U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB

[x] QUARTERLY REPORT PURSUANT SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarter ended March 31, 1997.

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from _________to __________

Commission File No. 0-26422
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ANSAN PHARMACEUTICALS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)

DELAWARE 94-3171943
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)

400 OYSTER POINT BLVD. SUITE 435
SOUTH SAN FRANCISCO, CALIFORNIA 94080
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(Address of Principal Executive Offices)

(415) 635-0200
--------------
(Issuer's Telephone Number, Including Area Code)

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 5, 1997: 2,851,954 shares of Common Stock outstanding, $0.001
par value.

Transitional Small Business Disclosure Format Yes No X
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INDEX TO FORM 10-QSB

PAGE

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Financial Statements:

Condensed Balance Sheets as of March 31, 1997 and
December 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . 3

Condensed Statements of Operations for the Three Months ended
March 31, 1997 and 1996 and period from
incorporation (November 6, 1992) to March 31, 1997 . . . . . . 4

Condensed Statements of Cash Flows for the Three
Months ended March 31, 1997 and 1996 and period from
incorporation (November 6, 1992) to March 31, 1997 . . . . . . 5

Notes to Condensed Financial Statements . . . . . . . . . . . . . 6

Item 2. Management's Discussion and Analysis
or Plan of Operation . . . . . . . . . . . . . . . . . . . . . 8

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 11

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS

ANSAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS

March 31, December 31,
1997 1996
------------ -------------
(Unaudited) (Note A)

Assets
Current assets:
Cash and cash equivalents $ 1,188,816 $ 245,778
Short-term investments 1,000,000 1,500,000
Prepaid expenses and other current assets 59,758 83,760
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Total current assets 2,248,574 1,829,538
Furniture and equipment, net 96,603 93,936
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$ 2,345,177 $ 1,923,474
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 181,375 $ 91,041
Payable to Titan Pharmaceuticals, Inc. 136,915 117,881
Accrued sponsored research expense 25,620 36,330
Accrued legal expense 7,100 26,327
Other accrued liabilities 13,547 62,457
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Total current liabilities 364,557 334,036

Noncurrent debenture payable to Titan Pharmaceuticals, Inc. 1,000,000 --

Stockholders' equity
Common stock, at amounts paid in, $0.001 par value;
20,000,000 shares authorized, 2,849,887 and 2,845,108
shares issued and outstanding at March 31, 1997 and
December 31, 1996, respectively 10,699,996 10,850,017
Deferred compensation -- (180,561)
Deficit accumulated during the development stage (9,719,376) (9,080,018)
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Total stockholders' equity 980,620 1,589,438
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$ 2,345,177 $ 1,923,474
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Note A: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

SEE NOTES TO CONDENSED FINANCIAL STATEMENTS.

ANSAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)

Period from
Incorporation
Three Months Ended (November 6,
March 31, 1992) to
------------------------- March 31,
1997 1996 1997
------------------------- --------------

COSTS AND EXPENSES:

Research and development $ 382,945 $ 257,362 $ 5,966,798
Sponsored research and development
and license fees- stockholder -- -- 396,689
General and administrative 271,779 199,581 3,185,976
----------- ---------- -------------
Loss from operations (654,724) (456,943) (9,549,463)

Other income/(expenses)
Interest income 18,507 49,008 268,377
Interest expense (3,141) -- (438,290)
----------- ---------- -------------

Net loss $ (639,358) $ (407,935) $(9,719,376)
----------- ---------- -------------
----------- ---------- -------------
Net loss per share $ (0.26) $ (0.17)
----------- ----------
----------- ----------
Shares used in computation 2,483,904 2,404,404
----------- ----------
----------- ----------

SEE NOTES TO CONDENSED FINANCIAL STATEMENTS.

ANSAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

PERIOD FROM
INCORPORATION
(NOVEMBER 6,
THREE MONTHS ENDED 1992) TO
MARCH 31, MARCH 31,
1997 1996 1997
------------- ------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (639,358) $(407,935) $(9,719,376)
Adjustments to reconcile net loss to net cash used
by operating activities
Depreciation expense 8,096 5,288 32,079
Amortization of debt discount -- -- 400,000
Write off deferred compensation 26,718 26,718
Amortization of deferred compensation -- 13,890 97,223
Forgiveness of stockholder receivable -- -- 205
Issuance of common stock in exchange for consulting
services -- -- 19,984
Grant of common stock to employee -- -- 155,000
Changes in operating assets and liabilities:
Prepaid expenses and sponsored research 24,002 32,519 (59,758)
Accounts payable 90,334 25,001 181,375
Accrued legal (19,227) -- 17,103
Accrued sponsored research (10,710) -- 15,617
Other accrued liabilities (48,910) 13,767 13,547
------------- ------------- --------------
Net cash used in operating activities (569,055) (317,470) (8,820,283)
------------- ------------- --------------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture and equipment (10,763) (64,343) (128,682)
Purchases of short-term investments (1,200,000) (53,168) (9,950,000)
Proceeds from sale of short-term investments 1,700,000 500,000 8,950,000
------------- ------------- --------------
Net cash provided by (used in) investing activities 489,237 382,489 (1,128,682)
------------- ------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of series A preferred stock -- -- 992,592
Proceeds from issuance of common stock, net 3,822 -- 5,976,058
Proceeds from related party notes -- -- 220,000
Proceeds from issuance of debenture to Titan
Pharmaceuticals, Inc. 1,000,000 -- 1,000,000
Payment on note from related party -- -- (190,000)
Issuance of notes payable -- -- 1,025,000
Repayment of note payable -- -- (1,425,000)
Issuance of warrants to purchase common stock -- -- 400,000
Proceeds from stockholder receivable -- -- 1,900
Payable to Titan Pharmaceuticals, Inc. 19,034 8,557 3,137,231
------------- ------------- --------------
Net cash provided by financing activities 1,022,856 8,557 11,137,781
------------- ------------- --------------
Net increase in cash and cash equivalents 943,038 73,576 1,188,816
Cash and cash equivalents, beginning of period 245,778 45,202 --
------------- ------------- --------------
Cash and cash equivalents, end of period $ 1,188,816 $ 118,778 $ 1,188,816
------------- ------------- --------------
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SUPPLEMENTAL CASH FLOW DISCLOSURE AND NONCASH
FINANCING ACTIVITIES
Forgiveness of note payable to related party $ -- $ -- $ 30,000
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Interest paid on related party notes $ -- $ -- $ 4,409
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Conversion of payable to parent into Series A
Preferred Stock $ -- $ -- $ 1,449,064
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Interest paid on bridge notes $ -- $ -- $ 29,694
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Conversion of payable to parent into Common Stock $ -- $ -- $ 1,551,252
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SEE NOTES TO CONDENSED FINANCIAL STATEMENTS.

1. Organization and Summary of Significant Accounting Policies

THE COMPANY

Ansan Pharmaceuticals, Inc. ("Ansan" or the "Company") was incorporated
in the State of Delaware on November 6, 1992 to engage in the development of
analogs of butyric acid for the treatment of cancer, blood disorders and
other serious diseases. The Company is in the development stage.

RELATIONSHIP WITH TITAN PHARMACEUTICALS, INC

Titan Pharmaceuticals, Inc. ("Titan"), a biopharmaceutical company
engaged, through the operations of its subsidiaries and affiliates, in the
development of new proprietary therapeutic products for use in the fields of
cancer, immunology, viral diseases, and disorders of the central nervous
system, was the Company's parent until the Company's initial public offering
(the "IPO") in August 1995. Subsequent to the IPO, Titan's ownership
interest was reduced to approximately 43%.

In March 1997, Ansan and Titan entered into an agreement for financing
pursuant to which Titan advanced Ansan $1,000,000 in return for a debenture
(the "Debenture") which is convertible at any time prior to June 21, 1997
into 333,333 shares of common stock. The Debenture bears interest at prime
plus 2% and is due in April 1998. In connection with the issuance of the
Debenture, Ansan granted Titan an option (the "First Option") to acquire an
additional 333,333 shares of Ansan common stock for an aggregate purchase
price of $1,000,000. The First Option expires on June 21, 1997.

In the event the Debenture is converted to equity, Ansan will grant
Titan two additional options (respectively, the "Second Option" and the
"Third Option"). The Second Option will be exercisable for two years from
the date of grant to purchase up to 1,630,000 shares of Ansan common stock at
an exercise price of $3.75 per share. The Third Option will be exercisable
through August 8, 2000 to purchase up to 500,000 shares of Ansan common stock
at an exercise price of $6.50 per share. Titan will be obligated to exercise
the Second Option for the purchase of specified numbers of shares in the
event Titan's outstanding Class A Warrants are exercised, provided Ansan has
not completed public or private equity financings resulting in specified
gross proceeds prior to the date such a purchase obligation arises.

The Company contracts with Titan for limited financial and
administrative services. Titan has previously supplied working capital
financing to the Company and may in the future provide such financing. As
part of its affiliation with Titan, the Company and Titan have a number of
members in common of their respective boards of directors.

BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principals for
interim financial information and with the instructions to form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do

not include all of the information and footnotes required by generally
accepted accounting principals for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered for fair presentation have been included. Operating
results for the three months ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's 1996 Annual Report
on Form 10-KSB.

The Company's activities since incorporation have consisted primarily of
conducting research and development, performing business and financial
planning and raising capital. Accordingly, the Company is considered to be
in the development stage and expects to incur increasing losses and require
additional financial resources to achieve commercialization of its products.
The Company also depends on third parties to conduct certain research on the
Company's behalf through various research arrangements. All of the Company's
current products under development are the subject of license agreements that
may require the payment of future royalties.

NET LOSS PER SHARE

Net loss per share for the three months ended March 31, 1997 and 1996 is
computed using the weighted average number of common shares outstanding,
reduced by the number of shares held in escrow (see Release of Escrowed
Shares and Options below). Common equivalent shares are excluded from the
calculation as their effect is antidilutive.

In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings Per Share", which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per
share, the dilutive effect of stock options will be excluded. The impact is
not expected to result in a change in primary earnings per share for the
quarters ended March 31, 1997 and March 31, 1996 as the Company incurred net
losses in those periods and, accordingly, the calculation of earnings per
share for those periods excluded stock options as their effect was
antidilutive.

RELEASE OF ESCROWED SHARES AND OPTIONS

In connection with the IPO, certain stockholders of the Company placed
an aggregate of 365,983 shares of Common Stock (the "Escrow Shares"), and the
current holders of certain options which are exercisable at less than the
initial public offering price of $5.00 placed options to purchase 34,017
shares (the "Escrow Options"), into escrow pending the Company's attainment
of certain revenue or share price goals. The Securities and Exchange
Commission has taken the position with respect to the release of securities
from escrow that in the event any of the Escrow Shares or Escrow Options are
released from escrow to directors, officers, employees or consultants of the
Company, the release will be treated, for financial reporting purposes, as a
compensation expense to the Company. Accordingly, the Company will, in the
event of the release of the Escrow Shares and Escrow Options, recognize
during the period in which the earnings or market price targets are met what
could be a substantial one-time charge which would substantially increase the
Company's loss or reduce or eliminate earnings, if any, at such time. The
amount of compensation expense recognized by the Company will not affect the
Company's total stockholders' equity.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

This Form 10-QSB contains forward-looking statements. These
forward-looking statements are subject to risks and uncertainties which may
cause actual results to differ materially from stated expectations. These
risks and uncertainties include but are not limited to: timeliness of
completion, if at all, of IND filings; FDA approval of IND's if filed;
timeliness of commencement, if ever, of clinical trials; timeliness of
completion, if ever, of clinical trials; changing requirements for regulatory
approval; technological uncertainties; the impact of competitive products and
pricing; future availability of capital; uncertainties arising from patents;
and a number of other risks, including those described above, those set forth
in the Company's 1996 annual report on form 10-KSB and other reports filed
with the Securities and Exchange Commission; and those which may not be
identifiable as yet.

RESULTS OF OPERATIONS

The Company is in the development stage. Since its inception in
November 1992, the Company's efforts have been principally devoted to
research and development, securing patent protection and raising capital.
From inception through March 31, 1997, the Company has sustained cumulative
losses of approximately $9,719,000. These losses have resulted from
expenditures in connection with research and development and general and
administrative activities, including legal and professional activities.

Through March 31, 1997, research and development expenses since
inception have been approximately $6,363,000 and general and administrative
expenses since inception have been approximately $3,186,000. Research and
development expenses for the three months ended March 31, 1997 (the "1997
quarter") were approximately $383,000 compared with $257,000 for the three
months ended March 31, 1996 (the "1996 quarter"), an increase of 49%. The
increase is due to expenditures associated with the development of Ansan's
newly acquired drug, Apafant, and the establishment of new development
initiative for AN10 topical. Such expenditures include, but are not limited
to, formulation development, chemistry, manufacturing and controls,
pharmacology, and toxicology.

General and administrative expenses for the 1997 quarter were
approximately $272,000 compared with approximately $200,000 for the 1996
quarter, a increase of 36%. The increase is due to additional overhead needed
to support the Company's additional development programs.

Interest income was approximately $19,000 during the 1997 quarter as
compared to approximately $49,000 during the 1996 quarter. The decrease is
the result of the Company having less capital available for investment during
the 1997 Quarter.

The Company expects to continue to incur substantial research and
development costs in the future due to ongoing and new research and
development programs, manufacturing of

products for use in clinical trials, patent and regulatory activities, and
preclinical and clinical testing of the Company's products. In May of 1996,
the Company signed a licensing agreement with Boehringer Ingelheim GmbH to
acquire the rights in the United States and the European Union to develop a
new intravenous formulation of the drug Apafant for all clinical indications.
The Company expects to incur substantial research and development costs
related to this acquisition. The Company also expects that general and
administrative costs necessary to support clinical trials, research and
development, manufacturing and the creation of a marketing and sales
organization, if warranted, will increase in the future. Accordingly, the
Company expects to incur increasing operating losses for the foreseeable
future. There can be no assurance that the Company will ever achieve
profitable operations.

LIQUIDITY AND CAPITAL RESOURCES

In August and September 1995, the Company completed an IPO which
resulted in net proceeds to the Company, after deduction of underwriting
discounts and commissions and other expenses of the IPO, of approximately
$5,950,000. As of March 31, 1997, the Company had working capital of
approximately $1,884,000.

Titan is a party to a master capital equipment lease, and the Company
and three other majority-owned subsidiaries of Titan have entered into a
sublease and assignment with Titan under such lease for which the Company is
jointly and severally liable. At March 31, 1997, the amount outstanding
under the equipment lease was $684,644 with current monthly payments of
$30,459.

The Company believes that it has the necessary capital to sustain
planned operations through the March 1998. In the event that the Company's
internal estimates relating to its planned expenditures prove materially
inaccurate, the Company may be required to reallocate funds among its planned
activities or to curtail certain planned expenditures. In any event, the
Company anticipates that it will require substantial additional financing
after such time in order to continue its research and development
capabilities, fund operating expenses, pursue regulatory approval, and build
production, sales, and marketing activities, as necessary. There can be no
assurance as to the availability or terms of any additional financing, when
and if needed. In the event that the Company fails to raise any funds it
requires, it may be necessary for the Company to curtail its activities
significantly or to cease operations altogether.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

10.12 Financing agreement between the Registrant and Titan
Pharmaceuticals, Inc. dated March 21, 1997

11.1 Statement of Computation of Net Loss Per Share

(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
March 31, 1997.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunder duly authorized.

ANSAN PHARMACEUTICALS, INC.

May 5, 1997 By: /s/ Vaughan H.J. Shalson
------------------------------
Vaughan H.J. Shalson
President and Chief Executive Officer
(Principal Executive Officer and Principal
Financial Officer)