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

                                      FORM 10-Q



/x/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the Quarterly Period Ended September 30, 1997

                                          OR

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the Transition Period from ____________ to ____________________________

Commission File Number   0-11094   
                       ------------



                            RIBI IMMUNOCHEM RESEARCH, INC.
                (Exact name of registrant as specified in its charter)



        Delaware                           81-0394349                           
------------------------     ---------------------------------------------------
(State of Incorporation)     (I.R.S. Employer Identification No.)

                      553 Old Corvallis Road, Hamilton, MT 59840                
--------------------------------------------------------------------------------
                (Address of principal executive offices and zip code)

Registrant's telephone number, including area code (406) 363-6214
                                                   --------------




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 _____
                                    -----


As of October 31, 1997, there were 20,311,423 shares of common stock
outstanding.

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                            RIBI IMMUNOCHEM RESEARCH, INC.

                                        INDEX




                                                                           Page
                                                                          Number
                                                                          ------

PART I.   FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .  3
-------------------------------

Item 1.   Financial Statements: . . . . . . . . . . . . . . . . . . . . . . .  3

          Condensed Balance Sheets
          September 30, 1997 (Unaudited)
          and December 31, 1996 . . . . . . . . . . . . . . . . . . . . . . .  4

          Condensed Statements of Operations
          Three months and nine months ended
          September 30, 1997 and 1996 (Unaudited) . . . . . . . . . . . . . .  5

          Condensed Statements of Cash Flows
          Nine months ended September 30, 1997 and
          1996 (Unaudited). . . . . . . . . . . . . . . . . . . . . . . . . .  6

          Notes to Condensed Financial Statements
          (Unaudited). . . . .  . . . . . . . . . . . . . . . . . . . . . . .  7

Item 2.   Management's Discussion and Analysis
          of Financial Condition and Results
          of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . .  8


PART II.  OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------------

Item 1.   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 11

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


SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
----------

                                          2

<PAGE>
                            RIBI IMMUNOCHEM RESEARCH, INC.



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



Item 1.   Financial Statements

     The condensed balance sheet as of September 30, 1997, the condensed
statements of operations for the three month and nine month periods ended
September 30, 1996 and 1997, and the condensed statements of cash flows for the
nine months ended September 30, 1996 and 1997, have been prepared by the Company
without audit.  In the opinion of management, all adjustments necessary to
present fairly the financial position, results of operations and cash flows as
of and for the periods indicated have been made.

     It is suggested that the accompanying condensed financial statements be
read in conjunction with the audited financial statements and the notes thereto
included in the Company's 1996 Annual Report to Stockholders and Annual Report
on Form 10-K for the fiscal year ended December 31, 1996.

     The results of operations for the three month and nine month periods ended
September 30, 1997, are not necessarily indicative of results expected for the
full year 1997.

                                          3

<PAGE>
                            RIBI IMMUNOCHEM RESEARCH, INC.

                               CONDENSED BALANCE SHEETS
                                    (In Thousands)
<TABLE>
<CAPTION>
                                                September 30,      December 31,
                                                    1997               1996    
                                                ------------       ------------
                                                 (Unaudited)
<S>                                                 <C>               <C>
ASSETS
------
Current assets:
     Cash and cash equivalents                      $  1,005              432
     Available-for-sale investment 
       securities                                     13,454           14,080
     Accounts receivable                                 883               52
     Inventories                                       1,421            1,268
     Other current assets                                138              273
                                                     -------          -------
                                                      
          Total current assets                        16,901           16,105

Property, plant and equipment, net                    11,319           11,601

Other assets, net                                        591              592
                                                     -------          -------

                                                    $ 28,811           28,298
                                                     =======          =======

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
     Accounts payable                               $    180              318
     Accrued expenses                                    627              570
     Deferred revenue                                    643              563
                                                     -------          -------

          Total current liabilities                    1,450            1,451
                                                     -------          -------

Stockholders' equity:
     Preferred stock                                    -                -
     Common stock                                         20               19
     Additional paid-in capital                       67,385           62,492
     Unrealized investment holding 
      (losses)                                           (45)             (28)
     Accumulated deficit                             (39,999)         (35,636)
                                                     -------          -------

          Total stockholders' equity                  27,361           26,847
                                                     -------          -------

                                                    $ 28,811           28,298
                                                     =======          =======

</TABLE>
See accompanying notes.

                                          4

<PAGE>
                            RIBI IMMUNOCHEM RESEARCH, INC.

                          CONDENSED STATEMENTS OF OPERATIONS
                         (In Thousands Except per Share Data)
                                     (UNAUDITED)
<TABLE>
<CAPTION>
                                     Three Months Ended      Nine Months Ended
                                        September 30,          September 30,   
                                    ---------------------   -------------------
<S>                                 <C>           <C>        <C>        <C>
                                       1997         1996       1997       1996
                                       ----         ----       ----       ----
Revenues:
   Sales                            $    980          603      1,846      1,421
   Contracts and licenses                650          516      1,950      1,549
   Investment income                     240          250        736        788
   Other, net                              1            1          9          3
                                     -------      -------    -------    -------

      Total revenues                   1,871        1,370      4,541      3,761
                                     -------      -------    -------    -------

Costs and expenses:                    
   Purchases and production              316          279        916        753
   Proprietary research
     and development                   1,885        1,498      5,446      4,267
   Selling, general and
     administrative                      826          648      2,542      2,093
                                     -------      -------    -------    -------

      Total costs and expenses         3,027        2,425      8,904      7,113
                                     -------      -------    -------    -------

      Net loss                      $ (1,156)      (1,055)    (4,363)    (3,352)
                                     =======      =======    =======    =======

Net loss per common share           $   (.06)        (.06)      (.22)      (.18)
                                     =======      =======    =======    =======
 
Average number of shares
  outstanding                         20,239       18,891     19,992     18,890
                                     =======      =======    =======    =======


</TABLE>
See accompanying notes.

                                          5

<PAGE>

                            RIBI IMMUNOCHEM RESEARCH, INC.

                          CONDENSED STATEMENTS OF CASH FLOWS
                                    (In Thousands)
                                     (UNAUDITED)
<TABLE>
<CAPTION>

                                                         Nine Months Ended
                                                           September 30,    
                                                      ----------------------
                                                      1997              1996
<S>                                                 <C>                <C>
Cash flows from operating activities:
  Net loss                                          $ (4,363)           (3,352)
  Adjustments to reconcile net loss to 
    cash used by operating activities:
      Depreciation and amortization                      744               694
      Common stock grants                                 12                 7
      Compensation relating to stock options              20                15
      Discount accretion                                 (43)             (370)
      Asset sales and abandoned patents                   18                 3
      Changes in operating assets and
        liabilities                                     (848)             (316)
                                                     -------           -------
        Net cash used by operating
          activities                                  (4,460)           (3,319)
                                                     -------           -------

Cash flows from investing activities:
  Capital expenditures                                  (421)             (688)
  Payments for other assets                              (74)              (71)
  Proceeds from maturities of held-to- 
    maturity investment securities                       -               3,121
  Proceeds from maturities and sales of 
    available-for-sale investment securities           6,853             2,650
  Purchases of available-for-sale
    investment securities                             (6,201)             (902)
  Purchases of held-to-maturity
    investment securities                                -                 (97)
                                                     -------           -------
        Net cash provided by investing
          activities                                     157             4,013
                                                     -------           -------

Cash flows from financing activities:
  Sale of common stock, net                            3,977               -
  Exercise of warrants                                   874               -
  Proceeds from exercise of options                       25                 6
                                                     -------           -------
        Net cash provided by financing
          activities                                   4,876                 6
                                                     -------           -------

        Net change in cash and short-term 
          deposits                                       573               700

Cash and cash equivalents at  
  beginning of period                                    432               284
                                                     -------           -------

Cash and cash equivalents at       
  end of period                                     $  1,005               984
                                                     =======           =======
</TABLE>

See accompanying notes.

                                          6

<PAGE>
                            RIBI IMMUNOCHEM RESEARCH, INC.

                       NOTES TO CONDENSED FINANCIAL STATEMENTS
                                     (UNAUDITED)



1.   Inventories
     -----------
     Inventories are as follows:

<TABLE>
<CAPTION>
                                September 30,      December 31,
                                    1997               1996   
                                 ----------         ----------
                                         (In Thousands)
      <S>                          <C>                 <C>
      Raw materials                $    88                 96
      Work in process                1,304              1,092
      Finished goods                    29                 80
                                    ------             ------

                                   $ 1,421              1,268
                                    ======             ======
</TABLE>

2.   Commitments and Contingencies
     -----------------------------

     The Company, the National Institutes of Health ("NIH") and the Bitterroot
Valley Sanitary Landfill ("Landfill") were notified by the Montana Department of
Health and Environmental Sciences (now known as the Department of Environmental
Quality ["DEQ"]) in March 1991 that they had been identified as potentially
responsible parties ("PRPs") and as such are jointly and severally liable for
groundwater contamination located at and near the site of the Landfill in
Ravalli County, Montana. The Company's involvement arises out of waste materials
which it deposited at the Landfill from 1982 to 1985 that the Landfill had
permits to receive. The NIH voluntarily initiated and completed work pursuant to
an interim remediation plan approved by the DEQ to remove and decontaminate the
believed source of contamination and treat the aquifers which tests have shown
contain contaminants. Although decontamination of the soil at and around the
Landfill has been completed, treatment of the groundwater in the proximity of
the disposal site continues utilizing carbon filtering and air sparging, and it
is anticipated such treatment will continue through 1997 and possibly longer.
The DEQ conducted a "Risk Assessment" and issued a "Draft Final Feasibility
Study" in October 1994 that discussed possible final remediation alternatives.
In August 1995, the DEQ announced that it had approved a second interim action
in the vicinity of the Landfill being voluntarily conducted by the NIH and which
involves installing individual replacement wells and new wells to provide both
an alternate water supply for the affected residents and to develop additional
information on the site hydrogeology. Information collected from these wells
through a multi-year monitoring program will be used by the DEQ to evaluate the
effectiveness of the remediation efforts to date. The current plan calls for the
wells to be installed in three phases: Phase I includes occupied properties with
the highest remaining contamination levels; Phase II includes occupied
properties with lesser degrees of contamination; and Phase III consists largely
of vacant properties. Preliminary studies completed in 1994 estimated the cost
of the wells to be approximately $1,400,000. The first Phase was completed in
the spring of 1996. The DEQ could require the PRPs to implement further
remediation should these wells not provide sufficient quality or quantity of
water. The NIH, which has taken the lead and incurred substantially all of the
remediation costs, has

                                          7

<PAGE>

represented publicly that it would continue to work with the DEQ toward an
acceptable final remediation plan. In 1993, the NIH stated that as of that time,
it had incurred costs and anticipated future interim remediation costs which
could total $2 million or more. In 1996 the DEQ filed an action against the
Company, the Landfill and the owner of the Landfill seeking reimbursement of
costs in the amount of $199,000 associated with its oversight activities. For
procedural reasons, the DEQ dismissed this action but recently reinitiated the
action against the Company, the Landfill and the owner of the Landfill seeking
recovery of past alleged costs associated with its oversight activities in the
amount of $238,000, as well as a declaratory judgment finding the parties liable
for future oversight costs, plus civil penalties in the event the parties fail
to comply. The Company has filed a response to the action. Because of the
uncertainties, including the uncertainty of the cost of further remediation and
whether the NIH will seek and obtain partial reimbursement from the other PRPs,
it is not possible at this time to determine the potential liability of the
Company as a PRP.

     During the first nine months in 1997 and 1996, the Company charged earnings
with net costs pertaining to the Landfill of $43,000 and $9,000, respectively,
including those costs associated with a civil suit settled in June 1997. As of
September 30, 1997, the Company has accrued a reserve of approximately $190,000,
primarily to cover billed and potential legal, consulting and DEQ reimbursement
costs associated with the Company as a PRP.


3.   Future Accounting Changes
     -------------------------

     During 1997 the Financial Accounting Standards Board released Statement of
Financial Accounting Standards No. 128 which revises certain procedures for
computing and presenting earnings per share. The Company will be required to
adopt the new Standard in its 1997 annual financial statements. However, the
Standard is not expected to cause a significant change in the earnings per share
it reports.




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

General
-------

     Since its inception in 1981, the Company has been engaged primarily in the
research and development of immunostimulants for use in preventing and treating
human diseases. To date, the Company has received limited revenues from
commercial sales and sales of clinical supplies. The Company has incurred net
losses in each year since its inception and expects to incur additional losses
for at least the next year, and probably longer. At September 30, 1997, the
Company's accumulated deficit was approximately $39,999,000.

     The Company's results of operations can vary significantly from quarter to
quarter and depend, among other factors, on costs related to the progress of
clinical trials conducted by the Company and, to a lesser extent, on revenues
and costs associated with manufacturing. To date, research and development
expenses, together with manufacturing costs, have exceeded product and other
revenues in all periods.

                                          8

<PAGE>

     The Company is not able to estimate with certainty the amount of cash and
working capital which may be needed for operations. Such requirements typically
vary depending upon the results of basic research and clinical trials, the time
and expense required for governmental approval of products, and competitive and
technical developments, most of which are beyond management's control. There is
no assurance that the Company will be able to obtain the necessary funding in
sufficient amounts or at the appropriate time for its planned activities. In the
event the Company may require additional funding, it might not be able to
proceed as rapidly as it would like, if at all, with the development and
commercialization of its products, which would have a material adverse effect on
its future financial condition and results of operations.

     Pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, several forward-looking statements that involve a number of
risks and uncertainties are included within this Management's Discussion and
Analysis of Financial Condition and Results of Operations including (i) levels
of purchases and production costs associated with manufacturing, (ii) filing of
commercial license applications for MELACINE melanoma theraccine, (iii) expected
levels of revenues and research and development spending, and (iv) the Company's
cash requirements. In addition to the risks and uncertainties discussed with the
forward-looking statements, there are a number of other factors that could cause
actual results to differ materially from projected results, including but not
limited to the following: levels of expenditure on and results of the Company's
research and the impact of those results on milestone and transfer payments from
partners; research results of other companies using the Company's products;
competition from other companies; changes in government regulation, including
price controls for newly developed drugs; and risk factors listed from time-to-
time in the Company's SEC reports. Forward-looking statements herein are
followed by an asterisk ("*").

Results of Operations
---------------------

     The Company experienced a larger net loss during both the third quarter and
the first nine months of 1997 compared to the same periods in 1996. The
increased net loss can be attributed primarily to increased expenses, which were
partially offset by greater sales and revenues from contracts and licenses.

     Revenues increased 37% in the third quarter of 1997 compared to the third
quarter of 1996 as a result of a 63% increase in sales and a 26% increase in
revenues from contracts and licenses. All of the increase in sales during the
third quarter of 1997 were due to improved sales of custom adjuvants. Custom
adjuvant sales made up approximately 92% of total sales for the third quarter of
1997 compared to approximately 80% for the same quarter of 1996. The increase in
custom adjuvant sales represents progress of licensees who are using the
Company's adjuvants in various vaccines they are developing. Revenues from
contracts and licenses increased because of a fifth agreement with SmithKline
Beecham signed in early January 1997.

     For the first nine months of 1997, revenues were up 21% compared to the
first nine months of 1996. Sales increased 30% and revenues from contracts and
licenses were up 26%, offset slightly by a 7% reduction in investment income.
Custom adjuvant sales made up approximately 80% of total sales for the first
nine months of 1997 compared to approximately 72% for the same period in 1996.

                                          9

<PAGE>

     Purchases and production costs increased 13% and 22% during the third
quarter and first nine months of 1997 compared to the same respective periods in
1996. The increases are due to higher sales, but the unit costs are lower in
1997, largely as a result of greater manufacturing throughput. As plant
throughput increases, the cost per unit should decrease until plant capacity is
reached.* It is possible that material, labor and other costs will be higher
than expected or that throughput will not reach the levels expected.

     Research and development expenses increased 26% in the third quarter of
1997 compared to the third quarter of 1996 and increased 28% in the first nine
months of 1997 compared to the first nine months of 1996. Most of the increase
in the third quarter and first nine months of 1997 over the same periods in 1996
resulted from the preparation of commercial license applications for MELACINE
melanoma theraccine. In Canada the Company's license application for MELACINE
has been accepted for "fast-track" review. Work also continues on the
preparation of applications for filing in the first half of 1998 in Europe and
the United States.* It is possible that completion of the various applications
will require more time than expected or that any or all of the regulatory
agencies in the countries where the applications are filed will not accept the
filings for detailed review. It is also possible that one or all of the
applications will not be approved once accepted for review. The Company is also
conducting a Phase III human clinical trial using MELACINE with interferon alfa-
2b to treat stage IV (late stage) melanoma patients. Expenses for this trial,
which began in late 1995, were higher throughout the first nine months of 1997
than in the same period in 1996 as patient accrual in the trial was higher in
1997. The Company had planned to conduct in 1997 a Phase II(b) controlled human
clinical trial in which cardiac bypass patients are treated prior to surgery
with MPL-C cardioprotectant to prevent or reduce cardiac ischemia reperfusion
injury. Recent preclinical studies have indicated that a novel cardioprotectant
under development can provide almost immediate protection from ischemia
reperfusion injury as opposed to previous data, which required prophylactic
administration of MPL nine to twelve hours prior to initiation of coronary
bypass procedures. This new data suggests a much more pragmatic approach with
broader applications if duplicated in further preclinical and in possible human
studies. Given this possible new opportunity, the planned Phase II(b) study of
MPL-C by the Cleveland Clinic was not initiated. Increased research and
development expenses in the first nine months of 1997 were partially offset by
charges in the first nine months of 1996 for non-GMP (Good Manufacturing
Practices) material manufactured in process scale-up work in late 1995 and early
1996. 

     Selling, general and administrative ("SG&A")expenses were up 27% in the
third quarter of 1997 and up 21% in the first nine months of 1997 compared to
those same periods in 1996. The increases result primarily from higher
depreciation, utilities and maintenance costs and increased investor relations
efforts. Additionally, costs associated with the defense of civil suits related
to the Bitterroot Valley Sanitary Landfill, as described in Note 2 of the Notes
to Condensed Financial Statements, were higher in 1997. SG&A expenses in 1997
also include the settlement costs of one of the Landfill civil suits which was
settled in June 1997. In 1997 more of the pool of employee benefit costs was
allocated to SG&A.

Financial Condition
-------------------

     During the first nine months of 1997 the Company used cash in operations of
$4,460,000, which was 34% more than the amount used in the first nine months of
1996. The increase in cash usage is attributable primarily to a larger net

                                          10

<PAGE>

loss, along with changes in operating assets and liabilities, which represent
timing differences in the conversion from an accrual to a cash basis. The
increase was offset in part by less accretion of discount on cash investments.
The Company expects cash used in operations for the year 1997 to be only
slightly greater than the amount used in 1996 as increased research and
development expenditures are partially offset by higher revenues from sales and
licenses and contracts.* Projected cash flows from operations are dependent upon
the Company receiving revenues that are anticipated and conducting the projected
research and clinical trials and proceeding with the anticipated product license
applications, as planned.

     In January 1997, effective December 31, 1996, SmithKline Beecham purchased
1,103,448 shares of the Company's common stock for $4,000,000. With this
additional funding, the Company believes its available cash, cash equivalents
and investments together with funds from licensing agreements and product sales
should be sufficient to meet its capital requirements through 1999.* However, it
is possible that revenues from license agreements, product sales and investments
could be lower than anticipated and/or operating costs and expenses could be
higher than anticipated which could result in having sufficient capital for a
period less than through 1999. 

     See Note 2 of the Notes to Condensed Financial Statements for a discussion
of contingencies related to the Company's identification as a Potentially
Responsible Party for groundwater contamination at and near the Bitterroot
Valley Sanitary Landfill, and the Company being a named defendant in a suit by
the Montana DEQ for reimbursement of administrative fees related to the
Landfill.



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


Item 1.   Legal Proceedings

     (a)  See Note 2 of the Notes to Condensed Financial Statements for a
          discussion of the Company's involvement as a Potentially Responsible
          Party and a defendant in a civil suit relating to the Bitterroot
          Valley Sanitary Landfill.


Item 6.   Exhibits and Reports on Form 8-K

     (a)  Exhibits

               Exhibit 27 - Financial Data Schedule (filed only electronically)

     (b)  Reports on Form 8-K

               No reports on Form 8-K were filed during the quarter ended
               September 30, 1997.

                                          11

<PAGE>

SIGNATURES
----------

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                         RIBI IMMUNOCHEM RESEARCH, INC.
                         ------------------------------
                                   (Registrant)
       


October 12, 1997        By   /s/Vern D. Child                       
                          ------------------------------------------
                              Vern D. Child, Vice President-Finance
                              and Treasurer (duly authorized officer
                              and principal financial and accounting
                              officer)

                                          12