SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A
Amendment No. 1

(Mark One)

[X]	Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2001
or
[   ]	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from        to

Commission File Number 0-24424

CIMA LABS INC.

(Exact name of registrant as specified in its charter)

Delaware	41-1569769
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
10000 Valley View Road, Eden Prairie,	(952) 947-8700
MN 55344-9361	(Registrant’s telephone number, including area code)
(Address of principal executive offices and zip code)

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [   ]

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

Aggregate market value of common stock held by non-affiliates of Registrant, based upon the last sale price of the Common Stock reported on the Nasdaq National Market tier of The Nasdaq Stock Market on March 21, 2002 was $277,566,789. Common stock outstanding at March 21, 2002 was 14,226,154 shares.

Documents Incorporated by Reference

Portions of the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the Registrant’s Annual Meeting of Stockholders to be held on June 5, 2002 are incorporated by reference in Part III, Items 10, 11, 12 and 13.

TABLE OF CONTENTS

	ITEM 1. BUSINESS
	ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS
EX-10.25 Master Development License & Supply Agmnt
EX-99.1 Certification of Chief Executive Officer
EX-99.2 Certification of Chief Financial Officer

Explanatory Note:

This Amendment No. 1 on Form 10-K/A is being filed to amend two paragraphs of the business section in Item 1 of Part I of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, filed on March 28, 2002 (the “Original 10-K”) and to amend Item 14(a)(3) of Part IV and Exhibit 10.25 of the Original 10-K in response to comments that we received from the Securities and Exchange Commission. The first full paragraph on page 7 of the Original 10-K which begins with “Named pharmaceutical companies...” and the last paragraph on page 10 of the Original 10-K immediately following the heading “Unnamed Pharmaceutical Company” have both been revised to disclose additional information with respect to the aggregate fees that we may receive under our development, license and supply agreement with the unnamed pharmaceutical company. This Amendment No. 1 also updates Item 14(a)(3) and revises Exhibit 10.25 to disclose additional provisions for which we had originally requested confidential treatment. In addition, we have included the certifications of the chief executive officer and chief financial officer required by Section 906 of the Sarbanes-Oxley Act as Exhibits 99.1 and 99.2 and have included the certifications of such officers pursuant to Section 302 of the Sarbanes-Oxley Act. Other than these amendments, Item 1 and Item 14 remain in the same form as initially filed. This report continues to speak as of the date of the Original 10-K, and we have not updated the disclosure in this report to speak as of a later date.

Item 1 of Part I of the Original 10-K is amended in its entirety as follows:

ITEM 1. BUSINESS

Company Overview

     We were incorporated in Delaware in 1986. Our executive offices are located at 10000 Valley View Road, Eden Prairie, Minnesota 55344-9361. Our telephone number is (952) 947-8700 and our web site is www.cimalabs.com. The information on our website is not incorporated into and is not intended to be a part of this report. Unless the context otherwise indicates, all references to the “Registrant,” the “Company,” or “CIMA” in this Form 10-K relate to CIMA LABS INC.

     All other trademarks used in this report are the property of their respective owners. We have registered “CIMA®,” “CIMA LABS INC.®,” “OraSolv®,” “OraVescent®,” “DuraSolv®” and “PakSolv®” as trademarks with the U.S. Patent and Trademark Office. We also use the trademarks “OraSolv®SR/CR,” “OraVescent®SL/BL” and “OraVescent®SS.” “Triaminic®” and “Softchews®” are trademarks of Novartis. “Zomig®,” “Zomig-ZMT®” and “Rapimelt™” are trademarks of AstraZeneca. “Remeron®” and “SolTab™” are trademarks of Organon. “Tempra®” is a registered trademark of a Canadian affiliate of Bristol-Myers Squibb. “FirsTabs™” is a trademark of Bristol-Myers Squibb. “NuLev™” is a trademark of Schwarz Pharma. “Actiq®” is a registered trademark of Anesta Corporation. “Claritin®” and “Reditabs®” are registered trademarks of Schering Corporation. “Maxalt-MLT®” is a registered trademark of Merck & Co., Inc. “Zydis®” is a registered trademark of Cardinal Health, Inc. “FlashDose®” is a registered trademark of Biovail Corporation. “WOWTab®” is a registered trademark of Yamanouchi Pharma Technologies, Inc. “Flashtab®” is a registered trademark of Ethypharm.

     We develop and manufacture fast dissolve and enhanced-absorption oral drug delivery systems. OraSolv and DuraSolv, our proprietary fast dissolve technologies, are oral dosage forms that dissolve quickly in the mouth without chewing or the need for water. We currently manufacture five pharmaceutical brands utilizing our DuraSolv and OraSolv fast dissolve technologies: three prescription brands and two over-the counter brands. These brands include Triaminic Softchews for Novartis, Tempra FirsTabs for Bristol-Myers Squibb, AstraZeneca’s Zomig-ZMT and its equivalent for the European market, Zomig Rapimelt, Remeron SolTab for Organon and NuLev for Schwarz Pharma. The U.S. Food and Drug Administration, or FDA is currently reviewing Wyeth’s (formerly known as American Home Products) regulatory submission for a product we developed, an orally disintegrating dosage form of loratadine, which is expected to be marketed as a generic alternative to Claritin Reditabs.

     We believe that the attributes of our OraSolv and DuraSolv fast dissolve technologies may enable consumers in certain age groups or with limited ability to swallow conventional tablets to receive medication in an oral dosage form that is more convenient than traditional tablet-based oral dosage forms. Both OraSolv and DuraSolv technologies are capable of incorporating taste masked active drug ingredients into tablets that have the following potential benefits:

• ease of administration;

• improved dosing compliance; and

• increased dosage accuracy compared to liquid formulations.

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     We generate revenue from net sales of products we manufacture for pharmaceutical companies using our proprietary fast dissolve technologies; product development fees and licensing revenues for development activities we conduct through collaborative agreements with pharmaceutical companies; and royalties on the sales of products we manufacture, which are sold by pharmaceutical companies under licenses from us. Net sales of products we manufacture for and the royalties we receive from Novartis for Triaminic Softchews are seasonal in nature and can be affected by the strength and duration of the cough, cold or allergy season in the U.S.

     Our proprietary technologies enable our pharmaceutical company partners to differentiate their products from competing products. In addition to providing a competitive advantage in the marketplace, our proprietary technologies also may enable our pharmaceutical company partners to extend the product life cycles of their patented drug compounds beyond existing patent expiration dates of those compounds. Our technologies may also provide benefits to the healthcare system more generally. For example, improved compliance can enhance therapeutic outcomes and potentially reduce overall costs. Named pharmaceutical partners with which we have significant collaborative agreements include AstraZeneca, Bristol-Myers Squibb, Organon, Novartis, Schwarz Pharma and Wyeth.

     In addition to our proprietary OraSolv and DuraSolv fast dissolve technologies, we are developing several new drug delivery technologies. One new technology is our sustained release technology, which adds sustained release properties to the fast dissolve and taste masking attributes available with our DuraSolv and OraSolv technologies. We also are developing new OraVescent drug delivery technologies that include OraVescent SL for drug delivery under the tongue and OraVescent BL for drug delivery between the gum and the cheek. An additional OraVescent technology, OraVescent SS, is designed for site-specific administration, which may allow for an active drug ingredient to be transported to a specific part of the gastrointestinal tract where it is released for absorption. We originally designed and continue to design our OraVescent technologies to improve the transport of poorly absorbed active drug ingredients across mucosal membranes in the oral cavity or the gastrointestinal tract. In addition, our microemulsions technology is a proprietary technology that we are evaluating which may improve the bioavailability of a wide range of active drug ingredients, which may otherwise not be suitable for administration in a solid oral dosage form.

Industry Overview

Drug Delivery Methods

     Historically, pharmaceutical products were available primarily through two delivery methods, oral dosage forms or injections. Recently, drug delivery technologies have been developed for the enhanced delivery of a variety of therapeutic compounds, improving safety, efficacy, ease of patient use and patient compliance. In addition, drug delivery technologies can be used to expand markets for existing products, as well as to develop new products. Industry analysts have estimated the total sales of branded products using drug delivery technologies at approximately $12.7 billion in 2001, of which $7.8 billion were derived from orally administered products. These same sources also predict that net revenues to the drug delivery industry could nearly triple from 2001 through 2005.

     Fast dissolve technology has recently emerged as an important type of drug delivery technology that enables tablets to dissolve quickly in the mouth without the use of water or chewing. Children and the elderly, as well as others with certain physiological or medical conditions, frequently experience difficulty in swallowing tablets. Although our fast dissolve technology does not generally affect the speed the of absorption, it may improve compliance with a prescribed drug regimen, as fast dissolve medications are easier to swallow and may taste better than non-taste masked alternatives. In addition, fast dissolve technology may improve dosing accuracy relative to liquid formulations. Finally, and most importantly, fast dissolve technology may provide a significant commercial benefit, as studies we have conducted indicate that patients often prefer it to conventional tablets and other formulations.

Trends Affecting the Drug Delivery Industry

     Several significant trends in the health care industry have important implications for drug delivery companies. These trends include:

     Drug Patent Expirations. Based on an industry source, eighteen branded prescription products with 1999 worldwide sales exceeding $1 billion each will lose patent protection between 2000 and 2005. In order to maintain their revenues, large pharmaceutical companies are defending against generic competition by enhancing existing drug products with drug delivery technologies. These enhancements may include increased efficacy, reduced side effects and more convenient administration. We believe that pharmaceutical companies will use drug delivery systems to preserve or increase market share, enhance therapeutic performance and, in some cases, extend product life cycles.

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     Direct-to-Consumer Marketing. An industry source reported that pharmaceutical companies spent an estimated $1.4 billion in the U.S. during the first six months of 2001 on direct-to-consumer marketing and promotion of prescription medications. We expect direct-to-consumer marketing and promotion spending to increase significantly in the future. We also believe that the significant trend towards direct-to-consumer marketing may focus consumers on patient-friendly pharmaceutical products, including products that incorporate innovative drug delivery technologies, such as fast dissolve technology. This focus may encourage pharmaceutical companies to develop products incorporating these technologies.

     Influence of Managed Care. Many managed care plans and other insurers actively manage the costs of prescription drugs for their clients by monitoring patient dosing compliance as well as the efficacy, quality and cost of medications. Payors have demonstrated acceptance of drug delivery technologies, such as fast dissolve and taste masking, that improve patient compliance.

Our Oral Drug Delivery Products and Technologies

     Our proprietary products and technologies focus on innovative oral drug delivery methods that meet the needs of consumers for convenient and effective medications and the needs of pharmaceutical companies for differentiated products and accurate dosing methods. Our most developed technologies are our OraSolv and DuraSolv fast dissolve drug delivery technologies. We have developed all of our fast dissolve technologies internally. We currently manufacture five pharmaceutical brands incorporating our proprietary fast dissolve technologies, of which three products use our OraSolv technology and two products use our DuraSolv technology. We are developing a product incorporating our DuraSolv technology for Wyeth, an orally disintegrating dosage form of loratadine, which is expected to be marketed as a generic alternative to Claritin Reditabs. We are also developing innovative transmucosal oral drug delivery technologies. These technologies include OraVescent SL for drug delivery under the tongue, OraVescent BL for drug delivery between the gum and the cheek and OraVescent SS for swallowable site-specific drug delivery in the gastrointestinal tract. In addition, we are evaluating our microemulsions technology, which may be useful in improving the bioavailability of a wide range of active drug ingredients that may otherwise not be suitable for oral administration in a solid oral dosage form.

Fast Dissolve Technologies

     Our two primary fast dissolve oral drug delivery technologies are OraSolv and DuraSolv. Our OraSolv technology incorporates active drug ingredients in lightly compacted fast dissolve tablets. The low level of compaction pressure applied to OraSolv tablets allows larger amounts of taste masked active drug ingredients to be compressed into the tablets without damage to the taste masked active drug ingredients. The low level of compaction pressure applied to OraSolv tablets also allows for a minimal portion of the tablet’s contents to be dedicated to effervescent and other fast dissolve agents, allowing for high doses of taste masked active ingredients. Our DuraSolv technology uses higher compaction pressures to produce fast dissolve tablets incorporating active drug ingredients in a more durable fast dissolve tablet. Due to their greater durability, DuraSolv tablets are easier to handle and package, and may cost less to produce, than OraSolv tablets. DuraSolv is best suited for applications involving low doses of active drug ingredients.

     OraSolv. Our OraSolv technology is an oral dosage form that combines taste masked drug ingredients with a fast dissolving, low-effervescence system. The OraSolv tablet dissolves quickly in the mouth without chewing or the need for water. We have developed and manufacture several important OraSolv formulations, which include Triaminic Softchews for Novartis, Tempra FirsTabs for Bristol-Myers Squibb and Remeron SolTab for Organon.

     To create our fast dissolving tablets, we combine the taste masked active drug ingredients with fast dissolving tablet materials, which can include a variety of flavoring, coloring and sweetening agents, all of which are generally recognized as safe materials, and commonly used tablet ingredients, such as binding agents and lubricants. We add an effervescent system, composed of a dry acid and a dry base, to the tablet formulation to cause a mild effervescent reaction when the tablet contacts saliva. This reaction accelerates the disintegration of the tablet through the release of carbon dioxide. As our OraSolv tablet dissolves, it releases the coated particles of the drug into the saliva, forming a suspension of the drug in the saliva, which is then swallowed. The core U.S. patent for our OraSolv technology was granted in 1993.

     We mask the taste of the active drug ingredients in our OraSolv products to prevent or minimize unpleasant tastes. The active drugs are taste masked using a variety of coating techniques. The coating materials prevent the active drug substance in the OraSolv tablet from contacting the patient’s taste buds, and provide for the immediate or controlled release of the active ingredient in the stomach. The taste masking process is effective with a wide variety of active ingredients, in both prescription and non-prescription products.

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     DuraSolv. The fast dissolve, taste masking and sustained release attributes of OraSolv are also available with our DuraSolv technology. DuraSolv is a fast dissolve oral dosage system that we designed to improve manufacturing efficiency, provide more packaging options and reduce production costs. DuraSolv is a higher compaction, more durable, solid oral dosage system formulated to achieve the primary benefits of the OraSolv fast dissolve dosage form. However, DuraSolv is capable of being packaged in conventional packaging such as foil pouches or bottles at much higher production rates and with lower packaging costs. DuraSolv is an appropriate technology for drug products requiring lower levels of active drug ingredient. Consumer testing by us and our pharmaceutical company partners has demonstrated high acceptability of this technology. The core U.S. patent for our DuraSolv technology was granted in 2000.

     We have developed and manufacture several important DuraSolv formulations, which include Zomig-ZMT and Zomig Rapimelt for AstraZeneca and NuLev for Schwarz Pharma. In addition, we are currently developing a DuraSolv formulation of loratadine for Wyeth. In December 2001, we announced that we are developing seven new prescription products based on our DuraSolv fast dissolve drug delivery system.

     Sustained Release. Our OraSolv and DuraSolv technologies may be combined with a sustained release formulation to extend the period of an active drug ingredient’s effectiveness. We incorporate time-release beads into our tablets, to provide the benefits of a sustained release of an active drug ingredient with the improved convenience of a fast dissolve dosage form. To date, we have not commercialized a product incorporating our sustained release technology.

     PakSolv. PakSolv is our proprietary packaging system for soft, brittle tablets. PakSolv is a light and moisture-proof packaging system that is used for all of our OraSolv products. The U.S. Patent and Trademark Office issued two patents for our PakSolv packaging system in 2001.

Transmucosal Technologies

     Our OraVescent technologies are based on an enhanced-absorption oral drug delivery system intended to improve the transport of active drug ingredients across mucosal membranes. These technologies may improve the bioavailability, and accelerate the onset of action, of some drugs. The U.S. Patent and Trademark Office issued two patents for our OraVescent technologies, one in 2001 and the other in 2002. We also have several foreign patent applications pending for our OraVescent technologies.

Microemulsions Technology

     Microemulsions technology is a proprietary technology that may improve the bioavailability of a wide range of active drug ingredients, which otherwise may not be suitable for administration in a solid oral dosage form. The U.S. Patent and Trademark Office issued a patent for our microemulsions technology in 2002. We are currently evaluating applications for this new technology.

Business Strategy

     Our objective is to become a leader in fast dissolve and other innovative oral drug delivery technologies. Our strategy to achieve this objective incorporates the following principal elements:

     Partner with pharmaceutical companies to market our technologies. We pursue collaborative relationships that leverage the sales and marketing capability of our pharmaceutical company partners, allowing us to focus on technology development and manufacturing. We believe that pharmaceutical companies are attracted to our technologies for their significant advantages over our competition. Those advantages include excellent taste masking, applicability to a wide range of pharmaceutical compounds, enhanced convenience and other patient benefits. Our technologies also may enable pharmaceutical companies to differentiate their products in the market, facilitating the extension of product life cycles. By demonstrating the advantages and benefits of our technologies through our collaborations with leading pharmaceutical companies, we intend to establish our technology as the preferred fast dissolve drug delivery solution.

     Maximize the value of OraSolv and DuraSolv fast dissolve technologies. We leverage our technologies by actively identifying and marketing to pharmaceutical companies whose prescription products would benefit by incorporating our fast dissolve technologies. We believe there are a large number of pharmaceutical products that could benefit from our technologies. At times, in an effort to expand the market for our technologies, we develop what we believe will be promising applications using active ingredients that have already been successfully marketed by leading pharmaceutical companies. When these development efforts produce positive results, we market the new formulation to the pharmaceutical companies.

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     Develop and commercialize new, innovative drug delivery technologies. We intend to develop new drug delivery technologies based on our expertise in fast dissolve, taste masking and sustained release technologies. Our OraVescent and microemulsions technologies represent an extension of this expertise and we intend to continue developing these and other novel drug delivery technologies. We also intend to acquire or license attractive new technologies as we encounter such opportunities. In addition, we will seek patents and other intellectual property protection for new technologies to enhance our ability to commercialize them.

     Enhance and expand our manufacturing capabilities. In an effort to control our technologies and the quality of our products, we manufacture all of our products internally. We currently have two manufacturing lines at our Eden Prairie facility in order to meet production requirements for our current pharmaceutical company partners. On the basis of expected future partnerships and the associated increased volume requirements, we plan to develop a second manufacturing site at our Brooklyn Park facility. Adding a second manufacturing site will help mitigate manufacturing risks and will enhance our ability to market our products and services to pharmaceutical companies that desire or require dual-site production.

Collaborations With Pharmaceutical Company Partners

     Our core business is focused on entering into collaborative development, licensing and manufacturing supply agreements with pharmaceutical companies. These agreements provide that the collaborating pharmaceutical company is responsible for marketing and distributing the developed products either worldwide or in specified markets or territories. Our collaborative agreements typically begin with a product prototyping phase. If successful, this phase may be followed by an agreement to complete development of the product. We subsequently enter into license and manufacturing supply agreements to commercialize the product. In some cases, we may develop product prototypes internally and enter directly into development, manufacturing or license agreements for commercialization of those products.

     Named pharmaceutical companies with which we currently have development and license agreements include AstraZeneca, Bristol-Myers Squibb, Organon, Novartis, Schwarz Pharma and Wyeth. In December 2001, we entered into a development, license and supply agreement with an unnamed pharmaceutical company. In each of these agreements, we have received an up-front fee, which is typically a non-refundable payment for future product development activities. We have also received milestone and development payments under each of these agreements for achieving certain product development milestone events and for completing certain predetermined product development activities, as defined in the agreements. In the aggregate for all of our agreements with pharmaceutical companies, we reported approximately $14.3 million, $10.5 million and $8.6 million in 2001, 2000 and 1999, respectively, for up-front fees, milestone and development payments and royalties. Our development, license and supply agreement with the unnamed pharmaceutical company provides for license and product development fees and milestone payments in the aggregate amount of $15 million. This is the greatest amount of such fees and payments that we may receive under this agreement. We could receive a substantially smaller amount of fees and payments for many reasons, including if we fail to achieve certain milestones or if the unnamed pharmaceutical company exercises its option to terminate the agreement. The aggregate amount of development fees and milestone payments set forth in the agreement should not be viewed as guaranteed future payments.

     We have manufacturing supply agreements in place with Organon for Remeron SolTab, Novartis for Triaminic, Wyeth for loratadine, Schwarz Pharma for NuLev, AstraZeneca for fast dissolve dosage forms of Zomig and with an unnamed pharmaceutical company for seven products. We do not have a manufacturing supply agreement with Bristol-Myers Squibb for Tempra. Generally, the supply agreements define the terms by which we will manufacture and release for shipment a product for a pharmaceutical company partner and the obligations both parties have relating to payment for products and services, as well as defining the communication process, the expected production requirements and other economic terms for product supply. These agreements have varying terms of duration ranging from three to ten years. In general, our pharmaceutical company partners direct our production and shipments. In the pharmaceutical industry, parties to manufacturing supply agreements generally consider these arrangements long-term due to the complexity and lead-time required to qualify a new manufacturer with the FDA. The qualification of a new manufacturer can take up to a year while the new manufacturer completes scale-up, produces validation lots and implements stability programs. We do not consider the backlog for our products to be significant.

     We currently manufacture five pharmaceutical brands using our fast dissolve technologies for five major pharmaceutical company partners. Revenues from sales of our products were approximately 55%, 56% and 36% of our total revenue in 2001, 2000 and 1999, respectively. We also receive revenue from royalties on product sales from these five pharmaceutical company partners, which were approximately 17%, 7% and 5% of our total revenue in 2001, 2000 and 1999. Our revenue also includes product development fees and licensing revenue for development activities from a number of pharmaceutical companies, which were approximately 28%, 37% and 58% of our total revenue in 2001, 2000 and 1999, respectively. Less than 10% of our total revenues in 2001, 2000 and 1999 were derived from activities outside the U.S.

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     The table below sets forth the partner, product brand name or active ingredient, therapeutic application, technology and current status for each of our major collaborative agreements.

	PRODUCT
PHARMACEUTICAL	BRAND NAME	THERAPEUTIC		CURRENT
COMPANY PARTNER	OR ACTIVE INGREDIENT	APPLICATION	TECHNOLOGY	STATUS
AstraZeneca	Zomig-ZMT and Rapimelt	Anti-migraine	DuraSolv	Commercially available in the U.S. and Europe
Bristol-Myers Squibb	Tempra FirsTabs	Pediatric pain reliever	OraSolv	Commercially available in Canada
Organon	Remeron SolTab	Anti-depression	OraSolv	Commercially available in the U.S. and subject to mutual recognition approval procedures in Europe.
Novartis	Triaminic Softchews	Pediatric cold, cough and allergy	OraSolv	Commercially available in the U.S. and Canada
Schwarz Pharma	NuLev	Gastrointestinal	DuraSolv	Commercially available in the U.S.
Wyeth (formerly American Home Products)	Loratadine	Non-sedating antihistamine	DuraSolv	Regulatory submission accepted by the FDA
Unnamed pharmaceutical company	Seven undisclosed products	Undisclosed	DuraSolv and OraSolv	In development

AstraZeneca

     In May 1999, we entered into a definitive global license agreement with an affiliate of AstraZeneca for a DuraSolv formulation of AstraZeneca’s Zomig (zolmitriptan) tablets. Under the license agreement, which is exclusive for the class of anti-migraine compounds of which Zomig is a member, we receive license and product development fees, payments upon achieving specific milestones, and royalties on any sales of the prescription product. Based on the anticipated life of our patents, we expect the license agreement to expire for the U.S. market in 2018. However, the license agreement may be terminated by AstraZeneca after a notice of 180 days or by either party upon the occurrence of a default event, such as a material breach of the agreement, that is not cured by the defaulting party within 30 days. In addition, we have the right to terminate the license agreement if AstraZeneca fails to meet certain regulatory and commercialization obligations. Upon the failure of AstraZeneca to meet minimum sales requirements, or to pay the difference between the royalty amount due on the minimum sales requirement and the royalty amount due on actual sales, we may convert AstraZeneca’s exclusive license into a non-exclusive license. In June 1999, AstraZeneca received its first European regulatory approval for Zomig Rapimelt. In September 1999, AstraZeneca launched Zomig Rapimelt in Europe and it is currently marketed in over 20 markets outside the United States. In August 2001, we entered into a supply agreement with an affiliate of AstraZeneca, which expires on a country-by-country basis at the same time as the definitive global license agreement expires. However, the supply agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 45 days of notice, or by CIMA in the event AstraZeneca commercializes another fast dissolve formulation of Zomig (zolmitriptan) with a third party. AstraZeneca received FDA approval to market both the 2.5 and 5.0 milligram strengths of Zomig-ZMT in February and September of 2001, respectively. AstraZeneca announced the U.S. market launch of its 2.5 and 5.0 milligram strengths of Zomig-ZMT in the second and fourth quarters of 2001, respectively. For the three years ending December 31, 2001, we reported approximately $12.7 million in net sales of products, up-front fees, milestone and development payments attributable to our agreements with AstraZeneca. In 2001, these revenues represented 22% of our total revenues.

Bristol-Myers Squibb

     In June 1997, we entered into a multi-country, non-exclusive license agreement with Bristol-Myers Squibb, covering multiple products to be developed using the OraSolv technology. We began manufacturing commercial quantities of the OraSolv dosage form

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of Tempra, Bristol-Myers Squibb’s pediatric pain reliever, in 1997. Mead Johnson, an affiliate of Bristol-Myers Squibb, introduced Tempra in Canada during 1997. During 1998, Bristol-Myers Squibb decided to discontinue marketing Tempra in the U.S., but expects to continue marketing Tempra in Canada through Mead Johnson. In the fourth quarter of 1998, the license agreement was amended to return to us the rights to pediatric pain relievers in the U.S. The license agreement provides that upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 60 days, either party may terminate the agreement. In November 2000, we agreed with Bristol-Myers Squibb to amend the June 1997 license agreement again. The amendment provides that Bristol-Myers Squibb may not terminate the license agreement before December 31, 2005, and afterwards may terminate for any reason by giving us 60 days written notice and paying us any royalty payments accruing through the termination date. We expect to continue to receive at least minimum royalty payments in connection with sales in Canada through 2005. For the three years ending December 31, 2001, we reported approximately $1.6 million in net sales of products, development payments, and royalties attributable to our agreement with Bristol-Myers Squibb. In 2001, these revenues represented 1% of our total revenues.

Organon

     In December 1999, we entered into a definitive global license agreement with affiliates of Akzo Nobel NV, Organon International AB and NV Organon, for an OraSolv formulation of Remeron (mirtazapine), a prescription anti-depression product. Under the license agreement, we receive license and product development fees, milestone payments upon achieving specific milestones, and royalties on any sales of the prescription product. The license agreement expires upon expiration of all patents covered under the agreement. Based on the anticipated life of our existing patents, we expect the license agreement to expire in the U.S. market in 2010. However, the license agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 90 days. In July 2000, we entered into a supply agreement with Organon Inc., a U.S. affiliate Akzo Nobel NV, which has an initial term of five years and automatic renewal provisions. However, the supply agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 60 days of notice. In January 2001, Organon Inc. received FDA approval to market Remeron SolTab. In February 2001, Organon announced the U.S. market launch of Remeron SolTab and its agreement with Solvay Pharmaceuticals to co-promote this product through their respective sales forces. In July 2001, Organon announced its first European approval of Remeron SolTab by the Dutch Medicines Evaluation Board, which is expected to trigger mutual recognition procedures in other European countries. Organon is expected to launch Remeron SolTab in selected European markets in 2002. For the three years ending December 31, 2001, we reported approximately $19.3 million in net sales of products, up-front fees, milestone and development payments attributable to these agreements with Organon. In 2001, these revenues represented 25% of our total revenues.

Novartis

     In July 1998, we entered into a license and a supply agreement with Novartis Consumer Health, granting to Novartis exclusive rights to use of our OraSolv technology with Novartis’ Triaminic non-prescription pediatric cold, cough and allergy product line in the U.S. and Canada. Triaminic products that have been formulated using our OraSolv fast dissolve delivery system are marketed under the trade name Softchews. The license agreement, which was amended in April 2001, expires on a country-by-country basis upon the later of January 12, 2010 or the expiration of all patents covered by the agreement. Based on the anticipated life of our patents, we expect the license agreement to expire in the U.S. market in 2010. The July 1998 supply agreement was superseded by a new supply agreement in 2001, which has a term of five years and includes an automatic renewal provision subject to agreement on product pricing for the renewal periods. The supply agreement may be terminated by Novartis by providing a 90 day notice to CIMA prior to the end of the initial five year term or any renewal period. In addition, either of the license or the supply agreement may be terminated by either party upon the occurrence of a default event, such as a material breach, which is not cured by the defaulting party within 90 days for the license agreement or within 60 days for the supply agreement. In addition, Novartis may terminate the license agreement on or after July 1, 2003, after giving us a notice of nine months and paying us a termination fee of $200,000 plus all accrued amounts owed to us under the agreement. Under various individual product development agreements, which apply to specific Triaminic products, we receive product development payments, and under the license agreement, we receive royalties on sales of Softchews products. In July 1999, Novartis launched three Softchews products nationally, followed by a fourth Softchews product launch during the third quarter of 2000 and three more Softchews product launches during the second half of 2001. For the three years ending December 31, 2001, we reported approximately $23.7 million in net sales of products, up-front fees, milestone and development payments, and royalties attributable to these agreements with Novartis. In 2001, these revenues, which were principally product sales, represented 33% of our total revenues.

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Schwarz Pharma

     In June 2000, we entered into an exclusive development, license and supply agreement with Schwarz Pharma, Inc. to develop and manufacture NuLev, our DuraSolv formulation of a hyoscyamine sulfate prescription product, which is used to treat irritable bowel syndrome. The agreement allows us, upon the failure of Schwarz Pharma to meet minimum sales requirements, to convert Schwarz Pharma’s exclusive license into a non-exclusive license. Based on the anticipated life of our patents, we expect the agreement to expire in the U.S. in 2018. However, the agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 60 days. Under the agreement, we will receive milestone payments upon achieving specific milestones and will receive manufacturing revenue and royalties on sales of the prescription product. A U.S. regulatory submission for NuLev is not required. Schwarz Pharma commenced the U.S. marketing launch of NuLev in March 2001. For the two years ending December 31, 2001, we reported approximately $3.2 million in net sales of products, up-front fees, milestone and development payments attributable to this agreement with Schwarz Pharma. In 2001, these revenues represented 6% of our total revenues.

Wyeth, formerly American Home Products

     In January 2000, we entered into an exclusive development and license agreement and a supply agreement with an affiliate of Wyeth for a fast dissolve formulation of loratadine, a non-sedating prescription antihistamine product. Loratadine is the active drug compound in Claritin and Claritin Reditabs, for which Schering Corporation has several U.S. patents, the first of which is scheduled to expire in December 2002. Wyeth is expected to market our DuraSolv formulation of loratadine as a generic alternative to Claritin Reditabs in 2003, unless Schering is successful in its efforts to secure extended exclusive rights to market Claritin. Based on the anticipated life of our patents, we expect the development and license agreement to expire in the U.S. market in 2018. The supply agreement expires on the tenth anniversary of the first commercial shipment of product. However, either agreement may be terminated by Wyeth after a six month notice or by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 60 days. Under the development and license agreement, we receive development and milestone payments upon achieving specific milestones and will receive royalties on any sales of the prescription product. Under the supply agreement, we receive payments based on our costs of manufacturing the products. The U.S. regulatory submission for our DuraSolv formulation of loratadine was accepted for filing by the FDA in the second quarter of 2000. For the three years ending December 31, 2001, we reported approximately $2.7 million in up-front fees, milestone and development payments attributable to these agreements with Wyeth. In 2001, these revenues represented less than 1% of our total revenues.

Unnamed Pharmaceutical Company

     In December 2001, we entered into an exclusive development, license and supply agreement with an unnamed pharmaceutical company to develop and manufacture seven undisclosed prescription products based primarily on our DuraSolv fast dissolve drug delivery system. Based on the anticipated life of our patents, we expect the agreement to expire in the U.S. in 2018. However, the agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party. In addition, the unnamed pharmaceutical company may unilaterally terminate the agreement, in its entirety or in part, at any time prior to the market launch of any or all of the seven products by providing notice to CIMA and reimbursing CIMA for its development activities. The agreement provides that we will receive manufacturing revenue and royalties on sales of the products that we develop. The unnamed pharmaceutical company will be required to obtain FDA approval for each of the seven products prior to the marketing of such products. We expect the first of these products could be approved by the FDA and launched in the U.S. during the first half of 2004. For the year ending December 31, 2001, we reported approximately $583,000 in up-front fees, milestone and development payments attributable to this agreement. In 2001, these revenues represented 2% of our total revenues. The agreement provides for license and product development fees and milestone payments in the aggregate amount of $15 million. This is the greatest amount of such fees and payments that we may receive under this agreement. We could receive a substantially smaller amount of fees and payments for many reasons, including if we fail to achieve certain milestones or if the unnamed pharmaceutical company exercises its option to terminate the agreement. The aggregate amount of development fees and milestone payments set forth in the agreement should not be viewed as guaranteed future payments.

Proprietary Product Development

     In addition to entering into collaborations with pharmaceutical companies, we also expect to leverage our oral drug delivery technologies by actively identifying promising applications using active drug ingredients that have already been successfully marketed by leading pharmaceutical companies. We are selecting, funding and developing products on an internal basis and will be responsible for securing FDA approvals for such products. We plan to sell or license the marketing rights to these products to pharmaceutical companies with the appropriate sales and marketing organizations. We believe this strategy represents an important opportunity for

9

CIMA because it eliminates the need for a collaborative agreement before developing additional products for our product pipeline. Equally important, we expect to retain a greater proportion of the economic value of those proprietary products that we successfully develop.

     To date, we have selected four proprietary products based on major active drug ingredients that are either off-patent or expected to become off-patent within the next few years. These proprietary products fall within the therapeutic categories of anti-infectives, cardiovascular, gastrointestinal and pain. Based on our current development schedule, we estimate the first of these products, OraVescent fentanyl, could be approved by the FDA for marketing in the U.S. in the second half of 2004.

     We have conducted three studies in humans with OraVescent fentanyl, a potential proprietary product for the treatment of breakthrough cancer pain. Our first study in humans compared our OraVescent BL formulation to a similar formulation without the absorption enhancing characteristics and to Actiq, a commercially available prescription product. Actiq (oral transmucosal fentanyl citrate) is indicated for breakthrough cancer pain in patients already receiving, and tolerant to, opioid therapy for underlying, persistent cancer pain. We believe this first study in humans demonstrates OraVescent BL’s superior absorption characteristics across mucosal membranes when compared to Actiq and to the other formulation without absorption enhancing characteristics. Our second study in humans compared our OraVescent SL to our OraVescent BL formulation using the same active drug ingredient contained in Actiq, fentanyl citrate. We believe this second study demonstrates a quicker onset of action with OraVescent SL when compared to our OraVescent BL formulation. Our third study in humans compared Actiq with OraVescent BL and OraVescent SL under simulated self-administration conditions. We believe preliminary results from the third study confirmed the results from our first two studies in humans. In November 2001, we participated in a pre-Investigational New Drug meeting with the FDA to discuss our OraVescent fentanyl human data and a possible clinical development path. We expect to perform additional studies in humans and animals in 2002.

     Our progress to date on the three other proprietary products has not gone beyond the pilot study phase, which includes acquiring active drug ingredients and preliminary planning. We do not expect to begin substantive work on one or more of these three proprietary products until late in 2002, or early 2003. These proprietary products would incorporate active drug ingredients with one of our proprietary oral drug delivery technologies. However, the active drug ingredients for these three products are currently protected by U.S. patents registered to third parties, of which the first is expected to expire in early 2005.

Intellectual Property

     We actively seek, when appropriate, to protect our products and proprietary information by means of U.S. and foreign patents, trademarks and contractual arrangements. We hold 14 issued U.S. patents and 15 issued foreign patents covering our technologies. The core U.S. and European patents relate to our fast dissolve and taste masking technologies. We also have over 45 U.S. and foreign patent applications pending.

     A description of our more important issued U.S. patents and their dates of expiration are set forth in the table below. The majority of these patents are composition-of-matter patents. The actual scope of coverage for a patent is governed by the specific claims applicable to the patent. The descriptions set forth below are intended solely to identify patents relevant to various technologies and are not intended to represent the scope of these patents.

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PATENTED TECHNOLOGIES	EXPIRATION DATE
Core OraSolv fast-dissolve and taste-masking technology		2010
The production of compressed effervescent and non-effervescent tablets using a tableting aid developed by us		2010 and 2012
The formulation of a base coated, acid effervescent mixture manufactured by controlled acid base reaction. The obtained mixture can be used in the formulation of acid sensitive compounds with OraSolv technology or other effervescent based products		2013
Taste-masking of micro-particles for oral dosage forms		2015
Core DuraSolv fast-dissolve and taste-masking technology		2018
Blister package and packaged tablet		2018
Core OraVescent oral transmucosal drug delivery technology		2019
Core OraVescent gastrointestinal drug delivery technology		2019
Microemulsions as solid oral dosage forms		2019
PakSolv technology covering part of packaging system		2019
PakSolv technology covering additional aspects of packaging system		2019

     Our success will depend in part on our ability to obtain and enforce patents for our products, processes and technology, to preserve our trade secrets and other proprietary information and to avoid infringing the patents or proprietary rights of others.

     In addition to patents, we rely on trade secrets and proprietary know-how to protect our products, processes and technologies. To protect our rights to trade secrets and proprietary know-how, we require all employees, consultants and advisors to sign confidentiality agreements that prohibit the disclosure or use of confidential information to or by any third party. These agreements also require disclosure and assignment to us of discoveries and inventions made by these individuals while devoted to our activities.

Research and Development

     Our research and product development efforts are focused on developing new product applications for our drug delivery technologies and expanding our technology platform to new areas of drug delivery. As of December 31, 2001, we had 54 scientists and other technicians working on research and product development. In August 2001, we purchased for $5.2 million the building in Brooklyn Park, Minnesota, which we use for our research and development center. Based on the strength of our product development portfolio of both collaborative and internal projects, we expect to end the year 2002 with approximately 80 scientists and other technicians, and to complete a renovation and expansion of our Brooklyn Park facility at an estimated capital cost of $10.0 million.

     Our research and product development personnel, support systems and facilities are organized to develop drug delivery formulations from bench-scale through full-scale commercial production under current good manufacturing practice conditions. The key goals for our research and product development efforts include:

• developing innovative drug delivery products and systems that fulfill pharmaceutical companies’ needs;

• developing, expanding and supporting systems to fulfill good manufacturing practice production at commercial levels required by pharmaceutical company partners;

• recruiting and training high-quality technical and scientific personnel; and

• supporting our intellectual property portfolio development.

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     For the years ended December 31, 2001, 2000 and 1999, we spent approximately $6.4 million, $5.0 million and $4.4 million, respectively, on research and product development. We estimate that most of these expenditures were directly related to product development activities for which we received fees and licensing revenues from our pharmaceutical company partners.

Business Development

     We market directly to leading pharmaceutical companies for products that we believe would benefit from our fast dissolve technologies. Our strategy has been to leverage the brand names, marketing and sales capabilities of these pharmaceutical companies to maximize the value of our fast dissolve drug delivery technologies. We build our credibility with major pharmaceutical companies by speaking at technical seminars, publishing in technical journals and hosting booths at pharmaceutical and drug delivery conferences.

     We pursue agreements with leading pharmaceutical companies to fund the development of new products incorporating our drug delivery technologies. Once specific milestones have been met under these agreements, we generally enter into license and supply agreements.

Manufacturing

     Currently, our only manufacturing facility is located at our headquarters in Eden Prairie, Minnesota. We have two production lines, which collectively have an estimated production capacity in excess of 500 million tablets a year. We anticipate that our existing manufacturing capacity is more than adequate to meet the production requirements of our pharmaceutical partners in 2002. We plan to construct a second manufacturing site at our Brooklyn Park facility and expect the new manufacturing site to be operational in 2003.

     In 2000, we completed construction of a coating unit to provide taste masked active ingredients for our pharmaceutical company partners. During the third quarter of 2000, we commercialized our first coated active drug ingredient, mirtazapine, which is the active drug ingredient in Remeron SolTab. We believe our in-house coating capability will be a key factor in signing new agreements related to prescription pharmaceutical drugs. In 2002, we expect to begin using our coating unit in Eden Prairie to taste mask selected active drug ingredients for our non-prescription products.

     We currently purchase taste masked active drug ingredients for each of our non-prescription products from single sources of supply. We believe that all other ingredients used in the manufacture of our products are readily available from multiple suppliers or from our pharmaceutical company partners.

     We are currently adding a second coating unit and a high shear granulation unit to our Eden Prairie manufacturing facility. We expect that the high shear granulation unit, coupled with the additional coating unit, will enable us to develop, and ultimately commercialize, a broader range of prescription products. The types of products that would require these additional manufacturing capabilities are those with taste masking challenges based on the particle size of the active drug ingredient, as well as products requiring a high dose of active drug ingredient into a smaller tablet. We expect to complete the installation of this equipment by the end of 2002 at an expected capital cost of approximately $6.5 million.

     PakSolv, our proprietary packaging process, allows high-speed packing of soft, brittle tablets without breakage, into specially designed protective, child resistant packages and normal blister packages. We believe that this technology, which has two issued patents, gives us a competitive advantage.

     We plan our manufacturing cycles in advance of actual production in order to address lead times our suppliers may require. We generally do not stock significant quantities of raw materials for a product in excess of a partner’s orders nor do we manufacture finished product in excess of a partner’s orders.

Competition

     Competition among pharmaceutical products and drug delivery systems is intense. Our primary competitors for developing drug delivery systems and manufacturing the products we develop include other drug delivery, biotechnology and pharmaceutical companies. Many of these competitors have substantially greater financial, technological, manufacturing, marketing, managerial and research and development resources and experience than we have. Our products compete not only with products employing advanced drug delivery systems, but also with products employing conventional dosage forms. These competing products may obtain governmental approval or gain market acceptance more rapidly than our products. New drugs or future developments in alternative drug delivery technologies also may provide therapeutic or cost advantages over our current or future products.

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     Fast dissolve tablet technologies that compete with our OraSolv and DuraSolv technologies include the Zydis technology developed by R.P. Scherer Corporation, a wholly-owned subsidiary of Cardinal Health, Inc., the WOWTab technology developed by Yamanouchi Pharma Technologies, the Flashtab technology developed by Ethypharm and the FlashDose technology developed by Fuisz Technologies Ltd., a wholly-owned subsidiary of Biovail Corporation. The Zydis technology is a fast dissolving oral drug delivery system based on a freeze-dried gelatin tablet. The WOWTab and Flashtab technologies are fast dissolving technologies used in an oral fast dissolving tablet, which are similar to our DuraSolv tablet. R.P. Scherer has commercialized its Zydis technology in several major prescription products in the U.S., including Claritin Reditabs and Maxalt-MLT. We believe that other pharmaceutical companies may be developing fast dissolve tablet technologies, which may compete with our technology in the future.

     The principal competitive factors in the market for fast dissolving tablet technologies are compatibility with taste masking techniques, packaging, dosage capacity, drug compatibility, cost, ease of manufacture, patient acceptance and required capital investment for manufacturing. We believe that our fast dissolving tablet technologies compete favorably with respect to each of these factors. In a 1997 quantitative consumer study that we conducted, consumers generally preferred the OraSolv formulation to the Zydis formulation of the same active drug ingredient. Our 1997 study was confirmed by an August 2001 study we sponsored that measured migraine sufferers’ preferences between Zomig-ZMT, a CIMA DuraSolv formulation, and Maxalt-MLT, a R.P. Scherer Zydis formulation. The 2001 study indicated that 70% of the study subjects preferred CIMA’s DuraSolv formulation, compared to 27% favoring the Zydis formulation. We also believe that we offer pharmaceutical companies the largest selection of oral fast dissolve drug delivery technologies.

Government Regulation

     Numerous governmental authorities in the U.S. and other countries extensively regulate the activities of pharmaceutical manufacturers. In the U.S., pharmaceutical products are subject to rigorous regulation by the Food and Drug Administration. The Federal Food, Drug, and Cosmetic Act and other federal and state statutes and regulations govern, among other things, the research, development, testing, manufacture, safety, storage, record keeping, labeling advertising, promotion, marketing and distribution of pharmaceutical products. If we fail to comply with the applicable requirements, we may be subject to administrative or judicially imposed sanctions such as warning letters, fines, injunctions, product seizures or recalls, total or partial suspension of production, or FDA refusal to approve pending pre-market approval applications or supplements to approved applications, as well as criminal prosecution.

     FDA approval generally is required before a new drug product may be marketed in the U.S. Many over-the-counter, or OTC, drug products are exempt, however, from the FDA’s pre-marketing approval requirements. Whether or not products require FDA approval, drug products remain subject to various ongoing FDA regulations, including good manufacturing practice requirements, labeling requirements and warning statements, advertising restrictions related to product labeling and drug ingredient specifications. Products and their manufacturing facilities are subject to FDA inspection, and failure to comply with applicable regulatory requirements may lead to administrative or judicially imposed penalties.

     We expect that our pharmaceutical company partners will seek any required FDA approvals in connection with the introduction of new products we develop for them under a collaborative agreement. The FDA submission and approval process may require significant commitments of our time and resources. The FDA approval process may delay or prevent the marketing of our products. We cannot be sure that approvals will be obtained, or that any such approvals will have the scope necessary for successful commercialization of these products. Even after an addendum or supplement to a new drug application is approved, existing FDA procedures may delay initial product shipment and materially reduce the period during which there is an exclusive right to exploit patented products or technologies.

     Prior to marketing a product internationally, we are likely to be required to obtain foreign regulatory approval. Foreign approval procedures vary from country to country and the time required for approval may result in delays in, or ultimately prevent, the marketing of a product. We expect our pharmaceutical company partners to obtain any necessary government approvals in foreign countries. However, we may have to spend considerable amounts of time and resources to support the submission and approval of these foreign filings. In addition, our manufacturing facility may be subject to inspections by foreign agencies, similar to the FDA, to allow for the marketing of our products in a foreign country.

     Our manufacturing facility is registered with the FDA. We must inform the FDA of every drug product we have in commercial distribution and keep an updated list of those drugs. Our manufacturing facility also is inspected by the FDA and must comply with good manufacturing practices regulations at all times during the manufacture and processing of drug products. The FDA completed pre-approval inspections of our Eden Prairie and Brooklyn Park facilities in August 2000. We were not cited for any significant shortcomings relating to the pre-approval inspections nor were we cited for any significant shortcomings in compliance with good

13

manufacturing practices regulations. We cannot guarantee that any future FDA inspections will proceed without any compliance issues requiring time and resources to resolve. Our facilities also must be inspected by, and we have received a license from, the Minnesota Board of Pharmacy for the manufacture of drug products.

     We are subject to regulation under various federal, state and local laws, rules, regulations and policies regarding, among other things, occupational safety, environmental protection, the use, generation, manufacture, storage, air emission, effluent discharge, handling and disposal of certain regulated materials and wastes, including controlled substances, and product advertising and promotion. We believe that we have complied with these laws and regulations in all material respects, and we have not been required to take any action to correct any material noncompliance. We do not currently anticipate that any material capital expenditures will be required in order to comply with these laws or that compliance with these laws will have a material effect on our business or financial condition. We are unable to predict, however, the impact on our business of any changes that may be made in these laws or of any new laws or regulations that may be imposed in the future. We cannot be sure that we will not be required to incur significant compliance costs or be held liable for damages resulting from any violation of these laws and regulations.

Employees

     As of March 1, 2002, we had 171 full-time employees, with 115 employees in Eden Prairie and 56 in Brooklyn Park. Of these employees, 88 are engaged in manufacturing and quality assurance, 54 in research and development and 29 in executive management and office support. None of our employees is subject to a collective bargaining agreement nor have we ever experienced a work stoppage. We believe our employee relations are good.

Executive Officers of the Registrant

     Our executive officers and their ages as of March 1, 2002 are as follows:

Name	Age		Title
John M. Siebert, Ph.D.		61	Chief Executive Officer and President
John H. Hontz, Ph.D.		45	Chief Operating Officer
David A. Feste		50	Vice President, Chief Financial Officer and Secretary

     Each of our executive officers has an employment agreement. There are no family relationships between or among any of our executive officers or directors.

     John M. Siebert, Ph.D. has been our President and Chief Executive Officer since September 1995, President and Chief Operating Officer from July 1995 to September 1995, and has served as a director since May 1992. From 1992 to 1995, Dr. Siebert was Vice President, Technical Affairs at Dey Laboratories, Inc., a pharmaceutical company. From 1988 to 1992, Dr. Siebert worked at Bayer Corporation. Dr. Siebert has also been employed by E.R. Squibb & Sons, Inc., G.D. Searle & Co. and The Procter & Gamble Company. On March 18, 2002, Dr. Siebert announced that he will retire from the Company at the end of 2003. Our Board of Directors has appointed a search committee to identify and recruit a new President and Chief Executive Officer. At the appointment of his successor, Dr. Siebert will become the Chairman of the Board of Directors and will serve as Chairman until December 31, 2003.

     John Hontz, Ph.D. has been our Chief Operating Officer since January 2000. From 1997 to January 2000, Dr. Hontz was our Vice President of Research and Development. From 1995 to 1997, Dr. Hontz was senior Group Leader of Product Development at Glaxo Wellcome plc, a pharmaceutical company. From 1987 to 1995, Dr. Hontz was with Burroughs-Wellcome, which was acquired by Glaxo in 1995, most recently as Section Head of Product Development.

     David A. Feste has been our Vice President, Chief Financial Officer and Secretary since February 2000. From 1995 to 1999, Mr. Feste was Vice President and Chief Financial Officer for Orphan Medical, Inc., a pharmaceutical company. From 1992 to 1995, Mr. Feste was self-employed as a financial consultant. From 1985 to 1991, Mr. Feste was with Tonka Corporation, most recently as its Corporate Vice President of Financial Services and Audit.

14

Item 14 of the Original 10-K is amended in its entirety to read as follows:

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1). Financial Statements

		Page Number
		in this
Description		Annual Report
Audited Financial Statements:
	Report of Independent Auditors	F-1
	Balance Sheets	F-2
	Statements of Operations	F-3
	Statements of Cash Flows	F-4
	Statement of Changes in	F-5
	Stockholders’ Equity
	Notes to Financial Statements	F-6 to F-17

(a)(2). Financial Statement Schedules

     The following financial statement schedule should be read in conjunction with the Audited Financial Statements referred to under Item 14 (a)(1) above. Financial statement schedules not included in this Form 10-K have been omitted because they are not applicable or the required information is shown in the Audited Financial Statement or Notes thereto.

	Page Number
	in this
Description	Annual Report
Schedule II – Valuation and Qualifying Accounts: Years Ended December 31, 2001, 2000 and 1999	F-18

(a)(3). Listing of Exhibits

Exhibit		Method of
Number	Description	Filing
3.1	Fifth Restated Certificate of Incorporation of CIMA, as amended		(13	)
3.2	Third Restated Bylaws of CIMA		(8	)
4.1	Form of Certificate for Common Stock		(1	)
4.2	Amended and Restated Rights Agreement dated June 26, 2001, between the Registrant and Wells Fargo Bank Minnesota, N.A. as Rights Agent.		(15	)
4.3	Form of Stock Purchase Agreement dated March 13, 2000 between CIMA and certain institutional investors.		(9	)
10.1	Letter Agreement, dated January 28, 1998, between CIMA and Joseph R. Robinson, Ph.D.*#		(6	)
10.2	Equity Incentive Plan, as amended and restated.#		(8	)
10.3	1994 Directors’ Stock Option Plan, as amended.#		(2	)
10.4	Form of Director and Officer Indemnification Agreement		(1	)
10.5	License Agreement, dated July 1, 1998, between Novartis Consumer Health Inc. and CIMA.*		(7	)
10.6	Supply Agreement, dated July 1, 1998, between Novartis Consumer Health Inc. and CIMA.*		(7	)
10.7	License Agreement, dated January 28, 1994, between SRI International and CIMA.*		(1	)
10.8	Non-Employee Directors’ Fee Option Grant Program.#		(3	)
10.9	License Agreement, dated June 26, 1997, between Bristol-Myers Squibb Company and CIMA.*		(4	)
10.10	Development and Option Agreement, dated August 11, 1997, between Schering Corporation and CIMA.*		(5	)
10.11	License Agreement dated May 28, 1999, between IPR Pharmaceuticals, Inc. and CIMA.*		(8	)
10.12	License Agreement dated December 29, 1999 between Organon International AG and N.V. Organon, and CIMA.*		(9	)
10.13	Development and License Agreement dated January 14, 2000 between CIMA and American Home Products Corporation.*		(9	)
10.14	Supply Agreement dated January 14, 2000 between CIMA and American Home Products Corporation.*		(9	)

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Exhibit		Method of
Number	Description	Filing
10.15	Employment Agreement, dated June 30, 2000, between CIMA and John M. Siebert, Ph.D.#		(10	)
10.16	Development, License and Supply Agreement by and between CIMA and Schwarz Pharma, Inc. dated June 30, 2000*		(10	)
10.17	Employment Agreement, dated August 23, 2000, between CIMA and John Hontz, Ph.D.#		(11	)
10.18	Employment Agreement, dated January 26, 2001, between CIMA and David Feste.#		(12	)
10.19	2001 Stock Incentive Plan, as amended.#		(13	)
10.20	Employee Stock Purchase Plan.#		(14	)
10.21	Toll Manufacturing Agreement between Organon Inc. and CIMA.*		(12	)
10.22	Supply Agreement, dated August 31, 2001, between CIMA and AstraZeneca UK Limited.*		(16	)
10.23	Supply Agreement, dated January 1, 2001, and executed September 2, 2001, between Novartis Consumer Health, Inc. and CIMA.*		(16	)
10.24	License Agreement Amendment No. 1, executed September 2, 2001, by and between Novartis Consumer Health, Inc. and CIMA, amending that certain License Agreement dated July 1, 1998, between Novartis and CIMA.*		(16	)
10.25	Master Development License & Supply Agreement, dated December 18, 2001, between CIMA LABS INC. and an unnamed pharmaceutical company.*+		Filed herewith
23.1	Consent of Ernst & Young LLP		(17	)
24.1	Power of Attorney		(17	)
99.1	Certification of Chief Executive Officer		Filed herewith
99.2	Certification of Chief Financial Officer		Filed herewith

*	Denotes confidential information that has been omitted from the exhibit and filed separately, accompanied by a confidential treatment request, with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934.
+	Previously filed with the Commission as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, filed on March 28, 2002. Pursuant to a confidential treatment request filed with the Commission, certain portions of this exhibit were omitted from our prior filing. The current filing reflects comments of the Commission regarding our confidential treatment request.
#	Management contract, compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K.
(1)	Filed as an exhibit to CIMA’s Registration Statement on Form S-1, File No. 33-80194, and incorporated herein by reference.
(2)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, File No. 0-24424, and incorporated herein by reference.
(3)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, File No. 0-24424, and incorporated by reference.
(4)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, File No. 0-24424, and incorporated herein by reference.
(5)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, File No. 0-24424, and incorporated herein by reference.
(6)	Filed as an exhibit to CIMA’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 0-24424, and incorporated herein by reference.
(7)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, File No. 0-24424, and incorporated herein by reference.
(8)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, File No. 0-24424, and incorporated herein by reference.

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(9)	Filed as an exhibit to CIMA’s Annual Report on Form 10-K for the year ended December 31, 1999, File No. 0-24424, and incorporated herein by reference.
(10)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, File No. 0-24424, and incorporated herein by reference.
(11)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File No. 0-24424, and incorporated herein by reference.
(12)	Filed as an exhibit to CIMA’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 0-24424, and incorporated herein by reference. (13 ) Filed as an exhibit to CIMA’s Registration Statement on Form S-8, filed June 13, 2001, File No. 333-62954, and incorporated herein by reference.
(14)	Filed as an exhibit to CIMA’s Registration Statement on Form S-8, filed June 14, 2001, File No. 333-63026, and incorporated herein by reference.
(15)	Incorporated by reference to Exhibit 1 to the Registrant’s Amendment No. 1 to Registration Statement on Form 8-A/A, filed July 18, 2001, File No. 0-24424.
(16)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001, File No. 0-24424, and incorporated herein by reference.
(17)	Previously filed with the Commission and incorporated herein by reference from the identically numbered exhibit to the Company’s Annual Report on Form 10-K, filed March 28, 2002, File No. 0-24424.

(b). Reports on Form 8-K
None.

(c). Exhibits
See Item 14(a)(3) above.

(d). Financial Statement Schedules
See Item 14(a)(2) above.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Eden Prairie, Minnesota, on the 31st day of October, 2002.

CIMA LABS INC.

By: /s/ David A. Feste
David A. Feste
Vice President and Chief Financial Officer

CERTIFICATIONS

I, John M. Siebert, certify that:

1.	I have reviewed this annual report on Form 10-K of CIMA LABS INC.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

Date: October 31, 2002

/s/ John M. Siebert
John M. Siebert
President and Chief Executive Officer

I, David A. Feste, certify that:

1.	I have reviewed this annual report on Form 10-K of CIMA LABS INC.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

Date: October 31, 2002

/s/ David A. Feste
David A. Feste
Vice President and Chief Financial Officer

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