<PAGE>   1

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20459

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

For the quarterly period ended September 30, 2000

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

For the transition period from ___________ to _____________.

                         Commission file number 0-20713


                                 ENTREMED, INC.
                                 --------------
             (Exact name of registrant as specified in its charter)

           Delaware                                      58-1959440
           --------                                      ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                            9640 Medical Center Drive
                               Rockville, Maryland
                               -------------------
                    (Address of principal executive offices)

                                      20850
                                      -----
                                   (Zip code)

                                 (301) 217-9858
                                 --------------
              (Registrant's telephone number, including area code)

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

YES     X      NO
    --------      ------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the most recent practicable date.

             Class                               Outstanding at November 7, 2000
------------------------------------             -------------------------------
Common Stock $.01 Par Value                               16,937,201


<PAGE>   2


                                 ENTREMED, INC.


                                Table of Contents

<TABLE>
<CAPTION>
PART I.   FINANCIAL INFORMATION                                              PAGE
                                                                             ----
<S>                                                                         <C>
Item 1 -- Financial Statements

Consolidated Balance Sheets
as of September 30, 2000 and December 31, 1999                                3

Consolidated Statements of
Operations for the Three Months Ended
September 30, 2000 and 1999, and the Nine Months
Ended September 30, 2000 and 1999                                             4

Consolidated Statements of Cash
Flows for the Nine Months Ended September 30, 2000
and 1999                                                                      5

Notes to Consolidated Financial
Statements                                                                    6

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

Part II.  OTHER INFORMATION

Item 1 --  Legal Proceedings                                                 11

Item 2 --  Changes in Securities                                             11

Item 3 --  Defaults upon Senior Securities                                   11

Item 4 --  Submission of Matters to Vote of
           Security Holders                                                  11

Item 5 --  Other Information                                                 11

Item 6 --  Exhibits and Reports on Form 8-K                                  11

SIGNATURES                                                                   12
</TABLE>



                                       2
<PAGE>   3


                                 ENTREMED, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                           September 30,                December 31,
                                                                                2000                        1999
                                                                        ------------------        ------------------
                                                                           (unaudited)
<S>                                                                     <C>                       <C>
ASSETS
Current assets:
   Cash and cash equivalents                                            $       37,987,956        $       26,027,235
   Interest receivable                                                             130,233                   105,482
   Accounts receivable                                                             996,042                   618,598
   Prepaid expenses and other                                                      241,539                   336,443
                                                                        ------------------        ------------------
Total current assets                                                            39,355,770                27,087,758

Furniture and equipment, net                                                     4,521,308                 4,013,785

Other assets                                                                       776,544                   742,082
                                                                        ------------------        ------------------
     Total assets                                                       $       44,653,622        $       31,843,625
                                                                        ==================        ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                     $        4,612,567        $        4,887,693
   Accrued liabilities                                                           1,703,524                 1,756,538
   Deferred revenue                                                                -                          75,000
   Notes payable                                                                   974,636                 1,125,620
                                                                        ------------------        ------------------
Total current liabilities                                                        7,290,727                 7,844,851

Note payable, less current portion                                               1,256,034                 1,995,327

Minority interest                                                                   17,724                    18,646

Stockholders' equity:
   Convertible preferred stock, $1.00 par and $1.50 Liquidation value:
     5,000,000 shares authorized, none issued and
    outstanding at September 30, 2000 (unaudited)
     and December 31, 1999                                                          -                    -
   Common stock, $.01 par value:
    35,000,000 shares authorized, 17,098,914 (unaudited)
    and 14,755,998 shares issued and outstanding at
    September 30, 2000 and December 31, 1999, respectively                         170,989                   147,560
   Treasury stock, at cost: 291,667 shares held
     September 30, 2000 (unaudited) and December 31, 1999                       (3,833,379)                (3,833,379)
   Additional paid-in capital                                                  157,000,454                107,863,638
   Accumulated deficit                                                        (117,248,927)               (82,193,018)
                                                                        ------------------        -------------------
Total stockholders' equity                                                      36,089,137                 21,984,801
                                                                        ------------------        -------------------
     Total liabilities and stockholders' equity                         $       44,653,622        $        31,843,625
                                                                        ==================        ===================

</TABLE>


   The accompanying notes are an integral part of the financial statements.

                                      3
<PAGE>   4






                                 ENTREMED, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                         Three Months Ended                    Nine months ended
                                                             September 30,                        September 30,
                                                       2000                1999            2000                1999
                                                 ---------------------------------    --------------------------------
<S>                                              <C>                <C>               <C>             <C>
Revenues:
    Collaborative research and development       $        -         $    1,014,166    $       -        $     3,099,166
    Licensing                                             -                303,333            -                403,333
    Grant                                               72,484             128,897           300,709           287,716
    Royalty                                            781,686             288,108         2,037,836           716,319
    Other                                                 -                 51,813           109,265            52,853
                                                 -------------      --------------    --------------   ---------------

Total revenues                                         854,170           1,786,317         2,447,810         4,559,387
                                                 -------------      --------------    --------------   ---------------


Expenses:
    Research and development                         9,971,223           6,959,576        30,269,128        21,686,171
    General and administrative                       2,873,036           2,223,748         8,771,430         6,122,655
                                                 -------------      --------------    --------------   ---------------
                                                    12,844,259           9,183,324        39,040,558        27,808,826

Interest expense                                       (54,889)                -            (167,805)              -
Investment income                                      764,765             501,290         1,704,643         1,196,577
                                                 -------------      --------------    --------------    --------------

Net loss                                          $(11,280,213)     $  (6,895,717)    $  (35,055,910)   $  (22,052,862)
                                                  =============     ==============    ==============    ==============

Net loss per share (basic and diluted)           $       (0.66)     $        (0.48)   $        (2.22)   $        (1.63)
                                                 ==============     ===============   ===============   ==============

Weighted average number of shares
     outstanding (basic and diluted)                16,964,613          14,247,373        15,781,868        13,506,269
                                                 ==============     ===============   ===============   ===============
</TABLE>




   The accompanying notes are an integral part of the financial statements.

                                      4

<PAGE>   5


                                 ENTREMED, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                                 2000                1999
                                                                           -----------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                       <C>                  <C>
Net loss                                                                   $    (35,055,910)    $   (22,052,862)
Adjustments to reconcile net loss to net cash
    used by operating activities:
    Depreciation                                                                    771,416             675,331
    Loss on equity investment                                                       195,000                 -
    Loss on disposal of furniture and equipment                                       -                  65,674
    Minority interest                                                                  (922)              5,683
    Changes in assets and liabilities:
      Accounts receivable                                                          (377,443)           (436,659)
      Interest receivable                                                           (24,751)             45,229
      Prepaid expenses and other                                                   (134,558)             48,284
      Accounts payable                                                             (275,126)          1,730,144
      Accrued liabilities                                                           (53,014)             52,418
      Deferred revenue                                                              (75,000)         (2,870,833)
                                                                           ----------------     ---------------
     Net cash used by operating activities                                      (35,030,308)        (22,737,591)
                                                                           ----------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
Maturities of short-term investments                                                  -               4,352,371
Purchases of furniture and equipment                                             (1,278,939)         (1,733,491)
                                                                           ----------------     ---------------
     Net cash (used) provided by investing activities                            (1,278,939)          2,618,880
                                                                           ----------------     ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from option and warrant exercises
  and the sale of common stock                                                   49,160,245          29,198,961
Payment on note payable                                                            (890,277)              -
                                                                           ----------------     ---------------
     Net cash provided by financing activities                                   48,269,968          29,198,961
                                                                           -----------------    ---------------

Net increase (decrease) in cash and cash equivalents                             11,960,721           9,080,250
Cash and cash equivalents at beginning of period                                 26,027,235          30,818,689
                                                                           ----------------     ---------------
Cash and cash equivalents at end of period                                 $     37,987,956     $    39,898,939
                                                                           ================     ===============
</TABLE>



   The accompanying notes are an integral part of the financial statements.


                                       5
<PAGE>   6





                                 ENTREMED, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         September 30, 2000 (unaudited)



1.        BASIS OF PRESENTATION

          Our accompanying unaudited consolidated financial information includes
the accounts of our 85% owned subsidiary, Cytokine Sciences, Inc. and our 97.5%
owned subsidiary TheraMed Inc. Cytokine Sciences was formed in June 1996 and was
capitalized with $250,000 from us for the purpose of acquiring the assets of
Innovative Therapeutics, Inc., which acquisition was completed in July 1996 in
exchange for 15% of the common stock of Cytokine Sciences, Inc. TheraMed Inc.
was formed in July 1998 as a wholly owned subsidiary. On April 1, 2000 TheraMed
Inc. was capitalized with $39,000 from us and $1,000 from a minority investor.
We also agreed to contribute certain technology and to provide additional
funding in exchange for preferred stock. We have further agreed to provide
facility and administrative services for which TheraMed Inc. is obligated to
repay us. TheraMed Inc. will focus on the continued development and the
commercialization of blood cell permeation technology.

          The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and in accordance with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, such consolidated financial
statements do not include all of the information and disclosures required by
generally accepted accounting principles for complete financial statements. In
the opinion of our management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30, 2000 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000. For further information, refer to our audited financial
statements and footnotes thereto included in our Form 10-K for the year ended
December 31, 1999.

2.        CONTINGENCIES

          We are a defendant in a lawsuit initiated in August 1995 in the United
States District Court for the Eastern District of Tennessee by Bolling, McCool &
Twist ("BMT"), a consulting firm. In the suit, BMT asserts that we breached an
agreement between BMT and us by failing to pay BMT certain fees it asserts are
owed under the agreement. More specifically, BMT has asserted a claim for the
payment of services rendered in the approximate amount of $50,000 and seeks a
success fee in an unspecified amount in connection with the BMS Collaboration.
The judge in the case bifurcated the proceeding into two phases: an adjudication
of whether we breached our agreement with BMT and then a damage phase. After a
trial on the merits the jury found in favor of BMT on the breach of contract
claim. A trial to determine damages had been scheduled for April 14, 1998.
However, on April 6, 1998, the court issued an Order pursuant to which damages
were limited to those arising during the term of the Agreement, which terminated
on November 1, 1995. On May 6, 1999, the court confirmed its decision by
granting our motion for summary judgement and limiting our damages to
approximately $50,000 plus interest. Thus, this litigation at the trial level
has been concluded. BMT has filed an appeal and we have cross-appealed. We
cannot predict the outcome of such appeal. However, we intend to continue to
contest any further action vigorously and believe that this proceeding will not
have a material adverse effect on us or on our financial condition, although
there can be no assurance that this will be the case.


                                       6
<PAGE>   7






          On May 30, 2000, Abbott Laboratories filed a law suit against
Children's Medical Center Corporation and us in the Federal District Court in
Massachusetts requesting, among other things, that the court substitute Dr.
Donald Davidson as inventor on Children's U.S. Patent No. 4,854,221 which covers
use of the Kringle 5 region of the plasminogen molecule as an anti-angiogenic
agent and a declaratory judgement from the court to invalidate any agreement
between Children's Hospital and EntreMed regarding this patent. Abbott also
filed a claim for misappropriation of trade secrets related to the Kringle 5
molecule seeking actual and punitive damages from the defendants. On July 18,
2000, we filed counterclaims against Abbott Laboratories including tortuous
interference with contract and a declaratory judgement that Abbott's patent
covering Kringle 5 is invalid and that Children's patent covering Kringle 5 is
valid. Although we do not currently believe that the Abbott lawsuit will have a
material impact on the operations of the company, and we intend to vigorously
contest the allegations raised in the lawsuit, there is a risk that Children's
patent or any agreement with Children's with respect to the use of the patent
could be invalidated or found not to exist.

          The Abbott lawsuit is not directed to nor does the suit affect our
Angiostatin molecule, Kringles 1-3 of the plasminogen molecule, that is
currently in Phase I clinical trial.


                                       7
<PAGE>   8



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

(a)       Overview

          Since our inception in September 1991, we have devoted substantially
all of our efforts and resources to sponsoring and conducting research and
development on our own behalf and through collaborations. Through September 30,
2000, with the exception of license fees, research and development funding,
royalty payments, and certain research grants, we have not generated any revenue
from operations. We anticipate our primary revenue sources for the next several
years to include royalty payments, research grants and collaboration payments
from collaborators under arrangements entered into in the future. The timing and
amounts of such revenues, if any, will likely fluctuate and depend upon the
achievement of specified research and development milestones, and results of
operations for any period may be unrelated to the results of operations for any
other period.

Results of Operations

Three and Nine Months Ended September 30, 2000 and September 30, 1999

          Revenues decreased approximately 52% from approximately $1,786,000 for
the three months ended September 30, 1999 ("1999 Three Months") to approximately
$854,000 for the three months ended September 30, 2000 ("2000 Three Months").
For the nine months ended September 30, 2000 ("2000 Nine Months"), revenues were
approximately $2,448,000 as compared to $4,559,000 the nine months ended
September 30, 1999 ("1999 Six Months"), a 46% decrease. These decreases result
from the absence of BMS collaborative research and development fees and license
fees. BMS collaborative research and development fees and license fees
recognized totaled approximately $3,503,000 for the 1999 Nine Months. This
decrease was partially offset by an increase in royalty income of approximately
185% from approximately $716,000 for the 1999 Nine Months to approximately
$2,038,000 for the 2000 Nine Months. The increase in royalty income is primarily
due to royalty income received from Celgene on the sale of THALOMID(R).

          Research and development expenses increased by approximately 43% from
approximately $6,960,000 for the 1999 Three Months to approximately $9,971,000
for the 2000 Three Months and by approximately 40% from approximately
$21,686,000 for the 1999 Nine Months to approximately $30,269,000 in the 2000
Nine Months. Research and development expenditures include sponsored research
payments to academic collaborators, including payments to Children's Hospital of
$900,000 in 2000 and $1,700,000 in 1999 and expenses related to our internal
research programs. The increase in internal research expenses resulted primarily
from the increased efforts in manufacturing of our three product candidates,
Endostatin, Angiostatin and 2ME2, supporting our clinical trial programs, and
our internal and sponsored research and product development programs relating to
our antiangiogenesis and blood cell permeation technologies. Overall, research
personnel increased from 52 as of September 30, 1999 to 74 as of September 30,
2000. Research and development expenses are expected to continue to increase as
we expand our research and development efforts.

          General and administrative expenses increased approximately 29% from
approximately $2,224,000 for the 1999 Three Months to approximately $2,873,000
for the 2000 Three Months. For the 2000 Nine Months general and administrative
expenses were approximately $8,771,000 as compared to approximately $6,123,000
for the 1999 Nine Months, a 43% increase. The 2000 Nine Months increase resulted
primarily from the increase in administrative costs associated with adding
administrative staff to support our research efforts and external
collaborations, investigating potential strategic relationships, and obtaining
professional services.

                                       8
<PAGE>   9

          Investment income increased approximately 53% from approximately
$501,000 for the 1999 Three Months to approximately $765,000 for the 2000 Three
Months and increased approximately 42% from approximately $1,197,000 in the 1999
Nine Months to approximately $1,705,000 in the 2000 Nine Months. This overall
increase in investment income during the 2000 periods versus comparable periods
of 1999 is due to an increase in our invested cash resulting from the sale of
our common stock.

(b)       Liquidity and Capital Resources

          We anticipate incurring substantial additional losses over at least
the next several years due to, among other factors, the need to expend
substantial amounts on our ongoing and planned clinical trials, additional
research and development activities, and related business development and
general corporate expenses. From inception through September 30, 2000, we have
financed our operations from:

     -    the net proceeds of private placements of equity securities which
          raised approximately $17,000,000;

     -    payments from Bristol-Myers Squibb, including $9,700,000 received in
          December 1995 (of which $6,500,000 was an equity investment),
          $11,535,000 received in 1996 (of which $5,000,000 was an equity
          investment), $3,670,000 in each of the years 1997 and 1998, $611,667
          in 1999;

     -    various grants from the World Health Organization and SBIR grants
          totaling approximately $1,477,000;

     -    our June 1996 Initial Public Offering ("IPO") which raised net
          proceeds of approximately $43,541,000;

     -    proceeds of approximately $654,000 under capital leases;

     -    a private offering completed on July 27, 1999 of 1,478,118 shares of
          our common stock, Series 1 Warrants to purchase a total of 739,059
          shares of common stock at an exercise price of $33.02 and Series 2
          Warrants to purchase a total of 739,059 shares of common stock at an
          exercise price of $25.45, resulting in net proceeds to us of
          approximately $28,400,000;

     -    exercise of warrants issued in connection with the private offering
          which have resulted in additional proceeds to us of approximately
          $24,200,000 through September 30, 2000;

     -    proceeds of $3,000,000 from a borrowing in December 1999 secured by
          substantially all of our furniture and equipment; and

     -    a public offering completed June 19, 2000 of 1,000,000 shares of our
          common stock resulting in net proceeds to us of approximately
          $20,680,000.

          The Series 1 Warrants issued in connection with the private offering
completed on July 27, 1999, are terminable by us at any time after January 27,
2002 if our common stock trades at a per share price greater than $61.91 for ten
consecutive trading days and such Warrants are not exercised within a specified
period after our delivery of a written notice. If the Series 1 Warrants were
fully exercised, they would result in us receiving $24,400,000 in aggregate
exercise proceeds. We terminated the Series 2 Warrants under a similar provision
on June 1, 2000. We received aggregate proceeds of approximately $17,818,000
from the exercise of the Series 2 Warrants.

          In December 1999, we exercised our option to repurchase 291,667 of our
common shares from BMS for $13.143 a share or a total repurchase price of
$3,833,379 and which is reflected as treasury stock in the accompanying
consolidated balance sheets. BMS's remaining 583,332 shares held in connection
with the collaborative research and development agreement are subject to certain
restrictions, including future repurchase rights which expire in December 2000
and 2001.

          At September 30, 2000, we had cash and cash equivalents of
approximately $37,988,000 with working capital of approximately $32,065,000,
primarily representing the net proceeds of our private


                                       9
<PAGE>   10

placements of equity securities and our initial public offering, payments from
BMS which include equity investments, royalties received from Celgene, proceeds
from secured borrowing and various grants.

          Our cash resources have been used to finance research and development,
including sponsored research, capital expenditures, including leasehold
improvements to our new facility, and general and administrative expenses. Over
the next several years, we expect to incur substantial additional research and
development costs, including costs related to early-stage research, preclinical
and clinical trials, product manufacturing, increased administrative expenses to
support our research and development operations and increased capital
expenditures for expanded research capacity, various equipment needs and
facility improvements.

          We are a party to sponsored research agreements requiring us to fund
an aggregate of approximately $2,316,000 through 2001 (including $1,350,000 to
Children's Hospital, Boston); clinical trial agreements of approximately
$1,656,000; a production agreement for clinical trial drug substance of an
estimated $14,100,000; license agreements requiring future milestone payments of
up to $3,435,000; and additional payments upon attainment of regulatory
milestones.

         We believe that our existing resources will be sufficient to meet our
planned expenditures over the next eight months, although there can be no
assurance we will not require additional funds. Our working capital requirements
will depend upon numerous factors including:

     -    the progress of our research and development programs;

     -    our ability to contain our manufacturing costs;

     -    preclinical testing and clinical trials;

     -    achievement of regulatory milestones;

     -    the timing and cost of seeking regulatory approvals;

     -    the level of resources that we devote to the development of
          manufacturing, marketing and sales capabilities, if any;

     -    technological advances;

     -    the status of competing products; and

     -    our ability to maintain existing and establish new collaborative
          arrangements with other companies to provide us with funding to
          support these activities.

          We will require substantial funds in addition to the present existing
working capital to develop our product candidates and to meet our business
objectives.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Not applicable.


                                       10
<PAGE>   11



PART II.  OTHER INFORMATION


Item 1.   LEGAL PROCEEDINGS

          This information as set forth in Note 2 of "Notes to Consolidated
Financial Statements" appearing in Item 1 of Part I of this report is
incorporated herein by reference.

Item 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

          Not applicable.

Item 3.   DEFAULT 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 REPORTS ON FORM 8-K

          (a) Exhibits

                27.1                                Financial Data Schedule

          (b) Reports on Form 8-K

                  Not applicable.

                                       11
<PAGE>   12




                                   SIGNATURES


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



                                                     ENTREMED, INC.
                                                      (Registrant)


Date:  November 13, 2000                          /s/ John W. Holaday
                                         ---------------------------------------
                                                  John W. Holaday, Ph.D.
                                          President and Chief Executive Officer




Date:  November 13, 2000                          /s/ Dane R. Saglio
                                         ---------------------------------------
                                                  Dane R. Saglio
                                                 Chief Accounting Officer



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