<PAGE>

================================================================================
                                       
                     SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                              ---------------------

                                   FORM 10-Q

                              ---------------------

(MARK ONE)
   X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
------ EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998 OR

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
------ EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________________
       TO ______________________.

                                       
                       COMMISSION FILE NUMBER 0-20726


                                 CORTECH, INC.
           (Exact name of registrant as specified in its charter) 
                                       
                 DELAWARE                                 84-0894091     
       (State or other jurisdiction                    (I.R.S. Employer  
    of incorporation or organization)                Identification No.) 
                                       
       6850 N. BROADWAY, SUITE G                             80221    
             DENVER, COLORADO                              (Zip Code) 
(Address of principal executive offices)
                                       
                                 (303) 650-1200
             (Registrant's telephone number, including area code)

                              ---------------------

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.

                                Yes  x   No    
                                    ---     ---

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

     Common Stock $0.002 par value                     18,523,918           
     ------------------------------         ------------------------------
             (Class)                        (Outstanding at April 30, 1998) 

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

<PAGE>
                                       
                                 CORTECH, INC.
                                       
                                     INDEX
                                       

PART I.   FINANCIAL INFORMATION                                       PAGE NO.
                                                                      --------
Item  1.  Financial Statements and Notes (unaudited)

          Balance Sheets - March 31, 1998
            and December 31, 1997. . . . . . . . . . . . . . . . . . .     3

          Statements of Operations -
            for the three months ended
            March 31, 1998 and 1997. . . . . . . . . . . . . . . . . .     4

          Statements of Cash Flows -
            for the three months ended 
            March 31, 1998 and 1997. . . . . . . . . . . . . . . . . .     5

          Notes to Financial Statements. . . . . . . . . . . . . . . .     6

Item  2.  Management's Discussion and 
            Analysis of Financial Condition
            and Results of Operations. . . . . . . . . . . . . . . . .     7

Item  3.  Quantitative and Qualitative Disclosures
            About Market Risk. . . . . . . . . . . . . . . . . . . . .     9


PART II.  OTHER INFORMATION

Item  1.  Legal Proceedings. . . . . . . . . . . . . . . . . . . . . .     9

Item  5.  Other Information. . . . . . . . . . . . . . . . . . . . . .    10

Item  6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . .    10

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    11


                                       2
<PAGE>
                                     PART I

ITEM 1.  FINANCIAL STATEMENTS AND NOTES.

                                  CORTECH, INC.

                                 BALANCE SHEETS
              (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

                                     ASSETS
<TABLE>
<CAPTION>
                                                        MARCH 31,  DECEMBER 31,
                                                          1998        1997
                                                        ---------  ------------
<S>                                                     <C>        <C>
CURRENT ASSETS
  Cash and cash equivalents . . . . . . . . . . . . .   $ 14,315     $ 11,562
  Short-term investments (Note 2) . . . . . . . . . .          -        3,841
  Prepaid expenses and other. . . . . . . . . . . . .        279          308
                                                        --------     --------
      Total current assets. . . . . . . . . . . . . .     14,594       15,711
                                                        --------     --------

PROPERTY AND EQUIPMENT, at cost
  Leasehold improvements. . . . . . . . . . . . . . .      5,118        8,026
  Office furniture and equipment. . . . . . . . . . .      2,300        2,300
                                                        --------     --------
                                                           7,418       10,326
  Less - Accumulated depreciation and amortization. .     (7,082)      (9,592)
                                                        --------     --------
                                                             336          734
                                                        --------     --------
        Total Assets. . . . . . . . . . . . . . . . .   $ 14,930     $ 16,445
                                                        --------     --------
                                                        --------     --------


               LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable. . . . . . . . . . . . . . . . . .   $    707     $    600
  Accrued liabilities . . . . . . . . . . . . . . . .         33          162
  Accrued vacation and other compensation . . . . . .        160          264
  Advances from corporate partners. . . . . . . . . .         45           36
                                                        --------     --------
        Total current liabilities . . . . . . . . . .        945        1,062
                                                        --------     --------

STOCKHOLDERS' EQUITY
  Preferred stock, $.002 par value, 2,000,000 shares 
    authorized, none issued . . . . . . . . . . . . .          -            -
  Common stock, $.002 par value, 50,000,000 shares 
    authorized 18,523,918 shares issued and 
    outstanding . . . . . . . . . . . . . . . . . . .         37           37
  Warrants. . . . . . . . . . . . . . . . . . . . . .      1,077        1,077
  Additional paid-in capital. . . . . . . . . . . . .     98,909       98,909
  Deferred compensation . . . . . . . . . . . . . . .          -           (1)
  Accumulated deficit . . . . . . . . . . . . . . . .    (86,038)     (84,639)
                                                        --------     --------
        Total stockholders' equity. . . . . . . . . .     13,985       15,383
                                                        --------     --------
        Total Liabilities and Stockholders' Equity. .   $ 14,930     $ 16,445
                                                        --------     --------
                                                        --------     --------
</TABLE>

           The accompanying notes to financial statements are an
                     integral part of these statements.


                                       3
<PAGE>

                                 CORTECH, INC.

                            STATEMENTS OF OPERATIONS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                                    FOR THE THREE MONTHS ENDED
                                                  -------------------------------
                                                  MARCH 31, 1998   MARCH 31, 1997
                                                  --------------   --------------
<S>                                               <C>              <C>
REVENUES:
  Sponsored research and development (Note 3)
    Ono . . . . . . . . . . . . . . . . . . . .    $         -      $     1,446
    SB. . . . . . . . . . . . . . . . . . . . .              -              435
                                                   -----------      -----------
      Total revenues. . . . . . . . . . . . . .              -            1,881
                                                   -----------      -----------

EXPENSES:
  Research and development. . . . . . . . . . .            288            2,334
  General and administrative. . . . . . . . . .          1,522              757
                                                   -----------      -----------
      Total expenses. . . . . . . . . . . . . .          1,810            3,091
                                                   -----------      -----------
      Operating loss. . . . . . . . . . . . . .         (1,810)          (1,210)
                                                   -----------      -----------
Interest income . . . . . . . . . . . . . . . .            196              313
Gain on disposition of property and equipment .            215                -
                                                   -----------      -----------
NET LOSS. . . . . . . . . . . . . . . . . . . .    $    (1,399)     $      (897)
                                                   -----------      -----------
                                                   -----------      -----------

  Basic net loss per share. . . . . . . . . . .    $     (0.08)     $     (0.05)
                                                   -----------      -----------
                                                   -----------      -----------

  Weighted average common shares
    outstanding . . . . . . . . . . . . . . . .     18,523,918       18,518,079
                                                   -----------      -----------
                                                   -----------      -----------
</TABLE>

           The accompanying notes to financial statements are an
                     integral part of these statements.


                                       4
<PAGE>
                                 CORTECH, INC.

                           STATEMENTS OF CASH FLOWS
                                (in thousands)
<TABLE>
<CAPTION>
                                                      FOR THE THREE MONTHS ENDED
                                                     ------------------------------
                                                     MARCH 31, 1998  MARCH 31, 1997
                                                     --------------  --------------
<S>                                                  <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss . . . . . . . . . . . . . . . . . . . .      $(1,399)        $  (897)
  Adjustments to reconcile net loss to net cash 
   used in operating activities -
    Depreciation and amortization. . . . . . . . .          317             459
    Gain on disposition of equipment . . . . . . .          (90)              -
    Research and compensation expense related to 
     grant of options, including amortization of 
     deferred compensation . . . . . . . . . . . .            1              14
    Decrease in prepaid expenses and other . . . .           29             689
    Decrease (increase) in accounts payable. . . .          107            (182)
    Increase (decrease) in advances from 
     corporate partner . . . . . . . . . . . . . .            9            (528)
    (Decrease) in accrued liabilities, accrued 
     vacation and other compensation . . . . . . .         (233)            (21)
    Increase in unearned income. . . . . . . . . .            -              29
                                                        -------         -------
      Net cash used in operating activities. . . .       (1,259)           (437)
                                                        -------         -------



CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment. . . . . . .            -             (29)
  Proceeds from sales of property and equipment. .          171               -
  Purchases of short-term investments. . . . . . .           (9)         (7,042)
  Sales of short-term investments. . . . . . . . .        3,850           6,350
                                                        -------         -------
    Net cash provided by (used in) investing 
     activities. . . . . . . . . . . . . . . . . .        4,012            (721)
                                                        -------         -------

NET INCREASE (DECREASE) IN CASH AND CASH 
  EQUIVALENTS. . . . . . . . . . . . . . . . . . .        2,753          (1,158)
CASH AND CASH EQUIVALENTS, beginning of period . .       11,562           7,792
                                                        -------         -------
CASH AND CASH EQUIVALENTS, end of period . . . . .      $14,315         $ 6,634
                                                        -------         -------
                                                        -------         -------

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING 
 ACTIVITIES:
  Note receivable for sale of property and 
   equipment . . . . . . . . . . . . . . . . . . .      $   125         $     -
                                                        -------         -------
                                                        -------         -------
</TABLE>

           The accompanying notes to financial statements are an
                     integral part of these statements.


                                       5
<PAGE>

                                CORTECH, INC.
                                       
                        NOTES TO FINANCIAL STATEMENTS
                                 March 31, 1998

(1)  SIGNIFICANT ACCOUNTING POLICIES

     The balance sheet at March 31, 1998 and the related statements of 
operations and statements of cash flows for the three-month periods ended 
March 31, 1998 and 1997 are unaudited, but in management's opinion include 
all adjustments, consisting only of normal recurring adjustments, necessary 
for a fair presentation of such financial statements.  Interim results are 
not necessarily indicative of results for a full year.  The accompanying 
financial statements should be read in conjunction with the financial 
statements as of and for the year ended December 31, 1997 (included in the 
Company's 1997 Annual Report on Form 10-K filed with the Securities and 
Exchange Commission).

     Certain items in the prior period have been reclassified to conform to 
the current presentation.

NEW ACCOUNTING PRONOUNCEMENT

     In March 1998, the Company adopted Statement of Financial Accounting 
Standards ("SFAS") No. 130, "Reporting of Comprehensive Income". Management 
believes the adoption of SFAS 130 will not have a significant impact on the 
Company's financial position and results of operations.

(2)  SHORT-TERM INVESTMENTS 

     Under SFAS No. 115, "Accounting for Certain Investments in Debt and Equity 
Securities," the Company's short-term investments held as of March 31, 1997, 
which consisted entirely of government securities, were classified as 
available-for-sale.  These securities matured on various dates through August 
1997.

(3) RESEARCH AND DEVELOPMENT AGREEMENTS

     In November 1995, Cortech entered into a worldwide product development 
and license agreement with SmithKline Beecham ("SB") for the development of 
Bradycor-TM-.  In March 1997, SB and the Company agreed to terminate their 
collaboration when a Phase II trial of Bradycor in patients with traumatic 
brain injury failed to demonstrate a statistically significant benefit of the 
compound on intracranial pressure, the primary endpoint of the trial. 

     During the first quarter of 1997, Cortech received $1.5 million from Ono 
Pharmaceutical Co., Ltd. ("Ono") for work to be performed over the next six 
months (under an agreement signed in March 1995 and amended in April 1997) 
to develop an oral elastase inhibitor.  Of this amount, $1.4 million was 
recorded as unearned income and was recognized as revenue over the following 
six months (including $246,000 in the first quarter of 1997).  Under the 
terms of the amended agreement, Ono assumed all responsibilities for research 
activities during the final six-month period of the collaborative project 
(which terminated on March 14, 1998).  As a result of this reallocation of 
responsibilities, Ono was not required to pay the Company $1.5 million in 
research funding to offset the costs that the Company would otherwise have 
incurred under the agreement during such final six-month period.

(4) OTHER

     On February 27, 1998, a complaint was filed in the New Castle County, 
Delaware Court of Chancery naming the Company, the Company's directors and 
BioStar, Inc. ("BioStar") as defendants. The complaint, filed by a stockholder 
of the Company, claims to be on behalf of a class of all the Company's 
stockholders and contends that the directors of the Company breached their 
fiduciary duties to the Company's stockholders when they unanimously approved 
the proposed combination with BioStar. The complaint seeks to enjoin the 
proposed combination with BioStar as well as the operation of the Company's 
stockholder rights plan and seeks an order rescinding the proposed combination 
with BioStar upon its consummation as well as compensatory damages and costs. 
The Company believes that the claims are without merit and intends to 
vigorously defend against this suit. Although there can be no assurances in 
this regard, the Company believes that the suit will have no material adverse 
effect on the Company because the Company (i) believes that the claimant will 
not prevail on the merits, (ii) has insurance which it believes will cover the 
cost of defending this claim (except for a $75,000 deductible amount) and 
(iii) has terminated the agreement which provided for the proposed combination 
with BioStar.

                                       6
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

     THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH 
THE COMPANY'S 1997 ANNUAL REPORT ON FORM 10-K AS WELL AS THE COMPANY'S 
FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS QUARTERLY 
REPORT ON FORM 10-Q. WHEN USED IN THIS DISCUSSION, THE WORD "EXPECTS" AND 
SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH 
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL 
RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. SUCH RISKS AND 
UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THE RISKS DISCUSSED BELOW AS 
WELL AS THE RISKS DISCUSSED IN THE SECTIONS ENTITLED "RISK FACTORS" AND 
"CORTECH BUSINESS" IN THE COMPANY'S 1997 ANNUAL REPORT ON FORM 10-K. THE 
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN SPEAK ONLY AS OF THE DATE HEREOF. 
THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO RELEASE 
PUBLICLY ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED 
HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO 
OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH 
STATEMENT IS BASED.

GENERAL

     Cortech is a biopharmaceutical company whose principal focus has been the 
discovery and development of novel therapeutics for the treatment of 
inflammatory disorders. Specifically, the Company has directed its research 
and development efforts principally toward protease inhibitors and bradykinin 
antagonists. These efforts have produced certain intellectual property rights. 

     In response to disappointing test results and its loss of collaborative 
partner support, the Company has (i) implemented a series of reductions in 
force over the past, approximately three-and-one-half years (which has reduced 
the number of full time, regular employees from more than 200 to fewer than 
15) and (ii) effectively discontinued all internal research and development 
activities. In addition, the Company is currently decommissioning its 
laboratories, has sold most of its scientific and technical equipment and 
plans to sell most of its office furniture and equipment and, where possible, 
its leasehold improvements.

     As a result of these actions, the Company no longer has the staff or 
operative facilities required to recommence internal research and development 
activities. The Company has retained a core group of professionals who, among 
other things, are actively engaged in ongoing efforts to realize appropriate 
value from the Company's tangible and intangible assets. It is uncertain, 
however, whether the Company will be able to retain employees with sufficient 
knowledge and experience to realize appropriate value from the Company's 
intangible assets. 

     In light of the above, the Company's management has focused on evaluating 
various strategic alternatives. As a result, on December 22, 1997, the 
Company entered into an Agreement and Plan of Merger and Reorganization (the 
"Reorganization Agreement") with BioStar, Inc., a privately held diagnostics 
company based in Boulder, Colorado ("BioStar"). The Reorganization Agreement 
provided, among other things, (i) for the combination of the Company and 
BioStar and (ii) that either the Company or BioStar could terminate the 
Reorganization Agreement if the combination was not consummated on or before 
May 31, 1998. Because the Company and BioStar determined that the combination 
was not likely to occur by such deadline, on May 7, 1998, the parties 
mutually elected to terminate the Reorganization Agreement to allow both the 
Company and BioStar to consider other alternatives.

     The Company's management is currently evaluating the Company's strategic 
alternatives in light of the termination of the Reorganization Agreement.

RESULTS OF OPERATIONS

REVENUES

    Revenues from research and development decreased from $1.9 million in the 
first quarter of 1997 to zero in the first quarter of 1998. The decrease in 
revenues resulted primarily from an April 1997 amendment to the Ono Agreement 
(defined below) with Ono Pharmaceutical Co. Ltd. ("Ono"), which terminated 
the obligation of Ono to make further research payments to the Company, and 
the discontinuation, as of March 1997, of the Company's collaboration with 
SmithKline Beecham ("SB"). The Company expects no further payments from Ono 
or SB.

                                       7
<PAGE>

     In the first quarter of 1997, (i) the Company recognized as revenue 
$435,000 received from SB for work performed in connection with Bradycor 
clinical trials and (ii) the Company received $1.5 million from Ono for work 
performed in 1997 under a contract to develop an oral elastase inhibitor (the 
"Ono Agreement"). Pursuant to the Ono Agreement, the Company had received an 
additional $1.3 million in 1996, $1.2 million of which was recorded as revenue 
in the first quarter of 1997 (as a result of work performed in the first 
quarter of 1997 by the Company). Of the $1.5 million received from Ono in the 
first quarter of 1997 under the Ono Agreement, the Company recognized $246,000 
as revenue in the first quarter of 1997. Under the terms of the Ono Agreement, 
as amended in April 1997, Ono assumed all responsibilities for research 
activities which were conducted during the final six months of the 
collaborative project (which terminated on March 14, 1998). As a result, Ono 
was not required to pay the Company the last scheduled $1.5 million in 
research funding to offset certain costs that the Company would otherwise have 
incurred.

RESEARCH AND DEVELOPMENT 

     Expenses for research and development decreased from $2.3 million in the 
first quarter of 1997 to $300,000 in the first quarter of 1998. This decrease 
was due primarily to the cessation of internal research and development 
activities by the Company in late 1997.

GENERAL AND ADMINISTRATIVE
    
     General and administrative expenses increased from $757,000 in the first 
quarter of 1997 to $1.5 million in the first quarter of 1998. The increase 
was due substantially to certain costs related to the proposed combination 
with BioStar ($242,000), costs related to stockholder litigation ($91,000) 
and certain severance payments to former employees ($81,000), with the 
remainder of the increase attributable to certain overhead costs that would 
otherwise have been allocated to research and development expenses had the 
Company's internal research and development efforts not been ceased in late 
1997 ($391,000).

NET LOSS

    The net loss for the first quarter ended March 31, 1998 increased to $1.4 
million from $897,000 for the first quarter ended March 31, 1997. The increase 
was due principally to a decrease in revenues and increased general and 
administrative expenses, although the increase was partially offset by a 
decrease in research and development expenses. 

LIQUIDITY AND CAPITAL RESOURCES

     At March 31, 1998, the Company had cash, cash equivalents and short-term 
investments totaling $14.3 million, compared to $15.4 million at December 31, 
1997. The Company's net cash used in operating activities totaled $1.3 million 
for the three months ended March 31, 1998, as compared to $437,000 in the 
first quarter of 1997. The Company's expenditures, net of depreciation and 
non-cash charges, decreased from $2.6 million in the first quarter of 1997 to 
$1.2 million in the first quarter of 1998. This decrease reflects the 
cessation of internal research and development activities by the Company in 
late 1997 and the effects of the restructurings implemented by the Company in 
May and November 1997.

     In January 1998, the Company sold certain leasehold improvements for 
$150,000 in cash and a note receivable of $125,000 payable in July 1998 which 
resulted in a gain of $215,000. There can be no assurances that any of the 
Company's remaining assets can be sold for book value, if at all.

     The Company presently expects to receive no revenues from sponsored 
arrangements for internal research and development in 1998 (or future years).

    From its inception through March 31, 1998, the Company raised cash 
totaling $97.1 million from the sale of equity securities, including $33.6 
million in net proceeds from its November 1992 initial public offering and 
$37.7 million in net proceeds from its October 1993 follow-on public offering.

     The Company has experienced net losses and negative cash flows from 
operations each year since inception and has incurred an accumulated deficit 
of $86.0 million through March 31, 1998.


                                       8
<PAGE>

ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK.

     No information is presented for this Item (the Company is not presently 
required to prepare or provide this information pursuant to Instructions to 
Item 305 of Regulation S-K).


                                   PART II


ITEM 1.  LEGAL PROCEEDINGS.

     On February 27, 1998, a complaint was filed in the New Castle County, 
Delaware Court of Chancery naming the Company, the Company's directors and 
BioStar as defendants.  The complaint, filed by a stockholder of the Company, 
claims to be on behalf of a class of all the Company's stockholders and 
contends that the directors of the Company breached their fiduciary duties to 
the Company's stockholders when they unanimously approved the proposed 
combination with BioStar.  The complaint seeks to enjoin the proposed 
combination with BioStar as well as the operation of the Company's 
stockholder rights plan and seeks an order rescinding the proposed 
combination with BioStar upon its consummation as well as compensatory 
damages and costs. The Company believes that the claims are without merit and 
intends to vigorously defend against this suit.  Although there can be no 
assurances in this regard, the Company believes that the suit will have no 
material adverse effect on the Company because the Company (i) believes that 
the claimant will not prevail on the merits, (ii) has insurance which it 
believes will cover the cost of defending this claim (except for a $75,000 
deductible amount) and (iii) has terminated the Reorganization Agreement 
which provided for the proposed combination with BioStar.


                                       9
<PAGE>

ITEM 5.  OTHER INFORMATION.

     TERMINATION OF MERGER AGREEMENT

     On December 22, 1997, the Company entered into the Reorganization 
Agreement with BioStar. The Reorganization Agreement provided, among other 
things, (i) for the combination of the Company and BioStar and (ii) that 
either the Company or BioStar could terminate the Reorganization Agreement if 
the combination was not consummated on or before May 31, 1998. Because the 
Company and BioStar determined that the combination was not likely to occur 
by such deadline, on May 7, 1998 the parties mutually elected to terminate 
the Reorganization Agreement to allow both the Company and BioStar to 
consider other alternatives.

     DELISTING NOTIFICATION FROM THE NASDAQ STOCK MARKET, INC. 

     The Company has been advised by The Nasdaq Stock Market, Inc. ("Nasdaq") 
that the Company's Common Stock will be delisted from the Nasdaq National 
Market due to (i) Nasdaq's assessment that the Company is operating analogous 
to a "public shell" and (ii) a bid price for the Company's Common Stock of 
less than $1.00 per share. Nasdaq has advised the Company that the Company's 
Common Stock would be delisted with the opening of the market on May 1, 1998; 
however, the Company has appealed the delisting to Nasdaq's Listing and 
Hearing Review Committee and delisting of the Company's Common Stock has been 
stayed during the pendency of such appeal.

     In reaching its decision with respect to the "public shell" 
determination, Nasdaq identified several factors, from its perspective, with 
respect to such determination (i) the Company presently has no revenue 
generating operations as identified in the Company's Annual Report on Form 
10-K for the year ended December 31, 1997; (ii) the Company has only a 
minimal staff dedicated to exploiting the Company's intellectual property 
rights; (iii) the Company's principal asset is cash; and (iv) the Company's 
operational focus, at the time of Nasdaq's determination, was the potential 
combination with BioStar contemplated by the Reorganization Agreement.

     With respect to the minimum bid price of $1.00 per share of the 
Company's Common Stock, the Company had proposed consideration of a reverse 
split of the Company's Common Stock in connection with a stockholder vote on 
the proposed combination with BioStar. Insofar as a special stockholder 
meeting will not be held for a vote on the canceled Reorganization Agreement, 
the Company's management is presently evaluating a proposal for consideration of
a reverse split of the Company's Common Stock at the Company's 1998 Annual 
Stockholder Meeting.

     The can be no assurances that the Company will be able to maintain the 
Nasdaq National Market listing for the Company's Common Stock (whether as a 
result of failure to meet the minimum bid price requirement, as a result of 
Nasdaq's assertion regarding the Company as analogous to a "public shell" or 
as a result of other requirements imposed by the Nasdaq National Market). The 
Company's management anticipates that the absence of the Nasdaq National Market 
listing for the Company's Common Stock would have an adverse effect on the 
market for, and potentially the market price of, the Company's Common Stock.

     If the Company's Common Stock is delisted from the Nasdaq National 
Market, the Company expects that brokers would continue to make a market in 
the Company's Common Stock on the OTC Bulletin Board.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     a.   Exhibits

          Item     Description
          ----     -----------

          10.28    License Agreement dated November 13, 1996 between The 
                   Johns Hopkins University and the Company, as amended.

          27.1     Financial Data Schedule
    

     b.   Reports on Form 8-K

          On January 13, 1998, the Company filed a report on Form 8-K which 
     discussed the Company's proposed combination with BioStar (which was 
     originally announced on December 22, 1997) and included as Exhibit 2.1 
     the Agreement and Plan of Merger and Reorganization dated December 22, 
     1997 executed by the Company and BioStar. The Company filed no other 
     reports on Form 8-K during the quarter ended March 31, 1998.


                                       10
<PAGE>

                            SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized, on this 14th day 
of May, 1998.

                                       CORTECH, INC.

                                         (Registrant)



Date:   May 14, 1998                   By:       /s/ KENNETH R. LYNN
     -----------------------------        --------------------------------------
                                                     Kenneth R. Lynn
                                           PRESIDENT, CHIEF EXECUTIVE OFFICER 
                                           AND ACTING CHIEF FINANCIAL OFFICER 
                                           (PRINCIPAL EXECUTIVE, ACCOUNTING AND 
                                           FINANCIAL OFFICER)


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