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 March 31, 2001

                                       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 April 30, 2001 was 6,861,791.

<PAGE>



                            Ixion Biotechnology, Inc
                               Index to Form 10QSB

Part 1   Financial Information                                              Page
                                                                            ----
Item 1.  Financial Statements (unaudited)

         Condensed Balance Sheet - March 31, 2001..............................2

         Condensed Statements of Operations - Three Months Ended
         March 31, 2001 and 2000...............................................3

         Condensed Statements of Cash Flows - Three Months Ended
         March 31, 2001 and 2000...............................................4

         Notes to Condensed Financial Statements...............................5

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations ................................................6

Part II  Other Information

Item 2.  Changes in Securities and Use of Proceeds............................11

Item 6.  Exhibits and Reports on Form 8-K.....................................11

Signatures....................................................................12

Exhibit Index.................................................................12

<PAGE>



Part I.  Financial Information

Item 1.  Financial Statements

Condensed Balance Sheet
March 31, 2001
Unaudited

<TABLE>
                                     Assets
<CAPTION>


<S>                                                              <C>
Current  Assets:

   Cash and cash equivalents                                      $   1,692,355
   Accounts receivable                                                   29,621
   Prepaid expenses                                                      35,649
   Other current assets                                                     500
                                                                  --------------
            Total current assets                                      1,758,125
                                                                  --------------
Property and Equipment, net                                             310,203
                                                                  --------------

Other Assets:
   Patents and patents pending, net                                     411,398
   Other                                                                  8,637
                                                                   -------------
            Total other assets                                          420,035
                                                                 --------------
            Total Assets                                          $   2,488,363
                                                                  ==============

                       Liabilities and Stockholders' Equity

Current Liabilities:
    Accounts payable                                              $      92,787
    Notes payable                                                       768,906
    Accrued expenses                                                    223,213
    Interest payable                                                      1,797
                                                                  --------------
           Total current liabilities                                  1,086,703
                                                                  --------------
Long-Term Liabilities:
    Liability under research agreement                                   42,317
    Deferred rent, including accrued interest                            26,610
                                                                  --------------
             Total long-term liabilities                                 68,927
                                                                  --------------
                  Total liabilities                                   1,155,630
                                                                  --------------
Stockholders' Equity:
    Common stock, $.01 par value; authorized 20,000,000, issued and
       Outstanding 6,861,791 shares at March 31                          68,618
        Additional paid-in capital                                   10,957,641
    Receivable from shareholder                                      (3,353,303)
    Accumulated deficit                                              (6,074,155)
    Less unearned compensation                                         (266,068)
                                                                  --------------
           Total stockholders' equity (deficit)                      (1,332,733)
                                                                  --------------
Total Liabilities and Stockholders' Equity                        $   2,488,363
                                                                  ==============

See accompanying notes to condensed financial statements
</TABLE>

                                       2
<PAGE>


Condensed Statements of Operations

                                                  Three Months Ended
                                                    March 31, 2001
                                                      Unaudited
                                               2001                    2000
                                          --------------          --------------
<TABLE>
<CAPTION>
<S>                                      <C>                      <C>
Revenues:
 Income under research agreement          $       3,913           $       2,450
 Income from research grants                    136,793                  43,924
                                          --------------          --------------
       Total revenues                           140,706                  46,374
                                          --------------          --------------

Expenses:
  Operating, general and administrative         207,915                 114,088
  Research and development                      547,233                 174,383
                                          --------------          --------------
      Total operating expenses                  755,148                 288,471
                                          --------------          --------------

Other Income (Expense):
Interest expense                                (19,968)                (41,443)
  Interest income                                26,988                     869
                                          --------------          --------------
     Total other income (expense)                 7,020                 (40,574)

Net Loss.                                 $    (607,422)          $    (282,671)
                                          ==============          ==============

Net Loss per Share (Basic)                $       (0.09)          $       (0.09)
                                          ==============          ==============

Weighted Average Common Shares                6,861,791               2,990,272
                                          ==============          ==============

</TABLE>




See accompanying notes to condensed financial statements

                                       3

<PAGE>

Condensed Statements of Cash Flows
                                                  Three Months Ended
                                                    March 31, 2001

                                               2001                    2000
                                         --------------          --------------
                                                      Unaudited
<TABLE>
<CAPTION>
<S>                                      <C>                       <C>
Cash Flows from Operating Activities:
   Net loss                               $    (607,422)           $   (282,671)
   Adjustments to reconcile net loss
      to net cash used in operating
      activities:
         Depreciation                            21,510                   8,368
         Amortization                             3,807                   2,410
         Amortization of debt discount           14,290                  14,292
         Stock, options or warrants issued
         for consulting services                  1,260                   1,880
         Stock compensation                      37,245                  25,005
         Decrease (increase) in prepaid
          expenses and other current assets      11,928                  (1,852)

         Decrease (increase) in accounts
          receivable and other assets            27,346                 27,834
         Increase (decrease) in deferred
          revenue                                 1,281                     -
         Increase (decrease) in accounts
          payable and accrued expenses          109,445                 (32,381)
         Increase in deferred fees and
          salaries                                  -                    49,600
         Increase in deferred rent                  703                   1,409
         Increase in interest payable            (7,731)                  2,399
                                          --------------          --------------
Net cash used in operating activities          (443,592)               (183,707)
                                          --------------          --------------

Cash Flows from Investing Activities:
   Purchase of property and equipment           (23,551)                (18,214)
   Payments for patents and patents
      pending                                       -                   (13,429)
                                          --------------          --------------
Net cash used in investing activities           (23,551)                (31,643)
                                          --------------          --------------

Cash Flows from Financing Activities:
   Proceeds from issuance of common
      stock                                         -                   376,200
   Principal reductions in notes payable           (780)                 (2,204)
   Payment of deferred offering costs               -                    (1,051)
                                          --------------          --------------
Net cash provided by (used in)
   financing activities                            (780)                372,945
                                          --------------          --------------

Net Increase (Decrease) In Cash and
   Cash Equivalents                            (467,923)                157,595

Cash and Cash Equivalents at Beginning
   of Period                                  2,160,278                  22,361
                                          --------------          --------------

Cash and Cash Equivalents at End
   of Period                              $   1,692,355           $     179,956
                                          ==============           =============

</TABLE>

See accompanying notes to condensed financial statements

                                       4
<PAGE>

Notes to Condensed Financial Statements

Three Month Period Ended March 31, 2001 and 2000

1.   Basis of Presentation:

     The accompanying  unaudited  condensed  financial  statements for the three
     months ended March 31, 2001 and 2000,  respectively  have been  prepared in
     accordance  with  generally  accepted  accounting  principles  for  interim
     financial information. 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, 2000  financial  statements and
     related notes  included in the  Company's  Annual Report on Form 10-KSB for
     the year ended  December  31,  2000.  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 March 31, 2001 are not  necessarily  indicative of the
     results to be expected for the full year.

2.   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 March 31, 2001:

             Net operating loss carryforward            $   2,400,000
                                                        --------------

             Deferred tax asset                             2,400,000
             Valuation Allowance                           (2,400,000)
                                                        --------------

             Net deferred tax asset                     $         -
                                                        ==============


3.       Stock Options:

     On January 3, 2001, the Company  granted  ten-year  incentive stock options
     under the 1994 Stock Option Plan to purchase  40,000 shares of Common Stock
     at an exercise  price of $4.00 per share to an officer of the  company,  in
     connection with hiring package. The options vest at a rate of 20% per year.


                                       5
<PAGE>


Special Note Regarding Forward-Looking Statements

         We intend that the forward-looking  statements contained in this report
be covered by the safe-harbor provisions of Section 27A of the Securities Act of
1933 and  Section  21E of the  Securities  Act of 1934.  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,  our 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 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:

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

         The  estimates in our research  and  development  plan are based on the
current  expectations of our management  team.  Expectations may change due to a
large number of potential events, including unanticipated future developments.

         The following  factors,  which could cause actual  results or events to
differ  materially  from those  anticipated,  include,  but are not  limited to:
general economic,  financial and business conditions;  competition for customers
in the biotechnology and  pharmaceutical  industries;  the costs of research and
development  of chemical  compounds and products;  and changes in and compliance
with governmental regulations.


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         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 Form 10-KSB and in other SEC filings.

Results of Operations

Three Months Ended March 31, 2001 and 2000

    ---------------------------------------------------------------------------
       Summary of Operations - Three Months Ended March 31,
    ---------------------------------------------------------------------------
                                                              2000 Percent
                                           2001               Change

   ---------------------------------------------------------------------------
    Revenues:                              $140,706        $46,374      203.41%
    Operating Expenses:                   ($755,148)     ($288,471)     161.78%
    Other Income (Expense):                  $7,020       ($40,574)    -117.30%
                                    ------------------------------------------

                                       6
<PAGE>

    Net Loss:                            ($607,422)     ($282,671)     114.89%
   ---------------------------------------------------------------------------


        Total  revenues  increased  from $46,374in the first quarter of 2000 to
$140,706 in the first quarter of 2001 mainly as a result of the following four
active NIH research contracts:

         - "Islets from Islet Progenitor/Stem Cells for Implantation"
         - "M3 Receptor: Diagnostic Marker for Sjogren's Syndrome"
         - "Oxalobacter Formigenes Diagnostic Kit Development"
         - "Coating of Urinary Protheses to Prevent Encrustation"

       We expect revenue to continue at it's current rate in 2001 because of

          o     The  continuation  of the "Islets from Islet  Progenitor/Stem
                Cells for Implantation" NIH grant for an additional  $100,000
                which began on September 1, 2000;

          o     NIH grant  entitled  "Oxalobacter  Formigenes  Diagnostic Kit
                Development"  with payments which began on September 1, 2000,
                for $99,958;

          o     NIH grant entitled  "Coating of Urinary  Protheses to Prevent
                Encrustation" with payments which began on September 1, 2000,
                for $99,958;

increasing  slightly in the last half of the year due to other  grants we expect
will be awarded during 2001.

[Graphics Omitted]

Comparison of G&A Expenses 1st quarter 2001 vs. 1st quarter 2000

                                  2001                       2000
                               ----------                -----------
Personnel-related              144,367                     58,062
Professional Fees               16,297                      5,978
Office & Supplies                9,391                      5,693
Rent & Utilities                 6,707                      3,895
Other G&A                       31,153                     40,460


         Operating,  general,  and  administrative  expenses  increased 82% from
$114,088 in the first  quarter of 2000 to $207,915 in the first quarter of 2001.
These increased expenses reflect:

         - an increase in personnel and related payroll expenses;
         - increased professional fees, including audit and legal fees;
         - increased supplies related to increased personnel;
         - increased rental space and associated utilities usage; and
         - support of increased research activities.

The increases were offset, somewhat, by a reduction in other miscellaneous
administrative fees.

We expect our  operating,  general  and  administrative  expenses to continue to
increase in 2001 as a result of

                                       7


<PAGE>

increased  pace  of  research   activities   which  also  results  in  increased
administrative personnel requirements.


[Graphics Omitted]

Comparison of R&D Expenses 1st quarter 2001 vs. 1st quarter 2000

                                  2001                       2000
                               ----------                -----------
Personnel-related               158,443                   57,260
Lab supplies                    141,084                   16,221
Consultants & Subcontracts      136,520                   51,219
Other R&D                        40,989                   11,430
Rent & Utilities                 30,890                   20,263
Deprec & Amort.                  21,929                   16,106
Scientific Advisors              12,833                    6,000
Travel                            4,545                    1,883


         Research and development expenditures consist primarily of:

         - personnel-related expenses, including employee health plan adopted
           September 1, 2000;
         - laboratory and animal supplies;
         - laboratory rent and associated utilities;
         - depreciation on laboratory equipment;
         - development activities;
         - payments for sponsored research;
         - scientific advisors fees;
         - regulatory consultants fees;
         - interest on the purchase of laboratory equipment; and
         - amortization of capitalized patent costs.

         Research and development expenses increased over 213% from $174,383 in
the first quarter of 2000 to $547,233 in the first quarter of 2001.  These
increased expenses reflect:

     o   increased laboratory personnel and related payroll expenses;
     o   increased laboratory-related supplies and expenses;
     o   increased consultants and subcontractors fees;
     o   increased research and development activities;
     o   increased laboratory rental space and associated utilities;
     o   increased number of issued patents resulting in increased amortization;
     o   increase in capitalized equipment resulting in increased depreciation;
     o  increase in R&D-related travel.


         Our research and development expenses will continue to increase in 2001
due to an increase in the scale of operations.

                                        8
<PAGE>

[Graphics Omiitted]

Comparison of Interest Income and Expenses - 1st Qtr 2001 vs. 1st Qtr 2000

                                  2001                       2000
                               ----------                -----------

Interest Income                   26,988                      869
Interest Expense                  19,968                   41,443


         Interest expense decreased almost 52% from $41,443 in the first quarter
of 2000 to $19,968 in the first quarter of 2001 due primarily to the  re-payment
of the officers' bridge loans and the conversion of deferred administrative fees
and salaries in mid 2000.  Interest  expense in 2001 should decline further as a
result of the maturity of the unsecured subordinated notes in August 2001.

     Interest  income  increased  from $869 in the  first  quarter  of 2000,  to
$26,988 in the first quarter of 2001, due to the investment of an increased cash
inflow,  in excess of  operating  needs.  Interest  income  should  continue  to
increase in 2001  primarily due to the payment by Q-Med in July 2001,  described
below.

Liquidity and Capital Resources

         Operations  during the first quarter of 2001 have been funded primarily
from funds provided from equity investments by Q-Med, AB ("Q-Med"), our majority
shareholder,   funds  from  NIH  grants,  and  research  agreements  with  other
companies. We do not have any material bank financing arrangements.

         Our agreement with Q-Med requires Q-Med to pay $3,353,303 in cash on or
before July 14, 2001. It also gives Q-Med the right of first refusal to offer to
redeem,  at the maturity date on August 31, 2001, from all holders  electing not
to convert, up to $787,270 in face amount of our unsecured subordinated notes.

                A  summarization  of the grant funds  received from the National
Institutes of Health under which we received  payments  during the first quarter
of 2001 follows:



     o    In  September  1999 we  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   subcontracted   $25,000  under  this  grant,  and  have  utilized
          approximately  $157,000  through  December 31, 2000,  leaving  $43,000
          available to support  diabetes  research through August 31, 2001, when
          the grant period expires.

     o    In September 2000 we were awarded  another NIH SBIR award for research
          entitled "M3 Receptor:  Diagnostic Marker for Sjogren's Syndrome".  We
          subcontracted  about $45,000 to the  University of Florida and drew on
          the rest of the funds available through the expiration of the grant in
          the first quarter of 2001.

     o    Also in September,  2000, we received  notice that we had been awarded
          another NIH SBIR grant,



                                       9
<PAGE>


          for $99,958 and  entitled  "Coating  of Urinary  Protheses  to Prevent
          Encrustation".  We have utilized approximately $59,000 through the end
          of the first quarter of 2001, leaving approximately $40,000 to support
          research through August of 2001.

     o    Also in September,  2000, we received  notice that we had been awarded
          another  NIH  SBIR  grant,  for  $99,958  and  entitled   "Oxalobactor
          Formigenes  Diagnostic  Kit  Development".  We received  approximately
          $35,000  in grant  revenues  through  the end of the first  quarter of
          2001, leaving approximately $65,000 to support research through August
          of 2001.

     o    We have other grant applications pending.

         At March 31,  2001,  we had  $1,692,355  in cash and cash  equivalents,
compared with $179,956 at March 31, 2000.  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.


         We expect that annual lease expenses,  which include repayment of funds
provided by lessor for tenant  improvements  and an emergency  generator,  to be
approximately  $175,000  for 2001.  We will  continue to have a need to purchase
additional  laboratory  equipment  and estimate that we will need to purchase at
least $500,000 of capital laboratory equipment during the remainder of 2001.

         We incurred negative cash flows from operations in the first quarter of
2001 of approximately  $444,000 as compared to $184,000 in 2000. Cash decreased,
in total for the first quarter of 2001,  approximately $468,000,  while we had a
slight  increase in cash of  approximately  158,000  during the first quarter of
2000,  due  primarily  to equity  investments.  We  expect to have a large  cash
increase during the second half of 2001,  with the Q-Med payment.  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    receipt  of  the  balance  of  the  purchase   price  from  the  Q-Med
          transaction;
     o    the successful commercialization of oxalate products;
     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.

         We will  continue  to be required to obtain  additional  funds  through
equity or debt  financing,  strategic  alliances  with  corporate  partners  and
others, mergers or the sale of substantially all of our assets, 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 Q-Med.  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 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.

                                       10
<PAGE>

         We expect that our existing  funds,  research grants and receipt of the
remaining $3,353,303 purchase price from Q-Med AB will be sufficient to fund our
operations  through  the  middle  of 2002.  We have the  ability  to  scale-back
operations,  as necessary,  in order to extend the use of operating cash.  There
can be no assurance that any additional financing required in the future will be
available on acceptable terms, if at all.

Recent Accounting Pronouncements

In June 1998,  the Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards No. 133"Accounting for Derivative Investments and
Hedging Activities" ("SFAS No. 133")which  establishes  accounting and reporting
standards requiring that every derivative  instrument be recorded in the balance
sheet as either an asset or liability  measured at its fair value. The statement
also  requires  that  changes  in the  derivative's  fair  value  be  recognized
currently in earnings  unless specific hedge  accounting  criteria are met. SFAS
No. 133, as extended by SFAS No. 137 and amended by SFAS No. 138, was  effective
for  Ixion  this  fiscal  quarter.  Historically,  Ixion  has not  entered  into
derivatives  contracts  to hedge  existing  risks or for  speculative  purposes.
Accordingly, adoption of SFAS No. 133 had no effect on its financial position or
results of operations.


Part II - Other Information

Item 2.  Changes in Securities and Use of Proceeds

None.

Item 6.  Exhibits and Reports on Form 8-K

         (a)     Exhibits

Exhibit   Description                                                      Page

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

(3)       Articles of Incorporation                                         None

(4)       Instruments defining the Rights of Security Holders               None

(9)       Voting Trust Agreement

(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                                                  None

(23)      Consents of Experts and Counsel                                   None


                                       11
<PAGE>

(24)      Power of Attorney                                                 None

(99)      Additional Exhibits                                               None


         (b)     Reports on Form 8-K                                        None


                                   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: May 1, 2001         By: /s/ Weaver H. Gaines
                               --------------------
                               Weaver H. Gaines
                               Chairman and Chief  Executive Officer

Dated: May 1, 2001         By: /s/ Kimberly A. Ramsey
                               ----------------------
                                Kimberly A. Ramsey
                          Vice President and Controller
                         (Principal Accounting Officer)