<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 MARCH 31, 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            (I.R.S. EMPLOYER
    INCORPORATION 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.

                                23,039,395 shares
                              As of April 30, 2000


--------------------------------------------------------------------------------
<PAGE>


                           MATRIX PHARMACEUTICAL, INC.
                                TABLE OF CONTENTS


                                     PART 1
                              FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----
<S>                                                                                                       <C>
Item 1.         Financial Statements:

                a.       Condensed Consolidated Balance Sheets
                         as of March 31, 2000 and December 31, 1999.....................................      2

                b.       Condensed Consolidated Statements of Operations
                         for the three months ended March 31, 2000 and 1999.............................      3

                c.       Condensed Consolidated Statements of Cash Flows
                         for the three months ended March 31, 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


                                     PART II
                                OTHER INFORMATION


                Risk Factors.............................................................................     9

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

Item 5.         Other Information........................................................................    16

Item 6.         Exhibits and Reports on Form 8-K.........................................................    16

                Signature................................................................................    17
</TABLE>



                                       1
<PAGE>

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

<TABLE>
<CAPTION>
                                                                              March 31,   December 31,
                                                                                 2000        1999
                                                                             -----------  ------------
                                                                             (Unaudited)      (*)
<S>                                                                         <C>           <C>
                                     ASSETS

Current assets:

     Cash and cash equivalents ............................................   $  14,896    $  16,042
     Short-term investments ...............................................      26,314       30,929
     Other current assets .................................................       2,101        1,805
                                                                              ---------    ---------
            Total current assets ..........................................      43,311       48,776

Property and equipment, net ...............................................      11,681       11,860
Long-term notes from related parties ......................................         437          455
Deposits and other assets .................................................         104          104
                                                                              ---------    ---------
            Total assets ..................................................   $  55,533    $  61,195
                                                                              =========    =========

                                  LIABILITIES

Current liabilities:
     Accounts payable .....................................................   $   1,238    $   1,612
     Accrued compensation .................................................         713        1,349
     Accrued clinical trial costs .........................................       1,103        1,447
     Other accrued liabilities ............................................       1,664        1,698
     Current portion of deferred income....................................         560          560

     Current portion of debt and capital lease obligations ................       1,352        1,217
                                                                              ---------    ---------
            Total current liabilities .....................................       6,630        7,883
Debt and capital lease obligations, less current portion ..................      12,004       12,356
Deferred other income .....................................................       4,034        4,200
                                                                              ---------    ---------
            Total long-term liabilities ...................................      16,038       16,556


                               STOCKHOLDERS' EQUITY

     Common stock..........................................................         240          226
     Additional paid-in capital............................................     227,913      226,827
     Notes receivable from shareholders ...................................      (2,114)      (2,145)
     Deferred compensation.................................................         (37)         (77)
     Accumulated other comprehensive income (loss) ........................         (14)        (108)
     Deficit accumulated during the development stage .....................    (193,123)    (187,967)
                                                                              ---------    ---------
            Total stockholders' equity ....................................      32,865       36,756
                                                                              ---------    ---------
                                                                              $  55,533    $  61,195
                                                                              =========    =========
</TABLE>

(*) Derived from audited financial statements.


                             See accompanying notes


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED
                                                   MARCH 31,
                                                2000        1999
                                              --------    --------
                                            (Unaudited)  (Unaudited)
<S>                                        <C>          <C>
Revenues ..................................   $     --    $     --

Costs and expenses:
   Research and development ...............      4,291       4,100
   General & administrative ...............      1,449       1,667
                                              --------    --------
      Total costs and expenses ............      5,740       5,767
                                              --------    --------

Loss from operations ......................     (5,740)     (5,767)

Interest and other income, net ............        584         636
                                              --------    --------

Net loss ..................................   $ (5,156)   $ (5,131)
                                              ========    ========

Basic and diluted net loss per common share   $  (0.22)   $  (0.23)
                                              ========    ========

Weighted average shares used in computing
basic and diluted net loss per common share     22,920      22,235
                                              ========    ========
</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 THREE MONTHS
                                                                            ENDED MARCH 31,
                                                                            2000        1999
                                                                          --------    --------
                                                                        (Unaudited) (Unaudited)
<S>                                                                     <C>         <C>
Cash flows from operating activities:
        Net loss ......................................................   $ (5,156)   $ (5,131)
        Adjustments to reconcile net loss to net cash used by operating
         activities:
          Depreciation, amortization, and other .......................        297         859
        Changes in assets and liabilities:
          Notes receivable from related parties .......................         --         187
          Deferred other income .......................................        (26)        (26)
          Accruals for special charges ................................         --        (513)
          Accrued compensation ........................................       (636)       (464)
          Other changes in assets .....................................     (1,048)       (427)
                                                                          --------    --------
          Net cash used in operating activities .......................     (6,569)     (5,515)
Cash flows from investing activities:
        Capital expenditures ..........................................       (106)       (161)
        Issuance of convertible promissory note .......................       --        (1,000)
        Investment in available-for-sale securities ...................     (5,246)    (13,100)
        Maturities of investments .....................................      9,861      13,176
                                                                          --------    --------
          Cash flows provided by (used in) investing activities .......      4,509      (1,085)
Cash flows from financing activities:
        Payments on debt and capital lease obligations ................       (217)       (331)
        Net cash proceeds from:
          Repayment of notes receivable from shareholders .............         31          --
          Common stock ................................................      1,100         197
                                                                          --------    --------
          Cash flows provided by (used in) financing activities .......        914        (134)
Net (decrease) in cash and cash equivalents ...........................     (1,146)     (6,734)
Cash and cash equivalents at the beginning of period ..................     16,042      24,840
                                                                          --------    --------
Cash and cash equivalents at the end of period ........................   $ 14,896    $ 18,106
                                                                          ========    ========
</TABLE>


                             See accompanying notes


                                       4
<PAGE>

                           MATRIX PHARMACEUTICAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2000

1.   BASIS OF PRESENTATION

     The condensed consolidated balance sheet as of March 31, 2000, the
     condensed consolidated statements of operations for the three months ended
     March 31, 2000 and 1999, and the condensed consolidated statements of cash
     flows for the three months ended March 31, 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 March 31, 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
     months ended March 31, 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 first quarter of 2000 and 1999, total comprehensive loss
     amounted to $5,062,000 and $5,165,000, respectively.


                                       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; ANTI-TAKEOVER PROVISIONS AND YEAR 2000 COMPLIANCE, 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 MONTHS ENDED MARCH 31, 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 March 31, 2000, the Company has incurred a cumulative net loss of
approximately $193,123,000.

The Company had no revenue from Matrix products in the first quarters of 2000
and 1999.

Research and development expenses for the first quarter of 2000 increased by 5%
to $4,291,000 compared to $4,100,000 for the first quarter of 1999. The increase
was primarily due to increased rent and property taxes, contract services for
biostatistics and manufacturing supplies and materials. Net rent and property
tax increased mainly due to lower sublease rental income on a portion of the San
Diego facility. These increases were partially offset by lower personnel costs,
depreciation and clinical consulting expenses.

General and administrative expenses for the first quarter of 2000 decreased 13%
to $1,449,000 compared to $1,667,000 for the first quarter of 1999. The decrease
was primarily due to higher amortization expenses for relocation loans to
certain employees that occurred in the first quarter of 1999. First quarter 2000
also reflected a decrease in the use of outside consultants and lower recruiting
costs.

Interest and other income decreased by 8% to $584,000 for the first quarter of
2000 compared to $636,000 for the same period in 1999. This decrease was largely
due to lower interest earned on reduced cash and investment balances partially
offset by contract manufacturing revenue earned at the San Diego facility.


                                       6
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2000, the Company had $41,210,000 in cash, cash equivalents and
marketable securities, compared to $46,971,000 at December 31, 1999. The Company
used $6,569,000 and $5,515,000 for operating activities for the three months
ended March 31, 2000 and March 31, 1999, respectively.

The decrease of $5,761,000 in cash, cash equivalents and short-term investments
during the first quarter of 2000 reflects $6,569,000 of cash disbursements used
to fund operating activities, payments of $217,000 on debt and capital lease
obligations, and capital purchases of $106,000. This was partially offset by
cash receipts of $1,100,000 received from stock option exercises.

In March 1998, the Company entered into an agreement with a real estate
investment trust for the sale and leaseback of its San Diego manufacturing
facility structured as an $18,425,000 purchase and a $6,000,000 convertible loan
secured by specific manufacturing related building improvements. The lease has a
term of 13 years with the option to renew up to 25 years. Net cash from the
lease and loan agreement, after the payment of the existing mortgage and escrow
and other related fees, totaled approximately $13,798,000 and is being used to
fund operating expenses and capital purchases.

In September 1995, the Company repurchased from Medeva PLC all marketing rights
related to its AccuSite product for $2,000,000, to be paid over a period of five
years. As of March 31, 2000, the remaining balance of this obligation was
$500,000.

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, preclinical 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 will enable it to maintain its current and planned
operations at least through mid-2001. The Company may require additional outside
financing to complete the process of bringing current products to market, and
there can be no assurance that such financing will be available on favorable
terms, if at all.


                                       7
<PAGE>

YEAR 2000

In prior years, the Company discussed the nature and progress of its plans to
become Year 2000 ready. In late 1999, the Company completed its remediation and
testing of systems. As a result of those planning and implementation efforts,
the Company experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes those
systems successfully responded to the Year 2000 date change. The Company spent
approximately $100,000 during 1999 in connection with remediating its systems.
The Company is not aware of any material problems resulting from Year 2000
issues, either with its products, its internal systems, or the products and
services of third parties. The Company will continue to monitor its mission
critical computer applications and those of its suppliers and vendors throughout
the year 2000 to ensure that any latent Year 2000 matters that may arise are
addressed promptly.


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

WE MAY NOT RECEIVE REGULATORY APPROVALS OF OUR PRODUCT CANDIDATES, MANUFACTURING
PROCESSES AND PRODUCTION FACILITIES

The preclinical 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 them 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 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. We
have had 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.

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 preclinical 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.

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 can give no assurance that the
FDA will accept our San Diego manufacturing facility, and failure to receive or
maintain such acceptance would materially and adversely affect our business.

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. Any FDA
interpretation may differ from our analysis, and we can give no assurance that
the FDA will accept our data or our interpretation of that data. NDAs for drug
candidates that the FDA determines are intended to treat serious or
life-threatening conditions and have the potential to address unmet medical
needs may be given more rapid ("fast track") regulatory review, which is
generally six months from submission. IntraDose Injectable Gel was granted "fast
track" status in May 1999. Although this designation is expected to shorten the
review period compared to NDAs that do not have "fast track" status, it does not
increase or decrease the probability of FDA approval. 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 adversely affect 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.


                                       9
<PAGE>

Violations of regulatory requirements at any stage, including the preclinical
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 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 preclinical 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.

UNCERTAINTIES ASSOCIATED WITH CLINICAL TRIALS

We have conducted and plan to continue to undertake extensive and costly
clinical testing to assess the safety and efficacy of our potential products.
Failure to comply with FDA regulations applicable to clinical testing can 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 can give no assurance 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, including two ongoing Phase III trials. 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 ongoing Phase III
trials. Delays in completing enrollment in other clinical studies may result in
increased costs and delays, which could materially and adversely affect 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. Although this action was
taken due to the encouraging results observed to date, final study results may
be different from the preliminary outcomes as more patients are 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 March 31, 2000, our accumulated deficit was approximately $193,123,000. 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


                                       10
<PAGE>

United States, and develop an effective sales and marketing organization in the
United States. We can give no assurance 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.

WE WILL REQUIRE ADDITIONAL FINANCING

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 can give no
assurance that such additional funds will be available on acceptable terms, if
at all. Our business could be materially and adversely affected if adequate
funds are not available from operations or additional sources of financing.
Based on our current operating plan, we anticipate that our existing capital
resources will be adequate to satisfy our capital needs through at least
mid-2001. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

WE HAVE LIMITED MANUFACTURING AND SALES AND MARKETING EXPERIENCE

We intend to market and sell certain 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 can give no assurance
that we will be able to establish a successful direct sales organization or
co-promotion or distribution arrangements. In addition, we can give no assurance
that resources will be available to us to fund our marketing and sales expenses,
many of which must be incurred before sales commence. Failure to establish a
marketing and sales capability in the United States or outside the United States
could materially and adversely affect our business.

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 clinical
requirements. We can give no assurance 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. Failure to establish additional
manufacturing capacity on a timely basis could materially and adversely affect
our business.

WE DEPEND ON OUR SOURCES OF SUPPLY

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 others and us in the
pharmaceutical industry on commercially reasonable terms. If our manufacturing
facilities are not able to produce 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


                                       11
<PAGE>

that source. We can give no assurance 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 materially and adversely affect 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. See "Uncertainty Regarding Patents and Proprietary Rights."

UNCERTAINTY REGARDING PATENTS AND PROPRIETARY RIGHTS

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 can give no assurance that patents do not exist or could not be
filed which would materially and adversely affect our ability to market our
products or maintain our competitive position with respect to our products. Our
patents may not prevent others from developing competitive products using
related technology. 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 can give no assurance 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 can give no assurance 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 can give no assurance that the U.S. Patent and Trademark Office, or PTO, will
approve our pending patent applications, and 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 can give no
assurance 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
others' patents 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, there can be no assurance 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.

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


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<PAGE>

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.

RISKS RELATED TO RAPID TECHNOLOGICAL CHANGE AND SUBSTANTIAL COMPETITION

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 can give no assurance 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.

PHARMACEUTICAL PRICING AND ADEQUATE REIMBURSEMENT IS UNCERTAIN

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


                                       13
<PAGE>

WE DEPEND ON QUALIFIED AND KEY PERSONNEL

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. Competition for such personnel is intense.
We can give no assurance that we will be able to continue to attract or retain
such persons.

RISKS ASSOCIATED WITH PRODUCT LIABILITY EXPOSURE; LIMITED INSURANCE COVERAGE

We face an inherent business risk of exposure to product liability claims in the
event that the use of products during research or commercialization results in
adverse effects. While we will continue to take appropriate precautions, we can
give no assurance that we will avoid significant product liability exposure.
Although we maintain product liability insurance for clinical studies and
contract service activities, we can give no assurance that this coverage will be
adequate or that adequate insurance coverage for future clinical or commercial
activities will be available at all, or at an acceptable cost, or that a product
liability claim would not materially adversely affect our business or financial
condition.

RISKS ASSOCIATED WITH HAZARDOUS MATERIALS AND PRODUCTS

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. The failure to comply with
such regulations could subject us 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.

In addition, bovine sourced materials are of some concern because of
transmission of Bovine Spongiform Encephalopathy, or BSE. We have taken all
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.


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<PAGE>

OUR STOCK PRICE IS VOLATILE AND WE HAVE NOT DECLARED ANY DIVIDENDS

The market prices for securities of biopharmaceutical and biotechnology
companies (including us) have historically been highly volatile, and, in
addition, the market has from time to time experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies. Future announcements concerning us, our competitors or
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 and general market
conditions may have a significant effect on the market price of our securities.
We have not paid any cash dividends on our Common Stock and do not anticipate
paying any dividends in the foreseeable future.

RISKS ASSOCIATED WITH ANTI-TAKEOVER PROVISIONS

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

IMPACT OF YEAR 2000

In prior years, the Company discussed the nature and progress of its plans to
become Year 2000 ready. In late 1999, the Company completed its remediation and
testing of systems. As a result of those planning and implementation efforts,
the Company experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes those
systems successfully responded to the Year 2000 date change. The Company spent
approximately $100,000 during 1999 in connection with remediating its systems.
The Company is not aware of any material problems resulting from Year 2000
issues, either with its products, its internal systems, or the products and
services of third parties. The Company will continue to monitor its mission
critical computer applications and those of its suppliers and vendors throughout
the year 2000 to ensure that any latent Year 2000 matters that may arise are
addressed promptly. Although we have converted our internal systems, we cannot
fully predict to what extent our business would be affected if any of our
suppliers' systems and services are not Year 2000 compliant. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations"


                                       15
<PAGE>

                           MATRIX PHARMACEUTICAL, INC.

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

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

None.


ITEM 5. OTHER INFORMATION

None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

          (a)  EXHIBITS

               27.1 Financial Data Schedule

          (b)  REPORTS ON FORM 8-K

               There were no Current Reports on Form 8-K filed during the
               quarter ended March 31, 2000.


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<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: May 8, 2000                  By:   /s/ David G. Ludvigson
      -----------                        ----------------------
                                         David G. Ludvigson
                                         Senior Vice President,
                                         Chief Operating Officer and
                                         Chief Financial Officer


                                         Signing on behalf of the registrant
                                         as principal financial officer


                                       17