##### 



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, 2002

[  ]    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 DriveRockville, Maryland
(Address of principal executive offices)

20850
(Zip code)

(240) 864-2600
(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 11, 2002
|                            |  |                                 
|Common Stock $.01 Par Value |  | 21,927,860                      





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ENTREMED, INC.
Table of Contents

|                                                       |  |     
|------------------------------------------------------ |  | ----
|PART I. FINANCIAL INFORMATION                          |  | PAGE
|                                                       |  |     
|Item 1  Financial Statements                          |  |     
|Consolidated Balance Sheets                            |  |     
|as of September 30, 2002 and December 31, 2001         |  | 3   
|Consolidated Statements of                             |  |     
|Operations for the Three Months Ended                  |  |     
|September 30, 2002 and 2001, and the Nine Months Ended |  |     
|September 30, 2002 and 2001                            |  | 4   
|Consolidated Statements of Cash Flows for the          |  |     
|Nine Months Ended September 30, 2002 and 2001          |  | 5   
|Notes to Consolidated Financial                        |  |     
|Statements                                             |  | 6   
|Item 2  Managements Discussion and Analysis          |  |     
|of Financial Condition and Results of                  |  |     
|Operations                                             |  | 8   
|Item 3  Quantitative and Qualitative Disclosures      |  |     
|About Market Risk                                      |  | 12  
|Item 4  Disclosure Controls and Procedures            |  | 13  
|Item 5  Other Information                             |  | 13  
|Part II. OTHER INFORMATION                             |  |     
|Item 1 Legal Proceedings                              |  | 13  
|Item 2 Changes in Securities                          |  | 13  
|Item 3 Defaults upon Senior Securities                |  | 13  
|Item 4 Submission of Matters to Vote of               |  |     
|Security Holders                                       |  | 13  
|Item 5 Other Information                              |  | 13  
|Item 6 Exhibits and Reports on Form 8-K               |  | 13  
|SIGNATURES                                             |  | 14  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains and incorporates by reference certain forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. These statements may be identified by forward-looking words
such as may, will, expect, anticipate or similar words. These
forward-looking statements include, among others, statements regarding the
timing of our clinical trials and the expected increases in our expenses.

Our forward-looking statements are based on information available to us today,
and we will not update these statements. Our actual results may differ
significantly from those discussed in our forward-looking statements due to,
among other factors, our history of operating losses and anticipation of future
losses; the value of our common stock; uncertainties relating to our
technological approach; uncertainty of our product candidate development; our
need for additional capital and uncertainty of additional funding; our
dependence on collaborators and licensees; intense competition and rapid
technological change in the biopharmaceutical industry; uncertainties relating
to our patent and proprietary rights; uncertainties relating to clinical
trials; government regulation and uncertainties of obtaining regulatory
approval on a timely basis or at all; our dependence on key personnel, research
collaborators and scientific advisors; uncertainties relating to health care
reform measures and third-party reimbursement; risks associated with product
liability; and other factors discussed in our other filings with the Securities
and Exchange Commission.

2



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##### 



ENTREMED, INC.
CONSOLIDATED BALANCE SHEETS

|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |            |            | 
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | ------------ | ------------- | --------- | ------------ | ------------ | ---------- | ---------- | 
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              | September 30, |           | December 31,
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              | 2002          |           | 2001        
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |             
|ASSETS                               |                                                                                                                                                                                     | (unaudited)                                                                                                                                                                                              |              |              |               |          
|Current assets:                      |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |             
|Cash and cash equivalents            |                                                                                                                                                                                     | $                                                                                                                                                                                                        | 4,793,445    |              |               | $         | 41,386,300   |             
|                                     | Interest receivable                                                                                                                                                                 |                                                                                                                                                                                                          |              | 6,092        |               |           |              | 57,038       |           
|                                     | Accounts receivable                                                                                                                                                                 |                                                                                                                                                                                                          |              | 334,842      |               |           |              | 177,158      |           
|                                     | Prepaid expenses and other                                                                                                                                                          |                                                                                                                                                                                                          |              | 367,833      |               |           |              | 371,155      |           
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|Total current assets                 |                                                                                                                                                                                     |                                                                                                                                                                                                          | 5,502,212    |              |               |           | 41,991,651   |             
|Furniture and equipment, net         |                                                                                                                                                                                     |                                                                                                                                                                                                          | 3,476,541    |              |               |           | 4,186,079    |             
|Other assets                         |                                                                                                                                                                                     |                                                                                                                                                                                                          | 15,645       |              |               |           | 40,720       |             
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          | Total assets |              | $             | 8,994,398 |              |              | $          | 46,218,450 | 
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |             
|Current liabilities:                 |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |             
|                                     | Accounts payable                                                                                                                                                                    |                                                                                                                                                                                                          | $            | 8,790,054    |               |           | $            | 16,309,238   |           
|                                     | Accrued liabilities                                                                                                                                                                 |                                                                                                                                                                                                          |              | 1,030,712    |               |           |              | 2,050,822    |           
|                                     | Deferred revenue  current                                                                                                                                                          |                                                                                                                                                                                                          |              | 95,496       |               |           |              |             |           
|                                     | Current portion of notes payable                                                                                                                                                    |                                                                                                                                                                                                          |              | 189,775      |               |           |              | 1,005,727    |           
|                                     | Current portion of convertible debt                                                                                                                                                 |                                                                                                                                                                                                          |              | 1,111,770    |               |           |              |             |           
|                                     | Common stock repurchase liability                                                                                                                                                   |                                                                                                                                                                                                          |              | 3,362,921    |               |           |              | 1,367,914    |           
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|Total current liabilities            |                                                                                                                                                                                     |                                                                                                                                                                                                          | 14,580,728   |              |               |           | 20,733,701   |             
|Non current deferred revenue         |                                                                                                                                                                                     |                                                                                                                                                                                                          | 310,362      |              |               |           |             |             
|Other long term liabilities          |                                                                                                                                                                                     |                                                                                                                                                                                                          | 80,000       |              |               |           |             |             
|Long term convertible debt           |                                                                                                                                                                                     |                                                                                                                                                                                                          | 3,073,978    |              |               |           | 2,272,399    |             
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|                                     | Total liabilities                                                                                                                                                                   |                                                                                                                                                                                                          |              | 18,045,068   |               |           |              | 23,006,100   |           
|Minority interest                    |                                                                                                                                                                                     |                                                                                                                                                                                                          | 17,237       |              |               |           | 17,452       |             
|Stockholders equity:                |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |             
|                                     | Convertible preferred stock, $1.00 par and $1.50
Liquidation value: 5,000,000 shares authorized, none
issued or outstanding at September 30, 2002 (unaudited)
and December 31, 2001 |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|                                     | Common stock, $.01 par value:                                                                                                                                                       |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|                                     |                                                                                                                                                                                     | 90,000,000 shares authorized, 22,506,193 (unaudited)
shares issued and outstanding at September 30, 2002
and 35,000,000 shares authorized, 22,506,193 shares
issued and outstanding at December 31, 2001 |              |              | 225,062       |           |              |              | 217,773    |           
|                                     | Treasury stock, at cost: 583,333 shares held at
September 30, 2002 (unaudited) and December 31, 2001                                                                                |                                                                                                                                                                                                          |              | (7,666,746   | )             |           |              | (7,666,746   | )         
|                                     | Additional paid-in capital                                                                                                                                                          |                                                                                                                                                                                                          |              | 210,249,327  |               |           |              | 205,013,706  |           
|                                     | Deferred stock compensation                                                                                                                                                         |                                                                                                                                                                                                          |              | (61,846      | )             |           |              | (73,369      | )         
|                                     | Accumulated deficit                                                                                                                                                                 |                                                                                                                                                                                                          |              | (211,813,704 | )             |           |              | (174,296,466 | )         
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|Total stockholders equity           |                                                                                                                                                                                     |                                                                                                                                                                                                          | (9,067,907   | )            |               |           | 23,194,898   |             
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |           
|                                     |                                                                                                                                                                                     | Total liabilities and stockholders equity                                                                                                                                                               |              | $            | 8,994,398     |           |              | $            | 46,218,450 |           
|                                     |                                                                                                                                                                                     |                                                                                                                                                                                                          |              |              |               |           |              |              |           

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

3



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##### 



ENTREMED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |            | 
|------------------------------------------------------- | -------------------------- | - | ------------------ | --------- | ----------------- | - | ---------- | ---------- | ---- | - | ----------- | ---------- |  | - | ----------- | ---------- | 
|                                                        |                            |   | Three Months Ended |           | Nine Months Ended
|                                                        |                            |   | September 30,      |           | September 30,    
|                                                        |                            |   |                    |           |                  
|                                                        |                            |   | 2002               |           | 2001              |   | 2002       |            | 2001
|                                                        |                            |   |                    |           |                   |   |            |            |     
|Revenues:                                               |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |           
|                                                        | Grant                      |   | $                  |          |                   |   | $          | 89,299     |      |   | $           | 34,830     |  |   | $           | 276,925    | 
|                                                        | Collaborative R&D          |   |                    | 319,058   |                   |   |            |           |      |   |             | 551,508    |  |   |             |           | 
|                                                        | Licensing                  |   |                    | 23,874    |                   |   |            |           |      |   |             | 71,622     |  |   |             |           | 
|                                                        | Royalty                    |   |                    |          |                   |   |            | 1,689      |      |   |             | 1,793      |  |   |             | 1,441,511  | 
|                                                        | Other                      |   |                    | 2,637     |                   |   |            |           |      |   |             | 54,916     |  |   |             | 14,027     | 
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |            | 
|Total revenues                                          |                            |   | 345,569            |           |                   |   | 90,988     |            |      |   | 714,669     |            |  |   | 1,732,463   |           
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |            | 
|Expenses:                                               |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |           
|                                                        | Research and development   |   |                    | 8,870,922 |                   |   |            | 12,731,159 |      |   |             | 27,041,496 |  |   |             | 33,323,287 | 
|                                                        | General and administrative |   |                    | 3,170,141 |                   |   |            | 3,898,658  |      |   |             | 11,199,493 |  |   |             | 11,057,642 | 
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |            | 
|                                                        |                            |   | 12,041,063         |           |                   |   | 16,629,817 |            |      |   | 38,240,989  |            |  |   | 44,380,929  |           
|Gain on sale of royalty interest                        |                            |   |                   |           |                   |   | 22,410,182 |            |      |   |            |            |  |   | 22,410,182  |           
|Interest expense                                        |                            |   | (97,760            | )         |                   |   | (89,297    | )          |      |   | (296,254    | )          |  |   | (233,027    | )         
|Investment income                                       |                            |   | 41,624             |           |                   |   | 383,206    |            |      |   | 305,336     |            |  |   | 1,165,355   |           
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |           
|Net income (loss)                                       |                            | $ | (11,751,630        | )         |                   | $ | 6,165,262  |            |      | $ | (37,517,238 | )          |  | $ | (19,305,956 | )         
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |           
|Net income (loss) per share
(basic)                     |                            | $ | (0.54              | )         |                   | $ | 0.34       |            |      | $ | (1.72       | )          |  | $ | (1.08       | )         
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |           
|Weighted average number of shares
outstanding (basic)   |                            |   | 21,922,860         |           |                   |   | 18,272,370 |            |      |   | 21,874,803  |            |  |   | 17,893,661  |           
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |           
|Net income (loss) per share
(diluted)                   |                            | $ | (0.54              | )         |                   | $ | 0.33       |            |      | $ | (1.72       | )          |  | $ | (1.08       | )         
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |           
|Weighted average number of shares
outstanding (diluted) |                            |   | 21,922,860         |           |                   |   | 18,822,750 |            |      |   | 21,874,803  |            |  |   | 17,893,661  |           
|                                                        |                            |   |                    |           |                   |   |            |            |      |   |             |            |  |   |             |           

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

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

|                                                                        |                                            |                                                     |                             |           |                   |            |             |             |             |            |  
|----------------------------------------------------------------------- | ------------------------------------------ | --------------------------------------------------- | --------------------------- | --------- | ----------------- | ---------- | ----------- | ----------- | ----------- | ---------- | -
|
|                                                                        |                                            |                                                     |                             |           | Nine Months Ended
|                                                                        |                                            |                                                     |                             |           | September 30,    
|                                                                        |                                            |                                                     |                             |           | 2002              |            | 2001       
|                                                                        |                                            |                                                     |                             |           |                   |            |            
|Cash flows from operating activities                                    |                                            |                                                     |                             |           |                   |            |             |            
|Net loss                                                                |                                            | $                                                   | (37,517,238                 | )         |                   | $          | (19,305,956 | )          
|Adjustments to reconcile net loss to net cash                           |                                            |                                                     |                             |           |                   |            |             |            
|                                                                        | used in operating activities:              |                                                     |                             |           |                   |            |             |             |            
|                                                                        | Depreciation                               |                                                     |                             | 1,125,048 |                   |            |             | 1,016,046   |            
|                                                                        | Recognition of non-cash stock compensation |                                                     |                             | 44,336    |                   |            |             | 44,820      |            
|                                                                        | Non-cash interest expense                  |                                                     |                             | 243,411   |                   |            |             |            |            
|                                                                        | Loss on common stock repurchase liability  |                                                     |                             | 1,995,007 |                   |            |             |            |            
|                                                                        | Gain on sale of royalty interest           |                                                     |                             |          |                   |            |             | (22,410,182 | )          
|                                                                        | Minority interest                          |                                                     |                             | (215      | )                 |            |             | (256        | )          
|                                                                        | Changes in assets and liabilities:         |                                                     |                             |           |                   |            |             |             |            
|                                                                        |                                            |                                                     | Accounts receivable         |           |                   | (157,684   | )           |             |             | 1,407,367  |  
|                                                                        |                                            |                                                     | Interest receivable         |           |                   | 50,946     |             |             |             | (85,074    | )
|                                                                        |                                            |                                                     | Prepaid expenses and other  |           |                   | 28,397     |             |             |             | (2,747,764 | )
|                                                                        |                                            |                                                     | Accounts payable            |           |                   | (7,519,184 | )           |             |             | 5,659,383  |  
|                                                                        |                                            |                                                     | Accrued liabilities         |           |                   | (1,020,110 | )           |             |             | 890,807    |  
|                                                                        |                                            |                                                     | Other long term liabilities |           |                   | 80,000     |             |             |             |           |  
|                                                                        |                                            |                                                     | Deferred revenue            |           |                   | 405,858    |             |             |             |           |  
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            
|                                                                        |                                            | Net cash used in operating activities               |                             |           | (42,241,428       | )          |             |             | (35,530,809 | )         
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            
|Cash flows from investing activities                                    |                                            |                                                     |                             |           |                   |            |             |            
|Proceeds from sale of royalty interest, net                             |                                            |                                                     |                            |           |                   |            | 22,410,182  |            
|Purchases of furniture and equipment                                    |                                            |                                                     | (415,510                    | )         |                   |            | (802,765    | )          
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            
|                                                                        |                                            | Net cash (used in) provided by investing activities |                             |           | (415,510          | )          |             |             | 21,607,417  |           
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            
|Cash flows from financing activities                                    |                                            |                                                     |                             |           |                   |            |             |            
|Proceeds from option and warrant exercises and the sale of common stock |                                            |                                                     | 4,878,777                   |           |                   |            | 26,149,858  |            
|Proceeds from the sale of warrants                                      |                                            |                                                     | 322,520                     |           |                   |            |            |            
|Proceeds from issuance of convertible debt                              |                                            |                                                     | 1,678,738                   |           |                   |            | 2,097,938   |            
|Payment of note payable                                                 |                                            |                                                     | (815,952                    | )         |                   |            | (738,412    | )          
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            
|                                                                        |                                            | Net cash provided by financing activities           |                             |           | 6,064,083         |            |             |             | 27,509,384  |           
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            
|Net increase (decrease) in cash and cash equivalents                    |                                            |                                                     | (36,592,855                 | )         |                   |            | 13,585,992  |            
|Cash and cash equivalents at beginning of period                        |                                            |                                                     | 41,386,300                  |           |                   |            | 24,503,886  |            
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            
|Cash and cash equivalents at end of period                              |                                            | $                                                   | 4,793,445                   |           |                   | $          | 38,089,878  |            
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            
|Cash paid for interest                                                  |                                            | $                                                   | 52,844                      |           |                   | $          | 126,280     |            
|                                                                        |                                            |                                                     |                             |           |                   |            |             |            

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

5



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ENTREMED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002 (unaudited)

1. BASIS OF PRESENTATION

Our accompanying unaudited consolidated financial information includes the
accounts of 85% owned subsidiary, Cytokine Sciences, Inc. and 96% owned
subsidiary MaxCyte, Inc. MaxCyte was formed in July 1998 as a wholly owned
subsidiary and on April 1, 2000 was capitalized with $40,000 in cash including
$1,000 from a MaxCyte officer. In addition, EntreMed, Inc. (the Company)
agreed to contribute certain technology and provide additional funding in
exchange for preferred stock. The Company provides facility and administrative
services for which MaxCyte is obligated to repay us. All intercompany balances
and transactions have been eliminated in consolidation.

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,
2002 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2002. For further information, refer to our audited
consolidated financial statements and footnotes thereto included in our Form
10-K for the year ended December 31, 2001.

2. CONTINGENCIES

The law suit between Donald J. Davidson and Abbott Laboratories and Yihai
Cao, Judah Judah Folkman, Michael S. OReilly, The Childrens Medical Center
Corporation and EntreMed, Inc., U.S. District Court for the District of
Massachusetts, Case No. 00-CV-11046-GAO has been settled. The terms of the
settlement are confidential, but will not have a material adverse impact on the Companys financial condition.

3. ALLERGAN LICENSING AGREEMENT

Under a licensing agreement effective as of January 18, 2002, EntreMed,
Inc. (the Company) entered into a five-year strategic alliance with Allergan
Inc. to develop and commercialize small molecule angiogenic inhibitors for
treatment and prevention of diseases and conditions of the eye. Under the terms
of a licensing agreement, Allergan will receive exclusive worldwide license to
commercialize Panzem. In return, the Company may receive up to $41 million in
the form of an equity investment, cash payments, and milestone payments.

In connection with the licensing agreement, Allergan purchased 728,863
Units from the Company at a purchase price of $6.86 per Unit. Each Unit
consists of one share of Common Stock and a warrant to purchase 0.15 shares of
Common Stock. The warrants have a term of five years and an exercise price per
share equal to $12.15 per share. Allergan will have certain registration rights
beginning one year after the closing of the transaction.

6



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##### 



4. MANAGEMENTS PLANS

To date, we have been engaged primarily in research and development
activities. As a result we have experienced and expect to continue to incur
operating losses for 2002 and the foreseeable future before we commercialize
any products. In addition, under the terms of certain license agreements, we
must be diligent in bringing potential products to market and would make future
milestone payments of up to $4,110,000. If we fail to comply with the
milestones or fail to make any required sponsored research or milestone
payment, we could face the termination of the relevant sponsored research or
license agreement.

At September 30, 2002, we had cash and cash equivalents of approximately
$4,793,000, as compared to approximately $41,386,000 at December 31, 2001. The
decrease in cash and cash equivalents primarily reflects the pay down of
approximately $7.5 million of accounts payable (including accrued manufacturing
expenses of approximately $13.9 million relating to our fourth quarter 2001
manufacturing campaign) and payment of other accrued liabilities of
approximately $1.0 million. Net cash provided from financing activities was
approximately $6,064,000 for the nine months ended September 30, 2002. At
September 30, 2002, we have negative working capital balance of approximately
$9,078,000 reflecting the decrease in our cash and cash equivalents, as well as
a current liability of approximately $3,363,000 relating to our stock
repurchase obligations to BMS.

In the absence of additional financing, based on expense reduction
measures coupled with the deferral of payments to certain vendors, we believe
that our available cash reserves will be sufficient to fund our operations
until approximately the end of 2002. Management continues to seek measures to
reduce cash used in operating activities through a realignment of programs and
workforce reductions and is exploring sources of additional financing.

In August and September 2002, we announced a realignment of research and
development programs to reduce expenses and focus resources on the development
of our clinical candidates. In conjunction with this plan, we reduced our
headcount by approximately 50% and eliminated funding of research
collaborations that do not support our clinical programs. We have recorded
charges of approximately $700,000 relating to severance and other termination
costs in the third quarter of this year. We also have announced our intention
to maintain our clinical programs for Endostatin and Angiostatin although we do
not plan to initiate new clinical trials. We believe that these actions,
coupled with decreased manufacturing activity, will result in a significant
reduction in operating expenses beginning in the fourth quarter.

We intend to continue to pursue strategic relationships to provide
resources for the further development of our future product candidates. There
can be no assurance, however, that these discussions will result in
relationships or additional funding. In addition, we will continue to seek
capital through the public or private sale of securities. If we are successful
in raising additional funds through the issuance of equity securities,
stockholders likely will experience substantial dilution, or the equity
securities may have rights, preferences or privileges senior to those of the
holders of our common stock. If we raise funds through the issuance of debt
securities, those securities would have rights, preferences and privileges
senior to those of our common stock.

In addition to pursuing sources of additional capital, we intend to take
one or more of the following actions:



| |  |  | seek to renegotiate the terms of our current liabilities and
commitments;                                                    
| | - |  | -----------------------------------------------------------------------------------------------------------------------------
|
| |  |  | delay, reduce the scope of, or eliminate one or more of our product
research and development programs;                       
|
| |  |  | reduce or eliminate our sponsored research programs, which may result
in the forfeiture of our rights to future technologies;

7



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##### 





| |  |  | obtain funds through licenses or arrangements with collaborative
partners or others that may require us to relinquish rights to certain
of our technologies, product candidates or products that we would
otherwise seek to develop or commercialize on our own.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If we are unsuccessful in our efforts, we will have to cease and/or
curtail our operations or seek protection under U.S. bankruptcy laws.

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

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,
2002, all of our revenues have been generated from license fees, research and
development funding, royalty payments, the sale of royalty rights, and certain
research grants; we have not generated any revenue from direct product sales.
We anticipate our primary revenue sources for the next few years to include
research grants and collaboration payments under current or future
arrangements. 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.

CRITICAL ACCOUNTING POLICIES AND THE USE OF ESTIMATES

The preparation of our financial statements in conformity with accounting
principles generally accepted in the U.S. requires management to make estimates
and assumptions that affect the amounts reported in our financial statements
and accompanying notes. Actual results could differ materially from those
estimates. The items in our financial statements requiring significant
estimates and judgments are as follows:



| |  |  | Contract and upfront license payments where we have continued
involvement through a research or development collaboration are
recognized net of royalties ratably over the contract period.                                                                                                                                                                                                            
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Royalties from licenses are based on third-party sales and
recorded as earned in accordance with contract terms, when third-party
results are reliably measured and collectibility is reasonably assured.
The majority of our royalty income is from Celgene on the sale of
THALOMID®.                                                                                                                 
|
| |  |  | Malaria Grant Revenue  The Company receives government grants
for the development of potential malaria vaccines. Grants are funded in
specific amounts based on funding requests submitted to the grantor.
Grant revenues are recognized and realized at the time that research and
development activities are performed.                                                                             
|
| |  |  | Research and development expenses consist primarily of
compensation and other expenses related to research and development
personnel, research collaborations, costs associated with pre-clinical
testing and clinical trials of our product candidates, including the
costs of manufacturing the product candidates, and facilities expenses.
Research and development costs are expensed as incurred.

RESULTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2001 and September 30, 2002.

Revenues. Revenues increased approximately 380% in the three month period
ending September 30, 2002 to approximately $346,000 from $91,000 in the
comparable 2001 period. For the nine month period revenues decreased
approximately 59% to $715,000 from $1,732,000. Royalty revenue decreased
approximately 99% in the 2002 periods reflecting the absence of royalty income
resulting from the sale of our right to receive royalty income from Celgenes
sales of thalidomide (THALOMID®). In accordance with

8



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##### 



our 1998 collaborative sublicensing agreement for thalidomide with
Celgene, we recognized net royalty revenues from Celgenes sales of thalidomide
(THALOMID®) of approximately $1,435,000 for the nine month period ending
September 30, 2001. For the nine months ended September 30, 2002 and 2001 grant
revenues include funds received from a Small Business Innovative Research, or
SBIR, program of the National Institutes of Health of approximately $35,000 and
$277,000 in 2002 and 2001, respectively. Included in the three and nine month
periods ending September 30, 2002 are revenues of approximately $319,000 and
$552,000 respectively resulting from externally funded research collaborations.
The majority of these revenues result from performance as a subcontractor
under an NIH sponsored Malaria Vaccine program.

Research and Development Expenses. From inception through September 30,
2002 we have incurred research and development expenses of approximately
$203,772,000. Included in this amount are the expenses related to our three
lead product candidates, Panzem, Endostatin and Angiostatin. At September
30, 2002 the accumulated expenses for each of these development projects are
$17,443,000, $69,255,000 and $34,134,000 respectively. Project expenses for
Panzem of $2,779,000, Endostatin of $8,011,000 and Angiostatin of
$4,297,000 are reflected in our 2002 R&D expenses for the nine month period
ending September 30, 2002 of approximately $27,041,000. Research and
Development expenses for the comparable 2001 period were approximately
$33,323,000. Research and Development expenses for the three month period
ending September 30, 2002 were approximately $8,871,000, a decrease of 30% from
the comparable 2001 period. The decreases primarily result from a lower level
of bulk manufacturing of clinical trial material. Project costs for Panzem,
Endostatin and Angiostatin were $5,388,000, $12,388,000 and $3,415,000
respectively for the nine month period ending September 30, 2001. In addition
to the accumulated expenses attributable to our three lead product candidates,
beginning in 1993 we have sponsored several research programs at Childrens
Hospital, Boston in an aggregate of $18,050,000 and our subsidiary MaxCyte has
incurred approximately $5,405,000 in research and development costs. Reflected
in our research and development expenses are sponsored research payments to
Childrens Hospital of $1,000,000 in the nine month period ended September 30,
2002 and $1,500,000 for the comparable period in 2001. MaxCytes research and
development costs for the nine month periods ending September 30, 2002 and
September 30, 2001 were $1,581,000 and $1,794,000, respectively. The balance
of our accumulated research and development expenses are attributable to
discovery research and preclinical development of additional product candidates
and costs associated with the management of research and development operations
and facilities.

The amounts of expenditures that will be necessary to execute our business
plan are subject to numerous uncertainties, which may adversely affect our
liquidity and capital resources. As of September 30, 2002, three of our
proprietary product candidates, Panzem, Endostatin and Angiostatin, were in
the Phase II stage of clinical trials. Completion of clinical trials may take
several years or more, but the length of time generally varies substantially
according to the type, complexity, novelty and intended use of a product
candidate. In light of our current financial condition, we have decided that
we will not initiate any new clinical trials for Endostatin and Angiostatin.
However, we intend to maintain the current Phase II trials from our current
inventory of these product candidates.

Research and development expenses consist primarily of compensation and
other expenses related to research and development personnel, research
collaborations, costs associated with pre-clinical testing and clinical trials
of our product candidates, including the costs of manufacturing the product
candidates, and facilities expenses. Research and development expenses for the
nine months ended September 30, 2002 decreased to approximately $27,041,000 in
2002 from $33,323,000 for the comparable period in 2001. The decrease in
overall research and development costs reflects a lower manufacturing level of
clinical trial material in 2002. Other cost components of the decrease are
associated with the following:



| |  |  | Increased personnelPersonnel costs increased to $6,506,000 for the
nine month period ended September 30, 2002 from $6,237,000 in 2001.
Staffing increased 10% in 2002 from 2001. Additions to research and
development have been necessary to support a higher level of product
development activities, including, process sciences, manufacturing and
increased clinical activities. Included in the increases are salary and
related fringe benefits, recruiting and relocation costs. In August
and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9



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| |   |  | September 2002, we reduced our headcount by approximately 50% and expect
personnel costs to be reduced in future periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Collaborative Research Agreements We have made payments to our
collaborators of $3,272,000 and $2,470,000 for the nine months ending
September 30, 2002 and 2001 respectively. Sponsored research payments to
academic collaborators include payments to Childrens Hospital, Boston
of $1,000,000 in 2002 and $1,500,000 in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  |  | Clinical Trial CostsClinical costs decreased to $2,205000 in the
nine months ending September 30, 2002 from $2,441,000 in the period
ending September 30, 2001. The decrease reflects the completion of some
Phase I and the transition into Phase II clinical trials for our three
lead product candidates. Costs of such trials include the clinical
investigator site fees, monitoring costs and data management costs.
Contracted regulatory support costs decreased in 2002 to $688,000 from
$900,000 in 2001. In addition, we contribute clinical trial product
material under our CRADA with the NCI who is conducting trials
collaboratively with us on Panzem.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  |  | Contract Manufacturing Costs The costs of manufacturing the
material used in clinical trials for our three lead product candidates
is reflected in contract manufacturing. These costs include bulk
manufacturing, encapsulation and fill finish services and product
release costs. Contract manufacturing costs decreased to $8,094,000 in
2002 from $14,592,000 in 2001. The 2002 decrease resulted primarily from
the timing of manufacturing activities. In 2001 we manufactured bulk
Endostatin and Angiostatin to buildup a supply of material for our
ongoing Phase I and the initiation of Phase II clinical trials. This
buildup began in the three month period ended June 30, 2001 and was be
completed in the third quarter of 2002. We currently have sufficient
bulk material to supply all current and planned Endostatin and
Angiostatin clinical trials through 2003. The majority of the cost of
bulk manufacturing activities was recorded in 2001 with the liability of
approximately $13,900,000 being paid during the first nine months of
2002. Although the majority of the bulk manufacturing costs were
recognized in 2001 and we will reflect lower overall manufacturing costs
in 2002, we will continue to incur manufacturing costs for Panzem.

General and administrative expenses decreased to $3,170,000 in the three
month period ending September 30, 2002 from $3,899,000 in the comparable 2001
period. For the nine months ended September 30, 2002 general and administrative
expenses increased to $11,199,000 from $11,058,000 in 2001. The 2002 period
increase reflects additional legal fees associated with the Abbott litigation
and a charge of $1,995,000 related to the potential repurchase of our common
stock from Bristol-Myers Squibb (BMS) and the related guaranteed minimum
purchase price. These increases are partially offset by decreased personnel
costs resulting from a smaller corporate staff versus the comparable 2001
period and the reversal of accrued compensation charges.

Interest expense. For the nine month period ending September 30, 2002
interest expense increased 27% to approximately $296,000 from $233,000 in the
comparable period in 2001. The 2002 increase reflects the accrual of interest
relating to MaxCytes issuance of additional convertible promissory notes in
2002.

Investment income. Investment income decreased by approximately 74% in
2002 to approximately $305,000 from $1,165,000 as a result of continued low
investment yields and lower balances in interest bearing cash accounts.

LIQUIDITY AND CAPITAL RESOURCES

To date, we have been engaged primarily in research and development
activities. As a result we have experienced and expect to continue to incur
operating losses for 2002 and the foreseeable future before we commercialize
any products. In addition, under the terms of certain license agreements, we
must be diligent in bringing potential products to market and would make future
milestone payments of up to $4,110,000. If we fail to comply with the
milestones or fail to make any required sponsored research or milestone
payment, we could face the termination of the relevant sponsored research or
license agreement.

10



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##### 



At September 30, 2002, we had cash and cash equivalents of approximately
$4,793,000, as compared to approximately $41,386,000 at December 31, 2001. The
decrease in cash and cash equivalents primarily reflects the pay down of
approximately $7.5 million of accounts payable (including accrued manufacturing
expenses of approximately $13.9 million relating to our fourth quarter 2001
manufacturing campaign) and payment of other accrued liabilities of
approximately $1.0 million. Net cash provided from financing activities was
approximately $6,064,000 for the nine months ended September 30, 2002. At
September 30, 2002, we have negative working capital balance of approximately
$9,078,000 reflecting the decrease in our cash and cash equivalents, as well as
a current liability of approximately $3,363,000 relating to our stock
repurchase obligations to BMS discussed below.

The table below sets forth our contractual obligations at September 30, 2002.

|                                  |  |       |            |             |  |                        |           |          |  |               |           |  |  |  |           |  |  |  |           | 
|--------------------------------- |  | ----- | ---------- | ----------- |  | ---------------------- | --------- | -------- |  | ------------- | --------- |  |  |  | --------- |  |  |  | --------- | 
|                                 
|CONTRACTUAL OBLIGATIONS           |  |       |            |             |  | PAYMENTS DUE BY PERIOD
|                                 
|                                  |  | Total |            | Next twelve |  | 1-3years               |           | 4-5years |  | After 5 years
|                                  |  |       |            | months      |  |                        |           |          |  |              
|Current portion of note payable   |  | $     | 190,000    |             |  |                        | 190,000   |          |  |               |           |  |  |  |           |  |  |  |           | 
|Convertible debt  Maxcyte*       |  |       | 4,186,000  |             |  |                        | 1,112,000 |          |  |               | 3,074,000 |  |  |  |           |  |  |  |           | 
|Common Stock repurchase
liability |  |       | 3,363,000  |             |  |                        | 3.363,000 |          |  |               |           |  |  |  |           |  |  |  |           | 
|Operating Leases                  |  |       | 6,289,000  |             |  |                        | 1,001,000 |          |  |               | 1,922,000 |  |  |  | 1,939,000 |  |  |  | 1,427,000 | 
|Clinical Trial Contracts          |  |       | 1,156,000  |             |  |                        | 1,156,000 |          |  |               |           |  |  |  |           |  |  |  |           | 
|Collaborative Research Contracts  |  |       | 100,000    |             |  |                        | 100,000   |          |  |               |           |  |  |  |           |  |  |  |           | 
|Contract Manufacturing            |  |       | 2,800,000  |             |  |                        | 2,800,000 |          |  |               |           |  |  |  |           |  |  |  |           | 
|Total Contractual Obligations     |  | $     | 18,084,000 |             |  |                        | 9,722,000 |          |  |               | 4,996,000 |  |  |  | 1,939,000 |  |  |  | 1,427,000 | 

*MaxCyte is a majority owned subsidiary of EntreMed, Inc. and as such
these convertible debts are reflected on the consolidated financial statements.
Repayment of these convertible debts is the sole responsibility of MaxCyte.

In addition to the items contained on the above table our balance sheet
also reflects accounts payable and other current liabilities of approximately
$9,821,000. In the absence of additional financing, based on expense reduction
measures coupled with the deferral of payments to certain vendors, we believe
that our available cash reserves will be sufficient to fund our operations
until approximately the end of 2002. Management continues to seek measures to
reduce cash used in operating activities through a realignment of programs and
workforce reductions and is exploring sources of additional financing.

In August and September 2002, we announced a realignment of research and
development programs to reduce expenses and focus resources on the development
of our clinical candidates. In conjunction with this plan, we reduced our
headcount by approximately 50% and eliminated funding of research
collaborations that do not support our clinical programs. We have recorded
charges of approximately $700,000 relating to severance and other termination
costs in the third quarter of this year. We also have announced our intention
to maintain our current clinical programs for Endostatin and Angiostatin although we do
not plan to initiate new clinical trials. We believe that these actions,
coupled with decreased manufacturing activity, will result in a significant
reduction in operating expenses beginning in the fourth quarter.

We intend to continue to pursue strategic relationships to provide
resources for the further development of our future product candidates. There
can be no assurance, however, that these discussions will result in
relationships or additional funding. In addition, we will continue to seek
capital through the public or private sale of securities. If we are successful
in raising additional funds through the issuance of equity securities,
stockholders likely will experience substantial dilution, or the equity
securities may have rights, preferences or privileges senior to those of the
holders of our common stock. If we raise funds through the issuance of debt
securities, those securities would have rights, preferences and privileges
senior to those of our common stock.

In addition to pursuing sources of additional capital, we intend to take
one or more of the following actions:



| |  |  | seek to renegotiate the terms of our current liabilities and
commitments;
| | - |  | -------------------------------------------------------------------------

11



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##### 





| |  |  | delay, reduce the scope of, or eliminate one or more of our product
research and development programs;                                                                                                                                                          
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | reduce or eliminate our sponsored research programs, which may result
in the forfeiture of our rights to future technologies;                                                                                                                                   
|
| |  |  | obtain funds through licenses or arrangements with collaborative
partners or others that may require us to relinquish rights to certain
of our technologies, product candidates or products that we would
otherwise seek to develop or commercialize on our own.

If we are unsuccessful in our efforts, we will have to cease and/or
curtail our operations or seek protection under U.S. bankruptcy laws.

Our cash and working capital balances represent the net proceeds of our
private placements of equity securities and our public offerings, payments from
BMS which included equity investments, royalties received from Celgene,
proceeds from secured borrowing, the sale of royalty rights and various grants.

On March 15, 2001, our subsidiary MaxCyte received net proceeds of
approximately $2,185,000 from the issuance of convertible promissory notes with
a maturity date of December 31, 2003. The notes accrue simple interest at 8%
per annum, payable upon maturity. The notes, plus the accrued interest, are
convertible to common stock at any time at the option of the holder and are
subject to a mandatory conversion to Series B Convertible Preferred Stock upon
the occurrence of certain specified events. Holders of the promissory notes
also received warrants to purchase a total of 10,925 shares of common stock of
EntreMed. In February 2002, MaxCyte received additional proceeds of $550,000
and issued additional convertible promissory notes with a maturity date of
December 31, 2003. Holders of the promissory notes also received warrants to
purchase a total of 2,750 shares of common stock of EntreMed. MaxCyte received
proceeds of $1,100,000 in May 2002 and issued convertible promissory notes with
a maturity date of July 23, 2003. Holders of the May 2002 promissory notes
also received warrants to purchase additional shares of MaxCyte common stock.
MaxCyte is a majority owned subsidiary of EntreMed, Inc. and as such these
convertible debts are reflected on the consolidated financial statements.
Repayment of these convertible debts is the sole responsibility of MaxCyte.

In December 2000 and 1999, we exercised our option to repurchase shares of
our common stock from BMS for $13.143 per share. Shares repurchased totaled
291,666 and 291,667 for repurchase prices of $3,833,367 and $3,833,379 in 2000
and 1999 respectively. Shares repurchased from BMS are accounted for as
treasury stock. In December 2001, BMS agreed not to sell the remaining 291,666
shares until December 1, 2002 unless the trading price of our stock exceeds a
specified threshold. In addition, BMS granted us a right of first offer and
extended our repurchase right until that time. We also may share some of the
proceeds from sales of the remaining shares with BMS. We guaranteed to either
repurchase the shares from BMS for $13.143 or pay to BMS the difference between
the per share sales price and $13.143 if the shares are sold at less than
$13.143 during the 10 days after December 1, 2002.

INFLATION AND INTEREST RATE CHANGES

Management does not believe that our working capital needs are sensitive
to inflation and changes in interest rates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of our investment activities is to preserve our
capital until it is required to fund operations while at the same time
maximizing the income we receive from our investments without incurring
investment market volatility risk. Our investment income is sensitive to the
general level of U.S. interest rates. In this regard, changes in the U.S.
interest rates affect the interest earned our cash and cash equivalents. Due
to the short term nature of our cash and cash equivalent holdings, a 10%
movement in market interest rates would not materially impact on the total fair
market value of our portfolio as of September 30, 2002.

12



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ITEM 4. DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Companys
Chairman, President and Chief Operating Officer, and Chief Accounting Officer
(its principal executive officers and principal financial officer), management
has evaluated the effectiveness of the design and operation of the Companys
disclosure controls and procedures within 90 days of the filing date of this
quarterly report. Based on that evaluation, the Chairman, President and Chief
Operating Officer, and Chief Accounting Officer have concluded that these
disclosure controls and procedures are effective. There were no significant
changes in our internal controls or in other factors that could significantly
affect these controls subsequent to the date of the evaluation

ITEM 5. OTHER INFORMATION

On October 31, 2002 we were notified by the Nasdaq Listing Qualifications
Department that our common stock is subject to delisting from the Nasdaq
National Market because it is not in compliance with Marketplace Rule
4450(b)(1)(A), which requires that EntreMeds common stock have a market value
of listed securities of $50 million. We have appealed the staffs
determination and a hearing before a Nasdaq Listing Qualifications Panel has
been scheduled for December 12, 2002. Under Nasdaq Marketplace Rules, the
hearing request will automatically stay the delisting pending the Panels
review and determination. Until the Panels ultimate determination, our common
stock will continue to be traded on the Nasdaq National Market. There can be
no assurance that the Nasdaq Panel will grant our request for continued listing
on the National Market. If we are unable to comply with all Nasdaq National
Market listing criteria, we intend to apply to transfer our common stock to the
Nasdaq SmallCap Market where shares of our common stock would continue to be
traded under their existing ticker symbol, ENMD.

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 VOTE OF SECURITY HOLDERS

Not applicable.

Item 5. OTHER INFORMATION

Not applicable.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits



| |                                              
| | ---------------------------------------------
| | 99.1 Certification of Chief Executive Officer
|
| | 99.2 Certification of Controller             

(b)  Reports on Form 8-K



| |     
| | ----
| | None

13



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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: November 14, 2002 |  | /s/ John W. Holaday                                         
|                        |  |                                                             
|                        |  | John W. Holaday, Ph.D.
Chairman and Chief Scientific Officer
|                       
|                       
|Date: November 14, 2002 |  | /s/ Neil J. Campbell                                        
|                        |  |                                                             
|                        |  | Neil J. Campbell
President and Chief Operating Officer      
|                       
|                       
|Date: November 14, 2002 |  | /s/ Dane R. Saglio                                          
|                        |  |                                                             
|                        |  | Dane R. Saglio
Chief Accounting Officer                     

14



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Certifications

I, John W. Holaday, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of EntreMed, Inc.;

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.

Date: November 14, 2002



|                                                         
|---------------------------------------------------------
|/s/ John W. Holaday, Ph.D.John W. Holaday, Ph.D.
Chairman

15



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##### 



I, Neil Campbell, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of EntreMed, Inc.;

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.

Date: November 14, 2002



|                                                                          
|--------------------------------------------------------------------------
|/s/ Neil J. CampbellNeil J. Campbell
Chief Operating Officer and
President

16



---



##### 



I, Dane R. Saglio, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of EntreMed, Inc.;

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.

Date: November 14, 2002



|                                                                           
|---------------------------------------------------------------------------
|/s/ Dane R. SaglioDane R. Saglio
Principal Financial and Accounting
Officer

17