<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                   Form 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934


                      For Quarter Ended January 31, 2001
                                        ----------------

                         Commission File Number 1-9579
                                                ------


                                  Ecogen Inc.
                                  -----------
            (Exact name of registrant as specified in its charter)



                Delaware                        22-2487948
                --------                        ----------
      (State or other jurisdiction of        (I.R.S. Employer
      incorporation or organization)         Identification Number)


    2000 W. Cabot Boulevard #170, Langhorne, Pennsylvania             19047
    -----------------------------------------------------             -----
             (Address of principal executive offices)              (Zip Code)



Registrant's telephone number,
including area code                    (2l5) 757-l590
                                       --------------


   Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5 (d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: Yes  X   No    .
                                              ---     ---

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

     Class                              Outstanding at March 15, 2001
     -----                              -----------------------------

Common Stock, $.01 par value                              14,278,777
<PAGE>

                                  ECOGEN INC.
                                  -----------


                                     INDEX


     Page
     ----

PART I - FINANCIAL INFORMATION

 Item 1   - Financial Statements:

  Unaudited Consolidated Condensed Balance Sheets as of
     January 31, 2001 and October 31, 2000...................  1

  Unaudited Consolidated Condensed Statements of Operations
     for the three months ended January 31, 2001 and 2000....  2

  Unaudited Consolidated Condensed Statements of Cash Flows
     for the three months ended January 31, 2001 and 2000....  3

  Notes to Unaudited Consolidated Condensed Financial
     Statements..............................................  5

 Item 2   - Management's Discussion and Analysis of Results
          of Operations and Financial Condition..............  10

PART II - OTHER INFORMATION

 Item 6(a)- Exhibits.........................................  14
<PAGE>


                         ECOGEN INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              Assets
----------------------------------------------------------------------------------------------------------------------
                                                                                     January 31,       October  31,
                                                                                         2001              2000
                                                                                  ------------------------------------
<S>                                                                                  <C>               <C>
Current assets:
   Cash, cash equivalents and temporary investments                                       $20,284           $215,777
   Trade receivables, net                                                                 620,088            616,741
   Inventory, net                                                                       1,408,875          2,051,184
   Prepaid expenses and other current assets                                              528,609            284,673
                                                                                  ------------------------------------
      Total current assets                                                              2,577,856          3,168,375
                                                                                  ------------------------------------

Plant and equipment, net                                                                  291,842            677,831
Other assets, net                                                                       2,512,524          2,653,571
                                                                                  ------------------------------------
                                                                                       $5,382,222         $6,499,777
                                                                                  ====================================

                                             Liabilities and Stockholders' Deficit
----------------------------------------------------------------------------------------------------------------------

Current liabilities:
   Debt due within one year                                                             1,917,644          2,123,972
   Accounts payable and accrued expenses                                                5,129,444          4,834,499
                                                                                  ------------------------------------
        Total current liabilities                                                       7,047,088          6,958,471
                                                                                  ------------------------------------

                                                                                  ------------------------------------
Long-term debt                                                                                 -               9,306
                                                                                  ------------------------------------
Long-term deferred revenue                                                              1,655,785          1,612,928
                                                                                  ------------------------------------
Minority interest                                                                       1,533,854          1,533,854
                                                                                  ------------------------------------

Stockholders' deficit:
   Preferred stock, par value $.01 per share; authorized
         7,500,000 shares:
       Series 2000 A convertible preferred stock                                               76                 76
       Series 1998 C convertible preferred stock                                              324                324
   Common stock, par value $.01 per share                                                 134,925            134,925
   Additional paid-in capital                                                         129,319,027        129,319,027
   Accumulated deficit                                                               (134,308,857)      (133,069,134)
   Other                                                                                       -                  -
                                                                                  ------------------------------------
        Total stockholders' deficit                                                    (4,854,505)        (3,614,782)
                                                                                  ------------------------------------
                                                                                       $5,382,222         $6,499,777
                                                                                  ====================================
</TABLE>
        See Accompanying Notes to Unaudited Consolidated Condensed Financial
         Statements.

                                       1
<PAGE>

                         ECOGEN INC. AND SUBSIDIARIES
            UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                           THREE  MONTHS  ENDED JANUARY 31,

                                                                               2001                      2000
-------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                       <C>
Revenues:

  Product  sales,  net                                                  $   792,493               $ 1,099,500
  Contract research                                                               -                         -
                                                                 --------------------------------------------
    Total revenues                                                          792,493                 1,099,500
                                                                 --------------------------------------------

Costs and expenses:

  Cost of products sold                                                     686,273                   906,530
  Research and development:                                                 292,182                   441,904
  Selling, general and administrative                                       827,932                 1,210,037
                                                                 --------------------------------------------
    Total costs and expenses                                              1,806,387                 2,558,471
                                                                 --------------------------------------------

Operating loss                                                           (1,013,894)               (1,458,971)
                                                                 --------------------------------------------
Other income (expense):
    Interest expense, net                                                  (122,639)                 (146,247)
    Other income                                                             31,473                    54,351
                                                                 --------------------------------------------
    Total other expense, net                                                (91,166)                  (91,896)
                                                                 --------------------------------------------

Net loss                                                                 (1,105,060)               (1,550,867)

Dividends on preferred stock including assumed
     incremental yield of $63,219 in 2000                                   134,662                   155,177
                                                                 --------------------------------------------

Net loss allocable to common stockholders                               ($1,239,722)              ($1,706,044)
                                                                 ============================================

Basic and diluted net loss  per  common  share                               ($0.09)                   ($0.17)
                                                                 ============================================



Weighted average number of common shares outstanding                     13,492,500                10,045,000
                                                                 ============================================
</TABLE>
        See Accompanying Notes to Unaudited Consolidated Condensed Financial
         Statements.

                                       2
<PAGE>
                         ECOGEN INC. AND SUBSIDIARIES

           UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                                    Three months ended
                                                                                                        January 31,
                                                                                                 2001                        2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                               <C>
Cash  flows  from  operating  activities:
   Net  loss                                                                              ($1,105,060)                ($1,550,867)
   Adjustments  to  reconcile  net  loss  to  net
     cash used  in operating  activities:
       Depreciation  and amortization expense                                                 168,755                     164,631
       Loss on disposition of fixed assets                                                     29,688
       Noncash interest and other expense                                                      87,065                      73,968
       Changes  in  assets  and  liabilities                                                  861,264                       4,448
                                                                                    ---------------------------------------------
 Net  cash provided by (used in) operating  activities                                         41,712                  (1,307,820)
                                                                                    ---------------------------------------------

Cash  flows  from  investing  activities:
   Purchase  of  plant and  equipment                                                               -                     (21,460)
                                                                                    ---------------------------------------------
Net  cash used in investing activities                                                              -                     (21,460)
                                                                                    ---------------------------------------------

Cash  flows  from  financing  activities:
   Proceeds from bank loan                                                                          -                   1,500,000
   Proceeds from promissory notes                                                             200,000                           -
   Payments on line of credit, net                                                           (415,634)                    (53,770)
   Repayment of capital lease obligations                                                     (21,571)                   (101,573)
                                                                                    ---------------------------------------------
Net  cash (used in ) provided by financing activities                                        (237,205)                  1,344,657
                                                                                    ---------------------------------------------

Net (decrease) increase in  cash                                                             (195,493)                     15,377

Cash  and  cash  equivalents,  beginning  of  period                                          215,777                           -
                                                                                    ---------------------------------------------
Cash  and  cash  equivalents,  end  of  period                                           $     20,284                $     15,377
                                                                                    =============================================

                                                                                                                       (Continued)
</TABLE>

                                       3
<PAGE>

                         ECOGEN INC. AND SUBSIDIARIES

     UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS, CONTINUED


<TABLE>
<CAPTION>
                                                                                                    Three months ended
                                                                                                        January 31,
                                                                                                 2001                        2000
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>                       <C>
Changes  in  assets  and  liabilities, net of acquisition:
    Increase in receivables                                                                   ($3,348)                   ($81,744)
    Decrease (increase)  in  inventory                                                        642,309                     (14,596)
    Decrease (increase) in  prepaid  expenses  and
      other  current  assets                                                                    6,064                     (73,015)
   Decrease in other assets                                                                     6,316                           -
   Increase in  accounts  payable
      and  accrued  expenses                                                                  209,923                     173,803
                                                                                         ----------------------------------------
      Changes  in  assets  and  liabilities,  net                                        $    861,264                $      4,448
=================================================================================================================================


Noncash investing and financing activities:
---------------------------------------------------------------------------------------------------------------------------------

  During the first quarter of fiscal 2000, the Company issued 498,747 shares of
  its common stock upon conversion of the Company's convertible preferred stock
  and issued 24,657 shares of common stock as dividends at the time of
  conversion.

  During the first quarter of fiscal 2001, the Company transferred ownership of
  certain fixed assets to a contract manufacturer in  exchanged for $250,000
  in credits to be applied toward future costs of production at that facility.


</TABLE>

        See Accompanying Notes to Unaudited Consolidated Condensed Financial
         Statements.


                                       4




<PAGE>

                         ECOGEN INC. AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                           JANUARY 31, 2001 AND 2000

(1)  BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---  --------------------------------------------------------------------

     ORGANIZATION AND BASIS OF PRESENTATION:

     The consolidated condensed financial statements include the accounts of
     Ecogen Inc. ("Ecogen" or the "Company") and its wholly-owned and majority-
     owned subsidiaries. All intercompany accounts and transactions have been
     eliminated in consolidation.

     The accompanying consolidated condensed financial statements include all
     adjustments (consisting of normal recurring accruals) which are, in the
     opinion of management, necessary for a fair presentation of the
     consolidated results of operations and financial position for the interim
     periods presented. The consolidated condensed financial statements have
     been prepared in accordance with the requirements for Form 10-Q and,
     therefore, do not include all disclosures of financial information required
     by generally accepted accounting principles. These consolidated condensed
     financial statements should be read in conjunction with the Company's
     October 31, 2000 consolidated financial statements and notes thereto
     included in the Company's Annual Report on Form 10-K.

     The results of operations for the interim period ended January 31, 2001 are
     not necessarily indicative of the operating results for the full year.

     OPERATIONS:

     The Company is a biotechnology company specializing in the development and
     marketing of environmentally compatible products for the control of pests
     in agricultural and related markets. The Company has not yet achieved
     profitable operations for any of its fiscal years and there is no assurance
     that profitable operations, if achieved, could be sustained on a continuing
     basis. Further, the Company's future operations are dependent, among other
     things, on the success of the Company's commercialization efforts and
     market acceptance of the Company's products.

     NET LOSS PER COMMON SHARE:

     Basic loss per share is based on net loss allocable to common stockholders
     for the relevant period, divided by the weighted average number of common
     shares outstanding during the period. Diluted loss per share is based on
     net loss allocable to common stockholders for the relevant period divided
     by common shares outstanding and other potential common shares if they are
     dilutive.

     Because the Company reported a net loss per share, there is no difference
     between the Company's basic and diluted net loss per share calculations,
     since all potential common shares were anti-dilutive.

                                                            (Continued)

                                       5
<PAGE>

                          ECOGEN INC. AND SUBSIDIARIES

   NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS, CONTINUED


(2) LIQUIDITY
    ---------

    The Company has reported net loses allocable to common stockholders of
    ($1.2) million, and ($1.7) million for the three month periods ended January
    31, 2001, and 2000, respectively. The loss from inception in 1983 to January
    31, 2001 amounts to ($134.3) million. Further, the Company has a working
    capital deficit, a stockholders' deficit and limited liquid resources. These
    factors raise substantial doubt about its ability to continue as a going
    concern. The financial statements do not include any adjustments relating to
    the recoverability and classification of reported asset amounts or the
    amount or classification of liabilities, which might result from the outcome
    of this uncertainty.

    The Company's continued operations will depend on its ability to raise
    additional funds. The Company has financed its working capital needs
    primarily through private and public offerings of equity and debt
    securities, revenues from research and development alliances and product
    sales. In addition, the Company has a working capital line of credit, which
    originally expired in August 2000 but has been extended to April 30, 2001, a
    term loan of $1.5 million that is due on June 30, 2001 and promissory notes
    aggregating $.6 million that are due on June 30,2001. The Company currently
    is not in compliance with the covenants of its $5.0 million working capital
    line of credit. This line of credit has a balance of $.2 million as of
    January 31, 2001. As a result of the Company's non-compliance with the
    covenants, the working capital lender, at its option, may discontinue making
    loans and liquidate the collateral including inventory and accounts
    receivable. Additionally, the Company was unable to make a principal payment
    of $.5 million on its $1.5 million term loan, however, the lender extended
    the due date of such principal repayment, originally due June 23, 2000, to
    June 30, 2001.

    The Company continues to pursue the raising of additional funds and other
    strategic initiatives including the sale of all or certain assets to improve
    its working capital position and its capital structure. Subsequent to
    January 31, 2001, the Company borrowed an additional $.4 million pursuant to
    promissory notes that now aggregate $.6 million and are due on June 30,
    2001. The holder of the notes is a corporation controlled by one of the
    Company's principal stockholders. Further the Company has taken a number of
    steps, including personnel reductions, to conserve cash until it is it is
    able to sell assets. The Company needs to obtain proceeds from the sale of
    assets by June 30, 2001 to provide the necessary cash resources to repay the
    outstanding balances under its line of credit (which is due April 30,2001),
    its term loan and promissory notes (which are due June 30,2001), its
    accounts payable and fund operations. Further, the Company needs to continue
    to obtain short-term financing while it negotiates its strategic
    transactions. At this time the Company is unable to predict whether it will
    be successful in its efforts. If the Company is not successful in obtaining

                                                            (Continued)

                                       6
<PAGE>

                          ECOGEN INC. AND SUBSIDIARIES

   NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS, CONTINUED


(2) LIQUIDITY, CON'T
    -----------------

    additional funding or selling assets, the Company will not be able to
    continue as a going concern. Over the long-term, the Company's liquidity is
    dependent on market acceptance of its products and technology.

(3) INVENTORY
    ---------

    At January 31, 2001, inventory consisted of raw materials of $.4 million,
    work-in-progress of $.2 million and finished products of $.8 million.

(4) LOAN AGREEMENTS
    ---------------

    In August 1998, the Company obtained a secured, revolving working capital
    line of credit for up to $5.0 million with a financial institution. Up to
    $1.0 million of the line may be used for letters of credit. The working
    capital line of credit expired in August 2000 (but has been extended to
    April 30,2001), bears interest at prime plus 3.25% and is fully
    collateralized by the Company's assets, other than certain of its
    intellectual property rights. The lending formula is based on eligible
    receivables and finished goods inventory. At January 31, 2001, the balance
    outstanding under the line was $.2 million. The loan agreement contains
    certain financial covenants and has certain restrictions on the Company's
    ability to pay dividends on its common stock. The Company is not in
    compliance with such covenants. As a result of the Company's noncompliance
    with such covenants, the lender, at its option, may discontinue making loans
    and liquidate the collateral.

    On December 24, 1999, the Company obtained a secured loan for $1.5 million
    with a financial institution that is controlled by a principal stockholder
    of the Company. The loan required a $.5 million principal payment in June
    2000 (which has been extended to June 30,2001) with the balance due in June
    2001. The loan bears interest at prime plus 2% and is payable monthly. The
    loan is collateralized by the Company's assets. The loan is guaranteed by a
    corporation controlled by one of the Company's principal stockholders. In
    connection with the guarantee, the corporation was issued a five-year
    warrant to purchase 200,000 shares of the Company's common stock at $1.25
    per share. The value of such warrants of $183,556 has been recorded as
    deferred debt expense and is being amortized as interest expense over the
    life of the loan.

    During the first quarter of fiscal 2001, a corporation controlled by one of
    the Company's principal stockholders loaned the Company $.2 million pursuant
    to promissory notes that are due June 30,2001, bear interest at 12%, and are
    secured by an interest in any success fees received under the Company's
    agreement with Monsanto Company. Subsequent to January 31, 2001, such
    corporation loaned the Company an additional $.4 million pursuant to
    promissory notes under the same terms as indicated previously.

                                                                     (Continued)

                                       7
<PAGE>

                          ECOGEN INC. AND SUBSIDIARIES

   NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS, CONTINUED


(5) STOCKHOLDERS' EQUITY
    --------------------

    Subsequent to January 31, 2001, the Company issued 734,988 shares of its
    common stock in exchange for 950 shares of the Company's Series 2000-A 7%
    convertible preferred stock issued in February 2000. The Company also issued
    51,289 shares of its common stock in payment of cumulative dividends at the
    time of conversion.

(6) PLANT AND EQUIPMENT
    -------------------

    During the first quarter of fiscal 2001, the Company transferred ownership
    in certain fixed assets to a contract manufacturer of the Company in
    exchange for $.3 million in credits to be used for future costs of
    production at that facility. If at the end of two years the Company has not
    utilized the full amount of the credits for production, the balance due will
    be paid to the Company in cash.

(7) ACQUISITION
    -----------

    On February 15, 2000, the Company completed its acquisition of certain
    assets of the sprayable Bt bioinsecticide business of Mycogen Corporation,
    an affiliate of Dow AgroSciences LLC. The Company issued 1,351,351 shares of
    the Company's common stock valued at approximately $3.0 million upon the
    closing of the transaction. Prior to the closing, the Company acquired
    approximately $.4 million of Mycogen's inventory of sprayable Bt products,
    under a distribution agreement  effective  January 31, 2000. Under the terms
    of the agreement, Mycogen has agreed to hold the shares for a three-year
    period, except in the event of certain change in control transactions.
    Mycogen was granted certain demand and piggyback registration rights with
    respect to the shares. In addition, Mycogen has the right of first refusal
    to purchase securities of the Company so as to maintain its ownership
    percentage in the Company.   Mycogen also has been granted certain market
    price protection rights at the time that Mycogen sells the shares, which may
    result in the issuance of additional shares, which may not exceed 20% of the
    Company's outstanding shares without stockholder approval. The Company and
    Dow AgroSciences LLC also entered into a five-year supply agreement and the
    companies have entered into distribution agreements granting exclusive
    rights to Dow AgroSciences to sell the acquired products in Mexico, New
    Zealand, Australia and France.

   The transaction was accounted for as a purchase and, accordingly, the total
   purchase price for the assets of approximately $3.4 million, including out of
   pocket expenses, was allocated based upon their fair value at the date of
   acquisition. The assets acquired include inventory and certain identifiable
   intangible assets including a license to certain genes and strains and
   product

                                                            (Continued)



                                       8
<PAGE>

                          ECOGEN INC. AND SUBSIDIARIES

   NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS, CONTINUED

(7) ACQUISITION, CONT.:


    registration and data citation rights. Included in the purchase price is
    inventory acquired by the Company prior to the final closing under a
    distribution agreement. The agreement also provides that the Company has no
    obligation for past or future royalties under a 1998 settlement agreement
    with Mycogen on a patent infringement dispute. Under purchase accounting,
    part of the purchase price has been allocated to other assets for the fully
    paid up royalty and any amounts previously accrued under the settlement
    agreement have been eliminated in purchase accounting.

    The following unaudited pro forma information has been prepared as if the
    February 2000 acquisition of the products had occurred on November 1, 1999.
    The unaudited pro forma information does not purport to represent the
    Company's consolidated results of operations that would have been achieved
    had the transaction to which pro forma effect is given been consummated as
    the date or period indicated.

                                    Three Months Ended January 31,
                                            2001      2000
                                          -------   -------
                                ($ in thousands except per share data)

    Total revenues                        $   792   $ 1,874
    Net loss allocable to
    common stockholders                    (1,239)   (1,792)
    Basic and diluted net
    loss per share                           (.09)     (.16)


                                       9
<PAGE>

                          ECOGEN INC. AND SUBSIDIARIES

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

                  THREE MONTHS ENDED JANUARY 31, 2001 AND 2000



THREE MONTHS ENDED JANUARY 31, 2001 AND 2000
--------------------------------------------

REVENUES
--------

Net product sales decreased $.3 million or 28% principally due to volume. Sales
of the Company's Bt product line, representing 85% of the Company's product
sales, decreased 36% in fiscal 2001. In January 2000 Ecogen began distributing
certain Mycogen Bt products for Dow AgroSciences until the final acquisition of
the product line was completed in February 2000. Included in the Company's
reported Bt sales for the three months ended January 31, 2001 and 2000 were $.3
million and $.5 million, respectively of the acquired Mycogen products.  Sales
of Ecogen's Bt products, excluding the acquired Mycogen products, decreased 31%
for the three months ended January 31, 2001. The decrease in sales was due
principally to the Company's lack of financial resources including its inability
to secure additional finished goods from Dow. Biofungicide product sales, which
represented 15% of product sales in fiscal 2001, increased 44% from the year-ago
period, principally due to higher sales of AQ10 in the first quarter of 2001,
the Company's biofungicide for control of powdery mildew, in Europe. Aq10 was
first introduced in Europe in the second quarter of fiscal 2000 so there were no
comparable sales in the first quarter of fiscal 2000.

COSTS AND EXPENSES
------------------

Cost of products sold decreased 24% in the first three months of fiscal 2001
compared to the same period in fiscal 2000 due primarily to a decrease in
product sales. Gross margins on product sales declined from 18% in fiscal 2000
to 13% in fiscal 2001. The lower gross margins in fiscal 2001 were due
principally to lower margin on AQ10 sales in Europe.

Total operating expenses consisting of research and development and selling,
general and administrative expenses were $1.1 million in the first quarter of
fiscal 2001, compared to $1.7 million in fiscal 2000, a decrease of 32% due to
cost reduction measures implemented by the Company to conserve cash, including
personnel reductions. Further cost reduction have been implemented in operating
expenses subsequent to the end of the first quarter of fiscal 2001. Research and
development costs decreased $.1 million or 34% and  selling, general and
administrative expenses were $.8 million in the first quarter of fiscal 2001
compared to $1.2 million in fiscal 2000, representing a decrease of $.4 million
or 32%.

The operating loss improved from ($1.5) million in fiscal 2000 to ($1.0) million
in fiscal 2001.  The improvement was primarily due to the decrease in operating
expenses.

                                       10
<PAGE>

NET LOSS
--------

Net loss allocable to common stockholders for the three months ended January 31,
2001 was ($1.2) million, compared to a net loss allocable to common stockholders
of ($1.7) million for the same period in fiscal 2000.  Basic and diluted net
loss per share for the three months ended January 31, 2001 was ($.09), compared
to net loss per share of ($.17) in the first quarter of fiscal 2000 on weighted
average shares outstanding of 13.5 million and 10.0 million in the first three
months of fiscal 2001 and 2000, respectively.  Net loss allocable to common
stockholders included preferred stock dividends of $.1 million and $.2 million
in fiscal 2001 and 2000, respectively, including an assumed incremental yield of
$.1 million in fiscal 2000.

SEASONALITY OF BUSINESS
-----------------------

The bulk of the Company's current products are presently marketed for
agricultural applications in the northern hemisphere, where the growing season
generally runs from spring through fall. Because of the seasonal nature of its
business, the Company's product revenues are likely to be concentrated in the
fiscal quarters prior to and during a particular growing season, which may
result in substantial variations in quarter-to-quarter financial results.
Product sales from year-to-year are also affected by unusual weather conditions,
such as droughts or floods, and the level of insect pressure in grower areas.
In addition, commercial introduction of the Company's new products is contingent
on, among other factors, completion of field testing and receipt of required
regulatory approvals.  Unusual weather conditions during field tests or failure
to receive regulatory approvals prior to the growing season may require
additional field tests in subsequent growing seasons, with resulting delays in
product development and commercialization.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

During the first quarter of fiscal 2001, cash and cash equivalents declined $.2
million primarily due to payments on debt. The Company funded its operating loss
primarily through decreases in inventory and accounts receivable. During the
first quarter of fiscal 2001, the Company borrowed $.2 million pursuant to
promissory notes that are due on June 30,2001 and made principal payments on
debt of approximately $.4 million.

At January 31, 2001, the Company had limited liquid resources. At January
31,2001, current liabilities were $7.0 million and current assets were $2.6
million resulting in a working capital deficit of $4.4 million. Current
liabilities increased $.3 million from October 31,2000 due primarily to the
Company's inability to make timely payments. At January 31, 2001, the Company
had $3.1 million in accounts payable. Certain of these creditors have initiated
legal and other action for collection of amounts overdue. Included in current
liabilities at January 31, 2001 are net borrowings under debt facilities of $1.9
million.

During fiscal 2000, the Company obtained a $1.5 million variable rate secured
term loan with the Berkshire Bank, a financial institution controlled by a
principal stockholder of United Equities (Commodities) Corporation, one of the
Company's

                                       11
<PAGE>

principal stockholders. The maturity date of the Term Loan was extended to June
30, 2001 for all principal, interest and penalty payments. Further, subsequent
to October 31,2000, a corporation controlled by the principal stockholder loaned
the Company $.6 million pursuant to promissory notes ("the Notes") which are due
on June 30,2001 and bears interest at 12%.

On September 11, 2000, the Company's common stock was delisted from the Nasdaq
National Market ("NNM") as a result of the Company's failure to meet the NNM's
net tangible assets listing requirement.  As a result, dividends on the
Company's Series 2000-A and Series 1998-C Convertible Preferred Stock are
payable in cash, effective with the quarterly dividend payment date of September
30, 2000 and the semiannual dividend payment date of December 31, 2000,
respectively.  The Company no longer has the option to pay such dividends in
stock. Under Delaware Law, the Company is precluded from paying cash dividends
due to its deficit in stockholders' equity and therefore is in default of its
preferred stock

To date, the Company has not generated positive cash flow from operations. Since
its inception, the Company financed its working capital needs primarily through
private and public offerings of equity and debt securities, revenues from
research and development alliances and product sales. The Company has secured
borrowings under a working capital line of credit, which expires on April 30,
2001, and a term loan and notes that are due on June 30, 2001. The Company
currently is not in compliance with the covenants of its $5.0 million working
capital line of credit.  This line of credit has a balance of $.2 million as of
January 31, 2001. As a result of the Company's non-compliance with the
covenants, the working capital lender, at its option, may discontinue making
loans and liquidate the collateral including inventory and accounts receivable.

The Company continues to pursue the raising of additional funds and other
strategic initiatives including the sale of all or certain assets to improve its
working capital position. The Company has recently taken a number of steps to
conserve cash, including additional personnel reductions until it is able to
sell assets.  The Company needs to sell assets by June 30, 2001 to provide the
necessary cash resources to repay the outstanding balances under its line of
credit the Term Loan, the Notes, its accounts payable and fund operations.
Further the Company needs to continue to obtain short-term funding while it
negotiates its strategic transactions. At this time the Company is unable to
predict whether it will be successful in its efforts.  If the Company is not
successful in obtaining additional funding or selling assets, the Company will
not be able to continue as a going concern. Over the long-term, the Company's
liquidity is dependent on market acceptance of its products and technology. The
report of our independent auditors on the Company's consolidated financial
statements for the year ended October 31, 2000 included an explanatory paragraph
which stated that the recurring losses from operations, working capital
deficiency, net capital deficiency and limited liquid resources raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

                                       12
<PAGE>

Recently Issued Accounting Standards
------------------------------------

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.  SAB 101 required the Company to follow its guidance no later than
its fiscal year beginning November 1, 2000 through a cumulative effect of a
change in accounting principle.  Adoption of this standard did not have a
material impact on the Company's financial statements.

In June 1998, the Financial Accounting Standard Board issued Statement No. 133
"Accounting for Derivative Instruments and Hedging Activities" (FAS 133"). FAS
133 which was required to be adopted for the fiscal year beginning November 1,
2000. However, the Company has reviewed FAS 133 and because it does not use
derivatives, the adoption of FAS 133 did not effect the results of operations or
the financial position of the Company.

In April 2000, the Financial Accounting Standard Board Interpretation No. 44,
"Accounting for Certain Transactions Involving Stock Compensation-An
Interpretation of APB Opinion No. 25" ("FIN 44") was issued. Fin 44 clarifies
the application of APB No. 25 for certain issues. Among other issues, FIN 44
clarifies the definition of employee for purposes of applying APB no. 25, the
criteria for determining whether a plan qualifies as non-compensatory plan, the
accounting consequences of various modifications to the term of a previously
fixed stock option or award, and the accounting for an exchange of stock
compensation awards in a business combination. Fin 44 became effective July 1,
2000, but certain conclusions in this interpretation cover specific events that
occur after either December 15, 1998 or January 12, 2000. The adoption of FIN 44
did not have a significant effect on the Company's financial position or results
of operations.

Forward-Looking Statements
--------------------------

All statements contained in this management's discussion and analysis of
financial condition and results of operations other than statements of
historical information, are forward-looking statements. Forward-looking
statements include statements containing plans, objectives, goals, strategies,
future events or performance and underlying assumptions and other statements
which are other than historical facts. Although the Company believes that its
expectations are based on reasonable assumptions, the Company operates in a high
technology, emerging market environment that involves significant risks and
uncertainties which may cause actual results to vary from such forward-looking
statements and to vary significantly from reporting period to reporting period.
These risks include among others, those listed in "Factors That May Affect
Future Results", in the Company's Annual Report on Form 10K for the year ended
October 31, 2000, and other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission. The Company does not
undertake to update the results discussed herein as a result of changes in risks
or operating results.

                                       13
<PAGE>

PART II - OTHER INFORMATION

Item 6         Exhibits and reports in Form 8-K

(a)  Exhibits
(b)
Exhibit No.    Description
-----------    -----------

3.1            Restated Certificate of Incorporation of Ecogen Inc. (Form 10-Q
               for fiscal quarter ended January 31, 1996)*

3.2            By-laws of Ecogen Inc., as amended (Form S-1 Registration
               Statement, File No. 33-14119)*

3.3            Certificate of Designations, Preferences and Rights of Series
               1998-A Convertible Preferred Stock (Form 10-Q for fiscal quarter
               ended April 30, 1998)*

3.4            Certificate of Designations, Preferences and Rights of Series
               1998-C Convertible Preferred Stock (Form 8-K, dated September 2,
               1998)*

3.5            Certificate of Designations, Preferences and Rights of Series
               1999-A Convertible Preferred Stock (Form 10-Q, for fiscal quarter
               ended April 30, 1999)*

3.6            Certificate of Designations, Preferences and Rights of Series
               2000-A Convertible Preferred Stock (Form 10-K, for fiscal year
               ended October 31, 1999)*

10.153         Asset Purchase and License Agreement between Ecogen Inc. and
               Mycogen Corporation dated as of February 15, 2000 (Current Report
               on Form 8-K dated March 1, 2000)*

10.154         Stockholders Agreement between Ecogen Inc. and Mycogen
               Corporation dated February 15, 2000 (Current Report on Form 8-K
               dated March 1, 2000)*

10.155         Purchase and Sale Agreement between Ecogen Inc. and Dow
               AgroSciences LLC dated as of February 15, 2000 (Current Report on
               Form 8-K dated March 1, 2000)*

10.156         Convertible Preferred Stock Purchase Agreement between Ecogen
               Inc. and Amro International, S.A., Aspen International, Ltd. and
               Markham Holdings Limited dated as of February 14, 2000 (Form 10-Q
               for the fiscal quarter ended January 31,2000) *

10.157         Registration Rights Agreement between Ecogen Inc. and Amro
               International, S.A., Aspen International, Ltd. and Markham
               Holdings Limited dated as of February 14, 2000 (Form 10-Q for the
               fiscal quarter ended January 31,2000)*

                                       14
<PAGE>

10.158         International, S.A. dated February 14, 2000 (Form 10-Q for the
               fiscal quarter ended January 31,2000)*

10.159         Warrant Agreement between Ecogen Inc. and Aspen International,
               Ltd. dated February 14, 2000 (Form 10-Q for the fiscal quarter
               ended January 31,2000)*

10.160         Warrant Agreement between Ecogen Inc. and Markham Holdings
               Limited dated as of February 14, 2000 (Form 10-Q for the fiscal
               quarter ended January 31, 2000) *

10.161         Form of Demand Promissory Note to Momar Corporation (Form 10-K
               for the fiscal year ended October 31,2000) *


(b)  Current Reports on Form 8-K

               None

27  Financial Data Schedule



*  These items are hereby incorporated by reference from the exhibits of the
filing or report indicated and are made part of this Report.

                                       15
<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.


Date:  March 28, 2001


                                  ECOGEN INC.



                                  By: /s/ James P. Reilly, Jr
                                      -----------------------
                                      James P. Reilly, Jr.
                                      Chairman, Chief Executive
                                      Officer and Acting Chief Financial Officer





                                       16