================================================================================


                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB


     (Mark One)

       [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
           ACT OF 1934
                  For the quarterly period ended March 31, 2003

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934
            For the transition period from _______________ to _________________

                         Commission file number 0-19724



                       PROTEIN POLYMER TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its charter)


               Delaware                                   33-0311631
    (State or other jurisdiction of            (IRS Employer Identification No.)
    incorporation or organization)


                 10655 Sorrento Valley Road, San Diego, CA 92121
                    (Address of principal executive offices)

                                 (858) 558-6064
                           (Issuer's telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
                                                               ------    -----


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of April 30, 2003, 33,943,290
shares of common stock were outstanding.

Transitional Small Business Disclosure Format (check one):  Yes         No   X
                                                               -----       -----


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                                       1
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.

                                   FORM 10-QSB

                                      INDEX


<TABLE>
<CAPTION>

                                                                                                     Page No.
                                                                                                     --------

PART I.  FINANCIAL INFORMATION
<S>         <C>                                                                                         <C>

Item 1.  Financial Statements (unaudited)

            Condensed Balance Sheets -
                March 31, 2003 and December 31, 2002.....................................................3

            Condensed Statements of Operations -
                For the Three Months ended March 31, 2003 and 2002
                and the period July 6, 1988 (inception) to March 31, 2003................................4

            Condensed Statements of Cash Flows -
                For the Three Months ended March 31, 2003 and 2002
                and the period July 6, 1988 (inception) to March 31, 2003................................5

            Notes to Condensed Financial Statements......................................................7

Item 2.     Management's Discussion and Analysis of
                Financial Condition and Results of Operations............................................9

Item 3.     Controls and Procedures.....................................................................14


PART II.    OTHER INFORMATION

Item 2.     Changes in Securities and Use of Proceeds...................................................14

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


            Signatures..................................................................................16

            Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002....................17
</TABLE>


                                       2
<PAGE>


                                     PART I
                             FINANCIAL INFORMATION


Item 1.       Financial Statements

                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)

                            Condensed Balance Sheets

<TABLE>
<CAPTION>

                                                                      March 31,         December 31,
                                                                        2003                 2002
                                                                 ------------------------------------------
<S>                                                              <C>                     <C>
Assets                                                               (unaudited)
Current assets:
Cash and cash equivalents                                        $       2,721,291       $      733,978
Other current assets                                                        98,545               30,773
                                                                 ------------------------------------------
Total current assets                                                     2,819,836              764,751

Deposits                                                                    30,479               29,679
Equipment and leasehold improvements, net                                   63,965               80,928
                                                                 ------------------------------------------

                                                                 $       2,914,280       $      875,358
                                                                 ==========================================
Liabilities and stockholders' equity
   Current liabilities:
   Accounts payable                                                        172,817       $      389,109
   Accrued employee benefits                                               121,661              112,714
   Other accrued expenses                                                   28,669               49,530
   Deferred rent                                                            24,111               24,111
                                                                 ------------------------------------------
Total current liabilities                                                  347,258              575,464


   Long-term portion deferred rent                                          18,083               24,111


Stockholders' equity:
Convertible Preferred Stock, $.01 par value, 5,000,000 shares
   authorized, 85,146 and 76,120 shares issued and outstanding
   at March 31, 2003 and December 31, 2002, respectively;
   liquidation preference of $8,514,600 and $7,612,000 at
   March 31, 2003 and December 31, 2002, respectively                    7,969,917            7,266,780
Common stock, $.01 par value, 60,000,000 shares authorized,
   33,943,290 and 29,731,535 shares issued and outstanding at
   March 31, 2003 and December 31, 2002, respectively                      339,444              297,327
Additional paid-in capital                                              39,821,230           36,618,235
Deficit accumulated during development stage                           (45,581,652)         (43,906,559)
                                                                 ------------------------------------------
Total stockholders' equity                                               2,548,939             (275,783)
                                                                 ------------------------------------------

                                                                 $       2,914,280       $      875,358
                                                                 ==========================================
</TABLE>


See accompanying notes.


                                       3
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)

                       Condensed Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                                       For the
                                                                                                        period
                                                                                                    July 6, 1988
                                                                                                     (inception)
                                                                       Three months ended                 to
                                                                            March 31,                  March 31,
                                                                     2003              2002              2003
                                                              --------------------------------------------------------
Revenues:
<S>                                                           <C>                 <C>               <C>
     Contract revenue                                         $         450,983   $      469,577    $    9,709,569
     Interest Income                                                      1,583            1,620         1,248,530
     Product and other income                                                 -            1,500           694,779
                                                              --------------------------------------------------------
Total revenues                                                          452,566          472,697        11,652,878

Expenses:
     Research and development                                           541,866          651,037        32,927,971
     Selling, general and administrative                                280,421          288,847        19,052,802
                                                              --------------------------------------------------------
Total expenses                                                          822,287          939,884        51,980,773
                                                              --------------------------------------------------------

Net loss                                                               (369,721)        (467,187)      (40,327,895)

Undeclared, imputed and/or paid dividends on preferred
stock                                                                 1,373,831           68,459         7,446,402
                                                              --------------------------------------------------------

Net loss applicable to common shareholders                    $      (1,743,552)  $     (535,646)   $  (47,774,297)
                                                              ========================================================

Basic and diluted net loss per common share                   $           (0.06)  $        (0.02)
                                                              =====================================

Shares used in computing basic and diluted net loss per
common share                                                         29,792,399       24,116,726
                                                              =====================================
</TABLE>


See accompanying notes.


                                       4
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)

                       Condensed Statements of Cash Flows
                                   (unaudited)


<TABLE>
<CAPTION>

                                                                                                    For the period
                                                                                                     July 6, 1988
                                                                    Three months ended              (inception) to
                                                                         March 31,                     March 31,
                                                                   2003                 2002             2003
                                                          ----------------------------------------------------------
<S>                                                           <C>                 <C>               <C>
Operating activities

Net loss                                                      $        (369,721)  $     (467,187)   $  (40,327,895)
Adjustments to reconcile net loss to net cash used for
operating activities:
Stock issued for compensation and interest                                   -                -            427,676
Depreciation and amortization                                            20,572           45,003         2,378,956
Write-off of purchased technology                                            -                -            503,500
Changes in assets and liabilities:
Deposits                                                                   (800)            (800)          (30,479)
Other current assets                                                    (67,771)        (157,100)          (98,544)
Accounts payable                                                       (216,292)         (96,629)          172,817
Accrued employee benefits                                                 8,947            2,428           121,661
Other accrued expenses                                                  (20,862)          19,472            28,669
Deferred revenue                                                             -           (83,333)               -
Deferred rent                                                            (6,028)          (6,028)           42,194
                                                          ----------------------------------------------------------
Net cash used for operating activities                                 (651,955)        (744,174)      (36,736,445)

Investing activities
Purchase of technology                                                       -                 -          (570,000)
Purchase of equipment and improvements                                   (3,609)          (1,293)       (2,000,895)
Purchases of short-term investments                                          -                 -       (16,161,667)
Sales of short-term investments                                              -                 -        16,161,667
                                                          ----------------------------------------------------------
Net cash provided by (used for) investing
activities                                                    $          (3,609)  $       (1,293)   $   (2,570,895)
</TABLE>


See accompanying notes.


                                       5
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)

                       Condensed Statements of Cash Flows
                                   (unaudited)



<TABLE>
<CAPTION>

                                                                                                    For the period
                                                                                                     July 6, 1988
                                                                    Three months ended              (inception) to
                                                                         March 31,                     March 31,
                                                                   2003                 2002             2003
                                                          ----------------------------------------------------------
<S>                                                           <C>                 <C>               <C>
Financing activities
Net proceeds from exercise of options
   and warrants, and sale of common stock                     $           3,227   $      969,745    $   22,859,303
Net proceeds from issuance and conversion of
   preferred stock                                                    2,639,650               -         18,148,068
Net proceeds from convertible notes and
   detachable warrants                                                       -                -          1,068,457
Payment on capital lease obligations                                         -                -           (288,770)
Payment on note payable                                                      -                -           (242,750)
Proceeds from note payable                                                   -                -            484,323
                                                          ----------------------------------------------------------
Net cash provided by financing activities                             2,642,877          969,745        42,028,631
                                                          ----------------------------------------------------------

Net increase in cash and cash equivalents                             1,987,313          224,278         2,721,291

Cash and cash equivalents at beginning of
   period                                                               733,978          234,271                -
                                                          ----------------------------------------------------------
Cash and cash equivalents at end of period                    $       2,721,291   $      458,549    $    2,721,291
                                                          ==========================================================

Supplemental disclosures of cash flow
   information
Equipment purchased by capital leases                                         -               -     $      288,772
Interest paid                                                                 -            3,924           146,775
Imputed dividend on Series E stock                                            -               -          3,266,250
Conversion of Series D preferred stock to
   common stock                                                               -               -          2,142,332
Conversion of Series E preferred stock to
   common stock                                                       1,921,513          400,000         5,277,813
Conversion of Series G preferred stock to
   common stock                                                          15,000               -            585,000
Series D stock issued for Series C stock                                     -                -          2,073,925
Series C dividends paid with Series D stock                                  -                -            253,875
Series D dividends paid with common stock                                    -                -            422,341
Imputed dividend on Series I stock                                    1,305,372               -          1,305,372
</TABLE>

See accompanying notes.

                                       6
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)

                     Notes to Condensed Financial Statements
                                   (unaudited)

                                 March 31, 2003

1.   Basis of Presentation

The condensed financial statements of Protein Polymer Technologies, Inc. (the
"Company") for the three months ended March 31, 2003 and 2002 are unaudited.
These financial statements reflect all adjustments, consisting of only normal
recurring adjustments which, in the opinion of management, are necessary to
state fairly the financial position at March 31, 2003 and the results of
operations for the three months ended March 31, 2003 and 2002. The results of
operations for the three months ended March 31, 2003 are not necessarily
indicative of the results to be expected for the year ended December 31, 2003.
For more complete financial information, these financial statements and the
notes thereto should be read in conjunction with the audited financial
statements included in our Annual Report on Form 10-KSB for the year ended
December 31, 2002, filed with the Securities and Exchange Commission.

2.   New Accounting Pronouncements

In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," which amends SFAS 123, "Accounting
for Stock-Based Compensation." SFAS 148 provides alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS 148 amends the
disclosure requirement of SFAS 123 to require more prominent and more frequent
disclosures in financial statements about the effects of stock-based
compensation, regardless of which accounting method is used to account for
stock-based compensation. The transition guidance and annual disclosure
provisions of SFAS 148 are effective for fiscal years ending after December 15,
2002. The interim disclosure provisions are effective for financial reports
containing financial statements for interim periods beginning after December 15,
2002. The Company has adopted the disclosure requirements of SFAS 148 as
described in Footnote 5.

3.   Revenue and Expense Recognition

Research and development contract revenues are recorded as earned in accordance
with the terms and performance requirements of the contracts. If the research
and development activities are not successful, we are not obligated to refund
payments previously received. Fees from the sale or license of technology are
recognized on a straight-line basis over the term required to complete the
transfer of technology or the substantial satisfaction of any performance
related responsibilities. License fee payments received in advance of amounts
earned are recorded as deferred revenue. Milestone payments are recorded as
revenue based upon the completion of certain contract specified events that
measure progress toward completion under certain long-term contracts. Royalty
revenue related to licensed technology is recorded when earned and in accordance
with the terms of the license agreement. Research and development costs are
expensed as incurred.

4.   Issuance of Preferred Stock

On March 25, 2003, we raised approximately $3 million from the sale of 30,050
shares of our Series I Convertible Preferred Stock ("Series I Stock") priced at
$100 per share, with warrants to purchase an aggregate of 4,545,453 shares of
common stock to a small group of institutional and accredited investors. Each
share of Series I Stock is convertible at any time at the election of the holder
into approximately 181 shares of common stock at a conversion price of $0.55 per
share, subject to certain anti-dilution adjustments. In connection with this
transaction, we recorded a non-cash "imputed dividend" expense of $1,305,372 in
order to account for the difference between the fair market value of the common
stock and the conversion price of the preferred stock into common stock.

We intend to use the net proceeds for general corporate and working capital
purposes.

Each share of Series I Stock received two common stock warrants. One warrant is
exercisable at any time for 27 shares of common stock at an exercise price of
$.88 per share, and expires 18 months after the close of the offering; the other
warrant is exercisable at any time for 18 shares of common stock at an exercise
price of $1.65 per share, and expires 48 months after the close of the offering.
In connection with the issuance of the Series I Stock, additional warrants to
purchase 819,543 shares of common stock at an exercise price of $.65 per share,
expiring 18 months after the close of the offering were issued, as well as


                                       7
<PAGE>


warrants to purchase 182,272 shares of common stock at an exercise price of $.58
per share, warrants to purchase 27,340 shares of common stock at an exercise
price of $.68 per share, warrants to purchase 27,340 shares of common stock at
an exercise price of $.92 per share and warrants to purchase 18,228 shares of
common stock at an exercise price of $1.73 per share, each expiring 5 years
after the close of the offering.

No underwriters were engaged by us in connection with such issuance and,
accordingly, no underwriting discounts were paid. The offering is exempt from
registration under Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), and met the requirements of Rule 506 of Regulation D
promulgated under the Securities Act. We have agreed to file a registration
statement covering resales of the shares of common stock underlying the Series I
Stock and the warrants with the Securities and Exchange Commission on or before
May 31, 2003.

5.   Accounting for Stock-Based Compensation

As allowed by Statement No. 123, Accounting for Stock-Based Compensation, Active
Power accounts for its stock compensation arrangements with employees using the
intrinsic value method under the provisions of the Accounting Principles Board's
Opinion No. 25, Accounting for Stock Issued to Employees. Deferred stock-based
compensation is amortized over the vesting period, which is generally four
years, utilizing the accelerated method prescribed in FASB Interpretation No.
28. Pro Forma stock compensation in accordance with Statement No. 123 is
amortized using the straight line method over the vesting period.

The following table illustrates the effect on net income and earnings per share
if we had applied the fair value recognition provisions of Statement No. 123:

                                                         2003           2002
                                                         ----           ----

       Net loss:
       As reported                                   $(1,743,552)   $  (535,646)
       Stock-based employee compensation expense
       included in reported net income,
       net of related tax effects                             -              -
       Total stock-based employee
       compensation expense determined under
       fair value based method for all options,
       net of related tax effects                        (22,794)       (11,026)
       Pro forma net loss                            $(1,766,346)   $  (546,672)

       Basic and diluted net loss per share:
            As reported                                    (0.06)         (0.02)
            Pro forma                                      (0.06)         (0.02)

6.   Liquidity

We believe our existing available cash and cash equivalents as of March 31,
2003, plus contractual amounts receivable, is sufficient to meet our anticipated
capital requirements until April 2004. Substantial additional capital resources
will be required to fund continuing expenditures related to our research,
development, clinical trials, and product marketing activities. If adequate
funds are not available, we will be required to significantly curtail our
operating plans and may have to sell or license out significant portions of our
technology or potential products.


                                       8
<PAGE>


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

Forward Looking Statements

Certain statements contained or incorporated by reference in this Quarterly
Report on Form 10-QSB constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause actual results, performance or achievements of the company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by forward-looking statements.
Such risks and uncertainties include, among others, history of operating losses,
raising adequate capital for continuing operations, early stage of product
development, scientific and technical uncertainties, competitive products and
approaches, reliance upon collaborative partnership agreements and funding,
regulatory testing and approvals, patent protection uncertainties and
manufacturing scale-up and required qualifications. While these statements
represent management's current judgment and expectations for the company, such
risks and uncertainties could cause actual results to differ materially from any
future results suggested herein. The company undertakes no obligation to release
publicly the results of any revisions to these forward-looking statements to
reflect events or circumstances arising after the date hereof.

General Overview

Incorporated in 1988, Protein Polymer Technologies, Inc., a Delaware corporation
with corporate offices and laboratories located in San Diego, California, is a
development-stage biotechnology company engaged in the research, development,
production and clinical testing of medical products based on its proprietary
protein-based biomaterials and tissue engineering technology. Since 1992, we
have focused primarily on developing technology and products to be used in the
surgical repair, augmentation, and regeneration of tissue; surgical adhesives
and sealants; soft tissue augmentation products; matrices for wound healing and
tissue engineering; and drug delivery formulations. We have been unprofitable to
date, and as of March 31, 2003 had an accumulated deficit of $(45,581,652).

Protein polymers are synthetic proteins created "from scratch" through chemical
DNA (gene) synthesis, and produced in quantity by traditional large-scale
microbial fermentation methods. As a result, protein polymers contain no human
or animal components that could potentially transmit or cause disease. Due to
their synthetic design, protein polymers are capable of combining the biological
functionality of natural proteins with the chemical functionality and
exceptional physical properties of synthetic polymers. A common goal is to
develop materials that beneficially interact with human cells, enabling cell
growth and the regeneration of tissues with improved outcomes as compared to
current products and practices.

Our product candidates for surgical repair, augmentation and regeneration of
human tissues are in various stages of research and development. The more
advanced programs are bulking agents for soft tissue augmentation, particularly
for use in urethral tissue for the treatment of female stress incontinence and
in dermal tissue for cosmetic and reconstructive procedures, and tissue adhesive
formulations for the repair of spinal discs damaged due of injury or aging. We
currently are devoting the majority of our resources to the development and
registration of these products.

Because of our technology's breadth of commercial opportunity, we are pursuing
multiple routes for commercial development. Currently, we independently are
developing the incontinence and the dermal augmentation products, which share
similar technology and product characteristics. We have established a
comprehensive license and development agreement with Genencor International for
the use of our biomaterials and technology to develop, manufacture and
commercialize products for industrial markets. Genencor International is one of
the world's largest manufacturers of industrial enzymes and other biologically
derived products. Through this arrangement, we will receive milestone payments,
and eventually royalties on the sale of products. For development and
commercialization of our spinal disc repair product, we joined with Windamere
Venture Partners to establish a new company, Spine Wave, Inc., that will provide
us with both near term research and development support and eventually royalties
on the sale of licensed products. Except for the industrial products, we have
retained manufacturing rights.

Significant Collaborative Agreements

Our collaborative development agreements generally contain provision for
specific payments for defined activities, services, royalties on the sales of
developed products, and/or the accomplishment of performance benchmarks. These
agreements also may provide for equity investments or other financial
incentives. Technology license agreements usually are associated with
collaborative development agreements, but occasionally we will agree to a
license without an accompanying development agreement.


                                       9
<PAGE>


Spine Wave
----------

     In April 2001, we entered into agreements with Spine Wave, Inc. ("Spine
Wave"), to develop and commercialize an injectable protein-based formulation for
the repair of spinal discs damaged either by injury or aging. As consideration
for entering into an exclusive, worldwide license agreement with Spine Wave, we
received one million shares of the founding common stock in Spine Wave, valued
initially at $10,000. Royalties from the sale or sublicensing of licensed
products will be determined in the future based on the gross margin (sales
revenue less the cost of goods) realized by Spine Wave from the sale of the
products.

     The shares of founding common stock are subject to a vesting schedule
consisting of three triggers corresponding to Spine Wave's progress in
commercializing products using the licensed technology. Unvested shares of
founding common stock are subject to repurchase by Spine Wave at the original
purchase price. One-third of the shares of founding common stock vest on or
after each trigger.

     In connection with the license agreement, we entered into a separate supply
and services agreement to provide Spine Wave with a variety of research and
development services, and to supply materials to Spine Wave for pre-clinical and
clinical testing. Spine Wave, in return, agreed to reimburse us for both our
direct costs and the associated overhead costs for the services provided. During
2001, we recognized contract revenues of $450,000 related to activities
performed under the collaborative agreement.

     In March 2002, we executed additional agreements with Spine Wave, Inc. that
expanded our contractual research and development relationship, and that offered
us additional equity incentives in the form of Spine Wave common stock and
warrants. Under the amended supply and services agreement, we, on behalf of
Spine Wave, are proceeding with pre-clinical safety and performance studies of a
product for spinal disc repair to support Spine Wave's filing of an
investigational device exemption with the FDA to obtain approval to initiate
human clinical testing. During the subsequent period leading to regulatory
marketing approval, our contractual responsibilities include the supply of
product to be used in clinical testing and preparation for commercial
manufacturing operations. Research and development services performed for Spine
Wave are reimbursed including both direct costs and associated overhead costs.
Spine Wave is responsible for clinical testing, regulatory approvals, and
commercialization. For the year ended December 31, 2002 and for the period ended
March 31, 2003 we received $2,427,000 and $451,000, respectively, in contract
revenue from Spine Wave which represents the reimbursement of direct costs plus
overhead costs allocated to the research and development resources used in
performing the collaborative activities.

     Additional equity incentives offered in conjunction with the expanded
supply and services agreement of March 17, 2002 consist of a three year warrant
to purchase 1,000,000 shares of Spine Wave common stock at an exercise price of
$0.50 per share (recently issued Spine Wave preferred stock was also priced at
$0.50 per share), and 400,000 shares of common stock valued at $0.05 per share
subject to repurchase at cost until each of three performance goals is achieved.
The performance goals consist of: (i) completion of certain studies for filing
an investigational device exemption application (100,000 shares); (ii)
completion of additional studies for filing of the investigational device
exemption and provision of inventory for the pilot clinical study (150,000
shares); and (iii) completion of certain manufacturing arrangements, and
production of certain quantities of product (150,000 shares). As of March 31,
2003, the first of the three performance goals had been met.

License Agreements

Our license agreements usually include provision for up-front compensation and
eventual royalties on the sale of licensed products. Terms of license agreements
typically commence as of the date executed and continue for a period of the
greater of twenty (20) years from execution date or the date upon which the last
of the patented technology under license expires.

Femcare, Ltd.
-------------

In January 2000, we entered into a strategic alliance agreement with Femcare,
Ltd. ("Femcare"), for the commercialization in Europe and Australia of our
product for treatment of stress urinary incontinence. Under the terms of the
license agreement, Femcare paid a $1 million non-refundable license fee in
exchange for the patented technology and a three year commitment from us to
provide support to Femcare in its efforts to clinically test our products in
Great Britain and to achieve European regulatory approval. We have not incurred
any research and development costs associated with our support efforts to date.
As a result of the arrangement, we recognized approximately $333,000 in deferred
license fee revenue for 2000 and 2001, and 2002. In accordance with the
agreement, we will receive a royalty on net product sales generated by Femcare,
and we have the right to manufacture commercial product for Femcare. The
agreement terminates on the greater of 20 years or upon which the last of the
licensed patents expire.


                                       10
<PAGE>


Genencor International, Inc.
----------------------------

In December 2000, we signed a broad-based, worldwide exclusive license agreement
with Genencor International, Inc. ("Genencor") enabling Genencor to potentially
develop a wide variety of new products for industrial markets. In October 2002,
the license agreement was amended to provide Genencor with an additional
one-year option to initiate development of products in the field of non-medical
personal care. As a result of the agreements, Genencor may use our patented
protein polymer design and production technology, in combination with Genencor's
extensive gene expression, protein design, and large-scale manufacturing
technology, to design and develop new products with improved performance
properties for defined industrial fields and the field of non-medical personal
care products.

In return for the licensed rights, Genencor paid us an up-front license fee of
$750,000, and will pay royalties on the sale of any products commercialized by
Genencor under the agreement. The licensed technology was transferred to
Genencor upon execution of the license agreement without any further product
development obligation on our part. Future royalties on the net sales of
products incorporating the technology under license and developed by Genencor
will be calculated based on a royalty rate to be determined at a later date. In
addition, we are entitled to receive up to $5 million in milestone payments
associated with Genencor's achievement of various industrial product development
milestones incorporating the licensed technology. There is no limitation on the
amount of milestone payments we can receive from Genencor for Genencor's product
development in the field of non-medical personal care products. In December 2002
we received a license milestone payment of $250,000 from Genencor for Genencor's
initiation of a product development project based on technology licensed from
us.

In connection with the license agreement, Genencor was issued two warrants, each
convertible by formula into $500,000 of our common stock. The first warrant
could be converted into 442,478 shares at an exercise price of $1.13 per share.
The second warrant could be converted into 1,250,000 shares at an exercise price
of $0.40 per share. As a result of the collaboration, in 2000 we recognized
$750,000 in license fee revenue (less the issuance of warrants to purchase $1
million of our common stock valued at $319,000). The agreement terminates on the
date of expiration of the last remaining patent.

Research and Development

We currently maintain detailed project costs (direct costs plus allocated
overhead) for contractual research and development services. However, we do not
maintain cost breakdowns for our internal research and development projects due
to the extensive degree of overlap between our tissue augmentation projects such
as common manufacturing, quality control, and developmental product testing.

Our product for the treatment of female stress urinary incontinence is in pilot
human clinical testing. We project beginning pivotal clinical testing during
2004. We expect these trials, including patient follow-up, will take
approximately 24 months, and the subsequent Food and Drug Administration review
of our pre-market approval submission may take an additional 12 months. Assuming
this schedule is met and the product is approved, U.S. sales of the product are
projected to begin in 2006. Commercial manufacturing process development and
completion of the clinical trials are estimated to cost approximately $10
million. Femcare, Ltd., our licensee for this product in Europe and Australia,
has advised us that commercialization of the product in Europe potentially can
occur at least one year in advance of U.S. commercialization.

Our tissue augmentation product for use in cosmetic and reconstructive surgery
applications is in pilot human clinical testing. We project beginning pivotal
clinical testing during 2004. We expect these trials, including patient
follow-up, will take approximately 15 months, and the subsequent Food and Drug
Administration review of our pre-market approval submission may take up to an
additional 12 months. Assuming this schedule is met and the product is approved,
U.S. sales are projected to begin in late 2005. The pivotal clinical trial is
estimated to cost approximately $2.2 million. This product is based on the same
manufacturing technology as our product for the treatment of female stress
urinary incontinence, and thus, the incremental cost of manufacturing
development is estimated to be approximately $0.1 million.

We currently do not have sufficient cash to complete the development of these
products. We anticipate obtaining the necessary cash either by additional equity
financings, or by sharing the cost of development with potential marketing
partners, or a combination of both methods. If we are unable to obtain the
necessary cash, it will have a material adverse effect on us.

Our spinal disc repair product being developed for our licensee, Spine Wave,
Inc., is in pre-clinical testing. The timing of this project is under the
control of Spine Wave. Under our contract with Spine Wave, we are responsible
for development of the formulated product, its manufacturing process, and
product production for both clinical trials and commercialization. Spine Wave is
responsible for funding all expenses associated with these activities. Contract
revenue received from Spine Wave is approximately equal to our cost (direct
project costs plus allocated laboratory and corporate overhead expenses) of the
work performed. Total research and development costs for the three month period
ended March 31, 2003 and for the period of project inception to date are
approximately $451,000 and $3,328,000 respectively.


                                       11
<PAGE>


To the extent sufficient capital resources are available, we continue to
research the use of our patented technology to produce proteins of unique design
for other tissue repair and medical device applications, principally for use in
supporting the wound healing process, including devices based on tissue
engineering, and in drug delivery devices. Our strategy for most of our programs
is to enter into collaborative development agreements with product marketing and
distribution companies. Although these relationships, to the extent any are
consummated, may provide significant near-term revenues through up-front
licensing fees, research and development payments and milestone payments, we
expect to continue incurring operating losses for the next several years.

Results of Operations

We received $451,000 in contract and licensing revenue for the three months
ended March 31, 2003 as compared to $470,000 for the three months ended March
31, 2002. The contract and licensing revenue for the three months ended March
31, 2003 was received from Spine Wave, Inc. for research and development
services associated with the development of an injectable spinal disc nucleus
product for the treatment of lower back pain whereas contract and licensing
revenue for the same period in 2002 also included $83,000 in amortized revenue
from a $1 million up-front license payment (being recognized ratably over a
period of three years) from Femcare ltd. for the commercial rights to our
incontinence product in Europe and Australia. The amortization of the $1 million
dollar payment terminated on December 31, 2002.

Interest income was $1,600 for the three months ended March 31, 2003 versus
$1,600 for the same period in 2002.

Research and development expenses for the three months ended March 31, 2003 were
$542,000, compared to $651,000 for the same period in 2002. The decrease in
research and development expenditures for the three month period in 2003
primarily reflects reduced pre-clinical costs associated with the development of
the spinal disc nucleus replacement product. We expect, in general, that our
research and development, human clinical testing and manufacturing expenses will
increase over time if our incontinence and dermal products, and other products
in development, successfully progress and additional capital is obtained.

Selling, general and administrative expenses for the three months ended March
31, 2003 were $280,000 as compared to $289,000 for the same period in 2002. We
expect that our selling, general and administrative expenses will remain largely
unchanged in the near term, but may increase in the future as support for our
research and development and manufacturing efforts require additional resources
and to the extent additional capital is obtained.

For the three months ended March 31, 2003, we recorded a net loss applicable to
common shareholders of $1,744,000 or $0.06 per share, as compared to a loss of
$536,000, or $0.02 per share for the same period in 2002. Included in the net
loss per share for the three months ended March 31, 2003 is a one-time, non-cash
"imputed dividend" of $1,305,000 from the sale and issuance of our Series I
Preferred Stock which raised approximately $3 million less expenses (see Note 4
to the Financial Statements). The net loss and the net loss per share also
included in each of the three-month periods of 2003 and 2002 $68,000 for
undeclared dividends related to our preferred stock. Excluding the effect of the
imputed dividends, the net loss applicable to common shareholders would have
been $438,000 ($.01 per share) for the quarter ended March 31, 2003.

In general, there can be significant fluctuation in revenue from quarter to
quarter due to variability in outside contract and licensing payments. In
general, we expect to incur increasing operating losses in the future (to the
extent additional capital is obtained), due primarily to increases in our soft
tissue augmentation program's development, manufacturing and business
development activities, and the initiation of new tissue adhesive product
development activities. Our financial results depend on our ability to establish
strategic alliances and generate contract revenues, increased research,
development and manufacturing efforts, pre-clinical and clinical product testing
and commercialization expenditures, expenses incurred for regulatory compliance
and patent prosecution, and other factors.

To date we believe that inflation and changing prices have had only a modest
effect on our continuing operations. However, increases in utility costs,
insurance, and employee benefits may have a greater impact in the future.


                                       12
<PAGE>


Liquidity and Capital Resources

As of March 31, 2003, we had cash, cash equivalents and short-term investments
totaling $2,721,000 as compared to $734,000 at December 31, 2002. As of March
31, 2003, we had working capital of $2,473,000, compared to a working capital of
$189,000 at December 31, 2002.

We do not have any off balance sheet financing activities and do not have any
special purpose entities. We had no long-term capital lease obligations as of
March 31, 2003 or December 31, 2002. For the three month period ended March 31,
2003, our cash expenditures for capital equipment and leasehold improvements
totaled $(3,600), compared with $(1,300) for the same period in the prior year.
To the extent capital is available, we anticipate that these expenditures will
be increased in 2003 for laboratory renovations and additional equipment
required to meet the FDA's applicable Quality System regulation as we scale up
our manufacturing operations to meet product requirements for expanded clinical
testing. We may enter into capital equipment lease arrangements in the future if
available at appropriate rates and terms.

We believe our existing available cash, cash equivalents and short-term
investments as of March 31, 2003, in combination with continuing contractual
commitments will be sufficient to meet our anticipated capital requirements
until April 2004. Substantial additional capital resources will be required to
fund continuing expenditures related to our research, development, manufacturing
and business development activities. In addition we are pursuing a number of
alternatives available to meet the continuing capital requirements of our
operations, such as collaborative agreements and public or private financings.
Further, we are continuing our reimbursed services to Spine Wave, Inc. We are
currently in preliminary discussions with potential financing sources and
collaborative partners, and funding in the form of equity investments, license
fees, milestone payments or research and development payments could be
generated. There can be no assurance that any of these fundings will be
consummated in the timeframes needed for continuing operations or on terms
favorable to us. If adequate funds are not available, we will be required to
significantly curtail our operating plans and would likely have to sell or
license out significant portions of our technology, and possibly cease
operations.


                                       13
<PAGE>


Item 3. Controls and Procedures

        The Company maintains disclosure controls and procedures designed to
        ensure that information required to be disclosed in the Company's
        reports under the Securities Exchange Act of 1934, as amended, is
        recorded, processed, summarized and reported within the time periods
        specified by the Securities and Exchange Commission and that such
        information is accumulated and communicated to the Company's management,
        including its Chief Executive Officer and Director of Finance, as
        appropriate, to allow timely decisions regarding disclosures. In
        designing and evaluating the disclosure controls and procedures, the
        Company's management recognized that any controls and procedures, no
        matter how well designed and operated, can provide only reasonable
        assurance of achieving the desired control objectives and that the
        Company's management necessarily applied its judgment in evaluating the
        cost-benefit relationship of possible controls and procedures.

        Within 90 days of the filing date of this report, the Company performed
        an evaluation of the effectiveness of the design and operation of its
        disclosure controls and procedures as defined in Rules 13a-14(c) and
        15d-14(c) promulgated under the Exchange Act. The evaluation was
        performed under the supervision and with the participation of the
        Company's management, including the Company's Chief Executive Officer
        and Director of Finance. Based upon that evaluation, the Chief Executive
        Officer and Director of Finance concluded that the Company's disclosure
        controls and procedures were effective in ensuring that material
        information relating to the Company was made known to them by others
        within the Company during the period in which this report was prepared.

        There have been no significant changes in the Company's internal
        controls or in other factors that could significantly affect these
        controls subsequent to the date the Company completed its evaluation.


                                     PART II
                               OTHER INFORMATION


Item 2. Changes in Securities and Use of Proceeds

        On March 25, 2003, we raised approximately $3 million from the sale of
        30,050 shares of our Series I Convertible Preferred Stock ("Series I
        Stock") priced at $100 per share, with warrants to purchase an aggregate
        of 4,545,453 shares of common stock to a small group of institutional
        and accredited investors. Each share of Series I Stock is convertible at
        any time at the election of the holder into approximately 181 shares of
        common stock at a conversion price of $0.55 per share, subject to
        certain anti-dilution adjustments. In connection with this transaction,
        we recorded a non-cash "imputed dividend" expense of $1,305,372 in order
        to account for the difference between the fair market value of the
        common stock and the conversion price of the preferred stock into common
        stock.

        We intend to use the net proceeds for general corporate and working
        capital purposes.

        Each share of Series I Stock received two common stock warrants. One
        warrant is exercisable at any time for 27 shares of common stock at an
        exercise price of $.88 per share, and expires 18 months after the close
        of the offering; the other warrant is exercisable at any time for 18
        shares of common stock at an exercise price of $1.65 per share, and
        expires 48 months after the close of the offering. In connection with
        the issuance of the Series I Stock, additional warrants to purchase
        819,543 shares of common stock at an exercise price of $.65 per share,
        expiring 18 months after the close of the offering were issued as well
        as warrants to purchase 182,272 shares of common stock at an exercise
        price of $.58 per share, warrants to purchase 27,340 shares of common
        stock at an exercise price of $.68 per share, warrants to purchase
        27,340 shares of common stock at an exercise price of $.92 per share and
        warrants to purchase 18,228 shares of common stock at an exercise price
        of $1.73 per share, each expiring 5 years after the close of the
        offering.

        No underwriters were engaged by us in connection with such issuance and,
        accordingly, no underwriting discounts were paid. The offering is exempt
        from registration under Section 4(2) of the Securities Act of 1933, as
        amended (the "Securities Act"), and met the requirements of Rule 506 of
        Regulation D promulgated under the Securities Act. We have agreed to
        file a registration statement covering resales of the shares of common
        stock underlying the Series I Stock and the warrants with the Securities
        and Exchange Commission on or before May 31, 2003.


                                       14
<PAGE>


Item 6. Exhibits and Reports on Form 8-K

        a. Exhibits

                3.1     Certificate of Designation of Series I Convertible
                        Preferred Stock

               10.1     Securities Purchase Agreement related to the sale of
                        Series I Preferred Stock dated as of March 25, 2003

               10.2     Form of Series I First Warrant

               10.3     Form of Series I Second Warrant

               10.4     Form of $0.65 Warrant issued in connection with Series I
                        Preferred Stock

               10.5     Form of $0.58 Warrant issued in connection with Series I
                        Preferred Stock

               10.6     Form of $0.68 Warrant issued in connection with Series I
                        Preferred Stock

               10.7     Form of $0.92 Warrant issued in connection with Series I
                        Preferred Stock

               10.8     Form of $1.73 Warrant issued in connection with Series I
                        Preferred Stock

               10.9     2002 Stock Option Plan, and forms of Incentive Stock
                        Option Agreement and Non-Statutory Stock Option
                        Agreement

               99.1     Certification of Chief Executive Officer pursuant to 18
                        U.S.C. Section 1350, as Adopted Pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002

               99.2     Certification of Director of Finance (Principal
                        Financial Officer) pursuant to 18 U.S.C. Section 1350,
                        as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                        Act of 2002


        b. Reports on Form 8-K

                        Current Report on Form 8-K filed with the Securities and
                        Exchange Commission on March 28, 2003.


                                       15
<PAGE>


                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                   PROTEIN POLYMER TECHNOLOGIES, INC.



Date: May 13, 2003                 By  /s/ J. Thomas Parmeter
                                       ----------------------
                                       J. Thomas Parmeter
                                       Chairman of the Board, Chief
                                       Executive Officer, President


Date: May 13, 2003                 By  /s/  Janis Y. Neves
                                       -------------------
                                       Janis Y. Neves
                                       Director of Finance, Controller
                                       and Assistant Secretary



                                       16
<PAGE>


                                  CERTIFICATION
                          PURSUANT TO 17 CFR 240.13a-14
                                PROMULGATED UNDER
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, J. Thomas Parmeter, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Protein Polymer
     Technologies, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     (b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     (c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     (a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and


                                       17
<PAGE>


     report financial data and have identified for the registrant's auditors
     any material weaknesses in internal controls; and

     (b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: May 13, 2003


/s/  J. Thomas Parmeter
-----------------------
J. Thomas Parmeter
Chief Executive Officer


                                       18
<PAGE>


                                  CERTIFICATION
                          PURSUANT TO 17 CFR 240.13a-14
                                PROMULGATED UNDER
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Janis Y. Neves, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Protein Polymer
     Technologies, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a)designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     (b)evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     (c)presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     (a)all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and


                                       19
<PAGE>


     report financial data and have identified for the registrant's auditors any
     material weaknesses in internal controls; and

     (b)any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: May 13, 2003


/s/  Janis Y. Neves
-------------------
Janis Y. Neves
Director of Finance


                                       20
<PAGE>


                                  EXHIBIT INDEX



Exhibit
Number            Description
------            -----------


    3.1        Certificate of Designation of Series I Convertible Preferred
               Stock

   10.1        Securities Purchase Agreement related to the sale of Series I
               Preferred Stock dated as of March 25, 2003

   10.2        Form of Series I First Warrant

   10.3        Form of Series I Second Warrant

   10.4        Form of $0.65 Warrant issued in connection with Series I
               Preferred Stock

   10.5        Form of $0.58 Warrant issued in connection with Series I
               Preferred Stock

   10.6        Form of $0.68 Warrant issued in connection with Series I
               Preferred Stock

   10.7        Form of $0.92 Warrant issued in connection with Series I
               Preferred Stock

   10.8        Form of $1.73 Warrant issued in connection with Series I
               Preferred Stock

   10.9        2002 Stock Option Plan, and forms of Incentive Stock Option
               Agreement and Non-Statutory Stock Option Agreement

   99.1        Certification of Chief Executive Officer pursuant to 18 U.S.C.
               Section 1350, as Adopted Pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002

   99.2        Certification of Director of Finance (Principal Financial
               Officer) pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
               to Section 906 of the Sarbanes-Oxley Act of 2002


                                       21