SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                    Commission File Number 0-19122
September 30, 2002


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


           Delaware                                      95-3640931
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


     80 SW Eighth Street, Suite 2160                       33130
             Miami, Florida                              (Zip Code)
(address of principal executive offices)


     Registrant's telephone number, including area code (305) 374-7338

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


                              Yes  X       No
                                  ---         ---

           The number of shares of Common Stock outstanding as of the
                     close of business on November 13, 2002:


             Class                                                Number of
                                                              Shares outstanding

Common Stock, $0.001 par value                                    22,681,639
<PAGE>

                               APHTON CORPORATION

                                      Index

                                                                            Page

Part I - Financial Information                                                3

  Item 1.  Condensed Consolidated Financial Statements:

     Balance Sheets - September 30, 2002 (Unaudited)
       and December 31, 2001                                                  4

     Statements of Operations (Unaudited) - Three and
       nine months ended September 30, 2002 and 2001                          5

     Statements of Cash Flows (Unaudited) - Three and
       nine months ended September 30, 2002 and 2001                          5

  Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                                6

  Item 3.  Quantitative and Qualitative Disclosures About
           Market Risk                                                        8

  Item 4.  Controls and Procedures                                            9

Part II - Other Information

  Item 1.  Legal Proceedings                                                  9

  Item 2.  Changes in Securities                                              9

  Item 3.  Defaults Upon Senior Securities                                    9

  Item 4.  Submission of Matters to a Vote of Security Holders                9

  Item 5.  Other Information                                                  9

  Item 6.  Exhibits and Reports on Form 8-K                                   9

Signature                                                                    10

Certifications Pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002                                                                11
<PAGE>

                         Part I - Financial Information

                           Forward-Looking Statements

This  Form 10-Q  contains  forward-looking  statements  that  involve  risks and
uncertainties.  In some cases,  you can identify  forward-looking  statements by
terminology such as "may", "will",  "should",  "expect",  "plan",  "anticipate",
"believe", "continue", "predict",  "estimated",  "potential", or the negative of
such terms or other comparable terminology.  We have based these forward-looking
statements on our current  expectations  and  projections  about future  events.
These statements include, but are not limited to information about:

o    Our business outlook and future financial performance;
o    Anticipated profitability, revenues, expenses and capital expenditures;
o    Anticipated research,  development,  clinical, regulatory and reimbursement
     progress;
o    Future funding and expectations as to any future events; and
o    Other  statements  that are not  historical  fact  and are  forward-looking
     statements within the meaning of the Private  Securities  Litigation Reform
     Act of 1995 that involve risks and uncertainties.

When considering such  forward-looking  statements,  you should keep in mind the
risk factors and other cautionary  statements in our publicly  available filings
with  the  Securities  and  Exchange  Commission,   including  our  most  recent
Registration  Statement on Form S-3/A  declared  effective on July 12, 2002, our
Transition  Report on Form 10-K/A for the eleven months ended December 31, 2001,
our Quarterly  Reports on Form 10-Q for the quarters ended March 31, 2002,  June
30,  2002 and this Form 10-Q.  These  risks and  uncertainties  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 place 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 Form 10-Q or to reflect the  occurrence  of  unanticipated  events,
except as may be required under applicable securities laws.

Item 1.  Condensed Consolidated Financial Statements

The interim condensed  consolidated  financial  statements  included herein have
been  prepared  by  the  Company,  without  audit,  pursuant  to the  rules  and
regulations  of the  Securities  and  Exchange  Commission.  In the  opinion  of
management,   the  condensed   consolidated  financial  statements  include  all
adjustments  (consisting  of normal  recurring  accruals)  necessary  to present
fairly the  financial  position  of the  Company as of  September  30,  2002 and
December  31,  2001 and the  results  of its  operations  for the three and nine
months ended September 30, 2002 and 2001; and its cash flows for the nine months
ended  September  30,  2002 and 2001.  These  condensed  consolidated  financial
statements  should be read in conjunction with the financial  statements and the
notes thereto included in the Company's latest annual report on Form 10-K/A.

Critical Accounting Policies
The  Company's  significant  accounting  policies are described in Note 2 to the
consolidated financial statements included in our Transition Report on Form 10-K
for the eleven  months ended  December 31, 2001,  filed with the SEC on April 1,
2002. The Company  believes that its most critical  accounting  policies include
the use of  estimates.  The Company  believes  the impact of these  estimates on
results  of  operations  in 2002  and 2001 are not  significant.  The  Company's
management  periodically  reviews these  policies and  estimates,  the effect of
which is  reflected as a component of net loss in the period in which the change
is  known.  Such  changes  to these  estimates  have not  been  material  to the
Company's results of operations during the three and nine months ended September
30, 2002.

                                      -3-
<PAGE>

                               APHTON CORPORATION

                          Financial Statement Overview

The  following  highlighted   information  is  also  contained  in  Management's
Discussion and Analysis of Financial Condition and Results of Operations. During
the nine months ended September 30, 2002,  Aphton received  approximately  $32.1
million for  approximately  5.2 million shares of its common stock.  Total costs
were reduced from $13.1 million in the quarter ending December 31, 2001 to $10.1
million in the quarter  ended March 31,  2002,  to $9.9  million for the quarter
ended June 30,  2002.  This  decrease  is  primarily  due to the  completion  of
recruitment for two of the Company's  clinical trials.  Total costs increased to
$10.8 million in the quarter ended September 30, 2002 primarily due to the costs
of  preparing  for  and  filing  an  application  for  clinical  trials  for the
non-cancer  indication  of GERD in Europe and the US. The Company is planning to
initiate a clinical  trial in Europe for GERD in the fourth quarter and to begin
recruiting  patients  in January of 2003.  Most of the costs  relating  to these
trials will be incurred during the fiscal year ended December 31, 2003.

<TABLE>
<CAPTION>

                                        APHTON CORPORATION
                              Condensed Consolidated Balance Sheets

                            Assets                               September 30,      December 31,
Current Assets:                                                       2002            2001 (a)
Cash and current investments:                                     (Unaudited)
<S>                                                               <C>               <C>
 Cash and short-term cash investments                            $  8,252,086      $  3,176,717
 Investment securities-trading                                        692,466         1,147,417
 Investment securities-held-to-maturity                                     -         1,999,006
                                                                 -------------     -------------
         Total cash and current investments                         8,944,552         6,323,140
Other assets (including current portion of
  unconditional supply commitment)                                    409,729           595,390
                                                                 -------------     -------------
         Total current assets                                       9,354,281         6,918,530
Equipment and improvements, net                                       192,153           188,597
Unconditional supply commitment                                     6,605,515         6,875,515
                                                                 -------------     -------------
         Total assets                                            $ 16,151,949      $ 13,982,642
                                                                 =============     =============

            Liabilities and Stockholders' Deficit
 Current liabilities - Accounts payable and other                 $11,663,562       $10,715,430
 Deferred revenue                                                  10,000,000        10,000,000
                                                                 -------------     -------------
         Total liabilities                                         21,663,562        20,715,430
Commitments

Stockholders' Deficit:
        Preferred stock, $0.001 par value -
        Authorized:  2,000,000 shares
        Issued and outstanding:  none                                       -                  -
        Common stock, $0.001 par value -
        Authorized:  30,000,000 shares
            Issued and outstanding:  22,681,639 shares at
            September 30, 2002 and 17,386,996 shares at
            December 31, 2001                                          22,682            17,387
 Additional paid-in capital                                       125,627,773        93,566,314
 Purchase warrants                                                    298,900           298,900
Accumulated deficit                                              (131,460,968)     (100,615,389)
                                                                 -------------     -------------
         Total stockholders' deficit                               (5,511,613)       (6,732,788)
                                                                 -------------     -------------
         Total liabilities and stockholders' deficit             $ 16,151,949      $ 13,982,642
                                                                 =============     =============

(a)  The balance  sheet at December 31, 2001 has been  derived  from the 2001  audited  financial
     statements.
</TABLE>

                                      -4-
<PAGE>

<TABLE>
<CAPTION>
                                                   APHTON CORPORATION
                               Unaudited Condensed Consolidated Statements of Operations
                            For the three and nine months ended September 30, 2002 and 2001

                                                Three months ended September 30,       Nine months ended September 30,
                                                   2002                2001                2002              2001
<S>                                          <C>                  <C>                 <C>                <C>
Revenue:                                     $          -         $         -         $          -       $         -
                                              ------------         -----------         ------------       -----------
Costs and expenses:
  General and administrative                      657,405             629,190            1,611,332         1,520,949
  Research and development                     10,180,407           7,550,430           29,182,312        18,126,330
                                             -------------        ------------        -------------      -------------
     Total costs and expenses                  10,837,812           8,179,620           30,793,644        19,647,279
                                             -------------        ------------        -------------      -------------
     Loss from operations                      10,837,812           8,179,620           30,793,644        19,647,279
Other income (expense):
  Dividend and interest income                     29,011              79,620              100,624           433,196
  Unrealized losses from investments             (115,043)            (39,156)            (152,558)       (1,417,340)
                                             -------------        ------------        -------------      -------------
     Net loss                                $(10,923,844)        $(8,139,156)        $(30,845,578)     $(20,631,423)
                                             =============       =============        =============     ==============
  Per share data:  Basic diluted
    loss per common share                          $(0.52)             $(0.48)              $(1.55)            $(1.25)
                                                   =======             =======              =======            =======
  Weighted average number of common
    shares outstanding                         20,961,639          16,991,161           19,934,496         16,463,382
                                               ===========         ===========          ===========        ===========
</TABLE>
The net loss for the three and nine months ended September 30, 2002 and 2001 was
the comprehensive loss for those periods. Potential common shares, consisting of
approximately  3.7  million  purchase  warrants  at  September  30, 2002 and 2.7
million  purchase  warrants  at  September  30,  2001,  were  excluded  from the
computation of net loss per share because their effect was anti-dilutive.

<TABLE>
<CAPTION>
                                              APHTON CORPORATION
                          Unaudited Condensed Consolidated Statements of Cash Flows
                            For the nine months ended September 30, 2002 and 2001

Cash flows from operating activities:                                              2002             2001
<S>                                                                           <C>              <C>
  Cash paid to suppliers and employees                                        $(28,928,147)    $(19,928,526)
                                                                              -------------    -------------
    Net cash used in operating activities                                      (28,928,147)     (19,928,526)
Cash flows from investing activities:
  Purchase of held to maturity securities                                                -      (12,121,649)
  Proceeds from maturity of held to maturity securities                          1,999,024       23,095,000
  Capital expenditures                                                             (62,262)         (75,871)
                                                                              -------------    -------------
    Net cash used in investing activities                                        1,936,762       10,897,480
                                                                              -------------    -------------
Cash flows provided by financing activities:
  Sales of stock                                                                32,066,754       13,275,024
                                                                              -------------    -------------
  Cash provided by financing activities                                         32,066,754       13,275,024
                                                                              -------------    -------------
      Net increase (decrease) in cash and short-term cash investments            5,075,369        4,243,978
Cash and short-term cash investments:
  Beginning of period                                                            3,176,717        4,998,650
                                                                              -------------    -------------
  End of period                                                               $  8,252,086     $  9,242,628
                                                                              =============    =============
  Reconciliation of net loss to net cash used in operating activities
Net loss                                                                      $(30,845,578)    $(20,631,423)
Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation and amortization                                                     58,707           55,705
  Unrealized losses from investments                                               152,558        1,417,340
  Non-cash employee research and development expense (credit)                     (152,558)      (1,417,340)
  Changes in -
    Net (increase) decrease in investment securities-trading                       454,931        1,396,418
    Other assets - including current portion of supply commitment                  185,661          147,010
    Unconditional supply commitment - long term portion                            270,000          150,000
    Accounts payable and other                                                     948,132       (1,046,236)
                                                                              -------------    -------------
Net cash used in operating activities:                                        $(28,928,147)    $(19,928,526)
                                                                              =============    =============
</TABLE>

                                      -5-
<PAGE>

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

                 Three and nine months ended September 30, 2002

                                     General

Aphton  Corporation  is a  biopharmaceutical  company  conducting a  randomized,
double blind, controlled, combination therapy Phase III clinical trial in the US
and Europe for patients with  advanced  pancreatic  cancer;  a Phase II clinical
trial in Europe and the US for patients with advanced gastric  (stomach) cancer;
and a Phase II  clinical  trial in Europe for  patients  with  prostate  cancer.
Aphton is initiating a Phase II  dose-ranging/indications  of efficacy  clinical
trial in Europe for  treating  patients  with  gastrointestinal  reflux  disease
(GERD).

We  apply  our   innovative   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 have strategic  alliances with Aventis  Pasteur (NYSE:
AVE), GlaxoSmithKline (NYSE: GSK) and others.

Aphton's  anti-gastrin targeted therapy induces antibodies in patients that bind
to both gastrin 17 and gly-gastrin and remove them from circulation  before they
can initiate cell growth.  Gastrin 17 and gly-gastrin are believed to be central
growth  factors,   or  the  initiating   signals,   for  cell  growth  and  cell
proliferation and metastasis (spread) in colon, pancreatic,  stomach, esophageal
and other  gastrointestinal  system  cancers.  This is  accomplished  by gastrin
binding to the large  numbers of gastrin  receptors  on the tumor cell  surface.
Interrupting  this process by immunizing the patient with Aphton's  anti-gastrin
immunogen is a precisely "targeted" immunotherapy. This specificity of targeting
only cancer cells occurs  because  gastrin is not normally  secreted and gastrin
receptors  are not normally  found on "healthy"  cells in the GI system,  unless
they are malignant, or on the path to malignancy (except for cells involved with
normal acid secretion).  Recent findings have shown that inhibiting  gastrin not
only inhibits  cell growth,  proliferation  and  metastasis  directly,  but also
"unblocks" a central pathway leading to cell-suicide (apoptosis). This tilts the
balance,   from  cell  growth,  to  cell  suicide.  This  effect  was  amplified
synergistically  when Aphton's drug was given together with a  chemotherapeutic.
Gastrin also stimulates the secretion and expression of other  important  growth
factors and  receptors  within and on the surface of the cancer cell involved in
tumor growth.  Hence,  inhibiting  gastrin inhibits all of the foregoing factors
contributing to tumor growth and spread, while simultaneously  opening a central
pathway to cell suicide.

                                Clinical Results

On  October  28,  2002,   the  Company   announced   results  of  a  randomized,
double-blind,  controlled,  statistically  powered,  phase  III  clinical  trial
conducted in European  countries.  Patients with advanced  pancreatic cancer who
had  received  no  previous  therapy  were  treated  either  with the  Company's
anti-gastrin immunogen G17DT as a monotherapy,  or with the control. The primary
efficacy measure was survival time from the date of randomization.  A summary of
the results  follows:  a) patients with stage IV pancreatic  cancer treated with
G17DT had a median  survival time that was 53% longer than the stage IV patients
in the control arm; b) 25% of the patients with stage IV  pancreatic  cancer who
were  treated  with  G17DT had a  survival  time that was 106%  longer  than the
control  arm; and c) the overall  Hazard  Ratio was 0.7;  that is to say, at any
point in time,  patients  on G17DT had a 143%  higher  likelihood  of  surviving
longer than patients on the control.

                        Significance of Clinical Results

Aphton  believes  that  these  results  with  G17DT  are the  first  in  which a
biological  agent  showed  a  survival  benefit  against  a  solid  tumor  in  a
randomized,  double-blind,  phase III clinical trial with  previously  untreated
patients  (non-refractory  patients).  For further  information  on our clinical
trials see the discussion of our reports filed on Form 8-K in Item 6 below.

                     Planned Filings for Marketing Approvals

Aphton plans to submit these results to certain foreign  regulatory  agencies in
the next few weeks for  their  consideration  for  marketing  approval  in those
jurisdictions.

                              Results of Operations

During the nine months ended September 30, 2002,  Aphton received  approximately
$32.1 million for  approximately  5.2 million shares of its common stock.  Total
costs were reduced from $13.1 million in the quarter ending December 31, 2001 to
$10.1  million in the quarter  ended  March 31,  2002,  to $9.9  million for the
quarter ended June 30, 2002. This decrease is primarily due to the completion of
recruitment for two of the Company's  clinical trials.  Total costs increased to
$10.8 million in the quarter ended September 30, 2002 primarily due to the costs
of  preparing  for  and  filing  an  application  for  clinical  trials  for the
non-cancer  indication  of GERD in Europe and the US. The Company is planning to
initiate a clinical  trial in Europe for GERD in the fourth quarter and to begin
recruiting  patients  in January of 2003.  Most of the costs  relating  to these
trials will be incurred during the fiscal year ended December 31, 2003.

During this period the Company had no contract revenues. The investment earnings
on cash and current investments for the nine months ended September 30, 2002 was
$100,624,  compared to $433,196  for the nine months ended  September  30, 2001.
This decrease was due to lower average cash balances and interest  rates.  Total
research and development  expenditures  increased from $7,550,430 to $10,180,407
in the three  months  ended  September  30,  2002 over the  three  months  ended
September  30,  2001.  Total  research  and  development  costs  increased  from
$18,126,330  for the nine months ended September 30, 2001 to $29,182,312 for the

                                      -6-
<PAGE>

nine  months  ended  September  30,  2002.  These  costs  included  the costs of
establishing centers where patients are treated and monitored. This 61% increase
was a  result  of  the  increased  clinical  trial  costs  associated  with  the
development of the Company's products and were partially offset by a significant
reduction of research and  development  costs in the nine months ended September
30,  2001.  The  Company  allows  certain   employees  to  defer  a  portion  of
compensation,  and the Company transfers this amount into an investment  account
such that the  employee  is able to direct  the  investment  of the  funds.  The
related  investment  securities are held by the Company,  and are subject to the
general  creditors of the Company.  These employees direct the investment of the
funds,  and the  changes  in  value  in  these  investments  are  recognized  as
unrealized  gains and losses in the statement of operations with a corresponding
increase or decrease to the carrying value of the investment  account.  The same
amount is used to adjust research and development  expense and the corresponding
liability for employees' wages and benefits payable.  Unrealized  holding losses
on trading securities and the corresponding decrease in research and development
expense totaled  $152,558 in the nine month period ending September 30, 2002 and
approximately $1,417,340 for the nine months ended September 30, 2001.

The Company does not accumulate cost information by major  development  product.
Many costs are  applicable to more than one product.  We receive  reimbursements
from our strategic  partners for some of our research and  development  expenses
and these  expenses are not included in our costs.  We estimate  that 93% of our
research and development  costs are spent on  gastrointestinal  and reproductive
system cancers.  There are no payment or penalty milestones  associated with any
of the  projects,  all of  which  are in Phase II or III  clinical  trials.  The
Company does not speculate on the timing of approvals by regulatory authorities.

                                      Other

In June 2001,  the Financial  Accounting  Standards  Board issued  Statements of
Financial  Accounting  Standards  No. 141,  "Business  Combinations,"  which the
Company  adopted  in July  2001 and No.  142,  "Goodwill  and  Other  Intangible
Assets," which was adopted in January 2002, effective for fiscal years beginning
after December 15, 2001.  Under the new rules,  goodwill and  intangible  assets
deemed to have indefinite  lives will no longer be amortized but will be subject
to annual  impairment tests in accordance with the Statements.  Other intangible
assets will continue to be amortized  over their useful  lives.  The adoption of
these statements did not have an impact on the Company's  financial  position or
results from operations.

In August 2001, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No. 144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets" (SFAS No. 144) which the Company adopted January
1, 2002.  SFAS 144 superseded  Statement of Financial  Accounting  Standards No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be  Disposed  Of," and the  accounting  and  reporting  provisions  of
Accounting   Principles  Board  Opinion  No.  30,   "Reporting  the  Results  of
Operations-Reporting  the Effects of  Disposal  of a Segment of a Business,  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions," for
the disposal of a segment of a business.  SFAS No. 144 also  amended  Accounting
Research Bulletin No. 51, "Consolidated  Financial Statements," to eliminate the
exception to  consolidation  for a subsidiary  for which control is likely to be
temporary.  The  adoption  of these  statements  did not have an  impact  on the
Company's financial position or results from operations.

In July 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal Activities" (SFAS 146). This Statement addresses financial
accounting and reporting for costs  associated with exit or disposal  activities
and  nullifies  Emerging  Issues Task Force (EITF)  Issue No.  94-3,  "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (including Certain Costs Incurred in a  Restructuring)."  SFAS No. 146
requires  that a  liability  for a cost  associated  with an  exit  or  disposal
activity  be  recognized  when the  liability  is  incurred  rather  than when a
commitment  to an exit  plan is  made.  It is  effective  for  exit or  disposal
activities  that are  initiated  after  December 31, 2002.  The Company does not
expect  the  impact of  adopting  SFAS 146 to be  significant  to the  Company's
financial position, results of operations, or cash flows.

                                      -7-
<PAGE>

Inflation and changing  prices have not had a  significant  effect on continuing
operations and are not expected to have any material  effect in the  foreseeable
future.  Interest and other  income were  primarily  derived  from  money-market
accounts.

                         Liquidity and Capital Resources

The Company has financed its operations since inception  through the sale of its
equity  securities and, to a lesser extent,  using  operating  revenues from R&D
limited  partnerships to conduct research and development.  These funds provided
the Company  with the  resources  to retain  staff,  construct  its research and
development  facilities,  acquire capital  equipment and finance  technology and
product  development,  manufacturing and clinical trials.  During the nine month
period ended September 30, 2002, total cash inflow from financing activities was
$32.1 million  compared to $28.9  million  total cash  outflows  from  operating
activities.  This reflects the use of our proceeds from the sale of common stock
to finance our research and development activities.

On September 26, 2002 the Company sold  2,500,000  shares of  registered  common
stock at $2.00 per share and received net proceeds of $4.4 million. On March 21,
2002, the Company sold 1,200,000 shares of registered common stock at $10.50 per
share and  received  net  proceeds of $11.7  million.  On February 7, 2002,  the
Company sold 1,345,000 shares of registered common stock at $12.70 per share and
received net proceeds of $16.0 million.

During the eleven months ended December 31, 2001, the Company received  proceeds
of approximately  $13.3 million net of approximately $1.0 million offering costs
from the closing of a private  financing with several funds.  The Company issued
1,187,503  shares of common stock and there were no warrants or options included
with this private placement. Approximately 170,000 additional shares were issued
subsequent to December 31, 2001 due to an  anti-dilution  provision for the sale
of securities at less than $12.00 per share prior to September 21, 2002.

On October 15, 2002 and on November 1, 2002, the Company  received  notices from
the staff of the Nasdaq  National  Market  that its  Common  Stock had failed to
maintain  certain  minimum  requirements  for  continued  listing  on the Nasdaq
National  Market and both of the notices  suggested that the company may want to
apply to transfer its securities to the Nasdaq SmallCap Market.

On November 13, 2002,  we submitted an  application to Nasdaq to move trading of
our Common Stock from the Nasdaq  National  Market to the Nasdaq SmallCap Market
under the same ticker  symbol.  We believe that we satisfied all of the criteria
for trading our Common Stock on the Nasdaq  SmallCap Market as of that date, and
believe that Nasdaq should accept our application.  Our application to be listed
on the Nasdaq  SmallCap Market may not,  however,  be accepted or if accepted we
may not be able to  maintain  eligibility  and if our  common  stock  were to be
delisted  from the Nasdaq it could  adversely  affect or limit or  restrict  our
ability to raise funds through stock issuances.

The Company  anticipates  that its existing  capital  resources of $8.9 million,
which are composed  primarily of cash and  short-term  cash  investments,  would
enable it to maintain its currently  planned  operations into the quarter ending
December 31, 2002. The Company's working capital and capital requirements, which
have averaged $3.4 million per month during the nine months ended  September 30,
2002, will depend upon numerous factors,  including the following:  the progress
of the  Company's  research and  development  program,  preclinical  testing and
clinical  trials;  the timing and cost of obtaining  regulatory  approvals;  the
levels  of  resources   that  the  Company   devotes  to  product   development,
manufacturing and marketing capabilities;  technological advances;  competition;
and collaborative arrangements or strategic alliances with other drug companies,
including the further development, manufacturing and marketing of certain of the
Company's  products  and the  ability of the  Company to obtain  funds from such
strategic  alliances  or from other  sources.  The Company is  negotiating  with
current  and  potential  strategic  partners  to  obtain  upfront  payments  and
milestone payments and royalties as part of, and in return for, granting certain
additional licensing rights to its products and technologies.  If adequate funds
do not become available as a result of our current negotiations, the sale of our
equity  securities or otherwise,  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 negotiate agreements which may be less than favorable to us, if we
are able to secure them at all.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The Company has no material  changes to the disclosure on this matter made under
Item 7A of its Transition  Report on Form 10-K for the eleven month period ended
December 31, 2001.

                                      -8-
<PAGE>

Item 4.  Controls and Procedures

We evaluated the design and operation of our disclosure controls and procedures
to determine whether they are effective in ensuring that the disclosure of
required information is timely made in accordance with the Exchange Act and the
rules and forms of the Securities and Exchange Commission. This evaluation was
made under the supervision and with the participation of management, including
our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") within
the 90-day period prior to the filing of this Quarterly Report on Form 10-Q. The
CEO and CFO have concluded, based on their review, that our disclosure controls
and procedures, as defined at Exchange Act Rules 13a-14(c) and 15d-14(c), are
effective to ensure that information required to be disclosed by the Company in
reports that it files under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in Securities and Exchange
Commission rules and forms. No significant changes were made to the Company's
internal controls or other factors that could significantly affect these
controls subsequent to the date of their evaluation.

      Part II - Other Information

Item 1.   Legal Proceedings.  Not applicable.

Item 2.   Changes in Securities.  Not applicable.

Item 3.   Defaults Upon Senior Securities.  Not applicable.

Item 4.   Submission of Matters to a Vote of Security Holders.  Not applicable.

Item 5.   Other Information.  Not applicable.

Item 6.   Exhibits and Report on Form 8-K.

          (a)       Exhibits

          99.1      Certificate of the Chief  Executive  Officer  pursuant to 18
                    U.S.C.  (Section 1350 as adopted  pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002)

          99.2      Certificate of the Chief  Financial  Officer  pursuant to 18
                    U.S.C.  (Section 1350 as adopted  pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002)


          (b)       Reports on Form 8-K

                    During the three months ended September 30, 2002 and through
                    November 13, 2002,  the Company filed the following  current
                    reports on Form 8-K:


          -On July 17, 2002, announced that it received official notice from the
          Food and Drug  Administration  (the "FDA")  granting its  anti-gastrin
          G17DT Immunogen  Orphan-Drug status for treatment of adenocarcinoma of
          the pancreas;

          -On July 23, 2002, announced that it received official notice from the
          FDA granting its anti-gastrin  G17DT Immunogen  Orphan-Drug status for
          treatment  of  gastric  (stomach)  cancer.  The  FDA  noted  that  the
          indication designated is broader than the indication originally sought
          by the Company;

          -On  July  29,  2002,  in its  S-3  filing  of July  8,  2002,  Aphton
          Corporation noted that it has concluded a phase II clinical trial with
          G17DT  which   showed,   among  other   findings,   the  reduction  of
          post-prandial  (post-meal)  levels of  gastrin to  pre-meal  levels of
          gastrin, in patients immunized with G17DT.  Furthermore,  for patients
          also treated with the proton-pump inhibitor (PPI) drug omeprazole,  we
          showed the  reduction  of the  many-fold  increase  in gastrin  levels
          induced by  omeprazole,  a  condition  known as  hypergastrinemia,  to
          pre-meal levels of gastrin.  The Company has been preparing to file an
          Investigational  New Drug (IND)  application  to examine,  among other
          endpoints,  whether G17DT may be efficacious in providing  symptomatic
          relief to patients suffering from gastroesophageal  reflux disease (or
          GERD). The preparation of an IND for a drug that could be administered
          to millions of patients  each year entails  resources and effort which
          Aphton has made in recent months and is now completing.

          -On July 31, 2002, Aphton reported further  impressive interim results
          from its phase II clinical trial with patients with metastatic stomach
          cancer  who  were  treated  with  Aphton's   G17DT  and   chemotherapy
          consisting of cisplatin and 5FU. The report updates  results  reported
          on June 12, 2002 for 58  evaluable  patients,  where 28  patients  had
          either a partial or a complete  tumor  response  for an overall  tumor
          response rate of 48.3%.

                                      -9-
<PAGE>

          -On September 23, 2002, Aphton  Corporation (the "Company")  announced
          that the Food and Drug  Administration  (the "FDA") has  reviewed  the
          Company's   request   for  Fast  Track   designation   for  its  G17DT
          (anti-gastrin)   immunogen   under   its   Investigational   New  Drug
          Application  to treat  pancreatic  cancer  patients  together with the
          chemotherapy  gemcitabine and concluded that it meets the criteria for
          Fast Track designation. The Company announced on August 19, 2002, that
          it had filed an application with the FDA for this designation.

          -On September 23, 2002,  Aphton  Corporation  (the "Company")  entered
          into a placement agency agreement (the  "Agreement") with Life Science
          Group,  Inc.,  as placement  agent,  in  connection  with the sale and
          issuance by the Company of  2,500,000  shares  (the  "Shares")  of the
          Company's  common stock,  $0.001 par value.  The Shares will be issued
          pursuant to a Registration  Statement on Form S-3 (File No. 333-92058)
          (the "Registration  Statement") filed with the Securities and Exchange
          Commission under the Securities Act of 1933, as amended.

          -On September 26, 2002, Aphton  Corporation (the "Company")  announced
          that the Company received gross proceeds of $5,000,000 for the sale of
          2,500,000 shares of registered  common stock. Life Science Group, Inc.
          acted as  placement  agent in  connection  with the  transaction.  The
          proceeds of the financing will be used for general corporate purposes,
          including  to  fund  the  Company's   on-going   clinical  trials  and
          operations.

          -On October 28, 2002,  Aphton  Corporation  (the "Company")  announced
          results  of  a  randomized,  double-blind,  controlled,  statistically
          powered,  phase III clinical  trial  conducted in European  countries.
          Patients with advanced  pancreatic cancer who had received no previous
          therapy were treated either with the Company's  anti-gastrin immunogen
          G17DT as a  monotherapy,  or with the  control.  The primary  efficacy
          measure was survival time from the date of randomization. A summary of
          the results  follows:  a)  patients  with stage IV  pancreatic  cancer
          treated with G17DT had a median survival time that was 53% longer than
          the stage IV patients in the control arm; b) 25% of the patients  with
          stage IV pancreatic  cancer who were treated with G17DT had a survival
          time that was 106%  longer than the  control  arm;  and c) The overall
          Hazard Ratio was 0.7;  that is to say, at any point in time,  patients
          on  G17DT  had a 143%  higher  likelihood  of  surviving  longer  than
          patients on the control.

          -On November 6, 2002,  Aphton  Corporation  (the "Company")  announced
          that it has received  approval and plans to initiate a clinical  trial
          in Europe for patients suffering from Gastroesophageal  Reflux Disease
          (GERD).  The  clinical  trial will  examine,  among  other  endpoints,
          whether G17DT may be  efficacious in providing  symptomatic  relief to
          patients  suffering  from GERD. In parallel with the clinical trial in
          Europe,  the  Company  has  agreed  with  the FDA to  conduct  certain
          toxicology and other  preclinical  studies prior to initiation of this
          trial in the US.  The  Company  is in  discussions  with  current  and
          potential strategic partners to license the GERD product worldwide, in
          return  for  an  up-front  fee,  milestone   payments,   payments  for
          conducting clinical trials and royalties. The Company plans to recruit
          the first patients in Europe by mid-January, 2003.

                                    Signature

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

                                     Aphton Corporation

Date:  November 14, 2002             By:/s/ Frederick W. Jacobs
                                        ----------------------------------------
                                        Frederick W. Jacobs
                                        Vice President, Chief Financial Officer,
                                          Treasurer and Chief Accounting Officer

                                      -10-
<PAGE>

                               APHTON CORPORATION

                                 CERTIFICATIONS
                           PURSUANT TO SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

Certification

I, Philip C. Gevas, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Aphton Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     (b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     (c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

     (a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     (b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                               By:/s/ Philip C. Gevas
                                  ----------------------------------------------
                                  Philip C. Gevas
                                  Chairman of the Board, Chief Executive Officer
                                    and President
                                  Date: November 14, 2002

                                      -11-
<PAGE>

Certification

I, Frederick W. Jacobs, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Aphton Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     (b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     (c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

     (a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     (b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                     By:/s/ Frederick W. Jacobs
                                        ----------------------------------------
                                        Frederick W. Jacobs
                                        Vice President, Chief Financial Officer,
                                          Treasurer and Chief Accounting Officer
                                        Date: November 14, 2002

                                      -12-