<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                                       OR

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

FOR THE QUARTER ENDED JUNE 30, 2001              COMMISSION FILE NUMBER 0-19041


                       AMERICAN BIOGENETIC SCIENCES, INC.
             (Exact name of registrant as specified in its charter)

                DELAWARE                                     11-2655906
    (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                      Identification No.)

           1375 AKRON STREET                                631-789-2600
        COPIAGUE, NEW YORK 11726                         (Telephone number)
(Address of Principal Executive Offices)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days  YES [X] NO [ ]

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

             Class                               Outstanding at August 3, 2001
-------------------------------------            -----------------------------
Class A Common Stock, par value $.001                      41,339,222
Class B Common Stock, par value $.001                       3,000,000
<PAGE>   2
               AMERICAN BIOGENETIC SCIENCES, INC. AND SUBSIDIARIES
                          (a development stage company)

                  Form 10-Q for the Quarter Ended June 30, 2001

                                      INDEX

<TABLE>
<CAPTION>
Part I - FINANCIAL INFORMATION

Item 1:  Financial Statements:                                                  Page No.
                                                                                --------
<S>                                                                             <C>
             Consolidated Balance Sheets -
                June 30, 2001 and December 31, 2000                                 3
             Consolidated Statements of Operations -
                Three and Six Months Ended June 30, 2001 and June 30, 2000
                and For the Period from Inception (September 1, 1983)
                Through June 30, 2001                                               4
             Consolidated Statements of Cash Flows -
                Six Months Ended June 30, 2001 and June 30, 2000 and
                For the Period from Inception (September 1, 1983)
                Through June 30, 2001                                               5
             Consolidated Statements of Stockholders' Equity -
                For the Period from Inception (September 1, 1983)
                Through June 30, 2001                                             6 - 9
          Notes to Consolidated Financial Statements                             10 - 12

Item 2:  Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                                  13 - 16

Item 3:  Quantitative and Qualitative Disclosures about Market Risk                17

Part II - OTHER INFORMATION

Item 2:  Changes in Securities                                                     18
Item 4.  Submission of Matters to Vote of Security Holders                       18 - 19
Item 5.  Other Information                                                         19
Item 6:  Exhibits and Reports on Form 8-K                                          19
          Signature                                                                20
</TABLE>

                                     Page 2
<PAGE>   3
               AMERICAN BIOGENETIC SCIENCES, INC AND SUBSIDIARIES
                          (a development stage company)

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                        June 30,         December 31,
                                                                                          2001               2000
                                                                                      ------------       ------------
                                                                                       (Unaudited)
<S>                                                                                   <C>                <C>
                                        ASSETS

CURRENT ASSETS:
 Cash and cash equivalents                                                            $  1,268,000       $  1,194,000
 Accounts receivable                                                                        17,000            146,000
 Inventories                                                                               297,000            531,000
 Other current assets                                                                       18,000             74,000
                                                                                      ------------       ------------
   Total current assets                                                                  1,600,000          1,945,000
                                                                                      ------------       ------------
Fixed assets, net of accumulated depreciation of $1,935,000 and $1,958,000,
  respectively                                                                             129,000            477,000
Patent costs, net of accumulated amortization of $737,000 and
  $633,000, respectively                                                                 2,012,000          1,967,000
Intangible assets, net                                                                          --            599,000
Other assets                                                                                34,000             98,000
                                                                                      ------------       ------------
                                                                                      $  3,775,000       $  5,086,000
                                                                                      ============       ============

                         LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                                               $    961,000       $    368,000
  Current portion of capital lease obligation                                               16,000             16,000
  Current portion of notes payable                                                         230,000            184,000
                                                                                      ------------       ------------
     Total current liabilities                                                           1,207,000            568,000
                                                                                      ------------       ------------
LONG TERM LIABILITIES:
  Notes payable, less current portion                                                           --              7,000
  Capital lease obligation                                                                  66,000             71,000
                                                                                      ------------       ------------
     Total liabilities                                                                   1,273,000            646,000
                                                                                      ------------       ------------

STOCKHOLDERS' EQUITY:

 Series A convertible preferred stock, par value $.001 per share 10,000,000
   shares authorized; 7,000 shares issued and outstanding (liquidation
   preference of $3,500,000)                                                                    --                 --
 Class A common stock, par value $.001 per share; 150,000,000 shares authorized;
   41,339,222 and 41,027,255 shares issued and outstanding, respectively                    41,000             41,000
 Class B common stock, par value $.001 per share; 3,000,000 shares authorized;
   3,000,000 shares issued and outstanding                                                   3,000              3,000
 Additional paid-in capital                                                             73,104,000         72,935,000
 Deficit accumulated during the development stage                                      (70,646,000)       (68,539,000)
                                                                                      ------------       ------------
   Total stockholders' equity                                                            2,502,000          4,440,000
                                                                                      ------------       ------------
                                                                                      $  3,775,000       $  5,086,000
                                                                                      ------------       ------------
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.


                                     Page 3
<PAGE>   4
               AMERICAN BIOGENETIC SCIENCES, INC AND SUBSIDIARIES
                          (a development stage company)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended                   Six Months Ended
                                             -------------------------------     -------------------------------
                                                                                                                    For the Period
                                                                                                                    From Inception
                                                                                                                     (September 1,
                                                                                                                     1983) Through
                                             June 30, 2001     June 30, 2000     June 30, 2001     June 30, 2000     June 30, 2001
                                             -------------     -------------     -------------     -------------     -------------
<S>                                          <C>               <C>               <C>               <C>              <C>
REVENUES:
 Sales                                        $    363,000      $    461,000      $    851,000      $    844,000      $  5,188,000
 Royalties / license fees                            1,000                --             2,000           500,000         1,504,000
 Collaborative agreements                               --            15,000            34,000            91,000           575,000
                                              ------------      ------------      ------------      ------------      ------------
                                                   364,000           476,000           887,000         1,435,000         7,267,000

COSTS AND EXPENSES:
  Cost of sales                                    121,000           132,000           313,000           288,000         2,025,000
  Research and development                         227,000           328,000           558,000           589,000        32,415,000
  Selling, general and administrative              930,000         1,099,000         1,831,000         2,158,000        39,653,000
  Facility consolidation cost                           --                --                --                --           252,000
                                              ------------      ------------      ------------      ------------      ------------
  Loss from operations                            (914,000)       (1,083,000)       (1,815,000)       (1,600,000)      (67,078,000)
                                              ============      ============      ============      ============      ============

OTHER INCOME (EXPENSE):
  Interest expense                                 (13,000)           (1,000)          (15,000)          (12,000)       (4,406,000)
  Net gain on sale of fixed assets                      --                --             2,000                --            13,000
  Net loss on sale of business                    (288,000)               --          (288,000)               --          (288,000)
  Investment income, net                             1,000            50,000             9,000            80,000         4,703,000
                                              ------------      ------------      ------------      ------------      ------------
Loss before extraordinary charge                (1,214,000)       (1,034,000)       (2,107,000)       (1,532,000)      (67,056,000)

Extraordinary charge for early retirement
  of debentures, net                                    --                --                --                --        (1,140,000)
                                              ------------      ------------      ------------      ------------      ------------
NET LOSS                                        (1,214,000)       (1,034,000)       (2,107,000)       (1,532,000)      (68,196,000)

Preferred stock dividend related to
warrants                                                --                --                --        (2,450,000)       (2,450,000)
                                              ------------      ------------      ------------      ------------      ------------

Net loss attributable to common
stockholders                                  ($ 1,214,000)     ($ 1,034,000)     ($ 2,107,000)     ($ 3,982,000)     ($70,646,000)
                                              ============      ============      ============      ============      ============

PER SHARE INFORMATION (NOTE 4):

Basic and Diluted net loss per share          ($       .03)     ($       .02)     ($       .05)     ($       .09)
                                              ============      ============      ============      ============

Common shares used in computing per share
  amounts:
  Basic and Diluted                             44,339,000        43,767,000        44,173,000        42,948,000
                                              ============      ============      ============      ============
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.


                                     Page 4
<PAGE>   5
               AMERICAN BIOGENETIC SCIENCES, INC AND SUBSIDIARIES
                          (a development stage company)
                CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)

<TABLE>
<CAPTION>
                                                                        Six Months Ended           For the Period From Inception
                                                                --------------------------------    (September 1, 1983) Through
                                                                June 30, 2001      June 30, 2000           June, 30 2001
                                                                -------------      -------------   -----------------------------
<S>                                                             <C>                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                               ($ 2,107,000)      ($ 1,532,000)           ($68,196,000)
Adjustments to reconcile net (loss) to net cash
provided by or (used) in operating activities:
   Depreciation and amortization                                     183,000            163,000               3,551,000
   Net gain on sale of fixed assets                                   (2,000)                --                 (13,000)
   Net loss on sale of business                                      288,000                 --                 288,000
   Net gain on sale of marketable securities                              --                 --                (217,000)
   Other noncash expenses accrued primarily for stocks
     and warrants                                                     57,000            154,000               2,926,000
   Amortization of debt discount included in interest
     expense                                                              --                 --               2,160,000
   Extraordinary loss on repurchase of debt                               --                 --               1,140,000
   Write-off of patent costs                                              --                 --                  93,000
 CHANGES IN OPERATING ASSETS AND LIABILITIES NET OF EFFECT
   OF SALE OF BUSINESS:
   (Increase) decrease in accounts receivable                       (104,000)          (105,000)               (142,000)
   (Increase) decrease in inventories                                (40,000)           (27,000)               (413,000)
   (Increase) decrease in other current assets                        56,000             11,000                 (18,000)
   (Increase) decrease in other assets                                 7,000                 --                  65,000
   Increase (decrease) in accounts payable and accrued
     expenses                                                        636,000         (1,023,000)              1,388,000
   Increase in interest payable to stockholder                            --              8,000                 120,000
                                                                ----------------------------------------------------------------
          Net cash provided by (used) in operating
            activities                                            (1,026,000)        (2,351,000)            (57,268,000)
                                                                ----------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:

  Capital expenditures                                                (6,000)            (2,000)             (2,094,000)
  Proceeds from sale of fixed assets                                   2,000                 --                  24,000
  Payments for patent costs and other assets                        (149,000)           (94,000)             (2,819,000)
  Proceeds from sale of business                                   1,200,000                 --               1,200,000
  Business acquisition, net of stock issued and cash
    acquired                                                              --                 --                (119,000)
  Proceeds from maturity and sale of marketable securities                --                 --              67,549,000
  Purchases of marketable securities                                      --                 --             (67,332,000)
                                                                ----------------------------------------------------------------
          Net cash provided by (used in) investing
            activities                                             1,047,000            (96,000)             (3,591,000)
                                                                ----------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:

  Payments to debentureholders                                            --                 --              (2,246,000)
  Proceeds from issuance of common stock, net                         19,000          2,691,000              42,898,000
  Proceeds from issuance of Series A convertible
    preferred stock                                                       --          3,000,000               3,000,000
  Proceeds from issuance of 5% convertible debentures, net                --                 --               3,727,000
  Proceeds from issuance of 7% convertible debentures, net                --                 --               8,565,000
  Proceeds from issuance of 8% convertible debentures, net                --                 --               7,790,000
  Principal payments under capital lease obligation and
    notes payable                                                    (96,000)           (15,000)               (246,000)
  Redemption of 8% convertible debentures                                 --                 --                (500,000)
  Repurchase of 5% convertible debentures                                 --                 --              (3,852,000)
  Capital contributions from chairman                                     --                 --               1,000,000
  Increase in loans payable to stockholder / affiliates              130,000             81,000               3,582,000
  Repayment of loans payable to stockholder / affiliates
   (remainder contributed to capital by the stockholder)                  --           (291,000)             (1,591,000)
                                                                ----------------------------------------------------------------
          Net cash provided by (used in) financing
            activities                                                53,000          5,466,000              62,127,000
                                                                ----------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  74,000          3,019,000               1,268,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                   1,194,000             93,000                      --
                                                                ----------------------------------------------------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                      $  1,268,000       $  3,112,000            $  1,268,000
                                                                ----------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
  Capital expenditure made under capital lease obligation                 --                 --            $    107,000
                                                                ----------------------------------------------------------------
  Convertible debentures converted into 0, 0 and
    10,470,583 shares of Common Stock, respectively                       --                 --            $ 14,658,000
                                                                ----------------------------------------------------------------
  Warrants issued                                                         --       $  2,792,000            $  3,380,000
                                                                ----------------------------------------------------------------
  Conversion of stockholder loan to preferred stock or
    paid-in capital                                                       --       $    500,000            $  1,981,000
                                                                ----------------------------------------------------------------
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.


                                     Page 5
<PAGE>   6
               AMERICAN BIOGENETIC SCIENCES, INC AND SUBSIDIARIES
                          (a development stage company)
           CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (unaudited)

<TABLE>
<CAPTION>

                                                                                 Class A                       Class B
                                                             Per               Common Stock                  Common Stock
                                                            Share
                                                            Amount         Shares        Dollars         Shares        Dollars
                                                         -----------    -----------    -----------    -----------    -----------
<S>                                                      <C>            <C>            <C>            <C>            <C>
BALANCE, AT INCEPTION,  (SEPTEMBER 1, 1983)              $                       --    $        --             --    $        --

  Sale of common stock to chairman for cash                      .33         78,000             --             --             --
  Net (loss) for the period                                                      --             --             --             --
                                                                        --------------------------------------------------------
BALANCE, DECEMBER 31, 1983                                                   78,000             --             --             --
                                                                        --------------------------------------------------------

  Sale of common stock to chairman for cash                      .33        193,500             --             --             --
  Net (loss) for the period                                                      --             --             --             --
                                                                        --------------------------------------------------------
BALANCE, DECEMBER 31, 1984                                                  271,500             --             --             --
                                                                        --------------------------------------------------------

  Sale of common stock to chairman for cash                      .33        276,700          1,000             --             --
  Net (loss) for the period                                                      --             --             --             --
                                                                        --------------------------------------------------------
BALANCE, DECEMBER 31, 1985                                                  548,200          1,000             --             --
                                                                        --------------------------------------------------------

  Sale of common stock to chairman for cash                      .33        404,820             --             --             --
  Net (loss) for the period                                                      --             --             --             --
                                                                        --------------------------------------------------------
BALANCE, DECEMBER 31, 1986                                                  953,020          1,000             --             --
                                                                        --------------------------------------------------------

  Sale of common stock to chairman for cash                      .33         48,048             --             --             --
  Net (loss) for the period                                                      --             --             --             --
                                                                        --------------------------------------------------------
BALANCE, DECEMBER 31, 1987                                                1,001,068          1,000             --             --
                                                                        --------------------------------------------------------

  Exchange of common stock for Class B stock                             (1,001,068)        (1,000)     1,001,068          1,000
  Sale of Class B stock to chairman for cash                     .33             --             --      1,998,932          2,000
  Net (loss) for the period                                                      --             --             --             --
                                                                        --------------------------------------------------------
BALANCE, DECEMBER 31, 1988                                                       --             --      3,000,000          3,000
                                                                        --------------------------------------------------------

  Net (loss) for the period                                                      --             --             --             --
                                                                        --------------------------------------------------------
BALANCE, DECEMBER 31, 1989                                                       --             --      3,000,000          3,000
                                                                        --------------------------------------------------------
  Conversion of loans payable to stockholder into
    additional paid-in capital                                                   --             --             --             --
  Sale of 1,150,000 Units to public consisting of
    3,450,000 shares of Class A common stock and
    warrants (net of $1,198,000 underwriting expenses)          2.00      3,450,000          3,000             --             --
  Conversion of Class B stock into
    Class A stock                                                           668,500          1,000       (668,500)        (1,000)
  Net (loss) for the period                                                      --             --             --             --
                                                                        --------------------------------------------------------
BALANCE, DECEMBER 31, 1990                                                4,118,500    $     4,000      2,331,500    $     2,000
                                                                        --------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                          Deficit
                                                                        Accumulated
                                                         Additional      During the
                                                           Paid-in      Development
                                                           Capital         Stage          Total
                                                         -----------    -----------    -----------
<S>                                                      <C>            <C>            <C>
BALANCE, AT INCEPTION,  (SEPTEMBER 1, 1983)              $        --    $        --    $        --

  Sale of common stock to chairman for cash                   26,000             --         26,000
  Net (loss) for the period                                       --        (25,000)       (25,000)
                                                         -----------------------------------------
BALANCE, DECEMBER 31, 1983                                    26,000        (25,000)         1,000
                                                         -----------------------------------------

  Sale of common stock to chairman for cash                   65,000             --         65,000
  Net (loss) for the period                                       --       (242,000)      (242,000)
                                                         -----------------------------------------
BALANCE, DECEMBER 31, 1984                                    91,000       (267,000)      (176,000)
                                                         -----------------------------------------

  Sale of common stock to chairman for cash                   92,000             --         93,000
  Net (loss) for the period                                       --       (305,000)      (305,000)
                                                         -----------------------------------------
BALANCE, DECEMBER 31, 1985                                   183,000       (572,000)      (388,000)
                                                         -----------------------------------------

  Sale of common stock to chairman for cash                  134,000             --        134,000
  Net (loss) for the period                                       --       (433,000)      (433,000)
                                                         -----------------------------------------
BALANCE, DECEMBER 31, 1986                                   317,000     (1,005,000)      (687,000)
                                                         -----------------------------------------

  Sale of common stock to chairman for cash                   16,000             --         16,000
  Net (loss) for the period                                       --       (730,000)      (730,000)
                                                         -----------------------------------------
BALANCE, DECEMBER 31, 1987                                   333,000     (1,735,000)    (1,401,000)
                                                         -----------------------------------------

  Exchange of common stock for Class B stock                      --             --             --
  Sale of Class B stock to chairman for cash                 664,000             --        666,000
  Net (loss) for the period                                       --     (1,031,000)    (1,031,000)
                                                         -----------------------------------------
BALANCE, DECEMBER 31, 1988                                   997,000     (2,766,000)    (1,766,000)
                                                         -----------------------------------------

  Net (loss) for the period                                       --     (1,522,000)    (1,522,000)
                                                         -----------------------------------------
BALANCE, DECEMBER 31, 1989                                   997,000     (4,288,000)    (3,288,000)
                                                         -----------------------------------------
  Conversion of loans payable to stockholder into
    additional paid-in capital                             1,481,000             --      1,481,000
  Sale of 1,150,000 Units to public consisting of
    3,450,000 shares of Class A common stock and
    warrants (net of $1,198,000 underwriting expenses)     5,699,000             --      5,702,000
  Conversion of Class B stock into
    Class A stock                                                 --             --             --
  Net (loss) for the period                                       --     (2,100,000)    (2,100,000)
                                                         -----------------------------------------
BALANCE, DECEMBER 31, 1990                               $ 8,177,000    ($6,388,000)   $ 1,795,000
                                                         -----------------------------------------
</TABLE>

                                     Page 6
<PAGE>   7
               AMERICAN BIOGENETIC SCIENCES, INC AND SUBSIDIARIES
                          (a development stage company)
                 CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
                             (unaudited) (continued)

<TABLE>
<CAPTION>

                                                                                 Class A                        Class B
                                                             Per               Common Stock                   Common Stock
                                                            Share
                                                            Amount         Shares         Dollars        Shares          Dollars
                                                         ------------   ------------   ------------   ------------    ------------
<S>                                                      <C>            <C>            <C>            <C>             <C>
BALANCE, DECEMBER 31, 1990                               $                 4,118,500   $      4,000      2,331,500    $      2,000

  Exercise of Class A Warrants (net of $203,000
    in underwriting expenses) for cash                           3.00      3,449,955          3,000             --              --
  Exercise of Class B Warrants for cash                          4.50         79,071             --             --              --
  Conversion of Class B stock
    into Class A stock                                                       850,000          1,000       (850,000)         (1,000)
  Exercise of stock options                                      2.00        417,750          1,000             --              --
  Fair Value for warrants issued                                                  --             --             --              --
  Net (loss) for the period                                                       --             --             --              --
                                                                        ----------------------------------------------------------
BALANCE, DECEMBER 31, 1991                                                 8,915,276          9,000      1,481,500           1,000
                                                                        ----------------------------------------------------------
  Exercise of Class B Warrants (net of $701,000
    in underwriting expenses) for cash                           4.50      3,370,884          3,000             --              --
  Conversion of Class B stock
    into Class A stock                                                       106,000             --       (106,000)             --
  Exercise of stock options                                      2.49        348,300          1,000             --              --
  Net (loss) for the period                                                       --             --             --              --
                                                                        ----------------------------------------------------------
BALANCE, DECEMBER 31, 1992                                                12,740,460         13,000      1,375,500           1,000
                                                                        ----------------------------------------------------------
  Sale of common stock to Medeva PLC                             7.50        200,000             --             --              --
  Exercise of stock options                                      2.00         32,700             --             --              --
  Net (loss) for the period                                                       --             --             --              --
                                                                        ----------------------------------------------------------
BALANCE, DECEMBER 31, 1993                                                12,973,160         13,000      1,375,500           1,000
                                                                        ----------------------------------------------------------
  Exercise of stock options                                      2.16         91,250             --             --              --
  Net (loss) for the period                                                       --             --             --              --
                                                                        ----------------------------------------------------------
BALANCE, DECEMBER 31, 1994                                                13,064,410         13,000      1,375,500           1,000
                                                                        ----------------------------------------------------------
  Conversion of 8% convertible debentures into
    Class A Common Stock                                         1.85        354,204             --             --              --
  Exercise of stock options                                      1.82         12,750             --             --              --
Fair Value for warrants/options issued                                            --             --             --              --
  Net (loss) for the period                                                       --             --             --              --
                                                                        ----------------------------------------------------------
BALANCE, DECEMBER 31, 1995                                                13,431,364   $     13,000      1,375,500    $      1,000
                                                                        ----------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                           Deficit
                                                                         Accumulated
                                                          Additional      During the
                                                           Paid-in       Development
                                                           Capital          Stage           Total
                                                         ------------    ------------    ------------
<S>                                                      <C>             <C>             <C>
BALANCE, DECEMBER 31, 1990                               $  8,177,000    ($ 6,388,000)   $  1,795,000

  Exercise of Class A Warrants (net of $203,000
    in underwriting expenses) for cash                     10,143,000              --      10,146,000
  Exercise of Class B Warrants for cash                       356,000              --         356,000
  Conversion of Class B stock
    into Class A stock                                             --              --              --
  Exercise of stock options                                   835,000              --         836,000
  Fair Value for warrants issued                              900,000              --         900,000
  Net (loss) for the period                                        --      (4,605,000)     (4,605,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1991                                 20,411,000     (10,993,000)      9,428,000
                                                         --------------------------------------------
  Exercise of Class B Warrants (net of $701,000
    in underwriting expenses) for cash                     14,465,000              --      14,468,000
  Conversion of Class B stock
    into Class A stock                                             --              --              --
  Exercise of stock options                                   865,000              --         866,000
  Net (loss) for the period                                        --      (4,016,000)     (4,016,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1992                                 35,741,000     (15,009,000)     20,746,000
                                                         --------------------------------------------
  Sale of common stock to Medeva PLC                        1,500,000              --       1,500,000
  Exercise of stock options                                    65,000              --          65,000
  Net (loss) for the period                                        --      (6,521,000)     (6,521,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1993                                 37,306,000     (21,530,000)     15,790,000
                                                         --------------------------------------------
  Exercise of stock options                                   197,000              --         197,000
  Net (loss) for the period                                        --      (7,431,000)     (7,431,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1994                                 37,503,000     (28,961,000)      8,556,000
                                                         --------------------------------------------
  Conversion of 8% convertible debentures into
    Class A Common Stock                                      571,000              --         571,000
  Exercise of stock options                                    23,000              --          23,000
Fair Value for warrants/options issued                        602,000              --         602,000
  Net (loss) for the period                                        --      (5,607,000)     (5,607,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1995                               $ 38,699,000    ($34,568,000)   $  4,145,000
                                                         --------------------------------------------
</TABLE>

                                     Page 7
<PAGE>   8
               AMERICAN BIOGENETIC SCIENCES, INC AND SUBSIDIARIES
                          (a development stage company)
     CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (unaudited) (continued)


<TABLE>
<CAPTION>

                                                                                 Class A                       Class B
                                                             Per               Common Stock                  Common Stock
                                                            Share
                                                            Amount         Shares         Dollars        Shares         Dollars
                                                         ------------   ------------   ------------   ------------   ------------
<S>                                                      <C>            <C>            <C>            <C>            <C>
BALANCE, DECEMBER 31, 1995                                                13,431,364   $     13,000      1,375,500   $      1,000

  Conversion of 8% convertible debentures into
    Class A Common Stock                                         2.74      2,269,755   $      2,000             --             --
  Exercise of stock options                                      2.53        569,875          1,000             --             --
  Fair Value for warrants/options issued                                          --             --             --             --
  Discount on 7% convertible debentures                                           --             --             --             --
  Net (loss) for the period                                                       --             --             --             --
                                                                        ---------------------------------------------------------
BALANCE, DECEMBER 31, 1996                                                16,270,994         16,000      1,375,500          1,000
                                                                        ---------------------------------------------------------
  Conversion of 7% and 8% convertible debentures into
    Class A Common Stock                                         2.93      2,995,006          3,000             --             --
  Sale of Class B Common Stock to Chairman for cash              2.23             --             --        350,000          1,000
  Exercise of stock options                                      2.00         27,500             --             --             --
  Fair Value for warrants issued                                                  --             --             --             --
  Class A Common Stock issued                                    3.12         48,117             --             --             --
  Net (loss) for the period                                                       --             --             --             --
                                                                        ---------------------------------------------------------
BALANCE, DECEMBER 31, 1997                                                19,341,617         19,000      1,725,500          2,000
                                                                        ---------------------------------------------------------
  Conversion of 5%, 7% and 8% convertible debentures
    into Class A Common Stock                                     .32      4,851,618          5,000             --             --
  Sale of Class B Common Stock to Chairman for cash               .37             --             --      1,274,500          1,000
  Exercise of stock options                                      1.75          4,000             --             --             --
  Fair Value for warrants issued                                                  --             --             --             --
  Class A Common Stock issued                                    1.06        163,915             --             --             --
  Class A Common Stock issued for Stellar                        1.76        398,406          1,000             --             --
  Class A Common Stock issued for Private Placement               .25     10,800,000         11,000             --             --
  Discount on 5% convertible debentures                                           --             --             --             --
  Net (loss) for the period                                                       --             --             --             --
                                                                        ---------------------------------------------------------
BALANCE, DECEMBER 31, 1998                                                35,559,556         36,000      3,000,000          3,000
                                                                        ---------------------------------------------------------
  Sale of Class A Common Stock to Chairman for cash              1.13        440,000             --             --             --
  Exercise of stock options                                       .61          5,250             --             --             --
  Fair Value for warrants issued                                                  --             --             --             --
  Class A Common Stock issued                                     .50        913,704          1,000             --             --
  Net (loss) for the period                                                       --             --             --             --
                                                                        ---------------------------------------------------------
BALANCE, DECEMBER 31, 1999                                                36,918,510   $     37,000      3,000,000   $      3,000
                                                                        ---------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                           Deficit
                                                                         Accumulated
                                                          Additional      During the
                                                           Paid-in       Development
                                                           Capital          Stage           Total
                                                         ------------    ------------    ------------
<S>                                                      <C>            <C>            <C>
BALANCE, DECEMBER 31, 1995                               $ 38,699,000    ($34,568,000)   $  4,145,000

  Conversion of 8% convertible debentures into
    Class A Common Stock                                    5,483,000              --       5,485,000
  Exercise of stock options                                 1,438,000              --       1,439,000
  Fair Value for warrants/options issued                      330,000              --         330,000
  Discount on 7% convertible debentures                     1,843,000              --       1,843,000
  Net (loss) for the period                                        --      (7,700,000)     (7,700,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1996                                 47,793,000     (42,268,000)      5,542,000
                                                         --------------------------------------------
  Conversion of 7% and 8% convertible debentures into
    Class A Common Stock                                    7,152,000              --       7,155,000
  Sale of Class B Common Stock to Chairman for cash           778,000              --         779,000
  Exercise of stock options                                    55,000              --          55,000
  Fair Value for warrants issued                              149,000              --         149,000
  Class A Common Stock issued                                 150,000              --         150,000
  Net (loss) for the period                                        --      (7,147,000)     (7,147,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1997                                 56,077,000     (49,415,000)      6,683,000
                                                         --------------------------------------------
  Conversion of 5%, 7% and 8% convertible debentures
    into Class A Common Stock                               1,442,000              --       1,447,000
  Sale of Class B Common Stock to Chairman for cash           465,000              --         466,000
  Exercise of stock options                                     7,000              --           7,000
  Fair Value for warrants issued                              205,000              --         205,000
  Class A Common Stock issued                                 174,000              --         174,000
  Class A Common Stock issued for Stellar                     699,000              --         700,000
  Class A Common Stock issued for Private Placement         2,689,000              --       2,700,000
  Discount on 5% convertible debentures                       762,000              --         762,000
  Net (loss) for the period                                        --      (7,548,000)     (7,548,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1998                                 62,520,000     (56,963,000)      5,596,000
                                                         --------------------------------------------
  Sale of Class A Common Stock to Chairman for cash           495,000              --         495,000
  Exercise of stock options                                     3,000              --           3,000
  Fair Value for warrants issued                              376,000              --         376,000
  Class A Common Stock issued                                 458,000              --         459,000
  Net (loss) for the period                                        --      (5,351,000)     (5,351,000)
                                                         --------------------------------------------
BALANCE, DECEMBER 31, 1999                               $ 63,852,000    ($62,314,000)   $  1,578,000
                                                         --------------------------------------------
</TABLE>

                                     Page 8
<PAGE>   9
               AMERICAN BIOGENETIC SCIENCES, INC AND SUBSIDIARIES
                          (a development stage company)
                 CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
                             (unaudited) (continued)

<TABLE>
<CAPTION>

                                                                                   Class A                        Class B
                                                              Per                Common Stock                   Common Stock
                                                             Share
                                                             Amount          Shares         Dollars         Shares        Dollars
                                                         --------------   ------------   ------------   ------------   ------------
<S>                                                      <C>            <C>            <C>            <C>            <C>

BALANCE, DECEMBER 31, 1999                               $                  36,918,510   $     37,000      3,000,000   $      3,000

  Sale of Series A Convertible Preferred Stock
    (7,000 shares)                                                                  --             --             --             --
  Warrants issued with the Convertible Preferred Stock                              --             --             --             --
  Preferred stock dividend related to warrants                                      --             --             --             --
  Exercise of stock options and warrants                            .97      1,278,675          1,000             --             --
  Fair Value for warrants issued                                                    --             --             --             --
  Class A Common Stock issued                                       .55      2,830,070          3,000             --             --
  Net (loss) for the period                                                         --             --             --             --
                                                                          ---------------------------------------------------------
BALANCE, DECEMBER 31, 2000                                                  41,027,255         41,000      3,000,000          3,000
                                                                          ---------------------------------------------------------
  Exercise of stock options                                         .25         75,000             --             --             --
  Class A Common Stock issued                                       .63        236,967             --             --             --
  Net (loss) for the period                                                         --             --             --             --
                                                                          ---------------------------------------------------------
BALANCE, JUNE 30, 2001                                                      41,339,222   $     41,000      3,000,000   $      3,000
                                                                          ---------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                             Deficit
                                                                           Accumulated
                                                            Additional      During the
                                                             Paid-in       Development
                                                             Capital          Stage           Total
                                                           ------------    ------------    ------------
<S>                                                      <C>            <C>            <C>

BALANCE, DECEMBER 31, 1999                                 $ 63,852,000    ($62,314,000)   $  1,578,000

  Sale of Series A Convertible Preferred Stock
    (7,000 shares)                                            3,500,000              --       3,500,000
  Warrants issued with the Convertible Preferred Stock        2,450,000              --       2,450,000
  Preferred stock dividend related to warrants                       --      (2,450,000)     (2,450,000)
  Exercise of stock options and warrants                      1,234,000              --       1,235,000
  Fair Value for warrants issued                                342,000              --         342,000
  Class A Common Stock issued                                 1,557,000              --       1,560,000
  Net (loss) for the period                                          --      (3,775,000)     (3,775,000)
                                                           --------------------------------------------
BALANCE, DECEMBER 31, 2000                                   72,935,000     (68,539,000)      4,440,000
                                                           --------------------------------------------
  Exercise of stock options                                      19,000              --          19,000
  Class A Common Stock issued                                   150,000              --         150,000
  Net (loss) for the period                                          --      (2,107,000)     (2,107,000)
                                                           --------------------------------------------
BALANCE, JUNE 30, 2001                                     $ 73,104,000    ($70,646,000)   $  2,502,000
                                                           --------------------------------------------
</TABLE>

  The accompanying notes are an integral part of these consolidated statements.


                                     Page 9
<PAGE>   10
               AMERICAN BIOGENETIC SCIENCES, INC. AND SUBSIDIARIES
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                  June 30, 2001

(1)      INTERIM FINANCIAL STATEMENTS

         The interim unaudited consolidated financial statements presented
herein have been prepared in accordance with generally accepted accounting
principles for interim financial statements and with the instructions to Form
10-Q and Regulation S-X pertaining to interim financial statements. Accordingly,
they do not include all information and footnotes required by generally accepted
accounting principles for complete financial statements. The interim financial
statements presented herein reflect all adjustments (consisting of normal
recurring adjustments and accruals) which, in the opinion of management, are
necessary for a fair presentation of financial position as of June 30, 2001 and
results of operations for the three and six months ended June 30, 2001 and June
30, 2000. The Company's financial statements should be read in conjunction with
the summary of significant accounting policies and the notes to consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2000. The results of operations for the three and
six months ended June 30, 2001 are not necessarily indicative of the results for
the full year.

(2)      SALE OF BUSINESS

         On June 29, 2001, the Company and its wholly owned subsidiary, Stellar
Bio Systems, Inc. ("Stellar"), completed the sale of Stellar's in vitro
immunoflourescent antibody slide format assay business and Stellar's mouse serum
business (collectively, the "Stellar Business") to PanBio InDx Inc. ("PanBio
InDx"), a wholly owned subsidiary of PanBio Limited, an Australian company. The
Company and Stellar received a purchase price of $1.2 million cash paid at
closing and the right to receive up to an additional $540,000, payable quarterly
over three years, based on revenues of certain portions of the Stellar Business.
Assets sold in the transaction included rights to specified products, rights
under certain contracts and leases, inventory, accounts receivable and
intellectual property related to the Stellar Business, rights to the name
"Stellar", certain computer hardware and software and other tangible assets and
goodwill. PanBio InDx assumed certain liabilities of the Stellar Business,
including accounts payable. The Company recorded a loss on the sale of $288,000,
which included the write-off of $705,000 of unamortized goodwill. Any future
quarterly receipts will be recorded as gains on the sale.

         In connection with the sale of the assets, the Company entered into a
Manufacture and Supply Agreement with PanBio InDx and PanBio Limited, pursuant
to which PanBio InDx will manufacture the Company's thrombus precursor protein
diagnostic test kit for annual periods that may be terminated on notice given at
least 45 days prior to the end of the term.

         The following unaudited pro forma summary presents information as if
the Stellar Business had been sold as of December 31, 2000 and 1999. The pro
forma amounts include certain adjustments, primarily to the elimination of
Stellar results of operations and deferred payments based on a portion of
Stellar revenue.


                                    Page 10
<PAGE>   11
Pro forma information does not necessarily reflect the actual results that would
have occurred nor is it necessarily indicative of future results of operations
of the Company:

                 PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                        Three Months Ended                     Six Months Ended
                                                 June 30, 2001      June 30, 2000      June 30, 2001      June 30, 2000
                                                 -------------      -------------      -------------      -------------
<S>                                              <C>                <C>                <C>                <C>
Total Revenue                                    $      29,000      $      72,000      $     119,000      $     682,000
                                                 -------------      -------------      -------------      -------------

Costs and expenses:
   Cost of sales                                         6,000              3,000              7,000              4,000
   Research and development                            195,000            302,000            483,000            528,000
   Selling, general and administrative                 785,000            937,000          1,521,000          1,842,000

Other Income (Expense), Net:                            (1,000)            61,000             27,000             91,000
                                                 -------------      -------------      -------------      -------------
Net loss                                              (958,000)        (1,109,000)        (1,865,000)        (1,601,000)
Preferred stock dividend related to warrants                --                 --                 --         (2,450,000)
                                                 -------------      -------------      -------------      -------------
Net loss attributable to common stockholders         ($958,000)       ($1,109,000)       ($1,865,000)       ($4,051,000)
                                                 =============      =============      =============      =============

Net Loss Per Common Share
  Basic and Diluted net loss per share                   ($.02)             ($.03)             ($.04)             ($.09)
   Basic and Diluted                                44,339,000         43,767,000         44,173,000         42,948,000
</TABLE>

(3)      LIQUIDITY AND FINANCING

         As of June 30, 2001, the Company had working capital of $393,000
compared to a working capital of $1,377,000 as of December 31, 2000.
Additionally, the Company had cash and cash equivalents of $1,268,000 at June
30, 2001. During the second quarter of 2001, the Company implemented a cash
conservation program whereby executive officers deferred 50% to 100% of their
salaries and certain consultants deferred their compensation. In addition the
Chairman, Mr. Roach, loaned the Company $130,000, which is included in current
liabilities as of June 30, 2001. On June 29, 2001, the Company sold the Stellar
Business for proceeds of $1,200,000 (See Note 2). The receipt of $1,200,000
provides the Company several months of operating funds and allows for the
repayment of amounts owed. As a result of the Company's continuing to incur cash
expenses in excess of cash receipts, the Company will require the receipt of
additional financing and the receipt of additional licensing fees and milestone
payments. If this does not occur, the Company will be required to carry out a
significant cash conservation program to carry it beyond the next several
months. Due to the uncertainties involved in the receipt of milestone payments
and additional licensing fees or receipt of additional financing, many of which
are outside the control of the Company, the Company's independent public
accountants have qualified their year-end December 31, 2000 audit opinion with
regard to the Company's ability to continue as a going concern.

         In order to address the need for additional capital, the Company is
actively seeking to license certain of its products and is aggressively working
on those matters within its control with respect to achievement of contractual
milestones for milestone payments. The Company's current products, which it is
aggressively seeking to license, include TpP, MH1, and the ABS-205 neurobiology
compound. If it is successful in licensing some of these products, the licensees
might provide additional funding or might perform additional testing necessary
to obtain regulatory approvals or provide clinical, manufacturing and marketing
expertise,


                                    Page 11
<PAGE>   12
which will indirectly lead to revenue for the Company. The Company is also
discussing collaborations and contract services involving its patented
Antigen-Free technology. The Company cannot guaranty that it will be successful
in generating funding from these sources.

         In addition, the Company is continuing discussions with certain
potential investors and private placement agents concerning additional
financing. The Company has made significant progress in negotiating a financing
package although no binding agreement has yet been entered into. In the current
economic environment, financing has become more difficult to obtain (including
within the biotechnology industry) and there is no guaranty that the Company
will be able to obtain additional financing on reasonable terms, or that it will
be able to obtain financing at all. The Company's failure to raise sufficient
additional funds, either through licensing, milestone payments, co-marketing
activities or additional financing, will have a material adverse effect on its
financial condition and ability to continue as a going concern.

(4)      NET LOSS PER COMMON SHARE

         The Company follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 128 "Earnings Per Share". In accordance with SFAS No. 128
basic net loss per common share ("Basic EPS") is computed by dividing net loss
attributable to common stockholders by the weighted average number of common
shares outstanding. Diluted net loss per common share ("Diluted EPS") is
computed by dividing net loss attributable to common stockholders by the
weighted average number of common shares and dilutive potential common shares
then outstanding. The provisions of SFAS No. 128 require the presentation of
both Basic EPS and Diluted EPS on the face of the consolidated statements of
operations. Diluted EPS for 2001 and 2000 is the same as Basic EPS because the
inclusion of stock options, warrants and the conversion of series A preferred
stock outstanding would be antidilutive.

(5)      INVENTORY

         Inventory consists of the following:

<TABLE>
<CAPTION>
                                          June 30,      December 31,
                                            2001            2000
                                            ----            ----
<S>                                       <C>             <C>
                   Raw Materials          $291,000        $328,000
                   Work in Process              --         132,000
                   Finished Goods            6,000          71,000
                                          --------        --------
                                          $297,000        $531,000
                                          ========        ========
</TABLE>

(6)      STOCKHOLDERS' EQUITY

         Stock Options - The following summarizes the stock option activity in
all stock option plans for the three months ended June 30, 2001.

<TABLE>
<CAPTION>
                                                                  Weighted Avg.
                                                  Shares          Option Price
                                                  ------          ------------
<S>                                             <C>               <C>
                   Granted                      2,802,500             $ .67
                   Exercised / Cancelled               --             $  --
</TABLE>

Each option entitles the holder to purchase one share of Class A Common Stock of
the Company.


                                    Page 12
<PAGE>   13
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         The matters discussed in this Management's Discussion and Analysis of
Financial Condition and Results of Operations contain forward-looking statements
that involve risks and uncertainties, including the timely development,
introduction and acceptance of new products, dependence on collaborators and
licensees, the impact of competitive products, third party reimbursement issues,
changing market conditions and other risks. These forward-looking statements
represent management's judgment as of the date of filing of this Form 10-Q and
should be considered with the risk factors set forth in the Company's various
filings with the Securities and Exchange Commission. The Company disclaims any
intent or obligation to update these forward-looking statements.

         The following discussion and analysis provides information which the
Company's (ABS) management believes is relevant to an assessment and
understanding of the Company's results of operations and financial condition.
This discussion should be read in conjunction with the consolidated financial
statements and notes appearing elsewhere herein.

OVERVIEW

         ABS is a development stage company incorporated in September 1983. To
date, ABS has launched two commercial products (TpP, ABS' Thrombus Precursor
Protein diagnostic test, and FiF, ABS' Functional Intact Fibrinogen diagnostic
test), although it has not yet derived any significant revenues from the sale of
these products.

         On April 23, 1998, the Company acquired Stellar Bio Systems, Inc.
("Stellar"), a manufacturer and distributor of in vitro diagnostic products and
research reagents. Reagents are individual components of diagnostic products,
such as antibodies, calibrators and serum used in the biotechnology industry.
The purchase price was $120,000 in cash and $700,000 in Class A Common Stock at
the market value on the acquisition date (398,406 shares), plus future
contingent payments of $650,000 in Class A Common Stock to be paid over three
years based upon future sales levels of Stellar, with the Class A Common Stock
to be valued at its market value on the acquisition agreement anniversary dates.
On April 23, 1999, the Company made the first contingent payment of $150,000 in
Class A Common Stock (131,118 shares). On April 24, 2000, the Company made the
second contingent payment of $20,000 in Class A Common Stock (10,811 shares). On
April 24, 2001 the Company made the third and final contingent payment of
$150,000 in Class A Common Stock (236,967 shares). See Note 2 on page 10 for a
discussion of the sale of the Stellar business.

         On January 27, 2000, ABS granted to Abbott an exclusive worldwide
license to its ABS-103 neurocompound. In consideration for the license, Abbott
paid ABS an initial license fee of $500,000 and agreed to pay up to $17.0
million of milestone payments depending upon successfully reaching development
milestones plus customary royalties on commercial sales. In addition, Abbott
purchased 2,782,931 Class A Common Stock for $1.5 million. As discussed in the
Company Annual Report for the fiscal year 2000, Abbott is steadily proceeding
with its preclinical studies using ABS-103R. The Company continues to be
encouraged by the progress reports issued by Abbott.


                                    Page 13
<PAGE>   14
         On February 3, 2000, ABS issued 7,000,000 shares of Series A
Convertible Preferred Stock and warrants to purchase 7,000,000 shares of Class A
Common Stock to Biotechnology Value Fund and the Company's Chairman, Mr. Roach
for an aggregate purchase price of $3.5 million.

         On June 29, 2001, ABS sold the Stellar Business, which consisted of
$1.2 million upfront cash payment at closing plus up to a total of $540,000
payable quarterly over the next three years, based on revenues of a portion of
the Stellar Business. Under the terms of the sale, the buyer of Stellar will
continue contract manufacturing of ABS' Thrombus Precursor Protein (TpP(TM))
ELISA diagnostic test kit for ABS. ABS recorded a loss on the sale of $288,000,
which included the write-off of $705,000 of unamortized goodwill. Any future
quarterly receipts will be recorded as gains on the sale.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has funded its research and development activities to date
principally from (i) the sale of Common Stock issued in an initial public
offering, (ii) the exercise of the Class A and Class B Warrants issued in the
initial public offering, (iii) private placements of Convertible Debentures,
Series A Convertible Preferred Stock and Class A Common Stock, (iv) the exercise
of stock options and warrants, (v) capital contributions and loans to ABS by
its Chairman of the Board, (vi) initial license fee payments and fees from
collaborative contract services, (vii) sale of a business and (viii) the income
on funds invested in bank deposits, United States Treasury bills and notes and
other high grade liquid investments.

         ABS expects to continue to incur substantial expenditures in research
and product development in the neurobiology program and monoclonal antibody
programs and in the development and commercialization of a rapid assay format
for TpP, as well as in the FDA approval process relating to additional 510(k)
filings for TpP.

         As of June 30, 2001, ABS had working capital of $393,000 compared to a
working capital of $1,377,000 as of December 31, 2000. Additionally, the Company
had cash and cash equivalents of $1,268,000 at June 30, 2001. During the second
quarter of 2001, the Company implemented a cash conservation program whereby
executive officers deferred 50% to 100% of their salaries and certain
consultants deferred their compensation. In addition the Chairman, Mr. Roach,
loaned the Company $130,000, which is included in current liabilities as of June
30, 2001. On June 29, 2001, the Company sold the Stellar Business for proceeds
of $1,200,000. The receipt of $1,200,000 provides the Company several months of
operating funds and allows for the repayment of amounts owed. As a result of the
Company's continuing to incur cash expenses in excess of cash receipts, the
Company will require the receipt of additional financing and the receipt of
additional licensing fees and milestone payments. If this does not occur, the
Company will be required to carry out a significant cash conservation program to
carry it beyond the next several months. Due to the uncertainties involved in
the receipt of milestone payments and additional licensing fees or receipt of
additional financing, many of which are outside the control of the Company, the
Company's independent public accountants have qualified their year-end December
31, 2000 audit opinion with regard to the Company's ability to continue as a
going concern.

         In order to address the need for additional capital, ABS is actively
seeking to license certain of its products and is aggressively working on those
matters within its control with respect to achievement of contractual milestones
for milestone payments. The Company's current products, which it is aggressively
seeking to license, include TpP, MH1, and the ABS-205 neurobiology compound. If
it is successful in


                                    Page 14
<PAGE>   15
licensing some of these products, the licensees might provide additional funding
or might perform additional testing necessary to obtain regulatory approvals or
provide clinical, manufacturing and marketing expertise, which will indirectly
lead to revenue for the Company. The Company is also discussing collaborations
and contract services involving its patented Antigen-Free technology. The
Company cannot guaranty that it will be successful in generating funding from
these sources.

         In addition, the Company is continuing discussions with certain
potential investors and private placement agents concerning additional
financing. The Company has made significant progress in negotiating a financing
package although no binding agreement has yet been entered into. In the current
economic environment, financing has become more difficult to obtain (including
within the biotechnology industry) and there is no guaranty that the Company
will be able to obtain additional financing on reasonable terms, or that it will
be able to obtain financing at all. The Company's failure to raise sufficient
additional funds, either through licensing, milestone payments or co-marketing
activities or additional financing, will have a material adverse effect on its
financial condition and ability to continue as a going concern.

         The Company's cash and cash equivalents increased by $74,000 to
$1,268,000 during the six months ended June 30, 2001, primarily from investing
activities ($1,047,000) which includes the proceeds from the sale of the Stellar
Business and financing activities ($53,000) offset by cash used in operations
($1,026,000). Net cash of $1,026,000 was used in operations to fund the
Company's cash loss from operations of $1,581,000 (net of non cash expenses of
$183,000 for depreciation and amortization, net loss on sale of business
$288,000 and $57,000 incurred in connection with the issuance of stock and
warrants, offset by a net gain on sale of fixed assets $2,000). Net cash of
$555,000 was provided by changes in operating assets and liabilities primarily
as a result of an increase in accounts payable and accrued expenses ($636,000),
a decrease in other current assets ($56,000), a decrease in other assets
($7,000), partially offset by an increase in accounts receivable ($104,000) and
an increase in inventory ($40,000). Cash provided from investing activities was
from the sale of the Stellar Business ($1,200,000) and the sale of fixed assets
($2,000), offset by payment for patents ($149,000) and the purchase of equipment
($6,000). Financing activities provided $53,000 as a result of loans from the
Company's Chairman ($130,000), the exercise of stock options ($19,000), offset
by payments under capital lease obligations and notes payable ($96,000).

RESULTS OF OPERATIONS

         Three Months Ended June 30, 2001

         The Company's net loss of $1,214,000 for the three months ended June
30, 2001 increased by $180,000 from a net loss of $1,034,000 for the three
months ended June 30, 2000. The increase in the net loss was primarily due to
the net loss on sale of the Stellar Business ($288,000), decreased sales
($98,000), decreased investment income ($49,000), offset by reduced research and
development expenses ($101,000) and reduced selling, general and administration
expenses ($169,000).

         Sales during the second quarter of 2001 decreased $98,000 primarily due
to lower sales of Stellar products ($85,000) as compared to the second quarter
of 2000. Sales of TpP diagnostic kits were also lower during the second quarter
of 2001 as compared to the second quarter of 2000.

         Cost of Sales decreased $11,000 during the second quarter of 2001. This
decrease was not in proportion to the sales decrease due to the product mix in
Stellar products sales.


                                    Page 15
<PAGE>   16
         Research and development expenses decreased by $101,000, from $328,000
for the three months ended June 30, 2000 to $227,000 for the three months ended
June 30, 2001, primarily from savings in personnel costs, reduced costs
associated with the TpP development program, travel and meeting costs, partially
offset by increases in research and development funding for ABS-205.

         Selling, general and administrative expenses decreased by $169,000,
from $1,099,000 in the second quarter of 2000 to $930,000 in the second quarter
of 2001, as a result of savings in personnel costs, investor relations costs and
travel and meeting costs, offset by increased cost of professional service fees
associated with the sale of business and licensing activities.

         Interest expense increased $12,000 from $1,000 in the second quarter of
2000 to $13,000 in the second quarter of 2001, primarily from an increase in
notes payable and capital lease obligations.

         Investment income decreased by $49,000, from $50,000 in the second
quarter of 2000 to $1,000 in the second quarter of 2001, as a result of lower
average cash balances.

         Six Months Ended June 30, 2001

         The Company's net loss of $2,107,000 for the six months ended June 30,
2001 increased by $575,000 from a net loss of $1,532,000 for the six months
ended June 30, 2000. The increase in the net loss is attributable primarily
to the Company not receiving a license fee of $500,000 in the 2001 period, as it
had in the 2000 period and the loss on the sale of the Stellar Business of
$288,000.

         Sales and cost of sales during the six months of 2001 remained
relatively flat compared to the same six months of 2000. As previously
discussed, sales decreased during the second quarter 2001 which offset the sales
increase during the first quarter of 2001. TpP sales were up 10% for the six
months of 2001, again from increased sales in the first quarter of 2001.

         Research and development expenses decreased by $31,000, from $589,000
during the six months ended June 30, 2000 to $558,000 during the six months
ended June 30, 2001, primarily from reduced personnel costs, reduced costs
associated with the TpP development program, offset by an increase in the
neurobiology research program.

         Selling, general and administrative expenses decreased by $327,000,
from $2,158,000 during the six months ended June 30, 2000 to $1,831,000 during
the six months ended June 30, 2001, as a result of reduced personnel costs, a
decrease in investor relations costs, reduced travel and meeting costs, reduced
amortization of warrant values and reduced professional service costs during the
six months of 2001.

         Interest expense increased by $3,000, from $12,000 during the six
months of 2000 compared to $15,000 during the six months of 2001, resulting from
higher balances of note payables and capital lease obligations.

         Investment income decreased by $71,000, from $80,000 during the six
months ended June 30, 2000 as compared to $9,000 in the six months of 2001, as a
result of lower average cash balances.


                                    Page 16
<PAGE>   17
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's available cash is invested in highly liquid investments
(primarily United States Treasury Bills) which have a maturity, at the time of
purchase, of less than three months. ABS does not have operations subject to
risks of foreign currency fluctuations, nor does it use derivative financial
instruments in its operations. ABS does not have exposure to market risks
associated with changes in interest rates as it has no variable interest rate
debt outstanding. ABS does not believe it has any other material exposure to
market risks associated with interest rates.


                                    Page 17
<PAGE>   18
                                     PART II

                                OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES

         During the quarter ended June 30, 2001, the Company issued 236,967
shares of Class A Common Stock to the sellers of Stellar in satisfaction of the
third and final contingent payment obligation of $150,000 under the terms of the
April 1998 agreement for the purchase of that business. Under the agreement, the
sellers agreed to acquire the shares issued to them for investment only and not
with a view to the distribution of such securities. The Company believes that
the exemption from registration afforded by Section 4(2) of the Securities Act
of 1933 is applicable to the issuance of such shares.

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

         At the Company's 2001 Annual Meeting of Stockholders held on June 19,
2001 the following matters were voted on:

         (a) Election of the following seven persons to serve as directors until
the next annual meeting of stockholders and until their respective successors
are elected and qualified, by the following vote:

<TABLE>
<CAPTION>
                                                                  Voting
                                                                 Authority
                                           For                   Withheld
                                           ---                   --------
<S>                                     <C>                      <C>
         Alfred J. Roach                67,704,870                152,155
         Josef C. Schoell               67,786,870                 70,155
         Ellena M. Byrne                67,704,870                152,155
         Glenna M. Crooks               67,786,870                 70,155
         Joseph C. Hogan                67,786,470                 70,555
         Timothy J. Roach               67,704,870                152,155
         Joseph M. Danis                67,786,470                 70,555
</TABLE>

         (b) Adoption of a proposal to authorize an amendment of the Company's
Certificate of Incorporation to increase the number of shares of Class A Common
Stock which the Company is authorized to issue from 100,000,000 shares to
150,000,000 shares by the following vote:

<TABLE>
<CAPTION>
             For                       Against                    Abstain
             ---                       -------                    -------
<S>                                   <C>                         <C>
         66,090,076                   1,747,964                   18,985
</TABLE>


         (c) Adoption of a proposal to authorize an amendment of the Company's
Certificate of Incorporation in order to effect a reverse stock split, pursuant
to which the Company's outstanding shares of Class A Common Stock and Class B
Common Stock would be exchanged for new shares of Class A Common Stock and Class
B Common Stock, respectively, in an exchange ratio to be approved by the Board
of Directors,


                                    Page 18
<PAGE>   19
ranging from one newly issued share for each two outstanding shares to one newly
issued share for each ten outstanding shares by the following vote:

<TABLE>
<CAPTION>
             For                       Against                    Abstain
             ---                       -------                    -------
<S>                                   <C>                         <C>
         65,959,190                   1,869,910                   27,925
</TABLE>

         (d) Adoption of proposal to amend the Company's 1993 Non-Employee
Director Stock Option Plan to increase the number of shares subject to options
to be granted thereunder at the time of a director's initial election and at
each annual meeting of stockholders from 10,000 shares to 25,000 shares by the
following vote:

<TABLE>
<CAPTION>
             For                       Against                    Abstain
             ---                       -------                    -------
<S>                                   <C>                         <C>
         65,960,110                   1,867,180                   29,735
</TABLE>

         (e) Ratification of the selection of Arthur Andersen LLP to serve as
the Company's independent auditors for the year ending December 31, 2001 by the
following vote:

<TABLE>
<CAPTION>
             For                       Against                    Abstain
             ---                       -------                    -------
<S>                                   <C>                         <C>
         67,763,972                    76,690                     16,363
</TABLE>

         Each matter was approved by the vote of Class A and Class B Common
Stock stockholders voting together as one class, with each share of Class A
having one vote and each share of Class B having ten votes, and the matters
described in paragraphs (b) and (d) above were additionally approved by the vote
of Class A Common Stock, voting as a separate class, with each share of Class A
Common Stock having one vote per share.

ITEM 5.  OTHER INFORMATION

         At the annual meeting of the Board of Directors following the annual
meeting of the Stockholders on June 19, 2001, the Board elected the following
persons to serve as the executive officers of the Company.

<TABLE>
<CAPTION>
            Name                              Position
            ----                              --------
<S>                                 <C>
         Alfred J. Roach            Chairman of the Board and Chief Executive Officer
         Josef C. Schoell           President, Chief Operating Officer and Chief Financial Officer
         Ellena M. Byrne            Executive Vice President-Global Scientific Network
         James H. McLinden          Senior Vice President and Chief Scientific Officer
         Timothy J. Roach           Treasurer and Secretary
</TABLE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

             (a)  Exhibits

                  None

             (b)  Reports on Form 8-K

                  The Company filed a report on Form 8-K dated June 29,
                  2001(date of earliest event reported) on July 13, 2001,
                  reporting under Item 2, Acquisition or Disposition of Assets,
                  relating to


                                    Page 19
<PAGE>   20
                  the sale of the business of its wholly owned subsidiary,
                  Stellar Bio Systems, Inc., to PanBio Limited.

                                   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.

                                           AMERICAN BIOGENETIC SCIENCES, INC.
                                              (Registrant)



Date:   August 10, 2001                     /s/  Josef C. Schoell
      ------------------------             -------------------------------------
                                           Josef C. Schoell
                                           President, COO & CFO
                                           (Principal Financial and
                                           Accounting Officer)


                                    Page 20