<PAGE>   1
================================================================================

                                  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 PERIOD ENDED        SEPTEMBER 30, 1996

                                       OR

    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
--- Act of 1934


COMMISSION FILE NUMBER: 0-28324


                           BIOTRANSPLANT INCORPORATED
             (Exact name of registrant as specified in its charter)


          DELAWARE                                               04-3119555
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                 CHARLESTOWN NAVY YARD, BUILDING 75 THIRD AVENUE
                        CHARLESTOWN, MASSACHUSETTS 02129
                    (Address of principal executive offices)


                                 (617) 241-5200
              (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: 
                                 Yes  X      No     
                                     ---        ---




    As of November 12, 1996, there were 8,548,874 shares of the Registrant's
                            Common Stock outstanding.

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


<PAGE>   2
                    BIOTRANSPLANT INCORPORATED AND SUBSIDIARY
                                    FORM 10-Q
                                      INDEX

                          PART I. FINANCIAL INFORMATION

                                                                        Page No.
                                                                        --------

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

       Condensed Consolidated Balance Sheets as of December 31, 1995 
           and September 30, 1996.........................................  3

       Condensed Consolidated Statement of Operations for the three and 
           nine months ended September 30, 1995 and 1996, and for the
           period from inception (March 20, 1990) to September 30, 1996...  4

       Condensed Consolidated Statement of Cash Flows for nine months 
           ended September 30, 1995 and 1996, and for the period from 
           inception (March 20, 1990) to September 30, 1996...............  5

       Notes to Condensed Consolidated Financial Statements...............  6

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS......................................  7


                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................. 10

           SIGNATURES..................................................... 10


                                       2

<PAGE>   3
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                    BIOTRANSPLANT INCORPORATED AND SUBSIDIARY
                          (A Development Stage Company)
<TABLE>
                                             CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                                                                                September 30,
                                                                                                December 31,         1996
                                                                                                    1995         (Unaudited)
                                                                                                ------------    -------------
<S>                                                                                             <C>              <C>
ASSETS
Current assets:
     Cash and cash equivalents                                                                  $  2,848,549     $ 15,896,560
     Marketable securities                                                                                --       17,632,072
     Accounts receivable                                                                             250,000          150,841
     Deposits and other prepaid expenses                                                             343,303          759,020
                                                                                                ------------     ------------
         Total current assets                                                                      3,441,852       34,438,493

Property and equipment - net                                                                       1,830,219        1,422,160
Other assets                                                                                          99,563           74,673
                                                                                                ------------     ------------
TOTAL ASSETS                                                                                    $  5,371,634     $ 35,935,326
                                                                                                ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Current obligation under capital leases                                                    $    450,768     $    426,343
     Accounts payable                                                                                187,225          222,934
     Accrued expenses                                                                                967,430        1,186,908
     Deferred revenue                                                                              1,750,000        2,000,000
                                                                                                ------------     ------------
         Total current liabilities                                                                 3,355,423        3,836,185
                                                                                                ------------     ------------

Long-term obligation under capital lease                                                             614,939          298,567
                                                                                                ------------     ------------
Convertible notes payable to stockholders                                                          1,000,000
                                                                                                                           --
                                                                                                ------------     ------------
Redeemable convertible preferred stock at net amount paid in, 15,586,345 shares issued
     and outstanding at December 31, 1995                                                         29,241,474               --
                                                                                                ------------     ------------

Stockholders' equity (deficit):
     Preferred stock, $.01 par value, authorized 2,000,000 shares; issued and
     outstanding - no shares                                                                              --               --
                                                                                                                            
Common stock, $.01 par value, authorized 25,000,000 shares; issued and outstanding
     126,594 shares at December 31, 1995 and 8,548,874 shares at September 30, 1996                    1,266           85,489
Additional paid-in capital                                                                         1,230,343       65,256,995
Accumulated deficit                                                                              (30,071,811)     (33,541,910)
                                                                                                ------------     ------------
         Total stockholders equity (deficit)                                                     (28,840,202)      31,800,574
                                                                                                ------------     ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                      $  5,371,634     $ 35,935,326
                                                                                                ============     ============
</TABLE>

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

                                       3

<PAGE>   4

                    BIOTRANSPLANT INCORPORATED AND SUBSIDIARY
                          (A Development Stage Company)
<TABLE>
                                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                     (Unaudited)
<CAPTION>
                                            Three Months Ended              Nine Months Ended            Cumulative
                                               September 30,                  September 30,                Since
                                           1995           1996            1995             1996          Inception
                                        ----------     -----------     -----------      -----------     ------------
<S>                                     <C>            <C>             <C>              <C>             <C>
Revenues:
     License fees                       $       --     $        --       2,000,000      $ 2,000,000     $  9,000,000
     Research and development            3,000,000       1,250,000       3,875,000        4,500,000       13,000,000
     Interest income                        11,057         493,333         105,494          874,345        1,399,822
                                        ----------     -----------     -----------      -----------     ------------
         Total revenues                  3,011,057       1,743,333       5,980,494        7,374,345       23,399,822
                                        ----------     -----------     -----------      -----------     ------------

Expenses:
     Research and development            2,458,601       3,244,848       7,359,751        8,923,289       45,198,496
     General and administrative            477,946         794,423       1,317,052        1,810,598       10,076,197
     Interest                              265,887          27,776         618,190          110,557        1,667,039
                                        ----------     -----------     -----------      -----------     ------------
         Total expenses                  3,202,434       4,067,047       9,294,993       10,844,444       56,941,732
                                        ----------     -----------     -----------      -----------     ------------

Net loss                                $ (191,377)    $(2,323,714)    $(3,314,499)     $(3,470,099)    $(33,541,910)
                                        ==========     ===========     ===========      ===========     ============

Pro forma net loss per common share     $    (0.05)    $     (0.27)    $     (0.83)     $     (0.50)
                                        ==========     ===========     ===========      ===========

Shares used in computing pro forma
     net loss per common share           4,015,254       8,548,756       4,012,567        6,999,687
                                        ==========     ===========     ===========      ===========
</TABLE>

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

                                       4

<PAGE>   5
                    BIOTRANSPLANT INCORPORATED AND SUBSIDIARY
                          (A Development Stage Company)
<TABLE>
                                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (Unaudited)
<CAPTION>
                                                                              Nine Months Ended            Cumulative
                                                                                September 30,                Since
                                                                            1995             1996           Inception
                                                                         -----------     ------------     ------------
<S>                                                                      <C>             <C>              <C>
Cash flows from operating activities:
     Net loss                                                            $(3,314,499)    $ (3,470,099)    $(33,541,910)
     Adjustments to reconcile net loss to net cash
         provided by (used in) operating activities:
         Depreciation and amortization                                       672,052          504,160        2,380,927
         Noncash interest expense                                                 --           15,583          465,477
         Noncash expenses related to options and warrants                    251,559           24,890        1,110,573        

         Changes in current assets and liabilities:
              Accounts receivable                                                 --           99,159         (150,841)
              Deposits and prepaid expenses                                  154,686         (415,717)        (759,020)
              Accounts payable                                                14,594           35,709          222,934
              Accrued expenses                                               (33,181)         219,478        1,186,908
              Deferred revenue                                             3,125,000          250,000        2,000,000
                                                                         -----------     ------------     ------------
         Net cash provided by (used in) operating activities                 870,211       (2,736,837)     (27,084,952)
                                                                         -----------     ------------     ------------

Cash flows from investing activities:
     Purchases of property and equipment                                     (81,584)         (96,100)      (3,178,353)
     Disposal of property and equipment, net                                      --               --           28,040
     Purchase of marketable securities                                            --      (17,632,072)     (17,632,072)
                                                                         -----------     ------------     ------------
         Net cash used in investing activities                               (81,584)     (17,728,172)     (20,782,385)
                                                                         -----------     ------------     ------------

Cash flows from financing activities:
     Proceeds from convertible notes payable to stockholders               1,000,000               --        9,400,000
     Payments of obligations under capital leases                           (422,893)        (340,797)      (1,469,299)
     Proceeds from sale/leaseback of equipment                                    --               --          771,968
     Net proceeds from equipment leases                                           --               --        1,422,240
     Net proceeds from sale of redeemable convertible preferred stock             --        5,889,530       25,661,526
     Proceeds from sale of common stock                                        7,354       27,964,287       27,977,462
                                                                         -----------     ------------     ------------
         Net cash provided by financing activities                           584,461       33,513,020       63,763,897
                                                                         -----------     ------------     ------------

Net increase in cash and cash equivalents                                  1,373,088       13,048,011       15,896,560

Cash and cash equivalents, beginning of period                             2,343,126        2,848,549               --  
                                                                         -----------     ------------     ------------

Cash and cash equivalents, end of period                                 $ 3,716,214     $ 15,896,560     $ 15,896,560
                                                                         ===========     ============     ============

Supplemental disclosures and noncash transactions:
     Increase in equipment under capital leases                          $        --     $         --     $ (2,210,270)
                                                                         ===========     ============     ============

     Conversion of convertible notes payable to stockholders and
         accrued interest into redeemable convertible preferred stock    $        --     $  1,055,816     $  9,905,710
                                                                         ===========     ============     ============

     Issuance of warrants                                                $        --     $         --     $    741,737
                                                                         ===========     ============     ============

     Interest paid during the period                                     $   146,840     $     94,901     $  1,309,830
                                                                         ===========     ============     ============
</TABLE>

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

                                       5

<PAGE>   6
                    BIOTRANSPLANT INCORPORATED AND SUBSIDIARY
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1. OPERATIONS AND BASIS OF PRESENTATION

BioTransplant Incorporated (the "Company") was incorporated on March 20, 1990.
The Company is developing proprietary anti-rejection pharmaceuticals and organ
transplantation systems which represent a comprehensive approach to inducing
long-term specific transplantation tolerance in humans.

The Company is in the development stage and is devoting substantially all of its
efforts toward product research and development and raising capital. The Company
is subject to a number of risks similar to those of other development stage
companies, including dependence on key individuals, competition from substitute
products and larger companies, the development of commercially usable products,
obtaining regulatory approval for products under development, the development
and marketing of commercial products, and the need to obtain adequate additional
financing necessary to fund the development of its products.

During May 1996, the Company completed an initial public offering of 3,220,000
shares of common stock resulting in net proceeds of approximately $28.0 million
(see Note 4).

The interim financial statements herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and include, in the opinion of management, all
adjustments, consisting of normal, recurring adjustments, necessary for a fair
representation of interim period results. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The results for the interim periods
presented are not necessarily indicative of results to be expected for the
fiscal year or any future period. These condensed consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements and the notes thereto included in the Company's initial public
offering Prospectus dated May 8, 1996, which is part of the Company's
Registration Statement on Form S-1, as amended and filed with the SEC (Reg. No.
333-2144).

2. CASH EQUIVALENTS AND MARKETABLE SECURITIES

Cash equivalents and marketable securities are classified as held-to-maturity
and are stated at amortized cost, which approximates market value. Cash
equivalents include short-term, highly liquid investments with original
maturities of less than three months from the date of purchase. Marketable
securities consist primarily of corporate notes with maturities of less than one
year from the date of purchase. At September 30, 1996 the weighted average
maturity of marketable securities was 4 months.

3. PRO FORMA NET LOSS PER COMMON SHARE

Pro forma net loss per common share is based on the pro forma weighted average
number of common shares outstanding during the periods presented, assuming the
automatic conversion of all shares of Series A, B, D and E redeemable
convertible preferred stock then outstanding into 3,212,896 shares of common
stock at September 30, 1995. Pursuant to the requirements of the SEC, common
stock and preferred stock issued during the 12 months immediately preceding the
initial public offering, plus shares of common stock that became issuable during
the same period pursuant to the grant of common stock options and warrants, have
been included in the calculation of pro forma weighted average number of common
shares outstanding for all periods presented until the effective date of the
Company's initial public offering using the treasury stock method.

4. INITIAL PUBLIC OFFERING

In May 1996, the Company completed an initial public offering of 3,220,000
shares of common stock for $9.50 per share, resulting in net proceeds of
approximately $28.0 million. In addition, all outstanding shares of Series A, B,
D and E redeemable convertible preferred stock were automatically converted into
5,202,154 shares of common stock upon the closing of the initial public
offering.

                                       6

<PAGE>   7

                    BIOTRANSPLANT INCORPORATED AND SUBSIDIARY
                          (A Development Stage Company)


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

The following discussion of the financial condition and results of operations of
the Company for the three and nine months ended September 30, 1995 and 1996
should be read in conjunction with the accompanying unaudited condensed
consolidated financial statements and the related notes thereto.

This report may contain certain forward looking statements which involve risks
and uncertainties. Such statements are subject to certain factors which may
cause the Company's plans and results to differ significantly from the plans and
results discussed in forward looking statements. Factors that may cause such
differences include, but are not limited to, the progress of the Company's
research and development programs, the Company's ability to compete
successfully, the Company's ability to attract and retain qualified personnel,
the Company's ability to enter into and maintain collaborations with third
parties , the Company's ability to enter into and progress in clinical trials,
the time and costs involved in obtaining regulatory approvals, the costs
involved in obtaining and enforcing patents, proprietary rights and any
necessary licenses, the ability of the Company to establish development and
commercialization capacities or relationships, the costs of manufacturing, the
Company's ability to obtain additional funds, and those other risks discussed
under the heading "Risk Factors" in the Prospectus dated May 8, 1996 included in
the Company's Registration Statement on Form S-1, as amended (Reg. No.
333-2144).

OVERVIEW

Since commencement of operations in 1990, the Company has been a development
stage company engaged primarily in the research and development of proprietary
anti-rejection pharmaceuticals and organ transplantation systems which represent
a comprehensive approach to inducing long-term specific transplantation
tolerance in humans. The major sources of the Company's working capital have
been the proceeds of sales of equity securities, sponsored research funding and
license fees and capital lease financings. The Company has not generated any
revenues from the sales of products to date, and does not expect to receive any
product revenues for several years. The Company will be required to conduct
significant research, development, testing and regulatory compliance activities
that, together with general and administrative expenses, are expected to result
in significant and increasing operating losses for at least the next several
years.

In 1993, the Company and Sandoz entered into a collaboration agreement (as
amended and restated in September 1995) for the development and
commercialization of xenotransplantation products utilizing gene transduction.
Under the agreement, Sandoz has committed research funding through March 1998 of
$20.0 million, of which $14.0 million had been received as of September 30,
1996, and agreed to pay license fees of $10.0 million, of which $7.0 million had
been received as of September 30, 1996. Sandoz has also agreed to fund certain
development and premarketing costs of such products, portions of which, under
certain circumstances, may be repayable from the Company's operating profits
from sales of such products.

In October 1995, the Company and MedImmune formed a collaborative research
agreement for the development of products to treat and prevent organ rejection.
MedImmune paid the Company a $2.0 million license fee at the time of execution
of the agreement, and agreed to fund and assume responsibility for clinical
testing and commercialization of BTI-322 and other related products. MedImmune
has agreed to provide research support and make milestone payments which could
total up to an additional $14.0 million, of which $1.0 million had been received
as of September 30, 1996.

                                       7

<PAGE>   8
RESULTS OF OPERATIONS:
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Revenues for the three months ended September 30, 1996 decreased to $1.7 million
from $3.0 million for the three months ended September 30, 1995. The anticipated
decrease was primarily due to the timing of $3.0 million in sponsored research
funding from Sandoz during the three months ended September 30, 1995, compared
to $1.0 million during the three months ended September 30, 1996, as a result of
the amendment and restatement of the collaboration agreement with Sandoz in
September, 1995. Under the terms of the amended and restated agreement, Sandoz
has committed an additional $10.0 million of sponsored research funding for a
total of $20.0 million in funding as described in the preceding "Overview"
discussion. This anticipated decrease in revenues was in part offset by a
$250,000 increase in sponsored research funding recognized in connection with
the collaboration formed with MedImmune. Additionally, interest income increased
to $493,000 for the three months ended September 30, 1996 from $11,000 for the
three months ended September 30, 1995. The increase was due primarily to higher
cash balances available for investment as a result of the initial public
offering of the Company's common stock, completed in May 1996.

Research and development expenses increased to $3.2 million for the three months
ended September 30, 1996 from $2.5 million for the three months ended September
30, 1995. This increase was primarily due to additional external research
support, including $214,000 in payments made to Stem Cell Sciences, combined
with increases in research and development staff together with the associated
increases in supplies and support services, partially offset by decreased
expenditures related to the human clinical safety trials for BTI-322.

General and administrative expenses increased to $794,000 for the three months
ended September 30, 1996 from $478,000 for the three months ended September 30,
1995. This increase was primarily due to increases in outside professional
services in connection with market research and business development in part
offset by decreased salary and related expenses for general and administrative
functions.

Interest expense decreased to $28,000 for the three months ended September 30,
1996 from $266,000 for the three months ended September 30, 1995. The decrease
was primarily due to the conversion of $4.4 million and $1.0 million of
convertible notes payable to stockholders, and the accrued interest thereon,
into redeemable convertible preferred stock in October 1995 and February 1996,
respectively. The redeemable convertible preferred stock was automatically
converted to shares of common stock upon the closing of the Company's initial
public offering. The decrease was also attributable to decreasing balances on
existing obligations under capital leases.

As a result of the above factors, the Company incurred a net loss for the three
months ended September 30, 1996 of $2.3 million, or $0.27 per share, compared to
a net loss of $191,000, or $0.05 per share for the three months ended September
30, 1995.

NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Revenues increased to $7.4 million for the nine months ended September 30, 1996
from $6.0 million for the nine months ended September 30, 1995. The increase in
revenues was primarily due to increased research and development revenues in
connection with $750,000 in sponsored research funding from the collaboration
formed with MedImmune. Sponsored research funding from the collaboration with
Sandoz was $3.8 million for the nine months ended September 30, 1996 compared to
$3.9 for the nine months ended September 30, 1996. Interest income increased to
$874,000 for the nine months ended September 30, 1996 from $105,000 for the nine
months ended September 30, 1995. The increase was due primarily to higher cash
balances available for investment as a result of the Company's initial public
offering, completed in May 1996.

Research and development expenses increased to $8.9 million for the nine months
ended September 30, 1996 from $7.4 million for the nine months ended September
30, 1995. This increase was primarily due to approximately $714,000 of research
support to Stem Cell Sciences, combined with increases in research and
development staff together with the associated increases in supplies and support
services, partially offset by decreased expenditures related to the human
clinical safety trials for BTI-322.

General and administrative expenses increased to $1.8 million for the nine
months ended September 30, 1996 from $1.3 million for the nine months ended
September 30, 1995. This increase was primarily due to increases in outside
professional services in connection with market research and business
development in part offset by decreased salary and related expenses for general
and administrative personnel.

                                       8

<PAGE>   9

Interest expense decreased to $111,000 for the nine months ended September 30,
1996 from $618,000 for the nine months ended September 30, 1995. The decrease
was primarily due to the conversion of $4.4 million and $1.0 million of
convertible notes payable, and the accrued interest thereon, to stockholders
into redeemable convertible preferred stock in October 1995 and February 1996,
respectively. The redeemable convertible preferred stock was automatically
converted into 738,208 shares of common stock upon the closing of the Company's
initial public offering. In addition, the decrease was in part attributable to
decreasing balances on existing obligations under capital leases

As a result of the above factors, the Company incurred a net loss for the nine
months ended September 30, 1996 of $3.5 million, or $0.50 per share, compared to
a net loss of $3.3 million, or $0.83 per share for the nine months ended
September 30, 1995.

LIQUIDITY AND CAPITAL RESOURCES

In May 1996, the Company completed an initial public offering of 3,220,000
shares of common stock at a price of $9.50 per share, and received net proceeds
of approximately $28.0 million. In addition, all outstanding shares of Series A,
B, D and E redeemable convertible preferred stock were automatically converted
into 5,202,154 shares of common stock upon the closing of the initial public
offering.

Since its inception and prior to the completion of the Company's initial public
offering, the Company's operations have been funded principally through the net
proceeds of an aggregate of $36.2 million from private placements of equity
securities. The Company has also received $21.0 million from a research and
development and collaboration agreement with Sandoz, $3.0 million from an
alliance agreement with MedImmune and $2.2 million in equipment lease financing.
The proceeds of the private placements, notes payable and capital leases and
cash generated from the corporate collaborations with Sandoz and MedImmune have
been used to fund operating losses of approximately $33.5 million and the
investment of approximately $3.7 million in equipment and leasehold improvements
through September 30, 1996. The Company had no significant commitments as of
September 30, 1996 for capital expenditures.

During the nine months ended September 30, 1996, the Company paid Stem Cell
Sciences approximately $929,000 for research support through December, 1996 and
to maintain its pro rata equity interest in Stem Cell Sciences. In addition, the
Company has an option to purchase additional shares of Stem Cell Sciences prior
to December 1996, to maintain its pro rata equity interest. If the Company does
not make such further investment, its rights to certain technologies become
nonexclusive.

The Company had cash and cash equivalents and marketable securities of $33.5 and
working capital of $30.6 million as of September 30, 1996, reflecting the net
proceeds of $28.0 million from the initial public offering as described above.

The Company has entered into sponsored research and consulting agreements with
certain hospitals, academic institutions and consultants, requiring periodic
payments by the Company. Aggregate minimum funding obligations under these
agreements, which include certain cancellation provisions, total approximately
$6.9 million, which includes approximately $3.9 million and $1.5 million in 1996
and 1997, respectively.

The Company anticipates that its existing funds, including the proceeds from its
initial public offering and interest earned thereon, should be sufficient to
fund its operating and capital requirements as currently planned through the end
of 1997. However, the Company's cash requirements may vary materially from those
now planned, due to many factors, including, but not limited to, the progress of
the Company's research and development programs, the scope and results of
preclinical and clinical testing, changes in existing and potential
relationships with corporate collaborators, the time and cost in obtaining
regulatory approvals, the costs involved in obtaining and enforcing patents,
proprietary rights and any necessary licenses, the ability of the Company to
establish development and commercialization capacities or relationships, the
costs of manufacturing and other factors.

The Company expects to incur substantial additional costs, including costs
related to research and development activities, preclinical studies, clinical
trials, obtaining regulatory approvals, manufacturing and the expansion of its
facilities. The Company will need to raise substantial additional funds, through
additional financings including public or private equity offerings and
collaborative arrangements with corporate partners. There can be no assurance
that funds will be available on terms acceptable to the Company, if at all. If
adequate funds are not available, the Company may be required to delay, scale
back or eliminate certain of its product development programs or to license to
others the right to commercialize products or technologies that the Company
would otherwise seek to develop and commercialize itself, any of which would
have a material and adverse effect on the Company.

                                       9

<PAGE>   10

                    BIOTRANSPLANT INCORPORATED AND SUBSIDIARY
                          (A Development Stage Company)


PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits
   +10.1    Development and Supply Agreement between BioTransplant Incorporated
            and Activated Cell Therapy, dated August 22, 1996
   +10.2    Supply Agreement between BioTransplant Incorporated and Neose 
            Technologies, Inc., dated September 20, 1996
    11.1    Statement: Computation of Pro Forma Net Loss Per Common Share
    27      Financial Data Schedule.

b) Reports on Form 8-K
   None.

-------------------
+ Confidential Treatment reguested as to certain portions.


                                   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.

                           BioTransplant Incorporated
                           (Registrant)

Date: November 14, 1996    /s/ Elliot Lebowitz
                           ----------------------------------------------
                           Elliot Lebowitz
                           President and Chief Executive Officer
                           (Principal Executive Officer)

                           /s/ Richard V. Capasso
                           ----------------------------------------------
                           Richard V. Capasso
                           Director of Finance
                           (Principal Financial and Accounting Officer)




                                       10