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

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-QSB



   [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                  For the quarterly period ended June 30, 2000

                                       or

  [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
                        For the transition period from to

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

                        Commission file number: 333-34765


                           Ixion Biotechnology, Inc..
        (Exact Name of Small Business Issuer as Specified in Its Charter)


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

         Delaware                                       59-3174033
 (State of incorporation)                   (I.R.S. Employer Identification No.)

                          13709 Progress Blvd., Box 13
                                Alachua, FL 32615
                    (Address of principal executive offices)

                   Registrant's telephone number: 904-418-1428

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

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 []


The  number of shares of the  registrant's  common  stock,  par value  $0.01 per
share, outstanding as of August 11, 2000 was 6,788,996.

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



<PAGE>




                            Ixion Biotechnology, Inc
                               Index to Form 10QSB


Part 1 - Financial Information                                              Page

Item 1.  Financial Statements (unaudited)

         Condensed Balance Sheet - June 30, 2000...............................3

         Condensed  Statements of Operations - Three Months and Six Months Ended
         June 30, 2000 and 1999 and for the period March 25, 1993
         (Date of Inception) through June 30, 2000.............................4

         Condensed Statements of Cash Flows - Six Months Ended June 30, 2000 and
         1999 and for the period March 25, 1993
         (Date of Inception) through June 30, 2000.............................6

         Notes to Condensed Financial Statements...............................7

Item 2.  Management's Discussion and Analysis of Financial Condition and
              Results of Operations or Plan of Operation.......................9

Part II - Other Information

Item 2. Changes in Securities and Use of Proceeds.............................19

Item 4.  Submission of Matters to a Vote of Security Holders..................19

Item 5.  Other Information....................................................20

Item 6.  Exhibits and Reports on Form 8-K.....................................20

Signatures....................................................................22

Exhibit Index.................................................................22



                                       2

<PAGE>




Part I.  Financial Information
Item 1.  Financial Statements

Condensed Balance Sheet
June 30, 2000
Unaudited

                                     Assets
Current  Assets:
   Cash and cash equivalents                                $         192,292
   Restricted Cash                                                     48,000
   Accounts receivable                                                      9
   Prepaid expenses                                                     6,834
   Other current assets                                                   500
                                                            -----------------
                 Total current assets                                 247,635
                                                            -----------------

Property and Equipment, net                                           131,540
                                                            -----------------
Other Assets:
    Patents and patents pending, net                                  393,652
    Other                                                               7,539
                                                            -----------------
                 Total other assets                                   401,191
                                                            -----------------
                  Total Assets                              $         780,366
                                                            =================

                       Liabilities and Capital Deficiency

Current Liabilities:
    Accounts payable                                        $          57,058
    Bridge loans payable to officers                                  312,400
    Current portion of notes payable                                   56,817
    Accrued expenses                                                  119,720
    Deferred rent - current                                             1,612
    Interest payable                                                   48,352
                                                            -----------------
         Total current liabilities                                    595,959
                                                            -----------------

Long-Term Liabilities:
    Notes payable                                                     722,783
    Liability under research agreement                                 42,317
    Deferred rent, including accrued interest                          24,949
    Deferred fees and salaries, including accrued interest          1,027,796
                                                            -----------------
                   Total long-term liabilities                      1,817,845
                                                            -----------------
                     Total liabilities                              2,413,804
                                                            -----------------

Capital Deficiency:
    Common stock, $.01 par value; authorized 20,000,000, is
       outstanding 3,102,964 shares at June 30                         32,158
    Common stock warrants outstanding                                  35,494
    Additional paid-in capital                                      3,084,117
    Deficit accumulated during the development stage               (4,593,115)
    Less unearned compensation                                       (192,092)
                                                            -----------------
                  Total capital deficiency                         (1,633,438)
                                                            -----------------

Total Liabilities and Capital Deficiency                    $         780,366
                                                            =================

See accompanying notes to condensed financial statements

                                       3

<PAGE>




Statements of Operations

                                                          Three Months Ended
                                                              June 30,
                                                    2000                 1999
                                                   -----------   ------------
                                                             Unaudited
Revenues:
   Income from research grants                     $    83,214   $          0
   Interest income                                       2,762            915
   Other income                                              0            250
                                                   -----------   ------------
            Total revenues                              85,976          1,165
                                                   -----------   ------------

Expenses:
  Operating, general and administrative                128,259         88,085
  Research and development                             202,738        129,514
  Interest                                             46,035          37,559
                                                   -----------   ------------
                 Total expenses                        377,032        255,158
                                                   -----------   ------------
Net Loss.                                          $  (291,056)  $   (253,993)
                                                   ===========   ============

Basic and Diluted Net Loss per Share               $     (0.09)  $      (0.10)
                                                   ===========   ============

Weighted Average Common Shares                       3,160,482      2,514,014
                                                   ===========   ============





















See accompanying notes to condensed financial statements


                                       4

<PAGE>
<TABLE>
<CAPTION>


                                                Statement of Operations

                                                                                    For the Period
                                                                                  March 25, 1993
                                                                                     (Date of
                                                                                    inception)
                                                         Six Months Ended             through
                                                              June 30,                June 30,
                                                       2000          1999               2000
                                                   -----------   ------------       -----------
                                                            Unaudited                Unaudited
<CAPTION>
                                                   <C>           <C>                <C>
<S>
Revenues:
   Income under research agreement                $    2,450    $         0        $  305,284
   Income from research grants                       127,139              0           290,442
   Interest income                                     3,631            963            29,184
   Other income                                            0            695            18,834
                                                  -----------   ------------       -----------
            Total revenues                            133,220          1,658           643,744
                                                  -----------   ------------       -----------

Expenses:
  Operating, general and administrative               237,616        178,819         2,153,523
  Research and development                            381,853        238,166         2,517,919
  Interest                                             87,478         74,729           565,417
                                                  -----------   ------------       -----------
                 Total expenses                       706,947        491,714         5,236,859
                                                  -----------   ------------       -----------


Net Loss                                          $  (573,727)  $   (490,056)      $(4,593,115)
                                                  ===========   ============       ===========

Basic and Diluted Net Loss per Share              $     (0.19)  $      (0.19)
                                                  ===========   ============

Weighted Average Common Shares                      3,075,077      2,514,001
                                                  ===========   ============
</TABLE>





















See accompanying notes to condensed financial statements

                                                             5

<PAGE>

<TABLE>
<CAPTION>

Statements of Cash Flows


                                                                                               For the Period
                                                                                                March 25, 1993
                                                                     Six Months              (Date of inception)
                                                                   Ended June 30,                   through
                                                          2000                      1999         June 30, 2000
                                                      ------------              -------------   --------------
                                                                     Unaudited                     Unaudited
<CAPTION>
                                                     <C>                        <C>
<S>
Cash Flows from Operating Activities:
  Net loss                                            $   (573,727)             $   (236,032)   $  (4,593,115)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
        Depreciation                                        14,982                     5,200           83,150
        Amortization                                         3,766                       774           16,636
        Write-off of abandoned patents                           0                         0           13,045
        Amortization of debt discount                       28,584                    14,292          219,144
        Stock warrants issued under license agreement          -                         -             20,465
        Stock, options/warrants issued for consulting
         services                                            3,081                       -             35,081
        Stock compensation                                  50,010                    40,725          566,311
        Decrease (increase) in prepaid expenses and other
          current assets                                    (2,490)                     (641)          (7,159)
        Decrease (increase) in accounts receivable          28,002                       -                 (9)
        Increase (decrease) in liability under research
          agreement                                            -                         -             42,317
        Increase (decrease) in accounts payable and
          accrued expenses                                 (16,487)                   11,049          190,263
        Increase in deferred fees and salaries              83,754                    64,580        1,001,244
        Increase in deferred rent                            2,818                    13,783           26,560
        Increase in interest payable                         8,911                     6,590           68,731
                                                      ------------              ------------    -------------
               Net cash used in operating activities      (368,796)                  (79,680)      (2,317,336)
                                                      ------------              ------------    -------------

Cash Flows from Investing Activities:
  Purchase of property and equipment                       (34,569)                      -           (160,040)
  Organization Costs                                           -                         -               (436)
  Transfer to restricted cash                              (48,000)                      -            (48,000)
  Payments for patents and patents pending                 (19,306)                     (113)        (407,172)
                                                      ------------              ------------    -------------
               Net cash used in investing activities      (101,875)                     (113)        (615,648)
                                                      ------------              ------------    -------------

Cash Flows from Financing Activities:
  Loans from officers                                          -                      90,000          445,307
  Proceeds from issuance of note payable                    48,000                       -             48,000
  Proceeds from issuance of convertible notes
   payable                                                     -                         -          1,087,270
  Proceeds from issuance of common stock                   603,200                     1,000        1,735,100
  Principal reductions in notes payable                     (4,408)                   (4,897)         (43,451)
  Payment of deferred offering costs                        (6,190)                   (4,821)        (135,870)
  Payment of loan costs                                        -                         -            (11,080)
                                                      ------------              ------------    -------------
               Net cash provided by (used in)
                financing activities                       640,602                    81,282        3,125,276
                                                      ------------              ------------    -------------

Net Increase (Decrease) In Cash and Cash Equivalents       169,931                     1,490          240,292

Cash and Cash Equivalents at Beginning of Period            22,361                    18,633              -
                                                      ------------              ------------    -------------
Cash, Cash Equivalents and Restricted Cast at
 End of Period                                        $    240,292              $     20,123    $     240,292
                                                      ============              ============    =============
</TABLE>

See accompanying notes to condensed financial statements


                                       6
<PAGE>


                     Notes to Condensed Financial Statements
                      Six Month Period Ended June 30, 1999

1.   Basis Of Presentation:

     The  accompanying  unaudited  condensed  financial  statements  for the six
     months ended June 30, 2000 and 1999, respectively, and for the period March
     25, 1993 (date of inception)  through June 30, 2000,  have been prepared in
     accordance  with  generally  accepted  accounting  principles  for  interim
     financial statements. Accordingly, they do not include all the information
     and footnotes  required by generally  accepted  accounting  principles  for
     complete financial statements. These interim financial statements should be
     read in  conjunction  with the December 31, 1999  financial  statements and
     related notes  included in the  Company's  Annual Report on Form 10-KSB for
     the year ended  December  31,  1999.  In the  opinion of the  Company,  the
     accompanying   unaudited   condensed   financial   statements  contain  all
     adjustments,  consisting only of normal  recurring  accruals,  necessary to
     present fairly the Company's financial position, results of operations, and
     cash flows for the periods  presented.  The results of  operations  for the
     interim  period ended June 30, 2000 are not  necessarily  indicative of the
     results to be expected for the full year.

2.   Notes Payable:

     On June 23, 2000, the company  borrowed  $48,000 on a Commercial Fixed Rate
     Promissory Note at 7.83% and  collateralized by a $48,000 CD earning 5.83%.
     The note requires five interest-only  payments,  and a final payment of the
     unpaid principal  balance plus accrued interest on December 23, 2000. There
     is no prepayment penalty.

3.   Income Taxes:

     The  components of the Company's net deferred tax asset and the tax effects
     of the primary temporary  differences giving rise to the Company's deferred
     tax asset are as follows as of June 30, 2000:

                  Deferred compensation                $  (406,000)
                  Net operating loss carryforward        1,817,000
                                                       -----------
                  Deferred tax asset                     1,411,000
                  Valuation allowance                  $(1,411,000)
                                                       -----------
                  Net deferred tax asset               $         0
                                                       ===========

4.    Stock Options:

     On January 1, 2000,  the Company  granted  ten-year  options under the 1994
     Stock  Option Plan to purchase  8,000 shares of Common Stock at an exercise
     price of $4.00 per share.  Stock options are exercisable  only when vested.
     Options  vest at the  rate of 20% per year  and are  exercisable  generally
     within ten years after date of grant.

     On April 1, 2000, the Company  granted options to purchase 86,900 shares of
     Common  Stock at an exercise  price of $4.00 per share,  conditioned  on an
     agreement to shorten the term of existing options with an exercise price of
     $10.00 per share. This transaction is discussed further under note 7.

5.    Stockholder's Equity

     The Company has sold 150,000 shares and received gross proceeds of $600,000
     through June 30, 2000 in the public  offering that  commenced  December 10,
     1997 and terminated on March 31, 2000. Offering costs of $135,870 have been
     offset against the proceeds of the offering through the termination date of
     the offering,

                                       7

<PAGE>

     March 31, 2000.


     Through  June 30,  2000,  Q-Med,  A.B.  has been  issued a total of 562,500
     shares of  restricted  common stock for  $1,125,000 as part of the on-going
     transaction with Q-Med.

     Because the Company does not yet have revenues from operations,  we will be
     required  to obtain  additional  funds  through  equity or debt  financing,
     strategic  alliances with corporate  partners,  research  grants or through
     other sources.

     The Company's ability to continue as a going concern depends upon obtaining
     additional financing;  however,  there can be no assurance that the Company
     will be successful in obtaining the required financing.


6.    Related Party Transactions

     The  Chairman/Chief  Executive  Officer and  President  of the Company each
     entered  into a revolving  agreement  to extend the Company  bridge  loans.
     Interest  on  bridge  loans  is at 8%,  but can be reset  annually,  at the
     election of either party, to prime rate in effect on January 1 of any given
     year,  plus 3%. In March,  the officers  purchased  25,650 shares of common
     stock in the  public  offering  at the public  offering  price of $4.00 per
     share. In payment,  the officers  cancelled $102,600 in principal amount of
     the bridge loans.  This  transaction was treated as a repayment of debt and
     subsequent  equity  investment,  having no income effect. At June 30, 2000,
     $312,400  was  outstanding  under these  agreements  and was due on demand.
     These officers have no commitment to lend  additional  funds in the future.
     See note 7.

7.    Subsequent Events

     On July 14, 2000 Qvestor,  LLC ("Qvestor"),  a Delaware subsidiary of Q-Med
     AB (publ)  exercised  the  option  granted  in  September  1999 to  acquire
     3,337,500 of the Company's  common stock for cash of $6,675,000 and certain
     other  consideration  pursuant to a stock purchase  agreement.  At closing,
     Qvestor  paid  cash  of  $3,321,697  and  Q-Med  agreed  to  a  world-wide,
     non-exclusive,  royalty free license of its hyaluronic  acid technology for
     use with the Company's islet technology. The balance of the $6,675,000 cash
     portion of the purchase price will be paid not later than July 14, 2001. On
     July 14, 2000,  Q-Med already owned 562,500 shares of the Company's  common
     stock, which, together with the Qvestor purchase,  brings the Q-Med group's
     total common stock  ownership to  3,900,000,  or  approximately  59% of the
     Company's outstanding shares.

     At the closing in connection with the stock purchase agreement,  $1,028,763
     in deferred fees and salaries due to officers and employees  were satisfied
     through the issuance of 236,192  shares of restricted  common stock and the
     payment of $84,000 in cash.  62,289  shares  vest  immediately;  50% of the
     balance vest after one year, and 1/12 of 50% vest monthly thereafter.  Also
     at the closing,  $358,957 in bridge loans and accrued interest were re-paid
     to  the  officers.   Following  this  repayment,  no  bridge  loans  remain
     outstanding.

     On July 14, 2000,  under the Board  Retainer  Plan,  the Audit and Benefits
     Committee  awarded  17,000 shares of restricted  common stock to members of
     the board of directors  and members of the  Scientific  Advisory  Board and
     7,800  shares to  officers  and  employees.  Also,  the Audit and  Benefits
     Committee granted options to purchase 12,500 shares at an exercise price of
     $4.00  per  share to  employees  under  the 1994  Stock  Option  Plan.  The
     Committee  also declared a  discretionary  bonus for  1999-2000  payable to
     consultants and employees of $92,000.

     On April 1, 2000, options to purchase 86,900 shares at $4.00 per share were
     issued to then holders of options with exercise  prices  greater than $4.00
     per share.  Acceptance of the new options was  conditioned  on an agreement
     that the old options  would expire on December 31, 2000. On March 31, 2000,
     the Financial Accounting  Standards Board (FASB) issued  Interpretation No.
     44 (FIN 44), an  interpretation  of APB Opinion

                                       8

<PAGE>

     No. 25, which included a provision  under which the  curtailment of the old
     options  triggered a requirement for "variable award"  accounting for these
     86,900 options. In light of this new interpretation, the Audit and Benefits
     Committee elected to cancel the April 1, 2000 options,  and issue, in their
     place, 8,690 shares of common stock to the option holders. The Company will
     recognize  a stock  compensation  charge  for the  intrinsic  value  of the
     8,690 shares of common stock on the date they are issued or earned.

     On August 8, 2000,  the Company  signed an amendment to the current  lease,
     which  increases  total  laboratory  and office space by 2,661 square feet;
     increases  the annual lease by  approximately  $32,500;  and  exercises the
     first  option  to extend  the lease  term for one  additional  year.  Total
     improvements  required  for the new  laboratory  will  total  approximately
     $10,000.



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

         The following  discussion  and analysis  should be read in  conjunction
with the Condensed  Financial  Statements and the related Notes thereto included
elsewhere in this report. This report contains  forward-looking  statements that
involve risks and  uncertainties.  Our actual  results may differ  significantly
from  the  results  discussed  in  the  forward-looking  statements.  These  and
additional  risk factors are  identified in our annual report to the  Securities
and Exchange Commission filed on forms 10-KSB and in other SEC filings.

Overview

         Ixion is a  development  stage,  biotechnology  company.  We are in the
development  stage because we are devoting  substantially  all of our efforts to
establishing  our  business,  and our  planned  principal  operations  have  not
commenced.

         Since we were founded in March of 1993, we have  principally been doing
research and development,  securing patent protection,  and raising capital.  We
have not received any revenues  from the sale of products.  We do not expect any
of our drug or device product candidates,  which require regulatory approval, to
be  commercially  available for at least several years;  however our nutritional
supplement  product,  OX-Control(TM),  is  scheduled  for  launch in 2001.  From
inception  through June 30, 2000, we incurred  cumulative  losses of $4,593,115.
These losses were due  primarily to  expenditures  on research and  development,
patent preparation and prosecution,  general and administrative  activities, and
interest charges.

     We expect to continue to incur  substantial  research and development costs
resulting from

     o    ongoing research and development programs,
     o    manufacturing  of products for use in clinical  trials and preclinical
          and clinical testing of our products.


     We also expect that general and administrative costs, including

     o    costs of additional administrative personnel;
     o    legal  and   regulatory   costs   necessary  to  support   preclinical
          development and clinical trials, and
     o    costs   associated   with  the  creation  of  a  marketing  and  sales
          organization, if warranted,

will increase in the future, assuming we can finance the increased requirements.
Accordingly, we expect to incur operating losses for the foreseeable future.


                                       9

<PAGE>

         Our operating  expenses will depend on several  factors,  including the
level of research and development expenses and our success in raising additional
capital.  Planned levels of research and development  may be maintained  without
any  additional  capital  infusion  through  the  end  of  2001.   Research  and
development  expenses  will  depend on the  progress  and results of our product
development  efforts,  which we  cannot  predict.  We may  sometimes  be able to
control  the  timing  of  development   expenses  in  part  by  accelerating  or
decelerating  preclinical testing and clinical trial activities.  As a result of
these factors,  we believe that  period-to-period  comparisons in the future are
not necessarily meaningful

Product Research and Development Plan

         Our plan of operation for the remaining year 2000 consists primarily of
research and development and related activities, including:

          o    further  research  into the  biology of islet and islet stem cell
               growth and  differentiation,  aimed at  developing  cell lines of
               functioning islets for transplantation into diabetic patients;
          o    further research into identifying and characterizing novel growth
               factors  associated with islets to discover factors  important in
               islet cell  differentiation  and possible  regulation of diabetes
               and to  identify  stem cell  markers  to which we hope to produce
               monoclonal antibodies useful in stem cell isolation
          o    differential  gene  expression  studies on  differentiated  islet
               cells;
          o    further research into encapsulation materials for transplantation
               of islets;
          o    development of OX-Control(TM),  a nutritional  supplement product
               not requiring regulatory approval;
          o    further preclinical development of a kit version of our molecular
               diagnostic test, the XEntrIx (TM) Oxalobacter formigenes Monitor,
          o    further  preclinical   development  of  our  oxalate  therapeutic
               compound,  IxC1-62/47;
          o    continuing the prosecution and filing of patent applications
          o    hiring additional employees.

         Our actual  research and  development  and related  activities may vary
significantly  from  current  plans  depending  on numerous  factors,  including
changes in the costs of such activities from current  estimates,  the results of
our research and  development  programs,  the results of clinical  studies,  the
timing of regulatory submissions,  technological advances,  determinations as to
commercial potential,  the status of competitive products,  and, most important,
our success in raising  capital.  The focus and direction of our operations will
also be dependent upon the  establishment  of  collaborative  arrangements  with
other companies, and other factors.

         We can not  assure  you  that we  will  be  able to  commercialize  our
technologies  or that  profitability  will ever be achieved.  We expect that our
operating  results will fluctuate  significantly  from quarter to quarter in the
future and will  depend on a number of  factors,  most of which are  outside our
control.

Results of Operations
<TABLE>
<CAPTION>

Three Months Ended June 30, 2000 and 1999

                ===========================================================
                    Summary of Operations - Three Months Ended June 30,
                                           2000         1999       Percent
                                                                   change
                                     --------------------------------------
<CAPTION>
                                        <C>          <C>             <C>
<S>
                Revenues                   85,976        1,165       7,280%
                Expenses                  377,032      255,158          50%
                                        ---------    ---------
                  Net Loss               (291,056)    (253,993)         17%
                                         --------     --------
</TABLE>
                ===========================================================


                                       10

<PAGE>


         Total  revenues  increased from $1,165 in the second quarter of 1999 to
$85,976 in the second quarter of 2000 mainly as a result of the following:

          o    Three active NIH research contracts:

               o    "Enteric Elimination of Oxalic Acid",
               o    "Islets from Islet  Progenitor/Stem Cells for Implantation",
                    and
               o    "Digestion of Food Oxalate"
          o    An increase in interest  income  generated from the investment of
               increased cash flows.

          We expect revenue to continue to increase in 2000 because of

          o    two NIH grants awarded in 1999
               o    "Digestion of Food Oxalate" and
               o    "Islets from Islet  Progenitor/Stem  Cells for Implantation"
                    which,  together,  will  provide  approximately  $85,000  of
                    income during the remainder of 2000,
          o    the renewal of the "Islets from Islet  Progenitor/Stem  Cells for
               Implantation" NIH grant for an additional  $100,000  beginning on
               September 1, 2000,
          o    another NIH grant,  entitled "M3 Receptor:  Diagnostic Marker for
               Sjogren's  Syndrome,"  with  payments to begin on August 1, 2000,
               for $100,000,
          o    further activity under the research support agreements,
          o    increased   interest  income  from  investments  of  excess  cash
               generated from increased cash flows.

<TABLE>
<CAPTION>

================================================================================
           Comparison of G&A Expenses - 2nd Qtr 2000 vs. 2nd Qtr 1999

                 [GRAPHIC OMITTED - DATA POINTS ARE AS FOLLOWS:]

                                       2nd Qtr        2nd Qtr
                                        1999           2000
                                        as of          as of      Percent
                                       6/30/99        6/30/00      Change
                                       -------        -------     --------
<CAPTION>
                                     <C>            <C>            <C>
<S>
Payroll & Related                    $  32,225      $  51,831       60.84%
Professional                             7,905         17,482      121.15%
Office & computer supplies               4,298          9,831      128.73%
Advertising                              1,605          3,889      142.27%
Director's Fees                          6,000          8,600       43.33%
Deprec & Amort                           2,986          3,943       32.05%
Rent & Utilities                         2,995          3,774       26.04%
Travel, Meals & Ent.                     7,465          4,551      -39.03%
Other G&A                               22,084         24,358       10.30%

</TABLE>

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


         Operating,  general,  and  administrative  expenses  increased 46% from
$88,085 in the second quarter of 1999 to $128,259 in the second quarter of 2000.
These  increased  expenses  reflect  an  increase  in the  scale of  operations,
including:

     o    increased personnel and related payroll expenses,
     o    increased professional fees, including accounting and legal expenses ,
     o    increased director's fees,


                                       11

<PAGE>


     o    increased supplies and computer-related expenses,
     o    increased utilities usage,
     o    support of increased research activities,

offset  somewhat by a reduction  in travel,  meals and  entertainment  and other
miscellaneous operating expenses.

     We expect our operating, general and administrative expenses to continue to
increase in 2000 as a result of  increased  research  activities  resulting in a
need for increased administrative personnel.

<TABLE>
<CAPTION>

================================================================================
           Comparison of R&D Expenses - 2nd Qtr 2000 vs. 2nd Qtr 1999

             {GRAHPIC OMITTED - DATA POINTS ARE AS FOLLOWS:]

                                       2nd Qtr        2nd Qtr
                                        ended          ended       Percent
                                       6/30/00        6/30/99      Change
                                       -------        -------     --------
<CAPTION>
                                     <C>            <C>           <C>
<S>
Payroll & Related                    $  58,773      $  49,495       18.75%
Consultants                             64,986         12,500      419.89%
Supplies & Animal costs                 34,736         16,659      108.50%
Rent & Utilities                        19,638         17,412       12.79%
Deprec & Amort                           9,071          5,985       51.56%
Scientific Advisors                      6,000         25,000      -76.00%
R&D-related Interest                     4,153          2,491       66.71%
Other R&D                                5,381            495      986.76%

</TABLE>

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


          Research and development expenditures consist primarily of:

          o    payroll-related expenses of research and development personnel,
          o    laboratory and animal supplies,
          o    laboratory rent and associated utilities,
          o    depreciation on laboratory equipment,
          o    development activities,
          o    payments for sponsored research,
          o    scientific advisors,
          o    regulatory consultants fees,
          o    interest on the  purchase of  laboratory  equipment  and deferred
               fees and salaries for research personnel,
          o    amortization of capitalized patent costs.

           Research and development  expenses increased 57% from $129,514 in the
second  quarter  of 1999 to  $202,738  in the  second  quarter  of  2000.  These
increased expenses reflect an increase in the scale of operations, including

          o    increased  laboratory  personnel  and related  payroll  expenses,
          o    increased fees to regulatory consultants,
          o    increased laboratory-related supplies and expenses,
          o    increased laboratory rent and associated utilities,
          o    interest charges on the purchase of lab equipment and on deferred
               fees and salaries,
          o    increased amortization of patents,


                                       12

<PAGE>

          o    increased depreciation on laboratory equipment,

offset  somewhat by a reduction in  regulatory  and  preclinical  expenses,  and
scientific advisors fees. Our research and development expenses will continue to
increase in 2000 due to an increase  in the scale of  operations  as a result of
the receipt of the  research  grants  referred to above,  and as a result of the
completion of the Q-Med Transaction, described below.

          Interest  expense  is  comprised  only  of  non-R&D-related  interest.
R&D-related  interest  is  accounted  for  as  an  expense  under  research  and
development.  Interest expense  increased 23% from $37,559 in the second quarter
of 1999 to $46,035 in the second  quarter of 2000 due  primarily  to interest on
bridge  loans  from  officers,  and the  compounding  of  interest  on  deferred
administrative  fees and  salaries,  including  deferred  interest,  payable  to
related parties.

<TABLE>
<CAPTION>

Six Months Ended June 30, 2000 and 1999

================================================================================
                Summary of Operations - Six Months Ended June 30,

                                                      Percent
                             2000          1999        Change
                           -------       -------      -------
<CAPTION>
                           <C>           <C>           <C>
<S>
Revenues                   133,220         1,658       7,935%
Expenses                   706,947       491,714          45%
                           -------       -------
  Net Loss                (573,727)     (490,056)         18%
                           -------       -------

</TABLE>

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

         Total  revenues  increased  from  $1,658 in the  first  half of 1999 to
$133,220 in the first half of 2000 mainly as a result of the following:

          o    three active NIH research contracts:

               o    "Enteric Elimination of Oxalic Acid",
               o    "Islets from Islet  Progenitor/Stem Cells for Implantation",
                    and
               o    "Digestion of Food Oxalate"
          o    one research support agreement, with corporate collaborators, and
          o    an increase in interest  income  generated from the investment of
               increased cash flows.

          We expect revenue to continue to increase in 2000 as a result of


          o    two NIH grants awarded in 1999

               o    "Digestion of Food Oxalate"

               o    "Islets from Islet  Progenitor/Stem  Cells for Implantation"
                    both of which, together,  will provide approximately $85,000
                    of income during the remainder of 2000,
          o    the renewal of the "Islets from Islet  Progenitor/Stem  Cells for
               Implantation" NIH grant for an additional  $100,000  beginning on
               September 1, 2000,
          o    another NIH grant,  entitled "M3 Receptor:  Diagnostic Marker for
               Sjogren's  Syndrome" , with  payments to begin on August 1, 2000,
               for $100,000,
          o    further activity under the research support agreements,
          o    increased   interest  income  from  investments  of  excess  cash
               generated from increased cash flows.


                                       13

<PAGE>
<TABLE>
<CAPTION>

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

        Comparison of G&A Expenses Six Months Ended 06/30/00 vs. 06/30/99

                [GRAPHIC OMITTED - DATA POINTS ARE AS FOLLOWS:]

                                     Six Months      Six Months
                                        Ended          Ended       Percent
                                       6/30/00        6/30/99      Change
                                       -------        -------     --------
<CAPTION>
                                      <C>             <C>         <C>
<S>

Payroll & Related                      102,152         60,853       67.87%
Advertising                              8,524          1,301      555.06%
Office & computer supplies              14,334          6,215      130.63%
Deprec & Amort                           7,806          4,596       69.84%
Director's Fees                         17,200         12,000       43.33%
Rent & Utilities                         7,669          5,989       28.05%
Professional                            23,460         29,559      -20.63%
Travel, Meals & Ent.                     7,704         12,185      -36.78%
Other G&A                               48,768         43,865       11.18%

</TABLE>

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


         Operating,  general,  and  administrative  expenses  increased 36% from
$178,819 in the first half of 1999 to $237,616 in the first half of 2000.  These
increased expenses reflect an increase in the scale of operations, including:

          o    increased personnel and related payroll expenses,
          o    increased  directors  fees as a result of the  addition  of Board
               members and  increased  responsibilities  of members of the Audit
               and Benefits Committee,
          o    increased advertising and trade show expenses,
          o    increased supplies and computer-related expenses,
          o    increased utilities usage,
          o    support of increased research activities,

offset  somewhat by a decrease in  professional  fees  including  accounting and
legal expenses, travel, meals and entertainment expenses.

     We expect our operating, general and administrative expenses to continue to
increase in 2000 as a result of  increased  research  activities  resulting in a
need for increased administrative personnel.

                                       14

<PAGE>
<TABLE>
<CAPTION>

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

                Comparison of R&D Expenses 06/30/00 vs. 06/30/99

             {GRAPHIC OMITTED - DATA POINTS ARE AS FOLLOWS:}


                                                                   Percent
                                       6/30/00        6/30/99      Change
                                       -------        -------      -------
<CAPTION>
                                      <C>             <C>         <C>
<S>
Payroll & Related                      122,282         90,921       34.49%
Consultants                            116,205         25,000      364.82%
Supplies & Animal costs                 55,142         20,115      174.13%
Rent & Utilities                        39,901         35,307       13.01%
Deprec & Amort                          17,660         10,349       70.65%
Scientific Advisors                     12,000         50,000      -76.00%
R&D-related Interest                     8,122          4,853       67.36%
Travel                                   4,412          1,947      126.60%
Other R&D                                6,128          1,929      217.75%

</TABLE>

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


         Research and development expenditures consist primarily of:

          o    payroll-related expenses of research and development personnel,
          o    laboratory and animal supplies,
          o    laboratory rent and associated utilities,
          o    depreciation on laboratory equipment,
          o    development activities,
          o    payments for sponsored research,
          o    scientific advisors fees,
          o    regulatory consultants fees,
          o    interest on the  purchase of  laboratory  equipment  and deferred
               fees and salaries for research personnel,
          o    amortization of capitalized patent costs.

           Research and development  expenses increased 61% from $238,166 in the
first  half of 1999 to  $381,853  in the  first  half of 2000.  These  increased
expenses reflect an increase in the scale of operations, including

          o    increased laboratory personnel and related payroll expenses,
          o    increased laboratory rent and associated utilities,
          o    increased regulatory consultant's fees,
          o    interest charges on the purchase of lab equipment and on deferred
               fees and salaries,
          o    increased laboratory-related supplies and expenses,
          o    increased amortization of patents,
          o    increased depreciation on laboratory equipment,
          o    increased travel by laboratory personnel,

offset  somewhat by a reduction  in  regulatory  and  preclinical  expenses  and
scientific advisors fees. Our research and development expenses will continue to
increase in 2000 due to an increase  in the scale of  operations  as a result of
the receipt of the  research  grants  referred to above,  and as a result of the
Q-Med transaction described below.


                                       15

<PAGE>


          Interest  expense  is  comprised  only  of  non-R&D-related  interest.
R&D-related  interest  is  accounted  for  as  an  expense  under  research  and
development.  Interest  expense  increased 17% from $74,729 in the first half of
1999 to $87,478 in the first half of 2000 due  primarily  to  interest on bridge
loans from officers, and the compounding of interest on deferred  administrative
fees and salaries, including deferred interest, payable to related parties.

Liquidity and Capital Resources

         The company's  capital  requirements  relate  primarily to research and
development activities and working capital requirements.  The Company's research
activities and working capital  requirements have been influenced mainly by cash
availability.  Historically,  the  company  has  funded  its  cash  requirements
primarily through equity financing and research grants.

         The Company  generated  approximately  $218,000 in cash, an approximate
$216,000  increase  over the same  period in 1999.  Approximately  $644,000  was
provided  by  financing  activities,  while  approximately  $54,000 was used for
investing purposes and approximately $372,000 was used for operating activities.

         During the first half of 2000,  our  development  activities  have been
funded  primarily  by the  proceeds  from  the  offering,  research  grants  and
agreements,  and $562,500  invested by Q-Med in exchange  for 281,250  shares of
common stock,  pursuant to the Q-Med transaction  described below.  Through July
14,  2000 we have  received  a  total  of  $3,884,197  in cash  investments  and
$3,353,303 in the form of a shareholder receivable from Q-Med, A.B. and issued a
total of  3,900,000  shares of common  stock  pursuant to the Q-Med  Transaction
described below.

         The Company  secured a $48,000  commercial  fixed rate  promissory note
with SunTrust Bank, at a 7.83% interest rate and  collateralized  by a six-month
CD for the same amount paying 5.83%  interest.  The promissory  note calls for 5
monthly interest  payments and a final payment of the unpaid  principal  balance
plus accrued interest on December 23, 2000. There is no prepayment penalty.

         Our  long-term  indebtedness  consists  primarily of deferred  fees and
salaries payable to related individuals and unsecured convertible notes. On July
14, 2000 the total  $1,028,763 in deferred fees and salaries were converted into
a total of 236,192  shares of restricted  common stock and $84,000 in cash.  The
shares vest 50% after one year, monthly thereafter, up to 100% after two years.

         The Company has sold  150,000  shares and  received  gross  proceeds of
$600,000  through June 30, 2000 in the public  offering that commenced  December
10, 1997 and  terminated on March 31, 2000.  Through June 30, 2000, we have paid
offering-related  expenses  of  $135,870  which have been  applied  against  the
proceeds of the public offering.  The officers purchased 25,650 shares of common
stock in the public offering at the public offering price of $4.00 per share. In
payment,  the  officers  cancelled  $102,600 in  principal  amount of the bridge
loans.

         On June 5, 1999,  we were  awarded a $100,000  Phase I grant  under the
Small  Business   Technology  Transfer  Program  for  research  in  our  oxalate
technology  entitled  "Enteric  Elimination of Oxalic Acid". We began drawing on
these funds in July,  1999. We subcontracted a large portion of the grant to the
University  of  California,  Irvine with 9,046 was available and used during the
six month  period ended June 30, 2000.  In  September  1999 we also  received an
award of  $200,000  (covering  a 23-month  period)  from the NIH to support  our
diabetes  research  entitled  "Islets  from  Islet   Progenitor/Stem  Cells  for
Implantation". We have subcontracted $25,000 under this grant, but have utilized
approximately  $75,000 through July, 2000, leaving $100,000 available to support
diabetes  research  through August 31, 2001. In February 2000 we received notice
that we had been  awarded  another  $100,000  NIH  Phase I grant  under the SBIR
program for  research  in our oxalate  technology  entitled  "Digestion  of Food
Oxalate".  We began  drawing on these funds in February.  We have  subcontracted
approximately $30,000 to Wake Forest University,  but have approximately $66,000
available to support  oxalate  research at Ixion  through  February 28, 2001. In
March 2000 we  received  notice of an  additional  NIH SBIR  award for  research
entitled  "M3  Receptor:  Diagnostic  Marker for  Sjogren's  Syndrome".  We will
subcontract $45,000 to the University of Florida,

                                       16

<PAGE>

leaving  approximately  $55,000 to support Ixion research  through January 2001.
These  funds will be  available  beginning  August 1, 2000.  We have other grant
applications pending.

         It has not been  necessary  to borrow  additional  funds from  officers
since the first  quarter of 1999.  The bridge  loans total  $358,957 at June 30,
2000,  including accrued  interest,  and are due on demand. As part of the Q-Med
transaction, described below, the full amount was repaid to the officers in cash
on July 14, 2000.

         At June 30, 2000, we had $240,292 in cash and cash equivalents. At July
31, 2000 we had  $3,006,574  in cash and cash  equivalents.  Until  required for
operations,  our policy is to invest any excess cash reserves in bank  deposits,
money market funds, certificates of deposit,  commercial paper, corporate notes,
U.S. government instruments and other investment-grade  quality instruments with
ratings of P1/A1 or Aaa/AAA or above by Moody's Investors' Services  ("Moody's")
or Standard & Poor's Corporation  ("S&P")  respectively,  in accordance with the
Company's investment policy.

         In  connection  with  a  sponsored  research  agreement  with  Genetics
Institute,  Inc. which was concluded during 1997, some  patent-related  expenses
were  reimbursed by Genetics  Institute.  We may be  contractually  obligated to
repay these  reimbursed  expenses in installments  over a 36 month period upon a
notice to or by Genetics  Institute to the effect that their option to negotiate
for a license to our technology,  contained in the sponsored  research agreement
has expired.  We have not given nor  received  such  notice,  and,  accordingly,
reimbursement  has  not  commenced.  We  have  accrued  $42,317  as a  long-term
liability pending final notice under the agreement.

         We expect that annual lease expenses,  which include repayment of funds
provided by lessor for tenant  improvements  and an emergency  generator,  to be
approximately  $104,000  for 2000.  We will  continue to have a need to purchase
additional  laboratory  equipment  and estimate that we will need to purchase at
least $350,000 of capital laboratory equipment in the coming year.

         We  have  incurred  negative  cash  flows  from  operations  since  our
inception.  We have spent and expect to continue to spend,  substantial funds to
complete our planned product development efforts,  commence clinical trials, and
diversify our technology.  Our future capital  requirements  and the adequacy of
available funds will depend on numerous factors, including

          o    the   successful   commercialization   of   Ox-Control(TM)   (our
               nutritional  supplement) the XEntrIx (TM) Oxalobacter  formigenes
               Monitor  (our   diagnostic   test),   and  IxC1-62/47  (our  lead
               therapeutic compound),
          o    the successful commercialization of our islet replacement therapy
               products,
          o    progress in our product development efforts,
          o    the magnitude and scope of development efforts,
          o    progress with preclinical studies and clinical trials,
          o    the cost of contract manufacturing and research organizations,
          o    cost of filing,  prosecuting,  defending,  and  enforcing  patent
               claims  and  other  intellectual  property  rights,
          o    competing technological and market developments, and
          o    the  development of strategic  alliances for the  development and
               marketing of our products

         In the long-term we will be required to obtain additional funds through
equity or debt  financing,  strategic  alliances  with  corporate  partners  and
others,  or through other sources in order to bring our drug and device products
through regulatory  approval to  commercialization.  We do not have any material
committed  sources of  additional  financing,  other than that  described in the
section below,  regarding the Q-Med transaction.  The available resources should
make it possible to scale-up  our research and  development  activities  through
2001. We cannot assure you that additional funding,  consolidation, or alliance,
if  necessary,  will be available on  acceptable  terms,  if at all. If adequate
funds are not available, we may be required to delay,  scale-back,  or eliminate
certain   aspects  of  our

                                       17

<PAGE>

operations or attempt to obtain funds through  arrangements  with  collaborative
partners or others that may  require us to  relinquish  rights to certain of our
technologies,  product candidates,  products,  or potential markets. If adequate
funds are not  available,  our  business,  financial  condition,  and results of
operations will be materially and adversely affected.

The Q-Med Transaction

         On April 16, 1999, we reached an agreement in principle  with Q-Med AB,
a  biotechnology  company  based  in  Uppsala,  Sweden,  which  was  amended  on
September7,  1999 in which we issued an  option  to Q-Med to  acquire  shares of
newly-issued common stock

         Pursuant to this  agreement  the Company sold  3,337,500  shares of its
common stock to Qvestor,  LLC  ("Qvestor"),  a Delaware  subsidiary  of Q-Med AB
(publ)  ("Q-Med"),  a Swedish  biotech  company  whose  shares are traded on the
Stockholm stock exchange,  on July 14, 2000.  (Q-Med AB has no affiliation  with
Q-Med,  Inc.,  a Nasdaq  listed  company.).  At  closing,  Qvestor  paid cash of
$3,321,697 and provided  certain other  consideration  in exchange for 3,337,500
newly-issued shares of the Company's Common Stock. The balance of the $6,675,000
cash  portion of the  purchase  price will be paid by Qvestor by July 14,  2001.
Prior to this transaction, Q-Med already owned 562,500 shares. Qvestor and Q-Med
purchased  approximately  59% of the  issued  and  outstanding  shares of common
stock.

     Special Note Regarding Forward-Looking Statements

         This quarterly report on Form 10-QSB of Ixion  Biotechnology,  Inc. for
the quarter  ended June 30, 2000  contains  certain  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section  21E of the  Securities  Exchange  Act of 194,  as  amended,  which  are
intended to be covered by the safe harbors created  thereby.  To the extent that
such  statements  are  not  recitations  of  historical  fact,  such  statements
constitute  forward-looking  statements which, by definition,  involve risks and
uncertainties.  In  particular,  statements  under Part I, Item 2,  Management's
Discussion  and  Analysis  or  Plan  of  Operations,   contain   forward-looking
statements.   Where,  in  any  forward-looking  statement,  Ixion  expresses  an
expectation or belief as to future results or events, such expectation or belief
is expressed in good faith and believed to have reasonable  basis, but there can
be no assurance  that the statement of  expectation  or belief will result or be
achieved or accomplished.

         Statements  in this report  regarding  the dates on which we anticipate
commencing  clinical  trials  or  filing  for  regulatory  approval,  constitute
forward-looking  statements  under the federal  securities laws. Such statements
are subject to risks and  uncertainties  that could  cause the actual  timing of
such clinical trials or filings to differ materially from those we project. With
respect to such dates, we have made assumptions regarding, among other things,

          o    the successful and timely completion of preclinical  tests,
          o    the approval of investigational new drug applications for each of
               our drug candidates by the FDA,
          o    the  availability of a simplified  application way to seek market
               clearance from the FDA for our molecular diagnostic test,
          o    the availability of adequate clinical supplies,
          o    the absence of delays in patient enrollment, and
          o    the availability of the capital  resources  necessary to complete
               the preclinical tests and conduct the clinical trials.

         Our ability to commence clinical trials or file for regulatory approval
on the dates  anticipated is subject to risks.  You should not rely on the dates
on which we anticipate filing regulatory approval or commencing clinical trials.

                                       18

<PAGE>



         Statements regarding our research and development plans also constitute
forward-looking statements.  Actual research and development activities may vary
significantly from the current plans depending on numerous factors including

          o    changes in the costs of such activities from current estimates,
          o    the results of the programs,
          o    the results of clinical  studies  referred to above,
          o    the timing of regulatory  submissions,  technological advances,
          o    determinations as to commercial potential, and
          o    the status of competitive products.

         All  of  the  estimates  stated  herein  are  based  on  the  current
expectations of our  management  team,  which may change in the future due to a
large  number of potential events, including unanticipated future developments.

         The following factors are factors  that could  cause  actual results or
events to differ materially from those  anticipated,  and include,  but are not
limited to:

          o    general economic, financial and business conditions
          o    labor difficulties
          o    competition for customers in the biotechnology and pharmaceutical
               industries
          o    the costs of research and  development of chemical  compounds and
               products
          o    and changes in and compliance with governmental regulations


Part II - Other Information

Item 2.  Changes in Securities and Use of Proceeds

         As of June 30,  2000,  a total of 150,000  shares of common stock at an
aggregate  price of  $600,000  have been sold in the public  offering.  From the
effective date of the offering to June 30, 2000,  $200 in expenses and $3,390 in
commissions  have been paid to  Unified  Management  Company as broker and there
have been no finders' fees.  Other offering  related  expenses  through June 30,
2000, amounted to $132,988,  all of which have been offset against proceeds.  No
payments were made to directors,  officers,  general partners of the Company, or
to their associates in connection with the offering.

         Net offering proceeds as of June 30, 2000 amounted to $463,422. The net
proceeds were used  entirely to fund the  operations of the Company as reflected
in the financial statements included elsewhere in this report.


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

The Company's  annual meeting was held on June 9, 2000. The  shareholders of the
Company  elected the following  directors of the Company to serve until the next
annual meeting.

                  Weaver H. Gaines
                  David C. Peck
                  David M. Margulies
                  Vincent P. Mihalik
                  Karl-E. Arfors
                  Bengt Agerup
                  Thomas P. Stagnaro

         The  shareholders  approved an  amendment to the  Company's  1994 Stock
Option Plan which  increased  the total number of shares which may be issued and
outstanding to 500,000 (including 181,400 previously  issued).  The amended plan
also eliminated the separate  reservation for employees and consultants,  on the
one hand,  and directors  and members of the  scientific  advisory  board on the
other.

                                       19

<PAGE>



         Votes For                  Votes Against             Abstentions
         ---------                  -------------             -----------
         2,750,169                      1,100                    1,800

         Finally,  the  shareholders  of the Company  ratified the  selection of
PricewaterhouseCoopers  LLP as independent accountants for its fiscal year ended
December 31, 2000, and the total number of shares cast "For," cast "Against" and
"Abstentions" are set forth below:

         Votes For                  Votes Against             Abstentions
         ---------                  -------------             -----------
         27523,769                        0                       300

Item 5.  Other Information

         As  reported  previously  on form 8-K, in  connection  with the sale of
common stock to Qvestor,  the Company terminated its prior employment  agreement
with Weaver H.  Gaines and entered  into a new  employment  agreement  with him,
employing Mr.  Gaines as Chairman of the Board of Directors and Chief  Executive
Officer of the Company.  The Company also  terminated its Deferred  Compensation
Plan and issued common stock to the  Chairman,  the  President,  the Senior Vice
President and Chief  Scientist,  and one other employee,  and in the case of the
President,  $84,000 in cash, in settlement of their deferred accounts which were
long term, unfunded  liabilities of the Company. The Company also terminated its
Employment  Agreement  with David Peck dated August 31, 1994 and the  Consulting
Agreement  with Mr. Peck dated July 1, 1996.  Mr. Peck resigned as President and
Chief Financial Officer,  but will remain as a director and was elected Chairman
of the Finance Committee of the board.  Finally, Dr. Karl-E.  Arfors, a director
since 1998, resigned effective July 1, 2000, and Mr. P.O.  Wallstrom,  President
of Q-Med,  was elected to fill the vacancy.  Dr.  Arfors  became a member of the
Company's Scientific Advisory Board.

Item 6.  Exhibits and Reports on Form 8-K

Exhibits  marked by  asterisk(s)  are included with this Report;  other exhibits
have been incorporated by reference to other documents filed by us with the SEC.


         (a)     Exhibits

Exhibit           Description                                               Page

  (2)             Plan of Acquisition, Reorganization, Arrangement,
                  Liquidation or Succession................................ None

       ** (2.1)   Stock Purchase Agreement, dated July 14, 2000,
                  between the Qvestor and the Company

  (3)             Articles of Incorporation.................................None

  (4)             Instruments defining the Rights of Security Holders.......None

  (11)            Statement re: Computation of Per Share Earnings...........None

  (15)            Letter re: Unaudited Interim Financial
                  Information...............................................None

  (18)            Letter re: Change in Accounting Principles................None


                                       20

<PAGE>



  (19)            Report Furnished to Security Holders......................None

         **(22)   Published Report re: Matters Submitted to Vote of
                  Security Holders

  (23)            Consents of Experts and Counsel...........................None

  (24)            Power of Attorney.........................................None

         * (27)   Financial Data Schedule.....................................24

  (99)            Additional Exhibits.......................................None

       **(99.1)   Employment Agreement, dated July 14, 2000, between
                  Ixion Biotechnology, Inc., and Weaver H. Gaines

       **(99.2)   Shareholders Agreement, dated July 14, 2000, among
                  Q-Med, Qvestor, Ammon B. Peck, Weaver H. Gaines, and
                  the Company

       **(99.3)   Director's Agreement, dated July 14, 2000, among
                  Qvestor, Q-Med, and the Company

       **(99.4)   Voting Trust Agreement, dated July 14, 2000, between
                  Qvestor and the Company

       **(99.5)   Side letter, dated July 14, 2000, from Q-Med to
                  Weaver H. Gaines, Chairman and CEO of the Company

       **(99.6)   Agreement and Release, dated July 14, 2000, between
                  Ammon B. Peck and the Company

       **(99.7)   Agreement and Release, dated July 14, 2000, between
                  David C. Peck and the Company

       **(99.8)   Agreement and Release, dated July 14, 2000, between
                  Weaver H. Gaines and the Company

       **(99.9)   Agreement and Release, dated July 14, 2000, between
                  Theodore L. Snow and the Company

      **(99.10)   Press release dated July 17, 2000


---------------
   *Filed herewith
  **Filed on Form 8-K for the period ended July 31, 2000.

         (b)     Reports on Form 8-K

The Company filed a Form 8-K on July 31, 2000 in connection with the exercise of
an option by Qvestor, LLC ("Qvestor"), a Delaware subsidiary of Q-Med AB (publ),
a Swedish  biotech  company  whose  shares  are  traded on the  Stockholm  stock
exchange, in which an option for a total of 3,337,500 shares was exercised.

                                       21

<PAGE>


                                   Signatures

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                            Ixion Biotechnology, Inc.


Dated: August 9, 2000               By:        /s/ Weaver H. Gaines
                                        ----------------------------------
                                           Weaver H. Gaines
                                           Chairman and Chief Executive Officer
                                           Chief Financial Officer

Dated: August 9, 2000               By:       /s/ Kimberly A. Ramsey
                                        ----------------------------------
                                            Kimberly A. Ramsey
                                            Vice President and Controller
                                            (Principal Accounting Officer)



         Exhibit Index

Exhibit           Description                                               Page

    (2)           Plan of Acquisition, Reorganization, Arrangement,
                  Liquidation or Succession.................................None

     ** (2.1)     Stock Purchase Agreement, dated July 14, 2000,
                  between the Qvestor and the Company

    (3)           Articles of Incorporation.................................None

    (4)           Instruments defining the Rights of Security Holders.......None

   (11)           Statement re: Computation of Per Share Earnings...........None

   (15)           Letter re: Unaudited Interim Financial Information........None

   (18)           Letter re: Change in Accounting Principles................None

   (19)           Report Furnished to Security Holders......................None

      ** (22)     Published Report re: Matters Submitted to Vote of
                  Security Holders

   (23)           Consents of Experts and Counsel...........................None

   (24)           Power of Attorney.........................................None

        *(27)     Financial Data Schedule.....................................24


                                       22

<PAGE>


    (99)          Additional Exhibits.......................................None

      **(99.1)    Employment Agreement, dated July 14, 2000, between
                  Ixion Biotechnology, Inc., and Weaver H. Gaines

      **(99.2)    Shareholders Agreement, dated July 14, 2000, among
                  Q-Med, Qvestor, Ammon B. Peck, Weaver H. Gaines, and
                  the Company

      **(99.3)    Director's Agreement, dated July 14, 2000, among
                  Qvestor, Q-Med, and the Company

      **(99.4)    Voting Trust Agreement, dated July 14, 2000, between
                  Qvestor and the Company

      **(99.5)    Side letter, dated July 14, 2000, from Q-Med to
                  Weaver H. Gaines, Chairman and CEO of the Company

      **(99.6)    Agreement and Release, dated July 14, 2000, between
                  Ammon B. Peck and the Company

      **(99.7)    Agreement and Release, dated July 14, 2000, between
                  David C. Peck and the Company

      **(99.8)    Agreement and Release, dated July 14, 2000, between
                  Weaver H. Gaines and the Company

      **(99.9)    Agreement and Release, dated July 14, 2000, between
                  Theodore L. Snow and the Company

     **(99.10)    Press release dated July 17, 2000


------------
 *Filed herewith
**Filed in Form 8-K for the period ended July 31, 2000.


                                       23