<Page>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

/x/      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

                                       OR

/ /      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 for the transition period ended __________________

                         Commission File Number 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 Identification No.)
 incorporation or organization)


                             140 Union Square Drive
                          New Hope, Pennsylvania 18938
               (Address of principal executive offices)(Zip Code)

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

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

                             YES: /x/    NO: / /

         Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 38,842,298
SHARES OF COMMON STOCK, $.001 PAR VALUE PER SHARE, ISSUED AND OUTSTANDING AT
AUGUST 15, 2002

==========================================================================
<Page>

                                      INDEX

<Table>
<Caption>

                                                                                                  Page
<S>       <C>     <C>                                                                             <C>
Part I.  Financial Information                                                                     1

         Item 1.  Financial Statements                                                             1
         Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations                                                                             10
         Item 3.  Quantitative and Qualitative Disclosures about Market Risk                      17

Part II. Other Information                                                                        17

         Item 1.  Legal Proceedings                                                               17
         Item 4.  Submission of Matters to a Vote of Security Holders                             17
         Item 5.  Other Information                                                               17
         Item 6.  Exhibits and Reports on Form 8-K                                                24
</Table>

                                       i
<Page>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           Photogen Technologies, Inc.
                          (A Development Stage Company)
                      Consolidated Condensed Balance Sheets
                                All amounts in $

<Table>
<Caption>

                                                                                    June 30,              December 31,
                                                                                      2002                    2001
                                                                                  (Unaudited)              (Audited)
                                                                                ------------------   ---------------------
<S>                                                                             <C>                  <C>
                                   ASSETS

CURRENT ASSETS
     Cash and cash equivalents                                                  $          83,023    $         1,352,904
     Prepaid expenses                                                                           -                 29,775
     Deposit                                                                              230,520                474,580
                                                                                ------------------   --------------------

TOTAL CURRENT ASSETS                                                                      463,543              1,857,259

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, less accumulated
     depreciation of $1,250,848 and $1,059,997, respectively                              691,369                882,220


PATENT COSTS, net of amortization of $121,526 and $100,693, respectively                  378,474                399,307

DEPOSITS                                                                                   14,383                 69,173

INVESTMENT IN AND ADVANCES TO AFFILIATE                                                10,585,288             10,994,680
                                                                                ------------------   --------------------


              TOTAL ASSETS                                                      $      11,983,057    $        14,202,639
                                                                                ==================   ====================

                    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                          $          887,984  $            373,774
     Accrued expenses                                                                     807,066               394,242
     Accrued restructuring                                                                475,000               173,932
     Accrued equipment lease                                                              393,312               374,580
                                                                                ------------------    ------------------

TOTAL CURRENT LIABILITIES                                                               2,563,362             1,316,528

ACCRUED EQUIPMENT LEASE                                                                   622,709               749,160

                                       1
<Page>

LONG-TERM DEBT                                                                          3,146,910             2,314,005
                                                                                ------------------    ------------------

TOTAL LIABILITIES                                                                       6,332,981             4,379,693
                                                                                ------------------    ------------------

SHARES SUBJECT TO RESCISSION                                                              650,000               650,000
                                                                                ------------------   -------------------

SHAREHOLDERS' EQUITY
     Preferred stock; par value $.01 per share; 5,000,000 shares authorized
         including:

         Series A Preferred Stock; 13,788 and 12,856 shares authorized, issued
              and outstanding at June 30, 2002 and December 31, 2001,
              respectively, liquidation preference $1,000 per share (in
              aggregate $13,788,000 at June 30, 2002 and
              $12,856,000 at December 31, 2001)                                               137                   128


         Series B Preferred Stock; 402,000 shares authorized; 378,716 and
              357,280 shares issued and outstanding, at June 30, 2002 and
              December 31, 2001, respectively, liquidation preference $16.88 per
              share (in aggregate $6,392,726 at June
              30, 2002 and $6,030,886 at December 31, 2001)                                 3,786                 3,572



     Common stock; par value $.001 per share; 150,000,000 shares
         authorized; 38,343,790 shares issued and outstanding                              38,344                38,344
     Additional paid-in capital                                                        38,253,126            38,224,215
     Deficit accumulated during the development stage                                 (33,295,317)          (29,093,313)
                                                                                ------------------    ------------------

TOTAL SHAREHOLDERS' EQUITY                                                              5,000,076             9,172,946
                                                                                ------------------    ------------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                      $      11,983,057     $      14,202,639
                                                                                ==================    ==================
</Table>

                                       2
<Page>

                           Photogen Technologies, Inc.
                          (A Development Stage Company)
                 Consolidated Condensed Statements of Operations
                                   (Unaudited)
                                All amounts in $

<Table>
<Caption>

                                                                                                                        Cumulative
                                                                                                                           Amounts
                                                          Three            Three                                              From
                                                         Months           Months      Six Months        Six Months     November 3,
                                                          Ended            Ended           Ended             Ended            1996
                                                  June 30, 2002    June 30, 2001   June 30, 2002     June 30, 2001     (Inception)
                                               ----------------  ---------------  -------------- -----------------  --------------
<S>                                            <C>               <C>              <C>            <C>                <C>
OPERATING EXPENSES
     Research and development                  $       697,530   $      455,667   $   1,386,643  $      1,245,455   $   13,698,054
     General and administrative                        808,625          956,753       1,425,350         2,081,655       14,091,218
     Provision for future lease payments                     -                -               -           696,070        1,264,208
     Restructuring charges                                   -                -         451,068                 -        1,048,093
                                               ----------------  ---------------  -------------- -----------------  ---------------

TOTAL OPERATING EXPENSES                             1,506,155        1,412,420       3,263,061         4,023,180       30,101,573

LOSS FROM JOINT VENTURE                               (380,331)        (689,291)       (940,445)       (1,161,844)      (4,402,624)

INVESTMENT INCOME                                          177           27,714           1,502            83,915        1,208,880
                                               ----------------  ---------------  -------------- -----------------  ---------------

NET LOSS                                       $     1,886,309   $   (2,073,997)  $  (4,202,004) $     (5,101,109)  $  (33,295,317)
                                                                                                                    ==============

DIVIDENDS ON PREFERRED STOCK                          (344,215)        (753,637)       (678,678)       (1,485,339)
                                               ----------------  ---------------  -------------- -----------------


NET LOSS APPLICABLE TO COMMON SHAREHOLDERS     $   (2,230,524)   $   (2,827,634)  $ (4,880,682)  $     (6,586,448)
                                               ===============   ===============  =============  =================


BASIC AND DILUTED LOSS PER COMMON SHARE        $          (.06)  $         (.08)  $        (.13) $           (.18)
                                               ================  ===============  ============== =================


WEIGHTED AVERAGE NUMBER OF COMMON
     SHARES OUTSTANDING - BASIC AND DILUTED         38,842,298       37,633,713      38,842,298        37,582,282
                                               ===============   ===============  =============  =================
</Table>

                                       3
<Page>

                           Photogen Technologies, Inc.
                          (A Development Stage Company)
            Consolidated Condensed Statements of Shareholders' Equity
                                   (Unaudited)
                                All amounts in $

<Table>
<Caption>


                                              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 and capital contributions 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     -           -          -          -            -               -
--------------------------------------------------------------------------------------------------------------------
</Table>

<Table>
<Caption>

                                          Deficit
                                      Accumulated
                     Additional        During the
       Members'         Paid-in       Development
       Capital         Capital             Stage         Total
------------------------------------------------------------------
<S>                <C>            <C>               <C>
   $      7,268    $          -   $             -   $     7,268
         (1,779)              -                 -        (1,779)
------------------------------------------------------------------

          5,489               -                 -         5,489


              -               -             (3,511)      (3,511)
          3,511               -                 -         3,511
------------------------------------------------------------------

          9,000               -            (3,511)        5,489

              -       1,797,137                 -     1,803,450
         (9,000)      1,181,500             1,732     1,203,919

              -        (371,111)                -      (371,111)

              -               -          (554,702)     (554,702)
------------------------------------------------------------------

              -       2,607,526          (556,481)    2,087,045

              -       6,999,125                 -     7,000,000

              -         (50,000)                -       (50,000)
              -          45,446                 -        45,446

              -               -        (1,973,913)   (1,973,913)
------------------------------------------------------------------
</Table>

                                       4
<Page>

<Table>
<Caption>

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

     Stock option compensation                   -           -         -          -           -              -
     Issuance of common stock for cash*          -           -         -          -     196,978            197
     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  38,343,790    $    38,344

     Stock option compensation                   -           -         -          -           -              -
     Issuance of preferred stock dividend      932           9    21,436        214           -              -
     Net loss for the six months ended
         June 30, 2002                           -           -         -          -           -              -
----------------------------------------------------------------------------------------------------------------

BALANCE, at June 30 2002 *                  13,788  $      137   378,716  $   3,786  38,343,790    $    38,344
----------------------------------------------------------------------------------------------------------------
</Table>

<Table>
<Caption>

                   Additional       During the
     Members'         Paid-in      Development
      Capital         Capital            Stage           Total
---------------------------------------------------------------
<S>             <C>             <C>               <C>
            -   $   9,602,097   $   (2,530,394)   $  7,108,578

            -          50,058                -          50,063
            -       3,664,749                -       3,664,749
            -       6,082,150                -       6,082,654
            -      11,578,839                -      11,578,959

                            -       (6,052,841)
            -                                       (6,052,841)
---------------------------------------------------------------

            -      30,977,893       (8,583,235)     22,432,162

            -         125,020                -         125,020
            -       1,366,050                -       1,366,050
                           (8)               -
            -                                                -
            -       5,272,970                -       5,276,340

            -               -      (10,787,062)    (10,787,062)
---------------------------------------------------------------

            -      37,741,925      (19,370,297)     18,412,510

            -          64,729                -          64,729
            -         418,526                -         418,723

                        (763)
                                                             -
            -           (202)                -               -

            -               -       (9,723,016)     (9,723,016)
---------------------------------------------------------------

            -   $  38,224,215   $  (29,093,313)    $  9,172,946

            -         29,134                 -           29,134
            -           (223)                -                -

            -              -        (4,202,004)      (4,202,004)
---------------------------------------------------------------

           --   $ 38,253,126    $  (33,295,317)    $  5,000,076
---------------------------------------------------------------
</Table>

* Excludes 498,508 shares of Common Stock valued at $650,000 that are subject to
rescission.

                                       5
<Page>

                           Photogen Technologies, Inc.
                          (A Development Stage Company)
                 Consolidated Condensed Statements of Cash Flows
                                   (Unaudited)
                                All amounts in $

<Table>
<Caption>

                                                        Six Months        Six Months     Cumulative Amounts
                                                             Ended             Ended                   From
                                                          June 30,          June 30,       November 3, 1996
                                                              2002              2001             (Inception)
                                                   ---------------    ---------------     ------------------
<S>                                                <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                      $    (4,202,004)    $   (5,101,109)     $     (33,295,317)
     Depreciation and amortization                         211,684            229,130              1,518,269
     Loss on disposal of fixed assets                            -             (5,092)                38,424
     Gain on sale of marketable securities                       -                  -                (18,503)
     United States Treasury Notes
         Amortization                                            -             (1,831)                12,586
     Stock option compensation                              29,134             32,364                645,650
     Issuance of warrants in exchange for
         services rendered                                       -            616,887              3,995,091
     Loss from investment in affiliate                     940,445          1,161,844              4,402,624
     Changes in operating assets and liabilities:
         Prepaid expenses                                   29,775            182,115                      -
         Interest receivable                                     -             55,759                      -
         Accounts payable                                  514,210           (370,731)               887,984
         Accrued expenses                                  412,824              7,593                807,066
         Accrued equipment lease                          (107,719)           649,247              1,016,021
         Accrued restructuring                             301,068           (155,552)               475,000
                                                    ---------------    ---------------   --------------------

Net cash used in operating activities                   (1,870,583)        (2,699,376)           (19,515,105)
                                                    ---------------    ---------------   --------------------

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                                                   -         (3,320,000)           (38,656,973)
     Sales of United States Treasury Notes                       -          6,765,000             39,778,548
     Purchase of capital assets                                  -            (45,938)            (1,943,553)
     Proceeds from sale of equipment                             -            110,177                145,551
     Costs to acquire patent                                     -                  -               (237,335)
     Investment in and advances to affiliate              (531,053)          (792,602)           (14,987,912)
     Decrease (increase) in deposit                        298,850            (14,383)              (244,903)
                                                    ---------------    ---------------   --------------------

Net cash provided by (used in) investing
activities                                                (232,203)         2,702,254            (16,165,080)
                                                    ---------------    ---------------   --------------------
</Table>

                                       6
<Page>

<Table>
<Caption>

                                                         Six Months         Six Months    Cumulative Amounts
                                                              Ended              Ended                  From
                                                           June 30,           June 30,      November 3, 1996
                                                               2002               2001           (Inception)
                                                    ---------------    ---------------    ------------------
<S>                                                 <C>                <C>                <C>
CASH FLOWS FROM FINANCING ACTIVITIES
     Principal payments on capital leases           $             -    $        (9,473)   $         (291,704)
     Net proceeds from issuance of equity                         -          1,068,723            31,367,439
     Proceeds from capital contributions by
         shareholders                                             -                  -             1,911,674
     Proceeds from issuance of debt                         832,905                  -             3,146,910
     Cost of recapitalization                                     -                  -              (371,111)
                                                    ----------------   ----------------   ------------------

Net cash provided by financing activities                   832,905          1,059,250            35,763,208
                                                    ----------------   ----------------   ------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         (1,269,881)         1,062,128                83,023

CASH AND CASH EQUIVALENTS, at beginning
     of period                                            1,352,904            622,795                     -
                                                    ----------------   ----------------   ------------------

CASH AND CASH EQUIVALENTS, at end of period         $        83,023    $     1,684,923    $           83,023
                                                    ================   ================   ==================
</Table>

                                       7
<Page>

                           Photogen Technologies, Inc.
                          (A Development Stage Company)
                     Notes To Condensed Financial Statements
                                   (Unaudited)

                                  June 30, 2002

1.       BASIS OF PRESENTATION

         The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information pursuant to Regulation S-K. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
six months ended June 30, 2002 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2002.

2.       JOINT VENTURE/INVESTMENT IN AFFILIATE

         The following is summarized financial information for the joint venture
         Sentigen, Ltd. at June 30, 2002 and 2001.

<Table>
<Caption>

          JUNE 30,                                                 2002             2001
         --------------------------------------------------------------------------------
         <S>                                              <C>               <C>
             License purchased from Elan, net of
             amortization of $1,711,961 in 2002
             and $733,697 in 2001                         $  13,288,039     $ 14,266,303
         --------------------------------------------------------------------------------

         Total assets                                     $  13,288,039     $ 14,266,303
         --------------------------------------------------------------------------------

         Due to affiliates                                $     230,254     $  2,601,215

         Total shareholders' equity                          13,057,785       11,665,088
         --------------------------------------------------------------------------------

         Total liabilities and equity                     $  13,288,039     $ 14,266,303
         --------------------------------------------------------------------------------


         Research and development expense                 $     666,219     $    961,360
         General and administrative expense                      18,739             -
         Amortization of license                                489,132          489,132
         --------------------------------------------------------------------------------

         Net loss                                         $   1,174,090     $  1,450,492

         ================================================================================
</Table>

3.       BASIC AND DILUTED LOSS PER COMMON SHARE

         Basic and diluted loss per common share is computed based on the
weighted average number of common shares outstanding. Loss per share excludes
the impact of outstanding options and warrants, preferred stock and convertible
debt, as they are antidilutive. Potential common shares excluded from the

                                       8
<Page>

calculation at June 30, 2002 are 7,859,000 options, 1,149,724 warrants,
1,182,371 shares issuable upon the conversion of Series A and B Preferred Stock
and 165,032 shares issuable upon conversion of the Elan line of credit. Basic
and diluted loss per common share includes 498,508 shares of common stock
subject to rescission.


4.       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 are being conducted at other company locations or with
outside consultants. In 2002, the Company recorded an additional restructuring
charge related to additional termination costs for one of the Westborough
employees. The restructuring charge is summarized as follows:

<Table>
<Caption>

                                            Balance at               Balance at                           Balance at
                  Charged in    Utilized  December 31,    Utilized  December 31,  Charged in    Utilized    June 30,
                        2000     in 2000          2000     in 2001         2001         2002     in 2002        2002
   -----------------------------------------------------------------------------------------------------------------
   <S>            <C>           <C>       <C>             <C>       <C>           <C>           <C>      <C>
   Employee
   costs            $ 95,233    $ 65,223      $330,000    $156,068     $173,932    $451,068    $150,000    $475,000

   Lease costs       201,802     201,802             -           -            -           -           -           -
   -----------------------------------------------------------------------------------------------------------------


   Total            $597,025    $267,025      $330,000    $156,068     $173,932    $451,068    $150,000    $475,000
   -----------------------------------------------------------------------------------------------------------------
</Table>

5.       LONG-TERM DEBT

              Long-term debt consists of the following:

<Table>
<Caption>

                                                                 June 30, 2002             December 31, 2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                          <C>
Line of credit with Elan, interest
     at 8%, due in 2005 or convertible to common
     stock at $18.15 per share, maximum borrowings
     of $4,806,000                                            $       2,846,910            $       2,314,005


Line of credit with entity controlled by
     a director of the Company, interest at
     4.65%, due in 2007, maximum borrowings of
     $2,500,000, secured by all of Company's assets                     300,000                            -
--------------------------------------------------------------------------------------------------------------------

Total long-term debt                                          $       3,146,910            $       2,314,005

====================================================================================================================
</Table>

                                       9
<Page>

ITEM 2.  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 below.

         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 for which we have signed an agreement to split off to five
founding shareholders of Photogen. See "Other Products" below.

         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
medical 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 65 patients for
lymphography, we shifted the strategic direction of Photogen to focus on the
cardiovascular and lymphography applications. 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. At June 30, 2002, we had borrowed $300,000 under that credit line. See
"Subsequent event" below.

         As of August 2, 2002, we signed definitive agreements with a syndicate
of institutional investors to sell $16.25 million of our common stock at an
expected price of $0.30 per share. This financing is subject to shareholder
approval and other contingencies detailed in our proxy statement for our
upcoming annual meeting. There can be no assurance that this transaction can
ultimately be consummated.

         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 the end of 2002. Our ability to conduct operations
beyond that date is entirely dependent on our ability to obtain additional
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,"
below.

         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 matters to supplement
our internal capabilities. We 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

                                      10
<Page>

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 June 30, 2002 was $10,585,288. At year-end 2001, we 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
then 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. At June 30, 2002, no changes had occurred in
such estimates.

CORE PRODUCT AREA

         Our core product is PH-50/N1177, a novel contrast agent that may have
multiple applications in vascular and cardiac imaging and lymphography.

CARDIOVASCULAR IMAGING - PH-50 may have application as a novel technique to
image the cardiovascular system using standard CT scanners. In animal model
studies, encouraging results have been demonstrated to image the heart, liver
and other organs. PH-50 could allow the imaging of the cardiovascular system
(angiography) and other organs without the need for catheters and high-speed
cameras. Over two million angiography procedures are conducted annually in the
U.S. Preclinical studies also suggest that PH-50 can be used to detect coronary
vulnerable plaque a condition believed to be a precursor to heart attacks and
sudden cardiac failure.

LYMPHOGRAPHY -- Through a joint venture with units of Elan Corporation, we are
developing N1177, a proprietary material to precisely locate and diagnose the
spread of cancer (micro-metastases) when administered into a patient's lymphatic
system. This novel nanoparticulate (a very small particle designed to travel
through the lymphatic system) X-ray contrast agent, when used with a standard
computed tomography (CT) scanner (a technology called "lymphography"), is being
developed to enable imaging and detection of cancer in lymph nodes prior to
surgery. Phase 1 studies have been completed. Phase 2 studies are planned to
commence within the next six months.

OTHER PRODUCTS

         As of July 29, 2002 we signed definitive agreements with the founders
of Photogen, L.L.C., to split off to an entity they control our PH-10 and laser
technologies in exchange for all the Company's stock beneficially owned by the
founders (approximately 20,548,435 shares or 52.9% of our outstanding common
stock). The consummation of this transaction is subject to shareholder approval
and other contingencies detailed in our proxy statement for our upcoming annual
meeting. There can be no assurance that such a transaction can ultimately be
consummated.

         Products and technology that would be transferred to the founders
include applications for:

PSORIASIS -- We have completed a Phase 1 clinical study of PH-10 as a treatment
for plaque psoriasis, the most common form of the disease afflicting
approximately 7 million people in the U.S. Data from this study is currently
being analyzed. Applied topically and activated with green laser light, PH-10 is
a promising treatment for psoriasis, particularly in areas such as knees, elbows
and facial areas. A clinical study conducted in Denmark demonstrated a 58%
reduction in the skin thickness of psoriatic plaque with a single treatment of
PH-10. This statistically significant result (p = 0.01) lasted for the 90-day
duration

                                      11
<Page>

of the study. Reduction in plaque thickness is generally regarded as a
precursor to other clinical indications of efficacy.

ACTINIC KERATOSIS -- We have completed a Phase 1 clinical study of PH-10 to
treat actinic keratosis, a skin disease resulting from over-exposure to sunlight
afflicting 5 million people in the U.S. Actinic keratosis is widely believed to
be a precursor to squamous cell cancer, the second leading cause of death due to
skin cancer. Clinical data from this study is currently being analyzed.

SOLID TUMOR CANCERS -- PH-10, in an injectable formulation, shows promise to
enhance the effect of radiation therapy in the treatment of solid tumors, which
represent 70% of all cancers initially diagnosed. This includes breast,
prostate, lung, melanoma, cervical and uterine cancers. The American Cancer
Society estimates that approximately 660,000 new cases of such cancers are
diagnosed annually. In pre-clinical studies of several radiation resistant tumor
models, PH-10 applied intratumorally consistently resulted in reduction of tumor
mass, while tumors in control models increased. We are working to develop a
systemic application of PH-10. If successful, we could commence human clinical
studies to treat either glioblastoma (brain cancer) or hepatic and colon
cancers.

MULTIPHOTON 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 senior executive and clinical development organization operates
from our corporate headquarters in New Hope, Pennsylvania. We have on staff
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
and certain administrative functions (all of which would be transferred in the
split off transaction), located in Knoxville, Tennessee includes specialists in
molecular biology, non-linear laser physics, interventional radiology,
spectroscopy, bioengineering and photochemistry.

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.

         Research and development costs for the six-month period ended June 30,
2002 increased 11.3 percent to $1,386,643 from $1,245,455 for the comparable
six-month period ended June 30, 2001. The increase was due principally to
clinical trial and related product manufacturing expenses for one of our
products as it entered human clinical studies partially offset by lower expense
levels for our FDA consultants and reduced costs associated with prosecuting
patent protection for our intellectual property.

         General and administrative expenses declined 31.5 percent to $1,425,350
in the six- month period ended June 30, 2002 from $2,081,655 in the comparable
2001 period. The decline is primarily attributable to the reduction in the
amortization of the cost of certain warrants that had been granted to a
consultant, the absence of recruiting costs as well as lower legal expenses
partially offset by costs of our New Hope, PA office.

         In 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 the first
half of 2001 and 2002, we recorded losses from the joint venture of $1,161,844
and $940,445, respectively. These losses resulted from our share of development
expenses incurred in the joint venture by the two

                                      12
<Page>

participants, including personnel expenses and costs associated with developing
a manufacturing process, including the purchase of drug substance and other
materials.

         In September 2000, we initiated a restructuring of our clinical
development operations, and we closed our Westborough, Massachusetts office.
Clinical development activities formerly carried on in Westborough were assumed
by outside consultants and other company employees. We took a charge against
earnings at that time of $597,025 for termination of our office lease and
associated expenses and termination costs associated with certain of the
employees at that location. During the first quarter 2002 we increased the
provision by $451,068 to provide for a potential settlement with the last
Westborough employee, and as of June 13, 2002 signed a settlement agreement with
that employee. See Item 3 "Legal Proceedings" of our Form 10-K for the year
ended December 31, 2001 and Item 1 "Legal Proceedings" of this Form 10-Q, below,
for additional information concerning this restructuring.

         During the six months ended June 30, 2002, we had no capital
expenditures. During the next twelve months we expect capital expenditures 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, in the first quarter of 2001 we recorded a provision for future
lease payments of $696,070. In the fourth quarter of 2001 we increased the
accrual to a total of $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.

         For the six months ended June 30, 2002, our investment income decreased
to $1,502 from $83,915 in the six months ended June 30, 2001. The decrease in
investment income resulted primarily from lower average balances of securities
in our investment portfolio. We expect our investment income to fluctuate both
as our capital decreases or increases and as the rates of interest earned by our
portfolio vary due to shifts in short term interest rates.

         We recorded dividends on our two series of preferred stock totaling
$678,678 in the first half of 2002 compared to $1,485,339 for the comparable
period in 2001. This decrease is due to the absence of the cost of certain
beneficial conversion provisions payable under our Series B Preferred Stock
originally issued in February 2000. Under the applicable Certificate of
Designations the holder of Series A Preferred is entitled to a mandatory
payment-in-kind dividend equal to 7% (i.e., 0.07 additional shares of Series A
Preferred) which is cumulative, compounds on a semi-annual basis and is payable
twice a year. Similarly, under the applicable Certificate of Designation the
holders of Series B Preferred are entitled to a payment-in-kind dividend equal
to 6% (i.e., 0.06 additional shares of Series B Preferred), which is cumulative
and payable annually.

         As a result of the above factors, our net loss of $4,202,004 for the
six months ended June 30, 2002, decreased by 17.6% from $5,101,109 reported for
the six months ended June 30, 2001. Our cumulative losses since inception are
approximately $33,295,317. Our net loss attributable to common shareholders
(including "in kind" preferred dividends) for the six months ended June 30,
2002, decreased to $4,880,682, or $0.13 per share from $6,586,448, or $0.18 per
share for the six months ended June 30, 2001.

LIQUIDITY; CAPITAL RESOURCES

         At June 30, 2002 we had cash and cash equivalents totaling
approximately $83,023.

         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
June 30, 2002 we had borrowed $2,846,910 under this credit line to fund our
capital obligations to Sentigen, a portion of which was in turn used by Sentigen

                                      13
<Page>

to reimburse us for expenses we had incurred on behalf of the joint venture. Our
current and any future borrowings under this facility bear interest at 8% per
annum, and are either repayable in 2005 or convertible, at Elan's election, into
our common stock at a conversion price of $18.15 per share. 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. At June 30, 2002, we had borrowed
$300,000 under this line of credit.

         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. 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 the end of
2002. Our ability to conduct operations beyond that date is entirely dependent
on our ability to obtain additional capital. See "Subsequent event", below. 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. If additional funds are raised by issuing equity securities,
substantial dilution to existing stockholders may result. However, there can be
no assurance that such capital will be available under acceptable terms, if at
all. See "Risk Factors -- We must raise additional financing in the future and
our inability to do so could prevent us from implementing our business
development plan," below.

As of April 2, 2001, the Company no longer met the $75 million public float test
and was no longer eligible to use its shelf registration statement in its
current form. From April 26, 2001 through June 21, 2001, Photogen sold a total
of 498,508 shares of common stock in a series of five transactions to
Ballsbridge Finance Limited of London, England at prices varying from $1.13 to
$1.55 per share for an aggregate cash purchase price of $650,000. Although these
shares were sold pursuant to Registration Statement No. 333-46394 (effective
February 9, 2001), the prospectus at the time of the sales to Ballsbridge
Finance Limited did not meet the requirements of Section 10(a)(3) of the
Securities Act causing the sale of such shares to be subject to rescission and
resulting in a contingent liability to the Company of $650,000. 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".

         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 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 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.

         Our only long-term commitment that is not recorded on our financial
statements is for our office space in Pennsylvania. Annual rent for this lease,
which expires in 2004, is approximately $190,765.

         SUBSEQUENT EVENT

         As of August 2, 2002, we signed definitive agreements with a syndicate
of institutional investors to sell $16.25 million of our Common Stock at an
expected price of $0.30 per share. This financing is subject to shareholder
approval and other contingencies detailed in our proxy statement for our
upcoming annual meeting. There can be no assurance that this transaction can
ultimately be consummated. These agreements also provide that we will make a
non-transferable rights offering to our existing shareholders

                                      14
<Page>

(other than the institutional investors and certain other larger shareholders)
at an expected price of $0.30 per share subject to Securities and Exchange
Commission rules and interpretations regarding the integration of such
offerings.

         The institutional investor group purchasing our Common Stock includes
Mi3, L.P., Oxford BioScience Partners IV L.P./MRNA Fund II L.P. and New England
Partners Capital, L.P. The group will also include Tannebaum, LLC, whose manager
is controlled in part by Dr. Weinstein, one of our directors. In all, the
institutional investors will purchase $16,250,000 of our Common Stock. The
transaction will be a private placement under Section 4(2) of the Securities Act
of 1933 and/or Rule 506 of Regulation D under the Securities Act. As part of the
financing transaction, we agreed to a Registration Rights Agreement requiring us
to file a registration statement with the Securities and Exchange Commission
within 45 days of the closing of the institutional financing to cover the
institutional investors' sales of the shares.

         The purchase price per share to the institutional investors will be
based on the institutional investors' valuation of the Company at $14,000,000
(before their investment) divided by the number of issued and outstanding shares
of Common Stock and all shares of Common Stock issuable on exercise of warrants
and options and conversion of securities convertible into Common Stock
(including a proposed increase to the 2000 Long Term Incentive Compensation
Plan). We expect that the price per share will be $.30 and that we will issue a
total of 54,166,667 shares to the institutional investors. If we issue
additional shares prior to the closing of the institutional financing, the price
per share to the institutional investors will decrease and the number of shares
they purchase will increase.

          Concurrent with Tannebaum, LLC's purchase of $2,000,000 of Common
Stock, its $2,500,000 credit facility will be eliminated. As of June 30, 2002,
we had drawn down $300,000 under the Tannebaum, LLC loan.

         Proceeds from the sale of our Common Stock to the institutional
investors must be used for the following purposes (including related general and
administrative costs) in the following order or priority, unless otherwise
authorized by a majority of the Board:

     o   To seek FDA approval for the use of PH-50 (our cardiovascular
         diagnostic technology) as a CT contrast agent.

     o   To seek FDA approval for the use of N1177 (being developed through our
         joint venture with Elan) as a lymphography contrast agent.

     o   To perform pre-clinical exploration of the use of PH-50 to identify
         vulnerable plaque.

     o   To acquire or license compounds to build a product pipeline for the
         Company.

CHANGES TO ELAN HOLDINGS

         As part of the financing, Elan has agreed to the following changes in
its holdings:

     o   We will reduce the price at which the Series A Preferred Stock
         (including all accrued in-kind dividends) converts into Common Stock
         from $21.17 per share to $3.00.

     o   The liquidation preference in favor of the Series A Preferred Stock
         will be eliminated.

                                      15
<Page>

     o   All principal and accrued interest under our $4,806,000 note to Elan
         will be converted into Common Stock at a conversion price of $6.00
         (reduced from $18.15).

     o   If Elan exercises its right to exchange the Series A Preferred Stock
         for shares of Sentigen, Ltd. (our joint venture company with Elan to
         develop N1177 for lymphography) before October 20, 2002, the Sentigen
         shares issued as a result will rank pari passu with the Company's
         Sentigen common stock (the exchanged shares would otherwise have been
         entitled to a liquidation preference in Sentigen).

     o   Elan will not exercise its preemptive right to receive any additional
         shares of Common Stock it would otherwise have as a result of the
         institutional financing pursuant to an earlier agreement with Elan.

CHANGES TO SERIES B PREFERRED STOCK

         As a condition to the closing of the financing transaction, the holders
of at least a majority of the Series B Preferred Stock must agree to convert
their shares into Common Stock. As a result, all shares of Series B Preferred
Stock (including all shares of Series B Preferred Stock paid as in-kind
dividends) will be converted into Common Stock at the closing. In exchange for
this conversion we expect that the conversion ratio of the Series B Preferred
Stock would change from 1.44703 (the conversion ratio after taking into
consideration all issuances of Common Stock before the institutional financing)
to 4.25. Thus, each share of Series B Preferred Stock will convert into 4.25
shares of Common Stock contemporaneously with the closing of the financing
transaction. The result will be that all shares of Series B Preferred Stock will
be converted into a total of approximately 1,653,806 shares of Common Stock (as
of June 30, 2002); and the Series B Preferred Stock will no longer be
outstanding, nor will there be any liquidation preference associated with the
Series B Preferred Stock.

PLAN OF OPERATION

         During the next twelve months we will focus our efforts 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. We have agreed to split off our therapeutic PH-10 and laser
technologies to the founders of Photogen L.L.C. Should that splitoff not occur,
we would seek to otherwise license, co-develop or sell those technologies to
other third parties. We would not expect to continue further development
activities for these products without obtaining sufficient financing to fund the
associated development costs. If we obtained sufficient funds to finance further
development of our dermatology and cancer therapy products, we would conduct
similar development activities for those indications as we plan for PH-50/N1177.
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.

         As we progress further into human clinical trials, our use of capital
will increase. We expect to continue to incur increasing losses for at least the
next several 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

                                      16
<Page>

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," below.

ITEM 3. 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 will reflect
the current market rates. To date, we have not engaged in any derivative or
hedging activities.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        In conjunction with the restructuring of our clinical development
office in 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. That litigation is described in our Form
10-K for the year ended December 31, 2001. The parties to the litigation have
entered into a confidential settlement agreement of that litigation as of June
13, 2002. The settlement includes, among various terms, the dismissal of all
parties' claims and mutual releases, and certain payments to Dr. Wolf and
Massachusetts General Hospital.

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

        None.

ITEM 5. OTHER INFORMATION

RISK FACTORS

        This Form 10-Q 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:

    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-Q, including under "Risk Factors." You should

                                      17
<Page>

read these cautionary statements as being applicable to all related
forward-looking statements wherever they appear in this Form 10-Q, in the
materials referred to in this Form 10-Q, in the materials incorporated by
reference into this Form 10-Q, 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-Q 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.

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
June 30, 2002, we have incurred cumulative net losses (before dividends on
preferred stock) of approximately $33,295,317. 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 through the end of 2002
(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. As of August 2, 2002 we entered into
definitive agreements with a syndicate of institutional investors to sell $16.25
million of our common stock at an expected price of $0.30 per share, subject to
shareholder approval and certain other contingencies. There can be no assurance
that this transaction will close. 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. Additional

                                      18
<Page>

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 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 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

                                      19
<Page>

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

                                      20
<Page>

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 certain 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.

         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.

                                      21
<Page>

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.

         A small group of our officers, directors and others control
approximately 81% 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, 2002 through June 30, 2002 our
closing stock price ranged from $0.65 to $1.51 per share. Daily trading volume
ranged from 0 (zero) shares to approximately 41,000 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;

                                      22
<Page>

         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
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 June 30, 2002, we had reserved 12,832,627 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 voting power 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 7,124,341
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).

                                      23
<Page>

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

     (a)   Exhibits.

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

<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.

           10.1              Common Stock Purchase Agreement dated as of August 2, 2002 by and among Photogen
                             Technologies, Inc., Mi3 L.P., OXFORD BIOSCIENCE PARTNERS IV L.P., New England Partners
                             Capital, L.P. and Tannebaum LLC.
</Table>

                                      24
<Page>

<Table>
<Caption>

        EXHIBIT NO.                                                DESCRIPTION
        <S>                  <C>
           10.2              Separation Agreement dated as of July 29, 2002 by and among the following: Craig Dees,
                             Ph.D. and Dees Family Foundation, Eric A. Wachter, Ph.D. and Eric A. Wachter 1998
                             Charitable Remainder Unitrust, Timothy D. Scott, Ph.D. and Scott Family Investment
                             Limited Partnership, Walter Fisher, Ph.D., Fisher Family Investment Limited
                             Partnership, and Walt Fisher 1998 Charitable Remainder Unitrust, and John A. Smolik and
                             Smolik Family LLP, Photogen Technologies, Inc., Photogen, Inc., Robert J. Weinstein,
                             M.D., Stuart P. Levine and Tannebaum, LLC

           99.1              Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                             the Sarbanes-Oxley Act of 2002

           99.2              Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                             the Sarbanes-Oxley Act of 2002
</Table>

           (b)    Reports on Form 8-K.

                  We did not file any reports on Form 8-K during the three-month
period ended June 30, 2002.

                                      25
<Page>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

Date:  August 16, 2002             Photogen Technologies, Inc.



                                   /S/ TAFFY J. WILLIAMS
                                   --------------------------------------------
                                   Taffy J. Williams, Ph.D., President and Chief
                                   Executive Officer


                                   /S/ BROOKS BOVEROUX
                                   --------------------------------------------
                                   Brooks Boveroux, Senior Vice President -
                                   Finance and Chief Financial Officer
                                   (Principal Financial and Chief
                                   Accounting Officer)

                                      26
<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.)

           +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.)

           +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.)

           +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.)

           +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.)

           +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.)

           +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.

          *10.1              Common Stock Purchase Agreement dated as of August 2, 2002 by and among Photogen
                             Technologies, Inc., Mi3 L.P., OXFORD BIOSCIENCE PARTNERS IV L.P., New England Partners
                             Capital, L.P. and Tannebaum LLC.

          *10.2              Separation Agreement dated as of July 29, 2002 by and among the following: Craig Dees,
                             Ph.D. and Dees Family Foundation, Eric A. Wachter, Ph.D. and Eric A. Wachter 1998
                             Charitable Remainder Unitrust, Timothy D. Scott, Ph.D. and Scott Family Investment
                             Limited Partnership, Walter Fisher, Ph.D., Fisher Family Investment Limited
                             Partnership, and Walt Fisher 1998 Charitable Remainder Unitrust, and John A. Smolik and
                             Smolik Family LLP, Photogen Technologies, Inc., Photogen, Inc., Robert J. Weinstein,
                             M.D., Stuart P. Levine and Tannebaum, LLC

          *99.1              Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                             the Sarbanes-Oxley Act of 2002

          *99.2              Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                             the Sarbanes-Oxley Act of 2002
</Table>

+ Incorporated by reference from the filing indicated.
* Filed herewith.

                                      27