $ 29,783             $ 93,783
                                                         ========           ========             ========
</TABLE>

    
 
   
    The number of shares of common stock outstanding at December 31, 2000 does
not include:
    
 
    - 237,257 shares of common stock issuable upon exercise of outstanding
      warrants at an exercise price of $12.00 per share;
 
   
    - 1,540,154 shares of common stock issuable upon exercise of options
      outstanding at December 31, 2000 at a weighted average exercise price of
      $0.81 per share; and
    
 
   
    - 762,729 shares available for future grant at December 31, 2000 under our
      1997 stock option plan.
    
 
   
    From January 1, 2001 to January 31, 2001, we issued an aggregate of 170,494
shares upon the exercise of options at a weighted average price of $0.69 per
share. In addition, from January 1, 2001 to January 31, 2001, we granted 151,000
options to purchase common stock at a weighted average exercise price of $2.00
per share.
    
 
                                       19

<PAGE>
                                    DILUTION
 
   
    Our pro forma net tangible book value at December 31, 2000 was $23,994,100
assuming the conversion of all outstanding shares of preferred stock into shares
of common stock. Net tangible book value per share is determined by dividing the
net tangible book value, total tangible assets less total liabilities, by the
number of outstanding shares of common stock at that date. Our pro forma net
tangible book value at December 31, 2000 was approximately $2.23 per share of
common stock. Without taking into account any other changes in pro forma net
tangible book value other than the sale of 5,000,000 shares of our common stock
in this offering at an assumed initial public offering price of $14.00 per share
and, after deducting underwriting discounts and commissions and our estimated
offering expenses, the pro forma as adjusted net tangible book value at
December 31, 2000 would be $87,994,100, or $5.58 per share. Assuming the
completion of this offering, there will be an immediate increase in net tangible
book value to existing stockholders of $3.35 per share and an immediate dilution
to new investors of $8.42 per share. The following table illustrates the per
share dilution to new investors:
    
 
   

<TABLE>
<S>                                                           <C>     <C>
Assumed initial public offering price per share.............          $14.00
  Pro forma net tangible book value per share at
    December 31, 2000.......................................  $2.23
  Pro forma increase in net tangible book value per share
    attributable to new investors...........................   3.35
                                                              -----
Pro forma as adjusted net tangible book value per share,
  after offering............................................            5.58
                                                                      ------
Pro forma dilution per share to new investors...............          $ 8.42
                                                                      ======
</TABLE>

    
 
   
    If the underwriters exercise their overallotment option in full, there will
be an increase in pro forma net tangible book value to $3.68 per share to
existing stockholders and an immediate dilution in pro forma net tangible book
value of $8.09 to new investors.
    
 
   
    The following table summarizes on a pro forma basis at December 31, 2000 the
differences between the existing stockholders and new investors with respect to
the number of shares of common stock purchased from us, the total consideration
paid and the average price per share paid, assuming the conversion of all
outstanding shares of preferred stock into shares of common stock:
    
 
   

<TABLE>
<CAPTION>
                           SHARES PURCHASED           TOTAL CONSIDERATION
                         ---------------------      -----------------------      AVERAGE PRICE
                           NUMBER     PERCENT          AMOUNT      PERCENT         PER SHARE
                         ----------   --------      ------------   --------      -------------
<S>                      <C>          <C>           <C>            <C>           <C>
Existing
  stockholders.........  10,783,382      68%        $ 49,129,100      41%           $ 4.56
New investors..........   5,000,000      32           70,000,000      59             14.00
                         ----------     ---         ------------     ---
    Total..............  15,783,382     100%        $119,129,100     100%
                         ==========     ===         ============     ===
</TABLE>

    
 
   
    If the underwriters exercise their overallotment option in full, our
existing stockholders would own 65% and our new investors would own 35% of the
total number of shares of our common stock outstanding after this offering.
    
 
   
    At December 31, 2000, there were options outstanding to purchase a total of
1,540,154 shares of common stock at a weighted average exercise price of $0.81
per share and 762,729 shares were reserved for grant of future options under our
1997 stock option plan. In December 2000, our board of directors adopted our
2000 employee stock purchase plan, our 2000 equity incentive plan and our 2000
nonemployee directors' stock option plan, under which an aggregate of 950,000
additional shares were reserved for issuance. At December 31, 2000, there were
warrants outstanding to purchase a total of 237,257 shares of common stock at an
exercise price of $12.00 per share. To the extent that any of these options or
warrants are exercised or any shares are issued under these plans, there will be
further dilution to new investors.
    
 
                                       20

<PAGE>
   
    Assuming the exercise in full of all options and warrants outstanding and
exercisable as of December 31, 2000, the average price per share paid by our
existing stockholders would be reduced by $0.09 per share to $4.47 per share.
After this offering, and assuming the exercise in full of all options and
warrants outstanding and exercisable as of December 31, 2000, the pro forma net
tangible book value as adjusted would be $5.46 per share, representing an
immediate increase in net tangible book value of $3.23 per share to existing
stockholders and an immediate dilution in net tangible book value of $8.54 per
share to new investors.
    
 
                                       21

<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
   
    The following data, insofar as it relates to each of the years 1996 through
2000, has been derived from audited annual financial statements, including the
consolidated balance sheet at December 31, 1999 and 2000 and the related
consolidated statements of operations and of cash flows for the three years
ended December 31, 2000 and related notes appearing elsewhere in this
prospectus. You should read the following selected financial data set forth
below in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our financial statements and related
notes appearing elsewhere in this prospectus.
    
 
   

<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                              ----------------------------------------------------
                                                                1996       1997       1998       1999       2000
                                                              --------   --------   --------   --------   --------
<S>                                                           <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues
  Collaborative revenues--related party.....................  $    --    $   273    $ 1,300    $ 2,238    $  4,193
  Other research revenues...................................      438        562        119         --         119
                                                              -------    -------    -------    -------    --------
    Total revenues..........................................      438        835      1,419      2,238       4,312
                                                              -------    -------    -------    -------    --------
Operating expenses
  Research and development(1)...............................      421      2,295      5,856      7,625      10,538
  General and administrative(2).............................      206      1,771      2,487      2,458       5,043
                                                              -------    -------    -------    -------    --------
    Total operating expenses................................      627      4,066      8,343     10,083      15,581
                                                              -------    -------    -------    -------    --------
Loss from operations........................................     (189)    (3,231)    (6,924)    (7,845)    (11,269)
Interest income.............................................       --        283        689        751       1,516
Interest expense............................................       (3)       (34)      (168)      (351)       (441)
                                                              -------    -------    -------    -------    --------
Net loss....................................................  $  (192)   $(2,982)   $(6,403)   $(7,445)   $(10,194)
                                                              =======    =======    =======    =======    ========
Net loss per share, basic and diluted.......................  $ (0.13)   $ (1.74)   $ (3.12)   $ (3.57)   $  (4.76)
                                                              =======    =======    =======    =======    ========
Weighted average shares used in computing net loss per
  share, basic and diluted(3)...............................    1,523      1,712      2,049      2,087       2,139
                                                              =======    =======    =======    =======    ========
Pro forma net loss per share, basic and diluted.............                                   $ (0.96)   $  (1.05)
                                                                                               =======    ========
Weighted average shares used in computing pro forma net loss
  per share, basic and diluted(3)...........................                                     7,780       9,715
                                                                                               =======    ========
</TABLE>

    
 
   

<TABLE>
<CAPTION>
                                                                                                 DECEMBER 31, 2000
                                                               DECEMBER 31,                  -------------------------
                                                 -----------------------------------------                PRO FORMA
                                                   1996       1997       1998       1999      ACTUAL    AS ADJUSTED(4)
                                                 --------   --------   --------   --------   --------   --------------
<S>                                              <C>        <C>        <C>        <C>        <C>        <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and investment
  securities...................................  $      5   $ 12,418   $ 17,577   $ 12,209   $ 28,896      $ 92,896
Working capital (deficit)......................      (329)    11,765     16,939     10,788     25,330        89,330
Total assets...................................       223     14,705     21,063     15,518     34,113        98,113
Long-term debt, less current portion...........        76      1,177      3,367      4,432      5,789         5,789
Convertible preferred stock....................        --     14,512     24,665     24,665     46,502            --
Total stockholders' equity (deficit)...........      (244)    (1,989)    (8,414)   (15,437)   (22,508)       87,994
</TABLE>

    
 
------------------------------
 
   
(1) Includes stock-based compensation of $3, $100 and $810 for the years ended
    December 31, 1998, 1999 and 2000, respectively.
    
 
   
(2) Includes stock-based compensation of $49, $6 and $2,044 for the years ended
    December 31, 1998, 1999 and 2000, respectively.
    
 
(3) Please see Note 2 of the notes to our consolidated financial statements for
    an explanation of the determination of the number of shares used in
    computing per share data.
 
   
(4) The pro forma as adjusted information in the table reflects the conversion
    of all of our outstanding shares of convertible preferred stock into shares
    of common stock and reflects the sale of 5,000,000 shares of common stock
    offered by us at an assumed initial public offering price of $14.00 per
    share, after deducting estimated underwriting discounts and commissions and
    estimated offering expenses payable by us.
    
 
                                       22

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
    THE FOLLOWING "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" SHOULD BE READ IN CONJUNCTION WITH "SELECTED
CONSOLIDATED FINANCIAL DATA" AND OUR CONSOLIDATED FINANCIAL STATEMENTS AND
ACCOMPANYING NOTES. OUR DISCUSSION MAY CONTAIN FORWARD LOOKING STATEMENTS BASED
UPON CURRENT EXPECTATIONS THAT INVOLVE RISKS AND UNCERTAINTIES, SUCH AS
STATEMENTS OF OUR PLANS, OBJECTIVES AND INTENTIONS. OUR ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE INDICATED IN ANY FORWARD LOOKING STATEMENTS. SEE
"NOTE REGARDING FORWARD LOOKING STATEMENTS." FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO THESE DIFFERENCES INCLUDE BUT ARE NOT LIMITED TO THOSE DISCUSSED
IN "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.
 
OVERVIEW
 
   
    We were incorporated in 1993 and have devoted substantially all of our
resources since that time to the development of an integrated technology
platform and the discovery of novel small molecule drug candidates. We have not
been profitable and we have incurred substantial operating losses since
inception due in large part to expenditures related to our research and
development activities. At December 31, 2000, we had incurred an accumulated
deficit of $27.0 million. We expect to incur substantial increases in our
expenditures and operating losses for at least the next several years and until
we generate sufficient revenue to offset expenses. Research and development
costs will continue to increase as we seek to discover and develop a sustainable
pipeline of drug candidates and expand and maintain our integrated technology
platform. Our results of operations have fluctuated significantly from period to
period in the past and are likely to do so in the future. Due to the possibility
of fluctuations in our revenue and expenses, we believe that the period to
period comparisons of our operating results are not a good indication of our
future performance.
    
 
   
    Our income to date has been generated substantially from research and
milestone payments from our collaborative agreements, interest income and
governmental grants. A major component of our business strategy is to enter into
collaborations with pharmaceutical and biotechnology companies in order to
leverage the research, development and commercial resources of our collaborators
to establish a pipeline of drug discovery programs and to commercialize our drug
candidates. Currently, our revenues are derived primarily from two collaborative
agreements with Allergan. These collaborations provide for the payment of
research funding to us on a quarterly basis through July 2001 and
September 2002, respectively, and are subject to rights of early termination. We
expect our sources of revenues for the next several years to consist of payments
under our current and future collaborations. We expect that our collaboration
agreements typically will provide for the following potential sources of
revenues:
    
 
    - upfront payments upon entering into the agreements;
 
    - research funding throughout the term of the agreements;
 
    - milestone payments contingent upon achievement of agreed upon objectives;
      and
 
    - royalties upon the commercialization of products.
 
   
    Revenues from upfront payments are recognized ratably over the term of the
agreements. Revenues from research funding are recognized when the related
research activities are performed. Revenues from milestone payments are
recognized when the milestone is achieved. However, milestone payments that
require future performance are deferred and recognized as revenue over the term
of the agreement as the related activities are performed. Amounts received under
the agreements are nonrefundable even if the research activities are not
successful.
    
 
                                       23

<PAGE>
    Our research and development expenses consist primarily of salaries and
other personnel-related expenses, facility costs and costs for equipment and
laboratory supplies. Our general and administrative expenses consist primarily
of personnel-related expenses for finance, business development and general
management, as well as professional fees, such as expenses for legal and
accounting services.
 
    Our discovery programs are at an early stage of development and we are
dependent on securing additional funding from the sale of equity securities and
from both current and new collaborations to meet our future funding
requirements. Another component of our business strategy is to manage our
financial resources and level of investment in drug discovery programs to
balance our proprietary efforts and activities under collaborations. As part of
this strategy, we are planning to make significant investments in our own
research and development programs, which will require us to obtain additional
financial resources. In particular, we intend to develop some of our own drug
candidates through the early stages of clinical development prior to entering
into licensing and development agreements with collaborators in return for a
greater share of the revenues derived from the resulting products. This strategy
will require us to obtain additional financial resources and invest more fully
in our own programs. If adequate funds are not available or are not available on
acceptable terms, our ability to further develop our drug candidates and fund
our operations could be significantly limited.
 
RESULTS OF OPERATIONS
 
   
    YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
    
 
   
    Revenues increased to $4.3 million for the year ended December 31, 2000 from
$2.2 million in 1999 and $1.4 million in 1998. The increase in revenues during
2000 relative to 1999 was primarily due to $1.1 million in increased revenues
recognized under our second collaboration agreement with Allergan, which
commenced in July 1999, $854,000 in increased revenues, largely consisting of
milestone payments, under our first collaboration with Allergan, and funding
from a governmental grant. The increase in revenues during 1999 relative to 1998
was primarily due to an increase in revenues recognized under our second
collaboration agreement with Allergan. Our two collaboration agreements with
Allergan accounted for substantially all of our revenues during these periods.
    
 
   
    Research and development expenses increased to $10.5 million for the year
ended December 31, 2000 from $7.6 million in 1999 and $5.9 million in 1998,
including stock-based compensation expense of $810,000, $100,000 and $3,000,
respectively. This increase, other than stock-based compensation expenses,
reflects increased costs associated with expansion of our research and discovery
organization and related activities. The increase in research and development
expenses during 2000 relative to 1999 was primarily due to $850,000 in increased
expenditures for laboratory supplies, $817,000 in increased personnel-related
expenses, and additional costs for equipment, facilities and other expenses. The
increase in research and development expenses during 1999 relative to 1998 was
primarily due to $850,000 in increased personnel-related expenses, $261,000 in
increased expenditures for laboratory supplies, and additional costs for
equipment, facilities and other expenses. We anticipate substantial increases in
research and development expenses in future periods related to further expansion
of our research and discovery organization and increased preclinical and
clinical expenses associated with our drug candidates.
    
 
   
    General and administrative expenses totaled $5.0 million for the year ended
December 31, 2000 and $2.5 million for the years ended December 31, 1999 and
1998, including stock-based compensation expense of $2.0 million, $6,000 and
$49,000, respectively. This increase, other than stock-based compensation
expenses, during 2000 relative to 1999, primarily reflects personnel-related
expenses from the expansion of our administrative organization to support
increased research and development efforts, and expanded business development
activities. General and administrative expenses, other than stock-based
compensation, were relatively consistent during 1999 and 1998. We anticipate
increases in general and administrative expenses in future periods as we expand
our administrative organization to
    
 
                                       24

<PAGE>
   
support the continued growth of our research organization, and incur additional
costs associated with operating as a public company and with increased business
development activities.
    
 
   
    Stock-based compensation expense increased to $2.9 million for the year
ended December 31, 2000 from $106,000 in 1999 and $52,000 in 1998. This increase
resulted from the amortization of deferred stock-based compensation,
compensation expense resulting from the modification of the terms of an option
grant, and compensation expense from the valuation of options granted to
consultants. During the years ended December 31, 2000 and 1999, we recorded
deferred stock-based compensation totaling $2.9 million and $470,000,
respectively, in connection with the grant of stock options to employees. This
amount has been reflected as a component of stockholders' equity (deficit) and
will be amortized to operations over the vesting period of the options,
generally four years. The estimated remaining unearned stock-based compensation
of $2.6 million at December 31, 2000 will be recognized as expense in future
years as follows: $1.4 million in 2001, $726,000 in 2002, $344,000 in 2003 and
$114,000 in 2004. We anticipate that additional deferred stock-based
compensation will be recorded for options granted after December 31, 2000,
including approximately $1.3 million for options granted in January 2001. This
$1.3 million amount will be recognized as expense as follows: $690,000 in 2001,
$359,000 in 2002, $193,000 in 2003 and $83,000 in 2004.
    
 
   
    Interest income increased to $1.5 million for the year ended December 31,
2000 from $751,000 in 1999 and $689,000 in 1998. This increase is primarily
attributable to higher average levels of cash and investment securities.
Interest expense increased to $441,000 for the year ended December 31, 2000 from
$351,000 in 1999 and $168,000 in 1998. This increase is primarily due to
increased borrowings under our loan agreements.
    
 
LIQUIDITY AND CAPITAL RESOURCES
 
   
    Since inception, we have funded our operations primarily through private
placements of our preferred stock, payments under our collaborative agreements,
debt financing and interest income. At December 31, 2000, we had received
$47.9 million in net proceeds from the sales of equity securities, including
$6.0 million from one of our collaborators, $9.3 million in payments from
collaborative agreements, $8.0 million in debt financing and $3.2 million in
interest income.
    
 
   
    At December 31, 2000, we had approximately $28.9 million in cash, cash
equivalents and investment securities compared to $12.2 million at December 31,
1999. This increase in cash balances was largely attributable to net proceeds of
$21.8 million from the issuance of Series E preferred stock during the second
quarter of 2000, offset by $4.9 million in cash used in operating activities for
the year ended December 31, 2000. We have invested a substantial portion of our
available cash funds in investment securities consisting of high quality debt
instruments of financial institutions and corporations and U.S. Government
securities.
    
 
   
    At December 31, 2000, we had purchased $6.4 million in property and
equipment. Since inception, we have financed approximately $2.2 million of our
property and equipment acquisitions through equipment financing agreements.
    
 
   
    Net cash provided by financing activities totaled $23.8 million for the year
ended December 31, 2000 compared to $1.8 million for the year ended
December 31, 1999. This increase was primarily due to net proceeds of
$21.8 million from the issuance of Series E preferred stock and increased
proceeds from the issuance of debt, net of repayments during 2000. At
December 31, 2000, we had $5.4 million, including accrued interest, outstanding
under a loan agreement with The Vaekstfonden (The Danish Fund for Industrial
Growth). This loan provides funding on a quarterly basis over the term of a
research project up to a maximum commitment of approximately 45 million Danish
kroner, or approximately $5.6 million. The loan accrues interest at 7.7% per
annum and principal and interest are payable in quarterly installments over a
five year period. The payments are based on a percentage of estimated revenues
that could potentially be generated from the project. Should actual revenues
fail to
    
 
                                       25

<PAGE>
   
materialize or fall short of projections, the loan may be forgiven or the
repayment terms revised at the discretion of The Vaekstfondon.
    
 
   
    At December 31, 2000, we had $1.7 million in outstanding borrowings under
two equipment financing agreements which are secured by the related equipment.
Outstanding balances under these agreements bear interest in the range of 9.9%
to 12.6% per annum and are due in monthly installments over a three to four year
period. At December 31, 2000, we had $1.0 million available under equipment
financing agreements, subject to compliance with specified financial covenants
and conditions. We also have commitments under operating leases for our
facilities and certain equipment requiring future payments totaling
$4.6 million through 2005.
    
 
   
    We believe our existing cash resources plus the proceeds of this offering
and anticipated proceeds from existing corporate collaborations will be
sufficient to fund our anticipated cash requirements through 2002. We plan to
use approximately $38 million of the net proceeds from this offering to fund
research and development activities, including research expenses and preclinical
and clinical development expenses associated with our internal drug discovery
programs. We also intend to use approximately $4 million of the net proceeds for
capital expenditures. We expect to use the remaining net proceeds for working
capital and general corporate purposes. The amounts and timing of our actual
expenditures will depend significantly on many factors, including the amount and
timing of revenues from our current or future collaborations and the progress
in, and the costs of, our internal programs.
    
 
   
    We expect to raise substantial additional capital to fund our operations for
periods after 2002, and may seek additional funding sooner than needed if
available on favorable terms. Our future capital requirements will depend on
many factors including:
    
 
    - progress in, and the costs of, our research and development programs;
 
    - the scope, prioritization and number of programs;
 
    - the progress of preclinical and clinical testing;
 
    - our ability to enter into additional collaborations;
 
    - the modification or termination of any of our current or future
      collaborations;
 
    - the time and costs involved in obtaining regulatory approvals; and
 
    - the costs involved in obtaining, enforcing and defending patent and other
      intellectual property rights.
 
    We intend to seek additional funding through collaborative and licensing
agreements, public or private equity or debt financing, or other financing
sources that may be available. We cannot assure you that additional financing or
collaborative and licensing agreements will be available when needed or that, if
available, this financing will be obtained on terms favorable to us or our
stockholders. If additional funds are raised through the sale of equity
securities, substantial dilution to existing stockholders may result. If
adequate funds are not available, we may be required to delay, or reduce the
scope of, or eliminate some or all of our research and development programs or
to relinquish rights to drug candidates at an earlier stage of development or on
less favorable terms than we would otherwise choose to do. Our failure to obtain
capital when needed could have a material adverse effect on our business,
financial condition and results of operations.
 
RECENTLY ISSUED ACCOUNTING STANDARDS
 
    In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, or SAB 101, REVENUE RECOGNITION IN FINANCIAL
STATEMENTS. The objective of SAB 101 is to provide further guidance on revenue
recognition issues in the absence of authoritative literature
 
                                       26

<PAGE>
addressing a specific arrangement or a specific industry. We have adopted SAB
101 for all periods presented.
 
    We expect to adopt Statement of Financial Accounting Standards No. 133, or
SFAS 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES,
effective January 1, 2001. SFAS 133 will require us to recognize all derivatives
on the balance sheet at fair value. We do not anticipate that the adoption of
SFAS 133 will have a significant effect on our results of operations or
financial position.
 
   
    In March 2000, the Financial Accounting Standards Board issued
Interpretation No. 44, or FIN 44, ACCOUNTING FOR CERTAIN TRANSACTION INVOLVING
STOCK COMPENSATION. We adopted FIN 44 effective July 1, 2000 with respect to
specific provisions applicable to new awards, exchanges of awards in a business
combination, modifications to outstanding awards, and changes in grantee status
that occur on or after that date. FIN 44 addresses practice issues related to
the application of Accounting Practice Bulletin Opinion No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES. Our adoption of FIN 44 had no material impact on our
financial statements.
    
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
    INTEREST RATE RISK
 
   
    We invest our excess cash in investment grade, interest bearing securities.
The primary objective of our investment activities is to preserve principal
while at the same time maximizing yields without significantly increasing risk.
To achieve this objective, we invest in highly liquid and high quality debt
instruments of financial institutions and corporations and U.S. government
securities with maturities of less than two years. If a 10% change in interest
rates were to have occurred on December 31, 2000, this change would not have had
a material effect on the fair value of our investment portfolio as of that date.
    
 
    FOREIGN CURRENCY RISK
 
    We have a wholly owned subsidiary in Denmark, ACADIA Pharmaceuticals A/S,
which exposes us to foreign exchange risk. The functional currency of our
subsidiary is the Danish local currency. Accordingly, all assets and liabilities
of our subsidiary are translated at the current exchange rate at the balance
sheet date. Revenue and expense components are translated at weighted average
exchange rates in effect during the period. Gains and losses resulting from
foreign currency translation are included as a component of our stockholders'
equity (deficit). Other foreign currency transaction gains and losses are
included in our results of operations and, to-date, have not been significant.
We have not hedged exposures denominated in foreign currencies or any other
derivative financial instrument.
 
                                       27

<PAGE>

 
                                   BUSINESS
 
OVERVIEW
 
    We are a genomics-based drug discovery and development company that
efficiently identifies target-specific small molecule drug candidates using our
integrated technology platform. Our proprietary approach integrates genomics,
chemistry and biology to rapidly identify and validate drug targets and discover
chemistries specific to those targets. We have successfully applied our approach
to generate a drug discovery pipeline that currently includes six advanced
programs as well as a number of earlier stage research projects. We have rapidly
advanced two of these programs to development with a collaborator. The first
drug candidate, for glaucoma treatment, is undergoing a Phase I/IIa clinical
trial. The second drug candidate has been nominated for development as a novel
treatment for chronic pain. We also have four additional drug candidates in
late-stage preclinical testing. We focus on major diseases that represent some
of the largest pharmaceutical markets in the world, including schizophrenia,
Alzheimer's disease, chronic pain and glaucoma.
 
BACKGROUND ON DRUG DISCOVERY
 
   
    The drug discovery process is complex and involves multiple steps.
Currently, researchers discover many drugs through screening large numbers of
chemical structures, or compounds, for a chosen disease target. Drugs are
natural or synthetic compounds that interact with a target molecule, normally a
protein, either to induce or to inhibit that molecule's function within the
human body. The key steps in the discovery of a compound for further development
as a drug candidate typically include:
    
 
    - identification of a suitable drug target, or target validation;
 
    - discovery of a lead compound;
 
    - optimizing the properties of the lead compound; and
 
    - preclinical testing and development of the lead compound.
 
   
    Recent advances in genomics research have led to the identification of a
large number of genes, which represent potential targets for therapeutic
intervention. As with genomic initiatives, researchers have made major advances
in chemistry techniques useful in the drug discovery process, including
combinatorial chemistry. As a result, many pharmaceutical and biotechnology
companies now have access to large collections of diverse chemical structures,
referred to as libraries, which may include synthetic compounds and natural
product extracts. Researchers have also made major advances in the technologies
available for screening libraries to identify compounds that interact with a
given drug target.
    
 
CURRENT LIMITATIONS OF DRUG DISCOVERY AND GENOMICS
 
    Recent advances in genomics have the potential to significantly improve the
drug discovery process. As genomics efforts continue to identify new genes,
however, researchers face a major challenge in understanding the functional and
clinical relevance of this increasing wealth of genetic information. These
developments have not enabled the rapid identification of ideal drug targets,
because the gene sequence data by itself provides only limited information, if
any, about a gene's relationship to a specific disease. The following
limitations exist in the current process of moving from a gene to a drug:
 
    - Slow and cumbersome process--Identification of gene function is
      inefficient and time consuming.
 
    - Poor target selection--The inability to look broadly and functionally at
      targets often leads to the selection of inappropriate drug targets.
 
                                       28

<PAGE>
    - Nonselective drugs--Difficulties exist in finding highly selective
      chemistries for the appropriate target; therefore many resulting drugs are
      nonspecific in their action.
 
    The selection of targets for drug discovery and the identification of
specific lead chemistries have historically been inefficient processes. Even
after advances in genomics and chemistry, these two aspects of drug discovery
continue to represent critical bottlenecks that significantly limit the
efficiency and productivity of current discovery efforts. Inappropriate drug
targets combined with nonselective chemistries often lead to low success rates
and drugs with suboptimal clinical profiles, including poor efficacy and side
effects.
 
OUR SOLUTION
 
    We have developed a drug discovery approach based on our integrated
technology platform that combines genomics, chemistry and biology to both
validate drug targets and discover novel chemistries specific to those targets.
Our technology platform efficiently and productively links diverse genomic and
chemical information. This platform may be used to identify and validate
individual gene products as novel disease targeting mechanisms. Our technology
platform may also be used to discover novel small molecule drug candidates that
selectively target these individual gene products.
 
   
    We have established drug discovery and technical expertise in the areas of
genomics, functional genomics, molecular biology, ultra high throughput
screening, molecular and behavioral pharmacology, and combinatorial, medicinal
and analytical chemistry. We have assembled a large and diverse compound library
and have developed more than 250 functional assays for key genomic targets. We
have discovered novel specific chemistries in over 200 structural classes for 35
genomic targets. We also apply our technology to the study of individual genetic
variation in the responses of patients to drugs, known as pharmacogenomics. In
addition to our internal capabilities, we collaborate with world renowned
scientists, clinicians and academic institutions. We believe that our discovery
expertise combined with our technology platform creates a highly efficient and
productive drug discovery process that we are able to use to discover superior
drug candidates more efficiently than traditional approaches. We believe that
our technology platform provides the following benefits:
    
 
    - Productive and efficient drug discovery--Since 1997, we have generated six
      advanced drug discovery programs, two of which are now in development.
 
   
    - Effective target validation--We identify the therapeutic relevance of
      genomic targets using our proprietary assay technology, R-SAT, to
      functionally link genomic and chemical information. Using our approach, we
      have validated targets for all six of our programs.
    
 
   
    - Target-specific drugs--Using our compound library and our proprietary
      combinatorial chemistries, we can identify specific chemistries for our
      validated targets, and thereby achieve therapeutic benefits with minimal
      or no side effects.
    
 
   
    - Broad applicability--We apply our technology platform over a wide range of
      potential drug targets to address several therapeutic areas. Our efforts
      address many diverse classes of potential targets, including the largest
      class of current drug targets, the G-protein coupled receptors, or GPCRs.
    
 
                                       29

<PAGE>
OUR DRUG DISCOVERY APPROACH
 
    KEY COMPONENTS OF OUR PLATFORM TECHNOLOGY
 
   
    We have based our drug discovery approach on our integrated technology
platform. This approach validates novel genomic targets while simultaneously
identifying specific chemistries for those targets. Our proprietary platform
consists of four key elements:
    
 
    - R-SAT FUNCTIONAL ASSAY PLATFORM. Our proprietary Receptor Selection and
      Amplification Technology, which we refer to as R-SAT, is the foundation of
      our integrated technology platform. R-SAT is a functional cell-based
      chemical compound testing system that we have broadly applied to measure
      the ability of compounds to alter cellular function. Our studies have
      shown that the results are predictive of the clinical activities of drugs.
      This technology is scaleable and we have integrated it into an industrial
      process for the analysis of diverse compound libraries.
 
    - GENOMIC TARGETS. We have developed what we believe is one of the most
      comprehensive sets of functional genomic assays, encompassing more than
      250 genomic targets. We have prioritized the discovery and testing of
      genomic targets to those targets that we believe are most likely to
      interact with small organic molecules.
 
    - DIVERSE COMPOUND LIBRARY. We have a large and diverse compound library,
      which we use as a resource to search for novel structure-activity
      relationships, which are the relationships between chemical structure and
      pharmacological activity. This library consists of over 700,000 small
      organic compounds that have been characterized and quality controlled for
      purity and drug-like characteristics.
 
    - REFERENCE DRUGS. We have assembled a collection of over 1,000 compounds,
      primarily consisting of currently and formerly marketed drugs, and drugs
      that failed in clinical trials, each with known effects or side effects on
      the central nervous system. Our reference drugs, when combined with R-SAT
      and the genomic targets, provide an important resource to link clinical
      and physiological effects of drugs with genomic targets.
 
                                     CHART
 
    [Depiction of ACADIA's Technology: Three boxes with a single circle overlaid
on each are vertically stacked to the left of a large triangle that points to
two boxes on the right. The top box of the three is captioned "Diverse Compound
Library" and its overlaid circle depicts chemical structures. The middle box is
captioned "Genomic Targets" and its overlaid circle depicts a strand of DNA. The
bottom circle is captioned "Reference Drugs" and its overlaid circle depicts a
chemical structure. The triangle is captioned "R-SAT." The top of the two boxes
is captioned "Validated Targets" and the bottom box is captioned
"Target-Specific Chemistries." Beneath and spanning the length of these figures
is a bracket pointing down to the text "Technology Platform."]
 
                                       30

<PAGE>
    HOW WE USE OUR TECHNOLOGY
 
   
    To validate novel targets and find target-specific chemistries, we can apply
our discovery approach in either of two complementary ways: an evidence-based
approach or a chemistry-based approach. With the evidence-based approach, we
match the effects of reference drugs on genomic targets using R-SAT to better
understand the clinical relevance of a genomic target. Our evidence-based
approach relies on the fact that most currently marketed drugs are not
completely target-specific and interact with a variety of gene products to cause
side effects. A thorough understanding of an established drug's multiple target
interactions coupled with knowledge about the clinical experience related to its
use in patients allows us to reach conclusions regarding the mechanism of action
underlying its clinical efficacy, as well as the targets responsible for side
effects. As a result, we can differentiate between the therapeutic targets and
those targets that are associated with side effects.
    
 
    Our second approach, the chemistry-based approach, uses high throughput
screening of compound libraries with detailed pharmacologic profiling of the
active chemistries using R-SAT. This process enables us to discover novel
proprietary chemistries that selectively target individual gene products and use
these as critical tools to determine the therapeutic potential of these targets.
We believe that our discovery expertise combined with our integrated technology
platform creates a highly efficient and productive drug discovery process that
allows us to discover superior drug candidates more efficiently than traditional
approaches.
 
OUR PROGRAMS
 
    We have used our integrated technology platform to generate a drug discovery
pipeline that currently includes six advanced programs. Our programs address
major diseases that are not well served by currently available therapies and
that represent significant commercial markets. We believe that these disease
areas are well suited to genomic approaches and that our drug candidates provide
the potential for improved therapeutic profiles relative to existing therapies.
The following table summarizes key information for our gene product specific
drug candidates.
 
                                       31

<PAGE>
 

<TABLE>
<CAPTION>
                                                                                               COMMERCIAL
PROGRAM                           STATUS                  OUR KEY ACHIEVEMENTS                   RIGHTS
-------                       ---------------  -------------------------------------------   --------------
<S>                           <C>              <C>                                           <C>
GLAUCOMA
  adrenergic agonist          Phase I/IIa      Identified and validated a specific             Allergan(A)
  (AGN 195795)                Clinical Trial   adrenergic target that affects intraocular
                                               pressure.
                                               Discovered a specific drug candidate that
                                               demonstrates a superior therapeutic profile
                                               in animal models relative to current
                                               adrenergic therapies.
  muscarinic agonist          Preclinical      Identified and validated a specific             Allergan(B)
                                               muscarinic target that affects intraocular
                                               pressure.
                                               Discovered a specific drug candidate that
                                               demonstrates a superior therapeutic profile
                                               in animal models relative to current
                                               muscarinic therapies.
CHRONIC PAIN
  GPCR agonist                Development      Identified and validated a specific GPCR as     Allergan(A)
  (AGN 197075)                Candidate        a target for the treatment of chronic pain.
                                               Discovered a drug candidate that was shown
                                               to be highly efficacious when administered
                                               orally in animal models, and does not
                                               exhibit the side effects common to pain
                                               drugs.
SCHIZOPHRENIA
  m1 muscarinic agonist/      Preclinical      Discovered specific drug candidates with a        ACADIA
  dopamine D(2) antagonist                     dual mechanism of action that demonstrate
                                               activity when administered orally in animal
                                               models of psychosis.
  5-HT(2A) inverse agonist    Preclinical      Identified and validated 5-HT(2A) inverse         ACADIA
                                               agonism as a therapeutic targeting
                                               mechanism for antipsychotic drugs.
                                               Discovered specific drug candidates with
                                               activity in animal models of psychosis.
ALZHEIMER'S DISEASE
  m1 muscarinic agonist       Preclinical      Discovered specific drug candidates with          ACADIA
                                               activity in animal models of psychotic
                                               symptoms associated with Alzheimer's
                                               disease.
</TABLE>

 
--------------------------
 
   
    "muscarinic" and "adrenergic" each refer to members of two distinct receptor
    families.
    
 
   
    "agonist" means that a drug is able to activate a receptor.
    
 
   
    "inverse agonist" means that a drug is able to directly inhibit receptor
    function.
    
 
   
    "antagonist" means that a drug is able to block the effect of an agonist on
    a receptor.
    
 
   
    "Phase I/IIa Clinical Trial" means that our collaborator is conducting a
    clinical trial designed to provide information on safety and preliminary
    efficacy in groups of patients following an investigational new drug, or IND
    application, becoming effective.
    
 
    "Development Candidate" means that our collaborator has nominated a drug
    candidate for development and is performing toxicology, manufacturing and/or
    other studies designed to compile data necessary for submission of an IND
    application to the FDA.
 
   
    "Preclinical" means that drug candidates have been discovered and are active
    in relevant animal models; these drug candidates meet specified criteria and
    are undergoing further testing designed to enable the selection of a
    Development Candidate for clinical testing.
    
 
    "Allergan(A)" indicates that the commercialization of this program is
    governed by the terms of our September 1997 Collaboration Agreement with
    Allergan, Inc. discussed under "--Collaboration Agreements."
 
    "Allergan(B)" indicates that the commercialization of this program is
    governed by the terms of our July 1999 License and Collaboration Agreement
    with Allergan, Inc. described under "--Collaboration Agreements."
 
                                       32

<PAGE>
GLAUCOMA
 
    Glaucoma is an eye disease that is associated with the degeneration of the
optic nerve. An important factor related to glaucoma is increased fluid pressure
within the eye, or intraocular pressure. Initially, glaucoma causes blind spots
in the visual field and, if left untreated, can result in blindness. In fact,
glaucoma is the second leading cause of blindness. According to the Glaucoma
Research Foundation, an estimated 3 million people in the United States and
67 million people worldwide have glaucoma. In 1999, global sales for glaucoma
therapeutics totaled $1.8 billion. It is expected that global sales of glaucoma
therapeutics will increase significantly as awareness and diagnoses increase and
the general population ages. Currently, physicians treat glaucoma with multiple
classes of therapeutics to optimize therapy and minimize side effects.
Therefore, we believe significant market demand exists for a novel glaucoma
therapeutic that offers superior efficacy with minimal side effects.
 
    We have two programs in glaucoma and have formed two collaborations with
Allergan, Inc. to develop and commercialize drug candidates from these programs.
These drug candidates address different but complementary therapeutic mechanisms
and we believe that they provide potential advantages as compared to current
therapies.
 
   
    SPECIFIC ADRENERGIC AGONIST:  Adrenergic agonists reduce intraocular
pressure and may have neuroprotective effects on the optic nerve. In
collaboration with Allergan, we have identified and validated a specific
adrenergic gene product that affects the lowering of intraocular pressure and
have discovered a development candidate, AGN 195795, that selectively activates
this gene product. In a pivotal primate model of glaucoma, our drug candidate
demonstrated effects indicative of clinical efficacy. In addition, studies in
other animal models suggest absence of activities indicative of side effects
commonly produced by nonselective adrenergic drugs such as sedation and
cardiovascular side effects. AGN 195795 has a preclinical profile that is
superior to that of currently used adrenergic drugs, suggesting that it may
offer potential advantages to patients. The IND application for AGN 195795 has
become effective and a Phase I/IIa placebo controlled, multicenter clinical
trial using different dosing regimens has begun at major medical centers in the
United States. We anticipate that the analysis from this Phase I/IIa clinical
trial will be completed in the second half of 2001.
    
 
   
    GENE PRODUCT SPECIFIC MUSCARINIC AGONIST:  Specific muscarinic agonists are
designed to treat glaucoma by increasing the outflow of ocular fluid, thereby
reducing the intraocular pressure. We have identified a specific muscarinic gene
product that affects the lowering of intraocular pressure and have discovered
lead compounds that selectively activate this gene product. In a pivotal primate
model of glaucoma, our drug candidates demonstrate efficacy and a long duration
of action, without visual disturbances including pupil contraction. Pupil
contraction, which can cause night blindness and other side effects, is believed
to be linked to the nonselective action of the drug pilocarpine on muscarinic
receptors. The long duration of action and the favorable preclinical side effect
profile of our target-specific muscarinic agonist indicates therapeutic benefits
as compared to the nonselective drug pilocarpine. Several drug candidates are
undergoing further preclinical testing in pivotal animal models designed to
allow Allergan to select a development candidate.
    
 
CHRONIC PAIN
 
    Pain can be classified in terms of its duration as either acute or chronic.
Chronic pain typically results from a chronic illness or appears spontaneously
and persists for undefined reasons. Examples of chronic pain include chronic
lower back pain, neuropathic pain and pain resulting from bone cancer or
advanced arthritis. Neuropathic pain, a specific type of pain caused by injury
to the nerves that sense pain, is a common and growing subset of pain. Common
causes include diabetes, HIV and nerve damage. Patients with chronic pain
commonly suffer from both the state of physical pain as well as a general
decline in the quality of life.
 
                                       33

<PAGE>
    The worldwide market for pain drugs totaled over $16 billion in 1997. In the
United States and Western Europe the corresponding market for pain drugs totaled
nearly $12 billion. The U.S. market for prescription pain drugs has grown by
approximately 15% per year during the past five years due to a number of
factors.
 
    The traditional method of treating chronic pain is through opioid
painkillers. Although there has been little innovation in the area of opioid
painkillers, sales in the United States were approximately $2.5 billion in 1999.
Despite widespread clinical use of opioids, such as morphine, pain management
remains less than optimal. Opioid painkillers have significant adverse side
effects that limit their usefulness, including respiratory depression, nausea,
vomiting, dizziness, sedation, mental clouding, constipation, urinary retention
and severe itching. In addition, chronic use of opioid painkillers can lead to
the need for increasing dosage, and potentially, addiction.
 
    The most common treatments for neuropathic pain are Neurontin, a seizure
medication, and antidepressants. Neurontin, in spite of being relatively
ineffective, had sales of approximately $900 million in 1999.
 
   
    SPECIFIC GPCR AGONIST:  In collaboration with Allergan, we have identified
and validated a specific GPCR as a target for chronic pain. We discovered a
novel lead chemistry by ultra high throughput screening of our diverse compound
library. Subsequent lead optimization resulted in the discovery of AGN 197075, a
small molecule drug that selectively activates this gene product. AGN 197075 was
shown to be highly efficacious when administered orally in relevant animal
models of pain, suggesting that it may offer potential as a new therapy for
chronic pain. In preclinical testing, AGN 197075 did not exhibit common side
effects of pain drugs, including sedation and cardiovascular, respiratory and
gastrointestinal effects. Allergan has nominated this drug candidate for
development and is conducting toxicology, manufacturing and other studies
designed to compile data necessary for submission of an IND application to the
FDA.
    
 
SCHIZOPHRENIA
 
    Schizophrenia is a common form of psychotic illness characterized by
disturbances in thinking, emotional reaction and behavior. It is one of the most
debilitating mental illnesses known and often requires patients to be under
medical care for their entire lives. According to the National Institutes of
Health, about 2.7 million people in the United States suffer from schizophrenia,
with approximately 300,000 new cases diagnosed each year. Worldwide sales of
antipsychotics totaled approximately $3.7 billion in 1999. Annual direct and
indirect healthcare costs for schizophrenia are approximately $45 billion in the
U.S. and over $100 billion worldwide. Traditional antipsychotic medications fail
to treat both cognitive and emotional symptoms and are often associated with
severe dose limiting side effects. While the more recently developed atypical
antipsychotic drugs exhibit fewer side effects, these drugs are far from
optimal. We believe that a significant market opportunity exists for new
therapeutics that have improved efficacy, reduced side effects and activity in
refractory patients.
 
    We have established two internal programs in schizophrenia, which provide us
with multiple drug targets that address different therapeutic mechanisms and
disease populations. We believe that our drug candidates provide potential
advantages compared to current therapies. We are also complementing these
programs through pharmacogenomic studies of schizophrenia patients.
 
   
    SPECIFIC M1 MUSCARINIC AGONIST/DOPAMINE D(2) ANTAGONISTS:  Our studies
suggest that the combination of m1 agonism and D(2) antagonism may provide
clinical benefits, and that m1 agonism has the potential to mitigate some of the
cognitive side effects of the typical antipsychotics that are currently
marketed. Drug candidates from this program are designed to target patients
responding to traditional antipsychotic agents. Our discovery efforts have
identified compounds that uniquely combine dopamine D(2) antagonism and m1
muscarinic agonism. Subsequent lead optimization resulted in the discovery of
gene product specific drug candidates that were selected for preclinical
testing. These drug candidates
    
 
                                       34

<PAGE>
   
demonstrate activity in animal models of schizophrenia, favorable
pharmacokinetic, or drug-like, properties and activity when taken orally. We are
currently testing selected drug candidates in animal models in order to select a
development candidate.
    
 
   
    SPECIFIC 5-HT(2A) INVERSE AGONISTS:  In contrast to currently marketed
antipsychotic drugs, selective 5-HT(2A) inverse agonists do not interact with
dopamine D(2) or other receptors believed to be responsible for side effects
such as motor disorders and obesity. We believe these drug candidates will
target patients not responding, or responding unfavorably, to traditional
antipsychotic agents. Our discovery efforts have identified and validated
inverse agonism of the 5-HT(2A) receptor as a targeting mechanism that is shared
by most of the currently marketed antipsychotic drugs. We have also discovered
that these drugs have many other activities that may contribute to their
clinical profiles. For example, the typical antipsychotics also have higher
potency as dopamine D(2) receptor antagonists, while the newer atypical
antipsychotics are more potent as 5-HT(2A) inverse agonists. Employing ultra
high throughput screening, we identified novel, proprietary chemistries that are
potent and have selectivity as 5-HT(2A) inverse agonists. From these
chemistries, our discovery efforts have identified gene product specific drug
candidates that were selected for preclinical testing. These drug candidates are
potent in animal models of schizophrenia. Hence, we believe that our 5-HT(2A)
inverse agonists will exhibit clinical efficacy with fewer side effects than
current antipsychotics. We are currently testing selected drug candidates in
animal models in order to select a development candidate.
    
 
    PHARMACOGENOMIC STUDIES OF ANTIPSYCHOTICS:  In collaboration with scientists
at the Karolinska Institute, we are studying the relationship between the
genomic targets and clinical outcomes in individual schizophrenia patients.
There are several different patient groups that suffer from schizophrenia. One
way to differentiate these patient groups is to classify them according to their
responsiveness to different types of drugs. Some schizophrenic patients respond
well to treatment with haloperidol and similar typical antipsychotics whereas
others do not respond to those drugs but do respond to treatment with atypical
drugs such as clozapine. We are focusing our initial studies on these two well
defined groups of patients. These studies are expected to provide insight into
the relative clinical roles of selected targets for different classes of
antipsychotic drugs, and how these genomic targets vary in patient populations.
Results from these studies will provide information that may be relevant to both
of our schizophrenia programs, and the selection of patients for future clinical
trials.
 
ALZHEIMER'S DISEASE
 
   
    Alzheimer's disease is the most common cause of dementia in older people.
Alzheimer's disease is a progressively debilitating disease and its prevalence
is increasing significantly as a function of the aging population. An estimated
4 million people in the U.S. over the age of 65 suffer from Alzheimer's disease.
Prevalence rates rise from 3% at age 65 to 47% by age 85. By various mechanisms,
Alzheimer's disease causes the death of nerve cells within the brains of
afflicted patients, resulting in impaired cognitive function and significant
changes in mood and behavior. Currently available drugs to treat Alzheimer's
disease attempt to substitute for the cholinergic deficit in this disease by
inhibiting the enzyme acetylcholinesterase. Because acetylcholinesterase
inhibitors indirectly activate all muscarinic receptors, these treatments often
lead to dose limiting cardiovascular and gastrointestinal side effects, which
may cause some patients to reduce or discontinue use of the drugs. Even with
these limitations, these drugs had sales of $600 million in 1999.
    
 
    One muscarinic receptor, the m1 receptor, is widely believed to be
associated with memory and cognition. This has led to the hypothesis that a
selective m1 receptor agonist could potentially treat Alzheimer's disease
without dose limiting side effects caused by nonselective muscarinic drugs. Due
to the ineffectiveness of current therapies, a large market opportunity exists
for new entrants with superior levels of efficacy.
 
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    SPECIFIC M1 MUSCARINIC AGONIST:  We have discovered what we believe is the
first uniquely selective series of m1 receptor agonists using our integrated
technology platform. Following this discovery, we have engaged in an aggressive
chemistry effort, which has resulted in the synthesis of more than 500 analogs,
many with improved potency, efficacy and bioavailability in animal models. We
have selected gene product specific drug candidates for preclinical testing.
These drug candidates have shown behavioral effects in animal models of
psychotic symptoms associated with Alzheimer's disease, without evidence of
cardiovascular or gastrointestinal side effects, suggesting that they may offer
advantages relative to existing treatments. We are currently testing selected
drug candidates in animal models in order to select a development candidate.
    
 
    PHARMACOGENOMIC STUDIES OF PATIENTS WITH ALZHEIMER'S DISEASE:  In
collaboration with scientists at Emory University, we are studying the
relationship between the genomic targets and clinical outcomes in individual
patients with Alzheimer's disease. Some of these patients respond well to
treatment with the acetylcholinesterase inhibitor, donepezil, whereas others do
not respond. Hence, the patients may be grouped according to donepezil
response/no response criteria. This study design may provide insights into the
interindividual genetic variation in target function and how this affects the
patient responses to donepezil. Results from these studies may provide
information relevant to our Alzheimer's disease program and for the selection of
patients in future clinical trials.
 
OUR RESEARCH PROJECTS
 
    Our integrated technology platform has produced a steady output of new
validated targets and related target-specific chemistries that serve as starting
points for novel research projects. In addition to our drug discovery programs,
which represent advanced efforts employing dedicated chemistry and pharmacology
groups and, when relevant, other preclinical capabilities, we also have earlier
stage research projects in several different areas. These research projects aim
to answer specific scientific questions using limited personnel resources. When
all key criteria have been fulfilled, research projects may be elevated into new
drug discovery programs. Some of our more advanced current research projects
focus on depression, feeding and obesity, and other indications. We believe that
these research projects will continue to supply us with additional drug
candidates in the future.
 
    In the area of depression, we have identified a GPCR that is targeted by
many marketed antidepressants using our evidence-based approach. Following
successful ultra high throughput screening of our diverse compound library, we
have available selective chemistries for this potential depression target and we
are currently studying the complete pharmacological profile of these
chemistries. Antidepressant drugs that interact with the optimal target(s) may
produce a quicker onset of action, a higher response rate and fewer side effects
than currently available therapies. We are also establishing appropriate
behavioral pharmacology models to enable critical animal proof of concept
studies.
 
    In the area of feeding and obesity, we have used our evidence-based approach
to identify likely GPCR targets. The targets have been used in ultra high
throughput screening of our diverse compound library to identify chemical
starting points for a potential program. In addition, most of the peptide
receptor targets that have been implicated in feeding and obesity have been
introduced in ultra high throughput screening of our diverse compound library,
searching for agonist chemistries. This has led to the identification of a
specifically acting small molecule peptide receptor agonist. Currently, we are
seeking to identify the most promising chemical starting point for a potential
program by careful pharmacological studies.
 
   
    In our functional genomics collaboration with Allergan, we have retained
development rights to inventions in the adrenergic program for applications in
the neuropsychiatric disease area. Through this collaboration, we have
identified a variety of unique gene product specific adrenergic leads, which
possess attractive pharmacokinetic properties. We believe that these compounds
provide us with the opportunity to explore previously unrealized therapeutic
opportunities for adrenergic therapies in the neuropsychiatric area. In this
program, we intend to evaluate our gene product specific leads in animal
    
 
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models mimicking various neuropsychiatric conditions, including
anxiety/depression, schizophrenia, Alzheimer's disease and attention
deficit/hyperactivity disorder.
    
 
OUR STRATEGY
 
    Our goal is to discover and develop novel target-specific drugs that address
large unmet medical needs. There are six basic elements to our business and
scientific strategy:
 
    FOCUS ON DISEASES WITH LARGE UNMET MEDICAL NEEDS THAT ARE WELL SUITED TO
     GENOMIC APPROACHES.
 
    We use our technology and scientific expertise to understand the genetic
basis of drug action. Our internal programs address disorders for which existing
therapies interact nonspecifically with several gene targets, leading to side
effects. In these areas there is a need to discover small molecule drug
candidates that are highly selective for the desired gene target and therefore
will have significantly improved therapeutic profiles. We will continue to
target diseases that are not well served by currently available medications and
which represent some of the largest pharmaceutical markets in the world.
 
    BUILD A LARGE AND DIVERSIFIED PRODUCT PORTFOLIO.
 
    We intend to use our integrated technology platform to generate drug
candidates to treat a variety of diseases. We have diversified our drug
discovery efforts by pursuing a portfolio of discovery programs and multiple
targets and drug candidates both independently and with our collaborators. We
believe that the breadth of our programs will reduce the risks inherent in drug
discovery and increase the likelihood of commercial success. We intend to pursue
a broad range of programs to continue to generate a sustainable pipeline of drug
candidates.
 
    ADVANCE SELECTED DISCOVERY PROGRAMS INTERNALLY THROUGH EARLY CLINICAL
     DEVELOPMENT.
 
    We plan to advance some of our discovery programs through the early stages
of clinical development prior to entering collaboration agreements. We believe
the varied nature of our drug discovery programs will enable us to internally
develop some of our drug candidates to a later stage. For programs that require
large resource allocations, we will establish collaborations at an earlier stage
of development to leverage the resources and expertise of pharmaceutical
partners.
 
    COMMERCIALIZE DRUG CANDIDATES THROUGH LICENSING AND DEVELOPMENT
     COLLABORATIONS.
 
    We plan to develop and commercialize our drug candidates through additional
collaborations with pharmaceutical and biotechnology companies. We intend to
evaluate each project on an individual basis and form collaborations at the
development stage that we believe optimizes our position while balancing our
financial and technical risks.
 
    COMMERCIALIZE OUR INTEGRATED TECHNOLOGY PLATFORM THROUGH FUNCTIONAL GENOMICS
     COLLABORATIONS.
 
    We intend to leverage our integrated technology platform and scientific
expertise by forming functional genomics collaborations with pharmaceutical,
biotechnology and other companies. These collaborations will capitalize on our
strengths in the areas of target validation, lead discovery and
pharmacogenomics. We believe that our technology and expertise may be applied to
these and other potential commercial opportunities and provide a potential
source of revenues.
 
    EXPAND OUR TECHNOLOGY PLATFORM LEADERSHIP.
 
    We believe that our technology platform which combines genomics, chemistry
and biology is superior at identifying novel genomic targets together with their
specific chemistries. We will continue to improve the scientific excellence of
our integrated technology platform and may license or acquire technologies that
complement our core capabilities. We will continue to protect and build on our
existing patent portfolio, and also rely on trade secrets to protect our
proprietary technologies. In addition, we will continue to recruit highly
skilled scientists and collaborate with leading scientific and clinical advisors
in each of our program areas.
 
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<PAGE>
TECHNOLOGY OVERVIEW
 
    We have built an integrated technology platform that interfaces with our
drug discovery capabilities. We believe that our technology platform will
continue to efficiently convert genomic information into a flow of novel
validated targets and target-specific chemistries, thereby providing us with
excellent starting points for additional drug discovery programs. Key components
of our technology platform include:
 
    R-SAT FUNCTIONAL ASSAY SYSTEM.  Our proprietary Receptor Selection and
Amplification Technology, which we call R-SAT, is the foundation of our
integrated technology platform. R-SAT is a cell-based assay system that has been
broadly applied to measure the ability of drugs to affect the function of gene
products. This assay system may be used to measure the ability of a drug to
activate or inhibit a wide range of gene products and is useful in assessing the
functional relevance of potential drug targets and in predicting the clinical
activity of novel drugs.
 
    In our R-SAT assay, a series of potential target genes are mixed together
and transferred to cells in culture. In the absence of an added test compound,
the cells that take up the genes behave normally. The cells continue to grow
only until they encounter another cell, at which point all cellular growth
ceases. If a test compound activates the product of one of the genes, the cells
that express that gene are able to grow and all other cells in the culture do
not grow. The cells with the compound's target are selected and amplified in the
culture relative to cells that make the other target genes. In short, the
technology uses the principle of genetic selection as a method to evaluate
compound/target interactions.
 
    Target genes are mixed with marker genes that change color intensity. The
number of marker gene molecules increases as the number of cells that express a
target for a given compound increase. As a result, when a compound activates a
target the intensity of color increases. In contrast to competing
"transcription-based marker gene" assays, our R-SAT technology does not rely on
changes in numbers of marker genes within a given cell.
 
                         R-SAT FUNCTIONAL ASSAY SYSTEM
 
                                     CHART
 
    [R-SAT FUNCTIONAL ASSAY SYSTEM: On the left is a line of cells Labeled "t1"
through "t6". Beneath these cells is a small hexagon and the text "+ Compound."
An arrow points down from here to the same line of cells, t1 through t6, except
that there are now many t4 cells replicated below the line of cells. One of
these t4 cells is magnified to the right of these graphics and is labeled
"Cell." The magnified cell shows the hexagonal compound attached to a cell
marked t4 which is linked by two downward arrows to a depiction of cell growth.
To the left of these arrows is a double arrow pointing towards the arrows and
captioned "Helper Gene." To the right of the magnified cell are three items of
text. "Activation of target 4 by compound" is linked by a downward arrow to
"Engineered signal" which is linked by a downward arrow to "Cell growth
enabled."]
 
------------------------
 
    This diagram depicts six distinct cells, each expressing a different target,
    targets 1 through 6, which are incubated with a compound. The compound is
    specific to one of the targets, target 4 in this case, which allows the cell
    containing the compatible target to grow.
 
    There are a number of features of our R-SAT system that we believe make it a
highly efficient and productive tool. First, we have shown that this technology
may be broadly applied to a wide range of
 
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<PAGE>
gene products. Second, we have demonstrated that there is a strong correlation
between the functional properties, or pharmacology, as determined by our R-SAT
system and events in humans. Third, the technology allows for a group of genes
or whole gene families to be tested simultaneously, which we refer to as a
multiplex. This feature, combined with the simplicity of our assay format and
other factors, allows our tests to be automated and performed at ultra high
throughput.
 
    FUNCTIONAL GENOMIC ASSAYS.  We have developed what we believe is one of the
leading, most comprehensive sets of functional genomic assays for use in our
R-SAT system. We currently have more than 250 genomic targets in our assay
format, which we refer to as our genomic targets. This set of assays is being
expanded on an ongoing basis as new genomic targets are discovered. We
prioritize the genomic targets that we believe are most likely to interact with
small organic compounds.
 
    Researchers have classified genes into categories, or gene families, based
upon similar characteristics. A large number of genes are referred to as
receptors, many of which are located on the surface of cells. The largest
category of receptors is GPCRs. This gene family is the predominant category of
receptors involved in cellular function, and represents the most common targets
for many of the world's largest selling pharmaceutical products. We have
developed significant expertise in the area of GPCRs and have established this
important gene family as our highest priority targets for drug discovery. We
have isolated genes for approximately 200 GPCRs and have integrated more than
130 of these into our functional genomic assays. We have also developed assays
for members of other gene families including cytokine receptors, growth factor
receptors, nuclear receptors, enzymes and neurotransmitter transporters.
 
    GENOMIC TARGET DISCOVERY.  The publicly available genomic databases are
rapidly being populated with sequence data from a variety of sources involved in
the human genome project. Our scientists search these databases for sequences
that are related to known targets of small organic compounds. These searches are
yielding large numbers of novel genes that are related in sequence to known
genes. Novel genes with no known ligands or function are referred to as orphans.
Our initial efforts in the orphan area have focused on genes related to GPCRs.
Our scientists have identified many novel orphan GPCRs. Several of these novel
genes are selectively expressed in the human brain. To date, we have integrated
more than 20 orphan GPCRs into our functional genomics assay format.
 
    ULTRA HIGH THROUGHPUT SCREENING.  We have established a state of the art
screening infrastructure and capability based on our R-SAT system. The
simplicity of our assay format, multiplexing capability, and miniaturization and
robotics, make our screening process highly efficient and productive in terms of
the numbers of compounds and breadth of genes that can be functionally tested.
Our screening infrastructure currently provides for a sustainable capacity of
approximately 250,000 functional tests per week and we have achieved a level of
over 500,000 functional tests per week. We believe that we can readily expand
this capacity. Our screens are normally multiplexed with four to six gene
products per test. As a result, our infrastructure provides for more than
1 million compound/gene interactions on a weekly basis.
 
    HIGH THROUGHPUT PHARMACOLOGY AND PROFILING.  Many of the competing high
throughput technologies either measure the simple binding of compounds to a
target or provide only qualitative approximations of function, thereby requiring
secondary assays to provide quantitative results. These secondary assays are
generally costly and time consuming, creating a bottleneck in the discovery
process. In contrast, our R-SAT assay system allows the quantitative and
physiologically predictive evaluation of compounds. The potency, efficacy and
selectivity of large numbers of compounds from screening can be established
rapidly using the same functional assay platform. As a result, our assay system
may relieve a major bottleneck that exists in many screening operations.
 
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<PAGE>
    One important feature of the R-SAT system, when used in high throughput
pharmacology, is its ability to accurately measure the full range of potential
activities of compounds at gene products. Many assay technologies are unable to
distinguish between partial agonists or full agonists, or between inverse
agonists and antagonists. In contrast, our R-SAT technology has the ability to
reliably and accurately measure the full range of activities.
 
    COMPOUND LIBRARIES.  Access to large, high quality libraries of diverse
molecular structures is an important aspect of our drug discovery efforts. We
have developed a large and diverse compound collection, referred to as our
diverse compound library, which we use as a resource to search for compounds
with functional activities. Our diverse compound library consists of
approximately 200,000 small organic compounds that have been characterized and
quality controlled for purity and drug like characteristics. We have collected
these compounds from a variety of sources throughout the world including
academic medicinal chemistry laboratories, pharmaceutical and biotechnology
companies, combinatorial chemistry companies, other commercial suppliers and our
own synthetic efforts. In addition, we have a collaboration with ArQule, Inc.,
and we have integrated more than 500,000 of ArQule's compounds into our
screening operation. Our internal combinatorial chemistry expertise provides our
library with another source of unique, diverse chemistry. We have developed a
convenient combinatorial synthetic method, which allows for the generation of
large sublibraries containing hundreds to thousands of analogs with designed
diversity.
 
    We have also assembled a collection of over 1,000 compounds with known
effects on the central nervous system, which we refer to as our reference drugs.
These compounds include many drugs that are currently used to treat various
diseases in psychiatry and neurology, and a host of other drugs and research
compounds that have important physiological effects on the brain. Our reference
drugs, when combined with our profiling capability, provide an important
resource to link clinical and physiological effects of drugs with genomic
targets.
 
    GENOMIC/PHARMACOLOGY DATABASE.  Using our evidence-based approach, our goal
is to measure the potency and efficacy of our reference drugs against a range of
genomic targets using our R-SAT system. Through these efforts, we are seeking to
generate an extensive set of central nervous system, or CNS, drug/gene product
interactions that will reside in our genomic/pharmacology database. Because the
majority of current CNS drugs were discovered before their genetic targets were
identified, the molecular mechanisms of their therapeutic and adverse effects
are poorly understood. We believe that by combining our database with existing
clinical knowledge, our evidence-based approach will result in important
correlations between gene/drug interactions and clinical responses. Our database
also contains information on proprietary chemistries that target individual gene
products. These chemistries provide tool compounds for the validation of genomic
targets and starting points for our drug discovery programs.
 
   
    LEAD OPTIMIZATION AND PRECLINICAL TESTING.  The properties of a lead
compound must generally be improved before selection of a development candidate
for further preclinical testing and clinical development. Using our R-SAT
system, we evaluate the pharmacology of new analogs IN VITRO. This high
throughput pharmacology capability provides our scientists with a powerful tool
to streamline the lead optimization process, removing a traditional bottleneck
in the drug discovery process. We complement this pharmacology capability by our
strength in combinatorial and medicinal chemistry, which allows for the design
and production of a large number of optimized analogs. Sufficiently potent,
efficacious and selective compounds are further evaluated using standard
pharmacological models, pivotal disease models, and relevant gene knockout
animal models. We have established expertise in drug metabolism and
pharmacokinetics, including bioanalytical chemistry, which allows us to
efficiently optimize the properties of our drug candidates. We complement our
internal pharmacology and preclinical testing capabilities through
collaborations with leading academic laboratories and clinical research
organizations.
    
 
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<PAGE>
    PHARMACOGENOMICS.  We are applying our integrated technology platform to the
area of pharmacogenomics using two approaches. The first approach seeks to
leverage proprietary information concerning the genomic targets of many
neuropsychiatric drugs. We sequence these specific targets in populations of
patients with relevant neuropsychiatric diseases. As we identify genetic
variations in these targets, we are testing the consequences of these variations
on the functional and pharmacological effects of relevant neuropsychiatric
drugs. Our second approach applies our functional genomics technology to the
analysis of genes isolated from individual patients. The functional and
pharmacological effects of drugs can be evaluated using patient DNA as a
starting point. By using this approach, we believe that potential differences in
therapeutic response and toxicity may be predicted prior to a patient's initial
exposure to a drug. Together, these approaches will provide a broad insight
concerning the influence that variation in genomic targets has on the clinical
responses to many neuropsychiatric drugs.
 
COLLABORATION AGREEMENTS
 
    We have established and intend to continue to pursue both licensing and
development collaborations and functional genomics collaborations with
pharmaceutical and biotechnology companies to commercialize our integrated drug
candidates and our technology platform. Our collaborations may include up front
payments at initiation of the collaboration, research support during the
discovery term, milestone payments upon successful completion of specified
development milestones, and royalties based upon sales, if any, of drugs
developed under the collaboration. Our current collaboration agreements are as
follows:
 
    ALLERGAN, INC.
 
   
    LICENSING AND DEVELOPMENT COLLABORATION.  In July 1999, we entered into a
licensing and development collaboration agreement with Allergan, a global health
care company providing eye care and specialty pharmaceutical products. This
collaboration provides for the development and commercialization of drugs for
glaucoma based on our proprietary and gene product specific muscarinic lead
compounds. Under the agreement, we provide our expertise in medicinal chemistry
and high throughput pharmacology for a two year period to enable the selection
of up to two development candidates for clinical development and
commercialization by Allergan. We granted Allergan an exclusive worldwide,
royalty-free license to use our technology to develop products based on our lead
compounds for the treatment of ocular disease. We also granted Allergan an
exclusive, worldwide, royalty-bearing license to use our technology to sell any
resulting drug products for the treatment of ocular disease. In exchange, we are
eligible to receive up to approximately $19 million for the first development
candidate, in the form of up front fees, research support and milestone
payments. This agreement requires Allergan to make milestone payments to us if
and when they achieve specified events such as designation of a specific
muscarinic lead compound and acceptance of an IND application. Allergan also has
the right to select a second development candidate, subject to similar payments
to us.
    
 
   
    At December 31, 2000, Allergan had paid an aggregate of $3.5 million to us
pursuant to the July 1999 agreement in the form of upfront fees and research
support. We will also receive royalties on any future product sales in any given
country until the later of ten years from the introduction of each product in
that country or the date of expiration of the last patent covering the
applicable product in that country. We have received no royalty payments under
the July 1999 agreement to date.
    
 
   
    The funding and collaborative activities under this agreement, as renewed,
will cease in July 2001, unless extended by the parties. The agreement itself
terminates six months after the later of ten years from the date of the first
sale of the final commercial product developed under the agreement or the
expiration of the last patent to expire covering a product developed under the
agreement. The agreement may be terminated earlier by Allergan upon 90 days'
notice to us, by mutual agreement of
    
 
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<PAGE>
   
the parties, or by either party in the event of a breach by the other party or
upon the other party's bankruptcy or insolvency.
    
 
   
    FUNCTIONAL GENOMICS COLLABORATION.  In September 1997, we established a
three year collaboration agreement with Allergan to work jointly and exclusively
on target validation and discovery efforts on several potential drug targets
focused primarily on glaucoma and chronic pain. This agreement was extended in
September 2000 for an additional two year period. We granted Allergan an
exclusive, worldwide, royalty-free license to use our technology to discover
potential drug candidates as well as an exclusive, worldwide, royalty-bearing
license to commercialize drug products discovered through this collaboration for
all therapeutic uses. However, we have retained development rights to at least
one therapeutic indication for each target area.
    
 
   
    Under the collaboration, we are eligible to receive research funding on a
quarterly basis as research activities are performed. We are also eligible to
receive milestone payments of up to $12.5 million for the first product
developed for each target. Specified events including various stages of clinical
testing will trigger Allergan's obligation to make milestone payments to us if
and when the events are achieved. At December 31, 2000, Allergan had paid an
aggregate of $5.3 million to us pursuant to the agreement in the form of
research funding and milestone payments. Allergan must also pay us royalties on
sales of each product, if any, resulting from the collaboration until the later
of 10 years from the introduction of each product in that country or the
expiration of the last patent covering the applicable product in that country.
We have received no royalty payments under the September 1997 agreement to date.
    
 
   
    The September 1997 agreement also gives Allergan limited rights of
negotiation in the event someone proposes to acquire us. In addition, we have
agreed that if Allergan elects to terminate the September 1997 agreement
following specified changes in control of our ownership, we will grant to
Allergan an exclusive, worldwide, royalty-bearing license to use our technology
in specified fields. This license, if granted, would also be exclusive as to the
surviving company in the change in control.
    
 
   
    The funding and collaborative activities under the September 1997 agreement,
as renewed, will cease in September 2002. The agreement itself terminates six
months after the later of ten years from the date of the first sale of the final
commercial product developed under the agreement or the expiration of the last
patent to expire covering a product developed under the agreement. The agreement
may be terminated earlier by mutual agreement of the parties, by either party in
the event of a breach by the other party or upon the other party's bankruptcy or
insolvency, or by Allergan in the event of a change in control of our company.
    
 
   
    Also in September 1997 and contemporaneous with our entering into the
agreement described above, we sold 1,000,000 shares of our Series C preferred
stock to Allergan for an aggregate purchase price of $6 million. We agreed with
Allergan in an arms-length negotiation on the price for the Series C preferred
stock. The Series C preferred stock will automatically convert into 1,000,000
shares of our common stock upon the closing of this offering.
    
 
    ARQULE, INC.
 
   
    LICENSING AND DEVELOPMENT COLLABORATIONS.  In December 2000, we entered into
a five year collaborative drug discovery agreement with ArQule, Inc, a company
engaged in the discovery, development and production of novel chemical compounds
primarily for the pharmaceutical, biotechnology and agrochemical industries.
This collaboration focuses on the discovery of drug candidates for selected
genomic targets and replaces an earlier material transfer and screening
agreement. Under the collaboration, we will combine our integrated technology
platform with ArQule's Parallel Track-TM- Drug Discovery Program to discover
novel small molecule drug candidates directed at individual genomic targets. In
furtherance of the research required to carry out this collaboration, we and
ArQule have each granted non-exclusive, worldwide, royalty-free licenses to the
other party to
    
 
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carry out the activities contemplated by the agreement. We have agreed with
ArQule to share equally in all future revenues created by our joint discovery
programs, including future milestone, royalty and upfront payments resulting
from the out licensing of drug candidates, if any, and we will each obtain
selected rights to pursue independent discovery efforts. If we commercialize
products based on our collaborative efforts with ArQule, the agreement requires
us to pay royalties to ArQule and negotiate the other terms of the necessary
licenses at that time. At December 31, 2000, we had neither received nor made
any payments under our agreement with ArQule. This agreement terminates in
December 2005. However, this agreement may be terminated earlier by mutual
agreement of the parties, by either party upon 90 days' notice to the other
party, or by either party after a deadlock of the steering committee that lasts
60 days.
    
 
   
    In May 2000, we entered into a compound license agreement with ArQule. Under
this agreement, ArQule granted us an exclusive, worldwide license to specified
ArQule compounds discovered in an earlier material transfer and screening
agreement we had entered into with ArQule. Under the license, we may use the
ArQule compounds in human and veterinary therapeutic, diagnostic and
prophylactic applications and agrochemical applications. We have agreed to pay
royalties to ArQule on products that contain the ArQule compounds. The May 2000
agreement requires the parties to negotiate in good faith to establish the
duration of the royalty obligation in the event we use an ArQule compound in a
commercial product in the future. We have made no payments to ArQule to date
under the May 2000 agreement. The compound license agreement terminates six
months after the latest date upon which ArQule could receive royalties or fees
under the agreement. However, the agreement may be terminated earlier by either
party in the event of a material breach by the other party.
    
 
    PAREXEL INTERNATIONAL CORPORATION.
 
   
    FUNCTIONAL GENOMICS COLLABORATION.  In November 2000, we entered into a
collaboration agreement with PAREXEL International Corporation, a leading
clinical research, medical marketing and consulting services organization,
designed to provide pharmacogenomic services to pharmaceutical companies using
our integrated technology platform. Under the agreement, PAREXEL will make our
pharmacogenomics capabilities and expertise available to potential
pharmaceutical customers engaged in clinical trials of drugs for
neuropsychiatric disease. We will seek to enter into agreements with these
customers to provide our services, including research to identify the genomic
targets of their neuropsychiatric drugs in clinical development and how these
targets may vary functionally in patient populations. We will be required to
make specified payments to PAREXEL based upon the revenues, if any, earned under
these agreements with pharmaceutical partners. To date, we have not entered into
any agreement with pharmaceutical customers as a result of our collaboration
with PAREXEL and, consequently, have not been required to make any payments to
PAREXEL. The initial term of the collaborative agreement expires in November
2003, but will be automatically renewed for additional one year periods unless
we or PAREXEL object to a renewal by 90 days' notice to the other party. The
agreement may be terminated by either PAREXEL or us by 90 days' prior notice to
the other party.
    
 
INTELLECTUAL PROPERTY
 
    We will be able to protect our technology from unauthorized use by third
parties only to the extent that it is covered by valid and enforceable patents
or are effectively maintained as trade secrets. Accordingly, patents or other
proprietary rights are an essential element of our business. We have three
issued patents and nine pending patent applications in the United States
covering novel target-specific small molecule drug candidates. In addition, we
have received patents in 13 foreign countries on our R-SAT technology and have
16 foreign patent applications and one international patent application pending
that cover our R-SAT technology or novel compounds identified using this
technology. Our policy is to file patent applications to protect technology,
inventions and improvements to inventions that are commercially important to the
development of our business. We seek United States and
 
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<PAGE>
international patent protection for a variety of technologies, including: new
screening and chemistry methodologies and other research tools; targeting
mechanisms that are associated with disease states identified in our screens;
and lead compounds that interact with these other targets. We also intend to
seek patent protection or rely upon trade secret rights to protect other
technologies that may be used to discover and validate targets and that may be
used to identify and develop novel drugs. We seek protection, in part, through
confidentiality and proprietary information agreements. We are a party to
various other license agreements that give us rights to use technologies in our
research and development.
 
COMPETITION
 
   
    We face, and will continue to face, intense competition from pharmaceutical
and biotechnology companies, as well as numerous academic and research
institutions and governmental agencies, both in the United States and abroad. We
compete with existing and new products being developed by our competitors. Some
of these competitors are pursuing the development of pharmaceuticals that target
the same diseases and conditions that our research programs target. Even if we
and our collaborators are successful in developing our drug candidates, the
resulting products will compete with a variety of established drugs in the areas
of glaucoma, chronic pain, schizophrenia and Alzheimer's disease.
    
 
   
    For example, in the area of glaucoma, our product candidates will compete
with well established products such as Xalatan, marketed by Pharmacia
Corporation, Trusopt/Cosopt and Timoptic/XE, both marketed by Merck & Co., and
Aplhagan, marketed by Allergan.
    
 
   
    Our potential products in the area of chronic pain will compete with drugs
marketed by companies such as Abbott Laboratories, Cephalon, Endo
Pharmaceuticals, Alza Pharmaceuticals and Astra Pharmaceuticals that currently
sell generic or proprietary opioid formulations.
    
 
   
    We are also developing potential products for the treatment of
schizophrenia, which ultimately could compete with established products such as
Zyprexa, marketed by Eli Lilly, and Risperdal, marketed by Johnson & Johnson.
    
 
   
    In the area of Alzheimer's disease, our product candidates, if successfully
developed, will compete with established products such as Aricept, marketed by
Pfizer/Eisai, Cognex, marketed by Parke Davis, and Exelon, marketed by Novartis.
    
 
   
    In addition, the companies described above and other competitors may have a
variety of drugs in development or awaiting FDA approval that could reach the
market and become established before we have a product to sell. Our competitors
may also develop alternative therapies that could further limit the market for
any drugs that we may develop. Some of our competitors are using functional
genomics technologies or other methods to identify and validate drug targets and
to discover novel small molecule drugs. Many of our competitors and their
collaborators have significantly greater experience than we do in the following:
    
 
    - identifying and validating targets;
 
    - screening compounds against targets;
 
    - preclinical and clinical trials of potential pharmaceutical products; and
 
    - obtaining FDA and other regulatory clearances.
 
    In addition, many of our competitors and their collaborators have
substantially greater advantages in the following areas:
 
    - capital resources;
 
    - research and development resources;
 
                                       44

<PAGE>
    - manufacturing;
 
    - sales and marketing; and
 
    - production facilities.
 
    Smaller companies also may prove to be significant competitors, particularly
through proprietary research discoveries and collaborative arrangements with
large pharmaceutical and established biotechnology companies. Many of our
competitors have products that have been approved or are in advanced
development. We face competition from other companies, academic institutions,
governmental agencies and other public and private research organizations for
collaborative arrangements with pharmaceutical and biotechnology companies, in
recruiting and retaining highly qualified scientific and management personnel
and for licenses to additional technologies.
 
    Our competitors, either alone or with their collaborators, may succeed in
developing technologies or drugs that are more effective, safer, more affordable
or more easily administered than ours and may achieve patent protection or
commercialize drugs sooner than us. Developments by others may render our
product candidates or our technologies obsolete. Our failure to compete
effectively could have a material adverse effect on our business.
 
GOVERNMENT REGULATION
 
    The manufacturing and marketing of our potential products and our ongoing
research and development activities are subject to extensive regulation by
numerous governmental authorities in the United States and other countries.
Before marketing in the United States, any drug developed by us must undergo
rigorous preclinical testing and clinical trials and an extensive regulatory
clearance process implemented by the FDA under the federal Food, Drug, and
Cosmetic Act. The FDA regulates, among other things, the development, testing,
manufacture, safety, efficacy, record keeping, labeling, storage, approval,
advertising, promotion, sale and distribution of biopharmaceutical products.
None of our product candidates has been approved for sale in the United States
or any foreign market. The regulatory review and approval process, which
includes preclinical testing and clinical trials of each product candidate, is
lengthy, expensive and uncertain. Securing FDA approval requires the submission
of extensive preclinical and clinical data and supporting information to the FDA
for each indication to establish a product candidate's safety and efficacy. The
approval process takes many years, requires the expenditure of substantial
resources, involves postmarketing surveillance, and may involve ongoing
requirements for postmarketing studies. Before commencing clinical
investigations in humans, we or our collaborators must submit to, and receive
approval from, the FDA of an Investigational New Drug application. We have in
the past and may in the future rely on some of our collaborators to file
Investigational New Drug applications and generally direct the regulatory
approval process for many of our potential products.
 
    Clinical testing must meet requirements for institutional review board
oversight, informed consent and good clinical practices. Clinical testing must
be conducted under FDA oversight. Before receiving FDA clearance to market a
product, we or our collaborators must demonstrate that the product is safe and
effective on the patient population that will be treated. If regulatory
clearance of a product is granted, this clearance will be limited to those
disease states and conditions for which the product is useful, as demonstrated
through clinical studies. Marketing or promoting a drug for an unapproved
indication is generally prohibited. Furthermore, clearance may entail ongoing
requirements for postmarketing studies. Even if this regulatory clearance is
obtained, a marketed product, its manufacturer and its manufacturing facilities
are subject to continual review and periodic inspections by the FDA. Discovery
of previously unknown problems with a product, manufacturer or facility may
result in restrictions on this product or manufacturer, including costly recalls
or withdrawal of the product from the market.
 
                                       45

<PAGE>
    Any drug is likely to produce some toxicities or undesirable side effects in
animals and in humans when administered at sufficiently high doses and/or for
sufficiently long periods of time. Unacceptable toxicities or side effects may
occur at any dose level at any time in the course of studies in animals designed
to identify unacceptable effects of a drug candidate, known as toxicological
studies, or clinical trials of our potential products. The appearance of any
unacceptable toxicity or side effect could cause us or regulatory authorities to
interrupt, limit, delay or abort the development of any of our product
candidates and could ultimately prevent their clearance by the FDA or foreign
regulatory authorities for any or all targeted indications.
 
    We and our collaborators and contract manufacturers are also are required to
comply with the applicable FDA current good manufacturing practice regulations.
Good manufacturing practice regulations include requirements relating to quality
control and quality assurance as well as the corresponding maintenance of
records and documentation. Manufacturing facilities are subject to inspection by
the FDA. These facilities must be approved before we can use them in commercial
manufacturing of our products. We or our collaborators or contract manufacturers
may not be able to comply with the applicable good manufacturing practice
requirements and other FDA regulatory requirements. If we or our collaborators
or contract manufacturers fail to comply, our business, financial condition and
results of operations may be materially adversely affected.
 
    Outside the United States, our collaborator's ability to market a product is
contingent upon receiving a marketing authorization from the appropriate
regulatory authorities. The requirements governing the conduct of clinical
trials, marketing authorization, pricing and reimbursement vary widely from
country to country. At present, foreign marketing authorizations are applied for
at a national level, although within the European Community, or EC, registration
procedures are available to companies wishing to market a product in more than
one EC member state. If the regulatory authority is satisfied that adequate
evidence of safety, quality and efficacy has been presented, a marketing
authorization will be granted. This foreign regulatory approval process involves
all of the risks associated with FDA clearance discussed above.
 
MARKETING, SALES & MANUFACTURING
 
    We currently have no marketing, sales, distribution or manufacturing
capabilities. In order to commercialize any of our product candidates, we must
make arrangements with our collaborators or other third parties to provide these
services or internally develop these capabilities. Our agreements with Allergan
call for Allergan to provide these services and to arrange for the manufacture
of sufficient quantities of our product candidates for use in preclinical and
clinical trials. Our future programs may be conducted independently or with a
collaborator who does not provide these services, in which case we will be
required to retain contract manufacturers for our product candidates or obtain
from third parties the components of product candidates and bulk chemical
materials. In the event that we elect to manufacture any of our future products
internally, we will have to add manufacturing facilities and personnel. In the
event we choose to market any of our future products directly, we must develop a
marketing and sales force with technical expertise and with supporting
distribution capabilities.
 
EMPLOYEES
 
   
    At December 31, 2000, we had 93 full time employees, of whom 36 hold Ph.D.
and/or other advanced degrees. Of our total workforce, 77 are engaged in
research and development activities and 16 are engaged in business development,
finance and administration. None of our employees is represented by a collective
bargaining agreement, nor have we experienced work stoppages. We believe that
our relations with our employees are good.
    
 
                                       46

<PAGE>
FACILITIES
 
    Our primary facilities consist of approximately 34,000 square feet of
research and office space located in San Diego, California that is leased to us
until 2005. We have an option to renew this lease for one additional period of
5 years. We also have approximately 14,500 square feet of research and office
space located in Glostrup, Denmark leased until 2002. We believe that our
existing facilities are adequate for our current needs. When our leases expire,
we may look for additional or alternate space for our operations and we believe
that suitable additional or alternative space will be available in the future on
commercially reasonable terms.
 
LEGAL PROCEEDINGS
 
    We are not currently a party to any legal proceedings.
 
SCIENTIFIC ADVISORY BOARD
 
    We utilize scientists and physicians to advise us on scientific and medical
matters as part of our Scientific Advisory Board, or SAB, including experts in
human genetics, mouse genetics, molecular biology, biochemistry, cell biology,
chemistry, pharmacology, structural biology and pharmaceutical discovery and
development. Generally, each of our scientific consultants has received an
option to purchase shares of our common stock.
 
    TAMAS BARTFAI, PH.D. is Director of the Harold L. Dorris Neurological
Research Center at the Scripps Research Institute of La Jolla, California and
holds the Harold L. Dorris Chair in Neuroscience. He also holds the chair of
Medical Chemistry at the Karolinska Institute, Stockholm. His more than
27 years of experience in neuroscience includes both academic and pharmaceutical
settings. Until recently, he was Head of Central Nervous System research at
Hoffmann-La Roche, Basel. Much of his professional career was spent as a
professor at Stockholm University, most recently as the Chairman of the
Department of Neurochemistry and Neurotoxicity. His expertise extends into the
areas of peptide neurobiology and muscarinic acetylcholine receptors and he has
made significant contributions to understanding the molecular and biochemical
basis of cognition and the molecular basis of fever and other neuroinflammatory
states. He has been involved in the development of several central nervous
system drugs in neurology and psychiatry as consultant to major pharmaceutical
corporations.
 
    HENRY BOURNE, M.D. has made significant contributions to the understanding
of the signaling pathways used by GPCRs. Dr. Bourne's research has focused on
transmembrane signaling mediated by G proteins, and his research played a key
role in identifying the role of cyclic AMP, or cAMP, in cellular function. His
laboratory studies also characterized various unique G protein subunits, which
define distinct signaling pathways within the cell. He is Professor of Medicine
and Pharmacology and a Senior Staff Member of the Cardiovascular Research
Institute at the University of California at San Francisco. He is a member of
the National Academy of Sciences and a Fellow of the American Association for
the Advancement of Science, and he is on the Board of Reviewing Editors of
SCIENCE magazine.
 
    ARVID CARLSSON, M.D., PH.D. is the most recent winner of the Nobel Prize in
medicine. He is Professor Emeritus of Pharmacology at University of Goteborg,
Sweden, and is a member of the Royal Swedish Academy of Sciences and a foreign
associate member of the US National Academy of Sciences. Dr. Carlsson's research
has changed the understanding of the molecular basis of several major
neuropsychiatric diseases, including Parkinson's disease, depression and
schizophrenia. He is an author on several hundred peer reviewed journal articles
and the recipient of numerous awards, including the Nobel Prize, the Japan Prize
in Psychology and Psychiatry, The Research Prize of the Lundbeck Foundation in
Denmark and the Lieber Prize for research in schizophrenia in the United States.
 
                                       47

<PAGE>
    MARC G. CARON, PH.D. is James B. Duke Professor of Cell Biology and Medicine
at Duke University Medical Center and Investigator at Howard Hughes Medical
Institute. His research focuses on the molecular study of receptors for
neurotransmitters and hormones. He is the recipient of numerous awards such as
the DuPont Prize for Receptor Research and the Javits Neuroscience Award.
Dr. Caron has served on editorial boards of a number of journals including
JOURNAL OF BIOLOGICAL CHEMISTRY and MOLECULAR PHARMACOLOGY. He is currently
Associate Editor in Chief of ENDOCRINE REVIEWS and Associate Editor of
BIOCHEMISTRY.
 
    ROBERT E. DAVIS, PH.D. is a consultant to our company. Previously, he was
President and Chief Scientific Officer of MitoKor, a development stage
biopharmaceutical company. Earlier in his career, Dr. Davis served as Director
of Neurodegenerative Diseases Research at Warner-Lambert Company where he was
instrumental in the development of Cognex, the first FDA approved therapy for
Alzheimer's disease. Dr. Davis serves on the editorial board of NEUROBIOLOGY OF
AGING, CURRENT OPINIONS IN INVESTIGATIONAL DRUGS and EMERGING THERAPEUTICS. His
awards include the National Research Award from the National Institute of
Alcohol Abuse and Alcoholism and the Leadership in Research Award from the
Alzheimer Association.
 
    BRIAN KOBILKA, M.D. is Professor of Medicine and Molecular and Cellular
Physiology at Stanford University Medical School. He is also an Associate
Investigator of the Howard Hughes Medical Institute. Dr. Kobilka is an expert in
the study of adrenergic receptor function. He has received several awards,
including the Syntex Prize in Receptor Pharmacology, the John Jacob Abel Award
from the American Society for Pharmacology and Experimental Therapeutics, and
the Young Investigator Award from the Western Society for Clinical
Investigation.
 
    LESLIE L. IVERSEN, PH.D. is also a member of our clinical advisory board and
is the chairman of our board of directors. For a description of his scientific
background, please see "Management."
 
    POVL KROGSGAARD-LARSEN, PH.D. is also a member of our board of directors.
For a description of his scientific background, please see "Management."
 
CLINICAL ADVISORY BOARD
 
    In addition to our SAB, we utilize a number of scientists and physicians to
advise us on scientific and medical matters as part of our Clinical Advisory
Board. Generally, each of our clinical advisors has received an option to
purchase shares of our common stock.
 
    ALLAN I. LEVEY, M.D., PH.D. is Professor of Neurology, Psychiatry and
Behavioral Sciences and Pharmacology at Emory University and Vice-Chairman of
the Department of Neurology. He is also Director of the Emory Center for
Neurodegenerative Diseases and the Alzheimer's Disease Center. Dr. Levey has
done extensive research in the molecular neurobiology of Alzheimer's and
Parkinson's diseases including animal models, diagnostics and clinical trials.
He has received numerous awards, including the Alzheimer's Association Faculty
Scholar Award, the Derek Denny-Brown Neurological Scholar Award from the
American Neurological Association and the Heikkila Research Scholar Award from
the National Parkinson Foundation.
 
    HERBERT Y. MELTZER, M.D., is Bixler Professor of Psychiatry and Pharmacology
and Director of the Division of Psychopharmacology at the Vanderbilt University
School of Medicine. Dr. Meltzer's major research interests are the
neurochemistry and psychopharmacologic treatment of schizophrenia, the mechanism
of action of antipsychotic drugs, and suicide and cognitive studies in
schizophrenic patients. His awards include the Daniel Efron Research Award of
the American College of Neuropsychopharmacology, the Lieber Prize from NARSAD,
Stanley Dean Award of the American College of Psychiatry and the Gold Medal
Award of the Society of Biological Psychiatry, the Research Prize of the
American Foundation for Suicide Prevention, the Paul Hoch Distinguished Service
Award from the American College of Neuropsychopharmacology, the Sachar Award
from Columbia University
 
                                       48

<PAGE>
and the Kobe Award from the Commonwealth of Pennsylvania. Dr. Meltzer is
President-elect of the Collegium Internationale Neuropsychopharmacologicum and
past president of the American College of Neuropsychopharmacology.
 
    CHARLES NEMEROFF, M.D., PH.D. is currently the Reunette W. Harris Professor
and Chairman of the Department of Psychiatry and Behavioral Sciences at Emory
University. His research has concentrated on the biological basis of the major
neuropsychiatric disorders, including affective disorders, Alzheimer's disease,
schizophrenia, and anxiety disorders. His numerous honors include the Gold Medal
Award from the Society of Biological Psychiatry, the Research Prize from the
American Psychiatric Association, the Selo Prize from the National Alliance for
Research in Schizophrenia and Depression and the Research Award in Mood
Disorders from the American College of Psychiatrists. Dr. Nemeroff is past
President of the American College of Neuropsychopharmacology.
 
    ARVID CARLSSON, M.D., PH.D. is also a member of our scientific advisory
board. For his scientific background, please see "Scientific Advisory Board."
 
    LESLIE L. IVERSEN, PH.D. is also a member of our scientific advisory board
and is the chairman of our board of directors. For a description of his
scientific background, please see "Management."
 
                                       49

<PAGE>

                                   MANAGEMENT
 
EXECUTIVE OFFICERS AND DIRECTORS
 
    Set forth below is the name, age, position and a brief account of the
business experience of each of our executive officers and directors.
 
   

<TABLE>
<CAPTION>
NAME                                          AGE      POSITION
----                                        --------   --------
<S>                                         <C>        <C>
Uli Hacksell, Ph.D........................     50      Chief Executive Officer and Director
Mark R. Brann, Ph.D.......................     42      President, Chief Scientific Officer and
                                                       Director
Thomas H. Aasen...........................     40      Vice President, Chief Financial Officer,
                                                         Secretary and Treasurer
Robert E. Davis, Ph.D.....................     50      Executive Vice President of Drug Discovery
                                                         and Development
Douglas E. Richards.......................     38      Vice President of Business Development
Bo-Ragnar Tolf, Ph.D......................     50      Vice President, Chemistry and Managing
                                                         Director of ACADIA Pharmaceuticals A/S
Leslie L. Iversen, Ph.D...................     63      Director and Chairman of the Board
Thomas Eklund(1)..........................     33      Director
Arne J. Gillin(1).........................     43      Director
Carl L. Gordon, Ph.D., CFA(1)(2)..........     36      Director
Lester J. Kaplan, Ph.D., D.Sc.(2).........     50      Director
Povl Krogsgaard-Larsen, Ph.D..............     59      Director
Torsten Rasmussen(2)......................     56      Director
</TABLE>

    
 
------------------------
 
(1) Member of the audit committee.
 
(2) Member of the compensation committee.
 
    ULI HACKSELL, PH.D. joined us as our Executive Vice President of Drug
Discovery in February 1999 and was elected Chief Executive Officer in
September 2000. He became a member of our board of directors in October 2000.
From August 1991 to February 1999, Dr. Hacksell held various senior executive
positions at Astra, a pharmaceutical company, including Vice President of Drug
Discovery and Technology as well as President of Astra Draco, one of Astra's
largest research and development subsidiaries, where he directed an organization
of more than 1,100 employees. From August 1991 to May 1994, he served as Vice
President of CNS Preclinical R&D at Astra Arcus, another subsidiary. Earlier in
his career, Dr. Hacksell held the positions of professor of Organic Chemistry
and Chairman at Uppsala University in Sweden and also served as Chairman and
Vice Chairman of the European Federation of Medicinal Chemistry. Dr. Hacksell
received a Master of Pharmacy and a Ph.D. in Medicinal Chemistry at Uppsala
University.
 
    MARK R. BRANN, PH.D. is our founder and has served as our President and
Chief Scientific Officer and a member of our board of directors since January
1997. Prior to founding our company and from 1991 to 1996, Dr. Brann was a
tenured Associate Professor at the University of Vermont. He also directed a
research group at the National Institutes of Health, where he received the
Boehringer award for his accomplishments in identifying and characterizing
muscarinic receptor genes. He is on the editorial boards of two international
scientific journals and is also an Adjunct Associate Professor at the University
of California, San Diego. Dr. Brann received his Ph.D. in Pharmacology from the
University of Vermont.
 
    THOMAS H. AASEN has served as our Vice President, Chief Financial Officer,
Secretary and Treasurer since April 1998. From June 1996 to April 1998,
Mr. Aasen held the position of Senior Director of Finance and Administration at
Axys Pharmaceuticals, formerly called Sequana Therapeutics, Inc. From
October 1991 to June 1996, he served as Director of Finance at Genta, Inc., a
 
                                       50

<PAGE>
life sciences company. Earlier in his career, Mr. Aasen held various financial
positions including Director of Accounting at Gen-Probe, Inc., a life sciences
company, and Audit Manager at KPMG Peat Marwick. He has eighteen years of
professional finance and accounting experience focused primarily on the life
sciences industry. Mr. Aasen received his B.S. degree with honors from San Diego
State University and is a Certified Public Accountant.
 
   
    ROBERT E. DAVIS, PH.D. has served as our Executive Vice President of Drug
Discovery and Development since February 2001. He was a founding member of our
Scientific Advisory Board and served as a consultant to us from November 2000
until becoming an employee. From January 1994 until October 2000, Dr. Davis held
various positions at MitoKor, a development stage biotechnology company,
ultimately serving as its President and Chief Scientific Officer. During his
tenure, MitoKor grew from five to 110 employees. Earlier in his career,
Dr. Davis held various positions at Parke-Davis Pharmaceutical Research,
Warner-Lambert Company including Director of Neurodegenerative Diseases. In the
latter capacity, Dr. Davis chaired or participated in research and development
teams that advanced ten new chemical entities into clinical development,
including the first drug approved by the FDA and other countries for Alzheimer's
disease, Cognex. Dr. Davis serves on the editorial boards of a number of
journals including NEUROBIOLOGY OF AGING, CURRENT OPINIONS IN INVESTIGATIONAL
DRUGS AND EMERGING THERAPEUTICS. Dr. Davis completed his postdoctoral work at
the University of California, Los Angeles. He received his Ph.D. in
Psychobiology at the University of Illinois, Chicago.
    
 
   
    DOUGLAS E. RICHARDS has served as our Vice President of Business Development
since January 2001. Prior to joining our company, Mr. Richards held the position
of Vice President, Corporate Development at Signal Pharmaceuticals beginning in
May 1998 and was responsible for closing several partnerships under which Signal
retained significant commercial rights. From May 1995 to May 1998, Mr. Richards
served at Bristol-Myers Squibb, most recently as Director of Biotechnology
Licensing, where he was responsible for forging a number of major collaborations
with biotechnology companies. Earlier in his career, Mr. Richards served in the
corporate development department at Gensia, a biotechnology company, and
previously held various positions at Eli Lilly. Mr. Richards received his M.B.A.
from the University of Chicago and his M.S. in Molecular Biology from the
University of Wisconsin.
    
 
   
    BO-RAGNAR TOLF, PH.D. has served as our Vice President, Chemistry and
Managing Director of ACADIA Pharmaceuticals A/S since January 2001. From 1991
until joining us, Dr. Tolf held various positions at Astra including deputy head
of preclinical research in the areas of central nervous system, or CNS, and pain
disorders at Astra Zeneca, Vice President of Preclinical Research and
Development at Astra Arcus, head of CNS Preclinical R&D at Astra Arcus, and
Director of the Department of Medicinal Chemistry at Astra Arcus. From 1989 to
1991, Dr. Tolf was head of the Department of Medicinal Chemistry at Kabi. From
1985 to 1989, Dr. Tolf served as Manager of Pharmaceutical R&D at Pharmacia
Ophthalmics AB. Dr. Tolf completed his postdoctoral work at Stanford Research
Institute and at Stanford University. Dr. Tolf received his Master of
Pharmaceutical Sciences degree and his Ph.D. in Organic Pharmaceutical Chemistry
at the University of Uppsala in Sweden.
    
 
    LESLIE L. IVERSEN, PH.D. has served as a director of our company since
April 1998 and is a founding member of our Scientific Advisory Board.
Dr. Iversen was elected Chairman of our board of directors in December 2000.
Since 1999, Dr. Iversen has been a Professor of Pharmacology at King's College,
London and Director of the Wolfson Centre for Age Related Diseases. Since 1995,
he has also served as a Visiting Professor at the Department of Pharmacology,
University of Oxford. Dr. Iversen is internationally recognized for his
fundamental contributions to the understanding of neurotransmission. He is a
Fellow of the Royal Society of London and a Foreign Associate Member of the US
National Academy of Sciences. From 1987 to 1995, Dr. Iversen acted as
Vice-President for Neuroscience for Merck Research Laboratories, the research
division of the leading international pharmaceutical company Merck & Co., Inc.
and, also served as served as Director of the Neuroscience Center of Merck
Research Laboratories in the UK from 1983 to 1995. In addition, he was Director
of the
 
                                       51

<PAGE>
Medical Research Council, Neurochemical Pharmacology Unit in Cambridge from 1970
to 1983. In 1995, Dr. Iversen founded Panos Therapeutics and currently serves as
one of its directors. He received his Ph.D. and B.A. from the University of
Cambridge.
 
    THOMAS EKLUND has served as a director of our company since September 2000.
Since June 2000, Mr. Eklund has served as Investment Director of Alfred Berg ABN
AMRO AB Capital Investment AB, a company organized in Sweden and majority owned
by ABN AMRO NV, Netherlands. From June 1992 to May 2000, he had various
positions within the Investment Banking division of Handelsbanken, a Swedish
universal banking group, including the last three years as Vice President and
head of the life science team within corporate finance. Mr. Eklund holds an
M.B.A. from Stockholm School of Economics.
 
    ARNE GILLIN has served on our board of directors since January 1997. Since
1993, he has been Vice President of Dansk Kapitalanlaeg, the largest venture
capital firm in Denmark. Prior to joining Dansk Kapitalanlaeg, Mr. Gillin's
experience included serving as Chief Controller for Volund A/S and as Department
Manager for Centralanstalten for Revision/KPMG C. Jespersen, an auditing
company. Mr. Gillin also serves on the boards of directors of several other
biopharmaceutical and technology companies. He is a State Authorized Public
Accountant in Denmark.
 
    CARL L. GORDON, PH.D., CFA has served as a director of our company since
June 2000. Since January 1998, Dr. Gordon has been a General Partner of OrbiMed
Advisors LLC, a leading institutional healthcare investor. Prior to joining
OrbiMed and from March 1995 to December 1997, Dr. Gordon was with Mehta and
Isaly, where he was a Senior Analyst covering biotechnology. Dr. Gordon was a
Fellow at The Rockefeller University. He received a Ph.D. in molecular biology
from the Massachusetts Institute of Technology and a B.A. degree from Harvard
University.
 
    LESTER J. KAPLAN, PH.D., D.SC. has served as a director of our company since
November 1997. Dr. Kaplan is Corporate Vice President, Science & Technology and
President, Research & Development and Global BOTOX-Registered Trademark- and a
board member of Allergan, Inc. Dr. Kaplan joined Allergan in 1983 and, prior to
being appointed to his current position, was Corporate Vice President, Research
and Development from June 1992 to July 1996. Dr. Kaplan was elected to
Allergan's board of directors in 1994, and is a member of its Science and
Technology Committee. Dr. Kaplan is also a member of the board of directors of
Allergan Specialty Therapeutics, Inc., and an Advisory Board Member to the
Pediatric Cancer Research Foundation and Healthcare Ventures. Dr. Kaplan
received his M.S. and Ph.D. in organic chemistry from the University of
California, Los Angeles.
 
    POVL KROGSGAARD-LARSEN, PH.D. has served as a member of both our board of
directors and our Scientific Advisory Board since January 1997. Since 1986,
Dr. Krogsgaard-Larsen has been Professor of Medicinal Chemistry at the Royal
Danish School of Pharmacy and, from 1991 to 1992, was
F. Merz-Stiftungsgastprofessor at Goethe University in Frankfurt. He is a
medicinal chemist who specializes in the study of compounds for treatment of
neurological disorders. He serves on the board of directors of Carlsberg
Foundation as a trustee of the Alfred Benzon Foundation and is the recipient of
numerous awards such as the Astra Award, the Paul Erlich Prize and the W.Th.
Nauta Award. Dr. Krogsgaard-Larsen is a member of the Royal Danish Academy of
Sciences and Letters and the Danish Academy of Natural Sciences. He received his
Ph.D. and D.Sc. from the Royal Danish School of Pharmacy and honorary doctorates
from Louis Pasteur University and Uppsala University.
 
    TORSTEN RASMUSSEN has served as a director of our company since April 1998.
Mr. Rasmussen has been CEO of Morgan Management ApS, a management advisory and
consulting company, since 1997. Prior to founding Morgan Management ApS in 1997,
Mr. Rasmussen held the position of Executive Vice President, Operations at the
LEGO Group (LEGO A/S) in Denmark, since 1981. He currently serves as a board
member in the capacity of chairman, deputy chairman or ordinary board member of
a number of Danish companies of which the following are quoted on the Danish
Stock Exchange:
 
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<PAGE>
Coloplast A/S, Bang & Olufsen A/S, TK Development A/S, Vestas Wind Systems A/S,
Vest-Wood A/S and A/S Det Oestasiatiske Kompagni. Mr. Rasmussen holds an M.B.A.
from IMD in Lausanne, Switzerland.
 
BOARD COMPOSITION
 
    Upon the closing of this offering, in accordance with the terms of our
certificate of incorporation, the terms of office of our board of directors will
be divided into three classes:
 
    - Class I directors, whose term will expire at the first annual meeting of
      stockholders following the closing of this offering;
 
    - Class II directors, whose term will expire at the second annual meeting of
      stockholders following the closing of this offering; and
 
    - Class III directors, whose term will expire at the third annual meeting of
      stockholders following the closing of this offering.
 
Our Class I directors will be Mr. Gillin, Dr. Iversen, and Mr. Eklund, our
Class II directors will be Dr. Kaplan, Dr. Brann and Mr. Rasmussen and our
Class III directors will be Dr. Gordon, Dr. Hacksell and Dr. Krogsgaard-Larsen.
At each annual meeting of stockholders, after the initial classification, the
successors to directors whose terms will then expire will be elected to serve
from the time of election and qualification until the third annual meeting
following election. Any additional directorships resulting from an increase in
the number of directors will be distributed among the three classes so that, as
nearly as possible, each class will consist of one third of the directors. This
classification of the board of directors may have the effect of delaying or
preventing a change of control or management of our company.
 
COMMITTEES OF THE BOARD OF DIRECTORS
 
    The audit committee of the board of directors reviews our internal
accounting procedures and consults with and reviews the services provided by our
independent accountants.
 
    Our compensation committee reviews and makes recommendations to the board
concerning compensation and benefits of all of our executive officers,
administers our stock option plans and establishes and reviews general policies
relating to compensation and benefits of our employees.
 
DIRECTOR COMPENSATION
 
    Our directors currently receive a cash retainer of $3,000 per year for
services on the board of directors or any committee thereof, and directors may
be reimbursed for expenses in connection with attendance at board and committee
meetings. In addition, all nonemployee directors are eligible to participate in
our 2000 nonemployee directors' stock option plan. However, if a nonemployee
director is not eligible to receive stock options by reason of the director's
obligations to the director's employer or for any other reason, the director may
elect to receive an additional cash retainer of $7,000 for each year.
 
    Our 2000 nonemployee directors' stock option plan provides for automatic
stock option grants to nonemployee directors serving on the board. Each person
who is elected or appointed for the first time to be a nonemployee director
subsequent to the date of this offering will be granted an initial grant on the
date of his or her election or appointment to the board to purchase 12,000
shares of our common stock.
 
    The 2000 nonemployee directors' stock option plan also provides that
eligible nonemployee directors will, on the day following each annual meeting,
automatically receive an annual grant to purchase 3,000 shares of our common
stock commencing, as applicable, with the annual meeting in 2002. If, however,
the person has not been serving as a nonemployee director for the entire period
 
                                       53

<PAGE>
since the preceding annual meeting, the number of shares subject to the annual
grant will be reduced pro rata for each full month period prior to the date of
grant during which such person did not serve as a nonemployee director.
 
    The nonemployee director stock options will have a maximum term of ten years
and generally must be exercised prior to the earliest of 18 months following the
death of the nonemployee director, 12 months from the termination of service on
the board by the nonemployee director due to a disability, three months from the
termination of the service of the nonemployee director for any other reason, or
the expiration of the original term of the stock option. One third of the shares
issued under each initial grant of a nonemployee director option vest one year
after the date of grant and one twelfth vest on a quarterly basis over the next
two years. One quarter of the shares under each annual grant of a nonemployee
director option vest each month following the date of grant. All options granted
to nonemployee directors will be granted at the fair market value of the common
stock on the date of grant.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
    None of our executive officers serves as a member of the board of directors
or compensation committee of any entity that has one or more executive officers
serving on our board of directors or compensation committee.
 

EXECUTIVE COMPENSATION
 
   
    The following table sets forth information concerning the compensation that
we paid during the fiscal year ended December 31, 2000, to our Chief Executive
Officer and each of our other executive officers whose salary and bonus for the
fiscal year exceeded $100,000 and who served as an executive officer of ours
during the fiscal year.
    
 
                           SUMMARY COMPENSATION TABLE
 

<TABLE>
<CAPTION>
                                                                           LONG-TERM
                                                                          COMPENSATION
                                                                          ------------
                                                  ANNUAL COMPENSATION      SECURITIES
                                                 ----------------------    UNDERLYING     ALL OTHER
NAME AND PRINCIPAL POSITION                       SALARY        BONUS       OPTIONS      COMPENSATION
---------------------------                      --------      --------   ------------   ------------
<S>                                              <C>           <C>        <C>            <C>
Uli Hacksell, Ph.D. ...........................  $237,944(1)   $55,310       100,000       $  8,500(2)
  Chief Executive Officer
 
Mark R. Brann, Ph.D. ..........................   223,478       44,696            --          8,500(2)
  President and Chief Scientific Officer
 
Thomas H. Aasen ...............................   184,026       48,500        35,000          8,500(2)
  Vice President and Chief Financial Officer
 
Leonard R. Borrmann, Pharm.D. .................   174,559           --            --        166,297
  Former Chief Executive Officer(3)
</TABLE>

 
------------------------
 
(1) Dr. Hacksell's salary reflects amounts paid to him as our Executive Vice
    President before becoming our Chief Executive Officer in September 2000, and
    amounts paid to him as Chief Executive Officer after September 2000.
 
(2) Represents matching contribution of $8,500 paid by us to the account of
    these executive officers in our 401(k) Plan.
 
(3) Dr. Borrmann resigned as our Chief Executive Officer effective
    September 20, 2000. Amounts under "All Other Compensation" include a
    matching contribution of $8,500 paid by us to the account of Dr. Borrmann in
    our 401(k) Plan and an aggregate of $157,797 in payments to
 
                                       54

<PAGE>
    Mr. Borrmann in connection with his separation from us, including
    continuation of salary, bonus and accrued vacation.
 
EMPLOYMENT AGREEMENTS AND INDEBTEDNESS OF MANAGEMENT
 
    ULI HACKSELL, PH.D.  We entered into an employment letter agreement with Uli
Hacksell, Ph.D. dated December 21, 1998, providing for an initial annual salary
of $212,835, subject to adjustment from time to time, plus bonuses based upon
Dr. Hacksell's individual performance and our financial performance as
determined by our board of directors, a signing bonus of $75,000 and an
opportunity to acquire 200,000 shares of our common stock under our 1997 stock
option plan. Dr. Hacksell's employment letter agreement also provided for
reimbursement of specified expenses incurred by Dr. Hacksell in connection with
his relocation to San Diego, California in an amount not to exceed $100,000.
Under the terms of the agreement, Dr. Hacksell's stock options will become fully
vested upon a change of control of our company. In September 2000, Dr. Hacksell
was promoted from Executive Vice President of Drug Discovery to the position of
Chief Executive Officer and his annual salary was raised to $275,000. If we
terminate Dr. Hacksell's employment for reasons other than cause, the employment
letter agreement obligates us to pay Dr. Hacksell a severance of the
continuation of his salary and other benefits he may be receiving at the time of
termination for the one year period following his termination.
 
   
    In May 2000, we loaned $100,000 to Dr. Hacksell to assist with the purchase
of a residence in connection with his relocation to San Diego, California. Under
the terms of a Secured Promissory Note dated May 11, 2000, the principal amount
of the loan plus accrues interest at prime and will be due and payable at the
end of four years, or earlier in the event of a termination of employment.
Dr. Hacksell has pledged any shares he receives upon exercise of options as
collateral for the loan.
    
 
    MARK R. BRANN, PH.D.  We entered into an employment agreement with Mark R.
Brann, Ph.D. dated January 31, 1997, providing for an initial annual salary of
$160,000, subject to adjustment from time to time, plus bonuses to be paid
solely at the discretion of our board of directors based on Dr. Brann's
achievement of reasonable, measurable performance objectives established by our
board of directors at the beginning of each fiscal year. The agreement obligates
us, following a termination of Dr. Brann's employment under select
circumstances, to pay Dr. Brann a severance of the continuation of his salary
and other benefits he may be receiving at the time of termination for the two
year period following his termination.
 
    THOMAS H. AASEN.  We entered into an employment letter agreement with Thomas
H. Aasen, dated March 4, 1998, providing for an initial annual salary of
$160,000, subject to adjustment from time to time, plus bonuses based upon
Mr. Aasen's individual performance and our financial performance as determined
by our board of directors, a signing bonus of $20,000 and an opportunity to
acquire 75,000 shares of common stock under our 1997 stock option plan. Under
the terms of the agreement, Mr. Aasen's stock options will become fully vested
upon a change of control of our company. If we terminate Mr. Aasen's employment
for reasons other than cause, we are obligated to pay Mr. Aasen a severance of
the continuation of his salary and other benefits he may be receiving at the
time of termination for the one year period following his termination.
 
    LEONARD R. BORRMANN, PHARM.D.  We entered into an employment letter
agreement with Leonard R. Borrmann, Pharm.D., dated April 17, 1998, providing
for an initial annual salary of $220,000, subject to adjustment from time to
time, plus bonuses to be paid solely at the discretion of our board of directors
based on Dr. Borrmann's achievement of reasonable, measurable performance
objectives established by our board of directors at the beginning of each fiscal
year, a signing bonus of $50,000 and an opportunity to acquire 300,000 shares of
our common stock under our 1997 stock option plan. Dr. Borrmann resigned as our
Chief Executive Officer effective September 20, 2000. In connection with his
resignation, we entered into a separation agreement with Dr. Borrmann that
provided for the
 
                                       55

<PAGE>
continuation of salary for an additional year from the date of his resignation,
the payment of a bonus for the period of service in 2000 and cash payment of
accrued vacation time. The agreement also provides for the acceleration of
vesting of options to purchase 31,250 shares of our common stock and that all of
Dr. Borrmann's options will remain exercisable until September 2007.
 
OPTION GRANTS IN 2000
 
   
    The following table sets forth, as to the named executive officers,
information concerning stock options granted to purchase shares of our common
stock under our 1997 stock option plan during the fiscal year ended
December 31, 2000. Except as otherwise noted below, 25% of the option vests on
the one year anniversary of employment and the remainder vest in a series of
equal monthly installments beginning on the month following the one year
anniversary of employment and continuing over the next three years of service.
The percentage of total options is based upon options to purchase an aggregate
of 398,250 shares of common stock granted to employees under our 1997 stock
option plan in 2000.
    
 
   
    Options were granted by our board at an exercise price determined by them in
good faith to be the fair market value of our common stock as of the date of
grant. In determining the fair market value of our common stock the board
considered various factors, including our financial condition and business
prospects, the stage of development of our company and our achievement of key
technical and business milestones, the absence of a public market for our common
stock and the risks normally associated with technology companies.
    
 
   
    Amounts represent the hypothetical gains that could be achieved from the
respective options if exercised at the end of the option term, based on an
assumed initial public offering price of $14.00 per share, and are not
predictive of our future gains, if any. There is a substantial disparity between
the exercise price of the options and the assumed public offering price. These
gains are based on assumed rates of stock appreciation of 5% and 10% compounded
annually from the date the respective options were granted to their expiration
date based upon an initial public offering price of $14.00, minus the applicable
per share exercise price.
    
 
   

<TABLE>
<CAPTION>
                                                  INDIVIDUAL GRANTS                     POTENTIAL REALIZABLE
                                 ---------------------------------------------------      VALUE AT ASSUMED
                                 NUMBER OF    PERCENTAGE OF                                 ANNUAL RATES
                                 SECURITIES   TOTAL OPTIONS                                OF STOCK PRICE
                                 UNDERLYING    GRANTED TO     EXERCISE                      APPRECIATION
                                  OPTIONS     EMPLOYEES IN    PRICE PER   EXPIRATION   -----------------------
NAME                              GRANTED      FISCAL YEAR      SHARE        DATE          5%          10%
----                             ----------   -------------   ---------   ----------   ----------   ----------
<S>                              <C>          <C>             <C>         <C>          <C>          <C>
Uli Hacksell, Ph.D............    100,000         25.1%         $1.00     10/01/2010   $2,180,452   $3,531,239
Mark R. Brann, Ph.D...........         --           --             --             --           --           --
Thomas H. Aasen...............     35,000          8.8           1.00      6/28/2010   $  763,158   $1,235,934
Leonard R. Borrmann, Pharm.D..         --           --             --             --           --           --
</TABLE>

    
 
                                       56

<PAGE>
2000 YEAR END OPTION VALUES
 
    The following table sets forth information concerning stock options to
purchase common stock held at December 31, 2000 by each of the named executive
officers.
 
   

<TABLE>
<CAPTION>
                                                         NUMBER OF
                                                   SECURITIES UNDERLYING         VALUE OF UNEXERCISED
                                                    UNEXERCISED OPTIONS         IN THE MONEY OPTIONS AT
                                                   AT DECEMBER 31, 2000          DECEMBER 31, 2000(1)
                                                ---------------------------   ---------------------------
NAME                                            EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                                            -----------   -------------   -----------   -------------
<S>                                             <C>           <C>             <C>           <C>
Uli Hacksell, Ph.D............................     91,667        208,333      $1,210,004     $2,739,996
Mark R. Brann, Ph.D...........................     62,500        137,500         818,750      1,801,250
Thomas H. Aasen...............................     50,000         60,000         670,000        790,000
Leonard R. Borrmann, Pharm.D.(2)..............    200,000             --       2,680,000             --
</TABLE>

    
 
------------------------
 
   
(1) There was no public trading market for our common stock at December 31,
    2000. Accordingly, these values have been calculated on the basis of the
    assumed initial public offering price of $14.00 per share minus the
    applicable per share exercise price.
    
 
(2) At the time of Dr. Borrmann's resignation, he held options to purchase
    200,000 shares of our common stock that are exercisable and will remain
    exercisable until September 20, 2007 under the terms of his separation
    agreement.
 
EMPLOYEE BENEFIT PLANS
 
    1997 STOCK OPTION PLAN.  In January 1997, we adopted our 1997 stock option
plan. A total of 2,700,000 shares of common stock are authorized for issuance
under the 1997 stock option plan, as amended in April 1999 and November 2000.
Shares subject to stock options that have expired or otherwise terminated
without having been exercised in full again become available for grant.
 
    The 1997 stock option plan permits the grant of options to our directors,
officers, other employees and consultants. Options may be either incentive stock
options to employees within the meaning of Section 422 of the Internal Revenue
Code or nonstatutory stock options. Except in specified circumstances, no person
may be granted options covering more than 500,000 shares of common stock in any
calendar year.
 
    The 1997 stock option plan is administered by the board of directors. The
board may delegate the authority to administer the plan to a committee of
directors or to one or more executive officers. In connection with this
offering, the board will designate the compensation committee to administer the
plan. Subject to the limitations set forth in the plan or limitations created by
the board, the administrator has the authority to select the eligible persons to
whom option grants are to be made, to designate the number of shares to be
covered by each option, to determine whether an option is to be an incentive
stock option or a nonstatutory stock option, to establish vesting schedules, to
specify the exercise price of options and the type of consideration to be paid
upon exercise and, subject to specified restrictions, to specify other terms of
option grants under the plan.
 
    The maximum term of options granted under the plan is ten years. Options
granted under the 1997 stock option plan are generally nontransferable. Options
granted under the 1997 stock option plan vest at the rate determined by the
administrator as specified in the option agreement.
 
    In the event of an acquisition event amounting to a change in control of our
ownership as defined in the 1997 stock option plan, our board of directors has
the discretion to provide that all outstanding stock options under the plan may
be assumed or substituted by the surviving entity. As an alternative or in
addition, our board may provide that outstanding options will become exercisable
in full at a specified date prior to the change of control and that all
unexercised options will terminate
 
                                       57

<PAGE>
immediately prior to the change of control. In addition, options granted to our
employees in Denmark under the 1997 stock option plan require the option
holders, in some circumstances, to sell all of their shares and other securities
of our company upon request by a group of our major stockholders under our
amended and restated stockholders agreement on terms negotiated between those
major stockholders and the proposed buyer.
 
    Our board of directors may amend or terminate the 1997 stock option plan at
any time. Amendments will generally be submitted for stockholder approval to the
extent required by applicable law.
 
   
    At December 31, 2000, we had issued and outstanding under the 1997 stock
option plan options to purchase 1,540,154 shares of common stock and 397,117
shares had been purchased upon the exercise of previously held options. The
exercise prices for each of these outstanding options ranges from $0.01 per
share to $2.00 per share.
    
 
    2000 EQUITY INCENTIVE PLAN.  In December 2000, we adopted our 2000 equity
incentive plan. A total of 3,300,000 shares of common stock will be authorized
for issuance under the plan and the 1997 stock option plan. There are 2,902,883
shares reserved for issuance under the 2000 equity incentive plan subject to
reduction for shares exercised under our 1997 stock option plan. The plan
includes an "evergreen" provision providing that an additional number of shares
will automatically be added annually to the shares authorized for issuance under
the plan and the 1997 stock option plan. The number of shares added at our
annual meeting each year beginning in 2002 will be equal to the least of:
 
    - five percent of our outstanding capital stock as of the record date for
      the applicable annual meeting;
 
    - 1,500,000; and
 
    - an amount determined for such year by our board of directors.
 
Shares subject to stock awards that have expired or otherwise terminated without
having been exercised in full again become available for grant.
 
    The 2000 equity incentive plan permits the grant of options to our
directors, officers, other employees and consultants. Options may be either
incentive stock options to employees within the meaning of Section 422 of the
Internal Revenue Code or nonstatutory stock options. In addition, the plan
permits the grant of stock bonuses and rights to purchase restricted stock.
Except in specified circumstances, no person may be granted options covering
more than 1,000,000 shares of common stock in any calendar year.
 
    The 2000 equity incentive plan is administered by the board of directors or
a committee appointed by the board. Subject to the limitations set forth in the
plan, the committee has the authority to select the eligible persons to whom
award grants are to be made, to designate the number of shares to be covered by
each award, to determine whether an option is to be an incentive stock option or
a nonstatutory stock option, to establish vesting schedules, to specify the
exercise price of options and the type of consideration to be paid upon exercise
and, subject to specified restrictions, to specify other terms of awards.
 
    The maximum term of any option granted under the plan is ten years.
Incentive stock options granted under the plan are generally nontransferable.
Nonstatutory stock options are generally nontransferable, although the
applicable option agreement may permit some transfers. Options generally expire
three months after the termination of an optionholder's service. However, if an
optionholder is permanently disabled, or dies, during his or her service, that
person's options generally may be exercised up to 12 months following disability
or up to 18 months following death.
 
                                       58

<PAGE>
    The exercise price of options granted under the 2000 equity incentive plan
will be determined by the board of directors or committee in accordance with the
guidelines set forth in the plan. The exercise price of an incentive stock
option cannot be less than 100% of the fair market value of the common stock on
the date of grant. The exercise price of a nonstatutory stock option generally
cannot be less than 85% of the fair market value of the common stock on the date
of grant.
 
    Options granted under the plan vest at the rate determined by the board of
directors or committee as specified in the option agreement. The terms of any
stock bonuses or restricted stock purchase awards granted under the plan will be
determined by the board of directors or committee. The purchase price of
restricted stock under any restricted stock purchase agreement will be
determined by the board of directors or committee and will not be less than 85%
of the fair market value of our common stock on the date of grant. Stock bonuses
and restricted stock purchase agreements awarded under the plan will generally
be nontransferable, although the applicable award agreement may permit some
transfers.
 
    In the event of a corporate transaction amounting to a change of control in
our ownership as defined in the 2000 equity incentive plan, all outstanding
stock awards under the plan must either be assumed or substituted for by the
surviving entity. In the event the surviving entity does not assume or
substitute for the stock awards, then the vesting and exercisability of
outstanding awards will accelerate prior to the change of control and the awards
will terminate to the extent not exercised prior to the change of control.
 
    The board of directors may amend or terminate the 2000 equity incentive plan
at any time. Amendments will be submitted for stockholder approval to the extent
required by applicable law.
 
    The 2000 equity incentive plan will take effect upon the consummation of
this offering.
 
    2000 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN.  In December 2000, we adopted
our 2000 nonemployee directors' stock option plan. A total of 200,000 shares of
common stock are authorized for issuance under the plan. Shares subject to stock
awards that have expired or otherwise terminated without having been exercised
in full again become available for grant.
 
    The plan permits the grant of options to our nonemployee directors. Options
under the 2000 nonemployee directors' stock option plan may only be nonstatutory
stock options. See also the discussion under " --Director Compensation"
regarding automatic grants to nonemployee directors under the plan and the terms
of those grants.
 
    The plan is administered by the board of directors. Subject to the
limitations set forth in the plan, the board has the authority to construe and
interpret the plan and options granted under it, and to establish, amend and
revoke rules and regulations for its administration and to specify the terms of
options granted under the plan.
 
    In the event of a corporate transaction amounting to a change of control in
our ownership as defined in the 2000 nonemployee directors' stock option plan,
all outstanding stock awards under the plan must either be assumed or
substituted by the surviving entity. In the event the surviving entity does not
assume or substitute for the stock awards, then the vesting and exercisability
of outstanding awards will accelerate prior to the change of control and the
awards will terminate to the extent not exercised prior to the change of
control. Amendments to the plan will generally be submitted for stockholder
approval to the extent required by applicable law.
 
    The 2000 nonemployee directors' stock option plan will take effect upon
completion of this offering.
 
    2000 EMPLOYEE STOCK PURCHASE PLAN.  In December 2000, we adopted the 2000
employee stock purchase plan. A total of 150,000 shares of common stock has been
reserved for issuance under the purchase plan. The plan includes an "evergreen"
provision providing that an additional number of
 
                                       59

<PAGE>
shares will automatically be added annually to the shares authorized for
issuance under the plan. The number of shares added at our annual stockholder
meeting each year beginning in 2002 will be the least of:
 
    - one percent of our outstanding capital stock;
 
    - 250,000; and
 
    - an amount expressly determined for such year by our board of directors.
 
    The purchase plan is intended to qualify as an employee stock purchase plan
within the meaning of Section 423 of the Internal Revenue Code. Under the
purchase plan, the board of directors may authorize participation by eligible
employees, including executive officers, in periodic offerings following the
commencement of the purchase plan. The initial offering under the purchase plan
will commence on the effective date of this offering and continue for two years
thereafter.
 
    Unless otherwise determined by the board of directors, employees are
eligible to participate in the purchase plan only if they are employed by us or
one of our subsidiaries designated by the board of directors for at least 20
hours per week and are customarily employed for at least five months per
calendar year. Employees who participate in an offering may have up to 15% of
their earnings withheld pursuant to the purchase plan. The amount withheld is
then used to purchase shares of common stock on specified dates determined by
the board of directors. The price of common stock purchased under the purchase
plan will be equal to 85% of the lower of the fair market value of the common
stock at the commencement date of each offering period or the relevant purchase
date. Employees may end their participation in the offering at any time during
the offering period, and participation ends automatically upon termination of
employment.
 
    In the event of a merger, reorganization, consolidation or liquidation, or
other change of control, each right to purchase common stock will be assumed or
an equivalent right substituted by the successor corporation. In the event that
the rights are not assumed or substituted, then all sums collected by payroll
deductions will be applied to purchase stock immediately prior to such merger or
other transaction. The board of directors has the authority to amend or
terminate the purchase plan, provided however, that no such action may adversely
affect any outstanding rights to purchase common stock.
 
    The 2000 employee stock purchase plan will take effect upon completion of
this offering.
 
    401(k) PLAN.  We adopted a 401(k) Plan effective January 1, 1997. All
regular employees who are 21 years or older, with the exception of post doctoral
training fellows and graduate student training fellows, are eligible to
participate in the plan on the first day of January, April, July or October
following their date of hire. These participants may contribute up to 15% of
their current compensation, subject to a statutorily prescribed annual dollar
limit set by the IRS. Participant contributions are held in a trust as required
by law. Individual participants may direct the trustee to invest their accounts
in authorized investment alternatives. We make matching contributions to the
401(k) Plan on behalf of each participant in an amount equal to 100% of the
participant's salary reduction contributions up to 5% of the participant's
annual compensation. In addition, we may make discretionary and special
contributions each year, although we have not done so to date. Each participant
is fully vested in his or her salary reduction contributions and our matching
and special contributions to the 401(k) Plan. We adopted the Safe Harbor
Contribution Plan Amendment in January 1999. The 401(k) Plan is intended to
qualify under Section 401(a) of the Internal Revenue Code so that contributions
to the 401(k) Plan, and income earned on such contributions, are not taxable to
participants until withdrawn or distributed from the 401(k) Plan.
 
                                       60

<PAGE>

                           RELATED PARTY TRANSACTIONS
 
    The following is a description of transactions since January 1, 1997 to
which we have been a party and in which any director, executive officer or
holder of more than 5% of our capital stock had or will have a direct or
indirect material interest, other than compensation arrangements, which are
described under "Management." See "Principal Stockholders" for more detail
regarding the relationship of these parties to our directors, executive offers
and principal stockholders.
 
    The following executive officer and principal stockholders purchased
securities in the amounts and on the dates shown:
   

<TABLE>
<CAPTION>
                                    SERIES A    SERIES B    SERIES C    SERIES D     SERIES E
                         COMMON     PREFERRED   PREFERRED   PREFERRED   PREFERRED   PREFERRED
PURCHASER                 STOCK     STOCK(1)    STOCK(2)    STOCK(3)    STOCK(4)     STOCK(5)    WARRANTS(6)   WARRANTS(7)
---------               ---------   ---------   ---------   ---------   ---------   ----------   -----------   -----------
<S>                     <C>         <C>         <C>         <C>         <C>         <C>          <C>           <C>
EXECUTIVE OFFICER
 
Mark R. Brann, Ph.D.,
  President, Chief
  Scientific Officer
  and Director(9).....  1,523,088         --          --           --         --            --         --            --
 
PRINCIPAL STOCKHOLDERS
 
Danske Kapitalanlaeg
  Aktieselskab(10)....     58,824    588,235     176,471           --    185,000       400,000     58,824        58,824
 
Kommunernes
  Pensionsforsikring
  A/S(10).............     58,824    588,235     176,471           --    185,000       400,000     58,824        58,824
 
Lonmodtagernes
  Dyrtidsfond(10).....     58,824    588,235     176,471           --    185,000       266,667     58,824        58,824
 
BankInvest
  affiliates(10)......     58,824    588,235     176,471           --         --            --     58,824        58,824
 
Allergan Sales,
  Inc.................         --         --          --    1,000,000         --            --         --            --
 
ABN AMRO Ventures
  BV..................         --         --          --           --    750,000            --         --            --
 
OrbiMed Advisors LLC
  affiliates..........         --         --          --           --         --       666,667         --            --
 
Hambrecht & Quist
  Capital Management,
  Inc. and
  affiliates..........         --         --          --           --         --       666,667         --            --
 
S.V. Penelope Jones,
  Ph.D.(11)...........    147,936         --          --           --         --            --         --            --
 
OTHER TRANSACTION
  INFORMATION
 
Price per share.......    Various    $  2.55     $  4.00    $    6.00    $  6.75    $     7.50         --            --
 
Date(s) of purchase...    Various       2/97        8/97         9/97       8/98    5/00, 6/00       2/97          2/97
 
<CAPTION>
 
PURCHASER               WARRANTS(8)
---------               -----------
<S>                     <C>
EXECUTIVE OFFICER
Mark R. Brann, Ph.D.,
  President, Chief
  Scientific Officer
  and Director(9).....        --
PRINCIPAL STOCKHOLDERS
Danske Kapitalanlaeg
  Aktieselskab(10)....    41,607
Kommunernes
  Pensionsforsikring
  A/S(10).............    41,607
Lonmodtagernes
  Dyrtidsfond(10).....    41,607
BankInvest
  affiliates(10)......    41,607
Allergan Sales,
  Inc.................    33,151
ABN AMRO Ventures
  BV..................        --
OrbiMed Advisors LLC
  affiliates..........        --
Hambrecht & Quist
  Capital Management,
  Inc. and
  affiliates..........        --
S.V. Penelope Jones,
  Ph.D.(11)...........        --
OTHER TRANSACTION
  INFORMATION
Price per share.......        --
Date(s) of purchase...      3/98
</TABLE>

    
 
------------------------
 
 (1) In February 1997, we sold in a private placement 2,372,548 shares of
     Series A preferred stock in exchange for an aggregate purchase price of
     $6,049,997 in cash. The shares of Series A preferred stock were sold under
     a Series A preferred stock purchase agreement dated February 3, 1997. Upon
     the closing of this offering, each share of Series A preferred stock will
     be converted into one share of common stock.
 
 (2) In August 1997, we sold in a private placement 738,384 shares of Series B
     preferred stock in exchange for an aggregate purchase price of $2,953,536
     in cash. The shares of Series B preferred stock were sold under a Series B
     preferred stock purchase agreement dated August 12, 1997.
 
                                       61

<PAGE>
     Upon the closing of this offering, each share of Series B preferred stock
     will be converted into one share of common stock.
 
 (3) In September 1997, we sold in a private placement 1,000,000 shares of
     Series C preferred stock to Vision Pharmaceuticals L.P., now Allergan
     Sales, Inc., in exchange for an aggregate purchase price of $6,000,000 in
     cash. The shares of Series C preferred stock were sold under a stock
     purchase agreement dated September 24, 1997. Upon the closing of this
     offering, each share of Series C preferred stock will be converted into one
     share of common stock.
 
 (4) In August 1998, we sold in a private placement 1,581,653 shares of
     Series D preferred stock in exchange for an aggregate purchase price of
     $10,676,158 in cash. The shares of Series D preferred stock were sold under
     a Series D preferred stock purchase agreement dated August 26, 1998. Upon
     the closing of this offering, each share of Series D preferred stock will
     be converted into one share of common stock.
 
 (5) In May and June 2000, we sold in a private placement 2,933,335 shares of
     Series E preferred stock in exchange for an aggregate purchase price of
     $22,000,013 in cash. The shares of Series E preferred stock were sold under
     a Series E preferred stock purchase agreement dated May 5, 2000. Upon the
     closing of this offering, each share of Series E preferred stock will be
     converted into one share of common stock.
 
 (6) In February 1997 in connection with our Series A preferred stock financing,
     we issued warrants to purchase an aggregate of 237,257 shares of our common
     stock at an exercise price of $6.00 per share, which warrants were
     exercised in December 1997.
 
 (7) In February 1997 in connection with our Series A preferred stock financing,
     we issued warrants to purchase an aggregate of 237,257 shares of our common
     stock at an exercise price of $12.00 per share, which warrants remain
     unexercised. These warrants expire in February 2002.
 
 (8) In March 1998, we issued warrants to purchase an aggregate of 202,043
     shares of our common stock at an exercise price of $15.00 per share. These
     warrants expired in June 2000.
 
   
 (9) The shares of common stock reflected in the table were issued upon our
     reincorporation in January 1997 in Delaware. We were previously
     incorporated in Vermont. Dr. Brann originally acquired 250 shares of common
     stock of the Vermont corporation for $250 in cash, which shares were
     exchanged for the shares of our common stock described above. Dr. Brann
     transferred record ownership of 687,575 shares of common stock to S.V.
     Penelope Jones, Ph.D. in connection with a marital settlement. For a
     description of current ownership, please refer to "Principal Stockholders."
    
 
 (10) The shares of common stock purchased by these stockholders and their
      affiliates were issued in December 1997 upon the exercise of the warrants
      described in footnote (6) above.
 
   
 (11) The 147,936 shares of common stock reflected in the table were issued upon
      the exercise of stock options granted under our 1997 stock option plan at
      an aggregate exercise price of $1,479. Dr. Jones subsequently acquired
      record ownership of an additional 687,575 shares of common stock from
      Dr. Brann as described in footnote (9) above. For a description of current
      ownership, please refer to "Principal Stockholders."
    
 
    We entered into other agreements in connection with the purchases of our
preferred stock described above. Under one of these agreements, our amended and
restated stockholders agreement, some of our stockholders acquired registration
rights. See "Description of Capital Stock--Registration Rights" for a
description of these registration rights. Further, we agreed with our
stockholders on restrictions on the issuance and transfer of shares of our
capital stock, rights of first refusal, voting rights relating to the election
of directors and provisions requiring all parties to the agreement to sell their
shares if requested by a group of major stockholders, all of which restrictions
and rights are not
 
                                       62

<PAGE>
applicable to, and will terminate upon the closing of, this offering. Similarly,
our purchase agreement with Vision Pharmaceuticals L.P., now Allergan
Sales, Inc., included a right of first refusal which is not applicable to, and
will terminate upon the closing of, this offering.
 
    In January and February 1999 and in connection with our Series A preferred
stock financing, Dr. Brann assigned his intellectual property rights relating to
mass drug screening and related technology to us.
 
    In July 1999, we entered into a collaborative research, development and
license agreement with Allergan, Inc., Allergan Sales, Inc. and Allergan
Pharmaceuticals (Ireland) Limited, Inc., related to our muscarinic glaucoma
program. In September 1997, we entered into a collaboration research,
development and license agreement with Allergan, Inc. and Vision Pharmaceuticals
L.P., now Allergan Sales, Inc., related to our functional genomics and discovery
efforts. One provision of the September 1997 agreement grants Allergan limited
rights of negotiation in the event of a proposed acquisition of our company. For
a more detailed discussion of our agreements with Allergan, refer to
"Business--Collaborations."
 
    Mr. Eklund, a member of our board of directors, held various positions from
June 1992 to May 2000 within the Investment Banking division of Handelsbanken, a
Swedish universal banking group. In August 1998, Handelsbanken served as
placement agent in our Series D preferred stock financing and received a
placement agent fee of $413,000.
 
   
    Dr. Iversen, a member of our board of directors, and his wife, Susan
Iversen, Ph.D., are currently employed by Oxford University. Oxford University
has provided pharmacology services to us from time to time. From January 1, 1997
through December 31, 2000, we have paid an aggregate of $71,600 to Oxford
University in consideration for services.
    
 
   
    S.V. Penelope Jones, Ph.D. was formerly employed by us. From November 3,
1997 through December 4, 1998, the date of her termination, we paid an aggregate
of $101,727 in salary and bonus to Dr. Jones. On December 4, 1998, we entered
into an agreement with Dr. Jones under which she provided cellular physiology
and other scientific consulting services to us. From December 4, 1998 to
December 3, 1999, we paid an aggregate of $93,500 to Dr. Jones in consideration
of these services. Dr. Jones is currently a professor at the University of
California, San Diego, or UCSD. UCSD provides laboratory services to us under
the terms of a services agreement. From December 1, 1999 through December 31,
2000, we have paid an aggregate of $50,000 to UCSD in consideration for
services.
    
 
    Some of our directors are associated with our major stockholders as
indicated in the table below:
 
   

<TABLE>
<CAPTION>
DIRECTOR                                        MAJOR STOCKHOLDER(S)
--------                      ---------------------------------------------------------
<S>                           <C>
Thomas Eklund..............   ABN AMRO Ventures BV
Arne J. Gillin.............   Danske Kapitalanlaeg Aktieselskab
Carl L. Gordon, Ph.D.......   OrbiMed Advisors LLC affiliates
Leslie L. Iversen, Ph.D....   BankInvest affiliates
Lester J. Kaplan, Ph.D.....   Allergan Sales, Inc.
Torsten Rasmussen..........   Kommunernes Pensionsforsikring A/S and Lonmodtagernes
                              Dyrtidsfond
</TABLE>

    
 
    We expect to enter into indemnification agreements with each of our
directors and executive officers.
 
                                       63

<PAGE>
                             PRINCIPAL STOCKHOLDERS
 
   
    Except as otherwise noted, the following table sets forth selected
information known to us with respect to beneficial ownership of our common stock
at December 31, 2000 by:
    
 
    - each stockholder we know to be the beneficial owner of more than five
      percent of our common stock;
 
    - each of our directors;
 
    - each of our named executive officers; and
 
    - all of our executive officers and directors as a group.
 
    Except where otherwise indicated below, the address of the stockholders
listed below is our address, 3911 Sorrento Valley Boulevard, San Diego,
California 92121.
 
   
    The following table reflects the number of shares of our common stock
outstanding at December 31, 2000 and the automatic conversion of all outstanding
shares of our convertible preferred stock into 8,625,920 shares of common stock.
    
 
   

<TABLE>
<CAPTION>
                                                                               PERCENTAGE OF SHARES
                                                                                BENEFICIALLY OWNED
                                                  NUMBER OF SHARES      -----------------------------------
NAME OF BENEFICIAL OWNER                        BENEFICIALLY OWNED(1)   BEFORE OFFERING   AFTER OFFERING(2)
------------------------                        ---------------------   ---------------   -----------------
<S>                                             <C>                     <C>               <C>
5% STOCKHOLDERS
Danske Kapitalanlaeg Aktieselskab(3)..........        1,467,354               13.5%              9.3%
Kommunernes Pensionsforsikring A/S(4).........        1,467,354               13.5               9.3
Lonmodtagernes Dyrtidsfond(5).................        1,334,021               12.3               8.4
Allergan Sales, Inc. affiliates(6)............        1,000,000                9.3               6.3
BankInvest affiliates(7)......................          882,354                8.1               5.6
S.V. Penelope Jones, Ph.D.(8).................          835,511                7.7               5.3
ABN AMRO Ventures BV(9).......................          750,000                7.0               4.8
Hambrecht & Quist Capital Management,
  Inc.(10)....................................          666,667                6.2               4.2
OrbiMed Advisors LLC affiliates(11)...........          666,667                6.2               4.2
 
DIRECTORS AND EXECUTIVE OFFICERS
Uli Hacksell, Ph.D.(12).......................          100,000                  *                 *
Mark R. Brann, Ph.D.(13)......................        1,593,921               14.7              10.1
Thomas H. Aasen(14)...........................           53,125                  *                 *
Leslie L. Iversen, Ph.D.(7)(15)...............            8,500                  *                 *
Torsten Rasmussen(4)(5)(16)...................            4,000                  *                 *
Arne J. Gillin(3).............................        1,469,354               13.5               9.3
Lester J. Kaplan, Ph.D.(6)....................        1,006,000                9.3               6.4
Thomas Eklund(9)..............................          750,000                7.0               4.8
Carl L. Gordon, Ph.D.(11).....................          666,667                6.2               4.2
Povl Krogsgaard-Larsen, Ph.D., D.Sc.(17)......            4,500                  *                 *
Leonard R. Borrmann, Pharm.D.(18).............          200,000                1.8               1.3
All current directors and executive officers
  as a group (10 persons)(19).................        5,656,067               51.9              35.6
</TABLE>

    
 
------------------------
 
*   Represents beneficial ownership of less than 1% of our outstanding common
    stock.
 
   
 (1) Unless otherwise indicated below, the persons and entities named in the
     table above have sole voting and sole investment power with respect to all
     shares beneficially owned, subject to community property laws where
     applicable. Shares of common stock subject to options or warrants that are
     currently exercisable or are exercisable within 60 days of December 31,
     2000 are
    
 
                                       64

<PAGE>
   
     deemed to be outstanding and to be beneficially owned by the person holding
     such options or warrants for the purpose of computing the percentage
     ownership of such person but are not treated as outstanding for the purpose
     of computing the percentage ownership of any other person.
    
 
 (2) See discussion under "Underwriting" regarding the overallotment option to
     the underwriters.
 
   
 (3) Reflects 1,408,530 shares owned by Dansk Kapitalanlaeg, a publicly held
     Danish corporation, Aktieselskab and includes 58,824 shares issuable upon
     the exercise of stock warrants. Mr. Gillin is a Vice President of Dansk
     Kapitalanlaeg Aktieselskab and he disclaims beneficial ownership of shares
     in which he does not have a pecuniary interest. Included in the
     beneficially owned shares of Mr. Gillin are 2,000 shares issuable to him
     upon the exercise of stock options. The address for Dansk Kapitalanlaeg
     Aktieselskab is 103 Gothersgade, P.O. Box 1080, Copenhagen K Denmark.
    
 
   
 (4) Reflects 1,408,530 shares owned by Kommunernes Pensionsforsikring A/S and
     includes 58,824 shares issuable upon the exercise of stock warrants.
     Mr. Rasmussen represents Kommunernes Pensionsforsikring A/S on our board of
     directors and disclaims beneficial ownership of shares in which he does not
     have a pecuniary interest. Any two of the following three individuals may
     make voting or investment decisions regarding the shares: Neils Hougaard,
     Head of Investments, Jens Bisgaard-Frantzen, Head of Equities, and Erling
     Skorstad, Head of Fixed Income. The address for Kommunernes
     Pensionsforsikring A/S is Krumptappen 2, 2500 Valby Denmark.
    
 
   
 (5) Reflects 1,275,197 shares owned by Lonmodtagernes Dyrtidsfond and includes
     58,824 shares issuable upon the exercise of stock warrants. Mr. Rasmussen
     represents Lonmodtagernes Dyrtidsfond on our board of directors and
     disclaims beneficial ownership of shares in which he does not have a
     pecuniary interest. Hans Jorgen Madsen, Manager, Head of Department, holds
     the voting and investment power over these shares. The address for
     Lonmodtagernes Dyrtidsfond is Vendersgade 28, DK-1363, Copenhagen K
     Denmark.
    
 
   
 (6) Reflects 1,000,000 shares owned by Allergan Sales, Inc. Dr. Kaplan is
     President, Research and Development and Global BOTOX at Allergan, Inc., a
     public company which is the parent company of Allergan Sales, Inc., and he
     disclaims beneficial ownership of shares in which he does not have a
     pecuniary interest. Included in the beneficially owned shares of
     Dr. Kaplan are 6,000 shares issuable to him upon the exercise of stock
     options. The address for Allergan Sales, Inc. is 2525 Dupont Drive,
     P.O. Box 19534, Irvine, California.
    
 
   
 (7) Reflects 411,764.5 shares owned by BankInvest 7 Biotechnology and 411,765.5
     shares owned by BankInvest 1 Danske Aktier, and includes a total of 58,824
     shares issuable upon the exercise of stock warrants. Dr. Iversen represents
     BankInvest 7 Biotechnology and BankInvest 1 Danske Aktier on our board of
     directors and disclaims beneficial ownership of shares in which he does not
     have a pecuniary interest. BankInvest 7 and BankInvest 1 are both open
     ended investment associations that are listed on the Copenhagen Stock
     Exchange. The address for both BankInvest 7 Biotechnology and BankInvest 1
     Danske Aktier is Toldbodgade 33, P.O. Box 9011, DK-22, Copenhagen K
     Denmark.
    
 
 (8) 687,575 of the shares held by Dr. Jones are subject to the terms of a
     voting agreement that permits Dr. Brann to direct the voting of the shares.
 
   
 (9) Reflects 750,000 shares owned by ABN AMRO Ventures BV, which is majority
     owned by ABN AMRO NV, a publicly held company incorporated in the
     Netherlands. Mr. Eklund is Investment Director of Alfred Berg ABN AMRO AB
     Capital Investment AB, a company majority owned by ABN AMRO NV, and he
     disclaims beneficial ownership of shares in which he does not have a
     pecuniary interest. The address for ABN AMRO Ventures BV is Foppingadreof
     22, Amsterdam, P.O. Box 283, 1000 EA Amsterdam, Netherlands.
    
 
                                       65

<PAGE>
   
 (10) Reflects 400,000 shares owned by H&Q Healthcare Investors and 266,667
      shares owned by H&Q Life Sciences Investors, each of which is a publicly
      traded closed-end mutual fund. Hambrecht and Quist Capital Management is
      the fund manager of H&Q Healthcare Investors and H&Q Life Sciences
      Investors. The address for Hambrecht and Quist Capital Management, Inc. is
      50 Rowes Wharf, Boston, Massachusetts.
    
 
   
 (11) Reflects 400,000 shares owned by Eaton Vance Worldwide Health Sciences
      Fund and 266,667 shares owned by Finsbury Worldwide Pharmaceutical Trust.
      Dr. Gordon is a General Partner of OrbiMed Advisors LLC, which provides
      investment advisory services to Eaton Vance Worldwide Health Sciences Fund
      and Finsbury Worldwide Pharmaceutical Trust, and holds voting and
      investment power over the shares held by both those funds. Dr. Gordon
      disclaims beneficial ownership of shares in which he does not have a
      pecuniary interest. The address of OrbiMed Advisors LLC is 767 Third
      Avenue, 6th Floor, New York, New York 10017-2023.
    
 
   
 (12) Reflects 100,000 shares issuable upon the exercise of stock options.
    
 
   
 (13) Reflects 835,513 shares held by Dr. Brann, 70,835 shares issuable upon the
      exercise of stock options and 687,575 shares held by Dr. Jones of which
      Dr. Brann has the power to direct the voting under the terms of a voting
      agreement. Dr. Brann disclaims beneficial ownership of shares subject to
      the voting agreement.
    
 
   
 (14) Reflects 53,125 shares issuable upon the exercise of stock options.
    
 
 (15) Reflects 8,500 shares issuable upon the exercise of stock options.
 
 (16) Reflects 4,000 shares issuable to Morgan Management ApS, a Danish
      corporation in which Mr. Rasmussen has a controlling interest, upon the
      exercise of stock options.
 
   
 (17) Reflects 4,500 shares issuable upon the exercise of stock options.
    
 
   
 (18) Reflects 200,000 shares issuable upon the exercise of stock options.
      Dr. Borrmann resigned as our Chief Executive Officer effective
      September 20, 2000.
    
 
   
 (19) Includes 234,563 shares issuable upon the exercise of stock options.
    
 
                                       66

<PAGE>

                          DESCRIPTION OF CAPITAL STOCK
 
   
    Following the closing of this offering, our authorized capital stock will
consist of 50,000,000 shares of common stock, $0.0001 par value per share, and
5,000,000 shares of preferred stock, $0.0001 par value per share. At
December 31, 2000, and assuming the conversion of all outstanding preferred
stock into common stock immediately prior to the closing of this offering there
were outstanding 10,783,382 shares of common stock held of record by 40
stockholders, warrants to purchase 237,257 shares of common stock and options to
purchase 1,540,154 shares of common stock.
    
 
COMMON STOCK
 
    Subject to preferences that may apply to shares of preferred stock
outstanding at the time, the holders of outstanding shares of common stock are
entitled to receive dividends out of assets legally available at such times and
in such amounts as our board of directors may from time to time determine. Each
stockholder is entitled to one vote for each share of common stock held on all
matters submitted to a vote of stockholders. Cumulative voting for the election
of directors is not provided for in our certificate of incorporation, which
means that the holders of a majority of the shares voted can elect all of the
directors then standing for election. The common stock is not entitled to
preemptive rights and is not subject to conversion or redemption. Each
outstanding share of common stock is, and all shares of common stock to be
outstanding upon completion of this offering will be, fully paid and
nonassessable.
 
PREFERRED STOCK
 
    Following the conversion of our outstanding preferred stock into common
stock in connection with this offering, our board of directors will have the
authority, without further action by the stockholders, to issue up to 5,000,000
shares of preferred stock in one or more series and to fix the designations,
powers, preferences, privileges, and relative participating, optional or special
rights and the qualifications, limitations or restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of redemption and
liquidation preferences, any or all of which may be greater than the rights of
the common stock. Our board of directors, without stockholder approval, can
issue preferred stock with voting, conversion or other rights that could
adversely affect the voting power and other rights of the holders of common
stock. Preferred stock could thus be issued quickly with terms calculated to
delay or prevent a change of control or make removal of management more
difficult. The issuance of preferred stock may have the effect of decreasing the
market price of the common stock, and may adversely affect the voting and other
rights of the holders of common stock. At present, there are no shares of
preferred stock outstanding and we have no plans to issue any of the preferred
stock.
 
WARRANTS
 
    Upon completion of this offering, we will have outstanding warrants to
purchase an aggregate of 237,257 shares of common stock at an exercise price of
$12.00 per share. These warrants expire in February 2002 or on the occurrence of
specified events, whichever occurs first.
 
ANTI-TAKEOVER PROVISIONS
 
DELAWARE LAW
 
    We are governed by the provisions of Section 203 of the Delaware General
Corporation Law. In general, Section 203 prohibits a public Delaware corporation
from engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved in
a prescribed manner. A "business combination" includes mergers, asset sales or
other transactions resulting in a financial benefit to the stockholder. An
"interested stockholder" is a person
 
                                       67

<PAGE>
who, together with affiliates and associates, owns, or within three years, did
own, 15% or more of the corporation's outstanding voting stock. This provision
could delay, discourage or prohibit transactions not approved in advance by the
board of directors, such as takeover attempts that might result in a premium
over the market price of the common stock.
 
CHARTER AND BYLAW PROVISIONS
 
    Our certificate of incorporation and bylaws contain provisions that could
discourage potential takeover attempts and make more difficult attempts by
stockholders to change management. Our certificate of incorporation provides
that stockholders may not take action by written consent but may only act at a
stockholders' meeting, and that special meetings of our stockholders may only be
called by the Chairman of our board of directors or a majority of our board of
directors.
 
REGISTRATION RIGHTS
 
    Following 180 days after the completion of this offering, under the terms of
our amended and restated stockholders agreement, the holders of 8,625,920 shares
of our common stock and warrants to purchase an aggregate of 237,257 shares of
our common stock will have the right to demand that we register their shares,
subject to limitations, under the Securities Act on Form S-1 or Form S-2 or
similar forms. In addition, at any time after we become eligible to file a
registration statement on Form S-3, these holders will have the right to demand
that we register their shares, subject to limitations, on Form S-3 or similar
form. In addition, these holders are entitled under the agreement, subject to
limitations, to require us to include their shares in future registration
statements that we may file for our own account or for the account of other
stockholders.
 
    We are generally required to bear all of the expenses of these
registrations, except underwriting discounts and commissions. Registration of
any of the shares of common stock entitled to these registration rights would
result in the shares becoming freely tradable without restriction under the
Securities Act. Upon completion of this offering, the registration rights with
respect to the shares held by any party to the amended and restated stockholders
agreement will terminate if the stockholder holds less than 1% of the then
outstanding shares of common stock and the stockholder's shares are entitled to
be resold without restriction under Rule 144 promulgated under the Securities
Act.
 
TRANSFER AGENT AND REGISTRAR
 
    The Transfer Agent and Registrar for our common stock is             .
 
                                       68

<PAGE>
                        SHARES ELIGIBLE FOR FUTURE SALE
 
    Prior to this offering, there has been no market for our common stock, and
we cannot assure you that a significant public market for the common stock will
develop or be sustained after this offering. Future sales of substantial amounts
of our common stock, including shares issued upon exercise of outstanding
options and warrants, in the public market after this offering could adversely
affect market prices prevailing from time to time and could impair our ability
to raise capital through sale of our equity securities. As described below, no
shares currently outstanding will be available for sale immediately after this
offering due to contractual restrictions on resale. Sales of substantial amounts
of our common stock in the public market after the restrictions lapse could
adversely affect the prevailing market price and our ability to raise equity
capital in the future.
 
   
    Upon completion of this offering, we will have outstanding 15,783,382 shares
of common stock, assuming no exercise of the underwriters' overallotment option
and no exercise of outstanding options that do not expire upon the closing. Of
these shares, the 5,000,000 shares sold in this offering will be freely tradable
without restriction under the Securities Act unless purchased by our
"affiliates" as that term is defined in Rule 144 under the Securities Act. The
remaining 10,783,382 shares held by existing stockholders are subject to various
lockup agreements providing that, with limited exceptions, the stockholder will
not offer, sell, contract to sell, grant an option to purchase, make a short
sale or otherwise dispose of or engage in any hedging or other transaction that
is designed or reasonably expected to lead to a disposition of any shares of
common stock or any option to purchase shares of common stock or any securities
exchangeable for or convertible into shares of common stock for a period of
180 days after public trading commences without the prior written consent of
Robertson Stephens, Inc. As a result of these lockup agreements, notwithstanding
possible earlier eligibility for sale under the provisions of Rules 144, 144(k)
and 701, none of these shares will be salable until 180 days after the public
trading commences. Beginning 180 days after public trading commences, 10,783,382
of these shares will be eligible for sale in the public market, although all but
2,238,944 shares will be subject to certain volume limitations. Thereafter,
1,200,001 of these shares will become eligible for sale without volume
limitations starting in 2002. In addition, at December 31, 2001, there were
outstanding options to purchase 1,540,154 shares common stock. All of such
options will be subject to lockup agreements. Robertson Stephens, Inc. may, in
its sole discretion and at any time without notice, release all or any portion
of the securities subject to lockup agreements.
    
 
    In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person, or persons whose shares are aggregated,
who has beneficially owned unregistered shares for at least one year, including
the holding period of any prior owner except an affiliate, would be entitled to
sell within any three month period a number of shares that does not exceed the
greater of:
 
   
    - 1% of the number of shares of common stock then outstanding, which will
      equal approximately 107,834 shares immediately after this offering; or
    
 
    - the average weekly trading volume of the common stock during the four
      calendar weeks preceding the filing of a Form 144 with respect to such
      sale.
 
Sales under Rule 144 are also subject to specific manner of sale provisions and
notice requirements and to the availability of current public information about
us. Under Rule 144(k), a person who is not deemed to have been an affiliate of
us at any time during the three months preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years,
including the holding period of any prior owner except an affiliate, is entitled
to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.
 
    Rule 701 permits resales of shares in reliance upon Rule 144 but without
compliance with specific restrictions, including the holding period requirement,
of Rule 144. Any of our employees, officers,
 
                                       69

<PAGE>
directors or consultants who purchased his or her shares pursuant to a written
compensatory plan or contract may be entitled to rely on the resale provisions
of Rule 701. Rule 701 permits affiliates to sell their Rule 701 shares under
Rule 144 without complying with the holding period requirements of Rule 144.
Rule 701 further provides that nonaffiliates may sell such shares in reliance on
Rule 144 without having to comply with the holding period, public information,
volume limitation or notice provisions of Rule 144. All holders of Rule 701
shares are required to wait until 90 days after the date of this prospectus
before selling such shares. However, all shares issued pursuant to Rule 701 are
subject to lockup agreements and will only become eligible for sale at the
earlier of the expiration of the 180 day lockup period or no sooner than
90 days after the offering upon obtaining the prior written consent of Robertson
Stephens, Inc.
 
                                       70

<PAGE>
               UNITED STATES TAX CONSEQUENCES TO NON-U.S. HOLDERS
 
    The following is a general discussion of the principal United States federal
income and estate tax consequences of the acquisition, ownership and disposition
of our common stock by a Non-U.S. Holder. As used in this prospectus, the term
"Non-U.S. Holder" is a person who holds our common stock other than:
 
    - a citizen or resident of the United States;
 
    - a corporation or other entity taxable as a corporation created or
      organized in or under the laws of the United States or of any political
      subdivision of the United States;
 
    - an estate the income of which is includable in gross income for United
      States federal income tax purposes regardless of its source; or
 
    - a trust subject to the primary supervision of a United States court and
      the control of one or more United States persons, or a trust (other than a
      wholly owned grantor trust) that was treated as a domestic trust despite
      not meeting the requirements described above.
 
    This discussion does not consider:
 
   
    - state, local or foreign tax consequences;
    
 
    - the tax consequences for the stockholders or beneficiaries of a Non-U.S.
      Holder;
 
   
    - special tax rules that may apply to selected Non-U.S. Holders, including
      without limitation, partnerships, banks or other financial institutions,
      insurance companies, dealers in securities, traders in securities,
      tax-exempt entities and United States expatriates; or
    
 
   
    - special tax rules that may apply to a Non-U.S. Holder that holds our
      common stock as part of a "straddle," "hedge" or "conversion transaction"
      or a Non-U.S. Holder that does not hold our common stock as a capital
      asset within the meaning of Section 1221 of the United States Internal
      Revenue Code of 1986, as amended, also known as the Code.
    
 
   
    The following discussion is based on provisions of the Code, applicable
Treasury regulations and administrative and judicial interpretations, all as of
the date of this prospectus, and all of which are subject to change,
retroactively or prospectively. We have not requested a ruling from the Unites
States Internal Revenue Service or an opinion of counsel with respect to the
federal income tax consequences of the purchase or ownership of our common stock
to a Non-U.S. Holder under the Code. The following summary is for general
information. Accordingly, each Non-U.S. Holder should consult a tax advisor
regarding the United States federal, state, local and foreign income and other
tax consequences of acquiring, holding and disposing of shares of our common
stock.
    
 
DIVIDENDS
 
   
    We do not anticipate paying cash dividends on our common stock in the
foreseeable future. See "Dividend Policy." In the event, however, that dividends
are paid on shares of our common stock, dividends paid to a Non-U.S. Holder of
our common stock generally will be subject to withholding of United States
federal income tax at a 30% rate on the gross amount of the deduction, or such
lower rate as may be provided by an applicable income tax treaty.
    
 
   
    Dividends that are effectively connected with a Non-U.S. Holder's conduct of
a trade or business in the United States or, if any income tax treaty applies,
attributable to a permanent establishment in the United States, known as "United
States trade or business income," are generally not subject to the 30%
withholding tax if the Non-U.S. Holder files the appropriate United States
Internal Revenue Service form with the payor. However, such United States trade
or business income, net of specified deductions and credits, is taxed at the
same graduated rates applicable to United States persons. Any
    
 
                                       71

<PAGE>
   
United States trade or business income received by a Non-U.S. Holder that is a
corporation may also, under limited circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as specified by an
applicable income tax treaty.
    
 
    Dividends paid prior to 2001 to an address in a foreign country are
presumed, absent actual knowledge to the contrary, to be paid to a resident of
such country for purposes of the withholding discussed above and for purposes of
determining the applicability of a tax treaty rate. For dividends paid after
2000, a Non-U.S. Holder of our common stock who claims the benefit of an
applicable income tax treaty rate generally will be required to satisfy
applicable certification and other requirements. Non-U.S. Holders should consult
their tax advisors regarding their entitlement to benefits under a relevant
income tax treaty.
 
    A Non-U.S. Holder of our common stock that is eligible for a reduced rate of
United States withholding tax under an income tax treaty may obtain a refund or
credit of any excess amounts withheld by filing an appropriate claim for a
refund with the United States Internal Revenue Service.
 
GAIN ON DISPOSITION OF COMMON STOCK
 
    A Non-U.S. Holder generally will not be subject to United States federal
income tax in respect of gain recognized on a disposition of our common stock
unless:
 
   
    - the gain is United States trade or business income, in which case the
      branch profits tax described above may also apply to a corporate Non-U.S.
      Holder;
    
 
    - the Non-U.S. Holder is an individual who holds our common stock as a
      capital asset within the meaning of Section 1221 of the Code, is present
      in the United States for more than 182 days in the taxable year of the
      disposition and meets other requirements;
 
    - the Non-U.S. Holder is subject to tax pursuant to the provisions of the
      Untied States tax law applicable to selected United States expatriates; or
 
    - we are or have been a "United States real property holding corporation"
      for United States federal income tax purposes at any time during the
      shorter of the five-year period ending on the date of disposition or the
      period that the Non-U.S. Holder held our common stock.
 
   
    Generally, a corporation is a "United States real property holding
corporation" if the fair market value of its "United States real property
interests" equals or exceeds 50% of the sum of the fair market value of its
worldwide real property interests plus its other assets used or held for use in
a trade or business. We believe we have never been, are not currently and are
not likely to become a United States real property holding corporation for
United States federal income tax purposes.
    
 
FEDERAL ESTATE TAX
 
    Common stock owned or treated as owned by an individual who is a Non-U.S.
Holder at the time of death will be included in the individual's gross estate
for United States federal estate tax purposes, unless an applicable estate tax
or other treaty provides otherwise.
 
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
 
    We must report annually to the United States Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends paid to that holder and the tax
withheld with respect to those dividends. Copies of the information returns
reporting those dividends and withholding may also be made available to the tax
authorities in the country in which the Non-U.S. Holder is a resident under the
provisions of an applicable income tax treaty or agreement.
 
                                       72

<PAGE>
    Under some circumstances, United States Treasury Regulations require
information reporting and backup withholding at a rate of 31% on specified
payments on our common stock. Under currently applicable law, Non-U.S. Holders
of our common stock, generally will be exempt from backup withholding on
dividends paid prior to 2001 to an address outside the United States. For
dividends paid after 2000, however, a Non-U.S. Holder of our common stock that
fails to certify its Non-U.S. Holder status in accordance with applicable United
States Treasury Regulations may be subject to backup withholding at a rate of
31% of dividends.
 
    The payment of the proceeds of the disposition of our common stock by a
holder to or through the United States office of a broker generally will be
subject to information reporting and backup withholding at a rate of 31% unless
the holder either certifies its status as a Non-U.S. Holder under penalties of
perjury or otherwise establishes an exemption. The payment of the proceeds of
the disposition by a Non-U.S. Holder of our common stock to or through a foreign
office of a foreign broker will not be subject to backup withholding or
information reporting unless the foreign broker is a "United States related
person." In the case of the payment of proceeds from the disposition of our
common stock by or through a foreign office of a broker that is a United States
person or a "United States related person," information reporting, but currently
not backup withholding, on the payment applies unless the broker receives a
statement from the owner, signed under penalty or perjury, certifying its
foreign status or the broker has documentary evidence on its files that the
holder is a Non-U.S. Holder and the broker has no actual knowledge to the
contrary. For this purpose, a "United States related person" is:
 
    - a "controlled foreign corporation" for United States federal income tax
      purposes;
 
    - a foreign person 50% or more of whose gross income from all sources for
      the three-year period ending with the close of its taxable year preceding
      the payment, or for such part of the period that the broker has been in
      existence, is derived from activities that are effectively connected with
      the conduct of a United States trade or business;
 
    - effective after 2000, a foreign partnership if, at any time during the
      taxable year, (A) at least 50% of the capital or profits interest in the
      partnership is owned by United States persons, or (B) the partnership is
      engaged in a United States trade or business; or
 
    - some U.S. branches of foreign banks or insurance companies.
 
    Effective after 2000, backup withholding may apply to the payment of
disposition proceeds by or through a foreign office or a broker that is a United
States person or a United States related person unless specific certification
requirements are satisfied or an exemption is otherwise established and the
broker has no actual knowledge that the holder is a United States person.
Non-U.S. Holders should consult their own tax advisors regarding the application
of the information reporting and backup withholding rules to them, including
changes to these rules that will become effective after 2000.
 
   
    Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder that result in an overpayment of taxes will be refunded, or
credited against the holder's United States federal income tax liability, if
any, provided that the required information is furnished to the United States
Internal Revenue Service.
    
 
                                       73

<PAGE>

                                  UNDERWRITING
 
    The underwriters named below, acting through their representatives,
Robertson Stephens, Inc. and U.S. Bancorp Piper Jaffray Inc., have severally
agreed with us, subject to the terms and conditions of the underwriting
agreement, to purchase from us the number of shares of common stock set forth
opposite their respective names below. The underwriters are committed to
purchase and pay for all of these shares if any are purchased.
 

<TABLE>
<CAPTION>
                                                              NUMBERS OF
UNDERWRITER                                                     SHARES
-----------                                                   ----------
<S>                                                           <C>
Robertson Stephens, Inc.....................................
U.S. Bancorp Piper Jaffray Inc..............................
</TABLE>

 
   

<TABLE>
<CAPTION>
INTERNATIONAL UNDERWRITER
-------------------------
<S>                                                           <C>
Robertson Stephens International, Ltd.......................
U.S. Bancorp Piper Jaffray Inc..............................
                                                              ---------
  Total.....................................................  5,000,000
                                                              =========
</TABLE>

    
 
    The representatives of the underwriters have advised us that the
underwriters propose to offer the shares of common stock to the public at the
public offering price shown on the cover page of this prospectus and to certain
dealers at that price less a concession of not more than $      per share, of
which $      may be reallowed to other dealers. After the completion of this
offering, the public offering price, concession and reallowance to dealers may
be reduced by the representatives. No such reduction will change the amount of
proceeds we are to receive as set forth on the cover page of this prospectus.
The common stock is offered by the underwriters as stated in this prospectus,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part.
 
   
    OVERALLOTMENT OPTION.  We have granted to the underwriters an option,
exercisable during the 30 day period after the date of this prospectus, to
purchase up to 750,000 additional shares of common stock at the same price per
share as we will receive for the 5,000,000 shares that the underwriters have
agreed to purchase. To the extent that the underwriters exercise this option,
each of the underwriters will have a firm commitment, subject to certain
conditions, to purchase approximately the same percentage of these additional
shares that the number of shares of common stock to be purchased by it shown in
the above table bears to the total number of shares offered by this prospectus.
If purchased, the additional shares will be sold by the underwriters on the same
terms as those on which the 5,000,000 shares are being sold. The underwriters
may exercise this option only to cover overallotments made in connection with
the sale of the shares of common stock in this offering.
    
 
    The following table shows the per share and total underwriting discounts and
commissions that we are to pay to the underwriters. This information is
presented assuming either no exercise or full exercise by the underwriters of
their overallotment option.
 

<TABLE>
<CAPTION>
                                                                        TOTAL
                                                               ------------------------
                                                               WITHOUT OVER   WITH OVER
                                                   PER SHARE    ALLOTMENT     ALLOTMENT
                                                   ---------   ------------   ---------
<S>                                                <C>         <C>            <C>
Price offering price.............................   $             $            $
Underwriting discounts and commissions...........   $             $            $
Proceeds, before expenses, to us.................   $             $            $
</TABLE>

 
   
    EXPENSES OF THIS OFFERING.  The expenses of this offering, other than the
underwriting discounts and commissions, are estimated at approximately
$1,100,000 and are payable entirely by us.
    
 
                                       74

<PAGE>
    INDEMNITY.  The underwriting agreement contains covenants of indemnity among
the underwriters and us against civil liabilities, including liabilities under
the Securities Act and liabilities arising from breaches of representations and
warranties contained in the underwriting agreement. In addition, the
underwriting agreement contains a covenant that we will maintain Directors and
Officers liability insurance in the minimum amount of $10 million and cause
Robertson Stephens, Inc., on behalf of the underwriters, to be added to such
policy such that up to $500,000 of certain of its expenses shall be paid
directly by such insurers.
 
    LOCKUP AGREEMENTS.  Each of our executive officers, directors, and
substantially all of our other stockholders and warrantholders have agreed,
subject to limited exceptions, not to offer, sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to any
shares of common stock, any options or warrants to purchase any shares of common
stock, or any securities convertible into or exchangeable for common stock owned
by the holder as of the date of this prospectus or acquired directly from us or
with respect to which these holders have or may acquire the power of
disposition, without the prior written consent of Robertson Stephens, Inc. This
restriction terminates after the close of trading of the shares on the 180th day
after, and including, the day the shares began trading on the Nasdaq National
Market. However, Robertson Stephens, Inc. may, in its sole discretion and at any
time without notice, release all or any portion of the securities subject to
lockup agreements. There are no existing agreements between the representatives
and any of our stockholders and warrantholders who have executed a lockup
agreement providing consent to the sale of shares prior to the expiration of the
lockup period.
 
    FUTURE SALES BY US.  In addition, we have agreed that for a period of
180 days after the date of this prospectus, we will not, without the prior
written consent of Robertson Stephens, Inc. (a) consent to the disposition of
any shares held by stockholders, warrantholders or optionholders before the
expiration of the 180 day lockup period or (b) issue, sell, contract to sell or
otherwise dispose of any shares of common stock, any options or warrants to
purchase any shares of common stock or any securities convertible into,
exercisable for or exchangeable for shares of common stock, other than our sale
of shares in this offering, the issuance of shares of common stock upon the
exercise of options outstanding on the date of this prospectus and the grant of
options to purchase shares of common stock under existing employee stock option
or stock purchase plans provided that those options are subject to a 180 day
lockup.
 
    DIRECTED SHARES.  At our request, the underwriters will reserve up to 5% of
the shares of common stock for sale in this offering, at the initial public
offering price, to our customers, partners and business associates. The number
of shares of common stock available for sale to the general public will be
reduced to the extent that these individuals purchase all or a portion of the
reserved shares. Any reserved shares that are not purchased will be offered by
the underwriters to the general public on the same basis as the other shares of
common stock offered by this prospectus. We have agreed to indemnify the
underwriters of the directed share program against liabilities and expenses,
including liabilities under the Securities Act, in connection with the sale of
the reserved shares.
 
   
    ONLINE ACTIVITIES.  A prospectus in electronic format may be made available
on the internet sites or through other online services maintained by one or more
of the underwriters of this offering, or by their affiliates. In those cases,
prospective investors may view offering terms online and, depending upon the
particular underwriter, prospective investors may be allowed to place orders
online. The underwriters may agree with us to allocate a specific number of
ordinary shares for sale to online brokerage account holders. Any such
allocation for online distributions will be made by the representatives on the
same basis as other allocations. Other than the prospectus in electronic format,
information on these websites is not a part of this prospectus and you should
not rely on other information on these websites in making a decision to invest
in our ordinary shares.
    
 
                                       75

<PAGE>
    LISTING.  We have applied for approval for quotation of our common stock on
the Nasdaq National Market under the symbol "ACAD."
 
    NO PRIOR PUBLIC MARKET.  Prior to this offering, there has been no public
market for our common stock. Consequently, the initial public offering price for
our common stock will be determined through negotiations between us and the
representatives. Among the factors to be considered in these negotiations are
prevailing market and economic conditions, our financial information, market
valuations of other companies that we and the representatives believe to be
comparable to us, estimates of our business potential and the present state of
our development. The estimated initial public offering price range set forth on
the cover page of this prospectus is subject to change as a result of market
conditions and other factors. A pricing committee of our board of directors will
establish the initial public offering price following such negotiations.
 
    The underwriters have advised us that they do not expect sales to
discretionary accounts to exceed 5% of the total number of shares offered.
 
   
    SYNDICATE SHORT SALES.  The representatives have advised us that, on behalf
of the underwriters, they may make short sales of our common stock in connection
with this offering, resulting in the sale by the underwriters of a greater
number of shares than they are required to purchase pursuant to the underwriting
agreement. The short position resulting from those short sales will be deemed a
"covered" short position to the extent that it does not exceed the 750,000
shares subject to the underwriters' overallotment option and will be deemed a
"naked" short position to the extent that it exceeds that number. A naked short
position is more likely to be created if the underwriters are concerned that
there may be downward pressure on the trading price of the common stock in the
open market that could adversely affect investors who purchased shares in the
offering. The underwriters may reduce or close out their covered short position
either by exercising the overallotment option or by purchasing shares in the
open market. In determining which of these alternatives to pursue, the
underwriters will consider the price at which shares are available for purchase
in the open market as compared to the price at which they may purchase shares
through the overallotment option. Any naked short position will be closed out by
purchasing shares in the open market. Similar to the other stabilizing
transactions described below, open market purchases made by the underwriters to
cover all or a portion of their short position may have the effect of preventing
or retarding a decline in the market price of our common stock following this
offering. As a result, our common stock may trade at a price that is higher than
the price that otherwise might prevail in the open market.
    
 
    STABILIZATION.  The underwriters' representatives have advised us that,
pursuant to Regulation M under the Securities Exchange Act of 1934, as amended,
certain persons participating in this offering may engage in transactions,
including stabilizing bids, syndicate covering transactions or the imposition of
penalty bids, that may have the effect of stabilizing or maintaining the market
price of the common stock at a level above that which might otherwise prevail in
the open market. A "stabilizing bid" is a bid for or the purchase of shares of
common stock on behalf of the underwriters for the purpose of fixing or
maintaining the price of the common stock. A "syndicate covering transaction" is
the bid for or the purchase of the common stock on behalf of the underwriters to
reduce a short position incurred by the underwriters in connection with this
offering. A "penalty bid" is an arrangement permitting the underwriters'
representatives to reclaim the selling concession otherwise accruing to an
underwriter or syndicate member in connection with the offering if the common
stock originally sold by such underwriter or syndicate member is purchased by
underwriters' representatives in the open market pursuant to a stabilizing bid
or to cover all or part of a syndicate short position. The underwriters'
representatives have advised us that such transactions may be effected on the
Nasdaq National Market or otherwise and, if commenced, may be discontinued at
any time.
 
                                       76

<PAGE>

                                 LEGAL MATTERS
 
    Cooley Godward LLP, San Diego, California, will pass upon the validity of
the common stock offered by this prospectus for us. Brobeck, Phleger & Harrison
LLP, San Diego, California, will pass upon legal matters for the underwriters.
 

                                    EXPERTS
 
   
    The financial statements at December 31, 1999 and 2000 and for each of the
three years in the period ended December 31, 2000 included in this prospectus
have been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
    
 
                      WHERE YOU CAN FIND MORE INFORMATION
 
    We have filed with the SEC a registration statement on Form S-1 under the
Securities Act with respect to the common stock offered hereby. This prospectus,
which constitutes a part of the registration statement, does not contain all of
the information set forth in the registration statement or the exhibits and
schedules which are part of the registration statement. For further information
with respect to us and our common stock offered by this prospectus, we refer you
to the registration statement and the exhibits and schedules filed as part of
the registration statement. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
website at http://www.sec.gov.
 
    Upon completion of this offering, we will become subject to the information
and periodic reporting requirements of the Securities Exchange Act, and, in
accordance therewith, will file periodic reports, proxy statements and other
information with the SEC. These periodic reports, proxy statements and other
information will be available for inspection and copying at the SEC's public
reference rooms and the website of the SEC referred to above.
 
                                       77

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 

<TABLE>
<CAPTION>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Report of Independent Accountants...........................    F-2
 
Consolidated Balance Sheet..................................    F-3
 
Consolidated Statement of Operations........................    F-4
 
Consolidated Statement of Convertible Preferred Stock and
  Stockholders' Equity (Deficit) and Comprehensive Loss.....    F-5
 
Consolidated Statement of Cash Flows........................    F-6
 
Notes to Consolidated Financial Statements..................    F-7

</TABLE>

 
                                      F-1

<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
  of ACADIA Pharmaceuticals Inc.
 
   
    In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of convertible preferred stock and
stockholders' equity (deficit) and comprehensive loss and of cash flows present
fairly, in all material respects, the financial position of ACADIA
Pharmaceuticals Inc. and its subsidiary at December 31, 1999 and 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
    
 
PricewaterhouseCoopers LLP
 
   
San Diego, California
January 22, 2001

    
 
                                      F-2

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
                           CONSOLIDATED BALANCE SHEET
 
   

<TABLE>
<CAPTION>
                                                                                              PRO FORMA
                                                                                            STOCKHOLDERS'
                                                                     DECEMBER 31,             EQUITY AT
                                                              ---------------------------   DECEMBER 31,
                                                                  1999           2000           2000
                                                              ------------   ------------   -------------
                                                                                             (UNAUDITED)
<S>                                                           <C>            <C>            <C>
                                                 ASSETS
 
Cash and cash equivalents...................................  $  3,684,100   $ 6,913,900
Investment securities, available-for-sale...................     8,524,600    21,982,100
Prepaid expenses and other current assets...................       438,300       763,300
                                                              ------------   ------------
    Total current assets....................................    12,647,000    29,659,300
Property and equipment, net.................................     2,508,500     3,693,900
Other assets................................................       362,300       759,500
                                                              ------------   ------------
                                                              $ 15,517,800   $34,112,700
                                                              ============   ============
 
                                LIABILITIES, CONVERTIBLE PREFERRED STOCK
                                   AND STOCKHOLDERS' EQUITY (DEFICIT)
 
Accounts payable............................................  $    236,700   $   928,300
Accrued expenses............................................       703,500     1,281,900
Deferred revenue............................................       291,700       794,400
Current portion of long-term debt...........................       626,700     1,324,900
                                                              ------------   ------------
    Total current liabilities...............................     1,858,600     4,329,500
                                                              ------------   ------------
Long-term debt, less current portion........................     4,431,700     5,789,100
                                                              ------------   ------------
Commitments (Note 10)
 
Convertible preferred stock, $0.01 par value; 10,019,067
  shares authorized; 5,692,585 and 8,625,920 shares issued
  and outstanding at December 31, 1999 and 2000,
  respectively; 5,000,000 shares authorized, no shares
  issued and outstanding pro forma; liquidation preference
  $56,953,900 at December 31, 2000..........................    24,664,800    46,501,800
                                                              ------------   ------------   ------------
Stockholders' equity (deficit)
  Common stock, $0.0001 par value; 14,218,712 shares
    authorized; 2,102,955 and 2,157,462 shares issued and
    outstanding at December 31, 1999 and 2000, respectively;
    50,000,000 shares authorized; 10,783,382 shares issued
    and outstanding pro forma...............................           200           200           1,100
  Additional paid-in capital................................     1,682,300     6,801,300      53,302,200
  Accumulated deficit.......................................   (16,805,500)  (26,999,400)    (26,999,400)
  Unearned stock-based compensation.........................      (371,700)   (2,616,300)     (2,616,300)
  Accumulated other comprehensive income....................        57,400       306,500         306,500
                                                              ------------   ------------   ------------
    Total stockholders' equity (deficit)....................   (15,437,300)  (22,507,700)   $ 23,994,100
                                                              ------------   ------------   ============
                                                              $ 15,517,800   $34,112,700
                                                              ============   ============
</TABLE>

    
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-3

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
                      CONSOLIDATED STATEMENT OF OPERATIONS
 
   

<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31,
                                                             ----------------------------------------
                                                                1998          1999           2000
                                                             -----------   -----------   ------------
<S>                                                          <C>           <C>           <C>
Revenues
  Collaborative revenues--related party....................  $ 1,300,000   $ 2,238,200   $  4,192,900
  Other research revenues..................................      119,400                      119,500
                                                             -----------   -----------   ------------
    Total revenues.........................................    1,419,400     2,238,200      4,312,400
                                                             -----------   -----------   ------------
Operating expenses
  Research and development (including stock-based
    compensation of $3,300, $99,700 and $809,700 for the
    years ended December 31, 1998, 1999 and 2000,
    respectively)..........................................    5,855,900     7,625,700     10,538,000
  General and administrative (including stock-based
    compensation of $49,400, $5,800 and $2,044,300 for the
    years ended December 31, 1998, 1999 and 2000,
    respectively)..........................................    2,487,000     2,457,600      5,043,100
                                                             -----------   -----------   ------------
    Total operating expenses...............................    8,342,900    10,083,300     15,581,100
                                                             -----------   -----------   ------------
Loss from operations.......................................   (6,923,500)   (7,845,100)   (11,268,700)
Interest income............................................      689,000       751,000      1,516,100
Interest expense...........................................     (168,000)     (351,200)      (441,300)
                                                             -----------   -----------   ------------
Net loss...................................................  $(6,402,500)  $(7,445,300)  $(10,193,900)
                                                             ===========   ===========   ============
Net loss per share, basic and diluted......................  $     (3.12)  $     (3.57)  $      (4.76)
                                                             ===========   ===========   ============
Weighted average shares outstanding, basic and diluted.....    2,049,307     2,086,977      2,139,470
                                                             ===========   ===========   ============
Pro forma net loss per share, basic and diluted
  (unaudited)..............................................                              $      (1.05)
Pro forma weighted average shares outstanding, basic and
  diluted (unaudited)......................................                                 9,715,390
</TABLE>

    
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-4

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
           CONSOLIDATED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND
             STOCKHOLDERS' EQUITY (DEFICIT) AND COMPREHENSIVE LOSS
   

<TABLE>
<CAPTION>
                                         CONVERTIBLE
                                       PREFERRED STOCK           COMMON STOCK       ADDITIONAL                    UNEARNED
                                   -----------------------   --------------------    PAID-IN     ACCUMULATED    STOCK-BASED
                                    SHARES       AMOUNT       SHARES      AMOUNT     CAPITAL       DEFICIT      COMPENSATION
                                   ---------   -----------   ---------   --------   ----------   ------------   ------------
<S>                                <C>         <C>           <C>         <C>        <C>          <C>            <C>
Balances at December 31, 1997....  4,110,932    14,512,100   1,983,715      200      1,149,500     (2,957,700)           --
  Issuance of Series D preferred
    stock at $6.75 per share, net
    of issuance costs............  1,581,653    10,152,700
  Issuance of common stock from
    exercise of stock options....                               84,533                     900
  Net loss.......................                                                                  (6,402,500)
  Noncash compensation related to
    stock options granted........                                                       52,700
  Unrealized loss on investment
    securities...................
  Cumulative translation
    adjustment...................
                                   ---------   -----------   ---------     ----     ----------   ------------   -----------
Balances at December 31, 1998....  5,692,585    24,664,800   2,068,248      200      1,203,100     (9,360,200)           --
  Issuance of common stock from
    exercise of stock options....                               34,707                   2,000
  Net loss.......................                                                                  (7,445,300)
  Noncash compensation related to
    stock options granted........                                                      477,200                  $  (371,700)
  Unrealized gain on investment
    securities...................
  Cumulative translation
    adjustment...................
                                   ---------   -----------   ---------     ----     ----------   ------------   -----------
Balances at December 31, 1999....  5,692,585    24,664,800   2,102,955      200      1,682,300    (16,805,500)     (371,700)
  Issuance of Series E preferred
    stock at $7.50 per share, net
    of issuance costs............  2,933,335    21,837,000
  Issuance of common stock from
    exercise of stock options....                               54,507                  20,400
  Net loss.......................                                                                 (10,193,900)
  Noncash compensation related to
    stock options granted........                                                    5,098,600                   (2,244,600)
  Unrealized gain on investment
    securities...................
  Cumulative translation
    adjustment...................
                                   ---------   -----------   ---------     ----     ----------   ------------   -----------
Balances at December 31, 2000....  8,625,920   $46,501,800   2,157,462     $200     $6,801,300   $(26,999,400)  $(2,616,300)
                                   =========   ===========   =========     ====     ==========   ============   ===========
 
<CAPTION>
                                    ACCUMULATED        TOTAL
                                       OTHER       STOCKHOLDERS'
                                   COMPREHENSIVE      EQUITY       COMPREHENSIVE
                                   (LOSS)/INCOME     (DEFICIT)         LOSS
                                   -------------   -------------   -------------
<S>                                <C>             <C>             <C>
Balances at December 31, 1997....     (181,500)      (1,989,500)   $ (3,163,400)
                                                                   ============
  Issuance of Series D preferred
    stock at $6.75 per share, net
    of issuance costs............                            --
  Issuance of common stock from
    exercise of stock options....                           900
  Net loss.......................                    (6,402,500)   $ (6,402,500)
  Noncash compensation related to
    stock options granted........                        52,700
  Unrealized loss on investment
    securities...................      (43,700)         (43,700)        (43,700)
  Cumulative translation
    adjustment...................      (32,000)         (32,000)        (32,000)
                                     ---------     ------------    ------------
Balances at December 31, 1998....     (257,200)      (8,414,100)   $ (6,478,200)
                                                                   ============
  Issuance of common stock from
    exercise of stock options....                         2,000
  Net loss.......................                    (7,445,300)   $ (7,445,300)
  Noncash compensation related to
    stock options granted........                       105,500
  Unrealized gain on investment
    securities...................       22,900           22,900          22,900
  Cumulative translation
    adjustment...................      291,700          291,700         291,700
                                     ---------     ------------    ------------
Balances at December 31, 1999....       57,400      (15,437,300)   $ (7,130,700)
                                                                   ============
  Issuance of Series E preferred
    stock at $7.50 per share, net
    of issuance costs............                            --
  Issuance of common stock from
    exercise of stock options....                        20,400
  Net loss.......................                   (10,193,900)   $(10,193,900)
  Noncash compensation related to
    stock options granted........                     2,854,000
  Unrealized gain on investment
    securities...................      118,300          118,300         118,300
  Cumulative translation
    adjustment...................      130,800          130,800         130,800
                                     ---------     ------------    ------------
Balances at December 31, 2000....    $ 306,500     $(22,507,700)   $ (9,944,800)
                                     =========     ============    ============
</TABLE>

    
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-5

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
 
   

<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                                              -----------------------------------------
                                                                  1998          1999           2000
                                                              ------------   -----------   ------------
<S>                                                           <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss..................................................  $ (6,402,500)  $(7,445,300)  $(10,193,900)
  Adjustments to reconcile net loss to cash used in
    operating activities:
    Depreciation and amortization...........................       509,800       790,800      1,025,700
    Stock-based compensation................................        52,700       105,500      2,854,000
    Changes in operating assets and liabilities:
      Accounts receivable...................................        87,500       208,800
      Prepaid expenses and other current assets.............      (534,900)      140,700       (733,000)
      Other assets..........................................       (16,700)        5,000
      Accounts payable......................................      (215,000)      (21,100)       236,000
      Accrued expenses......................................       459,900       251,800      1,399,300
      Deferred revenue......................................        75,000       (18,300)       502,700
                                                              ------------   -----------   ------------
      Net cash used in operating activities.................    (5,984,200)   (5,982,100)    (4,909,200)
                                                              ------------   -----------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of investment securities........................   (17,356,700)   (3,586,700)   (26,384,200)
  Maturities of investment securities.......................     4,515,000     7,883,000     13,045,000
  Purchases of property and equipment.......................    (1,174,400)   (1,142,500)    (2,274,700)
                                                              ------------   -----------   ------------
      Net cash (used in) provided by investing activities...   (14,016,100)    3,153,800    (15,613,900)
                                                              ------------   -----------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of long-term debt..................     2,140,400     1,987,800      2,652,100
  Repayments of long-term debt..............................                    (156,000)      (676,900)
  Proceeds from issuance of preferred stock, net of issuance
    costs...................................................    10,152,700                   21,837,000
  Proceeds from issuance of common stock....................           900         2,000         20,400
                                                              ------------   -----------   ------------
      Net cash provided by financing activities.............    12,294,000     1,833,800     23,832,600
                                                              ------------   -----------   ------------
Effect of exchange rate changes on cash.....................        67,400      (100,100)       (79,700)
                                                              ------------   -----------   ------------
Net increase (decrease) in cash and cash equivalents........    (7,638,900)   (1,094,600)     3,229,800
Cash and cash equivalents, beginning of period..............    12,417,600     4,778,700      3,684,100
                                                              ------------   -----------   ------------
Cash and cash equivalents, end of period....................  $  4,778,700   $ 3,684,100   $  6,913,900
                                                              ============   ===========   ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Interest paid.............................................  $      4,000   $    82,200   $    488,000
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
  ACTIVITIES
  Unrealized gain (loss) on investment securities...........  $    (43,700)  $    22,900   $    118,300
</TABLE>

    
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-6

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1. ORGANIZATION AND NATURE OF OPERATIONS
 
    ACADIA Pharmaceuticals Inc. (the "Company"), a Delaware corporation, was
incorporated on July 16, 1993, and is a genomics-based drug discovery and
development company that efficiently identifies target-specific small molecule
drug candidates using its integrated technology platform. The Company's
proprietary approach integrates genomics, chemistry and biology to rapidly
indentify and validate targets and discover chemistries specific to those
targets. The Company has successfully applied its approach to generate a drug
discovery pipeline that currently includes six advanced programs as well as a
number of earlier stage research projects. ACADIA Pharmaceuticals A/S, a wholly
owned subsidiary of the Company based near Copenhagen, Denmark, was established
in 1997 to conduct the Company's chemistry research operations.
 
   
    The Company has not been profitable and has generated substantial operating
losses since incorporating in 1993. At December 31, 2000, the Company's
accumulated losses were approximately $27 million. The Company expects to
increase operating expenses over the next several years as it expands its
research and development activities and enhances its core technologies.
Accordingly, the Company will require significant additional financing in the
future to fund operations. The Company does not know whether additional
financing will be available when needed, or that, if available, it will obtain
financing on favorable terms. If adequate funds are not available or are not
available on acceptable terms, the Company's ability to fund its operations,
take advantage of opportunities, develop drug candidates and technologies or
otherwise respond to competitive pressures could be significantly limited.
    
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
    Significant accounting policies followed in the preparation of these
financial statements are as follows:
 
PRINCIPLES OF CONSOLIDATION
 
   
    The accompanying consolidated financial statements include the accounts of
the Company and ACADIA Pharmaceuticals A/S, its wholly owned subsidiary. All
intercompany accounts and transactions have been eliminated in consolidation.
    
 
UNAUDITED PRO FORMA STOCKHOLDERS' EQUITY
 
   
    The Company's Board of Directors has authorized the filing of a registration
statement with the Securities and Exchange Commission to register shares of its
common stock in an initial public offering ("IPO"). If the IPO is closed under
certain terms, each share of preferred stock outstanding will convert into one
share of common stock. Unaudited pro forma stockholders' equity at December 31,
2000 reflects the conversion of all outstanding preferred stock into common
stock as if such conversion had occurred at December 31, 2000.
    
 
CASH AND CASH EQUIVALENTS
 
    The Company considers all highly liquid investments with an initial maturity
date at the date of purchase of three months or less to be cash equivalents. The
carrying amount of cash and cash equivalents approximates fair value.
 
                                      F-7

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT SECURITIES
 
    Investment securities are considered to be available-for-sale and are
carried at fair value. Unrealized gains and losses, if any, are reported in a
separate component of stockholders' equity (deficit). The cost of investment
securities classified as available-for-sale is adjusted for amortization of
premiums and accretion of discounts to maturity. Such amortization and accretion
are included in interest income. Realized gains and losses are also included in
interest income. The cost of securities sold is based on the specific
identification method.
 
PROPERTY AND EQUIPMENT
 
    Property and equipment are recorded at cost and depreciated over their
estimated useful lives (generally three to seven years) using the straight line
method. Leasehold improvements are amortized over the shorter of their estimated
useful lives or the term of the respective leases by use of the straight line
method. Maintenance and repair costs are expensed as incurred. When assets are
retired or sold, the assets and accumulated depreciation are removed from the
respective accounts and any gain or loss is recognized.
 
REVENUES
 
   
    Revenues from up front payments under collaborative agreements are
recognized over the term of the agreements. Revenues from research funding are
recognized when the related research activities are performed. Revenues from
milestone payments are recognized when the milestone is achieved. However,
milestone payments that require future performance are deferred and recognized
as revenue ratably over the term of the agreement as the related activities are
performed. Amounts received under the agreements are nonrefundable even if the
research activities are not successful.
    
 
RESEARCH AND DEVELOPMENT COSTS
 
    Research and development costs are expensed as incurred.
 
CONCENTRATIONS OF RISK
 
    Financial instruments which potentially subject the Company to
concentrations of credit risk principally consist of cash, cash equivalents and
investment securities. The Company invests its excess cash primarily in
marketable debt securities of corporations and financial institutions with
strong credit ratings. The Company has established guidelines relative to
diversification and maturities to maintain safety and liquidity.
 
   
    During the years ended December 31, 1998, 1999 and 2000, revenues from a
related party, Allergan, Inc., accounted for approximately 92%, 100% and 97% of
total revenues, respectively. At December 31, 1999 and 2000, deferred revenue
from this related party was $291,700 and $794,400, respectively.
    
 
FOREIGN CURRENCY TRANSLATION
 
    The functional currency of ACADIA Pharmaceuticals A/S is the local currency.
Accordingly, all assets and liabilities of this entity are translated at the
current exchange rate at the balance sheet date. Revenue and expense components
are translated at weighted average exchange rates in effect during
 
                                      F-8

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the period. Gains and losses resulting from foreign currency translation are
included as a component of stockholders' equity (deficit).
 
STOCK-BASED COMPENSATION
 
   
    The Company measures compensation expense for its employee stock-based
compensation plan using the intrinsic value method and provides pro forma
disclosures of net income (loss) as if a fair value method had been applied in
measuring compensation expense. Accordingly, compensation cost for stock awards
is measured as the excess, if any, of the estimated market value of the
Company's common stock at the date of grant over the amount an employee must pay
to acquire the stock. Compensation cost is amortized over the related vesting
periods using an accelerated method in accordance with Financial Accounting
Standards Board Interpretation No. 28, ACCOUNTING FOR STOCK APPRECIATION RIGHTS
AND OTHER VARIABLE STOCK OPTION OR AWARD PLANS. Accrued compensation costs for
unvested awards that are forfeited are reversed against compensation expense or
unearned stock-based compensation, as appropriate, in the period of forfeiture.
    
 
   
    Stock-based awards issued to nonemployees are accounted for using a fair
value method and are remeasured to fair value at each period end until the
earlier of the date that performance by the nonemployee is complete or a
performance commitment has been obtained. The fair value of each award is
estimated using the Black Scholes option pricing model.
    
 
INCOME TAXES
 
    Current income tax expense or benefit represents the amount of income taxes
expected to be payable or refundable for the current year. A deferred income tax
asset or liability is computed for the expected future impact of differences
between the financial reporting and income tax bases of assets and liabilities
and for the expected future tax benefit to be derived from tax credits and loss
carryforwards. Deferred income tax expense or benefit represents the net change
during the year in the deferred income tax asset or liability. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized.
 
USE OF ESTIMATES
 
    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
 
LONG LIVED ASSETS
 
    The Company assesses potential impairments to its long lived assets when
there is evidence that events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. An impairment loss is
recognized if the sum of expected future undiscounted cash flows before interest
from the use of the asset is less than the net book value of the asset. The
amount of the impairment loss, if any, will generally be measured as the
difference between the net book value of the assets and their estimated fair
values. No such impairment losses have been recorded by the Company.
 
                                      F-9

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
COMPREHENSIVE INCOME (LOSS)
 
    All components of comprehensive income (loss), including net income (loss),
are reported in the financial statements in the period in which they are
recognized. Comprehensive income (loss) is defined as the change in equity (net
assets) of a business enterprise during a period from transactions and other
events and circumstances from nonowner sources. Accordingly, in addition to
reporting net income (loss) under the current rules, the Company is required to
display the impact of any fluctuations in its foreign currency translation
adjustments and any unrealized gains or losses on its investment securities as
components of comprehensive income (loss) and to display an amount representing
total comprehensive income (loss) for each period.
 
NET INCOME (LOSS) PER SHARE
 
    Basic earnings (loss) per share is computed by dividing income (loss)
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted earnings (loss) per share is computed by
dividing income (loss) available to common stockholders by the weighted average
number of common shares outstanding during the period increased to include
potential dilutive common shares that were outstanding during the period. The
dilutive effect of outstanding stock options and warrants is reflected, when
dilutive, in diluted earnings (loss) per share by application of the treasury
stock method.
 
   
    The Company has excluded all preferred stock and outstanding stock options
and warrants from the calculation of diluted net loss per common share because
all such securities are antidilutive for all periods presented. The total number
of potential common shares excluded from the calculation of diluted net loss per
share, prior to application of the treasury stock method for options and
warrants, was 5,800,478, 7,319,611 and 9,381,186 for the years ended
December 31, 1998, 1999 and 2000, respectively.
    
 
   
    Unaudited pro forma basic and diluted net loss per common share, presented
in the statements of operations, has been computed for the year ended
December 31, 2000 as described above, and also gives effect to the assumed
conversion of preferred stock which, under certain circumstances, will convert
to common stock immediately prior to the completion of the offering contemplated
by this prospectus (using the "as if converted" method) from the original date
of issuance. The calculation of unaudited pro forma net loss per share for the
year ended December 31, 2000 excludes 1,805,266 shares.
    
 
                                      F-10

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    The following table presents the calculation of net loss per share:
 
   

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                           ----------------------------------------
                                                              1998          1999           2000
                                                           -----------   -----------   ------------
<S>                                                        <C>           <C>           <C>
Net loss................................................   $(6,402,500)  $(7,445,300)  $(10,193,900)
                                                           -----------   -----------   ------------
Basic and diluted net loss per share....................   $     (3.12)  $     (3.57)  $      (4.76)
                                                           -----------   -----------   ------------
Weighted average shares used in computing net loss per
  share, basic and diluted..............................     2,049,307     2,086,977      2,139,470
Unaudited pro forma net loss per share, basic and
  diluted...............................................                               $      (1.05)
                                                                                       ------------
Shares used to compute unaudited pro forma net loss per
  share:
  Weighted average shares used in computing net loss per
    share, basic and diluted............................                                  2,139,470
  Unaudited pro forma adjustment to reflect weighted
    average effect of assumed conversion of preferred
    stock...............................................                                  7,575,920
                                                                                       ------------
  Shares used in computing unaudited pro forma net loss
    per share, basic and diluted........................                                  9,715,390
                                                                                       ============
</TABLE>

    
 
SEGMENT REPORTING
 
    Statement of Financial Accounting Standards No. 131, DISCLOSURES ABOUT
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION, requires the use of a
management approach in identifying segments of an enterprise. Management has
determined that the Company operates in one business segment.
 
   
    All revenues for the years ended December 31, 1998, 1999 and 2000 were
generated in the United States. Information regarding long-lived assets by
geographic area is as follows:
    
 
   

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                       -----------------------
                                                          1999         2000
                                                       ----------   ----------
<S>                                                    <C>          <C>
United States........................................  $1,510,600   $2,636,200
Denmark..............................................     997,900    1,057,700
                                                       ----------   ----------
Total................................................  $2,508,500   $3,693,900
                                                       ==========   ==========
</TABLE>

    
 
RECENTLY ISSUED ACCOUNTING STANDARDS
 
    In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), REVENUE RECOGNITION IN FINANCIAL
STATEMENTS. The objective of SAB 101 is to provide further guidance on revenue
recognition issues in the absence of authoritative literature addressing a
specified arrangement or a specific industry. The Company has adopted SAB 101
for all periods presented.
 
    In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133") ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES, which the Company will adopt effective
January 1, 2001. SFAS 133 establishes accounting and reporting standards
 
                                      F-11

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
for derivative instruments, including certain derivative instruments imbedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities and measure those instruments at fair value. Management
does not believe the adoption of SFAS 133 will impact the financial statements
as the Company currently does not invest in derivative instruments or engage in
hedging activities.
 
   
    In March 2000, the Financial Accounting Standards Board issued
Interpretation No. 44 ("FIN 44"), ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING
STOCK COMPENSATION. The Company adopted FIN 44 effective July 1, 2000 with
respect to specific provisions applicable to new awards, exchanges of awards in
a business combination, modifications to outstanding awards and changes in
grantee status that occur on or after that date. FIN 44 addresses practice
issues related to the application of Accounting Practice Bulletin Opinion
No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. There was no material impact
on the financial statements of the Company upon adoption of FIN 44.
    
 
3. INVESTMENT SECURITIES
 
    Investment securities are comprised entirely of marketable debt securities
of corporations and financial institutions. The estimated fair value of
available-for-sale securities by contractual maturity is as follows:
 
   

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                     -------------------------
                                                        1999          2000
                                                     -----------   -----------
<S>                                                  <C>           <C>
Due within one year................................  $ 7,535,000   $12,033,300
Due after one year.................................      989,600     9,948,800
                                                     -----------   -----------
                                                     $ 8,524,600   $21,982,100
                                                     ===========   ===========
</TABLE>

    
 
   
    The estimated fair value of investment securities at December 31, 1999 was
lower than historical cost and at December 31, 2000 higher than historical cost;
therefore, an unrealized loss of $20,800 and an unrealized gain of $97,500,
respectively, have been included in Accumulated Other Comprehensive Income in
stockholders' equity (deficit). The Company had no realized gains or losses
during the years ended December 31, 1998, 1999 and 2000.
    
 
4. BALANCE SHEET COMPONENTS
 
    Property and equipment consist of the following:
 
   

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                      -----------------------
                                                         1999         2000
                                                      ----------   ----------
<S>                                                   <C>          <C>
Machinery and equipment.............................  $1,586,700   $2,536,400
Computers and software..............................   1,056,400    1,573,600
Furniture and fixtures..............................      95,300       99,900
Leasehold improvements..............................   1,226,300    1,937,700
                                                      ----------   ----------
                                                       3,964,700    6,147,600
Accumulated depreciation and amortization...........  (1,456,200)  (2,453,700)
                                                      ----------   ----------
                                                      $2,508,500   $3,693,900
                                                      ==========   ==========
</TABLE>

    
 
                                      F-12

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
4. BALANCE SHEET COMPONENTS (CONTINUED)
    Accrued expenses consist of:
 
   

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                       ---------------------
                                                         1999        2000
                                                       --------   ----------
<S>                                                    <C>        <C>
Accrued compensation.................................  $453,300   $  669,900
Accrued professional fees............................    67,200      458,000
Other................................................   183,000      154,000
                                                       --------   ----------
                                                       $703,500   $1,281,900
                                                       ========   ==========
</TABLE>

    
 
5. LONG-TERM DEBT
 
   
    In February 1997, the Company's Danish subsidiary was granted a loan from
The VaekstFonden (The Danish Fund for Industrial Growth, "Growth Fund"). The
loan provides funding on a quarterly basis over the term of a research project
conducted by the subsidiary up to a maximum commitment of approximately
$5.6 million. The research project was created to establish the Company's
chemistry operations and to assist in the discovery of drug candidates. The loan
accrues interest at 7.7% per annum, and principal and interest are payable in
quarterly installments over a five-year period. The payments are based on a
percentage (4.9%) of estimated revenues that could potentially be generated from
the project. Should actual revenues fail to materialize or fall short of
projections, the terms of the agreement provide that the loan may be forgiven or
the repayment schedule revised at the discretion of the Growth Fund.
Intellectual property rights resulting from the project are pledged to the
Growth Fund but the Company may license rights to third parties, subject to
certain conditions. During the year ended December 31, 2000, the Company made
payments of $388,800 on the loan. At December 31, 1999 and 2000, $4,060,200 and
$5,058,600, respectively, had been drawn on the loan with interest accrued of
$256,000 and $353,900, respectively.
    
 
   
    In October 1998 and September 2000, the Company entered into equipment
financing agreements which, subject to compliance with certain financial
covenants and conditions, may be used by the Company to finance up to
$1 million and $2.3 million of capital expenditures, respectively. The Company
was in compliance with these financial covenants and conditions at December 31,
1999 and 2000. The agreements provide for equal monthly installments to be paid
over a three to four year period for each draw under the financing agreements,
including interest at rates ranging from 9.90% to 12.58% per annum. Outstanding
borrowings under these agreements are collateralized by the equipment purchased
under these financing agreements. At December 31, 1999 and 2000, the Company had
$742,200 and $1,701,500 in outstanding borrowings under these agreements,
respectively.
    
 
                                      F-13

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
5. LONG-TERM DEBT (CONTINUED)
   
    At December 31, 2000, future anticipated payments under the Growth Fund loan
and equipment financing agreement are as follows:
    
 
   

<TABLE>
<S>                                                           <C>
YEAR ENDED DECEMBER 31,
 
  2001......................................................  $1,324,900
  2002......................................................   1,182,500
  2003......................................................   1,355,800
  2004......................................................   1,544,900
  2005......................................................   1,705,900
                                                              ----------
                                                               7,114,000
  Less current portion......................................  (1,324,900)
                                                              ----------
    Long-term portion.......................................  $5,789,100
                                                              ==========
</TABLE>

    
 
6. COLLABORATIVE RESEARCH AND LICENSING AGREEMENTS
 
   
    In July 1999, the Company entered into a licensing and development
collaboration agreement with Allergan, Inc. to develop and commercialize drugs
for glaucoma based on ACADIA's proprietary lead compounds. Under the agreement,
the Company will provide its expertise in medicinal chemistry and high
throughput pharmacology for a two year period to enable the selection by
Allergan of up to two development candidates for clinical development and
commercialization. Allergan was granted worldwide rights to products based on
these lead compounds for the treatment of ocular disease. In exchange, the
Company is eligible to receive up to approximately $19 million for the first
development candidate, in the form of up front fees, research support and
milestone payments. The Company will also receive royalties on future product
sales, if any. Allergan also has the right to select a second development
candidate, subject to similar milestone and royalty payments to the Company. The
agreement terminates six months after the later of ten years from the date of
the first sale of the final commercial product developed under the agreement or
the expiration of the last patent to expire covering a product developed under
the agreement. The agreement may be terminated earlier by Allergan upon 90 days'
notice to the Company, by mutual agreement of the parties, or by either party in
the event of a breach by the other party or upon the other party's bankruptcy or
insolvency. Revenue recognized under this agreement totaled $967,000 and
$2,067,900 during the years ended December 31, 1999 and 2000, respectively.
    
 
   
    In September 1997, the Company established a three year collaboration
agreement with Allergan, Inc. to work jointly and exclusively on target
validation and discovery efforts on several potential drug targets. Allergan has
exclusive development and commercialization rights to all therapeutics, with the
exception that the Company retains the development rights to at least one
therapeutic indication for each target. This collaboration was extended in
September 2000 for an additional two year period. Under the collaboration, the
Company receives research funding. The Company is also eligible to receive
milestone payments of up to $12.5 million for the first product developed for
each target as well as royalties on sales of products, if any, resulting from
the collaboration. The agreement provides Allergan limited rights of negotiation
in the event of a proposed acquisition of the Company. The funding and
collaborative activities under the September 1997 agreement, as renewed, will
cease in September 2002. The agreement terminates six months after the later of
ten years from the date of the first sale of the final commercial product
developed under the
    
 
                                      F-14

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
6. COLLABORATIVE RESEARCH AND LICENSING AGREEMENTS (CONTINUED)
   
agreement or the expiration of the last patent to expire covering a product
developed under the agreement. The agreement may be terminated earlier by mutual
agreement of the parties, by either party in the event of a breach by the other
party or upon the other party's bankruptcy or insolvency, or by Allergan in the
event of a change in control of the Company. Revenue recognized under this
agreement totaled $1,300,000, $1,271,200 and $2,125,000 during the years ended
December 31, 1998, 1999 and 2000, respectively. In September 1997, Allergan also
made a $6 million equity investment in the Company, acquiring 1,000,000 shares
of Series C preferred stock.
    
 
   
    In December 2000, the Company entered into a five year collaborative drug
discovery agreement with ArQule, Inc. Under the collaboration, the Company will
combine its integrated technology platform with ArQule's Parallel Track
Discovery Program to discover novel small molecule drug candidates directed at
individual genomic targets. The Company and ArQule will share costs and share
equally in all future revenues created by the joint discovery programs,
including future milestone, royalty and upfront payments resulting from the out
licensing of drug candidates, if any, and the companies will each obtain certain
rights to pursue independent discovery efforts. At December 31, 2000, we had
neither received nor made any payments under our agreement with ArQule. This
agreement terminates in December 2005. However, this agreement may be terminated
earlier by mutual agreement of the parties, by either party upon 90 days' notice
to the other party, or by either party after a deadlock of the steering
committee that lasts 60 days.
    
 
   
    In November 2000, the Company entered into a collaboration agreement with
PAREXEL International Corporation, designed to provide pharmacogenomic services
to pharmaceutical companies using the Company's integrated technology platform.
Under the agreement, PAREXEL will make the Company's pharmacogenomics
capabilities and expertise available to potential pharmaceutical customers
engaged in clinical trials of drugs for neuropsychiatric disease. The Company
will seek to enter into agreements with these customers to provide services,
including research to identify the genomic targets of their neuropsychiatric
drugs in clinical development and how these targets may vary functionally in
patient populations. The Company will be required to make specified payments to
PAREXEL based upon the revenues, if any, earned under these agreements with
pharmaceutical partners. To date, the Company has not entered into any agreement
with pharmaceutical customers as a result of our collaboration with PAREXEL and,
consequently, has not been required to make any payments to PAREXEL. The initial
term of the collaborative agreement expires in November 2003, but will be
automatically renewed for additional one-year periods unless the Company or
PAREXEL object to a renewal with 90 days' notice to the other party. The
agreement may be terminated by either PAREXEL or us by 90 days' prior notice to
the other party.
    
 
                                      F-15

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
7. CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
 
   
INITIAL PUBLIC OFFERING
    
 
   
    In December 2000, the Board of Directors authorized management of the
Company to file a registration statement with the Securities and Exchange
Commission permitting the Company to sell shares of its common stock to the
public. If the initial public offering is closed under certain terms, all of the
preferred stock outstanding at December 31, 2000 will convert or be reclassified
into shares of common stock.
    
 
CONVERTIBLE PREFERRED STOCK
 
    A summary of the Company's convertible preferred stock is as follows:
 
   

<TABLE>
<CAPTION>
                            SHARES AUTHORIZED       SHARES ISSUED AND OUTSTANDING   PREFERENCE IN
                        -------------------------   -----------------------------    LIQUIDATION
                              DECEMBER 31,                  DECEMBER 31,                 AT
                        -------------------------   -----------------------------   DECEMBER 31,
                           1999          2000           1999            2000            2000
                        -----------   -----------   -------------   -------------   -------------
<S>                     <C>           <C>           <C>             <C>             <C>
Series A..............    2,372,548     2,372,548      2,372,548       2,372,548     $ 8,419,600
Series B..............      738,384       738,384        738,384         738,384       3,950,300
Series C..............    1,000,000     1,000,000      1,000,000       1,000,000       7,950,000
Series D..............    1,908,135     1,908,135      1,581,653       1,581,653      13,167,300
Series E..............                  4,000,000                      2,933,335      23,466,700
                        -----------   -----------    -----------     -----------     -----------
                          6,019,067    10,019,067      5,692,585       8,625,920     $56,953,900
                        ===========   ===========    ===========     ===========     ===========
</TABLE>

    
 
CONVERSION
 
   
    Each share of the Company's Series A, B, D and E preferred stock shall be
reclassified in certain circumstances into one share of common stock upon the
closing of a qualifying initial public offering ("Qualifying IPO"). The
Company's Series C preferred stock automatically converts into one share of
common stock, subject to certain antidilution provisions, upon the closing of a
Qualifying IPO. A Qualifying IPO is defined as an initial public offering of the
Company's common stock pursuant to an effective registration statement under the
Securities Act of 1933, resulting in gross proceeds of at least $7.5 million in
the case of Series A and B shares, $15 million in the case of Series C and D
shares and $20 million in the case of Series E shares, at a price per share of
at least $7.50 in the case of Series A and B shares, $12.00 in the case of
Series C and D shares and $15.00 in the case of Series E shares. In addition,
holders of Series C preferred stock may at any time elect to convert each share
into one share of common stock, subject to certain antidilution provisions.
    
 
VOTING RIGHTS
 
    With the exception of certain matters, the holders of preferred stock vote
together with the holders of common stock as a single class. Holders of
preferred stock are entitled to one vote for each share of common stock into
which such shares would convert.
 
DIVIDENDS
 
   
    The holders of preferred stock are entitled to receive dividends when and if
the Company declares a dividend on its common stock, in such amount as they
would be entitled to receive if the preferred
    
 
                                      F-16

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
7. CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
   
stock had been converted into common stock. In addition, immediately prior to
the effectiveness of a Qualifying IPO, the holders of Series A, B, D and E
preferred stock are entitled to anti-dilution protection, if applicable, in the
form of a dividend payable in shares, as calculated based upon a formula
("Special Dividend"). At December 31, 2000, no shares were payable under the
terms of the Special Dividend.
    
 
LIQUIDATION
 
   
    In the event of any liquidation, dissolution or winding up of the Company,
the holders of preferred stock are entitled to a preference in relation to
holders of the Company's common stock with regard to any distribution as
follows: the greater of (i) $2.55 per share for Series A preferred stock, $4.00
per share for Series B preferred stock, $6.00 per share for Series C preferred
stock, $6.75 per share for Series D preferred stock and $7.50 per share for
Series E preferred stock, plus a rate of return of 10% per annum from the
original issue date until the date of payment, or (ii) the amount payable under
the Special Dividend, if applicable. In the event of a sale of all or
substantially all of the assets of the Company or a merger or consolidation of
the Company into or with another corporation in which the holders of capital
stock of the Company immediately prior to such merger or consolidation do not
continue to hold at least 80% of the voting power of the capital stock of the
surviving corporation, shall be deemed to be a liquidation of the Company with
respect to Series A, B, C, D and E preferred stock if a majority of the
Series A, B, D and E stockholders, taken together, or a majority of the
Series C stockholders vote in favor of deeming such asset sale, merger or
consolidation a liquidation. Therefore, the preferred stock is considered
temporary equity as presented in the consolidated balance sheet. Upon the
occurrence of such a deemed liquidation event, the holders of the Series A, B,
C, D and E preferred shares would receive a distribution of the consideration
received by the Company as specified above in return for their preferred shares.
    
 
RIGHTS OF REFUSAL
 
    The holders of preferred stock have certain rights of refusal to participate
in future equity offerings by the Company and are entitled to certain
registration rights with respect to such shares.
 
WARRANTS
 
   
    At December 31, 2000, the Company had outstanding warrants to purchase an
aggregate of 237,257 shares of the Company's common stock which were issued in
connection with the Series A preferred stock financing. The aggregate fair value
of the warrants issued was not material to the Company. The warrants have an
exercise price of $12.00 per share and expire in February 2002, or earlier upon
the occurrence of certain events.
    
 
   
2000 EQUITY INCENTIVE PLAN
    
 
   
    In December 2000, the Board of Directors approved the 2000 equity incentive
plan. Adoption of the 2000 equity incentive plan will be effective upon the
closing of the initial public offering.
    
 
                                      F-17

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
7. CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
   
2000 EMPLOYEE STOCK PURCHASE PLAN
    
 
   
    In December 2000, the Board of Directors approved the 2000 employee stock
purchase plan. Adoption of the 2000 employee stock purchase plan will be
effective upon the closing of the initial public offering.
    
 
   
2000 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
    
 
   
    In December 2000, the Board of Directors approved the 2000 nonemployee
directors' stock option plan. Upon adoption, all newly elected or appointed
nonemployee directors will be entitled to receive an initial option grant and in
subsequent years, all nonemployee directors will be entitled to receive an
automatic annual option grant to each eligible director. Adoption of the 2000
nonemployee directors' stock option plan will be effective upon the closing of
the initial public offering.
    
 
1997 STOCK OPTION PLAN
 
   
    The 1997 stock option plan (the "Plan"), as amended, provides for the grant
of incentive stock options and nonqualified stock options to employees,
officers, directors, consultants and advisors of the Company to purchase shares
of common stock. In November 2000, the Board of Directors approved an increase
in the number of shares of common stock reserved for issuance under the Plan to
2,700,000 shares. The exercise price of each option is set at fair market value
as determined by the Board of Directors and the option's maximum term is ten
years. Options granted under the Plan generally vest over a four year period. At
December 31, 1999 and 2000, options to purchase 390,354 and 762,729 shares of
common stock, respectively, remain available for grant under the Plan.
    
 
   
    Stock option transactions under the Plan during the years ending
December 31, 1998, 1999 and 2000 are presented below:
    
 
   

<TABLE>
<CAPTION>
                                                     NUMBER OF   WEIGHTED-AVERAGE
                                                      SHARES     EXERCISE PRICES
                                                     ---------   ----------------
<S>                                                  <C>         <C>
Balance at December 31, 1997.......................    711,349        $0.15
  Granted..........................................    527,000        $0.62
  Exercised........................................    (84,533)       $0.01
  Canceled/forfeited...............................   (291,566)       $0.06
                                                     ---------
Balance at December 31, 1998.......................    862,250        $0.49
  Granted..........................................    482,500        $0.85
  Exercised........................................    (34,707)       $0.06
  Canceled/forfeited...............................    (43,007)       $0.55
                                                     ---------
Balance at December 31, 1999.......................  1,267,036        $0.64
  Granted..........................................    479,250        $1.16
  Exercised........................................    (54,507)       $0.37
  Canceled/forfeited...............................   (151,625)       $0.64
                                                     ---------
Balance at December 31, 2000.......................  1,540,154        $0.81
                                                     =========
</TABLE>

    
 
                                      F-18

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
7. CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
   
    The following table summarizes information about stock options outstanding
at December 31, 2000:
    
 
   

<TABLE>
<CAPTION>
                                        OPTIONS OUTSTANDING                           OPTIONS EXERCISABLE
                        ----------------------------------------------------   ---------------------------------
                            NUMBER       WEIGHTED AVERAGE                          NUMBER
                        OUTSTANDING AT      REMAINING                          EXERCISABLE AT
       RANGE OF          DECEMBER 31,    CONTRACTUAL LIFE   WEIGHTED AVERAGE    DECEMBER 31,    WEIGHTED AVERAGE
   EXERCISE PRICES           2000            (YEARS)         EXERCISE PRICE         2000         EXERCISE PRICE
   ---------------      --------------   ----------------   ----------------   --------------   ----------------
<S>                     <C>              <C>                <C>                <C>              <C>
$0.01 - $0.25.........      125,404            6.2               $0.15            121,369            $0.15
$0.40 - $0.60.........      441,500            7.1               $0.58            366,500            $0.58
$0.80 - $1.00.........      854,500            8.9               $0.90            196,667            $0.84
$1.50 - $2.00.........      118,750            9.9               $1.74              4,500            $2.00
                          ---------                                               -------
                          1,540,154                                               689,036
                          =========                                               =======
</TABLE>

    
 
   
    The weighted average fair value of options granted during the years ended
December 31, 1998, 1999 and 2000 was approximately $0.23, $1.85 and $9.45,
respectively.
    
 
   
    During the years ended December 31, 1999 and 2000, in connection with the
grant of various stock options to employees, the Company recorded deferred
stock-based compensation of $470,000 and $2,947,100, respectively, representing
the difference between the exercise price and the estimated market value of the
Company's common stock on the date such stock options were granted. Unearned
stock-based compensation is included as a reduction of stockholders' equity
(deficit) and is being amortized to expense over the vesting period of the
options in accordance with FASB Interpretation No. 28. During the years ended
December 31, 1999 and 2000, the Company recorded amortization of unearned
stock-based compensation expense of $98,300 and $702,500, respectively. Also
included in stock-based compensation for years ended December 31, 1998, 1999 and
2000 is $52,700, $3,200 and $1,769,300, respectively, resulting from the
modification of certain option grants.
    
 
   
    During the years ended December 31, 1999 and 2000, in connection with the
grant of stock options to consultants, the Company recorded stock-based
compensation of $4,000 and $382,200, respectively. For purposes of determining
this compensation expense, the fair value of each option grant is estimated on
the measurement date using the Black Scholes option pricing model with the
following assumptions used for the years ended December 31, 1999 and 2000:
dividend yield of 0.0%; volatility of 100%; a risk free interest rate of 6% and
an expected life of ten years for all periods.
    
 
PRO FORMA INFORMATION
 
    Pro forma information regarding net income (loss) is required to be
disclosed in accordance with Statement of Financial Accounting Standards
No. 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value methodology.
 
   
    For purposes of determining compensation expense, the fair value of each
option grant is estimated on the grant date using the minimum value option
pricing model with the following assumptions used for grants during the years
ended December 31, 1998, 1999 and 2000: dividend yield
    
 
                                      F-19

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
7. CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
   
of 0.0% for all years; volatility of 0.0% for all years; a risk free interest
rate of 7.7% for 1998 and 6% for 1999 and 2000 and an expected life of six years
for all years. Pro forma information follows:
    
 
   

<TABLE>
<CAPTION>
                                                YEAR ENDED DECEMBER 31,
                                        ----------------------------------------
                                           1998          1999           2000
                                        -----------   -----------   ------------
<S>                                     <C>           <C>           <C>
Actual net loss.......................  $(6,402,500)  $(7,445,300)  $(10,193,900)
Pro forma net loss....................  $(6,429,500)  $(7,548,000)   (10,244,800)
Actual net loss per share, basic and
  diluted.............................  $     (3.12)  $     (3.57)         (4.76)
Pro forma net loss per share, basic
  and diluted.........................  $     (3.14)  $     (3.62)         (4.79)
</TABLE>

    
 
COMMON STOCK RESERVED FOR FUTURE ISSUANCE
 
   
    At December 31, 2000, a total of 10,019,067 shares of common stock have been
reserved for conversion of preferred stock into common stock. In addition,
1,540,154 and 237,257 shares of common stock have been reserved for issuance
upon the exercise of stock options and warrants, respectively.
    
 
8. 401(K) PLAN
 
   
    Effective January 1997, the Company established a deferred compensation plan
(the "401(k) Plan") pursuant to Section 401(k) of the Internal Revenue Code,
whereby substantially all employees are eligible to contribute up to 15% of
their pretax earnings, not to exceed amounts allowed under the code. The Company
makes contributions to the 401(k) Plan equal to 100% of the employees' pretax
contributions up to 5% of their eligible compensation. The Company's total
contributions to the 401(k) Plan were $89,600, $118,100 and $144,300 for the
years ended December 31, 1998, 1999 and 2000, respectively.
    
 
9. INCOME TAXES
 
   
    At December 31, 2000, the Company has both federal and state net operating
loss carryforwards of approximately $14,058,400 and $15,013,600, respectively,
which begin to expire in 2013 and 2003, respectively. The Company also has
foreign net operating loss carryforwards of approximately $9,549,800 which begin
to expire in 2003. Upon certain changes in the ownership of the Company, the
Company's use of net operating losses may be limited.
    
 
                                      F-20

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
9. INCOME TAXES (CONTINUED)
    The components of the deferred tax asset are as follows:
 
   

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                   ----------------------------
                                                       1999           2000
                                                   ------------   -------------
<S>                                                <C>            <C>
Net operating loss carryforwards.................  $  6,158,500   $   8,711,800
Research and development credit carryforwards....       379,900         655,500
Stock-based compensation.........................        18,100         890,500
Other............................................        54,100         124,300
                                                   ------------   -------------
                                                      6,610,600      10,382,100
Valuation allowance..............................    (6,610,600)    (10,382,100)
                                                   ------------   -------------
    Net deferred tax asset.......................  $         --   $          --
                                                   ============   =============
</TABLE>

    
 
    Based on a number of factors, including the lack of a history of profits and
the fact that the Company competes in a developing market that is characterized
by rapidly changing technology, management believes that there is sufficient
uncertainty regarding the realization of deferred tax assets such that a full
valuation allowance has been provided.
 
    A reconciliation of income taxes to the amount computed by applying the
statutory federal income tax rate to the net loss is summarized as follows:
 
   

<TABLE>
<CAPTION>
                                                YEAR ENDED DECEMBER 31,
                                       ------------------------------------------
                                           1998           1999           2000
                                       ------------   ------------   ------------
<S>                                    <C>            <C>            <C>
Amounts computed at statutory federal
  rate...............................  $ (2,176,800)  $ (2,531,000)  $ (3,465,900)
Permanent differences................         7,900         27,000        218,500
Federal research and development
  credits............................      (119,300)      (110,000)      (181,500)
Change in valuation allowance of
  deferred tax assets................     2,605,000      2,804,800      3,789,600
State taxes..........................      (317,700)      (398,600)      (417,500)
Foreign taxes........................            --        134,100         56,900
Other................................           900         73,700           (100)
                                       ------------   ------------   ------------
                                       $         --   $         --   $         --
                                       ============   ============   ============
</TABLE>

    
 
10. COMMITMENTS
 
   
    The Company and its subsidiary lease three office/laboratory facilities and
certain equipment under noncancelable operating leases that expire at various
dates through October 2005. Under the terms of the facilities leases, the
Company is required to pay its proportionate share of property taxes, insurance
and normal maintenance costs.
    
 
                                      F-21

<PAGE>
                          ACADIA PHARMACEUTICALS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
10. COMMITMENTS (CONTINUED)
   
    Future minimum payment obligations under noncancelable operating lease
arrangements are as follows at December 31, 2000:
    
 
   

<TABLE>
<S>                                                           <C>
YEAR ENDED DECEMBER 31,
 
  2001......................................................  $  978,800
  2002......................................................   1,011,600
  2003......................................................     894,300
  2004......................................................     925,500
  2005......................................................     810,700
                                                              ----------
                                                              $4,620,900
                                                              ==========
</TABLE>

    
 
   
    Rent expense was $648,900, $775,800 and $853,400 for the years ended
December 31, 1998, 1999 and 2000, respectively.
    
 
   
11. SUBSEQUENT EVENT (UNAUDITED)

    
 
   
AMENDMENT TO CERTIFICATE OF INCORPORATION
    
 
   
    The Company will amend its Certificate of Incorporation in connection with
the Company's initial public offering to, among other things, provide for the
reclassification of each share of Series E preferred stock into one share of
common stock if the initial public offering price is at least $12.00 per share.
The assumed offering price is $14.00 and at that price all outstanding shares of
preferred stock will be reclassified or converted into shares of common stock.
    
 
                                      F-22

<PAGE>
                                 [ACADIA LOGO]

<PAGE>
                 SUBJECT TO COMPLETION, DATED FEBRUARY 5, 2001
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES, IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>
                                 [ACADIA LOGO]
 
                                        SHARES
                                  COMMON STOCK
 
    ACADIA Pharmaceuticals Inc. is offering 5,000,000 shares of its common
stock. This is our initial public offering and no public market currently exists
for our shares. We have applied for approval for quotation of our common stock
on the Nasdaq National Market under the symbol "ACAD." We anticipate that the
initial public offering price will be between $13.00 and $15.00 per share.
 
                            ------------------------
 
                 INVESTING IN OUR COMMON STOCK INVOLVES RISKS.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 5.
 
                             ---------------------
 

<TABLE>
<CAPTION>
                                                               PER SHARE        TOTAL
                                                              ------------   ------------
<S>                                                           <C>            <C>
Public Offering Price.......................................  $              $
Underwriting Discounts and Commissions......................  $              $
Proceeds to ACADIA Pharmaceuticals Inc......................  $              $
</TABLE>

 
    THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
    ACADIA Pharmaceuticals Inc. has granted the underwriters a 30-day option to
purchase up to an additional 750,000 shares of common stock to cover
overallotments.
 
                            ------------------------
 
ROBERTSON STEPHENS INTERNATIONAL                      U.S. BANCORP PIPER JAFFRAY
 
                THE DATE OF THIS PROSPECTUS IS           , 2001

<PAGE>
                                 [ACADIA LOGO]

<PAGE>
 
                                   PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
    The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by us in connection with the
sale of common stock being registered. All amounts are estimates except the
registration fee, the Nasdaq National Market listing fee and the NASD filing
fee.
 
   

<TABLE>
<CAPTION>
                                                              AMOUNT TO BE PAID
                                                              -----------------
<S>                                                           <C>
Registration fee............................................     $   22,613
NASD fee....................................................          9,125
Nasdaq National Market listing fee..........................         95,000
Printing and engraving......................................        170,000
Legal fees and expenses.....................................        450,000
Accounting fees and expenses................................        275,000
Blue sky fees and expenses..................................          5,000
Transfer agent fees.........................................         25,000
Miscellaneous...............................................         48,262
                                                                 ----------
Total.......................................................     $1,100,000
                                                                 ==========
</TABLE>

    
 

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
    Under Section 145 of the Delaware General Corporation Law, we have broad
powers to indemnify our directors and officers against liabilities they may
incur in such capacities, including liabilities under the Securities Act.
 
    The form of the underwriting agreement filed as Exhibit 1.1 to this
registration statement provides for indemnification for the underwriters and
their controlling persons, on the one hand and of ACADIA and our controlling
persons on the other hand, for certain liabilities arising under the Securities
Act, the Securities Exchange Act or otherwise.
 
    We maintain directors and officers insurance providing indemnification for
certain of our directors, officers, affiliates, partners or employees for
certain liabilities.
 
    The indemnification provisions in our Bylaws and the indemnification
agreements entered into between us and our directors and executive officers, may
be sufficiently broad to permit indemnification of our officers and directors
for liabilities arising under the 1933 Act.
 

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
 
    Since January 1, 1997, we have sold and issued the following unregistered
securities:
 
        1.  On January 23, 1997, we issued an aggregate of 1,523,088 shares of
    our common stock to one accredited investor upon our reincorporation in
    Delaware in consideration for 250 shares of common stock issued by our
    predecessor in Vermont. The 250 shares of the Vermont corporation were
    issued for an aggregate purchase price of $250.
 
        2.  On February 3, 1997, we issued an aggregate of 2,372,548 shares of
    our Series A preferred stock to six accredited investors for an aggregate
    purchase price of $6,049,997. Also on February 3, 1997, we issued to the
    same investors warrants to purchase an aggregate of 237,257 shares of our
    common stock at an exercise price of $6.00 per share and warrants to
    purchase an aggregate of 237,257 shares of our common stock at an exercise
    price of $12.00 per share.
 
                                      II-1

<PAGE>
        3.  On August 12, 1997, we issued an aggregate of 738,384 shares of our
    Series B preferred stock to six accredited investors for an aggregate
    purchase price of $2,953,536.
 
        4.  On September 24, 1997, we issued 1,000,000 shares of our Series C
    preferred stock to one accredited investor for a purchase price of
    $6,000,000.
 
        5.  On December 16, 1997, we issued an aggregate of 237,257 shares of
    our common stock upon the exercise of warrants originally issued on
    February 3, 1997 to the holders of the warrants. The aggregate exercise
    price paid by the holders of the warrants was $1,423,542.
 
        6.  On March 31, 1998, we issued warrants to purchase an aggregate of
    202,043 shares of our common stock with an exercise price of $15.00 per
    share.
 
        7.  On August 26, 1998, we issued an aggregate of 1,581,653 shares of
    our Series D preferred stock to seven accredited investors for an aggregate
    purchase price of $10,676,158.
 
        8.  On May 5, 2000 and June 8, 2000, we issued an aggregate of 2,933,335
    shares of our Series E preferred stock to ten accredited investors for an
    aggregate purchase price of $22,000,013.
 
   
        9.  At December 31, 2000, we have granted options to purchase an
    aggregate of 1,937,271 shares of our common stock, including options
    subsequently cancelled that then became available for new option grants, to
    directors, employees and consultants under our 1997 stock option plan. The
    exercise prices for such options range from $0.01 to $2.00 per share. At
    December 31, 2000, we have issued an aggregate of 397,117 shares of common
    stock upon the exercise of stock options under our 1997 stock option plan.
    
 
The offers, sales and issuances of these securities were deemed to be exempt
from registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, and/or Regulation D promulgated thereunder, or Rule 701
promulgated under Section 3(b) of the Securities Act as transactions by an
issuer not involving a public offering or transactions under compensatory
benefit plans and contracts relating to compensation as provided under such
Rule 701. The recipients of securities in each such transaction represented
their intention to acquire the securities for investment only and not with a
view to or for sale in connection with any distribution thereof and appropriate
legends were affixed to the share certificates and warrants issued in such
transactions. All recipients had adequate access, through employment or other
relationships, to information about us.
 

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
    (a) EXHIBITS
 
   

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                                    DESCRIPTION OF DOCUMENT
-------                                   -----------------------
<C>                     <S>
       1.1(1)           Form of Underwriting Agreement
       3.1*             Registrant's Amended and Restated Certificate of
                          Incorporation, as currently in effect
       3.2(2)*          Form of Registrant's Amended and Restated Certificate of
                          Incorporation, to be effective upon the closing of this
                          offering
       3.3*             Registrant's Restated Bylaws, as currently in effect
       3.4*             Form of Registrant's Amended and Restated Bylaws, to be
                          effective upon the closing of this offering
       4.1*             Form of common stock certificate of Registrant
       4.2*             Amended and Restated Stockholders Agreement, dated May 5,
                          2000, by and among the Registrant and the stockholders
                          named therein
       4.3*             Form of Warrant to Purchase Common Stock, dated February 3,
                          1997
</TABLE>

    
 
                                      II-2

<PAGE>
 
   

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                    DESCRIPTION OF DOCUMENT
-------                                   -----------------------
<C>                     <S>
       5.1(1)           Opinion of Cooley Godward LLP
      10.1*             Form of Indemnity Agreement for directors and officers
      10.2*             1997 Stock Option Plan and forms of agreement thereunder
      10.3*             2000 Equity Incentive Plan and forms of agreement thereunder
      10.4*             2000 Non-employee Directors' Stock Option Plan and forms of
                          agreement thereunder
      10.5*             2000 Employee Stock Purchase Plan and initial offering
                          thereunder
      10.6*             401(k) Plan
      10.7*             Employment Letter Agreement, dated December 21, 1998,
                          between the Registrant and Uli Hacksell, Ph.D.
      10.8*             Employment Letter Agreement, dated January 31, 1997, between
                          the Registrant and Mark R. Brann, Ph.D.
      10.9*             Employment Letter Agreement, dated March 4, 1998, between
                          the Registrant and Thomas H. Aasen
      10.10*            Promissory Note, dated May 11, 2000, by Uli Hacksell, Ph.D.
                          in favor of the Registrant
      10.11             Stock Pledge Agreement, dated May 11, 2000, from Uli
                          Hacksell, Ph.D. in favor of the Registrant
      10.12*            Employment Letter Agreement, dated April 17, 1998, between
                          the Registrant and Leonard R. Borrmann, Pharm.D.
      10.13*            Separation Agreement and General Release, dated September
                          20, 2000, between the Registrant and Leonard R. Borrmann,
                          Pharm.D.
      10.14*            Loan Letter Agreement, dated December 4, 1996, between the
                          Registrant and The Vaekstfonden (The Danish Fund for
                          Industrial Growth)
      10.15(3)*         Collaborative Research, Development and License Agreement,
                          dated September 24, 1997, by and among the Registrant,
                          Allergan, Inc. and Vision Pharmaceuticals L.P. (now
                          Allergan Sales, Inc.)
      10.16(3)*         Collaborative Research, Development and License Agreement,
                          dated July 26, 1999, by and among the Registrant and
                          Allergan, Inc., Allergan Pharmaceuticals (Ireland)
                          Limited, Inc. and Allergan Sales, Inc.
      10.17(3)*         Compound Discovery Collaboration Agreement, dated
                          December 18, 2000, between the Registrant and ArQule, Inc.
      10.18*            Assignment of Brann Intellectual Property Rights, dated
                          January 29, 1997, by Mark R. Brann in favor of the
                          Registrant
      10.19*            Standard Industrial/Commercial Single-Tenant Lease-Net,
                          dated August 15, 1997, between the Registrant and R.G.
                          Harris Co.
      21.1              List of Subsidiaries
      23.1              Consent of Independent Accountants
      23.2              Consent of Counsel (included in Exhibit 5.1)
      24.1*             Power of Attorney
</TABLE>

    
 
------------------------
 
   
*   Previously filed.
    
 
(1) To be filed by amendment.
 
(2) As proposed to be filed with the Secretary of State of the State of Delaware
    prior to the effectiveness of the offering.
 
(3) This exhibit has been filed separately with the Commission pursuant to an
    application for confidential treatment. The confidential portions of this
    exhibit have been omitted and are marked by an asterisk.
 
                                      II-3

<PAGE>
    (b) FINANCIAL STATEMENT SCHEDULES
 
    Schedules have been omitted because the information required to be set forth
therein is not applicable or is shown in the financial statements or notes
thereto.
 

ITEM 17. UNDERTAKINGS
 
    The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
 
    Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of ACADIA
pursuant to provisions described in Item 14 or otherwise, we have been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by us of expenses incurred or paid by a director, officer or
controlling person of ACADIA in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
 
    The undersigned Registrant hereby undertakes:
 
    (1) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
 
    (2) That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
 
    (3) For the purpose of determining any liability under the Securities Act,
each post effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
 
                                      II-4

<PAGE>

                                   SIGNATURES
 
   
    Pursuant to the Securities Act of 1933, the Registrant has duly caused this
Amendment No. 1 to registration statement on Form S-1 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of San Diego, State
of California, on this 5th day of February, 2001.
    
 

<TABLE>
<S>                                                    <C>  <C>
                                                       ACADIA PHARMACEUTICALS INC.
 
                                                       By:  /s/ ULI HACKSELL
                                                            -----------------------------------------
                                                            Uli Hacksell
                                                            Chief Executive Officer
</TABLE>

 
   
    Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to registration statement has been signed by the following
persons in the capacities and on the dates indicated.
    
 
   

<TABLE>
<CAPTION>
                  SIGNATURE                                   TITLE                        DATE
                  ---------                                   -----                        ----
<C>                                            <S>                                   <C>
              /s/ ULI HACKSELL
    ------------------------------------       Chief Executive Officer and Director  February 5, 2001
                Uli Hacksell                     (Principal executive officer)
 
                                               Vice President, Chief Financial
             /s/ THOMAS H. AASEN                 Officer, Treasurer and Secretary
    ------------------------------------         (Principal financial and            February 5, 2001
               Thomas H. Aasen                   accounting officer)
 
              /s/ MARK R. BRANN
    ------------------------------------       President, Chief Scientific Officer   February 5, 2001
                Mark R. Brann                    and Director
 
                      *
    ------------------------------------       Chairman of the Board                 February 5, 2001
              Leslie L. Iversen
 
                      *
    ------------------------------------       Director                              February 5, 2001
                Thomas Eklund
 
                      *
    ------------------------------------       Director                              February 5, 2001
               Arne J. Gillin
 
                      *
    ------------------------------------       Director                              February 5, 2001
               Carl L. Gordon
</TABLE>

    
 
                                      II-5

<PAGE>
 
   

<TABLE>
<CAPTION>
                  SIGNATURE                                   TITLE                        DATE
                  ---------                                   -----                        ----
<C>                                            <S>                                   <C>
                      *
    ------------------------------------       Director                              February 5, 2001
              Lester J. Kaplan
 
                      *
    ------------------------------------       Director                              February 5, 2001
           Povl Krogsgaard-Larsen
 
                      *
    ------------------------------------       Director                              February 5, 2001
              Torsten Rasmussen
</TABLE>

    
 
   

<TABLE>
<S>   <C>                                            <C>
*By:  /s/  ULI HACKSELL
      -------------------------------
      Uli Hacksell
      ATTORNEY IN FACT
</TABLE>

    
 
                                      II-6

<PAGE>

                                 EXHIBIT INDEX
 
   

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                    DESCRIPTION OF DOCUMENT
-------                                   -----------------------
<C>                     <S>
       1.1(1)           Form of Underwriting Agreement
 
       3.1*             Registrant's Amended and Restated Certificate of
                        Incorporation, as currently in effect
 
       3.2(2)*          Form of Registrant's Amended and Restated Certificate of
                        Incorporation, to be effective upon the closing of this
                        offering
 
       3.3*             Registrant's Restated Bylaws, as currently in effect
 
       3.4*             Form of Registrant's Amended and Restated Bylaws, to be
                        effective upon the closing of this offering
 
       4.1*             Form of common stock certificate of Registrant
 
       4.2*             Amended and Restated Stockholders Agreement, dated May 5,
                        2000, by and among the Registrant and the stockholders named
                        therein
 
       4.3*             Form of Warrant to Purchase Common Stock, dated February 3,
                        1997
 
       5.1(1)           Opinion of Cooley Godward LLP
 
      10.1*             Form of Indemnity Agreement for directors and officers
 
      10.2*             1997 Stock Option Plan and forms of agreement thereunder
 
      10.3*             2000 Equity Incentive Plan and forms of agreement thereunder
 
      10.4*             2000 Non-employee Directors' Stock Option Plan and forms of
                        agreement thereunder
 
      10.5*             2000 Employee Stock Purchase Plan and initial offering
                        thereunder
 
      10.6*             401(k) Plan
 
      10.7*             Employment Letter Agreement, dated December 21, 1998,
                        between the Registrant and Uli Hacksell, Ph.D.
 
      10.8*             Employment Letter Agreement, dated January 31, 1997, between
                        the Registrant and Mark R. Brann, Ph.D.
 
      10.9*             Employment Letter Agreement, dated March 4, 1998, between
                        the Registrant and Thomas H. Aasen
 
      10.10*            Promissory Note, dated May 11, 2000, by Uli Hacksell, Ph.D.
                        in favor of the Registrant
 
      10.11             Stock Pledge Agreement, dated May 11, 2000, from Uli
                        Hacksell, Ph.D. in favor of the Registrant
 
      10.12*            Employment Letter Agreement, dated April 17, 1998, between
                        the Registrant and Leonard R. Borrmann, Pharm.D.
 
      10.13*            Separation Agreement and General Release, dated September
                        20, 2000, between the Registrant and Leonard R. Borrmann,
                        Pharm.D.
 
      10.14*            Loan Letter Agreement, dated December 4, 1996, between the
                        Registrant and The Vaekstfonden (The Danish Fund for
                        Industrial Growth)
 
      10.15(3)*         Collaborative Research, Development and License Agreement,
                        dated September 24, 1997, by and among the Registrant,
                        Allergan, Inc. and Vision Pharmaceuticals L.P. (now Allergan
                        Sales, Inc.)
</TABLE>

    
 

<PAGE>
 
   

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                    DESCRIPTION OF DOCUMENT
-------                                   -----------------------
<C>                     <S>
      10.16(3)*         Collaborative Research, Development and License Agreement,
                        dated July 26, 1999, by and among the Registrant and
                        Allergan, Inc., Allergan Pharmaceuticals (Ireland) Limited,
                        Inc. and Allergan Sales, Inc.
 
      10.17(3)*         Compound Discovery Collaboration Agreement, dated
                        December 18, 2000, between the Registrant and ArQule, Inc.
 
      10.18*            Assignment of Brann Intellectual Property Rights, dated
                        January 29, 1997, by Mark R. Brann in favor of the
                        Registrant
 
      10.19*            Standard Industrial/Commercial Single-Tenant Lease-Net,
                        dated August 15, 1997, between the Registrant and R.G.
                        Harris Co.
 
      21.1              List of Subsidiaries
 
      23.1              Consent of Independent Accountants
 
      23.2              Consent of Counsel (included in Exhibit 5.1)
 
      24.1*             Power of Attorney
</TABLE>

    
 
------------------------
 
   
*   Previously filed.
    
 
(1) To be filed by amendment.
 
(2) As proposed to be filed with the Secretary of State of the State of Delaware
    prior to the effectiveness of the offering.
 
(3) This exhibit has been filed separately with the Commission pursuant to an
    application for confidential treatment. The confidential portions of this
    exhibit have been omitted and are marked by an asterisk.





<PAGE>

                                                                   EXHIBIT 10.11


                             STOCK PLEDGE AGREEMENT


         THIS STOCK PLEDGE AGREEMENT ("PLEDGE AGREEMENT") is made by ULI
HACKSELL, an individual with a residence at 10819 Bonjon Lane, San Diego,
California 92131 ("PLEDGOR"), in favor of ACADIA PHARMACEUTICALS INC., a
Delaware corporation with its principal place of business at 3911 Sorrento
Valley Boulevard, San Diego, California ("PLEDGEE").

         WHEREAS, Pledgor has concurrently herewith executed that certain
Secured Promissory Note (the "NOTE") in favor of Pledgee in the amount of One
Hundred Thousand Dollars ($100,000); and

         WHEREAS, Pledgee is willing to accept the Note from Pledgor, but only
upon the condition, among others, that Pledgor shall have executed and delivered
to Pledgee this Pledge Agreement and the Pledged Collateral (as defined below);

         NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Pledgor hereby agrees as
follows:

         1.       As security for the full, prompt and complete payment and
performance when due (whether by stated maturity, by acceleration or otherwise)
of all indebtedness of Pledgor to Pledgee created under the Note,
 together with,
without limitation, the prompt payment of all expenses, including, without
limitation, reasonable attorneys' fees and legal expenses, incidental to the
collection of the foregoing and the enforcement or protection of Pledgee's lien
in and to the collateral pledged hereunder (all such indebtedness being the
"LIABILITIES"), Pledgor hereby pledges to Pledgee, and grants to Pledgee, a
first priority security interest in all of the following (collectively, the
"PLEDGED COLLATERAL"):

                  (a)      all shares of the capital stock of Pledgee owned by
Pledgor pursuant to Pledgor's exercise or rights under any stock option plan or
otherwise (the "PLEDGED SHARES"), and all dividends, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Shares;
and

                  (b)      all voting trust certificates held by Pledgor
evidencing the right to vote any Pledged Shares subject to any voting trust.

         Immediately following acquisition of the Pledged Shares, Pledgor agrees
to deliver to Pledgee the stock certificates representing said Pledged Shares
along with an executed but otherwise uncompleted Assignment Separate From
Certificate in the form attached hereto as Exhibit A.

         The term "indebtedness" is used herein in its most comprehensive sense
and includes any and all advances, debts, obligations and liabilities
heretofore, now or hereafter made, incurred or created, whether voluntary, or
involuntary, and whether due or not due, absolute or contingent, 


                                       1.

<PAGE>


liquidated or unliquidated, determined or undetermined, and whether recovery
upon such indebtedness may be or hereafter becomes unenforceable.

         2.       Pledgor hereby represents and warrants to Pledgee that as of
the date that the stock certificates representing the Pledged Shares are
delivered by Pledgor to Pledgee:

                  (a)      Pledgor shall be the sole holder of record and the
sole beneficial owner of the Pledged Collateral, free and clear of any lien
thereon or affecting title thereto, except for the lien created by this Pledge
Agreement.

                  (b)      None of the Pledged Shares will have been transferred
in violation of securities registration, securities disclosure or similar laws
of any jurisdiction to which such transfer may be subject with respect to which
such transfer could have a material adverse effect.

                  (c)      No consent, approval, authorization or other order of
any person and no consent or authorization of any governmental authority or
regulatory body is required to be made or obtained by Pledgor either (i) for the
pledge by Pledgor of the Pledged Collateral pursuant to this Pledge Agreement or
for the execution, delivery, or performance of this Pledge Agreement by Pledgor;
or (ii) for the exercise by Pledgee of the voting or other rights provided for
in this Pledge Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Pledge Agreement, except as may be required in connection with
such disposition by laws affecting the offering and sale of securities
generally.

                  (d)      The pledge, grant of a security interest in, and
delivery of the Pledged Collateral pursuant to this Pledge Agreement, will have
created a valid first priority lien on and in the collateral pledged by Pledgor,
and the proceeds thereof, securing the payment of the Liabilities.

                  (e)      This Pledge Agreement will have been duly executed
and delivered by Pledgor and will constitute a legal, valid, and binding
obligation of Pledgor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or other similar laws
affecting the rights of creditors generally or by the application of general
equity principles.

         Pledgor covenants, warrants, and represents to Pledgee that all
representations and warranties contained in this Pledge Agreement shall be true
at the time the stock certificates representing the Pledged Shares are delivered
by Pledgor to Pledgee and shall continue to be true until the Liabilities have
been paid or otherwise satisfied in full.

         3.       At time, without notice, and at the expense of Pledgor,
Pledgee in its name or in the name of its nominee or of Pledgor may, but shall
not be obligated to: (1) collect by legal proceedings or otherwise all dividends
(except cash dividends other than liquidating dividends), interest, principal
payments and other sums now or hereafter payable upon or on account of said
Pledged Collateral; (2) enter into any extension, reorganization, deposit,
merger or consolidation agreement, or any agreement in any way relating to or
affecting the Pledged Collateral, and in connection therewith may deposit or
surrender control of such Pledged Collateral thereunder, accept other property
in exchange for such Pledged 


                                       2.

<PAGE>


Collateral and do and perform such acts and things as it may deem proper, and
any money or property received in exchange for such Pledged Collateral shall be
applied to the indebtedness or thereafter held by it pursuant to the provisions
hereof; (3) insure, process and preserve the Pledged Collateral; (4) cause the
Pledged Collateral to be transferred to its name or to the name of its nominee;
and (5) exercise as to such Pledged Collateral all the rights, powers and
remedies of an owner, except that so long as no Event of Default (as defined in
the Note), exists under the Note and no default exists hereunder Pledgor shall
retain all voting rights as to the Pledged Shares.

         4.       Pledgor agrees to pay prior to delinquency all taxes, charges,
liens and assessments against the Pledged Collateral, and upon the failure of
Pledgor to do so, Pledgee at its option may pay any of them and shall be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same.

         5.       Pledgor agrees that Pledgor:

                  (a)      will not (1) sell, transfer or otherwise dispose of,
or grant any option or warrant with respect to, any of the Pledged Collateral
(or any part thereof or interest therein) except with the prior written consent
of Pledgee, or (2) create or permit to exist any lien or encumbrance upon or
with respect to any of the Pledged Collateral. If any Pledged Collateral, or any
part thereof, is sold, transferred or otherwise disposed of in violation of this
Section 5, the security interest of Pledgee shall continue in the Pledged
Collateral notwithstanding such sale, transfer or other disposition, and the
Pledgor will deliver any proceeds thereof to the Pledgee to be held as Pledged
Collateral hereunder.

                  (b)      shall, at Pledgor's own expense, promptly execute,
acknowledge, and deliver all such instruments and take all such actions as
Pledgee from time to time may reasonably request in order to ensure to Pledgee
the benefits of the lien in and to the Pledged Collateral intended to be created
by this Pledge Agreement.

                  (c)      shall maintain, preserve and defend the title to the
Pledged Collateral and the lien of Pledgee thereon against the claim of any
other person.

         6.       At the option of Pledgee and without necessity of demand or
notice, all or any part of the indebtedness of Pledgor shall immediately become
due and payable irrespective of any agreed maturity, upon the happening of any
of the following events: (1) failure to keep or perform any of the terms or
provisions of this Pledge Agreement; (2) the occurrence of an Event of Default
under the Note; or (3) the levy of any attachment, execution or other process
against the Pledged Collateral.

         7.       All advances, charges, costs and expenses, including
reasonable attorneys' fees, incurred or paid by Pledgee in exercising any right,
power or remedy conferred by this agreement, or in the enforcement thereof,
shall become a part of the indebtedness secured hereunder and shall be paid to
Pledgee by the undersigned immediately and without demand.

         8.       In the event of the nonpayment of any indebtedness when due,
whether by acceleration or otherwise, or upon the happening of any of the events
specified in paragraph 6, Pledgee may then, or at any time thereafter, at its
election, apply, set off, collect or sell in one or more sales, or take such
steps as may be necessary to liquidate and reduce to cash in the hands of
Pledgee in whole or in part, with or without any previous demands or demand of
performance or 


                                       3.

<PAGE>


notice or advertisement, the whole or any part of the Pledged Collateral in such
order as Pledgee may elect, and any such sale may be made either at public or
private sale at its place of business or elsewhere, or at any broker's board or
securities exchange, either for cash or upon credit or for future delivery;
provided, however, that if such disposition is at private sale, then the
purchase price of the Pledged Collateral shall be equal to the public market
price then in effect, or, if at the time of sale no public market for the
Pledged Collateral exists, then, in recognition of the fact that the sale of the
Pledged Collateral would have to be registered under the Securities Act of 1933
and that the expenses of such registration are commercially unreasonable for the
type and amount of collateral pledged hereunder, Pledgee and Pledgor hereby
agree that such private sale shall be at a purchase price mutually agreed to by
Pledgee and Pledgor or, if the parties cannot agree upon a purchase price, then
at a purchase price established by a majority of three independent appraisers
knowledgeable of the value of such collateral, one named by Pledgor within 10
days after written request by the Pledgee to do so, one named by Pledgee within
such 10 day period, and the third named by the two appraisers so selected, with
the appraisal to be rendered by such body within 30 days after the appointment
of the third appraiser. The cost of such appraisal, including all appraisers'
fees, shall be charged against the proceeds of sale as an expense of such sale.
Pledgee may be the purchaser of any or all Pledged Collateral so sold and hold
the same thereafter in its own right free from any claim of Pledgor or right of
redemption. Demands of performance, notices of sale, advertisements and presence
of property at sale are hereby waived, and Pledgee is hereby authorized to sell
hereunder any evidence of debt pledged to it. Any sale hereunder may be
conducted by any officer or agent of Pledgee.

         9.       The proceeds of the sale of any of the Pledged Collateral and
all sums received or collected by Pledgee from or on account of such Pledged
Collateral shall be applied by Pledgee to the payment of expenses incurred or
paid by Pledgee in connection with any sale, transfer or delivery of the Pledged
Collateral, to the payment of any other costs, charges, attorneys' fees or
expenses mentioned herein, and to the payment of the indebtedness or any part
hereof, all in such order and manner as Pledgee in its discretion may determine.
Pledgee shall then pay any balance to Pledgor.

         10.      Upon the transfer of all or any part of the indebtedness
Pledgee may transfer all or any part of the Pledged Collateral and shall be
fully discharged thereafter from all liability and responsibility with respect
to such Pledged Collateral so transferred, and the transferee shall be vested
with all the rights and powers of Pledgee hereunder with respect to such Pledged
Collateral so transferred; but with respect to any Pledged Collateral not so
transferred Pledgee shall retain all rights and powers hereby given.

         11.      Until all indebtedness shall have been paid in full the power
of sale and all other rights, powers and remedies granted to Pledgee hereunder
shall continue to exist and may be exercised by Pledgee at any time and from
time to time irrespective of the fact that the indebtedness or any part thereof
may have become barred by any statute of limitations, or that the personal
liability of Pledgor may have ceased.

         12.      Pledgee may at any time deliver the Pledged Collateral or any
part thereof to Pledgor and the receipt thereof by Pledgor shall be a complete
and full acquittance for the Pledged Collateral so delivered, and Pledgee shall
thereafter be discharged from any liability or responsibility therefor.


                                       4.

<PAGE>


         13.      The rights, powers and remedies given to Pledgee by this
Pledge Agreement shall be in addition to all rights, powers and remedies given
to Pledgee by virtue of any statute or rule of law. Any forbearance, failure or
delay by Pledgee in exercising any right, power or remedy hereunder shall not be
deemed to be a waiver of such right, power or remedy, and any single or partial
exercise of any right, power or remedy hereunder shall not preclude the further
exercise thereof, and every right, power and remedy of Pledgee shall continue in
full force and effect until such right, power or remedy is specifically waived
by an instrument in writing executed by Pledgee.

         14.      If any provision of this Pledge Agreement is held to be
unenforceable for any reason, it shall be adjusted, if possible, rather than
voided in order to achieve the intent of the parties to the extent possible. In
any event, all other provisions of this Pledge Agreement shall be deemed valid
and enforceable to the full extent possible.

         15.      This Pledge Agreement shall be governed by, and construed in
accordance with, the laws of the State of California as applied to contracts
made and performed entirely within the State of California by residents of such
state.

Dated:  May 11, 2000                  PLEDGOR


                                      /s/  ULI HACKSELL        
                                      -----------------
                                      ULI HACKSELL


                                       5.



<PAGE>


                                    EXHIBIT A

                      ASSIGNMENT SEPARATE FROM CERTIFICATE


         ULI HACKSELL hereby sells, assigns and transfers unto
________________________________ a total of ________________ (______) shares of
the ________________________________ stock of ACADIA PHARMACEUTICALS INC.,
standing in the undersigned's name on the books of said corporation represented
by Certificate Nos. _____________ delivered herewith and does hereby irrevocably
constitute and appoint ________________________________ to transfer said stock
on the books of said corporation with full power of substitution.


Dated:  ____________                    By:  /s/  ULI HACKSELL 
                                             -----------------
                                             ULI HACKSELL




<PAGE>

                                                                  Exhibit 21.1

                           LIST OF SUBSIDIARIES



<TABLE>
<CAPTION>

NAME                                   JURISDICTION OF INCORPORATION
----                                   -----------------------------
<S>                                    <C>
ACADIA Pharmaceuticals A/S             Denmark

ACADIA PharmacoGenomics Inc.           Delaware

</TABLE>








<PAGE>


                                                                    Exhibit 23.1


                         CONSENT OF INDEPENDENT ACCOUNTS



We hereby consent to the use in this Registration Statement on Form S-1 of 
our report dated January 22, 2001 relating to the financial statements of 
ACADIA Pharmaceuticals Inc., which appear in such Registration Statement. We 
also consent to the references to us under the headings "Experts" in such 
Registration Statement.

/s/ PricewaterhouseCoopers LLP

San Diego, California
February 1, 2001

                                      1