UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )*

(Name of Issuer)

(Title of Class of Securities)

(CUSIP Number)

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule l3G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  x

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

The class of equity securities to which this Schedule 13D relates is the common stock, par value $0.001 per share (the “Shares”), of Furiex Pharmaceuticals, Inc., a Delaware corporation (the “Company”). The principal executive offices of the Company are located at 3900 Paramount Parkway, Suite 150, Morrisville, North Carolina 27560.

(a) Name of Reporting Person: Fredric N. Eshelman

(b) Residence or business address: 929 North Front Street, Wilmington, NC 28401

(c) The Reporting Person is the Company’s founding chairman. He served as chief executive officer of Pharmaceutical Product Development, Inc. (“PPD”) from July 1990 until July 2009 when he was promoted to executive chairman of the board of directors of PPD. The principal executive offices of PPD are located at 929 North Front Street, Wilmington, NC 28401.

(d) The Reporting Person has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) The Reporting Person has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Citizenship: United States.

The Reporting Person acquired his Shares pursuant to a spin-off (the “Spin-Off”) of the Company from PPD, which was completed in June 2010 and acquired his options to purchase Shares pursuant to the terms of a consulting agreement, dated June 14, 2010 (the “Consulting Agreement”), by and between the Company, Elk Mountain and the Reporting Person, the terms of which are described in Item 6 below, and which are incorporated herein by reference.

In the future, the Reporting Person may use personal funds or may access other sources of financing, including debt available through a customary margin account with a broker-dealer, to acquire additional Shares.

The Reporting Person acquired his Shares pursuant to the Spin-Off and acquired his options to purchase Shares pursuant to the terms of the Consulting Agreement, the terms of which are described in Item 6 below, and which are incorporated herein by reference.

The Reporting Person has advised the Company and its Board of Directors that he believes that the Company’s Shares are currently undervalued and intends and desires to purchase additional Shares in market transactions from time to time in the future, up to a number of Shares, that in aggregate, together with Shares currently owned by the Reporting Person, would constitute approximately 18.5 percent of the number of Shares outstanding. The Reporting Person is not obligated to acquire additional Shares and his plans to do so may be modified or terminated at any time and for any reason.

Based upon the information provided by the Company there were 9,881,340 Shares issued and outstanding as of March 11, 2011.

As of the date hereof, the Reporting Person beneficially owns 700,109 Shares (or 7.1 percent of the Shares issued and outstanding as of March 11, 2011) including 591,489 Shares directly held by the Reporting Person, 41,666 Shares held in a grantor retained annuity trust; 938 Shares and 65,876 options to acquire Shares held by Elk Mountain, and 140 shares held by the Reporting Person’s spouse. The 700,109 Shares do not include 131,751 options to acquire Shares held by Elk Mountain which cannot be exercised in the next 60 days.

The Reporting Person has sole voting and dispositive power for 591,489 Shares. The Reporting Person has shared voting and dispositive power over the 938 Shares and 65,876 options to acquire Shares held by Elk Mountain (not including 131,751 options to acquire shares held by Elk Mountain which cannot be exercised in the next 60 days) and the Reporting Person may be deemed to have shared voting and dispositive powers as to the 140 Shares held by his spouse and the 41,666 Shares held by the grantor retained annuity trust.

During the sixty days on or prior to the date set forth on the cover page above, and from such date to the filing date of this Schedule 13D, there were no transactions effected in the Shares, or securities convertible into, exercisable for or exchangeable for the Shares, by the Reporting Person.

The Consulting Agreement provides that in exchange for providing certain consulting services of the Reporting Person, the Company will grant to Elk Mountain (i) on or before the expiration of the 60-day period following the completion of the Spin-Off, options to purchase Shares equal to two percent of the Company’s Shares outstanding immediately after the completion of the Spin-Off (the “Initial Option Grant”) and (ii) on or about the second anniversary of the Spin Off, options to purchase Shares equal to one percent of the Company’s common stock outstanding on the date of such grant (the “Subsequent Option Grant”). The Consulting Agreement further provides that such options will be subject to a three-year linear vesting schedule under which one-third of the total number of options granted under the Initial Option Grant and the Subsequent Option Grant will vest on each of the first, second and third anniversaries of the respective grant date. The Consulting Agreement further provides that the Initial Option Grant and the Subsequent Option Grant will have an exercise price based on the fair market value of the Company’s common stock on the respective date of grant. The options granted pursuant to the Consulting Agreement expire ten years after the respective date of grant. The Initial Option Grant was made on June 17, 2010 and consisted of options to acquire 197,627 Shares at a strike price of $9.11, with vesting on the following schedule: approximately 65,876 options vest on each of June 17, 2011, June 17, 2012 and June 17, 2013.

Not applicable.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001).