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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K
                /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                      For the Year Ended December 31, 2001
              / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

          For the Transition Period From ____________ to _____________

                           Commission File No. 0-23553

                           PHOTOGEN TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its Charter)

                 NEVADA                              36-4010347
      (State or other jurisdiction of             (I.R.S. Employer
       incorporation or organization)             Identification No.)


                             140 UNION SQUARE DRIVE
                               NEW HOPE, PA 18938
               (Address of principal executive offices) (Zip Code)

                                 (215) 862-6860
              (Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $.001 per share

Indicate by checkmark 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 past 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. / /


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The approximate aggregate market value of voting and non-voting common stock
held by non-affiliates computed as of March 15, 2002, based upon the last sale
price of the common stock reported on the Nasdaq SmallCap Market was
approximately $5,180,200. For purposes of this calculation only, the registrant
has assumed that its directors and executive officers, and any person known to
the issuer to hold 10% or more of the outstanding common stock, are affiliates.

The number of shares outstanding of each of the registrant's classes of common
stock, as of March 15, 2002: 38,842,298.

Documents Incorporated By Reference: Portions of the registrant's definitive
proxy statement for its 2002 annual meeting of stockholders are incorporated by
reference into Part III.

         Photogen Technologies, Inc., its wholly-owned subsidiary Photogen,
Inc., and its 80.1% owned affiliate Sentigen Ltd., are collectively referred to
as "Photogen," the "company," "we," or "us." Portions of the discussion in this
Form 10-K contain forward-looking statements and are subject to the Risk Factors
described below in Item 1.

                                     PART I.

ITEM 1. BUSINESS.

INTRODUCTION

         We are an emerging, development-stage biopharmaceutical company
focused on developing a novel contrast agent with potential applications (1)
as a blood pool agent to diagnose diseased tissue in the cardiovascular
system and other organs and (2) to diagnose cancer metastasizing into the
lymphatic system. We also have in development certain minimally invasive
products for the treatment of psoriasis and other topical diseases and cancer
and certain laser device technology.

         During the past eighteen months, we have taken several actions to
refocus our efforts on the development of products with significant medical and
commercial potential. These actions included:

o        revamping our clinical development group,

o        advancing PH-10, our photodynamic therapy drug, into human clinical
         studies as a treatment for psoriasis and actinic keratosis, and

o        together with our joint venture partner, Elan Corporation, converting
         the manufacture of our imaging product to a scalable commercial process
         meeting manufacturing requirements of the FDA and thus enabling the
         product, N1177, with FDA approval, to advance into Phase 2 clinical
         studies in lymphography.

         As part of the process of reconstituting Photogen to be a company
focused on product development, during 2001 we conducted and, in December,
announced the results of research on our contrast agent indicating its
potential as a potential significant new cardiovascular imaging agent. The
new cardiovascular imaging applications of this product are referred to as
PH-50, are subject to patent applications we have filed and have not been
licensed to any other party. According to Frost & Sullivan consulting firm,
the worldwide market for contrast agents is estimated to be $3.4 billion,
most of which are utilized with computed tomography (CT) machines in various
applications and approximately half of which is in

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the U.S. PH-50, if approved by the FDA, has the potential to take a share of
this existing market and, in addition, to be utilized in several additional
markets. The medical need and economic potential of this product is of such
significance that we determined to focus substantially all of our development
efforts in this area and to license, partner or otherwise co-develop our PH-10
and other therapeutic products to or with other companies for further
development and commercialization. One possible transaction may involve
transferring this therapeutic technology to certain of our founders in exchange
for all of their common stock. See "Recent Developments" below.

         Our lead compound, which we call PH-50 for cardiovascular imaging
applications and N1177 for lymphography, is a contrast agent that is not
penetrated by x-rays (called "radiopaque"). When injected systemically into
the circulatory system (i.e., the blood stream), it remains within the
system, mixing with the blood and flowing throughout the system. As the
compound is radiopaque, a physician using a device such as computed
tomography (CT) machine along with the contrast agent can create an image of
the desired area. When administered subcutaneously (i.e., beneath the skin)
in the vicinity of a tumor, the compound can be used to locate lymph nodes
and diagnose the presence or absence of cancer metastases.

         Our product development portfolio also includes compounds, notably
PH-10, that react with energy to destroy diseased cells, remove tissue or
identify and diagnose disease. Compounds that react with light energy are called
"photoactive agents," those that react with ionizing radiation (which we
generically refer to as X-rays) are called "radiosensitizers." We have also
discovered and are conducting research on new methods and apparatus for using
energy from lasers, X-rays or other sources to activate energy-sensitive
compounds within tissue to produce a range of beneficial therapeutic and
diagnostic outcomes.

         We are pursuing development of products in three areas:

o        IMAGING (our core area) - We are the exclusive licensee to a group of
         proprietary materials, the lead compound of which is a contrast agent
         named N1177 (for the field of lymphography) or PH-50 (when referring to
         cardiovascular and all other indications). The product designations
         PH-50 and N1177 refer to the same chemical entity. We established the
         two names to distinguish commercialization rights between
         cardiovascular imaging (and all other indications) to which we retain
         rights, and the field of lymphography, which we licensed to our joint
         venture (Sentigen, Ltd.) with affiliates of Elan Corporation. These
         materials are very small particles designed to travel through the
         circulatory or lymphatic system (depending on how they are
         administered) and are called "nanoparticulates." There are numerous
         potential applications for a contrast agent used in imaging parts or
         all of the cardiovascular system as well as other organs. For example,
         evaluating the heart and its arteries by using devices such as CT
         machines along with a contrast agent to create an image of the
         structure is a procedure called angiography. Studies of the blood flow
         through certain organs, such as the liver or kidney, are called
         perfusion studies. Evaluating lymph nodes (to precisely locate and
         diagnose the spread of cancer (micro-metastases)) and the lymph system
         by using devices that create an image of the lymph nodes is called
         lymphography.


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o        PHOTODYNAMIC THERAPY - We are developing compounds and technologies to
         treat tumors confined to specific areas within the body (solid tumors)
         and to treat diseased tissue on the surface of the body. One of these
         compounds, named PH-10, is both a photoactive agent and radiosensitizer
         that accumulates in diseased tissue and absorbs light energy and
         X-rays. When energy is applied, PH-10 becomes activated, thereby
         destroying the tissue.

o        MULTI-PHOTON TECHNOLOGY - Our proprietary laser technology uses
         ultrashort, pulsed bursts of long wavelength light to activate
         photoactive agents and other compounds that react with light to destroy
         diseased tissue. This technology can also be used to create images of
         tissue for diagnostic purposes.

         Our proposed products have the potential to replace numerous surgical
and similar invasive treatments, reduce side effects (such as those resulting
from chemotherapy), improve treatment efficacy, enhance a physician's ability to
diagnosis the spread of cancer in the lymphatic system and lower the overall
cost of care for oncology and other applications.

         We have no approved therapeutic or diagnostic products or operating
revenues at this time. Our business model for developing, producing and selling
our proposed products accounts for the high capital needs and long development
times inherent in new drug development and the existing resources available for
both manufacturing and product distribution. During each of the last three
fiscal years, we spent approximately $2,889,215, $4,308,313 and $3,347,778,
respectively, on research and development activities. Our goal is to leverage
our cash, technology and human resources in a manner that accelerates product
development and sales revenues, and minimizes equity dilution.

         We have 13 employees. A majority of our employees hold Ph.D.'s or other
advanced degrees. Our senior executive and clinical development team is based at
our corporate headquarters in New Hope, Pennsylvania, a suburb of Philadelphia.
We have personnel with expertise in clinical development, clinical trial design
and regulatory approval processes. We also work closely with consultants
experienced in drug development and regulatory requirements. Our scientific
research team is located in Knoxville, Tennessee. This team of scientists
includes specialists in molecular biology, non-linear laser physics,
interventional radiology, spectroscopy, bioengineering and photochemistry.

         Photogen Technologies, Inc. is a Nevada corporation that is the
successor by merger to Bemax Corporation, a California corporation incorporated
in 1984 to develop and market dot matrix computer printer products. In March
1995, Bemax completed a merger with its wholly owned Nevada subsidiary named M T
Financial Group, Inc. (organized in 1994). M T Financial was the surviving
corporation and Bemax Corporation thereby changed its state of incorporation
from California to Nevada. On May 16, 1997, M T Financial, through its
wholly-owned subsidiary, effected a reverse merger with Photogen, Inc.
(successor to Photogen, L.L.C.) and changed its name to Photogen Technologies,
Inc. Photogen, L.L.C. was organized September 10, 1996 to develop proprietary
laser-based technologies related to photodynamic therapy. Photogen, Inc. is now
a wholly owned subsidiary of Photogen Technologies, Inc.

RECENT DEVELOPMENTS


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         The conduct of development programs for therapeutics and diagnostic
imaging products are significantly different and require substantial amounts
of capital and diverse management resources. We have been in discussions with
Drs. Dees, Fisher, Scott and Wachter and Mr. Smolik, founders of Photogen,
L.L.C., about the possibility of transferring to an entity they control
certain of our therapeutic technologies (primarily PH-10 and laser
technologies) in exchange for all Photogen stock beneficially owned by them
(approximately 20,548,435 shares of common stock). We have not progressed
beyond preliminary discussions concerning the possible transaction at this
time. The consummation of such a transaction would depend upon the resolution
of numerous contingencies, including negotiating a structure for the
transaction, resolution of any potential tax and accounting issues, execution
of definitive agreements, receipt of appropriate fairness and other opinions,
and board and stockholder approval. There can be no assurance that such a
transaction can ultimately be consummated.

         On March 25, 2002, we entered into an agreement with AmeriCal
Securities, Inc. ("AmeriCal"). Under the agreement, AmeriCal will act as our
exclusive agent to assist us in the acceleration of the development of PH-50
diagnostics and therapeutics.

         On April 8, 2002, we entered into a credit facility that will provide
us with a $2,500,000 revolving line of credit, bearing interest at 4.65%, for a
period of five years. The loan is secured by a lien on all of our assets. The
lender is an entity which our director, Robert J. Weinstein, M.D., may be deemed
to control.

CORE TECHNOLOGY

IMAGING

         In 1999, we entered into an exclusive license for a group of
proprietary materials, the lead compound of which was being developed for the
field of lymphography. We call this product N1177 (for use in the field of
lymphography) or PH-50 (when referring to all other indications). The product
designations PH-50 and N1177 refer to the same chemical entity. Our lead
compound has completed Phase 1 clinical trials as a contrast agent administered
beneath the skin for lymphography. In 2002, we expect to commence Phase 2
clinical studies in lymphography and Phase 1/2 studies for certain
cardiovascular imaging indications. These materials are covered by patents and
patent applications filed in the U.S. and elsewhere. As part of the initial
acquisition of this product we also acquired patented methods for performing
minimally invasive lymphography using X-ray, CT or magnetic resonance imaging
("MRI").

CARDIAC AND VASCULAR IMAGING

         Ischemic heart disease is the leading cause of death in the U.S.,
accounting for one of every five deaths according to 1998 statistics of the
National Heart, Lung, and Blood Institute. The American Heart Association
(www.americanheart.org) estimates that approximately 1.1 million Americans
suffer a myocardial infarction (MI) annually, and over 40 percent will not
survive the event. Atherosclerotic coronary artery disease (CAD) is the
underlying cause of most ischemic cardiac events and can result in myocardial
infarction, congestive heart failure, cardiac arrhythmias, and sudden cardiac
death. Clinically significant CAD is uncommon in men under 40 and pre-menopausal
women, but risk increases with advancing age and in the presence of risk factors
such as smoking, hypertension, diabetes, high cholesterol, and family history of
heart disease. Although mortality from heart disease has declined steadily over
the past three decades in the U.S., the total burden of coronary disease is
predicted to increase substantially over the next 30 years due to the


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increasing size of the elderly population. According to the American Heart
Association, the cost of medical care and lost economic productivity due to
heart disease in the U.S. was estimated to exceed $214 billion.

         Angina is the most common presenting symptom of myocardial ischemia and
underlying CAD, but in many persons the first evidence of CAD may be myocardial
infarction or sudden death. It has been estimated that 1-2 million middle-aged
men have asymptomatic but physiologically significant coronary disease, also
referred to as silent myocardial ischemia.

GENERAL VASCULAR IMAGING USE FOR PH-50

         Imaging of vascular beds in the coronary arteries and other vascular
areas is important for the diagnosis of localized and generalized diseases. To
that end, contrast media have been used for a long time to enhance the imaging
of these areas in the human body. Current imaging techniques for the
visualization of vascular beds are coronary angiography, and angiography in
other vascular areas (kidney, brain, liver etc.).

         In animal experiments, our investigators have shown that PH-50 can be
used as an effective imaging agent to visualize cardiac structures after a
single, low-dose intravenous injection/infusion. The methodology is currently
being refined but holds great promise over existing contrast media. We are
working with experienced researchers at Stanford University and Memorial Sloan
Kettering Cancer Center to refine the use of the product in this indication and
prepare for human clinical evaluation in the near future.

CARDIOVASCULAR IMAGING DEVELOPMENT PROGRAM

         We have recently concluded pre-clinical studies of PH-50 for
potentially significant new applications in cardiovascular imaging and have
filed for additional patent protection of the use of the compound for
vascular and organ imaging applications. We plan to develop PH-50 as a blood
pool contrast agent for several indications. Based on considerable existing
preclinical studies and human clinical experience, we believe that we can
commence further clinical studies in the near future. Our initial development
strategy would be to evaluate PH-50 in Phase 1/2 studies for cardiovascular
and blood pool imaging using advanced computed tomography and PH-50 as a
contrast agent. As part of the original acquisition and our further research,
we have a substantial body of safety information in both animals and humans.
Pre-clinical toxicology and pharmacology data for PH-50/N1177 includes
testing in multiple animal models including studies in several models
utilizing intravenous administration, the route of administration to be
utilized in the cardiovascular indications. In addition, the product has been
tested for lymphography, through subcutaneous administration in 122 patients.

         We have an open investigational new drug application (IND) with the FDA
for the product in the lymphography indication. We intend to file an amendment
to this application for the intravenous administration of PH-50 for use as a
blood pool agent. Scaled-up manufacturing of PH-50 is currently being performed
for us by Elan through its Nanosystems group. Over the past two years,
considerable work has been undertaken by Nanosystems to manufacture PH-50 in
compliance with the FDA's cGMP ("current Good Manufacturing Practices")
regulations and in a scalable process sufficient to support commercial
quantities. Material is currently being


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manufactured in cGMP conditions in anticipation of conducting human clinical
studies for certain cardiovascular imaging indications.

LYMPHOGRAPHY

         Lymphography is a procedure used to determine if a patient's cancer has
spread to the lymph nodes. The presence or absence of cancer in the sentinel
lymph node (the first lymph node to receive lymphatic drainage from a tumor) is
an important indication of whether the disease has spread from the original
tumor and the seriousness of the disease. It also provides oncologists with
critical information to help determine the stage of the disease and the
appropriate course of treatment. Current lymphography procedures are costly due
to the time it takes to locate the sentinel node and have the pathologist
analyze a sample. If the node contains cancer, then surgical removal of all the
regional lymph nodes may be performed.

         It is generally accepted that breast cancer and melanoma are spread by
way of the lymph system. Similarly, cancers of the lung, prostate and many other
cancers spread through the local lymph system. Clinical studies have
demonstrated that patients with cervical cancer have an increased survival rate
if lymph nodes with cancerous tissue are removed. Effective and successful
treatment of these cancers is aided by an early assessment of the presence or
absence of disease (micro-metastases) in the lymph nodes.

         Patients believed to have cancer are currently subjected to injections
of blue dye or radioactive particles that track the materials to the general
area of the sentinel node. In some of these diseases, the location of the
sentinel node is difficult to access. In the case of breast cancer, oncologists
may remove 15-30 underarm lymph nodes for biopsy. Additional treatment will be
required if cancer is discovered. Approximately 80% of the patients diagnosed
with breast cancer or melanoma who undergo these painful procedures are found to
have no sign of disease in their nodes.

         We are developing an advanced lymphography technology through a joint
venture with affiliates of Elan Corporation, plc. Our goal is to demonstrate
that the use of N1177 will enable physicians to precisely locate sentinel nodes
following injection of the material in the vicinity of the tumor and then taking
an image (picture) using a computed tomography device. The particular
properties of N1177 enable it to travel through the lymph system to the lymph
nodes most likely to be affected if the cancer has spread. As N1177 is
radiopaque, it is seen on a CT scan as white spots. The difference in contrast
created by the presence or absence of the imaging agent serves as the basis to
determine the presence or absence of disease. We expect that N1177 would remain
in the node to allow for an effective imaging procedure with a good safety
profile and acceptable clearance times. In most cases, we expect that the image
may provide enough information to determine the position of nodes and the
presence of cancer. A further benefit of these minimally invasive procedures is
that they could be used multiple times and therefore provide a means to monitor
the results of cancer treatment and detect recurrence.

         Phase 1 clinical studies of N1177 have been completed. In these
studies, the safety of N1177 was evaluated in a total of 122 patients. N1177 was
administered subcutaneously, imaging the lymph nodes was performed, and safety
assessment of the patients was evaluated. No adverse events were recorded.


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         We plan to commence Phase 2 clinical studies for detection of cancer
metastasis in lymph nodes in patients with cervical cancer in 2002. In this
patient population, studies document an increase in survival when lymph nodes
containing cancer are removed. Tumor identification by CT imaging will be
correlated to the results of biopsy results from patients undergoing surgery to
demonstrate effectiveness in locating nodes and identifying those with cancer in
them.

         Elan is manufacturing N1177. The nanoparticulate material is currently
being made in compliance with FDA good manufacturing practices regulations for
use in additional clinical studies.

         We also have technology for the use of a laser system, coupled with
fluorescent diagnostic agents which target and concentrate in diseased tissue
and signal processing technology, to cause diseased tissue to emit light that
can be converted into images. This could supplement current X-ray, mammography
and MRI techniques to detect suspicious masses. We have one issued patent and
other pending patent applications regarding this technology.

OTHER PRODUCTS

PHOTODYNAMIC THERAPY

         We have identified a promising compound, PH-10, that offers a wide
variety of potential uses. We discovered that PH-10 selectively accumulates in
diseased tissue (such as tumors) for many days, whereas PH-10 in normal tissue
clears rapidly from the body. When activated with low-dosage X-ray, or with
green light, PH-10 reacts to effectively destroy those diseased cells. Our
preclinical studies to date lead us to believe that PH-10, when combined with
particular light or radiation sources, has the potential to treat a variety of
cancers and certain dermatological conditions. PH-10 has a long history of safe
use as an FDA approved compound for other medical applications. This prior human
experience with PH-10 gives us confidence that the risk of the drug being unsafe
is small.

         When PH-10 is used with ionizing radiation (such as X-rays or gamma
rays) it enhances the killing effect of the radiation, allowing the destruction
of cancerous tissue deep within the body (using markedly lower levels of
radiation energy than required in conventional therapy). Treatment at these
reduced radiation dosages means that the results of the interaction between
energy and PH-10, which in this case is cell destruction, will tend to be
limited to the diseased tissue with less damage to the healthy tissue. This
feature alone holds the potential to significantly improve current methods and
apparatus for radiation therapy.

         PH-10, when used with green light, may be effective in the treatment of
topical diseases on the skin. Green light is strongly absorbed by skin and thus
only penetrates the body to a depth of 3-5 millimeters. This feature is
especially important and useful for surface applications where serious damage
can result from deeper treatment. We are exploring this capability for treatment
of psoriasis and other surface conditions such as actinic keratosis. We have
patents and patent applications for the use of PH-10 in combination with visible
light and with ionizing radiation to treat and diagnose diseased tissue.

         PSORIASIS - Our initial focus in dermatology is to treat psoriasis.
Psoriasis is a common chronic disorder of the skin characterized by dry scaling
patches, for which current treatments are


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few and those that are available have potentially serious side effects.
According to the National Psoriasis Foundation, of the approximately seven
million people in the United States who suffer from psoriasis (there are
estimated to be between 150,000 and 260,000 new psoriasis cases diagnosed
each year in the United States), more than 65% are treated with topical
steroids that can have unpleasant side effects. None of the other treatments
for moderate cases of psoriasis have proven completely effective, and there
is no known cure for the disease at this time. The 25-30% of patients who
suffer from more severe cases are candidates for PUVA (Psoralen with
ultraviolet A light) and more intensive drug therapies. While PUVA treatment
is one of the more effective treatments, it increases a patient's risk of
skin cancer.

         PH-10 clears rapidly from the body and is photobleached during the
treatment process. All other PDT agents known to us have longer residence
times (i.e., half life) in the body and are present in all tissues resulting
in sensitivities to sunlight. Furthermore, PH-10 applied to normal tissue and
activated with light does not damage the normal tissue. The result of the
rapid clearance, selective application, and bleaching results in patients not
having the light sensitivities that are experienced with other agents.

         We have sponsored a human pilot study in Denmark to study the safety of
activating PH-10 with green light (delivered by a laser) to treat psoriasis. In
this study, PH-10 was applied topically to the psoriatic plaque and illuminated
with green light. The results of this study demonstrated up to a 58% reduction
in psoriatic plaque thickness following a single treatment session, a result
that was maintained for the course of the study. Plaque reduction is a precursor
to other clinical improvements such as lessening of redness and reduction of
scaling.

         In April 2001, we commenced a U.S. Phase 1 clinical study of PH-10
as a treatment for psoriasis. The study is evaluating the safety of three
different doses of PH-10 in separate patient groups. Patients in the study
each received a single dose of PH-10 followed by administration of green
light on psoriatic plaques. The patient's visit to the doctor's office was
generally less than one hour. While more than one treatment session will
likely be required to achieve optimal remission, significantly fewer visits
are expected for the initial treatment regimen as well as the ongoing
maintenance visits than is the case for competing treatment regimens. Patient
accrual was completed in the fourth quarter of 2001, and results of the study
are being compiled.

         ACTINIC KERATOSIS - Actinic keratosis (also called solar keratosis or
senile keratosis) is the most common pre-cancerous skin lesion among
fair-skinned people. It is a skin disease of rough, scaly patches caused by
excessive exposure to the sun. It afflicts over five million people in the U.S.
It is estimated that in 10 to 20 percent of patients this disease will progress
to squamous cell cancer, the second leading cause of death due to skin cancer.

         Early stages of this disease have proven responsive to photodynamic
therapy. We are researching the use of PH-10 with green light activation to
treat early and advanced stages of the disease. We commenced a Phase 1 clinical
study of this therapy in late summer 2001 and have completed patient accrual.
The study protocol is similar to that of the psoriasis study. The safety data
and efficacy data generated so far, while preliminary and anecdotal, are
encouraging.


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RESEARCH PIPELINE

         In addition to the programs described above we are conducting research
for the following potential applications of our technology:

         CANCER RADIATION THERAPY - When PH-10 is used with ionizing
radiation (such as X-rays or gamma rays) it enhances the killing effect of
the radiation, allowing the destruction of cancerous tissue deep within the
body (using markedly lower levels of radiation energy than required in
conventional therapy). Treatment at these reduced radiation dosages means
that the results of the interaction between energy and PH-10, which in this
case is cell destruction, will tend to be limited to the diseased tissue with
less damage to the healthy tissue. This feature alone holds the potential to
significantly improve current methods and apparatus for radiation therapy.

         MULTI-PHOTON EXCITATION - We have developed a method of activating
photosensitive drugs and other compounds using an ultra fast, pulsed laser based
on our proprietary simultaneous two-photon and multi-photon excitation
technologies. (We refer to simultaneous two-photon and multi-photon excitation
collectively as "multi-photon excitation" to distinguish them from traditional
single-photon activation as used to activate PH-10.) Our multi-photon excitation
technologies are covered by four issued U.S. patents (three for therapy and
another for diagnostics) and are subject to additional pending patent
applications in the U.S. and other foreign jurisdictions. This technology
provides us with the following capabilities:

o        Spatial control of an activation area to more selectively deliver a
         therapeutic effect: Multi-photon activation limits the field of
         activation to the focus of the laser beam. This focus can be made
         exceedingly small, providing fine control over where the photodynamic
         effect is produced.

o        Use of many photoactive agents: Our multi-photon technology uses a
         broader range of energy levels that we may use to activate photoactive
         agents that otherwise could not be used.

o        Deeper penetration: Multi-photon activation uses longer wavelength
         light that delivers activating energy more deeply within tissue.

o        Delivery of large amounts of energy while minimizing damaging effects
         to healthy tissue.

         SQUAMOUS AND BASAL CELL CARCINOMA - According to the American Cancer
Society, more than one million new cases of squamous and basal cell
carcinoma--common surface cancers that appear on the skin, lips, inside the
mouth, throat or esophagus--are expected to be diagnosed in 2001 and their
occurrence is increasing in the fair-skinned population of the United States,
Europe and Australia. We are currently researching use of PH-10 combined with
green light activation for potential treatment of these cancers.

         BARRETT'S ESOPHAGUS - Barrett's esophagus is a pre-cancerous condition
in which the lining of the esophagus changes tissue type as a result of
long-standing acid reflux. It has been estimated that there is a 10% chance that
the Barrett's tissue will advance to esophageal cancer if not properly treated.
We are researching whether PH-10, when topically applied to esophageal tissue
and treated with the proper light source, could selectively target and treat
diseased tissue. The research may lead to a new treatment that is less expensive
and safer than current methods of treating Barrett's esophagus.


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         HAIR REMOVAL - We are investigating the application of our multi-photon
excitation technology to remove blond and red hair, using a melanin precursor
present in the hair follicle as the photoactive agent to destroy the hair
follicle. Our approach, if successful, may yield an improvement over current
hair removal technologies by removing light colored hair and by removing hair
without generating heat or requiring cooling for the skin. It has been estimated
that there were approximately 1.5 million hair removal procedures in 2000 and
projections of three million procedures in 2003.

         TWO-PHOTON MICROSCOPY - We have evaluated a portion of this technology
by incorporating our designs into a conventional two-photon microscope. Our
technology for signal processing can potentially improve contrast of the
diagnostic signal over background noise, which should improve image clarity and
diagnostic sensitivity.

         DIAGNOSTIC IMAGING - We also have technology for the use of a laser
system, coupled with fluorescent diagnostic agents which target and concentrate
in diseased tissue and signal processing technology, to cause diseased tissue to
emit light that can be converted into images. This could supplement current
X-ray, mammography and MRI techniques to detect suspicious masses. We have one
issued patent and other pending patent applications regarding this technology.

DEVELOPMENT AND COMMERCIALIZATION STRATEGY

         Our overall strategy is to leverage our proprietary technologies
through contractual collaborations with third parties. In particular, we plan
to:

o        Address product development by demonstrating basic technical
         feasibility in test tube and animal models internally and then, using
         third party laboratories and/or clinicians experienced in the specific
         indication, conduct highly focused, formal preclinical trials. We
         intend to use the expertise of the third party clinicians to collect
         data necessary to obtain IND's (an Investigational New Drug Application
         with the FDA) or IDE's (an Investigational Device Exemption from the
         FDA) required to begin human trials.

o        Utilize our clinical development team and contractual collaborative
         arrangements with third parties to access the skills and resources
         required to design, test, obtain regulatory approval, and manufacture
         our potential products.

o        Market potential products through strategic or distribution
         collaborations as determined by the specific characteristics of each
         product application. If appropriate, we would consider developing an
         internal U.S. sales and marketing division to market certain products
         directly.

o        Consider opportunities in related fields for technological licensing
         when those opportunities could lead to faster development of products
         and FDA approval. This includes obtaining technology through licenses
         from others and licensing our own technology to third parties.

         We do not expect to generate material revenues from operations in the
near future. If we develop a saleable product, we expect to generate revenues
from product sales or licensing fees. Currently, we have not developed any
therapeutic or diagnostic products that are available to manufacture or sell to
the public nor do we have a pricing structure for any potential products.


                                       11
<Page>

         Our ability to develop and manufacture any product successfully is
subject to numerous contingencies and uncertainties, including certain Risk
Factors described below. Our objectives, business strategy and product
development efforts are subject to change based on numerous factors, including
the results of preclinical and clinical testing, the availability of suitable
collaborative relationships, the nature of competition, regulatory requirements
and the availability of capital. The description of our business and business
strategy contains forward-looking statements that should be read in conjunction
with the Risk Factors described below. Also, we may transfer our therapeutic
technologies, as described in "Recent Developments" above.

         Some of our research agreements provide generally that inventions
developed during the course of research by the institution's investigators,
alone or jointly with us, will be owned by the institution and subject to a
right of first refusal that we can exercise for a stated period allowing us to
enter into an exclusive license for that invention. Our agreements with Tufts
University School of Veterinary Medicine, Massachusetts Eye and Ear Infirmary,
Massachusetts General Hospital's Center for Imaging and Pharmaceutical Research,
the University of Arizona and other research institutions each contain
provisions of this type. In some cases the key terms of the license are stated
in the research agreement, with other terms to be negotiated at the time we
exercise the right of first refusal (if we choose to exercise it).

SENTIGEN LTD. - JOINT VENTURE WITH ELAN CORPORATION

         In October 1999 we entered into a joint venture with affiliates of Elan
Corporation, plc (collectively, "Elan"), a multi-national, billion dollar
pharmaceutical company. The joint venture company, Sentigen Ltd., is developing
and commercializing N1177, a nanoparticulate agent used to image lymph nodes to
detect cancer. We licensed to Sentigen certain methods and other proprietary
technology for use in lymphography, and we sub-licensed to Sentigen proprietary
compounds we obtained by license from Massachusetts General Hospital and Nycomed
Imaging AS. Elan, through its drug delivery division, Elan Pharmaceutical
Technologies, licensed to Sentigen its NanoCrystal(TM) stabilized
nanoparticulate formulation technology to develop the diagnostic imaging agents.

         As part of the joint venture agreement, Elan provided us with a $4.8
million credit facility we can draw on to fund our share of the anticipated
development costs of the joint venture. At December 31, 2001, we had drawn down
approximately $2,314,005 on this credit facility, all of which occurred during
2001, to fund certain of Sentigen's development expenses. Borrowings under the
credit facility are due in 2005 or can be converted into our common stock, at
Elan's option, at a price of $18.15 per share.

         Our agreement with Elan provides that Elan has the right to nominate a
member to our Board of Directors until October 2004 or as long as Elan owns 10%
of our common stock (Elan currently owns less than 10% of our common stock). The
Elan Board nominee is Aidan King, Vice President of Business Development for
Elan. Elan also has a preemptive right to participate in our future equity
offerings to maintain its pro rata interest in Photogen.

PATENTS


                                       12
<Page>

         We are continuing to pursue patent protection for our proprietary
technologies with the U.S. Patent and Trademark Office, and in various foreign
jurisdictions. We plan to prosecute, assert and defend our patent rights
whenever appropriate. However, securing patent protection does not necessarily
assure us of competitive success. See "Risk Factors - If we do not obtain and
maintain patent or other protection of our core technologies (namely PH-10, our
lymphography materials and methods, and our laser technologies), we may have
difficulty developing or commercializing product using these technologies,"
below. We are currently the owner of eleven patents issued in various foreign
jurisdiction and seven patents issued by the U.S. Patent and Trademark Office
which are summarized generally below:

o        Method of diagnosing disease of the lymph nodes through indirect
         lymphography (U.S. Patent No. 5,114,703)

o        Method of diagnosing disease of the lymph nodes through indirect
         lymphography using ultrasound or MRI (U.S. Patent No. 5,496,536)

o        Method of treatment of tissue with simultaneous two-photon excitation
         (U.S. Patent No. 5,829,448)

o        Method for identifying tissue using simultaneous two-photon excitation
         (U.S. Patent No. 5,832,931)

o        Method for producing at least one photoactivated molecular agent using
         simultaneous two-photon excitation (U.S. Patent No. 5,998,597)

o        Apparatus for treating tissue containing at least one photo-active
         molecular agent using a light source to promote simultaneous two-photon
         excitation and focusing apparatus (U.S. Patent No. 6,042,603)

o        Method of treating tumor or cancer diseased tissue by administering a
         radiosensitizer to the tissue and treating the tissue with ionizing
         radiation to activate the radiosensitizer (U.S. Patent No. 6,331,286)

         These patents expire at various times between 2012 and 2018.

         We have exclusive licenses to the following technologies:

o        Method of treating tissue using radiodense compositions and a radiation
         source.

         We are continuing to pursue patent protection for our other proprietary
technologies with the U.S. Patent and Trademark Office, under the Patent
Cooperation Treaty and in various foreign jurisdictions. In addition to our
seven issued patents in the United States and patent applications discussed
above, we have another 23 pending U.S. patent applications (along with
corresponding Patent Cooperation Treaty applications and foreign applications)
relating to inventions in the following areas:


                                       13
<Page>

o        PH-50 - methods of vascular imaging

o        Multi-photon excitation technology

o        Methods and apparatus for imaging and treating tissue using
         photodynamic therapies

o        Additional photodynamic therapy methods and apparatus for topical
         treatment of disease

o        Methods and apparatus for treatment of tissue containing an endogenous
         pigment (for example, melanoma destruction)

o        Radiation contrast agents and methods for treating tissue using those
         agents

o        Radiosensitizer agents and methods for treating tissue using those
         agents

o        Methods for enhanced production of cell lines

o        Topical medicaments for photodynamic treatment of disease

o        Intracorporeal medicaments for photodynamic treatment of disease

o        Methods and apparatus for optical imaging

o        Intracorporeal medicaments for high energy phototherapeutic treatment
         of disease

o        Intracorporeal medicaments for chemotherapeutic treatment of disease

o        Phototherapeutic vaccination and immunotherapy against tumors

         Some of our patented or licensed technology arose from research that
was partially funded by the United States Government. As with other entities
whose research is sponsored in any manner by the United States Government,
certain patents that we own or license are subject to Confirmatory Licenses in
favor of the United States Government, as required by applicable federal
regulations. These regulations require us or the patent owner to agree to convey
to the Government, upon the Government's request, rights in the technology if we
decide not to continue prosecution of the patent applications or if the patent
owner does not wish to retain title to the inventions covered in the patents.
The Government also retains certain "march in rights" that permit the Government
to use the technology under certain circumstances, including if that action is
necessary because we or the patent owner have not taken or are not expected to
take effective steps to achieve practical application of the inventions; it is
necessary to alleviate health or safety needs not being met by us or the patent
owner; or to meet the requirements for public use specified in certain federal
regulations and those requirements are not being met by us or the patent owner.
We intend to prosecute patent applications and in other respects develop patents
we own so that the Government will not exercise its rights under these
Confirmatory Licenses.

         "Photogen," the "ray of light" logo and "PulseView" are trademarks of
Photogen. All other trademarks or trade names used in this Form 10-K are
trademarks or trade names of their respective owners.

GOVERNMENT REGULATIONS


                                       14
<Page>

         All of the products we currently contemplate developing will require
approval by the United States Food and Drug Administration ("FDA") prior to
sales being made within the United States and by comparable foreign agencies
prior to sales being made outside the United States. The FDA and comparable
regulatory agencies impose substantial requirements on the manufacturing and
marketing of pharmaceutical products and medical devices. These agencies and
other entities extensively regulate, among other things, research and
development activities and the testing, manufacturing, quality control, safety,
effectiveness, labeling, storage, record keeping, approval, advertising and
promotion of our proposed products. See "Risk Factors--Our proposed products are
subject to extensive testing and government approval, and we may not obtain the
approvals necessary to sell our proposed products," below.

         The regulatory process required by the FDA through which our products
must successfully pass before they may be marketed in the U.S. generally
involves the following:

o        Preclinical laboratory and animal testing;

o        Submission of an application that must become effective before clinical
         trials may begin;

o        Adequate and well-controlled human clinical trials to establish the
         safety and efficacy of the product for its intended indication; and

o        FDA approval of the application to market a given product for a given
         indication.

         For imaging and pharmaceutical products, preclinical tests include
laboratory evaluation of the product, its chemistry, formulation and stability,
as well as animal studies to assess the potential safety and efficacy of the
product. Where appropriate (for example, for human disease indications for which
there exist inadequate animal models), we will attempt to obtain preliminary
data concerning safety and efficacy of proposed products using carefully
designed human pilot studies. We will require sponsored work to be conducted in
compliance with pertinent local and international regulatory requirements,
including those providing for Institutional Review Board approval, national
governing agency approval and patient informed consent, using protocols
consistent with ethical principles stated in the Declaration of Helsinki and
other internationally recognized standards. We expect any pilot studies to be
conducted outside the United States; but if any are conducted in the United
States, they will comply with applicable FDA regulations. Data obtained through
pilot studies will allow us to make more informed decisions concerning possible
expansion into traditional FDA-regulated clinical trials.

         If the FDA is satisfied with the results and data from preclinical
tests, it will authorize human clinical trials. Human clinical trials are
typically conducted in three sequential phases, which may overlap. Each of the
three phases involves testing and study of specific aspects of the effects of
the pharmaceutical on human subjects, including testing for safety, dosage
tolerance, side effects, absorption, metabolism, distribution, excretion and
clinical efficacy.

         We have established a core clinical development team and have been
working with outside regulatory consultants to assist us in developing
product-specific development and approval strategies, preparing the required
submittals, guiding us through the regulatory process, and providing input to
the design and site selection of human clinical studies. The testing and
approval process requires substantial time, effort, and financial resources, and
we may not obtain FDA approval on a timely basis, if at all. Success in
preclinical or early-stage clinical trials does not


                                       15
<Page>

assure success in later stage clinical trials. The FDA or the research
institution sponsoring the trials may suspend clinical trials or may not permit
trials to advance from one phase to another at any time on various grounds,
including a finding that the subjects or patients are being exposed to an
unacceptable health risk. Once issued, the FDA may withdraw a product approval
if we do not comply with pertinent regulatory requirements and standards or if
problems occur after the product reaches the market. If the FDA grants approval
of a product, the approval may impose limitations, including limits on the
indicated uses for which we may market a product. In addition, the FDA may
require additional testing and surveillance programs to monitor the safety
and/or effectiveness of approved products that have been commercialized, and the
agency has the power to prevent or limit further marketing of a product based on
the results of these post-marketing programs. Further, later discovery of
previously unknown problems with a product may result in restrictions on the
product, including its withdrawal from the market. Marketing our products abroad
will require similar regulatory approvals by equivalent national authorities and
is subject to similar risks.

         Historically, obtaining FDA approval for photodynamic therapies has
been a significant challenge. Not only must the photoactive agent be approved as
a drug, but the laser activation system must also be approved as a medical
device. Wherever possible, we intend to utilize lasers or other activating
systems that have been previously approved by the FDA to mitigate this risk.

         In the ordinary course of business, we must also comply with a variety
of other federal and state governmental regulations. These regulations impose,
among other things, standards of conduct, record keeping, labeling and
reporting.

         Specific regulations affecting our current and proposed operations
include: environmental-type discharge requirements, good laboratory practices
governing animal testing, good manufacturing practices regarding the manufacture
of drugs and other FDA-regulated products, animal care and use regulations, laws
and regulations relating to labor and the use of lasers, and required general
business practices. We do not currently anticipate that the cost of compliance
in these areas, other than obtaining FDA approval, will present a major obstacle
to achieving our goals.

         Another area of regulation that will impact our business is the recent
developments in health care reimbursement and delivery practices as a means to
better control health care costs. See "Risk Factors -- Changes in health care
reimbursement policies or legislation may make it difficult for patients to use
or receive reimbursement for using our products, which could reduce our
revenues," below.

COMPETITION

         The industry in which we operate is intensely competitive, and there is
rapid change with respect to technology for the diagnosis and treatment of
disease. Existing or future pharmaceutical and device companies, government
entities and universities may create developments that accomplish similar
functions to our technologies in ways that are less expensive, receive faster
regulatory approval, or receive greater market acceptance than our potential
products. See "Risk Factors -- Our potential markets are extremely competitive,
and many of our competitors have greater resources and have products that are in
more advanced stages of development" below.


                                       16
<Page>

         Our competitors have, in general, been in existence for considerably
longer than we have, and thus generally have greater capital resources and
access to capital; greater internal resources for activities in research and
development, clinical testing and trials, production and distribution; existing
collaborative relationships with third parties; and have made greater progress
in the preclinical and clinical testing of their products. In addition, our
competitors may be disinclined to form collaborative relationships with us
directly, or to permit their collaborative partners to work with us. See "Risk
Factors -- We have to rely on third parties and collaborative relationships for
the manufacturing, clinical testing and marketing for our proposed products, and
it may be difficult to implement our business development plans without these
collaborations," below.

         The existing market for radiopaque contrast agents is estimated to be
approximately $3.4 billion worldwide. The dominant uses of media, totaling 86
percent, are those employed in conjunction with CT or X-ray scans. Approximately
half of the usage is in the U.S. Omnipaque(R), marketed by a unit of Amersham,
is believed to be the leading agent utilized in coronary angiography. Other
companies marketing contrast agents include Mallinckrodt, Inc. (a unit of Tyco
International Ltd.), Bristol-Myers Squibb Medical Imaging (a unit of
Bristol-Myers Squibb Company), Berlex Laboratories, Inc., Abbott Laboratories
and Bracco.

         More broadly defined, other modalities, such as magnetic resonance
imaging and ultrasound, are also used by physicians to image internal
vasculature and organs. These modalities, including CT imaging, each have
particular attributes that may make their use applicable to any particular
situation.

         In the market of photodynamic agents to treat topical diseases and
cancer, we are aware of one competitor, QLT, Inc. that has already received FDA
approval for use of its proprietary photoactive agent, "Photofrin," in the
treatment of esophageal cancer and non-small cell lung cancer. In conjunction
with CIBA Vision, QLT, Inc. has a second product, "Visudyne," approved for
photodynamic treatment of certain forms of macular degeneration. Another
competitor, Dusa Pharmaceuticals, has received FDA approval for use of its
proprietary photodynamic product, Levulan(R) Kerastik(TM), for treatment of
actinic keratosis. Other competitors, namely Miravant Medical Technologies, Inc.
and Pharmacyclics, Inc., have advanced their proprietary photoactive agents to
Phase 2/3 clinical trials. Laser manufacturers are also making progress in using
laser technologies to treat certain indications. For example, Ethicon
Endo-Surgery, Inc., a subsidiary of Johnson & Johnson, uses a laser to treat
prostate cancer. In addition, there have been many dramatic developments in
treatments for cancer and other diseases that do not involve photodynamic
therapy. These treatments include new chemotherapy agents or other drugs,
vaccines, hyperthermic treatments, and ultrasound. Certain other companies,
notably Biogen, Inc., are in late stages of developing systemic treatments for
psoriasis. All of these alternatives potentially compete with products we may
offer because they provide alternative methods and treatments for certain
indications.

RISK FACTORS

         This Form 10-K contains (and press releases and other public statements
we may issue from time to time may contain) a number of forward-looking
statements regarding our business and operations. Statements in this document
that are not historical facts are forward-looking statements. Such
forward-looking statements include those relating to:


                                       17
<Page>

o        our current business and product development plans,

o        our future business and product development plans,

o        the timing and results of regulatory approval for proposed products,
         and

o        projected capital needs, working capital, liquidity, revenues, interest
         costs and income.

         Examples of forward-looking statements include predictive statements,
statements that depend on or refer to future events or conditions, and
statements that may include words such as "expects," "anticipates," "intends,"
"plans," "believes," "estimates," "should," "may," or similar expressions, or
statements that imply uncertainty or involve hypothetical events.

         Forward-looking statements involve known and unknown risks and
uncertainties that may cause our actual results in future periods to differ
materially from what is currently anticipated. We make cautionary statements
in certain sections of this Form 10-K, including under "Risk Factors." You
should read these cautionary statements as being applicable to all related
forward-looking statements wherever they appear in this Form 10-K, in the
materials referred to in this Form 10-K, in the materials incorporated by
reference into this Form 10-K, or in our press releases or other public
statements. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this Form 10-K or other documents
incorporated by reference might not occur. No forward-looking statement is a
guarantee of future performance and you should not place undue reliance on
any forward-looking statement.

         The following are some of the key risk factors that may affect our
future results:

WE ARE A DEVELOPMENT STAGE COMPANY, WE HAVE CONDUCTED ONLY LIMITED STUDIES ON
OUR PRODUCTS IN DEVELOPMENT AND WE DO NOT HAVE ANY REVENUES FROM SALES.

         Our Company and our technologies are in early stages of development. We
         began our business as a biopharmaceutical company in 1997. We have not
         generated revenues from sales or operations, and we do not expect to
         generate sufficient revenues to enable us to be profitable for at least
         several years.

         Our proposed technologies and products generally must complete
         preclinical tests in animals and three phases of tests (also called
         clinical trials) in humans before we can market them for use. Use of
         our technology has been limited primarily to laboratory experiments,
         animal testing or human pilot studies and only one compound has
         completed Phase 1 clinical trials. We have therefore not yet conducted
         substantive studies on the effectiveness of our compounds on human
         subjects. The drug products we currently contemplate developing will
         require costly and time-consuming research and development, preclinical
         and clinical testing and regulatory approval before they can be
         commercially sold. We may not be able to develop our technology into
         marketable products or develop our technology so it is effective for
         diagnosis or treatment of human diseases. As a result of changing
         economic considerations, market, clinical or regulatory conditions, or
         clinical trial results, we may shift our focus or determine not to
         continue one or more of the projects we are currently pursuing.


                                       18
<Page>

WE HAVE A HISTORY OF LOSSES AND WE MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY IN
THE FUTURE OR PAY CASH DIVIDENDS.

         We have incurred losses since the beginning of our operations. As of
         December 31, 2001, we have incurred cumulative net losses (before
         dividends on preferred stock) of approximately $29,093,000. We expect
         our losses to increase in the future as our financial resources are
         used for research and development, preclinical and clinical testing,
         regulatory activities, manufacturing, marketing and other related
         expenses. We may not be able to achieve or maintain profitability in
         the future. We have never declared or paid any cash dividends to
         stockholders, and do not expect to do so in the foreseeable future.

WE MUST RAISE ADDITIONAL FINANCING IN THE FUTURE AND OUR INABILITY TO DO SO WILL
PREVENT US FROM IMPLEMENTING OUR BUSINESS DEVELOPMENT PLAN.

         We believe that through the use of our cash and lines of credit, we
         will have cash resources for our current commitments over the next
         twelve months (depending on the pace of our spending for preclinical
         and clinical testing and other commitments, which, to an extent, we can
         adjust to preserve cash). We will need substantial additional financing
         for our research, clinical testing, product development and marketing
         programs. We cannot accurately estimate the amount of additional
         financing required; however, the amount could be an additional $30
         million or more over the next several years. We are aggressively
         seeking to raise additional capital through stock and debt offerings,
         collaborative relationships and other available sources. Additional
         funds may not be available on acceptable terms, if at all, and
         existing stockholders may be diluted as a result of those offerings.
         The pricing of our common stock, or other security convertible into
         common stock, in any such transaction may also result in an increase
         in the number of shares of common stock issuable upon conversion of
         Series B preferred stock or exercise of warrants in accordance with
         the anti-dilution provisions in the instruments governing those
         securities.

OUR PROPOSED PRODUCTS ARE SUBJECT TO EXTENSIVE TESTING AND GOVERNMENT APPROVAL,
AND WE MAY NOT OBTAIN THE APPROVALS NECESSARY TO SELL OUR PROPOSED PRODUCTS.

         None of our proposed imaging, drug and device products has received the
         Food and Drug Administration's approval. An extensive series of
         clinical trials and other associated requirements must be completed
         before our proposed products can be approved and sold in the United
         States or other countries. Requirements for FDA approval of a product
         include preclinical and clinical testing for effective use and safety
         in animals and humans; that testing can be extremely costly. The time
         frame necessary to perform these tasks for any individual product is
         long and uncertain, and we may encounter problems or delays that we
         cannot predict at this time. Even if testing is successful, our
         proposed products may not demonstrate sufficient effectiveness or
         safety to warrant approval by the FDA or other regulatory authorities.
         Any regulatory approval may not cover the clinical symptoms or
         indications that we may seek. Marketing our products in other


                                       19
<Page>

         countries will require seeking and obtaining regulatory approvals
         comparable to those required in the United States.

IF WE DO NOT OBTAIN AND MAINTAIN PATENT OR OTHER PROTECTION OF OUR CORE
TECHNOLOGIES (NAMELY PH-50 FOR CARDIOVASCULAR IMAGING, N1177 AND OUR OTHER
LYMPHOGRAPHY MATERIALS AND METHODS, PH-10 AND OUR LASER TECHNOLOGIES), WE MAY
HAVE DIFFICULTY COMMERCIALIZING PRODUCTS USING THESE TECHNOLOGIES.

         Our success depends in part on our ability to obtain, assert and defend
         our patents, protect trade secrets and operate without infringing the
         intellectual property of others. Among the important risks in this area
         are that:

         o        Our patent applications may not result in issued patents.
                  Moreover, any issued patents may not provide us with adequate
                  protection of our intellectual property or competitive
                  advantages, and the law on the scope of patent coverage is
                  continually changing.

         o        Various countries limit the subject matter that can be
                  patented and limit the ability of a patent owner to enforce
                  patents in the medical field. This may limit our ability to
                  obtain or utilize those patents internationally.

         o        Existing or future patents or patent applications (and the
                  products or methods they cover) of our competitors (or others,
                  such as research institutions or universities) may interfere,
                  invalidate, conflict with or infringe our patents or patent
                  applications. Similarly, the use of the methods or
                  technologies contained in our patents, patent applications and
                  other intellectual property may conflict with or infringe the
                  rights of others.

         o        If an advance is made that qualifies as a joint invention, the
                  joint inventor or his or her employer may have rights in the
                  invention. We are currently in litigation with our former
                  Medical Director and his former employer, Massachusetts
                  General Hospital, concerning his claims of joint inventorship
                  of some of our PH-10 inventions.

         We will be able to protect our proprietary rights from unauthorized
         use by third parties only to the extent that these rights are
         covered by valid and enforceable patents or effectively maintained
         as trade secrets. We own seven patents in the U.S., and eleven other
         patents in foreign countries including Taiwan, Australia, Singapore,
         Japan and New Zealand. We are also the exclusive licensee to a group
         of patented proprietary compounds known as nanoparticulates from
         Massachusetts General Hospital and Nycomed Imaging AS. We have filed
         patent applications under the Patent Cooperation Treaty covering a
         number of foreign countries. These patents and the patent
         applications relate to the use of PH-50 as a cardiovascular imaging
         agent, laser and ionizing radiation technology, photoactive agents
         and methods, methods for enhanced cell production and methods for
         performing lymphography.

         The patent position of biopharmaceutical companies involves complex
         legal and factual questions, and therefore we cannot assure the
         enforceability of these


                                       20
<Page>

         patents. Litigation over patents and other intellectual property rights
         occurs frequently in our industry, and there is a risk that we may not
         prevail in disputes over the ownership of intellectual property.
         Further, interference may occur over the rights to certain inventions,
         and there is a risk that we may not prevail in an interference. Those
         disputes can be expensive and time consuming, even if we prevail.
         Intellectual property disputes are often settled through licensing
         arrangements that could be costly to us. In any intellectual property
         litigation, it is possible that licenses necessary to settle the
         dispute would not be available, or that we would not be able to
         redesign our technologies to avoid any claimed infringement.

         Confidentiality agreements covering our intellectual property may be
         violated and we may not have adequate remedies for any violation. Third
         parties may challenge our existing patents and seek to hold them
         invalid or unenforceable. Also, our intellectual property may in other
         ways become known or be independently discovered by competitors.

         To the extent we use intellectual property through licenses or
         sub-licenses (as is the case for some of our lymphography technology),
         our rights are subject to us performing the terms of the license or
         sub-license agreement with third parties. Our rights are also subject
         to the actions of third parties we may not be able to control, such as
         our sub-licensor complying with the terms of its license with the
         patent owner and the patent owner maintaining the patent.

         Where intellectual property results from a research project supported
         by U.S. Government funding, the Government has limited rights to use
         the intellectual property without paying us a royalty.

WE ARE HIGHLY DEPENDENT UPON A SMALL NUMBER OF EMPLOYEES AND CONSULTANTS WHO
PROVIDE SCIENTIFIC AND MANAGEMENT EXPERTISE, AND IT MAY BE DIFFICULT TO
IMPLEMENT OUR BUSINESS DEVELOPMENT PLANS WITHOUT THIS EXPERTISE.

         These individuals have entered into employment or consulting
         agreements, confidentiality and/or non-competition agreements with us.
         We could suffer competitive disadvantage, loss of intellectual property
         or other material adverse effects on our business and results of
         operations if any employee or consultant violates or terminates these
         agreements or terminates his or her association with us. Our growth and
         future success also depends upon the continued involvement and
         contribution from these individuals, as well as our ability to attract
         and retain highly qualified personnel now and in the future.

         We currently employ three senior scientists (Drs. Dees, Scott and
         Wachter) and three senior executive officers, including Dr. Williams
         (our CEO), Mr. Boveroux (our CFO) and Dr. Reinhard Koenig (Senior Vice
         President of Medical and Regulatory Affairs). We also have retained
         consultants to advise us in regulatory affairs and product development
         matters. If we lost the services of our executive officers or outside
         consultants, we could experience a delay in the implementation of our
         business plan until we arranged for another individual or firm to
         fulfill the


                                       21
<Page>

         role. The loss of one of our scientists could cause delay in
         implementing our business plan and also jeopardize development of new
         technologies.

WE HAVE TO RELY ON THIRD PARTIES AND COLLABORATIVE RELATIONSHIPS FOR THE
MANUFACTURE, CLINICAL TESTING AND MARKETING OF OUR PROPOSED PRODUCTS, AND IT MAY
BE DIFFICULT TO IMPLEMENT OUR BUSINESS DEVELOPMENT PLANS WITHOUT THESE
COLLABORATIONS.

         We are currently involved in a joint venture with affiliates of Elan
         Corporation, plc, called Sentigen Ltd., to develop and commercialize
         materials in the field of lymphography. We have had and expect to
         continue in the future to have a variety of research agreements with
         universities and other research institutions to investigate specific
         protocols. We also contract and expect to continue to contract with
         research organizations and other third parties to manage clinical
         trials of our proposed products in development. We must continue to
         enter into collaborative relationships with third parties for
         additional research and development, preclinical and clinical testing,
         marketing and distribution of our proposed products.

         We are also dependent on third parties for the manufacture of supplies
         of our products and for the supply of lasers and radiotherapy devices
         and similar hardware in physicians' offices and hospitals. We have
         several research and supply agreements with third parties. However, we
         may not be able to negotiate other acceptable collaborative and supply
         arrangements in the future.

         Collaborative relationships may limit or restrict our operations or may
         not result in an adequate supply of necessary resources. Our
         collaborative partner could also pursue alternative technologies as a
         means of developing or marketing products for the diseases targeted by
         our collaborative program. If a third party we are collaborating with
         fails to perform under its agreement or fails to meet regulatory
         standards, this could delay or prematurely terminate clinical testing
         of our proposed products.

OUR POTENTIAL MARKETS ARE EXTREMELY COMPETITIVE, AND MANY OF OUR COMPETITORS
HAVE GREATER RESOURCES AND HAVE PRODUCTS THAT ARE IN MORE ADVANCED STAGES OF
DEVELOPMENT.

         We face substantial competition from competitors with greater
         financial, technical and human resources and with greater experience in
         developing products, conducting preclinical or clinical testing,
         obtaining regulatory approvals, manufacturing and marketing. We
         understand that the existing market for radiopaque contrast agents is
         estimated to be approximately $3.4 billion worldwide. The dominant uses
         of media are those employed in conjunction with CT or X-ray scans.
         Approximately half of the usage is in the U.S. Omnipaque(R), marketed
         by a unit of Amersham is estimated to be the leading agent utilized in
         coronary angiography. Other companies marketing contrast agents include
         Mallinckrodt, Inc. (a unit of Tyco International Ltd.), Bristol-Myers
         Squibb Medical Imaging (a unit of Bristol-Myers Squibb Company), Berlex
         Laboratories, Inc., Abbott Laboratories and Bracco.


                                       22
<Page>

         More broadly defined, other modalities, such as magnetic resonance
         imaging and ultrasound, are also used by physicians to image internal
         vasculature and organs. These modalities, including CT imaging, each
         have particular attributes that may make their use applicable to any
         particular situation.

         Competitors in the field of using light energy to treat and diagnose
         disease include: Miravant Medical Technologies, Pharmacyclics, Inc.,
         QLT Inc., Axcan Pharma Inc., Dusa Pharmaceuticals, Inc. and PhotoCure
         ASA. There are also numerous companies developing other technologies to
         image the vascular system and various body organs, and to treat and/or
         diagnose psoriasis, actinic keratosis, cancer and other diseases.
         Examples of the technologies from those other companies are the use of
         magnetic resonance imaging or ultrasound techniques to create internal
         organ images, drug or genetic treatments, procedures that use sound
         waves and procedures that destroy diseased tissue using heat. Some of
         these firms have drugs or devices that have completed or are in
         advanced stages of clinical trials and regulatory approvals.

         Others may develop technologies and obtain patent protection that could
         render our technologies or products obsolete or less competitive or our
         patents invalid or unenforceable. Due to the inherent risk of failure
         associated with the testing, development and production of new and
         innovative technologies, our technologies and products may be found to
         be ineffective, have unanticipated limitations or otherwise be
         unsuccessful in the marketplace. Also, although we believe our
         estimates of the possible size of markets for our potential products
         are based on information we consider reliable (including data from the
         American Heart Association, American Cancer Society and similar sources
         in the public domain), that data or our analysis of the data could
         prove incorrect.

CHANGES IN HEALTH CARE REIMBURSEMENT POLICIES OR LEGISLATION MAY MAKE IT
DIFFICULT FOR PATIENTS TO USE OR RECEIVE REIMBURSEMENT FOR USING OUR PRODUCTS,
WHICH COULD REDUCE OUR REVENUES.

         Our success will depend, in part, on the extent to which health
         insurers, managed care entities and similar organizations provide
         coverage or reimbursement for using the medical procedures and devices
         we plan to develop. These third-party payers are increasingly
         challenging the price of medical procedures and services and
         establishing guidelines that may limit physicians' selections of
         innovative products and procedures. We also cannot predict the effect
         of any current or future legislation or regulations relating to
         third-party coverage or reimbursement on our business. We may not be
         able to achieve market acceptance of our proposed products or maintain
         price levels sufficient to achieve or maintain any profits on our
         proposed products if adequate reimbursement coverage is not available.

THE CURRENT BOARD OF DIRECTORS CONTROLS PHOTOGEN, WHICH MAY MAKE IT DIFFICULT
FOR STOCKHOLDERS WHO ARE NOT IN THAT GROUP TO INFLUENCE MANAGEMENT.


                                       23
<Page>

         A small group of our officers, directors and others control
         approximately 83% of our outstanding common stock. Several of our
         principal stockholders are also parties to an Amended and Restated
         Voting Agreement, dated as of September 4, 2001, concerning the
         election of certain designees to the Board of Directors of Photogen
         Technologies, Inc. and Photogen, Inc. The Voting Agreement requires
         these stockholders to vote their shares for the election of the current
         Board of Directors or, in the case of a vacancy, for the person
         nominated by a majority of the remaining Directors. This concentration
         of ownership and control may delay or prevent a change in control of
         Photogen, and may also result in a small supply of shares available for
         purchase in the public securities markets. These factors may affect the
         market and the market price for our common stock in ways that do not
         reflect the intrinsic value of the stock.

THE PRICE AND TRADING VOLUME OF OUR COMMON STOCK FLUCTUATES SIGNIFICANTLY, WHICH
MAY MAKE IT DIFFICULT FOR US OR A STOCKHOLDER TO SELL OUR COMMON STOCK AT A
SUITABLE PRICE AND MAY CAUSE DILUTION FOR EXISTING STOCKHOLDERS WHEN WE ISSUE
ADDITIONAL SHARES.

         During the period from January 1, 2001 through December 31, 2001 our
         closing stock price ranged from $0.98 to $7.00 per share. Daily trading
         volume ranged from 0 (zero) shares to approximately 77,900 shares
         during that period.

         The following factors may have an impact on the price of our stock:

                  o        Announcements by us or others regarding scientific
                           discoveries, technological innovations, commercial
                           products, patents or proprietary rights;

                  o        Announcements by us concerning the licensing or other
                           transactions of our products or technologies;

                  o        The progress of preclinical or clinical testing;

                  o        Changes in government regulation;

                  o        Public concern about the safety of devices or drugs;

                  o        Limited coverage by securities analysts;

                  o        The occurrence of any of the risk factors described
                           in this section;

                  o        Sales of large blocks of stock by an individual or
                           institution;

                  o        Changes in our financial performance from period to
                           period; securities analysts' reports; and general
                           market conditions.

OUR COMMON STOCK COULD BE DELISTED FROM THE NASDAQ SMALLCAP MARKET, WHICH WOULD
MAKE TRADING IN OUR STOCK MORE DIFFICULT.

         Since November 1999, our common stock has been quoted in the Nasdaq
         SmallCap Market. Our shares could be delisted if we fail to meet the
         listing requirements of the Nasdaq SmallCap Market, which would force
         us to list our shares on the OTC Bulletin Board or some other quotation
         medium, such as pink sheets, depending upon our ability to meet the
         specific listing requirements of


                                       24
<Page>

         those quotation systems. As a result, an investor might find it more
         difficult to dispose of, or to obtain accurate price quotations for,
         our shares. Delisting might also reduce the visibility, liquidity, and
         price of our common stock. If our common stock were delisted from the
         Nasdaq SmallCap Market and were not traded on another national
         securities exchange, we could become subject to penny stock regulations
         that impose additional sales practice disclosure and market making
         requirements on broker/dealers who sell or make a market in our stock.
         The rules of the SEC generally define "penny stock" to be common stock
         that has a market price of less than $5.00 per share and is not traded
         on a national exchange. If our stock became subject to penny stock
         regulations, it could adversely affect the ability and willingness of
         broker/dealers who sell or make a market in our common stock and of
         investors to purchase or sell our stock in the secondary market.

IF STOCKHOLDERS HOLDING SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK SHOULD SELL IN
THE PUBLIC MARKET, THE PRICE OF OUR STOCK COULD FALL OR IT MAY BE MORE COSTLY
FOR US TO RAISE CAPITAL.

         As of March 15, 2002, we had reserved 11,474,700 shares of common stock
         for future issuance upon grants of options, or exercise or conversion
         of outstanding options and warrants and convertible securities and
         notes. If these options and warrants are all issued and exercised,
         investors may experience significant dilution in the book value and
         earnings per share of their common stock.

         Approximately 6,798,765 shares of our common stock were eligible for
         sale in the public market free of restrictions under the Securities
         Act of 1933. Approximately 5,490,162 shares are currently subject to
         agreements requiring us to permit the holders of the shares, under
         certain circumstances, to join a public offering of our stock or to
         demand that we register their shares. On May 9, 2001, Drs. Dees,
         Wachter, Scott and Fisher and Mr. Smolik entered into a lock-up
         agreement prohibiting them, without the company's approval, from
         selling in the public markets 20,548,435 shares until May 9, 2004
         (except for limited sales by each of them of between 42,000 and
         78,000 shares each year at prices above $5.00 per share).

ITEM 2. PROPERTIES.

         We are occupying approximately 4,000 square feet of office and
laboratory space in Knoxville, Tennessee. We negotiated an extension to this
lease agreement with a term expiring May 2002. We have one more option to renew
this lease agreement for an additional term of three years and an option to
purchase the facility at any time during the term of the lease or any renewal.

         We have a three-year lease agreement for approximately 6,164 square
feet of office space located in New Hope, Pennsylvania. The initial term of the
lease expires in August 2004. The lease permits us to extend the lease for two
additional three-year terms. This space is being used for our executive officer
headquarters and for our clinical development group.

         To our knowledge, the property and equipment in our Knoxville and New
Hope locations are in good condition. In the opinion of management, our interest
in these facilities is adequately covered by insurance.


                                       25
<Page>

ITEM 3. LEGAL PROCEEDINGS.

         In conjunction with the September 2000 restructuring of our clinical
development office at Westborough, Massachusetts, we filed a lawsuit captioned
PHOTOGEN, INC. V. GERALD L. WOLF (Case No. 00C 5841), in the United States
District Court for the Northern District of Illinois. In that litigation, we
allege that Dr. Wolf, our former Medical Director, breached his employment
agreement and other obligations to us. We also seek a declaration from the Court
that Dr. Wolf is not a co-inventor of certain of our discoveries relating to
PH-10. We have filed a number of patent applications for multiple inventions
involving PH-10. Dr. Wolf has asserted that he is a co-inventor of certain of
those inventions described in certain of the patent applications, apparently
claiming he conceived them outside the scope of his role as Principal
Investigator under our Research Agreement with Massachusetts General Hospital
(which gives us the right to an exclusive license to all jointly invented
technology) or his Employment Agreement (which vests in us title to all
inventions he develops). Dr. Wolf filed counterclaims against Photogen and Dr.
Williams alleging breach of contract, interference with economic advantage and
similar matters.

         If Dr. Wolf's assertion that he co-invented certain of our PH-10
inventions is correct, he (or his assignee) may be considered a joint owner of
the invention. If Dr. Wolf conceived of the invention outside the scope of the
Research Agreement or his Employment Agreement and we were unable to obtain an
exclusive license to Dr. Wolf's interest in any allegedly co-invented
technology, we could nonetheless use the co-invented technology as a joint owner
(but we might face possible competition for any products resulting from that
technology if it is not covered by any other patent of which we are the
exclusive owner or licensee), and our other inventions involving PH-10 should
not be affected. It is not currently possible for us to determine whether or how
this would affect our revenues, financial condition or prospects.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters were submitted to our common stockholders, Series A
convertible preferred stockholders or Series B convertible preferred
stockholders for a vote during the fourth quarter of the 2001 fiscal year.

                                    PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Our common stock is traded from time to time on the Nasdaq SmallCap
Market under the symbol "PHGN."

COMMON STOCK

         As of March 15, 2002 there were 38,842,298 shares of our common stock
outstanding and held by approximately 324 stockholders of record. Holders of our
Common Stock are entitled to receive such dividends as may be declared by the
Board of Directors. We have not declared or paid cash dividends on our common
stock, and we do not anticipate paying any cash dividends in the foreseeable
future.


                                       26
<Page>

         The high and low trading prices for our common stock during each
quarter of the last two fiscal years are set forth below.



<Table>
<Caption>
                              Year Ended                        Year Ended
                           December 31, 2000                 December 31, 2001
                           -----------------                 -----------------
(Amounts in $)

                         High             Low               High             Low
                         ----             ---               ----             ---

<S>                      <C>              <C>               <C>              <C>
1st Quarter              19.50            14.00             7.125            1.50

2nd Quarter              17.875           6.656             2.00             0.93

3rd Quarter              11.50            4.25              2.35             1.00

4th Quarter              6.00             1.125             1.52             1.00
</Table>

         For the period January 1, 2002 through March 15, 2002, the high and low
trading prices for our common stock were $1.51 and $0.63 respectively. Aggregate
trading volume for the period January 1, 2002 through March 15, 2002 was
approximately 253,757 shares. The foregoing information was obtained from the
National Association of Securities Dealers as reported on the Nasdaq SmallCap
Market. The quotations generally reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions. The
foregoing information for 2000 and 2001, however, reflects trade prices, and not
bid or ask prices. See "Risk Factors -- A small group of stockholders control
Photogen, which may make it difficult for stockholders who are not in that group
to influence management," and "The price and trading volume of our common stock
fluctuates significantly, which may make it difficult for us or a stockholder to
sell our common stock at a suitable price and may cause dilution for existing
stockholders when we issue additional shares," above, regarding the possible
effects of the concentrated ownership of our stock on the market and price of
the stock.

         In 2001, we granted qualified and non-qualified stock options pursuant
to our 1998 Long Term Incentive Plan to purchase an aggregate of 340,000 shares
of common stock, and 535,000 qualified stock options pursuant to our 2000 Long
Term Incentive Compensation Plan. The options vest at various times up to four
years from the date of the grant. Per share exercise prices range from $1.14 to
$5.3125. During 2001, we did not sell any securities without registration under
the Securities Act of 1933 (the "Securities Act").

         We are subject to six sets of registration rights agreements. All of
the agreements contain piggyback registration rights and one contains demand
registration rights upon the occurrence of certain events and subject to various
terms and conditions.

o        Under the first two agreements, we granted certain piggyback
         registration rights to the holders of warrants covering an aggregate of
         260,000 shares of our common stock owned by two shareholders; which
         warrants will expire on May 15, 2002.


                                       27
<Page>

o        Under a third agreement, the holder of warrants covering 1,000,000
         shares of our common stock may demand registration for those shares in
         the event that holders of 50% or more of those warrants make a request
         covered by at least 100,000 shares (in addition to certain piggyback
         registration rights). Demand registration, however, is subject to Board
         approval.

o        Under the fourth and fifth agreements, the holders of options to
         acquire a total of 4,000,000 shares of our common stock (granted under
         our Senior Executive Long Term Incentive Compensation Plan) have
         piggyback registration rights until we file a Form S-8 registration
         statement covering those shares. Options covering 1,333,333 of those
         shares have vested at this time.

o        Under the sixth agreement, we granted demand and piggyback registration
         rights covering approximately 230,162 shares of our common stock
         issuable on exercise of the warrant and conversion of amounts due under
         the convertible note we sold to Elan.

         Pursuant to the terms of the Securities Purchase Agreement dated as of
October 20, 1999 between Photogen and a unit of Elan, Elan has the right to
participate in any equity financing consummated by us in order to maintain its
pro rata interest in the Company. This right expires on October 20, 2003.

         On May 9, 2001, Drs. Dees, Wachter, Scott and Fisher and Mr. Smolik
entered into a lock-up agreement prohibiting them, without the Company's
approval, from selling in the public markets 20,548,435 shares until May 9, 2004
(except for limited sales by each of them of between 42,000 and 78,000 shares
each year at prices above $5.00 per share).

         Approximately 32,043,533 shares of our common stock and preferred
stock convertible into common stock are "restricted stock" or are
beneficially owned by persons who as of March 15, 2002 were affiliates of the
Company as defined in Rule 144 under the Securities Act. For purposes of this
calculation only (and the comparable disclosure on the cover page of this
Form 10-K) we have assumed that officers, directors and 10% stockholders are
affiliates of the company and that a person beneficially owns stock subject
to an option, warrant or convertible instrument that is exercisable or
convertible 60 days from the date of determination. Stock held by Elan may be
subject to Rule 144. A portion of those shares subject to Rule 144 would be
eligible for resale by company affiliates and others who have satisfied the
requisite holding periods, subject to the volume limitations and other
provisions of Rule 144 and applicable law. As of March 15, 2002, 875,000
shares of common stock that we sold in our March, 1998 private placement
and 327,240 shares of Series B Convertible Preferred Stock that we sold in
our February, 2000 private placement are no longer restricted stock or
subject to Rule 144 because two years have now passed.

SERIES A CONVERTIBLE PREFERRED STOCK

         On October 20, 1999, we issued 12,015 shares of Series A Preferred
Stock to Elan International Services, Ltd. ("EIS"), an affiliate of Elan, in
conjunction with the formation of Sentigen Ltd., our joint venture with Elan.
Under the Amended and Restated Certificate of Designations, Preferences and
Rights of Series A Preferred Stock, the holder of Series A Preferred


                                       28
<Page>

has a liquidation preference entitling it to the first $12,015,000 of funds
available for distribution to stockholders upon liquidation of the Company
and has the right to convert shares of Series A Preferred into common stock
at any time after October 20, 2001 at a conversion price of $21.17 per share.
The conversion price is subject to adjustment for certain dilutive events.
Alternatively, the holder of Series A Preferred may exchange shares of Series
A Preferred for common shares of Sentigen so that the holder of Series A
Preferred owns 50% of the equity of Sentigen. Each share of Series A
Preferred will be paid a mandatory payment-in-kind dividend equal to 7%
(i.e., 0.07 additional shares of Series A Preferred). The payment-in-kind
dividend is cumulative, compounds on a semi-annual basis and is payable twice
a year, beginning April 2000. Pursuant to this dividend requirement, we
declared a dividend of approximately 932 shares of Series A Preferred in 2001
and as of March 15, 2002, there were approximately 13,788 shares of Series A
Preferred outstanding. The holder of Series A Preferred is only entitled to
vote on matters that adversely affect or change the rights of holders of
Series A Preferred Stock. The holder of Series A Preferred does not have the
right to vote on the election of directors of the Company.

SERIES B CONVERTIBLE PREFERRED STOCK

         In February, 2000, we issued 327,240 shares of Series B Convertible
Preferred Stock ("Series B Preferred") to 32 accredited investors in a private
placement, for a purchase price of $16.88 per share and 9,816 shares to the
placement agent in connection with services rendered in our private placement of
Series B Preferred.

         Each share of Series B Preferred is entitled to a payment-in-kind
dividend payable in additional shares of Series B Preferred, at a rate of 6%
(i.e., 0.06 additional shares of Series B Preferred). Dividends will be payable
on January 15 of each year, beginning January 15, 2001 and will accrue from the
date of such share's issuance. As of December 31, 2001 there were 357,280 shares
of Series B Preferred outstanding. On January 15, 2002, we declared a dividend
of approximately 21,437 shares of Series B Preferred to Series B Preferred
Stockholders pursuant to the payment-in-kind dividend. As of March 15, 2002,
there were approximately 378,717 shares of Series B Preferred outstanding (or to
become outstanding on delivery of the in-kind dividend), that are convertible
into approximately 548,015 shares of our common stock. We may not make dividends
or distributions on common stock unless we also pay a dividend on the Series B
Preferred equal to the amount a holder of Series B Preferred would have received
on conversion of Series B Preferred into common stock.

         Each share of Series B Preferred is entitled to a liquidation
preference equal to $16.88 per share, before any amounts are paid on the common
stock on liquidation, but subject to the senior preference of our Series A
Preferred and the liquidation preference of any senior or pari passu securities
we create in the future with the requisite consent of the holders of Series B
Preferred. After payment of the Series B Preferred liquidation preference, we
will distribute our remaining assets pro rata among the holders of the common
stock and Series A Preferred and Series B Preferred (subject to the rights of
any senior securities). If we are acquired by another entity or sell all or
substantially all of our assets, and if we pay an amount equal to the
liquidation preference of the Series A Preferred and any other senior security,
holders of Series B Preferred will be entitled to receive the liquidation
preference unless our stockholders prior to the transaction hold at least 50% of
the voting power of the surviving or acquiring entity or if the holders of a
majority of Series B Preferred agree by vote or written consent to exclude the
acquisition or sale from this provision.


                                       29
<Page>

         Each share of Series B Preferred has the number of votes equal to the
number of shares of common stock into which the share of Series B Preferred
would be convertible (as of March 15, 2002, 1.44703 shares of common stock for
each share of Series B Preferred), and will be entitled to vote together with
the common stock. Certain matters, such as an amendment to the terms of the
Series B Preferred Certificate of Designation or a change in the preferences or
any relative or other rights of the Series B Preferred, may have to be approved
by a majority of the holders of Series B Preferred voting as a separate class.

         A holder of Series B Preferred may convert shares of Series B Preferred
into an initial conversion ratio of 1.4 shares of common stock at any time. The
conversion ratio is subject to adjustment for certain dilutive events, including
issuance of common stock or equivalent securities at less than $16.88 per share.
As we have issued common stock in our shelf registration at less than $16.88,
the revised conversion ratio for the number of shares of common stock issuable
upon conversion of our Series B Preferred is 1.44703 at March 15, 2002. We may
require holders of Series B Preferred to convert their shares into common stock
(at the same ratios that would apply for a voluntary conversion, except as
described in the second and third bullet points below) in connection with any of
the following events:

o        If the holders of a majority of the Series B Preferred approve a
         mandatory conversion;

o        Immediately prior to a firm commitment, underwritten public offering of
         our common stock in which we receive $20 million or more in gross
         proceeds;

o        If the holders of a majority of Series B Preferred do not approve any
         transaction to issue a security senior or pari passu to the Series B
         Preferred in a transaction involving any vendor, licensor or joint
         venturer or other commercial transaction (a "special senior security"),
         the purpose of which is not solely to provide financing, and which the
         Board has approved and recommended; or

o        At any time after January 1, 2005.

         We must obtain the approval of a majority of the then outstanding
shares of Series B Preferred if we seek to amend our Restated Articles of
Incorporation in a way that adversely affects the shares of Series B Preferred
(except for issuance of a special senior security), create certain senior or
pari passu securities, or if we change the rights of Series B Preferred in the
Certificate of Designation in any other material respect. This right is subject
to our ability to require mandatory conversion of Series B Preferred if a
"special senior security" is not approved.

ITEM 6. SELECTED FINANCIAL DATA.

         The following information is qualified by reference to and should be
read in conjunction with our Consolidated Financial Statements and the Notes
thereto and Management's Discussion and Analysis of Financial Condition and
Results of Operations included below. The selected financial data presented
below for the years ended December 31, 1997, 1998, 1999, 2000 and 2001 have been
derived from our audited financial statements.

<Table>
<Caption>
                         1997              1998              1999              2000              2001
                    ---------------------------------------------------------------------------------------
<S>                 <C>               <C>               <C>               <C>               <C>
Net loss from


                                       30
<Page>

continuing
operations          $     (554,702)   $   (1,973,913)   $   (6,052,841)   $  (10,787,062)   $   (9,723,016)
                    ---------------------------------------------------------------------------------------
Basic and diluted
loss per common
    share           $        (0.02)   $        (0.05)   $        (0.17)   $        (0.36)   $        (0.33)
                    ---------------------------------------------------------------------------------------

Total assets        $    2,284,373    $    8,060,585    $   23,304,829    $   19,652,037    $   14,202,639
                    ---------------------------------------------------------------------------------------

Total liabilities   $      197,328    $      952,007    $      872,667    $    1,239,527    $    4,379,693
                    ---------------------------------------------------------------------------------------

Total long-term
obligations         $       60,469    $       35,990    $       18,356    $        1,554    $    3,437,745
                    ---------------------------------------------------------------------------------------
</Table>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

         Portions of the discussion in this item contain forward-looking
statements and are subject to the Risk Factors described above.

         We are an emerging, development-stage biopharmaceutical company focused
on developing a novel contrast agent with potential applications in the imaging
of the cardiovascular system and cancer metastasizing into the lymphatic system.
We also have in development products to treat psoriasis and other topical
diseases and cancer. Our principal product is an X-ray contrast agent we call
PH-50, when referring to cardiovascular applications, and N1177 when referring
to lymphography. The lymphography application is being developed in a joint
venture with units of Elan Corporation plc. We have or own the rights for all
other applications. In December 2001, we announced positive preclinical results
of PH-50. Based on these studies, the extensive preclinical toxicology and other
study work, including the product's use in over 120 patients for lymphography,
we shifted the strategic direction of Photogen to focus on the cardiovascular
and lymphography applications. We plan to focus our efforts on these high value
opportunities and to license or co-develop our other products. We have not
completed development of any diagnostic or therapeutic product or process at
this time and have no revenue from operations.

         As of April 8, 2002, we entered into a credit facility that will
provide us with a $2,500,000 revolving line of credit, bearing interest at
4.65%, for a period of five years. The loan is secured by a lien on all of our
assets. Absent additional funding from the sale of debt or equity securities or
the sale or licensing of any of our products in development, we expect to
sustain operations through December 2002. Our ability to conduct operations
beyond that date is entirely dependent on our ability to obtain additional
capital, and we are aggressively seeking such capital. See "Risk Factors -- We
must raise additional financing in the future and our ability to do so could
prevent us from implementing our business plan," above.

         We operate with a small staff of researchers and senior level managers
to conduct basic research, oversee and direct third party contractors and
perform administrative functions. We contract with third party consultants
having expertise in clinical development and regulatory


                                       31
<Page>

matters to supplement our internal capabilities. We also contract with third
party research laboratories, contract research organizations and manufacturers
for clinical material supplies and the management of clinical trials. We also
contract with academic and other institutions to conduct specified research
projects.

         We expect that our quarterly and annual results of operations will
fluctuate based on several factors including, the timing and amount of expenses
involved in conducting our research programs, particularly the conduct of
clinical trials, the cost of clinical material used in those trials and required
for compliance with FDA regulations and the amount, if any, of fees, milestone
payments and research support payments received from potential strategic
partners.

         We consider our investment in the joint venture with affiliates of Elan
to be our only asset subject to a significant estimate. The carrying value of
our 80.1% equity interest in Sentigen, Ltd., the joint venture entity, at
December 31, 2001 was $10,994,680. We have reviewed the financial projections of
Sentigen and the underlying assumptions and have concluded that there has been
no degradation to the carrying value of our investment. The assumptions
underlying the financial forecasts were based on currently available
information, including estimates of development costs, pricing, operating
expenses and market sizes and penetration. These estimates may change and any
such changes may impact our future estimates of appropriate carrying values.

RESULTS OF OPERATIONS

         Our efforts have been focused on the development and clinical testing
of diagnostic and therapeutic products. To date, we have not generated revenues
from the sale of any proposed diagnostic or therapeutic products or other
operations. Net loss applicable to common shareholders (after preferred
dividends) was $6,273,518, $13,491,813 and $12,666,771 for the years ended
December 31, 1999, 2000 and 2001, respectively, and our cumulative losses since
inception, including "in kind" preferred stock dividends totaling $5,869,183,
are approximately $34,962,496.

         Research and development expenses for the years ended December 31,
1999, 2000 and 2001 were $2,889,215, $4,308,313 and $3,347,778, respectively.

         Research expenses in 1999 were due to costs incurred as we expanded
our development activities for PH-10 and for initiating research spending for
N1177. During the fourth quarter of 1999 we in-licensed N1177 for all
diagnostic and therapeutic applications and subsequently granted a license to
N1177 in the field of lymphography to Sentigen, Ltd. the joint venture
between Photogen and units of Elan Corporation plc. We established a clinical
development group in Westborough, Massachusetts during the fourth quarter of
1999 to support development of products approaching the stages of human
clinical testing. Substantially all research expenses incurred by Photogen on
N1177 are charged to the joint venture. See additional information on this
subject discussing the joint venture and the restructuring, in 2000, of our
clinical development operations in the paragraphs below.

         Research expenses increased in 2000 resulting from costs associated
with the Westborough, Massachusetts operations through September, 2000 and costs
associated with consultants we retained having expertise in the development of
cancer therapeutics and diagnostics as well as dermatological products. In
addition, we reversed approximately $810,000 in billings to the


                                       32
<Page>

Sentigen joint venture as we concluded, following the restructuring of our
clinical development operations, that the joint venture should not be charged
for certain work previously conducted in Westborough. The increase in research
expense was partially offset by a reduction in research contract expense as
contracts with certain academic institutions reached their conclusion.

         Research expenses in 2001 decreased by $960,535 to $3,347,778. The
reduction was due principally to lower expense levels following the closing of
our Westborough, Massachusetts facility in October 2000, including a one-time
credit in 2000 of $810,000 to Sentigen, our joint venture with Elan, partially
offset by clinical trial expenses and other costs incurred as our products
undergo human clinical testing.

         General and administrative expenses were $3,037,392, $5,095,442 and
$3,269,013 for the years ended December 31, 1999, 2000 and 2001, respectively.
These expenses include costs associated with obtaining patent protection for our
intellectual property, costs associated with administrative personnel and
corporate management, the amortization of warrants granted to a service
provider, legal and related expenses and facilities expenses. Expense increases
in 2000 resulted primarily from the full year impact of warrants issued during
1999 and additional warrants granted to a service provider in 2000, costs of
hiring and compensating our new senior management and legal expenses incurred in
connection with the reorganization of the clinical development group. In 2001,
general and administrative expenses were reduced by $1,826,429 primarily due to
the completion of the amortization of warrants granted to a service provider.

         In September 2000, we initiated a restructuring of our clinical
development operations. We closed our Westborough, Massachusetts office and
delivered notices of material breaches and/or dissatisfaction pursuant to the
employment agreements with three employees who worked there at that time.
Clinical development activities formerly carried on in Westborough were assumed
by outside consultants and other company employees. We took a charge against
earnings of $597,025 for termination of our office lease and associated expenses
and termination costs associated with certain of the employees at that location.
We have reached termination agreements with two of these employees. At December
31, 2001, approximately $173,932 of this charge was remaining. We cannot
estimate at this time additional costs or obligations (if any) related to any
litigation arising from the office closing. See Item 3 "Legal Proceedings" of
this Form 10-K for additional information concerning this restructuring.

         In the fourth quarter of 1999, we entered into a joint venture with
affiliates of Elan Corporation for the development of N1177, a potential product
to identify and diagnose lymph nodes for the presence of cancer. We own 80.1% of
the joint venture entity, Sentigen, Ltd., with the balance owned by Elan. During
1999, 2000 and 2001, we recorded losses from the joint venture of $306,029,
$1,203,392 and $1,952,758, respectively. These losses resulted from our share of
development expenses incurred in the joint venture by the two participants,
including personnel expenses and costs associated with developing a
manufacturing process, including the purchase of drug substance and other
materials.

         In accordance with the joint venture agreement between Photogen and
Elan, we charged certain research and development work performed at the
Westborough facility to Sentigen. As part of the restructuring of our
clinical development operations, we conducted an internal review of the
activities conducted at Westborough during 2000 and concluded that the joint
venture should not be charged for those activities. Accordingly, in the third
quarter of 2000, we reversed the billings previously

                                       33
<Page>

made to Sentigen and recorded the entire amount of research and development
costs on our financial statements. The effect on us was an increase in research
and development costs for 2000 of $810,000 less a decrease in the loss from
Sentigen of $649,000.

         Investment income for the years ended December 31, 1999, 2000 and
2001 was $179,795, $417,110 and $110,741, respectively. Investment income is
generated by the amount of capital in our investment portfolio prior to it
being used to fund our operations and the rate of interest earned on that
capital. We invest funds in the investment portfolio in United States
Government obligations. The 1999 investment income resulted primarily from
interest earned on the proceeds of a common stock offering in March 1998 and
on approximately $6,000,000 of capital received from Elan through their
purchase of our common stock at the time of the creation of the joint
venture. In the first quarter of 2000, we raised a total of $5,276,340 from
the issuance of Series B Preferred to qualified investors. The increase in
investment income in 2000 resulted primarily from investment of those
proceeds. In the first half of 2001, we received a total of $1,068,723 in net
proceeds of common stock sold under our shelf registration statement that was
declared effective in February 2001. Investment income declined in 2001 due
primarily to the decline in the average balances of our investment portfolio
as funds were used to support operations and, to a lesser extent, the general
decline in short term interest rates. We expect investment income to continue
to fluctuate both as the size of the investment portfolio decreases or
increases and as the rate of interest earned by the portfolio varies due to
shifts in short term interest rates.

         Purchases of equipment and leasehold improvements for the years ended
December 31, 1999, 2000 and 2001 were $374,741, $516,186 and $45,938,
respectively. These purchases were primarily for the acquisition of laboratory
and other equipment necessary to conduct pre-clinical and clinical studies and
leasehold improvements in the Knoxville, New Hope and Westborough offices.
During the next twelve months we expect capital expenditures for equipment to be
less than $100,000.

         During 2001, as a result of the closing of the Westborough facility and
the shift in the research priorities, we determined that certain equipment we
were leasing would no longer be useful in our research. Accordingly, we recorded
provisions for future lease payments totaling $1,264,208 representing the
remaining lease obligations. While we will pursue opportunities to sublease or
otherwise mitigate these obligations, there can be no assurance of any success
in this regard.

         We have two series of convertible preferred stock outstanding:
Series A, issued in October 1999 and Series B, issued in February 2000. The
holder of Series A Preferred is entitled to a mandatory, cumulative,
semi-annual payment-in-kind dividend of 7% (i.e., 0.07 additional shares of
Series A Preferred). Similarly, the holders of Series B Preferred are
entitled to a cumulative, annual payment-in-kind dividend equal to 6% (i.e.,
0.06 additional shares of Series B Preferred). Additionally, the terms of
both the Series A Preferred and the Series B Preferred create additional
preferred returns for the holders. The Series A Preferred was issued with
detachable warrants. The value allocated to those warrants caused the
preferred shareholders to receive an additional return. That additional
return has been amortized over the period from issuance through October 2001,
when the stock was first convertible. The additional return related to the
Series A Preferred recorded was $480,928 in 2000 and $391,154 in 2001. The
terms of the Series B Preferred include beneficial conversion rates if the
stock is converted to common stock after specified dates.

         The value of the beneficial conversion also creates an additional
return to the Series B holders. The value of the beneficial conversion
feature was amortized over the period from issuance until January 1, 2002,
the date the most beneficial conversion rate became effective. The preferred
return related to the Series B Preferred recorded in 2000 was $1,059,097 and
in 2001 was $1,263,219. As a result of the combination of the mandatory
dividends and the preferential value amortization, we recorded preferred
stock dividends of $220,677, $2,704,751 and $2,943,755 in 1999, 2000 and 2001
for Series A Preferred stock and Series B Preferred stock.

                                       34
<Page>

         As a result of the above factors, the net loss applicable to common
shareholders (after preferred dividends) was $6,273,518, $13,491,813 and
$12,666,771 for the years ended December 31, 1999, 2000 and 2001, respectively.
Basic and diluted loss per common share was $0.17, $0.36 and $0.33,
respectively, for these periods.

LIQUIDITY; CAPITAL RESOURCES

         At December 31, 2001 we had cash and cash equivalents totaling
approximately $1,352,904. We have a $4.8 million credit line available from Elan
under which we may borrow to fund our portion of the losses incurred by the
joint venture. At December 31,2001 we had borrowed $2,314,005 under this credit
line. We have an effective shelf registration statement pursuant to which we may
issue up to $40 million, of which we have issued $1,068,723, of our common
stock. On April 8, 2002, we entered into a credit facility that will provide us
with a $2,500,000 revolving line of credit, bearing interest at 4.65%, for a
period of five years. The loan is secured by a lien on all of our assets.

         Absent additional funding from the sale of debt or equity securities or
the sale or licensing of any of our products in development, we expect to
sustain operations through December 2002. Our ability to conduct operations
beyond that date is entirely dependent on our ability to obtain additional
capital, and we are aggressively seeking such capital. We have and continue to
take actions to minimize our spending until we raise additional capital through
the sale of securities or the sale/licensing of certain assets. However, there
can be no assurance that such capital will be available under acceptable terms,
if at all. We have access to certain additional capital through borrowings under
our credit line with Elan to reimburse our development costs of N1177 and
borrowings under our revolving line of credit. In addition, at our option, our
registration statement gives us the ability to sell from time to time up to a
remaining $39 million of our common stock. See "Risk Factors -- We must raise
additional financing in the future and our ability to do so could prevent us
from implementing our business plan," above.

         We have used, and if additional capital is secured, expect over the
next 12 months to use the capital available in our lines of credit as well
as potential proceeds from sales of common stock under our shelf registration
statement or from other issuances of debt or other equity securities, for
general corporate purposes, including activities related to preparing for and
conducting clinical trials, purchase and preparation of clinical material,
conduct of preclinical studies, administrative expenses to support our research
and development activities, capital expenditures and to meet working capital
needs. If our financial condition permits, we expect to evaluate from time to
time the acquisition or license of businesses, technologies or products. The
purchase of any such licenses or technologies would be funded by a portion of
any net proceeds of future offerings or the issuance of debt or equity
securities specifically for that purpose; at this time


                                       35
<Page>

we have no plan or commitments for any acquisition or license. We expect our use
of capital to increase as we conduct further clinical trials.

         We have a $4.8 million credit facility from Elan to fund a portion of
the operations of the Sentigen joint venture. Borrowings under this facility
bear interest at 8% per annum, are repayable in 2005 or at Elan's election, may
be converted into our common stock at a conversion price of $18.15 per share. At
December 31, 2001, we had borrowed $2,314,005 under this credit facility.

         In February 2001, our shelf registration statement to enable us to
issue up to $40 million of our common stock was declared effective by the SEC.
This shelf registration permits us to issue common stock from time to time at
our option. During 2001, we sold 695,486 shares of common stock pursuant to this
registration statement to institutional investors for proceeds, net of related
expenses, of $1,068,723.

         Pursuant to certain anti-dilution provisions granted to Elan as part of
their purchase in 1999 of our common stock, we were required to issue additional
shares to Elan so that the weighted average price for the common stock would
equal the effective price of our first offering after Elan's purchase. In the
third quarter we issued 763,426 additional shares of common stock to Elan in
full satisfaction of this right.

PLAN OF OPERATION

         During the next twelve months we will focus our efforts primarily on
the development of PH-50 and N1177 reflecting the strategic shift in the
direction of the company. Specifically we expect to conduct preclinical and
human clinical studies, prepare required filings to the FDA, and as required to
foreign regulatory bodies and acquire quantities of clinical grade drug
formulations of these products. If we obtain sufficient funds to finance further
development of our dermatology and cancer therapy products (PH-10), we will
conduct similar development activities for those indications. Alternatively, we
may license, co-develop or sell our therapeutic technologies (see "Recent
Developments" above). We expect to continue to incur increasing losses for at
least the next three years as we intensify research and development, preclinical
and clinical testing and associated regulatory approval activities and engage in
or provide for the manufacture and/or sale of any products that we may develop.

         Greater capital resources would enable us to quicken and expand our
research and development activities, and our failure to raise additional capital
will (absent a suitable collaborative agreement providing for a third party to
take over these functions) significantly impair or curtail our ability to
conduct further research and development activities and our ability to seek
regulatory approval for any possible product resulting from that research. In
any event, complete development and commercialization of our technology will
require substantial additional funds. See "Risk Factors -- We must raise
additional financing in the future and our inability to do so could prevent us
from implementing our business plan," above. Accordingly, we are aggressively
pursuing capital formation opportunities, either through offerings of equity or
debt or as part of collaborative arrangements with third parties.


                                       36
<Page>

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which establishes accounting and reporting standards for
derivative instruments and hedging activities. SFAS 133 is effective for
years beginning after June 15, 2000. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The Company, to date,
has not engaged in derivative or hedging activities.

         In June 2001, the Financial Accounting Standards Board finalized
FASB Statements No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142").
SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An
intangible asset with an indefinite useful life should be tested for
impairment in accordance with the guidance in SFAS 142. SFAS 142 is required
to be applied in fiscal years beginning after December 15, 2001 to all
goodwill and other intangible assets recognized at that date, regardless of
when those assets were initially recognized. SFAS 142 requires the Company to
complete a transitional goodwill impairment test six months from the date of
adoption. The Company is also required to reassess the useful lives of other
intangible assets within the first interim quarter after adoption of SFAS
142. The Company is currently assessing but has not yet determined how the
adoption of SFAS 142 will impact its financial position and results of
operations.

         In October 2001, the Financial Accounting Standards Board issued SFAS
144 "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"). This Statement addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. This Statement supersedes FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of", and the accounting and reporting
provisions of APB Opinion No. 30, "Reporting the Results of Operations --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions", for the disposal of
a segment of a business. The provisions of SFAS 144 will be effective for fiscal
years beginning after December 15, 2001. The Company is currently evaluating the
implications of adoption of SFAS 144 and anticipates adopting its provisions in
fiscal year 2002.


                                       37
<Page>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The primary market risk that could impact us is the fluctuation in
interest rates related to our investments in Government bonds. As our
investments all have short-term maturities, the investment return reflects the
current market rates. To date, we have not engaged in any derivative or hedging
activities.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


                                       38


<Page>


Independent Auditors' Report

Board of Directors
Photogen Technologies, Inc.
New Hope, Pennsylvania

We have audited the accompanying consolidated balance sheets of Photogen
Technologies, Inc., a development stage company, as of December 31, 2000 and
2001, and the related consolidated statements of operations, shareholders'
equity and cash flows for the period from November 3, 1996 (inception) to
December 31, 2001 and for each of the three years in the period ended December
31, 2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Photogen
Technologies, Inc. at December 31, 2000 and 2001, and the results of its
operations and its cash flows for the period from November 3, 1996 (inception)
to December 31, 2001 and for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States.

/s/ BDO Seidman, LLP

Chicago, Illinois
March 22, 2002, except for Note 11
which is as of April 8, 2002


                                       39

<Page>

<Table>
<Caption>

                                                                                       CONSOLIDATED BALANCE SHEETS



DECEMBER 31,                                                                               2000             2001
------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>               <C>

ASSETS

CURRENT ASSETS

     Cash and cash equivalents                                                  $       622,795  $     1,352,904
     United States Treasury Notes, total face value $4,945,000 and
         $0, respectively                                                             4,943,971                -
     Interest receivable                                                                 93,219                -
     Prepaid consulting expense (Note 6(a))                                             760,363                -
     Prepaid expenses                                                                   182,115           29,775
     Deposit (Note 5(a))                                                                100,000          474,580
------------------------------------------------------------------------------------------------------------------

TOTAL CURRENT ASSETS                                                                  6,702,463        1,857,259

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, less accumulated
     depreciation of $761,425 and $1,059,997, respectively (Note 5(a))                1,377,741          882,220

PATENT COSTS, net of amortization of $59,027 and $100,693,
     respectively                                                                       440,973          399,307

DEPOSIT (Note 5(a))                                                                     429,370           69,173

INVESTMENT IN AND ADVANCES TO AFFILIATE (Note 3)                                     10,701,490       10,994,680
------------------------------------------------------------------------------------------------------------------





                                                                                $    19,652,037  $    14,202,639
==================================================================================================================

                          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

</Table>

                                       40
<Page>

<Table>
<Caption>



                                                                           CONSOLIDATED BALANCE SHEETS (continued)


DECEMBER 31,                                                                               2000              2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                <C>

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

     Accounts payable                                                           $       641,719    $      373,774
     Accrued expenses (Note 4)                                                          579,452           568,174
     Current portion of obligation under capital leases                                  16,802                 -
--------------------------------------------------------------------------------------------------------------------

TOTAL CURRENT LIABILITIES                                                             1,237,973           941,948
--------------------------------------------------------------------------------------------------------------------

OBLIGATION UNDER CAPITAL LEASES                                                           1,554                 -
--------------------------------------------------------------------------------------------------------------------

ACCRUED EQUIPMENT LEASE (Note 5(a))                                                           -         1,123,740
--------------------------------------------------------------------------------------------------------------------

LONG-TERM DEBT (Note 3)                                                                       -         2,314,005
--------------------------------------------------------------------------------------------------------------------

COMMITMENTS (Note 5)

SHAREHOLDERS' EQUITY (Notes 2, 3, 6 and 7)
     Preferred stock; par value $.01 per share; 5,000,000 shares authorized
         including:
         Series A Preferred Stock; 12,856 shares authorized,
              issued and outstanding, liquidation preference
              $1,000 per share (in aggregate $12,856,000)                                   128               128
         Series B Preferred Stock; 402,000 shares authorized; 337,056
              and 357,280 issued and outstanding, respectively,
              liquidation preference $16.88 per share (in aggregate
              $5,689,505 and $6,030,886, respectively)                                    3,370             3,572
     Common stock; par value $.001 per share; 150,000,000 shares
         authorized; 37,383,386 and 38,842,298 shares issued and
         outstanding, respectively                                                       37,384            38,843
     Additional paid-in capital                                                      37,741,925        38,873,716
     Deficit accumulated during the development stage                               (19,370,297)      (29,093,313)
--------------------------------------------------------------------------------------------------------------------

TOTAL SHAREHOLDERS' EQUITY                                                           18,412,510         9,822,946
--------------------------------------------------------------------------------------------------------------------

                                                                                $    19,652,037    $   14,202,639
====================================================================================================================
</Table>

                   SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       41
<Page>

<Table>
<Caption>

                                                                              CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                                                                 Cumulative
                                                                                                                    Amounts
                                                                                                                       From
                                                                                                                November 3,
                                                                                                                       1996
                                                        Year Ended         Year Ended          YEAR ENDED    (Inception) to
                                                      December 31,       December 31,        DECEMBER 31,      December 31,
                                                              1999               2000                2001              2001
------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                <C>                <C>                 <C>

OPERATING EXPENSES (Notes 5, 6 and 7)
     Research and development                      $     2,889,215    $     4,308,313    $      3,347,778   $    12,311,411
     General and administrative                          3,037,392          5,095,442           3,269,013        12,665,868
     Restructuring charges                                       -            597,025                   -           597,025
     Provision for future lease payments                         -                  -           1,264,208         1,264,208
------------------------------------------------------------------------------------------------------------------------------

Total operating expenses                                 5,926,607         10,000,780           7,880,999        26,838,512

LOSS FROM JOINT VENTURE (Note 3)                          (306,029)        (1,203,392)         (1,952,758)       (3,462,179)

INVESTMENT INCOME                                          179,795            417,110             110,741         1,207,378
------------------------------------------------------------------------------------------------------------------------------

NET LOSS                                                (6,052,841)       (10,787,062)         (9,723,016)  $   (29,093,313)
                                                                                                          ====================

DIVIDENDS ON PREFERRED STOCK (Notes 3, 6 and 8)           (220,677)        (2,704,751)         (2,943,755)
-----------------------------------------------------------------------------------------------------------

NET LOSS APPLICABLE TO COMMON SHAREHOLDERS         $    (6,273,518)   $   (13,491,813)   $    (12,666,771)
===========================================================================================================

BASIC AND DILUTED LOSS PER COMMON SHARE            $          (.17)   $          (.36)   $           (.33)
===========================================================================================================

WEIGHTED AVERAGE NUMBER OF COMMON
     SHARES OUTSTANDING - BASIC AND DILUTED             36,983,707         37,383,386          38,030,773
===========================================================================================================
</Table>

                  SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       42
<Page>

<Table>
<Caption>


                                                                     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                               Preferred Stock       Preferred Stock
                                                  Series A               Series B                Common Stock
                                            ---------------------- --------------------- -----------------------------
                                               Shares      Amount     Shares     Amount       Shares          Amount
==========================================================================================================================
<S>                                               <C>  <C>            <C>    <C>              <C>             <C>

Contribution of capital                             -  $        -          - $        -            -   $           -
Net loss for the period ended December 31, 1996     -           -          -          -            -               -
--------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 1996                       -           -          -          -            -               -

     Net loss for the period January 1, 1997 to
         May 15, 1997                               -           -          -          -            -               -
     Capital contribution                           -           -          -          -            -               -
--------------------------------------------------------------------------------------------------------------------------

BALANCE, at May 15, 1997                            -           -          -          -            -               -

     Issuance of common stock                       -           -          -          -    6,312,833           6,313
     Effect of recapitalization and merger          -           -          -          -   29,687,167          29,687
     Cost associated with recapitalization and
         merger                                     -           -          -          -            -               -
     Net loss for the period May 16, 1997 to
         December 31, 1997                          -           -          -          -            -               -
--------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 1997                       -           -          -          -   36,000,000          36,000

     Issuance of common stock                       -           -          -          -      875,020             875
     Costs associated with common stock
         issuance                                   -           -          -          -            -               -
     Options issued to consultants                  -           -          -          -            -               -
     Net loss for the year ended December 31, 1998  -           -          -          -            -               -
--------------------------------------------------------------------------------------------------------------------------


                                       43

<Page>

<Caption>
                                                              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Continued)
                                                                                               Deficit
                                                                                           Accumulated
                                                                          Additional        During the
                                                             Members'        Paid-in       Development
                                                              Capital        Capital             Stage         Total
========================================================================================================================
<S>                                                           <C>       <C>            <C>               <C>

Contribution of capital                                       $ 7,268   $          -   $             -   $     7,268
Net loss for the period ended December 31, 1996                (1,779)             -                 -        (1,779)
-----------------------------------------------------------------------------------------------------------------------


BALANCE, at December 31, 1996                                   5,489              -                 -         5,489

     Net loss for the period January 1, 1997 to May 15, 1997        -              -            (3,511)       (3,511)
     Capital contribution                                       3,511              -                 -         3,511
-----------------------------------------------------------------------------------------------------------------------


BALANCE, at May 15, 1997                                        9,000              -            (3,511)        5,489

     Issuance of common stock                                       -      1,797,137                 -     1,803,450
     Effect of recapitalization and merger                     (9,000)     1,181,500             1,732     1,203,919
     Cost associated with recapitalization and merger               -       (371,111)                -      (371,111)
     Net loss for the period May 16, 1997 to December 31, 1997      -              -          (554,702)     (554,702)
-----------------------------------------------------------------------------------------------------------------------


BALANCE, at December 31, 1997                                       -      2,607,526          (556,481)    2,087,045

     Issuance of common stock                                       -      6,999,125                 -     7,000,000
     Costs associated with common stock issuance                    -        (50,000)                -       (50,000)
     Options issued to consultants                                  -         45,446                 -        45,446
     Net loss for the year ended December 31, 1998                  -              -        (1,973,913)   (1,973,913)

</Table>
                  SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       44
<Page>

<Table>
<Caption>
                                                                     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Continued)

                                           Preferred Stock        Preferred Stock
                                              Series A                Series B              Common Stock
                                       ------------------------ -------------------------------------------------     Members'
                                             Shares     Amount    Shares      Amount      Shares         Amount        Capital
--------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>    <C>           <C>     <C>         <C>          <C>            <C>

BALANCE, at December 31, 1998                     - $        -         -  $        -  36,875,020   $     36,875   $          -

     Exercise of stock options                    -          -         -           -       4,500              5              -
     Issuance of warrants and options             -          -         -           -           -              -              -
     Issuance of common stock                     -          -         -           -     503,866            504              -
     Issuance of preferred stock             12,015        120         -           -           -              -              -
     Net loss for the year ended
         December 31, 1999                        -          -         -           -           -              -              -
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 1999                12,015        120         -           -  37,383,386         37,384              -

     Stock option compensation                    -          -         -           -           -              -              -
     Issuance of warrants and options             -          -         -           -           -              -              -
     Issuance of preferred stock dividend       841          8         -           -           -              -              -
     Issuance of preferred stock                  -          -   337,056       3,370           -              -              -
     Net loss for the year ended
         December 31, 2000                        -          -         -           -           -              -              -
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 2000                12,856        128   337,056       3,370  37,383,386         37,384              -
--------------------------------------------------------------------------------------------------------------------------------

<Caption>

                                                                          Deficit
                                                                      Accumulated
                                                    Additional         During the
                                                       Paid-in        Development
                                                       Capital              Stage           Total
---------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>                <C>
BALANCE, at December 31, 1998                    $   9,602,097   $     (2,530,394)  $   7,108,578

     Exercise of stock options                          50,058                  -          50,063
     Issuance of warrants and options                3,664,749                  -       3,664,749
     Issuance of common stock                        6,082,150                  -       6,082,654
     Issuance of preferred stock                    11,578,839                  -      11,578,959
     Net loss for the year ended
         December 31, 1999                                   -         (6,052,841)     (6,052,841)
---------------------------------------------------------------------------------------------------

BALANCE, at December 31, 1999                       30,977,893         (8,583,235)     22,432,162

     Stock option compensation                         125,020                  -         125,020
     Issuance of warrants and options                1,366,050                  -       1,366,050
     Issuance of preferred stock dividend                   (8)                 -               -
     Issuance of preferred stock                     5,272,970                  -       5,276,340
     Net loss for the year ended
         December 31, 2000                                   -        (10,787,062)    (10,787,062)
---------------------------------------------------------------------------------------------------

BALANCE, at December 31, 2000                       37,741,925        (19,370,297)     18,412,510
---------------------------------------------------------------------------------------------------
</Table>

                  SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       45
<Page>

<Table>
<Caption>

                                                                    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Continued)

                                           Preferred Stock        Preferred Stock
                                              Series A                Series B              Common Stock
                                       ------------------------ -------------------------------------------------     Members'
                                             Shares     Amount    Shares      Amount      Shares         Amount        Capital
--------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>    <C>          <C>      <C>         <C>          <C>            <C>
BALANCE, at December 31, 2000                12,856 $      128   337,056  $    3,370  37,383,386   $     37,384   $          -

     Stock option compensation                    -          -         -           -           -              -              -
     Issuance of common stock for cash            -          -         -           -     695,486            696              -
     Issuance of common stock in
         satisfaction of anti-dilution
         provision                                -          -         -           -     763,426            763              -
     Issuance of preferred stock dividend         -          -    20,224         202           -              -              -
     Net loss for the year ended
         December 31, 2001                        -          -         -           -           -              -              -
--------------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 2001                12,856 $      128   357,280  $    3,572  38,842,298   $     38,843   $          -
================================================================================================================================

<Caption>

                                                                                Deficit
                                                                              Accumulated
                                                            Additional         During the
                                                               Paid-in        Development
                                                               Capital              Stage           Total
                                                        ---------------------------------------------------
<S>                                                      <C>             <C>                <C>

BALANCE, at December 31, 2000                            $  37,741,925   $    (19,370,297)  $  18,412,510

     Stock option compensation                                  64,729                  -          64,729
     Issuance of common stock for cash                       1,068,027                  -       1,068,723
     Issuance of common stock in satisfaction
         of anti-dilution provision                               (763)                 -               -
     Issuance of preferred stock dividend                         (202)                 -               -
     Net loss for the year ended December 31, 2001                   -         (9,723,016)     (9,723,016)
-----------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 2001                            $  38,873,716   $    (29,093,313)  $   9,822,946
===========================================================================================================
</Table>


                    SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       46
<Page>

<Table>
<Caption>

                                                                                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                                 Cumulative
                                                                                                                    Amounts
                                                                                                                       From
                                                                                                                November 3,
                                                                                                                       1996
                                                        Year Ended         Year Ended         YEAR ENDED     (Inception) to
                                                      December 31,       December 31,       DECEMBER 31,       December 31,
                                                              1999               2000               2001               2001
------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                <C>               <C>                <C>

CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                      $    (6,052,841)   $   (10,787,062)  $     (9,723,016)  $    (29,093,313)
     Depreciation and amortization                         282,049            416,511            442,191          1,306,585
     Loss (gain) on disposal of equipment and
         leasehold improvements                                  -             43,041             (4,617)            38,424
     Gain on sale of marketable securities                       -                  -                  -            (18,503)
     United States Treasury Notes
         amortization                                       24,914            (41,437)            (1,029)            12,586
     Stock option compensation                             381,321            125,020             64,729            616,516
     Issuance of warrants in exchange for
         services rendered                               1,043,466          2,191,262            760,363          3,995,091
     Loss from investment in affiliate                     306,029          1,203,392          1,952,758          3,462,179
     Changes in operating assets and
         liabilities
         Prepaid expenses                                 (155,315)           408,595            152,340            (29,775)
         Interest receivable                                37,144             (8,892)            93,219                  -
         Accounts payable                                  (21,085)          (141,444)          (267,945)           373,774
         Accrued expenses                                        -            579,452            (11,278)           568,174
         Accrued equipment lease                                 -                  -          1,123,740          1,123,740
------------------------------------------------------------------------------------------------------------------------------

Net cash used in operating activities                   (4,154,318)        (6,011,562)        (5,418,545)       (17,644,522)
------------------------------------------------------------------------------------------------------------------------------


CASH FLOWS FROM INVESTING ACTIVITIES
     Sale of marketable securities                               -                  -                  -          2,164,464
     Purchases of marketable securities                          -                  -                  -         (2,182,967)
     Purchases of United States Treasury
         Notes                                          (5,475,373)       (11,749,970)        (4,870,000)       (38,656,973)
     Sales of United States Treasury Notes               5,660,000         12,320,000          9,815,000         39,778,548
     Purchase of equipment and leasehold
         improvements                                     (374,741)          (516,186)           (45,938)        (1,943,553)
     Proceeds from sale of equipment                             -                  -            145,551            145,551
     Costs to acquire patent                              (150,000)           (50,000)                 -           (237,335)
     Investment in and advances to affiliate           (12,304,459)            93,548         (2,245,948)       (14,456,859)
     (Increase) decrease  in restricted cash              (100,000)           100,000                  -                  -
     Increase in deposit                                   (29,370)          (500,000)           (14,383)          (543,753)
------------------------------------------------------------------------------------------------------------------------------

Net cash (used in) provided by investing
activities                                             (12,773,943)          (302,608)         2,784,282        (15,932,877)
------------------------------------------------------------------------------------------------------------------------------
</Table>

                  SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       47
<Page>

<Table>
<Caption>

                                                                           CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

                                                                                                                  Cumulative
                                                                                                                     Amounts
                                                                                                                        From
                                                                                                                 November 3,
                                                                                                                        1996
                                                         Year Ended         Year Ended         YEAR ENDED     (Inception) to
                                                       December 31,       December 31,       DECEMBER 31,       December 31,
                                                               1999               2000               2001               2001
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                <C>                <C>                <C>

CASH FLOWS FROM FINANCING ACTIVITIES
     Principal payments on capital leases          $       (108,255)  $        (21,148)  $        (18,356)  $       (291,704)
     Net proceeds from issuance of equity                18,066,063          5,276,340          1,068,723         31,367,439
     Proceeds from capital contributions by
         shareholders                                             -                  -                  -          1,911,674
     Proceeds from issuance of debt                               -                  -          2,314,005          2,314,005
     Cost of recapitalization                                     -                  -                  -           (371,111)
-------------------------------------------------------------------------------------------------------------------------------

Net cash provided by financing activities                17,957,808          5,255,192          3,364,372         34,930,303
-------------------------------------------------------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH AND CASH
     EQUIVALENTS                                          1,029,547         (1,058,978)           730,109          1,352,904

CASH AND CASH EQUIVALENTS, at beginning of year             652,226          1,681,773            622,795                  -
-------------------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, at end of year          $      1,681,773   $        622,795   $      1,352,904   $      1,352,904
===============================================================================================================================
</Table>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

     2000
         Warrants issued in exchange for consulting services of $1,366,050.

     1999
        $300,000 of patent costs were paid through the issuance of common stock.

         Warrants issued in exchange for consulting services of $2,629,041.

                    SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       48
<Page>

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.      ORGANIZATION AND
        SIGNIFICANT ACCOUNTING
        POLICIES

        NATURE OF OPERATIONS       Photogen Technologies, Inc. (the "Company"),
                                   through its subsidiary Photogen, Inc.,
                                   successor to Photogen, L.L.C., is a
                                   development-stage biopharmaceutical company
                                   that is focusing on developing a novel
                                   contrast agent with potential applications
                                   (1) as a blood pool agent to diagnose
                                   diseased tissue in the cardiovascular system
                                   and other organs and (2) to diagnose cancer
                                   metastasizing into the lymphatic system. The
                                   Company also has in development certain
                                   minimally invasive products for the
                                   treatment of psoriasis and other topical
                                   diseases and cancer and certain laser device
                                   technology. The Company also has an
                                   investment in a joint venture (Note 3).

        PRINCIPLES OF              Intercompany balances and transactions have
        CONSOLIDATION              been eliminated in consolidation.

        ESTIMATES                  The financial statements include estimated
                                   amounts and disclosures based on management's
                                   assumptions about future events. Actual
                                   results may differ from those estimates.

        CASH EQUIVALENTS           Highly liquid investments with a maturity of
                                   three months or less when purchased are
                                   classified as cash equivalents.

        UNITED STATES TREASURY     United States Treasury notes are classified
        NOTES                      as held-to-maturity securities and all
                                   investments mature within one year.
                                   Held-to-maturity securities are stated at
                                   amortized cost which approximates market.

        EQUIPMENT AND LEASEHOLD    Equipment and leasehold improvements are
        IMPROVEMENTS               stated at cost. Depreciation and
                                   amortization of equipment are provided for
                                   using the straight-line method over the
                                   estimated useful lives of the assets.
                                   Computers and laboratory equipment are being
                                   depreciated over five years, furniture and
                                   fixtures are being depreciated over seven
                                   years and leasehold improvements are being
                                   amortized over five years. Leasehold
                                   improvements are being amortized on a
                                   straight-line basis over the lives of the
                                   respective leases or the service lives of
                                   the improvements, whichever is shorter.
                                   Depreciation expense was $264,688, $374,845
                                   and $400,525 for 1999, 2000 and 2001,
                                   respectively.


                                       49
<Page>

                                   The Company reviews the carrying values of
                                   its other long-lived assets for possible
                                   impairment whenever an event or change in
                                   circumstances indicates that the carrying
                                   amount of the assets may not be recoverable.
                                   Any long-lived assets held for disposal are
                                   reported at the lower of their carrying
                                   amounts or fair value less cost to sell.

       PATENT COSTS                Internal patent costs are expensed in
                                   the period incurred. Patents purchased are
                                   capitalized and amortized over the life of
                                   the patent.

       RESEARCH AND DEVELOPMENT    Research and development costs are charged to
                                   expense when incurred.

       INCOME TAXES                The Company recognizes deferred tax
                                   assets and liabilities for the expected
                                   future tax consequences of temporary
                                   differences between the tax basis and
                                   financial reporting basis of certain assets
                                   and liabilities based upon currently enacted
                                   tax rates expected to be in effect when such
                                   amounts are realized or settled.

                                   The Company has not recorded an income tax
                                   benefit for net operations losses incurred of
                                   approximately $20,510,000 primarily expiring
                                   in 2018 through 2021, or for equity losses in
                                   affiliate of approximately $3,462,000. The
                                   Company is in the development stage and
                                   realization of the losses is not considered
                                   more likely than not. An income tax valuation
                                   allowance has been provided for the losses
                                   realized to date.

       BASIC AND DILUTED LOSS      Basic and diluted loss per common share is
       PER COMMON SHARE            computed based on the weighted average
                                   number of common shares outstanding. Loss
                                   per share excludes the impact of outstanding
                                   options, warrants, convertible preferred
                                   stock and convertible debt as they are
                                   antidilutive. Potential common shares
                                   excluded from the calculation at December
                                   31, 2001 are 6,519,000 options, 1,149,724
                                   warrants, 1,124,268 shares issuable upon the
                                   conversion of Series A and B Preferred Stock
                                   and 130,162 shares issuable upon conversion
                                   of long-term debt.

       FINANCIAL INSTRUMENTS       The carrying amounts reported in the
                                   consolidated balance sheets for cash,
                                   treasury notes, accounts payable and accrued
                                   expenses approximate fair value because of
                                   the short-term nature of these amounts. The
                                   Company believes the fair value of its
                                   fixed-rate borrowings approximates the
                                   market value.


                                       50
<Page>

        RECLASSIFICATION           Certain 2000 amounts have been reclassified
                                   to conform with the 2001 presentation.

        RECENT ACCOUNTING          In June 1998, the FASB issued Statement of
        PRONOUNCEMENTS             Financial Accounting Standards ("SFAS") No.
                                   133, "Accounting for Derivative Instruments
                                   and Hedging Activities," which establishes
                                   accounting and reporting standards for
                                   derivative instruments and hedging
                                   activities. SFAS 133 is effective for years
                                   beginning after June 15, 2000. It requires
                                   that an entity recognize all derivatives as
                                   either assets or liabilities in the
                                   statement of financial position and measure
                                   those instruments at fair value. The
                                   Company, to date, has not engaged in
                                   derivative or hedging activities.

                                   In June 2001, the Financial Accounting
                                   Standards Board finalized SFAS No. 142,
                                   "Goodwill and Other Intangible Assets." SFAS
                                   142 requires, among other things, that
                                   companies no longer amortize goodwill, but
                                   instead test goodwill for impairment at least
                                   annually. In addition, SFAS 142 requires that
                                   the Company identify reporting units for the
                                   purposes of assessing potential future
                                   impairments of goodwill, reassess the useful
                                   lives of other existing recognized intangible
                                   assets, and cease amortization of intangible
                                   assets with an indefinite useful life. An
                                   intangible asset with an indefinite useful
                                   life should be tested for impairment in
                                   accordance with the guidance in SFAS 142.
                                   SFAS 142 is required to be applied in fiscal
                                   years beginning after December 15, 2001 to
                                   all goodwill and other intangible assets
                                   recognized at that date, regardless of when
                                   those assets were initially recognized. SFAS
                                   142 requires the Company to complete a
                                   transitional goodwill impairment test six
                                   months from the date of adoption. The Company
                                   is also required to reassess the useful lives
                                   of other intangible assets within the first
                                   interim quarter after adoption of SFAS 142.
                                   The Company is currently assessing but has
                                   not yet determined how the adoption of SFAS
                                   142 will impact its financial position and
                                   results of operations.


                                       51
<Page>

                                   In October 2001, the Financial Accounting
                                   Standards Board issued SFAS No. 144,
                                   "Accounting for the Impairment or Disposal of
                                   Long-Lived Assets." This statement addresses
                                   financial accounting and reporting for the
                                   impairment or disposal of long-lived assets.
                                   This statement supersedes SFAS No. 121,
                                   "Accounting for the Impairment of Long-Lived
                                   Assets and for Long-Lived Assets to Be
                                   Disposed of," and the accounting and
                                   reporting provisions of APB Opinion No. 30,
                                   "Reporting the Results of Operations,
                                   Reporting the Effects of Disposal of a
                                   Segment of a Business and Extraordinary,
                                   Unusual and Infrequently Occurring Events and
                                   Transactions," for the disposal of a segment
                                   of a business. The provisions of SFAS 144
                                   will be effective for fiscal years beginning
                                   after December 15, 2001. The Company is
                                   currently evaluating the implications of
                                   adoption of SFAS 144 and anticipates adopting
                                   its provisions in fiscal year 2002.

2.      RECAPITALIZATION AND       On May 16, 1997, MT Financial Group, Inc.
        MERGER                     (an inactive public company), through its
                                   wholly owned subsidiary, effected a reverse
                                   merger with Photogen, Inc. ("Photogen"),
                                   successor to Photogen, L.L.C. Photogen,
                                   L.L.C. was incorporated on September 10,
                                   1996 and commenced operations November 3,
                                   1996. Photogen, L.L.C. was formed to develop
                                   proprietary laser-based technologies related
                                   to photodynamic therapy. Legally, Photogen
                                   is a wholly owned subsidiary of Photogen
                                   Technologies, Inc. (formerly known as MT
                                   Financial Group, Inc.).

                                   For financial reporting purposes, Photogen
                                   was deemed to be the acquiring entity. The
                                   transaction has been reflected in the
                                   accompanying financial statements as (1) a
                                   recapitalization of Photogen (consisting of a
                                   48,000-for-one stock split and change in par
                                   value) and (2) an issuance of shares by
                                   Photogen in exchange for all of the
                                   outstanding shares of MT Financial Group,
                                   Inc.


                                       52
<Page>

                                   As part of the recapitalization, the Company
                                   sold 6,312,833 shares of common stock for a
                                   total purchase price of approximately
                                   $1,803,450. Further, as consideration for the
                                   acquisition of Photogen, 24,000,000 shares of
                                   common stock were issued. Five founding
                                   shareholders have agreed not to sell these
                                   shares until May 2004 without the prior
                                   consent of the Company. These shareholders
                                   currently hold approximately 20,548,000
                                   shares.

                                   Legal and brokerage fees of approximately
                                   $371,000 were charged to additional paid-in
                                   capital as costs of the recapitalization and
                                   merger. Included in the paid-in capital is
                                   the net cash of approximately $109,000 from
                                   MT Financial Group, Inc.

3.      JOINT VENTURE/             On October 7, 1999, the Company formed a
        INVESTMENT IN              joint venture with Elan International
        AFFILIATE                  Services, Ltd. ("Elan") to develop and
                                   commercialize nanoparticulate diagnostic
                                   imaging agents for the detection and
                                   treatment of cancer through lymphography.

                                   Sentigen Ltd. ("Sentigen") was formed to hold
                                   the operations, assets and liabilities of the
                                   joint venture. Elan purchased 2,980 shares of
                                   Sentigen nonvoting convertible preferred
                                   stock for $2,985,000 representing a 19.9%
                                   ownership interest. Elan also purchased
                                   12,015 shares of the Company's Series A
                                   convertible exchangeable preferred stock for
                                   $12,015,000. In connection with the issuance
                                   of the preferred stock to Elan, the Company
                                   granted warrants to Elan to purchase 100,000
                                   shares of the Company's common stock at
                                   $21.17 per share which was valued at
                                   $678,000. As a result, a preferred stock
                                   dividend of $436,041 is being recorded for
                                   the accretion of the preferred stock to its
                                   face value of $12,015,000 over the period
                                   until it is first convertible. Beginning in
                                   2000, in accordance with EITF 00-27, the
                                   Company recorded an additional preferred
                                   stock dividend to represent the beneficial
                                   conversion feature associated with the
                                   intrinsic value of the Series A Preferred
                                   conversion option. As a result, an additional
                                   preferred stock dividend of $436,041 is being
                                   recorded over the period until it is first
                                   convertible. As of December 31, 2001, the
                                   beneficial conversion feature had been fully
                                   recorded.


                                       53
<Page>

                                   The Company purchased 12,000 shares of
                                   Sentigen's common stock for $12,015,000
                                   representing an 80.1% ownership interest.

                                   Sentigen used the $15,000,000 received from
                                   the Company and Elan to purchase from Elan a
                                   worldwide license to certain patented Elan
                                   technology related to the joint venture.
                                   Expenses incurred by the Company and Elan,
                                   which relate to the development of the
                                   diagnostic imaging agents, are charged to
                                   Sentigen.

                                   Elan granted the Company a line of credit of
                                   $4,806,000 to be used by the Company to fund
                                   their portion of Sentigen's research and
                                   development. Principal and interest under the
                                   line of credit, if any, become due and
                                   payable in 2005 or, at the option of Elan,
                                   can be converted into the Company's common
                                   stock at $18.15 per share. Any borrowings
                                   under the line of credit would bear interest
                                   at 8%. There were no borrowings on this line
                                   of credit at December 31, 2000. At December
                                   31, 2001, borrowings on this line of credit
                                   were $2,314,005 and accrued interest was
                                   $48,429.

                                   In connection with the joint venture
                                   agreement, Elan also purchased 461,538 shares
                                   of the Company's common stock for $6,000,000.
                                   If in the Company's next third-party offering
                                   after the issuance of the Series A Preferred,
                                   it sells common stock at a price less than
                                   $13 per share, the Company must issue
                                   additional shares to Elan so that Elan's
                                   overall price for its common stock equals the
                                   effective price in that third-party offering.
                                   During 2001, the Company issued 763,426
                                   shares of common stock to satisfy this
                                   requirement.

                                   The total cash proceeds from the equity
                                   issuance to Elan of $18,015,000 were
                                   allocated to the common stock, preferred
                                   stock and the warrants.

                                   Elan has substantive participating rights in
                                   Sentigen, including the requirement for
                                   approval of the business plan and budgets and
                                   equal representation on the management
                                   committee which decides all day-to-day
                                   functions. As a result, the Company's
                                   investment in Sentigen is recorded under the
                                   equity method.


                                       54
<Page>

                                   Following is summarized financial information
                                   for Sentigen at December 31, 2000 and 2001:

<Table>
<Caption>
                                                                                           2000             2001
                                 ---------------------------------------------------------------------------------
<S>                                                                              <C>             <C>

                                 Cash                                            $            -  $         9,345
                                 License purchased from Elan,
                                     net of amortization of
                                     $244,565 and $1,222,829,
                                     respectively                                    14,755,435       13,777,171
                                 ---------------------------------------------------------------------------------

                                 Total assets                                    $   14,755,435  $    13,786,516
                                 =================================================================================

                                 Due to affiliates                               $    1,639,855  $       210,596

                                 Total shareholders' equity                          13,115,580       13,575,920
                                 ---------------------------------------------------------------------------------

                                 Total liabilities and equity                    $   14,755,435  $    13,786,516
                                 =================================================================================

                                 Research and development expense                $    1,257,815  $     1,450,291
                                 Amortization of license                                244,565          978,264
                                 ---------------------------------------------------------------------------------

                                 Net loss                                        $    1,502,380  $     2,428,555
                                 =================================================================================
</Table>


                                       55
<Page>

4.      ACCRUALS                   Accrued expenses consist of the following:

<Table>
<Caption>
                                   DECEMBER 31,                                         2000           2001
                                   ---------------------------------------------------------------------------
<S>                                <C>                                         <C>            <C>
                                   Accrued salaries                            $     195,345  $      93,963
                                   Accrued bonuses                                    54,107        251,850
                                   Accrued interest (Note 3)                               -         48,429
                                   Accrued restructuring (Note 9)                    330,000        173,932
                                   ---------------------------------------------------------------------------

                                                                               $     579,452  $     568,174
                                   ===========================================================================
</Table>

5.      COMMITMENTS            (a) At December 31, 2001, the Company has a
                                   lease for office and laboratory space in
                                   Knoxville, Tennessee, expiring in May 2002
                                   and a lease for office space in New Hope,
                                   Pennsylvania, expiring in August 2004.

                                   The Company also has an operating lease for
                                   laboratory equipment expiring in 2004.
                                   During 2001, the Company determined that
                                   equipment leased by the Company under this
                                   operating lease would no longer be used by
                                   the Company in its research. As a result, in
                                   2001, the Company recorded a provision for
                                   all future lease payments of $1,264,208.
                                   $568,138 of this provision was recorded in
                                   the fourth quarter. At December 31, 2001,
                                   $1,123,740 remains to be paid. In conjunction
                                   with this operating lease, the Company
                                   provided $500,000 as cash collateral to be
                                   refunded over the term of the lease. In 2002,
                                   $100,000 was refunded and, accordingly, this
                                   amount has been recorded as a current deposit
                                   at December 31, 2001. The Company and the
                                   lessor have agreed to offset certain future
                                   lease payments with the remaining $400,000
                                   deposit. As a result, an amount representing
                                   2002 lease payments of $374,580 has been
                                   classified as a current deposit at
                                   December 31, 2001.

                                   Total rental expense charged to operations
                                   for the years ended December 31, 1999, 2000
                                   and 2001 aggregated approximately $44,000,
                                   $352,000 and $358,000, respectively.


                                       56
<Page>

                                   Minimum future rental payments under
                                   these leases are as follows:

<Table>
<Caption>

                                                                                  Operating
                                          YEAR ENDING DECEMBER 31,                   Leases
                                          ----------------------------------------------------
<S>                                                                          <C>
                                          2002                               $      561,000
                                          2003                                      547,000
                                          2004                                      475,000
                                          ----------------------------------------------------

                                          Total                              $    1,583,000
                                          ====================================================
</Table>

                                   (b)      The Company has entered into
                                            employment agreements with certain
                                            officers and employees for initial
                                            terms ranging between three and five
                                            years expiring in 2002 and 2003.
                                            Under the terms of these agreements,
                                            the officers and employees are each
                                            entitled to initial annual salaries
                                            ranging between $100,000 and
                                            $265,000 plus fringe benefits
                                            (subject to adjustments).

6.      EQUITY TRANSACTIONS         (a)     The Company applies the recognition
                                            provisions of SFAS No. 123,
                                            "Accounting for Stock-Based
                                            Compensation," in accounting for
                                            stock options issued to
                                            nonemployees. The Company has
                                            issued options and warrants in
                                            exchange for consulting services
                                            rendered. The Company issued 10,000
                                            options and 502,000 warrants in
                                            1999, 21,000 options and 515,000
                                            warrants in 2000 and 30,000 options
                                            in 2001. As the fair market value
                                            of these services was not readily
                                            determinable, these services were
                                            valued based on the fair market
                                            value, determined using the
                                            Black-Scholes option pricing model,
                                            for the options issued which ranged
                                            from $5.22 to $9.52 in 1999, $1.34
                                            to $9.51 in 2000 and $1.70 in 2001.
                                            Consulting costs charged to
                                            operations were $1,199,787 in 1999,
                                            $2,316,282 in 2000 and $825,092 in
                                            2001. At December 31, 2000,
                                            $760,363 was classified as prepaid
                                            consulting expense as this amount
                                            represented payment in fully vested
                                            nonforfeitable warrants for
                                            services to be provided in the
                                            future. There was no prepaid
                                            consulting at December 31, 2001.


                                       57
<Page>

                                   (b)      In August 1999, the Company
                                            purchased patents for $500,000 which
                                            were satisfied by the issuance of
                                            42,328 shares of the Company's
                                            common stock valued at $300,000 and
                                            cash of $200,000.

                                   (c)      In 1999, the Company issued 740,000
                                            variable stock options to employees
                                            which would vest upon completion of
                                            performance milestones. Exercise
                                            prices ranged from $9.38 to $18.13
                                            and expired in 10 years. As of
                                            December 31, 1999, 75,000 of these
                                            shares had vested. Compensation
                                            charged to operations was $225,000
                                            in 1999. In 2000, all of these
                                            variable stock options were
                                            cancelled.

                                    (d)     Series A Preferred Stock - The
                                            Company originally designated
                                            12,015 shares of preferred stock
                                            as Series A Preferred Stock
                                            ("Series A Preferred"). For the
                                            first six years from issuance,
                                            the preferred stock has a
                                            mandatory dividend of 7%. Such
                                            dividends are cumulative and
                                            compound on a semiannual basis
                                            and are payable semiannually
                                            solely by the issuance of
                                            additional preferred Series A
                                            stock. The Company has a deficit
                                            and, as a result, the dividends
                                            have been recorded against
                                            paid-in capital. In accordance
                                            with the provisions of the
                                            agreement, the Company issued 841
                                            additional preferred shares in
                                            2000 in settlement of dividend
                                            requirements. Therefore, at
                                            December 31, 2001, there were
                                            12,856 shares of Series A
                                            Preferred outstanding. The
                                            Company has accrued and will
                                            issue 932 preferred shares in
                                            fulfillment of the 2001 dividend
                                            requirement. The Series A
                                            Preferred shall rank senior to
                                            any future series of preferred
                                            stock unless the majority of the
                                            Series A shareholders agree to
                                            rank pari passu with any future
                                            issuances. The liquidation
                                            preference is $1,000 per share.
                                            The Series A Preferred is
                                            convertible, after two years but
                                            before six years from issuance,
                                            into common stock of the Company
                                            with an initial

                                       58
<Page>

                                           conversion price of $21.17. The
                                           conversion price is subject to
                                           adjustment for certain dilutive
                                           events. Alternatively, the holder of
                                           the Series A Preferred can elect to
                                           exchange the Series A preferred
                                           shares for the number of shares in
                                           Sentigen which would allow the Series
                                           A holder to then own a total of 50%
                                           of Sentigen. The Series A holder is
                                           currently the minority shareholder in
                                           Sentigen. The exchange right is not
                                           available for any shares which have
                                           been converted to common stock. The
                                           exchange right terminates six years
                                           from the issuance of the Series A
                                           Preferred. The Series A Preferred was
                                           issued in October 1999.

                                           The holder of Series A Preferred is
                                           only entitled to vote on matters that
                                           adversely affect or change the rights
                                           of holders of Series A Preferred and
                                           does not have the right to vote on
                                           the election of directors of the
                                           Company. The holder of Series A
                                           Preferred also has a preemptive right
                                           until October 2003 to participate in
                                           any offering of the Company.

                                    (e)    Series B Preferred Stock - In
                                           February 2000, the Company
                                           completed a private placement of
                                           its Series B Convertible Preferred
                                           Stock ("Series B Preferred"). The
                                           Company received cash proceeds, net
                                           of related expenses, of $5,276,340
                                           in exchange for 337,056 shares of
                                           the Series B Preferred. The Series
                                           B Preferred has an annual dividend
                                           rate of 6%. Such dividends are
                                           cumulative, shall compound on an
                                           annual basis and are payable
                                           annually by the issuance of
                                           additional preferred Series B
                                           stock. The Company has a deficit
                                           and, as a result, the dividends
                                           will be recorded against paid-in
                                           capital. In accordance with the
                                           provisions of the agreement, the
                                           Company issued 20,224 additional
                                           preferred shares in settlement of
                                           dividend requirements. Therefore,
                                           at December 31, 2001, there were
                                           357,280 shares of Series B
                                           Preferred outstanding. The Company
                                           has accrued and will issue 21,437
                                           preferred shares in 2002. The
                                           Series B Preferred is subordinate
                                           to the Series A Preferred.


                                       59
<Page>

                                           Subject to the senior liquidation
                                           preference of the Series A Preferred
                                           stockholder, and the liquidation
                                           preference of any senior or pari
                                           passu securities created by the
                                           Company in the future with the
                                           requisite consent of the holders of
                                           Series B Preferred, each share of
                                           Series B Preferred is entitled to a
                                           liquidation preference equal to
                                           $16.88 per share, before any amounts
                                           are paid on the common stock on
                                           liquidation. If the Company is
                                           acquired by another entity or sells
                                           all or substantially all of its
                                           assets, and if it pays an amount
                                           equal to the liquidation preference
                                           of the Series A Preferred and any
                                           other senior security, holders of
                                           Series B Preferred will be entitled
                                           to receive the liquidation preference
                                           unless the stockholders prior to the
                                           transaction hold at least 50% of the
                                           voting power of the surviving or
                                           acquiring entity or if the holders of
                                           a majority of Series B Preferred
                                           agree by vote or written consent to
                                           exclude the acquisition or sale from
                                           this provision.

                                           Each share of Series B Preferred has
                                           the number of votes equal to the
                                           number of shares of common stock into
                                           which the share of Series B Preferred
                                           would be convertible, and is entitled
                                           to vote together with the common
                                           stock. Certain matters, such as an
                                           amendment to the terms of the Series
                                           B Preferred Certificate of
                                           Designation or a change in the
                                           preferences or any relative or other
                                           rights of the Series B Preferred
                                           (except for issuance of a special
                                           senior security), may have to be
                                           approved by a majority of the holders
                                           of Series B Preferred voting as a
                                           separate class. This right is subject
                                           to the Company's ability to require
                                           mandatory conversion of Series B
                                           Preferred if a special senior
                                           security (discussed below) is not
                                           approved.

                                           Holders of Series B Preferred may
                                           convert shares of Series B Preferred
                                           into 1.4 shares of common stock at
                                           any time.


                                       60
<Page>

                                           The Series B Preferred contains
                                           beneficial conversion features.
                                           Emerging Issues Task Force Issue
                                           98-5, "Accounting for Convertible
                                           Securities with Beneficial Conversion
                                           Features or Contingently Adjustable
                                           Conversion Ratios," requires the
                                           issuer to assume that the holder will
                                           not convert the instrument until the
                                           time of the most beneficial
                                           conversion which would occur after
                                           January 1, 2002. Using the conversion
                                           ratio at January 1, 2002 of 1.4
                                           shares of common stock and the stock
                                           price at the date of issuance, the
                                           maximum beneficial conversion amount
                                           is $2,322,316. This amount will be
                                           recorded as additional preferred
                                           stock dividends over the period from
                                           issuance until January 1, 2002.
                                           Through December 31, 2001, this full
                                           amount has been recorded as
                                           additional dividends.

                                           The conversion ratio is subject to
                                           adjustment for certain dilutive
                                           events, including issuance of common
                                           stock or equivalent securities at
                                           less than $16.88 per share. In 2001,
                                           the Company issued common stock at
                                           less than $16.88. As a result, the
                                           revised conversion ratio for the
                                           number of shares of common stock
                                           issuable upon conversion of Series B
                                           Preferred is 1.44703 at December 31,
                                           2001.

                                           The Company may require holders of
                                           Series B Preferred to convert their
                                           shares into common stock (at the same
                                           ratios that would apply for a
                                           voluntary conversion, except as
                                           described in the second and third
                                           bullet points below) in connection
                                           with any of the following events:

                                           -    If the holders of a majority of
                                                the Series B Preferred approve
                                                a mandatory conversion;

                                           -    Immediately prior to a firm
                                                commitment, underwritten public
                                                offering of the Company's common
                                                stock in which they receive $20
                                                million or more in gross
                                                proceeds;


                                       61
<Page>

                                           -    If the holders of a majority of
                                                Series B Preferred do not
                                                approve any transaction to issue
                                                a security senior or pari passu
                                                to the Series B Preferred in a
                                                transaction involving any
                                                vendor, licensor or joint
                                                venturer or other commercial
                                                transaction (a "special senior
                                                security"), the purpose of which
                                                is not solely to provide
                                                financing, and which the Board
                                                has approved and recommended; or

                                            -   At any time after January 1,
                                                2005.

                                    (f)    Common Stock - The Company is
                                           subject to six sets of registration
                                           rights agreements covering an
                                           aggregate of 5,490,162 shares of
                                           the Company's common stock,
                                           warrants that have vested covering
                                           the Company's common stock and
                                           common stock issuable upon
                                           conversion of the Company's Series
                                           A and B Preferred. All of the
                                           agreements contain piggyback
                                           registration rights and two contain
                                           demand registration rights upon the
                                           occurrence of certain events and
                                           subject to various terms and
                                           conditions. Of the 5,490,162
                                           shares, 4,260,000 shares are
                                           entitled to piggyback registration
                                           only and 1,230,162 are entitled to
                                           both demand and piggyback
                                           registration. Warrants that have
                                           vested covering 1,149,724 shares of
                                           the Company's common stock have
                                           weighted average anti-dilution
                                           rights.

                                           On March 13, 1998, the Company
                                           completed a private placement of
                                           875,020 shares of common stock for
                                           $8.00 per share to a number of
                                           accredited investors. The Company
                                           received $7,000,000 in gross proceeds
                                           from this offering.

                                           On February 9, 2001, the Company's
                                           shelf registration on Form S-3 was
                                           declared effective. Under the shelf
                                           registration, the Company may issue
                                           up to $40,000,000 of common stock. As
                                           of December 31, 2001, 695,486 shares
                                           have been issued under the shelf
                                           registration for cash proceeds of
                                           $1,068,723, net of related expenses
                                           of $56,252.


                                       62
<Page>

7.      STOCK INCENTIVE PLANS      The Company maintains three long-term
        AND WARRANTS               incentive compensation plans, which are
                                   described as follows:

                                   -    The 1998 Long-Term Incentive
                                        Compensation Plan, which provides for
                                        the granting of up to 2,000,000 stock
                                        options to key employees, directors and
                                        consultants;

                                   -    The 2000 Long-Term Incentive
                                        Compensation Plan, which provides for
                                        the granting of up to 2,000,000 stock
                                        options to key employees, directors and
                                        consultants;

                                   -    The 2000 Senior Executive Long-Term
                                        Incentive Compensation Plan, which
                                        provides for the granting of up to
                                        5,000,000 stock options to senior
                                        executives.

                                   Options granted under these plans may be
                                   either "incentive stock options" within the
                                   meaning of Section 422A of the Internal
                                   Revenue Code, or nonqualified options.

                                   The stock options are exercisable over a
                                   period determined by the Board of Directors
                                   (through its Compensation Committee), but
                                   generally no longer than 10 years after the
                                   date they are granted.

                                 Information with respect to the plans follows:

<Table>
<Caption>


                                 YEAR ENDED DECEMBER 31,                     1999            2000           2001
                                 ----------------------------------------------------------------------------------
<S>                                                                 <C>             <C>             <C>
                                 Options outstanding at beginning
                                     of year                               92,500       1,205,500      5,644,000
                                 Options granted                        1,117,500       5,546,000        875,000
                                 Options forfeited                              -      (1,107,500)             -
                                 Options exercised                         (4,500)              -              -
                                 ----------------------------------------------------------------------------------

                                 Options outstanding at end of year     1,205,500       5,644,000      6,519,000
                                 ==================================================================================

                                 Option prices per share granted    $9.38 - 19.38   $2.75 - 15.00   $1.14 - 5.31
                                 ==================================================================================

                                 Weighted average exercise price
                                     Options granted                $       11.83   $       10.38   $       2.03
                                     Options exercised                      11.13               -              -
                                     Options forfeited                          -           11.82              -
                                     Options outstanding at end of
                                          year                              11.94           10.47           9.29
                                     Options exercisable at end of
                                          year                               9.88            6.37          10.76
                                 Number of shares exercisable              18,500         112,500      1,833,333
</Table>


                                       63
<Page>

<Table>
<Caption>

                                              Options Outstanding                      Options Exercisable
                                   -----------------------------------------------------------------------------------
                                                                   Weighted                                 Weighted
                                                                    Average                      Number      Average
                                                       Number      Remaining                  Outstanding   Remaining
                                       Range of    Outstanding at Contractual    Range of          at      Contractual
                                       Exercise     December 31,     Life        Exercise     December 31,    Life
                                        Price           2001        (Years)        Price          2001       (Years)
                                   -----------------------------------------------------------------------------------
<S>                                                     <C>               <C>  <C>               <C>            <C>
                                   $1.14-1.70             225,000         9.9      $1.14-1.70            -        -
                                   $1.91-2.13             600,000         9.1      $1.91-2.13            -        -
                                   $2.75                1,528,000         8.9           $2.75      427,000      8.9
                                   $5.31                   50,000         9.1           $5.31            -        -
                                   $6.875-8.25          1,018,000         8.6          $6.875      351,333      8.6
                                   $11.125-13.250          88,000         6.7  $11.125-13.250       49,000      6.7
                                   $15.00-15.06         3,010,000         8.4          $15.06    1,006,000      8.4
</Table>

                                   The Company applies APB Opinion 25 and
                                   related interpretations in accounting for
                                   stock options granted to employees and
                                   directors. Under APB Opinion 25, no
                                   compensation cost is recorded if the exercise
                                   price is equal to the market price on the
                                   date of grant and the number of shares is
                                   fixed at that date.

                                   The weighted-average, grant date fair value
                                   of stock options granted to employees and
                                   directors during the year, and the
                                   significant assumptions used to determine
                                   those fair values, using a modified
                                   Black-Scholes option pricing model, and the
                                   pro forma effect on earnings of the fair
                                   value accounting for stock options under SFAS
                                   No. 123, are as follows:

<Table>
<Caption>
                                                                           1999              2000             2001
                                  -------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>               <C>
                                  Weighted average fair value per
                                      options granted               $     10.76     $        4.67     $        .91

                                  Significant assumptions
                                      (weighted average)
                                      Risk-free interest rate at
                                           grant date                       6.2%              6.2%             4.8%
                                      Expected stock price
                                           volatility                      88.0%             94.3%            95.5%
                                      Expected option life (years)            7                 5                5

                                  Net loss
                                      As reported                   $(6,052,841)    $ (10,787,062)    $ (9,723,016)
                                      Pro forma                     $(6,511,604)    $ (19,143,596)    $(21,037,474)
</Table>

                                       64
<Page>

<Table>
<Caption>

                                                                                1999            2000           2001
                                  ------------------------------------------------------------------------------------
<S>                               <C>                                    <C>           <C>             <C>

                                  Net loss applicable to common
                                      shareholders
                                      As reported                        $(6,273,518)  $ (13,491,813)  $(12,666,771)
                                      Pro forma                          $(6,732,281)  $ (21,848,347)  $(23,981,229)

                                  Net loss per share - basic and
                                      diluted
                                      As reported                        $      (.17)  $        (.36)  $       (.33)
                                      Pro forma                          $      (.18)  $        (.58)  $       (.63)

                                   Information with respect to warrants follows:

                                  YEAR ENDED DECEMBER 31,                       1999           2000           2001
                                  -----------------------------------------------------------------------------------

                                  Warrants outstanding at beginning
                                      of year                                      -        602,000      1,149,724
                                  Warrants granted                           602,000        547,724              -
                                  -----------------------------------------------------------------------------------

                                  Warrants outstanding at end of year        602,000      1,149,724      1,149,724
                                  ===================================================================================

                                  Warrant prices per share
                                      outstanding                       $ 9.45-21.17   $ 9.45-16.88   $ 9.45-16.88
                                  ===================================================================================

                                  Weighted average exercise price
                                      Warrants granted                  $      11.42   $      10.06   $          -
                                      Warrants outstanding              $      11.42   $      10.77   $      10.77


                                  Exercise dates of warrants range from August 2004 to January 2010.
</Table>

                                       65
<Page>

8.      DIVIDENDS                  Dividends are comprised of the following:

<Table>
<Caption>

                                                                    December 31,     December 31,      DECEMBER 31,
                                  YEAR ENDED                                1999             2000              2001
                                  -----------------------------------------------------------------------------------
<S>                               <C>                         <C>                 <C>             <C>
                                  Accrual of dividend on
                                      Series A Convertible
                                      Preferred                $         220,677  $       868,248 $         930,090

                                  Deemed dividend
                                      associated with
                                      beneficial conversion
                                      feature of Series A
                                      Convertible Preferred                    -          480,928           391,154

                                  Accrual of dividend on
                                      Series B Convertible
                                      Preferred                                -          296,478           359,292

                                  Deemed dividend
                                      associated with
                                      beneficial conversion
                                      feature of Series B
                                      Convertible Preferred                    -        1,059,097         1,263,219
                                  -----------------------------------------------------------------------------------

                                  Total                        $         220,677  $     2,704,751 $       2,943,755
                                 ====================================================================================
</Table>

                                       66
<Page>

9.      RESTRUCTURING               In 2000, the Company recorded a
                                    restructuring charge of $597,025, included
                                    in operating expenses, relating to the
                                    closure of its operations in Westborough,
                                    Massachusetts. The restructuring charge
                                    includes accruals related to estimated lease
                                    termination costs and accruals related to
                                    employee severance and related expenses in
                                    connection with their termination. All
                                    employees at the Westborough facility were
                                    terminated. The activities previously
                                    performed at the Westborough facility will
                                    continue at other company locations or with
                                    outside consultants. The restructuring
                                    charge is summarized as follows:

<Table>
<Caption>


                                                                                Balance                          BALANCE
                                                             Utilized                at                               AT
                                              Charge in            in      December 31,     Utilized in     DECEMBER 31,
                                                   2000          2000              2000            2001             2001
                        -------------------------------------------------------------------------------------------------
<S>                     <C>                 <C>           <C>           <C>                <C>           <C>

                        Employee costs      $   395,223   $    65,223   $       330,000    $    156,068  $       173,932
                        Lease costs             201,802       201,802                 -               -                -
                        -------------------------------------------------------------------------------------------------

                        Total               $   597,025   $   267,025   $       330,000    $    156,068  $       173,932
                        =================================================================================================
</Table>

                                       67
<Page>

10.     SELECTED QUARTERLY
        FINANCIAL DATA
        (UNAUDITED)

<Table>
<Caption>

                                                                       2000                                       2001
              ----------------------------------------------------------------------------------------------------------
                                                                   Net Loss                                   NET LOSS
                                                                  Per Share                                  PER SHARE
                                    Operating            Net     (Basic and      OPERATING          NET     (BASIC AND
                                     Expenses           Loss       Diluted)       EXPENSES         LOSS       DILUTED)
              ----------------------------------------------------------------------------------------------------------
<S>                               <C>          <C>             <C>            <C>           <C>           <C>

              Quarters
                  Fourth          $ 2,652,046  $  (3,103,418)  $      (0.11)  $  2,187,969  $(2,618,532)  $      (0.08)
                  Third             3,186,890     (2,696,499)         (0.09)     1,669,850   (2,003,375)         (0.07)
                  Second            2,089,098     (2,557,181)         (0.09)     1,412,420   (2,073,997)         (0.08)
                  First             2,072,746     (2,429,964)         (0.07)     2,610,760   (3,027,112)         (0.10)
              ----------------------------------------------------------------------------------------------------------

                                  $10,000,780  $ (10,787,062)  $      (0.36)  $  7,880,999  $(9,723,016)  $      (0.33)
              ==========================================================================================================
</Table>

11.  Subsequent   (a)      On April 8, 2002, the Company entered into a credit
     Events                facility that will provide the Company with a
                           $2,500,000 revolving line of credit, bearing interest
                           at 4.65%, for a period of five years. The loan is
                           secured by a lien on all of the Company's assets. The
                           lender is an entity which is controlled by a director
                           of the Company.

                  (b)      The Company has been in discussions with the founders
                           of Photogen, L.L.C., about the possibility of
                           transferring to an entity they control certain of the
                           Company's therapeutic technologies (primarily PH-10
                           and laser technologies) in exchange for the Company's
                           stock beneficially owned by the founders
                           (approximately 20,548,435 shares of common stock).
                           The Company has not progressed beyond preliminary
                           discussions concerning the possible transaction at
                           this time. The consummation of such a transaction
                           would depend upon the resolution of numerous
                           contingencies, including negotiating a structure for
                           the transaction, resolution of any potential tax and
                           accounting issues, execution of definitive
                           agreements, receipt of appropriate fairness and other
                           opinions, and board and stockholder approval. There
                           can be no assurance that such a transaction can
                           ultimately be consummated.


                                       68

<Page>

Independent Auditors' Report

To the Board of Directors and Shareholders of Sentigen Ltd.

We have audited the accompanying balance sheets of Sentigen Ltd., a development
stage company, as of December 31, 2001 and 2000, and the related statements of
operations, shareholders' equity and cash flows for the period from October 7,
1999 (inception) to December 31, 2001 and for the years ended December 31, 2001
and 2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sentigen Ltd. at December 31,
2001 and 2000, and the results of its operations and its cash flows for the
period from October 7, 1999 (inception) to December 31, 2001 and the years ended
December 31, 2001 and 2000, in conformity with accounting principles generally
accepted in the United States of America.


/s/ BDO International

Hamilton, Bermuda
April 5, 2002


                                       69
<Page>

                                                       SENTIGEN LTD.
                                                      BALANCE SHEETS

<Table>
<Caption>
DECEMBER 31,                                                               2001           2000
------------------------------------------------------------------------------------------------
<S>                                                                 <C>           <C>
ASSETS

CURRENT ASSETS
    Cash                                                            $     9,345   $          -
------------------------------------------------------------------------------------------------

LICENSE OF ELAN TECHNOLOGY, net of amortization of $1,222,829 and
    $244,565, respectively                                           13,777,171     14,755,435
------------------------------------------------------------------------------------------------

                                                                    $13,786,516   $ 14,755,435
================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
    Due to shareholders                                             $   210,596   $  1,639,855
------------------------------------------------------------------------------------------------

SHAREHOLDERS' EQUITY
    Preferred stock; par value $1.00 per share; 2,980 shares
        authorized, issued and outstanding                                2,980          2,980
    Common stock; par value $1.00 per share; 12,000 shares
        authorized, issued and outstanding                               12,000         12,000
    Additional paid-in capital                                       17,873,915     14,985,020
    Deficit accumulated during the development stage                 (4,312,975)    (1,884,420)
------------------------------------------------------------------------------------------------

TOTAL SHAREHOLDERS' EQUITY                                           13,575,920     13,115,580
------------------------------------------------------------------------------------------------

                                                                    $13,786,516   $ 14,755,435
================================================================================================
</Table>

                                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                       70
<Page>

                                                             SENTIGEN LTD.
                                                        STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                                  CUMULATIVE
                                                                                AMOUNTS FROM
                                                                                  OCTOBER 7,
                                                                                        1999
                                            YEAR ENDED        Year ended      (INCEPTION) TO
                                          DECEMBER 31,      December 31,        DECEMBER 31,
                                                  2001              2000                2001
----------------------------------------------------------------------------------------------
<S>                                     <C>               <C>              <C>
OPERATING EXPENSES
    Research and development            $    1,450,291    $    1,257,815   $       3,090,146
    Amortization of license                    978,264           244,565           1,222,829
----------------------------------------------------------------------------------------------

NET LOSS                                $   (2,428,555)   $   (1,502,380)  $      (4,312,975)
==============================================================================================
</Table>

                                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                       71
<Page>

                                                         SENTIGEN LTD.
                                              STATEMENTS OF SHAREHOLDERS' EQUITY

<Table>
<Caption>
                                                                                                 Deficit
                                                                                             Accumulated
                                        Preferred Stock       Common Stock     Additional     During the
                                        ----------------   -----------------      Paid-in    Development
                                        Shares    Amount   Shares     Amount      Capital          Stage          Total
------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>    <C>        <C>     <C>        <C>          <C>             <C>
Issuance of common stock                     -  $      -   12,000  $  12,000  $12,003,000  $           -   $ 12,015,000
Issuance of preferred stock              2,980     2,980        -          -    2,982,020              -      2,985,000
Net loss for the period October 7, 1999
    to December 31, 1999                     -         -        -          -            -       (382,040)      (382,040)
------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 1999            2,980     2,980   12,000     12,000   14,985,020       (382,040)    14,617,960

Net loss for the year ended December
    31, 2000                                 -         -        -          -            -     (1,502,380)    (1,502,380)
------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 2000            2,980     2,980   12,000     12,000   14,985,020     (1,884,420)    13,115,580

Contribution of capital                      -         -        -          -    2,888,895              -      2,888,895
Net loss for the year ended December
    31, 2001                                 -         -        -          -            -     (2,428,555)    (2,428,555)
------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 31, 2001            2,980  $  2,980   12,000  $  12,000  $17,873,915  $  (4,312,975)  $ 13,575,920
========================================================================================================================
</Table>

                                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                       72
<Page>

                                                  SENTIGEN LTD.
                                             STATEMENTS OF CASH FLOWS


<Table>
<Caption>
                                                                                   CUMULATIVE
                                                                                 AMOUNTS FROM
                                                                                   OCTOBER 7,
                                                                                         1999
                                              YEAR ENDED       Year ended      (INCEPTION) TO
                                            DECEMBER 31,     December 31,        DECEMBER 31,
                                                    2001             2000                2001
------------------------------------------------------------------------------------------------
<S>                                      <C>               <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                             $    (2,428,555)  $   (1,502,380)  $      (4,312,975)
    Amortization                                 978,264          244,565           1,222,829
    Changes in operating assets and
        liabilities
        Due to shareholders                   (1,429,259)       1,257,815             210,596
------------------------------------------------------------------------------------------------
Net cash used in operating activities         (2,879,550)               -          (2,879,550)
------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Cost to acquire license                            -                -         (15,000,000)
------------------------------------------------------------------------------------------------

Net cash used in investing activities                  -                -         (15,000,000)
------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from issuance of equity                   -                -          15,000,000
    Contribution of capital                    2,888,895                -           2,888,895
------------------------------------------------------------------------------------------------

Net cash provided by financing activities      2,888,895                -          17,888,895
------------------------------------------------------------------------------------------------

NET INCREASE IN CASH                               9,345                -               9,345

CASH, at beginning of period                           -                -                   -
------------------------------------------------------------------------------------------------

CASH, at end of period                   $         9,345   $            -   $           9,345
================================================================================================
</Table>

                                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                       73
<Page>

                                                            SENTIGEN LTD.
                                                   NOTES TO FINANCIAL STATEMENTS


1.     ORGANIZATION AND
       SIGNIFICANT
       ACCOUNTING POLICIES

       NATURE OF OPERATIONS   Sentigen Ltd. (the "Company") was incorporated on
                              October 7, 1999 in Bermuda. The Company is owned
                              jointly by Photogen Technologies, Inc.
                              ("Photogen") and Elan International Services, Ltd.
                              ("EIS"), a wholly owned subsidiary of Elan
                              Corporation plc ("Elan"), holding 80.1% and 19.9%
                              (nonvoting shares) of the shares, respectively.
                              The primary objective of the Company is to develop
                              and commercialize nanoparticulate diagnostic
                              imaging agents for the detection and treatment of
                              cancer through lymphography.

       BASIS OF PRESENTATION  The Company's ability to continue as a going
                              concern is entirely dependent upon the funds it
                              receives from its shareholders per the
                              Subscription, Joint Development and Operating
                              Agreement.

       ESTIMATES              The financial statements include estimated amounts
                              and disclosures based on management's assumptions
                              about future events. Actual results may differ
                              from those estimates.

       RESEARCH AND           Research and development costs are charged to
       DEVELOPMENT            expense when incurred.

       INCOME TAXES           Under current Bermuda law, the Company is not
                              required to pay any taxes in Bermuda on either
                              income or capital gains.

       RECENT ACCOUNTING      In October 2001, the Financial Accounting
       PRONOUNCEMENTS         Standards Board issued SFAS 144, "Accounting for
                              the Impairment or Disposal of Long-Lived Assets"
                              ("SFAS 144"). This statement addresses financial
                              accounting and reporting for the impairment or
                              disposal of long-lived assets. This statement
                              supersedes FASB Statement No. 121, "Accounting for
                              the Impairment of Long-Lived Assets and for
                              Long-Lived Assets to be Disposed of," and the
                              accounting and reporting provisions of APB Opinion
                              No. 30, "Reporting the Results of Operations,
                              Reporting the Effects of Disposal of a Segment of
                              a Business, and Extraordinary, Unusual and
                              Infrequently Occurring Events and Transactions,"
                              for the disposal of a segment of a business. The
                              provisions of SFAS 144 will be effective for
                              fiscal years beginning after December 15, 2001.
                              The Company is currently evaluating the
                              implications of adoption of SFAS 144 and
                              anticipates adopting its provisions in fiscal year
                              2002.


                                       74
<Page>

2.     RELATED PARTY          The amount due to shareholders represents costs
       TRANSACTIONS           for research and development that are
                              subcontracted to Photogen and Elan. The amount due
                              to shareholders is unsecured, and interest free
                              with no set terms of repayment. Research and
                              development expense represents costs under the
                              subcontract agreements with Photogen and Elan.
                              These transactions are in the normal course of
                              operations and are measured at the exchange
                              amount, which is the amount of consideration
                              established and agreed to by the related parties.


3.     LICENSE OF ELAN        In 1999, the Company paid a license fee to Elan in
       TECHNOLOGY             the amount of $15,000,000 to acquire rights to
                              certain Elan intellectual property. This license
                              is being amortized on a straight-line basis over
                              184 months, which is the end of the life of the
                              latest licensed patent.

                              The Company reviews the carrying values of its
                              license for possible impairment whenever an event
                              or change in circumstances indicates that the
                              carrying amount of the asset may not be
                              recoverable.


4.     SHAREHOLDERS' EQUITY   PREFERRED STOCK

                              In October 1999, the Company issued 2,980 shares
                              of nonvoting convertible preferred stock to EIS
                              for $2,985,000 with a par value of $1.00 per
                              share. At any time after October 2002, the holder
                              of the preferred stock has the right to convert
                              the preferred stock on a one-to-one basis into
                              common shares. Additionally, there exists an
                              exchange right which upon exercise, could
                              increase EIS's ownership to 50% of Sentigen Ltd.

                              COMMON STOCK

                              In October 1999, the Company issued 12,000 voting
                              common shares to Photogen for $12,015,000 with a
                              par value of $1.00 per share.


                                       75

<Page>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

         None.

                                    PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The information required by Item 10 is incorporated by reference to the
information under the captions "Directors, Executive Officers, Promoters and
Control Persons; and Compliance with Section 16(a) of the Exchange Act" in our
definitive proxy statement for the 2002 annual meeting of stockholders.


                                       76

<Page>

ITEM 11. EXECUTIVE COMPENSATION.

         The information required by Item 11 is incorporated by reference to the
information under the caption "Executive Compensation" in our definitive proxy
statement for the 2002 annual meeting of stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information required by Item 12 is incorporated by reference to the
information under the caption "Security Ownership of Certain Beneficial Owners
and Management" in our definitive proxy statement for the 2002 annual meeting of
stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information required by Item 13 is incorporated by reference to the
information under the caption "Certain Relationships and Related Transactions"
in our definitive proxy statement for the 2002 annual meeting of stockholders.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

FINANCIAL STATEMENTS

     The following is a list of our financial statements and our
subsidiaries and supplementary data included in this report under Item 8:

PHOTOGEN TECHNOLOGIES, INC.

Independent Auditors' Report.

Consolidated Balance Sheets as of December 31, 2001 and 2000.

Consolidated Statements of Operations for the years ended December 31, 2001,
2000 and 1999 and for the period from November 3, 1996 (inception) to
December 31, 2001.

Consolidated Statements of Stockholders' Equity for the years ended December
31, 2001, 2000 and 1999 and for the period from November 3, 1996 (inception)
to December 31, 2001.

Consolidated Statements of Cash Flows for the years ended December 31, 2001,
2000 and 1999 and for the period from November 3, 1996 (inception) to
December 31, 2001.

Notes to Consolidated Financial Statements.

SENTIGEN LTD.

Independent Auditors' Report.

Balance Sheets as of December 31, 2001 and 2000.

Statements of Operations for the years ended December 31, 2001 and 2000 and
for the period from October 7, 1999 (inception) to December 31, 2001.

Statements of Stockholders' Equity for the years ended December 31, 2001 and
2000 and for the period from October 7, 1999 (inception) to December 31, 2001.

Statements of Cash Flows for the years ended December 31, 2001 and 2000 and
for the period from October 7, 1999 (inception) to December 31, 2001.

Notes to Financial Statements.

FINANCIAL STATEMENT SCHEDULES

     Schedules are omitted because they are not applicable or are not
required, or because the required information is included in the consolidated
financial statements or notes thereto.

EXHIBITS.

         The following is a list of exhibits filed as part of this Form 10-K.
Exhibits that were previously filed are incorporated by reference. For exhibits
incorporated by reference, the location of the exhibit in the previous filings
is indicated in parentheses.

<Table>
<Caption>
          EXHIBIT NO.         DESCRIPTION

<S>                           <C>
          3.1                 Restated Articles of Incorporation of Photogen
                              Technologies, Inc. (Filed as Exhibit 3.1 to the
                              Company's Current Report on Form 8-K dated May 17,
                              2000 and incorporated herein by reference.)

          3.2                 Amended and Restated Certificate of Designations,
                              Preferences and Rights of Series A Preferred
                              Stock. (Filed as Exhibit 3.5 to the Company's
                              Quarterly Report on Form 10-QSB for the quarter
                              ended September 30, 1999 and incorporated herein
                              by reference.)

          3.3                 Certificate of Designation, Preferences and Rights
                              of Series B Convertible Preferred Stock. (Filed as
                              Exhibit 3 to the Company's Current Report on Form
                              8-K dated February 18, 2000 and incorporated
                              herein by reference.)

          3.4                 Bylaws of Photogen Technologies, Inc. (Amended and
                              Restated as of May 17, 2000) (Filed as Exhibit 3.2
                              to the Company's Current Report on Form 8-K dated
                              May 17, 2000 and incorporated herein by
                              reference.)


                                       77
<Page>

          3.5                 Charter of Photogen, Inc. (Filed as Exhibit 3.3 to
                              the Company's Registration Statement on Form 10-SB
                              dated December 24, 1997 and incorporated herein by
                              reference.)

          3.6                 Amended and Restated Bylaws of Photogen, Inc.
                              (Filed as Exhibit 3.3 to the Company's Current
                              Report on Form 8-K dated May 17, 2000 and
                              incorporated herein by reference.)

          9.1                 Amended and Restated Voting Agreement entered into
                              as of the 4th day of September, 2001, by and among
                              Eric A. Wachter, Ph.D., Craig Dees, Ph.D., Walter
                              G. Fisher, Ph.D., Tim Scott, Ph.D., John Smolik,
                              Robert J. Weinstein, M.D., and Theodore Tannebaum,
                              and joined into by Photogen Technologies, Inc. as
                              stockholder of Photogen, Inc. (Filed as Exhibit
                              9.1 to the Company's Quarterly Report on Form 10-Q
                              for the quarter ended September 30, 2001 and
                              incorporated herein by reference.)

          10.1                Lease entered into by the Company, P.C. Powell and
                              Wilma Powell dated July 1, 1999. (Filed as Exhibit
                              10.2 to the Company's Annual Report on Form 10-KSB
                              for the year ended December 31, 1999 and
                              incorporated herein by reference.)

          10.2                Office Lease dated February 19, 2001 by and
                              between Photogen, Inc. and Union Square, Limited
                              Partnership. (Filed as Exhibit 10.5 to the
                              Company's Annual Report on Form 10-K for the year
                              ended December 31, 2000 and incorporated herein by
                              reference.)

          10.3                Confirmatory License in favor of the U.S.
                              Department of Energy relating to the Company's
                              Method for Improved Selectivity in
                              Photo-Activation and Detection of Molecular
                              Diagnostic Agents (Serial No. 08/741,370) dated
                              February 4, 1997. (Filed as Exhibit 10.4 to the
                              Company's Registration Statement on Form 10-SB
                              dated December 24, 1997 and incorporated herein by
                              reference.)

          10.4                Confirmatory License in favor of the U.S.
                              Department of Energy relating to the Company's
                              Method for Improved Selectivity in
                              Photo-Activation of Molecular Agents (Serial No.
                              08/739,801) dated February 4, 1997. (Filed as
                              Exhibit 10.5 to the Company's Registration
                              Statement on Form 10-SB dated December 24, 1997
                              and incorporated herein by reference.)


                                       78
<Page>

          10.5                Form of Employment Agreements entered into by the
                              Company and each of John Smolik, Eric A. Wachter,
                              Ph.D., Walter G. Fisher, Ph.D., and Craig Dees,
                              Ph.D. dated May 16, 1997 and with Timothy C. Scott
                              dated November 1, 1997. (Filed as Exhibit 10.6 to
                              the Company's Registration Statement on Form 10-SB
                              dated December 24, 1997 and incorporated herein by
                              reference.)

          10.6                Form of Non-competition/Non-disclosure Agreements
                              entered into by the Company and each of John
                              Smolik, Eric A. Wachter, Ph.D., Walter G. Fisher,
                              Ph.D., Craig Dees, Ph.D. and Timothy C. Scott
                              Ph.D. dated May 16, 1997. (Filed as Exhibit 10.7
                              to the Company's Registration Statement on Form
                              10-SB dated December 24, 1997 and incorporated
                              herein by reference.)

          10.7                Employment Agreement entered into by the Company
                              and Taffy J. Williams, Ph.D., dated May 17, 2000.
                              (Filed as Exhibit 10.3 to the Company's Current
                              Report on Form 8-K dated May 17, 2000 and
                              incorporated herein by reference.)

          10.8                Employment Agreement entered into by the Company
                              and Brooks Boveroux, dated August 1, 2000. (Filed
                              as Exhibit 10.12 to the Company's Annual Report on
                              Form 10-K dated December 31, 2000 and incorporated
                              herein by reference.)

          10.9                Employment Agreement with Reinhard Koenig, Ph.D.,
                              M.D., RAC dated January 4, 2001. (Filed as Exhibit
                              10.1 to the Company's Quarterly Report on Form
                              10-Q for the quarter ended March 31, 2001 and
                              incorporated herein by reference.)

          10.10               2000 Long Term Incentive Compensation Plan. (Filed
                              as Exhibit 10.1 to the Company's Current Report on
                              Form 8-K dated May 17, 2000 and incorporated
                              herein by reference.)

          10.11               Senior Executive Long Term Incentive Compensation
                              Plan. (Filed as Exhibit 10.2 to the Company's
                              Current Report on Form 8-K dated May 17, 2000 and
                              incorporated herein by reference.)

          10.12               1998 Long Term Incentive Compensation Plan. (Filed
                              as Exhibit A to the Company's definitive proxy
                              statement filed under Schedule 14A dated April 30,
                              1998 and incorporated herein by reference.)


                                       79
<Page>

          10.13               Incentive Stock Option Award Agreement entered
                              into by and between the Company and Taffy J.
                              Williams, Ph.D. dated May 17, 2000. (Filed as
                              Exhibit 10.4 to the Company's Current Report on
                              Form 8-K dated May 17, 2001 and incorporated
                              herein by reference.)

          10.14               Incentive Stock Option Award Agreement entered
                              into by the Company and Brooks Boveroux dated
                              August 1, 2000. (Filed as Exhibit 10.13 to the
                              Company's Annual Report on Form 10-K dated
                              December 31, 2000 and incorporated herein by
                              reference.)

          10.15               Form of Indemnification Agreement entered into by
                              and between the Company and each Director of the
                              Company. (Filed as Exhibit 10.5 to the Company's
                              Current Report on Form 8-K dated May 17, 2000 and
                              incorporated herein by reference.)

          10.16               Form of Indemnification Agreement entered into
                              with Brooks Boveroux, Reinhard Koenig, Ph.D.,
                              M.D., RAC and any other Senior Executive.

          10.17               Tufts University Sponsored Research Agreement
                              dated August 1, 1999 by and between Photogen, Inc.
                              and Tufts University, a/k/a Trustees of Tufts
                              College. (Filed as Exhibit 10.3 to the Company's
                              Quarterly Report on Form 10-QSB for the quarter
                              ended September 30, 1999 and incorporated herein
                              by reference.) Confidential portions of this
                              exhibit were redacted.

          10.18               Warrant Agreement by and between Photogen
                              Technologies, Inc. and Farcap Group LLC effective
                              August 9, 1999. (Filed as Exhibit 10.5 to the
                              Company's Quarterly Report on Form 10-QSB for the
                              quarter ended September 30, 1999 and incorporated
                              herein by reference.)

          10.19               License Agreement effective as of September 30,
                              1999 between The General Hospital Corporation and
                              Photogen, Inc. (Filed as Exhibit 10.7 to the
                              Company's Quarterly Report on Form 10-QSB for the
                              quarter ended September 30, 1999 and incorporated
                              herein by reference.) Confidential portions of
                              this exhibit were redacted.

          10.20               Securities Purchase Agreement dated as of October
                              20, 1999, among Photogen Technologies, Inc. and
                              Elan International Services, Ltd. (Filed as
                              Exhibit 10.8 to the Company's


                                       80
<Page>

                              Quarterly Report on Form 10-QSB for the quarter
                              ended September 30, 1999 and incorporated herein
                              by reference.) Confidential portions of this
                              exhibit were redacted.

          10.21               Warrant to Purchase Shares of Common Stock dated
                              October 20, 1999 between Photogen Technologies,
                              Inc. and Elan International Services, Ltd. (Filed
                              as Exhibit 10.9 to the Company's Quarterly Report
                              on Form 10-QSB for the quarter ended September 30,
                              1999 and incorporated herein by reference.)

          10.22               Convertible Promissory Note dated October 20, 1999
                              from Photogen Technologies, Inc. to Elan
                              International Services, Ltd. (Filed as Exhibit
                              10.10 to the Company's Quarterly Report on Form
                              10-QSB for the quarter ended September 30, 1999
                              and incorporated herein by reference.)

          10.23               Registration Rights Agreement dated October 20,
                              1999 by and among Photogen Technologies, Inc. and
                              Elan International Services, Ltd. (Filed as
                              Exhibit 10.11 to the Company's Quarterly Report on
                              Form 10-QSB for the quarter ended September 30,
                              1999 and incorporated herein by reference.)

          10.24               Funding Agreement dated October 20, 1999 among
                              Elan Pharma International Limited and Photogen
                              Technologies, Inc. (Filed as Exhibit 10.12 to the
                              Company's Quarterly Report on Form 10-QSB for the
                              quarter ended September 30, 1999 and incorporated
                              herein by reference.)

          10.25               License Agreement dated October 20, 1999 between
                              Photogen Technologies, Inc, Photogen Newco Ltd.
                              and Elan Pharma International Limited. (Filed as
                              Exhibit 10.13 to the Company's Quarterly Report on
                              Form 10-QSB for the quarter ended September 30,
                              1999 and incorporated herein by reference.)
                              Confidential portions of this exhibit were
                              redacted.

          10.26               License Agreement dated October 20, 1999 between
                              Elan Pharma International Limited, Photogen Newco
                              Ltd. and Photogen Technologies, Inc. (Filed as
                              Exhibit 10.14 to the Company's Quarterly Report on
                              Form 10-QSB for the quarter ended September 30,
                              1999 and incorporated herein by reference.)
                              Confidential portions of this exhibit were
                              redacted.


                                       81
<Page>

          10.27               Subscription, Joint Development and Operating
                              Agreement dated October 20, 1999 between Elan
                              Pharma International Limited, Elan International
                              Services, Ltd., Photogen Technologies, Inc. and
                              Photogen Newco Ltd. (Filed as Exhibit 10.15 to the
                              Company's Quarterly Report on Form 10-QSB for the
                              quarter ended September 30, 1999 and incorporated
                              herein by reference.) Confidential portions of
                              this exhibit were redacted.

          10.28               Agreement entered into as of May 9, 2001 by and
                              among the Company, Photogen, Inc., and Timothy
                              Scott, John Smolik, Eric Wachter, Craig Dees and
                              Walter Fisher, Theodore Tannebaum and Robert W.
                              Weinstein. (Filed as Exhibit 10.2 to the Company's
                              Quarterly Report on Form 10-Q for the quarter
                              ended March 31, 2001 and incorporated herein by
                              reference.)

          10.29               Form of Registration Rights Agreement between the
                              Company and holders of Series B Convertible
                              Preferred Stock. (Filed as Exhibit 10.35 to the
                              Company's Annual Report on Form 10-KSB for the
                              year ended December 31, 1999 and incorporated
                              herein by reference.)

          10.30               Equipment Lease between Picker Financial Group,
                              L.L.C. and Photogen, Inc. dated October 25, 1999.
                              (Filed as Exhibit 10.37 to the Company's Annual
                              Report on Form 10-KSB for the year ended December
                              31, 1999 and incorporated herein by reference.)

          10.31               Letter Agreement between the Company and AmeriCal
                              Securities, Inc., dated March 25, 2002, regarding
                              business development. Confidential portions of
                              this exhibit were redacted.

          10.32               Loan and Security Agreement between Photogen
                              Technologies, Inc., Photogen, Inc. and Tannebaum,
                              LLC dated April 8, 2002.

          10.33               Revolving Promissory Note (Secured) between
                              Photogen Technologies, Inc., Photogen, Inc. and
                              Tannebaum, LLC dated April 8, 2002.


          21                  Subsidiaries of the registrant. (Filed as Exhibit
                              21 to the Company's Annual Report on Form 10-KSB
                              for the year ended December 31, 1999 and
                              incorporated herein by reference.)

          23.1                Consent of BDO Seidman, LLP, Independent Auditors

          23.2                Consent of BDO International, Independent Auditors
</Table>

REPORTS ON FORM 8-K.


                                       82
<Page>

         During the quarter ended December 31, 2001, we did not file any reports
on Form 8-K.





                                       83
<Page>

SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.


Date:             April 11, 2002           Photogen Technologies, Inc.

     By: /s/ Taffy Williams
        --------------------------------
     Taffy J. Williams, Ph.D., President
     and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

<Table>
<Caption>
Signature                       Title                                                 Date
---------                       -----                                                 ----
<S>                             <C>                                                   <C>

By: /s/ Taffy Williams
   ---------------------------  President, Chief Executive Officer and Director,      April 11, 2002
   Taffy J. Williams, Ph.D.     Chairman of the Board

By: /s/ Brooks Boveroux
   ---------------------------  Senior Vice President - Finance and Chief             April 11, 2002
   Brooks Boveroux              Financial Officer and Treasurer (principal
                                financial and accounting officer)

By: /s/ Eric Wachter
   ---------------------------  Director, Vice President and Secretary                April 11, 2002
   Eric A. Wachter, Ph.D.

By: /s/ Robert Weinstein
   --------------------------   Director                                              April 11, 2002
   Robert J. Weinstein, M.D.

By: /s/ Lester McKeever
   --------------------------   Director                                              April 11, 2002
   Lester H. McKeever, Jr.

By: /s/ Gene Golub
   --------------------------   Director                                              April 11, 2002
   Gene Golub

By: /s/ Aidan King
   --------------------------   Director                                              April 11, 2002
   Aidan King
</Table>





                                       84
<Page>

EXHIBIT INDEX

<Table>
<Caption>
          EXHIBIT NO.         DESCRIPTION

<S>                           <C>
          +3.1                Restated Articles of Incorporation of Photogen
                              Technologies, Inc. (Filed as Exhibit 3.1 to the
                              Company's Current Report on Form 8-K dated May 17,
                              2000 and incorporated herein by reference.)

          +3.2                Amended and Restated Certificate of Designations,
                              Preferences and Rights of Series A Preferred
                              Stock. (Filed as Exhibit 3.5 to the Company's
                              Quarterly Report on Form 10-QSB for the quarter
                              ended September 30, 1999 and incorporated herein
                              by reference.)

          +3.3                Certificate of Designation, Preferences and Rights
                              of Series B Convertible Preferred Stock. (Filed as
                              Exhibit 3 to the Company's Current Report on Form
                              8-K dated February 18, 2000 and incorporated
                              herein by reference.)

          +3.4                Bylaws of Photogen Technologies, Inc. (Amended and
                              Restated as of May 17, 2000) (Filed as Exhibit 3.2
                              to the Company's Current Report on Form 8-K dated
                              May 17, 2000 and incorporated herein by
                              reference.)

          +3.5                Charter of Photogen, Inc. (Filed as Exhibit 3.3 to
                              the Company's Registration Statement on Form 10-SB
                              dated December 24, 1997 and incorporated herein by
                              reference.)

          +3.6                Amended and Restated Bylaws of Photogen, Inc.
                              (Filed as Exhibit 3.3 to the Company's Current
                              Report on Form 8-K dated May 17, 2000 and
                              incorporated herein by reference.)

          +9.1                Amended and Restated Voting Agreement entered into
                              as of the 4th day of September, 2001, by and among
                              Eric A. Wachter, Ph.D., Craig Dees, Ph.D., Walter
                              G. Fisher, Ph.D., Tim Scott, Ph.D., John Smolik,
                              Robert J. Weinstein, M.D., and Theodore Tannebaum,
                              and joined into by Photogen Technologies, Inc. as
                              stockholder of Photogen, Inc. (Filed as Exhibit
                              9.1 to the Company's Quarterly Report on Form 10-Q
                              for the quarter ended September 30, 2001 and
                              incorporated herein by reference.)

          +10.1               Lease entered into by the Company, P.C. Powell and
                              Wilma Powell dated July 1, 1999. (Filed as Exhibit
                              10.2 to the Company's Annual Report on Form 10-KSB
                              for the year


                                       85
<Page>

                              ended December 31, 1999 and incorporated herein by
                              reference.)

          +10.2               Office Lease dated February 19, 2001 by and
                              between Photogen, Inc. and Union Square, Limited
                              Partnership. (Filed as Exhibit 10.5 to the
                              Company's Annual Report on Form 10-K for the year
                              ended December 31, 2000 and incorporated herein by
                              reference.)

          +10.3               Confirmatory License in favor of the U.S.
                              Department of Energy relating to the Company's
                              Method for Improved Selectivity in
                              Photo-Activation and Detection of Molecular
                              Diagnostic Agents (Serial No. 08/741,370) dated
                              February 4, 1997. (Filed as Exhibit 10.4 to the
                              Company's Registration Statement on Form 10-SB
                              dated December 24, 1997 and incorporated herein by
                              reference.)

          +10.4               Confirmatory License in favor of the U.S.
                              Department of Energy relating to the Company's
                              Method for Improved Selectivity in
                              Photo-Activation of Molecular Agents (Serial No.
                              08/739,801) dated February 4, 1997. (Filed as
                              Exhibit 10.5 to the Company's Registration
                              Statement on Form 10-SB dated December 24, 1997
                              and incorporated herein by reference.)

          +10.5               Form of Employment Agreements entered into by the
                              Company and each of John Smolik, Eric A. Wachter,
                              Ph.D., Walter G. Fisher, Ph.D., and Craig Dees,
                              Ph.D. dated May 16, 1997 and with Timothy C. Scott
                              dated November 1, 1997. (Filed as Exhibit 10.6 to
                              the Company's Registration Statement on Form 10-SB
                              dated December 24, 1997 and incorporated herein by
                              reference.)

          +10.6               Form of Non-competition/Non-disclosure Agreements
                              entered into by the Company and each of John
                              Smolik, Eric A. Wachter, Ph.D., Walter G. Fisher,
                              Ph.D., Craig Dees, Ph.D. and Timothy C. Scott
                              Ph.D. dated May 16, 1997. (Filed as Exhibit 10.7
                              to the Company's Registration Statement on Form
                              10-SB dated December 24, 1997 and incorporated
                              herein by reference.)

          +10.7               Employment Agreement entered into by the Company
                              and Taffy J. Williams, Ph.D., dated May 17, 2000.
                              (Filed as Exhibit 10.3 to the Company's Current
                              Report on Form 8-K dated May 17, 2000 and
                              incorporated herein by reference.)


                                       86
<Page>

          +10.8               Employment Agreement entered into by the Company
                              and Brooks Boveroux, dated August 1, 2000. (Filed
                              as Exhibit 10.12 to the Company's Annual Report on
                              Form 10-K dated December 31, 2000 and incorporated
                              herein by reference.)

          +10.9               Employment Agreement with Reinhard Koenig, Ph.D.,
                              M.D., RAC dated January 4, 2001. (Filed as Exhibit
                              10.1 to the Company's Quarterly Report on Form
                              10-Q for the quarter ended March 31, 2001 and
                              incorporated herein by reference.)

          +10.10              2000 Long Term Incentive Compensation Plan. (Filed
                              as Exhibit 10.1 to the Company's Current Report on
                              Form 8-K dated May 17, 2002 and incorporated
                              herein by reference.)

          +10.11              Senior Executive Long Term Incentive Compensation
                              Plan. (Filed as Exhibit 10.2 to the Company's
                              Current Report on Form 8-K dated May 17, 2000 and
                              incorporated herein by reference.)

          +10.12              1998 Long Term Incentive Compensation Plan. (Filed
                              as Exhibit A to the Company's definitive proxy
                              statement filed under Schedule 14A dated April 30,
                              1998 and incorporated herein by reference.)

          +10.13              Incentive Stock Option Award Agreement entered
                              into by and between the Company and Taffy J.
                              Williams, Ph.D. dated May 17, 2000. (Filed as
                              Exhibit 10.4 to the Company's Current Report on
                              Form 8-K dated May 17, 2001 and incorporated
                              herein by reference.)

          +10.14              Incentive Stock Option Award Agreement entered
                              into by the Company and Brooks Boveroux dated
                              August 1, 2000. (Filed as Exhibit 10.13 to the
                              Company's Annual Report on Form 10-K dated
                              December 31, 2000 and incorporated herein by
                              reference.)

          +10.15              Form of Indemnification Agreement entered into by
                              and between the Company and each Director of the
                              Company. (Filed as Exhibit 10.5 to the Company's
                              Current Report on Form 8-K dated May 17, 2000 and
                              incorporated herein by reference.)

          +10.16              Form of Indemnification Agreement entered into
                              with Brooks Boveroux, Reinhard Koenig, Ph.D.,
                              M.D., RAC and any other Senior Executive.


                                       87
<Page>

          +10.17              Tufts University Sponsored Research Agreement
                              dated August 1, 1999 by and between Photogen, Inc.
                              and Tufts University, a/k/a Trustees of Tufts
                              College. (Filed as Exhibit 10.3 to the Company's
                              Quarterly Report on Form 10-QSB for the quarter
                              ended September 30, 1999 and incorporated herein
                              by reference.) Confidential portions of this
                              exhibit were redacted.

          +10.18              Warrant Agreement by and between Photogen
                              Technologies, Inc. and Farcap Group LLC effective
                              August 9, 1999. (Filed as Exhibit 10.5 to the
                              Company's Quarterly Report on Form 10-QSB for the
                              quarter ended September 30, 1999 and incorporated
                              herein by reference.)

          +10.19              License Agreement effective as of September 30,
                              1999 between The General Hospital Corporation and
                              Photogen, Inc. (Filed as Exhibit 10.7 to the
                              Company's Quarterly Report on Form 10-QSB for the
                              quarter ended September 30, 1999 and incorporated
                              herein by reference.) Confidential portions of
                              this exhibit were redacted.

          +10.20              Securities Purchase Agreement dated as of October
                              20, 1999, among Photogen Technologies, Inc. and
                              Elan International Services, Ltd. (Filed as
                              Exhibit 10.8 to the Company's Quarterly Report on
                              Form 10-QSB for the quarter ended September 30,
                              1999 and incorporated herein by reference.)
                              Confidential portions of this exhibit were
                              redacted.

          +10.21              Warrant to Purchase Shares of Common Stock dated
                              October 20, 1999 between Photogen Technologies,
                              Inc. and Elan International Services, Ltd. (Filed
                              as Exhibit 10.9 to the Company's Quarterly Report
                              on Form 10-QSB for the quarter ended September 30,
                              1999 and incorporated herein by reference.)

          +10.22              Convertible Promissory Note dated October 20, 1999
                              from Photogen Technologies, Inc. to Elan
                              International Services, Ltd. (Filed as Exhibit
                              10.10 to the Company's Quarterly Report on Form
                              10-QSB for the quarter ended September 30, 1999
                              and incorporated herein by reference.)

          +10.23              Registration Rights Agreement dated October 20,
                              1999 by and among Photogen Technologies, Inc. and
                              Elan International Services, Ltd. (Filed as
                              Exhibit 10.11 to the Company's Quarterly Report on
                              Form 10-QSB for the quarter


                                       88
<Page>

                              ended September 30, 1999 and incorporated herein
                              by reference.)

          +10.24              Funding Agreement dated October 20, 1999 among
                              Elan Pharma International Limited and Photogen
                              Technologies, Inc. (Filed as Exhibit 10.12 to the
                              Company's Quarterly Report on Form 10-QSB for the
                              quarter ended September 30, 1999 and incorporated
                              herein by reference.)

          +10.25              License Agreement dated October 20, 1999 between
                              Photogen Technologies, Inc, Photogen Newco Ltd.
                              and Elan Pharma International Limited. (Filed as
                              Exhibit 10.13 to the Company's Quarterly Report on
                              Form 10-QSB for the quarter ended September 30,
                              1999 and incorporated herein by reference.)
                              Confidential portions of this exhibit were
                              redacted.

          +10.26              License Agreement dated October 20, 1999 between
                              Elan Pharma International Limited, Photogen Newco
                              Ltd. and Photogen Technologies, Inc. (Filed as
                              Exhibit 10.14 to the Company's Quarterly Report on
                              Form 10-QSB for the quarter ended September 30,
                              1999 and incorporated herein by reference.)
                              Confidential portions of this exhibit were
                              redacted.

          +10.27              Subscription, Joint Development and Operating
                              Agreement dated October 20, 1999 between Elan
                              Pharma International Limited, Elan International
                              Services, Ltd., Photogen Technologies, Inc. and
                              Photogen Newco Ltd. (Filed as Exhibit 10.15 to the
                              Company's Quarterly Report on Form 10-QSB for the
                              quarter ended September 30, 1999 and incorporated
                              herein by reference.) Confidential portions of
                              this exhibit were redacted.

          +10.28              Agreement entered into as of May 9, 2001 by and
                              among the Company, Photogen, Inc., and Timothy
                              Scott, John Smolik, Eric Wachter, Craig Dees and
                              Walter Fisher, Theodore Tannebaum and Robert W.
                              Weinstein. (Filed as Exhibit 10.2 to the Company's
                              Quarterly Report on Form 10-Q for the quarter
                              ended March 31, 2001 and incorporated herein by
                              reference.)

          +10.29              Form of Registration Rights Agreement between the
                              Company and holders of Series B Convertible
                              Preferred Stock. (Filed as Exhibit 10.35 to the
                              Company's Annual Report on Form 10-KSB for the
                              year ended December 31, 1999 and incorporated
                              herein by reference.)


                                       89
<Page>

          +10.30              Equipment Lease between Picker Financial Group,
                              L.L.C. and Photogen, Inc. dated October 25, 1999.
                              (Filed as Exhibit 10.37 to the Company's Annual
                              Report on Form 10-KSB for the year ended December
                              31, 1999 and incorporated herein by reference.)

          *10.31              Letter Agreement between the Company and AmeriCal
                              Securities, Inc., dated March 25, 2002, regarding
                              business development. Confidential portions of
                              this exhibit were redacted.

          *10.32              Loan and Security Agreement between Photogen
                              Technologies, Inc., Photogen, Inc. and Tannebaum,
                              LLC dated April 8, 2002.

          *10.33              Revolving Promissory Note (Secured) between
                              Photogen Technologies, Inc., Photogen, Inc. and
                              Tannebaum, LLC dated April 8, 2002.

          +21                 Subsidiaries of the registrant. (Filed as Exhibit
                              21 to the Company's Annual Report on Form 10-KSB
                              for the year ended December 31, 1999 and
                              incorporated herein by reference.)

          *23.1               Consent of BDO Seidman, LLP, Independent Auditors

          *23.2               Consent of BDO International, Independent Auditors
</Table>

*Filed herewith
+Incorporated herein by reference

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