<PAGE>

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

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

                                  Form 10-QSB

(Mark One)
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended  September 30, 1999
                               --------------------

                                      OR

[_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934


                        Commission File Number 0-27264


                                 UROGEN CORP.
                                 ------------
            (Exact name of registrant as specified in its charter)


               DELAWARE                            33-0687976
               --------                            ----------
    (State or other jurisdiction of            (I.R.S. Employer
    incorporation or organization)             Identification no.)


               10835 Altman Row, Suite 150, San Diego, CA, 92121
    (Address of principal executive offices)      (Zip code)

      Registrant's Telephone Number, including area code:  (858) 450-5949

                                Not Applicable
                                --------------
        (Former name, former address and former fiscal year, if changed
                              since last report)

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

The number of shares of the Common Stock of the registrant outstanding as of
November 4, 1999 was 12,097,999.
<PAGE>

                                 UROGEN CORP.
                       (A Development Stage Enterprise)

                             INDEX TO FORM 10-QSB

                        PART I.  FINANCIAL INFORMATION
                        ------------------------------

<TABLE>
<CAPTION>
                                                                    Page No.
                                                                    --------
<S>                                                                 <C>
Item 1.  Financial Statements


         Condensed Consolidated Balance Sheets
           September 30, 1999 (Unaudited) and  December 31, 1998......   2

         Condensed Consolidated Statements of Operations (Unaudited)
           Three and Nine Month Periods Ended September 30, 1999 and
           1998 and the period from July 1, 1991 (inception)
           to September 30, 1999......................................   3

         Condensed Consolidated Statements of Cash Flows (Unaudited)
           Nine Months Ended September 30, 1999 and
           1998 and the period from July 1, 1991 (inception)
           to September 30, 1999......................................   4

         Notes to Unaudited Condensed Consolidated
           Financial Statements.......................................   5

Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations..............   7

                          PART II.  OTHER INFORMATION
                          ---------------------------

Item 1.  Legal Proceedings............................................  12
Item 2.  Changes in Securities........................................  12
Item 3.  Defaults Upon Senior Securities..............................  12
Item 4.  Submission of Matters to a Vote
         of Security Holders..........................................  12
Item 5.  Other Information............................................  13
         Market For Registrant's Common Equity
Item 6.  Exhibits and Reports on Form 8-K.............................  13
         Signatures...................................................  14
</TABLE>
                                       1
<PAGE>

                                 UROGEN CORP.
                       (A DEVELOPMENT STAGE ENTERPRISE)
                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                              September 30,        December 31
                                                                                  1999                1998
                                                                              -------------        -----------
                                                                               (unaudited)
<S>                                                                           <C>                  <C>
ASSETS

Current assets:
   Cash and cash equivalents                                                   $  1,157,999        $   314,983
   Accounts receivable from related party                                                 -            348,718
   Other current assets                                                              22,821             20,173
                                                                               ------------        -----------
       Total current assets                                                       1,180,820            683,874

Property and equipment, net                                                         477,878            383,826
Other assets                                                                        218,552             30,052
                                                                               ------------        -----------

                                                                               $  1,877,250        $ 1,097,752
                                                                               ============        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                            $    222,944        $   392,461
   Amounts due to stockholder                                                             -            315,000
   Accrued employee benefits                                                         74,394            200,716
   Other accrued liabilities                                                         63,610             58,280
   Current portion of capital lease obligation                                       43,072                  -
   Notes payable                                                                          -            991,761
                                                                               ------------        -----------
       Total current liabilities                                                    404,020          1,958,218

Deferred compensation                                                               150,644             28,987
Advance from related party                                                        3,391,816          1,044,275
Capital lease obligation, net of current portion                                     75,423

Commitments

Stockholders' equity:
   Preferred Stock - $0.01 par value, 5,000,000
      shares authorized:
         Series A Preferred Stock, 5,830 and 5,830
           issued and outstanding                                                        58                 58
         Series B Preferred Stock, 704 and none
           issued and outstanding                                                         7                  -
   Common Stock - $0.001 par value, 40,000,000
       shares authorized; 12,097,999 and 9,378,538
       issued and outstanding                                                        12,097              9,379
   Additional paid-in capital                                                     9,267,909          6,782,920
   Note receivable from stockholder                                                       -            (20,522)
   Deficit accumulated during development stage                                 (11,424,724)        (8,705,563)
                                                                               ------------        -----------
       Total stockholders' equity                                                (2,144,653)        (1,933,728)
                                                                               ------------        -----------

                                                                               $  1,877,250        $ 1,097,752
                                                                               ============        ===========
</TABLE>

                            See accompanying notes

                                       2
<PAGE>

                                 UROGEN CORP.
                       (A Development Stage Enterprise)
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                -----------------------------------------------
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                Three Months Ended             Nine Months Ended          July 1, 1991
                                                ------------------             -----------------         (inception) to
                                          September 30,   September 30,   September 30,   September 30,   September 30,
                                              1999            1998            1999            1998             1999
                                          ------------    ------------    ------------    ------------    -------------
<S>                                       <C>             <C>             <C>             <C>            <C>
Revenue                                    $    16,389     $         -     $    67,201     $   192,300     $    908,581
                                          ------------    ------------    ------------    ------------    -------------
Costs and expenses:
  Cost of sales                                      -               -               -               -          821,878
  Research and development                     714,908         807,204       1,861,892       1,176,680        7,296,560
  Write-off of acquired in-process
   technology                                        -       3,429,700               -       3,429,700        5,455,505
  Selling, general and administrative          185,751         164,068         591,777         299,501        1,938,733
                                          ------------    ------------    ------------    ------------    -------------
Total costs and expenses                       900,659       4,400,972       2,453,669       4,905,881       15,512,676
                                          ------------    ------------    ------------    ------------    -------------

Loss from operations                          (884,270)     (4,400,972)     (2,386,468)     (4,713,581)     (14,604,095)

Other income (expense)                               -               -             905               -           64,981
Interest expense                                     -        (170,790)       (348,890)       (170,790)        (654,996)
Interest income                                  7,454           2,057          15,292           3,031           43,590
                                          ------------    ------------    ------------    ------------    -------------

Net loss                                   $  (876,816)    $(4,569,705)    $(2,719,161)    $(4,881,340)    $(15,150,520)
                                          ============    ============    ============    ============    =============


Basic and diluted loss per share           $     (0.07)    $     (0.61)    $     (0.27)    $    ( 0.65)
                                          ============    ============    ============    ============
Number of shares used in the
computation of  basic and  diluted
 loss per share                             12,097,999       7,537,319      10,237,493       7,537,319
                                          ============    ============    ============    ============
</TABLE>

                            See accompanying notes.

                                       3
<PAGE>

                                 UROGEN CORP.
                       (A Development Stage Enterprise)
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                -----------------------------------------------
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                                      July 1, 1991
                                                                   For the nine months ended         (inception) to
                                                                         September 30,                September 30,
                                                                    1999              1998               1999
                                                                ------------      -------------      --------------
<S>                                                             <C>               <C>                <C>
Net loss                                                        $(2,719,161)        $(4,881,340)      $(15,150,520)
Adjustments to reconcile net loss to net cash used
   In operating activities:
      Write-off of in-process technology acquired with stock              -           3,429,700          5,455,505
      Expenses paid via advances from related  party                      -             465,093            695,557
      Depreciation and amortization                                  89,491                 741            609,818
      Distribution of common stock for services                       2,900                   -             21,050
      Accrued interest paid through issuance of
         Common Stock                                                42,563                                 42,563
      Non-cash outside service cost                                       -                   -            106,000
      Gain (loss) on disposal of fixed assets                             -                   -            (81,807)
      Amortization of debt discount                                 305,428             152,955            571,068
      Change in assets and liabilities:
            Other current assets                                     (2,648)            (12,466)           (22,821)
            Other assets                                           (188,500)                              (218,552)
            Accounts payable                                       (163,508)            216,154            228,953
            Amounts due to stockholder                             (315,000)            315,000                  -
            Other current liabilities                               (88,557)            104,224            170,439
            Deferred compensation                                   121,657                   -            150,644
                                                                -----------         -----------       ------------
Net cash used in operating activities                            (2,915,335)           (209,939)        (7,422,103)

Cash flows from investing activities:
   Purchase of property and equipment                               (65,048)             (2,306)          (644,044)
                                                                -----------         -----------       ------------

Net cash used in investing activities                               (65,048)             (2,306)          (644,044)

Cash flows from financing activities:
   Advances from related party                                    3,401,670                   -          3,401,670
   Repayment of note receivable from stockholder                     20,000                   -             20,000
   Proceeds from notes payable                                      400,000           1,030,000          1,430,000
   Stock issuance costs                                                                 (83,366)           (83,366)
   Proceeds from issuance of common stock upon
    exercise of options and warrants                                  1,729                   -             72,229
   Proceeds from sale of Common Stock                                     -                   -                148
   Net advances from Medstone                                             -                   -          3,883,465
   Capital contribution by Medstone                                       -                   -            500,000
                                                                -----------         -----------       ------------
Net cash provided by financing activities                         3,823,399             946,634          9,224,146
                                                                -----------         -----------       ------------

Net increase (decrease) in cash and equivalents                     843,016             734,389          1,157,999

Cash and equivalents, beginning of period                           314,983              74,353                  -
                                                                -----------         -----------       ------------

Cash and equivalents, end of period                             $ 1,157,999         $   808,742       $  1,157,999
                                                                ===========         ===========       ============
</TABLE>

                            See accompanying notes.

                                       4
<PAGE>

                                 UROGEN CORP.
                       (A Development Stage Enterprise)

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
        --------------------------------------------------------------
                              September 30, 1999
                              ------------------


1.  The unaudited financial information furnished herein, in the opinion of
    management, reflects all adjustments, consisting only of normal recurring
    adjustments, which are necessary to state fairly the consolidated financial
    position, results of operations, and cash flows of UroGen Corp. as of and
    for the periods indicated. UroGen presumes that users of the interim
    financial information have read or have access to the Company's audited
    consolidated financial statements and Management's Discussion and Analysis
    of Financial Condition and Results of Operations for the year ended December
    31, 1998 and that the adequacy of additional disclosure needed for a fair
    presentation, except in regard to material contingencies or recent
    significant events, may be determined in that context. Accordingly, footnote
    and other disclosures which would substantially duplicate the disclosures
    contained in Form 10-KSB for the year ended December 31, 1998 filed on March
    31, 1999 by the Company have been omitted. The financial information herein
    is not necessarily representative of a full year's operations.

2.  The accompanying financial statements have been prepared assuming the
    Company will continue as a going concern. The Company incurred net losses of
    $2,719,161 during the nine months ended September 30, 1999 and has a deficit
    accumulated during its development stage of $11,424,724 at September 30,
    1999. While management intends to raise additional debt and/or equity
    financing to fund future operations and to provide additional working
    capital, cash raised through the sale of the unsecured notes (Note 5) as
    well as funds provided by Baxter Healthcare Corporation ("Baxter") are
    expected to finance the Company's operations through October 2000.

    The accompanying financial statements do not include any adjustments to
    reflect the possible future effects on the recoverability and classification
    of assets or the amounts and classifications of liabilities that may result
    from the possible inability of the Company to continue as a going concern.

3.  The following summarizes non-cash investing and financing activities
    during the nine months ended September 30, 1999:

       Conversion of advance from related party to preferred stock   $  704,000
       Conversion of notes payable to common stock                    1,430,000

                                       5
<PAGE>

4.  In accordance with the Financial Accounting Standards Board's Statement of
    Financial Accounting Standards ("SFAS") No. 128, Earnings per Share, net
    loss per share is based on the average number of shares of common stock
    outstanding during the nine-month periods ended September 30, 1999 and 1998.
    Equivalent shares arising from convertible preferred stock, convertible
    debt, warrants for Common Stock and outstanding stock options have not been
    included in the computation of net loss per share as their effect would be
    antidilutive.

5.  In April 1999, the Company closed a financing in which we received $400,000
    from the sale of unsecured convertible notes payable, which bore interest at
    8% per annum and were due on March 30, 2000, unless previously converted.
    The notes were convertible, at the option of the holder , into Common Stock
    at $0.30 per share, and automatically converted into Common Stock
    immediately prior to the filing of any registration statement to register
    the resale of the underlying shares.

    In addition, each note holder received a warrant to purchase the same number
    of shares of Common Stock as their notes convert into. The warrants are
    exerciseable for seven years from issuance and have an exercise price of
    $0.30 per share. The warrants were valued at $266,667, which was recorded as
    a discount to the notes payable. The discount was fully amortized to
    interest expense upon the conversion of the notes to Common Stock on June
    22, 1999 (Note 6).

6.  On June 22, 1999 the Company filed a registration statement with the
    Securities and Exchange Commission to register for resale the shares
    underlying the unsecured convertible notes payable and the related warrants
    issued in July 1999 and April 1999. Immediately prior to filing the
    registration statement, the unsecured convertible notes payable and accrued
    interest automatically converted into 2,460,811 shares of common stock of
    UroGen Corp.

7.  In September 1999, the Company entered into a facility operating lease for
    approximately 8,600 square feet for manufacturing operations. The lease
    expires in August 2004. Future minimum lease payments are $50,415 for
    1999; $203,676 for 2000; $209,788 for 2001; $216,084 for 2002; $222,560 for
    2003; and $151,312 for 2004.

8.  In September 1999, the Company entered into a $250,000 capital lease line
    under which it will lease furniture and equipment for manufacturing
    operations. The term of the lease is thirty-six months and the line is
    secured by all of the company's equipment. In connection with the lease, the
    Company issued warrants to the lessor for 250,000 shares of common stock.
    The warrants are exercisable at $0.30 per share and expire in August 2007.
    As of September 30, 1999 the balance under the lease was $118,495.

                                       6
<PAGE>

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

OVERVIEW

    UroGen commenced operations as a stand-alone entity in January 1996 and has
been in the development stage since inception.  Our original mission was to
develop products to treat diseases in urology, with a particular interest in
prostate cancer. We had licensed technology that uses the IL-3 gene to treat
several types of cancer, but did not have technology to deliver the gene.  On
July 8, 1998, we entered into an agreement with Baxter Healthcare Corporation in
which we acquired the exclusive rights to gene delivery technologies and
laboratory equipment.  The gene delivery technology will be used to enhance our
existing technology and to develop products to deliver other genes.  We believe
that the gene delivery technology provides a higher level of expression of the
gene being delivered compared to other gene therapy approaches.  Prior to our
license of the technology, Baxter had been developing this technology for the
treatment of hemophilia and cancer and has continued to fund the development of
our Factor VIII product for hemophilia.

    In exchange for the exclusive license to the gene delivery technology and
equipment, we issued 1,841,219 shares of common stock and 5,830 shares of Series
A preferred stock to Baxter.  The assets acquired from Baxter were valued based
on the fair market value of our common stock on the date of the agreement.  We
obtained an appraisal of the value of the equipment acquired.  Based upon the
very early stage of development of the technology, the value of the technology
was charged to acquired in-process technology.

    Our current activities consist of the development of the gene transfer
system in our Factor VIII Mini-Ad product for hemophilia.  If we are successful
in raising sufficient capital, we plan to develop the system for our Tumor
Killing IL-3 product to treat prostate cancer.  We expect to incur increasing
research and development expenditures as we focus our efforts on further
development of these products. We expect no significant revenues and to incur
significant operating losses for at least the next five years.

RECENT EVENTS

  In April 1999, the Company closed a financing in which we received $400,000
representing proceeds from the sale of unsecured convertible notes payable,
which bore interest at 8% per annum and were due on March 30, 2000, unless
previously converted.  The notes were convertible, at the option of the holder ,
into Common Stock at $0.30 per share, and automatically converted into Common
Stock immediately prior to the filing of any registration statement to register
the resale of the underlying shares.

                                       7
<PAGE>

   In addition, each note holder received a warrant to purchase the same number
of shares of Common Stock as their notes convert into.  The warrants are
exerciseable for seven years from issuance and have an exercise price of $0.30
per share.

   On June 22, 1999 the Company filed a registration statement with the
Securities and Exchange Commission to register for resale the shares underlying
the unsecured convertible notes payable and the related warrants issued in July
1998 and April 1999.  Immediately prior to filing the registration statement,
the unsecured convertible notes payable and accrued interest converted into
2,460,811 shares of common stock of UroGen Corp.

RESULTS OF OPERATIONS

Revenues

   UroGen has generated revenues to date of $908,581 from contract research
agreements and grants. Total revenues for the nine months ended September 30,
1998 and 1999 were $192,300 and $67,201, respectively.  Total revenues for the
years ended December 31, 1996, 1997 and 1998 were none, $193,500 and $192,300,
respectively.  We anticipate seeking additional research agreements and grants
to help fund research and development efforts; however, we do not expect that
contract research will result in significant revenues in the future. We do not
anticipate revenues from products for at least five years.

Research and development and acquired in-process technology

   Research and development expenses and acquired in-process technology charges
during the years ended December 31, 1996, 1997 and 1998 were $347,698, $345,592
and  $7,371,053, respectively. Research and development expenses for the nine-
month periods ended September 30, 1998 and 1999 were $4,606,380 and $1,861,892,
respectively.  Research and development expenses during 1996, 1997 and through
June 30, 1998 consisted primarily of payments to consultants who were performing
research and to fees related to technology licenses and patent applications.
Following consummation of the Baxter transaction on July 8, 1998, research and
development costs were expanded to include the costs of the hemophilia and
cancer programs acquired from Baxter, but which were continued at Baxter until
certain employees and tangible assets involved were moved to our facilities in
October 1998. Additionally, the technology acquired from Baxter valued at
$5,455,505 was charged to acquired in-process technology during the year ended
December 31, 1998 due to the early stage of development. We estimate that it
will take five more years and approximately $30 million dollars to complete the
development of the Factor VIII product and obtain regulatory approvals, if we
are able to obtain approvals.

   We anticipate increasing research and development expenditures in the future
as we conduct preclinical and clinical testing necessary to bring our products
to market and to establish manufacturing and marketing capabilities.  We are
currently in the process of developing a facility to manufacture the materials
for Phase I and Phase II clinical trials for our hemophilia product.  We
estimate that the costs to develop the facility and manufacture materials for
Phase I clinical trials will be approximately $4.4 million, which will be funded
by Baxter under the developmental collaboration agreement.  We are unable to
estimate the costs to develop

                                       8
<PAGE>

manufacturing facilities for Phase III clinical trials and for commercial
quantities of our potential products and the costs to develop marketing
capabilities because we have not determined whether we will build these
capabilities within the company or enter into collaborative arrangements with
others to perform these functions.

General and administrative expenses

  General and administrative expenses during the years ended December 31, 1996,
1997 and 1998, were $174,472, $151,315 and $487,501, respectively. General and
administrative expenses for the nine month periods ended September 30, 1998 and
1999 were $299,501 and $591,777, respectively.  General and administrative
expenses include the costs of our administrative personnel and consultants,
office lease expenses and other overhead costs, including legal and accounting
costs. General and administrative expenses have increased related to the
increased level of operations, and we expect general and administrative expenses
to continue to increase to support our increasing research and development
activities.

LIQUIDITY AND CAPITAL RESOURCES

  The following discussion compares activity for the nine months ended September
30, 1999 to the year ended December 31, 1998 because the comparison to the nine
months ended September 30, 1998 is not considered appropriate due to the changes
to operations resulting from the consummation of the Baxter transaction on July
8, 1998.  Net cash used by operating activities was $642,511 during the year
ended December 31, 1998 and $2,915,335 during the nine months ended September
30, 1999. Net cash used by operating activities consists primarily of UroGen's
net loss increased by non-cash expenses, such as the write-off of in-process
technology acquired with stock, expenses paid via advances from Baxter and the
amortization of debt discount. Net cash used by investing activities of $63,493
during 1998 and $65,048 for the nine months ended September 30, 1999 consists of
the purchase of furniture and equipment. Net cash provided by financing
activities of $946,634 during 1998 consists of proceeds from notes payable of
$1,030,000 offset by expenses paid to raise capital.  Net cash provided by
financing activities of $3,823,399 for the nine months ended September 30, 1999
consists primarily of amounts received from Baxter for development of the
hemophilia product, proceeds from notes payable and payment of a note receivable
from a stockholder.

  UroGen's future capital requirements will depend on many factors, including
scientific progress in our research and development programs, our ability to
establish collaborative arrangements with others for drug development, progress
with preclinical and clinical trials, the time and costs involved in obtaining
regulatory approvals and effective commercialization activities.  Medstone
International, Inc. funded all of UroGen's operations from July 1, 1991
(inception) through and ending with a $500,000 capital contribution of cash on
February 9, 1996. In July 1998, we completed an offering of 8% Convertible
Subordinated Notes due June 30, 1999, which raised $1,030,000. In April 1999, we
completed another offering of Convertible Subordinated Notes due March 30, 2000,
which raised $400,000.  UroGen has incurred net losses of $15,150,520 since its
inception and has never been profitable during its existence. We expect to incur
significant additional operating losses over the next several years as our
research and development efforts expand. Our ability to achieve profitability
depends upon our ability, alone or

                                       9
<PAGE>

with others, to successfully complete development of products, obtain required
regulatory approvals and manufacture and market products. We can not assure you
that we will be successful or that we will attain significant revenues or
profitability. Our operations to date have consumed substantial amounts of cash.
The negative cash flow from operations is expected to continue and to accelerate
for at least the next three years. The development of our products will require
a commitment of substantial funds to conduct the costly and time-consuming
research, preclinical and clinical testing necessary to bring our products to
market and to establish manufacturing and marketing capabilities.

  Under the terms of our Developmental Collaboration Agreement and Credit
Agreements with Baxter , Baxter is required to provide funding for development
of the hemophilia product until we commence a Phase I Clinical Trial for the
hemophilia product. The funding provided by Baxter is in the form of a note
payable, which can be converted to Series B Preferred Stock, at our option, on
December 31 of each year of the agreement.

  We have commitments for $400,000 in additional capital through the sale of
preferred stock and warrants. We anticipate our existing capital resources,
including funds received from Baxter under the Developmental Collaboration
Agreement, coupled with the commitment for an additional $400,000 in capital,
will enable us to maintain our current and planned operations through October
2000.  Accordingly, we will need to raise substantial additional capital to fund
our operations. We intend to seek such additional funding either through
collaborative arrangements or through public or private equity or debt
financings. Additional financing may not be available on acceptable terms or at
all. If adequate funds are not available, we may be required to delay or reduce
the scope of our operations or to obtain funds through arrangements with
collaborative partners or others that may require us to relinquish rights we may
have.

  Our independent auditors have issued their report on our financial statements.
This report contains an explanatory paragraph which expresses substantial doubt
regarding UroGen's ability to continue as a going concern based on certain
existing conditions. Successful completion of our development program and
transition, ultimately, to attaining profitable operations is dependent upon
obtaining additional financing adequate to fulfill our research and development
activities, and achieving a level of revenues adequate to support our cost
structure.

YEAR 2000 COMPLIANCE

  The Year 2000 issue refers to the inability of a date-sensitive computer
program to recognize a two-digit date field designated as "00" as the year 2000.
Mistaking "00" for 1900 could result in a system failure or miscalculations
causing disruptions to operations, an inability to process transactions or an
inability to engage in other normal business activities. We have addressed the
Year 2000 issue and believe that all of our critical systems are Year 2000
compliant. The majority of our systems are either new or have been recently
upgraded with upgrades including Year 2000 compliance. Such upgrades have cost
approximately $1,500 to date. We do not engage in significant electronic
interfaces with third parties. We have confirmed Year 2000 compliance with all
of our significant service providers, our significant vendors and with Baxter
and have received satisfactory responses. However, failure on the part of third
parties we do business with to be Year 2000 compliant could impact their
operations, which would, in turn, impact our

                                      10
<PAGE>

operations. Additionally, we have assessed all of our critical laboratory
equipment to determine whether such equipment contains embedded chips, and have
determined that all of our critical internal equipment is compliant. The most
reasonably likely worse case scenario resulting from the Year 2000 issue is
unproductive operations resulting from retrieving stored data and/or
implementing contingency plans.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  At September 30, 1999, the Company's cash and cash equivalents were invested
in liquid checking and money market accounts, and will not change in value if
interest rates change. Accordingly, an immediate 10% change in interest rates
would not have an impact on our financial condition or results of operations.

  The Company does not conduct business with foreign entities, and does not have
any foreign exchange risk.

                                      11
<PAGE>

                                 UROGEN CORP.
                       (A Development Stage Enterprise)

                          PART II.  OTHER INFORMATION
                          ---------------------------

Item 1.  LEGAL PROCEEDINGS

     None.

Item 2.  CHANGES IN SECURITIES

     In May 1999, the Company issued 218,433 shares of common stock to the
     Immune Response Corporation (IRC) for $218 upon IRC's exercise of its
     warrant to purchase common stock of UroGen Corp.

     In May 1999, the Company issued 10,000 shares of common stock valued at
     $2,900, based on the market value of the stock on the date of issuance, to
     Dr. Daniel Mercola to satisfy a milestone payment under a consulting
     agreement.

     In June 1999, the Company converted  then outstanding unsecured convertible
     notes payable in the amount of $1,430,000 and the accrued interest thereon
     into 2,460,811 shares of common stock in accordance with the terms of the
     Note and Warrant Purchase Agreements entered into in July 1998 and April
     1999.

     UroGen Corp. relied on the exemption from registration provided by Rule 506
     of Regulation D, and/or Section 4(2) under the Securities Act of 1933, as
     amended for all of the above issuances.

Item 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

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<PAGE>

Item 5.  OTHER INFORMATION

     Market for Registrant's Common Equity

       None of the shares of capital stock of the Company issued in the
       Distribution or otherwise, or acquired through the exercise of stock
       options could be sold prior to December 31, 1997 except for the following
       transfers: (i) transfers by gift, will, bequest or the applicable laws of
       descent and distribution; (ii) non-sale distributions by partnerships,
       corporations or trusts to their partners, shareholders or beneficiaries;
       (iii) transfers to the Company; and (iv) transfers pursuant to qualified
       domestic relations order as defined by the Code or the rules thereunder.
       In the case of any such permitted transfers, the shares in the hands of
       the transferees will continue to be subject to the same transfer
       restriction.  No market for the Company's shares of capital stock existed
       prior to January 1, 1998.  A limited market on the Electronic Bulletin
       Board has recently been established.  The Company trades under the symbol
       UROG.  No assurance can be given that any active trading market will be
       sustained.


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

     Exhibit 27     Financial Data Schedule

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<PAGE>

                                  SIGNATURES


In accordance with the requirements of the Exchange Act, the Registrant has
caused this Report to be signed on its behalf by the undersigned, hereunto duly
authorized.



                                UROGEN CORP.
                                ------------
                                A Delaware Corporation



Date:  November 10, 1999    /s/ Carin D. Sandvik
                                -----------------------
                                Carin D. Sandvik
                                Controller, Chief Accounting Officer & Secretary
                                (Principal accounting officer)

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