<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

(Mark One)

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

         For the quarterly period ended July 31, 2000

[ ]      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 1-8366

                         POLYDEX PHARMACEUTICALS LIMITED
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

   Commonwealth of the Bahamas                             None
-------------------------------                      -------------------
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                      Identification No.)


               421 Comstock Road, Toronto, Ontario, Canada M1L 2H5
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

Registrant's telephone number, including area code (416) 755-2231

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

                             Yes   X           No
                                -------          -------

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

Common Shares, $.0167 Par Value                       3,030,717 shares
-------------------------------               ---------------------------------
        (Title of Class)                     (Outstanding at September 5, 2000)




<PAGE>

                         POLYDEX PHARMACEUTICALS LIMITED

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                             ----
<S>               <C>                                                                                        <C>

PART I            FINANCIAL INFORMATION

Item 1            CONSOLIDATED FINANCIAL STATEMENTS
                  (UNAUDITED)

                  Consolidated Balance Sheets
                  July 31, 2000 and January 31, 2000...........................................................3

                  Consolidated Statements of Operations
                  Three Months ended July 31, 2000 and 1999 and
                  Six Months ended July 31, 2000 and July 31, 1999.............................................4

                  Consolidated Statements of Shareholders' Equity
                  Six Months ended July 31, 2000 and 1999......................................................5

                  Consolidated Statements of Cash Flows
                  Six Months ended July 31, 2000 and 1999......................................................6

                  Segmented Information
                  Three Months ended July 31, 2000 and 1999 and
                  Six Months ended July 31, 2000 and 1999......................................................7

Item 2            MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS................................................8

Item 3            QUANTITATIVE AND QUALITATIVE DISCLOSURES
                  ABOUT MARKET RISK............................................................................12

PART II           OTHER INFORMATION

Item 4            SUBMISSION OF MATTERS TO A VOTE OF
                  SECURITY HOLDERS.............................................................................14

Item 6            EXHIBITS AND REPORTS ON FORM 8-K.............................................................15

                  Signatures...................................................................................17
</TABLE>


                                       -2-

<PAGE>



                         PART I - FINANCIAL INFORMATION


Item 1.           Consolidated Financial Statements.

POLYDEX PHARMACEUTICALS LIMITED AND SUBSIDIARIES

Consolidated Balance Sheets
(Expressed in United States dollars)

<TABLE>
<CAPTION>

===========================================================================================================================
                                                                                            (Unaudited)
                                                                                               July 31          January 31
                                                                                                  2000                2000
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                  <C>
ASSETS
Current assets:
       Cash                                                                         $          659,300   $         799,565
       Trade accounts receivable                                                               880,949           1,204,495
       Inventories:
             Finished goods                                                                  1,531,634           1,186,110
             Work in process                                                                    66,303              53,023
             Raw materials                                                                     565,779             678,145
             --------------------------------------------------------------------------------------------------------------
                                                                                             2,163,716           2,051,251
       Prepaid expenses and other current assets                                                46,747              73,072
       --------------------------------------------------------------------------------------------------------------------
                                                                                             3,750,712           4,128,383
Property, plant and equipment, net                                                           5,183,043           5,154,333
Patents, net                                                                                   142,520             153,611
Due from shareholder                                                                         1,392,279           1,396,615
Deferred income taxes                                                                          720,485           1,146,000
Other assets                                                                                    45,630              39,414
---------------------------------------------------------------------------------------------------------------------------

                                                                                    $       11,234,669   $      12,018,356
===========================================================================================================================




===========================================================================================================================
                                                                                            (Unaudited)
                                                                                               July 31          January 31
                                                                                                  2000                2000
---------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
       Bank indebtedness                                                            $           47,068   $               -
       Accounts payable                                                                      1,050,673           1,279,778
       Accrued liabilities                                                                     528,463             454,824
       Income taxes payable                                                                     22,116              17,072
       Current portion of long-term debt                                                       392,879             523,454
       Current portion of capital lease obligations                                            120,391             118,093
       --------------------------------------------------------------------------------------------------------------------
                                                                                             2,161,590           2,393,221
Long-term debt                                                                               1,001,175           1,096,473
Capital lease obligations                                                                      539,872             616,302
Due to shareholder                                                                             693,790             672,766
Deferred income taxes                                                                                -             274,960
---------------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                            4,396,427           5,053,722
Shareholders' equity:
       Capital stock
             Authorized:
                  100,000 Class A preferred shares, par value $0.10 per share
                  899,400 Class B preferred shares, par value $0.0167 per share
                  10,000,000 common shares, par value $0.0167 per share
             Issued and outstanding:
                  899,400 Class B preferred shares                                              15,010              15,010
                  3,030,717 common shares (2000 - 3,021,917)                                    50,350              50,203
       Contributed surplus                                                                  23,151,085          23,121,345
       Deficit                                                                             (15,603,612)        (15,528,932)
       Accumulated other comprehensive income                                                 (774,591)           (692,992)
       --------------------------------------------------------------------------------------------------------------------
                                                                                             6,838,242           6,964,634
---------------------------------------------------------------------------------------------------------------------------
                                                                                    $       11,234,669   $      12,018,356
===========================================================================================================================
</TABLE>


                                      -3-
<PAGE>


POLYDEX PHARMACEUTICALS LIMITED AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)
(Expressed in United States dollars)

<TABLE>
<CAPTION>


===============================================================================================================================
                                                                  Quarter Ended     Quarter Ended   Year to Date   Year to Date
                                                                        July 31           July 31       July 31        July 31
                                                                           2000              1999          2000           1999
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>             <C>              <C>            <C>
Sales                                                            $    3,105,898  $      3,027,285 $   6,498,727  $   6,197,926
Cost of products sold                                                 2,278,949         2,245,541     4,718,640      4,389,648
-------------------------------------------------------------------------------------------------------------------------------
                                                                        826,949           781,744     1,780,087      1,808,278
Expenses:
       General and administrative                                       415,847           392,717       824,252        790,525
       Research and development                                         264,358           164,012       358,109        243,516
       Depreciation                                                     144,355           126,473       282,498        250,156
       Interest expense                                                  76,142            36,653       150,788         71,387
       Selling and promotion                                             38,501            33,151        81,547         52,871
       Amortization                                                       5,545             5,479        11,091         10,953
       ------------------------------------------------------------------------------------------------------------------------
                                                                        944,748           758,485     1,708,285      1,419,408
-------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations                                          (117,799)           23,259        71,802        388,870
Other income:
       Interest and other                                                 9,125             7,682        20,530         16,300
-------------------------------------------------------------------------------------------------------------------------------
                                                                          9,125             7,682        20,530         16,300
-------------------------------------------------------------------------------------------------------------------------------
Income (loss) before the undernoted                                    (108,674)           30,941        92,332        405,170
Recovery of (provision for) income taxes                                (45,803)          (55,393)     (167,012)      (201,690)
-------------------------------------------------------------------------------------------------------------------------------
Net income (loss) for the period                                 $     (154,477) $        (24,452)$     (74,680) $     203,480
===============================================================================================================================
Per share information:
       Earnings (loss) per common share for the period:
                Basic                                            $        (0.05) $          (0.01)$       (0.02) $        0.07
                Diluted                                          $        (0.05) $          (0.01)$       (0.02) $        0.07
==============================================================================================================================
Weighted average number of common shares
       outstanding for the period                                     3,027,567         3,016,917     3,025,684      3,016,917
==============================================================================================================================
</TABLE>

                                       -4-

<PAGE>


POLYDEX PHARMACEUTICALS LIMITED AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Comprehensive Income
(Unaudited)
(Expressed in United States dollars)

<TABLE>
<CAPTION>

===============================================================================================
                                                                 Year to Date      Year to Date
                                                                      July 31           July 31
                                                                         2000              1999
------------------------------------------------------------------------------------------------
<S>                                                          <C>               <C>
Preferred Shares:
          Balance, beginning of period                       $         15,010   $        15,010
          Private placement of preferred shares                             -                 -
          --------------------------------------------------------------------------------------
          Balance, end of period                             $         15,010   $        15,010
================================================================================================
Common Shares:
          Balance, beginning of period                       $         50,203   $        48,552
          Sale of shares under purchase contingency                         -               300
          Common share options exercised                                  147                 -
          --------------------------------------------------------------------------------------
          Balance, end of period                             $         50,350   $        48,852
================================================================================================
Contributed Surplus:
          Balance, beginning of period                       $     23,121,345   $    22,464,783
          Sale of shares under purchase contingency                         -            73,488
          Common share options exercised                               29,740                 -
          --------------------------------------------------------------------------------------
          Balance, end of period                             $     23,151,085   $    22,538,271
================================================================================================
Deficit:
          Balance, beginning of period                       $    (15,528,932)  $   (16,498,775)
          Net income (loss) for the period                            (74,680)          203,480
          --------------------------------------------------------------------------------------
          Balance, end of period                             $    (15,603,612)  $   (16,295,295)
================================================================================================
Accumulated Other Comprehensive Income:
          Balance, beginning of period                       $       (692,992)  $      (783,542)
          Currency translation adjustment for the period              (81,599)           46,152
          --------------------------------------------------------------------------------------
          Balance, end of period                             $       (774,591)  $      (737,390)
================================================================================================
Comprehensive Income for the period:
          Net income (loss) for the period                   $        (74,680)  $       203,480
          Currency translation adjustment for the period              (81,599)           46,152
          --------------------------------------------------------------------------------------
                                                             $       (156,279)  $       249,632
================================================================================================
</TABLE>


                                       -5-
<PAGE>


POLYDEX PHARMACEUTICALS LIMITED AND SUBSIDIARIES

Consolidated Statements of Cash Flows
(Expressed in United States dollars)

<TABLE>
<CAPTION>

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

                                                                                    Year to Date     Year to Date
                                                                                         July 31          July 31
                                                                                            2000             1999
------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>              <C>
Cash provided by (used in):
Operating activities:
       Net income (loss) for the period                                           $      (74,680)  $      203,480
       Add (deduct) items not affecting cash:
             Depreciation and amortization                                               293,589          261,109
             Imputed interest on share value guarantee payable                            44,678                -
             Imputed interest on lawsuit settlement payable                               17,759                -
             Deferred income taxes                                                       140,566          190,650
             Legal expenses charged to deferred gain                                           -           (2,665)
       Change in non-cash operating working capital                                       66,777         (558,768)
       -----------------------------------------------------------------------------------------------------------
                                                                                         488,689           93,806
       -----------------------------------------------------------------------------------------------------------

Investing activities:
       Additions to property, plant and equipment and patents                           (390,440)        (537,068)
       Repayment of due from shareholder, net                                              4,336           29,360
       -----------------------------------------------------------------------------------------------------------
                                                                                        (386,104)        (507,708)
       -----------------------------------------------------------------------------------------------------------

Financing activities:
       Proceeds from long-term debt                                                       49,896           77,422
       Repayment of long-term debt                                                      (335,770)         (50,949)
       Repayment of capital lease obligations                                            (56,914)               -
       Payment of mandatorily redeemable capital stock                                         -          (50,000)
       Proceeds from (repayment of) advances from shareholder, net                        21,024           22,254
       Increase (decrease) in bank indebtedness                                           47,068           55,822
       Exercise of common share options                                                   29,887                -
       -----------------------------------------------------------------------------------------------------------
                                                                                        (244,809)          54,549
       Effect of exchange rate changes on cash                                             1,960            8,622
------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash position                                                    (140,265)        (350,731)
Cash, beginning of period                                                                799,565          655,131
------------------------------------------------------------------------------------------------------------------
Cash, end of period                                                               $      659,300   $      304,400
==================================================================================================================
</TABLE>


                                      -6-
<PAGE>


POLYDEX PHARMACEUTICALS LIMITED AND SUBSIDIARIES

Segmented Information (Unaudited)
(Expressed in United States dollars)

          All operations are carried out through Dextran Products Limited
          ("Dextran") in Canada and through Chemdex, Inc. ("Chemdex") in the
          United States. The operations of Chemdex represent the veterinary
          products business and the operations are carried out through its
          wholly-owned subsidiary, Veterinary Laboratories, Inc. Each of Dextran
          and Chemdex operates as a strategic business unit offering different
          products. Each subsidiary comprises a reportable segment as follows:
                      Dextran -                manufactures and sells bulk
                                               quantities of Dextran and several
                                               of its derivatives to large
                                               pharmaceutical companies
                                               throughout the world.
                      Veterinary products -    manufactures and sells
                                               veterinary pharmaceutical
                                               products and specialty chemicals
                                               in the United States. The primary
                                               customers are distributors and
                                               private labelers, who in turn
                                               sell to the end-user of these
                                               products.

<TABLE>
<CAPTION>

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

                                                        Quarter Ended        Quarter Ended        Year to Date        Year to Date
                                                              July 31              July 31             July 31             July 31
                                                                 2000                 1999                2000                1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                 <C>                  <C>                 <C>
SALES:
          Dextran                                      $    1,331,350      $     1,283,951      $    2,554,124      $    2,527,045
          Veterinary products                               1,901,817            1,828,697           4,176,023           3,883,916
          -------------------------------------------------------------------------------------------------------------------------

          Total segment sales                               3,233,167            3,112,648           6,730,147           6,410,961
          Less:  intercompany sales elimination               127,269               85,363             231,420             213,035
          -------------------------------------------------------------------------------------------------------------------------

          Total consolidated sales                     $    3,105,898      $     3,027,285      $    6,498,727      $    6,197,926
===================================================================================================================================


INCOME (LOSS) FROM OPERATIONS:
          Dextran                                      $      132,935      $       192,082      $      375,585      $      567,452
          Veterinary products                                  (4,520)              13,249             161,792             182,655
          -------------------------------------------------------------------------------------------------------------------------

          Total income from operations from segments          128,415              205,331             537,377             750,107
          Less:  Unallocated corporate expenses               246,214              182,072             465,575             361,237
          -------------------------------------------------------------------------------------------------------------------------

          Total consolidated income from operations    $     (117,799)     $        23,259      $       71,802      $      388,870
===================================================================================================================================

ASSETS:
          Dextran                                                                               $    5,839,900      $    5,313,001
          Veterinary products                                                                        4,184,465           4,006,488
          -------------------------------------------------------------------------------------------------------------------------

          Total assets from segments                                                                10,024,365           9,319,489
          Corporate assets                                                                           1,210,304           1,128,411
          -------------------------------------------------------------------------------------------------------------------------

          Total consolidated assets                                                             $   11,234,669      $   10,447,900
===================================================================================================================================
</TABLE>

                                      -7-

<PAGE>


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

(a) RESULTS OF OPERATIONS

During the fiscal quarter ended July 31, 2000, the Registrant's pre-tax loss
from operations amounted to $117,799, as compared to pre-tax income from
operations of $23,259 for the second quarter of fiscal 2000, ending July 31,
1999. This decrease in results is primarily due to a decrease in operating
profits during the quarter at Dextran Products Limited ("Dextran") of $59,147,
and at Veterinary Laboratories Inc. ("Vet Labs") of $17,769 and an increase in
corporate expenses of $64,142. The decrease in operating profits is primarily
attributable to a significant increase in research and development expenditures
as compared to the same quarter last year.

Sales volume for the second quarter of fiscal 2001 increased from $3,027,285 to
$3,105,898, representing an increase of $78,613 or 3%.

Vet Labs experienced a quarter over quarter increase in sales of $73,120, or 4%,
due to increases in both the liquids and boluses product lines resulting from
increased demand. Sales in the injectable product line in the second quarter of
fiscal 2001 were consistent with that experienced in the second quarter of
fiscal 2000. Within the injectable product line, there was a product mix sales
variance. Injectable iron dextran sales declined by approximately $98,000 from
the second quarter in fiscal 2000. However this reduction was offset by
increased sales of injectable vitamin products of approximately $100,000. Vet
Labs continues to increase its market penetration with the vitamin products.
Sales at Dextran remained constant as compared to the second quarter in fiscal
2000.

In the second quarter of fiscal 2001, sales of euthanasia products amounted to
$186,882, as compared to $165,381 in the second quarter of fiscal 2000. During
this quarter, the United States Food and Drug Administration ("FDA") granted an
emergency release of raw materials by the euthanasia product supplier which
allowed Vet Labs to formulate and sell such products. This release was granted
due to the short supply of euthanasia products in the field. However, there
continue to be federal regulatory problems with the raw material supplier.
Barring future FDA emergency releases, management does not expect any further
sales of these products until late in 2000, when the necessary raw materials are
expected to become available.

Gross margins increased from 26% in the second quarter of fiscal 2000 to 27% in
the first quarter of fiscal 2001. Dextran's quarter over quarter gross margin
decreased from 40% to 36% while Vet Labs' gross margin increased from 15% to
19%. Vet Labs experienced a lower than normal gross margin in the second quarter
of fiscal 2000 due to a product mix sales variance. The gross margin achieved at
Vet Labs this quarter is consistent with that experienced in the first quarter
this year. Management expects the gross margin at Vet Labs to continue at these
levels.

                                    -8-

<PAGE>

The margin decrease at Dextran is primarily due to increased utility costs.
Increased oil and gas costs in the second quarter of fiscal 2001 have
contributed to higher utility costs at Dextran. The new production equipment
uses more power because of its increased capacity. Management expects to realize
significant cost savings from the more efficient new production equipment once
the plant refurbishment is completed and production capacity is increased.

Management expects strong sales and margins to continue at Dextran. As expected,
summer months are typically slower sales months for Vet Labs as large animals
are put outdoors to pasture and therefore have less need for vitamins and other
supplements. Management is therefore forecasting higher sales levels in the
third quarter of fiscal 2001 than were achieved in the second quarter at Vet
Labs.

General and administrative expenses in the second quarter of fiscal 2001
increased by $23,130 or 6% from the second quarter of fiscal 2000 due primarily
to an increase in payroll. Depreciation and amortization in the second quarter
of fiscal 2001 increased by $17,948 or 14% from the second quarter of fiscal
2000 due primarily to the capital expenditures at Dextran relating to plant
refurbishment.

Research and development costs in the second quarter of fiscal 2001 increased by
$100,346 or 61% as compared to the second quarter of fiscal 2000 due to the
continued development of a raw material for a human injectable product and the
cellulose sulfate project at Dextran, and the development of additional new
products at Vet Labs. Development costs for these products are expected to
continue for the remainder of the year.

Research and development, in conjunction with the Rush Medical Center in
Chicago, relating to Cellulose Sulfate gel is progressing. Pre-IND tests have
indicated that this gel holds great promise as a topical prophylactic for
sexually transmitted diseases, including AIDS, and as a contraceptive. Phase I
human clinical trials to test the safety and tolerance of this gel were
successfully completed. This trial was funded by the Consortium for Industrial
Collaboration in Contraceptive Research (CICCR). The project team is moving
ahead to prepare clinical supplies for long-term toxicology and further clinical
trials. Management expects funding to continue from CICCR for this project.

Interest expense in the second quarter of fiscal 2001 increased by $39,489 or
108% as compared to the second quarter in fiscal 2000 due to the financing of
capital expenditures for production equipment in fiscal 2000. Interest expense
also includes imputed interest of $32,388 on long-term payables incurred in the
fourth quarter of fiscal 2000.

Selling and promotion expenses in the second quarter of fiscal 2001 increased by
$5,350 or 16% as compared to the second quarter of fiscal 2000, primarily

                                      -9-


<PAGE>

due to the retention of a public relations firm subsequent to the second quarter
of fiscal 2000.

Operating results for the quarter ended July 31, 2000 are not necessarily
indicative of the results that may be expected for the year ended January 31,
2001. For further information, refer to the consolidated statements and
footnotes thereto included in the Registrant's annual report on Form 10-K for
the year ended January 31, 2000.

(b) LIQUIDITY AND CAPITAL RESOURCES

The Registrant in the second quarter of fiscal 2001 generated cash flow from
operations of $423,519 compared to the second quarter of fiscal 2000 cash flow
from operations of $19,347. This increase of $404,172 is primarily attributable
to the large decrease in accounts receivable during the quarter. A reduction in
accounts receivable turns non-cash operating working capital into cash. The
decrease in accounts receivable is attributable to increased collections during
the quarter.

There were no significant changes in inventory levels at either Dextran or Vet
Labs during the quarter.

Management has budgeted $750,000 for plant refurbishment and capital equipment
purchases during fiscal 2001. The majority of the $203,343 of capital
expenditures on plant and equipment during the second quarter of fiscal 2001
related to production and research and development equipment at Dextran. There
are no production interruptions planned for the next quarter due to this
refurbishment.

LONG-TERM OBJECTIVES

At the beginning of the year, two critical long-term objectives were identified.

1.   Bring new products to market. During the second quarter, development work
     has continued on the cellulose sulfate project and a raw material for a
     human injectable product. Vet Labs is continuing development of new
     veterinary products.

2.   Upgrade and refurbish existing production facilities to increase capacity
     and efficiency. Refurbishment of the Dextran plant is continuing and
     planning for the next two phases is nearing completion.


                                      -10-


<PAGE>


FORWARD-LOOKING STATEMENTS SAFE HARBOR

This Form 10-Q, including the Management's Discussion and Analysis of Financial
Condition and Results of Operations, contains various "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which represent the Company's expectations or beliefs concerning future
events, including, but not limited to statements regarding management's
expectations of regulatory approval and the commencement of sales. In addition,
statements containing expressions such as "believes", "anticipates", "plans" or
"expects" used in this Form 10-Q, the Company's Annual Report, and the Company's
periodic reports on Forms 10-K and 10-Q previously filed with the Securities and
Exchange Commission are intended to identify forward-looking statements. The
Company cautions that these and similar statements in this Form 10-Q, the
Company's Annual Report, and in previously filed periodic reports including
reports filed on Forms 10-K and 10-Q are further qualified by important factors
that could cause actual results to differ materially from those in the
forward-looking statements. These factors include, without limitation, changing
market conditions, the progress of clinical trials, and the results obtained,
the establishment of new corporate alliances, the impact of competitive products
and pricing, and the timely development, FDA approval and market acceptance of
the Company's products, none of which can be assured.

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normally recurring accruals) considered necessary for a fair presentation
have been included.


                                      -11-

<PAGE>

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

POLYDEX PHARMACEUTICALS LIMITED AND SUBSIDIARIES
JULY 31, 2000
INTEREST RATE SENSITIVITY

     The table below provides information about the Company's financial
     instruments that are sensitive to changes in interest rates. All financial
     instruments are held for other than trading purposes. The Company does not
     have a material exposure to interest rate risk.

     The table presents principal cash flows and related weighted average
     interest rates by expected maturity dates.

<TABLE>
<CAPTION>

                                                            Expected Maturity Date
                                    --------------------------------------------------------------------                Fair
                                    31-Jan-01   31-Jan-02   31-Jan-03  31-Jan-04  31-Jan-05   Thereafter     Total      Value
                                    ---------   ---------   ---------  ---------  ---------   ----------     -----      -----
                                                                       (US$ Equivalent)
<S>                                 <C>         <C>         <C>         <C>        <C>        <C>        <C>          <C>
                ASSETS
     Notes receivable:
        Variable rate ($US)           46,051      11,530      12,568     13,699     14,932     588,044      686,824      686,824
            Average interest rate       8.87%       9.00%       9.00%      9.00%      9.00%       9.00%        8.98%

                LIABILITIES:
     Long-term debt:
        Fixed rate ($US)             377,062     266,843     909,022      4,758          -           -    1,557,685    1,557,685
            Average interest rate       9.19%       9.14%       9.03%      9.45%      0.00%       0.00%        9.20%
        Fixed rate ($CDN)            165,543     188,048      87,098     87,934     96,182     210,231      835,036      835,036
            Average interest rate       9.04%       9.03%       9.23%      9.00%      9.00%       9.00%        9.05%
        Variable rate ($US)          (53,547)    (46,820)    (50,565)   (54,611)   (58,979)    883,722      619,200      619,200
            Average interest rate       9.00%       9.00%       9.00%      9.00%      9.00%       9.00%        9.00%
</TABLE>

                                      -12-

<PAGE>


POLYDEX PHARMACEUTICALS LIMITED AND SUBSIDIARIES
JULY 31, 2000
EXCHANGE RATE SENSITIVITY

     The table below provides information about the Company's financial
     instruments that are sensitive to changes in foreign currency exchange
     rates. All financial instruments are held for other than trading purposes.
     The Company's major exposure to exchange rate risk is that the Canadian
     dollar rises dramatically in relation to the U.S. dollar and that this
     significantly reduces the gross margin experienced at Dextran Products.
     Management monitors the margin at Dextran to ensure that an acceptable
     margin level is maintained. Management has the ability, to some extent, to
     adjust sales prices to maintain an acceptable margin level.

     The table presents principal cash flows and related weighted average
     interest rates by expected maturity dates.

<TABLE>
<CAPTION>

                                                                Expected Maturity Date
                                     ----------------------------------------------------------------------------        Fair
                                      31-Jan-01   31-Jan-02   31-Jan-03   31-Jan-04    31-Jan-05   Thereafter   Total    Value
                                      ---------   ---------   ---------   ---------    ---------   ----------   -----    -----
                                                                              (US$ Equivalent)
     <S>                               <C>        <C>         <C>          <C>         <C>          <C>        <C>       <C>
                LIABILITIES:
     Long-term debt:
         Fixed rate ($CDN)              165,543     188,048      87,098      87,934       96,182     210,231   835,036   835,036
            Average interest rate          9.04%       9.03%       9.23%       9.00%        9.00%       9.00%     9.05%
</TABLE>

                                      -13-



<PAGE>


                           PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders.

         (a)  The 2000 Annual General Meeting of the Members was held on
         June 22, 2000.

         (b)  Not applicable.

         (c)  At the Annual Meeting, Mr. George G. Usher and Mr. Thomas C. Usher
         were  elected  as  directors  of the  Company  to  hold  office  for a
         three-year  term expiring at the Annual General Meeting of the Members
         held in 2003 or until  successors are duly elected and qualified.  The
         tabulation  of votes in person or by proxy at the Annual  Meeting with
         respect to Mr. George G. Usher's and Mr. Thomas C. Usher's election
         are as follows:

<TABLE>
<CAPTION>

                                                                       Against or       Abstain and
                           Class                     For               Withheld         Non-Votes
                           -----                     ---               --------         ---------
<S>                        <C>                       <C>                   <C>          <C>
George G.                  Common Shares             1,928,386             26,227       1,074,060
Usher                      Class B Preferred         1,798,800(1)          --                 --
                             Shares

Thomas C.                  Common Shares             1,928,121             26,492       1,074,060
Usher                      Class B Preferred         1,798,800(1)          --                 --
                             Shares
</TABLE>
------------
(1)  the 899,400 outstanding Class B Preferred Shares of the Company have two
votes per share.

              The Shareholders of the Company also approved a proposal to
              authorize the Board of Directors of the Company to appoint the
              Company's independent public accountants and fix their
              remuneration ("Proposal No. 2"). The tabulation of votes present
              in person or by proxy at the Annual Meeting with respect to the
              foregoing proposal is as follows:


                                      -14-

<PAGE>

<TABLE>
<CAPTION>

                                                                       Against or       Abstain and
                           Class                     For               Withheld         Non-Votes
                           -----                     ---               --------         ---------
<S>                        <C>                       <C>               <C>              <C>
Proposal No. 2             Common Shares             1,949,114              5,500       1,074,059
                           Class B Preferred         1,798,800(1)          --                 --
                             Shares
</TABLE>
------------
(1)  the 899,400 outstanding Class B Preferred Shares of the Company have two
votes per share.

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

         (a)  Exhibits

         3.1  Memorandum of Association of Polydex Pharmaceuticals Limited, as
              amended to date (filed as Exhibit 3.1 to the Annual Report on Form
              10-K filed April 30, 1997, and incorporated herein by reference)

         3.2  Articles of Association of Polydex Pharmaceuticals Limited, as
              amended to date (filed as Exhibit 3.2 to the Quarterly Report on
              Form 10-Q filed September 13, 1999, and incorporated herein by
              reference)

         10.1 Employment Agreement between Polydex Pharmaceuticals Limited and
              Thomas C. Usher dated December 22, 1993, as amended on November 1,
              1996 (filed as Exhibit 10.1 to the Annual Report on Form 10-K
              filed April 30, 1997, and incorporated herein by reference)*

         10.2 Amendment to Employment Agreement between Polydex Pharmaceuticals
              Limited and Thomas C. Usher dated February 1, 1999 (filed as
              Exhibit 10.2 to the Registrant's Annual Report on Form 10-K filed
              April 29, 1999, and incorporated herein by reference)*

         10.3 Employment Agreement between Polydex Pharmaceuticals Limited and
              George G. Usher dated December 22, 1993 (filed as Exhibit 10.2 to
              the Annual Report on Form 10-K filed April 30, 1997, and
              incorporated herein by reference)*

         10.4 Amendment to Employment Agreement between Polydex Pharmaceuticals
              Limited and George G. Usher dated February 1, 1999 (filed as
              Exhibit 10.2 to the Registrant's Annual Report on Form 10-K filed
              April 29, 1999, and incorporated herein by reference)*


                                      -15-

<PAGE>


         10.5 Research Agreement among Dextran Products Limited, Canadian
              Microbiology Consortium, British Columbia's Children's Hospital
              and the University of British Columbia, dated April 1, 1996 (filed
              as Exhibit 10.4 to the Annual Report on Form 10-K filed April 30,
              1997, and incorporated herein by reference)

         10.6 Joint Venture Agreement among Chemdex, Inc., Veterinary
              Laboratories Inc. and Sparhawk Laboratories, Inc., dated December
              1, 1992 (filed as Exhibit 10.5 to the Annual Report on Form 10-K
              filed April 30, 1997, and incorporated herein by reference)

         10.7 Manufacturing Agreement among Sparhawk Laboratories, Inc., Agri
              Laboratories, Ltd. and Veterinary Laboratories Inc., dated
              September 23, 1996 (filed as Exhibit 10.6 to the Annual Report on
              Form 10-K filed April 30, 1997, and incorporated herein by
              reference)

         10.8 Stock Sale and Purchase Agreement between Continental Grain
              Company and Polydex Pharmaceuticals Limited dated October 30,
              1992, as amended on November 22, 1996 (filed as Exhibit 10.8 to
              the Annual Report on Form 10-K filed April 30, 1997, and
              incorporated herein by reference)

         27   Financial Data Schedule
----------------

*  Indicates a management contract or compensatory plan or arrangement


         (b)  Reports on Form 8-K

              Not applicable.



                                      -16-

<PAGE>


                                   SIGNATURES


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

Date: September 11, 2000


                               POLYDEX PHARMACEUTICALS LIMITED
                               (Registrant)

                               By /s/ George G. Usher
                                  ----------------------------------------------
                                  George G. Usher, Chairman, President and Chief
                                  Executive Officer
                                  (Principal Executive Officer)


                               By /s/ Sharon L. Wardlaw
                                  ----------------------------------------------
                                  Sharon L. Wardlaw, Treasurer, Secretary and
                                  Chief Financial and Accounting Officer
                                  (Principal Financial Officer)



                                      -17-

<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

Exhibit Number                          Exhibit Description
--------------                          -------------------
<S>                                     <C>
       27                               Financial Data Schedule
</TABLE>