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

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

                                   FORM 10-QSB

           |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2003

                                       OR

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
            For the Transition Period from ___________ to ___________

                        Commission File Number: 333-64430

                            MOLICHEM MEDICINES, INC.
             (Exact name of Registrant as specified in its charter)

                Delaware                             33-0820923
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

                       300 St. Sacrement Street, Suite 414
                            Montreal, Quebec H2Y 1X4
          (Address of principal executive offices, including zip code)

                                 (514) 286-0909
              (Registrant's telephone number, including area code)

               100 Europa Drive, Suite 421, Chapel Hill, NC 27517
               --------------------------------------------------
      (Former Name, Former Address, and Former Fiscal year if Changed Since
                                  Last Report)

         Check 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,  and (2) has been subject to such filing  requirements  for
the past 90 days. Yes [X] No [ ]

       The number of shares of the Registrant's common stock outstanding at June
2, 2003 was 24,179,287.

       Transitional Small Business Disclosure Format:Yes [ ]  No [X]

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



<PAGE>


                            MOLICHEM MEDICINES, INC.
                 MARCH 31, 2003 QUARTERLY REPORT ON FORM 10-QSB
                                TABLE OF CONTENTS


                                                                     Page Number

                  Special Note Regarding Forward Looking Statements ...........3

                          PART I FINANCIAL INFORMATION

Item 1.           Financial Statements ........................................4
Item 2.           Management's Discussion and Analysis
                  of Financial Condition and Results of Operations............13
Item 3            Controls and Procedures.....................................18

                            PART II OTHER INFORMATION

Item 2.           Changes in Securities and Use of Proceeds...................18
Item 6.           Exhibits and Reports on Form 8-K............................18





                                       2

<PAGE>




                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         To the extent that the information  presented in this Quarterly  Report
on Form  10-QSB  for the  quarter  ended  March 31,  2003,  discusses  financial
projections,  information  or  expectations  about our  products or markets,  or
otherwise   makes   statements   about  future  events,   such   statements  are
forward-looking.  We are making these forward-looking  statements in reliance on
the safe harbor  provisions of the Private  Securities  Litigation Reform Act of
1995.   Although  we  believe   that  the   expectations   reflected   in  these
forward-looking  statements  are based on  reasonable  assumptions,  there are a
number of risks and  uncertainties  that could  cause  actual  results to differ
materially from such forward-looking  statements.  These risks and uncertainties
are described,  among other places in this Quarterly  Report,  in  "Management's
Discussion and Analysis".

          In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or  circumstances  after the date of this Quarterly
Report.  When considering such  forward-looking  statements,  you should keep in
mind the risks  referenced  above and the other  cautionary  statements  in this
Quarterly Report.

                                       3

<PAGE>





                         PART I - FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS                                      PAGE
                                                                            ----


  Consolidated Balance Sheet as of March 31, 2003 (unaudited)
  and December 31, 2002........................................................5

  Consolidated Statements of Operations (unaudited)
       for the three months ended March 31, 2003 and 2002 and for
       the period from inception on December 22, 1995 through March 31, 2003...6

  Consolidated  Statements of Cash Flows (unaudited) for the three months
       ended March 31, 2003 and 2002 and for the
        period from inception on December 22, 1995 through March 31, 2003......7

  Notes to Consolidated Financial Statements...................................8




                                       4

<PAGE>




PART I--FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
MOLICHEM MEDICINES, INC. AND SUBSIDIARY
(A company in the development stage)

<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS
MARCH 31, 2003 AND DECEMBER 31, 2002
-------------------------------------------------------------------------------------------------------------------

ASSETS                                                                                   MARCH 31,       DECEMBER, 31
                                                                                           2003              2002
                                                                                        (UNAUDITED)
<S>                                                                                      <C>               <C>
CURRENT ASSETS:
     Cash and cash equivalents....................................................       $  87,299         $ 304,178
     Accounts receivable..........................................................             300               300
     Prepaid expenses and other current assets....................................          29,158            69,231
                                                                                        ----------        ----------
              Total current assets................................................         116,757           373,709
                                                                                        ----------        ----------

PROPERTY AND EQUIPMENT, net.......................................................          35,426            38,020

OTHER ASSETS......................................................................           7,481             7,515
                                                                                        ----------        ----------

TOTAL ASSETS......................................................................       $ 159,664         $ 419,244
                                                                                        ==========        ==========

LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)

LIABILITIES:

     Accounts payable and accrued expenses........................................       $ 693,420         $ 819,270
     Accrued compensation and benefits and benefits ..............................          21,193            20,122
                                                                                        ----------        ----------
              Total  liabilities..................................................         714,613           839,392
                                                                                        ----------        ----------

STOCKHOLDERS' (DEFICIENCY):
     Preferred stock - $0.0001  par value,  20,000,000  shares  authorized,
              none issued and outstanding at March 31, 2003 and December 31, 2002
     Common stock - $0.0001 par value, 80,000,000 shares authorized,
              18,679,287 shares issued and outstanding at
              March 31, 2003 and December 31, 2002................................           1,868             1,868
     Additional paid-in capital...................................................       4,043,243         4,043,243
     Accumulated deficit..........................................................      (4,600,060)       (4,465,259)
                                                                                        ----------        ----------
              Total stockholders' (deficiency)....................................        (554,949)         (420,148)
                                                                                        ----------        ----------

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)..................................       $ 159,664         $ 419,244
                                                                                        ==========        ==========
</TABLE>


See notes to consolidated financial statements.

                                       5

<PAGE>



MOLICHEM MEDICINES, INC. AND SUBSIDIARY
(A company in the development stage)

CONSOLIDATED STATEMENTS OF OPERATIONS  (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2003 AND 2002, AND PERIOD
FROM DECEMBER 22, 1995 (DATE OF INCEPTION) THROUGH MARCH 31, 2003

<TABLE>
<CAPTION>

                                                                                                         PERIOD
                                                                                                      DECEMBER 22,
                                                                                                          1995
                                                                                                        (DATE OF
                                                                                                       INCEPTION)
                                                              THREE MONTHS ENDED MARCH 31,              THROUGH
                                                               2003                  2002            MARCH 31, 2003

<S>                                                          <C>                <C>                   <C>
REVENUE:
   Grant revenue ......................................      $       --         $       --            $  1,716,697
   Revenue from joint development agreement                          --              425,585             3,299,885
                                                             ------------       ------------          ------------
           Total revenue ..............................              --              425,585             5,016,582
                                                             ------------       ------------          ------------

OPERATING EXPENSES:
   Research and development ...........................            54,738            885,351             6,741,716
   General and administrative costs ...................            76,574            421,030             3,321,389
   Depreciation and amortization ......................             2,627              1,926                26,182
                                                             ------------       ------------          ------------
           Total operating expenses ...................           133,939          1,308,307            10,089,287
                                                             ------------       ------------          ------------

LOSS FROM OPERATIONS ..................................          (133,939)          (882,722)           (5,072,705)

INTEREST EXPENSE ......................................            (1,356)              (620)              (42,969)


INTEREST INCOME .......................................               495              6,605                87,871
                                                             ------------       ------------          ------------

LOSS BEFORE INCOME TAXES ..............................          (134,800)          (876,737)           (5,027,803)

INCOME TAXES ..........................................              --                 --                  13,000
                                                             ------------       ------------          ------------

NET LOSS ..............................................      $   (134,800)      $   (876,737)         $ (5,040,803)
                                                             ============       ============          ============


Basic net loss per share............ ..................      $      (0.01)      $      (0.05)         $       (.35)
                                                             ============       ============          ============
</TABLE>


See notes to consolidated financial statements.

                                       6

<PAGE>




MOLICHEM MEDICINES, INC. AND SUBSIDIARY
(A COMPANY IN THE DEVELOPMENT STAGE)

CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2003 AND 2002, AND PERIOD FROM
DECEMBER 22, 1995 (DATE OF INCEPTION) TO MARCH 31, 2003

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------


                                                                                                                  PERIOD
                                                                                                            DECEMBER 22, 1995
                                                                                                                 (DATE OF
                                                                            THREE MONTHS ENDED MARCH 31,    INCEPTION) THROUGH
                                                                                 2003             2002        MARCH 31, 2003

<S>                                                                        <C>              <C>              <C>
OPERATING ACTIVITIES:
     Net loss ..........................................................   $    (134,800)   $    (876,737)   $   (5,040,803)
     Adjustments to reconcile net loss to
       net cash used in operating activities:
       Depreciation and amortization ...................................           2,628            1,926            26,182
       Amortization of deferred stock compensation .....................            --             18,247         1,272,947
       Stock and options issued for consulting services ................            --               --             117,406
     Increase (decrease) in cash attributable to changes in operating
       assets and liabilities:
       Accounts receivable .............................................            --             99,915              (300)
       Prepaid expenses and other assets ...............................          40,073          (24,622)          (29,158)
       Accounts payable, accrued expenses and accrued compensation......        (124,780)          57,780           714,610
       Deferred revenue ................................................            --            (90,000)             --
       Accrued income taxes ............................................            --            (13,000)             --
                                                                           -------------    -------------    --------------

              Net cash provided by (used in) operating activities ......        (216,879)        (826,491)       (2,939,116)
                                                                           -------------    -------------    --------------

INVESTING ACTIVITIES:
     Purchases of property and equipment ...............................            --            (10,898)          (58,981)
     Investment in other assets ........................................            --               --             (10,106)
                                                                           -------------    -------------    --------------

              Net cash used in investing activities ....................            --            (10,898)          (69,087)
                                                                           -------------    -------------    --------------

FINANCING ACTIVITIES:
     Deferred financing costs...........................................            --            (25,000)          (25,000)
     Proceeds on loan payable ..........................................            --               --             120,000
     Repayment on loan payable .........................................            --               --            (120,000)
     Issuance of stock in reverse merger ...............................            --               --           1,494,489
     Proceeds from issuance of stock ...................................            --          1,500,000         1,601,013
                                                                           -------------    -------------    --------------

              Net cash provided by financing activities ................            --          1,475,000         3,095,502
                                                                           -------------    -------------    --------------

NET INCREASE IN CASH AND CASH EQUIVALENTS ..............................        (216,879)         637,611            87,299

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .........................         304,178        1,481,881              --
                                                                           -------------    -------------    --------------

CASH AND CASH EQUIVALENTS, END OF PERIOD ...............................   $      87,299    $   2,119,492    $       87,299
                                                                           =============    =============    ==============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION -
        Cash paid for income taxes .....................................   $        --      $      13,000    $       13,000
                                                                           =============    =============    ==============
     Cash paid for interest ............................................   $       1,356    $         620    $       41,319
                                                                           =============    =============    ==============
</TABLE>

See notes to consolidated financial statements.


                                       7

<PAGE>







                            MOLICHEM MEDICINES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

   1.  NATURE OF BUSINESS AND BASIS OF PRESENTATION

       ORGANIZATION  AND  DESCRIPTION  OF THE  BUSINESS  - Since  its  inception
       Molichem  Medicines,  Inc. (the "Company") has operated as an early stage
       pharmaceutical   company  focused  on  the  discovery,   development  and
       marketing  of  pharmaceutical  products  for  the  treatment  of  serious
       respiratory    and   related    conditions.    These    development   and
       commercialization activities were conducted by the Company's wholly owned
       subsidiary  Molichem R&D, Inc.  ("Molichem R&D"). As described more fully
       in Note 6, effective May 6, 2003 100 percent of the stock of MoliChem R&D
       was  transferred to Lantibio,  Inc. in exchange for 13,379,282  shares of
       common  stock  of the  Company  held by  Lantibio,  Inc.,  and a  license
       agreement  providing  certain  rights to  intellectual  property  held by
       MoliChem R&D. In connection  with this  transaction  all of the Company's
       assets and liabilities  were transferred to MoliChem R&D, after which the
       Company's  operations  consisted of holding a license from  Molichem R&D,
       and maintaining its status as a public reporting entity.

       Molichem R&D, was incorporated on December 22, 1995 in North Carolina. On
       January  18,  2001,  Molichem  R&D  acquired  Cortez  Development,   Ltd.
       ("Cortez") in a reverse  merger in which  Molichem R&D was the accounting
       acquirer  and  Cortez  was the legal  acquirer  (see Note 3).  Cortez was
       incorporated on July 20, 1998 under the laws of the State of Delaware and
       had no operations prior to the reverse merger.

       Prior  to  the  reverse  merger,  Molichem  R&D  was  known  as  Molichem
       Medicines,  Inc. (the "Company").  In connection with the reverse merger,
       the Company  changed its name to Molichem  R&D.  Cortez then  changed its
       name to Molichem  Medicines,  Inc.  Subsequent  to the  completion of the
       reverse merger,  Molichem R&D, the operating company,  was a wholly-owned
       subsidiary of Molichem Medicines, Inc.

       The  consolidated  financial  statements have been prepared in accordance
       with  Statement  of  Financial   Accounting  Standards  ("SFAS")  No.  7,
       Accounting and Reporting by Development Stage Enterprises, as the Company
       is  devoting  substantially  all of its  efforts  to  establishing  a new
       business  and  planned  principal  operations  have  not  commenced.  Its
       principal  activities to date have been  development of a financial plan,
       procurement  of  capital,   research  and  development,   acquisition  of
       operating equipment, recruitment of personnel, development of proprietary
       drug  candidates,  and clinical  research.  The success of the Company is
       dependent upon obtaining  additional financing from third parties and the
       successful  development  and  marketing  of products  from the  Company's
       research and development  programs in order to generate  revenue adequate
       to support its cost structure.

       BASIS OF PRESENTATION - The accompanying  financial  statements have been
       prepared on a going concern basis, which assumes continuity of operations
       and realization of assets and satisfaction of liabilities in the ordinary
       course of business.  As shown in the accompanying  financial  statements,
       the Company  incurred a net loss of $134,800  for the three  months ended
       March 31, 2003 and used cash from  operations of $216,879 for that period
       and  has  accumulated  losses  since  inception  totaling   approximately
       $5,000,000.  As set forth in Note 6, following the transfer of assets and
       liabilities to Lantibio,  Inc.  subsequent to March 31, 2003, the Company
       had no assets or liabilities, and no revenue generating operations. These
       circumstances  raise  substantial  doubt as to the  Company's  ability to
       continue to operate as a going concern. The Company's ability to continue
       as a going  concern is  dependent  upon its ability to obtain  additional
       financing  and initiate  operations  that will  ultimately  generate cash
       flows.

                                       8

<PAGE>



       The Company plans to pursue equity or debt  financing to fund the cost of
       its basic infrastructure and future operations.  In the event the Company
       is  unable  to  obtain   additional   financing  or  generate  cash  from
       operations,  it might not have sufficient  funds to permit the Company to
       continue to operate for a year following March 31, 2003.

       The accompanying  unaudited consolidated financial statements and related
       footnotes have been prepared pursuant to the rules and regulations of the
       Securities and Exchange Commission for Form 10-QSB. Accordingly,  they do
       not include all of the information  and footnotes  required by accounting
       principles  generally  accepted  in the  United  States  of  America  for
       complete  financial  statements.  In  the  opinion  of  management,   all
       adjustments   (consisting  of  normal  recurring   accruals)   considered
       necessary for a fair  presentation  have been  included.  It is suggested
       that these financial statements be read in conjunction with the financial
       statements and footnotes  thereto included in the Company's Annual Report
       on Form 10-KSB for the fiscal year ended  December 31, 2002.  The results
       of  operations  for  the  three-months  ended  March  31,  2003  are  not
       necessarily  indicative of the operating results that may be expected for
       the fiscal year ending December 31, 2003.

       The accompanying financial statements include the accounts of the Company
       and its wholly owned subsidiaries.  All significant intercompany balances
       and transactions have been eliminated in consolidation.

       RECENTLY ADOPTED ACCOUNTING STANDARDS - In December 2002, the FASB issued
       SFAS No. 148,  Accounting for  Stock-Based  Compensation,  Transition and
       Disclosure. SFAS No. 148 provides alternative methods of transition for a
       voluntary  change  to the fair  value  based  method  of  accounting  for
       stock-based employee compensation,  and also requires that disclosures of
       the pro forma  effect of using the fair value  method of  accounting  for
       stock-based employee  compensation be displayed more prominently and in a
       tabular  format.  This statement was effective for the Company  beginning
       January 1, 2002.  The  adoption  of this  statement  had no impact on its
       consolidated financial statements.

       RECENTLY ISSUED  ACCOUNTING  STANDARDS In July, 2002 the FASB issued SFAS
       No.  146,   Accounting  for  Costs   Associated  with  Exit  or  Disposal
       Activities. In November 2002, the FASB issued Interpretation No. 45 ("FIN
       45"), Guarantor's Accounting and Disclosure  Requirements for Guarantees,
       Including Indirect Guarantees of Indebtedness of Others. In January 2003,
       the FASB issued FASB  Interpretation No. 46 ("FIN 46"),  Consolidation of
       Variable Interest Entities,  an Interpretation of ARB No. 51. The Company
       has evaluated the impact of the adoption of these  standards and does not
       believe that their adoption will have an impact on its financial position
       and results of operations.


   2.  CONTRACT DEPOSIT AND COMMERCIALIZATION AGREEMENT

       On  May  11,  2001,   the  Company   entered  into  a   Development   and
       Commercialization   Agreement  (the  "Agreement")  with  InterMune,  Inc.
       ("InterMune")  for the joint  development  and  commercialization  of its
       compound,  Moli1901.  Under  the  Agreement,   InterMune  was  granted  a
       co-exclusive  worldwide  license for  Moli1901  and was required to share
       equally the costs of development  and  commercialization  of Moli1901 for
       the treatment of cystic fibrosis and other therapeutic applications. Upon
       commercialization  of  Moli1901,  InterMune  and the Company  would share
       equally in the net profits or losses from the sale of the  products  that
       have been jointly  developed.  The  Agreement  was  terminated  effective
       December 16, 2002 resulting in the Company obtaining  exclusive rights to
       the Moli1901 technology in exchange for the release of InterMune from all
       obligations under the agreement.

       Upon execution of the Agreement, InterMune made a non-refundable up-front
       payment to the Company of  $1,450,000.  InterMune  was  obligated to make
       additional   non-refundable   payments  of  up  to  $5,000,000  upon  the
       achievement  of  specified   milestones   related  to  each   therapeutic
       application  developed  from Moli1901.  None of the specified  milestones
       were achieved prior to the termination of the agreement.

       In November  2000,  InterMune  paid the Company  $50,000 as a  refundable
       exclusive  dealing binder (the "Binder  Payment") under which the Company
       agreed to pursue the execution of the  Agreement.  Upon  execution of the
       Agreement, the Binder Payment became non-refundable.

       The up-front  payments  described  above totaling  $1,500,000  were being
       recognized  as  revenue  ratably  over  the  estimated   initial  product
       development  period for the cystic fibrosis  indication for Moli1901prior
       to the termination of the agreement. Upon termination of the Agreement in
       2002 all remaining deferred revenue was recognized as income.


                                       9

<PAGE>

       The Company  recognized  revenue  attributable to the amortization of the
       upfront payments and shared product development costs as follows:

<TABLE>
<CAPTION>
                                                                    THREE MONTHS     THREE MONTHS
                                                                       ENDED             ENDED         INCEPTION TO
                                                                   MARCH 31, 2003   MARCH 31, 2002    MARCH 31, 2003
<S>                                                                    <C>                 <C>             <C>
       Amortization of up front payments........................       $    --             $ 30,000        $1,500,000
       Shared product development costs.........................       $    --              395,585         1,799,885
                                                                       ----------           -------         ---------
       Total....................................................       $    --             $425,585        $3,299,885
                                                                       ----------           -------         ---------
</TABLE>

       We were entitled to receive  additional  revenues related to each product
       developed under the Agreement as certain milestones in the development of
       Moli1901  were  achieved.  No  milestone  payments  were  ever  earned or
       received.


   3.  REVERSE MERGER AND RECAPITALIZATION

       As discussed in Note 1, Molichem R&D acquired  Molichem  Medicines,  Inc.
       (formerly  Cortez  Development  Company,  Ltd.) in a reverse  merger (the
       "Merger")  on  January  18,  2001.  On  January  11,  2001,  the Board of
       Directors of Molichem Medicines,  Inc. declared a 6.959314-for-one common
       share  stock  split   effected  in  the  form  of  a  stock  dividend  to
       stockholders of record on that date.

       Following the split, 8,469,491 shares of Molichem Medicines,  Inc. $.0001
       par value common stock were  outstanding.  In connection with the Merger,
       holders of  5,219,486  shares of Molichem  Medicines,  Inc.  common stock
       contributed  those shares to Molichem  Medicines,  Inc., and those shares
       were  cancelled.  Molichem  Medicines,  Inc. also issued 50,000 shares of
       common stock in exchange for legal services.  These transactions resulted
       in Molichem  Medicines,  Inc. having 3,300,005 common shares  outstanding
       immediately prior to the Merger.

       To  effect  the  Merger,  each of the  1,732,670  outstanding  shares  of
       Molichem  R&D common  stock was  exchanged  for 7.716  shares of Molichem
       Medicines,  Inc. common stock. Prior to the Merger,  Molichem  Medicines,
       Inc. was a shell corporation with no significant  operations.  The merger
       was accounted for as a reverse  acquisition of Molichem  Medicines,  Inc.
       through   issuance  of  3,300,005   shares  of  stock  by  Molichem  R&D,
       accompanied by a recapitalization.  Accordingly, the financial statements
       prior  to the date of  acquisition  reflect  the  historical  results  of
       operations  of  Molichem  R&D.  References  to the number of  outstanding
       shares, par value,  additional paid-in capital, and per share amounts for
       Molichem R&D for all periods  have been  restated to reflect the ratio of
       the exchange of shares in the merger.

       In connection  with the merger,  Molichem  Medicines sold 1,000,000 stock
       units (each unit  consisting  of one share of common  stock and a warrant
       for the purchase of one share of common stock) in a private placement for
       cash  proceeds  of  $1,494,489,  net of  issuance  costs of  $5,511.  The
       warrants were exercised on January 17, 2002 at $1.50 per share, resulting
       in net proceeds of $1,500,000 to the Company.

                                       10

<PAGE>



   4.  LOSS PER SHARE

       The  computation  of basic and diluted  earnings  per share for the three
       months  ended March 31, 2003 and 2002,  and for the period from  December
       22, 1995 (date of inception) to March 31, 2003 is as follows:

<TABLE>
<CAPTION>
                                                                                                    PERIOD FROM
                                                                                                   DECEMBER 22,
                                                                                                    1995 (DATE
                                                                                                        OF
                                                              THREE MONTHS       THREE MONTHS      INCEPTION) TO
                                                            ENDED MARCH 31,     ENDED MARCH 31,     MARCH 31,
                                                                  2003                2002             2003
                                                            ---------------     ---------------    -------------
<S>                                                         <C>                <C>                <C>
       Numerator:
       Basic net loss.....................................  $    (134,800)     $    (876,737)     $(5,071,199)
                                                            =============      =============      ===========
       Denominator:
       Basic weighted-average common shares outstanding...     18,679,287         18,490,398       14,535,907
                                                            =============      =============      ===========
       Basic and diluted loss per share...................  $       (0.01)     $       (0.05)     $     (0.35)
                                                            =============      =============      ===========
</TABLE>

       The following number of warrants and options to purchase shares of common
       stock were  outstanding as of the end each period,  but were not included
       in the  computation  of diluted  earnings  per share  because the Company
       realized a loss during the period,  and their  effect on the  computation
       would be antidilutive:

<TABLE>
<CAPTION>
                                                                                             INCEPTION TO
                                                                 2003            2002       MARCH 31, 2003
                                                               ---------      ---------     --------------
<S>                                                            <C>            <C>              <C>
       Number of options..................................     1,767,870      2,149,248        2,149,248
       Number of warrants.................................           --             --         1,000,000
                                                               ---------      ---------        ---------
       Total..............................................     1,767,870      2,149,248        3,149,248
                                                               =========      =========        =========
</TABLE>

   5.  COMMITMENTS AND CONTIGENCIES

       Research Grants- The Company has received research grants from the Cystic
       Fibrosis  Foundation (the  "Foundation") to develop its compound Moli1901
       for the treatment of cystic fibrosis.  The Company is contingently liable
       to  repay  these  grants  if the Food  and  Drug  Administration  ("FDA")
       approves  Moli1901 for marketing to the public. As of March 31, 2003, the
       Company has  received a total of $786,560 in grants from the  Foundation.
       Repayment,  if  required,  would  be due 60  days  from  the  date of FDA
       approval.

       Royalties - The Company is committed to pay royalties to various  parties
       on the sale of  products,  should it succeed in bringing  the products to
       market. The Company's obligations to pay royalties total 3.67% of the net
       selling price of a treatment for cystic fibrosis  (Moli1901) and 2.00% of
       the selling price derived from the compounds Moli56A and Moli56B.

       Other  Commitments  - The Company has  research and  development  studies
       currently  in process  that  require  progress  payments and payment upon
       completion  of the  studies.  At  March  31,  2003,  the  total  of those
       remaining commitments was approximately $675,000.

6.     SUBSEQUENT EVENT

       On May 6, 2003 the  Company  exchanged  100  percent  of the stock of its
       subsidiary  MoliChem  R&D,  Inc. for  13,379,282  shares of the Company's
       stock owned by Lantibio,  Inc., a company  owned by the former  President
       and certain former shareholders of the Company. The Company also received
       a non-exclusive license (the "License agreement") to develop, market, and
       sell  certain  products  incorporating  MoliChem  R&D,  Inc.'s  compounds
       Moli56A and Moli56B.  The License Agreement has a ten year term, provides
       for  annual  licensing  fees of  $1.00  payable  by the  Company  on each
       anniversary of the License Agreement,  a one time continuation payment of
       $500,000 payable on the first anniversary of the License Agreement, a one
       time  milestone  payment of $2,000,000  payable by the Company  within 60
       days  of  the  approval  of  a  product   incorporating   the  technology
       encompassed by the License  Agreement,  and annual royalty payments equal
       to 6 percent of net sales related to the  technology  encompassed  by the
       License Agreement. In addition,  options to purchase a total of 1,637,114


                                       11
<PAGE>

       shares of common stock were cancelled in connection with the transaction.
       In addition,  all of the assets and  liabilities  of MoliChem  Medicines,
       Inc. were  transferred to MoliChem R&D, Inc., which became a wholly-owned
       subsidiary of Lantibio, Inc.

       The  following  pro  forma  balance  sheet  reflects  the  effect  of the
       transaction on the Company's  balance sheet as though the transaction had
       been consummated as of December 31, 2002:


      Total assets                                            $     --
                                                              =========

      Stockholders' equity
        Common stock                                              1,080
        Additional paid-in capital                              908,563
        Accumulated deficit                                   (909,643)
                                                              ---------
        Total stockholders' equity                                 (--)
                                                              ---------
      Total liabilities and stockholders' equity              $     --
                                                              =========







                                       12

<PAGE>





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

       The  following  discussion  of our  financial  condition  and  results of
operations  should be read in conjunction with the financial  statements and the
notes to those  statements  included  elsewhere in this  report.  In May 2003 we
exchanged all of the stock of our  subsidiary  MoliChem R&D, Inc. for 13,379,282
shares of our stock  owned by  Lantibio,  Inc.,  a company  owned by the  former
president  and  certain  former   shareholders  of  ours.  We  also  received  a
non-execlusive   license  to  develop,   market,   and  sell  certain   products
incorporating  MoliChem, R&D, Inc.'s compounds Moli56A and Moli56B. Prior to the
exchange,  all of the assets and  liabilities of MoliChem  Medicines,  Inc. were
transferred to MoliChem R&D, Inc. This sale of our operating  subsidiary brought
to an end our proposed business as a pharmaceutical  company.  Accordingly,  the
discussion below is primarily of historical significance only.

BACKGROUND

       We were  incorporated in the state of Delaware on July 20, 1998 under the
name of Cortez Development,  Ltd.  ("Cortez").  Our name was changed to MoliChem
Medicines,  Inc. on February 21, 2001,  following a reverse  merger  effected on
January 18, 2001. On January 18, 2001, MoliChem R&D acquired Cortez in a reverse
merger in which MRD, Inc. was the  accounting  acquirer and Cortez was the legal
acquirer.  MoliChem  R&D was  incorporated  in the  state of North  Carolina  on
December  21,  1995  under the name of  MoliChem  Medicines,  Inc.  Its name was
changed to MoliChem R&D, Inc. on April 6, 2001.

       MoliChem  Medicines,  Inc. has had no  operations  or revenues  since its
inception and, since the acquisition of MoliChem R&D, MoliChem  Medicines,  Inc.
has been a holding company only. All of MoliChem  Medicines  Inc.'s research and
development  activities  have been conducted by MoliChem R&D.  Accordingly,  the
terms "we",  "us",  "our",  and similar  terms  refer to the  entities  MoliChem
Medicines,  Inc. and MoliChem  R&D,  Inc. on a  consolidated  basis,  unless the
context requires otherwise.


SIGNIFICANT DEVELOPMENTS IMPACTING OPERATIONS

Termination of InterMune Joint Development and Commercialization Agreement
--------------------------------------------------------------------------

         In the  second  quarter  of 2001 we  entered  into  an  agreement  with
InterMune, Inc. for the joint development and commercialization of Moli1901 (the
"Agreement").  Under the terms of the  Agreement  we and  InterMune  shared  the
rights to the Moli1901 technology,  and each party contributed 50 percent of the
of research and  development  costs  related to  Moli1901.  The  Agreement  also
provided  for  payments  to us by  InterMune  upon  the  attainment  of  certain
milestones.  In  December  2002 the  agreement  was  terminated  and we obtained
exclusive  rights to the  Moli1901  technology  in  exchange  for the release of
InterMune of all obligations  related to the Agreement.  We also assumed certain
financial obligations that would have been shared under the Agreement.

RESEARCH AND DEVELOPMENT ACTIVITIES

       Since we began  operations  in December  1995,  through  MoliChem  R&D we
devoted  substantially  all of our resources to the discovery and development of
pharmaceutical products for the treatment of pulmonary diseases and generated no
revenues from product sales. In addition,  we engaged in development  activities
for a product for the treatment of sepsis based on our two compounds Moli56A and
Moli56B.  We had one product candidate,  Moli1901 (commonly known as Duramycin),
in Phase I clinical  trials,  while Moli56A and Moli56B were in the pre-clinical
trials  stage of  development.  We also began  research  to  develop  additional
products  based on the structure of Moli1901,  but no  additional  products were
ever developed by us.

Development of Moli1901
-----------------------

       The majority of our resources  were used in the  development of Moli1901.
Moli1901 is currently in Phase I of clinical  development to determine safe dose
levels in healthy patients.  We initiated Phase II clinical studies to determine

                                       13

<PAGE>

the  effectiveness  of safe dose levels in patients with cystic  fibrosis during
the fourth quarter of 2002.  Prior to the assignment of the Moli1901  technology
to MoliChem  R&D, we estimate  that  approximately  $10 million was spent on its
preclinical   development.   Through  March  31,  2003  we  spent  approximately
$4,850,000  in  developing  Moli1901.  The  majority  of the  development  costs
incurred  during  2001 and 2002  were  shared  with  InterMune  under  the joint
development  and  commercialization  agreement  until  the  termination  of that
Agreement during the fourth quarter of 2002.

Development of Moli56A and Moli56B
----------------------------------

       During  2002 we  initiated  development  activities  for  Moli56A for the
treatment  of  sepsis.  Both  Moli56A  and  Moli56B  are in the early  stages of
development,  with positive  results  having been  demonstrated  in  preclinical
studies in animal models.  Additional preclinical studies,  including toxicology
studies,  were initiated for Moli56A during the second quarter of 2002.  Further
development  of that compound was stopped  during the fourth  quarter of 2002 to
conserve financial and other resources for the development of Moli1901.

       Prior to the  assignment  of Moli56A and Moli56B to us, we estimate  that
approximately $1 million was spent on their preclinical development.  Subsequent
to such assignment,  through March 31, 2003 we incurred  approximately  $497,000
related to the development of Moli56A and Moli56B.

SIGNIFICANT SOURCES OF REVENUE

Grant Revenue
-------------

       Prior to 2001,  our  revenues  were  derived  from grants from the Cystic
Fibrosis  Foundation and the National  Institutes of Health to develop  Moli1901
for the treatment of cystic  fibrosis.  We received no grant revenue  during the
three months ended March 31, 2003 and 2002.  Through March 31, 2003, we received
a total of approximately  $1,717,000 in revenue under these grants.  Our primary
source of revenue during 2002 was derived from payments from InterMune, Inc. for
the sharing of development costs related to Moli1901.

Revenue from Joint Development Agreement
----------------------------------------

       In the  second  quarter  of  2001  we  entered  into  an  agreement  with
InterMune,  Inc. for the joint  development  and  commercialization  of Moli1901
under which we received $1,450,000 as an up-front  non-refundable  payment. This
payment  provided  InterMune  with a  worldwide  co-exclusive  license  for  the
Moli1901  technology,  including  all  information  related to Moli1901  and its
patents.  . Under this agreement,  we and InterMune,  Inc. agreed to share costs
incurred  subsequent  to the date of the  agreement  related to  furthering  the
clinical  development  and  commercialization  of Moli1901.  The agreement  also
provided for additional payments to us by InterMune, Inc. for the achievement of
certain milestones, and the sharing of revenues from product sales. Prior to the
termination of the Agreement in December 2002, the up-front  payments under this
agreement of $1,450,000 and a payment from InterMune,  Inc.  received in 2000 in
connection  with our  agreement  not to seek  another  development  partner  for
Moli1901 of $50,000 were being  recognized as revenue ratably over the estimated
fifty-month period from the effective date of the Agreement through the expected
date our first product was approved for sale. Upon termination of the Agreement,
the remaining deferred revenue was recognized.

       Under the Agreement,  we and InterMune,  Inc. shared equally the costs of
developing Moli1901. Those costs included agreed-upon costs incurred internally,
such as personnel costs, and amounts paid to external organizations with whom we
or  InterMune,   Inc.  had  contracted  to  perform   research  and  development
activities.  We  recognized  revenue  attributable  to the  amortization  of the
upfront payments and shared product development costs as follows:

<TABLE>
<CAPTION>
                                                                    THREE MONTHS     THREE MONTHS
                                                                       ENDED             ENDED         INCEPTION TO
                                                                   MARCH 31, 2003   MARCH 31, 2002    MARCH 31, 2003
<S>                                                                      <C>           <C>             <C>
       Amortization of up front payments........................         $             $ 30,000        $1,500,000
                                                                         -----          -------         ---------
       Shared product development costs.........................         $ --           395,585         1,799,885
                                                                         -----          -------         ---------
       Total....................................................         $             $425,585        $3,299,885
                                                                         =====         ========        ==========
</TABLE>


                                       14
<PAGE>

Milestone Payments and Product Revenues
---------------------------------------

         We were entitled to receive additional revenues related to each product
developed  under the  Agreement  as certain  milestones  in the  development  of
Moli1901 were achieved. No milestone payments were ever earned or received.

SIGNIFICANT ELEMENTS OF COST

       Through March 31, 2003 our expenses consisted primarily of costs incurred
in research and development related to Moli1901,  and general and administrative
costs associated with our operations.

Research and Development Costs
------------------------------

       Research and  development  costs included  primarily costs related to the
development of Moli1901, Moli56A and development costs related to our library of
stable polypeptides.  These costs consisted primarily of amounts paid to outside
contractors for the manufacture and testing of the Moli1901 compound, toxicology
studies, consultation regarding regulatory and other matters, and the conduct of
clinical research studies. Research and development costs also included the cost
of our  personnel  involved  in product  development,  the legal and other costs
incurred to secure and maintain our  intellectual  property,  and indirect costs
associated  with  our  research  activities.  We did  not  operate  research  or
manufacturing  facilities,  and thus internal facility costs associated with our
product development efforts were historically immaterial.


General and Administrative Costs
--------------------------------

       The major components of general and  administrative  costs were personnel
costs,  infrastructure costs such as rent and utilities,  legal and professional
fees related to general corporate matters, accounting fees, and travel costs.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES


The  preparation  of  financial  statements  requires  our  management  to  make
estimates and assumptions in a number of areas,  including  revenue  recognition
and  reporting of research  and  development  costs.  Management  evaluates  the
reasonableness of those estimates and assumptions on an ongoing basis, and makes
changes as deemed  appropriate.  In the  opinion  of  management,  the  critical
accounting  policies and underlying  estimates described in its Annual Report on
Form 10-KSB for the fiscal year ended  December 31, 2002 continue to be relevant
to the  financial  statements  and  disclosures  included in this Report on Form
10-QSB.

FINANCIAL POSITION

       Our balance sheet at March 31, 2003 continued to demonstrate  our lack of
liquidity.  Cash at March 31,  2003 had  declined  to $87,299  from  $304,178 at
December 31, 2002.  Although our  operating  expenses were  significantly  lower
during the three  months  ended  March 31,  2003 than they were during the three
months ended March 31,  2002,  our lack of revenue,  and payment of  liabilities
resulted in a decline in cash of $216,679  from the December  31, 2002  balance.
Our  operating  activities  used cash of $216,679 in the quarter ended March 31,
2003, compared to using cash of $826,491 in the quarter ended March 31, 2002.

       Accounts  payable  and accrued  liabilities  decreased  from  $839,392 at
December  31,  2002 to  $714,613  at  March  31,  2003.  The  majority  of these
liabilities  are amounts owed to outside  contract  research  organizations  for
research conducted during 2002.


                                       15
<PAGE>

RESULTS OF OPERATIONS

THREE-MONTH PERIODS ENDED MARCH 31, 2003 AND 2002

Revenue
-------

We had no revenue for the  three-month  period ended March 31, 2003  compared to
$425,585 for the  three-month  period  ended March 31, 2002.  All of the revenue
recognized  during  2002  resulted  from the joint  development  agreement  with
InterMune, Inc. This agreement was terminated in December 2002.

Included in revenue  from joint  development  agreement is  amortization  of the
deferred  up-front  payments under the joint  development and  commercialization
agreement with InterMune of $30,000 for the  three-month  period ended March 31,
2002.

Research and Development Costs
------------------------------

Research and development  costs for the three-month  period ended March 31, 2003
were  $54,738  compared  to  $885,351  for the three  month  period  ended March
31,2002.  These costs  consisted  primarily  of  payments  to contract  research
organizations,  consultants,  and  internal  personnel  costs.  The  decline  in
research and development  during 2003 reflects the curtailment of  substantially
all research activities pending additional funding. These costs will continue to
be very  limited  in the  future  unless  and until we raise  additional  funds,
implement a development  plan for the license  agreement  executed in connection
with the sale of MRD, or acquire additional technologies for development.

General and Administrative Costs
--------------------------------

General and  administrative  costs were $76,574 for the three months ended March
31, 2003  compared to $421,030 for the three  months ended March 31, 2002.  This
decrease reflects lower personnel costs,  professional fees, accounting fees and
travel costs resulting from scaling back all of our operations  during 2003, and
the reduced cost of administration and support costs.

Depreciation and Amortization
-----------------------------

Depreciation  and  amortization  costs were nominal for the three month  periods
ended March 31, 2003 and 2002,  totaling  $2,627 and $1,926,  respectively.  The
Company  has  minor   investments  in  property  and  equipment  and  we  expect
depreciation and amortization to remain a small component of our cost structure.

Loss from Operations
--------------------

Loss from  operations  for three month periods ended March 31, 2003 and 2002 was
$133,939 and $882,722,  respectively.  The decrease in revenue was offset by the
decrease in research and development and general and administrative expenses due
to scaling back operations.

Interest Expense
----------------

Interest  expense for the three  months ended March 31, 2003 and 2002 was $1,356
and $620,  respectively.  These costs have been  consistently low reflecting low
levels of borrowing by the Company.

Interest Income
---------------

Interest  income for the three months ended March 31, 2003 and 2002 was $495 and
$6,605,  respectively.  . This decrease resulted from the lower interest-bearing
deposit balances and lower short-term interest rates.

Income Taxes
------------

We report  income and expenses on the cash basis for income tax  purposes,  file
separate  returns for MoliChem  Medicines  and MoliChem R&D for state income tax
purposes,  and file a consolidated  return for federal  income tax purposes.  We
anticipate  that the  Company  will  incur  losses  in future  periods  for both
financial  reporting and tax purposes,  and do not expect significant income tax
expenses or benefits until the Company achieves profitability.

LIQUIDITY AND CAPITAL RESOURCES

As  discussed  above,  the sale of  MoliChem  R&D  subsequent  to year end,  the
resulting  license  agreement,  and the  termination  of our  joint  development
agreement with InterMune,  Inc. has significantly changed our business strategy.



                                       16
<PAGE>

Currently,  the  scope  of  our  operations  is  significantly  reduced,  and we
anticipate   significantly   reduced  costs  of  operations  given  our  current
structure.  However,  we anticipate the need to raise additional  capital during
2003 to maintain our status as a public  reporting  company,  and to develop and
execute  a  business  plan  that  may  include  the  acquisition  of  additional
technologies  or  entities.  This  may  involve  sales  of our  equity  or  debt
securities in merger or acquisition transactions.

We incurred a net loss of $134,800 in the quarter  ended March 31, 2003,  and we
have incurred  losses since our inception of  $5,040,804.  We currently  have no
planned sources of revenue and expect to continue to incur losses in the future.

At  March  31,  2003  we had  certain  commercial  commitments  and  contractual
obligations  that  required us to incur  expenses in the future.  Subsequent  to
March 31, 2003 these commitments were transferred to Lantibio in connection with
its acquisition of MoliChem R&D.







                                       17
<PAGE>




ITEM 3.  CONTROLS AND PROCEDURES

Our principal  executive  officer and principal  financial officer evaluated the
effectiveness  of our disclosure  controls and procedures as of a date within 90
days prior to the filing of this report. Based on this evaluation, our principal
executive  officer and  principal  financial  officer  have  concluded  that our
controls and procedures are effective in providing reasonable assurance that the
information required to be disclosed in this report is accurate and complete and
has been recorded,  processed,  summarized  and reported  within the time period
required  for  the  filing  of  this  report.  Subsequent  to the  date  of this
evaluation, there have not been any significant changes in our internal controls
or, to our  knowledge,  in other  factors  that could  significantly  affect our
internal controls.

Consistent  with Section  10A(i)(2) of the  Securities  Exchange Act of 1934, as
added by Section 202 of the  Sarbanes-Oxley  Act of 2002, we are responsible for
listing  the  non-audit  services  approved  by our  Board  of  Directors  to be
performed by Rogoff & Company,  P.C., our external auditor.  Non-audit  services
are defined as services other than those provided in connection with an audit or
a review of our financial  statements.  Our Board of Directors currently has not
approved  the  engagement  of Rogoff & Company,  P.C. to perform  any  non-audit
services in 2003.

                           PART II--OTHER INFORMATION

ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

         No equity  securities were sold by us during the period covered by this
Report.

         During the period  subsequent  to this Report,  in May 2003,  we issued
5,500,000  shares  to 5  persons  pursuant  to our May 5,  2003  Stock  Purchase
Agreement.   These  shares  were  issued  in  reliance  on  the  exemption  from
registration under Section 4(2) of the Securities Act of 1933, as amended.

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

(a)      Exhibits

The following exhibits are filed as a part of this report on Form 10-QSB:

    EXHIBIT NO.                                 DESCRIPTION
        11                    Statement of Computation of Per Share Earnings
       99.1                Certificate of Chief Executive and Financial Officer

(b) Reports on Form 8-K

On January 10, 2003, we filed a Form 8-K dated  January 7, 2003.  Item 5 thereof
referred  to a press  release  contained  therein  as Item 7. The press  release
announced the receipt of Orphan Designation for the treatment of Cystic Fibrosis
in Europe for duramycin (Moli1901).








                                       18
<PAGE>




                                   SIGNATURES

           Pursuant to the requirements of Section 13 or 15(d) of the Securities
       Exchange Act of 1934,  the Registrant has duly caused this Form 10-QSB to
       be signed on its behalf by the undersigned, thereunto duly authorized.

       Dated: June 3, 2003             MoliChem Medicines, Inc.

                                       By: /s/ Gilles Cloutier
                                          --------------------
                                       Gilles Cloutier
                                       President, Chief Executive and Accounting
                                       Officer






                                       19
<PAGE>



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                              AS ADOPTED PRSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gilles Cloutier, certify that:

1.       I have  reviewed  this  quarterly  report on Form  10-QSB  of  MoliChem
         Medicines, Inc.;

2.       Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included in the quarterly  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report;

4.       I am responsible for establishing and maintaining  disclosure  controls
         and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
         the registrant and have:

a.       designed  such  disclosure  controls  and  procedures  to  ensure  that
         material  information   relating  to  the  registrant,   including  its
         consolidated  subsidiaries,  is made known to me by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

b.       evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

c.       presented  in  this   quarterly   report  my   conclusions   about  the
         effectiveness  of the disclosure  controls and  procedures  based on my
         evaluation as of the Evaluation Date;

5.       I  have  disclosed,   based  on  my  most  recent  evaluation,  to  the
         registrant's  auditors and the audit committee of registrant's board of
         directors (or persons performing the equivalent functions):

a.       all  significant  deficiencies  in the design or  operation of internal
         controls  which  could  adversely  affect the  registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and

b.       any fraud,  whether or not material,  that involves management or other
         employees  who have a  significant  role in the  registrant's  internal
         controls; and

6.       I  have  indicated  in  this   quarterly   report  whether  there  were
         significant changes in internal controls or in other factors that could
         significantly  affect  internal  controls  subsequent to the date of my
         most recent evaluation, including any corrective actions with regard to
         significant deficiencies and material weaknesses.

Date: June 3, 2003                     By:      /s/ Gilles Cloutier
                                                --------------------------
                                                Gilles Cloutier
                                           Chief Executive and Financial Officer


                                       20
<PAGE>

                                  EXHIBIT INDEX


       EXHIBIT                                 DESCRIPTION
          NO.
          11                 Statement of Computation of Per Share Earnings*
         99.1              Certificate of Chief Executive and financial Officer

       *Included in financial statements filed herewith.









                                       21