As filed with the Securities and Exchange Commission on May 28, 2003
                                                             File No. 333-

================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------
                                    FORM S-3
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933
                             ----------------------

                               APHTON CORPORATION
             (Exact name of registrant as specified in its charter)

Delaware                                                       95-3640931
(State or other            80 S.W. Eighth Street,           (I.R.S. Employer
jurisdiction of                 Suite 2160                Identification Number)
incorporation or            Miami, Florida 33130
organization)                 (305) 374-7338

                  (Address, including zip code, and telephone
             number, including area code, of registrant's principal
                               executive offices)
                           ---------------------------

                                 Philip C. Gevas
                 Chairman, President and Chief Executive Officer
                               Aphton Corporation
                        80 S.W. Eighth Street, Suite 2160
                              Miami, Florida 33130
                                 (305) 374-7338
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                   Copies to:
                             Jonathan E. Kahn, Esq.
                                White & Case LLP
                           1155 Avenue of the Americas
                             New York, NY 10036-2787

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

         Approximate date of commencement of proposed sale to the public: From
time to time after this registration statement becomes effective.

         If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|

         If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|

         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|

         If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|

         If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|

                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
                                           AMOUNT TO          PROPOSED MAXIMUM        PROPOSED MAXIMUM            AMOUNT OF
         TITLE OF SECURITIES             BE REGISTERED        AGGREGATE PRICE         AGGREGATE OFFERING        REGISTRATION
          TO BE REGISTERED                    (1)               PER SHARE (2)            PRICE (2)                  FEE
-----------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                      <C>                  <C>                       <C>
Common Stock, $.001 par value             13,769,048               $5.09                $70,084,454               $5,669.83
=============================================================================================================================
</TABLE>
(1)  Consists  of (a)  13,650,000  shares  that the  registrant  is  required to
     register  under  the terms of a  registration  rights  agreement  among the
     registrant and the selling stockholders in connection with the execution of
     certain  senior  convertible  notes and  warrants  on March 31,  2003 (this
     amount  represents  approximately  150%  of  the  shares  of  common  stock
     currently  issuable  upon the  conversion  of these  notes and  payment  of
     interest  thereon and the exercise of these warrants;  pursuant to Rule 416
     of the Securities Act, the registrant is registering  additional  shares of
     its common  stock as may be  offered,  issued or sold to  prevent  dilution
     resulting from stock splits, stock dividends or similar transactions);  and
     (b)  119,048  shares  held by  Heartland  Group,  Inc.,  one of the selling
     stockholders,  to which such shares were issued by the registrant  pursuant
     to certain anti-dilution provisions set forth in a stock purchase agreement
     entered into in connection with a private  placement  transaction on August
     24, 2001.
(2)  Estimated   solely  for  the  purpose  of  computing   the  amount  of  the
     registration  fee in accordance  with Rule 457 of the Securities Act, based
     on the average high and low prices  reported on the Nasdaq  National Market
     on May 20, 2003.
                             ----------------------

     We hereby amend this registration statement on such date or dates as may be
necessary to delay its effective  date until we file a further  amendment  which
specifically  states that this  registration  statement shall thereafter  become
effective in accordance  with Section 8(a) of the  Securities  Act or until this
registration  statement  shall become  effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
================================================================================

<PAGE>

THE  INFORMATION  IN THIS  PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.  THESE
SECURITIES  MAY NOT BE SOLD  UNTIL THE  REGISTRATION  STATEMENT  FILED  WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO  SELL  THESE  SECURITIES  AND IT IS NOT  SOLICITING  AN  OFFER  TO BUY  THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.


                    SUBJECT TO COMPLETION, DATED MAY 28, 2003

                                   PROSPECTUS

                               APHTON CORPORATION

          13,769,048 Shares of Common Stock, Par Value $.001 per Share
               --------------------------------------------------

     The selling  stockholders named on page 18 of this prospectus may offer for
sale up to  13,769,048  shares of our common  stock,  of which up to  13,650,000
shares may be issued as a result of the conversion of certain senior convertible
notes, as interest  shares on these notes and upon exercise of certain  warrants
held by the selling  stockholders.  We will not receive any of the proceeds from
the sale of the shares of our common  stock by the  selling  stockholders  under
this  prospectus,  although we may  receive  proceeds  from the  exercise of the
warrants held by the selling stockholders.

     We have been advised by the selling  stockholders  that they may or may not
sell all or a portion  of the  shares of our  common  stock from time to time on
Nasdaq.  They may also make  private  sales of the shares of our common stock to
purchasers directly.  Alternatively, they may from time to time offer the shares
of our common stock through  underwriters,  brokers,  dealers or agents, who may
receive  compensation  in the form of  underwriting  discounts,  commissions  or
concessions.

     Our common stock is listed on the Nasdaq  National  Market under the symbol
"APHT." On May 27,  2003,  the last  reported  sale  price of our  common  stock
reported on Nasdaq was $5.51.

     Investing in our common stock involves risks. See "Risk Factors"  beginning
on page 4 of this  prospectus  for a  discussion  of certain  factors you should
consider before you buy our common stock.
                             ---------------------

     Neither the  Securities and Exchange  Commission  nor any state  securities
commission has approved or disapproved of these securities or determined if this
prospectus  is truthful or  complete.  Any  representation  to the contrary is a
criminal offense.

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

                   The date of this prospectus is May 28, 2003

<PAGE>

                                TABLE OF CONTENTS




         ABOUT THIS PROSPECTUS.............................................1

         THE COMPANY.......................................................1

         RECENT DEVELOPMENTS...............................................4

         RISK FACTORS......................................................4

         FORWARD-LOOKING STATEMENTS.......................................17

         USE OF PROCEEDS..................................................18

         THE SELLING STOCKHOLDERS.........................................18

         PLAN OF DISTRIBUTION.............................................24

         LEGAL MATTERS....................................................26

         EXPERTS..........................................................27

         WHERE YOU CAN FIND MORE INFORMATION..............................27

         INCORPORATION OF DOCUMENTS BY REFERENCE..........................27

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

<PAGE>

                              ABOUT THIS PROSPECTUS


     This  prospectus  is part of a  registration  statement on Form S-3 that we
filed with the Securities and Exchange  Commission using a "shelf"  registration
process.  Under this process,  the selling  stockholders may, from time to time,
sell up to 13,769,048 shares of our common stock in one or more offerings.  This
prospectus does not contain all of the information  included in the registration
statement and the exhibits thereto. Statements included in this prospectus as to
the  contents of any contract or other  document  that is filed as an exhibit to
the registration  statement are not necessarily complete and you should refer to
that  agreement or document for a complete  description  of these  matters.  You
should read both this  prospectus and any prospectus  supplement,  together with
the additional information described in this prospectus under the heading "Where
You Can Find More Information."


                                   THE COMPANY


     Aphton Corporation ("we," "Aphton" or the "Company") is a biopharmaceutical
company.  We are engaged in research and development and conduct clinical trials
for our products,  both independently and with our corporate strategic partners.
We apply our innovative active  immunization  (vaccine)  technology-platform  to
develop products for neutralizing,  and removing from circulation,  hormones and
other molecules that  participate in  gastrointestinal  system and  reproductive
system  cancer and  non-cancer  diseases.  We also are  developing  a product to
neutralize hormones to prevent pregnancy.

     Since 1997 we have had a strategic alliance with Pasteur Merieux Connaught,
now Aventis Pasteur, for products that treat gastrointestinal  cancers, in North
America and Europe. Since 1998, we have had a strategic alliance with SmithKline
Beecham,  now  GlaxoSmithKline,  for  products  that treat  reproductive  system
cancers and non-cancer diseases, worldwide.

     During our first  five  years,  we  developed  the basis of our  innovative
active  immunization  technology and our monoclonal antibody technology and have
continued  developing  them to date. In our second five years,  we initiated the
development  of  products  based on those  technology  platforms,  which we have
continued to date.  Since our  inception,  we have  developed a patent estate to
protect our technology platforms and our products after they are commercialized.
During this period and since,  together with our  collaborating  scientists,  we
have developed the scientific foundations and the scientific literature relating
to the central role of gastrin and gastrin receptors in the onset,  development,
growth and spread of  adenocarcinomas  of the  gastrointestinal  system from the
esophagus to the stomach, pancreas and liver and through the colon and rectum.

     After conducting toxicology testings and pre-clinical trials in animals, we
initiated  phase I safety  and  phase II  dose-ranging/indications  of  efficacy
clinical trials, with G17DT and GnRH pharmaccine.  These trials demonstrated for
the first  time that a  patient's  immune  system  can be  activated  to target,
neutralize and inhibit  hormonal growth factors that fuel cancers and drive them
to  metastasize  (spread).  We  recently  reported  successful  results  from  a
randomized, double-blind, phase III trial with G17DT as monotherapy for advanced
pancreatic  cancer and

<PAGE>

from a phase II gastric  (stomach)  cancer trial with G17DT in combination  with
the chemotherapeutics cisplatin and 5-FU.

     We achieved our  developments,  pre-clinical  and clinical results with the
expenditure of approximately  $134 million in the twelve years since our initial
public offering in 1991. We believe we can reduce our costs and expenses for the
twelve months ending March 31, 2004 to less than $16 million. We will pursue our
primary  objective of filing for approval to market  G17DT for  monotherapy  for
advanced  pancreatic cancer patients in the European Union, Canada and Australia
in the fourth  quarter of 2003,  but that  cannot be stated with  certainty.  We
currently have a strategic  alliance with Aventis Pasteur,  whereby Aventis will
exclusively  promote,  advertise,  market,  distribute and sell our anti-gastrin
vaccine (G17DT) in North America and Europe. We intend to license G17DT to third
parties to treat human cancers in other markets  worldwide,  including Japan. We
also intend to license  worldwide  our  monoclonal  antibody  products to target
gastrointestinal  system cancers. For non-cancer therapies, we intend to license
G17DT for the treatment of gastroesophageal reflux disease (GERD).

Clinical Trials

     We are currently  conducting  the following  clinical  trials:  a phase III
trial  conducted  outside of the United  States for  pancreatic  cancer with our
anti-gastrin  17 immunogen  (G17DT) as a monotherapy;  a phase II clinical trial
conducted in the United States and foreign countries,  with G17DT in combination
with the chemotherapeutics cisplatin and 5-FU for gastric cancer patients; and a
phase II trial in Europe with GnRH pharmaccine for prostate cancer patients.  We
are  conducting  a second  phase  III  trial  that has  also  completed  patient
recruitment, conducted in the United States and foreign countries for pancreatic
cancer with G17DT in combination with the chemotherapeutic  gemcitabine. We have
initiated but are not currently  recruiting patients pending funding for a phase
II trial in Europe with G17DT for  gastroesophageal  reflux disease  (GERD),  or
"severe  heart burn"  patients.  In addition,  our Phase II clinical  trial with
respect to  immuno-contraception  has been  initiated  but is "on hold"  pending
further funding from the World Health Organization (WHO).

     We believe  that the results of the  randomized,  double  blind,  phase III
trial  conducted in foreign  countries with G17DT as a monotherapy  for advanced
pancreatic  cancer  patients  are already  sufficient  for filing for  marketing
approval in the European Union, Canada and Australia.  Therefore,  we have begun
the process of  gathering  and  compiling  the data and the  preparation  of the
extensive  regulatory   documentation  required  for  submission  for  marketing
approval.  We expect this process to be completed in the fourth quarter of 2003,
but that  cannot be  stated  with  certainty.  We  expect  that we will  receive
priority  review  of the  filings.  The  time for  review  and the  granting  of
marketing approval in each jurisdiction cannot, however, be predicted by us with
certainty.

     In addition,  we believe that the results of our phase II trial for gastric
cancer patients treated with G17DT in combination with cisplatin and 5-FU can be
described as "impressive." We plan to investigate the possibility of obtaining a
conditional  marketing approval for this therapy in a foreign jurisdiction based
on these results, when the final data is compiled, analyzed and documented.

                                      -2-
<PAGE>

Financial Strategy

     We  finance  our  operations  through  the sale of our  equity  securities,
convertible  debentures  and  licensing  fees.  These funds  provide us with the
resources  to  operate  our  business,  attract  and retain  key  personnel  and
scientific  staff,  fund our  research  and  development  program,  pre-clinical
testing and clinical  trials,  obtain the  necessary  regulatory  approvals  and
develop our technology and products.

     We anticipate that our existing capital resources,  which consist primarily
of cash and  short-term  cash  investments,  including (i) the proceeds from the
sale of convertible, redeemable, 5-year, interest-bearing notes and unregistered
warrants to the selling  stockholders  sold in two tranches,  of which the first
$15 million  tranche was executed on March 31, 2003 (the gross proceeds of which
were  subsequently  received  by us by April 4,  2003) and the second $5 million
tranche  we expect to close on a future  date upon the  fulfillment  of  certain
conditions  (information  about these conditions is contained in this prospectus
under the caption "The Selling  Stockholders");  (ii)  proceeds of $1.48 million
from the sale of our common  stock on February  24, 2003 and proceeds of $18,750
from the sale of unregistered warrants to an institutional  investor;  and (iii)
proceeds of $3 million from the issuance on December 19, 2002 of a  convertible,
redeemable, 5-year, interest bearing debenture to Aventis Pharmaceuticals, Inc.,
will enable us to maintain a range of operations into the first quarter of 2004.
Our  working  capital  and  capital  requirements  depend on  numerous  factors,
including the following:

     o    the  progress of our  research and  development  program,  preclinical
          testing and clinical trials;

     o    the timing and cost of obtaining regulatory approvals;

     o    the  levels  of  resources  that we  devote  to  product  development,
          manufacturing and marketing capabilities;

     o    technological advances;

     o    competition; and

     o    collaborative  arrangements  or  strategic  alliances  with other drug
          companies,  including  the  further  development,   manufacturing  and
          marketing  of certain of our  products and our ability to obtain funds
          from such strategic alliances or from other sources.

     Many of these factors are beyond our control.  In the event that we require
additional  funds,  we may be required to sell  additional  securities,  whether
equity, convertible debt or otherwise. In addition, we may be required to obtain
funds through  arrangements with  collaborative  partners that may require us to
negotiate  agreements  which may be less than favorable to us, if we are able to
secure them at all. If we are unable to complete  such

                                      -3-

<PAGE>

transactions, we may be required to delay, reduce the scope of, or eliminate one
or more of our research or development  programs.

     Our web page, describing the company, our technology,  products,  strategic
alliances and news releases can be visited at:  www.aphton.com.  The web site is
not a part of this prospectus.

                               RECENT DEVELOPMENTS

     On May 2, 2003,  we announced  that  Patrick T. Mooney,  MD, has joined our
management team,  reporting to the office of the chief executive  officer in the
capacity of chief medical  officer.  Dr. Mooney will be working closely with our
senior  management in finance,  business  development and operations,  including
clinical trials and regulatory affairs, research, development and manufacturing.

     On May 21,  2003,  we held an  Annual  Meeting  of  Shareholders  at  which
shareholders  representing a majority of our outstanding common stock re-elected
Messrs. Georges Hibon and Nicolas John Stathis as directors and approved (i) the
private placement of senior convertible notes and warrants as part of an overall
$20 million financing  transaction with the selling  stockholders,  and (ii) the
amendment of our certificate of incorporation to increase our authorized  common
stock to 60,000,000 shares and authorized preferred stock to 4,000,000 shares.

                                  RISK FACTORS

     If you purchase  shares of our common  stock,  you will take on a financial
risk. In deciding whether to invest, you should consider carefully the following
factors, the information  contained in this prospectus and the other information
to which we have referred you.  Additional risks and uncertainties not presently
known to us or that we currently do not  consider  material  also may impair our
business operations. If any of the following risks actually occur, our business,
financial  condition  or results of  operations  could be  materially  adversely
affected. In such case, the trading price of our common stock could decline, and
you may lose all or part of your investment.

     Our potential products are in various stages of product  development.  Some
of our potential products are in research or in early  development,  and we have
generated no revenues from product sales. Our most advanced  potential  product,
an immunogen to treat pancreatic  cancer,  is in a phase III trial in the United
States  and  Europe.  Our other  potential  products  to treat  stomach  cancer,
colorectal  cancer,  gastroesophageal  reflux disease (or GERD),  chronic peptic
ulcers, breast cancer,  endometriosis and prostate cancer are mostly at phase II
development  but  some  potential   products  are  in  even  earlier  phases  of
development. All of our potential products will require expensive, extensive and
time consuming clinical testing,  and some may require  additional  research and
development,  prior to commercial use.  Accordingly,  we cannot plan on deriving
revenues from these products for a number of years,  if at all. These  potential
products  may  not  be  developed  successfully  into  immunogens  that  can  be
administered  to humans or may not prove to be safe and  effective  in  clinical
trials  or  cost-effective  to  manufacture  and  administer.  We may  encounter
problems  in  clinical  trials that will cause us to delay or suspend a clinical
trial.  Also,  our products  that are  currently  under  development  may not be
completed  successfully or within an acceptable time period, if at all. Further,
our  products

                                      -4-

<PAGE>

may not receive regulatory approval.  Finally, if any of our products do receive
required regulatory approval,  we may not be capable of producing those products
in  commercial  quantities  or  those  products  may  not  be  accepted  by  the
marketplace.

     We expect to continue  incurring  substantial  operating losses in the next
several  years.  We have  experienced  significant  operating  losses  since our
inception in 1981 and expect to continue incurring  substantial operating losses
for at least the next several years. We expect losses to increase as a result of
the expenses  associated with clinical testing and research and development.  As
of March  31,  2003,  we had an  accumulated  deficit  of  approximately  $145.5
million. Our ability to achieve profitability depends upon our ability, alone or
through relationships with third parties, to develop successfully our technology
and products, to obtain required regulatory approvals and to manufacture, market
and sell such products.

     We have never paid any  dividends  and do not expect to pay cash  dividends
before significant product revenues, if any, are realized, if then. In addition,
under the $15 million senior  convertible notes we executed and delivered to the
selling  stockholders on March 31, 2003, we are restricted,  for so long as such
notes are  outstanding,  from paying any cash  dividend or  distribution  on our
common stock  without the prior express  written  consent of the holders of such
notes representing not less than two-thirds of the aggregate principal amount of
the then outstanding notes.

     We have substantial  capital  requirements and we may not be able to obtain
additional  financing.  Developing  our  technology  and products will require a
commitment  of  substantial  funds to  conduct  the  costly  and  time-consuming
research and clinical trials necessary for such development.  Our future capital
requirements will depend on many other factors, including:

     o    continued   scientific   progress  in  the  research  and  development
          (clinical trials) of our products;

     o    our ability to collaborate with others for the manufacture,  marketing
          and sale of our products;

     o    the cost of regulatory approvals;

     o    the  cost of  establishing,  maintaining  and  enforcing  intellectual
          property rights;

     o    competing technological and market developments; and

     o    changes in our existing research relationships.

     Although we intend to reduce our costs and expenses  for the twelve  months
ending March 31, 2004 to less than $16 million,  it is possible that our rate of
expenditure may further increase if we pursue  pre-clinical  studies or clinical
trials for our other products at a faster rate than we currently anticipate.  We
believe that the receipt and the  application  of proceeds from our  financings,
including  the $15  million  financing  executed  on March 31,  2003 (the  gross
proceeds  of which were  subsequently  received  by us by April 4, 2003) and the
second $5  million  tranche  we expect to  complete,  together  with our plan to
reduce our costs and  expenses,  will allow us to operate into the first quarter
of 2004 without any additional funds.

                                      -5-

<PAGE>

     We may seek  additional  financing  through  collaborative  arrangements or
through public or private equity or debt  financings.  Additional  financing may
not be available  to us on  acceptable  terms or at all. If we raise  additional
funds by issuing  equity  securities,  dilution  to the  interests  of  existing
stockholders may result. If adequate funds are not available, we may be required
to  delay,  reduce  the scope of or  eliminate  one or more of our  research  or
development  programs or obtain funds through  arrangements  with  collaborative
partners or others that may  require us to  relinquish  rights to certain of our
technologies,  potential  products or products that we would  otherwise  seek to
develop or commercialize ourselves.

     Our different  approach to disease treatment may not prove successful.  Our
products  under  development  are based on an  approach  to disease  therapy and
prevention which has not yet been approved. Our approach may ultimately prove to
be unsuccessful since:

     o    we may not successfully complete our product development efforts;

     o    our products may not be proven to be safe and effective;

     o    we may not receive approval from the U.S. Food and Drug Administration
          or FDA, or any other applicable regulatory agencies; or

     o    medical centers, hospitals,  physicians or patients may not accept our
          products  as readily  as  current  drug  therapies  or other  forms of
          treatment.

     Undesirable and unintended side effects or unfavorable publicity concerning
any of our products or other  products  incorporating  a similar  approach could
limit or curtail commercial use of our products and could have an adverse effect
on our  ability to obtain  regulatory  approvals  and to achieve  physician  and
patient acceptance.

     The  development  of our products is subject to extensive  regulation.  The
research, pre-clinical development, clinical trials, manufacturing and marketing
of our  products are subject to extensive  regulation  by numerous  governmental
authorities  in the  United  States  and other  countries.  Clinical  trials and
manufacturing  and marketing of products  undergo  rigorous testing and approval
processes by the FDA and equivalent  foreign regulatory  authorities,  including
the Medicines  Control  Agency,  or MCA, in the United  Kingdom.  The process of
obtaining FDA and other required regulatory  approvals is lengthy and expensive.
The time required for FDA approval is uncertain, and typically takes a number of
years,  depending  on the type,  complexity  and novelty of the  product.  Since
certain of our products  involve the  application  of new  technologies  and are
based on a new therapeutic  approach,  regulatory approvals may be obtained more
slowly  than  for  products  produced  using  more  conventional   technologies.
Additionally,  we may encounter  delays or  disapprovals  based upon  additional
government regulation resulting from future legislation or administrative action
or changes in FDA or equivalent foreign regulatory policy made during the period
of product development and regulatory review.

     We may apply  for  approval  from MCA or other  European  Union  regulatory
agencies to  commercialize  our potential  immunogen to treat one or more of the
gastrointestinal  system cancers and ulcerations previously described,  prior to
applying for similar FDA  approval.  Even if we obtain  approval from the MCA or
other foreign regulatory agencies, FDA approval would

                                      -6-

<PAGE>

still be  required  prior to  marketing  such a product  in the  United  States.
Although we have filed an Investigational  New Drug application,  or IND (a type
of submission used to ultimately obtain FDA approval to market a new drug), with
the FDA and the FDA has  permitted  us to proceed  with  clinical  trials in the
United States for pancreatic  cancer,  gastric cancer and prostate  cancer,  the
clinical  trials will seek safety data as well as efficacy data and will require
substantial time and significant funding.  Furthermore,  we, the FDA, the MCA or
other foreign regulatory  agencies may suspend clinical trials at any time if it
is  determined  that the  participants  in such  trials  are  being  exposed  to
unacceptable  health  risks.  Approval  for any  products  we develop may not be
granted by applicable  regulatory  agencies on a timely basis,  if at all, or if
granted the approval may not cover all the clinical indications for which we are
seeking approval or may contain significant limitations in the form of warnings,
precautions or contraindications with respect to conditions of use. Any delay in
obtaining, or failure to obtain,  necessary approvals would adversely affect our
ability to  generate  product  revenue.  Failure to comply  with the  applicable
regulatory requirements can, among other things, result in fines, suspensions of
regulatory  approvals,  product  recalls,  operating  restrictions  and criminal
prosecution.   In  addition,  the  marketing  and  manufacturing  of  drugs  and
biological products are subject to continuing FDA review, and later discovery of
previously unknown problems with a product, its manufacture or its marketing may
result in the FDA requiring  further  clinical  research or  restrictions on the
product  or the  manufacturer,  including  withdrawal  of the  product  from the
market.

     The industry in which we operate is  characterized  by rapid  technological
change and intense competition. The treatment of diseases such as those to which
our  products are directed is subject to rapid,  unpredictable  and  significant
change.  Our products  under  development  seek to address  certain  cancers and
diseases currently  addressed,  to some extent, by existing or evolving products
and  technologies  of  other   biotechnology   and   pharmaceutical   companies.
Competition from other biotechnology  companies,  large pharmaceutical companies
and universities  and other research  institutions is intense and is expected to
increase.  Many of these companies and institutions have  substantially  greater
resources,  research and  development  staffs and facilities than we do and have
substantially  greater  experience  in  obtaining  regulatory  approval,  and in
manufacturing  and  marketing   pharmaceutical   products.  In  addition,  other
technologies  may in the  future  be the  basis  of  competitive  products.  Our
competitors  may succeed in developing  technologies  and products that are more
effective  than those we are  developing or that would render our technology and
products obsolete or noncompetitive.

     Our ability to enforce our patents and proprietary rights is uncertain. Our
success will depend in large part on our ability to obtain patents,  both in the
United States and in other countries,  maintain our unpatented trade secrets and
operate  without  infringing  on the  proprietary  rights of others.  The patent
positions of biotechnology and pharmaceutical  companies can be highly uncertain
and involve  complex  legal and factual  questions,  and  therefore the breadth,
validity and enforceability of claims allowed in patents we have obtained cannot
be predicted.

     As of May 13,  2003 we held 31  issued  patents  and  have  pending  patent
applications and patent applications in preparation. Our pending applications or
patent  applications  in preparation  may or may not be issued as patents in the
future. Additionally,  our existing patents, patents pending and patents that we
may  subsequently  obtain  will  not  necessarily   preclude   competitors  from
developing  products that compete with products we have developed and thus would

                                      -7-

<PAGE>

substantially  lessen  the value of our  proprietary  rights.  We intend to file
additional patent applications, when appropriate,  relating to our technologies,
improvements to our technologies and specific products we may develop. If any of
our  patents  are   challenged,   invalidated,   circumvented   or  held  to  be
unenforceable, we could lose the protection of rights we believe to be valuable,
and our business could be materially and adversely affected.

     Our  commercial  success also will depend,  in part, on our not  infringing
patents  issued to others.  We may be  required  to obtain  licenses to patents,
patent  applications or other proprietary  rights of others. If we do not obtain
such  licenses,  we could  encounter  delays in product  introductions  while we
attempt to design around such patents,  or the development,  manufacture or sale
of products  requiring  such  licenses  could be  precluded.  Our  products  may
ultimately be found to infringe on the patents or proprietary  rights of others.
We could incur  substantial  costs,  including  diversion of management time, in
defending  ourselves  in  litigation  brought  against us on such  patents or in
litigation  in  which  we  assert  our  patents  against  another  party,  or in
litigation  brought by another party  asserting  its patents  against us. If our
competitors prepare and file patent applications in the United States that claim
technology  also  claimed  by us,  we may have to  participate  in  interference
proceedings  declared  by the U.S.  Patent  and  Trademark  Office to  determine
priority of invention,  which could result in substantial  financial costs to us
and diversion of management attention, even if the eventual outcome is favorable
to us. We believe  there  will  continue  to be  significant  litigation  in the
industry regarding patent and other intellectual property rights.

     We also rely on trade secrets to protect our technology,  especially  where
patent  protection is not believed to be appropriate  or obtainable.  We protect
our proprietary technology and processes, in part, by confidentiality agreements
with our employees,  consultants and certain  contractors.  These agreements may
not ultimately provide us with adequate protection.

     We depend on key  personnel.  We depend  upon the  services  of our  senior
management,  none of whom is subject to an employment agreement with us. We have
not insured against the loss, due to death or disability,  of any key personnel.
The loss of the  services  of any key  personnel  could have a material  adverse
effect on us.  Because of the  specialized  nature of our business,  our success
also depends upon our ability to attract and retain highly qualified  scientists
and other technical personnel.  We face intense competition for such persons and
we may not be able to attract or retain such individuals.

     We may be exposed to product  liability  claims and uninsured risk. The use
of  any  of  our  products,   whether  for  commercial  applications  or  during
pre-clinical  or  clinical  trials,  exposes us to an  inherent  risk of product
liability  claims if such  products  cause injury or result in adverse  effects.
Such   liability   might  result  from  claims  made  directly  by  health  care
institutions, contract laboratories or others selling or using such products. We
currently  maintain  product  liability  coverage  against risks associated with
testing our  potential  products  in clinical  trials.  Insurance  coverage  for
product liability,  however, is becoming increasingly expensive and difficult to
obtain.  Insurance  coverage may not be available in the future at an acceptable
cost, if at all, or in sufficient  amounts to protect us against such liability.
The  obligation  to pay any  product  liability  claim  in  excess  of  whatever
insurance  we are able to acquire  could have a material  adverse  effect on our
business, financial condition and future prospects.

                                      -8-

<PAGE>

     Our business  involves the use of hazardous  materials that could expose us
to environmental  liability. Our research and development activities involve the
controlled  use  of  hazardous  materials,   chemicals,   cultures  and  various
radioactive  compounds.  We are  subject  to  federal,  state and local laws and
regulations governing the use, generation,  manufacture,  storage, air emission,
effluent  discharge,  handling and disposal of such  materials and certain waste
products.  Although  we believe  that our safety  procedures  for  handling  and
disposing of such  materials  comply with the standards  prescribed by such laws
and  regulations,  the risk of  accidental  contamination  or injury  from these
materials cannot be completely eliminated.  In the event of such an accident, we
could be held liable for any damages  that result and any such  liability  could
exceed our resources.  We may be required to incur  significant  costs to comply
with  environmental  laws and  regulations  in the  future.  Current  or  future
environmental  laws  or  regulations  could  materially   adversely  affect  our
business, financial condition and results of operations.

     We  depend  on  others  for  manufacturing   and  marketing.   We  have  no
manufacturing  facilities  for  commercial  production  of  our  products  under
development  and have no  experience  in marketing,  sales or  distribution.  We
intend to continue establishing  arrangements with and relying on third parties,
including  large  pharmaceutical  companies,  to manufacture,  market,  sell and
distribute  any product we  develop.  Although  we believe  that  parties to any
future  arrangements  will have an economic  incentive  to perform  successfully
their  contractual  responsibilities,  the amount and timing of  resources to be
dedicated to these  activities will not be within our control.  Such parties may
not perform their  obligations as expected,  we may not derive any revenues from
such  arrangements  and our  reliance on others for  manufacturing  products may
result in unforeseen problems with product supply. Should we encounter delays or
difficulties  in  establishing  relationships  with  manufacturers  to  produce,
package  and  distribute  any  product  we  develop,   market  introduction  and
subsequent  sales  of such  products  would  be  adversely  affected.  Moreover,
contract manufacturers that we may use must adhere to current good manufacturing
practice  regulations  enforced  by the FDA through  its  facilities  inspection
program.  If these facilities cannot pass a pre-approval  plant inspection,  any
FDA pre-market  approval of our potential products would be adversely  affected.
Additionally,  these  manufacturers are subject to continual review and periodic
inspections  by the FDA and  discovery of  previously  unknown  problems  with a
manufacturer  or facility may result in FDA  restrictions  which could adversely
affect the manufacture and marketing of our products.

     We depend on one of our  strategic  collaborators  to supply one of our key
materials.  Diphtheria Toxoid (DT) is a key material used in the development and
manufacture  of  several  of  our  therapeutic  vaccines.  We do  not  currently
manufacture DT and large quantities of DT suitable for human use are not readily
obtainable in the open market. We currently have a supply agreement with Aventis
Pasteur, one of the few manufacturers of DT in the world, for this material.  If
the supply of DT from  Aventis  Pasteur is disrupted  for any reason,  we may be
unable to obtain  sufficient  quantities  of DT on a timely  and  cost-effective
basis, if at all. This could result in increased costs,  delayed  development or
ultimately  unsuccessful  clinical  trials which could  materially and adversely
affect our ability to commercialize our products.

     Future healthcare reforms may adversely affect our financial  results.  The
levels  of  revenues  and  profitability  of  biotechnology  and  pharmaceutical
companies,   including  us,  may  be  affected  by  the  continuing  efforts  of
governmental  and  third-party  payors to  contain or reduce the

                                      -9-

<PAGE>

costs of health care through  various  means.  For example,  in certain  foreign
markets, pricing or profitability of prescription  pharmaceuticals is subject to
government  control.  In the United States,  there have been, and we expect that
there will  continue to be, a number of federal and state  proposals  to control
health care costs. It is uncertain what legislative  proposals,  if any, will be
adopted  or what  actions  federal,  state  or  third-party  payors  may take in
response to any health care reform  proposals or  legislation.  Further,  to the
extent that such  proposals or reforms have an adverse  effect on our  business,
financial  condition  and  profitability  or  that  of  other  biotechnology  or
pharmaceutical  companies that are prospective corporate partners for certain of
our  products,  our  ability  to  commercialize  our  products  may be  affected
adversely.

     Our   success   depends   on   third   party   reimbursement.    Successful
commercialization  of our products  will depend in part on the  availability  of
adequate  reimbursement from third-party health care payors,  such as government
and private  health  insurers and other  organizations.  Third-party  payors are
increasingly   challenging  the  pricing  of  medical   products  and  services.
Significant  uncertainty exists as to the reimbursement status of newly approved
health care products.  Any product that we succeed in bringing to market may not
be eligible for  reimbursement  at a level which is  sufficient  to enable us to
achieve market  acceptance of our products or to maintain  appropriate  pricing.
Without  such  reimbursement,  the  market  for  our  products  may be  limited.
Significant  reductions in insurance coverage also may have an adverse effect on
our future operations.

     The price of our common  stock may be  volatile.  The  market  price of our
common  stock,  like that of securities of other  biotechnology  companies,  has
fluctuated  significantly  in recent  years and is  likely to  fluctuate  in the
future. Announcements regarding

     o    scientific discoveries,

     o    strategic partnerships or arrangements,

     o    technological innovations,

     o    litigation and governmental inquiries,

     o    commercial products,

     o    patents or proprietary rights,

     o    the progress of clinical trials,

     o    government regulation,

     o    public  concern  as to the  safety  of drugs  and  reliability  of our
          testing processes,

     o    general market conditions,

     o    fluctuations in financial performance from period to period,

     o    termination of strategic alliances,

                                      -10-
<PAGE>

     o    new financings, and

     o    ability to maintain Nasdaq listing requirements

may have a  significant  impact on the  market  price of our  common  stock.  In
addition,  price and volume trading volatility in the U.S. stock market can have
a  substantial   effect  on  the  market  prices  of  the   securities  of  many
biotechnology  companies,  frequently  for  reasons  other  than  the  operating
performance of such companies.  These broad market  fluctuations could adversely
affect the market price of our common stock.

     The conversion of our convertible  securities,  the exercise of outstanding
warrants and other rights to obtain  additional shares could dilute the value of
the shares;  sales of  substantial  amounts of our shares of common  stock could
cause  the  price  to go  down.  As of May 27,  2003,  there  are  approximately
3,364,940  unregistered  warrants  outstanding to purchase  shares of our common
stock expiring at various dates through  October 1, 2021,  with exercise  prices
ranging from $1.91 to $24.00 per share of our common stock.

     The holder of the warrants  issued on February 24, 2003 is able to exercise
such warrants to purchase up to 150,000  shares of our common stock at $2.96 per
share.  The shares of common stock  issuable upon the exercise of these warrants
have been  registered  under the  Securities  Act of 1933,  as  amended,  or the
Securities Act, and will be freely transferable upon issuance.

     The $3 million  convertible  debenture  issued to Aventis  Pharmaceuticals,
Inc. on December 19, 2002 is  convertible  into shares of our common stock based
upon a price substantially equivalent to the market price of our common stock at
the time of  conversion.  The actual  number of shares of common stock  issuable
upon conversion of the convertible debenture is indeterminate because the number
is dependent on the market price of our common stock at the time of  conversion.
Based upon the market  price of the shares of our common  stock on May 27, 2003,
the debenture  would be  convertible  into  approximately  544,465 shares of our
common stock.

     The $15 million senior  convertible  notes we executed and delivered to the
selling stockholders on March 31, 2003 are initially  convertible into 6,000,000
shares of our common stock at any time prior to their maturity on March 31, 2008
at a fixed  conversion  price of $2.50,  subject  to  certain  price  adjustment
provisions.  Under the price adjustment provisions,  the conversion price of the
convertible  notes could be lowered,  perhaps  substantially,  in the event of a
"dilutive issuance",

                                      -11-

<PAGE>

that is, if we issue common  stock at any time prior to their  maturity at a per
share price below such conversion  price,  either directly or in connection with
the issuance of securities that are convertible into, or exercisable for, shares
of our common stock.

     Concurrently  with the $15 million senior  convertible  notes, we issued to
the selling  stockholders  warrants  entitling the  warrant-holders to initially
purchase an  aggregate  of  1,080,000  shares of our common stock at an exercise
price of $2.70  per  share,  subject  to price  adjustment  provisions  that are
substantially  similar to those  applicable  to the notes.  A  reduction  in the
exercise price may result in the issuance of a significant  number of additional
shares upon the exercise of the warrants.

     We are obligated to sell, and one of the selling  stockholders is obligated
to  purchase,  an  additional  $5 million of the  senior  convertible  notes and
warrants  on  a  future  date  upon  the   fulfillment  of  certain   conditions
(information  about these  conditions is contained in this prospectus  under the
caption  "The  Selling  Stockholders").  The  conversion  of  these  convertible
securities  and the exercise of these  warrants  could result in dilution in the
value of the  shares  of our  outstanding  common  stock  and the  voting  power
represented  thereby.  In  addition,  the  conversion  price of the notes or the
exercise  price of the  warrants  may be  lowered  in the  event  of a  dilutive
issuance (as described above) under the price adjustment provisions.

     Neither the notes nor the  warrants  establish  a "floor"  that would limit
reductions in such conversion price or exercise price,  except for the 80% floor
applicable to any dilutive issuance that occurs between March 31, 2004 and prior
to March 31, 2006. By  corollary,  there is no "ceiling" on the number of shares
issuable upon  conversion  of the notes or exercise of the warrants.  Additional
detail about the price  adjustment  provisions  is contained in this  prospectus
under  the  caption  "The  Selling  Stockholders".  Similarly,  the  convertible
debenture issued to Aventis Pharmaceuticals, Inc. is convertible at the holder's
option at a price  substantially  equivalent  to the market  price of our common
stock  at the  time of  conversion.  There  is no floor  that  would  limit  the
conversion  price of the  convertible  debenture and no ceiling on the number of
shares issuable upon conversion of such  debenture.  The downward  adjustment of
the  conversion  price of  these  convertible  notes  and  debenture  and of the
exercise price of these  warrants could result in further  dilution in the value
of the shares of our outstanding  common stock and the voting power  represented
thereby.

     In addition,  to the extent the holders of our  convertible  securities and
warrants  convert or exercise  such  securities  and then sell the shares of our
common  stock they  receive upon  conversion  or  exercise,  our stock price may
decrease due to the  additional  amount of shares  available in the market.  The
subsequent sales of these shares could encourage short sales by our stockholders
and others  which  could place  further  downward  pressure on our stock  price.
Moreover,  holders of these convertible  securities and warrants may hedge their
positions in our common stock by shorting our common stock,  which could further
adversely  affect our stock price.  The effect of these  activities on our stock
price could  increase the number of shares  issuable upon future  conversions of
our convertible securities or exercises of our warrants.

     We may also issue additional capital stock,  convertible  securities and/or
warrants to raise  capital in the future.  In  addition,  we may,  subject to no
event  constituting  an event of default under the notes,  or an event that with
the passage of time would if not cured  constitute an event

                                      -12-

<PAGE>

of default under the notes,  having occurred and the  registration  statement of
which this  prospectus  forms a part  continuing  to be  effective at that time,
elect to pay any accrued  interest on the $15 million senior  convertible  notes
with shares of our common  stock.  The value  attributed to any interest paid in
shares  depends  on the  market  price  of our  common  stock  during  the  five
consecutive business days immediately  preceding the applicable interest payment
date. To attract and retain key personnel,  we may issue additional  securities,
including stock options. All of the above could result in additional dilution of
the value of our  common  stock and the voting  power  represented  thereby.  No
prediction can be made as to the effect,  if any, that future sales of shares of
our common stock,  or the  availability  of shares for future sale, will have on
the market  price of our common  stock  prevailing  from time to time.  Sales of
substantial  amounts of shares of our common stock in the public market,  or the
perception that such sales could occur, may adversely affect the market price of
our  common  stock  and may make it more  difficult  for us to sell  our  equity
securities in the future at a time and price which we deem  appropriate.  Public
or private sales of substantial amounts of shares of our common stock by persons
or entities that have exercised  options and/or warrants could adversely  affect
the prevailing market price of the shares of our common stock.

     The  securities  purchase  agreement  relating  to the $15  million  senior
convertible  notes imposes  operating  restrictions  on us, which may prevent us
from taking some  corporate  actions.  Furthermore,  the  additional  $5 million
senior  convertible  notes,  if  sold,  will  contain  similar  provisions.  The
securities  purchase  agreement  relating to the $15 million senior  convertible
notes imposes  operating  restrictions on us. These  restrictions  limit,  among
other things, our ability to:

     o    on  or  before   March  31,  2006,   incur  or  guarantee   additional
          indebtedness;

     o    redeem,  pay cash dividends or make other  distributions on our common
          stock; and

     o    create liens.

     In addition,  for a period of 18 months  following the issuance by us of an
additional $5 million principal amount of senior convertible notes to one of the
selling  stockholders or, if no such additional notes are issued,  then from May
31,  2003,  we are,  subject  to certain  limited  exceptions,  restricted  from
issuing,  selling or exchanging,  (A) any shares of our common stock, (B) any of
our other equity  securities,  including without  limitation shares of preferred
stock, (C) any of our debt securities  (other than debt with no equity feature),
including without limitation any debt security which by its terms is convertible
into or exchangeable for any of our equity securities, (D) any of our securities
that are a combination of debt and equity,  or (E) any option,  warrant or other
right to subscribe for,  purchase or otherwise  acquire any such equity security
or any such debt  security,  unless in each case we shall have first  offered to
sell such securities on the same terms to the selling stockholders.

     We cannot assure you that these  covenants  will not  adversely  affect our
ability to finance our future operations or capital needs or to pursue available
business  opportunities  or limit  our  ability  to plan for or react to  market
conditions  or meet  capital  needs or  otherwise  restrict  our  activities  or
business  plans. A breach of any of these covenants could result in a default in
respect of the $15 million senior  convertible  notes. If a default occurs,  the
investors could elect

                                      -13-

<PAGE>

to declare all amounts,  together with accrued  interest,  to be immediately due
and payable in cash, at a price equal to 110% of the amount due.

     Our failure to satisfy our  registration  obligations  with  respect to the
common  stock  underlying  the $15  million  senior  convertible  notes  and the
warrants could result in adverse  consequences,  including  acceleration  of the
notes.  We are  required  to  maintain  the  effectiveness  of the  registration
statement,  of which this  prospectus  forms a part,  covering the resale of the
common  stock  underlying  the $15  million  senior  convertible  notes  and the
warrants,  until the  earlier of (i) such time as all of the shares  that can be
sold under this prospectus by the selling  stockholders have been sold, and (ii)
such time as such shares are eligible  for resale  pursuant to Rule 144(k) under
the Securities Act. We will be subject to various  penalties for failing to meet
our  registration  obligations  and  the  related  listing  obligations  for the
underlying common stock,  which include cash penalties and the forced redemption
of the notes at 110% of the principal amount plus accrued interest for cash.

     Our existing  debt  obligations  may make it difficult for us to enter into
strategic  transactions or to obtain  financing in the future.  The terms of the
agreements  governing  the $15 million  senior  convertible  notes issued to the
selling stockholders and the $3 million convertible debentures issued to Aventis
Pharmaceuticals,  Inc. may restrict our ability to be acquired,  sell our assets
or obtain financing in the future. Under the terms of these debt securities,  in
the event of a change of control of us or a sale of all or substantially  all of
our assets,  the surviving  entity would be obligated to assume our  outstanding
debt obligations,  and in the event of a change of control,  the holders of each
of our  outstanding  convertible  notes and  debentures  would have the right to
require us to redeem the entire  principal of the debt  securities  plus accrued
interest for cash, and, in the case of the $15 million senior convertible notes,
110% of the principal amount plus accrued interest. These provisions may make it
difficult for us to enter into such a transaction with potential acquirers.

     The  securities  purchase  agreement  relating  to the $15  million  senior
convertible  notes  imposes  further  restrictions  on  our  ability  to  obtain
financing in the future.  These  restrictions  limit,  among other  things,  our
ability to incur or  guarantee  additional  indebtedness  on or before March 31,
2006. In addition,  for a period of 18 months following the issuance by us of an
additional $5,000,000 principal amount of senior convertible notes to one of the
selling  stockholders or, if no such additional notes are issued,  then from May
31, 2003, we are restricted from issuing, selling or exchanging,  (A) any shares
of our common stock, (B) any of our other equity  securities,  including without
limitation shares of preferred stock, (C) any of our debt securities (other than
debt with no equity  feature),  including  without  limitation any debt security
which by its terms is  convertible  into or  exchangeable  for any of our equity
securities, (D) any of our securities that are a combination of debt and equity,
or (E) any  option,  warrant  or  other  right to  subscribe  for,  purchase  or
otherwise acquire any such equity security or any such debt security,  unless in
each case we shall have first offered to sell such  securities on the same terms
to the selling stockholders.

     In addition,  our existing debt obligations may make it difficult for us to
attract  financing  in the  future  through  the  issuance  of  equity  or  debt
securities.  The  conversion of any of our  outstanding  debt  securities  could
result in substantial  dilution to our  stockholders.  This  potential  dilution
could dissuade  potential  investors from investing in the event that we attempt
to issue

                                      -14-

<PAGE>

additional  convertible debt securities in the future.  Finally, the $15 million
senior  convertible  notes  (as  well as the  related  warrants)  contain  price
adjustment  provisions that could result in a substantial increase in the number
of shares of common stock issuable upon conversion of these notes, and therefore
additional  significant  dilution,  in the event of an  issuance  of shares in a
financing  transaction in the future  (information  about these price adjustment
provisions  is  contained  in this  prospectus  under the caption  "The  Selling
Stockholders").

     We are obligated to make  periodic  interest  payments  under our financing
instruments. We have material amounts of indebtedness outstanding as a result of
the $15 million senior convertible notes issued to the selling  stockholders and
the $3 million convertible debenture issued to Aventis Pharmaceuticals,  Inc. We
are  required to make  quarterly  interest  payments  on the $15 million  senior
convertible notes in cash or stock, at our option,  and annual interest payments
on the $3 million convertible debenture in cash. Additionally, we have the right
and  obligation to issue an additional $5 million of senior  convertible  notes,
together with the  accompanying  warrants,  to one of the selling  stockholders,
subject to certain  conditions  (information about these conditions is contained
in this prospectus under the caption "The Selling Stockholders").

     We are not in default under any of our existing  financing  instruments and
believe we will have the resources to make all required interest  payments.  If,
however,  we at any time  default  on any of our  payment  obligations  or other
obligations  under any  financing  instrument,  the  holders  of the  applicable
instrument will have all rights  available  under the instrument,  including the
forced  redemption  of the  entire  principal  of the  instrument  plus  accrued
interest for cash, and, in the case of the $15 million senior convertible notes,
110% of the  principal  amount plus  accrued  interest.  The $15 million  senior
convertible  notes  also  have  certain  qualified   cross-default   provisions,
particularly  for  acceleration  of  indebtedness  under the  notes.  Under such
circumstances,  our cash position and liquidity would be severally impacted, and
it is possible we would not be able to pay our debts as they come due.

     If we cannot operate as a going  concern,  our stock price will decline and
you could lose your entire  investment.  We have  incurred  recurring  operating
losses since  inception and had a negative  working capital at March 31, 2003 of
approximately $9.0 million.  Our independent auditors added a paragraph to their
opinion on the  consolidated  financial  statements for the year ending December
31,  2002 with  respect  to our  ability to  continue  as a going  concern.  The
financial  statements do not include any  adjustments  to reflect the financings
completed subsequent to December 31, 2002.  Management believes that the receipt
and the application of proceeds from these financings, including the $15 million
financing  executed  on March  31,  2003  (the  gross  proceeds  of  which  were
subsequently  received by us by April 4, 2003) and the second $5 million tranche
we expect to complete,  together  with our plan to reduce our costs and expenses
for the twelve months ending March 31, 2004 to less than $16 million, will allow
us to operate into the first quarter of 2004 without any additional funds.

     The Company is presently  seeking  additional funds to operate through 2004
and beyond. In the event we are unable to secure additional funding, in order to
preserve  cash,  we would be required  to further  reduce  expenditures,  effect
further  reductions  in our corporate  infrastructure,  or we may be required to
delay,  reduce  the  scope  of,  or  eliminate  one or more of our  research  or
development  programs,  any of which could have a material adverse effect on our
ability to continue our current level of operations. Even if we

                                      -15-

<PAGE>

obtain  additional  working  capital  in the near  future,  to the  extent  that
operating  expenses  increase  or  we  need  additional  funds  to  develop  new
technologies,  the need for additional  funding may be accelerated and there can
be no assurance that such additional funding can be obtained on terms acceptable
to us, if at all.  If we are not able to  generate  sufficient  capital  through
additional  financing  to fund  our  current  operations,  we may not be able to
continue as a going concern. If we are unable to continue as a going concern, we
may be forced to  significantly  reduce or cease our  current  operations.  This
could  significantly  reduce the value of our securities,  which could result in
our delisting from Nasdaq and cause investment losses for our stockholders.

     We may not be able to maintain the Nasdaq listing requirements.  On October
15,  2002 and on November 1, 2002,  we  received  notices  from the staff of the
Nasdaq  National  Market that our common  stock had failed to  maintain  certain
minimum  requirements  for continued  listing on the Nasdaq  National Market and
both of the notices  suggested that we may want to consider applying to transfer
our securities to the Nasdaq Smallcap Market.  We were  subsequently  advised by
Nasdaq that we had regained  compliance  with certain minimum  requirements  for
continued  listing on the Nasdaq National Market and that our common stock would
continue to be listed on the Nasdaq National Market, pending future review.

     As of May 27, 2003, our share price on Nasdaq was $5.51. If our share price
falls below $3 per share for a period of 30  consecutive  business days, we will
not be in  compliance  with the  continued  listing  requirements  of the Nasdaq
National  Market  and our  common  stock  will be  delisted  if we do not regain
compliance within 90 calendar days after we receive a non-compliance notice from
Nasdaq.  In the event that our common stock is delisted from the Nasdaq National
Market,  we would apply to list our common stock on the Nasdaq Smallcap  Market.
If we had to move our securities  from the Nasdaq  National  Market,  we believe
that we satisfy all the  criteria  for  listing  our common  stock on the Nasdaq
Smallcap  Market  which,  among  others,  requires that our share price not fall
below $1.00.  There is no assurance,  however,  that our application for trading
our  common  stock on the  Nasdaq  Smallcap  Market  would be  accepted  or,  if
accepted, that we would be able to maintain eligibility for continued listing on
the Nasdaq Smallcap Market.

     Under the terms of the $15 million senior  convertible notes, if our common
stock were to be delisted from the Nasdaq  National  Market and not accepted for
listing on the Nasdaq  Smallcap  Market,  The American Stock Exchange or The New
York Stock  Exchange,  Inc.,  the  holders of such notes may redeem the notes at
110% of the principal amount plus accrued interest for cash.

     In  addition,  delisting  could reduce the ability of holders of our common
stock to purchase or sell  shares as quickly and as  inexpensively  as they have
done historically.  For instance, failure to obtain listing on another market or
exchange  may  make it more  difficult  for  traders  to  sell  our  securities.
Broker-dealers  may be less  willing  or able  to sell or make a  market  in our
common stock.  Not maintaining a listing on a major stock market may result in a
decrease  in the  trading  price  of our  common  stock  due  to a  decrease  in
liquidity,  reduced  analyst  coverage  and less  interest by  institutions  and
individuals in investing in our common stock.  This could  adversely  affect our
ability to raise funds through stock and debt issuances.

                                      -16-

<PAGE>

                           FORWARD-LOOKING STATEMENTS

     This prospectus,  any prospectus supplement and the documents  incorporated
by reference in this prospectus may contain forward-looking  statements. We have
based  these   forward-looking   statements  on  our  current  expectations  and
projections about future events.

     These statements include, but are not limited to:

     o    expectations  as to the adequacy of our cash balances,  cash flow from
          operations  and the  proceeds of  securities  issuances to support our
          operations  for  specified  periods  of time and as to the  nature and
          level of cash expenditures;

     o    expectations as to the receipt and timing of regulatory  clearance and
          approvals;

     o    expectations  as to the  development  of our  products,  including our
          clinical research program;

     o    statements as to anticipated reimbursement from third-party healthcare
          payers for our products;

     o    expectations  as to the  maintenance of the Nasdaq  continued  listing
          requirements;

     o    expectations  as to  the  reduction  of  our  costs  and  expenses  of
          operations;

     o    expectations as to our ability to continue as a going concern.

     The  forward-looking  statements  included or  incorporated by reference in
these  documents  are  based  on  the  beliefs  of our  management  as  well  as
assumptions made by us and information  available to us on the date hereof.  Our
actual  results  could  differ   materially  from  those  anticipated  in  these
forward-looking  statements  as a result of various  factors,  including all the
risks discussed in "Risk Factors" and elsewhere in this prospectus.

     In addition,  statements that use the terms  "believe,"  "expect,"  "plan,"
"intend,"  "estimate,"  "anticipate"  and similar  expressions  are  intended to
identify  forward-looking  statements.  All  forward-looking  statements in this
prospectus  reflect  our  current  views  about  future  events and are based on
assumptions  and are  subject to risks and  uncertainties  that could  cause our
actual results to differ  materially from future results expressed or implied by
the forward-looking  statements. Many of these factors are beyond our ability to
control or predict.  You should not put undue  reliance  on any  forward-looking
statements.  We undertake no  obligation  to release  publicly any  revisions to
these  forward-looking  statements to reflect events or circumstances  after the
date of this  document or to reflect the  occurrence  of  unanticipated  events,
except as may be required under  applicable  securities  laws. In evaluating our
business,  you should  consider  carefully the factors set forth above under the
heading "Risk  Factors" in addition to the other  information  set forth in this
prospectus and incorporated by reference in this prospectus.

                                      -17-

<PAGE>

                                 USE OF PROCEEDS

     We will not receive any proceeds  from the sale of the shares of our common
stock by the selling  stockholders,  if they choose to sell some or all of their
shares of our common stock. If the warrants held by the selling stockholders are
exercised and the selling  stockholders do not avail  themselves of the cashless
exercise  provisions  contained  therein,  we may receive up to $2,916,000  upon
exercise of these warrants, subject to the price adjustment provisions described
in this  prospectus.  We intend to use the net proceeds from the exercise of the
warrants, if any, for general corporate purposes,  including to fund our ongoing
clinical trials and operations.



                            THE SELLING STOCKHOLDERS

The March 2003 Financing

     On March 31, 2003, we executed the first  tranche of a $20 million  overall
financing  transaction with the selling  stockholders,  Smith Barney Fundamental
Value Fund, Heartland Group, Inc. and SF Capital Partners Ltd. The first tranche
consisted of a private  placement of senior  convertible  notes and warrants for
gross proceeds of $15 million,  which we subsequently received by April 4, 2003.
We are obligated to sell, and SF Capital Partners Ltd. is obligated to purchase,
an  additional $5 million of senior  convertible  notes and warrants in a second
tranche, subject to the following conditions:

     (i) the  registration  statement,  of which this  prospectus  forms a part,
filed  pursuant  to a  registration  rights  agreement  among us and the selling
stockholders,  is effective and available for the resale of the shares  issuable
upon  conversion  of the senior  convertible  notes and exercise of the warrants
purchased in the first tranche on each of the 10 trading days immediately  prior
to the closing of the second tranche;

     (ii) our common  stock  continuing  to be listed on the Nasdaq (or  another
acceptable  stock  exchange)  and it not having been  suspended  from trading or
having  been  threatened  with  delisting  by the  Nasdaq  (or the  other  stock
exchange,  as the case may be), or having fallen below the minimum standards for
continued listing;

     (iii) no change of control of us or event of default having  occurred under
the senior convertible notes then outstanding;

     (iv)  performance  of our  obligation to deliver shares of our common stock
issuable upon the conversion of the then outstanding  senior  convertible  notes
and the warrants;

     (v) payment of interest on a timely basis;

     (vi) our share price remaining above $3.00 per share; and

     (vii) shareholder approval of the $20 million financing transaction and the
amendment of our certificate of incorporation to increase our authorized  common
stock to  60,000,000  shares  having been  obtained,  which was  obtained at our
annual meeting of shareholders held on May 21, 2003.

Issuance of Notes and Warrants

     The senior  convertible  notes and the warrants  were executed on March 31,
2003 under an exemption  from the  registration  requirements  of the Securities
Act,  pursuant  to  Section  4(2)  of the  Securities  Act  and/or  Rule  506 of
Regulation D under the  Securities  Act.  Both the notes and the warrants have a
term of five  years.  The notes bear  interest  at the rate of 6% per annum.  In
addition,  we have the option to, subject to no event  constituting  an event of
default under the notes,  or an event that with the passage of time would if not
cured  constitute an event of default under the notes,  having  occurred and the
registration  statement of which this  prospectus  forms a part continuing to be
effective  at that time,  elect to pay any  accrued  interest on the $15 million
senior  convertible  notes with shares of our common stock. The value attributed
to any interest  paid in shares  depends on the market price of our common stock
during the five consecutive  business days immediately  preceding the applicable
interest  payment  date.  In addition,  we have the right to redeem the notes in
cash under certain  conditions at any time after March 31, 2006.  The holders of
the notes have the right at any time to convert  these  notes into shares of our
common stock subject to certain  conditions as discussed below. The holders also
have the right to cause us to redeem  the  outstanding  principal  and  interest
amounts and any unpaid late  charges due under the notes at any time after March
31, 2006.

Conversion of Notes and Exercise of Warrants and  Adjustments  to Conversion and
Exercise Prices

                                      -18-

<PAGE>

     The $15 million senior  convertible  notes are  convertible at the holders'
option at any time into shares of common stock at a price of $2.50 per share and
the warrants are  exercisable at any time at a price of $2.70 per share,  unless
otherwise  adjusted  pursuant to the price  adjustment  provisions and the stock
ownership limits as described  below.  The notes are initially  convertible into
6,000,000 shares of common stock and the warrants are initially exercisable into
1,080,000 shares of common stock,  subject to the price  adjustment  provisions.
All of the shares of common stock to be issued upon  conversion of the notes and
exercise of the warrants are restricted  securities until we register them under
the registration statement of which this prospectus forms a part.

     The notes and the  warrants  contain  provisions  that place a limit on the
numbers of shares of our  common  stock that can be issued  upon  conversion  or
exercise,  respectively.  Under the provisions of the notes,  the holders do not
have the right to convert  any  portion  of the notes to the  extent  that after
giving effect to such  conversion the holders would  beneficially  own more than
19.99% in the case of Smith Barney  Fundamental  Value Fund and Heartland  Group
Inc., or 4.99% in the case of SF Capital  Partners Ltd., of the number of shares
of our common stock outstanding  immediately prior to such conversion.  The same
stock ownership limitations are applicable to the warrants.  The following table
sets forth the stock ownership limitations  applicable to the respective selling
stockholders.

               Selling Stockholder                Stock Ownership Limitation (%)
     -------------------------------------------  ------------------------------

         Smith Barney Fundamental Value Fund                 19.99

         Heartland Group, Inc.                               19.99

         SF Capital Partners Ltd.*                            4.99

         ----------------
     * SF Capital Partners Ltd. has committed to buying an additional $5 million
of senior  convertible  notes and warrants in a second  tranche,  subject to the
conditions described on page 18 of this prospectus.  Any conversion of the notes
or exercise of the warrants  issued to SF Capital  Partners Ltd. under the first
and the second  tranches is subject to the same stock  ownership  limitations in
the aggregate.

     The stock  ownership  limitations  described above do not prevent a selling
stockholder  from  selling a  substantial  number of  shares in the  market.  By
periodically  selling  shares  into the  market,  a  selling  stockholder  could
eventually  convert  more  than  the  applicable  stock  ownership   limitations
otherwise  permit while never exceeding such stock ownership  limitations at any
specific time.

     In  addition,  the $15 million  senior  convertible  notes and the warrants
contain price adjustment provisions. Under the provisions of the notes, if on or
prior to March 31,  2006,  we issue or sell any  shares of our  common  stock or
securities  convertible into or exercisable for shares of our common stock for a
consideration  per share less than the  conversion  price of the notes in effect
immediately  prior  to  such  issuance  or sale (a  "Dilutive  Issuance"),  then
immediately after such Dilutive Issuance, the conversion price of the notes will
be reduced to an amount equal to such lower  consideration  for which our shares
of common stock were issued.  If any  Dilutive  Issuance  occurs after March 31,
2004 and prior to March 31, 2006, then the

                                      -19-

<PAGE>

conversion  price  will  not be  adjusted  below  a  price  equal  to 80% of the
conversion  price in effect  immediately  before the Dilutive  Issuance.  If any
Dilutive Issuance occurs on or after March 31, 2006 and prior to March 31, 2008,
then immediately after such issuance, the conversion price will be reduced to an
amount equal to the product of (x) the  conversion  price in effect  immediately
prior to the  Dilutive  Issuance  and (y) the quotient of (1) the sum of (I) the
product of the conversion price then in effect  immediately  before the Dilutive
Issuance  and the number of shares of our common stock  outstanding  immediately
prior to such issuance and (II) the  consideration,  if any, received by us upon
the Dilutive  Issuance,  divided by (2) the product of (I) the conversion  price
then in effect immediately  before the Dilutive Issuance  multiplied by (II) the
number of shares of our common stock outstanding  immediately after the Dilutive
Issuance.  Substantially  similar price adjustment  provisions are applicable to
the warrants.

     The foregoing provisions do not apply to common stock issued or issuable by
us (i) in connection  with any employee  benefit plan which has been approved by
our board of directors,  pursuant to which our  securities  may be issued to any
employee,  officer or director for services provided to us, (ii) upon conversion
of the  notes  or upon  exercise  of the  warrants  described  in the  foregoing
paragraph,  (iii) in  connection  with the payment of any  interest on the notes
described in the foregoing  paragraph in the form of shares of our common stock,
(iv) in connection with a strategic  partnership or joint venture in which there
is a  significant  commercial  relationship  between us and a third  party,  the
primary purpose of which is not to raise capital in an amount not to exceed,  in
the  aggregate,  gross  proceeds of  $20,000,000  or an aggregate of  10,000,000
shares  of our  common  stock,  (v)  pursuant  to a bona  fide  firm  commitment
underwritten  public  offering with a nationally  recognized  underwriter  which
generates gross proceeds in excess of $45,000,000  (other than an "at-the-market
offering"  as defined in Rule  415(a)(4)  under the  Securities  Act and "equity
lines") and (vi) upon  conversion of any options under our stock option plans or
convertible  securities that were  outstanding on March 30, 2003,  provided that
the terms of such options or convertible securities are not amended, modified or
changed on or after March 30, 2003.

Registration Rights


     Pursuant  to a  registration  rights  agreement  dated as of March 31, 2003
entered into in connection with the March convertible  notes financing,  we have
agreed to register for resale  13,650,000 shares of our common stock in order to
have  sufficient  shares  issuable  upon  conversion  of the $15 million  senior
convertible  notes,  as  interest  shares on the notes and upon  exercise of the
warrants  held by the  selling  stockholders.  In  addition,  we have  agreed to
maintain  the  effectiveness  of  the  registration  statement,  of  which  this
prospectus forms a part, until the earlier of (i) such time as all of the shares
that can be sold under this  prospectus  by the selling  stockholders  have been
sold,  and (ii) such time as all of the  shares of our common  stock  covered by
this  prospectus  are  eligible  for resale  pursuant to Rule  144(k)  under the
Securities Act.


     For additional  detail about the $15 million senior  convertible  notes and
the  warrants,   please  refer  to  the  securities  purchase   agreement,   the
registration rights agreement,  the form of senior convertible note and the form
of warrant,  each of which is filed as an exhibit to our

                                      -20-

<PAGE>

current report on Form 8-K filed with the Securities and Exchange  Commission on
April 1, 2003.

The Anti-Dilution Shares


     On August 24, 2001, we completed a private  placement  transaction and sold
1,187,503  shares of our  common  stock to a group of  institutional  investors,
including Heartland Advisors, Inc. Heartland Advisors, Inc., purchased shares of
our common stock in that transaction on behalf of Heartland Value Fund, which is
a fund owned by Heartland Group, Inc, one of the selling  stockholders  offering
our shares under this prospectus. On March 21, 2002, we sold 1,200,000 shares of
our common stock in a public  offering at $10.50 per share.  Pursuant to certain
anti-dilution  provisions set forth in the stock purchase  agreement  between us
and Heartland  Advisors,  Inc.  dated as of August 24, 2001,  we issued  119,048
unregistered  shares to Heartland  Value Fund in April 2002. We are  registering
these  119,048  shares to permit  Heartland  Group Inc. to resell  these  shares
without restrictions on behalf of Heartland Value Fund, if it chooses to do so.

Stock Ownership of Selling Stockholders

     The  following  table sets forth  information  known to us with  respect to
beneficial  ownership  of our  common  stock as of May 27,  2003 by the  selling
stockholders and their respective affiliates.  We have determined the number and
percentage of shares  beneficially  owned in  accordance  with Rule 13d-3 of the
Securities  Exchange  Act of 1934,  as amended,  or the  Exchange  Act, and this
information  does not necessarily  indicate  beneficial  ownership for any other
purpose.  In determining the number of shares beneficially owned by each selling
stockholder and the percentage ownership of each selling stockholder, we include
any shares as to which that selling  stockholder has sole or shared voting power
or  investment  power,  as well as any  shares of our  common  stock  subject to
options,  warrants or other  derivative  securities held by that person that are
currently exercisable or exercisable within 60 days after May 28, 2003.

     The number of shares in the column  "Maximum  Number of Shares Which May Be
Offered Under This Prospectus" represents the pro rata portion of the 13,650,000
shares of common stock  offered  under this  prospectus  based on the amounts of
notes and warrants held by the selling stockholders,  plus an additional 119,048
shares of our common  stock held by Heartland  Group,  Inc. The number of shares
that may actually be sold by any of the selling  stockholders will be determined
by the selling stockholders. The selling stockholders may sell some, all or none
of these shares.  Because the offering  contemplated  by this  prospectus is not
currently  being  underwritten,  no  estimate  can be given as to the  number of
shares  of  common  stock  that will be held by the  selling  stockholders  upon
termination  of the offering.  We do not know how long the selling  stockholders
will hold the shares before  selling them and we currently  have no  agreements,
arrangements or understandings with the selling stockholders  regarding the sale
of any of the shares.

     The table assumes that the selling stockholders sell as many shares as they
can under this prospectus without regard to any limitations on the conversion or
exercise of the  convertible  notes or warrants  imposed by the stock  ownership
limitations  described  above or  otherwise.  Under the terms of the $15 million
senior  convertible  notes and the warrants,  no holder may

                                      -21-

<PAGE>

     convert its notes or exercise its warrants if such  conversion  or exercise
would cause such holder, together with its affiliates, to beneficially hold more
than 19.99% in the case of Smith  Barney  Fundamental  Value Fund and  Heartland
Group,  Inc.,  or  4.99%  in  the  case  of SF  Capital  Partners  Ltd.,  of our
outstanding  common  stock.  The numbers of shares in the columns  "Common Stock
Beneficially  Owned Prior to the Offering"  and "Maximum  Number of Shares Which
May Be Offered  Under This  Prospectus"  do not reflect these  limitations.  The
stock ownership  limitations do not prevent a selling stockholder from selling a
substantial number of shares in the market. By periodically  selling shares into
the  market,  a  selling  stockholder  could  eventually  convert  more than the
applicable  stock ownership  limitations  otherwise permit while never exceeding
such stock ownership limitations at any specific time.

     Under the terms of the registration  rights  agreement  described above, we
are  required  to  register  13,650,000  shares of our  common  stock  under the
registration  statement of which this prospectus forms a part. As a result,  the
number of shares  that may be offered by the  selling  stockholders  exceeds the
shares  beneficially  owned before the offering that are  attributable  to their
ownership of the  convertible  notes and  warrants.  The  additional  shares are
registered in the event that (a) the price  adjustment  provisions are triggered
to lower the  conversion  price of the notes  and/or the  exercise  price of the
warrants,  which  could  result  in the  issuance  of a  substantial  number  of
additional  shares to the selling  stockholders  upon conversion of the notes or
exercise of the warrants, or (b) the assumptions used to calculate the number of
interest  shares issuable (which depends on the market price of our common stock
during the five consecutive  business days immediately  preceding the applicable
interest payment date) are incorrect and additional interest shares are issued.

     The  percentages  in the column  "Maximum  Percentage  of Common Stock Held
After Sale of Common Stock" are based on  42,411,044  shares of our common stock
outstanding, which is the sum of:

     (i)  24,701,639 shares of our common stock issued and outstanding as of May
          27, 2003;

     (ii) the potential  issuance of a maximum of 3,364,940 shares of our common
          stock  upon  the  exercise  of  the  warrants  held  primarily  by our
          employees as well as certain other holders,

    (iii) the  potential  issuance of a maximum of 150,000  shares of our common
          stock  upon the  exercise  of the  warrants  we  issued  to  Mainfield
          Enterprises Inc. on February 24, 2003;

     (iv) the  potential  issuance of a maximum of 544,465  shares of our common
          stock  issuable  upon the  conversion  of the $3  million  convertible
          debenture  we issued to Aventis  Pharmaceuticals,  Inc.  (based on the
          last sale price of our common stock as of May 27, 2003); and

     (v)  the  potential  issuance to the selling  stockholders  of a maximum of
          13,650,000  shares  issuable  upon the  conversion  of the $15 million
          senior   convertible  notes,  the  exercise  of  the  warrants  issued
          concurrently  with these notes,  and the

                                      -22-

<PAGE>

          conversion of any unpaid and accrued  interest on the notes payable in
          shares of our common stock.

<TABLE>
<CAPTION>

                                                                   Maximum Number of         Maximum Percentage of
                                         Common Stock             Shares Which May Be          Common Stock Held
                                      Beneficially Owned          Offered Under This         After Sale of Common
      Selling Stockholder            Prior to the Offering            Prospectus                   Stock (%)
--------------------------------    ------------------------    ------------------------    ------------------------
<S>                                       <C>                         <C>                           <C>
Smith Barney Fundamental Value
Fund                                      7,226,508 (1)                4,550,000 (4)                 6.3

SF Capital Partners Ltd.*                 2,360,000 (2)                4,550,000 (4)                 0.0

Heartland Group, Inc.                     5,918,948 (3)                4,669,048 (4)                 2.9

--------------------------------    ------------------------    ------------------------    ------------------------
Total:                                    15,505,456                  13,769,048                     9.2
</TABLE>

--------------------------------
*    SF Capital  Partners  Ltd. has committed to buying an additional $5 million
     of senior  convertible  notes and warrants in a second tranche,  subject to
     the  conditions  described on page 18 of this  prospectus.  The numbers and
     percentages  shown in this table do not take into account the additional $5
     million of notes and warrants.
(1)  Consists of (i)  4,866,508  shares of our common stock held by Smith Barney
     Asset Management,  an affiliate of Smith Barney  Fundamental Value Fund, as
     of May 27, 2003;  (ii) 2,000,000  shares issuable upon conversion of the $5
     million senior convertible note held by Smith Barney Fundamental Value Fund
     at $2.50 per share;  and (iii) 360,000 shares issuable upon exercise of the
     warrant held by Smith Barney Fundamental Value Fund at $2.70 per share. For
     the  purposes  of  calculating  these  numbers,  we  have  not  taken  into
     consideration  the application of the 19.99%  limitations  described above,
     and for the purposes of  calculating  (ii) and (iii),  we have assumed that
     the price adjustment  provisions  applicable to the conversion price of the
     notes and the exercise  price of the warrants  will not be  triggered.
(2)  Consists of (i) 2,000,000 shares issuable upon conversion of the $5 million
     senior  convertible  note held by SF  Capital  Partners  Ltd.  at $2.50 per
     share;  and (ii) 360,000 shares  issuable upon exercise of the warrant held
     by SF Capital  Partners  Ltd.  for $2.70 per  share.  For the  purposes  of
     calculating  these  numbers,  we have  not  taken  into  consideration  the
     application of the 4.99% limitations  described above, and for the purposes
     of  calculating  (i) and (ii),  we have assumed  that the price  adjustment
     provisions applicable to the conversion price of the notes and the exercise
     price of the warrants will not be triggered.
(3)  Consists  of (i)  3,439,900  shares of our common  stock held by  Heartland
     Advisors,  Inc., an affiliate of Heartland Group, Inc., as of May 27, 2003;
     (ii)  2,000,000  shares  issuable upon  conversion of the $5 million senior
     convertible  note held by Heartland Group,  Inc. at $2.50 per share;  (iii)
     360,000  shares  issuable  upon  exercise of the warrant  held by Heartland
     Group, Inc. at $2.70 per share; and (iv) an additional  119,048 shares that
     were issued by us pursuant to certain anti-dilution provisions described on
     page 21 of this prospectus.  For the purposes of calculating these numbers,
     we  have  not  taken  into  consideration  the  application  of the  19.99%
     limitations  described  above, and for the purposes of calculating (ii) and
     (iii), we have assumed that the price adjustment  provisions  applicable to
     the  conversion  price of the notes and the exercise  price of the warrants
     will  not be  triggered.
(4)  As of May 27,  2003,  the price  adjustment  provisions  applicable  to the
     conversion  price of the notes and the exercise  price of the warrants have
     not been  triggered.  The maximum number of shares that can be individually
     offered  by each of the  selling  stockholders  that hold the notes and the
     warrants as of that date,  based on the conversion price of $2.50 per share
     for the senior  convertible notes and the exercise price of $2.70 per share
     for the  warrants  and without  regard to the  applicable  stock  ownership
     limitation, is 2,360,000, which includes (i) 2,000,000 shares issuable upon
     conversion of the $5 million senior  convertible note held  individually by
     each selling  stockholder and (ii) 360,000 shares issuable upon exercise of
     the warrant held  individually  by each selling  stockholder.  This maximum
     number  of  2,360,000  for  each  of the  three  selling  stockholders,  or
     7,080,000 in aggregate,  is less than the 13,650,000 shares we are required
     to  register  under the terms of the  registration  rights  agreement.  The
     additional shares are registered in the event that (a) the price adjustment
     provisions are triggered to lower the conversion  price of the notes and/or
     the exercise price of the warrants, which could result in the issuance of a
     substantial number of additional shares to the selling

                                      -23-

<PAGE>

     stockholders  upon conversion of the notes or exercise of the warrants,  or
     (b) the  assumptions  used to  calculate  the  number  of  interest  shares
     issuable  (which depends on the market price of our common stock during the
     five  consecutive  business  days  immediately   preceding  the  applicable
     interest  payment date) are incorrect and  additional  interest  shares are
     issued.

Relationship With the Selling Stockholders

     Two of the selling  stockholders,  who together purchased two thirds of the
notes and  warrants  executed  on March 31,  2003,  are  affiliates  of existing
investors in our common stock.  Smith Barney  Fundamental  Value Fund Inc. is an
affiliate of Smith Barney Asset Management,  which holds 4,866,508 shares of our
common stock as of May 27, 2003,  representing  19.7% of our common stock issued
and  outstanding  as of that date.  Heartland  Group,  Inc. is an  affiliate  of
Heartland Advisors, Inc., which holds 3,439,900 shares of our common stock as of
May 27, 2003,  representing  13.9% of our common stock issued and outstanding as
of that date.

     Except as described in this  prospectus,  neither the selling  stockholders
nor their  affiliates have had any material  relationship  with us or any of our
affiliates within the past three years.



                              PLAN OF DISTRIBUTION


     We are  registering  13,769,048  shares of our common stock, of which up to
13,650,000  shares are issuable upon conversion or redemption of the convertible
notes,  as interest  shares on the  convertible  notes and upon  exercise of the
warrants to permit the resale of these  shares of common stock by the holders of
the convertible  notes and the warrants from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by any selling
stockholder  of the shares of common  stock.  We will bear all fees and expenses
incident to our  obligation  to register the shares of common  stock;  provided,
however,  that a  selling  stockholder  will  pay  all  applicable  underwriting
discounts and selling commissions, if any.

     Any  selling  stockholder  may sell all or a portion  of our  common  stock
beneficially  owned by it and  offered  hereby  from  time to time  directly  or
through one or more underwriters,  broker-dealers or agents. If the common stock
is sold through underwriters or broker-dealers,  the selling stockholder will be
responsible for  underwriting  discounts or commissions or agent's  commissions.
The common stock may be sold in one or more  transactions  at fixed  prices,  at
prevailing  market prices at the time of the sale, at varying prices  determined
at the time of sale,  or at  negotiated  prices.  These sales may be effected in
transactions, which may involve crosses or block transactions,

     (1) on any national  securities  exchange or quotation service on which the
securities may be listed or quoted at the time of sale,

     (2) in the over-the-counter market,

     (3) in transactions  otherwise than on these exchanges or systems or in the
over-the-counter market,

                                      -24-

<PAGE>

     (4) through  the  writing of options,  whether the options are listed on an
options exchange or otherwise,

     (5) through the settlement of short sales;

     (6) through a combination of such methods of sale; or

     (7) through any other method permitted pursuant to applicable law.

     If a selling  stockholder  effects such  transactions  by selling shares of
common  stock  to  or  through  underwriters,  broker-dealers  or  agents,  such
underwriters,  broker-dealers  or agents may receive  commissions in the form of
discounts,   concessions  or  commissions   from  the  selling   stockholder  or
commissions  from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal (which discounts,  concessions or
commissions as to particular  underwriters,  broker-dealers  or agents may be in
excess of those customary in the types of transactions  involved). In connection
with sales of the common stock or  otherwise,  a selling  stockholder  may enter
into hedging transactions with broker-dealers, which may in turn engage in short
sales of the common stock in the course of hedging in positions  they assume.  A
selling  stockholder  may also sell  shares of common  stock  short and  deliver
shares of common stock covered by this prospectus to close out short  positions.
Each  selling  stockholder  may also  loan or pledge  shares of common  stock to
broker-dealers  that in turn may sell such shares. The selling  stockholders may
also  elect  to sell  all or a  portion  of their  common  stock in open  market
transactions in reliance upon Rule 144 under the Securities  Act,  provided they
meet the criteria and conform to the requirements of Rule 144.

     Each selling stockholder may pledge or grant a security interest in some or
all of the  convertible  notes,  warrants or shares of common  stock owned by it
and, if it defaults in the performance of its secured obligations,  the pledgees
or secured  parties  may offer and sell the shares of common  stock from time to
time pursuant to this prospectus or any amendment to this prospectus  under Rule
424(b)(3) or other  applicable  provision of the Securities  Act,  amending,  if
necessary,  the list of selling stockholders to include the pledgee,  transferee
or other  successors-in-interest  as selling stockholders under this prospectus.
Each selling stockholder also may transfer and donate the shares of common stock
in other circumstances in which case the transferees,  donees, pledgees or other
successors-in-interest  will be the selling  beneficial  owners for  purposes of
this prospectus.

     Each  selling  stockholder  and  any  broker-dealer  participating  in  the
distribution  of the shares of common  stock may be deemed to be  "underwriters"
within the  meaning of the  Securities  Act,  and any  commission  paid,  or any
discounts or concessions  allowed, to any such broker-dealer may be deemed to be
underwriting  commissions or discounts  under the Securities  Act. At the time a
particular  offering  of the  shares  of  common  stock  is made,  a  prospectus
supplement,  if required, will be distributed which will set forth the aggregate
amount of shares of common  stock being  offered and the terms of the  offering,
including  the name or names of any  broker-dealers  or agents,  any  discounts,
commissions  and  other  terms  constituting   compensation  from  each  selling
stockholder and any discounts,  commissions or concessions  allowed or reallowed
or paid to broker-dealers.

                                      -25-

<PAGE>

     Under the securities laws of some states, the shares of common stock may be
sold in such states only through  registered or licensed brokers or dealers.  In
addition,  in some states the shares of common  stock may not be sold unless the
shares have been  registered  or qualified for sale in the state or an exemption
from registration or qualification is available and is complied with.

     There can be no assurance that any selling stockholder will sell any or all
of the shares of common  stock  registered  pursuant  to the shelf  registration
statement, of which this prospectus forms a part.

     Each  selling  stockholder  and  any  other  person  participating  in such
distribution  will be subject to applicable  provisions of the Exchange Act, and
the rules and regulations thereunder,  including, without limitation, Regulation
M of the Exchange Act,  which may limit the timing of purchases and sales of any
of the  shares  of  common  stock  by the  selling  stockholders  and any  other
participating  person.  Regulation M may also restrict the ability of any person
engaged  in the  distribution  of the  shares  of  common  stock  to  engage  in
market-making  activities with respect to the shares of common stock. All of the
foregoing  may affect the  marketability  of the shares of common  stock and the
ability  of any  person or entity to  engage in  market-making  activities  with
respect to the shares of common stock.

     We will pay all expenses of the  registration of the shares of common stock
pursuant  to the  registration  rights  agreement,  estimated  to be $76,000  in
total, including, without limitation,  Securities and Exchange Commission filing
fees and  expenses  of  compliance  with  state  securities  or "blue sky" laws;
provided,   however,   that  a  selling  stockholder  will  pay  all  applicable
underwriting  discounts and selling  commissions,  if any. We will indemnify the
selling stockholders  against liabilities,  including some liabilities under the
Securities Act, in accordance with the  registration  rights  agreement,  or the
selling stockholders will be entitled to contribution.  We may be indemnified by
a selling stockholder against civil liabilities, including liabilities under the
Securities Act, that may arise from any written  information  furnished to us by
the selling stockholder  specifically for use in this prospectus,  in accordance
with the registration  rights agreement,  or we may be entitled to contribution.
The  selling   stockholders  may  agree  to  indemnify  any  agent,   dealer  or
broker-dealer that participates in transactions involving sales of the shares of
our common stock  against civil  liabilities,  including  liabilities  under the
Securities Act.

     Once sold under the shelf registration  statement, of which this prospectus
forms a part, the shares of common stock will be freely tradable in the hands of
persons other than our affiliates.


                                  LEGAL MATTERS


     Certain legal matters with respect to the  securities  offered  pursuant to
the  registration  statement,  of which this  prospectus  forms a part,  will be
passed upon by White & Case LLP.

                                      -26-

<PAGE>

                                     EXPERTS


     The  financial  statements  of  Aphton  Corporation   appearing  in  Aphton
Corporation's  Annual  Report  (Form 10-K) for the year ended  December 31, 2002
have  been  audited  by  Ernst  &  Young  LLP,   independent   certified  public
accountants, as set forth in their reports thereon (which contain an explanatory
paragraph describing conditions that raise substantial doubt about the Company's
ability to continue as a going  concern as described in Note 1 to the  financial
statements)  included  therein  and  incorporated  herein  by  reference.   Such
financial  statements are incorporated herein by reference in reliance upon such
report  given  on the  authority  of such  firm as  experts  in  accounting  and
auditing.


                       WHERE YOU CAN FIND MORE INFORMATION


     We are subject to the informational  reporting requirements of the Exchange
Act, and therefore we file reports,  proxy statements and other information with
the SEC. You may read and copy these reports and other information at the Public
Reference Room maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549.  Please call the SEC at  1-800-SEC-0330  for further  information  on the
public  reference  rooms.  In  addition,  the SEC  maintains  a home page on the
Internet   (http://www.sec.gov)   that  contains   certain   reports  and  other
information filed by us.


                     INCORPORATION OF DOCUMENTS BY REFERENCE


     The SEC allows us to  "incorporate  by  reference"  information  from other
documents  that we file with them,  which means that we can  disclose  important
information by referring to those  documents.  The  information  incorporated by
reference is considered to be part of this  prospectus,  and information that we
file  later  with  the  SEC  will   automatically   update  and  supersede  this
information.

     This prospectus incorporates by reference the documents listed below.

     o    Our Quarterly Report on Form 10-Q for the quarterly period ended March
          31, 2003 filed on May 15, 2003;
     o    Our  Definitive  Proxy  Statement  on Schedule  14A filed on April 28,
          2003;
     o    Our Annual  Report on Form 10-K for the year ended  December  31, 2002
          filed on March 31, 2003;
     o    Our Current Reports on Form 8-K filed on February 7, 2003 and February
          21, 2003; two Current  Reports on Form 8-K filed on February 25, 2003;
          our  Current  Report on Form 8-K filed on March 6, 2003;  two  Current
          Reports on Form 8-K filed on April 1, 2003; our Current Report on Form
          8-K filed on May 2, 2003 and May 21, 2003; and
     o    The  description  of our common stock  contained  in our  Registration
          Statement on Form 8-A, filed on January 30, 1998.

     We also incorporate by reference additional documents that we may file with
the SEC under Section  13(a),  13(c),  14 or 15(d) of the Exchange Act after the
date of this  prospectus  and

                                      -27-

<PAGE>

prior to the entire time all of the shares of our common  stock  offered by this
prospectus are sold. These include periodic  reports,  such as Annual Reports on
Form 10-K,  Quarterly  Reports on Form 10-Q and Current  Reports on Form 8-K, as
well as proxy statements.

     We  undertake  to provide  without  charge to each  person,  including  any
beneficial owner, to whom a prospectus is delivered, a copy of these filings, at
no cost, by writing or telephoning us. Any requests should be directed to:

                               Aphton Corporation
                        80 S.W. Eighth Street, Suite 2160
                              Miami, Florida 33130
                               Tel: (305) 374-7338

     You  should  rely only on the  information  incorporated  by  reference  or
provided in this  prospectus or any  supplement.  We have not authorized  anyone
else to provide you with different  information.  You should not assume that the
information  in this  prospectus  or any  supplement  is accurate as of any date
other than the date on the front of those documents.

                                      -28-

<PAGE>



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.*

         SEC registration fee....................................$      5,669.83
         Legal fees and expenses.................................$     60,000.00
         Accounting fees and expenses............................$     10,000.00
         Miscellaneous...........................................$        330.17
                                                                  --------------
                  Total..........................................$     76,000.00
                                                                  ==============

* All amounts are estimated.

Item 15. Indemnification of Directors and Officers.

     Section 145 of the Delaware  General  Corporation  Law (the "DGCL") permits
the Company to indemnify any person who is or was a director,  officer, employee
and agent,  or is or was  serving at the  request of the  Company as a director,
officer, employee or agent of another company, partnership, joint venture, trust
or other  enterprise  (each  an  "Insider")  against  liability  for  each  such
Insider's  acts taken in his or her  capacity  as an Insider in a civil  action,
suit or  proceeding  if such  actions  were  taken in good faith and in a manner
which  the  Insider  reasonably  believed  to be in or not  opposed  to the best
interests of the Company,  and in a criminal action, suit or proceeding,  if the
Insider had no  reasonable  cause to believe  his or her  conduct was  unlawful,
including under certain  circumstances,  suits by or in the right of the Company
for any expenses,  including attorneys' fees, judgments,  fines and amounts paid
in settlements  and for any  liabilities  which the Insider may have incurred in
consequence of such action,  suit or proceeding under conditions  stated in said
Section 145. The Company's Certificate of Incorporation and By-Laws provide that
the Company shall  indemnify  its  directors and officers to the fullest  extent
authorized  by the DGCL;  provided,  that the  Company  will not be  required to
indemnify  any director or  executive  officer in  connection  with a proceeding
initiated by such person, with certain exceptions.

     As  permitted  by  Section  102(b)(7)  of the  DGCL,  Article  NINTH of the
Company's  Certificate of Incorporation  provides that a director of the Company
will not be personally  liable to the Company or its  stockholders  for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or  omissions  not in good  faith  or  which  involve  intentional
misconduct or a knowing  violation of law,  (iii) under Section 174 of the DGCL,
as amended,  which concerns unlawful  payments of dividends,  stock purchases or
redemption,  or (iv) for any  transaction  from  which the  director  derived an
improper personal benefit.

     The Company's  Certificate of  Incorporation  permits the Company to secure
insurance on behalf of any director,  officer,  employee or agent of the Company
or another Company,  partnership,  joint venture,  trust or other enterprise for
any liability arising out of his or her actions in such capacity,  regardless of
whether the Company would have the power to indemnify  such person  against such
liability under the DGCL.

                                      -29-

<PAGE>

Item 16. Exhibits.


 Exhibit No.                      Description

     4.1       Amended  and  Restated  Certificate  of  Incorporation  of Aphton
               Corporation.

     4.2       Specimen of Common Stock  Certificate  (incorporated by reference
               to Exhibit 4.1 to the Registrant's Registration Statement on Form
               8-A filed on January 30, 1998).

     4.3       Securities Purchase Agreement,  dated as of March 31, 2003, among
               Aphton Corporation and the selling stockholders  (incorporated by
               reference to Exhibit 4.1 to the  Registrant's  Current  Report on
               Form 8-K filed on April 1, 2003).

     4.4       Registration Rights Agreement,  dated as of March 31, 2003, among
               Aphton Corporation and the selling stockholders  (incorporated by
               reference to Exhibit 4.2 to the  Registrant's  Current  Report on
               Form 8-K filed on April 1, 2003).

     4.5       Form of Senior  Convertible Note issued by Aphton  Corporation to
               the  selling  stockholders  on March 31,  2003  (incorporated  by
               reference to Exhibit 4.3 to the  Registrant's  Current  Report on
               Form 8-K filed on April 1, 2003).

     4.6       Form of  Warrant  to  purchase  common  stock  issued  by  Aphton
               Corporation  to  the  selling  stockholders  on  March  31,  2003
               (incorporated  by  reference  to Exhibit 4.5 to the  Registrant's
               Current Report on Form 8-K filed on April 1, 2003).

     5.1       Opinion of White & Case LLP.

     23.1      Consent of  independent  certified  public  accountants,  Ernst &
               Young LLP.

     23.2      Consent of White & Case LLP  (included in their  opinion filed as
               Exhibit 5.1 hereto).

     24.1      Power  of  Attorney   (included  on   signature   pages  of  this
               Registration Statement).

                                      -30-

<PAGE>

Item 17. Undertakings.

(a)  The undersigned Registrant hereby undertakes:

     (1)  To file,  during any period in which offers or sales are being made, a
          post-effective amendment to this Registration Statement:

          (i)  To include any  prospectus  required  by section  10(a)(3) of the
               Securities Act of 1933 (the "Securities Act");

          (ii) To reflect in the  prospectus  any facts or events  arising after
               the  effective  date of the  Registration  Statement (or the most
               recent post-effective  amendment thereof) which,  individually or
               in  the  aggregate,   represent  a  fundamental   change  in  the
               information   set   forth   in   the   Registration    Statement.
               Notwithstanding the foregoing, any increase or decrease in volume
               of  securities  offered (if the total dollar value of  securities
               offered  would not  exceed  that  which was  registered)  and any
               deviation  from  the low or  high  end of the  estimated  maximum
               offering  range may be reflected in the form of prospectus  filed
               with the Commission pursuant to Rule 424(b) if, in the aggregate,
               the  changes  in  volume  and price  represent  no more than a 20
               percent change in the maximum aggregate  offering price set forth
               in the  "Calculation of Registration  Fee" table in the effective
               registration statement;

         (iii) To include any material  information  with respect to the plan of
               distribution   not  previously   disclosed  in  the  registration
               statement  or any  material  change  to such  information  in the
               registration statement;

          provided,  however,  that  paragraphs  (a)(1)(i) and (a)(1)(ii) do not
          apply if the information  required to be included in a  post-effective
          amendment by those  paragraphs is contained in periodic  reports filed
          with or  furnished to the  Commission  by the  Registrant  pursuant to
          Section  13 or 15(d) of the  Exchange  Act  that are  incorporated  by
          reference in the Registration Statement.

     (2)  That,  for  the  purpose  of  determining   any  liability  under  the
          Securities Act, each such post-effective  amendment shall be deemed to
          be a new  registration  statement  relating to the securities  offered
          therein,  and the  offering of such  securities  at that time shall be
          deemed to be the initial bona fide offering thereof.

     (3)  To remove from registration by means of a post-effective amendment any
          of  the  securities  being  registered  which  remain  unsold  at  the
          termination of the offering.

(b)  The  undersigned   Registrant  hereby  undertakes  that,  for  purposes  of
     determining  any  liability  under the  Securities  Act, each filing of the
     Registrant's  annual  report  pursuant  to  Section  13(a)  or 15(d) of the
     Exchange Act (and,  where  applicable,  each filing of an employee  benefit
     plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
     incorporated by reference in the registration  statement shall be deemed to
     be a new registration statement relating to the securities offered therein,
     and the offering of such  securities at that time shall be deemed to be the
     initial bona fide offering thereof.


<PAGE>

(c)  Insofar as indemnification for liabilities arising under the Securities Act
     may be permitted to  directors,  officers  and  controlling  persons of the
     Registrant  pursuant  to  the  foregoing   provisions  or  otherwise,   the
     Registrant  has been  advised  that in the opinion of the  Commission  such
     indemnification is against public policy as expressed in the Securities Act
     and  is,  therefore,   unenforceable.   In  the  event  that  a  claim  for
     indemnification  against  such  liabilities  (other than the payment by the
     Registrant  of  expenses  incurred  or  paid  by  a  director,  officer  or
     controlling  person of the  Registrant  in the  successful  defense  of any
     action,  suit or  proceeding)  is  asserted  by such  director,  officer or
     controlling person in connection with the securities being registered,  the
     Registrant  will,  unless in the opinion of its counsel the matter has been
     settled  by  controlling  precedent,  submit  to  a  court  of  appropriate
     jurisdiction  the question  whether such  indemnification  by it is against
     public  policy as expressed in the  Securities  Act and will be governed by
     the final adjudication of such issue.

(d)  The undersigned Registrant hereby undertakes that:

     (1)  For purposes of determining  any liability  under the Securities  Act,
          the information  omitted from the form of prospectus  filed as part of
          this  Registration  Statement in reliance upon Rule 430A and contained
          in a form of  prospectus  filed  by the  Registrant  pursuant  to Rule
          424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
          be part of this Registration  Statement as of the time it was declared
          effective.

     (2)  For the purposes of  determining  any liability  under the  Securities
          Act, each post-effective  amendment that contains a form of prospectus
          shall be deemed to be a new  registration  statement  relating  to the
          securities  offered  therein,  and the offering of such  securities at
          that  time  shall be  deemed  to be the  initial  bona  fide  offering
          thereof.


<PAGE>



                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of New York, New York, on the 28th day of May, 2003.

                           APHTON CORPORATION


                           By:  /S/ PHILIP C. GEVAS
                              -------------------------------------------------
                                Philip C. Gevas
                                Chairman, President and Chief Executive Officer



                                POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE  PRESENTS,  each person whose  signature  appears
below  constitutes  and appoints  Philip C. Gevas and Frederick W. Jacobs as his
true and  lawful  attorneys-in-fact,  each  acting  alone,  with  full  power of
substitution  and  resubstitution,  for such  person and in his name,  place and
stead  in any  and all  capacities,  to sign  any or all  amendments  (including
post-effective amendments) to this Registration Statement, and to file the same,
with  exhibits  thereto and other  documents in connection  therewith,  with the
Securities and Exchange Commission,  granting unto said  attorneys-in-fact  full
power and authority to do and perform each and every act and thing requisite and
necessary  to be done in and about the  premises,  as fully for all  intents and
purposes as he might or could do in person,  hereby ratifying and confirming all
that each of said attorneys-in-fact,  or their substitute or substitutes, may do
or cause to be done by virtue hereof.

<PAGE>

     Pursuant to the  requirements  of the  Securities  Act of 1933, as amended,
this  Registration  Statement  has been signed by the  following  persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>



                Signature                             Title                        Date
                ---------                             -----                        ----
<S>                                         <C>                                 <C>
/S/  PHILIP C. GEVAS                        Chairman, President and Chief       May 28, 2003
--------------------------------------           Executive Officer
     Philip C. Gevas


/S/  WILLIAM A. HASLER                      Vice Chairman of the Board,         May 28, 2003
--------------------------------------        Director and Co-Chief
     William A. Hasler                         Executive Officer


/S/  NICHOLAS JOHN STATHIS                             Director                 May 28, 2003
--------------------------------------
     Nicholas John Stathis

                                                       Director
--------------------------------------                                          ------------
Georges Hibon

                                                       Director
--------------------------------------                                          ------------
Robert S. Basso


/S/  FREDERICK W. JACOBS                    Vice President, Chief Financial     May 28, 2003
--------------------------------------        Officer, Treasurer and Chief
     Frederick W. Jacobs                           Accounting Officer

</TABLE>