<PAGE>
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                   ---------------------------------------
                                       
                                   FORM 10-K
                                       
               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                                       
For the fiscal year ended September 30, 1997     Commission File No. 1-4430

                   ---------------------------------------
                                       
                          MAXIM PHARMACEUTICALS, INC.
            (Exact Name of Registrant as specified in its charter)
                                       
                   Delaware                       87-0279983
        (State or other jurisdiction of        (I.R.S. Employer
        incorporation or organization)      Identification Number)

                          10835 Altman Row, Suite 150
                          San Diego, California 92121
                                (619) 453-4040
              (Address, including zip code, and telephone number,
       including area code, of Registrant's principal executive offices)
                                       
                   ---------------------------------------

<TABLE>
<CAPTION>
<S>                                                         <C>
Securities registered pursuant to Section 12(b) of the Act: Common Stock, $.001 Par Value             
                                                            Redeemable Common Stock Purchase Warrants 
                                                                    (Title of Class)                  
Securities registered pursuant to Section 12(g) of the Act: None
                                                            
                                                            
</TABLE>

                   ---------------------------------------

     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
                                                    ---   ---

     Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 
10-K or any amendment to this Form 10-K.  [ ]

     The aggregate market value of the voting stock held by persons 
considered by the registrant for this purpose to be nonaffiliates of the 
registrant was approximately $138,757,614 on December 19, 1997, when the 
closing price of such stock, as reported in the American Stock Exchange, was 
$15.06.

     The number of shares outstanding of the registrant's Common Stock, $.001 
par value, as of December 19, 1997 was 9,213,653 shares.

                   ---------------------------------------

                      DOCUMENTS INCORPORATED BY REFERENCE
                                       
1. Certain portions of the Registrant's Annual Report to Stockholders for the
   fiscal year ended September 30, 1997, are incorporated into Part II hereof.

2. Certain portions of the Registrant's Proxy Statement for its Annual Meeting
   of Stockholders to be held on February 20, 1998, which will be mailed on or
   about January 12, 1998, are incorporated into Part III hereof.

------------------------------------------------------------------------------
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<PAGE>

     THIS FORM 10-K CONTAINS FORWARD-LOOKING STATEMENTS REGARDING THE 
COMPANY'S BUSINESS AND PRODUCTS AND THEIR PROJECTED PROSPECTS OR QUALITIES.  
SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES, PARTICULARLY 
THOSE INHERENT IN THE PROCESS OF DISCOVERING AND DEVELOPING DRUGS THAT CAN BE 
PROVEN TO BE SAFE AND EFFECTIVE FOR USE AS HUMAN THERAPEUTICS AND THE 
ENDEAVOR OF BUILDING A BUSINESS AROUND SUCH POTENTIAL PRODUCTS.  ACTUAL 
RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THIS FORM 10-K.  
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE 
NOT LIMITED TO, THOSE DISCUSSED IN THIS FORM 10-K INCLUDING, WITHOUT 
LIMITATION, IN THE SECTION OF ITEM I ENTITLED "RISK FACTORS."  AS A RESULT, 
THE READER IS CAUTIONED NOT TO PLACE RELIANCE ON THESE FORWARD-LOOKING 
STATEMENTS.
                                       
                                    PART 1
                                       
ITEM 1.   BUSINESS

OVERVIEW

     Maxim Pharmaceuticals, Inc. ("Maxim" or the "Company") is developing 
novel therapeutics for the treatment of cancer and infectious disease.  The 
Company's lead drug, MAXAMINE, is designed to offer a safer treatment that 
extends life for seriously ill patients.  In many patients with cancer and 
chronic infectious diseases, the capacity of the patient's immune system to 
detect and destroy tumor cells is compromised.  MAXAMINE THERAPY combines the 
administration of MAXAMINE, which protects critical immune cells, with the 
administration of certain agents which stimulate these immune cells (these 
agents include cytokines and other biological response modifiers).  This 
method of action is designed to allow MAXAMINE THERAPY to improve the immune 
system's ability to identify, disable and destroy malignant or infected 
cells.  The Company believes that MAXAMINE THERAPY has the potential to:  
extend life; reduce toxic side effects of cytokines and other biological 
response modifiers; maintain the patient's quality of life during therapy; 
allow for self-administration at home; and provide cost-effective therapy.

     The Company anticipates that by early 1998 it will be conducting three 
Phase III clinical trials of MAXAMINE THERAPY for the treatment of cancer.  
In June 1997 the Company commenced a 200-patient Phase III clinical trial of 
MAXAMINE THERAPY for advanced malignant melanoma in the United States.  A 
separate international Phase III advanced malignant melanoma trial centered 
in Sweden and Australia commenced in November 1997.  The Company intends 
to commence a Phase III clinical trial for acute myelogenous leukemia ("AML") 
in Europe and the United States in early 1998.  Furthermore, the Company has 
initiated earlier stage clinical trials of MAXAMINE THERAPY for the treatment 
of renal cell carcinoma, hepatitis C, and multiple myeloma, and expects to 
commence clinical trials of MAXAMINE THERAPY for the treatment of additional 
cancers, such as prostate adenocarcinoma, in 1998.  All studies of MAXAMINE 
THERAPY conducted to date have used MAXAMINE in combination with one or both 
of the cytokines interleukin-2 ("IL-2") and interferon-alpha ("IFN-ALPHA"). 
Both IL-2 and IFN-ALPHA are cytokines with the capacity for stimulating 
certain immune functions.

     In the Company's two completed Phase II clinical trials for the 
treatment of advanced malignant melanoma, MAXAMINE THERAPY produced improved 
patient survival outcomes.  Median survival time for patients treated with 
MAXAMINE THERAPY the two studies exceeded 13 and 15 months, respectively, as 
compared with reported median survival times of approximately seven months 
for existing available treatments.  In patients where the melanoma 
metastasized to the liver, MAXAMINE therapy improved median survival time to 
18 months compared to predicted survival times of approximately four months 
for these patients.

     The Company's Phase II clinical trials for the treatment of AML have 
demonstrated an improvement of disease-free remission intervals.  As of 
November 1997, after 23 months of follow-up, 67% of patients treated with 
MAXAMINE THERAPY during their first complete remission ("CR1") remain in 
complete remission; less than 30% would be expected remain in remission under 
current treatments.  Patients who relapsed and achieved a second or greater 
remission ("CR2+") and were subsequently treated with MAXAMINE THERAPY had 

                                       1
<PAGE>

a median time in remission in excess of 20 months as compared with reported 
median time in remission of approximately six months under the current 
standard of care.  Remission inversion (prolonging the duration of CR2+ to 
that equal to or exceeding the patient's prior remission duration) was 
achieved in 9 of 12 (75%) patients treated with MAXAMINE THERAPY as compared 
with approximately 10% to 20% under the current standard of care.

     Maxim is also developing MAXVAX, a mucosal vaccine carrier/adjuvant 
platform.  The MAXVAX technology is based on the B subunit of cholera toxin 
("CTB"), generally regarded as a safe and effective mucosal vaccine carrier. 
The Company expects that its future product development efforts will focus on 
mucosal vaccines against sexually transmitted diseases, major respiratory 
diseases and gastrointestinal tract diseases.  The MAXVAX platform is also 
being evaluated for therapeutic vaccines and gene-based vaccines.  The 
Company intends to seek collaborations with pharmaceutical and 
biopharmaceutical partners for the development of mucosal vaccine candidates.

     Maxim's drug development strategy is designed to facilitate product 
development from preclinical to FDA approval and product launch.  Once a 
product has been launched, Maxim plans to work with numerous collaborators, 
both pharmaceutical and clinical, in the oncology and infectious disease 
communities to extend the labeling of the drug to other indications.  In 
order to market its products effectively, the Company intends to develop 
marketing alliances with corporate partners and may co-promote and/or 
co-market in certain territories.

MAXAMINE IMMUNOTHERAPY PLATFORM

     CANCER MARKET

     Cancer comprises a large and diverse group of diseases resulting from 
the uncontrolled proliferation of abnormal (malignant) cells. Most cancers 
will spread beyond their original sites and invade surrounding tissue and may 
also metastasize to more distant sites and ultimately cause death in the 
patient unless effectively treated. To be effective, cancer treatment must 
target not only the primary tumor site but also distant metastases. CANCER 
FACTS AND FIGURES, a report from the American Cancer Society, estimates that 
a total of approximately 1,380,000 new cases and approximately 560,000 deaths 
will be reported for invasive cancers in the United States in 1997. 
Predominant forms of cancer include leukemia and lymphoma, breast, lung, 
urinary, prostate, melanoma, ovarian, colon, rectal and brain cancers. The 
National Cancer Institute estimates that the direct medical cost of treating 
cancer in the United States is $35 billion per year. Information regarding 
certain cancer indications is summarized below.

       Estimated Incidence for Selected Cancers in the United States for 1997

                                                                Annual
                                                       ----------------------
                                                       New Cases       Deaths
                                                       ---------       ------
Malignant Melanoma .............................          40,000        7,000
Acute Myelogenous Leukemia .....................           9,000        7,000
Prostate Adenocarcinoma ........................         335,000       42,000
All Invasive Cancers ...........................       1,380,000      560,000

     The Company estimates that the size of the anti-cancer pharmaceutical 
market in Europe is approximately equivalent to the U.S. market.

     Predominant methods of treating cancer generally include surgery, 
radiation therapy, chemotherapy and immunotherapy.  Although these techniques 
have achieved success for certain cancers, particularly when detected in the 
early stages, each has drawbacks which may significantly limit their success 
in treating certain types and stages of cancer.  For example, cancer may 
recur even after repeated attempts at surgical removal of tumors or other 
treatment. Surgery may be successful in removing visible tumors but may leave 
smaller nests of cancer cells in the patient which continue to proliferate.  
Radiation or chemotherapy are relatively imprecise methods for the 
destruction of cancer cells (i.e., such therapies can kill both cancer cells 
and normal cells) and 

                                       2
<PAGE>

have toxic side effects which may themselves be lethal to the patient; these 
toxic side effects may also restrict the application of these treatment modes 
to less than optimal levels required to ensure eradication of the cancer.

     The high number of cancer-related deaths indicate the need for more 
efficacious therapies for many patients.  In addition, the Company believes 
that new cancer therapies will increasingly be required to be more 
cost-effective and allow for alternate site or in-home treatment and to 
improve patient quality of life during treatment.

HEPATITIS C MARKET

     The U.S. Centers for Disease Control and Prevention estimates that 
approximately four million Americans are infected with the hepatitis C virus 
("HCV").  Approximately 85% of HCV patients develop long-term or chronic 
infection, possibly leading to serious liver diseases, cirrhosis (scarring of 
the liver), liver cancer and death.  HCV is the leading cause of liver cancer 
and the primary reason for liver transplantation in the United States.  The 
World Health Organization and other sources estimate that approximately 60 
million people are chronically infected worldwide.  The only approved 
treatment for HCV is IFN-ALPHA. However, IFN-ALPHA therapy results in sustained,
long-lasting responses in only about 10-15% of chronically infected persons.

IMMUNE SYSTEM MODULATION AGAINST CANCER AND INFECTIOUS DISEASES

     In recent years, research has focused on the immune system's ability to 
combat cancer and infectious diseases.  New drugs, vaccines, chemotherapeutic 
agents and advanced radiation therapy technologies are continually being 
developed to protect and enhance the response of the immune system to 
disease. Many of these technologies, however, have demonstrated significant 
limitations in their ability to treat cancer and certain infectious agents.  
These limitations include marginal efficacy, severe adverse side effects and 
the development of multi-drug resistance.

     Since the early 1980's, the cytokines IL-2 and IFN-ALPHA have been studied 
for the treatment of many cancers and infectious diseases including advanced 
malignant melanoma, renal cell carcinoma, hepatitis C and AML.  Cytokines are 
naturally occurring molecules that have potent effects related to 
inflammation and immune cell functions.  The medical community held high 
expectations for IL-2 and IFN-ALPHA in the treatment of cancer and infectious 
diseases based on findings that these cytokines enhance the anti-tumor 
activity of natural killer-cells ("NK-cells") IN VITRO (NK-cells are a 
specialized subset of cells which can function to destroy cancer cells and 
virally infected cells). Although certain beneficial effects were 
demonstrated with IL-2 and IFN-ALPHA therapy in both experimental animals and in
the killing activity of human NK-cells IN VITRO, in only a small portion of 
cancer patients do these cytokines demonstrate a clinically significant tumor 
response.  Further, in chronically infected hepatitis C patients, IFN-ALPHA 
therapy results in sustained, long-lasting responses in only about 10-15% of 
these cases.  Moreover, cytokines generally produce severe adverse 
side-effects and are intolerable at high doses.

MAXAMINE TECHNOLOGY

     The scientific foundation for MAXAMINE THERAPY is based on discoveries 
by the Company's scientists at the University of Goteborg, Sweden.  MAXAMINE, 
based on a naturally occurring molecule and important immune system 
mechanism, was developed to preserve the functions of two kinds of immune 
cells, the natural killer-cells (NK-cells) and T-cells, both of which possess 
an ability to kill and support the killing of cancer cells and virally 
infected cells.

     The killing activity of NK-cells and T-cells can be stimulated by 
certain agents such as the cytokines, naturally occurring proteins.  The 
cytokines IL-2 and IFN-ALPHA have been studied and used for the treatment of 
many cancers and infectious diseases, but results have been largely 
disappointing in most indications.  Maxim's research may explain in part why 
cytokine therapy using IL-2 or IFN-ALPHA alone has demonstrated limited 
efficacy. Phagocytic cells, present in large quantities at the site of malignant
cell growth, may inhibit the tumor-killing activity of NK-cells and T-cells by 
releasing reactive oxygen 

                                       3
<PAGE>

metabolites (ROM's).  ROM's induce self-destruction (apoptosis) of NK-cells 
and T-cells, preventing the NK-cells and T-cells from attacking the tumor and 
thus limiting the potential therapeutic effect of cytokines.

     Maxim researchers have discovered that when MAXAMINE binds to the type-2 
histamine receptor (H(2) receptor) on the surface of phagocytic cells, it can 
block the production of ROMs, resulting in enhanced activation of NK-cells 
and T-cells.  MAXAMINE THERAPY combines MAXAMINE'S preservation of NK and 
T-cell function with the stimulation of these functions by cytokines or other 
biological response modifiers.

     Because MAXAMINE increases the effectiveness of cytokines, lower doses 
of cytokines such as IL-2 and IFN-ALPHA can be used in MAXAMINE THERAPY without 
compromising the therapeutic effectiveness, thereby reducing side effects 
which can lead to the maintenance of the patient's quality of life.  The 
Company expects that MAXAMINE THERAPY will ultimately encompass the 
combination of MAXAMINE and a broad range of cytokines and other biological 
response modifiers (agents designed to stimulate the immune system).

BENEFITS OF MAXAMINE

     The Company believes that MAXAMINE may be integral in the growing trend 
toward combination therapy for certain cancers and infectious diseases and 
may offer a number of important clinical and commercial advantages relative 
to current therapies or approaches including:

     -    EXTENDING LIFE.  The Company's preliminary clinical data has 
          provided evidence of improved therapeutic efficacy (extended 
          survival and remission intervals) over approved therapies or 
          standards of care.  In addition, the combination therapy may extend 
          the range of indications for the use of cytokine therapies in both 
          cancer and infectious diseases.

     -    MAINTAINING QUALITY OF LIFE.  MAXAMINE THERAPY reduces toxic side 
          effects of cytokines and other biological response modifiers, 
          thereby allowing the maintenance of the patient's quality of life 
          during therapy.

     -    OUTPATIENT ADMINISTRATION.  MAXAMINE therapy can be 
          self-administered on an outpatient basis, subcutaneously, rather 
          than the in-hospital administration required for other therapies.

     -    COST EFFECTIVE.  By utilizing a lower dose of IL-2 or IFN-ALPHA, the 
          cost to the patient may be reduced below existing treatment 
          regimens.  In addition, MAXAMINE THERAPY is designed to be 
          delivered on an outpatient basis rather than in-hospital.

MAXAMINE CLINICAL TRIAL STATUS

     A number of clinical trials of MAXAMINE THERAPY have been initiated or 
are planned by the Company in the near future.  By early 1998, the Company 
expects to have commenced three Phase III clinical trials for MAXAMINE 
THERAPY in various countries around the world, any one of which, if 
successful, could provide data necessary to file for the approval to market 
MAXAMINE in certain countries.  The table below sets forth the disease 
indications currently targeted or planned to be targeted by the Company.  No 
assurance can be given that the Company will be able to commence planned 
clinical studies within the time frames set forth below, if at all.  
Moreover, the Company cannot predict when clinical studies for all of the 
indications set forth below will be completed or whether the results of such 
studies will support the filing of NDAs or the equivalent.  See "Risk 
Factors--No Assurance of Successful Clinical Trials and Product Development."

                                       4
<PAGE>

                  MAXAMINE THERAPY Clinical Trial Status

<TABLE>
<CAPTION>
       Indication                                    Phase           Status                Location
       ----------                                    -----           ------                --------
<S>                                            <C>                 <C>                     <C>
Advanced Malignant Melanoma                    Phase III trial     Ongoing                 United States
                                               Phase III trial     Ongoing                 Sweden and Australia
                                               Phase II trial      Ongoing                 Sweden
Acute Myelogenous Leukemia                     Phase II trial      Ongoing                 Sweden
                                               Phase III trial     Planned for early 1998  Europe and United States
Renal Cell Carcinoma                           Phase I/II trial    Ongoing                 Sweden
Multiple Myeloma                               Phase I/II trial    Ongoing                 Sweden
Hepatitis C                                    Phase I trial       Ongoing                 Sweden
                                               Phase II trial      Planned for 1998        United States
Prostate Adenocarcinoma                        Phase I trial       Planned for 1998        United States
</TABLE>

     ADVANCED MALIGNANT MELANOMA

     The Company's initial Phase II clinical trial was conducted in Sweden at 
the Sahlgrenska University Hospital in Goteborg in which fifteen patients 
with advanced metastatic malignant melanoma were treated with a high-dose 
regimen of IL-2 together with daily injections of IFN-ALPHA in five-day cycles. 
Eight of the patients were also given MAXAMINE THERAPY, which consisted of 
MAXAMINE injections twice daily in combination with treatment with IL-2 and 
IFN-ALPHA.

     The results of the initial Phase II clinical trial indicated that 
MAXAMINE may be given as an effective adjuvant to IL-2/IFN-ALPHA therapy.  In 
the seven patients who did not receive MAXAMINE THERAPY, one partial response 
(defined as a 50% reduction of the total tumor burden) was observed in a 
patient with skin and lymph node melanoma.  In the eight patients treated 
with MAXAMINE THERAPY, four partial and two mixed responses were observed.  
Notably, two of the MAXAMINE THERAPY patients had complete resolution of 
their extensive liver metastases.  Sites of response in MAXAMINE THERAPY 
patients also included skin, lymph nodes, skeleton, spleen and muscle.  In 
patients receiving MAXAMINE THERAPY, there was a statistically significant 
improvement in overall survival (p  LESS THAN  0.03).  The MAXAMINE THERAPY 
patients had a mean survival of 13.3 months, more than double the mean 6.8 
month survival in the control group.  One patient remains completely free of 
detectable disease more than four years after the onset of MAXAMINE THERAPY.

     A second advanced malignant melanoma study was undertaken at the 
Sahlgrenska University Hospital in Sweden to determine if MAXAMINE THERAPY 
consisting of a lower-dose regimen of the same cytokines (IL-2 and IFN-ALPHA) in
combination with the same doses of MAXAMINE would retain the efficacy seen 
previously while reducing the side effects of the cytokine portion of the 
treatment.  In addition to survival, a goal for MAXAMINE THERAPY is to lower 
toxicity of immunotherapy and thus maintain the patients' quality of life. 
Lowering the doses of the cytokines reduces many of the side effects of these 
drugs, thereby facilitating tolerance of the therapy and even allowing 
self-administration of the drugs at home.  The median survival time of 
patients with advanced (stage IV) malignant melanoma using conventional 
treatments is historically reported to be seven months.  In this second, 
low-dose malignant melanoma study, 11 patients had a median survival time of 
15 months, more than double the rate generally reported for the normal course 
of the disease and exceeding the favorable results from the high-dose study 
described above.  In this second malignant melanoma clinical trial MAXAMINE 
THERAPY was well-tolerated and most patients were able to treat themselves at 
home.

     A third Phase II advanced malignant melanoma trial of stage IV patients 
is ongoing in Sweden using MAXAMINE in combination with IL-2 and IFN-ALPHA. In 
aggregate, MAXAMINE THERAPY has now been studied in three Phase II trials in 
a total of 31 patients with stage IV malignant melanoma.  In each of the 
first two trials the median survival time has exceeded 14 months compared to 
reported medians of seven months for conventional treatments.  In addition, 
of the seven patients having liver metastases, treatment with MAXAMINE 

                                       5
<PAGE>

THERAPY was shown to significantly improve survival outcome (median of 18 
months survival as a group) compared to the predicted four months survival 
time for these patients.

     A multi-center Phase III clinical trial of MAXAMINE THERAPY in the 
United States for the treatment of advanced malignant melanoma commenced in 
June 1997. In this clinical trial, advanced malignant melanoma patients are 
being treated with a combination of MAXAMINE and IL-2, while patients in the 
control group are being treated with IL-2 alone.  The primary endpoint of the 
study is overall patient survival, and the secondary endpoints include time 
to progression, tumor response rate, duration of response and quality of 
life. The enrollment objective for the study is 200 evaluable patients, 100 
in each arm.  The study will ultimately be conducted in 25 or more centers in 
the United States.

     A second international Phase III trial of MAXAMINE THERAPY for the 
treatment of advanced malignant melanoma centered in Sweden and Australia 
commenced in November 1997.  The trial will ultimately be performed in 
approximately 8-10 clinical centers in Sweden and a similar number of sites 
in Australia.  Patients in the MAXAMINE THERAPY arm will receive a 
co-administration of MAXAMINE plus low-dose IL-2 and IFN-ALPHA, while patients 
in the control arm will receive dacarbazine (DTIC), the most commonly used 
chemotherapeutic agent for the treatment of advanced malignant melanoma which 
has a reported survival benefit of 6-7 months in advanced malignant melanoma 
patients.  The international study will be designed to encompass 200 
evaluable patients.

     ACUTE MYELOGENOUS LEUKEMIA ("AML")

     Once diagnosed with AML, patients are typically treated with 
chemotherapy to attain remission, yet 75-80% of these patients will relapse 
and require additional chemotherapy.  The standard of care once a patient is 
in remission, however, is no further treatment.  Historically, patients in 
their first complete remission ("CR1") remain in disease-free remission for a 
median time of approximately 12 months. Unfortunately 75-80% of patients in 
their first CR ("CR1") will relapse, usually within a year.  A subsequent CR 
("CR2"), if achieved following chemotherapy or other treatment, normally has 
a shorter duration, approximately 50% of the length of the prior CR.  Less 
than 5% of patients who have relapsed survive long term.

     In Phase II clinical trials conducted in Sweden, 30 patients with AML in 
complete remission have been evaluated to date in a clinical trial wherein 
they were given outpatient MAXAMINE THERAPY.  The objective of the study is 
to treat AML patients in remission with MAXAMINE and low doses of IL-2 to 
prevent relapse and prolong disease-free survival while maintaining a good 
quality of life during treatment.

     As of November 1997, after 23 months of follow-up, 67% of patients 
treated with MAXAMINE THERAPY during their first complete remission ("CR1") 
remain in complete remission; less than 30% would be expected remain in 
remission under standard treatments.  Patients who relapsed and achieved a 
second or greater remission ("CR2+") and were subsequently treated with 
MAXAMINE THERAPY had a median time to relapse in excess of 20 months as 
compared with reported median time to relapse of approximately six months 
under the current standard of care. Remission inversion (prolonging the 
duration of CR2+ to that equal to or exceeding the patient's prior remission 
duration) was achieved in 9 of 12 (75%) patients treated with MAXAMINE 
THERAPY as compared with approximately 10% to 20% under the current standard 
of care.  Interim results from this study were included in a paper published 
in LEUKEMIA AND LYMPHOMA in November 1997.

     The above findings for patients in CR2+ may be compared to those in a 
study published in 1994 in which non-bone marrow transplanted patients were 
treated with IL-2 alone.  In that study, remission inversion was achieved 
with IL-2 alone in only 2 of 29 AML patients, or 7%, and time in CR2+ 
averaged less than six months (compared to 76% and a median of 20 months for 
MAXAMINE THERAPY patients as reported above).  In addition, data collected in 
Gothenburg, Sweden from 1976 to 1994 representing the natural course for this 
disease reported a 9% remission inversion and a mean remission time of only 
five and one-half months.

     An international Phase III clinical trial of MAXAMINE THERAPY for the 
treatment of AML is planned to commence in early 1998 based upon the results 
of the data for the ongoing Phase II study.  The Company 

                                       6
<PAGE>

currently plans to include clinical sites in both Europe and the United 
States and to enroll approximately 300 patients.

     HEPATITIS C (HCV)

     In mid-1997 the Company initiated a Phase I clinical trial of MAXAMINE 
THERAPY for the treatment of HCV.  The Company expects to treat up to 15 HCV 
patients with a combination of MAXAMINE and IFN-ALPHA.  Response to the therapy 
will be measured through an evaluation of specific liver function tests and 
viral burden.  The objective of the trial will be to determine if MAXAMINE 
THERAPY is safe and can demonstrate clinical responses among previously 
IFN-ALPHA-resistant HCV patients.  The study is being conducted in Gothenburg, 
Sweden.  The Company expects to start a Phase II trial of MAXAMINE THERAPY in 
hepatitis C in the United States in 1998.

MAXVAX MUCOSAL VACCINE CARRIER/ADJUVANT PLATFORM

     OVERVIEW OF VACCINE MARKET AND INFECTIOUS DISEASES

     There remains today a broad range of infectious diseases for which no 
therapies currently exist.  One of the most promising areas in the fight 
against such diseases is the development of vaccines.  Recent trends in the 
delivery of health care in the United States, including an increased emphasis 
on preventive health care, have contributed to significant growth of interest 
in disease prevention and development of the vaccine market.  Immunization 
has long been recognized as an effective means to decrease health care costs 
through disease prevention and is one of the key areas given priority 
attention by the United States Department of Health and Human Services and 
the World Health Organization in their respective public health service 
publications.  In 1992, revenues for the total world human vaccine market 
totaled $1.8 billion, with the U.S. and Europe comprising 75% of the market.  
It is estimated that by 1999, the total world market for human vaccine 
products will have more than tripled to $5.3 billion and is anticipated to 
grow in excess of 20% per year.

     MUCOSAL MEMBRANES - A FIRST-LINE DEFENSE

     The mucosal membranes (which line the nasal compartment and sinuses, 
eyes, ears, oral cavity, respiratory tract, gastrointestinal tract and 
urogenital tract) represent the body's first line defense against infections 
and are the sites where most infectious agents enter the body.  Examples of 
infectious pathogens which enter the body through the mucosal membranes are 
chlamydia, herpes simplex viruses and HIV, which cause sexually transmitted 
diseases; respiratory syncytial virus ("RSV"), pneumococcus and streptococcus 
which cause respiratory diseases; and HELICOBACTER PYLORI (ulcers) and 
rotavirus (diarrhea) which causes gastrointestinal diseases.  There has been 
a long-standing interest in developing mucosal vaccines against these and 
other important infections.
     
     MAXVAX SYSTEM--MUCOSAL VACCINE CARRIER/ADJUVANT PLATFORM

     MAXVAX is a mucosal vaccine carrier/adjuvant platform based on the 
cholera toxin B subunit ("CTB").  CTB has already been administered to 
hundreds of thousands of patients worldwide and is a major component of an 
existing oral cholera vaccine and traveler's diarrhea vaccine.  Most current 
vaccines have been designed to provide systemic immunity administered through 
injection. They treat or prevent infection only after the infecting organism 
has entered the blood stream or deep tissues of the body.  The mechanisms 
which induce mucosal immunity appear to be distinct from those that protect 
systemically. The Company believes that the MAXVAX approach to therapeutic 
and protective vaccines has the potential to elicit both mucosal and systemic 
immunity by delivering antigens directly to the mucosal system.  By combining 
the Company's proprietary recombinant form of CTB with vaccine antigens 
and/or genes, the Company believes that it will be able to develop effective, 
new mucosal-based vaccines.

     POTENTIAL BENEFITS OF MUCOSAL IMMUNIZATION USING MAXVAX

     The Company's MAXVAX approach to therapeutic and protective vaccines has 
been shown to elicit both mucosal and systemic immunity and is based upon 
"non-injectable" administration.  The Company 

                                       7
<PAGE>

believes that there are numerous important clinical and commercial advantages 
to mucosal immunization compared with traditional injected vaccine products, 
including:

     -    GREATER CLINICAL EFFICACY.  The body's largest defense system 
          against disease is the mucosal immune system where most infectious 
          agents enter the body.  The Company believes that its mucosal 
          vaccine platform may likely result in mucosal and systemic immune 
          stimulation and could more effectively prevent or treat most 
          infectious diseases, as compared to traditional injected vaccines.

     -    HIGHER LEVEL OF SAFETY.  CTB-based vaccines have been administered 
          to hundreds of thousands of patients worldwide in clinical trials 
          for the cholera and traveler's diarrhea.  CTB is widely thought to 
          be a safe and effective mucosal vaccine carrier.

     -    LOWER COST OF ADMINISTRATION.  The administration of the Company's 
          products by oral, nasal and topical applications involving direct 
          contact with mucosal surfaces may not require patients to go to 
          clinics nor will it require trained personnel, thereby effectively 
          lowering the cost of administration.  The vaccines may be 
          prescribed by a doctor and dispensed by a pharmacy, thus 
          simplifying delivery and eliminating the multiple office visits 
          required for injection delivery of most contemporary vaccines.

     -    IMPROVED VACCINE UTILIZATION.  Maxim believes that the relative 
          ease of administration and the concept of "prescription" vaccines 
          may improve vaccine utilization over traditionally administered 
          vaccines. Further, the Company believes that this novel mucosal 
          vaccine concept may allow development of protective and therapeutic 
          approaches to diseases where previous vaccines and therapeutics 
          have failed.

     The MAXVAX technology is currently in preclinical development.  The 
Company has expanded its internal research and development efforts with 
emphasis on a mucosal vaccine against chlamydia and a mucosal vaccine against 
diphtheria.  In addition, the Company has ongoing programs related to 
gene-based vaccines and potential therapeutic vaccines.  The chlamydia 
vaccine utilizes the Company's gene-fusion technology and is nearing a 
prototype for animal testing.  This program also includes an ongoing human 
Phase I study addressing appropriate routes of administration (nasal, oral, 
vaginal), dosing and immune response using the MAXVAX carrier alone.  The 
results of this human study is expected to be published in a scientific 
journal.  The Company intends to seek collaborations with pharmaceutical and 
biopharmaceutical companies for the discovery and development of vaccine 
candidates of market interest.

     The MAXVAX technology represents an early stage discovery and 
development program.  As with any such program, substantial additional 
research and development will be necessary in order for the Company or its 
partners to develop products based on the technology, and there can be no 
assurance that the Company's research and development efforts will lead to 
development of products that are shown to be safe and effective in clinical 
trials and are commercially viable.  See "Risk Factors--No Assurance of 
Successful Clinical Trials and Product Development."

PRODUCT DEVELOPMENT AND COLLABORATIVE RELATIONSHIPS

     The Company conducts its research and other product development efforts 
through a combination of its internal research staff and collaborative 
programs.  For MAXAMINE, the Company relies upon its clinical management 
personnel along with arrangements with universities and other clinical 
research sites, contract research organizations and similar institutions and 
persons for a significant portion of its product development efforts.  The 
majority of the basic research and development efforts related to MAXVAX were 
transferred to the Company's internal laboratories during 1997, although the 
Company expects to rely more heavily on pharmaceutical company collaborative 
relationships as product development advances.

                                       8
<PAGE>

     The Company has relied upon licensing and other transactions to gain 
access to certain of its proprietary technologies.  Conduct of the Company's 
current and planned clinical trials of MAXAMINE THERAPY relies upon 
contractual relationships with universities and other clinical trial sites, 
contract research organizations, home nursing organizations, and regulatory 
and other consultants.  The Company's strategy for development, 
commercialization and marketing of MAXAMINE and MAXVAX will involve, where 
appropriate, the establishment of marketing and other collaborative 
relationships with pharmaceutical industry partners.  The Company intends to 
seek collaborative relationships in certain targeted development areas, 
particularly in situations where the Company believes that the clinical 
testing, marketing, manufacturing and other resources of pharmaceutical 
collaborators will enable it to more effectively access particular products 
or geographic markets.

MARKETING AND SALES

     The Company expects to enter into an alliance with one or more 
pharmaceutical companies to market MAXAMINE and to assist with funding of 
certain portions of the clinical development efforts.  The Company is 
currently in discussions with potential collaborative marketing partners, 
although there can be no assurance that any such relationships can be 
consummated, or that any such relationships will be consummated under terms 
favorable to the Company. See "Risk Factors--No Marketing and Sales 
Capacities; Anticipated Dependence Upon Marketing Alliances."

     The treatment of cancer is a highly specialized activity in which the 
approximately 3,500 practicing oncologists in the United States tend to be 
concentrated in major medical centers.  The Company's marketing strategy for 
MAXAMINE may include co-promotion or co-marketing of the product with the 
Company's future marketing partners.

     Due to the nature of the vaccine markets, the Company intends to 
establish licensing arrangements with pharmaceutical companies with large 
distribution systems for MAXVAX and does not expect to establish a direct 
sales capability in the vaccine area.

MANUFACTURING

     There are a number of facilities with FDA Good Manufacturing Practice 
("GMP") approval available for contract manufacturing of the MAXAMINE 
product. The Company does not intend to acquire or establish its own 
dedicated manufacturing facilities for MAXAMINE in the foreseeable future.  
The Company's strategy has been, and is expected to continue, to contract 
with established pharmaceutical manufacturers for the production of MAXAMINE. 
 The CTB protein portion of MAXVAX is currently being produced by SBL Vaccin 
AB ("SBL"), Stockholm, Sweden, under GMP through a system suitable for 
large-scale industrial production.

     The Company believes that, in the event of the termination of an 
agreement with any single supplier or manufacturer, the Company would likely 
be able to enter into agreements with other suppliers and/or manufacturers on 
similar terms.  However, there can be no assurance that there will be 
manufacturing capacity available to the Company within the timelines and at 
quantities required.  See "Risk Factors--No Manufacturing Capabilities."

PATENTS, LICENSES AND PROPRIETARY RIGHTS

     The Company holds five issued or allowed patents and has six patent 
applications pending in the United States.  In addition, the Company holds 
license rights to one issued patent and three patent applications pending in 
the United States.  Corresponding patent applications have been filed, and in 
certain instances patents have been issued, in major international markets.  
It is the Company's policy to file, where possible, patent applications to 
protect technologies, inventions and improvements that are important to the 
development of its business.  Maxim's management has devoted substantial 
attention and resources to the Company's patent and license portfolio to 
obtain the strongest positions available.  Maintaining patents and licenses 
and conducting an assertive patent prosecution strategy is a high priority of 
the Company.

                                       9
<PAGE>

     KEY GRANTED PATENTS AND PENDING APPLICATIONS

     The Company holds a patent relating to the combination of IL-2 and H2 
receptor agonists ("H2RA's") that was issued by the U.S. Patent and Trademark 
Office in September 1994 and has additionally been granted in Europe and 
Australia.  The Company holds a patent application relating to the 
combination of IFN-ALPHA and HRA's which was allowed by the U.S. Patent and 
Trademark Office in July 1997 and has also issued in Australia.  The Company 
also holds four other patent applications in the United States relating to 
other cytokines, biotherapies, mechanisms, rates and routes of 
administration, and uses which have also been filed internationally.

     Maxim holds a worldwide exclusive license to Vitec AB ("Vitec") and 
SBL's U.S. and international patents for recombinantly producing CTB for use 
in infectious diseases other than cholera, bacterial related diarrheas and 
HIV (the Company holds non-exclusive rights to this patent with regard to 
HIV). The Company also holds exclusive license rights to related patent 
applications as well as a patent application with respect to certain 
therapeutic and anti-inflammatory properties of CTB.

     A patent application has been filed by the Company in the U.S. Patent 
and Trademark Office covering use of CTB to make vaccines against chlamydia 
and other sexually transmitted diseases.  The Company has filed a U.S. patent 
application for the use of CTB and other proteins in gene delivery of DNA or 
RNA.

     MAXAMINE TECHNOLOGY RIGHTS

     In 1993, the Company entered into a technology transfer agreement 
pursuant to which the Company purchased the core intellectual property and 
patent rights related to its MAXAMINE technology.  The technology transfer 
agreement requires that the Company pay certain royalty obligations to 
inventors of the technology.  The Company has also filed additional patent 
applications and received additional patents encompassing the MAXAMINE 
technology.

     MAXVAX LICENSES AND TECHNOLOGY RIGHTS

     In 1993, the Company entered into an option and license agreement with 
Vitec and SBL, pursuant to which the Company exercised an option for an 
exclusive, worldwide license to technology related to CTB for use in a 
chlamydia vaccine.  Under the agreement, the Company is required to use its 
best efforts to engage SBL to manufacture any products which result from the 
application of the licensed technology.  The Company has to make royalty 
payments on the net sales of products using the licensed technology and to 
make additional license and milestone payments to Vitec upon the execution of 
any sub-licenses.  Pursuant to the agreement, any party may terminate the 
license agreement, with respect to the rights and duties of that party, as a 
result of a material breach of the agreement by another party.

     In 1994, the Company entered into a second license agreement with Vitec 
and SBL for an exclusive, worldwide license to technology rights related to 
CTB for all infectious diseases except chlamydia (which is governed by the 
agreement discussed above), HIV (which is governed by a separate 
non-exclusive sub-license agreement held by the Company), cholera and 
bacterial-related diarrheas.  Under the agreement, the Company has agreed to 
use its best efforts to engage SBL to manufacture any products which result 
from the application of licensed technology, and both Vitec and the Company 
shall receive a percentage of any profits that SBL derives from manufacturing 
such products.  The licensors may terminate the agreement upon a material 
breach of the agreement by the Company.

     The Company has asked Active i Malmo AB (publ) ("Active"), SBL's recent 
acquirer, to address concerns regarding SBL's performance under the 1994 
license agreement, including (i) the transfer of technical information and 
materials to Maxim as required by the license agreement, (ii) disclosure of 
all improvements to the technology licensed to Maxim as required by the 
license agreement and (iii) cessation of any activities which conflict with 
Maxim's rights under the license agreement.  The Company is currently

                                      10
<PAGE>

discussing resolution of the matter with Active.  The Company cannot 
determine what impact, if any, an unfavorable resolution of the existing 
concerns would have on the commercial value of the CTB technology.

     The Company holds other licenses relating to CTB, including a 
non-exclusive sub-license to CTB for the prevention and treatment of HIV 
infection, and an exclusive, worldwide license to patent applications and 
related technology rights with respect to certain therapeutic and 
anti-inflammatory properties of CTB.

GOVERNMENT REGULATION

     Regulation by governmental authorities in the United States and other 
countries is a significant factor in the development, manufacture and 
marketing of the Company's proposed products and in its ongoing research and 
product development activities.  The nature and extent to which such 
regulation applies to the Company will vary depending on the nature of any 
products which may be developed by the Company.  It is anticipated that all 
of the Company's products will require regulatory approval by governmental 
agencies prior to commercialization.  In particular, human therapeutic and 
vaccine products are subject to rigorous preclinical and clinical testing and 
other approval procedures of the U.S. Food and Drug Administration ("FDA") 
and similar regulatory authorities in European and other countries.  Various 
governmental statutes and regulations also govern or influence testing, 
manufacturing, safety, labeling, storage and record- keeping related to such 
products and their marketing.  The process of obtaining these approvals and 
the subsequent compliance with appropriate statutes and regulations require 
the expenditure of substantial time and financial resources.  Any failure by 
the Company or its collaborators to obtain, or any delay in obtaining, 
regulatory approval could adversely affect the marketing of any products 
developed by the Company, its ability to receive product revenues and its 
liquidity and capital resources. See "Risk Factors--No Assurance of 
Regulatory Approval; Government Regulation."

     FDA APPROVAL PROCESS

     Prior to commencement of clinical studies involving human beings, 
preclinical testing of new pharmaceutical products is generally conducted on 
animals in the laboratory to evaluate the potential efficacy and the safety 
of the product.  The results of these studies are submitted to the FDA as a 
part of an Investigational New Drug ("IND") application, which must become 
effective before clinical testing in humans can begin.  Typically, clinical 
evaluation involves a time consuming and costly three-phase process.  In 
Phase I, clinical trials are conducted with a small number of subjects to 
determine the early safety profile, the pattern of drug distribution and 
metabolism.  In Phase II, clinical trials are conducted with groups of 
patients afflicted with a specific disease in order to determine preliminary 
efficacy, optimal dosages and expanded evidence of safety.  In Phase III, 
large-scale, multi-center, comparative trials are conducted with patients 
afflicted with a target disease in order to provide enough data to 
demonstrate the efficacy and safety required by the FDA.  The FDA closely 
monitors the progress of each of the three phases of clinical testing and 
may, at its discretion, re-evaluate, alter, suspend or terminate the testing 
based upon the data which have been accumulated to that point and its 
assessment of the risk/benefit ratio to the patient.

     The results of the preclinical and clinical testing on a non-biologic 
drug and certain diagnostic drugs are submitted to the FDA in the form of a 
New Drug Application ("NDA") for approval prior to commencement of commercial 
sales.  In the case of vaccines, the results of clinical trials are submitted 
as a Product License Application ("PLA").  In responding to an NDA or PLA, 
the FDA may grant marketing approval, request additional information or deny 
the application if the FDA determines that the application does not satisfy 
its regulatory approval criteria.  There can be no assurance that approvals 
will be granted on a timely basis, if at all.  Similar procedures are in 
place in countries outside the United States.

     The FDA has issued "fast-track" regulations intended to accelerate the 
approval process for the development, evaluation and marketing of new 
therapeutic products used to treat life-threatening and severely debilitating 
illnesses, especially those for which no satisfactory alternative therapies 
exist.  "Fast- track" designation affords the Company early interaction with 
the FDA in terms of protocol design and permits, although it does not 
require, the FDA to grant approval after completion of Phase II clinical 
trials.  On March 29, 1996, the FDA announced further intentions to 
accelerate the approval for cancer therapeutics.  The

                                      11
<PAGE>

FDA's cancer drug initiative consists of specific requirements and elements 
including accelerated approval for cancer drugs, expanded access for drugs 
approved in other countries and facilitating additional uses of approved 
cancer drugs.  Further, the FDA has stated that it will increase its 
proactive role in ensuring cancer drugs become available to patients by 
soliciting applications for U.S. approval for products approved overseas and, 
for the first time, taking international regulatory approvals into 
consideration.  The FDA has previously accepted data generated in clinical 
trials from Sweden for incorporation in NDAs filed in the United States.  The 
Company believes that a number of its product candidates may fall under these 
regulations, but there can be no assurance that any of the Company's products 
will receive this or other similar regulatory treatment.

     The Advisory Committee of Immunization Practices ("ACIP") of the Centers 
for Disease Control and Prevention ("CDCP") has a role in setting the market 
for most, if not all, of the vaccine products Maxim intends to make.  The 
ACIP meets quarterly to review developing data on licensed vaccines, and 
those approaching license, as well as epidemiologic data on the need for 
these products.  The recommendations of the ACIP on the appropriate use of 
vaccines and related products are published in the MORBIDITY AND MORTALITY 
WEEKLY REPORT and reprinted in several journals.  The CDCP develops 
epidemiological data in support of the need for new vaccines and monitors 
vaccine usage and changes in disease incidence.  In addition, CDCP staff 
frequently act as key advisors to the FDA in their review process.

     EUROPEAN AND OTHER REGULATORY APPROVAL

     Whether or not FDA approval has been obtained, approval of a product by 
comparable regulatory authorities in Europe and other countries will likely 
be necessary prior to commencement of marketing the product in such 
countries. The regulatory authorities in each country may impose their own 
requirements and may refuse to grant, or may require additional data before 
granting, an approval even though the relevant product has been approved by 
the FDA or another authority.  As with the FDA, the European Union ("EU") 
countries and other developed countries have very high standards of technical 
appraisal and, consequently, in most cases a lengthy approval process for 
pharmaceutical products.  The process for gaining such approval in particular 
countries varies, but generally follows a similar sequence to that described 
for FDA approval.  In Europe, the European Committee for Proprietary 
Medicinal Products provides a mechanism for EU-member states to exchange 
information on all aspects of product licensing and assesses license 
applications submitted under two different procedures (the multi-state and 
the high-tech concentration procedures).  The EU has established a European 
agency for the evaluation of medical products, with both a centralized 
community procedure and a decentralized procedure, the latter being based on 
the principle of mutual recognition between the member states.

      OTHER REGULATIONS

     The Company is also subject to various U.S. federal, state and local and 
international laws, regulations and recommendations relating to safe working 
conditions, laboratory manufacturing practices and the use and disposal of 
hazardous or potentially hazardous substances, including radioactive 
compounds and infectious disease agents, used in connection with the 
Company's research work.  The extent of government regulation which might 
result from future legislation or administrative action cannot be predicted 
accurately.

THIRD-PARTY REIMBURSEMENT

     The business and financial condition of pharmaceutical and biotechnology 
companies will continue to be affected by the efforts of government and 
third-party payors to contain or reduce the cost of health care through 
various means.  For example, in certain international markets pricing 
negotiations are often required in each country of the European Community, 
even if approval to market the drug under the European Medical Evaluation 
Authority's centralized procedure is obtained.  In the U.S., there have been, 
and the Company expects that there will continue to be, a number of federal 
and state proposals to implement similar government control. In addition, an 
increasing emphasis on managed care in the U.S. has and will continue to 
increase the pressure on pharmaceutical pricing.  While the Company cannot 
predict whether any such legislative or regulatory proposals will be adopted 
or the effect such proposals or managed care efforts may have on its 
business, the announcement of such proposals or efforts could have a material 
adverse effect on the

                                      12
<PAGE>

Company's ability to raise capital, and the adoption of such proposals or 
efforts could have a material adverse effect on the Company's business, 
financial condition and results of operations.  Further, to the extent that 
such proposals or efforts have a material adverse effect on other 
pharmaceutical companies that are prospective corporate partners for the 
Company, the Company's ability to establish a strategic alliance may be 
adversely affected.  In addition, in both the U.S. and elsewhere, sales of 
prescription pharmaceuticals are dependent in part on the availability of 
reimbursement to the consumer from third-party payors, such as government and 
private insurance plans that mandate predetermined discounts from list 
prices.  In addition, third-party payors are increasingly challenging the 
prices charged for medical products and services. If the Company succeeds in 
bringing one or more products to the market, there can be no assurance that 
these products will be considered cost effective and that reimbursement to 
the consumer will be available or will be sufficient to allow the Company to 
sell its products on a competitive basis.

COMPETITION

     Competition in the discovery and development of methods for treating or 
preventing cancer and infectious disease is intense.  Numerous 
pharmaceutical, biotechnology and medical companies and academic and research 
institutions in the United States and elsewhere are engaged in the discovery, 
development, marketing and sale of products for the treatment of cancer and 
infectious disease.  These include surgical approaches, new pharmaceutical 
products and new biologically derived products.  The Company expects to 
encounter significant competition for the principal pharmaceutical products 
it plans to develop.  Companies that complete clinical trials, obtain 
regulatory approvals and commence commercial sales of their products before 
their competitors may achieve a significant competitive advantage.  A number 
of pharmaceutical companies are developing new products for the treatment of 
the same diseases being targeted by the Company. In some instances, the 
Company's competitors already have products in clinical trials.  In addition, 
certain pharmaceutical companies are currently marketing drugs for the 
treatment of the same diseases being targeted by the Company, and may also be 
developing new drugs to address these disorders.

     The Company believes that its competitive success will be based on its 
ability to create and maintain scientifically advanced technology, develop 
proprietary products, attract and retain scientific personnel, obtain patent 
or other protection for its products, obtain required regulatory approvals, 
obtain orphan drug status for certain products and manufacture and 
successfully market its products either independently or through outside 
parties.  Many of the Company's competitors have substantially greater 
financial, clinical testing, regulatory compliance, manufacturing, marketing, 
human and other resources.  In addition, the Company will continue to seek 
licenses with respect to key technologies related to its fields of interest 
and may face competition with respect to such efforts.  See "Risk 
Factors--Competition."

EMPLOYEES AND CONSULTANTS

     As of December 19, 1997, the Company had 23 employees, all but two of 
which were based at its headquarters in San Diego, California.  The Company 
believes its relationships with its employees are satisfactory.  Other 
experienced professionals and personnel are expected to be hired to join the 
Company's management team in 1998 to, among other things, address the 
requirements of the expansion of clinical trials of MAXAMINE THERAPY and 
other commercialization efforts.  See "Risk Factors--Dependence on Qualified 
Personnel."

     In addition to its employees, Maxim has engaged approximately 12 
experienced consultants in the United States, Europe and Australia with 
pharmaceutical and business backgrounds to assist in its product development 
efforts.  The Company plans to leverage its key personnel by making extensive 
use of contract laboratories, development consultants, and strategic 
partnerships with pharmaceutical companies to conduct the Company's 
preclinical and clinical trials.

                                      13
<PAGE>

RISK FACTORS

     In evaluating the Company and its business, prospective investors should 
carefully consider the following risk factors in addition to the other 
information contained herein.

     DEVELOPMENT STAGE COMPANY; ACCUMULATED DEFICIT; UNCERTAINTY OF FUTURE 
PROFITABILITY.  The Company, as a development stage enterprise, has 
experienced net losses every year since its inception and, as of September 
30, 1997, had a deficit accumulated during the development stage of 
approximately $20.8 million.  The Company anticipates incurring substantial 
additional losses over at least the next several years due to, among other 
factors, the need to expend substantial amounts on its ongoing and planned 
clinical trials and anticipated research and development activities, and the 
business development and general and administrative expenses associated with 
those activities.  The Company has not commercially introduced any product 
and its products are in varying stages of development and testing.  The 
Company's ability to attain profitability will depend upon its ability to 
develop products that are effective and commercially viable, to obtain 
regulatory approval for the manufacture and sale of its products and to 
market its products successfully.  There can be no assurance that the Company 
will ever achieve profitability or that profitability, if achieved, can be 
sustained on an ongoing basis.  See "Management's Discussion and Analysis of 
Financial Condition and Results of Operations."

     NO ASSURANCE OF SUCCESSFUL CLINICAL TRIALS AND PRODUCT DEVELOPMENT.  All 
drug products currently under development by the Company will require 
extensive preclinical and clinical testing prior to regulatory approval for 
commercial use.  To date, the Company has not completed testing for efficacy 
or safety in humans on any of its products.  Substantial additional research 
and development will be necessary in order for the Company to develop 
products based on the Company's MAXAMINE and MAXVAX technologies and there 
can be no assurance that the Company's research and development efforts will 
lead to development of products that are shown to be safe and effective in 
clinical trials and are commercially viable.  In addition to further research 
and development, potential products based on the Company's MAXAMINE and 
MAXVAX technologies will require clinical testing, regulatory approval and 
substantial additional investment prior to commercialization.  There can be 
no assurance that any such products will be successfully developed, prove to 
be safe and effective in clinical trials, meet applicable regulatory 
standards, be capable of being produced in commercial quantities at 
acceptable costs, be eligible for third party reimbursement from governmental 
or private insurers, be successfully marketed or achieve market acceptance.  
Further, the Company's products may prove to have undesirable or unintended 
side effects that may prevent or limit their commercial use.  The Company may 
find, at any stage of this process, that products that appeared promising in 
preclinical studies or Phase I and Phase II clinical trials do not 
demonstrate efficacy in larger-scale, Phase III clinical trials and do not 
receive regulatory approvals.  Accordingly, any product development program 
undertaken by the Company may be curtailed, redirected or eliminated at any 
time.  In addition, there may be delays in the Company's testing and 
development schedules, and there can be no assurance that the Company will 
meet expected testing and development schedules, which could have a material 
adverse effect on the Company's business, financial condition and results of 
operations.  See "Business."

     NO ASSURANCE OF REGULATORY APPROVAL; GOVERNMENT REGULATION.  The U.S. 
Food and Drug Administration (the "FDA") and comparable agencies in countries 
outside the United States impose substantial requirements on the introduction 
of therapeutic pharmaceutical products and vaccines through lengthy and 
detailed laboratory and clinical testing procedures and other costly and time 
consuming procedures.  Satisfaction of these requirements typically takes a 
number of years and varies substantially based upon the type, complexity and 
novelty of the pharmaceutical agent.  In general, the FDA approval process 
for pharmaceuticals involves the submission of an Investigational New Drug 
("IND") application following preclinical studies, clinical trials in humans 
to demonstrate the safety and efficacy of the product under the protocols set 
forth in the IND and submission of preclinical and clinical data as well as 
other information to the FDA in a New Drug Application ("NDA") or Product 
License Application ("PLA").  The Company must expend substantial time and 
financial resources to conduct clinical trials.  The Company's clinical 
trials have been primarily conducted overseas and in the future will continue 
to be conducted in part overseas.  There can be no assurance that the results 
of such trials will support the submission or the approval of an NDA or PLA or

                                      14
<PAGE>

that data from the Company's overseas trials or approvals of the Company's 
products in foreign countries outside of the United States, if any, will be 
accepted by the FDA.  Accordingly, there can be no assurance that FDA or 
other regulatory approval for any products developed by the Company will be 
granted on a timely basis, or at all.  There can be no assurance that the 
Company will have sufficient resources to complete the required regulatory 
review process, or that the Company could overcome the inability to obtain, 
or delays in obtaining, such approvals.  The failure of the Company to 
receive FDA approval for its products under development would preclude the 
Company from marketing and selling its products in the United States.  
Therefore, failure to receive such FDA approval would have a material adverse 
effect on the business, financial condition and results of operations of the 
Company.  European and other international regulatory approvals are subject 
to the same risks and uncertainties as FDA and other regulatory approvals in 
the United States.

     The production and marketing of the Company's proposed products, as well 
as its ongoing research and development activities, are also subject to 
regulation by governmental agencies of the United States and other countries. 
The effect of government regulation may be to delay marketing of the 
Company's products for a considerable period of time, to impose costly 
procedures upon the Company's activities and to furnish a competitive 
advantage to larger companies that compete with the Company.  Any delay in 
obtaining, or failure to obtain, FDA or other necessary regulatory approvals, 
including approvals by comparable agencies outside the U.S., would adversely 
affect the marketing of the Company's products and the ability to generate 
product revenue.  In addition, the marketing and manufacturing of 
pharmaceuticals are subject to continuing FDA (or comparable international 
agency) review and surveillance and failure to comply with regulations or 
discovery of previously unknown problems can result in FDA (or comparable 
international agency) action against the product or the manufacturer, 
including fines, recalls, product seizures and suspension or withdrawal of 
previously granted regulatory approvals. Furthermore, government regulation 
may increase at any time, creating additional costs and delays for the 
Company.  The extent of potential adverse government regulation which might 
arise from future legislation or administrative action cannot be predicted.  
See "Business--Government Regulation."

     UNCERTAINTY REGARDING PATENTS AND PROPRIETARY RIGHTS.  It is the policy 
of the Company to file patent applications in the United States, Europe and 
other major markets throughout the world.  The patent positions of 
biotechnology and pharmaceutical companies are highly uncertain and involve 
complex legal and factual questions, and the breadth of claims allowed in 
biotechnology and pharmaceutical patents cannot be predicted.  There can be 
no assurance that patents will issue from any of the Company's patent 
applications.  With respect to already issued patents and any patents which 
may issue from the Company's applications, there can be no assurance that 
claims allowed will be sufficient to protect the Company's technologies.  
Patent applications in the United States are maintained in secrecy until a 
patent issues, and the Company cannot be certain that others have not filed 
patent applications for technology covered by the Company's pending 
applications or that the Company was the first to file patent applications 
for such technology.  Competitors may have filed applications for, or may 
have received patents and may obtain additional patents and proprietary 
rights relating to, compounds or processes that block or compete without 
infringing on those of the Company.  In addition, there can be no assurance 
that any patents issued to the Company or to licensors from whom the Company 
has licensed rights to its technologies will not be challenged, invalidated 
or circumvented or that the rights granted thereunder will provide 
proprietary protection or commercial advantage to the Company.

     Other public and private concerns, including universities, may have 
filed applications for or have been issued patents with respect to technology 
potentially useful or necessary to the Company.  The scope and validity of 
such patents, the extent to which the Company may wish or need to acquire 
licenses under such patents, and the cost or availability of such licenses, 
are currently unknown.

     In addition to patents and proprietary rights, the Company relies on 
unpatented trade secrets and proprietary know-how, and there can be no 
assurance that others will not obtain access to or independently develop such 
trade secrets and know-how.  Although potential corporate partners and the 
Company's research partners and consultants are not given access to trade 
secrets and proprietary know-how of the Company until

                                      15
<PAGE>

they have executed confidentiality agreements, these agreements may be 
breached by the other party thereto or may otherwise be of limited 
effectiveness or enforceability.

     The pharmaceutical industry has experienced extensive litigation 
regarding patent and other intellectual property rights.  Accordingly, the 
Company could incur substantial costs in defending itself in suits that may 
be brought against the Company claiming infringement of the patent rights of 
others or in asserting the Company's patent rights in a suit against another 
party.  The Company may also be required to participate in interference 
proceedings declared by the United States Patent and Trademark Office for the 
purpose of determining the priority of inventions in connection with the 
patent applications of the Company or other parties.  Adverse determinations 
in litigation or interference proceedings could require the Company to seek 
licenses (which may not be available on commercially reasonable terms) or 
subject the Company to significant liabilities to third parties, and could 
therefore have a material adverse effect on the Company.  See 
"Business--Patents, Licenses and Proprietary Rights."

     NEED FOR ADDITIONAL FUNDS; UNCERTAINTY OF ADDITIONAL FUNDING.  The 
Company's operations to date have consumed substantial amounts of cash. 
Negative cash flow from the Company's operations is expected to continue and 
to accelerate over at least the next several years.  The Company's capital 
requirements will depend on numerous factors, including: the progress of 
preclinical testing and clinical trials; the progress of the Company's 
research and development programs; the time and costs required to obtain 
regulatory approvals; the resources devoted to manufacturing methods and 
advanced technologies; the timing and amount, if any, of funding obtained 
through corporate collaborations; the cost of filing, prosecuting and, if 
necessary, enforcing patent claims; the cost of commercialization activities 
and arrangements; and the demand for the Company's products if and when 
approved. The Company may have to raise substantial additional funds to 
complete development of any product or bring products to market.  Issuance of 
additional equity securities by the Company, for these or other purposes, 
could result in dilution to then existing stockholders.  There can be no 
assurance that additional financing will be available on acceptable terms, if 
at all.  If adequate funds are not available on acceptable terms, the Company 
may be required to delay, scale back or eliminate one or more of its product 
development programs or obtain funds through arrangements with collaborative 
partners or others that may require the Company to relinquish rights to 
certain of its technologies or products that the Company would not otherwise 
relinquish, which may have a material adverse effect on the Company's 
business, financial condition and results of operations.  See "Management's 
Discussion and Analysis of Financial Condition and Results of Operations."

     DEPENDENCE ON QUALIFIED PERSONNEL.  The Company's future performance 
depends in part upon the continued contributions of its senior management and 
on the ability to attract and retain qualified management and scientific 
personnel.  Competition for such personnel is intense, and there can be no 
assurance that the Company will be able to continue to attract, assimilate or 
retain highly qualified technical and management personnel.  The loss of key 
personnel or the failure to recruit additional personnel or to develop needed 
expertise could have a material adverse effect on the Company's business, 
financial condition and results of operations.  See "Business--Employees and 
Consultants."

     DEPENDENCE ON COLLABORATIVE PARTNERS.  The Company's strategy for the 
research, development, clinical testing, manufacturing and commercialization 
of certain of its products requires arrangements with corporate and 
university collaborators, licensors, marketing partners, licensees, 
consultants and others, and is dependent upon the subsequent success of these 
outside parties in performing their responsibilities.  Although the Company 
believes parties to any such arrangements would have an economic motivation 
to perform their contractual responsibilities, the amount and timing of 
resources to be devoted to these activities may not be within the control of 
the Company.  In addition, there can be no assurance that collaborators will 
not pursue alternative technologies as a means for developing treatments for 
the diseases targeted by these collaborative programs.  Furthermore, there 
can be no assurance that the Company will be able to negotiate acceptable 
collaborative arrangements, or that its collaborative arrangements will be 
successful.  See "Business--Product Development and Collaborative 
Relationships."

                                      16
<PAGE>

     NO MARKETING AND SALES CAPABILITIES; ANTICIPATED DEPENDENCE UPON 
MARKETING ALLIANCES.  The Company has not developed pharmaceutical marketing 
or sales capabilities.  In order to market and sell certain products, the 
Company will need to develop a sales force and a marketing group with 
technical expertise, or make appropriate arrangements with strategic 
partners.  There can be no assurance that the Company will be able to gain 
such expertise or that such efforts will be successful.  The Company's 
strategy for development, commercialization and marketing of MAXAMINE and 
MAXVAX is expected to involve, where appropriate, the establishment of 
marketing and other collaborative relationships with pharmaceutical industry 
partners.  There can be no assurance that any such relationships can be 
consummated on terms favorable to the Company or that marketing efforts 
undertaken by such partners will be successful.  See "Business--Marketing and 
Sales."

     NO ASSURANCE OF MARKET ACCEPTANCE.  There can be no assurance that, if 
approved for marketing, MAXAMINE or any of the Company's other products in 
development will achieve market acceptance.  The degree of market acceptance 
will depend upon a number of factors, including the scope of regulatory 
approvals, the establishment and demonstration in the medical community of 
the clinical efficacy and safety of the Company's products and therapies and 
their potential advantages over existing treatment methods, and reimbursement 
policies of government and third-party payors.  There can be no assurance 
that physicians, patients, payors or the medical community in general will 
accept and utilize any products that may be developed by the Company.  See 
"Business--Competition" and --Third-Party Reimbursement."

     NO MANUFACTURING CAPABILITIES.  The Company has not invested in the 
development of pharmaceutical manufacturing capabilities.  The Company's 
strategy has been, and is expected to continue to be for the foreseeable 
future, to contract with established pharmaceutical manufacturers for the 
production of MAXAMINE.  If the Company is unable to contract for 
manufacturing capabilities on acceptable terms, the Company's ability to 
conduct clinical testing and to produce commercial quantities of product will 
be adversely affected, resulting in delays in submissions for regulatory 
approval and in commercial product launches, which in turn could materially 
impair the Company's competitive position and the possibility of achieving 
profitability. There can be no assurance that the Company will be able to 
maintain its existing, or acquire or establish new, satisfactory third- party 
relationships to provide manufacturing resources.  See 
"Business--Manufacturing."

     COMPETITION.  There are many companies, both publicly and privately 
held, including well-known pharmaceutical companies, as well as academic and 
other research institutions, engaged in developing pharmaceutical and 
biologically-derived products for the treatment of cancer and vaccines and 
therapeutics for the prevention or the treatment of infectious diseases.  
Many of the Company's competitors and potential competitors have 
substantially greater capital, research and development capabilities and 
human resources than the Company and represent significant competition for 
the Company.  Many of these competitors have significantly greater experience 
than the Company in undertaking preclinical testing and clinical trials of 
new pharmaceutical products and obtaining FDA and other regulatory approvals. 
If the Company is permitted to commence commercial sales of any product, it 
will also be competing with companies that have greater resources and 
experience in the manufacturing, marketing and sales of pharmaceutical 
products.  The Company's competitors may succeed in developing products that 
are more effective, less costly, or have a better side effect profile than 
any that may be developed by the Company, and such competitors may also prove 
to be more successful than the Company in manufacturing, marketing and sales. 
See "Business--Competition."

     TECHNOLOGICAL CHANGES AND UNCERTAINTY.  The Company is engaged in the 
pharmaceutical field, which is characterized by extensive research efforts 
and rapid technological progress.  New developments in oncology, cancer 
therapy, medicinal pharmacology, biochemistry and other fields are expected 
to continue at a rapid pace in both industry and academia.  There can be no 
assurance that research and discoveries by others will not render some or all 
of the Company's proposed programs or products noncompetitive or obsolete.  
The Company's business strategy is subject to the risks inherent in the 
development of new products using new technologies and approaches.  There can 
be no assurance that unforeseen problems will not develop with these 
technologies or applications, that the Company will be able to address 
successfully technological challenges it

                                      17
<PAGE>

encounters in its research and development programs or that commercially 
feasible products will ultimately be developed by the Company.  See 
"Business--Competition."

     LEGAL PROCEEDINGS.  In March 1997, the former President and Chief 
Operating Officer and the Chief Financial Officer of the Company (the "Former 
Employees") filed a complaint in the Superior Court in the State of 
California, County of San Diego (the "Complaint") seeking claims for certain 
purported damages in contract and in tort arising from their respective 
terminations of employment with the Company in March 1996.  In addition, the 
Former Employees asserted possible punitive damages and damages based on 
emotional distress. The Former Employees also claimed the right to vested 
options of the Company's Common Stock.  According to the Complaint, each of 
the Former Employees appears to be claiming compensatory damages in excess of 
$2 million and punitive damages in excess of $3 million.  In June 1997, the 
Company filed an answer to the Complaint denying each of the allegations 
therein.  Pretrial discovery with respect to these legal proceedings has 
commenced, and a trial date has been scheduled for May 1998.  The Company 
believes the Former Employees' claims are without merit and the Company 
intends to contest any such claims vigorously. However, there can be no 
assurances as to the eventual outcome of such claims or their effect on the 
Company's business, financial condition and results of operations.  In 
addition, an adverse determination in any litigation arising from these 
claims or the settlement of such claims could have a material adverse effect 
on the Company's business, financial condition and results of operations.  
See "Legal Proceedings."

     PRODUCT LIABILITY EXPOSURE AND INSURANCE.  The Company's business 
exposes it to potential product liability risks which are inherent in the 
clinical testing, manufacturing and marketing of human therapeutic products.  
The Company currently maintains product liability insurance coverage for its 
clinical trials, and intends to expand its insurance coverage to include the 
sales of commercial products if marketing approval is obtained for MAXAMINE 
or other products in development.  There can be no assurance that such 
coverage is or in the future will be adequate or that adequate insurance will 
be available in the future at an acceptable cost, if at all.  In addition, 
there can be no assurance that a product liability claim, even if the Company 
has insurance coverage, would not materially adversely affect the business or 
financial condition of the Company.

     POTENTIAL ADVERSE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE; PRICE 
VOLATILITY OF THE COMMON STOCK.  Sales of substantial amounts of the Common 
Stock of the Company in the public market could adversely affect prevailing 
market prices for the Common Stock and the ability of the Company to raise 
equity capital in the future.  The Company's Common Stock currently trades on 
the American Stock Exchange and on the Stockholm Stock Exchange.  
Historically, the Common Stock has generally experienced relatively low daily 
trading volumes in relation to the aggregate number of shares outstanding.  
The price and liquidity of the Common Stock may be significantly affected by 
trading activity and market factors related to the AMEX and SSE, which 
factors and the effects thereof may differ between these markets.  In 
addition, the securities markets have from time to time experienced 
significant price and volume fluctuations that may be unrelated to the 
operating performance of particular companies.  In addition, the market 
prices of the common stock of many publicly traded pharmaceutical or 
biotechnology companies have in the past been, and can in the future be 
expected to be, especially volatile.  Low trading volumes, announcements of 
technological innovations or new products by the Company or its competitors, 
developments or disputes concerning patents or proprietary rights, publicity 
regarding actual or potential medical results relating to products under 
development by the Company or its competitors, regulatory developments in 
both the United States and countries outside of the United States, delays in 
the Company's testing and development schedules, events or announcements 
relating to the Company's collaborative relationships with others, public 
concern as to the safety of biopharmaceutical or biotechnology products and 
economic and other external factors, as well as period-to-period fluctuations 
in the Company's financial results, may have a significant impact on the 
market price or liquidity of the Common Stock.

                                      18
<PAGE>

ITEM 2.  PROPERTIES

     The Company currently leases approximately 9,500 square feet of 
laboratory and office space in San Diego, California.  The Company has 
determined that additional office facilities will be required to accommodate 
the hiring of additional personnel planned as part of the commercialization 
of MAXAMINE, including the management of the ongoing and planned clinical 
trials.  The Company believes it has made appropriate plans to ensure that 
such additional facilities will be available as required.

ITEM 3.  LEGAL PROCEEDINGS

     In March 1997, the former President and Chief Operating Officer and the 
Chief Financial Officer of the Company (the "Former Employees") filed a 
complaint in the Superior Court in the State of California, County of San 
Diego (the "Complaint") seeking claims for certain purported damages in 
contract and in tort arising from their respective terminations of employment 
with the Company in March 1996.  In addition, the Former Employees asserted 
possible punitive damages and damages based on emotional distress.  The 
Former Employees also claimed the right to vested options of the Company's 
Common Stock. According to the Complaint, each of the Former Employees 
appears to be claiming compensatory damages in excess of $2 million and 
punitive damages in excess of $3 million.  In June 1997, the Company filed an 
answer to the Complaint denying each of the allegations therein.  Pretrial 
discovery with respect to these legal proceedings has commenced, and a trial 
date has been scheduled for May 1998.  The Company believes the Former 
Employees' claims are without merit and the Company intends to contest any 
such claims vigorously.  However, there can be no assurances as to the 
eventual outcome of such claims or their effect on the Company's business, 
financial condition and results of operations.  In addition, an adverse 
determination in any litigation arising from these claims or the settlement 
of such claims could have a material adverse effect on the Company's 
business, financial condition and results of operations.  See "Risk 
Factors--Legal Proceedings."

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

No matters were submitted to a vote of security holders during the quarter 
ended September 30, 1997.

                                      19
<PAGE>

                                   PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED MATTERS

    (a) The information required by this Item 5 is incorporated herein by
reference to the information contained in Note 15 of the Notes to Financial
Statements under the caption "Price Range of Common Stock (Unaudited)"  on page
37 of the Company's Annual Report to Stockholders for the fiscal year ended
September 30, 1997, filed as Exhibit 13.1 hereto.  In addition to the foregoing,
the Company has entered into a Loan and Security agreement with Silicon Valley
Bank which restricts the payment of dividends by the Company.
    
    (b) On July 9, 1996, the Company's Form SB-2 registration statement (File
No. 333-4854-LA) was declared effective by the Securities and Exchange
Commission.  The registration statement, as amended, covered the offering of
2,500,000 shares of the Company's Common Stock, $.001 par value and 2,500,000
Redeemable Common Stock Purchase Warrants (the "Warrants").  The offering
commenced on July 10, 1996 and the sale to the public of 2,500,000 shares of
Common Stock at $7.50 per share was completed on July 15, 1996 for an aggregate
price of $17,480,000.  The registration statement included an additional 375,000
shares of Common Stock and/or 375,000 additional Warrants solely to cover 
over-allotments.  The managing underwriter for the offering was National 
Securities Corporation. On July 23, 1996, the Underwriters exercised their
option to purchase 375,000 additional shares of Common Stock and 375,000 
additional Warrants.  The offering was terminated on July 26, 1996.  A total 
of 2,875,000 shares of Common Stock and 2,875,000 Warrants were sold in the 
offering at an aggregate price of $21,850,000.  All of the shares sold in the 
offering were sold by the Company.

Expenses incurred by the Company through September 30, 1997 in connection with
the issuance and distribution of Common Stock and Warrants in the offering
included underwriting discounts and commissions of $1,748,000 and other expenses
of $1,882,000.  Total offering expenses of $3,630,000 resulted in net offering
proceeds to the Company of $18,220,000.  No expenses were paid to directors,
officers or affiliates of the Company or 10% owners of any class of equity
securities of the Company.

Of the net offering proceeds to the Company of $18.2 million, through September
30, 1997, the following payments have been made:

                                                  (A)                    (B)
Purchase and installation of 
machinery and equipment                                                439,000

Repayment of indebtedness                       289,000                547,000

Interest earning bonds and securities                               12,160,000

R&D expenses                                                         3,170,000

Business development expenses                                          207,000

G&A expenses                                                         1,020,000

Intellectual property                                                  388,000

(A) Direct or indirect payments to directors, officers, general partners of the
    issuer or their associates; to persons owning ten percent or more of any
    class of equity securities of the issuer; and to affiliates of the issuer.
(B) Direct or indirect payments to others.  

ITEM 6.  SELECTED FINANCIAL DATA

     The information required by this Item 6 is incorporated herein by 
reference to the information contained under the caption "Selected Financial 
Data" on page 21 of the Company's Annual Report to Stockholders for the 
fiscal year ended September 30, 1997, filed as Exhibit 13.1 hereto.

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

     The information required by this Item 7 is incorporated herein by 
reference to the information contained under the caption "Management's 
Discussion and Analysis" on pages 18-21 of the Company's Annual Report to 
Stockholders for the fiscal year ended September 30, 1997, filed as Exhibit 
13.1 hereto.

ITEM 8.  FINANCIAL STATEMENTS

     The information required by this Item 8 is incorporated herein by 
reference to the Company's Financial Statements and the Notes to Financial 
Statements set forth on pages 21-37 of the Company's Annual Report to 
Stockholders for the fiscal year ended September 30, 1997, filed as Exhibit 
13.1 hereto.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURES

     None.

                                      20
<PAGE>

                                   PART III


ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT

     The information required by this Item 10 is incorporated herein by 
reference to the information under the caption "Election of Directors" set 
forth in the Company's definitive Proxy Statement to be filed with the 
Securities and Exchange Commission within 120 days after September 30, 1997, 
for its Annual Meeting of Stockholders to be held on February 20, 1998.  
Information concerning executive officers is incorporated herein by reference 
to the information included under the caption "Other Information - Executive 
Officers" set forth in the Company's definitive Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this Item 11 is incorporated herein by 
reference to the information under the caption "Executive Compensation" set 
forth in the Company's definitive Proxy Statement to be filed with the 
Securities and Exchange Commission within 120 days after September 30, 1997, 
for its Annual Meeting of Stockholders to be held on February 20, 1998.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS

     The information required by this Item 12 is incorporated herein by 
reference to the information under the captions "Security Ownership of 
Certain Beneficial Owners and Management" in the Company's definitive Proxy 
Statement to be filed with the Securities and Exchange Commission within 120 
days after September 30, 1997, for its Annual Meeting of Stockholders to be 
held on February 20, 1998.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this Item 13 is incorporated herein by 
reference to the information under the captions "Certain Transactions" in the 
Company's definitive Proxy Statement to be filed with the Securities and 
Exchange Commission within 120 days after September 30, 1997, for its Annual 
Meeting of Stockholders to be held on February 20, 1998.

                                      21
<PAGE>

                                    PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES
         AND REPORTS ON FORM 8-K

     (a)  The following documents are filed as part of this Annual Report:

          1.   FINANCIAL STATEMENTS

          The following financial statements are incorporated herein by 
reference from pages 22-38 of the Company's Annual Report to Stockholders for 
the fiscal year ended September 30, 1997:

          Balance Sheets as of September 30, 1997 and 1996

          Statements of Operations for the years ended September 30, 1997,
          1996, and 1995, and from October 23, 1989 (date of inception) to
          September 30, 1997

          Statements of Stockholders' Equity (Deficit) from October 23, 1989
          (date of inception) through September 30, 1997

          Statements of Cash Flows for the years ended September 30, 1997,
          1996, and 1995, and from October 23, 1989 (date of inception) to
          September 30, 1997

          Notes to Financial Statements

          Independent Auditors' Report

          2.   FINANCIAL STATEMENT SCHEDULES

          All schedules have been omitted since the required information is not
present in amounts sufficient to require submission of the schedule, or because
the information required is included in the consolidated financial statements
or notes thereto.

          3.   EXHIBITS

          See list of Exhibits set forth in paragraph (c) below.

          The following management contracts or compensatory plans and 
arrangements are required to be filed as exhibits to this Annual Report 
pursuant to Item 14(c):

   10.14  Amended and Restated 1993 Long Term Incentive Plan and forms of 
          stock option agreements (1)

   10.15  Employment Agreement dated October 1, 1997 between the Registrant 
          and Kurt R. Gehlsen.                                              

   10.16  Employment Agreement dated October 1, 1997 between the Registrant  
          and Dale A. Sander

   10.17  Employment Agreement dated November 5, 1997 between the Registrant 
          and Larry G. Stambaugh.

-----------------
(1) Previously filed together with the Registrant's Quarterly Report on Form 
10-Q (File No. 1-4430) dated December 31, 1996.

     (b)  The Company filed no reports on Form 8-K during the fourth quarter of
the fiscal year ended September 30, 1997.

                                      22
<PAGE>

                                   EXHIBIT INDEX
Exhibit
Number                        Description
------                        -----------
3.1    Amended and Restated Certificate of Incorporation of Registrant. (1)

3.2    Bylaws of Registrant. (1)

4.1    Reference is made to Exhibits 3.1 and 3.2.

4.2    Form of Common Stock Certificate. (1)

10.1   Form of Indemnification Agreement for directors and officers of the
       Registrant. (1)

10.2   Form of Representative's Warrant Agreement between the Company and
       National Securities Corporation, as representative of the several
       Underwriters (the "Representative"), including form of Representative's
       Warrant Certificate. (1)

10.3   Form of Warrant Agreement between the Company, the Representative and
       American Stock Transfer & Trust Company, including form of Warrant
       Certificate. (1)

10.4   Option to Buy Technology and Rights Agreement, dated March 30, 1993,
       between the Registrant and Estero Anstalt. (1)(2)

10.5   Security Agreement, dated July 27,1993, between the Registrant and Estero
       Anstalt. (1)(2)

10.6   Exclusive License Agreement, dated June 14, 1995, among the Registrant,
       Jan Holmgren, M.D., Ph.D., Cecil Czerkinsky, Duotol AB and Triotol Ltd.
       (1)(2)

10.7   Option and License Agreement, dated May 19, 1993, among the Registrant,
       Vitec AB and SBL Vaccin AB, as amended. (1)(2)

10.8   License Agreement dated January 14, 1994, among the Registrant, Vitec AB
       and SBL Vaccin, AB, as amended. (1)(2)

10.9   Agreement, dated December 2, 1995, among the Registrant, Syntello Vaccine
       Development AB and Estero Anstalt. (1)(2)

10.10  Agreement, dated April 23, 1996, among the Registrant, Anders Vahlne,
       M.D., Ph.D. and Syntello Vaccine Development AB. (1)(2)

10.11  Letter Agreement, dated February 15, 1996, between the Registrant and
       Burrill & Craves, Inc.(1)

10.12  Lease dated November 1, 1996 between DM Spectrum LLC, a California
       limited liability company, as Landlord and the Registrant for 3099
       Science Park Road, Suite 150, San Diego, California  92121. (3)

10.13  Stock Purchase Agreement, dated as of July 5, 1996, by and between
       Dr. Anders Vahlne and the Registrant. (1)

10.14  Amended and Restated 1993 Long-Term Incentive Plan and forms of stock
       option agreements. (4)

10.15  Employment Agreement dated October 1, 1997 between the Registrant and
       Kurt R. Gehlsen.

10.16  Employment Agreement dated October 1, 1997 between the Registrant and
       Dale A. Sander.

                                      23
<PAGE>

10.17  Employment Agreement dated November 5, 1997 between the Registrant and
       Larry G. Stambaugh.

10.18  Loan and Security Agreement between the Registrant and Silicon Valley
       Bank. (5)

10.19  Financial Advisory Services Agreement between the Registrant and
       Rodman & Renshaw, Inc. dated September 17, 1997.(6)

11.1   Statement re: computation of pro forma loss per share.

13.1   Registrant's Annual Report to Stockholders for the fiscal year ended
       September 30, 1997.

23.1   Consent of KPMG Peat Marwick LLP, Independent Auditors.

23.3   Power of Attorney

27.1   Financial Data Schedule.

99.1   Independent Auditors' Report.
_______

(1)  Previously filed together with the Registrant's Registration Statement on
     Form SB-2 (File No. 333-4854-LA) or amendments thereto and incorporated
     herein by reference.

(2)  Certain confidential portions deleted pursuant to Order Granting
     Application Under the Securities Act of 1933 and Rule 406 thereunder
     respecting confidential treatment.

(3)  Previously filed together with the Registrant's Annual Report on Form 10-K
     (File No. 1-4430) dated September 30, 1996.

(4)  Previously filed together with the Registrant's Quarterly Report on Form
     10-Q (File No. 1-4430) dated December 31, 1996.

(5)  Previously filed together with the Registrant's Quarterly Report on Form
     10-Q (File No. 1-4430) dated March 31, 1997.

(6)  Previously filed together with the Registrant's Registration Statement on
     Form S-1 (File No. 333-35895) dated September 18, 1997.

                                      24
<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 report 
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                       MAXIM PHARMACEUTICALS, INC.

                                       By:  /s/ DALE A. SANDER
                                            ------------------
                                       Dale A. Sander,
                                       Vice President, Finance
                                       and Chief Financial Officer

                                       Date:  December 23, 1997

     NOW ALL PERSONS BY THESE PRESENTS, that each person whose signature 
appears below constitutes and appoints Larry G. Stambaugh and Dale A. Sander, 
and each of them, as his true and lawful attorneys-in-fact and agents, with 
full power of substitution and resubstitution, for him and in his name, place 
and stead, in any and all capacities, to sign any and all amendments to this 
Report, and to file the same, with all exhibits thereto, and other documents 
in connection therewith, with the Securities and Exchange Commission, 
granting unto said attorneys-in-fact and agents, and each of them, full power 
and authority to do and perform each and every act and thing requisite and 
necessary to be done in connection therewith, as fully to all intents and 
purposes as he might or could do in person, hereby ratifying and confirming 
that all said attorneys-in-fact and agents, or any of them or their or his 
substitute or substituted, may lawfully do or cause to be done by virtue 
hereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below, by the following persons on behalf of the 
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                              Title                                  Date
---------                              -----                                  ----

<S>                             <C>                                      <C>
/S/ LARRY G. STAMBAUGH          Chairman of the Board                    December 23, 1997
-------------------------       Director, President and
Larry G. Stambaugh              Chief Executive Officer
                                (Principal Executive Officer)

/S/ DALE A. SANDER              Vice President, Finance, and             December 23, 1997
-------------------------       Chief Financial Officer
Dale A. Sander                  (Principal Accounting Officer and
                                Principal Financial Officer)

/S/ COLIN B. BIER               Director                                 December 23, 1997
-------------------------
Colin B. Bier, Ph.D.

/S/ G. STEVEN BURRILL           Director                                 December 23, 1997
-------------------------
G. Steven Burrill

/S/ PER-OLOF MARTENSSON         Director                                 December 23, 1997
-------------------------
Per-Olof Martensson

/S/ F. DUWAINE TOWNSEN          Director                                 December 23, 1997
-------------------------
F. Duwaine Townsen

</TABLE>
                                      25

<PAGE>

                                   EXHIBIT INDEX
Exhibit
Number                              Description
------                              -----------
3.1    Amended and Restated Certificate of Incorporation of Registrant. (1)

3.2    Bylaws of Registrant. (1)

4.1    Reference is made to Exhibits 3.1 and 3.2.

4.2    Form of Common Stock Certificate. (1)

10.1   Form of Indemnification Agreement for directors and officers of the
       Registrant. (1)

10.2   Form of Representative's Warrant Agreement between the Company and
       National Securities Corporation, as representative of the several
       Underwriters (the "Representative"), including form of Representative's
       Warrant Certificate. (1)

10.3   Form of Warrant Agreement between the Company, the Representative and
       American Stock Transfer & Trust Company, including form of Warrant
       Certificate. (1)

10.4   Option to Buy Technology and Rights Agreement, dated March 30, 1993,
       between the Registrant and Estero Anstalt. (1)(2)

10.5   Security Agreement, dated July 27,1993, between the Registrant and Estero
       Anstalt. (1)(2)

10.6   Exclusive License Agreement, dated June 14, 1995, among the Registrant,
       Jan Holmgren, M.D., Ph.D., Cecil Czerkinsky, Duotol AB and Triotol Ltd.
       (1)(2)

10.7   Option and License Agreement, dated May 19, 1993, among the Registrant,
       Vitec AB and SBL Vaccin AB, as amended. (1)(2)

10.8   License Agreement dated January 14, 1994, among the Registrant, Vitec AB
       and SBL Vaccin, AB, as amended. (1)(2)

10.9   Agreement, dated December 2, 1995, among the Registrant, Syntello Vaccine
       Development AB and Estero Anstalt. (1)(2)

10.10  Agreement, dated April 23, 1996, among the Registrant, Anders Vahlne,
       M.D., Ph.D. and Syntello Vaccine Development AB. (1)(2)

10.11  Letter Agreement, dated February 15, 1996, between the Registrant and
       Burrill & Craves, Inc.(1)

10.12  Lease dated November 1, 1996 between DM Spectrum LLC, a California
       limited liability company, as Landlord and the Registrant for 3099
       Science Park Road, Suite 150, San Diego, California  92121. (3)

10.13  Stock Purchase Agreement, dated as of July 5, 1996, by and between
       Dr. Anders Vahlne and the Registrant. (1)

10.14  Amended and Restated 1993 Long-Term Incentive Plan and forms of stock
       option agreements. (4)

10.15  Employment Agreement dated October 1, 1997 between the Registrant and
       Kurt R. Gehlsen.

10.16  Employment Agreement dated October 1, 1997 between the Registrant and
       Dale A. Sander.

                                      26
<PAGE>

10.17  Employment Agreement dated November 5, 1997 between the Registrant and
       Larry G. Stambaugh.

10.18  Loan and Security Agreement between the Registrant and Silicon Valley
       Bank. (5)

10.19  Financial Advisory Services Agreement between the Registrant and
       Rodman & Renshaw, Inc. dated September 17, 1997.(6)

11.1   Statement re: computation of pro forma loss per share.

13.1   Registrant's Annual Report to Stockholders for the fiscal year ended
       September 30, 1997.

23.1   Consent of KPMG Peat Marwick LLP, Independent Auditors.

23.3   Power of Attorney

27.1   Financial Data Schedule.

99.1   Independent Auditors' Report.
_______

(1)  Previously filed together with the Registrant's Registration Statement on
     Form SB-2 (File No. 333-4854-LA) or amendments thereto and incorporated
     herein by reference.

(2)  Certain confidential portions deleted pursuant to Order Granting
     Application Under the Securities Act of 1933 and Rule 406 thereunder
     respecting confidential treatment.

(3)  Previously filed together with the Registrant's Annual Report on Form 10-K
     (File No. 1-4430) dated September 30, 1996.

(4)  Previously filed together with the Registrant's Quarterly Report on Form
     10-Q (File No. 1-4430) dated December 31, 1996.

(5)  Previously filed together with the Registrant's Quarterly Report on Form
     10-Q (File No. 1-4430) dated March 31, 1997.

(6)  Previously filed together with the Registrant's Registration Statement on
     Form S-1 (File No. 333-35895) dated September 18, 1997.

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