<PAGE>

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

                     U.S. 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 JUNE 30, 2000

                                       OR

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


                         Commission file number 0-19750

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

                           MATRIX PHARMACEUTICAL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

                  DELAWARE                                     94-2957068
(STATE OR OTHER JURISDICTION OF INCORPORATION               (I.R.S. EMPLOYER
                ORGANIZATION)                             IDENTIFICATION NUMBER)

                               34700 CAMPUS DRIVE
                            FREMONT, CALIFORNIA 94555
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (510) 742-9900
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

         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
                                   -----     -----


         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, $.01 par value, outstanding as of the latest
practicable date.

                                25,593,558 shares
                               As of July 31, 2000


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


<PAGE>

                           MATRIX PHARMACEUTICAL, INC.
                                TABLE OF CONTENTS

                                     PART 1
                              FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                                Page
                                                                                                ----
Item 1.         Financial Statements:
<S>             <C>                                                                             <C>
                a.       Condensed Consolidated Balance Sheets
                         as of June 30, 2000 and December 31, 1999..............................  2

                b.       Condensed Consolidated Statements of Operations
                         for the three and six months ended June 30, 2000 and 1999..............  3

                c.       Condensed Consolidated Statements of Cash Flows
                         for the six months ended June 30, 2000 and 1999........................  4

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


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

Item 3.         Quantitative and Qualitative Disclosures About Market Risk......................  8

</TABLE>
                                     PART II
                                OTHER INFORMATION
<TABLE>
<S>             <C>                                                                              <C>
                Risk Factors....................................................................  9


Item 4.         Submission of Matters to a Vote of Security Holders............................. 16


Item 6.         Exhibits and Reports on Form 8-K................................................ 17


                Signature....................................................................... 18
</TABLE>

                                       1
<PAGE>

                           MATRIX PHARMACEUTICAL, INC.
                          (a development stage company)
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                  June 30,          December 31,
                                                                                    2000                1999
                                                                               -------------       -------------
                                                                                (Unaudited)              (*)
<S>                                                                            <C>                 <C>
                                     ASSETS
Current assets:
     Cash and cash equivalents ............................................    $     17,652         $     16,042
     Short-term investments ...............................................          18,321               30,929
     Other current assets .................................................           1,433                1,805
                                                                               -------------        -------------
            Total current assets ..........................................          37,406               48,776

Property and equipment, net ...............................................          11,536               11,860
Long-term notes from related parties ......................................             405                  455
Deposits and other assets .................................................             242                  104
                                                                               -------------        -------------
            Total assets ..................................................    $     49,589         $     61,195
                                                                               =============        =============
                                   LIABILITIES
Current liabilities:
     Accounts payable .....................................................    $      1,486         $      1,612
     Accrued compensation .................................................           1,135                1,349
     Accrued clinical trial costs .........................................             651                1,447
     Other accrued liabilities ............................................           1,694                1,698
     Current portion of deferred income....................................             560                  560
     Current portion of debt and capital lease obligations ................           1,392                1,217
                                                                               -------------        -------------
            Total current liabilities .....................................           6,918                7,883
Debt and capital lease obligations, less current portion ..................          11,689               12,356
Deferred other income .....................................................           3,868                4,200
                                                                               -------------        -------------
            Total long-term liabilities ...................................          15,557               16,556

                              STOCKHOLDERS' EQUITY
     Common stock..........................................................             240                  226
     Additional paid-in capital............................................         228,094              226,827
     Notes receivable from shareholders ...................................          (1,989)              (2,145)
     Deferred compensation.................................................              --                  (77)
     Accumulated other comprehensive income (loss) ........................             (34)                (108)
     Deficit accumulated during the development stage .....................        (199,197)            (187,967)
                                                                               -------------        -------------
            Total stockholders' equity ....................................          27,114               36,756
                                                                               -------------        -------------
                                                                               $     49,589         $     61,195
                                                                               =============        =============
</TABLE>

(*) Derived from audited financial statements.

                             See accompanying notes


                                       2
<PAGE>

                           MATRIX PHARMACEUTICAL, INC.
                          (a development stage company)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands except per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED            SIX MONTHS ENDED
                                                           JUNE 30,                     JUNE 30,
                                                     2000           1999           2000           1999
                                                 ------------   ------------   ------------   ------------
<S>                                              <C>            <C>            <C>            <C>
Revenues ....................................... $    --        $    --        $    --        $    --

Costs and expenses:
   Research and development ....................     4,781          4,739          9,072          8,839
   General and administrative ..................     2,076          1,294          3,525          2,961
                                                 ------------   ------------   ------------   ------------
      Total costs and expenses .................     6,857          6,033         12,597         11,800
                                                 ------------   ------------   ------------   ------------

Loss from operations ...........................    (6,857)        (6,033)       (12,597)       (11,800)

Interest and other income, net .................       783            507          1,367          1,143
                                                 ------------   ------------   ------------   ------------
                                                       783            507          1,367          1,143
                                                 ------------   ------------   ------------   ------------

Net loss ....................................... $  (6,074)     $  (5,526)     $ (11,230)     $ (10,657)
                                                 ============   ============   ============   ============

Basic and diluted net loss per common share..... $   (0.26)     $   (0.25)     $   (0.49)     $   (0.48)
                                                 ============   ============   ============   ============

Weighted average shares used in computing
basic and diluted net loss per common share.....    23,039         22,348         22,979         22,291
                                                 ============   ============   ============   ============
</TABLE>

                             See accompanying notes


                                       3
<PAGE>

                           MATRIX PHARMACEUTICAL, INC.
                          (a development stage company)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                              FOR THE SIX MONTHS
                                                                                 ENDED JUNE 30,
                                                                              2000           1999
                                                                          (Unaudited)     (Unaudited)
                                                                         -------------   -------------
<S>                                                                      <C>             <C>
Cash flows from operating activities:
     Net loss .......................................................... $    (11,230)   $    (10,657)
     Adjustments to reconcile net loss to net cash used
      by operating activities:
       Depreciation, amortization, and other ...........................          376             526
     Changes in assets and liabilities:
       Notes receivable from related parties ...........................           50             368
       Deferred other income ...........................................          (52)            (52)
       Accruals for special charges ....................................         --              (513)
       Accrued compensation ............................................         (214)            (85)
       Other changes in assets .........................................         (619)          1,412
                                                                         -------------   -------------
       Net cash used in operating activities ...........................      (11,689)         (9,001)
Cash flows from investing activities:
     Capital expenditures ..............................................         (255)           (296)
     Issuance of convertible promissory note ...........................         --            (1,000)
     Investment in available-for-sale securities .......................      (26,591)        (56,000)
     Maturities of investments .........................................       39,200          63,871
                                                                         -------------   -------------
       Cash flows provided by investing activities .....................       12,354           6,575
Cash flows from financing activities:
     Payments on debt and capital lease obligations ....................         (492)           (908)
     Net cash proceeds from:
       Repayment of notes receivable from shareholders .................          156             --
       Common stock ....................................................        1,281             642
                                                                         -------------   -------------
       Cash flows provided by (used in) financing activities ...........          945            (266)
Net (decrease) increase in cash and cash equivalents ...................        1,610          (2,692)
Cash and cash equivalents at the beginning of period ...................       16,042          24,840
                                                                         -------------   -------------
Cash and cash equivalents at the end of period ......................... $     17,652    $     22,148
                                                                         =============   =============
</TABLE>

                             See accompanying notes


                                       4
<PAGE>

                           MATRIX PHARMACEUTICAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 2000

1.       BASIS OF PRESENTATION

         The condensed consolidated balance sheet as of June 30, 2000, the
         condensed consolidated statements of operations for the six months
         ended June 30, 2000 and 1999, and the condensed consolidated statements
         of cash flows for the six months ended June 30, 2000 and 1999 have been
         prepared by the Company, without audit. In the opinion of management,
         all adjustments (which include only normal recurring adjustments)
         necessary to present fairly the financial position, results of
         operations, and cash flows at June 30, 2000 and for all periods
         presented have been made. The condensed consolidated balance sheet at
         December 31, 1999 has been derived from the audited financial
         statements at that date.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted pursuant to the
         Securities and Exchange Commission's rules and regulations.

         Certain items have been reclassified to conform to current period
         classification.

         The condensed financial statements should be read in conjunction with
         the Company's audited financial statements as included in the Company's
         Annual Report on Form 10-K for the year ended December 31, 1999 as
         filed with the Securities and Exchange Commission. The results of
         operations for the three and six months ended June 30, 2000 are not
         necessarily indicative of the results to be expected for any subsequent
         quarter or for the entire fiscal year ending December 31, 2000.

2.       COMPREHENSIVE LOSS

         During the second quarter of 2000 and 1999, total comprehensive loss
         amounted to $6,094,000 and $5,662,000, respectively. For the first six
         months of 2000 and 1999, total comprehensive loss amounted to
         $11,156,000 and $10,782,000, respectively.

3.       SUBSEQUENT EVENT

         On July 31, 2000 the Company completed the sale of 2,500,000 shares of
         newly issued common stock to selected institutional investors at
         $12.50 per share that resulted in net proceeds of approximately $29.0
         million to the Company.


                                       5
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.


THIS FORM 10-Q MAY CONTAIN, IN ADDITION TO HISTORICAL INFORMATION,
FORWARD-LOOKING STATEMENTS, INCLUDING WITHOUT LIMITATION, STATEMENTS
REGARDING THE TIMING AND OUTCOME OF REGULATORY REVIEWS AND CLINICAL TRIALS.
ANY SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT
EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM EXPECTED RESULTS. FOR
ADDITIONAL INFORMATION, INCLUDING RISK FACTORS, SUCH AS NO ASSURANCE OF
REGULATORY APPROVALS; UNCERTAINTIES ASSOCIATED WITH CLINICAL TRIALS; HISTORY
OF LOSSES; FUTURE PROFITABILITY UNCERTAIN; ADDITIONAL FINANCING REQUIREMENTS
AND UNCERTAIN ACCESS TO CAPITAL MARKETS; LIMITED MANUFACTURING AND SALES AND
MARKETING EXPERIENCE; DEPENDENCE ON SOURCES OF SUPPLY; UNCERTAINTY REGARDING
PATENTS AND PROPRIETARY RIGHTS; RAPID TECHNOLOGICAL CHANGE AND SUBSTANTIAL
COMPETITION; UNCERTAINTY OF PHARMACEUTICAL PRICING; NO ASSURANCE OF ADEQUATE
REIMBURSEMENT; DEPENDENCE UPON QUALIFIED AND KEY PERSONNEL; PRODUCT LIABILITY
EXPOSURE; LIMITED INSURANCE COVERAGE; HAZARDOUS MATERIALS AND PRODUCT RISKS;
VOLATILITY OF STOCK PRICE; NO DIVIDENDS; AND ANTI-TAKEOVER PROVISIONS, PLEASE
SEE THE "RISK FACTORS" SECTION INCLUDED IN THE COMPANY'S 1999 ANNUAL REPORT
ON FORM 10-K AND IN THIS FORM 10-Q AS WELL AS OTHER FACTORS DISCUSSED BELOW
AND ELSEWHERE IN THIS REPORT. THE COMPANY DISCLAIMS, HOWEVER, ANY INTENT OR
OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.


RESULTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999

Since the Company's inception in 1985, the primary focus of its operations has
been research and development, and, to date, it has not received any revenues
from the commercial sale of products. The Company has a history of operating
losses and expects to incur substantial additional losses over the next several
years as it continues to develop its products. For the period from its inception
to June 30, 2000, the Company has incurred a cumulative net loss of
$199,197,000.

The Company had no revenue from Matrix products in the second quarter of 2000
and 1999 or in the first six months of 2000 and 1999.

Research and development expenses for the second quarter of 2000 increased by 1%
to $4,781,000 compared to $4,739,000 for the second quarter of 1999. The
increase was primarily due to higher manufacturing supply and service costs,
contract services for biostatistics, and consulting expenses offset by lower
clinical trial costs and reduced salaries and wages. For the first six months of
2000, research and development expenses increased by 3% to $9,072,000 compared
to $8,839,000 for the same period in 1999. The increase was primarily due to
increased rent and property taxes, manufacturing supplies and materials, and
contract services for biostatistics. Net rent and property tax increased mainly
due to lower sublease rental income on a portion of the San Diego facility. The
increase in costs was offset by lower clinical trial expenses, reduced salaries
and wages, and depreciation.

General and administrative expenses for the second quarter of 2000 increased 60%
to $2,076,000 compared to $1,294,000 for the second quarter of 1999 due to
higher market assessment and preparation expenses for IntraDose, recruiting and
relocation costs, and consulting expenses. For the first six months of 2000,
general and administrative expenses increased by 19% to $3,525,000 compared


                                       6
<PAGE>

to $2,961,000 for the same period in 1999. The increase was due to higher market
assessment and preparation expenses for IntraDose, recruiting and relocation
costs, and public relations expenses. This increase was partially offset by
lower salary and wage expenses.

Interest and other income increased by 54% to $783,000 for the second quarter of
2000 compared to $507,000 for the same period in 1999. This increase was largely
due to contract manufacturing revenue earned at the San Diego facility, and
interest earned for certain employee loans, partially offset by lower interest
earned on reduced cash and investment balances. For the first six months of
2000, interest and other income increased by 20% to $1,367,000 compared to
$1,143,000 primarily for the same reasons as noted for the second quarter.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2000, the Company had $35,973,000 in cash, cash equivalents and
marketable securities, compared to $46,971,000 at December 31, 1999. The Company
used $11,689,000 and $9,001,000 for operating activities for the six months
ended June 30, 2000 and June 30, 1999, respectively.

The decrease of $10,998,000 in cash, cash equivalents and short-term investments
during the first six months of 2000 reflects $11,689,000 of cash disbursements
used to fund operating activities, payments of $492,000 on debt and capital
lease obligations, and capital purchases of $255,000. This was partially offset
by cash receipts of $1,281,000 received primarily from stock option exercises
and $156,000 from employee loans.

On July 31, 2000, the Company completed the sale of 2,500,000 shares of newly
issued common stock to selected institutional investors at $12.50 per share that
resulted in net proceeds of approximately $29.0 million to the Company.

The Company has financed its operations and capital asset acquisitions from its
inception through the sale of equity securities, interest income, and capital
lease and debt financing. The Company expects to finance its continued operating
requirements principally with cash on hand as well as additional capital that
may be generated through equity and debt financings and collaborative
agreements.

The Company's working capital and capital requirements will depend on
numerous factors, including the progress of the Company's research and
development programs, pre-clinical testing and clinical trial activities, the
timing and cost of obtaining regulatory approvals, the levels of resources
that the Company devotes to the development of manufacturing and marketing
capabilities, technological advances and the status of competitors.

The Company expects to incur substantial additional costs relating to the
continued clinical development of its oncology products, continued research and
development programs, the development of manufacturing capabilities, and general
working capital requirements. The Company anticipates that its existing and
committed capital resources including the proceeds of the financing noted above
which was completed on July 31, 2000 will enable it to maintain its current and
planned operations at least through 2001. The Company may require additional
outside financing to complete the process of bringing current products to
market, and the Company cannot assure that such financing will be available
on favorable terms, if at all.


                                       7
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         There have been no material changes in the reported market risks since
December 31, 1999.


                                       8
<PAGE>

PART II.  OTHER INFORMATION

                                  RISK FACTORS


THE REGULATORY APPROVAL PROCESS IS EXPENSIVE, TIME CONSUMING, AND UNCERTAIN AND
MAY PREVENT US FROM OBTAINING REQUIRED APPROVALS FOR THE COMMERCIALIZATION OF
OUR PRODUCTS OR MAY NEGATIVELY IMPACT THE ONGOING MARKETING OF APPROVED
PRODUCTS.

         The pre-clinical and clinical testing, manufacturing, and marketing of
our products are subject to extensive regulation by numerous governmental
authorities in the United States and other countries, including the Food and
Drug Administration, or FDA. Among other requirements, the FDA must approve our
product candidates, manufacturing processes and production facilities before we
may market our products in the United States. Similarly, a foreign governmental
authority must typically approve the marketing of a product before that
product's manufacturer can market it in a particular foreign country. We have
only limited experience in submitting and pursuing regulatory applications. The
process of obtaining FDA approvals can be costly, time consuming and subject to
unanticipated delays, and we can give no assurance that the FDA will grant us
any approvals on a timely basis, or at all. We have no products approved by the
FDA and we do not expect to achieve profitable operations unless our product
candidates now under development receive FDA and foreign regulatory approval and
are thereafter commercialized successfully.

         The process of obtaining FDA regulatory approval involves a number of
steps that, taken together, may involve seven years or more from the initiation
of clinical trials and require the expenditure of substantial resources. Among
other requirements, this process requires that the product candidate undergo
extensive pre-clinical and clinical testing to demonstrate its safety and
efficacy for its intended uses. We must also file a New Drug Application, or
NDA, requesting FDA approval. When a product contains more than one component
that contributes to the product's effect, as do some of our current product
candidates, the FDA may request that additional data be submitted in order to
demonstrate the contribution of each such component to clinical efficacy.
Further, when we submit an NDA, the FDA must review and interpret our analysis
of the results of our clinical studies submitted as part of the NDA. An FDA
interpretation may differ from our analysis and we cannot assure that the FDA
will accept our data or our interpretation of that data. In addition, changes in
applicable law or FDA policy during the period of product development and FDA
regulatory review may result in the delay or rejection of our NDA. Any failure
to obtain, or delay in obtaining, FDA approvals would harm our ability to market
our proposed products. Moreover, even if FDA approval is granted, the approval
may include significant limitations on indicated uses for which a product could
be marketed.

         In addition, prior to approval of a product, the FDA must inspect and
accept the product's manufacturing facilities as being in compliance with its
Good Manufacturing Practices, or GMP, regulations. We cannot assure that the FDA
will accept our San Diego manufacturing facility, and failure to receive or
maintain such acceptance would prevent us from successfully commercializing our
products.

         Violations of regulatory requirements at any stage, including the
pre-clinical and clinical testing process, the approval process or after
approval, may result in adverse consequences, including the FDA's delay in
approving or refusal to approve a product, withdrawal of an approved product
from the market, and/or the imposition of criminal penalties against the
manufacturer and/or the NDA holder. In addition, the subsequent discovery of
previously unknown problems relating to a marketed product may result in


                                       9
<PAGE>

restrictions on such product, manufacturer, or the NDA holder, including
withdrawal of the product from the market. Also, new government requirements may
be established that could delay or prevent regulatory approval of our products
under development.

         The processes required by European regulatory authorities before our
product candidates can be marketed in Western Europe are similar to those in the
United States. We must first complete appropriate pre-clinical laboratory and
animal tests as well as analytical product quality tests and then submit a
clinical trial exemption or similar documentation before we can initiate human
clinical trials. Upon completion of adequate and well-controlled clinical trials
in humans that establish that the drug is safe and efficacious, we must obtain
regulatory approval from the relevant regulatory authorities.

CLINICAL TRIALS REQUIRED BY THE FDA AND OTHER REGULATORY AGENCIES CAN BE
LENGTHY, EXPENSIVE AND MAY NOT PROVIDE POSITIVE RESULTS.

         We have conducted and plan to continue to undertake extensive and
costly clinical testing to assess the safety and efficacy of our potential
products. If we fail to comply with FDA regulations applicable to clinical
testing it could result in delay, suspension, or cancellation of this testing,
or refusal by the FDA to accept the results of this testing. In addition, the
FDA or we may modify or suspend clinical trials at any time if the FDA concludes
that the subjects or patients participating in the trials are being exposed to
unacceptable health risks. Further, we cannot assure that human clinical testing
will show any current or future product candidate to be safe and effective or
provide data suitable for submission to the FDA.

         We are currently conducting multiple clinical trials in the United
States and certain foreign countries. The rate of completion of our clinical
trials depends upon, among other factors, the rate of patient enrollment.
Patient enrollment is a function of many factors, including the size of the
patient population, the nature of the protocol, the proximity of patients to
clinical sites and the eligibility criteria for the study. We experienced slower
than planned accrual of patients in our two recently completed Phase III trials.
Delays in completing enrollment in other clinical studies may result in
increased costs and delays, which could harm our business. Generally, similar
considerations apply to clinical testing that is subject to regulatory oversight
by foreign authorities and/or that is intended to be used in connection with
foreign marketing applications.

         Additionally, we extended enrollment in a Phase II Intradose trial
beyond the original number of patients planned for that study. Final study
results may be different from the preliminary outcomes as more patients have
been entered into the study and as patients are followed for a longer period of
time.

WE HAVE A HISTORY OF LOSSES AND OUR FUTURE PROFITABILITY IS UNCERTAIN.

         We incorporated in 1985 and have experienced significant losses since
that date. As of June 30, 2000, our accumulated deficit was $199,197,000. Our
net loss for the year ended December 31, 1999, six months ending June 30, 2000
and the three months ended June 30, 2000 was $20,998,000, $11,230,000 and
$6,074,000 respectively. We have not generated revenues from our products or
product candidates and expect to incur significant additional losses over the
next several years. In order to achieve a profitable level of operations, we
must successfully develop products, obtain regulatory approvals for our
products, enter into agreements for product commercialization outside the United
States, and develop an effective sales and marketing organization in the United
States. We cannot assure that we will complete our product development efforts,
that we will obtain the required regulatory approvals, that we will manufacture
or market any products successfully, or that we will achieve profitability.


                                       10
<PAGE>

WE WILL REQUIRE ADDITIONAL FINANCING TO DEVELOP AND COMMERCIALIZE OUR PRODUCTS.
ADDITIONAL FINANCING MAY NOT BE READILY AVAILABLE.

         We have expended and will continue to expend substantial funds to
complete the research and development of our product candidates. We may require
additional funds for these purposes and for the establishment of sales and
marketing functions through additional equity or debt financings, collaborative
arrangements with corporate partners or from other sources. We cannot assure
that such additional funds will be available on acceptable terms, if at all. Our
failure to raise additional funds would require us to scale back or eliminate
some or all of our research and development license programs to third parties of
products or technologies that we would otherwise seek to develop ourselves.
Based on our current operating plan, we believe that our existing capital
resources will be adequate to satisfy our capital needs through at least 2001.

WE HAVE LIMITED SALES AND MARKETING EXPERIENCE, AND IF WE ARE UNABLE TO DEVELOP
OUR OWN SALES AND MARKETING CAPABILITY, WE MAY BE UNSUCCESSFUL IN
COMMERCIALIZING OUR PRODUCTS.

         We intend to market and sell some of our product candidates, if
successfully developed and approved, through our own dedicated sales force in
the United States and through pharmaceutical licensees in Europe. We cannot
assure that we will be able to establish a successful direct sales organization
or co-promotion or distribution arrangements. In addition, we cannot assure that
we will be able to fund our marketing and sales expenses, much of which would be
incurred before sales commence. If we fail to establish a marketing and sales
capability in the United States or outside the United States we will not be able
to successfully commercialize our products.

WE HAVE LIMITED MANUFACTURING EXPERIENCE AND MAY NOT BE ABLE TO MANUFACTURE
PRODUCTS ON A COMMERCIAL SCALE.

         Our ability to conduct clinical trials on a timely basis, to obtain
regulatory approvals and to commercialize our products will depend in part upon
our ability to manufacture our products, either directly or through third
parties, at a competitive cost and in accordance with applicable FDA and other
regulatory requirements, including GMP regulations. We closed our manufacturing
facilities in San Jose and Milpitas, California in March 1998 and transferred
manufacturing personnel to a research and manufacturing facility in San Diego,
California that we acquired in 1995 to meet our anticipated long-term commercial
scale production requirements. We expect that the San Diego facility and
contract manufacturers should provide sufficient production capacity to meet our
clinical requirements. We cannot assure that we will be able to validate this
facility in a timely manner or that this facility will be adequate for our
long-term needs without delaying our ability to meet product demand or to
manufacture in a cost-effective manner. We expect to continue to use selected
contract manufacturers, in addition to our own manufacturing capability, for
some or all of our product components. If we fail to establish additional
manufacturing capacity on a timely basis we will not be able to successfully
commercialize our products.

OUR DEPENDENCE ON SUPPLIERS FOR MATERIALS COULD IMPAIR OUR ABILITY TO
MANUFACTURE OUR PRODUCTS.

         Several of the materials used in our product candidates are available
from a limited number of suppliers. These items, including collagen gel and
various bulk drug substances, have generally been available to us on
commercially reasonable terms. If our manufacturing facilities are not able to
produce


                                       11
<PAGE>

sufficient quantities of collagen gel in accordance with applicable regulations,
we would have to obtain collagen gel from another source and gain regulatory
approval for that source. We cannot assure that we would be able to locate an
alternative, cost-effective and FDA approvable source of supply for collagen
gel.

         We have negotiated and intend to continue to negotiate supply
agreements, as appropriate, for the raw materials and components utilized in our
products. Any interruption of supply could impair our ability to manufacture our
products, complete clinical trials, or commercialize our products. In addition,
the issuance in 1996 of a U.S. patent for cisplatin, a chemotherapeutic drug
that is the active compound in our IntraDose Injectable Gel product, could limit
our ability to commercialize this product in the United States if the
newly-issued patent were upheld, if IntraDose were found to infringe that
patent, and if we were unable to obtain a license under that patent.

OUR PATENTS AND PROPRIETARY RIGHTS MAY NOT KEEP US FROM INFRINGING THE RIGHTS OF
OTHERS OR MAY NOT PROHIBIT POTENTIAL COMPETITORS FROM COMMERCIALIZING PRODUCTS.

         Our success depends in part on our ability to obtain patent protection
for our products and to preserve our trade secrets and operate without
infringing on the proprietary rights of third parties. We have not conducted an
exhaustive patent search and we cannot assure that patents do not exist or could
not be filed which would negatively affect our ability to market our products or
maintain our competitive position with respect to our products. Additionally,
our patents may not prevent others from developing competitive products using
related technology. Further, other companies that obtain patents claiming
products or processes useful to us may bring infringement actions against us. As
a result we may be required to obtain licenses from others to develop,
manufacture or market our products. We cannot assure that we will be able to
obtain any such licenses on commercially reasonable terms, if at all. We also
rely on trade secrets and proprietary know-how that we seek to protect, in part,
by confidentiality agreements with our employees, consultants, suppliers and
licensees. We cannot assure that these third parties will not breach these
agreements, that we would have adequate remedies for any breach, or that our
trade secrets will not otherwise become known or be independently developed by
competitors.

         We cannot assure that the U.S. Patent and Trademark Office, or PTO,
will approve our pending patent applications, or that any patent issued to, or
licensed by us will provide protection that has commercial significance. In this
regard, the patent position of pharmaceutical compounds and compositions is
particularly uncertain. Even issued patents may later be modified or revoked by
the PTO in proceedings instituted by others or us. In addition, we cannot assure
that our patents will afford protection against competitors with similar
compounds or technologies, that others will not obtain patents with claims
similar to those covered by our patents or applications, or that the patents of
others will not adversely affect our ability to conduct our business.

         In 1996, for instance, the PTO granted a composition-of-matter patent
for the cytotoxic drug cisplatin in the United States to a pharmaceutical
company. This company's licensed use patent on cisplatin as an anti-tumor agent
was due to expire in December 1996. We believe on advice of patent counsel that
our IntraDose product candidate, which contains cisplatin, does not infringe
this new composition-of-matter patent. Moreover, the 7th U.S. District Court
found the key claims of this new patent invalid in October 1999. However, if the
court's decision is appealed and overturned, and if IntraDose were found to
infringe that upheld patent, we cannot assure that we would be able to obtain a
license to the patent on commercially reasonable terms, if at all, in order to
commercialize IntraDose in the United States.


                                       12
<PAGE>

         We believe that obtaining foreign patents may be more difficult than
obtaining domestic patents because of differences in patent laws, and recognize
that our patent position therefore may be stronger in the United States than
abroad. In addition, the protection provided by foreign patents, once they are
obtained, may be weaker than that provided by domestic patents.

RAPID TECHNOLOGICAL CHANGE AND SUBSTANTIAL COMPETITION MAY IMPAIR OUR BUSINESS.

         The pharmaceutical industry is subject to rapid and substantial
technological change. Technological competition in the industry from
pharmaceutical and biotechnology companies, universities, governmental entities
and others diversifying into the field is intense and is expected to increase.
Most of these entities have significantly greater research and development
capabilities, as well as substantially more marketing, financial and managerial
resources than us, and represent significant competition for us. Acquisitions
of, or investments in, competing biotechnology companies by large pharmaceutical
companies could increase these competitors' financial, marketing and other
resources. We cannot assure that developments by others will not render our
products or technologies noncompetitive or that we will be able to keep pace
with technological developments. Competitors have developed or are in the
process of developing technologies that are, or in the future may be, the basis
for competitive products. Some of these products may have an entirely different
approach or means of accomplishing similar therapeutic endpoints than products
that we are developing. These competing products may be more effective and less
costly than the products that we are developing. In addition, conventional drug
therapy, surgery and other more familiar treatments and modalities will compete
with our products.

         Any product that we successfully develop and for which we gain
regulatory approval must then compete for market acceptance and market share.
Accordingly, important competitive factors, in addition to completion of
clinical testing and the receipt of regulatory approval, will include product
efficacy, safety, timing and scope of regulatory approvals, availability of
supply, marketing and sales capability, reimbursement coverage, pricing and
patent protection.

HEALTHCARE REFORM AND RESTRICTIONS ON REIMBURSEMENT MAY LIMIT OUR RETURNS ON OUR
PRODUCTS.

         The continuing efforts of governmental and third party payers to
contain or reduce the costs of health care through various means may affect the
future revenues, profitability, and availability of capital for
biopharmaceutical companies. For example, in certain foreign markets pricing or
profitability of prescription pharmaceuticals is subject to government control.
In the United States, there have been, and we expect that there will continue to
be, a number of federal and state proposals to implement similar government
control. Specific legislation is currently being reviewed concerning the
reimbursement of oncology drugs. While we cannot predict whether any such
legislative or regulatory proposals will be adopted, the announcement or
adoption of such proposals could negatively affect our prospects.

         Our ability to commercialize our products successfully will depend in
part on the extent to which appropriate oncology-related reimbursement levels
for the cost of such products and related treatment are obtained from government
authorities, private health insurers and other organizations, such as health
maintenance organizations, or HMOs. Third-party payers are increasingly
challenging the prices charged for medical products and services. Also, the
trend towards managed health care in the United States and the concurrent growth
of organizations like HMOs, which could control or significantly influence the
purchase of health care services and products, as well as legislative proposals
to reform health care or reduce government insurance programs, may limit prices
we can charge for our products. The cost


                                       13
<PAGE>

containment measures that health care payers and providers are instituting
and the effect of any health care reform could impair our ability to sell our
products and may negatively affect our business.

IF WE LOSE QUALIFIED MANAGEMENT AND SCIENTIFIC PERSONNEL OR ARE UNABLE TO
ATTRACT AND RETAIN SUCH PERSONNEL, WE MAY BE UNABLE TO SUCCESSFULLY DEVELOP OUR
PRODUCTS OR WE MAY BE SIGNIFICANTLY DELAYED IN DEVELOPING OUR PRODUCTS.

         Because of the specialized nature of our business, our ability to
maintain our competitive position depends on our ability to attract and retain
qualified management and scientific personnel. We operate in geographical areas
where competition for such critical resources is intense, time consuming and
expensive. We cannot assure that we will be able to continue to attract or
retain such persons.

WE MAY HAVE SIGNIFICANT PRODUCT LIABILITY EXPOSURE.

         We face an inherent business risk of exposure to product liability and
other claims in the event that the use of products during research or
commercialization is alleged to have resulted in adverse effects. While we will
continue to take precautions, we may not avoid significant product liability
exposure. Although we maintain product liability insurance for clinical studies
and contract service activities, this coverage may not be adequate. We may not
be able to obtain adequate insurance coverage for future clinical or commercial
activities at all, or at an acceptable cost. If we are sued for any injury
caused by our technology or products, our liability could exceed our assets.

WE USE HAZARDOUS MATERIALS IN OUR BUSINESS. ANY CLAIMS RELATING TO IMPROPER
HANDLING, STORAGE OR DISPOSAL COULD BE TIME CONSUMING AND COSTLY.

         Our research and development involves the controlled use of hazardous
materials, such as cytotoxic drugs, other toxic and carcinogenic chemicals and
various radioactive compounds. Although we believe that our safety procedures
for handling and disposing of such materials comply with the standards
prescribed by federal, state and local regulations, we cannot completely
eliminate the risk of accidental contamination or injury from these materials.
In the event of this type of accident, we could be held liable for any resulting
damages, and any such liability could be extensive. We are also subject to
substantial regulation relating to occupational health and safety, environmental
protection, hazardous substance control, and waste management and disposal. If
we fail to comply with such regulations, we could be subject to, among other
things, fines and criminal liability.

         Certain chemotherapeutic agents that we employ in our aqueous-based
protein systems, Anhydrous Delivery Vehicles, and regional delivery technology
are known to have toxic side effects, particularly when used in traditional
methods of administration. Each product incorporating a chemotherapeutic agent
will require separate FDA approval as a new drug under the procedures specified
above. Bovine collagen is a significant component of our protein matrix. Two
rare autoimmune connective tissue conditions, polymyositis and dermatomyositis,
have been alleged to occur with increased frequency in patients who have
received cosmetic collagen treatments. Based upon the occurrence of these
conditions, the FDA requested a major manufacturer of bovine collagen products
for cosmetic applications to investigate the safety of such uses of its
collagen. In October 1991, an expert panel convened by the FDA to examine this
issue found no statistically significant relationships between injectable
collagen and the occurrence of autoimmune disease, but noted that certain
limitations in the available data made it difficult to establish a statistically
significant association.


                                       14
<PAGE>

         In addition, bovine sourced materials are of some concern because of
transmission of Bovine Spongiform Encephalopathy, or BSE. We have taken
precautions to minimize the risk of contamination of our collagen with BSE,
including the use of United States-sourced hides. The Committee For Proprietary
Medicinal Products, a steering committee of the European Medicines Evaluation
Agency, has determined that materials made from bovine skin are unlikely to
result in any risk of contamination, indicating minimal risk of transmission of
BSE.

OUR STOCK PRICE COULD CONTINUE TO BE VOLATILE AND YOU MAY NOT BE ABLE TO RESELL
YOUR SHARES AT OR ABOVE THE PRICE YOU PAID FOR THEM. ADDITIONALLY, WE HAVE NOT
DECLARED ANY DIVIDENDS.

         The market price for our common stock has been highly volatile, and, in
addition, the market for biopharmaceutical and biotechnology companies'
securities has from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies.

         The following factors, among others, could have significant impact on
the market for our common stock:

         -  Future announcements concerning us
         -  Future announcements concerning our competitors
         -  Future announcements concerning other biopharmaceutical products
         -  Governmental regulation
         -  Developments in patent or other proprietary rights
         -  Litigation or public concern as to the safety of products that we or
            others have developed
         -  Changes or announcements of changes in reimbursement policies
         -  Period to period fluctuations in our operating results
         -  Changes in estimates of our performance by securities analysts
         -  General market conditions

         We have not paid any cash dividends on our Common Stock and do not
anticipate paying any dividends in the foreseeable future.

OUR ANTI-TAKEOVER PROVISIONS COULD DISCOURAGE POTENTIAL TAKEOVER ATTEMPTS.

         Some of the provisions of our Certificate of Incorporation and Bylaws
may make it more difficult for a third party to acquire, or discourage a third
party from attempting to acquire, control of us. These provisions could limit
the price that certain investors might be willing to pay in the future for
shares of our common stock. Our Board of Directors has the authority to issue
shares of preferred stock and to determine the price, rights, preferences,
privileges and restrictions of those shares without any further vote or action
by the stockholders.

         The rights of the holders of common stock will be subject to, and may
be adversely affected by, the rights of the holders of any Preferred Stock that
may be issued in the future. The issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of our outstanding voting stock. We have no
present plans to issue shares of preferred stock. Some of the provisions of
Delaware law applicable to us could also delay or make more difficult a merger,
tender offer or proxy contest involving us, including Section 203 of the
Delaware General


                                       15
<PAGE>

Corporation Law, which prohibits a Delaware corporation from engaging in any
business combination with any interested stockholder for a period of three years
unless specific conditions are met.



                           MATRIX PHARMACEUTICAL, INC.



PART II                         OTHER INFORMATION


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

The Company's 2000 Annual Meeting of Stockholders was held during May 2000. The
following directors, all of whom served in such capacity prior to the meeting,
were re-elected by the stockholders:

<TABLE>
<CAPTION>
                                                        For            Withheld
                                                        ---            --------
               <S>                                  <C>                <C>
               Michael D. Casey                     21,397,166          71,007
               J. Stephan Dolezalek                 21,399,716          68,457
               James R. Glynn                       21,400,716          67,457
               Stephen B. Howell                    21,400,716          67,457
               Marvin E. Jaffe, M.D.                21,400,716          67,457
               Bradley G. Lorimier                  21,399,566          68,607
               Julius L. Pericola                   21,397,716          70,457
</TABLE>

The following additional matters were submitted to the stockholders for vote and
approved:

-    Approval of amendments to the Company's Certificate of Incorporation to
     increase the number of shares of Common Stock authorized for issuance
     thereunder by an additional 30,000,000 shares to a total of 60,000,000
     shares of Common Stock: 20,588,644 shares were voted "For," 840,248 shares
     voted "Against" and 33,141 shares "Abstained."

-    Approval of an amendment to the Company's 1988 Restricted Stock Plan to
     increase the maximum number of shares of Common Stock authorized for
     issuance under the Plan by an additional 1,100,000 shares and extend the
     term of the Plan through December 31, 2005. Of the total shares voting on
     the foregoing resolution, 9,173,334 voted in favor, 1,730,663 voted against
     and 62,357 abstained.

-    Approval of a series of amendments to the Company's 1991 Directors Stock
     Option Plan (the "Directors Plan") that effected the following changes: (i)
     reduce the number of shares of Common Stock subject to the automatic option
     grant made to an individual who first joins the Company's Board of
     Directors as a non-employee director from 40,000 to 20,000 shares; (ii)
     increase the number of shares subject to the automatic option grant made to
     an individual upon re-election to the Company's Board of Directors as a
     non-employee director from 3,000 to 10,000 shares; (iii) make both the
     initial and re-election options immediately vested and exercisable for all
     the option shares upon grant and (iv) extend the term of the Directors Plan
     through December 31, 2005: 9,633,850 shares were voted "For," 1,247,858
     shares voted "Against" and 84,646 shares "Abstained."


                                       16
<PAGE>

-    Ratification of the appointment of Ernst & Young LLP as independent public
     accountants for the fiscal year ending December 31, 2000. Of the total
     shares voting on the foregoing resolution, 21,314,483 voted in favor,
     129,986 voted against and 23,704 abstained.



ITEM 6. EXHIBITS AND REPORTS ON Form 8-K

                  (a)      EXHIBITS

                           10.7  Purchase Agreement
                           27.1  Financial Data Schedule

                  (b)      REPORTS ON FORM 8-K

                           The Company filed a Current Report on Form 8-K on
                           July 11, 2000 reporting under item 5, Other Events,
                           to disclose: (1) proposals approved at the May 2000
                           Annual Meeting of Shareholders; (2) other
                           developments since March 2000; and (3) certain
                           relationships and related transactions.


                                       17
<PAGE>

                           MATRIX PHARMACEUTICAL, INC.


                                    SIGNATURE



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.


                           MATRIX PHARMACEUTICAL, INC.





Date:   August 2, 2000                      By:   /s/ David G. Ludvigson
      -----------------                           ----------------------

                                            David G. Ludvigson
                                            Chief Operating Officer,
                                            Chief Financial Officer,
                                            and Senior Vice President


                                            Signing on behalf of the registrant
                                            as principal financial officer


                                       18