UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-QSB

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

|                                             |  |                               
|-------------------------------------------- |  | ------------------------------
|For the quarterly period ended June 30, 2001 |  | Commission file number 0-18170

REGENERX BIOPHARMACEUTICALS, INC.
(Exact name of small business issuer as specified in its charter)

|                         |  |                           
|------------------------ |  | --------------------------
|Delaware                 |  | 52-1253406                
|(State of Incorporation) |  | (IRS Employer I.D. Number)

3 Bethesda Metro Center
Suite 700Bethesda, Maryland 20814
(Address of principal executive offices)

Issuers telephone number, including area code: (301) 961-1992

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

19,477,429 shares of RegeneRx Biopharmaceuticals, Inc. Common Stock, par value
$.001 per share, were outstanding as of July 31, 2001.
Transitional Small Business Disclosure Format (Check One) Yes [ ] No [X]





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RegeneRx Biopharmaceuticals, Inc.
Form 10-QSB
Quarter Ended June 30, 2001

Index

|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|---------- |  | --------------------- |  | --------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- |  | -------- | ---
|Part I.    |  | Financial Information |  |                                                           |                                                                                                                            |  | Page No.
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  | Item 1.               |  | Financial Statements                                      |                                                                                                                           
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  |                       |  |                                                           | Balance Sheets at June 30, 2001
(unaudited) and December 31, 2000                                                          |  |          | 3  
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  |                       |  |                                                           | Statements of Operations for the
three-months and six-months ended
June 30, 2001(unaudited) and June
30, 2000 (unaudited)  |  |          | 4  
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  |                       |  |                                                           | Statements of Cash Flows for the
three-months and six-months ended
June 30, 2001 (unaudited) and June
30, 2000 (unaudited) |  |          | 5  
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  |                       |  |                                                           | Notes to Financial Statements (unaudited)                                                                                  |  |          | 6-7
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  | Item 2.               |  | Managements Discussion and Analysis or Plan of Operation |                                                                                                                            |  | 7-11    
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|Part II.   |  | Other Information    
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  | Item 1.               |  | Legal Proceedings                                         |                                                                                                                            |  | 12      
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  | Item 2.               |  | Changes in Securities and Use of Proceeds                 |                                                                                                                            |  | 12      
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  | Item 3.               |  | Defaults upon Senior Securities                           |                                                                                                                            |  | 12      
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  | Item 4.               |  | Submission of matters to a vote of security holders       |                                                                                                                            |  | 12      
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  | Item 5.               |  | Other information                                         |                                                                                                                            |  | 12      
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|           |  | Item 6.               |  | Exhibits and Reports on Form 8-K                          |                                                                                                                            |  | 13-15   
|          
|          
|          
|          
|           |  |                       |  |                                                           |                                                                                                                            |  |          |    
|Signatures |  |                       |  |                                                           |                                                                                                                            |  |          | 16 

2



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Item 1.

RegeneRx Biopharmaceuticals, Inc.
BALANCE SHEETS

|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|---------------------------------------- | -------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----- | ----------- | ------- | ------------ | ----- | ----------- | ------- | 
|                                         |                                                                                                          |                                            |       | June 30,    |         | December 31,
|                                         |                                                                                                          |                                            |       | 2001        |         | 2000        
|                                         |                                                                                                          |                                            |       | (unaudited)
|ASSETS                                  
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|Current assets                           |                                                                                                          |                                            |       |             |         |              |       |            
|                                        
|                                        
|                                        
|                                        
|                                         | Cash and cash equivalents                                                                                |                                            | $     | 287,903     |         |              | $     | 335,421     |        
|                                        
|                                        
|                                        
|                                        
|                                         | Investments                                                                                              |                                            |       |            |         |              |       | 150,691     |        
|                                        
|                                        
|                                        
|                                        
|                                         | Other current assets                                                                                     |                                            |       | 8,000       |         |              |       | 8,000       |        
|                                         |                                                                                                          |                                            |       |             |         |              |       |            
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|                                         |                                                                                                          | Total current assets                       |       |             | 295,903 |              |       |             | 494,112 | 
|                                        
|                                        
|                                        
|                                        
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|Fixed assets, net                        |                                                                                                          |                                            | 2,397 |             |         |              | 1,158 |            
|                                        
|                                        
|                                        
|                                        
|Due from related party, net of allowance |                                                                                                          |                                            | 3,464 |             |         |              | 4,387 |            
|                                         |                                                                                                          |                                            |       |             |         |              |       |            
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|                                         |                                                                                                          | Total assets                               |       | $           | 301,764 |              |       | $           | 499,657 | 
|                                         |                                                                                                          |                                            |       |             |         |              |       |            
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|LIABILITIES AND STOCKHOLDERS EQUITY    
|                                        
|                                        
|                                        
|                                        
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|Current liabilities                      |                                                                                                          |                                            |       |             |         |              |       |            
|                                         | Accounts payable                                                                                         |                                            | $     | 76,768      |         |              | $     | 109,293     |        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                         | Accrued expenses                                                                                         |                                            |       | 18,711      |         |              |       | 29,256      |        
|                                        
|                                        
|                                        
|                                        
|                                         | Letter agreements with vendors                                                                           |                                            |       | 106,912     |         |              |       | 106,912     |        
|                                         |                                                                                                          |                                            |       |             |         |              |       |            
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|                                         |                                                                                                          | Total current liabilities                  |       |             | 202,391 |              |       |             | 245,461 | 
|                                         |                                                                                                          |                                            |       |             |         |              |       |            
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|Stockholders equity                    
|                                        
|                                        
|                                        
|                                        
|                                         | 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; 19,477,429
issued and outstanding |                                            |       | 19,477      |         |              |       | 19,477      |        
|                                        
|                                        
|                                        
|                                        
|                                         | Additional paid-in capital                                                                               |                                            |       | 36,415,289  |         |              |       | 36,415,289  |        
|                                        
|                                        
|                                        
|                                        
|                                         | Accumulated deficit                                                                                      |                                            |       | (36,035,393 | )       |              |       | (35,964,159 | )      
|                                        
|                                        
|                                        
|                                        
|                                         | Accumulated other comprehensive income                                                                   |                                            |       |            |         |              |       | 83,589      |        
|                                        
|                                        
|                                        
|                                        
|                                         | Stock subscriptions                                                                                      |                                            |       | (300,000    | )       |              |       | (300,000    | )      
|                                         |                                                                                                          |                                            |       |             |         |              |       |            
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|                                         |                                                                                                          | Total stockholders equity                 |       |             | 99,373  |              |       |             | 254,196 | 
|                                         |                                                                                                          |                                            |       |             |         |              |       |            
|                                         |                                                                                                          |                                            |       |             |         |              |       |             |         | 
|                                         |                                                                                                          | Total liabilities and stockholders equity |       | $           | 301,764 |              |       | $           | 499,657 | 
|                                         |                                                                                                          |                                            |       |             |         |              |       |            

See notes to financial statements

3



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RegeneRx Biopharmaceuticals, Inc.
STATEMENTS OF OPERATIONS

|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|------------------------------------------------------------------------------- | -------------------------- | - | ------------------ | ------ | ---------------- | - | ---------- | ------ | ---- | - | ---------- | ------- |  | - | ---------- | ------- | 
|                                                                                |                            |   | (Unaudited)        |        | (Unaudited)     
|                                                                                |                            |   | Three months ended |        | Six months ended
|                                                                                |                            |   | June 30,           |        | June 30,        
|                                                                                |                            |   |                   
|                                                                                |                            |   | 2001               |        | 2000             |   | 2001       |        | 2000
|                                                                                |                            |   |                    |        |                  |   |            |        |     
|Revenues                                                                        |                            | $ |                   |        |                  | $ |           |        |      | $ |           |         |  | $ |           |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Expenses                                                                       
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Research and development   |   |                    | 26,645 |                  |   |            | 14,435 |      |   |            | 85,317  |  |   |            | 68,274  | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | General and administrative |   |                    | 94,410 |                  |   |            | 67,014 |      |   |            | 177,163 |  |   |            | 125,847 | 
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Total expenses                                                                  |                            |   | 121,055            |        |                  |   | 81,449     |        |      |   | 262,480    |         |  |   | 194,121    |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Operating loss                                                                  |                            |   | (121,055           | )      |                  |   | (81,449    | )      |      |   | (262,480   | )       |  |   | (194,121   | )      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Realized gain on sale of investments                                            |                            |   |                   |        |                  |   |           |        |      |   | 174,781    |         |  |   | 646,059    |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Other income                                                                    |                            |   | 6,000              |        |                  |   |           |        |      |   | 8,000      |         |  |   |           |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Interest income                                                                 |                            |   | 4,529              |        |                  |   | 5,957      |        |      |   | 8,465      |         |  |   | 5,979      |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|(Loss) income before extraordinary items                                        |                            |   | (110,526           | )      |                  |   | (75,492    | )      |      |   | (71,234    | )       |  |   | 457,917    |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Extraordinary item  settlement of vendor payables                              |                            |   |                   |        |                  |   | 34,747     |        |      |   |           |         |  |   | 618,948    |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Extraordinary item  settlement of note payable & interest                      |                            |   |                   |        |                  |   |           |        |      |   |           |         |  |   | 162,827    |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Net (loss) income                                                               |                            | $ | (110,526           | )      |                  | $ | (40,745    | )      |      | $ | (71,234    | )       |  | $ | 1,239,692  |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Basic and diluted net (loss) income per common share
before extraordinary items |                            | $ | (0.01              | )      |                  | $ | (0.00      | )      |      | $ | (0.00      | )       |  | $ | 0.03       |        
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Extraordinary items  settlement of payables/debt                               |                            |   | 0.00               |        |                  |   | 0.00       |        |      |   | 0.00       |         |  |   | 0.04       |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Basic and diluted net (loss) income per common share                            |                            | $ | (0.01              | )      |                  | $ | (0.00      | )      |      | $ | (0.00      | )       |  | $ | 0.07       |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |         | 
|Weighted average number of common shares outstanding                            |                            |   | 19,477,429         |        |                  |   | 19,477,429 |        |      |   | 19,477,429 |         |  |   | 18,117,539 |        
|                                                                                |                            |   |                    |        |                  |   |            |        |      |   |            |         |  |   |            |        

See notes to financial statements

4



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RegeneRx Biopharmaceuticals, Inc.
STATEMENTS OF CASH FLOWS

|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|--------------------------------------------------------------------------- | ------------------------------------ | -------------------------------------------- | ---------------------------------- | ------- | ---------------- | ------- | -------- | --------- | -------- | -------- | -
|                                                                            |                                      |                                              |                                    |         | (Unaudited)     
|                                                                            |                                      |                                              |                                    |         | Six months ended
|                                                                            |                                      |                                              |                                    |         | June 30,        
|                                                                            |                                      |                                              |                                    |         |                 
|                                                                            |                                      |                                              |                                    |         | 2001             |         | 2000    
|Cash flows from operating activities:                                      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net (loss) income                    |                                              | $                                  | (71,234 | )                |         | $        | 1,239,692 |         
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|Adjustments to reconcile net loss to net
cash used in operating activities:
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      | Depreciation                                 |                                    |         | 566              |         |          |           | 365      |         
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      | Realized gain on sale of investments         |                                    |         | (174,780         | )       |          |           | (646,059 | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      | Settlement of vendor payables                |                                    |         |                 |         |          |           | (618,948 | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      | Settlement of note payable                   |                                    |         |                 |         |          |           | (139,222 | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      | Changes in operating assets and liabilities:
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      |                                              | Decrease in due from related party |         |                  | 923     |          |           |          |         |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      |                                              | Decrease in accounts payable       |         |                  | (32,525 | )        |           |          | (167,375 | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      |                                              | Decrease in accrued expenses       |         |                  | (10,545 | )        |           |          | (23,605  | )
|                                                                            |                                      |                                              |                                    |         |                  |         |          |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|Net cash used in operating activities                                       |                                      |                                              | (287,595                           | )       |                  |         | (355,152 | )        
|                                                                            |                                      |                                              |                                    |         |                  |         |          |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|Cash flows from investing acctivities:                                     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Purchase of fixed assets             |                                              |                                    | (1,806  | )                |         |          |          |         
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Cash received on sale of investments |                                              |                                    | 241,883 |                  |         |          | 918,125   |         
|                                                                            |                                      |                                              |                                    |         |                  |         |          |          
|Net cash provided by investing activities                                   |                                      |                                              | 240,077                            |         |                  |         | 918,125  |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|Cash flows from financing activities:                                      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Repayment of notes payable           |                                              |                                    |        |                  |         |          | (162,500  | )       
|                                                                            |                                      |                                              |                                    |         |                  |         |          |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|Net cash used in financing activities                                       |                                      |                                              |                                   |         |                  |         | (162,500 | )        
|                                                                            |                                      |                                              |                                    |         |                  |         |          |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|Net increase in cash and cash equivalents                                   |                                      |                                              | (47,518                            | )       |                  |         | 400,473  |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|Cash and cash equivalents at beginning of period                            |                                      |                                              | 335,421                            |         |                  |         | 43,387   |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |           |          |          |  
|Cash and cash equivalents at end of period                                  |                                      | $                                            | 287,903                            |         |                  | $       | 443,860  |          
|                                                                            |                                      |                                              |                                    |         |                  |         |          |          

See notes to financial statements

5



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RegeneRx Biopharmaceuticals, Inc.
Notes to Financial Statements
For the three-months and six-months ended June 30, 2001 and 2000 (Unaudited)



|A. |  | GENERAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | RegeneRx Biopharmaceuticals, Inc. (the Company), a Delaware corporation,
was incorporated in 1982. The Company operates predominately in a single
industry segment, the biotechnology industry, which 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 currently has no products that have received regulatory
approval. During 1997, the Company entered into a Material Transfer
Agreement  Cooperative Research and Development Agreement with the National
Institutes of Health (NIH), pursuant to which an NIH investigator used
Thymosin beta 4 provided by the Company in pre-clinical animal studies for
the treatment of non-healing wounds. In exchange for providing the product
and other data, the Company received an option to elect to negotiate for an
exclusive or non-exclusive commercialization license from the NIH pursuant
to a patent application filed by NIH in 1998. The Companys option expired
on February 11, 1999. The Companys President is named as a co-inventor on
the patent application filed by the NIH. As a result, he retains an equal,
undivided interest in the intellectual property described in the patent
application, which he subsequently assigned to the Company for nominal
consideration on May 1, 2000. On February 6, 2001, the Company signed an
exclusive licensing agreement with NIH whereby the Company obtained an
exclusive world-wide license to Thymosin beta 4 as a wound-healing drug. In
exchange for the exclusive license, the Company must make certain royalty
and milestone payments to the NIH. To date, no payments have been made or
are due.
|  
|   |  | In August 1999, the Company contracted with a group of four consultants,
including the Companys President, to advise the Company on the most viable
approaches for raising the necessary capital to continue business operations
and funding research and development. The consultants each received compensation in the form of
1,875,000 stock options, exercisable at $.04 per share. On February 3, 2000
each consultant exercised all of his outstanding options in return for
consulting services valued at $7,500 each and a three-year note for $75,000
each, secured by the shares issued and bearing interest at 6.09% per annum.
In addition, one consultant receives a monthly fee of $8,000 (increased from
$5,000 per month effective August 2000) and another consultant (the
Companys President) receives a monthly salary of $5,000 per month ($2,000
of which is withheld by the Company as partial repayment of certain of the
Presidents outstanding indebtedness to the Company other than the note
payable for the option exercise).                                                                                                                                                                                                                                                                                                                      

6



---





|B. |  | FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Balance Sheet as of June 30, 2001, the Statements of Operations for the
three-month and six-month periods ended June 30, 2001 and June 30, 2000, and
the Statements of Cash Flows for the three-month and six-month periods ended
June 30, 2001 and June 30, 2000, have been prepared without audit. In the
opinion of management, all adjustments necessary to present fairly the
financial position, results of operations, and cash flows at June 30, 2001,
and for the periods then ended, have been recorded. All adjustments
recorded were of a normal recurring nature.
|  
|   |  | Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated financial
statements should be read in conjunction with the financial statements and
notes thereto for the year ended December 31, 2000 included in the Companys
Annual Report on Form 10-KSB for the year ended December 31, 2000.                                                                                                                               
|  
|   |  | The results of operations for the three-month and six-month periods ended
June 30, 2001 are not necessarily indicative of the operating results
anticipated for the full year.                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|C. |  | NET (LOSS) INCOME PER SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Net (loss) Income per share is based on the weighted average number of common
shares outstanding during the three-month and six-month periods ended June 30,
2001 and June 30, 2000. During these periods an immaterial number of options
were outstanding that did not materially impact the above calculations.

ITEM 2. Managements Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the unaudited financial statements
and notes thereto of the Company contained in Item 1 of this report.

Forward-looking Statements

When used in this Form 10-QSB and in future filings by the Company with the
Securities and Exchange Commission, in the Companys press releases or other
public or shareholder communications, and in oral statements made with the
approval of an authorized executive officer, the words or phrases will likely
result, are expected to, will continue, is anticipated, estimate,
project or similar expressions are intended to identify forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are subject to certain risks and uncertainties, that
could cause actual results to differ materially from historical results and
those presently anticipated or projected. The Company wishes to caution
readers not to place undue reliance on any forward-looking statements, which
speak only as of the date made. The Company wishes to advise readers that
various factors could affect the Companys financial performance and could
cause the Companys actual results for future periods to differ materially from
any opinions or statements expressed with respect to future periods in any
current statements. These factors include, but are not limited to, the
following: the Companys lack of revenues and history of losses; uncertainties
related to the Companys limited capital resources; risks associated with the
development of the Companys products; the Companys lack of product
diversification; the

7



---



Companys dependence on collaborative relationships with
larger partners for the development, manufacturing and marketing of its
products; reliance upon key personnel; the Companys ability to obtain and
protect intellectual property
rights; and competition. For a discussion of these and other factors, see
Exhibit 99 to the Companys Annual Report on Form 10-KSB for the year ended
December 31, 2000.

The Company does not undertake  and specifically declines any obligation  to
publicly release the result of any revisions that may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.

Plan of Operations

The Company currently has no products that have received regulatory approval.
The Company has not generated significant revenues from operations and does not
anticipate generating product revenues or other revenues from operations for
the foreseeable future. As of June 30, 2001, the Companys current assets
primarily consisted of cash and cash equivalents of $287,903. Although no
assurance can be given, the Company believes that it will be able to satisfy
its cash requirements through December 31, 2001 by utilizing its existing
balance of cash and cash equivalents. If additional funds are not raised by
that point, the Company likely will be forced to suspend or discontinue
operations.

The Company utilizes a virtual company strategy in order to effectively control
costs. The Company contracts out research and development and manufacturing
operations, as well as other functions critical to its mission. The Company
believes this approach enhances its ability to allocate resources rapidly to
different projects. The strategy consists of (i) identifying, evaluating and
licensing pharmaceutical product opportunities that appear to have significant
commercial potential; (ii) designing pre-clinical and/or clinical protocols to
test such products; (iii) utilizing third party contract manufacturers to
supply clinical grade material and third party contract research organizations
to perform pre-clinical and/or clinical studies in accordance with its designed
protocols; and (iv) pursuing sublicense arrangements with established
pharmaceutical companies to support late stage clinical testing and ultimately
marketing if regulatory approval is obtained.

The Companys current primary business focus is the commercialization of
Thymosin beta 4 (Tß4), a 43 amino acid peptide. The Company is concentrating
its product development efforts on the use of Tß4 for the treatment of injured
tissue and non-healing wounds to enable more rapid repair and/or tissue
regeneration. Toward this end, the Company in 1997 entered into an agreement
with the NIH pursuant to which the Company provided an NIH investigator with
Tß4 for testing in animal models in a wound healing study. A provisional patent
application was filed by NIH in July 1998, with a Patent Cooperation Treaty
(PCT) application filed in July 1999, pertaining to the work performed on Tß4.
On February 6, 2001, the Company obtained an exclusive world-wide license from
NIH to Thymosin beta 4 as a wound-healing drug. In exchange for the exclusive
license, the Company must make certain royalty and milestone payments to the
NIH. No assurance can be given as to whether or when a patent will be issued,
or as to any conditions that might be attached to the patent.

On May 22, 2001, the Company entered into a new Material-CRADA with NIDCR,
whereby the Company will provide significant quantities of Tß4 to NIDCR for
continued research and development. In return, the Company retains the right
to secure an exclusive license related to any patents filed by

8



---



NIH on new
discoveries related to Tß4.

In anticipation of Phase I clinical trials, the Company contracted with a
manufacturer to produce Tß4 for this, and future, studies of Tß4. In March
2000, the Company pre-paid $50,000 of the $100,000 cost of an initial quantity
of the material and, under the agreement with the manufacturer, the remaining
$50,000 was placed in escrow pending completion of production.

For the Phase I clinical trials, it is expected that the Tß4 supplied by the
Company will be given to another manufacturer to produce a topical gel or other
material that will be administered to test subjects. Two manufacturers have
been identified to formulate and test this material. No agreements with these
manufacturers have been entered into, however, and no assurance can be given
that such agreements will be negotiated on terms favorable to the Company, or
at all.

Before the Phase I clinical trials may begin, the Company must file with the
U.S. Food and Drug Administration (the FDA) an Investigational New Drug
Application (IND), and the IND must be approved by the FDA. The Company has
received correspondence from the FDA which specifies the remaining pre-clinical
work the Company must undertake in order to have the IND approved. The Company
is currently evaluating the cost of completing the pre-clinical work necessary
for approval of the IND and Phase I clinical trials, and will need to enter
into a collaborative relationship with a larger partner or raise additional
funds to conduct these trials.

In following its product development strategy outlined above, the Company does
not plan to purchase manufacturing plants or other facilities and does not
expect any significant purchases of equipment. See Liquidity and Capital
Resources below.

Financial Condition

The Companys total assets at June 30, 2001 were $301,764, compared with
$499,657 at December 31, 2000. This decrease was due to decreases in the
Companys investment in SciClone that was originally received pursuant to a
royalty sale agreement entered into in 1998. Cash and cash equivalents
decreased to $287,903 at June 30, 2001 from $335,421 at December 31, 2000, as a
result of the sale of all remaining SciClone common stock during the 1st
quarter of 2001, net of the use of cash for operating expenses.

The Companys total liabilities were reduced to $202,391 at June 30, 2001 from
$245,461 at December 31, 2000. Accounts payable at June 30, 2001 were $76,768,
compared with $109,293 at December 31, 2000, and amounts owed under letter
agreements with vendors totaled $106,912 at June 30, 2001 and December 31,
2000. The decrease in liabilities during the period resulted from the payment
and reduction of accounts payable.

Stockholders equity decreased to $99,373 at June 30, 2001 from $254,196 at
December 31, 2000. This change resulted from the operating loss experienced
during this period net of the realized gain on the sale of SciClone stock. The
accumulated deficit increased to ($36,035,393) at June 30, 2001 from
($35,964,159) at December 31, 2000 as a result of the Companys net loss of
$71,234 for the six-month period ended June 30, 2001.

9



---



Results of Operations

Net (Loss) Income. The Company had a net loss of $110,526 and $71,234 for the
three-months and six-months ended June 30, 2001 compared with a net loss of
$40,745 and net income of $1,239,692 for prior year periods, respectively.
This change resulted primarily from a $471,278 decrease in realized gain on
sale of investments and the inclusion in income for the six-months ended June
30, 2000 of extraordinary items totaling $781,775. Excluding extraordinary
items, the Companys net income for the six-months ended June 30, 2000 was
$457,917.

Operating Loss. The Company had an operating loss of $121,055 and $262,480 for
the three-months and six-months ended June 30, 2001, respectively, compared
with an operating loss of $81,449 and $194,121 for the same periods in 2000,
respectively. This increase resulted from an increase in operating expenses
for the six-months of 2001, as discussed below. Revenues for the three-months
and six-months ended June 30, 2001 and the three-months and six-months ended
June 30, 2000 were zero. As noted above, under Plan of Operation, the
Company does not anticipate it will generate revenues in the foreseeable
future.

Operating expenses for the three-months and six-months ended June 30, 2001
totaled $121,055 and $262,480, respectively, compared with $81,449 and $194,121
for the same period in 2000, respectively. Operating expenses were comprised of
research and development expenses, which were $26,645 and $85,317 for the
three-months and six-months ended June 30, 2001, respectively, and $14,435 and
$68,274 for prior year periods, respectively, and general and administrative
expenses, which were $94,410 and $177,163 for the three-months and six-months
ended June 30, 2001 and $67,014 and $125,847 for the prior year periods,
respectively. Research and development expenses during the first quarter of
2000 primarily consisted of a $50,000 deposit paid toward the purchase of Tß4
from a contract manufacturer to be used in clinical trials. The final payment
of $50,000 paid toward the purchase of Tß4 was made in the first quarter of
2001. Additionally personnel and related costs increased in 2001. General and
administrative expenses increased primarily as a result of increases in legal
fees and shareholder communication.

Other Income and Extraordinary Items. As a result of selling SciClone shares,
the Company realized a gain on sale of investments of $174,781 during the
three-months ended March 31, 2001, compared with a gain of $646,059 for the
prior year period. This change occurred because the market value of the
SciClone shares was substantially higher at the time of the first quarter 2000
sales. During the three-months ended March 31, 2000, the Company made payments
and negotiated settlements of amounts owed to certain vendors, reducing the
aggregate amount owed to $164,823 on March 31, 2000 from $693,394 on December
31, 1999. During the first quarter of 2000, the Company also negotiated a
settlement of all amounts owed to SciClone under advances made to the Company
in connection with the royalty sale transaction. Prior to payment of the
$162,500 settlement amount, the Company owed SciClone $301,722. The $162,827
difference between the amount owed and the settlement amount was reported as an
extraordinary item.

10



---



Liquidity and Capital Resources

At June 30, 2001, the Company had cash and cash equivalents totaling $287,903
and working capital of $93,512 as compared to $335,421 and $248,651,
respectively, at December 31, 2000. The decrease in the Companys cash and
working capital from December 31, 2000 was due primarily to the use of cash for
operating expenses net of cash generated from the sale of Sciclone stock. See
also Financial Condition.

The Company incurred $1,806 in capital expenditures for equipment in the
six-month period ended June 30, 2001. The Company does not expect to spend
more than $15,000 in total for equipment in the year ending December 31, 2001.

The Companys only readily available sources of funds are its balance of cash
and cash equivalents. As noted above under Plan of Operation, while no
assurance can be given, the Company believes that this source will allow it to
satisfy its cash requirements through December 31, 2001. If the Company has
not raised additional funds by that date, the Company will likely be forced to
suspend or discontinue operations.

11



---



REGENERX BIOPHARMACEUTICALS, INC.
PART II  OTHER INFORMATION

Item 1. Legal Proceedings



| |     
| | ----
| | None

Item 2. Changes in Securities



| |     
| | ----
| | None

Item 3. Defaults upon Senior Securities



| |     
| | ----
| | None

Item 4. Submission of matters to a vote of security holders



| |                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On June 13, 2001, the Company held its annual meeting of stockholders
for the purpose of the election of directors of the Company and for the
ratification of Reznick Fedder & Silverman, P.C. as the Companys
independent accountants. The results are set forth below:

|                                       |                    |  |                                       |  |  |  |  |  |  |  |  |  | 
|-------------------------------------- | ------------------ |  | ------------------------------------- |  |  |  |  |  |  |  |  |  | 
|                                       |                    |  | The following directors were elected:
|1.Election of Directors of the Company |                    |  |                                       |  |  |  |  |  |  |  |  | 
|                                       | Allan L. Goldstein
|                                       | Joseph C. McWay   
|                                       | Albert Rosenfeld  

|                                                                                                    |  |  |                                                                                         
|--------------------------------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------------
|2.Ratification of
        Reznick Fedder & Silverman, P.C. as the Companys
independent accountants |  |  | Reznick Fedder & Silverman, P.C. were
ratified as the
Company's independent accountants.

Item 5. Other information



| |     
| | ----
| | None

12



---



Item 6. Exhibits and Reports on Form 8-K



| |             
| | ------------
| | (a) Exhibits

| |            |  |                                                                                                                                |  |                                                                                                
| | ---------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------
| | Exhibit No |  | Description of Exhibit                                                                                                         |  | Reference*                                                                                     
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 3.1        |  | Restated Certificate of
Incorporation of the Company                                                                           |  | Exhibit 3.1 to
Registration Statement
No. 33-9370, Amendment
No. 1 (filed 11/26/86)            
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 3.2        |  | Amendment to Restated
Certificate of Incorporation
of Company                                                                  |  | Exhibit 3.2 to the
Companys Transitional
Report on Form 10-K, File
No. 1-15070 (filed
3/18/91)
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 3.3        |  | Amendment to Restated
Certificate of Incorporation
of Company                                                                  |  | Exhibit 3.3 to the
Companys Form 10-KSB,
File No. 1-15070 (filed
4/2/01)                      
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 3.4        |  | Bylaws of Company                                                                                                              |  | Exhibit 3.2 to
Registration Statement
No. 33-9370 (filed
10/8/86)                              
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 3.5        |  | Amendment No. 1 to Bylaws of
Company adopted 8/11/89                                                                           |  | Exhibit 4.7 to
Registration Statement
No. 33-34551, Amendment
No. 3 (filed 6/21/90)            
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 3.6        |  | Amendment No. 2 to Bylaws of
Company adopted 6/18/90                                                                           |  | Exhibit 4.8 to
Registration Statement
No. 33-34551, Amendment
No. 3 (filed 6/21/90)            
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 3.7        |  | Amendment No. 3 to Bylaws of
Company adopted 11/30/90                                                                          |  | Exhibit 3.6 to the
Companys Transitional
Report on Form 10-K, File
No. 1-15070 (filed
3/18/91)
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 4.1        |  | Form of Stock Certificate                                                                                                      |  | Exhibit 4.1 to
Registration Statement
No. 33-9370, Amendment
No. 1 (filed 11/26/86)            
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 4.2        |  | Rights Agreement, dated as of
April 29, 1994, between the
Company and American Stock
Transfer & Trust Company, as
Rights Agent |  | Exhibit 1 to the
Companys Current Report
on Form 8-K, File No.
1-15070 (filed May 2,
1994)    
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                
| | 4.3        |  | Warrant Agreement, dated March
12, 1997                                                                                        |  | Exhibit 4.3 to the
Companys Annual Report
on Form 10-K, File No.
1-15070 (filed 3/31/97)      
|
|
|
|
| |            |  |                                                                                                                                |  |                                                                                                

13



---



| |      |  |                                                                                                                                                        |  |                                                                                                    
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------
| | 4.4  |  | Warrant Agreement, dated July
7, 1997                                                                                                                  |  | Exhibit 4.4 to the
Companys Annual Report
on Form 10-K/A, File No.
1-15070 (filed 5/13/98)        
| | 10.1 |  | Patent License Agreement 
Exclusive, between the U.S.
Public Health Service and the
Company                                                           |  | Exhibit 3.3 to the
Companys Form 10-KSB,
File No. 1-15070 (filed
4/2/01)                          
|
|
|
|
| |      |  |                                                                                                                                                        |  |                                                                                                    
| | 10.2 |  | Settlement Agreement and
Mutual Release, dated March
17, 2000, between the Company
and Bachem Biosciences, Inc.                                        |  | Exhibit 3.3 to the
Companys Form 10-KSB,
File No. 1-15070 (filed
4/2/01)                          
|
|
|
|
| |      |  |                                                                                                                                                        |  |                                                                                                    
| | 10.3 |  | Consulting Agreement, dated
August 16, 1999, among the
Company, Allan L. Goldstein,
J.J. Finkelstein, Richard J.
Hindin and Sidney J. Silver           |  | Exhibit 99.2 to the
Companys Current Report
on Form 8-K, File No.
1-15070 (filed 11/9/99)         
|
|
|
|
| |      |  |                                                                                                                                                        |  |                                                                                                    
| | 10.4 |  | Amended and Restated Directors
Stock Option Plan                                                                                                       |  | Exhibit 10.25 to the
Companys Annual Report
on Form 10-K, File No.
1-15070 (filed 3/26/93)        
|
|
|
|
| |      |  |                                                                                                                                                        |  |                                                                                                    
| | 10.5 |  | 2000 Stock Option and
Incentive Plan                                                                                                                   |  | Filed as an Appendix to
the Companys preliminary
proxy materials, File No.
1-15070 (filed 9/29/00)
|
|
|
|
| |      |  |                                                                                                                                                        |  |                                                                                                    
| | 10.6 |  | Lease Agreement, dated
February 10, 1993, between the
Company and John Arrillaga,
Trustee, and Richard T. Perry,
Trustee (Sunnyvale, California
lease) |  | Exhibit 10.28 to the
Companys Annual Report
of Form 10-K, File No.
1-15070 (filed 3/26/93)        
|
|
|
|
| |      |  |                                                                                                                                                        |  |                                                                                                    
| | 10.7 |  | Lease Agreement Amendment
Number 1, dated September 1,
1993, and Amendment Number 2,
dated December 27, 1993
(Sunnyvale, California lease)             |  | Exhibit 10.24 to the
Companys Annual Report
on Form 10-K, File No.
1-15070 (filed 3/28/94)        
|
|
|
|
| |      |  |                                                                                                                                                        |  |                                                                                                    
| | 10.8 |  | Lease Agreement Amendment No.
3, dated April 19, 1994
(Sunnyvale, California Lease)                                                                    |  | Exhibit 10.28 to the
Companys Annual Report
on Form 10-K, File No.
1-15070 (filed 3/31/95)        
|
|
|
|
| |      |  |                                                                                                                                                        |  |                                                                                                    

14



---



| |       |  |                                                                                                              |  |                                                                                            
| | ----- |  | ------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------
| | 10.9  |  | Assignment of Lease, dated
March 22, 1995 from the
Company to Scios Nova, Inc.
(Sunnyvale, California Lease) |  | Exhibit 10.24 to the
Companys Annual Report
on Form 10-K, File No.
1-15070 (filed 3/31/95)
|
|
|
|
| |       |  |                                                                                                              |  |                                                                                            
| | 10.11 |  | Unit Purchase Agreement dated
March 12, 1997                                                                 |  | Exhibit 10.25 to the
Companys Annual Report
on Form 10-K, File No.
1-15070 (filed 3/31/97)
| | 10.12 |  | Registration Rights Agreement,
dated March 12, 1997                                                          |  | Exhibit 10.26 to the
Companys Annual Report
of Form 10-K, File No.
1-15070 (filed 3/31/97)



---

|* |  | Except where noted, the exhibits referred to in this column have
heretofore been filed with the Securities and Exchange Commission as
exhibits to the documents indicated and are hereby incorporated by
reference thereto. The Registration Statements referred to are
Registration Statements of the Company.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |                                   
| | ----------------------------------
| | (b) Reports on Form 8-K       None

15



---



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.

|                      |  |                                                                                                                                              
|--------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|                      |  | RegeneRx Biopharmaceuticals, Inc.
(Registrant)                                                                                               
|                     
|                     
|                     
|                     
|                      |  |                                                                                                                                              
|Date: August 14, 2001 |  | /s/Allan L. Goldstein.
Allan L. Goldstein
President and Chief Executive Officer
(Principal Executive Officer and
Principal Financial Officer)

16