##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934    
|  |  | For the fiscal year ended December 31, 2005                                                 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|  |  | For the transition period
    from           to                                             

Commission file number: 0-21990





OXiGENE, Inc.


(Exact name of Registrant as specified in its charter)





|                                                                         |  |                                         
|------------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                                 |  | 13-3679168                              
|(State or other jurisdiction of
    incorporation or organization)       |  | (I.R.S. Employer
    Identification No.)
|230 Third Avenue
    Waltham, MA(Address of principal executive offices) |  | 02451(Zip Code)                         

Registrants telephone number, including area code:


(781) 547-5900


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


Common Stock, par value $0.01 per share


Common Stock Purchase Rights


(Title of class)





o þ


o þ


þ o


S-K 10-K, 10-K. o


12b-2


o þ o


12b-2 o þ






DOCUMENTS INCORPORATED BY REFERENCE


10-K.










---



##### Table of Contents



SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS


UNDER THE SECURITIES LITIGATION REFORM ACT OF 1995


10-K




---



##### 










TABLE OF CONTENTS


|                                                         |  |                                                                                                    |    |      |    | 
|-------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                                         |  |                                                                                                    |    | Page |   
|                                                         |  |                                                                                                    |    |      |   
|PART I                                                   |  |                                                                                                    | 2  |     
|1.                                                       |  | BUSINESS                                                                                           |    |      | 2  | 
|                                                         |  | INTRODUCTION                                                                                       |    |      | 2  | 
|                                                         |  | TECHNOLOGY OVERVIEW                                                                                |    |      | 5  | 
|                                                         |  | CLINICAL TRIAL PROGRAM                                                                             |    |      | 6  | 
|                                                         |  | REGULATORY MATTERS                                                                                 |    |      | 11 | 
|                                                         |  | RESEARCH AND DEVELOPMENT AND COLLABORATIVE
    ARRANGEMENTS                                        |    |      | 16 | 
|                                                         |  | PATENTS AND TRADE SECRETS                                                                          |    |      | 17 | 
|                                                         |  | COMPETITION                                                                                        |    |      | 20 | 
|                                                         |  | EMPLOYEES                                                                                          |    |      | 20 | 
|                                                         |  | GLOSSARY OF SCIENTIFIC TERMS                                                                       |    |      | 23 | 
|1A.                                                      |  | RISK FACTORS                                                                                       |    |      | 23 | 
|1B.                                                      |  | UNRESOLVED STAFF COMMENTS                                                                          |    |      | 30 | 
|2.                                                       |  | PROPERTIES                                                                                         |    |      | 30 | 
|3.                                                       |  | LEGAL PROCEEDINGS                                                                                  |    |      | 30 | 
|4.                                                       |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS                                            |    |      | 30 | 
|                                                        
|PART II                                                  |  |                                                                                                    | 31 |     
|5.                                                       |  | MARKET FOR REGISTRANTS COMMON EQUITY
    AND RELATED STOCKHOLDER MATTERS                          |    |      | 31 | 
|6.                                                       |  | SELECTED FINANCIAL DATA                                                                            |    |      | 32 | 
|                                                         |  | SUMMARY FINANCIAL INFORMATION                                                                      |    |      | 32 | 
|7.                                                       |  | MANAGEMENTS DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS          |    |      | 33 | 
|                                                         |  | OVERVIEW                                                                                           |    |      | 33 | 
|                                                         |  | RESULTS OF OPERATIONS                                                                              |    |      | 37 | 
|                                                         |  | LIQUIDITY AND CAPITAL RESOURCES                                                                    |    |      | 39 | 
|7A.                                                      |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES
    ABOUT MARKET RISK                                     |    |      | 40 | 
|8.                                                       |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY
    DATA                                                    |    |      | 41 | 
|9.                                                       |  | CHANGES IN AND DISAGREEMENTS WITH
    ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE           |    |      | 41 | 
|9A.                                                      |  | CONTROLS AND PROCEDURES                                                                            |    |      | 41 | 
|9B.                                                      |  | OTHER INFORMATION                                                                                  |    |      | 43 | 
|                                                        
|PART III                                                 |  |                                                                                                    | 43 |     
|10.                                                      |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE
    REGISTRANT                                             |    |      | 43 | 
|11.                                                      |  | EXECUTIVE COMPENSATION                                                                             |    |      | 43 | 
|12.                                                      |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
    OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |    |      | 43 | 
|13.                                                      |  | CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS                                                 |    |      | 43 | 
|14.                                                      |  | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                             |    |      | 43 | 
|                                                        
|PART IV                                                  |  |                                                                                                    | 43 |     
|15.                                                      |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                            |    |      | 43 | 
|EX-10.29 Form of Incentive Stock Option Agreement       
|EX-10.30 Form of Non-Qualified Stock Option Agreement   
|EX-10.31 Form of Restricted Stock Agreement             
|EX-23 Consent of Ernst & Young LLP.                     
|EX-31.1 Certification of CEO                            
|EX-31.2 Certification of CFO                            
|EX-32 Certification of CEO & CFO pursuant to Section 906



1



---



##### Table of Contents






PART I







|        |         
|------- | --------
|ITEM 1. | BUSINESS




INTRODUCTION






| |                                            
| | -------------------------------------------
| | Development Programs and Product Candidates

(Combretum caffrum) in vitro in vivo




| |                                    
| | -----------------------------------
| | Vascular Disrupting Agents, or VDAs



In vitro Journal of
Clinical Investigation


2



---



##### Table of Contents







| |                                     
| | ------------------------------------
| | CA4P and Its Application in Oncology











| |   |                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A Phase III clinical trial in patients with advanced,
    inoperable Stage IIIb/ IV non small cell lung cancer, or
    NSCLC, in combination with chemotherapy and radiotherapy. This
    trial has received regulatory clearance from the Medicines and
    Healthcare Products Regulatory Agency, or MHRA, in the United
    Kingdom, but has not yet initiated patient enrollment;                    
|
| |  | A randomized Phase II clinical trial in patients with
    unresectable Stage IIIa/ IIIb NSCLC in combination with
    concurrent chemoradiotherapya widely accepted standard of
    treatment for NSCLC in the United States. The trial will be
    conducted under OXiGENEs Investigational New Drug, or IND,
    application on file with the United States Food and Drug
    Administration, or FDA;
|
| |  | A Phase II clinical trial in patients with advanced,
    inoperable, platinum-resistant ovarian cancer in combination
    with carboplatin and paclitaxel;                                                                                                                                                                                                                                               
|
| |  | A Phase Ib clinical trial in patients with advanced solid
    tumors in combination with the anti-angiogenic drug,
    Avastin®
    (Bevacizumab), which has not yet initiated patient enrollment;                                                                                                                                                                                                       
|
| |  | A Phase I/ II clinical trial in patients with advanced
    NSCLC, head & neck or prostate cancers in combination
    with radiotherapy;                                                                                                                                                                                                                                                                  
|
| |  | A Phase I clinical trial in patients with advanced and
    recurring cervical cancer in combination with cisplatin;                                                                                                                                                                                                                                                                                      
|
| |  | A Phase I/ II clinical trial in patients with advanced
    colorectal cancer in combination with the anti-CEA monoclonal
    antibody A5B7;                                                                                                                                                                                                                                                              
|
| |  | A Phase II clinical trial in patients with anaplastic
    thyroid cancer as a monotherapy; and                                                                                                                                                                                                                                                                                                           
|
| |  | A Phase I/ II clinical trial in patients with newly
    diagnosed anaplastic thyroid cancer in combination with
    doxorubicin, cisplatin and radiotherapy.                                                                                                                                                                                                                                             

3



---



##### Table of Contents





| |                                          
| | -----------------------------------------
| | CA4P and Its Application in Ophthalmology











| |                                
| | -------------------------------
| | Ortho-Quinone Prodrugs, or OQPs





| |        
| | -------
| | General

www.OXiGENE.com 10-K, 10-Q, 8-K,


4



---



##### Table of Contents






TECHNOLOGY OVERVIEW














Combretastatin. (Combretum caffrum).


5



---



##### Table of Contents














CLINICAL TRIAL PROGRAM


Combretastatin A-4 Prodrug.




| |                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) CA4P was manageable and well tolerated.                                                                                                                                                                            
|
| | (2) A similar maximum tolerated dose was determined in each
    clinical trial.                                                                                                                                        
|
| | (3) The side-effect profile did not display the typical
    toxicities associated with chemotherapeutic agents.                                                                                                        
|
| | (4) CA4P demonstrated reductions in tumor blood flow below,
    up to, and beyond the maximum tolerated dose.                                                                                                          
|
| | (5) There is data to support biological and vascular
    activity in humans with a meaningful therapeutic index.                                                                                                       
|
| | (6) Promising signs of clinical effects were observed with
    one complete response, one partial response, two cases of
    measurable tumor size reduction and three cases of long-term
    stabilization of disease.

6



---



##### Table of Contents







| |                 
| | ----------------
| | CA4P in Oncology





| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | Phase III: CA4P in Combination with Chemotherapy and
    Radiotherapy for the Treatment of Non Small Cell Lung Cancer









-




7



---



##### Table of Contents





| |                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------
| | Phase II: CA4P in Combination with Concurrent
    Chemoradiotherapy for the Treatment of
    Stage IIIa/IIIb NSCLC





| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | Phase II: CA4P in Combination with Chemotherapy for the
    Treatment of Advanced, Platinum-Resistant Ovarian Cancer











| |                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------
| | Phase Ib: CA4P in Combination with the Anti-Angiogenic
    Agent, Avastin, for the Treatment of Solid Malignancies



8



---



##### Table of Contents

















| |                                            
| | -------------------------------------------
| | Other clinical trials with CA4P in oncology







9



---



##### Table of Contents









OXi4503 in Oncology








| |                            
| | ---------------------------
| | CA4P in Diseases of the Eye





| |                                                                    
| | -------------------------------------------------------------------
| | Phase II: CA4P for the Treatment of Myopic Macular
    Degeneration



10



---



##### Table of Contents










REGULATORY MATTERS




| |                                           
| | ------------------------------------------
| | Government Regulation And Product Approval







| |   |                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | completion of preclinical laboratory tests, animal studies and
    formulation studies according to Good Laboratory Practices;                                                                                                                                                                                                                           
|
| |  | submission of an investigational new drug application, or IND,
    which must become effective before human clinical trials may
    begin;                                                                                                                                                                                                               
|
| |  | performance of adequate and well-controlled human clinical
    trials according to Good Clinical Practices to establish the
    safety and efficacy of the proposed drug for its intended use;                                                                                                                                                           
|
| |  | submission to the FDA of an NDA;                                                                                                                                                                                                                                                                                                                         
|
| |  | satisfactory completion of an FDA inspection of the
    manufacturing facility or facilities at which the product is
    produced to assess compliance with current good manufacturing
    practice, or cGMP, to assure that the facilities, methods and
    controls are adequate to preserve the drugs identity,
    strength, quality and purity; and
|
| |  | FDA review and approval of the NDA.                                                                                                                                                                                                                                                                                                                      



| |                                       
| | --------------------------------------
| | United States Drug Development Process



11



---



##### Table of Contents



30-day








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Phase I: The drug is initially introduced into
    healthy human subjects or patients with the disease and tested
    for safety, dosage tolerance, absorption, metabolism,
    distribution and excretion. In the case of some products for
    severe or life-threatening diseases, especially when the product
    may be too inherently toxic to ethically administer to healthy
    volunteers, the initial human testing is often conducted in
    patients.
|
| |  | Phase II: Involves studies in a limited patient
    population to identify possible adverse effects and safety
    risks, to preliminarily evaluate the efficacy of the product for
    specific targeted diseases and to determine dosage tolerance and
    optimal dosage.                                                                                                                                                                                      
|
| |  | Phase III: Clinical trials are undertaken to further
    evaluate dosage, clinical efficacy and safety in an expanded
    patient population at geographically dispersed clinical study
    sites. These studies are intended to establish the overall
    risk-benefit ratio of the product and provide, if appropriate,
    an adequate basis for product labeling.                                                                                             







| |                                   
| | ----------------------------------
| | U.S. Review and Approval Processes



12



---



##### Table of Contents









| |                              
| | -----------------------------
| | Expedited review and approval





| |            
| | -----------
| | Orphan Drug



13



---



##### Table of Contents







| |                      
| | ---------------------
| | Pediatric Exclusivity





| |                           
| | --------------------------
| | Post-approval Requirements









14



---



##### Table of Contents





| |                   
| | ------------------
| | Foreign Regulation







| |              
| | -------------
| | Reimbursement









15



---



##### Table of Contents






RESEARCH AND DEVELOPMENT AND COLLABORATIVE ARRANGEMENTS


day-to




| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | Gray Cancer Institute, Middlesex, United Kingdom;                          
|
| |  | Baylor University, Waco, Texas;                                            
|
| |  | Arizona State University, Tempe, Arizona;                                  
|
| |  | The University of Texas MD Anderson Cancer Center, Houston,
    Texas; and,
|
| |  | Beth Israel Deaconess Medical Center, Boston, Massachusetts.               









16



---



##### Table of Contents










PATENTS AND TRADE SECRETS




Patent Protection.






Granted Patents and Pending Applications.




17



---



##### Table of Contents





OXiGENEs United States Patent Portfolio


|                                         |  |                 |    |  |                 |  |    | 
|---------------------------------------- |  | --------------- | -- |  | --------------- |  | -- | 
|                                         |  | Patents Pending |    |  | Patents Granted | 
|                                         |  |                 |    |  |                 | 
|Product Line                             |  |                 |    |  |                 |  |    | 
|Combretastatins                          |  |                 | 14 |  |                 |  | 10 | 
|Baylor VDA Compounds                     |  |                 | 9  |  |                 |  | 7  | 
|Benzamides, Nicotinamides, & Cordycepins |  |                 | 1  |  |                 |  | 7  | 
|Diagnostic                               |  |                 | 0  |  |                 |  | 1  | 
|                                         |  |                 |    |  |                 | 
|Total                                    |  |                 | 24 |  |                 |  | 25 | 



|                                                                                                             |  |                 |           |  |                    |  |                   |                  |  |                          |  |                                                                                                                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------ |  | --------------- | --------- |  | ------------------ |  | ----------------- | ---------------- |  | ------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Title of Patent                                                                                              |  | U.S. Patent No. |           |  | Date of Expiration |  |                   | Holder of Patent |  | Importance              
|                                                                                                             |  |                 |           |  |                    |  |                   |                  |  |                         
|Combretastatin A-4                                                                                           |  |                 | 4,996,237 |  |                    |  | February 26, 2008 |                  |  | Arizona State University |  | Provides composition-of-matter protection for the active,
    tubulin-binding parent compound of the prodrug CA4P, as well as
    protection for methods-of-use for treatment of cancer. CA4 is
    generated in the body following administration of CA4P, which is
    the Companys most advanced product.
|Combretastatin A-4 Prodrug                                                                                   |  |                 | 5,561,122 |  |                    |  | December 22, 2014 |                  |  | Arizona State University |  | Provides composition-of-matter protection for the Companys
    lead VDA compound, CA4P. Claims were also granted for methods of
    using CA4P for the treatment of cancer.                                                                                                                                 
|Isolation, Structural Elucidation, and Synthesis of novel
    Antineoplastic Agents termed Combretastatins |  |                 | 5,569,786 |  |                    |  | October 29, 2013  |                  |  | Arizona State University |  | Provides composition-of-matter protection for several
    Combretastatins, including CA1, which is the active,
    tubulin-binding compound of OXi4503, the Companys most
    advanced second generation compound.                                                                                          
|Isolation, Structural Elucidation, and Synthesis of novel
    Antineoplastic Agents termed Combretastatins |  |                 | 5,409,953 |  |                    |  | April 25,2012     |                  |  | Arizona State University |  | Provides methods of using Combretastins, including CA1, for the
    treatment of cancerous cells. CA1 is the active, tubulin-binding
    parent compound of OXi4503, the Companys most advanced
    second generation compound.                                                                             

18



---



##### Table of Contents



|                                                                                                                                                      |  |                 |           |  |                    |  |                    |                  |  |                                                |  |                                                                                                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | --------- |  | ------------------ |  | ------------------ | ---------------- |  | ---------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Title of Patent                                                                                                                                       |  | U.S. Patent No. |           |  | Date of Expiration |  |                    | Holder of Patent |  | Importance                                    
|                                                                                                                                                      |  |                 |           |  |                    |  |                    |                  |  |                                               
|Compositions and Methods for Use in Targeting Vascular
    Destruction                                                                                |  |                 | 6,538,038 |  |                    |  | February 16, 2020  |                  |  | OXiGENE, Inc.                                  |  | Provides methods of using phosphate prodrugs of tubulin- binding
    compounds, including CA4P and OXi4503, to selectively target the
    proliferating vasculature of cancers, proliferative
    retinopathies, and other diseases characterized by the presence
    of unwanted neovascularization.
|Combretastatin A-4 Phosphate Prodrug Mono- and Di-Organic Amine
    Salts, Mono- and Di- Amino Acid Salts, and Mono- and D-Amino
    Acid Ester Salts |  |                 | 6,670,344 |  |                    |  | September 11, 2021 |                  |  | Bristol-Myers Squibb Company                   |  | Provides novel Tromethamine (TRIS) and Histidine
    salt forms of CA4P along with methods for their use and
    manufacture. The preferred TRIS salt composition provides
    enhanced formulation properties over the Disodium salt of CA4P.                                                     
|Efficient Method of Synthesizing Combretastatin A-4 Prodrugs                                                                                          |  |                 | 6,743,937 |  |                    |  | July 17,2021       |                  |  | OXiGENE, Inc.                                  |  | Provides methods of synthesizing combretastatin A4 phosphate
    esters, prodrugs and trans-isomers thereof.                                                                                                                                                                                         
|Use of combretastatin A4 and its prodrugs as an immune enhancing
    therapy                                                                          |  |                 | 6,773,702 |  |                    |  | December 26, 2021  |                  |  | OXiGENE, Inc. and Bristol-Myers Squibb Company |  | Provides treatment methods for counteracting tumor-induced
    immunosuppression (e.g., during conventional immunotherapy) that
    avoid vascular destruction by administering combretastatin A4 or
    prodrugs thereof.                                                                           
|Combretastatin A-4 Phosphate Prodrug Mono- and Di-Organic Amine
    Salts, Mono- and Di- Amino Acid Salts, and Mono- and D-Amino
    Acid Ester Salts |  |                 | 6,855,702 |  |                    |  | September 11, 2021 |                  |  | Bristol-Myers Squibb Company                   |  | Provides optionally substituted aliphatic organic amine forms of
    CA4P, and pharmaceutical compositions comprising such compounds.                                                                                                                                                                

Combretastatins.




19



---



##### Table of Contents



Baylor VDA Compounds.







COMPETITION















EMPLOYEES




20



---



##### Table of Contents






SCIENTIFIC ADVISORY BOARD AND CLINICAL TRIAL ADVISORY
BOARD




out-of






| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ADRIAN L. HARRIS, M.D. is Cancer Research UK
    Professor of Clinical Oncology at the University of Oxford, and
    Director of the Cancer Research UK Molecular Oncology
    Laboratories at the Universitys Weatherall Institute of
    Molecular Medicine. He is involved in clinical trials of
    anti-angiogenesis therapy, signal blockade inhibitors and
    immunotherapy. His clinical research interests include breast
    cancer, melanoma, and renal cancer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | ROBERT S. KERBEL, Ph.D. is known internationally for
    his research into cancer metastasis, drug resistance and tumor
    angiogenesis. He is a senior scientist, as well as the Canada
    Research Chair in Molecular Medicine at Sunnybrook and
    Womens College Health Sciences Centre in Toronto and
    Professor of the Department of Medical Biophysics at the
    University of Toronto. He is the author of more than 270
    scientific papers and the recipient of numerous scientific
    awards. Dr. Kerbel serves on the editorial boards of many
    scientific journals, including Cancer Research, Clinical
    Cancer Research, Molecular Cancer Researchand
    Angiogenesis. He was
    Editor-in-Chief of
    Cancer & Metastasis Reviews from 1991-2001.
    Dr. Kerbel received his B.S. from the University of Toronto
    and his Ph.D. in immunology from Queens University. He was
    a post-doctoral fellow in cancer biology at the Chester Beatty
    Research Institute in London, England.
|
| | DIETMAR W. SIEMANN, Ph.D. (Chairman)is the John P.
    Cofrin Professor and Associate Chair for Research in Radiation
    Oncology at the University of Florida College of Medicine in
    Gainesville. In addition, he is a Professor in the schools
    Department of Pharmacology and Therapeutics. Dr. Siemann
    has authored more than 150 scientific papers and is the
    recipient of numerous scientific awards, including the Research
    Award of the Radiation Research Society in Oak Brook, Illinois
    (1990). He is the former Chairman of the National Cancer
    Institutes Radiation Study Section (1996-1998).                                                                                                                                                                                                                                                                                                                                                                                          





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | EUGENE de JUAN, Jr., M.D. is a Professor of
    Ophthalmology at the Keck School of Medicine of the University
    of Southern California. Before joining the faculty of the Keck
    School, he served as the
    co-director of
    vitreoretinal service, director of the Microsurgery Advanced
    Design Laboratory and Joseph E. Green Professor of Ophthalmology
    at the Wilmer Eye Institute at Johns Hopkins University School
    of Medicine in Baltimore. From 1983 to 1992, he was a member of
    the medical staff of the Duke University Eye Center, holding
    joint teaching appointments with the Department of Ophthalmology
    and Department of Cell Biology. A graduate of the University of
    South Alabama College of Medicine, de Juan served an internship
    at University of South Alabama Medical Center, a residency at
    the Wilmer Ophthalmological Institute and a fellowship in
    vitreoretinal surgery at Duke University in Durham, North
    Carolina. He holds more than 20 patents.
|
| | JEFFREY S. HEIER, M.D.,is a Vitreoretinal
    Specialist at Ophthalmic Consultants of Boston, Co-Director of
    the Vitreoretinal Fellowship at OCB/ Tufts Medical School, and
    President of the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

21



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Center for Eye Research and Education in Boston, Massachusetts.
    Dr. Heiers academic appointments include an
    instructorship in ophthalmology at Tufts University School of
    Medicine and Harvard University Medical School, both in Boston.
    Dr. Heier received a medical degree from Boston University
    School of Medicine in Massachusetts, and subsequently completed
    a transitional internship, ophthalmic residency, and
    vitreoretinal fellowship at Fitzsimons Army Medical Center.
    Additional postgraduate training includes a vitreoretinal
    fellowship completed at Ophthalmic Consultants of Boston/ Tufts
    University School of Medicine. Dr. Heiers research
    interests are focused on age-related macular degeneration
    (ARMD), diabetic retinopathy, and innovation in vitreoretinal
    surgical instrumentation: areas he has pursued as lead or
    principal investigator in numerous clinical trials.
|
| | HAKAN MELLSTEDT, M.D., Ph.D. (Chairman)is
    Professor of Oncologic Biotherapy at the Karolinska Institute
    and Managing Director of Cancer Center Karolinska, Karolinska
    Institute, Stockholm, Sweden. He holds a position as Chief
    Physician at the Department of Oncology (Radiumhemmet),
    Karolinska Hospital, Stockholm, and has specialist certificates
    in Oncology, Hematology and Internal Medicine. He is a Member of
    the Board of Directors of ESMO (European Society for Medical
    Oncology) and a Member of ESMOs Executive Committee.
    Professor Mellstedt is currently a member of the Editorial Board
    of several international scientific journals and has published
    more than 450 articles in the areas of hematology, Contributions
    to Biomolecular Technologies.                                                                                                                                       
|
| | LEE S. ROSEN, M.D. is the Director of Developmental
    Therapeutics for the Cancer Institute Medical Group, affiliated
    with the John Wayne Cancer Institute in Santa Monica. He is the
    former Adjunct Assistant Professor at UCLAs Department of
    Medicine, Division of Hematology-Oncology and served as Director
    of UCLAs Cancer Therapy Development Program from
    1996-2002. Dr. Rosen serves as the principal investigator
    for many Phase I and II clinical trials, focusing on novel
    agents in general and the angiogenesis inhibitors in particular.                                                                                                                                                                                                                                                                                                                                                                           
|
| | GORDON RUSTIN, M.D. is the Director of Medical
    Oncology at Mount Vernon Hospital, which is the largest cancer
    center in the South of England. He has published widely on
    management of gynecological cancers and germ cell tumors and the
    use of tumor markers. He has developed response criteria on
    CA125, which are now increasingly used in Phase II trials
    of ovarian cancer. He has recently been the principal
    investigator of two trials of vascular targeting agents, as well
    as several trials in ovarian cancer. He was awarded an Honorary
    Professorship by University College London in March 2001.                                                                                                                                                                                                                                                                                                              
|
| | MARGARET A. TEMPERO, M.D. is Deputy Director of the
    University of California San Francisco Cancer Center and
    Professor and Chief of Medical Oncology in the School of
    Medicine. She is the former President of the American Society of
    Clinical Oncology (ASCO). She also has served on the Board of
    ASCO and is on the Board of Scientific Counselors, which is
    advisory to the intramural programs on the National Cancer
    Institute. She holds or has held editorial positions on numerous
    prestigious journals, such as Cancer Research, Journal of
    Clinical Oncology, Clinical Cancer Research and the American
    Journal of Medicine. She is also credited with over 100 original
    articles and book chapters.                                                                                                                                                                                                      
|
| | JAN B. VERMORKEN, M.D., Ph.D. is a professor of
    Oncology and head of the Department of Medical Oncology of the
    University Hospital of the University of Antwerp, Belgium.
    Professor Vermorken has held numerous functions with the Dutch
    Cancer Society and the European Organization for Research on
    Treatment of Cancer (EORTC). He is a member of several EORTC
    study groups and presently is Secretary of the EORTC Head and
    Neck Cancer Group. Professor Vermorken has lectured extensively
    in the area of gynecological oncology and head and neck cancer,
    and currently serves on the editorial boards of several
    international journals.                                                                                                                                                                                                                                                                          

22



---



##### Table of Contents



GLOSSARY OF SCIENTIFIC TERMS


|                    |  |                                                                                                                                                                                                                                                                   
|------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Angiogenesis        |  | The creation of new blood vessels.                                                                                                                                                                                                                                
|Chemotherapy        |  | Treatment with drugs whose aim is the mitigation or cure of
    diseases, such as cancer.                                                                                                                                                                         
|Choroid             |  | The thin layer of major blood vessels that lies between the
    retina and sclera in the eye. The choroid supplies the retina
    with oxygen and nutrients.                                                                                                      
|DNA                 |  | Chemical building blocks of genetic material.                                                                                                                                                                                                                     
|Double-blind study  |  | A study in which neither the investigators assessing the outcome
    of the trial nor the patients know whether the patient is
    receiving the drug being investigated or merely a placebo. The
    outcome can only be determined when the results are decoded.
|Endothelial cells   |  | Thin, flat cells that line the interior surface of blood
    vessels. Their structure and functional integrity is fundamental
    to maintaining a blood vessel wall.                                                                                             
|IND                 |  | An Investigational New Drug application filed with
    the United States Food and Drug Administration that permits the
    administration of compounds to humans in clinical trials.                                                                            
|In vitro experiment |  | An artificial environment created outside a living organism
    (e.g., a test tube or culture plate) used in experimental
    research to study a disease or process.                                                                                             
|In vivo experiment  |  | An experiment carried out in living organisms.                                                                                                                                                                                                                    
|Malignant cell      |  | Cancer cell.                                                                                                                                                                                                                                                      
|Metabolic function  |  | Living process of growth and reproduction.                                                                                                                                                                                                                        
|NDA                 |  | A New Drug Application filed with the United States
    Food and Drug Administration, which, if approved, allows a drug
    to be marketed in the United States.                                                                                                
|Necrosis            |  | Cell death by decomposition.                                                                                                                                                                                                                                      
|Placebo             |  | A non-active substance given to a group of patients in a
    clinical trial to duplicate the treatment method, but without
    the administration of the active drug under investigation.                                                                         
|Radiation           |  | Physical energy that splits molecules and induces DNA damage.                                                                                                                                                                                                     
|Retina              |  | The light sensitive portion of the back of the eye onto which
    images are projected                                                                                                                                                                            
|Tubulin             |  | A protein that forms the basic building blocks of microtubules.
    Microtubules perform many functions inside the cell, including
    helping to maintain endothelial cell shape.                                                                                






|         |             
|-------- | ------------
|ITEM 1A. | RISK FACTORS





23



---



##### Table of Contents





| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | We have a history of losses and we anticipate that we will
    continue to incur losses in the future.





| |                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------
| | Our products have not completed clinical trials, and may
    never demonstrate sufficient safety and efficacy in order to do
    so.





| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | We depend, and likely will continue to depend, on third
    parties for clinical development and manufacturing and marketing
    of our products.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | collaborators have significant discretion in determining the
    efforts and resources that they will apply to these
    collaborations;                                                                                                                                                                                                                                                                  
|
| |  | collaborators may not pursue further development and
    commercialization of our product candidates or may elect not to
    continue or renew research and development programs based on
    preclinical or clinical trial results, changes in their
    strategic focus or available funding, or external factors such
    as an acquisition that diverts resources or creates competing
    priorities;

24



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | collaborators may delay clinical trials, provide insufficient
    funding for a clinical trial program, stop a clinical trial or
    abandon a product candidate, repeat or conduct new clinical
    trials or require a new formulation of a product candidate for
    clinical testing;                                                                                
|
| |  | collaborators could independently develop, or develop with third
    parties, products that compete directly or indirectly with our
    product candidates or future products if the collaborators
    believe that competitive products are more likely to be
    successfully developed or can be commercialized under terms that
    are more economically attractive;
|
| |  | a collaborator with marketing and distribution rights to one or
    more products may not commit enough resources to their marketing
    and distribution;                                                                                                                                                                                                               
|
| |  | collaborators may not properly maintain or defend our
    intellectual property rights or may use our proprietary
    information in such a way as to invite litigation that could
    jeopardize or invalidate our proprietary information or expose
    us to potential litigation;                                                                                    
|
| |  | disputes may arise between us and the collaborators that result
    in the delay or termination of the research, development or
    commercialization of our product candidates or that result in
    costly litigation or arbitration that diverts management
    attention and resources; and                                                                          
|
| |  | collaborations may be terminated and, if terminated, may result
    in a need for additional capital to pursue further development
    of the applicable product candidates.                                                                                                                                                                                             



| |                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If third parties on which we rely for clinical trials do
    not perform as contractually required or as we expect, we may
    not be able to obtain regulatory approval for or commercialize
    our product candidates.





| |                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have licensed in rights to CA4P, OXi4503 and other
    programs from third parties. If our license agreements
    terminate, we may lose the licensed rights to our product
    candidates, including CA4P and OXi4503, and we may not be able
    to continue to develop them or, if they are approved, market or
    commercialize them.



25



---



##### Table of Contents









| |                                                                                                           
| | ----------------------------------------------------------------------------------------------------------
| | We depend, and likely will continue to depend, on third
    parties for the manufacturing of our products.







| |                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We will be required to raise additional funds to finance
    our operations; we may not be able to do so when necessary,
    and/or the terms of any financings may not be advantageous to
    us.



26



---



##### Table of Contents









| |                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our products are subject to extensive government
    regulation, which results in uncertainties and delays in the
    progress of our products through the clinical trial
    process.



27



---



##### Table of Contents





| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | The uncertainty associated with pharmaceutical
    reimbursement and related matters may adversely affect our
    business.





| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | Our industry is highly competitive, and our products may
    become technologically obsolete.





| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | We depend extensively on our patents and proprietary
    technology, and we must protect those assets in order to
    preserve our business.





28



---



##### Table of Contents









| |                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We depend heavily on our executive officers, directors,
    and principal consultants, and the loss of their services would
    materially harm our business.

Joel-Tomas




| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our products may result in product liability exposure, and
    it is uncertain whether our insurance coverage will be
    sufficient to cover any claims.





| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | The price of our common stock is volatile, and is likely
    to continue to fluctuate due to reasons beyond our
    control.



29



---



##### Table of Contents







| |                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our restated certificate of incorporation, our shareholder
    rights agreement and Delaware law could defer a change of our
    management which could discourage or delay offers to acquire
    us.








|         |                          
|-------- | -------------------------
|ITEM 1B. | UNRESOLVED STAFF COMMENTS








|        |           
|------- | ----------
|ITEM 2. | PROPERTIES








|        |                  
|------- | -----------------
|ITEM 3. | LEGAL PROCEEDINGS








|        |                                                    
|------- | ---------------------------------------------------
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



30



---



##### Table of Contents






PART II







|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES



|               |  |                  |      |  |                  |   |      |      |  |   |       |  |  |   |      | 
|-------------- |  | ---------------- | ---- |  | ---------------- | - | ---- | ---- |  | - | ----- |  |  | - | ---- | 
|               |  | Fiscal Year 2005 |      |  | Fiscal Year 2004 |  
|               |  |                  |      |  |                  |  
|               |  | High             |      |  | Low              |   |      | High |  |   | Low   | 
|               |  |                  |      |  |                  |   |      |      |  |   |       | 
|First Quarter  |  | $                | 6.12 |  |                  | $ | 4.02 |      |  | $ | 11.34 |  |  | $ | 8.05 | 
|Second Quarter |  |                  | 5.22 |  |                  |   | 3.63 |      |  |   | 9.49  |  |  |   | 6.02 | 
|Third Quarter  |  |                  | 5.66 |  |                  |   | 4.33 |      |  |   | 7.25  |  |  |   | 4.20 | 
|Fourth Quarter |  | $                | 5.78 |  |                  | $ | 3.89 |      |  | $ | 6.50  |  |  | $ | 5.21 | 







31



---



##### Table of Contents








|        |                        
|------- | -----------------------
|ITEM 6. | SELECTED FINANCIAL DATA

SUMMARY FINANCIAL INFORMATION


10-K.


|                                                     |                                  |                                                  |        |       |      |   |         |       |  |   |        |       |  |      |         |       |  |   |         |       | 
|---------------------------------------------------- | -------------------------------- | ------------------------------------------------ | ------ | ----- | ---- | - | ------- | ----- |  | - | ------ | ----- |  | ---- | ------- | ----- |  | - | ------- | ----- | 
|                                                     |                                  | Years Ended December 31,                         |       
|                                                     |                                  |                                                  |       
|                                                     |                                  | 2001                                             |        |       | 2002 |   |         | 2003  |  |   | 2004   |       |  | 2005 |        
|                                                     |                                  |                                                  |        |       |      |   |         |       |  |   |        |       |  |      |        
|                                                     |                                  | (Amounts in thousands, except per share amounts) |       
|STATEMENT OF OPERATIONS DATA:                        |                                  |                                                  |        |       |      |   |         |       |  |   |        |       |  |      |         |       |  |   |         |      
|License revenue                                      |                                  | $                                                | 8,953  |       |      | $ |        |       |  | $ | 30     |       |  | $    | 7       |       |  | $ | 1       |      
|Operating costs and expenses:                        |                                  |                                                  |        |       |      |   |         |       |  |   |        |       |  |      |         |       |  |   |         |      
|                                                     | Costs related to license revenue |                                                  |        | 1,508 |      |   |         |      |  |   |        |      |  |      |         |      |  |   |         |      | 
|                                                     | Research and development         |                                                  |        | 6,430 |      |   |         | 5,201 |  |   |        | 4,036 |  |      |         | 5,947 |  |   |         | 7,098 | 
|                                                     | General and administrative       |                                                  |        | 5,447 |      |   |         | 7,438 |  |   |        | 5,282 |  |      |         | 4,540 |  |   |         | 5,951 | 
|                                                     |                                  |                                                  |        |       |      |   |         |       |  |   |        |       |  |      |        
|Total operating costs and expenses                   |                                  |                                                  | 13,385 |       |      |   | 12,639  |       |  |   | 9,318  |       |  |      | 10,487  |       |  |   | 13,049  |      
|                                                     |                                  |                                                  |        |       |      |   |         |       |  |   |        |       |  |      |        
|Operating loss                                       |                                  |                                                  | (4,432 | )     |      |   | (12,639 | )     |  |   | (9,288 | )     |  |      | (10,480 | )     |  |   | (13,048 | )    
|Investment income                                    |                                  |                                                  | 907    |       |      |   | 335     |       |  |   | 321    |       |  |      | 470     |       |  |   | 1,135   |      
|Interest expense                                     |                                  |                                                  | (61    | )     |      |   | (53     | )     |  |   | (36    | )     |  |      |        |       |  |   |        |      
|Other income (expense), net                          |                                  |                                                  | (553   | )     |      |   | 1,344   |       |  |   | 635    |       |  |      | (14     | )     |  |   | 4       |      
|                                                     |                                  |                                                  |        |       |      |   |         |       |  |   |        |       |  |      |        
|Net loss                                             |                                  | $                                                | (4,139 | )     |      | $ | (11,013 | )     |  | $ | (8,368 | )     |  | $    | (10,024 | )     |  | $ | (11,909 | )    
|                                                     |                                  |                                                  |        |       |      |   |         |       |  |   |        |       |  |      |        
|Basic and diluted net loss per common share          |                                  | $                                                | (0.37  | )     |      | $ | (0.88   | )     |  | $ | (0.63  | )     |  | $    | (0.61   | )     |  | $ | (0.61   | )    
|Weighted average number of common shares outstanding |                                  |                                                  | 11,282 |       |      |   | 12,514  |       |  |   | 13,184 |       |  |      | 16,560  |       |  |   | 19,664  |      

|                                                         |  |                          |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |          |  
|-------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | -------- | -
|                                                         |  | Years Ended December 31, |        
|                                                         |  |                          |        
|                                                         |  | 2001                     |         |   | 2002 |   |         | 2003 |  |   | 2004    |   |  | 2005 |        
|                                                         |  |                          |         |   |      |   |         |      |  |   |         |   |  |      |        
|                                                         |  | (Amounts in thousands)   |        
|BALANCE SHEET DATA:                                      |  |                          |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |          |  
|Cash, cash equivalents and available-for-sale securities |  | $                        | 19,030  |   |      | $ | 11,830  |      |  | $ | 18,572  |   |  | $    | 30,502  |   |  | $ | 58,855   |  
|Working capital                                          |  |                          | 16,309  |   |      |   | 8,446   |      |  |   | 15,250  |   |  |      | 21,457  |   |  |   | 52,221   |  
|Total assets                                             |  |                          | 22,153  |   |      |   | 13,598  |      |  |   | 20,205  |   |  |      | 31,757  |   |  |   | 60,268   |  
|Total liabilities                                        |  |                          | 3,634   |   |      |   | 3,578   |      |  |   | 3,735   |   |  |      | 2,622   |   |  |   | 3,734    |  
|Accumulated deficit                                      |  |                          | (60,641 | ) |      |   | (71,654 | )    |  |   | (80,022 | ) |  |      | (90,046 | ) |  |   | (101,955 | )
|Total stockholders equity                               |  | $                        | 18,519  |   |      | $ | 10,020  |      |  | $ | 16,470  |   |  | $    | 29,135  |   |  | $ | 56,534   |  



32



---



##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS






OVERVIEW








| |                                                
| | -----------------------------------------------
| | Our Development Programs and Product Candidates

(Combretum
caffrum) in vitro in vivo






33



---



##### Table of Contents













| |                    
| | -------------------
| | Financial Resources









| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In June 2003, we completed a private placement with three large
    institutional investors. We received approximately $13,898,000
    in net proceeds after deducting costs and expenses. The
    investors purchased 1,500,000 shares of our Common Stock at
    $10 per share and were issued two-year warrants to purchase
    up to an aggregate of 375,000 shares of our Common Stock at
    $15 per share, which expired in 2005.
|
| |  | In January 2004, we received gross proceeds of approximately
    $24,200,000 from the sale of 2,755,695 shares of our Common
    Stock and net proceeds of approximately $22,359,000 after the                                                                                                                                                                                                                                          

34



---



##### Table of Contents



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | deduction of fees and expenses, pursuant to a shelf registration
    statement on
    Form S-3 filed
    with the Securities and Exchange Commission in October 2003,
    allowing us to sell up to $50,000,000 of our Common Stock, debt
    securities and/or warrants to purchase our securities.                                                                                                                                                                                                      
|
| |  | In March 2005, we received gross proceeds of approximately
    $15,000,000 from the sale of 3,336,117 shares of our Common
    Stock and net proceeds of approximately $13,719,000 after the
    deduction of fees and expenses, pursuant to the shelf
    registration statement referred to above.                                                                                                                                                                                                      
|
| |  | In December 2005, we received gross proceeds of approximately
    $27,284,000 from the sale of 7,475,000 shares of our Common
    Stock and net proceeds of approximately $25,205,000 after the
    deduction of fees and expenses, pursuant to a shelf registration
    statement on
    Form S-3 filed
    with the Securities and Exchange Commission in September 2005,
    allowing us to sell up to $75,000,000 of our Common Stock, debt
    securities and/or warrants to purchase our securities.







| |                                                                         
| | ------------------------------------------------------------------------
| | Critical Accounting Policies and Significant Judgments and
    Estimates







| |                              
| | -----------------------------
| | Available-for-Sale Securities





| |                                 
| | --------------------------------
| | Accrued Research and Development



35



---



##### Table of Contents







| |                                
| | -------------------------------
| | Impairment of Long-lived Assets





| |                         
| | ------------------------
| | Stock-Based Compensation



Accounting for
Equity Instruments That are Issued to Other Than Employees for
Acquiring, or in Conjunction With Selling Goods or Services.


Share-Based
Payment,


36



---



##### Table of Contents





share-based





RESULTS OF OPERATIONS




| |                                       
| | --------------------------------------
| | Years ended December 31, 2005 and 2004



| |         
| | --------
| | Revenues







| |                   
| | ------------------
| | Costs and Expenses





37



---



##### Table of Contents







| |                          
| | -------------------------
| | Other Income and Expenses





| |            
| | -----------
| | Tax Matters





| |                                       
| | --------------------------------------
| | Years ended December 31, 2004 and 2003



| |         
| | --------
| | Revenues





| |                   
| | ------------------
| | Costs and Expenses







38



---



##### Table of Contents







| |                          
| | -------------------------
| | Other Income and Expenses








LIQUIDITY AND CAPITAL RESOURCES






S-3








39



---



##### Table of Contents









| |                        
| | -----------------------
| | Contractual Obligations



|                                                                                  |  |                            |       |                        |        |   |       |       |  |     |       |  |       |         |     |  |  |  |   | 
|--------------------------------------------------------------------------------- |  | -------------------------- | ----- | ---------------------- | ------ | - | ----- | ----- |  | --- | ----- |  | ----- | ------- | --- |  |  |  | - | 
|                                                                                  |  |                            |       | Payments Due by Period |       
|                                                                                  |  |                            |       |                        |       
|                                                                                  |  |                            |       | Less Than              |        |   | 1-3   |       |  | 4-5 |       |  | After |        
|                                                                                  |  | Total                      |       |                        | 1 Year |   |       | Years |  |     | Years |  |       | 5 Years |    
|                                                                                  |  |                            |       |                        |        |   |       |       |  |     |       |  |       |         |    
|                                                                                  |  | (All amounts in thousands) |      
|Preclinical, chemistry and manufacturing and clinical
    development commitments |  |                            | 5,080 |                        |        |   | 4,539 |       |  |     | 522   |  |       |         | 19  |  |  |  |  | 
|Operating leases                                                                  |  |                            | 2,516 |                        |        |   | 583   |       |  |     | 1,195 |  |       |         | 738 |  |  |  |  | 
|                                                                                  |  |                            |       |                        |        |   |       |       |  |     |       |  |       |         |    
|Total contractual cash obligations                                                |  | $                          | 7,596 |                        |        | $ | 5,122 |       |  | $   | 1,717 |  |       | $       | 757 |  |  |  |  | 










|         |                                                               
|-------- | --------------------------------------------------------------
|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK



40



---



##### Table of Contents








|        |                                            
|------- | -------------------------------------------
|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE








|         |                        
|-------- | -----------------------
|ITEM 9A. | CONTROLS AND PROCEDURES



| |                                                         
| | --------------------------------------------------------
| | Evaluation of our Disclosure Controls and
    Procedures

10-K, 13a-15(e) 15d-15(e)




| |                                                         
| | --------------------------------------------------------
| | Changes in Internal Control over Financial
    Reporting





| |                                                                   
| | ------------------------------------------------------------------
| | Management Report on Internal Control over Financial
    Reporting

13a-15(f) 15d-15(f)






| |                         
| | ------------------------
| | Important Considerations



41



---



##### Table of Contents



Report of Independent Registered Public Accounting Firm on
Internal Control over Financial Reporting




















| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





42



---



##### Table of Contents








|         |                  
|-------- | -----------------
|ITEM 9B. | OTHER INFORMATION






PART III







|         |                                                   
|-------- | --------------------------------------------------
|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT








|         |                       
|-------- | ----------------------
|ITEM 11. | EXECUTIVE COMPENSATION








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT AND RELATED STOCKHOLDER MATTERS








|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS






ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES







PART IV







|         |                                        
|-------- | ---------------------------------------
|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES

10-K.




| |                         
| | ------------------------
| | (1) Financial Statements





| |                                  
| | ---------------------------------
| | (2) Financial Statement Schedules





| |             
| | ------------
| | (3) Exhibits

10-K.


43



---



##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                       
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .1          |  | Restated Certificate of Incorporation of the Registrant.*                                                                                                                                                             
|       
|        | 3  | .2          |  | Amended and Restated By-Laws of the Registrant.%                                                                                                                                                                      
|       
|        | 3  | .3          |  | Certificates of Amendment of Certificate of Incorporation, dated
    June 21, 1995 and November 15, 1996.**                                                                                                           
|       
|        | 3  | .4          |  | Certificate of Amendment of Restated Certificate of
    Incorporation, dated July 14, 2005.!                                                                                                                          
|       
|        | 4  | .1          |  | Specimen Common Stock Certificate.*                                                                                                                                                                                   
|       
|        | 4  | .2          |  | Form of Warrant, dated as of June 10, 2003, issued to Roth
    Capital Partners, LLC.&&&                                                                                                                              
|       
|        | 10 | .1          |  | OXiGENE 1996 Stock Incentive Plan, as amended.@                                                                                                                                                                      
|       
|        | 10 | .2          |  | Collaborative Research Agreement, dated as of August 1,
    1997, between the Registrant and Boston Medical Center
    Corporation.***                                                                                
|       
|        | 10 | .3          |  | Technology Development Agreement, dated as of May 27, 1997,
    between the Registrant and the Arizona Board of Regents, acting
    for and on behalf of Arizona State University.***                                 
|       
|        | 10 | .4          |  | Office Lease, dated February 28, 2000, between Registrant
    and Charles River Business Center Associates, L.L.C.###                                                                                                 
|       
|        | 10 | .5          |  | Research Collaboration and License Agreement, dated as of
    December 15, 1999, between OXiGENE Europe AB and
    Bristol-Myers Squibb Company.                                                                    
|       
|        | 10 | .6          |  | Employment Agreement between Registrant and Joel Citron dated as
    of January 2, 2002.#@                                                                                                                         
|       
|        | 10 | .7          |  | Termination Agreement by and between the Registrant and
    Bristol-Myers Squibb Company, dated as of February 15,
    2002.##                                                                                     
|       
|        | 10 | .8          |  | Employment Agreement, dated as of October 23, 2000, between
    Registrant and Frederick W. Driscoll.#@                                                                                                               
|       
|        | 10 | .9          |  | Independent Contractor Agreement For Consulting Services, dated
    as of April 1, 2001, between Registrant and David Chaplin
    Consultants, Ltd.#@                                                                 
|       
|        | 10 | .10         |  | Employment Agreement, dated as of April 1, 2001, between
    Registrant and Dr. David Chaplin.#@                                                                                                                      
|       
|        | 10 | .11         |  | Restricted Stock Agreement for Employees, dated as of
    January 2, 2002, between Registrant and Dr. David
    Chaplin.#                                                                                             
|       
|        | 10 | .12         |  | Restricted Stock Agreement for Employees, dated as of
    January 2, 2002, between Registrant and Frederick W.
    Driscoll.#                                                                                         
|       
|        | 10 | .13         |  | Form of Compensation Award Stock Agreement for Non-Employee
    Directors, dated as of January 2, 2002.#                                                                                                              
|       
|        | 10 | .14         |  | Amendment and Confirmation of License Agreement
    No. 206-01.LIC, dated as of June 10, 2002, between the
    Registrant and the Arizona Board of Regents, acting for and on
    behalf of Arizona State University.#
|       
|        | 10 | .15         |  | License Agreement No. 206-01.LIC by and between the Arizona
    Board of Regents, acting on behalf of and for Arizona State
    University, and OXiGENE Europe AB, dated August 2,
    1999.&                         
|       
|        | 10 | .16         |  | Research and License Agreement between the Company and Baylor
    University, dated June 1, 1999.&                                                                                                                    
|       
|        | 10 | .17         |  | Agreement to Amend Research and License Agreement between the
    Company and Baylor University, dated April 23, 2002.&                                                                                               
|       
|        | 10 | .18         |  | Addendum to Research and License Agreement between
    the Company and Baylor University, dated April 14,
    2003.&                                                                                                
|       
|        | 10 | .19         |  | License Agreement by and between Active Biotech AB
    (Active) and the Company dated November 16,
    2001.&                                                                                                       
|       
|        | 10 | .20         |  | License Agreement by and between Active and the Company dated
    April 23, 2002.&                                                                                                                                    
|       
|        | 10 | .21         |  | Funded Research Agreement by and between the Company and The
    Foundation Fighting Blindness, effective as of October 30,
    2002.&&                                                                               

44



---



##### Table of Contents



|        |    |             |  |                                                                                                                                            
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|       
|        | 10 | .22         |  | Stock Pledge and Loan Agreement, dated as of November 13,
    2000, between Registrant and Per-Olof
    Söderberg.&&&&                     
|       
|        | 10 | .23         |  | Registration Rights Agreement, dated as of June 10, 2003,
    among the Registrant and the Purchasers signatory
    thereto.&&&            
|       
|        | 10 | .24         |  | Employment Agreement, dated as of February 23, 2004,
    between the Registrant and James B. Murphy.%@                                     
|       
|        | 10 | .25         |  | Lease by and between The Realty Associates Fund III and the
    Registrant, dated as of August 8, 2003.%%                                  
|       
|        | 10 | .26         |  | Sublease by and between Schwartz Communications, Inc. and the
    Registrant, dated as of March 16, 2004.%%                                
|       
|        | 10 | .27         |  | Stockholder Rights Agreement.!!                                                                                                            
|       
|        | 10 | .28         |  | OXiGENE 2005 Stock Plan.!!!                                                                                                                
|       
|        | 10 | .29         |  | Form of Incentive Stock Option Agreement under OXiGENE 2005
    Stock Plan.                                                                
|       
|        | 10 | .30         |  | Form of Non-Qualified Stock Option Agreement under OXiGENE 2005
    Stock Plan.                                                            
|       
|        | 10 | .31         |  | Form of Restricted Stock Agreement under OXiGENE 2005 Stock Plan.                                                                          
|       
|        | 10 | .32         |  | Description of Director Compensation Arrangement.!!!!                                                                                      
|       
|        | 10 | .33         |  | Description of Named Executive Officers Compensation
    Arrangements.!!!!                                                                 
|       
|        | 10 | .34         |  | Lease Modification Agreement No. 1 by and between The
    Realty Associates Fund III and the Registrant, dated as of
    May 25, 2005. !!!!
|       
|        | 14 |             |  | Corporate Code of Conduct and Ethics.####                                                                                                  
|       
|        | 23 |             |  | Consent of Ernst & Young LLP.                                                                                                              
|       
|        | 31 | .1          |  | Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                    
|       
|        | 31 | .2          |  | Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                    
|       
|        | 32 |             |  | Certification of Chief Executive and Financial Officers Pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.                     






|     |  |                                                                                                                                                  
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|*    |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form S-1 (file
    no. 33-64968) and
    any amendments thereto. 
|    
|**   |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    fiscal year ended December 31, 1996.                        
|    
|***  |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 1997.                    
|    
|**** |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 1999.                    
|    
|#    |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended June 30, 2002.            
|    
|##   |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended March 31, 2002.           
|    
|###  |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 2000.                    
|    
|#### |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 2002.                    
|    
|    |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form S-8 (file no.
    333-92747) and any
    amendments thereto.
|    
|   |  | Incorporated by reference to the Registrants Current
    Report on
    Form 8-K, filed on
    December 28, 1999.                                

45



---



##### Table of Contents





|     |  |                                                                                                                                                                                    
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|&    |  | Incorporated by reference to Amendment No. 3 to the
    Registrants Annual Report on
    Form 10-K for the
    fiscal year ended December 31, 2002.                               
|    
|&&   |  | Incorporated by reference to Amendment No. 4 to the
    Registrants Annual Report on
    Form 10-K for the
    fiscal year ended December 31, 2002.                               
|    
|&&&  |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form S-3 (file
    no. 333-106307)
    and any amendments thereto.                                 
|    
|&&&& |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 2003.                                                      
|    
|%    |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended March 31, 2004.                                             
|    
|%%   |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended June 30, 2004.                                              
|    
|!    |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form S-8 (file
    no. 333-126636)
    and any amendments thereto.                                 
|    
|!!   |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form 8-A, dated
    March 30, 2005 and any amendments thereto.                                     
|    
|!!!  |  | Incorporated by reference to the Registrants Current
    Report on
    Form 8-K, filed on
    July 11, 2005.                                                                      
|    
|!!!! |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended June 30, 2005.                                              
|    
|  |  | Confidential treatment requested as to certain portions of the
    document, which portions have been omitted and filed separately
    with the Securities and Exchange Commission.
|    
|@    |  | Management contract or compensatory plan or arrangement required
    to be filed as an exhibit to this
    Form 10-K pursuant
    to Item 15(a) of this report.                    

46



---



##### Table of Contents



SIGNATURES






| |              
| | -------------
| | OXiGENE, Inc.



| |     |                          
| | --- | -------------------------
| | By: | /s/ Frederick W. Driscoll

| |                                      
| | -------------------------------------
| |                                      
| | Frederick W. Driscoll                
| | President and Chief Executive Officer





|                                                   |  |                                                                                                                      |  |                |  | 
|-------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|Signature                                          |  | Title                                                                                                                |  | Date          
|                                                   |  |                                                                                                                      |  |               
|                                                  
|/s/ Joel-Tomas CitronJoel-Tomas Citron             |  | Chairman of the Board and Director                                                                                   |  | March 14, 2006
|                                                  
|/s/ David ChaplinDavid Chaplin                     |  | Chief Scientific Officer and Head of Research and Development,
    Executive Vice Chairman of the Board and Director |  | March 14, 2006
|                                                  
|/s/ Frederick W.
    DriscollFrederick W. Driscoll |  | President, Chief Executive Officer and Director (Principal
    executive officer)                                    |  | March 14, 2006
|                                                  
|/s/ James B. MurphyJames B. Murphy                 |  | Chief Financial Officer
    (Principal financial officer)                                                            |  | March 14, 2006
|                                                  
|/s/ Richard ChinRichard Chin                       |  | Director                                                                                                             |  | March 14, 2006
|                                                  
|/s/ Arthur B. LafferArthur B. Laffer               |  | Director                                                                                                             |  | March 14, 2006
|                                                  
|/s/ William N. ShieblerWilliam N. Shiebler         |  | Director                                                                                                             |  | March 14, 2006
|                                                  
|/s/ Per-Olof
    SöderbergPer-Olof Söderberg       |  | Director                                                                                                             |  | March 14, 2006
|                                                  
|/s/ J. Richard ZecherJ. Richard Zecher             |  | Director                                                                                                             |  | March 14, 2006

47



---



##### Table of Contents



EXHIBIT INDEX


|        |    |             |  |                                                                                                                                                                                                                       
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .1          |  | Restated Certificate of Incorporation of the Registrant.*                                                                                                                                                             
|       
|        | 3  | .2          |  | Amended and Restated By-Laws of the Registrant.%                                                                                                                                                                      
|       
|        | 3  | .3          |  | Certificates of Amendment of Certificate of Incorporation, dated
    June 21, 1995 and November 15, 1996.**                                                                                                           
|       
|        | 3  | .4          |  | Certificate of Amendment of Restated Certificate of
    Incorporation, dated July 14, 2005.!                                                                                                                          
|       
|        | 4  | .1          |  | Specimen Common Stock Certificate*                                                                                                                                                                                    
|       
|        | 4  | .2          |  | Form of Warrant, dated as of June 10, 2003, issued to Roth
    Capital Partners, LLC.&&&                                                                                                                              
|       
|        | 10 | .1          |  | OXiGENE 1996 Stock Incentive Plan, as amended.@                                                                                                                                                                      
|       
|        | 10 | .2          |  | Collaborative Research Agreement, dated as of August 1,
    1997, between the Registrant and Boston Medical Center
    Corporation.***                                                                                
|       
|        | 10 | .3          |  | Technology Development Agreement, dated as of May 27, 1997,
    between the Registrant and the Arizona Board of Regents, acting
    for and on behalf of Arizona State University.***                                 
|       
|        | 10 | .4          |  | Office Lease, dated February 28, 2000, between Registrant
    and Charles River Business Center Associates, L.L.C.###                                                                                                 
|       
|        | 10 | .5          |  | Research Collaboration and License Agreement, dated as of
    December 15, 1999, between OXiGENE Europe AB and
    Bristol-Myers Squibb Company.                                                                    
|       
|        | 10 | .6          |  | Employment Agreement between Registrant and Joel Citron dated as
    of January 2, 2002.#@                                                                                                                         
|       
|        | 10 | .7          |  | Termination Agreement by and between the Registrant and
    Bristol-Myers Squibb Company, dated as of February 15,
    2002.##                                                                                     
|       
|        | 10 | .8          |  | Employment Agreement, dated as of October 23, 2000, between
    Registrant and Frederick W. Driscoll.#@                                                                                                               
|       
|        | 10 | .9          |  | Independent Contractor Agreement For Consulting Services, dated
    as of April 1, 2001, between Registrant and David Chaplin
    Consultants, Ltd.#@                                                                 
|       
|        | 10 | .10         |  | Employment Agreement, dated as of April 1, 2001, between
    Registrant and Dr. David Chaplin.#@                                                                                                                      
|       
|        | 10 | .11         |  | Restricted Stock Agreement for Employees, dated as of
    January 2, 2002, between Registrant and Dr. David
    Chaplin.#                                                                                             
|       
|        | 10 | .12         |  | Restricted Stock Agreement for Employees, dated as of
    January 2, 2002, between Registrant and Frederick W.
    Driscoll.#                                                                                         
|       
|        | 10 | .13         |  | Form of Compensation Award Stock Agreement for Non-Employee
    Directors, dated as of January 2, 2002.#                                                                                                              
|       
|        | 10 | .14         |  | Amendment and Confirmation of License Agreement
    No. 206-01.LIC, dated as of June 10, 2002, between the
    Registrant and the Arizona Board of Regents, acting for and on
    behalf of Arizona State University.#
|       
|        | 10 | .15         |  | License Agreement No. 206-01.LIC by and between the Arizona
    Board of Regents, acting on behalf of and for Arizona State
    University, and OXiGENE Europe AB, dated August 2,
    1999.&                         
|       
|        | 10 | .16         |  | Research and License Agreement between the Company and Baylor
    University, dated June 1, 1999.&                                                                                                                    
|       
|        | 10 | .17         |  | Agreement to Amend Research and License Agreement between the
    Company and Baylor University, dated April 23, 2002.&                                                                                               
|       
|        | 10 | .18         |  | Addendum to Research and License Agreement between
    the Company and Baylor University, dated April 14,
    2003.&                                                                                                
|       
|        | 10 | .19         |  | License Agreement by and between Active Biotech AB
    (Active) and the Company dated November 16,
    2001.&                                                                                                       
|       
|        | 10 | .20         |  | License Agreement by and between Active and the Company dated
    April 23, 2002.&                                                                                                                                    
|       
|        | 10 | .21         |  | Funded Research Agreement by and between the Company and The
    Foundation Fighting Blindness, effective as of October 30,
    2002.&&                                                                               

48



---



##### Table of Contents



|        |    |             |  |                                                                                                                                            
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|       
|        | 10 | .22         |  | Stock Pledge and Loan Agreement, dated as of November 13,
    2000, between Registrant and Per-Olof
    Söderberg.&&&&                     
|       
|        | 10 | .23         |  | Registration Rights Agreement, dated as of June 10, 2003,
    among the Registrant and the Purchasers signatory
    thereto.&&&            
|       
|        | 10 | .24         |  | Employment Agreement, dated as of February 23, 2004,
    between the Registrant and James B. Murphy.%@                                     
|       
|        | 10 | .25         |  | Lease by and between The Realty Associates Fund III and the
    Registrant, dated as of August 8, 2003.%%                                  
|       
|        | 10 | .26         |  | Sublease by and between Schwartz Communications, Inc. and the
    Registrant, dated as of March 16, 2004.%%                                
|       
|        | 10 | .27         |  | Stockholder Rights Agreement.!!                                                                                                            
|       
|        | 10 | .28         |  | OXiGENE 2005 Stock Plan.!!!                                                                                                                
|       
|        | 10 | .29         |  | Form of Incentive Stock Option Agreement under OXiGENE 2005
    Stock Plan.                                                                
|       
|        | 10 | .30         |  | Form of Non-Qualified Stock Option Agreement under OXiGENE 2005
    Stock Plan.                                                            
|       
|        | 10 | .31         |  | Form of Restricted Stock Agreement under OXiGENE 2005 Stock Plan.                                                                          
|       
|        | 10 | .32         |  | Description of Director Compensation Arrangement.!!!!                                                                                      
|       
|        | 10 | .33         |  | Description of Named Executive Officers Compensation
    Arrangements.!!!!                                                                 
|       
|        | 10 | .34         |  | Lease Modification Agreement No. 1 by and between The
    Realty Associates Fund III and the Registrant, dated as of
    May 25, 2005. !!!!
|       
|        | 14 |             |  | Corporate Code of Conduct and Ethics.####                                                                                                  
|       
|        | 23 |             |  | Consent of Ernst & Young LLP.                                                                                                              
|       
|        | 31 | .1          |  | Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                    
|       
|        | 31 | .2          |  | Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                    
|       
|        | 32 |             |  | Certification of Chief Executive and Financial Officers Pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.                     






|     |  |                                                                                                                                                  
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|*    |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form S-1 (file no.
    33-64968) and any
    amendments thereto. 
|    
|**   |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    fiscal year ended December 31, 1996.                        
|    
|***  |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 1997.                    
|    
|**** |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 1999.                    
|    
|#    |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended June 30, 2002.            
|    
|##   |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended March 31, 2002.           
|    
|###  |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 2000.                    
|    
|#### |  | Incorporated by reference to the Registrants Annual Report
    on Form 10-K for
    the fiscal year ended December 31, 2002.                    
|    
|    |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form S-8 (file no.
    333-92747) and any
    amendments thereto.
|    
|   |  | Incorporated by reference to the Registrants Current
    Report on
    Form 8-K, filed on
    December 28, 1999.                                

49



---



##### Table of Contents





|     |  |                                                                                                                                                                                    
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|&    |  | Incorporated by reference to Amendment No. 3 to the
    Registrants Annual Report on
    Form 10-K for the
    fiscal year ended December 31, 2002.                               
|    
|&&   |  | Incorporated by reference to Amendment No. 4 to the
    Registrants Annual Report on
    Form 10-K for the
    fiscal year ended December 31, 2002.                               
|    
|&&&  |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form S-3 (file no.
    333-106307) and
    any amendments thereto.                                 
|    
|&&&& |  | Incorporated by reference to the Registrants Annual
    Report on
    Form 10-K for the
    fiscal year ended December 31, 2003.                                                  
|    
|%    |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended March 31, 2004.                                             
|    
|%%   |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended June 30, 2004.                                              
|    
|!    |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form S-8 (file no.
    333-126636) and any
    amendments thereto.                                 
|    
|!!   |  | Incorporated by reference to the Registrants Registration
    Statement on
    Form 8-A, dated
    March 30, 2005 and any amendments thereto.                                     
|    
|!!!  |  | Incorporated by reference to the Registrants Current
    Report on
    Form 8-K, filed on
    July 11, 2005.                                                                      
|    
|!!!! |  | Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q for the
    quarterly period ended June  30, 2005.                                             
|    
|  |  | Confidential treatment requested as to certain portions of the
    document, which portions have been omitted and filed separately
    with the securities and Exchange Commission.
|    
|@    |  | Management contract or compensatory plan or arrangement required
    to be filed as an exhibit to this
    Form 10-K pursuant
    to Item 15(a) of this report.                    

50



---



##### 










Form 10-K
Item 15(a)(1)


OXiGENE, Inc.


Index to Consolidated Financial Statements




|                                                            |  |  |            | 
|----------------------------------------------------------- |  |  | ---------- | 
|Report of Independent Registered Public
    Accounting Firm |  |  | F-2        | 
|Consolidated Balance Sheets                                 |  |  | F-3        | 
|Consolidated Statements of Operations                       |  |  | F-4        | 
|Consolidated Statements of
    Stockholders Equity         |  |  | F-5        | 
|Consolidated Statements of Cash Flows                       |  |  | F-6        | 
|Notes to Consolidated Financial
    Statements              |  |  | F-7  F-21 | 



F-1



---



##### Table of Contents






Report of Independent Registered Public Accounting Firm
















| |                      
| | ---------------------
| | /s/ Ernst & Young LLP







F-2



---



##### Table of Contents






OXiGENE, Inc.


Consolidated Balance Sheets


|                                                                                                                     |                                                                                                                                          |                           |        |         |      |   |        |          |  
|-------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ------ | ------- | ---- | - | ------ | -------- | -
|                                                                                                                     |                                                                                                                                          | Year Ended December 31,   |       
|                                                                                                                     |                                                                                                                                          |                           |       
|                                                                                                                     |                                                                                                                                          | 2004                      |        |         | 2005 |  
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  
|                                                                                                                     |                                                                                                                                          | (Amounts in thousands,    |       
|                                                                                                                     |                                                                                                                                          | except par value amounts) |       
|ASSETS                                                                                                              
|Current assets:                                                                                                      |                                                                                                                                          |                           |        |         |      |   |        |         
|                                                                                                                     | Cash and cash equivalents                                                                                                                |                           | $      | 15,988  |      |   | $      | 32,344   |  
|                                                                                                                     | Available-for-sale securities                                                                                                            |                           |        | 7,986   |      |   |        | 23,355   |  
|                                                                                                                     | Prepaid expenses                                                                                                                         |                           |        | 59      |      |   |        | 81       |  
|                                                                                                                     | Other assets                                                                                                                             |                           |        | 46      |      |   |        | 175      |  
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  
|Total current assets                                                                                                 |                                                                                                                                          |                           | 24,079 |         |      |   | 55,955 |         
|Furniture and fixtures, equipment and leasehold improvements                                                         |                                                                                                                                          |                           | 955    |         |      |   | 1,054  |         
|Accumulated depreciation                                                                                             |                                                                                                                                          |                           | (888   | )       |      |   | (919   | )       
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  
|                                                                                                                     |                                                                                                                                          |                           | 67     |         |      |   | 135    |         
|Available-for-sale securities  long term                                                                            |                                                                                                                                          |                           | 6,528  |         |      |   | 3,156  |         
|License agreements, net of accumulated amortization of $528 and
    $626 at December 31, 2004 and 2005, respectively |                                                                                                                                          |                           | 971    |         |      |   | 873    |         
|Deposits                                                                                                             |                                                                                                                                          |                           | 112    |         |      |   | 149    |         
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  
|Total assets                                                                                                         |                                                                                                                                          | $                         | 31,757 |         |      | $ | 60,268 |         
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  
|                                                                                                                    
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                
|Current Liabilities:                                                                                                 |                                                                                                                                          |                           |        |         |      |   |        |         
|                                                                                                                     | Accounts payable                                                                                                                         |                           | $      | 494     |      |   | $      | 693      |  
|                                                                                                                     | Accrued research and development                                                                                                         |                           |        | 1,263   |      |   |        | 1,719    |  
|                                                                                                                     | Accrued other                                                                                                                            |                           |        | 865     |      |   |        | 1,322    |  
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  
|Total current liabilities                                                                                            |                                                                                                                                          |                           | 2,622  |         |      |   | 3,734  |         
|                                                                                                                    
|Commitments and contingencies (Note 6)                                                                               |                                                                                                                                          |                           |        |         |      |   |        |         
|                                                                                                                    
|Stockholders equity:                                                                                                |                                                                                                                                          |                           |        |         |      |   |        |         
|                                                                                                                     | Common Stock, $.01 par value, 100,000 shares
    authorized; 16,714 shares in 2004 and 28,037 shares in
    2005, issued and outstanding |                           |        | 167     |      |   |        | 280      |  
|                                                                                                                     | Additional paid-in capital                                                                                                               |                           |        | 119,527 |      |   |        | 160,885  |  
|                                                                                                                     | Accumulated deficit                                                                                                                      |                           |        | (90,046 | )    |   |        | (101,955 | )
|                                                                                                                     | Accumulated other comprehensive loss                                                                                                     |                           |        | (94     | )    |   |        | (85      | )
|                                                                                                                     | Notes receivable                                                                                                                         |                           |        | (384    | )    |   |        | (187     | )
|                                                                                                                     | Deferred compensation                                                                                                                    |                           |        | (35     | )    |   |        | (2,404   | )
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  
|Total stockholders equity                                                                                           |                                                                                                                                          |                           | 29,135 |         |      |   | 56,534 |         
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  
|Total liabilities and stockholders equity                                                                           |                                                                                                                                          | $                         | 31,757 |         |      | $ | 60,268 |         
|                                                                                                                     |                                                                                                                                          |                           |        |         |      |  



F-3



---



##### Table of Contents






OXiGENE, Inc.


Consolidated Statements of Operations


|                                                     |                            |                            |        |       |      |   |         |       |  |   |         |       | 
|---------------------------------------------------- | -------------------------- | -------------------------- | ------ | ----- | ---- | - | ------- | ----- |  | - | ------- | ----- | 
|                                                     |                            | Year Ended December 31,    |       
|                                                     |                            |                            |       
|                                                     |                            | 2003                       |        |       | 2004 |   |         | 2005  | 
|                                                     |                            |                            |        |       |      |   |         |       | 
|                                                     |                            | (All amounts in thousands, |       
|                                                     |                            | except per share amounts)  |       
|License revenue                                      |                            | $                          | 30     |       |      | $ | 7       |       |  | $ | 1       |      
|Operating costs and expenses:                        |                            |                            |        |       |      |   |         |       |  |   |         |      
|                                                     | Research and development   |                            |        | 4,036 |      |   |         | 5,947 |  |   |         | 7,098 | 
|                                                     | General and administrative |                            |        | 5,282 |      |   |         | 4,540 |  |   |         | 5,951 | 
|                                                     |                            |                            |        |       |      |   |         |       | 
|Total operating costs and expenses                   |                            |                            | 9,318  |       |      |   | 10,487  |       |  |   | 13,049  |      
|                                                     |                            |                            |        |       |      |   |         |       | 
|Operating loss                                       |                            |                            | (9,288 | )     |      |   | (10,480 | )     |  |   | (13,048 | )    
|Investment income                                    |                            |                            | 321    |       |      |   | 470     |       |  |   | 1,135   |      
|Interest expense                                     |                            |                            | (36    | )     |      |   |        |       |  |   |        |      
|Other (expense) income, net                          |                            |                            | 635    |       |      |   | (14     | )     |  |   | 4       |      
|                                                     |                            |                            |        |       |      |   |         |       | 
|Net loss                                             |                            | $                          | (8,368 | )     |      | $ | (10,024 | )     |  | $ | (11,909 | )    
|                                                     |                            |                            |        |       |      |   |         |       | 
|Basic and diluted net loss per common share          |                            | $                          | (0.63  | )     |      | $ | (0.61   | )     |  | $ | (0.61   | )    
|Weighted-average number of common shares outstanding |                            |                            | 13,184 |       |      |   | 16,560  |       |  |   | 19,664  |      



F-4



---



##### Table of Contents






OXiGENE, Inc.


Consolidated Statements of Stockholders Equity


|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |   |  |   |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------- |  | -------------------------- | ------ | - | ---------- | - | --- | ----------- | ----------- | ----- | ------------- | - |  | ------------- | -------- | - | ---------- | - | ---- | ------------- |  | - | ------ | - |  | - | ------ | - |  | - | ------- | -
|                                                                                             |  | Common Stock               |        |   |            |   |     |             | Accumulated |       |               |   |  |               |          |  
|                                                                                             |  | $.01 Par Value             |        |   | Additional |   |     |             |             | Other |               |   |  |               |          |   | Total      |  
|                                                                                             |  |                            |        |   | Paid-in    |   |     | Accumulated |             |       | Comprehensive |   |  | Notes         |          |   | Deferred   |   |      | Stockholders | 
|                                                                                             |  | Shares                     |        |   | Amount     |   |     | Capital     |             |       | Deficit       |   |  | Income (Loss) |          |   | Receivable |   |      | Compensation  |  |   | Equity |  
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|                                                                                             |  | (All amounts in thousands) |       
|Balance at December 31, 2002                                                                 |  |                            | 12,677 |   |            | $ | 127 |             |             | $     | 83,465        |   |  | $             | (71,654  | ) |            | $ | 637  |               |  | $ | (2,187 | ) |  | $ | (368   | ) |  | $ | 10,020  |  
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Unrealized loss from available-for-sale securities                                           |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   | (169 | )             |  |   |       |   |  |   |       |   |  |   | (169    | )
|Foreign currency translation adjustment                                                      |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   | (600 | )             |  |   |       |   |  |   |       |   |  |   | (600    | )
|Net loss                                                                                     |  |                            |       |   |            |   |    |             |             |       |              |   |  |               | (8,368   | ) |            |   |     |               |  |   |       |   |  |   |       |   |  |   | (8,368  | )
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Comprehensive loss                                                                           |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | (9,137  | )
|Issuance of common stock in connection with private financing,
    net of expenses of $1,102 |  |                            | 1,500  |   |            |   | 15  |             |             |       | 13,883        |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | 13,898  |  
|Issuance of common stock upon exercise of options                                            |  |                            | 110    |   |            |   | 1   |             |             |       | 499           |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | 500     |  
|Compensation related to restricted stock, options and stock
    appreciation rights          |  |                            | 5      |   |            |   |    |             |             |       | 229           |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   | 391    |   |  |   | 620     |  
|Payment of notes receivable                                                                  |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   |     |               |  |   | 569    |   |  |   |       |   |  |   | 569     |  
|Interest on notes receivable                                                                 |  |                            |       |   |            |   |    |             |             |       | 102           |   |  |               |         |   |            |   |     |               |  |   | (102   | ) |  |   |       |   |  |   |        |  
|Cancellation of notes receivable                                                             |  |                            | (298   | ) |            |   | (3  | )           |             |       | (755          | ) |  |               |         |   |            |   |     |               |  |   | 758    |   |  |   |       |   |  |   |        |  
|Options issued for services provided by non-employees                                        |  |                            |       |   |            |   |    |             |             |       | 251           |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   | (251   | ) |  |   |        |  
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Balance at December 31, 2003                                                                 |  |                            | 13,994 |   |            |   | 140 |             |             |       | 97,674        |   |  |               | (80,022  | ) |            |   | (132 | )             |  |   | (962   | ) |  |   | (228   | ) |  |   | 16,470  |  
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Unrealized gain from available-for-sale securities                                           |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   | 38   |               |  |   |       |   |  |   |       |   |  |   | 38      |  
|Net loss                                                                                     |  |                            |       |   |            |   |    |             |             |       |              |   |  |               | (10,024  | ) |            |   |     |               |  |   |       |   |  |   |       |   |  |   | (10,024 | )
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Comprehensive loss                                                                           |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | (9,986  | )
|Issuance of common stock in connection with private financing,
    net of expenses of $1,837 |  |                            | 2,756  |   |            |   | 27  |             |             |       | 22,332        |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | 22,359  |  
|Issuance of common stock upon exercise of options                                            |  |                            | 20     |   |            |   |    |             |             |       | 52            |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | 52      |  
|Compensation related to restricted stock                                                     |  |                            | (9     | ) |            |   |    |             |             |       | (26           | ) |  |               |         |   |            |   |     |               |  |   |       |   |  |   | 156    |   |  |   | 130     |  
|Payment of notes receivable                                                                  |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   |     |               |  |   | 82     |   |  |   |       |   |  |   | 82      |  
|Interest on notes receivable                                                                 |  |                            |       |   |            |   |    |             |             |       | 21            |   |  |               |         |   |            |   |     |               |  |   | (21    | ) |  |   |       |   |  |   |        |  
|Cancellation of notes receivable                                                             |  |                            | (47    | ) |            |   |    |             |             |       | (517          | ) |  |               |         |   |            |   |     |               |  |   | 517    |   |  |   |       |   |  |   |        |  
|Options issued for services provided by non-employees                                        |  |                            |       |   |            |   |    |             |             |       | (9            | ) |  |               |         |   |            |   |     |               |  |   |       |   |  |   | 37     |   |  |   | 28      |  
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Balance at December 31, 2004                                                                 |  |                            | 16,714 |   |            |   | 167 |             |             |       | 119,527       |   |  |               | (90,046  | ) |            |   | (94  | )             |  |   | (384   | ) |  |   | (35    | ) |  |   | 29,135  |  
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Unrealized gain from available-for-sale securities                                           |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   | 9    |               |  |   |       |   |  |   |       |   |  |   | 9       |  
|Net loss                                                                                     |  |                            |       |   |            |   |    |             |             |       |              |   |  |               | (11,909  | ) |            |   |     |               |  |   |       |   |  |   |       |   |  |   | (11,909 | )
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Comprehensive loss                                                                           |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | (11,900 | )
|Issuance of common stock in connection with equity financings,
    net of expenses of $3,372 |  |                            | 10,811 |   |            |   | 108 |             |             |       | 38,816        |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | 38,924  |  
|Issuance of common stock upon exercise of options                                            |  |                            | 3      |   |            |   |    |             |             |       | 10            |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   |       |   |  |   | 10      |  
|Issuance of restricted stock                                                                 |  |                            | 520    |   |            |   | 5   |             |             |       | 2,691         |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   | (2,696 | ) |  |   |        |  
|Compensation related to restricted stock                                                     |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   |     |               |  |   |       |   |  |   | 303    |   |  |   | 303     |  
|Payment of notes receivable                                                                  |  |                            |       |   |            |   |    |             |             |       |              |   |  |               |         |   |            |   |     |               |  |   | 57     |   |  |   |       |   |  |   | 57      |  
|Interest on notes receivable                                                                 |  |                            |       |   |            |   |    |             |             |       | 11            |   |  |               |         |   |            |   |     |               |  |   | (11    | ) |  |   |       |   |  |   |        |  
|Cancellation of notes receivable                                                             |  |                            | (11    | ) |            |   |    |             |             |       | (151          | ) |  |               |         |   |            |   |     |               |  |   | 151    |   |  |   |       |   |  |   |        |  
|Options issued for services provided by non-employees                                        |  |                            |       |   |            |   |    |             |             |       | (19           | ) |  |               |         |   |            |   |     |               |  |   |       |   |  |   | 24     |   |  |   | 5       |  
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  
|Balance at December 31, 2005                                                                 |  |                            | 28,037 |   |            | $ | 280 |             |             | $     | 160,885       |   |  | $             | (101,955 | ) |            | $ | (85  | )             |  | $ | (187   | ) |  | $ | (2,404 | ) |  | $ | 56,534  |  
|                                                                                             |  |                            |        |   |            |   |     |             |             |       |               |   |  |               |          |   |            |   |      |               |  |   |        |  



F-5



---



##### Table of Contents






OXiGENE, Inc.


Consolidated Statements of Cash Flows


|                                                                                |                                                                                                                   |                         |         |         |      |   |         |        |   |   |         |         |  
|------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ----------------------- | ------- | ------- | ---- | - | ------- | ------ | - | - | ------- | ------- | -
|                                                                                |                                                                                                                   | Year Ended December 31, |        
|                                                                                |                                                                                                                   |                         |        
|                                                                                |                                                                                                                   | 2003                    |         |         | 2004 |   |         | 2005   |  
|                                                                                |                                                                                                                   |                         |         |         |      |   |         |        |  
|                                                                                |                                                                                                                   | (Amounts in thousands)  |        
|Operating activities:                                                           |                                                                                                                   |                         |         |         |      |   |         |        |   |   |         |        
|Net loss                                                                        |                                                                                                                   | $                       | (8,368  | )       |      | $ | (10,024 | )      |   | $ | (11,909 | )      
|Adjustments to reconcile net loss to net cash used in operating
    activities: |                                                                                                                   |                         |         |         |      |   |         |        |   |   |         |        
|                                                                                | Foreign currency translation gain                                                                                 |                         |         | (635    | )    |   |         |       |   |   |         |        |  
|                                                                                | Depreciation                                                                                                      |                         |         | 478     |      |   |         | 27     |   |   |         | 44      |  
|                                                                                | Amortization of license agreements                                                                                |                         |         | 98      |      |   |         | 98     |   |   |         | 98      |  
|                                                                                | Compensation expense related to issuance of warrants, options,
    stock appreciation rights and restricted stock |                         |         | 620     |      |   |         | 158    |   |   |         | 308     |  
|Changes in operating assets and liabilities:                                    |                                                                                                                   |                         |         |         |      |   |         |        |   |   |         |        
|                                                                                | Restricted cash                                                                                                   |                         |         | (364    | )    |   |         | 364    |   |   |         |        |  
|                                                                                | Prepaid expenses and other current assets                                                                         |                         |         | (7      | )    |   |         | (56    | ) |   |         | (151    | )
|                                                                                | Accounts payable, accrued expenses and other payables                                                             |                         |         | 427     |      |   |         | (958   | ) |   |         | 1,112   |  
|                                                                                |                                                                                                                   |                         |         |         |      |   |         |        |  
|Net cash used in operating activities                                           |                                                                                                                   |                         | (7,751  | )       |      |   | (10,391 | )      |   |   | (10,498 | )      
|Investing activities:                                                           |                                                                                                                   |                         |         |         |      |   |         |        |   |   |         |        
|                                                                                | Purchase of available-for-sale securities                                                                         |                         |         | (10,584 | )    |   |         | (9,777 | ) |   |         | (33,392 | )
|                                                                                | Proceeds from sale of available-for-sale securities                                                               |                         |         | 798     |      |   |         | 12,995 |   |   |         | 21,404  |  
|                                                                                | Amount paid for license agreements                                                                                |                         |         | (290    | )    |   |         | (155   | ) |   |         |        |  
|                                                                                | Purchase of furniture, fixtures and equipment                                                                     |                         |         | (35     | )    |   |         | (50    | ) |   |         | (112    | )
|                                                                                | Deposits                                                                                                          |                         |         | (33     | )    |   |         | (5     | ) |   |         | (37     | )
|                                                                                |                                                                                                                   |                         |         |         |      |   |         |        |  
|Net cash provided by (used in) investing activities                             |                                                                                                                   |                         | (10,144 | )       |      |   | 3,008   |        |   |   | (12,137 | )      
|Financing activities:                                                           |                                                                                                                   |                         |         |         |      |   |         |        |   |   |         |        
|                                                                                | Proceeds from issuance of common stock                                                                            |                         |         | 14,398  |      |   |         | 22,411 |   |   |         | 38,934  |  
|                                                                                | Payment of notes receivable and related interest                                                                  |                         |         | 569     |      |   |         | 82     |   |   |         | 57      |  
|                                                                                |                                                                                                                   |                         |         |         |      |   |         |        |  
|Net cash provided by financing activities                                       |                                                                                                                   |                         | 14,967  |         |      |   | 22,493  |        |   |   | 38,991  |        
|Effect of exchange rate changes on cash                                         |                                                                                                                   |                         | 54      |         |      |   |        |        |   |   |        |        
|                                                                                |                                                                                                                   |                         |         |         |      |   |         |        |  
|Increase (Decrease) in cash and cash equivalents                                |                                                                                                                   |                         | (2,874  | )       |      |   | 15,110  |        |   |   | 16,356  |        
|Cash and cash equivalents at beginning of year                                  |                                                                                                                   |                         | 3,752   |         |      |   | 878     |        |   |   | 15,988  |        
|Cash and cash equivalents at end of year                                        |                                                                                                                   | $                       | 878     |         |      | $ | 15,988  |        |   | $ | 32,344  |        
|                                                                                |                                                                                                                   |                         |         |         |      |   |         |        |  
|Supplemental Disclosure                                                         |                                                                                                                   |                         |         |         |      |   |         |        |   |   |         |        
|Interest paid                                                                   |                                                                                                                   | $                       | 30      |         |      |   |        |        |   |   |        |        



F-6



---



##### Table of Contents



OXiGENE, INC.





Notes to Consolidated Financial Statements


December 31, 2005




|   |                                                                
|-- | ---------------------------------------------------------------
|1. | Description of Business and Significant Accounting
    Policies



| |                        
| | -----------------------
| | Description of Business







| |                      
| | ---------------------
| | Basis of Presentation







| |                 
| | ----------------
| | Use of Estimates





| |                             
| | ----------------------------
| | Concentration of Credit Risk





| |                          
| | -------------------------
| | Cash and Cash Equivalents



F-7



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)




| |                              
| | -----------------------------
| | Available-for-Sale Securities

Accounting for Certain
Investments in Debt and Equity Securities






|                                    |                               |                                                  |        |            |        |            |        |   |   |            |     |     |     |   |        |       |        | 
|----------------------------------- | ----------------------------- | ------------------------------------------------ | ------ | ---------- | ------ | ---------- | ------ | - | - | ---------- | --- | --- | --- | - | ------ | ----- | ------ | 
|                                    |                               | December 31, 2005                                |       
|                                    |                               |                                                  |       
|                                    |                               |                                                  |        | Gross      |        | Gross      |        |   |  
|                                    |                               |                                                  |        | Unrealized |        | Unrealized |        |   |  
|                                    |                               | Cost                                             |        |            | Gains  |            | Losses |   |   | Fair Value |    
|                                    |                               |                                                  |        |            |        |            |        |   |   |            |    
|Current                             |                               |                                                  |        |            |        |            |        |   |   |            |     |     |     |   |        |      
|Government bonds and notes          |                               |                                                  |        |            |        |            |        |   |   |            |     |     |     |   |        |      
|                                    | Maturing in less than 2 years |                                                  | $      | 3,782      |        |            | $      |  |   |            | $   | (1  | )   |   | $      | 3,781 |       
|Corporate bonds                     |                               |                                                  |        |            |        |            |        |   |   |            |     |     |     |   |        |      
|                                    | Maturing in less than 2 years |                                                  |        | 4,806      |        |            |        |  |   |            |     | (28 | )   |   |        | 4,778 |       
|                                    | Maturing in 2 to 4 years      |                                                  |        | 1,203      |        |            |        |  |   |            |     |    |     |   |        | 1,203 |       
|                                    |                               |                                                  |        |            |        |            |        |   |   |            |     |    
|                                    |                               | Subtotal corporate bonds                         |        |            | 6,009  |            |        |   |  |            |     |     | (28 | ) |        |       | 5,981  | 
|Commercial Paper                    |                               |                                                  | 9,334  |            |        |            |       |   |   |            | (1  | )   |     |   | 9,333  |      
|Asset backed securities             |                               |                                                  | 3,268  |            |        |            |       |   |   |            | (8  | )   |     |   | 3,260  |      
|Certificates of deposit             |                               |                                                  | 1,000  |            |        |            |       |   |   |            |    |     |     |   | 1,000  |      
|                                    |                               |                                                  |        |            |        |            |        |   |   |            |     |    
|                                    |                               | Subtotal current available-for-sale securities   |        |            | 23,393 |            |        |   |  |            |     |     | (38 | ) |        |       | 23,355 | 
|Long Term                           |                               |                                                  |        |            |        |            |        |   |   |            |     |     |     |   |        |      
|Government bonds and notes          |                               |                                                  |        |            |        |            |        |   |   |            |     |     |     |   |        |      
|                                    | Maturing in less than 2 years |                                                  |        | 1,500      |        |            |        |  |   |            |     | (28 | )   |   |        | 1,472 |       
|Corporate bonds                     |                               |                                                  |        |            |        |            |        |   |   |            |     |     |     |   |        |      
|                                    | Maturing in less than 2 years |                                                  |        | 1,703      |        |            |        |  |   |            |     | (19 | )   |   |        | 1,684 |       
|                                    |                               |                                                  |        |            |        |            |        |   |   |            |     |    
|                                    |                               | Subtotal long term available-for-sale securities |        |            | 3,203  |            |        |   |  |            |     |     | (47 | ) |        |       | 3,156  | 
|                                    |                               |                                                  |        |            |        |            |        |   |   |            |     |    
|Total available-for-sale securities |                               | $                                                | 26,596 |            |        | $          |       |   |   | $          | (85 | )   |     | $ | 26,511 |      
|                                    |                               |                                                  |        |            |        |            |        |   |   |            |     |    

F-8



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)


|                                    |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |     |     |     |        |       |       |       | 
|----------------------------------- | -------------------------------- | ------------------------------------------------ | ---------------------------------------------- | ---------- | ----- | ----- | ---------- | ------ | - | - | ---------- | --- | --- | --- | ------ | ----- | ----- | ----- | 
|                                    |                                  | December 31, 2004                                |                                               
|                                    |                                  |                                                  |                                               
|                                    |                                  |                                                  |                                                | Gross      |       |       | Gross      |        |   |  
|                                    |                                  |                                                  |                                                | Unrealized |       |       | Unrealized |        |   |  
|                                    |                                  | Cost                                             |                                                |            | Gains |       |            | Losses |   |   | Fair Value |    
|                                    |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |    
|Current                             |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |     |     |     |        |      
|Government bonds and notes          |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |     |     |     |        |      
|                                    | Maturing in less than 2 years    |                                                  | $                                              | 752        |       |       | $          |       |   |   | $          | (8  | )   |     | $      | 744   |      
|Corporate bonds                     |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |     |     |     |        |      
|                                    | Maturing in less than 2 years    |                                                  |                                                | 950        |       |       |            | 2      |   |   |            | (6  | )   |     |        | 946   |      
|Certificates of deposit             |                                  |                                                  | 2,052                                          |            |       |       |           |        |   |   | (9         | )   |     |     | 2,043  |      
|Fixed income mutual funds           |                                  |                                                  | 4,253                                          |            |       |       |           |        |   |   |           |     |     |     | 4,253  |      
|                                    |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |    
|                                    |                                  |                                                  | Subtotal current available-for-sale securities |            |       | 8,007 |            |        |   | 2 |            |     |     | (23 | )      |       |       | 7,986 | 
|Long Term                           |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |     |     |     |        |      
|Government bonds and notes          |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |     |     |     |        |      
|                                    | Maturing in 2 to 4 years         |                                                  |                                                | 1,500      |       |       |            |       |   |   |            | (3  | )   |     |        | 1,497 |      
|                                    | Maturing in greater than 4 years |                                                  |                                                | 1,000      |       |       |            |       |   |   |            |    |     |     |        | 1,000 |      
|                                    |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |    
|                                    |                                  |                                                  | Subtotal government bonds                      |            |       | 2,500 |            |        |   |  |            |     |     | (3  | )      |       |       | 2,497 | 
|Corporate bonds                     |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |     |     |     |        |      
|                                    | Maturing in less than 2 years    |                                                  |                                                | 1,751      |       |       |            |       |   |   |            | (24 | )   |     |        | 1,727 |      
|                                    | Maturing in 2 to 4 years         |                                                  |                                                | 1,741      |       |       |            |       |   |   |            | (35 | )   |     |        | 1,706 |      
|                                    |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |    
|                                    |                                  | Subtotal corporate bonds                         |                                                |            | 3,492 |       |            |        |  |   |            |     | (59 | )   |        |       | 3,433 |      
|Certificates of deposit             |                                  |                                                  | 609                                            |            |       |       |           |        |   |   | (11        | )   |     |     | 598    |      
|                                    |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |    
|                                    |                                  | Subtotal long term available-for-sale securities |                                                |            | 6,601 |       |            |        |  |   |            |     | (73 | )   |        |       | 6,528 |      
|                                    |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |    
|Total available-for-sale securities |                                  | $                                                | 14,608                                         |            |       | $     | 2          |        |   | $ | (96        | )   |     | $   | 14,514 |      
|                                    |                                  |                                                  |                                                |            |       |       |            |        |   |   |            |    





| |                                 
| | --------------------------------
| | Accrued Research and Development



F-9



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)






| |             
| | ------------
| | Income Taxes

Accounting for Income Taxes




| |                  
| | -----------------
| | License Agreement





| |             
| | ------------
| | Depreciation





| |                                
| | -------------------------------
| | Patents and Patent Applications





| |                             
| | ----------------------------
| | Foreign Currency Translation



F-10



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)






| |                   
| | ------------------
| | Net Loss Per Share





| |                         
| | ------------------------
| | Stock-Based Compensation

Accounting for Stock-Based Compensation




|                             |  |      |         |   |      |  |         |      |  |  |         |  
|---------------------------- |  | ---- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|Weighted Average Assumptions |  | 2003 |         |   | 2004 |  |         | 2005 | 
|                             |  |      |         |   |      |  |         |      | 
|Risk-free interest rate      |  |      | 3.16    | % |      |  | 2.57    | %    |  |  | 4.19    | %
|Expected life                |  |      | 4 years |   |      |  | 4 years |      |  |  | 4 years |  
|Expected volatility          |  |      | 95      | % |      |  | 118     | %    |  |  | 133     | %
|Dividend yield               |  |      | 0.00    | % |      |  | 0.00    | %    |  |  | 0.00    | %





F-11



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)




|                                      |                                                                                                            |                         |        |       |      |   |         |        |   |   |         |        |  
|------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ----------------------- | ------ | ----- | ---- | - | ------- | ------ | - | - | ------- | ------ | -
|                                      |                                                                                                            | Year Ended December 31, |       
|                                      |                                                                                                            |                         |       
|                                      |                                                                                                            | 2003                    |        |       | 2004 |   |         | 2005   |  
|                                      |                                                                                                            |                         |        |       |      |   |         |        |  
|Net loss as reported                  |                                                                                                            | $                       | (8,368 | )     |      | $ | (10,024 | )      |   | $ | (11,909 | )     
|                                      | Deduct: Stock-based employee compensation expense included in
    reported net loss                        |                         |        | 112   |      |   |         | 129    |   |   |         | 303    |  
|                                      | Add: Stock-based employee compensation expense determined under
    fair value based method for all awards |                         |        | (909  | )    |   |         | (2,250 | ) |   |         | (1,814 | )
|                                      |                                                                                                            |                         |        |       |      |   |         |        |  
|Pro forma net loss                    |                                                                                                            | $                       | (9,165 | )     |      | $ | (12,145 | )      |   | $ | (13,420 | )     
|                                      |                                                                                                            |                         |        |       |      |   |         |        |  
|Basic and diluted net loss per share: |                                                                                                            |                         |        |       |      |   |         |        |   |   |         |       
|                                      | As reported                                                                                                |                         | $      | (0.63 | )    |   | $       | (0.61  | ) |   | $       | (0.61  | )
|                                      | Pro forma                                                                                                  |                         | $      | (0.70 | )    |   | $       | (0.73  | ) |   | $       | (0.68  | )

Accounting for Equity Instruments
That are Issued to Other Than Employees for Acquiring, or in
Conjunction With Selling Goods or Services.






| |                            
| | ---------------------------
| | Comprehensive Income (Loss)

Reporting Comprehensive Income




| |                    
| | -------------------
| | Revenue Recognition

Revenue Recognition in
Financial Statements 00-21, Revenue Arrangements with Multiple
Deliverables.




F-12



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)






| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements

Share-Based Payment,




share-based


Accounting Changes and
Error Corrections Accounting Changes Reporting Accounting Changes in
Interim Financial Statements.


F-13



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)






|   |                   
|-- | ------------------
|2. | Foreign Operations



|                  |  |                   |      |  
|----------------- |  | ----------------- | ---- | -
|                  |  | December 31, 2003 |     
|                  |  |                   |     
|Assets            |  | $                 |     |  
|Liabilities       |  |                   |     |  
|Expenses          |  |                   | 136  |  
|Net (loss) income |  | $                 | (165 | )





|   |                           
|-- | --------------------------
|3. | Related Party Transactions







|   |                     
|-- | --------------------
|4. | Stockholders Equity



S-3


S-3


F-14



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)


S-3






| |                      
| | ---------------------
| | Stock Incentive Plans









| |                          
| | -------------------------
| | Stock Appreciation Rights



F-15



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)








| |                     
| | --------------------
| | Options and Warrants

The following is a summary of the Companys stock
option, warrant and


stock appreciation right activity: (Amounts in thousands)


|                                 |           |               |       |       |              |  |    |          |   |  |     |      |  
|-------------------------------- | --------- | ------------- | ----- | ----- | ------------ |  | -- | -------- | - |  | --- | ---- | -
|                                 |           |               |       | Stock |              |  |   
|                                 |           | Non-Qualified |       |       | Appreciation |  |    |         
|                                 |           | Stock Options |       |       | Rights       |  |    | Warrants |  
|                                 |           |               |       |       |              |  |    |          |  
|Outstanding at December 31, 2002 |           |               | 590   |       |              |  | 25 |          |   |  |    |     
|                                 | Granted   |               |       | 919   |              |  |    |         |   |  |     | 525  |  
|                                 | Exercised |               |       | (98   | )            |  |    | (17      | ) |  |     |     |  
|                                 | Canceled  |               |       | (29   | )            |  |    | (8       | ) |  |     |     |  
|                                 |           |               |       |       |              |  |    |          |  
|Outstanding at December 31, 2003 |           |               | 1,382 |       |              |  |   |          |   |  | 525 |     
|                                 | Granted   |               |       | 378   |              |  |    |         |   |  |     |     |  
|                                 | Exercised |               |       | (20   | )            |  |    |         |   |  |     |     |  
|                                 | Canceled  |               |       | (146  | )            |  |    |         |   |  |     |     |  
|                                 |           |               |       |       |              |  |    |          |  
|Outstanding at December 31, 2004 |           |               | 1,594 |       |              |  |   |          |   |  | 525 |     
|                                 | Granted   |               |       | 133   |              |  |    |         |   |  |     |     |  
|                                 | Exercised |               |       | (4    | )            |  |    |         |   |  |     |     |  
|                                 | Canceled  |               |       | (51   | )            |  |    |         |   |  |     | (375 | )
|                                 |           |               |       |       |              |  |    |          |  
|Outstanding at December 31, 2005 |           |               | 1,672 |       |              |  |   |          |   |  | 150 |     

F-16



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)


Weighted-Average Exercise Price of Stock Options, Warrants
and Stock Appreciation Rights


|                  |           |               |      |       |              |   |      |          |  |   |       |       | 
|----------------- | --------- | ------------- | ---- | ----- | ------------ | - | ---- | -------- |  | - | ----- | ----- | 
|                  |           |               |      | Stock |              |   |     
|                  |           | Non-Qualified |      |       | Appreciation |   |      |         
|                  |           | Stock Options |      |       | Rights       |   |      | Warrants | 
|                  |           |               |      |       |              |   |      |          | 
|December 31, 2002 |           | $             | 3.14 |       |              | $ | 7.51 |          |  | $ |      |      
|                  | Granted   |               |      | 8.58  |              |   |      |         |  |   |       | 14.14 | 
|                  | Exercised |               |      | 3.79  |              |   |      | 7.63     |  |   |       |      | 
|                  | Canceled  |               |      | 4.07  |              |   |      | 7.25     |  |   |       |      | 
|                  |           |               |      |       |              |   |      |          | 
|December 31, 2003 |           |               | 6.69 |       |              |   |     |          |  |   | 14.14 |      
|                  | Granted   |               |      | 6.21  |              |   |      |         |  |   |       |      | 
|                  | Exercised |               |      | 2.58  |              |   |      |         |  |   |       |      | 
|                  | Canceled  |               |      | 8.64  |              |   |      |         |  |   |       |      | 
|                  |           |               |      |       |              |   |      |          | 
|December 31, 2004 |           | $             | 6.45 |       |              | $ |     |          |  | $ | 14.14 |      
|                  |           |               |      |       |              |   |      |          | 
|                  | Granted   |               |      | 4.89  |              |   |      |         |  |   |       |      | 
|                  | Exercised |               |      | 2.96  |              |   |      |         |  |   |       |      | 
|                  | Canceled  |               |      | 7.43  |              |   |      |         |  |   |       | 15.00 | 
|                  |           |               |      |       |              |   |      |          | 
|December 31, 2005 |           | $             | 6.31 |       |              | $ |     |          |  | $ | 12.00 |      
|                  |           |               |      |       |              |   |      |          | 

Stock Options and Warrants Exercisable


|                   |                                 |                   |   |       |          |  |   |       | 
|------------------ | ------------------------------- | ----------------- | - | ----- | -------- |  | - | ----- | 
|                   |                                 | Non-qualified     |   |       |         
|                   |                                 | Stock             |   |       |         
|                   |                                 | Options           |   |       | Warrants | 
|                   |                                 |                   |   |       |          | 
|                   |                                 | (Share amounts in |  
|                   |                                 | thousands)        |  
|December 31, 2003: |                                 |                   |   |       |          |  |   |      
|                   | Exercisable                     |                   |   | 462   |          |  |   | 525   | 
|                   | Weighted-average exercise price |                   | $ | 2.96  |          |  | $ | 14.14 | 
|December 31, 2004: |                                 |                   |   |       |          |  |   |      
|                   | Exercisable                     |                   |   | 746   |          |  |   | 525   | 
|                   | Weighted-average exercise price |                   | $ | 5.33  |          |  | $ | 14.14 | 
|December 31, 2005: |                                 |                   |   |       |          |  |   |      
|                   | Exercisable                     |                   |   | 1,119 |          |  |   | 150   | 
|                   | Weighted-average exercise price |                   | $ | 6.19  |          |  | $ | 12.00 | 

F-17



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)


Stock Options and Warrants Outstanding


|                          |             |                                             |               |     |            |   |                |       |            |   |                 |     |            | 
|------------------------- | ----------- | ------------------------------------------- | ------------- | --- | ---------- | - | -------------- | ----- | ---------- | - | --------------- | --- | ---------- | 
|                          |             | Non-qualified Stock Options                 |               |     | Warrants   |  
|                          |             |                                             |               |     |            |  
|                          |             | (Share amounts in thousands)                |              
|December 31, 2005:        |             |                                             |               |     |            |   |                |       |            |   |                 |    
|Range of Exercise prices: |             | $                                           | 1.06 to $5.00 |     |            | $ | 5.01 to $10.35 |       |            | $ | 12.00 to $15.00 |    
|                          |             |                                             |               |     |            |   |                |       |           
|                          | Outstanding |                                             |               | 497 |            |   |                | 1,175 |            |   |                 | 150 |           
|                          |             | Weighted-average exercise price             |               | $   | 2.94       |   |                | $     | 7.73       |   |                 | $   | 12.00      | 
|                          |             | Weighted-average remaining contractual life |               |     | 6.58 years |   |                |       | 7.95 years |   |                 |     | 2.44 years | 
|                          | Exercisable |                                             |               | 412 |            |   |                | 707   |            |   |                 | 150 |           
|                          |             | Weighted-average exercise price             |               | $   | 2.70       |   |                | $     | 8.23       |   |                 | $   | 12.00      | 



| |                 
| | ----------------
| | Notes Receivable







| |                                   
| | ----------------------------------
| | Common Stock Reserved for Issuance





|   |             
|-- | ------------
|5. | Income Taxes



F-18



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)






|                                                                       |  |      |         |     |      |   |         |  
|---------------------------------------------------------------------- |  | ---- | ------- | --- | ---- | - | ------- | -
|                                                                       |  | 2004 |         |     | 2005 |  
|                                                                       |  |      |         |     |      |  
|Net operating loss carryforwards                                       |  | $    | 35,058  | (1) |      | $ | 39,641  |  
|Compensatory stock options, warrants and stock appreciation
    rights |  |      | 70      |     |      |   | (60     | )
|Other                                                                  |  |      | 232     |     |      |   | 622     |  
|                                                                       |  |      |         |     |      |  
|Total deferred tax asset                                               |  |      | 35,360  |     |      |   | 40,203  |  
|Valuation allowance                                                    |  | $    | (35,360 | )   |      | $ | (40,203 | )
|                                                                       |  |      |         |     |      |  
|Net deferred tax asset                                                 |  |      |        |     |      |   |        |  
|                                                                       |  |      |         |     |      |  








|    |                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This amount for the year ended December 31, 2004 was originally
    reported as $44,324,000 and has been adjusted to exclude foreign
    net operating loss carryforwards, which are not available due to
    the liquidation of OXiGENE Europe AB.



|   |                              
|-- | -----------------------------
|6. | Commitments and Contingencies



| |       
| | ------
| | Leases



F-19



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)




|           |  |             |       |  |               |   |      |             |  |   |       | 
|---------- |  | ----------- | ----- |  | ------------- | - | ---- | ----------- |  | - | ----- | 
|           |  | Gross       |       |  | Receipts from |   |      | Net         | 
|           |  | Commitments |       |  | Sublease      |   |      | Commitments | 
|           |  |             |       |  |               |   |      |             | 
|2006       |  | $           | 583   |  |               | $ | (210 | )           |  | $ | 373   | 
|2007       |  |             | 593   |  |               |   | (211 | )           |  |   | 382   | 
|2008       |  |             | 602   |  |               |   | (143 | )           |  |   | 459   | 
|2009       |  |             | 441   |  |               |   |     |             |  |   | 441   | 
|2010       |  |             | 297   |  |               |   |     |             |  |   | 297   | 
|Thereafter |  |             |      |  |               |   |     |             |  |   |      | 
|           |  |             |       |  |               |   |      |             | 
|           |  | $           | 2,516 |  |               | $ | (564 | )           |  | $ | 1,952 | 
|           |  |             |       |  |               |   |      |             | 



| |                   
| | ------------------
| | License Agreements







| |           
| | ----------
| | Litigation







|   |                        
|-- | -----------------------
|7. | Retirement Savings Plan



F-20



---



##### Table of Contents



OXiGENE, INC.


Notes to Consolidated Financial
Statements  (Continued)






|   |                                            
|-- | -------------------------------------------
|8. | Quarterly Results of Operations (Unaudited)



|                                     |  |                     |        |   |          |   |        |               |  |   |              |   |  |   |        |  
|------------------------------------ |  | ------------------- | ------ | - | -------- | - | ------ | ------------- |  | - | ------------ | - |  | - | ------ | -
|                                     |  | Three Months Ended, |       
|                                     |  |                     |       
|                                     |  | March 31,           |        |   | June 30, |   |        | September 30, |  |   | December 31, |  
|                                     |  | 2004                |        |   | 2004     |   |        | 2004          |  |   | 2004         |  
|                                     |  |                     |        |   |          |   |        |               |  |   |              |  
|License revenue                      |  | $                   | 7      |   |          | $ |       |               |  | $ |             |   |  | $ |       |  
|Net loss                             |  |                     | (2,062 | ) |          |   | (2,803 | )             |  |   | (2,910       | ) |  |   | (2,249 | )
|Basic and diluted net loss per share |  | $                   | (0.13  | ) |          | $ | (0.17  | )             |  | $ | (0.17        | ) |  | $ | (0.13  | )

|                                     |  |                     |        |   |          |   |        |               |  |   |              |   |  |   |        |  
|------------------------------------ |  | ------------------- | ------ | - | -------- | - | ------ | ------------- |  | - | ------------ | - |  | - | ------ | -
|                                     |  | Three Months Ended, |       
|                                     |  |                     |       
|                                     |  | March 31,           |        |   | June 30, |   |        | September 30, |  |   | December 31, |  
|                                     |  | 2005                |        |   | 2005     |   |        | 2005          |  |   | 2005         |  
|                                     |  |                     |        |   |          |   |        |               |  |   |              |  
|License revenue                      |  | $                   |       |   |          | $ |       |               |  | $ |             |   |  | $ | 1      |  
|Net loss                             |  |                     | (2,028 | ) |          |   | (3,058 | )             |  |   | (3,444       | ) |  |   | (3,379 | )
|Basic and diluted net loss per share |  | $                   | (0.12  | ) |          | $ | (0.15  | )             |  | $ | (0.17        | ) |  | $ | (0.16  | )

F-21