<PAGE>   1
                                                                   Page 1 of 13



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC.  20549

                                   FORM 10-Q

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

         For the quarterly period ended             June 30, 1997
                                        -----------------------------------

                                       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     0-15070
                                            ------------

                           Alpha 1 Biomedicals, Inc.
                ------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                      52-1253406
--------------------------------        ------------------------------------
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)


                            6707 Democracy Boulevard
                                   Suite 111
                            Bethesda, MD  20817-1129
        ------------------------------------------------------------
        (Address of principal executive offices, including zip code)

                                 (301) 564-4400
               ------------------------------------------------
             (Registrants 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      
                   --------------                    ------------

         As of July 31, 1997, 11,977,429 shares of the registrant's common
stock, par value $.001 per share, were issued and outstanding.
<PAGE>   2
                                                                    Page 2 of 13


                           ALPHA 1 BIOMEDICALS, INC.

                                   FORM 10-Q

                          QUARTER ENDED JUNE 30, 1997

                                     INDEX


<TABLE>
<CAPTION>
                                                                                                    Page No.
                                                                                                    --------
<S>                                                                                                   <C>
Part I.          Financial Information

            Item 1.    Financial Statements

                       Balance Sheets at June 30, 1997
                       (unaudited) and December 31, 1996
                       (audited)                                                                         3

                       Statements of Operations for the three-
                       month and six-month periods ended
                       June 30, 1997 and 1996 (unaudited)                                                4

                       Statements of Cash Flows for the six-
                       month periods ended June 30, 1997 and
                       1996 (unaudited)                                                                  5

                       Notes to Financial Statements                                                   6-7

            Item 2.    Management's Discussion and Analysis of
                       Financial Condition and Results of
                       Operations                                                                     8-11

Part II.         Other Information

            Item 6.    Exhibits and Reports on Form 8-K                                                 12

Signatures                                                                                              13
</TABLE>
<PAGE>   3

                                                                    Page 3 of 13


                          Part 1. Financial Statements

                           ALPHA 1 BIOMEDICALS, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                          June 30,               December 31,
                                                                            1997                    1996
                                                                            ----                    ----
                                                                         (unaudited)
<S>                                                                   <C>                   <C>
ASSETS
------

Current assets
   Cash and cash equivalents                                          $       6,196         $       153,725
   Prepaid insurance                                                         38,629                  61,048
   Other current assets                                                      -                        3,677  
                                                                      ---------------       -----------------

        Total current assets                                                 44,825                 218,450

Fixed assets, net                                                             2,282                   6,344
Due from related party                                                       71,871                  72,643
Other assets                                                                  1,221                  15,831
                                                                      ---------------       -----------------

        Total assets                                                  $     120,199         $       313,268  
                                                                      ===============       =================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------

Current liabilities
   Accounts payable                                                   $     190,803         $       165,084
   Accrued expenses                                                         277,276                 463,393
   Letter agreements with vendors                                         1,306,257               1,323,022  
                                                                      ---------------       -----------------

        Total current liabilities                                         1,774,336               1,951,499  
                                                                      ---------------       -----------------

Stockholders' equity (deficit)
   Preferred stock, $.001 par value per share,
    1,000,000 authorized; no shares issued                                   -                      -
   Common stock, par value $.001 per share,
    20,000,000 shares authorized; 11,977,429 and
     9,102,429 issued and outstanding, respectively                          11,977                   9,102
   Additional paid-in capital                                            35,965,289              35,613,164
   Accumulated deficit                                                  (37,631,403)            (37,260,497) 
                                                                      ---------------       -----------------

        Total stockholders' equity (deficit)                             (1,654,137)             (1,638,231) 
                                                                      ---------------       -----------------

        Total liabilities and stockholders' equity (deficit)          $     120,199         $       313,268  
                                                                      ===============       =================
</TABLE>






<PAGE>   4
                                                                    Page 4 of 13



                           ALPHA 1 BIOMEDICALS, INC.
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                  Three months ended                        Six months ended
                                                      June 30,                                  June 30,              
                                       ----------------------------------       ---------------------------------------
                                              1997               1996                    1997                1996
                                              ----               ----                    ----                ----
                                                     (unaudited)                                (unaudited)
<S>                                     <C>                  <C>                    <C>                  <C>
Revenues                                $       45,727       $       3,783          $       54,956       $      12,071

Expenses
  Research and product
   development                                  14,831             125,116                  54,167             912,644
  General and administrative                   157,085             257,379                 303,010             488,298 
                                       ----------------     ---------------        ----------------     ---------------

Total expenses                                 171,916             382,495                 357,177           1,400,942 
                                       ----------------     ---------------        ----------------     ---------------
Operating loss                                (126,189)           (378,712)               (302,221)         (1,388,871)
Loss on sale of VTI                             -                   -                       -                  (34,028)
Interest expense                               (34,549)            (34,297)                (69,592)            (63,472)
Interest income                                    676               2,803                     907               6,402 
                                       ----------------     ---------------        ----------------     ---------------

Net loss                                $     (160,062)      $    (410,206)         $     (370,906)      $  (1,479,969)
                                       ================     ===============        ================     ===============

Net loss per common share               $        (0.01)      $       (0.05)         $        (0.04)      $       (0.16)
                                       ================     ===============        ================     ===============

Weighted average number
 of common shares outstanding               11,781,275           9,092,814               9,764,169           9,035,121 
                                       ================     ===============        ================     ===============
</TABLE>







<PAGE>   5
                                                                    Page 5 of 13




                           ALPHA 1 BIOMEDICALS, INC.
                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                  Six months ended
                                                                                      June 30,               
                                                                      ---------------------------------------
                                                                             1997                 1996
                                                                             ----                 ----
                                                                                     (unaudited)
<S>                                                                     <C>                   <C>
Cash flows from operating activities:
   Net loss                                                             $    (370,906)        $  (1,479,969)

Adjustments to reconcile net loss to net
   cash used in operating activities:
     Depreciation                                                               4,062                 8,416
     Amortization                                                              -                     64,672
     Litigation settlement in common stock                                    105,000               (60,000)
     Loss on disposal/writedown of fixed assets                                -                     26,969
     Changes in operating assets and liabilities:
        Decrease in prepaid insurance                                          22,419                58,766
        Decrease in other current assets                                        3,677                 3,819
        Decrease in due from related party                                        772                 7,802
        Decrease (increase) in other assets                                    14,610                (1,221)
        Increase (decrease) in accounts payable                                25,719              (159,094)
        Decrease in accrued expenses                                         (186,117)             (631,136)
        (Decrease) increase in letter agreements with vendors                 (16,765)            1,323,022  
                                                                       ----------------      ----------------

Net cash used in operating activities                                        (397,529)             (837,954) 
                                                                       ----------------      ----------------

Cash flows from investing activities:
   Sale of short term investments, net                                         -                    284,538
   Proceeds from the sale of fixed assets                                      -                     13,700  
                                                                       ----------------      ----------------

Net cash provided by investing activities                                      -                    298,238  
                                                                       ----------------      ----------------

Cash flows from financing activities:
   Proceeds from issuance of common stock/warrants                            250,000                35,000  
                                                                       ----------------      ----------------

Net cash provided by financing activities                                     250,000                35,000  
                                                                       ----------------      ----------------

Net decrease in cash and cash equivalents                                    (147,529)             (504,716)

Cash and cash equivalents at beginning of period                              153,725               546,797  
                                                                       ----------------      ----------------

Cash and cash equivalents at end of period                              $       6,196         $      42,081  
                                                                       ================      ================
</TABLE>







<PAGE>   6
                                                                    Page 6 of 13



                           ALPHA 1 BIOMEDICALS, INC.

                         NOTES TO FINANCIAL STATEMENTS


Alpha 1 Biomedicals, Inc. (the "Company"), a Delaware corporation, was
incorporated in 1982.  The Company operates predominantly in a single industry
segment, the biotechnology industry.  Its business consists of researching and
developing new pharmaceutical products for the treatment of diseases or
conditions that arise as a result of immune system disorders, including chronic
viral infections, cancer and autoimmune disease.

The Company delayed its development program for Thymosin beta 4 during 1996 and
has no products that have received regulatory approval.  The Company has not
generated significant revenues from operations and does not anticipate
generating product revenues for the foreseeable future.  The Company will
require substantial funding in order to resume and conduct its research and
development activities and to manufacture and market the products which the
Company intends to develop.  Management plans to continue to pursue strategic
alliances or other partnership arrangements with entities interested in and
with resources to develop Thymosin beta 4, or other business transactions which
would allow the Company to generate resources to permit continuation of the
Company's operations.

During March 1997, the Company completed a private placement in which it raised
$200,000 through the sale of four units, each consisting of 500,000 shares of
Common Stock and 165,000 Class D Warrants having an exercise price of $0.10 per
warrant and a term of ten years.  In June, the Company raised an additional
$50,000 through the sale of one unit on identical terms.  The proceeds were used
in part to initiate preclinical animal studies at a major United States
university using the Company's product, Thymosin beta 4, and to fund current
operations.  In July 1997, the Company secured a $50,000 loan from an
individual to provide additional operating capital.  The terms of the loan
agreement provide for repayment of principal and interest within six months
with interest at the rate of 8% per annum.  Additionally, the noteholder
received a warrant to purchase 100,000 shares of the Company's common stock at
$.13 per share.  The warrant has a five-year term.

Cash balances at June 30, 1997 were $6,196.  Current cash balances will be
insufficient to satisfy operating requirements beyond August 1997.  In the
event that substantial funding is not obtained, the Company likely will be
forced to discontinue operations.  During 1996, the board of directors approved
a plan which provided for the termination of all ongoing research and
development activities, a reduction of leased space, a reduction of certain
salaries and the severance of administrative staff.  Also, during 1996,
management reached agreements with its major vendors to defer approximately
$1,323,000 in payments that are due in exchange for a commitment to the vendors
to make payments from revenues received by the Company in the future under the
SciClone license agreement until the full amount of the liabilities have been
liquidated.

Should the Company obtain substantial additional funding, other factors
relating to competition, dependence on third parties, uncertainty regarding
<PAGE>   7
                                                                    Page 7 of 13

patents, protection of proprietary rights, manufacturing of peptides and
technology obsolescence could have a significant impact on the Company and its
operations.

Financial Statements

The Balance Sheet as of June 30, 1997, the Statement of Operations for the
three-month and six-month periods ended June 30, 1997 and 1996, and the
Statements of Cash Flows for the six-month periods ended June 30, 1997 and
1996, have been prepared without audit.  In the opinion of the management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position at June 30, 1997 and the results of
operations and changes in cash flows for such period have been made.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted.  These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
December 31, 1996 audited financial statements.  The results of operations for
the three-month and six-month periods ended June 30, 1997, are not necessarily
indicative of the operating results for the full year.  Certain prior year
amounts have been reclassified to conform with current year presentation.

Forward Looking Statements

Any statements which are not actual facts contained in this document are
forward looking statements that involve risks and uncertainties, including but
not limited to, those relating to product demand, pricing, market acceptance,
the effect of economic conditions, intellectual property rights and litigation,
clinical trials, governmental regulations, competitive products, risks in
product and technology development, the results of financing efforts, the
ability to complete transactions and other risks identified in other of the
Company's Securities and Exchange Commission filings.
<PAGE>   8
                                                                    Page 8 of 13

                           ALPHA 1 BIOMEDICALS, INC.

Item 2.

          Management's Discussion and Analysis of Financial Condition
                           and Results of Operations


     Results of Operations for the Three-Month Period Ended June 30, 1997
            Compared to the Three-Month Period Ended June 30, 1996


Revenues.  Revenues for the three-month period ended June 30, 1997 were $45,727
as compared to $3,783 during the comparable period a year earlier.  Current
period revenues consisted of royalty payments totaling $20,727 and $25,000
received under a consulting agreement, whereas the comparable period a year
earlier consisted of $3,783 in royalty payments.

Expenses.  Expenses for the three-month period ended June 30, 1997 were
$171,916, a decrease of $210,579 from the comparable period a year earlier.
Research and development expenses during the current period were $14,831, a
decrease of $110,285 from the prior period.  The current period decrease
reflects the effect of a cost reduction program implemented during early 1996,
in addition to higher prior period expenses incurred for the purchase of
Thymosin beta 4 material and costs incurred for the conduct of clinical
studies.  General and administrative expenses during the current period were
$157,085, a decrease of $100,294 from the comparable period a year earlier,
primarily reflecting the effect of the cost reduction program.

       Results of Operations for the Six-Month Period Ended June 30, 1997
              Compared to the Six-Month Period Ended June 30, 1996

Revenues.  Revenues for the six-month period ended June 30, 1997 were $54,956
as compared to $12,071 during the comparable period a year earlier.  Current
period revenues consisted of royalty payments totaling $29,831 and $25,125
received primarily in fees under a consulting agreement, whereas the comparable
period a year earlier consisted of $8,071 in royalty payments and $4,000
received under a consulting agreement.

Expenses.  Expenses for the six-month period ended June 30, 1997 were $357,177,
a decrease of $1,043,765 from the comparable period a year earlier.  Research
and development expenses during the current period were $54,167, a decrease of
$858,477 from the prior period.  The current period reflects the effect of a
cost reduction program implemented during early 1996, in addition to higher
prior period expenses incurred for the purchase of Thymosin beta 4 material and
costs incurred for the conduct of clinical studies.  General and administrative
expenses during the current period were $303,010, a decrease of $185,288 from
the comparable period a year earlier, primarily reflecting the effect of the
cost reduction program and the effect of proprietary rights becoming fully
amortized during the prior period.

Other Items.  During the six-month period of 1996, the Company recorded a loss
of $34,028 resulting from the sale of shares of CEL-SCI Corporation.  No such
expense was incurred during the 1997 comparable period.
<PAGE>   9
                                                                    Page 9 of 13

Capital Resources and Liquidity

Since its inception in 1982, the Company's activities have consisted of
conducting research and development, sponsoring clinical trials of its
proprietary products, the construction and equipping of laboratory and
production facilities, and the manufacture of products for research, testing
and clinical trials.  The Company's accumulated deficit of $37,631,403 through
June 30, 1997 has been primarily funded by the proceeds from the issuance of
equity securities (and interest earned on such funds), the licensing of
technology developed or acquired by the Company and limited product sales.

The Company has delayed its development program for Thymosin beta 4, and has no
products that have received regulatory approval.  The Company has not generated
significant revenues from operations and does not anticipate generating product
revenues for the foreseeable future.  The Company will require substantial
funding in order to re-activate and conduct its research and development
activities and to manufacture and market the products which the Company intends
to develop.

During the first six months of 1997, revenues consisted primarily of royalty
income from SciClone and payments received under a consulting agreement.  These
revenue sources are substantially below the level required to cover fully the
Company's expenses.  During the first quarter of 1997, the Company completed a
private placement consisting of shares of Common Stock and Class D Warrants
from which the Company received $200,000.  Each unit consisted of 500,000
shares of Common Stock and 165,000 Class D Warrants having an exercise price of
$0.10 per warrant and a term of ten years.  During the second quarter of 1997,
the Company raised an additional $50,000 through the sale of one unit on
identical terms.  The proceeds of this offering were used to conduct
preclinical animal studies at a major United States university using the
Company's product, Thymosin beta 4, and to fund operations through the second
quarter of 1997.  The Company has subsequently been advised that the animal
studies it sponsored failed to indicate that Thymosin beta 4 may be an
effective treatment for sepsis.  In July, the Company secured a $50,000 loan
from an individual to provide additional operating capital.  The terms of the
loan agreement provide for repayment within six months with interest at the
rate of 8% per annum.  Additionally, the noteholder received a warrant to
purchase 100,000 shares of the Company's common stock at $.13 per share.  The
warrant has a five-year term.

During the second quarter, the Company entered into a Material Transfer
Agreement-Cooperative Research and Development Agreement ("MTA-CRADA") with the
National Institutes of Health ("NIH"), whereby the NIH investigator will use
Thymosin beta 4 material provided by the Company in a wound healing study.  In
exchange, the Company may license from the NIH any patent rights that might
result from the research study that relate to the use of Thymosin beta 4 as a
wound healing treatment.

Based on its existing resources, the Company does not have sufficient cash to
sustain its operations beyond August.  If additional financing cannot be
obtained prior to that time, the Company likely will be forced to discontinue
operations.
<PAGE>   10
                                                                   Page 10 of 13

During 1995, the Company refocused its research efforts to Thymosin beta 4.
Research activities and preclinical studies were initiated and accelerated
based on anticipated cash resources that the Company expected to materialize
through a proposed merger.  In anticipation of the merger and the cash that was
to become available, the Company commenced placing orders for the conduct of
research studies and for the purchase of Thymosin beta 4 material totaling
$2,704,000.  In January 1996, the Company learned of the issuance of a U.S.
patent such that the commercialization of Thymosin beta 4 as a mucolytic for
the treatment for cystic fibrosis would potentially infringe the claims of this
patent.  Following an unsuccessful attempt to obtain a license to this patent,
the merger agreement was terminated by mutual agreement.

As a result of the termination of research and development activities during
1996, the Company canceled research orders with certain vendors.  The Company
was able to cancel approximately $1,200,000 of work on outstanding orders of
approximately $2,700,000.  Management entered into separate letter agreements
with four vendors, which in the aggregate totaled $1,323,000, to defer payment
in exchange for a commitment to the vendors of revenues received by the Company
in the future under a license agreement with SciClone Pharmaceuticals, Inc.
until the full amounts of the liabilities have been liquidated.  In the event
that sufficient funding is obtained for the Thymosin beta 4 program, all
amounts then due would become payable immediately.

The Company continues to pursue strategic alliances or other partnership
arrangements with entities interested in and with resources to develop Thymosin
beta 4, or other business transactions which would allow the Company to
generate resources to permit continuation of the Company's operations.

The effect of inflation and changing prices on the continuing operations of the
Company is not expected to be significant.

New Accounting Standards

In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128").
This statement establishes new standards for computing and presenting earnings
per share ("EPS").  This standard replaces Accounting Principles Board Opinion
No. 15 ("APB 15") presentation of "primary EPS" with "basic EPS," computed as
income available to common stockholders divided by the weighted average number
of common shares outstanding during the period.  SFAS 128 also requires dual
presentation of basic and diluted EPS on the face of the income statement for
entities with complex capital structures.  Diluted EPS is computed similarly to
"fully diluted EPS," as defined in APB 15.  In addition, the statement requires
a reconciliation of the numerator and denominator of the basic to diluted EPS.
SFAS 128 is effective for financial statements issued for periods ending after
December 15, 1997, with early adoption not permitted.  Restatement of all prior
period EPS data is not required.  The Company anticipates that adoption of SFAS
128 will not have a significant impact on its EPS.

In June 1997, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" and
No. 131, "Disclosures about Segments of an Enterprise and Related Information."
These statements are effective for FY 1998.  The Company is 

<PAGE>   11
                                                                   Page 11 of 13


evaluating these statements to determine the impact on its reporting and
disclosure requirements.
<PAGE>   12
                                                                   Page 12 of 13





                           ALPHA 1 BIOMEDICALS, INC.

                          Part II - Other Information


Item 6.    Exhibits and Reports on Form 8-K

           (a)   Exhibits

                 Exhibit
                 Number
                 ------
                    27       Financial Data Schedule

           (b)   No reports on Form 8-K were filed during the quarter ended 
                 June 30, 1997.
<PAGE>   13
                                                                   Page 13 of 13

                                   SIGNATURES



         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                 Alpha 1 Biomedicals, Inc.
                                 -------------------------
                                        (Registrant)
                                 
                                 
                                 
                                 
                                
Date: August 11, 1997            By:     /s/  R.J. Lanham                  
                                    -----------------------------
                                         R.J. Lanham
                                         Vice President and
                                         Chief Financial Officer