<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, 1998
                               ------------------ 

                                      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 105, SAN DIEGO, CA, 92121
              (Address of principal executive offices)   (Zip code)

      Registrant's Telephone Number, including area code:  (619) 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
October 26, 1998, was 7,677,330.
<PAGE>
 
                                 UROGEN CORP.
                       (A DEVELOPMENT STAGE ENTERPRISE)

                             INDEX TO FORM 10-QSB

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


<TABLE>
<CAPTION>
                                                                        Page No.
                                                                        --------
<S>          <C>                                                           <C>
Item 1.      Financial Statements
             
             Condensed Balance Sheets
               September 30, 1998 (Unaudited) and  December 31, 1997...... 2
 
             Condensed Statements of Operations (Unaudited)............... 3
               Three and Nine Months Ended September 30, 1998
               and 1997 and the period from July 1, 1991
               (inception) to September 30, 1998
 
             Condensed Statements of Cash Flows (Unaudited)
               Nine Months Ended September 30, 1998 and
               1997 and the period from July 1, 1991 to
               September 30, 1998........................................ 4
 
             Notes to Unaudited Condensed Financial
               Statements................................................ 5
 
Item 2.      Management's Discussion and Analysis of..................... 9
               Plan of Operation
 
                          PART II.  OTHER INFORMATION
                          ---------------------------
 
Item 1.      Legal Proceedings.......................................... 11
Item 2.      Changes in Securities...................................... 11
Item 3.      Defaults Upon Senior Securities............................ 11
Item 4.      Submission of Matters to a Vote
               of Security Holders...................................... 11
Item 5.      Other Information.......................................... 11
             Market For Registrant's Common Equity
Item 6.      Exhibits and Reports on Form 8-K........................... 11
             Signatures................................................. 12
</TABLE>

                                       1
<PAGE>
 
<TABLE>
<CAPTION>
                                 UROGEN CORP.
                       (A DEVELOPMENT STAGE ENTERPRISE)
                           CONDENSED BALANCE SHEETS
                       --------------------------------
 
                                       September 30,    December 31,
                                           1998            1997
                                       ------------     -----------
ASSETS                                  (Unaudited)        (Note)
------
<S>                                    <C>              <C>
Current assets:
 Cash and equivalents                  $   808,742      $   74,353
  Accounts receivable                      213,399             -
  Prepaid assets                            12,466             -
                                       -----------      ----------
                                    
  Total current assets                   1,034,607          74,353
                                       -----------      ----------
                                    
Property and equipment                       5,545           3,239
  Less accumulated depreciation         (    1,869)      (   1,128)
                                       -----------      ----------
Net property and equipment                   3,676           2,111
                                       -----------      ----------
                                    
Other assets                                 1,065           1,065
                                       -----------      ----------
                                    
                                       $ 1,039,348      $   77,529
                                       ===========      ==========
                                    
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)                     
---------------------------------------------
                                    
Current liabilities:                
  Accounts payable                     $   280,178      $   64,024
  Accrued liabilities                      109,024             -
  Amounts due officers/shareholders        315,000           4,800
                                       -----------      ----------
                                    
    Total current liabilities              704,202          68,824
                                       -----------      ----------
                                    
Long-term funding liability                678,492             -
Notes payable, net of discount             877,045             -
                                    
Stockholders' equity(deficit):      
  Preferred Stock - $0.001 par value,  
     5,000,000 shares authorized,   
     5,444 and none issued at       
     September 30, 1998 and         
     December 31, 1997, respectively             5             -
  Common Stock - $.001 par value,   
     40,000,000 shares authorized,  
     7,537,319 issued at September 30, 
     1998 and December 31, 1997              7,538           7,538
  Additional paid-in capital             4,415,073         751,584
  Note receivable for common stock     (    18,492)     (    7,242)
  Deficit accumulated during 
     development stage                 ( 5,624,515)     (  743,175)
                                       -----------      ----------
                                    
Total stockholders' equity 
  (deficit)                            ( 1,220,391)          8,705
                                       -----------      ----------
                                    
                                       $ 1,039,348      $   77,529
                                       ===========      ==========
</TABLE>

Note:  The Balance Sheet at December 31, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.


                            See accompanying notes.

                                       2
<PAGE>
 
                                 UROGEN CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                       CONDENSED 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,
                                                  1998            1997              1998              1997              1998
                                              ------------    ------------       ------------      -----------      ------------
<S>                                          <C>               <C>               <C>                <C>              <C>
Revenue                                       $     -           $   96,750        $   192,300       $   96,750       $   841,380
                                              -----------       ----------        -----------       ----------       -----------
                                                                                                              
Costs and expenses:                                                                                           
  Cost of sales                                      -                -                  -                -              821,878
  Research and development                        807,204           77,879          1,176,680          279,761         4,695,800
  Acquired in-process research and                                                                            
   development                                  3,429,700                           3,429,700                          3,429,700
  Selling, general and administrative             164,068           35,923            299,501          109,286         1,158,953
                                              -----------       ----------        -----------       ----------       -----------
Total costs and expenses                        4,400,972          113,802          4,905,881          389,047        10,106,331
                                              -----------       ----------        -----------       ----------       -----------

Loss from operations                           (4,400,972)         (17,052)        (4,713,581)        (292,297)       (9,264,951)
                                                                                                              
Gain on disposal of                                                                                           
   Property and equipment                            -                -                  -                -               63,776
Interest expense                                 (170,790)            -              (170,790)                          (170,790)
Interest income                                     2,057            1,034              3,031            3,900            21,657
                                              -----------       ----------        -----------       ----------       -----------
Net loss                                      $(4,569,705)      $  (16,018)       $(4,881,340)      $ (288,397)      $(9,350,308)
                                              ===========       ==========        ===========       ==========       ===========
                                                                                                              
Basic and diluted loss per share                   $(0.61)          $(0.00)            $(0.65)          $(0.04)
                                              ===========       ==========        ===========       ==========
 
Number of shares used in the
 computation of basic and  diluted
 loss per share                                  7,537,319        7,537,319          7,537,319        7,311,573
                                               ===========       ==========        ===========       ==========
</TABLE>


                            See accompanying notes.
                                      
                                       3
<PAGE>
 
                                 UROGEN CORP.
                       (A DEVELOPMENT STAGE ENTERPRISE)
                      CONDENSED STATEMENTS OF CASH FLOWS
                      ----------------------------------

<TABLE>
<CAPTION>

                                                   Nine Months         Nine Months          July 1, 1991
                                                      Ended               Ended             (inception) to
                                                   September 30,       September 30,        September 30, 
                                                       1998                1997                 1998 
                                                   -------------       --------------       --------------
                                                   (Unaudited)         (Unaudited)          (Unaudited)
<S>                                                <C>                 <C>                  <C>
Cash flows from operating activities:
  Net loss                                         $(4,881,340)        $(288,397)           $(9,350,308)
  Adjustments to reconcile net loss to
     cash provided by operations:
     Depreciation                                          741               450                459,943
     Amortization                                                                                35,410
     Non-cash expense related
      to stock issuance                                                                         124,150
     Gain on sale of fixed assets                                                               (63,776)
     Accretion of debt discount                        152,955                 -                152,955
     Technology purchased with stock                 3,429,700                 -              3,429,700
     Changes in operating assets and
      liabilities                                      409,513            26,796                447,272
                                                   -----------         ---------            -----------
 
  Net cash provided by operating activities           (888,431)         (261,151)            (4,764,654)
                                                   -----------         ---------            -----------
 
Cash flows from investing activities:
  Gain on sale of fixed assets                                                                   11,969
  Purchases of property and equipment                   (2,306)             (500)              (517,812)
                                                   -----------         ---------            -----------
 
  Net cash used by investing activities                 (2,306)             (500)              (505,843)
                                                   -----------         ---------            -----------
 
Cash flows from financing activities:
  Proceeds from sale of stock                               -             70,648                 70,648
  Net advances from Medstone                                -                  -              3,883,465
  Capital contribution by Medstone                          -                  -                500,000
  Equity issuance costs                                (83,366)                -                (83,366)
  Proceeds from notes payable                        1,030,000                 -              1,030,000
  Amounts funded under development
     agreement                                         678,492                 -                678,492
                                                   -----------         ---------            -----------
 
  Net cash provided by financing activities          1,625,126            70,648              6,079,239
                                                   -----------         ---------            -----------
 
Increase (decrease) in cash                            734,389          (191,003)               808,742
 
Cash at beginning of period                             74,353           250,255                   -
                                                   -----------         ---------            -----------
 
Cash at end of period                              $   808,742         $  59,252            $   808,742
                                                   ===========         =========            ===========
</TABLE>

                                       4
<PAGE>
 
                                 UROGEN CORP.
                       (A DEVELOPMENT STAGE ENTERPRISE)

               NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
               -------------------------------------------------
                              September 30, 1998
                              ------------------
                                        
1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

UroGen Corp. (the "Company"), a Delaware corporation, was incorporated on June
30, 1995, as a wholly-owned subsidiary of Medstone International, Inc.
("Medstone").  The Company was formed from the medical biology and small
molecule pharmaceuticals divisions of Medstone to continue the effort, started
in 1991, to treat diseases in urology, with a particular interest in prostate
cancer.  UroGen operated as two divisions of Medstone from July 1, 1991 to
December 29, 1995.

DISTRIBUTION AND CAPITALIZATION

On December 29, 1995, Medstone declared a dividend of all of the stock of UroGen
Corp. to be distributed to all Medstone stockholders.  Each stockholder of
Medstone received, on February 9, 1996, one share of UroGen Common Stock for
each share of Medstone Common Stock held on the Record Date, December 29, 1995.
The Distribution resulted in the receipt by record holders of Medstone Common
Stock of all of UroGen's outstanding Common Stock. Upon completion of the
Distribution, there were 5,616,528 shares of UroGen Common Stock outstanding.

The Distribution occurred on February 9, 1996, on which date Medstone also
contributed to the capital of UroGen Corp. $500,000 cash.  For financial
reporting purposes, the Distribution and contribution to capital have been
considered effective as of January 1, 1996, and the operations of the business
have been considered those of UroGen Corp. effective that date.

Additionally, effective January 1, 1996, Medstone executed a forgiveness of all
intercompany advances resulting from the prior divisional funding of operations
between Medstone and UroGen.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.  The Company incurred net losses of $4,881,340
during the nine months ended September 30, 1998 and has a deficit accumulated
during its development stage of $5,624,515 at September 30, 1998.  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 3) as well as funds

                                       5
<PAGE>
 
provided by Baxter Healthcare Corporation ("Baxter") are expected to finance the
Company's operations through June 1999.

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.

NET LOSS PER SHARE

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 three-month and nine-month periods ended September 30, 1998 and 1997.
Equivalent shares arising from convertible preferred stock, convertible debt and
outstanding stock options have not been included in the computation of net loss
per share as their effect would be antidilutive.

NEW ACCOUNTING STANDARDS

In 1997, the Financial Accounting Standards Board issued SFAS No. 130, Reporting
Comprehensive Income, (SFAS 130) and SFAS No. 131, Segment Information, (SFAS
131).  Both these standards are effective for the year ending December 31, 1998.
SFAS 130 requires that all components of comprehensive income, including net
income, be reported in the financial statements in the period in which they are
recognized.  Comprehensive income is defined as the change in equity during a
period from transactions and other events and circumstances from non-owner
sources.  Net income and other comprehensive income, including foreign currency
translation adjustments, and unrealized gains and losses on investments, shall
be reported, net of their related tax effect, to arrive at comprehensive income.
The Company believes that comprehensive income or loss will not be materially
different than net income or loss.  SFAS 131 amends the requirements for public
enterprises to report financial and descriptive information about its reportable
operating segments.  Operating segments, as defined in SFAS 131, are components
of an enterprise for which separate financial information is available and is
evaluated regularly by the Company in deciding how to allocate resources and in
assessing performance.  The financial information is required to be reported on
the basis that is used internally for evaluating the segment performance.  The
Company believes it operates in one business and operating segment, and the
adoption of this standard will not have a material impact on the Company's
financial statements.


2.  RELATED PARTY TRANSACTIONS

During 1998, the Company paid three shareholders/officers an aggregate of
$162,917 for consulting services.

During 1998, the Company paid a research organization/shareholder $47,553  for
rent and services.

                                       6
<PAGE>
 
3.      NOTES PAYABLE

In July 1998, the Company received $1,030,000 representing proceeds from the
sale of unsecured convertible notes payable which bear interest at 8% per annum
and are due on June 30, 1999 unless previously converted.  The notes are
convertible into common stock at $1.00 per share.  Each note shall be
automatically converted into common stock immediately prior to the filing of any
registration statement.

In addition, each note holder received a warrant to purchase a number of shares
of common stock of the Company equal to one share for each $2.00 of principal.
The warrants are exercisable for seven years from issuance and have an exercise
price of $0.74 per share.  The warrants were valued at $305,910  which was
recorded as a debt discount to be accreted to interest expense over the expected
term of the notes.  Accretion during the three months ended September 30, 1998
was $152,955.

4.  STOCKHOLDERS' EQUITY

PREFERRED STOCK

The Company is authorized to issue 5,000,000 shares of Preferred Stock $0.001
par value.  As of September 30, 1998 there were 5,444 shares of Series A
Preferred Stock issued and outstanding.  The Series A Preferred Stock is non-
voting and each share is convertible into 1,000 shares of the Company's common
stock.

COMMON STOCK

The Company is authorized to issue 40,000,000 shares of Common Stock $0.001 par
value.  As of September 30, 1998 there were  7,537,319 shares issued and
outstanding.

WARRANTS

In connection with a License Agreement (see Note 6), the Company granted to the
licensee a warrant to purchase additional shares in the Company to maintain a
fully diluted ownership percentage of two percent (2%) or increase its ownership
percentage up to three percent (3%).  Such warrant rights are exercisable at
prices ranging from $.03 to $.04 per share.  Such warrant rights expire on the
later of March 5, 1999 or the first date on which the aggregate outstanding
shares of the Company equals or exceeds 15,000,000 shares on a fully diluted
basis.

In 1997 the Company issued warrants to purchase 200,000 shares of Common Stock
to an officer of the Company.  These warrants are exercisable at $.05 per share
and expire on July 31, 2001.

In July 1998, the Company issued warrants related to notes payable issued (Note
3).

                                       7
<PAGE>
 
5. TECHNOLOGY ACQUISITION AGREEMENT

On July 9, 1998 the Company executed various agreements with Baxter, pursuant to
which the Company acquired Baxter's proprietary gene transfer technologies (the
"Baxter Acquisition").  Under the terms of the agreements, the Company obtained
certain assets and the exclusive rights to Baxter's adenoviral-based gene
transfer technologies in exchange for 5,444 shares of non-voting convertible
Series A Preferred Stock.  Additionally, the agreement provides for the issuance
of 1,768,319 shares of the Company's common stock and an additional 325 shares
of Series A Preferred Stock on the date certain tangible assets are transferred.
The shares issued to acquire the gene transfer technologies were valued at
$4,572,955 based on the fair value of the common stock on the date of the
agreement and was recorded to acquired in-process research and development.

Baxter will provide funding to the Company for continued research and
development of this technology which will be converted to additional convertible
Preferred Stock.  The funding provided to date is included in the long-term
funding liability on the accompanying balance sheet.  Baxter also will have
exclusive worldwide rights to sell, market and distribute products that are
developed using this technology for blood clotting disorders.

6.  LICENSE AGREEMENT

In 1997, the Company entered into a License Agreement with an unrelated public
biotechnology company.  The Company obtained an exclusive license to use certain
patented technologies to develop and commercialize products based upon the
licensed patent rights.  The License Agreement requires the Company to pay
future cash royalties to the licensee based upon net sales.  In connection with
this License Agreement, the Company entered into a Stock and Warrant Purchase
Agreement with the licensee whereby the Company issued 147,791 shares of Common
Stock at $.05 per share for total cash proceeds of $148 and a note receivable of
$7,242.  Additionally, the Agreement granted to the licensee a Warrant to
purchase additional shares in the Company to maintain a fully diluted ownership
percentage of two percent (2%) or increase its ownership percentage up to three
percent (3%).  Such Warrant rights are exercisable at prices ranging from $.03
to $.04 per share.  Such Warrant rights expire the later of March 5, 1999 or the
first date on which the aggregate outstanding shares of the Company equals or
exceeds 15,000,000 shares on a fully diluted basis.

7. AMOUNTS DUE OFFICERS/SHAREHOLDERS

In conjunction with the Baxter Acquisition (Note 5), the Company has agreed to
reimburse Baxter for all reasonable cancer related research expenses that Baxter
incurred from January 1, 1998 to September 30, 1998, not to exceed $35,000 per
month.  As such, the Company has accrued a total of $315,000 as of September
30,1998, which has been included in research and development costs.

                                      8
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
         ---------------------------------------------------------

GENERAL

UroGen Corp. (the "Company") is a development stage company, which is primarily
engaged in the development of gene transfer and prostate cancer therapies.  The
Company was incorporated in Delaware on June 30, 1995.  It was inactive until
January 1, 1996, at which date, the operations of the business, which previously
operated as a division of Medstone International, Inc. ("Medstone") from July 1,
1991 through December 31, 1995, were transferred to the new company.  In July,
1998, the Company acquired certain proprietary gene transfer technologies from
Baxter Healthcare Corporation.

YEAR 2000 COMPLIANCE

Many currently installed computer systems and software products are coded to
accept only two-digit entries to represent years.  These systems and products
will need to be able to accept four-digit entries to distinguish years beginning
with 2000 from prior years.  As a result, systems and products that do not
accept four-digit year entries will need to be upgraded or replaced to comply
with such "Year 2000" requirements.  The Company believes that its internal
systems are Year 2000 compliant or will be replaced in connection with
previously planned upgrades to information systems prior to the need to comply
with Year 2000 requirements.  However, a number of the Company's customers and
vendors may be affected by Year 2000 issues that require that they expend
significant resources to modify or replace their existing systems.

LIQUIDITY AND CAPITAL RESOURCES

Medstone funded all of the Company's operations from July 1, 1991 (inception)
and ending with a $500,000 capital contribution of cash on February 9, 1996.
The Company has incurred net losses of $9,350,308 since its inception and has
never been profitable during its existence. The Company expects to incur
significant additional operating losses over the next several years as the
Company's research and development efforts expand.  The Company's ability to
achieve profitability depends upon its ability, alone or with others, to
successfully complete development of pharmaceutical products, obtain required
regulatory approvals and manufacture and market its products.  There can be no
assurance that it will be successful or that profitability will ever be
obtained.

The Company's operations to date have consumed substantial amounts of cash.  The
negative cash flow from operations is expected to continue and to accelerate in
the foreseeable future.  The development of the Company's products will require
a commitment of substantial funds to conduct the costly and time-consuming
research, preclinical and clinical testing necessary to bring such products to
market and to establish manufacturing and marketing capabilities.  The Company's
future capital requirements will depend on many factors, including scientific
progress in its research and development programs, the ability of the Company to
establish collaborative arrangements with others for drug development, 

                                       9
<PAGE>
 
progress with preclinical and clinical trials, the time and costs involved in
obtaining regulatory approvals and the effectiveness of commercialization
activities.

The Company expects that its existing capital resources, including the proceeds
from its sale of $1,030,000 million of unsecured convertible notes and
development financing from Baxter, will enable the Company to maintain its
expanded operations through June 1999.  Thereafter, the Company will need to
raise substantial additional capital to fund its operations.  The Company
intends to seek such additional funding either through its corporate partner
agreement with Baxter, collaborative arrangements with other corporate partners,
or through public or private equity or debt financing. There can be no assurance
that additional financing will be available on acceptable terms or at all.  If
issuing equity securities raises additional funds, further dilution to
stockholders will result.  If adequate funds are not available, the Company may
be required to delay or reduce the scope of its operations or obtain funds
through arrangements with collaborative partners or others that may require the
Company to relinquish rights it may have acquired in the interim.

RESULTS OF OPERATIONS

For the three months ended September 30, 1998 and 1997, the Company had
operating revenues of none and $96,750, respectively, and net losses of
$4,569,705 and $16,018, respectively. Revenues relate to amounts billed under a
research agreement.  The increased loss for the current period reflects
primarily increased research and development costs from $77,879 to $4,236,904
for the three months ended September 30, 1997 and 1998, respectively, including
costs associated with the new technology acquired of $3,429,700.   General and
administrative costs increased $128,145 from $35,923 in 1997 to $164,068 in 1998
related to the increased level of operations of the Company during 1998.

For the nine months ended September 30, 1998 and 1997, the Company had operating
revenues of $192,300 and $96,750, respectively, and net losses of $4,881,340 and
$288,397, respectively.  The increased loss for the current period reflects
primarily increased research and development costs from $279,761 to $4,606,380
for the nine months ended September 30, 1997 and 1998, respectively, including
costs associated with the new technology acquired of $3,429,700.   General and
administrative costs increased $190,215 from $109,286 in 1997 to $299,501 in
1998 related to the increased level of operations of the Company during 1998.
These increases are offset by increased revenue from a research agreement.

                                      10
<PAGE>
 
                                  UROGEN CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)

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

ITEM 1.  LEGAL PROCEEDINGS

     None.

ITEM 2.  CHANGES IN SECURITIES

     In July 1998, the Company issued 5,444 shares of Series A Preferred Stock
     in exchange for technology acquired.  UroGen Corp. relied upon exemption
     from registration provided by Rule 506 of Regulation D, and Section 4(2)
     under the Securities Act of 1933, as amended.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

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

     Current Report on Form 8-K filed on July 23, 1998

     Exhibits 27 - Financial Statement Schedule

                                      11
<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

<TABLE> 
<S>                                      <C> 
Date:  November 12, 1998                    /s/  Carin D. Sandvik
                                         ------------------------------------------------
                                         Carin D. Sandvik
                                         Controller, Chief Accounting Officer & Secretary
                                         (Principal financial and accounting officer)
</TABLE> 


                                      12