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


                                  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 September 30, 2002

[ ]   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 November 8, 2002, 27,449,028
shares of common stock were outstanding.

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

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


                                       1
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.

                                   FORM 10-QSB

                                      INDEX


<TABLE>
<CAPTION>

                                                                                           Page No.
                                                                                           --------
<S>                                                                                              <C>

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

               Condensed Balance Sheets -
                      September 30, 2002 and December 31, 2001  .................................3

               Condensed Statements of Operations -
                      For the Three Months and Nine Months ended September 30, 2002 and 2001
                      and the period July 6, 1988 (inception) to September 30, 2002..............4

               Condensed Statements of Cash Flows -
                      For the Nine Months ended September 30, 2002 and 2001
                      and the period July 6, 1988 (inception) to September 30, 2002..............5

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

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


PART II.       OTHER INFORMATION

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>


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

                            Condensed Balance Sheets

<TABLE>
<CAPTION>
                                                                September 30,    December 31,

                                                                    2002             2001
                                                              -----------------------------------
<S>                                                           <C>               <C>

Assets                                                           (unaudited)
Current assets:
Cash and cash equivalents                                     $       666,067   $      234,271
Other current assets                                                  122,537           57,520
                                                              -----------------------------------
Total current assets                                                  788,604          291,791

Deposits                                                               30,479           29,679
Equipment and leasehold improvements, net                             108,662          205,247
                                                              -----------------------------------

                                                              $       927,745   $      526,717
                                                              ===================================
Liabilities and stockholders' equity
   Current liabilities:
   Accounts payable                                           $       265,243   $      356,942
   Accrued employee benefits                                          100,249          118,987
   Other accrued expenses                                              53,474           43,398
   Deferred revenue                                                    83,333          333,333
   Deferred rent                                                       54,250           24,111
                                                              -----------------------------------
Total current liabilities                                             556,549          876,771


   Long-term portion deferred rent                                          -           48,222


Stockholders' equity:
Convertible Preferred Stock, $.01 par value, 5,000,000 shares
  authorized, 76,121 and 88,258 shares issued and outstanding
  at September 30, 2002 and December 31, 2001, respectively;
  liquidation preference of $7,612,100 and $8,825,800 at
  September 30, 2002 and December 31, 2001, respectively            7,266,780        8,480,530
Common stock, $.01 par value, 60,000,000 shares authorized,
  29,724,028 and 21,740,650 shares issued and outstanding at
  September 30, 2002 and December 31, 2001, respectively              297,252          217,418

Additional paid-in capital                                         36,615,307       33,794,177
Deficit accumulated during development stage                      (43,808,143)     (42,890,401)
                                                              -----------------------------------
Total stockholders' equity                                           (371,196)        (398,276)
                                                              -----------------------------------

                                                              $       927,745   $      526,717

                                                              ===================================
</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) to
                                   Three months ended               Nine months ended         September 30,
                                     September 30,                    September 30,
                                  2002            2001             2002            2001           2002
                            ----------------------------------------------------------------------------------
<S>                         <C>             <C>              <C>              <C>             <C>

Revenues:
   Contract revenue         $      713,742  $      283,333   $    2,127,084   $      550,000  $    8,375,099
   Interest income                   1,058          12,175            4,695           38,857       1,244,832
   Product and other income              -               -            1,500               38         694,779
                            ----------------------------------------------------------------------------------
Total revenues                     714,800         295,508        2,133,279          588,895      10,314,710

Expenses:
   Research and development        556,916         677,861        2,080,673        1,880,382      31,768,045
   Selling, general and
   administrative                  303,602         299,845          970,347        1,062,490      18,406,422
                            ----------------------------------------------------------------------------------
Total expenses                     860,518         977,706        3,051,020        2,942,872      50,174,467
                            ----------------------------------------------------------------------------------

Net loss                          (145,718)       (682,198)        (917,741)      (2,353,977)    (39,859,757)
Undeclared, imputed and/or
  paid dividends on
  preferred stock                   69,980          69,980          207,659          207,659       6,002,591
                            ----------------------------------------------------------------------------------

Net loss applicable to
  common shareholders       $     (215,698) $     (752,178)  $   (1,125,400)  $   (2,561,636) $  (45,862,348)

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

Basic and diluted net loss
  per common share          $       (0.01)  $       (0.03)   $        (0.04)  $       (0.12)
                            =================================================================

Shares used in computing
  basic and diluted net
  loss per common share         29,713,871      21,735,420       26,964,186       20,749,940
                            =================================================================
</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
                                                    Nine months ended        (inception) to
                                                      September 30,           September 30,
                                                  2002             2001            2002
                                             --------------------------------------------------
<S>                                          <C>             <C>             <C>

Operating activities
Net loss                                     $     (917,741) $   (2,353,977) $  (39,859,757)
Adjustments to reconcile net loss to net
  cash used for operating activities:
    Stock issued for compensation and
      interest                                            -               -         472,676
    Depreciation and amortization                   123,697         107,828       2,326,196
    Write-off of purchased technology                     -               -         503,500
    Changes in assets and liabilities:
      Deposits                                         (800)         (2,800)        (30,479)
      Other current assets                          (65,017)        (53,687)       (122,537)
      Accounts payable                              (91,701)        (15,641)        265,241
      Accrued employee benefits                     (18,738)         39,540         100,249
      Other accrued expenses                        (10,077)         (3,819)         53,475
    Deferred revenue                               (250,000)       (250,001)         83,333
    Deferred rent                                   (18,083)          1,283          54,250
                                             --------------------------------------------------
 Net cash used for operating activities          (1,228,306)     (2,531,274)    (36,153,853)

Investing activities
Purchase of technology                                    -               -        (570,000)
Purchase of equipment and improvements              (27,112)        (99,669)     (1,992,832)
Purchases of short-term investments                       -               -     (16,161,667)
Sales of short-term investments                           -               -      16,161,667
                                             --------------------------------------------------
Net cash used for investing activities       $      (27,112) $      (99,669) $   (2,562,832)
</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
                                                    Nine months ended        (inception) to
                                                      September 30,           September 30,
                                                  2002             2001            2002
                                             --------------------------------------------------
<S>                                          <C>             <C>             <C>

Financing activities
Net proceeds from exercise of options and
  warrants, and sale of common stock         $    1,687,214  $    1,255,228  $   24,006,824
Net proceeds from issuance and conversion of
  preferred stock                                         -       1,218,258      14,294,668
Net proceeds from convertible notes and
  detachable warrants                                     -               -       1,068,457
Payment on capital lease obligations                      -         (25,088)       (288,770)
Payment on note payable                                   -               -        (242,750)
Proceeds from note payable                                -               -         484,323
                                             --------------------------------------------------
Net cash provided by financing activities         1,687,214       2,448,398      39,382,752
                                             --------------------------------------------------

Net increase in cash and cash equivalents           431,796        (182,545)        666,067

Cash and cash equivalents at beginning of
  period                                            234,271         866,220               -
                                             --------------------------------------------------
Cash and cash equivalents at end of period   $      666,067  $      683,675  $      666,067
                                             ==================================================

Supplemental disclosures of cash flow
  information
Equipment purchased by capital leases        $            -  $            -  $      288,772
Interest paid                                           723           3,924         145,328
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                                      643,750         400,000       3,356,300
Conversion of Series G preferred stock to
  common stock                                      570,000               -         570,000
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
</TABLE>


See accompanying notes.


                                        6
<PAGE>


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

                     Notes to Condensed Financial Statements
                                   (unaudited)

                               September 30, 2002

1.  Basis of Presentation

The condensed financial statements of Protein Polymer Technologies, Inc. (the
"Company") for the three months and the nine months ended September 30, 2002 and
2001 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 September
30, 2002 and the results of operations for the three months and the nine months
ended September 30, 2002 and 2001. The results of operations for the nine months
ended September 30, 2002 are not necessarily indicative of the results to be
expected for the year ended December 31, 2002. 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, 2001, filed with the Securities
and Exchange Commission.

2.  New Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board issued SFAS No.144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No.144
supersedes SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of." SFAS No. 144 addresses the accounting
for long-lived assets to be disposed of by sale and resulting implementation
issues. This statement requires the measurement of long-lived assets at the
lower of carrying amount or fair value less cost to sell, whether reported in
continuing operations or in discontinued operations. This statement is effective
for financial statements issued for fiscal years beginning after December 15,
2001. The Company adopted SFAS No. 144 as of January 1, 2002. There was no
financial impact as a result of the adoption. The Company will apply its
provisions to future impairments or disposals of long-lived assets as they
occur.

In April 2002, the Financial Accounting Standards Board issued SFAS No. 145,
which rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of
Debt," SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers" and
SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements
and amends SFAS No. 13, "Accounting for Leases." This statement updates,
clarifies and simplifies existing accounting pronouncements. As a result of
rescinding SFAS No. 4 and SFAS No. 64, the criteria in Accounting Principles
Bulletin No. 30 will be used to classify gains and losses from extinguishment of
debt. This statement is effective for financial statements issued for fiscal
years beginning after May 15, 2002. The Company does not expect the adoption of
SFAS No. 145 to have a material impact on the Company's financial position or
its results of operations.

In June 2002, the Financial Accounting Standards Board issued SFAS No. 146,
"Accounting for Exit or Disposal Activities." SFAS No. 146 addresses significant
issues regarding the recognition, measurement, and reporting of costs that are
associated with exit and disposal activities, including restructuring activities
that are currently accounted for pursuant to the guidance that the Emerging
Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." The scope of
SFAS No. 146 also includes costs related to terminating a contract that is not a
capital lease and certain termination benefits provided to employees under the
terms of one-time benefit arrangements. SFAS No. 146 will be effective for exit
or disposal activities that are initiated after December 31, 2002.

3.  Net Loss Per Share

Net loss per share is computed using the weighted average number of common
shares outstanding during the period. The loss figures used for this calculation
recognize accumulated dividends on the Company's Series D and Series F Preferred
Stock. Such dividends are payable when declared by the Board of Directors in
cash or common stock.


                                       7
<PAGE>


4.  Basic and Diluted Loss Per Share

In accordance with FAS No. 128, we are required to present basic and diluted
earnings per share if applicable. Basic and diluted earnings per share are
determined based on the weighted average number of shares outstanding during the
period. Diluted earnings per share also include potentially dilutive securities
such as options and warrants outstanding and securities convertible into common
stock.

Both the basic and diluted loss per share for the nine months ended September
30, 2002 and 2001 are based on the weighted average number of shares of common
stock outstanding during the periods. Since potentially dilutive securities have
not been included in the calculation of the diluted loss per share for both
periods as their effect is anti-dilutive, there is no difference between the
basic and diluted loss per share calculations.

5.  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.

6.  Expanded Spine Wave, Inc. Relationship

On March 17, 2002, we executed additional agreements with Spine Wave, Inc. that
expanded our contractual research and development relationship, and that
provided us with additional equity incentives in the form of Spine Wave common
stock and warrants. Under the amended Supply and Services Agreement, the
Company, on behalf of Spine Wave, is proceeding with pre-clinical safety and
performance studies of the injectable spinal disc nucleus device 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 approvals, 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 fully reimbursed including both direct costs and associated
overhead costs. Spine Wave is responsible for clinical testing, regulatory
approvals, and commercialization. For the nine months ended September 30, 2002,
we received $1,877,084 in contract revenue from Spine Wave which represents the
reimbursement of direct costs plus overhead costs allocated to research and
development resources performing 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 the 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) acceptance
of the investigational device exemption application by the Food and Drug
Administration (150,000 shares); and (iii) completion of certain manufacturing
arrangements and production of certain quantities of product (150,000 shares).
As of September 30, 2002, none of the performance goals had been completed.

7.  Exercise of Warrants

During January 2002, certain holders of warrants, issued in connection with the
sale of Series G Preferred Stock, exercised their warrants to purchase common
stock which were due to expire in February 2002. The original exercise price was
$0.50 per share. As an inducement to exercise the warrant early, we offered each
holder a reduced exercise price of $0.25 and the issuance of a new eighteen
month warrant for a similar number of shares at an exercise price of $0.40 per
share. As a result we raised $990,000. The newly issued warrants will expire on
the last day of August 2003.

In August 2002, certain holders of warrants, issued in connection with the sale
of Series G Preferred Stock, exercised their warrants to purchase common stock
which were due to expire in August 2003. The original exercise price was $0.40
per share. As an inducement to exercise the warrant early, we offered each
holder a reduced exercise price of $0.30 per share and the issuance


                                       8
<PAGE>


of a new warrant for a similar number of shares at an exercise price of $0.10
per share. As a result we raised $682,500. The newly issued warrants will expire
on the last day of August 2003.

8.  Liquidity

We believe our existing available cash and cash equivalents as of September 30,
2002, plus contractual amounts receivable, is sufficient to meet our anticipated
capital requirements until January 2003. 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.


                                       9
<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 September 30, 2002 had an accumulated deficit of $(43,808,143).

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


                                       10
<PAGE>


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.

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

In April 2001, we joined with Windamere Venture Partners and affiliates to form
a new orthopedic company, 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 a result of the endeavor, we entered
into an exclusive, worldwide license agreement with Spine Wave in exchange for
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.

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
provided us with additional equity incentives in the form of Spine Wave common
stock and warrants. Under the amended Supply and Services Agreement, the
Company, on behalf of Spine Wave, is proceeding with pre-clinical safety and
performance studies of the injectable spinal disc nucleus device 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 fully reimbursed including both direct costs and associated
overhead costs. Spine Wave is responsible for clinical testing, regulatory
approvals, and commercialization. For the nine months ended September 30, 2002,
we received $1,877,084 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 the 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) acceptance
of the investigational device exemption application by the Food and Drug
Administration (150,000 shares); and (iii) completion of certain manufacturing
arrangements, and production of certain quantities of product (150,000 shares).
As of September 30, 2002, none of the performance goals had been completed.

License Agreements

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.

Sanyo Chemical Industries, Ltd.
-------------------------------

In February 2000, we sold our in vitro cell culture business to Sanyo
Chemical Industries, Ltd., ("Sanyo"). Under the terms of the agreement,
Sanyo purchased a license to our in vitro cell culture technology and
existing product inventory for $280,000. As a result of the arrangement, we
recognized $280,000 in revenue in the first quarter of 2000 as the licensed
technology was transferred to Sanyo upon execution of the agreement and
without further obligation on our part.

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,


                                       11
<PAGE>


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 $250,000 for the nine months ended September 30,
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.

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 product development milestones incorporating the licensed
technology. In connection with the license agreement, Genencor received
warrants to acquire up to $1 million of our common stock. The warrants are
exercisable within four years of the agreement date and at a price of 110%
of the average over the counter market price during a five-day period
immediately preceding the agreement date. As a result of the collaboration,
we recognized $750,000 in license fee revenue (less the issuance of warrants
to purchase our common stock valued at $319,000) in 2000. The agreement
terminates on the date of expiration of the last remaining patent.


Research and Development

Our product for the treatment of female stress urinary incontinence is in pilot
human clinical testing. We hope to begin pivotal clinical testing during the
summer of 2003. 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 12 to 18 months 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 hope to begin pivotal
clinical testing during the summer of 2003. 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 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. Thus
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 nine month
period ended September 30, 2002 and for the period of project inception to date
are approximately $1,877,084 and $2,272,084, respectively.


                                       12
<PAGE>


To the extent sufficient capital resources are available, we continue to
research the use of our protein polymers for other tissue repair and medical
device applications, principally for use in tissue engineering matrices and 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 reimbursements and milestone payments, the Company expects to
continue incurring operating losses for the next several years.

We are aggressively pursuing domestic and international patent protection for
our technology, making claim to an extensive range of recombinantly prepared
structural and functional proteins, methods for preparing synthetic repetitive
DNA, methods for the production and purification of protein polymers, end-use
products incorporating such materials and methods for their use. To date, the
United States Patent and Trademark Office ("USPTO") has issued 24 patents to us.
In addition, we have filed corresponding patent applications in other relevant
commercial jurisdictions.

As of September 30, 2002, we had cash and cash equivalents totaling $666,067. We
believe our available cash and cash equivalents, accounts receivable, and future
contractual research and development payments will be sufficient to meet our
anticipated capital requirements until January 2003. We will continue to attempt
to raise additional funds for continuing operations through private or public
offerings and collaborative agreements. See "Liquidity and Capital Resources"
below for additional information and a description of the associated risks.

Results of Operations

We received $713,742 in contract and licensing revenue for the three months
ended September 30, 2002 as compared to $283,333 for the three months ended
September 30, 2001. For the nine months ended September 30, 2002, we received
$2,127,084 as compared to $550,000 for the same period in 2001. The contract and
licensing revenue for the three months and the nine months ended September 30,
2002 primarily represents $83,333 and $250,000, respectively, from Femcare Ltd.
(the amortized portion of an up-front license payment of $1 million being
recognized ratably over a period of three years ending in January of 2003) for
the commercial rights to our potential incontinence product in Europe and
Australia, and payments totaling $630,409 and $1,877,084, respectively, 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. The increase in contract and licensing revenue over the
nine-month period, as compared to the same period in 2001, primarily reflects a
March 17, 2002 amendment in our Supply and Services Agreement with Spine Wave
(Amendment No. 1), that provides for an increase in research and development
services and payments in support of the pre-clinical development of the
injectable spinal disc nucleus product.

Interest income was $1,058 and $4,695, respectively, for the three months and
nine months ended September 30, 2002 versus $12,175 and $38,857 for the same
periods in 2001.

Research and development expenses for the three months ended September 30, 2002
were $556,916, compared to $677,861 for the same period in 2001. Research and
development expenses for the nine-month period ended September 30, 2002 were
$2,080,673 as compared to $1,880,382 for the same period in 2001. The increase
in research and development expenditures for the nine-month period in 2002
primarily reflects increased 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 and the nine
months ended September 30, 2002 were $303,602 and $970,347, respectively, as
compared to $299,845 and $1,062,490 for the same periods in 2001. 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 September 30, 2002, we recorded a net loss applicable
to common shareholders of $215,698, or $0.01 per share, as compared to a loss of
$752,178, or $0.03 per share for the same period in 2001. For the nine-month
period, our net loss applicable to common shareholders was $1,125,400, or $0.04
per share as compared to $2,561,636, or $0.12 per share for the same period in
2001. Also included in each of the three month periods of 2002 and 2001 were


                                       13
<PAGE>


$69,220, and $207,659 for each of the nine-month periods, respectively, for
undeclared dividends related to our preferred stock.

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, the sharp rise in utility costs
may have a greater impact in the future.

Liquidity and Capital Resources

As of September 30, 2002, we had cash and cash equivalents of $666,067 as
compared to $234,271 at December 31, 2001. As of September 30, 2002, we had
working capital of $232,055 as compared to ($584,980) at December 31, 2001.

We had no long-term debt obligations as of September 30, 2002 or as of December
31, 2001. We had $27,112 in expenditures for capital equipment and leasehold
improvements for the nine months ending September 30, 2002, compared to $99,669
for the same period last year. We are expecting to increase our capital
expenditures in the next few quarters (to the extent additional capital is
obtained), as we improve existing space to expand capacity to meet materials
manufacturing requirements for clinical testing. We may also enter into capital
lease arrangements if available at appropriate rates and terms.

Due to increases in contractual research and development payments, we have been
able over the past nine months to substantially reduce our cash burn rate. As a
result our predicted cash requirements for the remainder of 2002 are lower than
in previous periods. We believe our existing available cash, cash equivalents
and accounts receivable, in combination with anticipated contract research
payments and revenues received from the transfer of clinical testing materials,
will be sufficient to meet our anticipated capital requirements until January
2003. Substantial additional capital resources will be required to fund
continuing expenditures related to our research, development, manufacturing and
business development activities. We believe there may be a number of
alternatives to meeting the continuing capital requirements of our operations,
including additional collaborative agreements and public or private financings.
There can be no assurance, however, that any of these fundings will be
consummated in the necessary time frames needed for continuing operations or on
terms favorable to us. If adequate funds are not available, we will be required
to significantly curtail or cease our operations, and may have to sell or
license out significant portions of our technology or potential products.



                                       14
<PAGE>


Item 6. EXHIBITS AND REPORTS ON FORM 8-K

        a.     Exhibits

               10.43  Amendment No. 1 to Supply and Services Agreement dated
                      February 12, 2002 between the Company and Spine Wave, Inc.

               10.44  Stock Purchase and Vesting Agreement dated March 21, 2002
                      between the Company and Spine Wave, Inc.

               10.45  Warrant to Purchase Shares of Common Stock of Spine Wave,
                      Inc. issued to the Company

               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 September 4, 2002.


                                       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:    November 13, 2002          By  /s/  J. Thomas Parmeter
                                            -----------------------
                                               J. Thomas Parmeter
                                               Chairman of the Board, Chief
                                               Executive Officer, President


    Date:    November 13, 2002          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 functions):

    (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 report


                                       17
<PAGE>


        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: November 13, 2002


/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 functions):

    (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 report


                                       19
<PAGE>


        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: November 13, 2002


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


                                       20
<PAGE>


                                  EXHIBIT INDEX



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


  10.43    Amendment No. 1 to Supply and Services Agreement dated February 12,
           2002 between the Company and Spine Wave, Inc.

  10.44    Stock Purchase and Vesting Agreement dated March 21, 2002 between the
           Company and Spine Wave, Inc.

  10.45    Warrant to Purchase Shares of Common Stock of Spine Wave, Inc. issued
           to the Company

  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