<PAGE>   1
                                  SCHEDULE 14A
                                 (RULE 14A-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION
           PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                    EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ]    Preliminary Proxy Statement

[ ]    Confidential, for Use of the Commission Only (as permitted by Rule
       14a-6(e)(2))

[X]    Definitive Proxy Statement

[ ]    Definitive Additional Materials

[ ]    Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12


                             PAIN THERAPEUTICS, INC.
--------------------------------------------------------------------------------
                (Name of Registrant as Specified in its Charter)

--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 

    (1) Title of each class of securities to which transaction applies:

        ------------------------------------------------------------------------

    (2) Aggregate number of securities to which transaction applies:

        ------------------------------------------------------------------------

    (3) Per unit price or other underlying value of transaction computed
        pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
        filing fee is calculated and state how it was determined):

        ------------------------------------------------------------------------

    (4) Proposed maximum aggregate value of transaction:

        ------------------------------------------------------------------------

    (5) Total fee paid:

        ------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

<PAGE>   2

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
    0-11(a)(2) and identify the filing for which the offsetting fee was paid
    previously. Identify the previous filing by registration statement number,
    or the Form or Schedule and the date of its filing.

    (1) Amount Previously Paid:

        ------------------------------------------------------------------------

    (2) Form, Schedule or Registration Statement No.:

        ------------------------------------------------------------------------

    (3) Filing Party:

        ------------------------------------------------------------------------

    (4) Date Filed:


        ------------------------------------------------------------------------

<PAGE>   3
 
                                      LOGO
 

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                  MAY 31, 2001
 
TO THE STOCKHOLDERS:
 
     NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Pain
Therapeutics, Inc. (the "Company"), a Delaware corporation, will be held on
Thursday, May 31, 2001 at 10:00 a.m., local time, at the offices of Wilson
Sonsini Goodrich & Rosati, Professional Corporation located at 650 Page Mill
Road, Palo Alto, California, 94304, for the following purposes:
 
          1. To elect two (2) Class I Directors to serve for a three year term
     and until their successors are duly elected and qualified (Proposal One);
 
          2. To ratify the appointment of KPMG LLP as independent auditors to
     the Company for the fiscal year ending December 31, 2001 (Proposal Two);
     and
 
          3. To transact such other business as may properly be brought before
     the meeting and any adjournment(s) thereof.
 
     The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
 
     Only stockholders of record at the close of business on April 12, 2001 are
entitled to notice of and to vote at the meeting.
 
                                          Sincerely,
 
                                          /s/ Michael J. O'Donnell
                                          Michael J. O'Donnell
                                          Secretary
South San Francisco, California
A
pril 20, 2001
 
                             YOUR VOTE IS IMPORTANT
 
    THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF
PROXIES BY THE COMPANY, ON BEHALF OF THE BOARD OF DIRECTORS, FOR THE 2001 ANNUAL
MEETING OF STOCKHOLDERS. THE PROXY STATEMENT AND THE RELATED PROXY FORM ARE
BEING DISTRIBUTED ON OR ABOUT APRIL 20, 2001. YOU CAN VOTE YOUR SHARES USING ONE
OF THE FOLLOWING METHODS:
 
     - COMPLETE AND RETURN A WRITTEN PROXY CARD
 
     - ATTEND THE COMPANY'S 2001 ANNUAL MEETING OF STOCKHOLDERS AND VOTE
 
    ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING, HOWEVER, TO
ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID
ENVELOPE ENCLOSED FOR THAT PURPOSE. ANY STOCKHOLDER ATTENDING THE MEETING MAY
VOTE IN PERSON EVEN IF HE OR SHE HAS RETURNED A PROXY CARD.

<PAGE>   4
 
                            PAIN THERAPEUTICS, INC.
                                416 BROWNING WAY
                     SOUTH SAN FRANCISCO, CALIFORNIA 94080
                            ------------------------
 
                                PROXY STATEMENT
                            ------------------------
 
                 INFORMATION CONCERNING SOLICITATION AND VOTING
 
GENERAL
 
     The enclosed Proxy is solicited on behalf of the Board of Directors of Pain
Therapeutics, Inc. (which we will refer to as the "Company" throughout this
Proxy Statement) for use at the Annual Meeting of Stockholders to be held at the
offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation located at
650 Page Mill Road, Palo Alto, California, 94304, on Thursday, May 31, 2001, at
10:00 a.m., local time, and at any adjournment(s) thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Stockholders.
The Company's principal executive offices are located at the address listed at
the top of the page and the telephone number is (650) 624-8200.
 
     The Company's Annual Report and Annual Report on Form 10-K, containing
financial statements for the fiscal year ended December 31, 2000, are being
mailed together with these proxy solicitation materials to all stockholders
entitled to vote. This Proxy Statement, the accompanying Proxy and the Company's
Annual Report will first be mailed on or about April 20, 2001 to all
stockholders entitled to vote at the meeting.
 
     THE COMPANY SHALL PROVIDE WITHOUT CHARGE TO EACH STOCKHOLDER SOLICITED BY
THESE PROXY SOLICITATION MATERIALS A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K, TOGETHER WITH THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
REQUIRED TO BE FILED WITH THE ANNUAL REPORT ON FORM 10-K, UPON REQUEST OF THE
STOCKHOLDER MADE IN WRITING TO PAIN THERAPEUTICS, INC., 416 BROWNING WAY, SOUTH
SAN FRANCISCO, CALIFORNIA, 94080, ATTN: MANAGER, INVESTOR RELATIONS.
 
RECORD DATE AND SHARE OWNERSHIP
 
     Stockholders of record at the close of business on April 12, 2001 (which we
will refer to as the "Record Date" throughout this Proxy Statement) are entitled
to notice of and to vote at the meeting and at any adjournment(s) thereof. The
Company has one series of common shares issued and outstanding, designated as
Common Stock, $0.001 par value per share and one series of undesignated
Preferred Stock, $0.001 par value per share. As of the Record Date, 120,000,000
of the Company's common shares were authorized and 26,740,316 shares were issued
and outstanding. As of the Record Date, 10,000,000 shares of the Company's
Preferred Stock were authorized and none were outstanding.
 
REVOCABILITY OF PROXIES
 
     Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by (A) delivering to the Company at its
principal offices (Attention: Manager, Investor Relations) (i) a written notice
of revocation or (ii) a duly executed proxy bearing a later date or (B)
attending the meeting and voting in person.
 
VOTING
 
     On all matters, each share has one vote. See Proposal One -- Election of
Two Class I Directors -- Vote Required.

<PAGE>   5
 
SOLICITATION OF PROXIES
 
     The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of the Company's common stock (the
"Common Stock") beneficially owned by others to forward to such beneficial
owners. The Company may reimburse persons representing beneficial owners of
Common Stock for their costs of forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone or facsimile.
 
QUORUM; ABSTENTIONS; BROKER NON-VOTES
 
     Votes cast by proxy or in person at the Annual Meeting ("Votes Cast") will
be tabulated by the Inspector of Elections (the "Inspector") who will be a
representative from Mellon Investor Services, the Company's Transfer Agent and
Registrar. The Inspector will also determine whether or not a quorum is present.
Except in certain specific circumstances, the affirmative vote of a majority of
shares present in person or represented by proxy at a duly held meeting at which
a quorum is present is required under Delaware law for approval of proposals
presented to stockholders. In general, Delaware law provides that a quorum
consists of a majority of shares entitled to vote and present or represented by
proxy at the meeting.
 
     The Inspector will treat shares that are voted WITHHELD or ABSTAIN as being
present and entitled to vote for purposes of determining the presence of a
quorum but will not be treated as votes in favor of approving any matter
submitted to the stockholders for a vote. When proxies are properly dated,
executed and returned, the shares represented by such proxies will be voted at
the Annual Meeting in accordance with the instructions of the stockholder. If no
specific instructions are given, the shares will be voted for (i) the election
of the nominees for directors set forth herein; (ii) the ratification of KPMG
LLP, as independent auditors of the Company for the fiscal year ending December
31, 2001; and (iii) upon such other business as may properly come before the
Annual Meeting or any adjournment thereof but will not be voted in the election
of directors other than as provided in (i) above.
 
     If a broker indicates on the enclosed proxy or its substitute that such
broker does not have discretionary authority as to certain shares to vote on a
particular matter (broker non-votes), those shares will be considered as present
with respect to establishing a quorum for the transaction of business. The
Company believes that the tabulation procedures to be followed by the Inspector
are consistent with the general statutory requirements in Delaware concerning
voting of shares and determination of a quorum.
 
     In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that while broker non-votes may be counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
broker non-votes should not be counted for purposes of determining the number of
votes cast with respect to the particular proposal on which the broker has
expressly not voted. Broker non-votes with respect to proposals set forth in
this Proxy Statement will therefore not be considered "Votes Cast" and,
accordingly, will not affect the determination as to whether the requisite
majority of Votes Cast has been obtained with respect to a particular matter.
 
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
 
     Stockholders are entitled to present proposals for action at a forthcoming
meeting if they comply with the requirements of the Company's bylaws and the
rules established by the Securities and Exchange Commission, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Proposals of
stockholders of the Company that are intended to be presented by such
stockholders at the Company's 2002 Annual Meeting of Stockholders must be
received by the Company no later than December 21, 2001, in order that they may
be considered for inclusion in the proxy statement and form of proxy relating to
that meeting.
 
     The attached proxy card grants the proxy holders discretionary authority to
vote on any matter raised at the Annual Meeting. If a stockholder intends to
submit a proposal at the Company's 2002 Annual Meeting of
 
                                        2

<PAGE>   6
 
Stockholders that is not eligible for inclusion in the proxy statement relating
to the meeting, and the stockholder fails to give the Company notice in
accordance with the requirements set forth in the Exchange Act but after
December 21, 2001 and on or before March 6, 2002, then the proxy holders will be
allowed to use their discretionary authority when and if the proposal is raised
at the Company's Annual Meeting in 2002.
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The following table sets forth as of February 28, 2001, certain information
with respect to the beneficial ownership of the Company's Common Stock by (i)
any person (including any group as that term is used in Section 13(d)(3) of the
Exchange Act), known by the Company to be the beneficial owner of more than 5%
of the Company's voting securities, (ii) each director and each nominee for
director to the Company, (iii) each of the executive officers named in the
Summary Compensation Table appearing herein, and (iv) all current executive
officers and directors of the Company as a group. The number and percentage of
shares beneficially owned are based on the aggregate of 26,738,316 shares of
Common Stock outstanding as of February 28, 2001. The Company does not know of
any arrangements, including any pledge by any person of securities of the
Company, the operation of which may at a subsequent date result in a change of
control of the Company.
 

<TABLE>
<CAPTION>
 
                                                                                PERCENT OF COMMON
         NAME AND ADDRESS OF BENEFICIAL OWNER(1)            NUMBER OF SHARES    STOCK OUTSTANDING(1)
         ---------------------------------------            ----------------    --------------------
<S>                                                         <C>                 <C>
William H. Gates, III(2)..................................      2,000,000                7.5%
  2365 Carillon Point
  Kirkland, WA 98033
TVM-Techno Venture Management III GmbH(3).................      1,644,104                6.1%
  101 Arch Street, Suite 1950
  Boston, MA 02110
John Griffin(4)...........................................      1,710,270                6.4%
  Blue Ridge Limited Partnership
  660 Madison Avenue
  New York, NY 10021
Remi Barbier(5)...........................................      8,180,000               30.6%
Gert Caspritz, Ph.D.(6)...................................      1,644,939                6.2%
  101 Arch Street, Suite 1950
  Boston, MA 02110
Sanford R. Robertson(7)...................................        275,520                1.0%
  Two Embarcadero Center, Suite 420
  San Francisco, CA 94111
David L. Johnson(8).......................................        190,479                  *
Barry M. Sherman, M.D.(9).................................        252,439                  *
Nadav Friedmann, M.D., Ph.D.(10)..........................        145,520                  *
  91 Bacon Court
  Lafayette, CA 94549
Michael J. O'Donnell(11)..................................         71,484                  *
  Wilson Sonsini Goodrich & Rosati
  650 Page Mill Road
  Palo Alto, CA 94304-1050
Edmon R. Jennings(12).....................................         65,625                  *
Wilfred R. Konneker, Ph.D. ...............................          2,007                  *
  Konneker Development Corporation
  142 Enchanted Parkway, Suite 200
  Manchester, MO 63021
All directors and executive officers as a group
  (9 persons)(13).........................................     10,828,013               40.5%
</TABLE>

 
---------------
* Represents beneficial ownership of less than one percent (1%) of the
  outstanding shares of the Company's Common Stock.
 
                                        3

<PAGE>   7
 
 (1) This table is based upon information supplied by officers, directors and
     principal stockholders and Schedules 13G filed with the SEC. Unless
     otherwise indicated in the footnotes to this table, and subject to
     community property laws where applicable, each of the stockholders named in
     this table has sole voting and investment power with respect to the shares
     indicated as beneficially owned. Applicable percentage of ownership is
     based on 26,738,316 shares of Common Stock outstanding as of February 28,
     2001, adjusted as required by the rules promulgated by the SEC.
 
 (2) Based on Schedule 13G as filed with the SEC and dated July 24, 2000.
     Includes 2,000,000 shares held by Cascade Investments, LLC, which is
     controlled by William H. Gates, III.
 
 (3) Based on Schedule 13G as filed with the SEC and dated February 14, 2001.
     TVM-Techno Venture Management III GmbH is controlled by its two managing
     directors, Helmut Schuhsler and Friedrick Bornikee.
 
 (4) Based on Schedule 13G as filed with the SEC and dated February 14, 2001.
     Includes 1,090,270 shares held by Blue Ridge Limited Partnership, 40,000
     shares held by Blue Ridge Private Equity Fund, and 580,000 shares held by
     John Griffin. All of the shares held by Blue Ridge Limited Partnership and
     Blue Ridge Private Equity Fund are beneficially owned by John Griffin.
 
 (5) Represents 8,180,000 shares issued which are subject to a repurchase right
     held by the Company which lapses over time.
 
 (6) Includes 1,644,104 shares held by TVM-Techno Venture Management III GmbH.
     Dr. Caspritz, a director of the Company, is a partner of TVM-Techno Venture
     Management. Dr. Caspritz disclaims beneficial ownership of the shares held
     by TVM-Techno Venture Management III GmbH, except to the extent of his
     partnership interest in such shares.
 
 (7) Includes 50,000 shares issued which are subject to a repurchase right held
     by the Company which lapses over time, and 25,520 shares issuable pursuant
     to options exercisable within 60 days of February 28, 2001.
 
 (8) Includes 190,000 shares issued which are subject to a repurchase right held
     by the Company which lapses over time.
 
 (9) Includes 168,749 shares issuable pursuant to options exercisable within 60
     days of February 28, 2001.
 
(10) Includes 100,000 shares issued which are subject to a repurchase right held
     by the Company which lapses over time, and 25,520 shares issuable pursuant
     to options exercisable within 60 days of February 28, 2001.
 
(11) Includes 45,000 shares held by WS Investment Company 98B, 12,162 shares
     held by WS Investment Company 99B, 1,777 shares held by WS Investment
     Company 2000A, 5,775 shares held by Michael J. O'Donnell, 5,000 of which
     are subject to a repurchase right held by the Company which lapses over
     time, and 6,770 shares issuable to Mr. O'Donnell pursuant to options
     exercisable within 60 days of February 28, 2001. Mr. O'Donnell, a director
     of the Company, is a general partner of WS Investment Company. Mr.
     O'Donnell disclaims beneficial ownership of the shares held by WS
     Investment Company, except to the extent of his partnership interest in
     such shares. Mr. O'Donnell is also a partner in Wilson Sonsini Goodrich &
     Rosati, Professional Corporation, the Company's corporate counsel.
 
(12) Includes 46,875 shares issuable pursuant to options exercisable within 60
     days of February 28, 2001.
 
(13) Includes 273,434 shares issuable pursuant to options exercisable within 60
     days of February 28, 2001.
 
                                        4

<PAGE>   8
 

                                  PROPOSAL ONE
 
                       ELECTION OF TWO CLASS I DIRECTORS
 
NOMINEES
 
     The Company's Board of Directors has six authorized directors and currently
consists of six members. The Company has a classified Board of Directors, which
is divided into three classes and whose terms expire at different times. The
three classes are currently comprised of the following directors:
 
     - Class I consists of Michael J. O'Donnell, who will serve until the annual
       meeting of stockholders to be held in 2001, and Wilfred R. Konneker,
       Ph.D., who will resign his position immediately prior to the 2001 annual
       meeting of stockholders;
 
     - Class II consists of Gert Caspritz, Ph.D., who will serve until the
       annual meeting of stockholders to be held in 2002, and Nadav Friedmann,
       M.D., Ph.D., who will resign his position immediately prior to the 2001
       annual meeting of stockholders and will be standing for re-election as a
       Class I Director at such meeting; and
 
     - Class III consists of Remi Barbier and Sanford R. Robertson, who will
       serve until the annual meeting of stockholders to be held in 2003.
 
     Effective as of May 30, 2001, Wilfred R. Konneker, Ph.D. will resign his
position as a Class I Director and as a member of the Audit Committee. Effective
as of May 30, 2001, Nadav Friedmann M.D., Ph.D. will resign his position as a
Class II Director and as a member of the Compensation Committee. Effective as of
May 30, 2001, the Board of Directors has appointed Dr. Friedmann to fill the
vacancies in the Class I Directors, the Audit Committee and the Compensation
Committee, and has reduced the number of authorized directors on the Board of
Directors from six to five.
 
     At each annual meeting of stockholders beginning with the 2001 annual
meeting, the successors to directors whose terms will then expire will be
elected to serve from the time of election and qualification until the third
annual meeting following election and until their successors have been duly
elected and qualified. Any additional directorships resulting from an increase
in the number of directors will be distributed among the three classes so that,
as nearly as possible, each class will consist of an equal number of directors.
 
     Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's two nominees named below, who are currently
directors of the Company. The nominees have consented to be named as nominees in
the proxy statement and to continue to serve as directors if elected. If either
nominee becomes unable or declines to serve as a director or if additional
persons are nominated at the meeting, the proxy holders intend to vote all
proxies received by them in such a manner as will assure the election of the
nominees listed below if possible (or, if new nominees have been designated by
the Board of Directors, in such a manner as to elect such nominees), and the
specific nominees to be voted for will be determined by the proxy holders.
 
     The nominees for the Class I Directors and their biographical information
are as follows:
 
     - Michael J. O'Donnell, Esq. Mr. O'Donnell has served as a director since
       June 1998. Mr. O'Donnell has been a member of the law firm of Wilson
       Sonsini Goodrich & Rosati, Professional Corporation, the Company's
       corporate counsel, since 1993. Mr. O'Donnell serves as corporate counsel
       to numerous public and private biopharmaceutical and life sciences
       companies. Mr. O'Donnell received a J.D. degree, cum laude, from Harvard
       University and a B.A. degree from Bucknell University, summa cum laude.
 
     - Nadav Friedmann, M.D., Ph.D. Dr. Friedmann has served as a director since
       September 1998. Dr. Friedmann is the owner and President of EMET Research
       Inc., a consulting firm in the pharmaceutical industry. Dr. Friedmann was
       President and Chief Executive Officer of Daiichi Pharmaceutical
       Corporation, a pharmaceutical company, from 1997 to April 2000, and
       before that was a Consultant to the Board of Directors of Daiichi
       Pharmaceutical Co., Ltd. in Tokyo from 1995 to
 
                                        5

<PAGE>   9
 
       1997. From 1992 to 1995, Dr. Friedmann served as Vice President, Clinical
       Research at Xoma Corporation. From 1980 to 1991, Dr. Friedmann held
       various leadership positions, with Johnson & Johnson, a healthcare
       company, including Vice President and Head of Research of J&J
       Biotechnology Center. Prior to that, Dr. Friedmann was Medical Director
       of Abbott Laboratories. Dr. Friedmann is a graduate of Albert Einstein
       College of Medicine, where he received an M.D., and of the University of
       California, San Diego, where he received a Ph.D. degree in Biochemistry.
 
     The Company is not aware of any reason that either nominee will be unable
or will decline to serve as a director. The term of office of each person
elected as a director will continue until the Company's Annual Meeting of
Stockholders held in 2004 or until a successor has been elected and qualified.
Other than the relationships noted in the section "Certain Business
Relationships," there are no arrangements or understandings between any director
or executive officer and any other person pursuant to which he is or was to be
selected as a director or officer of the Company.
 
     The following table sets forth for each Class I Director, the Class II
Director, each Class III Director and the executive officers of the Company,
their ages and present positions with the Company as of the Record Date.
 

<TABLE>
<CAPTION>
                NAME                  AGE                           POSITION
                ----                  ---                           --------
<S>                                   <C>   <C>
Remi Barbier........................  41    President, Chief Executive Officer, Chairman of the Board
                                            of Directors and Class III Director
Barry M. Sherman, M.D. .............  59    Executive Vice President and Chief Medical Officer
Edmon R. Jennings...................  54    Chief Commercialization Officer
David L. Johnson....................  47    Chief Financial Officer
Gert Caspritz, Ph.D.(1).............  51    Class II Director
Nadav Friedmann, M.D., Ph.D.(2).....  58    Class II Director
Wilfred R. Konneker(1)..............  79    Class I Director
Michael J. O'Donnell, Esq. .........  42    Class I Director and Secretary
Sanford R. Robertson(1)(2)..........  69    Class III Director
</TABLE>

 
---------------
(1) Member of Audit Committee.
 
(2) Member of Compensation Committee.
 
     There is no family relationship between any director or executive officer
of the Company.
 
     Remi Barbier, the Company's founder, has served as the Company's President,
Chief Executive Officer and Chairman since the Company's inception in May 1998.
Prior to that time, Mr. Barbier helped in the growth or founding of: Exelixis
Inc., a functional genomics company, ArQule, a chemistry company, and EnzyMed
(now owned by Albany Molecular Research), a chemistry company. Mr. Barbier
served as Chief Operating Officer of Exelixis from January 1996 to May 1998.
Prior to that, he was Vice President of Corporate Development and Clinical
Project Manager of Xoma Corporation, a biotechnology company, from October 1993
to December 1995. Mr. Barbier received his B.A. from Oberlin College and his
M.B.A. from the University of Chicago. He is a director of Mendel Biotechnology,
Inc.
 
     Barry M. Sherman, M.D. has served as the Company's Executive Vice President
and Chief Medical Officer since April 1999. From April 1996 to February 1999,
Dr. Sherman was President and Chief Executive Officer of Anergen Inc., an
immunology biotechnology company. From 1985 until 1996, Dr. Sherman held various
positions at Genentech Inc., a biotechnology company, most recently serving as
Senior Vice President and Chief Medical Officer with responsibility for
Genentech's overall clinical development activities. Since 1986, Dr. Sherman has
also been a Clinical Professor of Internal Medicine at Stanford University. From
1971 to 1985, Dr. Sherman was a Professor of Internal Medicine and director of
the Clinical Research Center at the University of Iowa College of Medicine. Dr.
Sherman received his M.D., with honors, from the University of Michigan.
 
     Edmon R. Jennings joined Pain Therapeutics, Inc. in February 2000. Prior to
that time, Mr. Jennings held senior management positions at Genentech, including
Vice President of Corporate Development from
 
                                        6

<PAGE>   10
 
December 1995 to January 2000, Vice President of Sales and Marketing from
January 1994 to December 1995 and Vice President of Sales from December 1990 to
December 1993. Prior to Genentech, Mr. Jennings held positions with
Bristol-Myers Oncology and Bristol Laboratories, both of which were divisions of
Bristol-Myers (now Bristol-Myers Squibb), a pharmaceutical company, for
approximately twelve years. Mr. Jennings received his B.A. from the University
of Michigan.
 
     David L. Johnson, CPA joined Pain Therapeutics, Inc. in January 2000. From
November 1998 to December 1999, Mr. Johnson was an independent financial
consultant, and acted as Chief Financial Officer at Aradigm, a drug delivery
technology company. From October 1997 to November 1998, Mr. Johnson held
positions as Vice President of Finance and Administration of Elan
Pharmaceuticals North America and Vice President of Finance and Chief Financial
Officer of Athena Neurosciences, both of which were divisions of Elan
Pharmaceuticals, a pharmaceutical company. From September 1996 to October 1997,
Mr. Johnson was Director of Finance at Gilead Sciences, a biopharmaceutical
company. From January 1995 to September 1996, Mr. Johnson was an independent
financial consultant and provided accounting services to Chiron, a biotechnology
company. From June 1993 to December 1994, Mr. Johnson was Director of Financial
Planning and Operational Analysis at Chiron. Mr. Johnson is a former member of
the audit staff of KPMG LLP, the Company's auditors. Mr. Johnson received his
B.S. in Accounting from Oklahoma State University.
 
     Gert Caspritz, Ph.D. has served as a director since November 1999. Dr.
Caspritz is currently a partner of TVM-Techno Venture Management, an
international venture capital firm based in Germany. Prior to joining TVM in
June 1999, he was employed by Hoechst Marion Roussel, now Aventis Pharma, a
pharmaceutical company, for over 15 years, most recently as Vice President of
New Technologies Licensing. During his tenure at Hoechst Marion Roussel he was a
member of various strategy task forces, including the group that negotiated many
of Hoechst Marion Roussel's biotechnology collaborations. Dr. Caspritz serves on
the board of Coley Pharmaceutical Group, PhytoMedica, now Vivoquest, Enanta,
Cydex, Transmolecular, Transave and Epicept, and is a board observer to Sunol
Molecular. Dr. Caspritz received his undergraduate degree and his Ph.D. in
Biology from the University of Mainz, Germany.
 
     Nadav Friedmann's biographical information can be found above.
 
     Wilfred R. Konneker, Ph.D. has served as a director since November 1999.
Dr. Konneker has been a private investor since retiring as Vice President of the
radio pharmaceuticals division of Mallinckrodt, Inc., a healthcare company, in
1973. He served as a director of Mallinckrodt, Inc. from 1966 to 1975. Dr.
Konneker founded Nuclear Consultants, Inc., the first supplier of radio-isotopes
to the pharmaceutical industry, in 1950, and served as its President and Chief
Executive Officer until its merger with Mallinckrodt, Inc. in 1966. Dr. Konneker
sits on the Board of Trustees for Washington University and the Board of
Directors for Ohio University Foundation, the St. Louis Symphony, the Opera
Theater of St. Louis and the Chautauqua Foundation. Dr. Konneker received his
Ph.D. in Nuclear Physics from Washington University and an undergraduate degree
from Ohio University.
 
     Michael J. O'Donnell's biographical information can be found above.
 
     Sanford R. Robertson has served as a director since September 1998. Mr.
Robertson has been a general partner of Francisco Partners, a technology
investment fund since January 2000. From October 1998 to December 1999 he was
President of S. R. Robertson and Co., LLC. Mr. Robertson is the founder and
former chairman of Robertson, Stephens & Company, an investment banking firm
founded in October 1978, with which Mr. Robertson was associated through
September 1998. Mr. Robertson is also the founder of Robertson, Colman, Siebel &
Weisel, later renamed Montgomery Securities. He is also a former director of AIM
Management Group Inc. (now AMVESCAP) and BankAmerica Corporation. Mr. Robertson
received his B.B.A. and M.B.A. degrees with distinction from the University of
Michigan. He is also a director of Big Vine.com, Inc. and Netro Corporation.
 
DIRECTOR COMPENSATION
 
     The Company reimburses its officers and directors for expenses incurred in
attending any Board of Directors or committee meeting.
 
                                        7

<PAGE>   11
 
     The Company's non-employee directors are eligible to participate in the
Company's 1998 Stock Plan. The shares subject to the options granted to
non-employee directors will vest annually over a four year period following the
date of grant. Additionally, beginning at the Company's annual meeting of
stockholders to be held on May 31, 2001 and at each successive annual
stockholder meeting, each non-employee director who continues to serve as a
director through the date of such annual meeting will receive an option to
purchase 20,000 shares of the Company's Common Stock. The exercise price per
share for all options automatically granted to directors under the Company's
1998 Stock Plan will be equal to the market price of the Company's Common Stock
on the date of grant and will have a ten year term, but will generally terminate
within a specified time, as defined in the 1998 Stock Plan, following the date
the option holder ceases to be a director or consultant.
 
     Employee directors who meet the eligibility requirements may participate in
the Company's 2000 Employee Stock Purchase Plan.
 
     The Company has renewed its directors and officers indemnification
insurance coverage. This insurance covers directors and officers individually.
These policies run from July 13, 2000, through July 13, 2001, at a total cost of
$255,000. The primary carrier is Zurich American.
 
BOARD MEETINGS AND COMMITTEES
 
     The Board of Directors of the Company held a total of four meetings during
the fiscal year ended December 31, 2000. No director serving throughout fiscal
year 2000 attended fewer than 75% of the aggregate of all meetings of the Board
of Directors and the committees of the Board upon which such director served.
Mr. O'Donnell and Dr. Freidmann attended all meetings of the Board of Directors.
The Board of Directors has two standing committees: the Audit Committee and the
Compensation Committee. The Board of Directors does not have a standing
Nominating Committee.
 
     The Audit Committee consists of directors Caspritz, Konneker and Robertson,
each of whom is independent as defined under the National Association of
Securities Dealers listing standards. The Audit Committee reviews the Company's
internal accounting procedures, consults with and reviews the services provided
by the Company's independent accountants and makes recommendations to the Board
of Directors regarding the selection of independent accountants. The Audit
Committee held two meetings during fiscal 2000. A copy of the Audit Committee
charter is attached to this Proxy Statement as Appendix A.
 
     The Compensation Committee consists of directors Friedmann and Robertson.
The Compensation Committee reviews and recommends to the Board of Directors the
salaries, incentive compensation and benefits of the Company's officers and
employees and administers the Company's stock plans and employee benefit plans.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The Board of Directors established the Compensation Committee in March
2000. Prior to establishing the Compensation Committee, the Board of Directors
as a whole performed the functions delegated to the Compensation Committee. No
member of the Compensation Committee has served as a member of the Board of
Directors or Compensation Committee of any entity that has one or more executive
officers serving as a member of the Company's Board of Directors or Compensation
Committee. Since the formation of the Compensation Committee, none of its
members has been an officer or employee.
 
                                        8

<PAGE>   12
 
VOTE REQUIRED
 
     Directors will be elected by a plurality vote of the shares of the
Company's Common Stock present or represented and entitled to vote on this
matter at the meeting. Accordingly, the candidate receiving the highest number
of affirmative votes of shares represented and voting on this proposal at the
meeting will be elected directors of the Company. Votes withheld from a nominee
and broker non-votes will be counted for purposes of determining the presence or
absence of a quorum but, because directors are elected by a plurality vote, will
have no impact once a quorum is present. See "Quorum; Abstentions; Broker
Non-Votes."
 
                         THE CLASS II AND III DIRECTORS
                        RECOMMEND THAT STOCKHOLDERS VOTE
 
                    FOR THE CLASS I NOMINEES LISTED ABOVE.
 
                                        9

<PAGE>   13
 

                                  PROPOSAL TWO
 
       RATIFICATION OF APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS TO
            THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001
 
     The Board of Directors has selected KPMG LLP, independent auditors, to
audit the financial statements of the Company for the fiscal year ending
December 31, 2001, and recommends that stockholders vote for ratification of
s
uch appointment. Although action by stockholders is not required by law, the
Board of Directors has determined that it is desirable to request approval of
this selection by the stockholders. Notwithstanding the selection or a
ratification, the Board of Directors, in its discretion, may direct the
appointment of new independent public accountants at any time during the year,
if the Board of Directors determines that such a change would be in the best
interest of the Company and its stockholders. In the event of a negative vote or
ratification, the Board of Directors will reconsider its selection.
 
     KPMG LLP has audited the Company's financial statements since the period
ended December 31, 1998. Representatives of KPMG LLP are expected to be present
at the meeting and will be afforded the opportunity to make a statement if they
desire to do so. The representatives of KPMG LLP are also expected to be
available to respond to appropriate questions.
 
           FEES BILLED TO THE COMPANY BY KPMG, LLP DURING FISCAL 2000
 
AUDIT FEES
 
     Fees paid by the Company to KPMG LLP for audit of the Company's 2000
financial statements and timely quarterly reviews of the Company's financial
information included on Form 10-Q totaled $82,400.
 
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
 
     The Company did not engage KPMG LLP to provide advice to the Company
regarding financial information systems design and implementation during the
fiscal year ended December 31, 2000.
 
ALL OTHER FEES
 
     Fees billed to the Company by KPMG LLP during the Company's 2000 fiscal
year for all other non-audit services rendered to the Company, including
accounting advice services totaled $374,300.
 
        THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
      VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS INDEPENDENT
     AUDITORS TO THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001.
 
                                        10

<PAGE>   14
 

EXECUTIVE COMPENSATION
 
     The following table sets forth all compensation paid or accrued during
fiscal years 2000, 1999 and 1998 to the Company's President and Chief Executive
Officer, and each of the Company's three other most highly compensated executive
officers whose annual compensation exceeded $100,000 for fiscal year 2000.
 
                           SUMMARY COMPENSATION TABLE
 

<TABLE>
<CAPTION>
                                                                             LONG-TERM
                                                                            COMPENSATION
                                                                               AWARDS
                                                                            ------------
                                                     ANNUAL COMPENSATION     SECURITIES
                                                     --------------------    UNDERLYING       ALL OTHER
    NAME AND PRINCIPAL POSITION       FISCAL YEAR     SALARY      BONUS      OPTIONS(#)    COMPENSATION(1)
    ---------------------------       -----------    ---------   --------   ------------   ---------------
<S>                                   <C>            <C>         <C>        <C>            <C>
Remi Barbier(2).....................     2000        $312,500    $45,000            --         $10,085
  President, Chief Executive Officer     1999        $176,042         --            --         $ 7,217
  and Chairman of the Board              1998        $ 37,500         --            --              --
Barry M. Sherman, M.D.(3)...........     2000        $249,559    $15,000            --         $ 1,189
  Executive Vice President and           1999        $132,275         --       600,000              --
  Chief Medical Officer                  1998              --         --            --              --
Edmon R. Jennings(4)................     2000        $183,476    $15,000       225,000         $ 1,400
  Chief Commercialization Officer        1999              --         --            --              --
                                         1998              --         --            --              --
David L. Johnson(5).................     2000        $177,125    $25,000    190,000(6)         $ 1,231
  Chief Financial Officer                1999              --         --            --              --
                                         1998              --         --            --              --
</TABLE>

 
---------------
(1) All other compensation includes life insurance paid by the Company on behalf
    of the executive officers.
 
(2) Mr. Barbier, the Company's founder, commenced his employment at the
    Company's inception in May 1998.
 
(3) Dr. Sherman commenced his employment with the Company in April 1999.
 
(4) Mr. Jennings commenced his employment with the Company in February 2000.
 
(5) Mr. Johnson commenced his employment with the Company in January 2000.
 
(6) Mr. Johnson purchased 190,000 shares of common stock at an exercise price of
    $0.20 per share subject to a repurchase right held by the Company which
    lapses over a period of four years, beginning January 3, 2000 (the date on
    which Mr. Johnson commenced employment with the Company), at a rate of 1/48
    per month. At December 31, 2000, 146,459 of such shares remained subject to
    the Company's right of repurchase.
 
OPTION GRANTS IN 2000
 
     The following table sets forth information concerning grants of stock
options to each of the executive officers named in the table above during 2000.
All options granted to these executive officers in 2000 were granted under the
1998 Stock Plan, as amended. Except as otherwise noted, one forty-eighth of the
shares subject to each option vests and becomes exercisable one month after the
vesting commencement date, and an additional one forty-eighth of the shares
subject to each option vests each month thereafter. The percent of the total
options set forth below is based on an aggregate of 934,000 options granted to
employees and consultants during 2000. Prior to the initial public offering in
July 2000, options were granted at fair market value as determined by the Board
of Directors on the date of grant. Subsequent to the initial public offering,
options were granted at market value on the date of grant.
 
     Potential realizable value represents hypothetical gains that could be
achieved for the options if exercised at the end of the option term assuming the
initial public offering price of the Company's Common Stock of $12.00 per share
or, for options granted after the Company's initial public offering, the fair
market value of the Common Stock on the date of grant appreciates at 5% and 10%
over the option term. The assumed 5% and
 
                                        11

<PAGE>   15
 
10% rates of stock price appreciation are provided in accordance with rules of
the Securities and Exchange Commission and do not represent our estimate or
projection of the Company's future Common Stock price.
 

<TABLE>
<CAPTION>
                                                 INDIVIDUAL GRANTS
                                ---------------------------------------------------
                                              PERCENT OF                              POTENTIAL REALIZABLE VALUE
                                NUMBER OF    TOTAL OPTIONS                            AT ASSUMED ANNUAL RATES OF
                                SECURITIES    GRANTED TO                                STOCK APPRECIATION FOR
                                UNDERLYING     EMPLOYEES     EXERCISE                         OPTION TERM
                                 OPTIONS        DURING         PRICE     EXPIRATION   ---------------------------
             NAME                GRANTED       PERIOD(%)     PER SHARE      DATE           5%            10%
             ----               ----------   -------------   ---------   ----------   ------------   ------------
<S>                             <C>          <C>             <C>         <C>          <C>            <C>
Remi Barbier..................        --           --             --            --             --             --
Barry M. Sherman, M.D. .......        --           --             --            --             --             --
Edmon R. Jennings.............   225,000          24%          $1.00      02/01/10     $4,173,015     $6,778,104
David L. Johnson(1)...........   190,000          20%          $0.20      01/03/10     $3,651,982     $5,815,171
</TABLE>

 
---------------
(1) Mr. Johnson purchased 190,000 shares of common stock at an exercise price of
    $0.20 per share subject to a repurchase right held by the Company which
    lapses over a period of four years, beginning January 3, 2000 (the date on
    which Mr. Johnson commenced employment with the Company), at a rate of
    1/48th per month. At December 31, 2000, 146,459 of such shares remained
    subject to the Company's right of repurchase.
 
AGGREGATE OPTION EXERCISES IN 2000 AND VALUES AT DECEMBER 31, 2000
 
     The following table sets forth information concerning exercisable and
unexercisable stock options held by the executive officers named in the summary
compensation table at December 31, 2000. The value of unexercised in-the-money
options is based on the fair market value per share, as of December 31, 2000, of
the Company's Common Stock underlying the options minus the actual exercise
prices. All options were granted under the Company's 1998 Stock Plan, as
amended. Except as otherwise noted, these options vest over four years and
otherwise generally conform to the terms of the Company's 1998 Stock Plan, as
amended.
 

<TABLE>
<CAPTION>
                                                           NUMBER OF SECURITIES          VALUE OF UNEXERCISED
                                                          UNDERLYING UNEXERCISED             IN-THE-MONEY
                                                                OPTIONS AT                    OPTIONS AT
                               SHARES                        DECEMBER 31, 2000           DECEMBER 31, 2000(1)
                              ACQUIRED       VALUE      ---------------------------   ---------------------------
           NAME              ON EXERCISE    REALIZED    EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
           ----              -----------   ----------   -----------   -------------   -----------   -------------
<S>                          <C>           <C>          <C>           <C>             <C>           <C>
Remi Barbier...............         --             --          --             --              --             --
Barry M. Sherman, M.D. ....     83,333     $1,231,245     118,750        397,917      $1,752,031     $5,871,723
Edmon R. Jennings..........     18,750     $  260,156      28,125        178,125      $  390,234     $2,471,484
David L. Johnson(2)........    190,000     $2,788,250          --             --              --             --
</TABLE>

 
---------------
(1) Value is determined by subtracting the exercise price of an option from the
    $14.875 per share fair market value of the Company's Common Stock as of
    December 31, 2000.
 
(2) Mr. Johnson purchased 190,000 shares of common stock at an exercise price of
    $0.20 per share subject to a repurchase right held by the Company which
    lapses over a period of four years, beginning January 3, 2000 (the date on
    which Mr. Johnson commenced employment with the Company), at a rate of
    1/48th per month. At December 31, 2000, 146,459 of such shares remained
    subject to the Company's right of repurchase.
 
EMPLOYMENT AND SEVERANCE AGREEMENTS
 
     In July 1998, the Company entered into an employment agreement with Mr.
Barbier. Under the terms of the agreement as amended by the Board of Directors,
Mr. Barbier receives an annual salary of $350,000, and is eligible to receive an
annual bonus in an amount to be determined by the Board of Directors. The term
of the agreement is three years, and it automatically renews for consecutive
one-year terms unless the Company or Mr. Barbier terminates the agreement
earlier on sixty days' notice. The agreement entitles Mr. Barbier to serve on
the Board of Directors for as long as he is the Company's President and Chief
Executive Officer. Thereafter, he will remain a member of the Board of Directors
only if the Company terminates his employment without cause. The agreement also
provides that if the Company terminates Mr. Barbier without
 
                                        12

<PAGE>   16
 
cause, the Company must pay him his salary for twelve months following the date
of his termination and relinquish its right to repurchase any of his shares of
its Common Stock.
 
     In March 1999, the Company executed an employment offer letter for Dr.
Sherman. Under the terms of the offer as amended by the Board of Directors, Dr.
Sherman receives an annual salary of $250,000. The offer letter provides that
Dr. Sherman's employment may be terminated at any time by either Dr. Sherman or
the Company upon thirty days' notice.
 
     The Company executed employment offer letters for Mr. Johnson and Mr.
Jennings in November and December 1999, respectively. Pursuant to these offer
letters, as amended by the Board of Directors, Mr. Johnson and Mr. Jennings
receive annual base salaries of $200,000 and $205,000, respectively. In
addition, Mr. Johnson was permitted to purchase 190,000 shares of the Company's
Common Stock at a per share exercise price of $0.20 subject to the Company's
repurchase right, and Mr. Jennings received an option to purchase 225,000 shares
of the Company's Common Stock at a per share exercise price of $1.00. The
Company may terminate either officer's employment at any time and for any reason
or no reason. However, if the Company terminates Mr. Johnson's or Mr. Jennings'
employment without cause, the Company must pay severance equal to such officer's
base salary until the sooner of the date that he secures new employment, or the
date that is three months after the date of his termination. Neither officer
will receive any severance if he voluntarily terminates his employment any time,
or if the Company terminates him for cause at any time.
 
 
                     REPORT OF THE COMPENSATION COMMITTEE
                           OF THE BOARD OF DIRECTORS
 
     The following is the report of the Compensation Committee of the Board of
Directors with respect to the compensation paid to the Company's executive
officers during the fiscal year ended December 31, 2000. Actual compensation
earned during fiscal 2000 by the named executive officers is shown in the
Summary Compensation Table above under "Executive Compensation."
 
INTRODUCTION
 
     The Compensation Committee of the Board of Directors establishes the
general compensation policies of the Company, and recommends to the Board of
Directors the compensation plans and specific compensation levels for executive
officers. One of the Committee's goals is to ensure that the Company's executive
compensation programs are competitive with those of regional companies in our
industry. In addition, the Committee strives to enable the Company to attract
and retain key people and motivate them to achieve or exceed certain key
objectives of the Company by making individual compensation directly dependent
on the achievement of certain corporate and individual goals, and by providing
rewards for meeting or exceeding those goals.
 
COMPENSATION PROGRAMS
 
     Base Salary. The Committee recommends base salaries for executive officers,
and reviews such salaries on an annual basis. In general, the salaries of
executive officers are based upon a review of surveys of publicly held companies
in our industry and of a similar size to the Company. Base pay increases vary
according to individual contributions to the Company's success and comparisons
to similar positions within the Company and at other comparable companies.
 
     Bonuses. The Committee recommends bonuses for executive officers to the
Board of Directors. Each executive officer is evaluated individually to
determine a bonus for the fiscal year based on performance criteria, including,
among other criteria, progress towards or achievement of milestones in such
executive's area of responsibility and with respect to the Company's financial
performance generally.
 
     Stock Options. The Committee believes that stock options provide additional
incentive to officers to work towards maximizing stockholder value. The
Committee views stock options as one of the more important components of the
Company's long-term, performance-based compensation philosophy. These options
are provided through initial grants at or near the date of hire and through
subsequent periodic grants. The
 
                                        13

<PAGE>   17
 
Company generally grants options that become exercisable over a four year period
as a means of encouraging executives and other employees to remain with the
Company and to promote its success. Options granted by the Company to its
executive officers and other employees have exercise prices equal to the fair
market value at the time of grant. This approach is designed to focus executives
on the enhancement of stockholder value over the long term and encourage equity
ownership in the Company. Options vest and become exercisable at such time as
determined by the Board. The initial option grant is designed to be competitive
with those of comparable companies for the level of the job that the executive
holds and motivate the executive to make the kind of decisions and implement
strategies and programs that will contribute to an increase in the Company's
stock price over time. Periodic additional stock options within the comparable
range for the job are granted to reflect the executives' ongoing contributions
to the Company, to create an incentive to remain at the Company and to provide a
long-term incentive to achieve or exceed the Company's financial goals.
 
COMPENSATION LIMITATIONS
 
     The Company has considered the potential future effects of Section 162(m)
of the Internal Revenue Code on the compensation paid to the Company's executive
officers. Under Section 162(m) of the Internal Revenue Code, adopted in August
1993, and regulations adopted thereunder by the Internal Revenue Service,
publicly-held companies may be precluded from deducting certain compensation
paid to an executive officer in excess of $1.0 million in a year. The
regulations exclude from this limit performance-based compensation and stock
options provided certain requirements, such as stockholder approval, are
satisfied. The Company plans to take actions, as necessary, to ensure that its
stock option plans and executive annual cash bonus plans qualify for exclusion.
 
COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
 
     Remi Barbier, a founder of the Company, is the Chief Executive Officer,
President and Chairman of the Board of Directors of the Company. The Committee
uses the performance criteria described above in setting the base salary and
bonus for Mr. Barbier, except that his salary is adjusted according to whether
overall corporate, rather than individual, objectives were met. During the last
fiscal year, Mr. Barbier led the Company through its successful initial public
offering, the ongoing progress in the clinical development of its product
candidates and the expansion of the Company's internal systems and
infrastructure in support of these activities. Accordingly, the Committee and
the Board of Directors increased Mr. Barbier's base salary of $275,000 to
$350,000 effective September 1, 2000. Mr. Barbier was also awarded a cash bonus
of $45,000 in 2000. Given Mr. Barbier's significant stock ownership of the
Company, the Committee did not grant him any stock options in fiscal 2000.
 
                                      Respectfully Submitted By:
 
                                      MEMBERS OF THE COMPENSATION COMMITTEE
 
                                      Nadav Friedmann, M.D., Ph.D., Chairman
                                      Sanford R. Robertson
 
Dated: April 20, 2001
 
                                        14

<PAGE>   18
 
                         REPORT OF THE AUDIT COMMITTEE
                           OF THE BOARD OF DIRECTORS
 
     The following is the report of the Audit Committee of the Board of
Directors. The purpose of the Audit Committee is to monitor the Company's system
of internal accounting controls, to make recommendations to the Board of
Directors regarding the selection of independent auditors and to provide to the
Board of Directors such additional information and materials as it may deem
necessary to make the Board of Directors aware of significant financial matters
which require the Board of Directors' attention.
 
     The Audit Committee has reviewed and discussed the audited financial
statements of the Company for the fiscal year ended December 31, 2000 with
management and KPMG LLP, the Company's independent auditors. In addition, the
Audit Committee has discussed with KPMG LLP the matters required to be discussed
by Statement on Auditing Standards No. 61 (Communications with Audit Committee).
The Audit Committee also has received the written disclosures and the letter
from KPMG LLP as required by the Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and the Audit Committee has
discussed the independence of KPMG LLP with that firm. The Audit Committee also
has considered the non-audit services provided by KPMG LLP and determined that
the services provided are compatible with maintaining the independent
accountant's independence.
 
     Based on the Audit Committee's review of the matters noted above and its
discussions with the Company's independent auditors and the Company's
management, the Audit Committee recommended to the Board of Directors that the
financial statements be included in the Company's Annual Report on Form 10-K.
This report has been provided by Gert Caspritz, Wilfred Konneker and Sanford R.
Robertson, the members of the Audit Committee.
 
                                          Respectfully Submitted by:
 
                                          MEMBERS OF THE AUDIT COMMITTEE
 
                                          Gert Caspritz, Ph.D., Chairman
                                          Wilfred Konneker, Ph.D.
                                          Sanford R. Robertson
 
Dated: April 20, 2001
 
                                        15

<PAGE>   19
 
PERFORMANCE GRAPH
 
     Set forth below is a line graph comparing the percentage change in the
cumulative return to the stockholders of the Company's Common Stock with the
cumulative return of the Nasdaq Index and of the Nasdaq Pharmaceutical Composite
Index for the period commencing July 14, 2000 and ending on December 31, 2000.
Returns for the indices are weighted based on market capitalization at the
beginning of each measurement point.
 
           COMPARISON OF HISTORICAL CUMULATIVE TOTAL RETURN(*) AMONG
            PAIN THERAPEUTICS, INC., NASDAQ COMPOSITE INDEX AND THE
                     NASDAQ PHARMACEUTICAL COMPOSITE INDEX
 
                              [PERFORMANCE GRAPH]
---------------
 
(*) The graph assumes that $100 was invested on July 14, 2000, in the Company's
    Common Stock, at the offering price of $12.00 per share, and $100 was
    invested on June 30, 2000, in the Nasdaq Composite Index and the Nasdaq
    Pharmaceutical Composite Index, and that all dividends were reinvested. The
    Company has not declared or paid any dividends on the Company's Common
    Stock. Stockholder returns over the indicated period should not be
    considered indicative of future stockholder returns.
 
                    CUMULATIVE TOTAL RETURN AT PERIOD ENDED
 

<TABLE>
<CAPTION>
----------------------------------------------------------------------
                                                   7/14/00    12/31/00
----------------------------------------------------------------------
<S>                                                <C>        <C>
 Pain Therapeutics, Inc.                           100.00      123.96
 NASDAQ Composite Index                            100.00       61.67
 Nasdaq Pharmaceutical Composite Index             100.00       91.30
----------------------------------------------------------------------
</TABLE>

 
     The information contained above under the captions "Report of the
Compensation Committee of the Board of Directors," "Report of the Audit
Committee of the Board of Directors" and "Performance Graph" shall not be deemed
to be soliciting material or to be filed with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as
 
                                        16

<PAGE>   20
 
amended, (the "Securities Act") or the Exchange Act, except to the extent that
the Company specifically incorporates it by reference into such filing.
 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Such
officers, directors and ten-percent stockholders are also required by SEC rules
to furnish the Company with copies of all forms that they file pursuant to
Section 16(a). Based solely on its review of the copies of such forms received
by it, or written representations from certain reporting persons, the Company
believes that during fiscal 2000 all executive officers and directors of the
Company complied with all applicable filing requirements.
 
 
                        CERTAIN BUSINESS RELATIONSHIPS
 
     Since our inception, and during the last fiscal year, Wilson Sonsini
Goodrich & Rosati, Professional Corporation has provided legal services to us.
One of the directors of the Company, Michael O'Donnell, Esq., is a member of
Wilson Sonsini Goodrich & Rosati, Professional Corporation. Wilson Sonsini
Goodrich & Rosati, Professional Corporation beneficially owns an aggregate of
64,714 shares of the Company's Common Stock.
 
     During the last fiscal year, EMET Research Inc., a consulting firm in the
pharmaceutical industry, has provided consultation regarding clinical trials
design, data review and interpretation. The Company paid EMET Research Inc.
$36,000 for services in 2000. One of the directors of the Company, Nadav
Friedmann, Ph.D., M.D., is the owner and President of EMET Research Inc. Dr.
Friedmann beneficially owns an aggregate of 145,520 shares of the Company's
Common Stock.
 

                           RELATED PARTY TRANSACTIONS
 
     In the Company's last fiscal year, there has not been nor is there
currently proposed any transaction or series of similar transactions to which
the Company was or is to be a party in which the amount involved exceeds $60,000
and in which any director, executive officer, holder of more than 5% of the
Common Stock of the Company or any member of the immediate family of any of the
foregoing persons had or will have a direct or indirect material interest other
than (1) compensation agreements and other arrangements, which are described
where required in "Employment and Severance Agreements" and (2) the transactions
described below.
 
I
NVESTOR RIGHTS AGREEMENT
 
     The Company has entered into an agreement with the former holders of the
Company's preferred stock, including Nadav Friedmann, M.D., Ph.D., and Sanford
Robertson, and entities affiliated with Cascade Investments, LLC, TVM-Techno
Venture Management III GmbH, Blue Ridge Limited Partnership, William H. Gates,
III, John Griffin, Gert Caspritz, Ph.D. and Michael J. O'Donnell, Esq., pursuant
to which former preferred stockholders will have registration rights with
respect to their shares of Common Stock. The registration rights provide that if
the Company proposes to register any securities under the Securities Act, either
for the Company's own account or for the account of other security holders
exercising registration rights, they are entitled to notice of the registration
and are entitled to include shares of their Common Stock in the registration.
This right is subject to conditions and limitations, including the right of the
underwriters in an offering to limit the number of shares included in the
registration. The holders of these shares may also require the Company to file
up to two registration statements under the Securities Act at the Company's
expense with respect to their shares of Common Stock. The Company is required to
use its best efforts to effect these registrations, subject to conditions and
limitations. Furthermore, the holders of these shares may require the Company to
file additional registration statements on Form S-3, subject to conditions and
limitations. These rights terminate on the earlier of five years after the
effective date of the Company's
 
                                        17

<PAGE>   21
 
July 14, 2000 initial public offering, the date on which all shares subject to
these registration rights have been sold to the public, or when a holder is able
to sell all its shares pursuant to Rule 144 under the Securities Act in any
90-day period.
 
     Upon the completion of the Company's initial public offering, all shares of
the Company's outstanding preferred stock were automatically converted into an
equal number of shares of Common Stock. Dr. Caspritz, one of the Company's
directors, is a Partner of TVM-Techno Venture Management, an entity considered a
5% shareholder. Dr. Caspritz disclaims beneficial ownership of the securities
held by TVM-Techno Venture Management, except for his proportional interest in
TVM-Techno Venture Management. Mr. Barbier is the Company's President, Chief
Executive Officer, one of the Company's directors and a 5% stockholder. WS
Investment Company 98B, WS Investment Company 99B and WS Investment Company
2000A are affiliated entities. Mr. Michael O'Donnell, Esq., one of the Company's
directors, is a general partner of WS Investment Company. Mr. O'Donnell
disclaims beneficial ownership of the securities held by such entities, except
for his proportional interest in the entities.
 
STOCK OPTION GRANTS TO OFFICERS AND DIRECTORS
 
     During fiscal 2000, the Company granted the following options to purchase
the Company's Common Stock to its officers, directors and stockholders who
beneficially own 5% or more of its Common Stock.
 

<TABLE>
<CAPTION>
                                                                              EXERCISE PRICE
                      NAME                        DATE OF GRANT    OPTIONS      PER SHARE
                      ----                        -------------    -------    --------------
<S>                                               <C>              <C>        <C>
Remi Barbier....................................          --            --           --
Barry M. Sherman, M.D. .........................          --            --           --
Edmon R. Jennings...............................    02/01/00       225,000        $1.00
David L. Johnson(1).............................    01/03/00       190,000        $0.20
Gert Caspritz, Ph.D. ...........................          --            --           --
Nadav Friedmann, M.D., Ph.D. ...................    03/01/00        50,000        $2.00
Wilfred R. Konneker, Ph.D. .....................          --            --           --
Michael J. O'Donnell, Esq. .....................    03/01/00        25,000        $2.00
Sanford R. Robertson............................    03/01/00        50,000        $2.00
</TABLE>

 
---------------
(1) Mr. Johnson purchased 190,000 shares of common stock at an exercise price of
    $0.20 per share subject to a repurchase right held by the Company which
    lapses over a period of four years, beginning January 3, 2000 (the date on
    which Mr. Johnson commenced employment with the Company), at a rate of 1/48
    per month. At December 31, 2000, 146,459 of such shares remained subject to
    the Company's right of repurchase.
 
INDEMNIFICATION, CHANGE OF CONTROL AND EMPLOYMENT AGREEMENTS
 
     The Company has entered into indemnification agreements with each of its
directors and officers. Such indemnification agreements will require the Company
to indemnify its directors and officers to the fullest extent permitted by
Delaware law.
 
                                 OTHER MATTERS
 
     The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form Proxy to vote the shares they represent as
the Board of Directors may recommend.
 
                                          THE BOARD OF DIRECTORS
 
Dated: April 20, 2001
 
                                        18

<PAGE>   22
 
                                                                     APPENDIX A.
 
                            PAIN THERAPEUTICS, INC.
                             A DELAWARE CORPORATION
 
                         CHARTER OF THE AUDIT COMMITTEE
                           OF THE BOARD OF DIRECTORS
 
                                    PURPOSES
 
     The purpose of the Audit Committee of the Board of Directors of Pain
Therapeutics, Inc., a Delaware corporation (the "Company"), shall be to make
such examinations as are necessary to monitor the Company's system of internal
controls, to provide the Company's Board of Directors with the results of its
examinations and recommendations derived therefrom, to outline to the Board of
Directors improvements made, or to be made, in internal accounting controls, to
nominate independent auditors and to provide to the Board of Directors such
additional information and materials as it may deem necessary to make the Board
of Directors aware of significant financial matters which require the Board of
Director's attention.
 
     In addition, the Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board of Directors
may from time to time prescribe.
 
                                   MEMBERSHIP
 
     The Audit Committee members will be appointed by, and will serve at the
discretion of, the Board of Directors and will consist of at least three members
of the Board of Directors, each of whom:
 
     1. Will be an independent director;
 
     2. Will be able to read and understand fundamental financial statements, in
        accordance with the NASDAQ National Market Audit Committee requirements;
        and
 
     3. At least one of whom will have past employment experience in finance or
        accounting, requisite professional certification in accounting, or other
        comparable experience or background, including a current or past
        position as a chief executive or financial officer with financial
        oversight responsibilities.
 
                                RESPONSIBILITIES
 
     The responsibilities of the Audit Committee shall include:
 
      1. Reviewing on a continuing basis the adequacy of the Company's system of
         internal controls;
 
      2. Reviewing on a continuing basis the activities, organizational
         structure and qualifications of the Company's internal audit function;
 
      3. Reviewing the independent auditors' proposed audit scope, approach and
         independence;
 
      4. Conducting a post-audit review of the financial statements and audit
         findings, including any significant suggestions for improvements
         provided to management by the independent auditors;
 
      5. Reviewing the performance of the independent auditors, who shall be
         accountable to the Board of Directors and the Audit Committee;
 
      6. Recommending the appointment of independent auditors to the Board of
         Directors;
 
      7. Reviewing fee arrangements with the independent auditors;
 
      8. Reviewing before release the audited financial statements and

         Management's Discussion and Analysis in the Company's annual report on
         Form 10-K;
 
                                       A-1

<PAGE>   23
 
      9. Reviewing before release the unaudited quarterly operating results in
         the Company's quarterly earnings release;
 
     10. Overseeing compliance with the requirements of the Securities and
         Exchange Commission for disclosure of independent auditor's services
         and audit committee members and activities;
 
     11. Overseeing of compliance with the Company's Standards of Business
         Conduct and with the Foreign Corrupt Practices Act;
 
     12. Reviewing, in conjunction with counsel, any legal matters that could
         have a significant impact on the Company's financial statements;
 
     13. Providing oversight and review of the Company's asset management
         policies, including an annual review of the Company's investment
         policies and performance for cash and short-term investments;
 
     14. If necessary, instituting special investigations and, if appropriate,
         hiring special counsel or experts to assist;
 
     15. Reviewing related party transactions for potential conflicts of
         interest;
 
     16. Providing a report in the Company's proxy statement in accordance with
         the requirements of Item 306 of Regulations S-K and S-B and Item
         7(e)(3) of Schedule 14A; and
 
     17. Performing other oversight functions as requested by the full Board of
         Directors.
 
     In addition to the above responsibilities, the Audit Committee will
undertake such other duties as the Board of Directors may delegate to it and
will report, at least annually, to the Board of Directors regarding the
Committee's examinations and recommendations.
 
                                    MEETINGS
 
     The Audit Committee will meet at least two times each year. The Audit
Committee may establish its own schedule and shall provide such schedule to the
Board of Directors in advance.
 
     The Audit Committee will meet separately with the Company's president and
separately with the Company's chief financial officer at least annually to
review the financial controls of the Company. The Audit Committee will meet with
the independent auditors of the Company at such times as it deems appropriate to
review the independent auditor's examination and management report.
 
                                    MINUTES
 
     The Audit Committee will maintain written minutes of its meetings, which
minutes will be filed with the minutes of the meetings of the Board of
Directors.
 
                                       A-2

<PAGE>   24


[PAIN THERAPEUTICS LOGO]

PAIN THERAPEUTICS, INC.
C/O MIDTOWN STATION
P.O. BOX 892
NEW YORK, NY 10018-0968

                                 VOTE BY MAIL

                                 Mark, sign and date your proxy card and return
                                 it in the postage-paid envelope we have
                                 provided, or return it to Pain Therapeutics,
                                 Inc., c/o Midtown Station, P.O. Box 892, New
                                 York, NY 10018-0968.

                                 VOTE IN PERSON

                                 Attend the Company's Annual Meeting of
                                 Stockholders on May 31, 2001 at 10:00 a.m.,
                                 local time, at the offices of Wilson Sonsini
                                 Goodrich & Rosati, Professional Corporation
                                 located at 650 Page Mill Road, Palo Alto,
                                 California, 94304, and vote in person at the
                                 meeting.



TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [________]  KEEP
THIS PORTION FOR YOUR RECORDS


<PAGE>   25


                                             DETACH AND RETURN THIS PORTION ONLY

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

PAIN THERAPEUTICS, INC.

VOTE ON DIRECTORS

<TABLE>
<CAPTION>

<S>                                          <C>       <C>            <C>            <C>
1. To elect two (2) Class I Directors        For       Withhold       For All        To withhold authority to vote,
   to serve for a three year term and        All         All           Except        mark "For All Except" and
   until their successors are duly           [ ]         [ ]            [ ]          write the nominee's number on
   elected and qualified (Proposal                                                   the line below.
   One);

   Nominees:  01)  Michael J. O'Donnell

              02)  Nadav Friedmann

Vote On Proposal

2. To ratify the appointment of KPMG LLP as independent auditors        For      Against    Abstain
   to the Company for the fiscal year ending  December 31, 2001
   (Proposal Two); and                                                  [ ]        [ ]        [ ]
</TABLE>


3. To transact such other business as may properly be brought
   before the meeting and any adjournment(s) thereof.

        The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only stockholders of record at the close of
business on April 12, 2001 are entitled to notice of and to vote at the meeting.

                                                   Sincerely,

                                                   /s/ MICHAEL J. O'DONNELL
                                                   Michael J. O'Donnell
                                                   Secretary

South San Francisco, California
April 20, 2001

---------------------------------   ------   -------------------------   ------


---------------------------------   ------   -------------------------   ------
Signature                            Date     Signature (Joint Owners)     Date

                                      -2-

<PAGE>   26


                             PAIN THERAPEUTICS, INC.

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
                       2001 ANNUAL MEETING OF STOCKHOLDERS
                             TO BE HELD MAY 31, 2001

                             YOUR VOTE IS IMPORTANT

THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES
BY THE COMPANY, ON BEHALF OF THE BOARD OF DIRECTORS, FOR THE 2001 ANNUAL MEETING
OF STOCKHOLDERS. THE PROXY STATEMENT AND THE RELATED PROXY FORM ARE BEING
DISTRIBUTED ON OR ABOUT APRIL 20, 2001. YOU CAN VOTE YOUR SHARES USING ONE OF
THE FOLLOWING METHODS:

        -  COMPLETE AND RETURN A WRITTEN PROXY CARD

        -  ATTEND THE COMPANY'S 2001 ANNUAL MEETING OF STOCKHOLDERS AND VOTE

ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING, HOWEVER, TO ENSURE
YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO MARK, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE
ENCLOSED FOR THAT PURPOSE. ANY STOCKHOLDER ATTENDING THE MEETING MAY VOTE IN
PERSON EVEN IF HE OR SHE RETURNED A PROXY CARD.

================================================================================

                            PAIN THERAPEUTICS, INC.
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                  MAY 31, 2001

TO THE STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Pain
Therapeutics, Inc. (the "Company"), a Delaware corporation, will be held on
Thursday, May 31, 2001 at 10:00 a.m., local time, at the offices of Wilson
Sonsini Goodrich & Rosati, Professional Corporation located at 650 Page Mill
Road, Palo Alto, California, 94304, for the purposes stated on the reverse side
of this proxy card.

The signatory on the reverse side of this proxy card (the "Signatory"), revoking
all prior proxies, hereby appoints Remi Barbier and David L. Johnson, and each
of them, as proxies and attorneys-in-fact, with full power of substitution, to
represent and vote on the matters set forth in this proxy any and all shares of
the Common Stock of the Company held or owned by or standing in the name of the
Signatory on the Company's books that the Signatory would be entitled to vote at
the Annual Meeting of Stockholders of the Company to be held on May 31, 2001, at
10:00 a.m. local time at the offices of Wilson Sonsini Goodrich & Rosati,
Professional Corporation located at 650 Page Mill Road, Palo Alto, California
94304 and any continuation or adjournment thereof, with all powers the Signatory
would possess if personally present at the meeting.

The Signatory hereby directs and authorizes said Proxies and each of them, or
their substitute or substitutes, to vote as specified with respect to the
proposals listed on the reverse side of this proxy card, or, if no specification
is made, to vote in favor thereof. The Signatory hereby further confers upon
said Proxies, and each of them, or their substitute or substitutes,
discretionary authority to vote with respect to all other matters that may
properly come before the meeting or any continuation or adjournment thereof.

The signatory hereby acknowledges receipt of Annual Meeting of Stockholders, 
Proxy Statement, Annual Report and the Annual Report on Form 10-K.

<PAGE>   27

The Signatory hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders, Proxy Statement, Annual Report and the Annual Report on Form 10-K.







                                      -2-