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 March 31, 1998

      [ ]        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 Identification No.)
    incorporation or organization)             

    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 May 12, 1998
               -----                             ------------------------------
   Common Stock, par value $.001                      24,351,160 Shares

<PAGE>

                          IMCLONE SYSTEMS INCORPORATED

                                     INDEX

                                                                        Page No.
                                                                        --------

PART I - FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Balance Sheets - March 31, 1998 (unaudited)
                  and December 31, 1997                                     1

                  Unaudited Statements of Operations - Three
                   months ended March 31, 1998 and 1997                     2

                  Unaudited Statements of Cash Flows - Three
                  months ended March 31, 1998 and 1997                      3

                  Notes to Financial Statements                             4

         Item 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations             5

         Item 3.  Quantitative and Qualitative Disclosures About
                  Market Risk                                               9

PART II - OTHER INFORMATION

         Item 5.  Other Information                                        10

         Item 6.  Exhibits and Reports on Form 8-K                         11

<PAGE>

Part 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

                          IMCLONE SYSTEMS INCORPORATED

                                 Balance Sheets
                        (in thousands, except share data)

                                                        March 31,   December 31,
                      Assets                               1998         1997
                                                       -----------  ------------
                                                       (unaudited)
Current assets:
  Cash and cash equivalents ........................   $   3,754     $   2,558
  Securities available for sale ....................      51,636        57,052
  Prepaid expenses .................................         506           596
  Other current assets .............................         679           589
                                                       ---------     ---------
                Total current assets ...............      56,575        60,795
                                                       ---------     ---------
Property and equipment:
  Land .............................................         340           340
  Building and building improvements ...............      10,471         8,969
  Leasehold improvements ...........................       4,832         4,832
  Machinery and equipment ..........................       7,353         6,315
  Furniture and fixtures ...........................         597           550
  Construction in progress- ........................        --           2,159
                                                       ---------     ---------
                Total cost .........................      23,593        23,165

  Less accumulated depreciation and amortization ...     (11,706)      (11,294)
                                                       ---------     ---------
                Property and equipment, net ........      11,887        11,871
                                                       ---------     ---------

Patent costs, net ..................................         942           944
Deferred financing costs, net ......................          53            55
Other assets .......................................       2,115         2,115
                                                       ---------     ---------
                                                       $  71,572     $  75,780
                                                       =========     =========

       Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable .................................   $   1,261     $   1,731
  Accrued expenses and other .......................         715         1,440
  Interest payable .................................         104            68
  Deferred revenue .................................         358           208
  Current portion of long-term liabilities .........         405           677
                                                       ---------     ---------
                Total current liabilities ..........       2,843         4,124
                                                       ---------     ---------

Long-term debt .....................................       2,200         2,200
Other long-term liabilities, less
  current portion ..................................         998         1,118
Preferred stock dividends payable ..................         704           112
                                                       ---------     ---------
                Total liabilities ..................       6,745         7,554
                                                       ---------     ---------

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 March 31, 1998 and December 31, 1997
    (preference in liquidation $40,704
    and $40,112, respectively) .....................         400           400
  Common stock, $.001 par value; authorized
    45,000,000 shares; issued 24,378,502
    and 24,265,072 at  March 31, 1998 and
    December 31, 1997, respectively;
    outstanding 24,327,685 and 24,214,255
    at March 31, 1998 and December 31, 1997,
    respectively ...................................          24            24
  Additional paid-in capital .......................     185,364       185,706
  Accumulated deficit ..............................    (120,457)     (117,464)
  Treasury stock, at cost; 50,817 shares
    at March 31, 1998 and December 31, 1997 ........        (492)         (492)
  Common stock subscription receivable .............        (133)         --
  Accumulated other comprehensive income:
    Unrealized gain on securities
       available for sale ..........................         121            52
                                                       ---------     ---------
                Total stockholders' equity .........      64,827        68,226
                                                       ---------     ---------
                                                       $  71,572     $  75,780
                                                       =========     =========

                See accompanying notes to financial statements.


                                     Page 1

<PAGE>

                          IMCLONE SYSTEMS INCORPORATED

               Statements of Operations and Comprehensive Income
                     (in thousands, except per share data)
                                  (unaudited)

                                                           Three Months Ended
                                                                March 31,
                                                         ----------------------
                                                           1998          1997
                                                          ------        ------
Revenues:
  License fees from third parties ..................     $  1,000      $   --
  Research and development
     funding from third
     parties and other .............................          850            75
                                                         --------      --------
                Total revenues .....................        1,850            75
                                                         --------      --------

Operating expenses:
  Research and development .........................        4,171         5,395
  General and administrative .......................        1,413         1,083
                                                         --------      --------
                Total operating expenses ...........        5,584         6,478
                                                         --------      --------

Operating loss .....................................       (3,734)       (6,403)
                                                         --------      --------
Other:
  Interest and other income ........................         (831)         (245)
  Interest expense .................................           90           195
                                                         --------      --------
                Net interest and other income ......         (741)          (50)
                                                         --------      --------

Net loss ...........................................       (2,993)       (6,353)

Preferred dividends (including
  incremental yield of $266) .......................          858          --
                                                         --------      --------

Net loss to common stockholders ....................       (3,851)       (6,353)
                                                         --------      --------

Other comprehensive income (loss):
  Unrealized gain (loss) on
    securities available for sale:
    Unrealized holding gain (loss)
      arising during the period ....................           69           (72)
    Less: Reclassification adjustment
      for realized gain (loss)
      included in net income .......................            1            (3)
                                                         --------      --------
                Total other comprehensive
                  income (loss) ....................           68           (69)
                                                         --------      --------
Comprehensive loss .................................     $ (3,783)     $ (6,422)
                                                         ========      ========

Basic and diluted net loss
  per common share .................................     $  (0.16)     $  (0.30)
                                                         ========      ========

Weighted average shares outstanding ................       24,228        21,231
                                                         ========      ========

                See accompanying notes to financial statements.


                                     Page 2

<PAGE>

                          IMCLONE SYSTEMS INCORPORATED

                            Statements of Cash Flows
                                 (in thousands)
                                  (unaudited)

                                                          Three Months Ended
                                                               March 31,
                                                          ------------------
                                                           1998        1997
                                                          ------      ------

Cash flows from operating activities:
   Net loss ..........................................  $ (2,993)    $ (6,353)
   Adjustments to reconcile net loss to net
      cash used in operating activities:
      Depreciation and amortization ..................       440          433
      Expense associated with issuance
          of options and warrants ....................        80        2,423
      (Gain) loss on sale of investments .............        (1)           3
      Changes in:
         Prepaid expenses ............................        90          (65)
         Other current assets ........................       (90)         330
         Due from officer ............................      --            (12)
         Interest payable ............................        36          104
         Accounts payable ............................      (470)        (190)
         Accrued expenses and other ..................      (725)        (589)
         Deferred revenue ............................       150         --
                                                        --------     --------
                Net cash used in
                  operating activities ...............    (3,483)      (3,916)
                                                        --------     --------

Cash flows from investing activities:
      Acquisitions of property and equipment .........      (428)        (336)
      Purchases of securities available for sale .....   (23,461)     (30,103)
      Sales of securities available for sale .........    28,947       10,069
      Additions to patents ...........................       (24)         (23)
                                                        --------     --------
                Net cash provided by (used in)
                  investing activities ...............     5,034      (20,393)
                                                        --------     --------
Cash flows from financing activities:
      Net proceeds from issuance of common stock .....      --         23,196
      Proceeds from exercise of stock
        options and warrants .........................        37          593
      Purchase of treasury stock .....................      --           (173)
      Payments of other liabilities ..................      (392)        (461)
                                                        --------     --------
                Net cash (used in) provided
                  by financing activities ............      (355)      23,155
                                                        --------     --------
Net increase (decrease) in cash
  and cash equivalents ...............................     1,196       (1,154)

Cash and cash equivalents at
  beginning of period ................................     2,558        2,734
                                                        --------     --------
Cash and cash equivalents at
  end of period ......................................  $  3,754     $  1,580
                                                        ========     ========

                See accompanying notes to financial statements.


                                     Page 3

<PAGE>

                          IMCLONE SYSTEMS INCORPORATED

                         NOTES TO FINANCIAL STATEMENTS
                                  (unaudited)

(1)  Basis of Presentation

      The financial statements of ImClone Systems Incorporated ("ImClone" or the
"Company")  as of March 31, 1998 and for the three  months  ended March 31, 1998
and 1997 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, 1997, as filed with the  Securities  and Exchange  Commission  (the
"Commission").

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

(2) 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,  bears annual  interest at the rate of 8.5% and is full recourse.
At March 31,  1998,  the total amount due the Company,  including  interest,  is
approximately  $133,000 and is classified in the stockholders' equity section of
the balance sheet as common stock subscription receivable.

(3)  Earnings Per Share

      Basic and diluted  Earnings Per Share  ("EPS") are  computed  based on the
weighted average number of shares outstanding.  Potentially dilutive securities,
including  convertible  preferred  stock,  options and  warrants,  have not been
included in the diluted EPS computation because they are anti-dilutive.

(4)  Comprehensive Income

      On January 1, 1998, the Company adopted Statement of Financial  Accounting
Standards  No.  130,  "Reporting   Comprehensive  Income"  ("SFAS  130"),  which
establishes  standards for reporting and display of comprehensive income and its
components.  In  accordance  with  SFAS  130,  the  Company  has  displayed  the
components of "Other  comprehensive  income (loss)" and "Comprehensive  loss" in
the  accompanying   Financial   Statements.   All  prior-period  data  has  been
reclassified to conform with the provisions of SFAS 130.

(5)  Reclassification

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


                                     Page 4

<PAGE>

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

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

RESULTS OF OPERATIONS

Three Months Ended March 31, 1998 and 1997

Revenues

      Revenues  for  the  three-months  ended  March  31,  1998  and  1997  were
$1,850,000 and $75,000 respectively, an increase of $1,775,000. Revenues for the
three-months  ended March 31, 1998 consisted of (i) $75,000 in research  support
from the Company's  partnership  with the  Wyeth/Lederle  Vaccine and Pediatrics
Division of American Home Products  Corporation  ("American Home") in infectious
diseases,  (ii)  $1,000,000  in milestone  payments and $625,000 in research and
support  payments from the Company's  research and license  agreement with Merck
KGaA  ("Merck")  with respect to the  Company's  BEC2 product  candidate,  (iii)
$52,000 in royalty  revenue from the  Company's  strategic  alliance with Abbott
Laboratories  ("Abbott") in  diagnostics,  and (iv) $98,000 from a Phase I Small
Business  Innovation  Research ("SBIR") grant from the National Cancer Institute
(the  "NCI")  for a program in  cancer-related  angiogenesis.  Revenues  for the
three-months  ended March 31, 1997 consisted of $75,000 in research support from
the Company's partnership with American Home.

Operating; Research and Development Expenses

      Total  operating  expenses for the  three-months  ended March 31, 1998 and
1997 were  $5,584,000 and  $6,478,000,  respectively,  a decrease of $894,000 or
14%. Research and development expenses for the three-months ended March 31, 1998
and 1997 were $4,171,000 and $5,395,000,  respectively, a decrease of $1,224,000
or 23%.  Such  amounts  for the  three-months  ended  March  31,  1998  and 1997
represented 75% and 83%, respectively, of total operating expenses. The decrease
in research and development  expenses for the three-months  ended March 31, 1998
was  attributable  to the  one-time  $2,233,000  non-cash  compensation  expense
recorded  for the  three-months  ended  March 31,  1997 in  connection  with the
extension  of the term of an  officer's  warrant to purchase  397,000  shares of
Common  Stock.  This  decrease is  partially  offset by  increased  costs in the
three-months  ended March 31, 1998 associated  with  additional  staffing in the
area of discovery  research,  the initiation of new supported  research programs
with  academic  institutions  and the  establishment  of corporate  in-licensing
arrangements,  and expenditures in the functional areas of product  development,
manufacturing and clinical and regulatory  affairs to support the Company's lead
therapeutic product candidate, C225, for human clinical trials.

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 the Company's  technology and products.  Such expenses for
the  three-months  ended March 31, 1998 and 1997 were $1,413,000 and $1,083,000,
respectively,  an  increase  of  $330,000  or 30%.  The  increase in general and
administrative  expenses  primarily reflects (i) additional support staffing for
the expanding research,  clinical,  development and manufacturing 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. The Company expects general and administrative expenses to increase in
future periods to support planned increases in research,  clinical,  development
and manufacturing efforts of the Company.


                                     Page 5

<PAGE>

Interest and Other Income and Interest Expense

      Interest and other income was  $831,000 for the  three-months  ended March
31, 1998  compared to $245,000 for the  three-months  ended March 31,  1997,  an
increase of $586,000.  The increase was primarily  attributable to the increased
interest  income earned from higher cash  balances in the  Company's  investment
portfolio  resulting from a public  offering of Common Stock  completed in March
1997 and a  private  placement  of Series A  Convertible  Preferred  Stock  (the
"Series A Preferred Shares" or "Series A Preferred Stock") completed in December
1997. Interest expense was $90,000 and $195,000 for the three-months ended March
31, 1998 and 1997, respectively, a decrease of $105,000 or 54%. Interest expense
for both  periods  primarily  included  interest  on an  outstanding  Industrial
Development  Revenue  Bond issued in 1990 (the "1990 IDA Bond") with a principal
amount of  $2,200,000,  interest  recorded  on capital  lease  obligations,  and
interest recorded on a liability to Pharmacia and UpJohn Inc. ("Pharmacia"), for
the  reacquisition  of the  worldwide  rights to a  recombinant  mutein  form of
Interleukin-6  ("IL-6m") as well as clinical material  manufactured and supplied
by Pharmacia to the Company.  The  decrease was  primarily  attributable  to the
December 1997 repayment of an IDA Bond issued in 1986 (the "1986 IDA Bond") with
a  principal  amount  of  $2,113,000  and the  February  1998  repayment  of the
remaining liability to Pharmacia.

Net Losses

      The Company had net losses to common  stockholders  of $3,851,000 or $0.16
per share for the three-months ended March 31, 1998, compared with $6,353,000 or
$0.30 per share for the  three-months  ended March 31, 1997. The decrease in the
net losses and per share net loss to common  stockholders  is due to the factors
mentioned in the preceding  paragraphs as well as the increased number of shares
of Common  Stock  outstanding  primarily  as a result of the March  1997  public
offering of Common Stock.

LIQUIDITY AND CAPITAL RESOURCES

      At March 31, 1998, the Company's  principal sources of liquidity consisted
of cash and cash equivalents and securities  available for sale of approximately
$55,390,000.  The Company has financed its operations since inception  primarily
through the public and  private  sales of equity  securities,  the sale of three
issues of IDA Bonds through the New York City Industrial Development Agency (the
"NYIDA"),  license fees and contract research and development fees and royalties
received under  agreements  with  collaborative  partners and interest earned on
these funds.  Since inception,  public and private sales of equity securities in
financing  transactions have raised approximately  $163,799,000 in net proceeds.
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 the Company's research and development facility
in New York  City,  and of which  $2,200,000  is  currently  outstanding.  Since
inception,  the Company has earned approximately  $30,512,000 from license fees,
contract  research  and  development  fees  and  royalties  from   collaborative
partners,  including  approximately  $1,850,000  earned during the  three-months
ended March 31,  1998.  Since  inception  the  Company has earned  approximately
$6,277,000 in interest income,  including  approximately  $830,000 earned during
the three-months ended March 31, 1998.


                                     Page 6

<PAGE>

      The Company  has  obligations  under  various  capital  leases for certain
laboratory, office and computer equipment and also certain building improvements
primarily  under a  December  1996  financing  agreement  (the  "1996  Financing
Agreement") with Finova Technology Finance, Inc. ("Finova").  The 1996 Financing
Agreement  allows the Company to finance the lease of equipment and make certain
building and leasehold  improvements to existing  facilities  involving  amounts
aggregating  approximately  $2,500,000.  As of March 31,  1998,  the Company had
entered into six individual leases aggregating a total cost of $1,745,000.  Each
lease has a fair market value  purchase  option at the  expiration of a 42-month
term. Pursuant to the 1996 Financing  Agreement,  the Company issued to Finova a
warrant expiring  December 31, 1999 to purchase 23,220 shares of Common stock at
an  exercise  price of $9.69 per share.  The  Company  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 the Company did not
utilize the full  $2,500,000  under the  agreement.  In April 1998,  the Company
entered into a new financing  agreement (the "1998  Financing  Agreement")  with
Finova  aggregating  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.

      The  Company  has  expended  and will  continue  to expend  in the  future
substantial  funds to continue  the research and  development  of its  products,
conduct   pre-clinical  and  clinical  trials,   establish   clinical-scale  and
commercial-scale  manufacturing  in its own  facilities or in the  facilities of
others,  and market its  products.  The  Company has  entered  into  preliminary
discussions  with  several  major  pharmaceutical  companies  regarding  various
alternatives  concerning the funding of research and  development for certain of
its  products.  No assurance can be given that the Company will be successful in
consummating any such  alternatives.  These discussions have included  potential
significant strategic alliances for the development and commercialization of the
Company's lead product candidate,  C225. Such strategic  alliances could include
up-front license fees plus milestone fees and revenue  sharing.  There can be no
assurance that the Company will be successful in achieving such  alliances,  nor
can the Company predict the amount of funds which might be available to it if it
entered  into  such  alliances  or the time at which  such  funds  would be made
available.

      In January 1998, the Company  completed the construction and commissioning
of a new 1,750 square foot process  development  center at its  Somerville,  New
Jersey  facility  at a cost of  approximately  $1,650,000.  The Company has also
taken steps to complete a formal design concept for large scale manufacturing at
this facility.  If the Company adapts this facility to large scale manufacturing
or does so at another location, it will incur substantial  additional costs. The
lease on the Company's New York City facility expires in March 1999. The Company
is  currently  in  discussions  regarding  the  extension  of the  lease  and is
considering  other  alternatives,  such as relocating its executive  offices and
laboratories  to a new  facility.  Were the  Company to relocate  its  executive
offices and laboratories, it would incur substantial additional costs.

      The IDA Bond  issued in 1990  (the  "1990  IDA  Bond") in the  outstanding
principal  amount  of  $2,200,000  becomes  due in  2004.  If the  lease  on the
Company's New York City facility is terminated,  the 1990 IDA Bond provides that
it will become due 60 days prior to such  termination.  The  Company  will incur
interest on the 1990 IDA Bond  aggregating  approximately  $250,000 during 1998.
The  Company has granted  the NYIDA a security  interest  in  substantially  all
facility equipment located in the New York facility to secure the obligations of
the Company to the NYIDA under the 1990 IDA Bond.

      The  holders of the Series A  Preferred  Shares  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 $704,000 at March 31, 1998.


                                     Page 7

<PAGE>

      Total capital  expenditures  made during the three-months  ended March 31,
1998  were  $428,000.   Of  the  total  capital  expenditures  made  during  the
three-months  ended March 31, 1998,  $365,000 related to improving and equipping
the  Company's  manufacturing  facility  in New  Jersey.  The balance of capital
additions  was for equipment  and  computer-related  purchases for the corporate
office and research laboratories in New York.

      The Company anticipates that its existing capital resources, including the
on-going  research  support  of its  corporate  partners,  should  enable  it to
maintain  its current and planned  operations  through the end of the year 2000.
However,  the receipt of such ongoing  research  support is subject to attaining
research  and  development  milestones,  certain  of  which  have  not yet  been
achieved.  There  can be no  assurance  that  the  Company  will  achieve  these
milestones.  The Company's future working capital and capital  requirements will
depend upon numerous factors,  including the progress of the Company's  research
and  development  programs,   pre-clinical  testing  and  clinical  trials,  the
Company's  corporate partners  fulfilling their obligations to the Company,  the
timing  and cost of  seeking  regulatory  approvals,  the cost of  manufacturing
scale-up and effective commercialization activities and arrangements,  the level
of resources that the Company  devotes to the development of marketing and sales
capabilities,  the costs involved in filing,  prosecuting  and enforcing  patent
claims, technological advances, the status of competitors and the ability of the
Company to maintain existing and establish new  collaborative  arrangements with
other companies to provide  funding to the Company to support these  activities.
In order to fund its capital  needs after the end of the year 2000,  the Company
will require  significant  levels of additional capital and intends to raise the
capital through additional arrangements with corporate partners,  equity or debt
financings  or from other  sources.  There is no  assurance  the Company will be
successful in  consummating  any such  arrangements.  If adequate  funds are not
available,  the Company may be  required  to  significantly  curtail its planned
operations.

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

      At December 31, 1997, the Company had net operating loss carryforwards for
federal  income tax  purposes  of  approximately  $115,000,000  which  expire at
various  dates from 2000  through  2012.  At  December  31, 1997 the Company had
research  credit  carryforwards  of  approximately  $2,303,000  which  expire at
various  dates  between  years 2001 and 2012.  Pursuant  to  Section  382 of the
Internal  Revenue  Code of 1986,  as  amended,  the  annual  utilization  of the
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, the Company  experienced two ownership
changes.  Accordingly, the Company is significantly limited in utilizing its tax
net operating loss carryforwards arising before such ownership changes to offset
future  federal  taxable  income.   Similarly,   the  Company  is  significantly
restricted  in using its  research  credit  carryforwards  arising  before  such
ownership changes to offset future federal income tax expense.


                                     Page 8

<PAGE>

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 to manufacture,  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;
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

      Not applicable.


                                     Page 9

<PAGE>

PART II - OTHER INFORMATION

Item 5 - Other Information

      On May 12, 1998 the Company  announced that the U.S.  Patent and Trademark
Office has issued Patent No. 5,747,651 to the Company for antibodies against the
extracellular portion of the tyrosine kinase receptor KDR/FLK-1.  This receptor,
known as the  KDR/FLK-1  receptor,  is expressed on tumor  associated  capillary
blood vessels and plays a major role in the  vascularization of tumors and their
malignant  growth.  On March 30,  1998 at the  annual  meeting  of the  American
Association  for  Cancer   Research,   ImClone's   researchers   presented  data
demonstrating  the  development  of a monoclonal  antibody  that blocks in vitro
binding of VEGF to the human KDR receptor and inhibits VEGF stimulated growth of
endothelial  cells.  Primary data  suggests  that the antibody also inhibits the
growth of human tumor-associated blood vessels.

Item 6 - Exhibits and Reports on Form 8-K

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

            Exhibit No.                Exhibit No.
            -----------                -----------

            27.1                       Financial Data Schedule

      (b)   Reports on Form 8-K

      On February  10,  1998,  the Company  filed with the  Commission a Current
Report on Form 8-K dated  January 21, 1998 (i)  relating to the  election to the
Board of Directors of John Mendelsohn, and (ii) filing as an Exhibit thereto the
Company's Amended and Restated By-laws.


                                    Page 10

<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:  May 14, 1998                   By   /s/ Samuel D. Waksal
                                           -------------------------------------
                                           Samuel D. Waksal
                                           President and Chief Executive Officer

Date: May 14, 1998                    By   /s/ Carl S. Goldfischer
                                           -------------------------------------
                                           Carl S. Goldfischer
                                           Vice President, Finance and Chief 
                                           Financial Officer


                                    Page 11