<PAGE>   1
                                 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, 2000
                                             -----------------

    [ ]       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 incorporation    (IRS Employer Identification
               or organization)                              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.

<TABLE>
<CAPTION>
                Class                      Outstanding as of August 10, 2000
   -------------------------------         ---------------------------------
<S>                                        <C>
    Common Stock, par value $.001                32,226,061 Shares
</TABLE>

<PAGE>   2

                          IMCLONE SYSTEMS INCORPORATED

                                     INDEX

<TABLE>
<CAPTION>
                                                                                         Page No.
                                                                                         --------
<S>                                                                                     <C>
PART I - FINANCIAL INFORMATION

          Item 1.      Financial Statements

                       Consolidated Balance Sheets - June 30, 2000 (unaudited)
                       and December 31, 1999                                                 1

                       Unaudited Consolidated Statements of Operations - Three
                       and six months ended June 30, 2000 and 1999                           2

                       Unaudited Consolidated Statements of Cash Flows - Three
                       and six months ended June 30, 2000 and 1999                           3

                       Notes to Consolidated Financial Statements                            4



          Item 2.      Management's Discussion and Analysis of
                       Financial Condition and Results of Operations                         7

          Item 3.      Quantitative and Qualitative Disclosures About
                       Market Risk                                                          14


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
</TABLE>


<PAGE>   3

PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                          IMCLONE SYSTEMS INCORPORATED

                          CONSOLIDATED BALANCE SHEETS
                (in thousands, except per share and share data)


<TABLE>
<CAPTION>
                                                                                     JUNE 30,                   DECEMBER 31,
                                      ASSETS                                           1999                        2000
                                                                                   -------------              --------------
                                                                                   (UNAUDITED)
<S>                                                                               <C>                         <C>
    Current assets:
         Cash and cash equivalents....................................             $     10,442               $      12,016
         Securities available for sale................................                  317,335                     107,352
         Prepaid expenses.............................................                    3,596                         158
         Other current assets.........................................                    7,262                       7,599
                                                                                   -------------              --------------
                                Total current assets..................                  338,635                     127,125
                                                                                   -------------              --------------
    Property and equipment:
         Land.........................................................                    1,113                       1,087
         Building and building improvements...........................                   10,921                      10,810
         Leasehold improvements.......................................                    7,211                       4,891
         Machinery and equipment......................................                    9,330                       9,049
         Furniture and fixtures.......................................                    1,233                         898
         Construction in progress.....................................                   13,330                       5,209
                                                                                   -------------              --------------
                                Total cost............................                   43,138                      31,944

           Less accumulated depreciation and amortization.............                  (15,999)                    (14,729)
                                                                                   -------------              --------------
                                Property and equipment, net...........                   27,139                      17,215
                                                                                   -------------              --------------

    Patent costs, net ................................................                      975                       1,013
    Deferred financing costs, net.....................................                    7,926                          37
    Other assets......................................................                    7,797                         304
                                                                                   -------------              --------------
                                                                                   $    382,472               $     145,694
                                                                                   =============              ==============

                       LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
        Accounts payable..............................................             $      3,534               $       3,987
        Accrued expenses .............................................                    5,463                       5,123
        Interest payable..............................................                    4,443                          45
        Fees potentially refundable to corporate partner..............                   26,000                      20,000
        Current portion of long-term liabilities .....................                      810                         906
        Preferred stock dividends payable.............................                      895                           -
                                                                                   -------------              --------------
                                Total current liabilities.............                   41,145                      30,061
                                                                                   -------------              --------------

    Long-term debt ...................................................                  242,200                       2,200
    Other long-term liabilities, less current portion ................                      749                       1,135
                                                                                   -------------              --------------
                                Total liabilities.....................                  284,094                      33,396
                                                                                   -------------              --------------

    Commitments and contingencies

    Stockholders' equity :
        Preferred stock, $1.00 par value; authorized 4,000,000 shares; issued
             and outstanding Series A Convertible: 300,000 at June 30, 2000 and
             December 31, 1999 (preference in liquidation $30,895 and $30,000,
             respectively)...........................................                       300                         300
        Common stock, $.001 par value; authorized 120,000,000 shares;
             issued 31,716,381 and 29,703,090 at June 30, 2000 and December 31,
             1999, respectively; outstanding 31,665,564, and 29,652,273 at June
             30, 2000 and December 31, 1999, respectively.............                       32                          30
        Additional paid-in capital....................................                  297,335                     286,038
        Accumulated deficit...........................................                 (199,363)                   (173,457)
        Treasury stock, at cost; 50,817 shares at June 30, 2000
             and December 31, 1999....................................                     (492)                       (492)
        Note receivable - officer and stockholder.....................                        -                        (142)
        Accumulated other comprehensive income:
             Unrealized gain on securities available for sale.........                      566                          21

                                                                                   -------------              --------------
                                Total stockholders' equity............                   98,378                     112,298
                                                                                   -------------              --------------
                                                                                   $    382,472               $     145,694
                                                                                   =============              ==============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                     Page 1
<PAGE>   4
                 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,
                                                                  ----------------------  -----------------------
                                                                     2000         1999       2000        1999
                                                                  ----------   ---------  ----------  -----------
<S>                                                               <C>          <C>        <C>         <C>
Revenues:
     License fees from third parties ..................           $    -       $   -      $      40   $    -
     Research and development funding from third
        parties and other..............................                 160         254         326          883
                                                                  ----------   ---------  ----------  -----------
                   Total revenues......................                 160         254         366          883
                                                                  ----------   ---------  ----------  -----------

Operating expenses:
     Research and development  ........................              12,743       7,151      23,844       13,505
     Marketing, general and administrative ............               3,782       1,675       6,908        3,677
                                                                  ----------   ---------  ----------  -----------
                  Total operating expenses ............              16,525       8,826      30,752       17,182
                                                                  ----------   ---------  ----------  -----------

Operating loss ........................................             (16,365)     (8,572)    (30,386)     (16,299)
                                                                  ----------   ---------  ----------  -----------
Other:
     Interest income...................................              (6,165)       (564)     (9,352)      (1,168)
     Interest expense..................................               3,667         123       4,888          246
     Loss (gain) on securities available for sale......                 (18)       -            (16)         832
                                                                  ----------   ---------  ----------  -----------
                 Net interest and other income.........              (2,516)       (441)     (4,480)         (90)
                                                                  ----------   ---------  ----------  -----------

Net loss...............................................             (13,849)     (8,131)    (25,906)     (16,209)

Preferred dividends (including assumed incremental yield
     attributible to beneficial conversion feature of
     $256 and $336 for the three months ended June 30,
     2000 and 1999, respectively and $510 and $672 for
     the six months ended June 30, 2000 and 1999,
     respectively).....................................                 703         934       1,405        1,862
                                                                  ----------   ---------  ----------  -----------

Net loss to common stockholders........................           $ (14,552)   $ (9,065)  $ (27,311)  $  (18,071)
                                                                  ==========   =========  ==========  ===========

Basic and diluted net loss per common share............           $   (0 46)   $  (0 36)  $   (0 89)  $    (0.73)
                                                                  ==========   =========  ==========  ===========

Weighted average shares outstanding....................              31,302      24,986      30,635       24,718
                                                                  ==========   =========  ==========  ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                     Page 2

<PAGE>   5

                          IMCLONE SYSTEMS INCORPORATED

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (unaudited)


<TABLE>
<CAPTION>
                                                                                                      SIX MONTHS ENDED
                                                                                                          JUNE 30,
                                                                                           ------------------------------------
                                                                                              2000                      1999
                                                                                           -----------               ----------
<S>                                                                                        <C>                       <C>
Cash flows from operating activities:
   Net loss ...........................................................................    $  (25,906)               $ (16,209)
   Adjustments to reconcile net loss to net
          cash used in operating activities:
      Depreciation and amortization ...................................................         1,330                      925
      Amortization of deferred financing costs.........................................           560                     -
      Expense associated with issuance
          of options and warrants......................................................         2,565                    1,064
      Loss (gain) on securities available for sale ....................................           (16)                     832
      Changes in:
         Prepaid expenses .............................................................        (3,438)                     138
         Other current assets .........................................................           337                     (284)
         Other assets .................................................................             8                     (135)
         Interest payable .............................................................         4,398                       (2)
         Accounts payable .............................................................          (453)                    (165)
         Accrued expenses .............................................................           340                   (1,279)
         Deferred revenue..............................................................             -                      (75)
         Fees potentially refundable to corporate partner..............................         6,000                    8,000
                                                                                           -----------               ----------
                        Net cash used in operating activities .........................       (14,275)                  (7,190)
                                                                                           -----------               ----------
Cash flows from investing activities:
      Acquisitions of property and equipment ..........................................       (11,194)                  (2,010)
      Purchases of securities available for sale.......................................      (320,282)                 (18,508)
      Sales and maturities of securities available for sale ...........................       110,859                   23,500
      Investment in Valigen N.V........................................................        (7,500)                       -
      Additions to patents ............................................................           (22)                     (87)
                                                                                           -----------               ----------
                        Net cash (used in) provided by investing activities ...........      (228,139)                   2,895
                                                                                           -----------               ----------

Cash flows from financing activities:
      Proceeds from exercise of stock options and warrants ............................         9,462                    3,335
      Proceeds from issuance of common stock under the employee stock purchase plan ...           164                       50
      Proceeds from issuance of 5 1/2% convertible subordinated notes..................       240,000                        -
      Deferred financing costs.........................................................        (8,449)                       -
      Proceeds from equipment and building improvement financings......................             -                       94
      Proceeds from repayment of note receivable - officer and stockholder,
           including interest..........................................................           145                       11
      Payments of other liabilities ...................................................          (482)                    (411)
                                                                                           -----------               ----------

                        Net cash provided by financing activities .....................       240,840                    3,079
                                                                                           -----------               ----------

Net decrease in cash and cash equivalents .............................................        (1,574)                  (1,216)

Cash and cash equivalents at beginning of period ......................................        12,016                    3,888
                                                                                           -----------               ----------
Cash and cash equivalents at end of period ............................................    $   10,442                $   2,672
                                                                                           ===========               ==========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                     Page 3
<PAGE>   6


                          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, 2000 and for the three and six
months ended June 30, 2000 and 1999 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, 1999, as filed with the
Securities and Exchange Commission.

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

(2) SEGMENT INFORMATION

The Company is a biopharmaceutical company engaged in the research and
development of novel cancer treatments. The Company is currently pursuing three
research and development programs that it believes show potential for treating
certain cancers: growth factor inhibitors, cancer vaccines and angiogenesis
inhibitors. A substantial portion of the Company's efforts and resources are
devoted to research and development conducted on its own behalf and through
collaborations with corporate partners and academic research and clinical
institutions. The Company has not derived any commercial revenue from product
sales. The Company is managed and operated as one business. The entire business
is comprehensively managed by a single management team that reports to the
Chief Operating Officer. The Company does not operate separate lines of
business or separate business entities with respect to any of its product
candidates. Except for contract services (see Note 4) and clinical trials
conducted by independent investigators on behalf of the Company, the Company
does not conduct any of its operations outside of the United States.
Accordingly, the Company does not prepare discrete financial information with
respect to separate product areas or by location and does not have separately
reportable segments as defined by SFAS No. 131.

(3) FOREIGN CURRENCY TRANSACTIONS

Gains and losses from foreign currency transactions, such as those resulting
from the translation and settlement of receivables and payables denominated in
foreign currencies, are included in the consolidated statement of operations.
The Company does not currently use derivative financial instruments to manage
the risks associated with foreign currency fluctuations. The Company recorded
gains on foreign currency transactions of approximately $4,000 in both six
month periods ended June 30, 2000 and 1999, respectively. The Company recorded
gains on foreign currency transactions of approximately $4,000 and $2,000 for
the three months ended June 30, 2000 and 1999, respectively.

(4) CONTRACT SERVICES

In December 1999, the Company entered into a development and manufacturing
services agreement with Lonza Biologics PLC ("Lonza"). Under the agreement,
Lonza is engaging in process development and scale-up for the manufacture of
IMC-C225, the Company's lead interventional therapeutic product for the
treatment of cancer. These steps are being taken to assure that its process
will produce bulk material that conforms with the Company's reference material.
Under the Company's arrangements with Lonza, Lonza will manufacture six 5,000
liter production runs under cGMP conditions the output of which may be used for
clinical and/or commercial supply. The Company also has agreed in principle
with Lonza to the material terms of a three-year commercial supply agreement
for which the definitive agreement is being completed. As of June 30, 2000, the
Company has incurred approximately $259,000 for services provided under this
agreement.

                                     Page 4

<PAGE>   7

The Company is building a new manufacturing facility adjacent to its current
manufacturing facility in New Jersey. This new facility will contain three
10,000 liter fermentors and will be dedicated to the commercial production of
IMC-C225. The 80,000 square foot facility will cost approximately $45 million
and is being built on land purchased in December 1999. The Company has incurred
approximately $13,241,000 in engineering, pre-construction and construction
costs associated with the new manufacturing facility through June 30, 2000. The
costs incurred to date associated with the construction of the facility have
been paid from the Company's cash reserves.

(5) INVESTMENT IN VALIGEN N.V.

In May 2000, the Company made an equity investment in Valigen N.V. ("Valigen"),
a private biotechnology company specializing in therapeutic target
identification and validation using the tools of genomics and gene expression
analysis. The Company purchased 705,882 shares of Valigen's series A preferred
stock for an aggregate purchase price of $7,500,000 which represents ownership
in Valigen of approximately 6%. In connection with this investment, the Company
received a warrant to purchase 388,235 shares of Valigen's common stock at a per
share purchase price of $12.50. The Valigen preferred stock contains voting
rights identical to holders of Valigen's common stock. Each share of Valigen
preferred stock is convertible into one share of Valigen common stock. The
Company may elect to convert the Valigen preferred stock at any time; provided,
that the Valigen preferred stock will automatically convert into Valigen common
stock upon the closing of an initial public offering of Valigen's common stock
with gross proceeds not less than $20,000,000. The Company recorded its
investment in Valigen using the cost method of accounting and is classified as a
long-term asset included in other assets in the consolidated balance sheet.

(6) LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>

                                                                          JUNE 30,               JUNE 30,
                                                                            2000                   1999
                                                                    ---------------------   --------------------
<S>                                                                 <C>                     <C>
5 1/2% Convertible Subordinated Notes due March 1, 2005..........          $ 240,000,000    $         -

11 1/4% Industrial Development Revenue Bond due May 1, 2004......              2,200,000              2,200,000
                                                                    ---------------------   --------------------
                                                                           $ 242,200,000            $ 2,200,000
                                                                    =====================   ====================
</TABLE>

In February 2000, the Company completed a private placement of $240,000,000 in
convertible subordinated notes due March 1, 2005. The Company received net
proceeds from this offering of approximately $231,600,000, after deducting
costs associated with the offering. The notes bear interest at an annual rate
of 5 1/2% payable semi-annually on September 1 and March 1 of each year,
beginning September 1, 2000. Accrued interest on the notes was approximately
$4,400,000 at June 30, 2000. The holders may convert all or a portion of the
notes into common stock at any time on or before March 1, 2005 at a conversion
price of $110.18 per share, subject to adjustment if certain events affecting
the common stock of the Company occur. The notes will be subordinated to all
existing and future senior indebtedness. The Company may redeem some or all of
the notes at any time prior to March 6, 2003, at a redemption price equal to
$1,000 per $1,000 aggregate principal amount of notes plus accrued and unpaid
interest to the redemption date if (1) the closing price of the common stock
has exceeded 150% of the conversion price for at least 20 trading days in any
consecutive 30-trading day period and (2) if the redemption would occur before
March 1, 2002, the shelf registration statement covering resales of the notes
and the common stock is effective and expected to remain effective and
available for use for the 30 days following the redemption date. If the notes
are redeemed under these circumstances, the Company will make an additional
payment of $152.54 per $1,000 aggregate principal amount of notes, minus the
amount of any interest actually paid on the note prior to the date the notice
was mailed. On or after March 6, 2003, the Company may redeem some or all of
the notes at specified redemption prices, plus accrued and unpaid interest to
the day preceding the redemption date. The Company is required to file and
obtain the effectiveness of a shelf registration statement covering resales of
the notes and the common stock.

In January and February 2000, the Company entered into financing arrangements
with Finova Technology Finance, Inc. ("Finova") and Transamerica Business Credit
Corporation ("Transamerica") under which it may obtain at its option up to an
aggregate of $25,000,000 for its utilization primarily in connection with the
build-out of its new commercial manufacturing facility. The Funds may be
obtained through multiple leases of equipment and building improvements for not
less than specified minimum amounts. Each lease contains a balloon purchase
option at the end of a 48-month term. During the first quarter of 2000 the
Company paid $100,000 in application fees associated with these agreements,
which may be applied against future principal and interest payments.


                                     Page 5

<PAGE>   8


(7) COMMON STOCK

On May 31, 2000, 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 60,000,000 shares to 120,000,000 shares.

(8) STOCK OPTIONS

On May 31, 2000, the date of the annual shareholders meeting, the stockholders
approved an amendment to the Company's 1996 Incentive Stock Option Plan and
1996 Non-Qualified Stock Option Plan (the "Plans") to increase the total number
of shares of common stock which may be issued in the aggregate pursuant to
options which may be granted under the Plans from 4,000,000 to 5,500,000.

At this meeting, the stockholders also approved the amendments to a total of
1,600,000 options held by the Company's President and Chief Executive Officer
and Executive Vice President and Chief Operating Officer. The options were
amended to provide that each tranche vests immediately upon achievement of the
relevent stock target price associated with such tranche without regard to the
passage of time which was a requirement in the original options. The options
became fully vested and exercisable upon the approval of the amendments.

(9) NET LOSS PER COMMON SHARE

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

(10) COMPREHENSIVE INCOME (LOSS)

The following table reconciles net loss to comprehensive loss:


<TABLE>
<CAPTION>

                                                             THREE MONTHS ENDED                          SIX MONTHS ENDED
                                                                  JUNE 30,                                   JUNE 30,
                                                   -------------------------------------  ---------------------------------------
                                                          2000                1999               2000                 1999
                                                   ------------------  -----------------  -------------------  ------------------
<S>                                               <C>                 <C>                 <C>                  <C>
Net loss....................................           $(13,849,000)       $(8,131,000)      $(25,906,000)        $(16,209,000)

Other comprehensive income (loss):
   Unrealized holding gain (loss)
        arising during the period...........                (89,000)            56,000            561,000               69,000
   Less: Reclassification adjustment
        for net realized gain (loss)
        included in net loss................                 18,000                  -             16,000             (832,000)
                                                   ------------------  ------------------ -------------------  ------------------
   Total other comprehensive income
        (loss)..............................               (107,000)            56,000            545,000              901,000
                                                   ------------------  ------------------ -------------------  ------------------
Total comprehensive loss....................           $(13,956,000)       $(8,075,000)      $(25,361,000)        $(15,308,000)
                                                   ==================  ================== ===================  ==================
</TABLE>

(11) COLLABORATIVE AGREEMENTS

The Company has a development and license agreement with Merck KGaA with
respect to IMC-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

                                     Page 6


<PAGE>   9


which are equity-based) assuming the achievement of certain milestones and a
$30,000,000 secured line of credit or guaranty relating to the build-out of a
manufacturing facility for the commercial production of IMC-C225. This
agreement may be terminated by Merck KGaA in various instances, including (i)
at its discretion on any date on which a milestone is achieved (in which case
no milestone payment will be made), (ii) for a one-year period after first
commercial sale of IMC-C225 in Merck KGaA's territory, upon Merck KGaA's
reasonable determination that the product is economically unfeasible (in which
case Merck KGaA is entitled to receive back 50% of the cash-based milestone
payments then paid to date, but only out of revenues received, if any, based
upon a royalty rate applied to the gross profit from IMC-C225 sales or IMC-C225
license fees in the United States and Canada), or (iii) in the event the
Company does not obtain certain collateral license agreements in which case
Merck KGaA also is entitled to a return of all cash amounts with respect to
milestone payments to date, plus liquidated damages of $500,000. In April 1999,
the parties agreed on the production concept for the manufacturing facility and
are negotiating securing Merck KGaA's guaranty of the Company's obligations
under a proposed $30,000,000 credit facility relating to the construction of
the manufacturing facility. In the event of termination of the agreement, the
Company will be required to use its best reasonable efforts to cause the
release of Merck KGaA as guarantor. As of June 30, 2000, the Company has
received $26,000,000 in milestone payments. These payments have been recorded
as fees potentially refundable to corporate partner and revenue recognition of
such amounts will commence upon the Company obtaining the defined collateral
license agreements.

(12) REVENUE RECOGNITION

In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
("SAB 101"). SAB 101 summarizes certain of the staff's views in applying
generally accepted accounting principles to revenue recognition in financial
statements, including the recognition of non-refundable fees received upon
entering into arrangements. The Company is in the process of evaluating this
SAB and the effect it will have on its financial statements and current revenue
recognition policies. The Company must adopt SAB 101, as amended, in the fourth
quarter of 2000 with an effective date of January 1, 2000 and the recognition
of a cumulative effect adjustment, if any, calculated as of January 1, 2000.

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 that affected our financial position and operating
results during the periods included in the accompanying financial statements.

                             RESULTS OF OPERATIONS

Six Months Ended June 30, 2000 and 1999

REVENUES.

Revenues for the six months ended June 30, 2000 and 1999 were $366,000 and
$883,000, respectively, a decrease of $517,000, or 59%. Revenues for the six
months ended June 30, 2000 primarily consisted of $326,000 in royalty revenue
from our strategic corporate alliance with Abbott Laboratories ("Abbott") in
diagnostics. Revenues for the six months ended June 30, 1999 primarily
consisted of (i) $150,000 in research support from our strategic corporate
alliance with American Home Products Corporation ("American Home") in
infectious disease vaccines, (ii) $533,000 in research and support payments
from our strategic corporate alliance with Merck KGaA for our principal cancer
vaccine product candidate, BEC2, and (iii) $195,000 in royalty revenue from our
strategic corporate alliance with Abbott in diagnostics. The decrease in
revenues for the six months ended June 30, 2000 was primarily attributable to
the decrease in research and support revenue as a result of the completion of
all research and support

                                     Page 7

<PAGE>   10


payments due from our strategic corporate alliance with American Home in
infectious disease vaccines and our strategic corporate alliance with Merck
KGaA for BEC2. The decrease was partially offset by increased royalty revenue
from our strategic corporate alliance with Abbott in diagnostics.

OPERATING EXPENSES: RESEARCH AND DEVELOPMENT.

Total operating expenses for the six months ended June 30, 2000 and 1999 were
$30,752,000 and $17,182,000, respectively, an increase of $13,570,000, or 79%.
Research and development expenses for the six months ended June 30, 2000 and
1999 were $23,844,000 and $13,505,000, respectively, an increase of $10,339,000
or 77%. Such amounts for the six months ended June 30, 2000 and 1999
represented 78% and 79%, respectively, of total operating expenses. Research
and development expenses for the six months ended June 30, 2000 and 1999 have
been reduced by $1,514,000 and $583,000, respectively, for clinical trial costs
that are reimbursable by Merck KGaA. The increase in research and development
expenses for the six months ended June 30, 2000 was primarily attributable to
(i) the costs associated with two pivotal Phase III clinical trials of IMC-C225
in treating head and neck cancer, one in combination with radiation and one in
combination with cisplatin, (ii) the costs associated with two additional Phase
II clinical trials of IMC-C225, one in refractory head and neck cancer in
combination with cisplatin and one in refractory colorectal cancer in
combination with irinotecan, (iii) expenditures in the functional areas of
product development, manufacturing, clinical and regulatory affairs associated
with IMC-C225, and (iv) non-cash expenses recognized in connection with the
issuance of options granted to scientific consultants. We expect research and
development costs to increase in future periods as we continue to expand our
efforts in product development and clinical trials.

OPERATING EXPENSES: MARKETING, GENERAL AND ADMINISTRATIVE.

Marketing, general and administrative expenses include administrative personnel
costs, costs to develop internal marketing and sales capabilities, costs to
pursue arrangements with stategic 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, 2000 and 1999 were
$6,908,000 and $3,677,000, respectively, an increase of $3,231,000, or 88%. The
increase in marketing, general and administrative expenses primarily reflected
(i) costs associated with our marketing efforts, (ii) additional support
staffing for our expanding research, development, clinical and manufacturing
efforts, particularly with respect to IMC-C225 and (iii) expenses associated
with the pursuit of strategic corporate alliances and other corporate
development efforts. We expect marketing, 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 $9,352,000 for the six months ended June 30, 2000 compared
with $1,168,000 for the six months ended June 30, 1999, an increase of
$8,184,000 or 700%. The increase was primarily attributable to the increase in
our investment portfolio as a result of the November 1999 public stock offering
and the February 2000 private placement of 5 1/2% convertible subordinated
notes. Interest expense was $4,888,000 and $246,000 for the six months ended
June 30, 2000 and 1999, respectively, an increase of $4,642,000. 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. Interest expense for the six months ended
June 30, 2000 was offset by capitalized interest costs during the construction
period of the Company's new manufacturing facility in the amount of $307,000.
The increase in interest expense is attributable to interest associated with the
outstanding convertible subordinated notes. Gains on securities available for
sale for the six months ended June 30, 2000 were $16,000 and losses on
securities available for sale for the six months ended June 30, 1999 were
$832,000. The loss for the six months ended June 30, 1999 was primarily
attributable to the $828,000 write-down of our investment in CombiChem Inc. as a
result of an other than temporary impairment.



                                     Page 8

<PAGE>   11
NET LOSSES.

We had a net loss to common stockholders of $27,311,000 or $0.89 per share for
the six months ended June 30, 2000 compared with $18,071,000 or $0.73 per share
for the six months ended June 30, 1999. The increase in the net losses and per
share net loss to common stockholders was due primarily to the factors noted
above.

Three Months Ended June 30, 2000 and 1999

REVENUES.

Revenues for the three months ended June 30, 2000 and 1999 were $160,000 and
$254,000, respectively, a decrease of $94,000, or 37%. Revenues for the three
months ended June 30, 2000 consisted of $160,000 in royalty revenue from our
strategic corporate alliance with Abbott in diagnostics. Revenues for the three
months ended June 30, 1999 consisted of (i) $75,000 in research support from
our strategic corporate alliance with American Home in infectious disease
vaccines, (ii) $108,000 in research and support payments from our strategic
corporate alliance with Merck KGaA for our principal cancer vaccine product
candidate, BEC2, and (iii) $71,000 in royalty revenue from our strategic
corporate alliance with Abbott in diagnostics. The decrease in revenues for the
three months ended June 30, 2000 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 strategic corporate alliance with American Home
in infectious disease vaccines and our strategic corporate alliance with Merck
KGaA for BEC2. The decrease was partially offset by increased royalty revenue
from our strategic corporate alliance with Abbott in diagnostics.

OPERATING EXPENSES: RESEARCH AND DEVELOPMENT.

Total operating expenses for the three months ended June 30, 2000 and 1999 were
$16,525,000 and $8,826,000, respectively, an increase of $7,699,000, or 87%.
Research and development expenses for the three months ended June 30, 2000 and
1999 were $12,743,000 and $7,151,000, respectively, an increase of $5,592,000
or 78%. Such amounts for the three months ended June 30, 2000 and 1999
represented 77% and 81%, respectively, of total operating expenses. Research
and development expenses for the three months ended June 30, 2000 and 1999 have
been reduced by $690,000 and $67,000, respectively, for clinical trial costs
that are reimbursable by Merck KGaA. The increase in research and development
expenses for the three months ended June 30, 2000 was primarily attributable to
(i) the costs associated with two pivotal Phase III clinical trials of IMC-C225
in treating head and neck cancer, one in combination with radiation and one in
combination with cisplatin, (ii) the costs associated with two additional Phase
II clinical trials of IMC-C225, one in refractory head and neck cancer in
combination with cisplatin and one in refractory colorectal cancer in
combination with irinotecan, (iii) expenditures in the functional areas of
product development, manufacturing, clinical and regulatory affairs associated
with IMC-C225, and (iv) non-cash expenses recognized in connection with the
issuance of options granted to scientific consultants. We expect research and
development costs to increase in future periods as we continue to expand our
efforts in product development and clinical trials.

OPERATING EXPENSES: MARKETING, GENERAL AND ADMINISTRATIVE.

Marketing, general and administrative expenses include administrative personnel
costs, costs to develop internal marketing and sales capabilities, 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, 2000 and 1999 were $3,782,000 and $1,675,000, respectively, an
increase of 2,107,000, or 126%. The increase in marketing, general and
administrative expenses primarily reflected (i) costs associated with our
marketing efforts, (ii) additional support staffing for our expanding research,
development, clinical and manufacturing efforts, particularly with respect to
IMC-C225 and (iii) expenses associated with the pursuit of strategic corporate
alliances and other corporate development efforts. We expect marketing, general
and administrative expenses to increase in future periods to support our planned
increases in research, development, clinical and manufacturing efforts.

                                     Page 9

<PAGE>   12

INTEREST AND OTHER INCOME AND INTEREST EXPENSE.

Interest income was $6,165,000 for the three months ended June 30, 2000
compared with $564,000 for the three months ended June 30, 1999, an increase of
$5,601,000 or 993%. The increase was primarily attributable to the increase in
our investment portfolio as a result of the November 1999 public stock offering
and the February 2000 private placement of 5 1/2% convertible subordinated
notes. Interest expense was $3,667,000 and $123,000 for the three months ended
June 30, 2000 and 1999, respectively, an increase of $3,544,000. Interest
expense for both periods primarily included (i) interest on the 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. Interest expense for the three months
ended June 30, 2000 was offset by capitalizing interest costs during the
construction period of the Company's new manufacturing facility in the amount
of $153,000. The increase in interest expense is attributable to interest
associated with the outstanding convertible subordinated notes.

NET LOSSES.

We had a net loss to common stockholders of $14,552,000 or $0.46 per share for
the three months ended June 30, 2000 compared with $9,065,000 or $0.36 per
share for the three months ended June 30, 1999. 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, 2000, our principal sources of liquidity consisted of cash
and cash equivalents and short-term securities available for sale of
approximately $327.8 million. From inception through June 30, 2000 we have
financed our operations through the following means:

      -  Public and private sales of equity securities and convertible notes in
         financing transactions have raised approximately $489.5 million in net
         proceeds

      -  We have earned approximately $35.4 million from license fees, contract
         research and development fees and royalties from collaborative
         partners. Additionally, we have received $26.0 million in potentially
         refundable fees from our IMC-C225 development and license agreement
         with Merck KGaA. The amounts from Merck KGaA with respect to IMC-C225
         have yet to be recognized as revenue because they are refundable under
         certain circumstances

      -  We have earned approximately $20.7 million in interest income

      -  The sale of the IDA Bonds in each of 1985, 1986 and 1990 raised an
         aggregate of $6.3 million, 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 $2.2 million is
         outstanding

      We may from time to time consider a number of strategic alternatives
designed to increase shareholder value, including joint ventures, acquisitions
and other forms of alliances as well as the sale of all or part of the Company.

      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
New York Industrial Development Agency ("NYIDA") under the 1990 IDA Bond, we
have granted the NYIDA a security interest in facility equipment purchased with
the bond proceeds.

                                    Page 10

<PAGE>   13

       In February 2000, we completed a private placement of $240,000,000 in
convertible subordinated notes due March 1, 2005. We received net proceeds of
approximately $231,600,000, after deducting expenses associated with the
offering. The notes bear interest at 5 1/2% payable semi-annually on September
1 and March 1 of each year, beginning September 1, 2000. Accrued interest on
the notes was approximately $4,400,000 at June 30, 2000. A holder may convert
all or a portion of a note into common stock at any time on or before March 1,
2005 at a conversion price of $110.18 per share, subject to adjustment if
certain events affecting our common stock occur. We may redeem some or all of
the notes prior to March 6, 2003 if specified common stock price thresholds are
met. On or after March 6, 2003, we may redeem some or all of the notes at
specified redemption prices.

      In December 1999, we entered into a development and manufacturing
services agreement with Lonza. Under the agreement, Lonza is engaging in
process development and scale-up for the manufacture of IMC-C225. These steps
are being taken to assure that its process will produce bulk material that
conforms with our reference material. Under our arrangements with Lonza, Lonza
will manufacture six 5,000 liter production runs under cGMP conditions of
material that may be used for clinical and/or commercial supply. We also have
agreed in principle with Lonza to the material terms of a three-year commercial
supply agreement for which the definitive agreement is being completed. As of
June 30, 2000, we have incurred approximately $259,000 for services provided
under this agreement.

      We can not be certain that we will be able to enter into agreements for
commercial supply with third party manufacturers on terms acceptable to us.
Even if we are able to enter into such agreements, we cannot be certain that we
will be able to produce or obtain sufficient quantities for commercial sale of
our products. Any delays in producing or obtaining commercial quantities of our
products could have a material effect on our business, financial condition and
results of operations.

      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 to
purchase 23,220 shares of our common stock at an exercise price of $9.69 per
share which was exercised in November 1999. 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 expired 1996 Financing Agreement except that each lease has a 48-month
term. We have 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. In January and
February 2000, we entered into financing arrangements with Finova and
Transamerica under which we may obtain at our option up to an aggregate of
$25,000,000 for our utilization primarily in connection with the build-out of
our new commercial manufacturing facility. The funds may be obtained through
multiple leases for not less than specified minimum amounts. Each lease contains
a balloon purchase option at the end of a 48-month term. We paid $100,000 in
application fees associated with these agreements which may be applied against
future principal and interest payments.

      We rent our New York facility under an operating lease that expires in
December 2004. We have substantially completed renovations of the facility to
better suit our needs at a cost of approximately $2,500,000.

      Under our agreement with Merck KGaA for IMC-C225, we developed, in
consultation with Merck KGaA, a production concept for a new manufacturing
facility for the commercial production of IMC-C225. Merck KGaA is to provide
us, if we so choose, subject to certain conditions, with a guaranty under a $30
million credit facility for the build-out of this facility. We are currently
erecting this facility adjacent to our current manufacturing facility in New
Jersey, which supplies IMC-C225 to support our clinical trials. We broke ground
on the facility in January 2000 and estimate that the total cost will be
approximately $45 million. We

                                    Page 11

<PAGE>   14

are negotiating the terms of the loan agreement and guaranty. We expect to fund
the remaining cost of this facility through a combination of cash on hand,
proceeds from our February 2000 private placement of convertible notes and
equipment financing transactions.

      Total capital expenditures made during the six months ended June 30, 2000
were $11,194,000 of which (i) $1,002,000 related to the purchase of equipment
for and costs associated with the retrofit of our corporate office and research
laboratories in New York and other capital expenditures relating to the New
York facility; (ii) $9,923,000 related to engineering, pre-construction and
construction costs of the commercial manufacturing facility being erected
adjacent to our current manufacturing facility in New Jersey and (iii) the
remaining $269,000 related to improving and equipping our existing
manufacturing facility.

      To prepare for the marketing and sale of IMC-C225 in the U.S. and Canada
we hired a Vice President of Marketing and Sales in 1998 and have recently
hired directors of marketing, field sales and sales operations, each with
experience in the commercial launch of a monoclonal antibody cancer
therapeutic. We expect to hire regional sales managers and approximately 40
sales representatives prior to the commencement of IMC-C225 sales.

      The holders of the series A 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 stock and are payable on the
outstanding series A preferred stock 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 stock on which the dividend is to be paid, whichever is
sooner. Accrued dividends were approximately $895,000 at June 30, 2000.

      We believe that our existing cash and cash equivalents and securities
available for sale and amounts expected to be available under our credit
facilities should enable us to maintain our current and planned operations
through at least 2002. We are also entitled to reimbursement for certain
research and development expenditures and to certain milestone payments,
including $4 million in cash-based milestone payments and $30 million in
equity-based milestone payments from our IMC-C225 development and license
agreement with Merck KGaA, which are to be paid subject to our attaining
research and development milestones and certain other conditions. There can be
no assurance that we will achieve the unachieved milestones. Additionally, the
termination of the agreement due to our failure to obtain the necessary
collateral license agreements would require us to return all milestone payments
made to date, plus $500,000 in liquidated damages. Our future working capital
and capital requirements will depend upon numerous factors, including, but not
limited to:

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

     -   our corporate partners' fulfilling their obligations to us

     -   timing and cost of seeking and obtaining regulatory approvals

     -   timing and cost of manufacturing scale-up and effective
         commercialization activities and arrangements, including costs of
         establishing manufacturing capacity in our facility and those of
         others

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

     -   costs involved in filing, prosecuting and enforcing patent claims

     -   technological advances

     -   status of competitive products and candidates


                                    Page 12

<PAGE>   15

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

      In order to fund our capital needs after 2002, we will require
significant levels of additional capital which we intend to raise 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.

      At December 31, 1999, we had net operating loss carryforwards for United
States federal income tax purposes of approximately $151 million, which expire
at various dates from 2000 through 2019. At December 31, 1999 we had research
credit carryforwards of approximately $7.7 million, which expire at various
dates from 2009 through 2019. Under Section 382 of the Internal Revenue Code of
1986, as amended, a corporation's ability to use net operating loss and
research credit carryforwards may be limited if the corporation experiences a
change in ownership of more than 50 percentage points within a three-year
period. Since 1986, we have experienced at least two such ownership changes. As
a result, we are only permitted to use in any one year approximately $5.2
million of our available net operating loss carryforwards that relate to
periods before these ownership changes. Similarly, we are limited in using our
research credit carryforwards. We are in the process of determining whether the
November 1999 public stock offering and the February 2000 private placement of
convertible subordinated notes will be viewed as additional ownership changes
that would further limit the use of our net operating losses and research
credit carryforwards.

RECENTLY ISSUED ACCOUNTING STANDARDS

      In December 1999, the staff of the Securities and Exchange Commission
issued Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in
Financial Statements ("SAB 101"). SAB 101 summarizes certain of the staff's
views in applying generally accepted accounting principles to revenue
recognition in financial statements, including the recognition of
non-refundable fees received upon entering into arrangements. We are in the
process of evaluating this SAB and the effect it will have on our financial
statements and current revenue recognition policies. We must adopt SAB 101, as
amended, in the fourth quarter of 2000 with an effective date of January 1,
2000 and the recognition of a cumulative effect adjustment, if any, calculated
as of January 1, 2000.

      In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Financial Instruments and Hedging Activities.
This Statement standardizes the accounting for derivative instruments including
certain derivative instruments embedded in other contracts. The effective date
of SFAS No. 133 was delayed to fiscal year 2001 by the issuance of SFAS No.
137. SFAS No. 137 is an amendment to SFAS No. 133. We will adopt this statement
as of January 1, 2001. We have not determined the impact this statement will
have on our financial statements.

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 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,

                                    Page 13

<PAGE>   16

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; obtaining and
protecting proprietary rights; 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
Registration Statement on Form 10-K.

                                    Page 14

<PAGE>   17


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Our holdings of financial instruments comprise a mix of securities which may
include 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 investment grade 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 invest in securities that have a range of maturity
dates. Typically, those with a short-term maturity are fixed-rate, highly
liquid, debt instruments and those with longer-term maturities are highly
liquid debt instruments with periodic interest rate adjustments. We also have
certain foreign exchange currency risk. See footnote 3 of the financial
statements. 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, 2000:

<TABLE>
<CAPTION>
                                                                                  2005 AND
                   2000          2001        2002        2003      2004          THEREAFTER          TOTAL         FAIR VALUE
              -------------------------------------------------------------------------------------------------------------------
<S>           <C>              <C>          <C>         <C>   <C>              <C>                <C>            <C>
Fixed Rate        $5,980,000   $11,892,000  $1,444,000    -       $40,087,000      $131,817,000    $191,220,000     $191,722,000
Average
Interest Rate          5.10%         6.55%       8.00%    -             6.60%             6.64%           6.50%         -
Variable Rate        -             -           -          -    $16,738,000(1)   $108,811,000(1)    $125,549,000     $125,613,000
Average
Interest Rate        -             -           -          -             6.35%             6.82%           6.76%         -
              -------------------------------------------------------------------------------------------------------------------
                 $5,980,000    $11,892,000  $1,444,000    -       $56,825,000      $240,628,000    $316,769,000     $317,335,000
              ===================================================================================================================
</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.

      Our 5 1/2% convertible subordinated notes in the principal amount of
$240,000,000 due March 1, 2005 and other long-term debt have fixed interest
rates. The subordinated notes are convertible into the Company's common stock
at a conversion price of $110.18 per share. The fair value of fixed interest
rate instruments are affected by changes in interest rates and in the case of
the convertible notes by changes in the price of the Company's common stock.

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 31, 2000 (the
"Annual Meeting").

      (b)   The directors elected at the Annual Meeting were Richard Barth,
Vincent T. DeVita, Jr.,  Robert F. Goldhammer, David M. Kies, Paul B. Kopperl,
Arnold Levine, 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 are set forth below. Broker non-votes were not applicable.

                                    Page 15

<PAGE>   18


      (i)         Election of directors

<TABLE>
<CAPTION>
  NAME                        IN FAVOR       WITHHELD
  ----                        --------       --------
<S>                         <C>             <C>
  Richard Barth              26,803,815         93,654
  Arnold Levine              26,798,835         98,634
  Vincent T. DeVita, Jr.     26,763,723        133,746
  Robert F. Goldhammer       26,762,643        134,826
  David M. Kies              26,805,135         93,334
  Paul B. Kopperl            26,804,100         93,369
  John Mendelsohn            26,804,765         92,704
  William R. Miller          26,804,115         93,354
  Harlan W. Waksal           26,339,136        558,333
  Samuel D. Waksal           25,711,026      1,186,443
</TABLE>

      (ii)  The stockholders approved amendments to the Company's 1996
            Incentive Stock Option Plan and 1996 Non-Qualified Stock Option
            Plan (the "Plans") to increase the total number of shares of common
            stock which may be issued in the aggregate pursuant to options
            which may be granted under the Plans from 4,000,000 to 5,500,000.
            The stockholders voted 18,786,001 shares in favor and 8,056,062
            shares against. 55,406 shares abstained from voting.

      (iii) 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 60,000,000
            shares to 120,000,000 shares. The stockholders voted 26,119,685
            shares in favor and 717,559 shares against. 60,225 shares abstained
            from voting.

      (iv)  The stockholders approved amendments to options held by the
            Company's President and Chief Executive Officer and Executive Vice
            President and Chief Operating Officer. The stockholders voted
            19,603,979 shares in favor and 7,173,670 shares against. 119,820
            shares abstained from voting.

      (v)   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, 2000. The
            stockholders voted 26,880,617 shares in favor and 19,912 shares
            against. 56,940 shares abstained from voting.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

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

<TABLE>
<CAPTION>
            Exhibit No.       Description
            -----------       -----------
<S>                           <C>
            3.1A              Amendment dated June 12, 2000 to the Company's
                              certificate of incorporation, as amended.

            27.1              Financial Data Schedule

            99.7              1996 Non-Qualified Stock Option Plan, as amended.

            99.8              1996 Incentive Stock Option Plan, as amended.
</TABLE>

      (b)   Reports on Form 8-K

                                    Page 16

<PAGE>   19

             None.

                                   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 11, 2000              By    /s/ Samuel D. Waksal
                                         ---------------------------------------
                                         Samuel D. Waksal
                                         President and Chief Executive Officer



Date: August 11, 2000              By    /s/ Paul A. Goldstein
                                         ---------------------------------------
                                         Paul A. Goldstein
                                         Assistant Vice President, Finance and
                                         Controller

                                    Page 17