<PAGE>
                                       UNITED STATES
                            SECURITIES AND EXCHANGE COMMISSION
                                  WASHINGTON, D.C. 20549


                                         FORM 10-Q


[ X ]    Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934


                      FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

                                         or

[   ]    Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                         For the transition period from _____ to _____

                                 COMMISSION FILE NUMBER 0-29993

                               INTRABIOTICS PHARMACEUTICALS, INC.
                     (Exact name of Registrant as specified in its charter)

                   DELAWARE                                     94-3200380
         (State or other jurisdiction of                     (I.R.S. Employer
         incorporation or organization)                   Identification Number)

          1255 TERRA BELLA, MT. VIEW CA                           94043
     (Address of principal executive offices)                  (zip code)

                                     (650) 526-6800
                 (Registrant's telephone number including area code)

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

                                                   Yes [ X ]   No  [  ]

         There were 29,045,906 shares of the Company's Common Stock, par value
         $.001 outstanding on July 31, 2000.



<PAGE>

                                        INTRABIOTICS PHARMACEUTICALS, INC.

                                                     FORM 10-Q
                                            QUARTER ENDED JUNE 30, 2000

                                                 TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                   PAGE NO.
                                                                                                   --------
<S>                                                                                                <C>
PART I.                               FINANCIAL INFORMATION

Item 1.  Financial Statements:

         Condensed Balance Sheets as of June 30, 2000 and December 31, 1999.......................      3

         Condensed Statements of Operations for the Three and Six Month Periods
         Ended June 30, 2000 and June 30, 1999....................................................      4

         Statements of Cash Flows for the Six Months Ended
         June 30, 2000 and June 30, 1999..........................................................      5

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

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
         Operations...............................................................................      8

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...............................     16


PART II                                 OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds................................................     17

Item 6.  Exhibits and Reports on Form 8-K.........................................................     17

SIGNATURES........................................................................................     18

</TABLE>


                                      2
<PAGE>



                                            INTRABIOTICS PHARMACEUTICALS, INC.
                                                CONDENSED BALANCE SHEETS
                                                     (IN THOUSANDS)
                                                      (UNAUDITED)
<TABLE>
<CAPTION>
                                                                     JUNE 30,                       DECEMBER 31,
                                                                       2000                             1999
                                                                ------------------               ------------------
                                                                                                      (Note 1)
<S>                                                             <C>                              <C>
ASSETS
Current assets:
     Cash and cash equivalents, including restricted deposits          $   75,961                       $   18,862
     Short-term investments                                                 8,164                           12,567
     Other current assets                                                   6,727                              633

                                                                ------------------               ------------------
        Total current assets                                               90,852                           32,062

Property, plant, and equipment, net                                         4,450                            3,828

Other assets, principally investments                                      25,815                               68

                                                                ------------------               ------------------
        Total assets                                                   $  121,117                       $   35,958
                                                                ==================               ==================


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                  $      831                       $    2,295
     Accrued clinical costs                                                 1,468                              916
     Other accrued liabilities                                              1,195                              535
     Amount payable to contract partner                                         -                             1,677
     Current equipment financing obligations                                1,148                              896
                                                                ------------------               ------------------
         Total current liabilities                                          4,642                            6,319

Long-term equipment financing obligations                                   2,089                            1,725

STOCKHOLDERS EQUITY:
Preferred stock                                                                 -                           79,609
Common stock                                                                   29                                1
Additional paid-in capital                                                199,657                           13,828
Deferred stock compensation                                               (13,706)                         (12,650)
Accumulated deficit                                                       (71,594)                         (52,874)
                                                                ------------------               ------------------
        Total stockholders' equity                                        114,386                           27,914

                                                                ------------------               ------------------
        Total liabilities and stockholders' equity                     $  121,117                       $   35,958
                                                                ==================               ==================
</TABLE>

                                                  See accompanying notes.

                                                             3
<PAGE>

                                           INTRABIOTICS PHARMACEUTICALS, INC.
                                          CONDENSED STATEMENTS OF OPERATIONS
                                       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                          (UNAUDITED)
<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED                      SIX MONTHS ENDED
                                                            JUNE 30,                               JUNE 30,
                                                 -------------------------------       -------------------------------
                                                     2000               1999               2000               1999
                                                 ------------       ------------       ------------       ------------
<S>                                              <C>                <C>                <C>                <C>

 Contract revenue                                 $        -         $    2,116         $        -         $    3,496

 Operating expenses:
    Research and development                          10,594              6,875             16,032             12,220
    General and administrative                         2,646              1,187              4,809              2,242

                                                 ------------       ------------       ------------       ------------
       Total operating expenses                       13,240              8,062             20,841             14,462

                                                 ------------       ------------       ------------       ------------
       Operating loss                                (13,240)            (5,946)           (20,841)           (10,966)

    Interest income                                    1,921                286              2,334                630
    Interest expense                                    (102)               (44)              (212)               (80)

                                                 ------------       ------------       ------------       ------------
       Net loss                                   $  (11,421)        $   (5,704)        $  (18,719)        $  (10,416)
                                                 ============       ============       ============       ============

 Basic and diluted net loss per share             $    (0.39)        $    (5.42)        $    (0.74)        $   (10.14)
                                                 ============       ============       ============       ============

 Shares used to compute basic and diluted net
    loss per share                                    29,012              1,052             25,347              1,027
                                                 ============       ============       ============       ============

 Pro forma basic and diluted net loss per
    share                                                            $    (0.32)                           $    (0.59)
                                                                    ============                          ============

 Shares used to compute pro forma basic and
    diluted net loss per share                                           17,669                                17,573
                                                                    ============                          ============
</TABLE>


                                                  See accompanying notes.

                                                             4
<PAGE>

                                          INTRABIOTICS PHARMACEUTICALS, INC.
                                              STATEMENTS OF CASH FLOWS
                                                   (IN THOUSANDS)

                                                     (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                         SIX MONTHS ENDED JUNE 30,
                                                                                   ------------------------------------
                                                                                        2000                  1999
                                                                                   --------------        --------------
<S>                                                                                <C>                   <C>
OPERATING ACTIVITIES

Net loss                                                                             $  (18,719)           $  (10,416)

Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization                                                          624                   323
     Amortization of deferred stock compensation                                          1,589                   225

Change in assets and liabilities
     Other current assets                                                                (6,094)                 (315)
     Other assets                                                                             -                   (23)
     Accounts payable                                                                    (1,464)                 (532)
     Accrued clinical costs                                                                 552                 1,094
     Other accrued liabilities                                                              660                (2,645)
     Amount payable to contract partner                                                  (1,677)                    -
     Deferred revenue                                                                         -                 2,576
                                                                                   --------------        --------------
Net cash used in operating activities                                                   (24,529)               (9,711)

INVESTING ACTIVITIES

    Capital expenditures                                                                 (1,246)               (1,537)
    Purchase of long-term investments                                                   (25,747)                    -
    Purchase of short-term investments                                                   (4,662)                    -
    Maturities of short-term investments                                                  9,065                     -
                                                                                   --------------        --------------
Net cash used for investing activities                                                  (22,590)               (1,537)

FINANCING ACTIVITIES

     Proceeds from issuance of preferred stock                                                -                 2,580
     Proceeds from issuance of common stock                                             103,603                    20
     Proceeds from equipment financing                                                    1,166                 1,184
     Payments on equipment financing                                                       (550)                 (303)
                                                                                   --------------        --------------
Net cash provided by financing activities                                               104,219                 3,482

                                                                                   --------------        --------------
Net increase in cash and cash equivalents                                                57,100                (7,768)

Cash and cash equivalents at beginning of period                                         18,862                29,869

                                                                                   --------------        --------------
Cash and cash equivalents at end of period                                           $   75,961            $   22,101
                                                                                   ==============        ==============

Supplemental disclosure of cash flow information
     Interest Paid                                                                   $      239            $       80
                                                                                   ==============        ==============

Supplemental disclosure of non-cash information
     Conversion of preferred stock to common stock                                   $   79,609            $        -
                                                                                   ==============        ==============
</TABLE>

                                                        See accompanying notes.

                                                                   5
<PAGE>

                     IntraBiotics Pharmaceuticals, Inc.
                  Notes To Condensed Financial Statements
                                (Unaudited)

Note 1.  Basis of Presentation

         The accompanying condensed financial statements are unaudited and have
been prepared by the Company in accordance with the rules and regulations of the
Securities and Exchange Commission for interim financial information, and in
accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X.

         Certain information and footnote disclosures normally included in the
Company's annual audited financial statements (as required by generally accepted
accounting principles) have been condensed or omitted. The interim financial
statements, in the opinion of management, reflect all adjustments (consisting of
normal recurring accruals) necessary for a fair statement of the financial
position at June 30, 2000 and the results for the interim periods ended June 30,
2000 and 1999.

         The results of operations of the interim periods are not necessarily
indicative of the results of operations to be expected for the fiscal year.
These interim financial statements should be read in conjunction with the
audited financial statements for the year ended December 31, 1999, which are
contained in the Company's Registration Statement on Form S-1 (NO. 333-95461),
as amended and filed with the Securities and Exchange Commission. The
accompanying condensed Balance Sheet as of December 31, 1999 is derived from
such audited financial statements.

Note 2. Equipment Financing

         On March 1, 2000, the Company entered into an $861,000
equipment-financing agreement secured by the related assets purchased. The
interest rate for this obligation is 10.99% and the principal and interest
payments are $22,000 per month for 42 months with a final payment of $129,000 on
September 1, 2003.

         On March 30, 2000, the Company entered into a $221,000
equipment-financing agreement secured by the related assets. The interest rate
for this obligation is 9.98% and the principal and interest payment is $6,000
per month for 36 months with a final payment of $22,000 on April 1, 2003.

Note 3.      Investments in Debt and Equity Securities

         The Company invests its excess cash in high quality, short-term and
long-term equity instruments. The following is a summary of the Company's
investments by major security type at amortized cost, which approximates fair
value:

<TABLE>
<CAPTION>
                                                                  JUNE 30,           DECEMBER 31,
                                                                    2000                 1999
                                                               --------------     -----------------
                                                                         (IN THOUSANDS)
<S>                                                            <C>                <C>
Operating cash                                                           595                   235
Money market                                                          28,533                18,266
Certificates of deposit                                                1,366                   361
Commercial paper                                                      79,380                12,567
                                                               --------------     -----------------
                                                                  $  109,874            $   31,429
                                                               ==============     =================


Amounts included in cash and cash equivalents                         75,961                18,862
Amounts included in short-term investments                             8,164                12,567
Amounts included in long-term investments                             25,748                     -
                                                               --------------     -----------------
                                                                  $  109,874            $   31,429
                                                               ==============     =================
</TABLE>

The Company classifies all securities as either cash and cash equivalents or
available for sale.


                                      6
<PAGE>

Note 4. Net Loss Per Common Share

         Net loss per share has been computed according to Financial Accounting
Standards Board Statement No. 128, "Earnings Per Share" ("SFAS 128"), which
requires disclosure of basic and diluted earnings per share. Basic and diluted
earnings per share is calculated using the weighted-average number of shares of
common stock outstanding during the period, less shares subject to repurchase.
Diluted earnings per share include the impact of potentially dilutive
securities. As the Company's potentially dilutive securities (convertible
preferred stock, stock options, and warrants) were antidilutive for all periods,
they were not included in the computation of weighted-average shares used in
computing diluted net loss per share.

         Pro forma net loss per share has been computed as described above and
also gives effect to the conversion of convertible preferred shares not included
above that automatically converted into common stock upon completion of the
Company's initial public offering of common stock from the original date of
issuance.

         The following is a reconciliation of the numerator and denominator of
basic and diluted net loss per share (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                               SIX MONTHS ENDED
                                                                                    JUNE 30,
                                                                   -----------------------------------------
                                                                          2000                    1999
                                                                   -----------------       -----------------
<S>                                                                <C>                     <C>
                                                                     (UNAUDITED)

Basic and diluted:
     Net loss                                                         $    (18,719)           $    (10,416)
                                                                   =================       =================

     Weighted-average shares used in computing basic and
         diluted net loss per share                                          25,347                   1,027
                                                                   =================       =================

Basic and diluted net loss per share                                   $     (0.74)           $     (10.14)
                                                                   =================       =================

Pro forma basic and diluted:
     Shares used above                                                       25,347                   1,027
     Pro forma adjustment to reflect weighted-average effect
         of conversion of preferred stock from the date
         of issuance                                                              -                  16,546
                                                                   -----------------       -----------------

Total weighted-average shares of common stock outsanding                     25,347                  17,573
                                                                   =================       =================

Pro forma basic and diluted net loss per share                               (0.74)                  (0.59)
                                                                   =================       =================
</TABLE>


Note 5.  Public Offering of Common Stock

         On March 27, 2000, the Company completed an initial public offering of
7,500,000 shares of its common stock at $15.00 per share with net proceeds to
the Company of approximately $103.6 million.


                                      7
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The following Management's Discussion and Analysis of Financial
Condition and Results of Operations contains forward-looking statements, which
involve risks and uncertainties. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth under "RISKS RELATED TO OUR
BUSINESS" below. The following discussion should be read in conjunction with the
financial statements and notes included elsewhere herein. IntraBiotics disclaims
any obligation to update any of the forward-looking statements contained in this
report to reflect any future events or developments.

OVERVIEW

         IntraBiotics Pharmaceuticals, Inc. develops and intends to
commercialize new antibacterial and antifungal drugs for the prevention or
treatment of serious infectious diseases. We have initiated expanded human
clinical trials to test for efficacy and safety, known as a phase III trials,
for our two lead product candidates. These are Protegrin IB-367 Rinse for the
treatment of oral mucositis, a side effect of anti-cancer therapies, and
Ramoplanin Oral for the prevention of infections due to Vancomycin-Resistant
Enterococci, or VRE. In July 2000 we initiated a second Phase III trial for
Protegrin IB-367 Rinse for patients receiving radiotherapy and a first Phase III
trial for patients receiving high dose chemotherapy is also ongoing. We
previously obtained statistically significant data from human clinical trials
that test for preliminary safety and efficacy, known as phase II trials, that
indicate each of these products was well tolerated and support further efficacy
trials. We are also enrolling patients in more limited human clinical trials to
test for safety for our product candidates, Protegrin IB-367 Gel for the
prevention of ventilator-associated pneumonias and Protegrin IB-367 Aerosol for
the treatment of serious lung infections.

         We have incurred significant losses since inception and expect to incur
substantial losses for the foreseeable future, primarily due to the expansion of
our research and development programs. We expect that operating results will
fluctuate from quarter to quarter and that such fluctuations may be substantial.
As of June 30, 2000, the Company's accumulated deficit was approximately $71.6
million.

RESULTS OF OPERATIONS

THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999

         IntraBiotics had no product sales or contract revenue for the three and
six month periods ended June 30, 2000 compared to $2.1 million and $3.5 million
of contract revenue for the same periods of 1999. Revenue in 1999 was generated
under a prior agreement with Pharmacia and Upjohn S.p.A., which terminated in
July 1999. We will not recognize any additional revenue under this agreement.
The Company does not anticipate any product revenue in the near future.

         Research and development expenses increased to $10.6 million and $16.0
million in the three and six month periods ended June 30, 2000 from $6.9 million
and $12.2 million for the same periods in 1999. The increase was attributable to
higher personnel and payroll expenses, development milestone fees, clinical
trial activity and consulting expenses. We expect research and development
expenses to increase as we continue to expand our research and development
programs.

         General and administrative expenses increased to $2.6 million and $4.8
million in the three and six month periods ended June 30, 2000 from $1.2 million
and $2.2 million for the same periods in 1999. The increase was primarily
attributed to increased personnel and payroll expenses, consulting, legal,
professional, travel and other expenses associated with increased business
development activities. We expect general and administrative expenses to
increase due to business development activities.


                                      8
<PAGE>

         In connection with the grant of certain stock options to employees, the
Company recorded no deferred compensation in the three months ended June 30,
2000 and deferred compensation of $2.6 million in the six month period ended
June 30, 2000 compared to $1.8 million and $3.4 million for the same periods in
1999. Deferred compensation represents the difference between the deemed fair
value of the common stock for financial reporting purposes and the exercise
price of these options at the date of grant. Deferred compensation is presented
as a reduction of stockholders' equity and is amortized over the vesting period
of the applicable options. We expensed $795,00 and $1.6 million of deferred
compensation during the three and six month periods ended June 30, 2000,
respectively, compared to $162,000 and $225,000 of deferred compensation for the
same periods in 1999. The research and development deferred compensation
amortization expense in the three and six month periods ended June 30, 2000 was
$460,000 and $920,000 up from $102,000 and $164,000 for the same periods in
1999. The general and administrative deferred compensation amortization expense
in the three and six month periods ended June 30, 2000 was $335,000 and $669,000
up from $60,000 and $61,000 for the same periods in 1999.

         Interest income increased to $1.9 million and $2.3 million in the three
and six month periods ended June 30, 2000 from $286,000 and $630,000 for the
same periods in 1999. The increase in interest income resulted from the increase
in average cash and investment balances primarily due to the Company's recent
financing activities. Interest expense increased to $102,000 and $212,000 for
the three and six month periods ended June 30, 2000, from $44,000 and $80,000
for the same periods in 1999. The increase was primarily attributed to
additional equipment financing.

LIQUIDITY AND CAPITAL RESOURCES

         Prior to the initial public offering, IntraBiotics financed its
operations primarily through the private placement of convertible preferred
stock and capital leases. On March 27, 2000, we completed our initial public
offering of common stock, in which we sold 7,500,000 shares of common stock at a
price of $15.00 per share. Net proceeds to the Company were approximately $103.6
million.

         At June 30, 2000, we had cash, cash equivalents, short term investments
and long term investments of $109.9 million including restricted deposits of
approximately $1.4 million in connection with standby letters of credit for
leased facilities, short-term investments of $8.2 million and long-term
investments of $25.7 million. The Company regularly invests excess funds in
short-term money market funds and commercial paper.

         Net cash used in operating activities for the six month period ended
June 30, 2000 and 1999 was $24.5 million and $9.7 million, respectively. Cash
used in operating activities in each period was primarily the result of net
losses, increased prepaid expenses primarily for clinical trials, decreases in
accounts payable and changes to accrued liabilities, clinical costs, amount
payable to contract partner and deferred revenue.

         Net cash used by investing activities for the six month period ended
June 30, 2000 and 1999 was $22.6 million and $1.5 million, respectively. Cash
used by investing activities in the six month period ended June 30, 2000 was
primarily due to the net decrease of short term investments of $4.4 million and
the purchase of long term investments of $25.7 million. During the six months
ended June 30, 2000 the company used cash to purchase equipment of $1.2 million.
Cash used in investing activities in the six month period ended June 30, 1999
was due to the purchase of equipment of $1.5 million.

         Net cash provided by financing activities for the six month periods
ended June 30, 2000 and 1999 was $104.2 million and $3.5 million, respectively.
Cash provided by financing activities for the six month period ended June 30,
2000 was due to proceeds from the issuance of common stock, including net
proceeds of $103.6 million from the initial public offering and proceeds from
equipment lease financing, partially offset by payments on capital lease
obligations.

         We expect to continue to incur substantial operating losses. We believe
that existing capital resources and interest income will be sufficient to fund
our operations for at least the next 12 months.


                                      9
<PAGE>

         Our future capital requirements will depend on many factors, including:

                  - the timing, cost, extent and results of clinical trials;

                  - payments to third parties for manufacturing scale up;

                  - the costs and timing of regulatory approvals;

                  - the costs of acquiring technologies or assets that
                    compliment our business;

                  - the costs of establishing sales, marketing and distribution
                    capabilities;

                  - the progress of our research and development activities;

                  - availability of technology in-licensing opportunities; and

                  - future opportunities for raising capital.

         Until we can generate sufficient cash from our operations (which we do
not anticipate in the foreseeable future) we expect to finance future cash needs
through private and public financings, including equity financings. We cannot be
certain that additional funding will be available when needed or on favorable
terms. If funding is not available, we may need to delay or curtail our
development and commercialization activities to a significant extent.

RISKS RELATED TO OUR BUSINESS

WE EXPECT TO CONTINUE TO INCUR FUTURE OPERATING LOSSES AND MAY NEVER ACHIEVE
PROFITABILITY.

We have never generated revenue from product sales and have incurred significant
net losses in each year since inception. We incurred net losses of $4.1 million
in 1997, $17.4 million in 1998, $23.1 million in 1999 and $18.7 million for the
six month period ended June 30, 2000. As of June 30, 2000, our accumulated
deficit was approximately $71.6 million. We expect to continue to incur
substantial additional losses for the foreseeable future primarily as a result
of increases in clinical trial expense costs, and we may never become
profitable. In addition, we expect increases in pre-clinical research to
identify new product candidates and manufacturing and development costs to
commercialize Ramoplanin and IB-367 Rinse, our lead product candidates. To date,
we have financed our operations primarily through the private sale of equity
securities, funds received from a terminated collaboration agreement, the
proceeds of equipment financing arrangements and our initial public offering of
common stock on March 27, 2000. We will receive product revenues only if we
complete clinical trials with respect to one or more products, receive
regulatory approvals and successfully commercialize such products.

WE MAY BE FORCED TO RAISE CAPITAL SOONER THAN CURRENTLY ANTICIPATED AND IF WE
FAIL TO OBTAIN THE CAPITAL NECESSARY TO FUND OUR OPERATIONS, WE WILL BE UNABLE
TO DEVELOP OUR DRUG CANDIDATES AND MAY HAVE TO CEASE OPERATIONS.

We believe that our current cash balances and cash equivalents of approximately
$76.0 million, short-term investments of approximately $8.2 million and
long-term investments of approximately $25.7 million will be sufficient to meet
our operating and capital requirements for at least the next 12 months. However,
we have based this estimate on assumptions that may prove to be wrong. For the
years ended December 31, 1999 and 1998, net cash used for operating activities
was $24.7 million and $9.3 million, respectively. For the six months ended June
30, 2000, net cash used for operating activities was $24.5 million. Our future
liquidity and capital requirements will depend on many factors, including the
timing, cost, extent and results of clinical trials, payments associated with
manufacturing scale-up, the costs and timing of


                                      10
<PAGE>

regulatory approvals, costs associated with researching drug candidates,
securing in-licensing opportunities and conducting pre-clinical research.

Any additional equity financing may be dilutive to stockholders, and debt
financing, if available, may involve restrictive covenants. Collaborative
arrangements may require us to relinquish our rights to certain of our
technologies, drug candidates or marketing territories. We believe that
additional financing may be required in the future to fund our operations. We do
not know whether additional financing will be available when needed or on
acceptable terms, if at all. If we are unable to raise additional financing when
necessary, we may have to delay some or all of our product development efforts
or be forced to cease operations.

WE DEPEND ON THE OUTCOME OF OUR CLINICAL TRIALS AND IF THEY ARE UNSUCCESSFUL, WE
MAY NOT BE ABLE TO COMMERCIALIZE OUR PRODUCTS AND GENERATE PRODUCT REVENUE.

Before obtaining regulatory approvals for the commercial sale of any products,
we must demonstrate through preclinical research and clinical trials that our
drug candidates are safe and effective for use in humans. We currently have two
drug candidates in Phase III clinical trials, Ramoplanin Oral and Protegrin
IB-367 Rinse. If either drug candidate fails to establish safety and efficacy in
Phase III clinical trials, we would be unable to obtain regulatory approval from
the FDA or to commercialize the drug candidate, and we will be unable to
generate product revenue from that candidate. Clinical trials are expensive and
time-consuming to conduct, and the outcome of these trials is uncertain. A
number of new drugs have shown promising results in clinical trials, but
subsequently failed to establish sufficient safety and efficacy data to obtain
necessary regulatory approvals. A number of companies have suffered significant
setbacks in advanced clinical trials, even after promising results in earlier
trials.

In addition, if we have delays in clinical trials or the FDA approval process or
if we need to perform more or larger clinical trials, our product development
costs will increase and our ability to generate product revenue will be delayed.

Our commencement and completion of clinical trials may be delayed by many
factors, including:

         - slower than expected rate of patient recruitment;

         - inability to adequately obtain data about patients after their
           treatment;

         - additional regulatory requests

         - inability to manufacture sufficient quantities of materials used
           for clinical trials; or

         - unforeseen safety issues

If the delays are substantial, the increase in product development expenses
could cause our losses to increase and diminish the commercial potential for our
drug products.

IF OUR COLLABORATIVE PARTNERS ASSISTING IN OUR CLINICAL TRIALS FAIL TO
APPROPRIATELY MANAGE OUR CLINICAL TRIALS, THE TRIALS COULD BE DELAYED OR COULD
FAIL.

We have limited experience in conducting and managing clinical trials. We rely
on several contract research organizations including, PharmaNet, Inc. and Amarex
Clinical Research, to assist us in managing and monitoring our clinical trials.
The FDA may inspect some of our clinical investigational sites, our
collaborative partner's records and our facility and files to determine if the
clinical trials were conducted according to good clinical practices. If the FDA
determines that the trials were not in compliance, we may be required to repeat
the clinical trials. If our contract research organizations fail to perform
under our agreements with them, we may face delays in completing our clinical
trials or failure of our clinical program.


                                      11
<PAGE>

IF OUR SINGLE-SOURCE THIRD PARTY MANUFACTURERS FAIL TO PRODUCE CLINICAL OR
COMMERCIAL QUANTITIES OF OUR DRUG CANDIDATES, WE MAY NOT HAVE SUFFICIENT
QUANTITIES OF OUR DRUG CANDIDATES TO MEET DEMAND.

We rely on PolyPeptide Laboratories A/S and Biosearch Italia S.p.A. to
manufacture our bulk drug substances on a commercial scale. While we maintain a
limited inventory of our drug candidates, we depend on these single-source
contract manufacturers to produce each of our products for use in our clinical
trials. Our contract manufacturers have no experience in manufacturing Protegrin
IB-367 or Ramoplanin in quantities sufficient for commercialization and may have
difficulty in scaling up production. If our contract manufacturers are unable or
fail to produce the required quantities of our drug candidates for clinical use
or commercial sale on a timely basis, at commercially reasonable prices and with
sufficient purity, we will not have sufficient quantities of our drug candidates
to complete current and future clinical trials, or to meet commercial demand. In
addition, we intend to contract with third parties for the manufacture of the
final formulation. We cannot guarantee that we will be able to contract with a
reliable manufacturer on commercially reasonable terms.

Our third-party manufacturers and we are required to register manufacturing
facilities with the FDA and foreign regulatory authorities. If these facilities
become unavailable for any reason or if our contract manufacturers fail to
comply with the FDA's current good manufacturing practices or if our contract
manufacturers terminate their agreements with us, we would have to find an
alternative source for manufacturing our drug candidates. There are, on a
worldwide basis, a limited number of contract facilities in which our drug
candidates can be produced according to current good manufacturing practice
regulations. In addition, the manufacturing processes for Protegrin IB-367 and
Ramoplanin are extremely complex and proprietary. If we are unable to continue
having Protegrin IB-367 or Ramoplanin manufactured by our current contract
manufacturers, we do not know if we could engage another contract manufacturer
when needed or on acceptable terms, if at all.

IF WE FAIL TO OBTAIN FDA APPROVALS FOR OUR PRODUCTS, WE WILL BE UNABLE TO
COMMERCIALIZE OUR DRUG CANDIDATES.

We do not have a drug candidate approved for sale in the U.S. or any foreign
market. We must obtain approval from the FDA in order to sell our drug
candidates in the U.S. and from foreign regulatory authorities in order to sell
our drug candidates in other countries. We must successfully complete our Phase
III clinical trials and demonstrate manufacturing capability before we can file
with the FDA for approval to sell our products. The FDA could require us to
repeat clinical trials as part of the regulatory review process. Delays in
obtaining or failure to obtain regulatory approvals may:

         - delay or prevent the successful commercialization of any of our drug
           candidates;

         - diminish our competitive advantage; and

         - defer or decrease our receipt of revenues or royalties.

The regulatory review and approval process is lengthy, expensive and uncertain.
Extensive preclinical and clinical data and supporting information must be
submitted to the FDA for each indication to establish safety and effectiveness
in order to secure FDA approval. We have limited experience in obtaining such
approvals, and cannot be certain when, if ever, we will receive these regulatory
approvals.

In addition to initial regulatory approval, our drug candidates will be subject
to extensive and rigorous ongoing domestic and foreign government regulation.
Any approvals, once obtained, may be withdrawn if compliance with regulatory
requirements is not maintained or safety problems are identified. Failure to
comply with these requirements may subject us to stringent penalties.


                                      12
<PAGE>

DEVELOPMENT AND COMMERCIALIZATION OF COMPETITIVE PRODUCTS COULD REDUCE OR
PREVENT SALES OF OUR PRODUCTS AND REDUCE REVENUE.

We may be unable to compete successfully if other companies develop and
commercialize competitive products that are less expensive, more effective, have
fewer side effects or are easier to administer than our drug candidates. If we
are unable to compete successfully with our drug candidates, physicians may not
recommend and patients may not buy our drugs that would cause our product
revenue to decline.

There are several drugs under development that might compete with Ramoplanin
Oral and Protegrin IB-367 Rinse. To the best of our knowledge, there are no
direct competitors approved or under development for the prevention of VRE
bloodstream infections. However, there are two approved products for the
treatment of VRE infections, Synercid-Registered Trademark-, and
Zyvox-Registered Trademark-. For oral mucositis, there is one approved
device, Radiacare-Registered Trademark-, and several drugs in early stage
clinical trials. These include two growth factors, keratinocyte growth factor
and interleukin-11, as well as a chemoprotective agent, Ethyol-Registered
Trademark-. The companies sponsoring these trials have successfully
commercialized products in the past. In addition, there may be products under
development of which we are unaware for the prevention of VRE bloodstream
infections or the treatment of oral mucositis.

Many of our competitors and related private and public research and academic
institutions have substantially greater experience, financial resources and
larger research and development staffs than we do. In addition, many of these
competitors, either alone or together with their collaborative partners, have
significantly greater experience than we do in developing drugs, obtaining
regulatory approvals and manufacturing and marketing products. We also
compete with these organizations and other companies for in-licensing
opportunities for future drug candidates, and for attracting scientific and
management personnel.

IF WE ARE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, WE MAY BE
UNABLE TO SELL OUR PRODUCTS OR TO COMPETE EFFECTIVELY.

We rely on a combination of patents, trade secrets and contractual provisions to
protect our intellectual property. If we fail to adequately protect our
intellectual property, other companies or individuals may prevent us from
selling our products or may develop competing products based on our technology.
Our success depends in part on our ability to:

         - obtain patents;

         - protect trade secrets;

         - operate without infringing upon the proprietary rights of others; and

         - prevent others from infringing on our proprietary rights.

We will be able to protect our proprietary rights from unauthorized use by third
parties only to the extent that our proprietary rights are covered by valid and
enforceable patents or are effectively maintained as trade secrets.

We try to protect our proprietary position by filing U.S. and foreign patent
applications related to our proprietary technology, inventions and improvements
that are important to the development of our business. For example, we own or
have rights to 7 patents and 2 pending patent applications in the U.S. However,
the patent position of biopharmaceutical companies involves complex legal and
factual questions. We cannot predict the enforceability or scope of any issued
patents or those that may issue in the future. Patents, if issued, may be
challenged, invalidated or circumvented. Consequently, if any patents that we
own or license from third parties do not provide sufficient protection, our
competitive position would be weakened. Furthermore, others may independently
develop similar technologies or duplicate any


                                      13
<PAGE>

technology that we have developed. In addition, we may not be issued patents
for our pending patent applications, those we may file in the future, or
those we may license from third parties.

In addition to patents, we rely on trade secrets and proprietary know-how. Our
contract manufacturers perform the manufacturing processes covered by these
trade secrets. Accordingly, our contract manufacturers and we must maintain
confidentiality. We have confidentiality and proprietary information agreements
with our contract manufacturers and with our employees. These agreements may not
provide meaningful protection or adequate remedies for our technology in the
event of unauthorized use or disclosure of confidential and proprietary
information.

WE MAY BE SUBJECT TO INTELLECTUAL PROPERTY LITIGATION THAT COULD BE COSTLY AND
TIME-CONSUMING.

The biotechnology and pharmaceutical industries have been characterized by
extensive litigation regarding patents and other intellectual property rights.
Although we are not currently a party to any lawsuits, third parties may assert
infringement or other intellectual property claims against us. We may have to
pay substantial damages, including treble damages, for past infringement if it
is ultimately determined that our products infringe a third party's proprietary
rights. The defense and prosecution of intellectual property suits, U.S. Patent
and Trademark Office interference proceedings and related legal and
administrative proceedings in the U.S. and internationally are costly and
time-consuming to pursue and their outcome is uncertain. If we become involved
in any of these proceedings, we will incur substantial expense and the efforts
of our technical and management personnel will be significantly diverted. An
adverse determination may result in the invalidation of our patents subject us
to significant liabilities or require us to seek licenses that may not be
available from third parties on satisfactory terms, or at all. Our stock price
could decline based on any public announcements related to litigation or
interference proceedings initiated or threatened against us.

IF PHYSICIANS AND PATIENTS DO NOT ACCEPT OUR PRODUCTS, WE MAY BE UNABLE TO
GENERATE SIGNIFICANT REVENUE, IF ANY.

Our drug candidates may not gain market acceptance among physicians, patients,
and the medical community. If any of our drug candidates fail to achieve market
acceptance, we may be unable to successfully market and sell the product, which
would limit our ability to generate revenue. The degree of market acceptance of
any drug candidate depends on a number of factors, including:

         - demonstration of clinical efficacy and safety;

         - cost-effectiveness;

         - convenience and ease of administration;

         - potential advantage over alternative treatment methods; and

         - marketing and distribution support.

Currently, we have two drug candidates in phase III clinical trials and do not
have any drug candidate approved by the FDA. Physicians will not recommend our
products until such time as clinical data or other factors demonstrate the
safety and efficacy of our drugs as compared to other treatments. In practice,
competitors may be more effective in marketing their drugs. Even if the clinical
safety and efficacy of our antibiotic products is established, physicians may
elect not to recommend products. For example, physicians may be reluctant to
prescribe widespread use of our products because of concern about developing
bacterial strains that are resistant to our drugs.


                                      14
<PAGE>

IF WE ARE UNABLE TO ESTABLISH SALES, MARKETING AND DISTRIBUTION CAPABILITIES OR
ENTER INTO AGREEMENTS WITH THIRD PARTIES TO PERFORM THESE SERVICES, WE WILL BE
UNABLE TO COMMERCIALIZE OUR DRUG PRODUCTS.

We do not currently have marketing, sales or distribution capabilities. For our
initial products, Ramoplanin Oral and IB-367 Rinse, we intend to establish a
direct marketing and sales force in the U.S. and Canada. If we fail to establish
successful marketing and sales capabilities or fail to enter into successful
marketing arrangements with third parties, we would be unable to commercialize
these drug products. We must develop a marketing and sales force with technical
expertise and distribution capabilities to market any of our products directly.
We intend to enter into arrangements with third parties to market and sell most
of our products outside of the U.S. and Canada. To the extent that we enter into
marketing and sales arrangements with other companies, our revenues will be
lower than if we marketed the products directly.

THE FAILURE TO RECRUIT AND RETAIN KEY PERSONNEL MAY DELAY OUR ABILITY TO
COMPLETE, DEVELOP AND COMMERCIALIZE RAMOPLANIN, PROTEGRIN IB-367 RINSE AND OUR
EARLIER STAGE PRODUCTS.

We are highly dependent on our management and technical staff. Competition for
personnel is intense. If we lose the services of any of our senior management,
we may be delayed in our product development and commercialization efforts. We
do not maintain key person life insurance and do not have employment agreements
with our management and technical staff. In order to pursue product development,
marketing and commercialization plans, we will need to hire additional qualified
scientific personnel to perform research and development. We will also need to
hire personnel with expertise in clinical testing, government regulation,
manufacturing, marketing and finance. We may not be able to attract and retain
personnel on acceptable terms given the competition for such personnel among
biotechnology, pharmaceutical and other companies.

In addition, we rely on consultants to assist us in formulating our research and
clinical development strategy. All of our consultants are employed by other
entities. They may have commitments to, or relationships with, other entities
that may limit their availability to us. The loss of the services of these
personnel may delay our research and development efforts.

DIRECTORS, EXECUTIVE OFFICERS, PRINCIPAL STOCKHOLDERS AND AFFILIATED ENTITIES
OWN A SIGNIFICANT PORTION OF OUR CAPITAL STOCK AND WILL HAVE SUBSTANTIAL CONTROL
OVER OUR ACTIVITIES.

Our directors, executive officers, principal stockholders and affiliated
entities beneficially own, in the aggregate, approximately 50% of our
outstanding common stock. These stockholders, if acting together, will be able
to significantly influence all matters requiring approval by our stockholders,
including the election of directors and the approval of mergers or other
business combination transactions.

ANTITAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND UNDER DELAWARE LAW MAY MAKE
AN ACQUISITION OF US MORE DIFFICULT.

Provisions of our certificate of incorporation and bylaws could make it more
difficult for a third party to acquire us, even if doing so would be beneficial
to our stockholders.

These provisions:

         - provide for a classified board of directors of which approximately
           one third of the directors will be elected each year;

         - allow the authorized number of directors to be changed only by
           resolution of the board of directors;

         - require that stockholder actions must be effected at a duly called
         stockholder meeting and prohibit stockholder action by written consent;

         - establish advance notice requirements for nominations to the board
           of directors or for proposals that can be acted on at stockholder
           meetings; and

         - limit who may call stockholder meetings.


                                      15
<PAGE>


In addition, because we are incorporated in Delaware, we are governed by the
provisions of Section 203 of the Delaware General Corporation Law which may
prohibit large stockholders from consummating a merger with or acquisition of
us. These provisions may prevent a merger or acquisition that would be
attractive to stockholders and could limit the price that investors would be
willing to pay in the future for our common stock.

OUR STOCK PRICE MAY BE VOLATILE, AND THE VALUE OF YOUR INVESTMENT MAY DECLINE.

The market prices for securities of biotechnology companies in general have been
highly volatile and our stock may be subject to volatility. The following
factors, in addition to the other risk factors described in this section, may
have a significant impact on the market price of our common stock:

         - announcements of technological innovations or new commercial
           products by our competitors or us;

         - developments concerning proprietary rights;

         - publicity regarding actual or perceived adverse events in our
           clinical trials or relating to products under development by our
           competitors;

         - regulatory developments in the U.S. or foreign countries;

         - litigation;

         - significant short selling in our common stock;

         - economic and other external factors; and

         - period-to-period fluctuations in our financial results and changes
           in analysts' recommendations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE REGARDING MARKET RISK

         The primary objective of our investment activities is to preserve our
capital until it is required to fund operations while at the same time
maximizing the income we receive from our investments without significantly
increasing risk. We own financial instruments that are sensitive to market risks
as part of our investment portfolio. To minimize this risk, we maintain a
portfolio of cash equivalents and short-term investments in a variety of
securities, including money market funds, commercial paper.

<TABLE>
<CAPTION>
                                                                                      Cost           Fair Value
                                 2000              2001              2002             Total        June 30, 2000
                           ---------------  -----------------  ---------------  ---------------  ----------------
<S>                        <C>              <C>                <C>              <C>              <C>
Short term investments       $  3,521          $  4,662                 -           $  8,183         $  8,164
Long term investments               -          $ 25,741                 -           $ 25,741         $ 25,748

</TABLE>


                                      16
<PAGE>

PART II OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         The Company's registration statement, filed on Form S-1 under the
Securities Act of 1933 (NO. 333-95461), was declared effective on March 27,
2000. The Company registered 8,625,000 shares and sold 7,500,000 shares of
Common Stock at $15.00 for aggregate proceeds of $112.5 million prior to
deducting underwriting discounts, commissions and offering expenses.

         The Company incurred related offering costs of approximately $0.2
million and $8.9 million in the three and six month periods ended June 30, 2000,
respectively, of which $7.9 million represented underwriting discounts and
commissions. All initial public offering costs were direct or indirect payments
to others. The net offering proceeds to the Company after all expenses were
approximately $103.6 million.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      List of Exhibits

                  Number            Exhibit Description
                  ------            -------------------
                  27.1              Financial Data Schedule

         (b)      Reports on Form 8-K

                  The Company did not file a report on Form 8-K during the
                  quarter ended June 30, 2000.


                                      17
<PAGE>

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                            IntraBiotics Pharmaceuticals, Inc.


                                            /s/ Kenneth J. Kelley
                                            ---------------------------
                  August 8, 2000            Kenneth J. Kelley
                                            President and Chief Executive



                                            /s/ Russell L. Hughes
                                            ---------------------------
                  August 8, 2000            Russell L. Hughes
                                            Controller





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