<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 March 31, 1999

[  ]  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)


                                    Suite 200
                            9610 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      NO   X
    ---      ---

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 May 12, 1999
----------------------------                ---------------------------
Common Stock $.01 Par Value                         13,173,205


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                                 ENTREMED, INC.


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

Consolidated Balance Sheets
as of March 31, 1999 and December 31, 1998                     3

Consolidated Statements of
Operations for the Three Months Ended
March 31, 1999 and 1998                                        4

Consolidated Statements of Cash
Flows for the Three Months Ended March 31, 1999
and 1998                                                       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>




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                                 ENTREMED, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                       March 31,               December 31,
                                                                         1999                     1998
                                                                 -------------------      --------------------
                                                                     (unaudited)
<S>                                                              <C>                      <C>
ASSETS
Current assets:
   Cash and cash equivalents                                     $        26,090,813      $        30,818,689
   Short term investments                                                  1,506,815                4,352,371
   Interest receivable                                                        70,069                  186,927
   Accounts receivable                                                       302,779                  112,383
   Prepaid expenses and other                                                 67,362                  170,877
                                                                 --------------------     --------------------
Total current assets                                                      28,037,838               35,641,247

Furniture and equipment, net                                               3,586,995                2,979,237

Other assets                                                                 954,907                  953,519
                                                                 --------------------     --------------------
      Total assets                                               $        32,579,740      $        39,574,003
                                                                 ====================     ====================


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                              $         3,325,071      $         2,093,017
   Accrued liabilities                                                     1,130,890                1,332,682
   Deferred revenue                                                        1,853,332                2,945,833
                                                                 --------------------     --------------------
Total current liabilities                                                  6,309,293                6,371,532

Minority interest                                                             23,872                   14,407

Stockholders' equity:
   Convertible preferred stock, $1.00 par and $1.50
     Liquidation value:
     5,000,000 shares authorized, none issued and
     outstanding at March 31, 1999 (unaudited)
     and December 31, 1998                                                    -                         -
   Common stock, $.01 par value:
     35,000,000 shares authorized, 13,147,422 (unaudited)
     and 13,123,031 shares issued and outstanding at
     March 31, 1999 and December 31, 1998, respectively                      131,474                  131,230
   Additional paid-in capital                                             78,571,243               78,364,136
   Accumulated deficit                                                  (52,456,142)             (45,307,302)
                                                                 --------------------     --------------------
Total stockholders' equity                                                26,246,575               33,188,064
                                                                 --------------------     --------------------
      Total liabilities and stockholders' equity                 $        32,579,740      $        39,574,003
                                                                 ====================     ====================
</TABLE>



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




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<PAGE>   4


                                 ENTREMED, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                          Three Months Ended
                                                                               March 31,
                                                                 1999                         1998
                                                              ----------------------------------------
<S>                                                           <C>                   <C>
Revenues:
     Collaborative research and development                   $        1,042,500    $        1,042,500
     Licensing                                                            50,000                50,000
     Grant revenues                                                      158,819                62,471
     Royalty revenues                                                    191,680                   -
     Other revenues                                                        1,040                   -
                                                              ------------------    ------------------

Total revenues                                                         1,444,039             1,154,971
                                                              ------------------    ------------------


Expenses:
     Research & development                                            7,107,455             3,499,431
     General & administrative                                          1,895,838             1,305,890
                                                              ------------------    ------------------
                                                                       9,003,293             4,805,321

Investment income                                                        410,414               538,224
                                                              ------------------    ------------------

Net loss                                                      $      (7,148,840)    $      (3,112,126)
                                                              ==================    ==================

Net loss per share (basic and diluted)                        $           (0.55)    $          ( 0.25)
                                                              ==================    ==================

Weighted average number of shares
      outstanding (basic and diluted)                                 13,057,561            12,300,943
                                                              ==================    ==================
</TABLE>

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




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<PAGE>   5


                                 ENTREMED, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                            March 31,
                                                                               1999                        1998
                                                                         ------------------------------------------
<S>                                                                      <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                 $      (7,148,840)           $(3,112,126)
Adjustments to reconcile net loss to net cash
     used by operating activities:
     Depreciation                                                                   259,628                185,525
     Loss on disposal of furniture & equipment                                       65,674                    -
     Minority interest                                                                9,465                 14,385
     Changes in assets and liabilities:
        Accounts receivable                                                       (190,396)              (205,820)
        Interest receivable                                                         116,858                114,446
        Prepaid expenses and other                                                  102,127                 51,343
        Accounts payable                                                          1,232,054                327,655
        Accrued liabilities                                                       (201,792)              (346,982)
        Deferred revenue                                                        (1,092,501)            (1,092,499)
                                                                         ------------------      -----------------
      Net cash used by operating activities                                     (6,847,723)            (4,064,073)
                                                                         ------------------      -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
Maturities of short-term investments                                              2,845,556             23,100,974
Purchases of short-term investments                                                  -                (10,948,950)
Purchases of furniture & equipment                                                (933,060)              (145,283)
                                                                         ------------------      -----------------
      Net cash provided by investing activities                                   1,912,496             12,006,741
                                                                         ------------------      -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from option and warrant exercise                                           207,351                333,757
                                                                         ------------------      -----------------
      Net cash provided by financing activities                                     207,351                333,757
                                                                         ------------------      -----------------

Net increase (decrease) in cash and cash equivalents                            (4,727,876)              8,276,425
Cash and cash equivalents at beginning of period                                 30,818,689             18,232,491
                                                                         ------------------      -----------------
Cash and cash equivalents at end of period                               $       26,090,813      $      26,508,916
                                                                         ==================      =================
</TABLE>

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





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                                 ENTREMED, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            MARCH 31, 1999(UNAUDITED)



1.     BASIS OF PRESENTATION

       The accompanying unaudited consolidated financial information of
       EntreMed, Inc. (the "Company") includes the accounts of its 85% owned
       subsidiary, Cytokine Sciences, Inc. Cytokine Sciences was formed in June
       1996 and was capitalized with $250,000 by EntreMed 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.

       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 management, all
       adjustments (consisting of normal recurring accruals) considered
       necessary for a fair presentation have been included. Operating results
       for the three month period ended March 31, 1999 are not necessarily
       indicative of the results that may be expected for the year ending
       December 31, 1999. For further information, refer to the Company's
       audited financial statements and footnotes thereto included in the
       Company's Form 10-K for the year ended December 31, 1998.


2.     COMPREHENSIVE INCOME

       In June 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
       Income" ("Statement 130"), which establishes standards for reporting and
       display of comprehensive income and its components (revenues, expenses,
       gains and losses) in financial statements. Statement 130 is effective for
       fiscal years beginning after December 15, 1997. The Company adopted
       Statement 130 in 1998 and has not presented a statement of comprehensive
       income because the effect of the components of comprehensive income is
       not material to its consolidated financial statements.




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<PAGE>   7

3.     CONTINGENCIES

       The Company is 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 the Company breached an agreement between BMT and the
       Company 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 the Company breached its 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 the Company's motion for summary judgement and
       limiting the Company's damages to approximately $50,000 plus interest. 
       Thus, this litigation at the trial level has been concluded. The parties 
       have 30 days to file an appeal. In the event this matter is appealed, the
       Company can not predict the outcome of such appeal. However, the Company 
       intends to continue to contest any further action vigorously and believes
       that this proceeding will not have a material adverse effect on the 
       Company or on its financial condition, although there can be no assurance
       that this will be the case.




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

GENERAL

       Since its inception in September 1991, the Company has devoted
substantially all of its efforts and resources to sponsoring and conducting
research and development on its own behalf and through collaborations with
corporate partners and academic research and clinical institutions, and
establishing its facilities and hiring personnel. In December 1995, the Company
entered into a collaboration agreement with Bristol-Myers Squibb Company ("BMS")
in which BMS made an equity investment in the Company and agreed to pay certain
research and development fees and expenses, license fees, milestone payments,
and royalties on net sales, if any. In August 1997, the Company reacquired the
commercial rights to thalidomide from BMS. In December 1998, the Company 
sublicensed, on a worldwide basis, its intellectual property covering 
thalidomide to Celgene Corporation. On February 9, 1999, the Company and BMS
agreed to modify the research agreement whereby the Company assumed all
responsibility for preclinical and clinical work on the Angiostatin(R) protein. 
Through March 31, 1999, with the exception of license fees and research and 
development funding from BMS and royalty payments from Celgene's sales of 
thalidomide as well as certain research grants, the Company has not generated 
any revenue from operations. The Company anticipates its revenue sources for the
next several years to include royalty payments from Celgene's sales of 
thalidomide, research grants and future collaboration payments from 
collaborators under arrangements that may be entered into in the future. The 
timing and amounts of such revenues, if any, will likely fluctuate and depend 
upon the achievement of specified milestones, and results of operations for any 
period may be unrelated to the results of operations for any other period.

RESULTS OF OPERATIONS

Three Months Ended March 31, 1999 and March 31, 1998

       Revenues increased approximately 25% from approximately $1,155,000 for
the three months ended March 31, 1998 ("1998 Three Months") to approximately
$1,444,000 for the three months ended March 31, 1999 ("1999 Three Months"). This
increase is due to an increase in grant revenue earned under a Small Business
Innovative Research program from the National Institutes of Health awarded to
the Company in May 1997 and royalty income from Celgene Corporation on the sale
of thalidomide. The collaborative research and development fees relate to the
amortization over five years of a one-time payment from BMS, of $2,500,000
received in December 1995 and the amortization of semi-annual payments of
$1,835,000 under the BMS collaboration agreement. The license fee represents the
amortization over five years of a one-time $1,000,000 license fee received in
December 1995 under the BMS collaboration agreement.

       Research and development expenses increased by approximately 103% from
approximately $3,500,000 in the 1998 Three Months to approximately $7,107,000 in
the 1999 Three Months. Research and development expenditures include sponsored
research payments to academic collaborators, including a $1,000,000 payment to
Children's Hospital in both 1999 and 1998 Three Months and expenses related to
the Company's internal research programs. The increase in research and
development costs reflects increased efforts in the Company's internal and
sponsored research and product development programs related to its
antiangiogenesis technologies. Overall, research personnel increased from 40 as 
of March 31, 1998 to 45 as of March 31, 1999. Research and development



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<PAGE>   9

expenses are expected to continue to increase as the Company continues to expand
its research and development efforts.

       General and administrative expenses increased from approximately
$1,306,000 in the 1998 Three Months to approximately $1,896,000 in the 1999
Three Months, a 45% increase. The 1999 Three Months increase resulted primarily
from the increase in administrative costs associated with adding administrative
staff to support the research scientists and collaborative efforts the Company
is conducting, investigating potential strategic relationships, and obtaining
professional services. Investment income decreased approximately 24% from
approximately $538,000 in the 1998 Three Months to approximately $410,000 in the
1999 Three Months. This decrease in investment income is due to the reduction
of the Company's cash and short term investments as such working capital 
components are used to fund the Company's operations.

Liquidity and Capital Resources

       At March 31, 1999, the Company had cash and cash equivalents of
approximately $26,091,000 and short-term investments of approximately $1,507,000
with working capital of approximately $21,729,000, primarily representing the
net proceeds of the Company's private placements of equity securities and its
initial public offering, payments from BMS, including equity investments and
various grants.

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

       The Company is a party to sponsored research agreements and clinical
trials requiring the Company to fund an aggregate of approximately $851,000
through 2000 and license agreements requiring future milestone payments of up to
$3,735,000 and additional payments upon attainment of regulatory milestones.

       On February 9, 1999, the original Bristol-Myers Squibb Collaboration was
modified such that the final payment of $611,667 under the agreement is due on
June 5, 1999. As amended, Bristol-Myers Squibb has no further funding obligation
to the Company after August 9, 1999.


YEAR 2000 COMPLIANCE

       The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. As a result,
those computer programs having time-sensitive software would recognize a date
using "00" as the year 1900 rather than the year 2000.

       Based on a recent assessment, the Company determined that its accounting
software will need to be updated or modified. This should be accomplished
through updates from the software manufacturer. The Company does not expect any
material costs associated with this modification or any disruptions to its
primary operations.



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<PAGE>   10

       The Company has queried its significant supplier that does not share
information systems with the Company (external agent). To date, the Company is
not aware of any external agent with a Year 2000 issue that would materially
impact the Company's results of operations, liquidity, or capital resources.
However, the Company has no means of ensuring that external agents will be Year
2000 ready. The inability of external agents to complete the Year 2000
resolution process in a timely fashion could materially impact the Company. The
effect of non-compliance by external agents is not determinable.

       The Company anticipates no other Year 2000 problems which are reasonably
likely to have a material adverse effect on the Company's operations. There can
be no assurance, however, that such problems will not arise.

       To date, the Company has not incurred significant costs in connection
with the implementation of its Year 2000 Plan. The Company does not expect
future costs to be significant.

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

       Statements herein that are not descriptions of historical facts are
forward-looking and subject to risk and uncertainties. Actual results could
differ materially from those currently anticipated due to a number of factors,
including those set forth in the Company's Securities and Exchange Commission
filings under "Risk Factors", including risks relating to the early stage of
products under development; uncertainties relating to clinical trials'
dependence on third parties' future capital needs; and risks relating to the
commercialization, if any, of the Company's proposed products (such as
marketing, safety, regulatory, patent, product liability, supply, competition
and other risks).



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<PAGE>   11

PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

          This information as set forth in Note 4 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

          Not applicable.

Item 3.   DEFAULT UPON SENIOR SECURITIES

          Not applicable.

Item 4.   SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

          Not applicable

Item 5.   OTHER INFORMATION

          Not applicable.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)   The following exhibits are filed with this report:

          27.1           Financial Data Schedule

          (b)   A report on Form 8-K was filed on February 9, 1999 under
                Item 5 thereto reporting that the Company and Bristol-Myers
                Squibb Company agreed to modify the research agreement
                between the two companies whereby the Company assumed all
                responsibility for preclinical and clinical work on
                Angiostatin(R) protein.




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                                   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:  May 17, 1999                                  /s/ John W. Holaday
                                           -------------------------------------
                                                   John W. Holaday, Ph.D.
                                           President and Chief Executive Officer




Date:  May 17, 1999                                 /s/ R. Nelson Campbell
                                           ------------------------------------
                                                     R. Nelson Campbell
                                                   Chief Financial Officer





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