UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 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, 1999

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

              For the transition period from  ___________  to  ___________

Commission file number  0-19612

                          IMCLONE SYSTEMS INCORPORATED
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

             DELAWARE                                            04-2834797
--------------------------------                             ------------------
 (State or other jurisdiction of                               (IRS Employer
  incorporation or organization)                             Identification No.)

    180 VARICK STREET, NEW YORK, NY                                 10014
---------------------------------------                            --------
(Address of principal executive offices)                          (Zip Code)

                                 (212) 645-1405
               --------------------------------------------------
               Registrant's telephone number, including area code

                                 Not Applicable
               --------------------------------------------------
               Former name, former address and former fiscal year,
                          if changed since last report

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 ___

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

                  Class                     Outstanding as of August 13, 1999
      -----------------------------         ---------------------------------
      Common Stock, par value $.001                 25,540,495  Shares

<PAGE>

                          IMCLONE SYSTEMS INCORPORATED

                                      INDEX
                                      -----

                                                                        Page No.
                                                                        --------

PART I - FINANCIAL INFORMATION

   Item 1.    Financial Statements

              Consolidated Balance Sheets - June 30, 1999 (unaudited)
              and December 31, 1998                                            1

              Unaudited Consolidated Statements of Operations - Three
              and six months ended June 30, 1999 and 1998                      2

              Unaudited Consolidated Statements of Cash Flows - Six
              months ended June 30, 1999 and 1998                              3

              Notes to Consolidated Financial Statements                       4

   Item 2.    Management's Discussion and Analysis of
              Financial Condition and Results of Operations                    6

   Item 3.    Quantitative and Qualitative Disclosures About
              Market Risk                                                     13


PART II - OTHER INFORMATION


   Item 4.    Submission of Matters to a Vote of Security Holders             14

   Item 6.    Exhibits and Reports on Form 8-K                                15

<PAGE>

Part 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

                          IMCLONE SYSTEMS INCORPORATED

                           Consolidated Balance Sheets
                 (in thousands, except per share and share data)

                                                         June 30,   December 31,
                            Assets                         1999        1998
                                                        ----------  ------------
                                                        (unaudited)

Current assets:
     Cash and cash equivalents ......................... $   2,672    $   3,888
     Securities available for sale .....................    38,006       42,851
     Prepaid expenses ..................................       434          470
     Other current assets ..............................     1,378        1,196
                                                         ---------    ---------
                Total current assets ...................    42,490       48,405
                                                         ---------    ---------
Property and equipment:
     Land ..............................................       340          340
     Building and building improvements ................    10,690       10,519
     Leasehold improvements ............................     4,878        4,846
     Machinery and equipment ...........................     8,427        7,834
     Furniture and fixtures ............................       641          640
     Construction in progress ..........................     1,860          115
                                                         ---------    ---------
                Total cost .............................    26,836       24,294

       Less accumulated depreciation
          and amortization .............................   (13,742)     (12,877)
                                                         ---------    ---------
                Property and equipment, net ............    13,094       11,417
                                                         ---------    ---------

Patent costs, net ......................................       892          860
Deferred financing costs, net ..........................        41           46
Other assets ...........................................     1,581        1,524
                                                         ---------    ---------
                                                         $  58,098    $  62,252
                                                         =========    =========
               Liabilities and Stockholders' Equity

Current liabilities:
    Accounts payable ................................... $     944    $   1,109
    Accrued expenses and other .........................     3,568        4,847
    Interest payable ...................................        43           45
    Deferred revenue ...................................      --             75
    Fee potentially refundable from corporate partner ..    12,000        4,000
    Current portion of long-term liabilities ...........       919          744
    Preferred stock dividends payable ..................     3,702        2,512
                                                         ---------    ---------
                Total current liabilities ..............    21,176       13,332
                                                         ---------    ---------

Long-term debt .........................................     2,200        2,200
Other long-term liabilities, less current portion ......     1,586        1,546
                                                         ---------    ---------
                Total liabilities ......................    24,962       17,078
                                                         ---------    ---------

Commitments and contingencies

Stockholders' equity :
    Preferred stock, $1.00 par value;  authorized
         4,000,000 shares;  issued and outstanding
         Series A Convertible: 400,000 at June 30,
         1999 and December 31, 1998 (preference
         in liquidation $43,702 and $42,512,
         respectively) .................................       400          400
    Common stock, $.001 par value; authorized
         60,000,000 shares; issued 25,397,474 and
         24,567,312 at June 30, 1999 and December 31,
         1998, respectively; outstanding 25,346,657,
         and 24,516,495 at June 30, 1999 and December
         31, 1998, respectively ........................        25           25
    Additional paid-in capital .........................   188,118      184,853
    Accumulated deficit ................................  (155,055)    (138,846)
    Treasury stock, at cost; 50,817 shares
         at June 30, 1999 and
         December 31, 1998 .............................      (492)        (492)
    Note receivable - officer and stockholder ..........      (137)        (142)
    Accumulated other comprehensive income (loss):
         Unrealized gain (loss) on securities
              available for sale, net ..................       277         (624)
                                                         ---------    ---------
                 Total stockholders' equity ............    33,136       45,174
                                                         ---------    ---------
                                                         $  58,098    $  62,252
                                                         =========    =========

          See accompanying notes to consolidated financial statements.


                                     Page 1

<PAGE>

                          IMCLONE SYSTEMS INCORPORATED

                      Consolidated Statements of Operations
                      (in thousands, except per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                     Three Months Ended       Six Months Ended
                                                          June 30,                June 30,
                                                   ---------------------   ---------------------
                                                      1999       1998        1999        1998
                                                   ---------   ---------   ---------   ---------
<S>                                                <C>         <C>         <C>         <C>
Revenues:
     Product development milestone revenues ....   $   --      $   --      $   --      $  1,000
     Research and development funding from third
          parties and other ....................        254         765         883       1,615
                                                   --------    --------    --------    --------
                   Total revenues ..............        254         765         883       2,615
                                                   --------    --------    --------    --------
Operating expenses:
     Research and development ..................      7,151       4,675      13,505       8,846
     General and administrative ................      1,675       1,546       3,677       2,959
                                                   --------    --------    --------    --------
                  Total operating expenses .....      8,826       6,221      17,182      11,805
                                                   --------    --------    --------    --------

Operating loss .................................     (8,572)     (5,456)    (16,299)     (9,190)
                                                   --------    --------    --------    --------
Other:
     Interest income ...........................       (564)       (777)     (1,168)     (1,607)
     Interest expense ..........................        123         110         246         200
     Loss (gain) on securities available
        for sale ...............................       --            (1)        832          (2)
                                                   --------    --------    --------    --------
               Net interest  and other income ..       (441)       (668)        (90)     (1,409)
                                                   --------    --------    --------    --------
Net loss .......................................     (8,131)     (4,788)    (16,209)     (7,781)

Preferred  dividends (including assumed
     incremental  yield  attributable  to
     beneficial  conversion  feature of $336
     and $317 for the three months ended
     June 30, 1999 and 1998,  respectively
     and $672 and $635 for the six months
     ended June 30, 1999 and 1998,
     respectively) .............................        934         967       1,862       1,825
                                                   --------    --------    --------    --------
Net loss to common stockholders ................   $ (9,065)   $ (5,755)   $(18,071)   $ (9,606)
                                                   ========    ========    ========    ========
Basic and diluted net loss per common share ....   $  (0.36)   $  (0.24)   $  (0.73)   $  (0.40)
                                                   ========    ========    ========    ========
Weighted average shares outstanding ............     24,986      24,273      24,718      24,251
                                                   ========    ========    ========    ========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                     Page 2
<PAGE>

                          IMCLONE SYSTEMS INCORPORATED

                      Consolidated Statements of Cash Flows
                                 (in thousands)
                                   (unaudited)

                                                            Six Months Ended
                                                                 June 30,
                                                           --------------------
                                                             1999        1998
                                                           ---------   --------
Cash flows from operating activities:
 Net loss ................................................ $(16,209)   $ (7,781)
 Adjustments to reconcile net loss to net
        cash used in operating activities:
    Depreciation and amortization ........................      925         883
    Expense associated with issuance
        of options and warrants ..........................    1,064         310
    Loss (gain) on securities available for sale .........      832          (2)
    Changes in:
       Prepaid expenses ..................................      138          20
       Other current assets ..............................     (284)        (49)
       Other assets ......................................     (135)        (35)
       Interest payable ..................................       (2)        (25)
       Accounts payable ..................................     (165)       (151)
       Accrued expenses and other ........................   (1,279)       (744)
       Deferred revenue ..................................      (75)         75
       Fee potentially refundable from corporate partner .    8,000        --
                                                           --------    --------
              Net cash used in operating activities ......   (7,190)     (7,499)
                                                           --------    --------

Cash flows from investing activities:
    Acquisitions of property and equipment ...............   (2,010)       (570)
    Purchases of securities available for sale ...........  (18,508)    (28,760)
    Sales and maturities of securities available for sale    23,500      37,997
    Additions to patents .................................      (87)        (81)
                                                           --------    --------
              Net cash provided by investing activities  .    2,895       8,586
                                                           --------    --------

Cash flows from financing activities:
    Proceeds from exercise of stock options and warrants .    3,335         150
    Proceeds from issuance of common stock under the
        employee stock purchase plan .....................       50        --
    Proceeds from equipment and building improvement
        financings .......................................       94         593
    Payments of other liabilities ........................     (411)       (514)
    Interest received on note receivable - officer
        and stockholder ..................................       11        --
                                                           --------    --------
              Net cash provided by financing activities ..    3,079         229
                                                           --------    --------
Net (decrease) increase in cash and cash equivalents .....   (1,216)      1,316

Cash and cash equivalents at beginning of period .........    3,888       2,558
                                                           --------    --------
Cash and cash equivalents at end of period ............... $  2,672    $  3,874
                                                           ========    ========

          See accompanying notes to consolidated financial statements.


                                     Page 3
<PAGE>

                          IMCLONE SYSTEMS INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

(1)  Basis of Presentation

The consolidated financial statements of ImClone Systems Incorporated ("ImClone"
or the  "Company")  as of June 30,  1999 and for the three and six months  ended
June 30,  1999 and 1998 are  unaudited.  In the  opinion  of  management,  these
unaudited  financial  statements  include all  adjustments,  consisting  only of
normal recurring adjustments, necessary for a fair presentation. These financial
statements should be read in conjunction with the audited  financial  statements
and notes thereto  included in the Company's  Annual Report on Form 10-K for the
year  ended  December  31,  1998,  as filed  with the  Securities  and  Exchange
Commission.

Results for the interim  periods are not  necessarily  indicative of results for
the full years.

(2) Commitments

The  Company  signed a  definitive  agreement  in  April  1999  with  Boehringer
Ingelheim Pharmaceuticals KG ("BI Pharmaceuticals") for the further development,
production  scale-up and manufacture of the Company's lead  therapeutic  product
candidate,  C225, for use in human clinical  trials.  Services  pursuant to this
agreement  commenced in April 1998  pursuant to an agreement in  principle.  The
Company estimates that the total cost under the agreement, including the cost of
additional  amounts of material  the  Company has the right to request,  will be
DM12,100,000  or  $6,392,000.  As of June 30,  1999,  the Company  has  incurred
approximately  DM3,940,000,  of which  DM3,130,000  has been paid,  for services
provided under this agreement.

(3) Related Party Transactions

In January 1998, the Company  accepted a promissory note totaling  approximately
$131,000 from its President and CEO in connection with the exercise of a warrant
to purchase  87,305 shares of the Company's  common stock,  $.001 par value (the
"Common  Stock").  The note is due no later than two years from  issuance and is
full recourse. Interest was paid on the first anniversary date of the promissory
note at an annual  rate of 8.5% and is  payable on the  stated  maturity  or any
accelerated  maturity.  At June 30,  1999,  the total  amount  due the  Company,
including  interest,  was  approximately  $137,000  and  is  classified  in  the
stockholders'  equity  section of the balance  sheet as a note  receivable  from
officer and stockholder.

In October  1998,  the Company  accepted an unsecured  promissory  note totaling
$100,000  from its  Executive  Vice  President  and COO. The note was payable on
demand  including  interest  at the annual rate of 8.25% for the period that the
loan is outstanding.  In April 1999, the note, including all interest,  was paid
in full.

In January  1999,  the Company  accepted an unsecured  promissory  note totaling
$60,000 from its Vice President,  Product and Process Development.  The note was
payable upon the earlier of on the Company's  demand or July 28, 1999  including
interest  at an  annual  rate  of  8.75%  for  the  period  that  the  loan  was
outstanding.  The loan was made in connection  with the acceptance of employment
and the  corresponding  relocation of the officer.  At June 30, 1999,  the total
amount due the Company,  including  interest,  was approximately  $62,000 and is
included  as a  component  of other  current  assets.  In July  1999,  the note,
including all interest, was paid in full.

(4)  Earnings Per Share

Basic and diluted  Earnings Per Share ("EPS") are computed based on the net loss
for the relevant period,  adjusted for cumulative Series A Convertible Preferred
Stock (the "Series A Preferred Stock" or "Series A Preferred  Shares") dividends
and the assumed  incremental  yield  attributable  to the beneficial  conversion
feature in the preferred stock, divided by the weighted average number of shares
outstanding  during  the  period.  Potentially  dilutive  securities,  including
convertible preferred stock, options and warrants, have not been included in the
diluted EPS computation because they are anti-dilutive.


                                     Page 4
<PAGE>

(5)  Comprehensive Income (Loss)

The following table reconciles net loss to comprehensive loss:

<TABLE>
<CAPTION>

                                                     Three Months Ended              Six Months Ended
                                                          June 30,                       June 30,
                                               ----------------------------    ----------------------------
                                                   1999            1998            1999            1998
                                               -------------   ------------    ------------    ------------
<S>                                            <C>             <C>             <C>             <C>
Net loss ...................................   $ (8,131,000)   $ (4,788,000)   $(16,209,000)   $ (7,781,000)

Other comprehensive income:
   Unrealized holding gain arising
   during the period .......................         56,000         135,000          69,000         204,000
   Less: Reclassification adjustment for
             realized  gain (loss)  included
             in net loss ...................           --              --          (832,000)          2,000
                                               ------------    ------------    ------------    ------------
      Total other comprehensive income .....         56,000         135,000         901,000         202,000
                                               ------------    ------------    ------------    ------------
Total comprehensive loss ...................   $ (8,075,000)   $ (4,653,000)   $(15,308,000)   $ (7,579,000)
                                               ============    ============    ============    ============
</TABLE>

(6)  Loss on Securities Available for Sale

In October 1997, the Company entered into a  Collaborative  Research and License
Agreement with CombiChem Inc. ("CombiChem"). Concurrent with this agreement, the
Company  entered into a Stock Purchase  Agreement  pursuant to which the Company
purchased 312,500 shares of common stock of CombiChem,  as adjusted, for a total
purchase  price of $2,000,000.  The investment has been  classified as available
for sale and a long-term  asset. The market value of the investment in CombiChem
has declined  substantially from the date of original investment and the Company
has deemed this decline in market value to be other than temporary. Accordingly,
the cost basis in the  investment  in CombiChem  has been adjusted and a loss on
securities  available  for sale of $828,000  was  recorded in March 1999.  These
securities have not been sold by the Company.

(7)   Common Stock

On May 24, 1999, the date of the annual shareholders  meeting,  the stockholders
approved the amendment of the Company's certificate of incorporation to increase
the total  number of shares of Common Stock the Company is  authorized  to issue
from 45,000,000 shares to 60,000,000 shares.

(8)   Stock Options and Warrants

On May 24, 1999, the date of the annual shareholders  meeting,  the stockholders
approved an amendment to the  Company's  1996  Incentive  Stock Option Plan (the
"1996 ISO Plan") to increase  the total  number of shares of Common  Stock which
may be issued  pursuant to options  which may be granted under the 1996 ISO Plan
from  3,000,000  to  4,000,000,  which  number shall be reduced by the number of
shares of Common  Stock  which  have been or may be issued  pursuant  to options
granted  under the  Company's  1996  Non-Qualified  Stock Option Plan (the "1996
Non-Qualified Plan").

The stockholders  also approved  amendments to the Company's 1996  Non-Qualified
Plan to (i)  increase  the total  number of shares of Common  Stock which may be
issued  pursuant to options  which may be granted  under the 1996  Non-Qualified
Plan from 3,000,000 to 4,000,000, which number shall be reduced by the number of
shares of common  stock  which  have been or may be issued  pursuant  to options
granted under the Company's  1996 ISO Plan,  and (ii) increase the annual option
grant made to members of the Board of  Directors  and the  Chairman  who are not
full-time employees of the Company under the 1996 Non-Qualified Plan. The annual
option grant to  non-employee  members of the Board of Directors  increased from
2,500 to 15,000 and the annual option grant to the Chairman increased from 2,500
to 30,000.


                                     Page 5
<PAGE>

The stockholders  approved the grant of an option to the Company's President and
Chief Executive  Officer to purchase  1,000,000  shares of Common Stock at a per
share exercise price equal to $18.25, the last reported sale price of the Common
Stock on the date shareholder  approval was obtained at the annual  shareholders
meeting.  The  option  will vest no later than six years from the grant date and
specified  amounts are subject to earlier  vesting if specified  Company  Common
Stock price thresholds are met.

The stockholders approved the grant of an option to the Company's Executive Vice
President and Chief Operating Officer to purchase 650,000 shares of Common Stock
at a per share exercise  price equal to $18.25,  the last reported sale price of
the Common  Stock on the date  shareholder  approval  was obtained at the annual
shareholders  meeting.  The  option  will vest no later  than six years from the
grant date and  specified  amounts are subject to earlier  vesting if  specified
Company Common Stock price thresholds are met.


(9)  Reclassification

Certain  amounts  previously  reported have been  reclassified to conform to the
current year's presentation.

(10)  Collaborative Agreements

The Company has a development  and license  agreement  with Merck KGaA ("Merck")
with  respect  to C225,  its lead  interventional  therapeutic  product  for the
treatment of cancer. In exchange for certain  marketing and development  rights,
the Company can receive up to $60,000,000 in milestone payments  ($30,000,000 of
which are equity based)  assuming the  achievement  of certain  milestones and a
$30,000,000  secured  line  of  credit  or  guaranty  for  the  build-out  of  a
manufacturing  facility for the  commercial  production  of C225.  The agreement
provides that among other  reasons,  it may be terminated by either party if the
Company and Merck failed to agree on a production  concept for the manufacturing
facility or if Merck had not provided  the Company  with the credit  facility or
guaranty by April 15, 1999,  in which case Merck is entitled to receive back all
milestone  payments made to date.  Additionally,  the Company must timely obtain
certain  collateral  license  agreements,  and the failure to do so will entitle
Merck to receive back all  milestone  payments  made to date.  In April 1999 the
parties agreed on the production concept for the manufacturing  facility and are
currently  working toward securing the credit  facility or guaranty.  As of June
30, 1999,  the Company has received  $12,000,000  in milestone  payments.  These
payments  have been  recorded  as fees  potentially  refundable  from  corporate
partner and will be  recognized  as revenue  upon Merck's  providing  the credit
facility or guaranty and the Company's  obtaining the defined collateral license
agreements.

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

The following  discussion and analysis by our management is provided to identify
certain  significant factors which affected our financial position and operating
results during the periods included in the accompanying financial statements.

                              RESULTS OF OPERATIONS

Six Months Ended June 30, 1999 and 1998

Revenues.

Revenues  for the six months  ended  June 30,  1999 and 1998 were  $883,000  and
$2,615,000, respectively, a decrease of $1,732,000, or 66%. Revenues for the six
months  ended June 30,  1999  primarily  consisted  of (i)  $150,000 in research
support from our partnership with American Home Products Corporation  ("American
Home") in  infectious  disease  vaccines,  (ii) $533,000 in research and support
payments  from our research and license  agreement  with Merck for our principal
cancer vaccine  product  candidate,  BEC2, and (iii) $195,000 in royalty revenue
from our strategic alliance with Abbott Laboratories  ("Abbott") in diagnostics.
Revenues  for the six months  ended June 30, 1998  consisted  of (i) $150,000 in
research support from our partnership  with American Home in infectious  disease
vaccines,  (ii)  $1,000,000 in milestone  revenue and $1,250,000 in research and
support  payments  from our research and license  agreement  with Merck for BEC2
(iii)  $117,000 in royalty  revenue from our  strategic  alliance with Abbott in


                                     Page 6
<PAGE>

diagnostics and (iv) $98,000 from a Phase I Small Business  Innovation  Research
grant  from the  National  Cancer  Institute  for a  program  in  cancer-related
angiogenesis.  The  decrease in revenues  for the six months ended June 30, 1999
was primarily  attributable  to (i) the decrease in research and support revenue
as a result of the completion of all research and support  payments due from our
research  and  license  agreement  with  Merck for BEC2 and (ii) a  decrease  in
milestone revenue which can vary widely from period to period depending upon the
timing of the  achievement of various  research and  development  milestones for
products under development.

Operating; Research and Development Expenses.

Total  operating  expenses  for the six months ended June 30, 1999 and 1998 were
$17,182,000 and $11,805,000,  respectively,  an increase of $5,377,000,  or 46%.
Research  and  development  expenses  for the six months ended June 30, 1999 and
1998 were $13,505,000 and $8,846,000, respectively, an increase of $4,659,000 or
53%.  Such amounts for the six months  ended June 30, 1999 and 1998  represented
79% and 75%, respectively, of total operating expenses. The increase in research
and  development  expenses for the six months ended June 30, 1999 was  primarily
attributable to (i) the costs  associated with an agreement for the supplemental
further   development   and   manufacture  of  clinical  grade  C225,  our  lead
interventional  therapeutic product candidate for cancer, to support ongoing and
future human clinical  trials,  (ii) the costs associated with the initiation of
Phase III clinical studies of C225,  (iii)  expenditures in the functional areas
of  product   development,   manufacturing,   clinical  and  regulatory  affairs
associated with C225 and (iv) expenditures  associated with additional  staffing
in the area of discovery research.

General and Administrative Expenses.

General and  administrative  expenses  include  administrative  personnel costs,
costs incurred in connection with pursuing  arrangements with corporate partners
and  technology  licensors,  and expenses  associated  with  applying for patent
protection  for our  technology  and products.  Such expenses for the six months
ended June 30, 1999 and 1998 were  $3,677,000 and $2,959,000,  respectively,  an
increase  of  $718,000,  or 24%.  The  increase  in general  and  administrative
expenses  primarily  reflected (i) additional support staffing for the expanding
research,  development,  clinical  manufacturing  and  marketing  efforts of the
Company, particularly with respect to C225 and (ii) expenses associated with the
pursuit  of  strategic  corporate  alliances  and  other  corporate  development
expenses.  We expect general and  administrative  expenses to increase in future
periods to support our planned increases in research, development,  clinical and
manufacturing efforts.

Interest and Other Income or Loss and Interest Expense.

Interest  income was  $1,168,000 for the six months ended June 30, 1999 compared
to $1,607,000 for the six months ended June 30, 1998, a decrease of $439,000, or
27%. The decrease was primarily  attributable  to the decrease in our investment
portfolio as a result of funding our operations.  Interest  expense was $246,000
and $200,000 for the six months ended June 30, 1999 and 1998,  respectively,  an
increase of $46,000 or 23%. Interest expense for both periods primarily included
(i) interest on an  outstanding  Industrial  Development  Revenue Bond issued in
1990 (the  "1990 IDA  Bond")  with a  principal  amount of  $2,200,000  and (ii)
interest  recorded on various  capital lease  obligations  under a December 1996
Financing Agreement (the "1996 Financing Agreement") and an April 1998 Financing
Agreement (the "1998 Financing  Agreement") with Finova Technology Finance, Inc.
("Finova").  The increase was primarily attributable to entering into additional
capital leases. We recorded losses on securities  available for sale for the six
months  ended June 30,  1999 in the amount of  $832,000  as compared to gains of
$2,000 for the six months ended June 30, 1998. The loss for the six months ended
June 30,  1999 is  primarily  attributable  to the  $828,000  write-down  of our
investment  in  CombiChem  Inc.  ("CombiChem")  as a  result  of  other  an than
temporary decline. See "Liquidity and Capital Resources".

Net Losses.

We had net losses to common  stockholders  of $18,071,000 or $0.73 per share for
the six months ended June 30, 1999 compared  with  $9,606,000 or $0.40 per share
for the six months ended June 30,  1998.  The increase in the net losses and per
share net loss to common  stockholders  was due  primarily to the factors  noted
above.


                                     Page 7
<PAGE>

Three Months Ended June 30, 1999 and 1998

Revenues.

Revenues  for the three  months  ended June 30, 1999 and 1998 were  $254,000 and
$765,000,  respectively,  a decrease of $511,000, or 67%. Revenues for the three
months ended June 30, 1999 consisted of (i) $75,000 in research support from our
partnership with American Home in infectious disease vaccines,  (ii) $108,000 in
research and support payments from our research and license agreement with Merck
for BEC2, and (iii) $71,000 in royalty revenue from our strategic  alliance with
Abbott  in  diagnostics.  Revenues  for the three  months  ended  June 30,  1998
consisted of (i) $75,000 in research  support from our partnership with American
Home in  infectious  disease  vaccines,  (ii)  $625,000 in research  and support
payments  from our  research  and  license  agreement  with Merck for BEC2 (iii)
$65,000  in  royalty  revenue  from  our  strategic   alliance  with  Abbott  in
diagnostics.  The  decrease in revenues for the three months ended June 30, 1999
was primarily  attributable to the decrease in research and support revenue as a
result of the  completion  of all  research  and support  payments  due from our
research and license agreement with Merck for BEC2.

Operating; Research and Development Expenses.

Total operating  expenses for the three months ended June 30, 1999 and 1998 were
$8,826,000 and  $6,221,000,  respectively,  an increase of  $2,605,000,  or 42%.
Research and  development  expenses for the three months ended June 30, 1999 and
1998 were $7,151,000 and $4,675,000,  respectively, an increase of $2,476,000 or
53%. Such amounts for the three months ended June 30, 1999 and 1998  represented
81% and 75%, respectively, of total operating expenses. The increase in research
and development  expenses for the three months ended June 30, 1999 was primarily
attributable to (i) the costs  associated with an agreement for the supplemental
further  development  and  manufacture of clinical grade C225 to support ongoing
and future human clinical trials,  (ii) the costs associated with the initiation
of Phase III clinical  studies of C225,  (iii)  expenditures  in the  functional
areas of product  development,  manufacturing,  clinical and regulatory  affairs
associated with C225 and (iv) expenditures  associated with additional  staffing
in the area of discovery research.

General and Administrative Expenses.

General and  administrative  expenses  include  administrative  personnel costs,
costs incurred in connection with pursuing  arrangements with corporate partners
and  technology  licensors,  and expenses  associated  with  applying for patent
protection for our  technology and products.  Such expenses for the three months
ended June 30, 1999 and 1998 were  $1,675,000 and $1,546,000,  respectively,  an
increase of $129,000, or 8%. The increase in general and administrative expenses
primarily  reflected (i) additional support staffing for the expanding research,
development,  clinical  manufacturing  and  marketing  efforts  of the  Company,
particularly with respect to C225 and (ii) expenses  associated with the pursuit
of strategic corporate alliances and other corporate  development  expenses.  We
expect  general and  administrative  expenses  to increase in future  periods to
support  our  planned   increases   in  research,   development,   clinical  and
manufacturing efforts.

Interest and Other Income and Interest Expense.

Interest  income was $564,000 for the three months ended June 30, 1999  compared
to $777,000 for the three months ended June 30, 1998, a decrease of $213,000, or
27%. The decrease was primarily  attributable  to the decrease in our investment
portfolio as a result of funding our operations.  Interest  expense was $123,000
and $110,000 for the three months ended June 30, 1999 and 1998, respectively, an
increase of $13,000 or 12%. Interest expense for both periods primarily included
(i)  interest  on an  outstanding  1990  IDA Bond  with a  principal  amount  of
$2,200,000 and (ii) interest recorded on various capital lease obligations under
the 1996 Financing  Agreement and the 1998 Financing  Agreement with Finova. The
increase was primarily attributable to entering into additional capital leases.


                                     Page 8
<PAGE>

Net Losses.

We had net losses to common  stockholders  of  $9,065,000 or $0.36 per share for
the three months ended June 30, 1999 compared with $5,755,000 or $0.24 per share
for the three months ended June 30, 1998. The increase in the net losses and per
share net loss to common  stockholders  was due  primarily to the factors  noted
above.

                         LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1999, our principal sources of liquidity  consisted of cash and cash
equivalents  and  short-term  securities  available  for  sale of  approximately
$40,678,000. We have financed our operations since inception primarily through:

o     the proceeds from the public and private sales of our equity securities.

o     license fees.

o     contract research and development fees.

o     royalties received under agreements with collaborative partners.

o     interest earned on these funds.

o     the sale of three issues of Industrial Development Revenue Bonds (the "IDA
      Bonds") through the New York Industrial Development Agency (the "NYIDA").

Since inception:

o     public and private sales of equity  securities  in financing  transactions
      have raised approximately $163,799,000 in net proceeds.

o     we have earned  approximately  $33,738,000  from  license  fees,  contract
      research and development fees and royalties from  collaborative  partners,
      including  approximately  $883,000 earned during the six months ended June
      30,  1999.  Additionally,  we have  received  $12,000,000  in  potentially
      refundable  milestone fees from our C225 development and license agreement
      with Merck.  These  amounts  have yet to be  recognized  as  revenue.  See
      Footnote  8,  "Collaborative  Agreements",  of the  Notes to  Consolidated
      Financial Statements.

o     we have earned  approximately  $9,631,000  in interest  income,  including
      approximately $1,168,000 earned during the six months ended June 30,1999.

o     the  sale of the IDA  Bonds  in each of 1985,  1986  and  1990  raised  an
      aggregate  of  $6,313,000,  the  proceeds  of which have been used for the
      acquisition, construction and installation of our research and development
      facility  in  New  York  City,  and  of  which   $2,200,000  is  currently
      outstanding.

We  signed a  definitive  agreement  in April  1999  with  Boehringer  Ingelheim
Pharmaceuticals  KG  ("BI   Pharmaceuticals")   for  the  further   development,
production  scale-up and manufacture of the Company's lead  therapeutic  product
candidate,  C225, for use in human clinical  trials.  Services  pursuant to this
agreement  commenced in April 1998  pursuant to an agreement  in  principle.  We
estimate  that  the  total  cost  under  the  agreement,  including  the cost of
additional  amounts  of  material  we  have  the  right  to  request,   will  be
DM12,100,000 or $6,392,000.  As of June 30, 1999, we have incurred approximately
DM3,940,000,  of which  DM3,130,000  has been paid, for services  provided under
this agreement.

In October 1997, we entered into a Collaborative  Research and License Agreement
with CombiChem to discover and develop novel small  molecules  against  selected
targets for the  treatment  of cancer.  At the same time as we entered into this
agreement,  we entered  into a Stock  Purchase  Agreement  pursuant  to which we
purchased 312,500 shares of common stock of CombiChem,  as adjusted, for a total
purchase price of $2,000,000.  The investment has been classified as a long-term
asset.   The  market  value  of  our   investment   in  CombiChem  had  declined
substantially  from the date of our  investment.  In March 1999,  we deemed this
decline  in  market  value  to be other  than  temporary.  Accordingly,  we have
adjusted  our cost basis in the  investment  and  recorded a loss on  securities
available  for sale of $828,000 in the first quarter of 1999.  These  securities
have not been  sold and we will  continue  to  monitor  our cost  investment  in
CombiChem.


                                     Page 9
<PAGE>

We have obligations under various capital leases for certain laboratory,  office
and computer  equipment and also certain building  improvements  primarily under
the 1996 Financing  Agreement and the 1998 Financing  Agreement with Finova. The
1996 Financing  Agreement  allowed us to finance the lease of equipment and make
certain  building and leasehold  improvements to existing  facilities  involving
amounts totaling  approximately  $2,500,000.  Each lease has a fair market value
purchase  option at the  expiration  of a 42-month  term.  Pursuant  to the 1996
Financing Agreement, we issued to Finova a warrant expiring December 31, 1999 to
purchase  23,220  shares of our common  stock at an exercise  price of $9.69 per
share.  We  recorded a non-cash  debt  discount  of  approximately  $125,000  in
connection  with this  financing,  which  discount is being  amortized  over the
42-month  term of the first  lease.  The 1996  Financing  Agreement  with Finova
expired in December 1997 and we utilized only  $1,745,000 of the full $2,500,000
under the agreement. In April 1998, we entered into the 1998 Financing Agreement
with Finova totaling approximately  $2,000,000.  The terms of the 1998 Financing
Agreement are substantially  similar to the now expired 1996 Financing Agreement
except that each lease has a 48-month  term. As of June 30, 1999, we had entered
into twelve  individual  leases under both the 1996 Financing  Agreement and the
1998  Financing  Agreement  aggregating  a total  cost of  $3,695,000.  The 1998
Financing Agreement expired in May 1999.

We have  spent and will  continue  to spend in the future  substantial  funds to
continue the research and development of our products,  conduct pre-clinical and
clinical trials, establish clinical-scale and commercial-scale  manufacturing in
our own facilities or in the facilities of others,  and market our products.  We
have  continued  to  engage  in  discussions  with  major   pharmaceutical   and
biopharmaceutical   companies  regarding  various  alternatives  concerning  the
funding of research and  development  for certain of our products.  No assurance
can be given that we will be successful in consummating  any such  alternatives.
Such strategic alliances could include up-front license fees plus milestone fees
and revenue  sharing.  There can be no assurance  that we will be  successful in
achieving such alliances,  nor can we predict the amount of funds which might be
available  to us if we  entered  into such  alliances  or the time at which such
funds would be made available or the other terms of any such alliances.

In January 1998, we completed the construction and  commissioning of a new 1,750
square foot process development center at our Somerville, New Jersey facility at
a cost of approximately $1,650,000.

Under our  agreement  with Merck for C225, we developed,  in  consultation  with
Merck, a production concept for a new manufacturing  facility for the commercial
production of C225. Merck is to provide us, subject to certain conditons, with a
$30  million  secured  line of  credit or  guaranty  for the  build-out  of this
facility.  We have  determined  to erect this  facility  adjacent to our current
manufacturing facility in New Jersey which supplies C225 to support our clinical
trials.

We rent our New York City  facility  under a lease which was scheduled to expire
in March 1999.  We renewed the entire lease for a term  commencing as of January
1, 1999 through  December 2004 and have begun to retrofit the facility to better
suit our needs at an expected cost of approximately $2,000,000.

The 1990 IDA Bond in the outstanding  principal amount of $2,200,000 becomes due
in 2004.  We will  incur  annual  interest  on the  1990  IDA  Bond  aggregating
approximately  $250,000.  In order to secure our  obligations to the NYIDA under
the 1990 IDA Bond,  we have  granted  the NYIDA a security  interest in facility
equipment purchased with the bond proceeds.

The holders of the 400,000  shares of Series A Convertible  Preferred  Stock are
entitled to receive  cumulative  dividends at an annual rate of $6.00 per share.
Dividends  accrue as of the issuance  date of the Series A Preferred  Shares and
are payable on the outstanding  Series A Preferred Shares in cash on December 31
of each  year  beginning  December  31,  1999 or at the  time of  conversion  or
redemption of the Series A Preferred Shares on which the dividend is to be paid,
whichever is sooner. Accrued dividends were $3,702,000 at June 30, 1999.

Total capital  expenditures  made during the six months ended June 30, 1999 were
$2,542,000,  of which $532,000 have been reimbursed in accordance with the terms
of the 1998 Financing  Agreement with Finova. Of the total capital  expenditures
made  during the  six-months  ended  June 30,  1999,  $1,392,000  related to the
purchase  of  equipment  for and  costs  associated  with  the  retrofit  of our
corporate  office and research  laboratories in New York. The balance of capital
additions  include  $933,000  associated  with the  build-out of the  commercial
manufacturing facility to be erected adjacent to our current


                                    Page 10
<PAGE>

manufacturing  facility  in  New  Jersey.  The  remaining  $217,000  related  to
improving and equipping our existing manufacturing facility.

We expect that our existing  capital  resources  and expected  future cash flows
should  enable us to maintain  our current and planned  operations  through June
2001. Certain milestone payments,  including $18,000,000 in cash based milestone
payments  and  $30,000,000  in equity  based  milestone  payments  from our C225
development  and license  agreement  with Merck,  are to be paid  subject to our
attaining research and development milestones. There can be no assurance that we
will achieve these  milestones.  Additionally,  the termination of the agreement
due to Merck's failure to provide the credit facility or guaranty or our failure
to obtain the necessary collateral license agreements would require us to return
all milestone  payments  made to date.  Our future  working  capital and capital
requirements will depend upon numerous factors, including, but not limited to:

o     progress of our research and development  programs,  pre-clinical  testing
      and clinical trials.

o     our corporate partners fulfilling their obligations to us.

o     timing and cost of seeking and obtaining regulatory approvals.

o     timing and cost of manufacturing scale-up and effective  commercialization
      activities and arrangements.

o     level of resources  that we devote to the  development  of  marketing  and
      sales capabilities.

o     costs involved in filing, prosecuting and enforcing patent claims.

o     technological advances.

o     status of competitors.

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

o     costs  of   establishing   both  clinical  scale  and   commercial   scale
      manufacturing capacity in our facility and those of others.

In order to fund our capital needs after June 2001, we will require  significant
levels  of  additional  capital  and we  intend  to raise  the  capital  through
additional arrangements with corporate partners,  equity or debt financings,  or
from other sources  including the proceeds of product sales, if any. There is no
assurance that we will be successful in consummating any such  arrangements.  If
adequate funds are not available,  we may be required to  significantly  curtail
our planned operations.

Uncertainties  associated  with the  length  and  expense  of  pre-clinical  and
clinical  testing of any of our product  candidates  could greatly  increase the
cost of  development  of such products and affect the timing of any  anticipated
revenues from product sales. Our failure to obtain  regulatory  approval for any
product will preclude its commercialization.  In addition, our failure to obtain
sufficient  patent  protection for our products may make certain of our products
commercially unattractive.

At December 31, 1998, we had net operating loss carryforwards for federal income
tax purposes of  approximately  $129,485,000  which expire at various dates from
2000 through 2018. At December 31, 1998 we had research credit  carryforwards of
approximately  $3,642,000  which expire at various  dates between years 2009 and
2018.  Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended,
the annual  utilization  of a company's net operating  loss and research  credit
carryforwards may be limited if the company experiences a change in ownership of
more than 50  percentage  points  within a  three-year  period.  Since 1986,  we
experienced  two such  ownership  changes.  Accordingly,  our net operating loss
carryforwards  available to offset future federal  taxable income arising before
such ownership  changes are limited to $5,159,000  annually.  Similarly,  we are
restricted  in using our  research  credit  carryforwards  arising  before  such
ownership changes to offset future federal income tax expense.

Year 2000

The "Year 2000  problem"  involves  mainly  the  inability  of certain  computer
programs and microprocessing  devices to differentiate between the year 1900 and
the year 2000  because  two-digit  rather  than  four-digit  fields were used to
identify the year. There are a variety of related "date" problems, including the
use by older  programs  and devices of  algorithms  that will fail to  correctly
identify the year 2000 and certain  other years in the  twenty-first  century as
leap years. A Year 2000 problem could cause a computer system or  microprocessor
that is date  sensitive  to  malfunction,  resulting  in system  failures.  Such
failures  could  cause  disruptions  of  our  operations,   including,   without
limitation, the systems in place at our Branchburg clinical-scale  manufacturing
facility,  computers,  communication devices and laboratory  instrumentation


                                    Page 11
<PAGE>

and systems  which use dated  information  in our research and  development  and
scientific testing or, possibly, in our pre-clinical or clinical trials.

To deal with the Year 2000  problem we have  developed a year 2000  program that
has three main phases:  (i) review of information  technology  ("IT") and non-IT
systems for the purposes of assessing the  potential  impact of Year 2000 on our
business and identifying  non-Year 2000 compliant systems;  (ii) remediation and
development  of  contingency  plans;  and (iii)  testing.  These  phases are not
necessarily sequential. We have a Year 2000 team to coordinate and carry out the
various  phases  and  Reporting  Responsible  Persons  in  each  critical  area,
including computer hardware,  software,  other hardware,  laboratory  equipment,
collaborators  and  process/clinical  development.  While  we  believe  that our
program is and will be adequate to address Year 2000  problems,  there can be no
assurance  that our  operations  will not be adversely  affected.  While we have
devoted significant resources to dealing with the Year 2000 problem, our efforts
to date have not caused the deferral of any other significant IT projects.

We have  reviewed  the  potential  impact of the "Y2K" bug on our  research  and
development, product development,  manufacturing,  financial,  communication and
administrative  operations.  We  determined  which  systems are  critical to our
business. We also determined which systems were non-year 2000 compliant.

We  are  in  the  process  of   remediating   through   corrective   programming
modifications  or  system  replacement  all  mission  critical  systems  that we
identified  as  non-compliant.  We estimate  that this process is  substantially
completed and that it will be finished by September  30, 1999. In addition,  for
systems  that we have  identified  as  non-mission  critical,  we also intend to
either correct them through  programming  changes or replace them with compliant
software and any necessary  hardware or, possibly,  simply discontinue using the
system.

We have  already  developed  testing  protocols  and have begun  testing for all
mission-critical   systems.  We  have  substantially   completed  these  testing
protocols  and expect to be finished no later than  September  30, 1999.  We are
also in the process of testing other systems,  and expect to have completed that
process no later than September 30, 1999.

We have incurred  approximately  $350,000 on our Year 2000 program  through June
30,  1999.  This  includes  the  purchase of  third-party  software and required
hardware to run such  software  as well as the cost of  modifying  software.  We
estimate that any  additional  costs  incurred to complete the second phase will
not be material.

In addition to the review of internal  systems,  we have identified and begun to
make inquiries of our critical  suppliers,  corporate  partners,  manufacturers,
clinical study sites,  service  suppliers,  communications  providers,  lessors,
utilities,  and banks whose system failures or non-compliant products could have
an adverse impact on our  operations.  We expect to complete the  identification
and assessment  process for such entities prior to September 30, 1999.  While we
are not  currently  aware of any  material  Year 2000  problems  involving  such
entities that are likely to adversely  affect us, there can be no assurance that
there will not be such  problems  or that,  if  discovered,  they will be timely
remediated.

We are in the  process of  developing  contingency  plans to deal with  possible
disruptions  of  important  operations  such  as  discovery  research,   product
development,  manufacturing and ongoing clinical trials.  Such disruptions could
affect the development and ultimate  marketing of potential  products as well as
put us at a competitive  disadvantage  relative to companies that have corrected
such  problems.  These  contingency  plans  may  need  to  be  refined  as  more
information becomes available.

Certain Factors Affecting Forward-Looking Statements--Safe Harbor Statement

         Those  statements  contained  herein  that do not relate to  historical
information are forward-looking  statements.  There can be no assurance that the
future  results  covered by such  forward-looking  statements  will be achieved.
Actual results may differ materially due to the risks and uncertainties inherent
in  the  Company's  business,   including  without  limitation,  the  risks  and
uncertainties associated with completing pre-clinical and clinical trials of the
Company's  compounds that demonstrate such compounds' safety and  effectiveness;
obtaining  additional financing to support the Company's  operations;  obtaining
and maintaining  regulatory approval for such compounds and complying with other
governmental


                                    Page 12
<PAGE>

regulations  applicable to the Company's  business;  obtaining the raw materials
necessary  in the  development  of such  compounds;  consummating  collaborative
arrangements  with  corporate  partners  for  product   development;   achieving
milestones under collaborative arrangements with corporate partners;  developing
the  capacity  and  ability  to  manufacture,  as well as  market  and  sell the
Company's products,  either directly or with collaborative partners;  developing
market demand for and acceptance of such products;  competing  effectively  with
other   pharmaceutical  and   biotechnological   products;   obtaining  adequate
reimbursement  from third party payors;  attracting and retaining key personnel;
protecting  proprietary  rights;  failing to remedy  Year 2000  problems  by the
Company or the failure by those entities associated with the Company;  and those
other factors set forth in  "Management's  Discussion  and Analysis of Financial
Condition  and  Results  of  Operations--Overview  and  Risk  Factors,"  in  the
Company's most recent Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our  holdings of  financial  instruments  are  comprised of a mix of any of U.S.
corporate  debt,   foreign  corporate  debt,  U.S.   government  debt,   foreign
government/agency guaranteed debt and commercial paper. All such instruments are
classified as  securities  available  for sale.  Generally,  we do not invest in
portfolio  equity  securities or  commodities or use financial  derivatives  for
trading purposes.  Our debt security portfolio represents funds held temporarily
pending use in our business and operations.  We manage these funds  accordingly.
We seek reasonable  assuredness of the safety of principal and market  liquidity
by investing in rated fixed income  securities while at the same time seeking to
achieve  a  favorable  rate  of  return.   Our  market  risk  exposure  consists
principally  of exposure to changes in interest  rates.  Our  holdings  are also
exposed to the risks of changes in the credit  quality of issuers.  We typically
invest in the  shorter-end  of the maturity  spectrum,  or if longer,  in highly
liquid debt instruments with periodic  interest rate  adjustments.  We also have
certain  foreign  exchange  currency risk, see footnote 2. We do not consider it
necessary to implement a currency  hedging  program since  currently,  we do not
generally enter into contracts denominated in foreign currencies.

The table below  presents the  principal  amounts and related  weighted  average
interest rates by year of maturity for our  investment  portfolio as of June 30,
1999:

<TABLE>
<CAPTION>
                                                                         2004 and
                    1999       2000         2001        2002    2003    Thereafter          Total       Fair Value
                 ---------  ----------    ---------    ------  ------  ------------       --------      -----------

<S>               <C>       <C>          <C>            <C>    <C>    <C>                <C>             <C>
Fixed Rate           -      $2,739,000        -           -      -           -           $2,739,000      $2,744,000
Average
Interest Rate        -            5.10%       -           -      -           -                5.20%        -

Variable Rate        -            -      $1,136,000(1)    -      -     $33,952,000(1)   $35,088,000     $35,262,000
Average
Interest Rate        -            -            5.43%      -      -              5.17%         5.18%        -

                  --------   ----------  ------------  ------  ------  -------------    -----------     -----------
                     -       $2,739,000  $1,136,000(1)    -      -     $33,952,000(1)   $37,827,000     $38,006,000
                  ========   ==========  ============  ======  ======  =============    ===========     ===========
</TABLE>

(1) These holdings consist of U.S. corporate and foreign corporate floating rate
notes.  Interest on the securities are adjusted at fixed dates using  prevailing
interest  rates.  These holdings are highly liquid and we consider the potential
for loss of principal to be minimal.


                                    Page 13
<PAGE>

PART II - OTHER INFORMATION

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

      (a) An  annual  meeting  of  stockholders  was held on May 24,  1999  (the
"Annual Meeting").

      (b) The directors  elected at the Annual Meeting were Richard Barth,  Jean
Carvais,  Vincent T. DeVita,  Jr., Robert F. Goldhammer,  David M. Kies, Paul B.
Kopperl,  John  Mendelsohn,  William R.  Miller,  Harlan W. Waksal and Samuel D.
Waksal.  Such  persons are all of the  directors  of the  Company  whose term of
office as a director continued after the Annual Meeting.

      (c) The  matters  voted upon at the Annual  Meeting and the results of the
voting, including broker non-votes, where applicable, are set forth below.

      (i)   Election of directors

                                                                      Broker
   Name                          In Favor          Withheld          Non-Votes
   ----                          --------          --------          ---------
   Richard Barth                21,134,026          602,958             N/A
   Jean Carvais                 21,134,026          602,958             N/A
   Vincent T. DeVita, Jr.       21,134,026          602,958             N/A
   Robert F. Goldhammer         21,134,026          602,958             N/A
   David M. Kies                21,134,026          602,958             N/A
   Paul B. Kopperl              21,134,026          602,958             N/A
   John Mendelsohn              21,134,026          602,958             N/A
   William R. Miller            21,134,026          602,958             N/A
   Harlan W. Waksal             21,134,026          602,958             N/A
   Samuel D. Waksal             21,134,026          602,958             N/A

      (ii)  The  stockholders  approved  an  amendment  to  the  Company's  1996
            Incentive  Stock  Option Plan (the "1996 ISO Plan") to increase  the
            total number of shares of Common Stock which may be issued  pursuant
            to  options  which  may be  granted  under  the 1996  ISO Plan  from
            3,000,000 to 4,000,000,  which number shall be reduced by the number
            of shares of Common Stock which have been or may be issued  pursuant
            to options  granted under the  Company's  1996  Non-Qualified  Stock
            Option Plan (the "1996 Non-Qualified  Plan"). The stockholders voted
            7,365,864 shares in favor,  2,431,698 shares against,  74,069 shares
            abstained from voting and there were 11,865,353 broker non-votes.

      (iii) The   stockholders   approved   amendments  to  the  Company's  1996
            Non-Qualified  Plan to (i)  increase  the total  number of shares of
            Common  Stock which may be issued  pursuant to options  which may be
            granted  under  the  1996   Non-Qualified  Plan  from  3,000,000  to
            4,000,000,  which number shall be reduced by the number of shares of
            common  stock  which have been or may be issued  pursuant to options
            granted  under the  Company's  1996 ISO Plan,  and (ii) increase the
            annual  option grant made to members of the Board of  Directors  and
            the Chairman who are not  full-time  employees of the Company  under
            the 1996 Non-Qualified Plan. The stockholders voted 7,326,707 shares
            in favor,  2,460,425  shares against,  84,499 shares  abstained from
            voting and there were 11,865,353 broker non-votes.

      (iv)  The  stockholders   approved  a  proposal  to  amend  the  Company's
            certificate of  incorporation to increase the total number of shares
            of Common Stock the Company is authorized  to issue from  45,000,000
            shares to  60,000,000  shares.  The  stockholders  voted  21,245,136
            shares in favor,  424,054 shares against and 67,794 shares abstained
            from voting. Broker non-votes were not applicable.


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<PAGE>

      (v)   The  stockholders  approved the grant of an option to the  Company's
            President and Chief Executive  Officer to purchase  1,000,000 shares
            of common  stock  pursuant  to a  specified  vesting  schedule.  The
            stockholders  voted  7,512,857  shares  in favor,  2,322,720  shares
            against,  131,454  shares  abstained  from  voting  and  there  were
            11,769,953 broker non-votes.

      (vi)  The  stockholders  approved the grant of an option to the  Company's
            Executive  Vice  President and Chief  Operating  Officer to purchase
            650,000  shares of common  stock  pursuant  to a  specified  vesting
            schedule.   The  stockholders   voted  7,364,733  shares  in  favor,
            2,372,994  shares against,  133,904 shares abstained from voting and
            there were 11,865,353 broker non-votes.

      (vii) The stockholders  ratified the appointment by the Board of Directors
            of  KPMG  LLP  as  the  Company's   independent   certified   public
            accountants  for the fiscal  year  ending  December  31,  1999.  The
            stockholders voted 21,635,440 shares in favor, 50,475 shares against
            and 51,069 shares  abstained from voting.  Broker non-votes were not
            applicable.

Item 6 - Exhibits and Reports on Form 8-K

      (a)   Exhibits (numbered in accordance with Item 601 of Regulation S-K)

            Exhibit No. Description

             3.1A       Amendment  dated June 4, 1999 to the Company's
                        certificate of incorporation, as amended

            10.72       Agreement  for Supply of Material  dated as of
                        January 1, 1997 between  the  Company,
                        Connaught  Laboratories  Limited,  a
                        Pasteur Merieux Company, and Merck KGaA*

            10.73       Development and Supply Agreement dated
                        as of April 30, 1999 between the Company
                        and Boehringer Ingelheim Pharma KG*

            27.1        Financial Data Schedule

            99.6        1996 Non-Qualified Stock Option Plan, as amended.

            99.7        1996 Incentive Stock Option Plan, as amended.

            *   Confidential treatment has been requested for a portion of this
                exhibit.

         (b)  Reports on Form 8-K

                None.


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<PAGE>

                                   SIGNATURES

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

                                        IMCLONE SYSTEMS INCORPORATED
                                        (Registrant)

Date: August 16, 1999              By   /s/ Samuel D. Waksal
                                        ----------------------------------------
                                        Samuel D. Waksal
                                        President and Chief Executive Officer

Date: August 16, 1999              By   /s/ Carl S. Goldfischer
                                        ----------------------------------------
                                        Carl S. Goldfischer
                                        Vice President, Finance and Chief
                                        Financial Officer


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