<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 SEPTEMBER 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            (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.








                                25,866,976 shares
                             As of November 2, 2000

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





                           MATRIX PHARMACEUTICAL, INC.
                                TABLE OF CONTENTS


                                     PART 1
                              FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----

<S>            <C>                                                                                         <C>
Item 1.         Financial Statements:

                a.       Condensed Consolidated Balance Sheets
                         as of September 30, 2000 and December 31, 1999.................................      3

                b.       Condensed Consolidated Statements of Operations
                         for the three and nine months ended September 30, 2000 and 1999................      4

                c.       Condensed Consolidated Statements of Cash Flows
                         for the nine months ended September 30, 2000 and 1999..........................      5

                d.       Notes to Condensed Consolidated Financial Statements............................     6


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

Item 3.         Quantitative and Qualitative Disclosures About Market Risk...............................    10
</TABLE>


                                     PART II
                                OTHER INFORMATION

<TABLE>
<CAPTION>
<S>            <C>                                                                                         <C>
                Risk Factors.............................................................................    11

Item 2.         Changes in Securities and Use of Proceeds................................................    18

Item 6.         Exhibits and Reports on Form 8-K.........................................................    18

                Signature................................................................................    19
</TABLE>


                                       2
<PAGE>




                           MATRIX PHARMACEUTICAL, INC.
                          (a development stage company)
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                  September 30,       December 31,
                                                                                       2000                 1999
                                                                                ------------------  ------------------
                                                                                   (Unaudited)              (*)
                                     ASSETS
<S>                                                                             <C>                <C>
Current assets:
     Cash and cash equivalents................................................. $       42,191      $     16,042
     Short-term investments....................................................         19,050            30,929
     Other current assets......................................................          1,953             1,805
                                                                                ------------------  ------------------
            Total current assets............................................... $       63,194            48,776


Property and equipment, net....................................................         11,365            11,860
Long-term notes from related parties............................................           389               455
Deposits and other assets......................................................            295               104
                                                                                ------------------  ------------------
            Total assets....................................................... $       75,243      $     61,195
                                                                                ==================  ==================
                                   LIABILITIES
Current liabilities:
     Accounts payable.......................................................... $        3,070     $       1,612
     Accrued compensation.......................................................         1,202             1,349
     Accrued clinical trial costs..............................................            685             1,447
     Other accrued liabilities.................................................          1,097             1,698
     Current portion of deferred income........................................            560               560
     Current portion of debt and capital lease obligations ....................          1,424             1,217
                                                                                ------------------  ------------------
            Total current liabilities..........................................          8,038             7,883
Debt and capital lease obligations, less current portion.......................         11,322            12,356
Deferred other income..........................................................          3,701             4,200
                                                                                ------------------  ------------------
            Total long-term liabilities........................................         15,023            16,556

                              STOCKHOLDERS' EQUITY
     Common stock..............................................................            280               226
     Additional paid-in capital.................................................       257,660           226,827
     Notes receivable from shareholders                                                 (1,255)           (2,145)
     Deferred compensation.....................................................              -               (77)
     Accumulated other comprehensive income (loss).............................             (7)             (108)
     Deficit accumulated during the development stage..........................       (204,496)         (187,967)
                                                                                ------------------  ------------------
            Total stockholders' equity.........................................         52,182            36,756
                                                                                ------------------  ------------------
                                                                                $       75,243      $     61,195
                                                                                ==================  ==================
</TABLE>

(*) Derived from audited financial statements.




                             See accompanying notes


                                       3
<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               NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                    SEPTEMBER 30,
                                                            2000              1999             2000             1999
                                                       --------------   --------------    -------------    --------------

<S>                                                    <C>              <C>               <C>              <C>
Revenues from contract services........................$      620       $        135      $    1,052       $       135

Operating costs and expenses:

   Contract Services...................................       406                 88             687                88

   Research and development............................     4,692              4,419          13,483            13,258
   General and administrative..........................     1,731              1,226           5,256             4,187
                                                       --------------   --------------    -------------    --------------
      Total costs and expenses.........................     6,829              5,733          19,426            17,533
                                                       --------------   --------------    -------------    --------------

Loss from operations...................................    (6,209)            (5,598)        (18,374)          (17,398)

Interest and other income, net.........................       910                466           1,845             1,609
                                                       --------------   --------------    -------------    --------------

Net loss...............................................$   (5,299)      $     (5,132)      $ (16,529)     $    (15,789)
                                                       ==============   ==============    =============    ==============

Basic and diluted net loss per common share............$    (0.21)      $      (0.23)      $   (0.70)     $     (0.71)
                                                       ==============   ==============    =============    ==============

Weighted average shares used in computing
basic and diluted net loss per common share ...........    24,828             22,490           23,596           22,357
                                                       ==============   ==============    =============    ==============
</TABLE>




                                              See accompanying notes

                                       4
<PAGE>





                           MATRIX PHARMACEUTICAL, INC.
                          (a development stage company)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   (In thousands, except footnote disclosure)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                             FOR THE NINE MONTHS
                                                                                              ENDED SEPTEMBER 30,
                                                                                        2000                      1999
                                                                                      -------------          -------------
<S>                                                                              <C>                       <C>
Cash flows from operating activities:
        Net loss................................................................... $  (16,529)              $  (15,789)
        Adjustments to reconcile net loss to net cash used by operating
        activities:
          Depreciation, amortization, and other....................................        956                    1,260
          Amortization of deferred income..........................................       (420)                    (420)
        Changes in assets and liabilities:
          Notes receivable from related parties....................................         66                      619
          Deferred other income....................................................        (79)                     (79)
          Accruals for special charges.............................................          -                     (513)
          Accrued compensation.....................................................       (147)                      23
          Other changes in assets and liabilities..................................       (144)                     690
                                                                                      -------------          -------------
          Net cash used in operating activities....................................    (16,297)                 (14,209)
Cash flows from investing activities:
        Capital expenditures.......................................................       (384)                    (313)
        Investment in available-for-sale securities................................    (68,021)                 (71,973)
        Maturities of investments..................................................     79,900                   77,277
                                                                                      -------------          -------------
          Net cash flows provided by investing activities..........................     11,495                    4,991
Cash flows from financing activities:
        Payments on debt and capital lease obligations.............................       (827)                  (1,275)
          Net cash proceeds from capital stock.....................................     30,888                    1,020
          Payments received on notes receivable from shareholders..................        890                       74
                                                                                      -------------          -------------
          Net cash flows provided by (used in) financing activities................     30,951                     (181)
Net increase (decrease) in cash and cash equivalents...............................     26,149                   (9,399)
Cash and cash equivalents at the beginning of period...............................     16,042                   24,840
                                                                                     ===============         =============
Cash and cash equivalents at the end of period..................................... $   42,191               $   15,441
                                                                                     ===============         =============
</TABLE>







                                              See accompanying notes


                                       5
<PAGE>



                           MATRIX PHARMACEUTICAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000

1.        BASIS OF PRESENTATION

                    The condensed consolidated balance sheet as of September 30,
          2000, the condensed consolidated statements of operations for the
          three and nine months ended September 30, 2000 and 1999, and the
          condensed consolidated statements of cash flows for the nine months
          ended September 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
          September 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 consolidated 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
          nine months ended September 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 third quarter of 2000 and 1999, total
          comprehensive loss amounted to $5,272,000 and $5,139,000,
          respectively. For the first nine months of 2000 and 1999, total
          comprehensive loss amounted to $16,428,000 and $15,966,000,
          respectively.

3.        REVENUE RECOGNITION

                    The Company recognizes all contract services revenue when
          products meeting customers' specifications are shipped to customers.

4.        NEW ACCOUNTING STANDARDS

                    In June 1998, the Financial Accounting Standards Board
          issued Statement of Financial Accounting Standards No. 133,
          "Accounting for Derivative Financial Instruments and Hedging
          Activities" ("SFAS 133") which provides a comprehensive and consistent
          standard for the recognition and measurement of derivatives and
          hedging activities. SFAS 133, as amended, is required to be adopted by
          the Company effective January 1, 2001 and is not anticipated to have
          an impact on the Company's results of operations or financial
          condition when adopted as the



                                       6
<PAGE>

          Company holds no derivative financial instruments and does not
          currently engage in hedging activities.

                    In December 1999, the Securities and Exchange Commission
          issued Staff Accounting Bulletin No. 101, "Revenue Recognition in
          Financial Statements" ("SAB 101"). SAB 101 summarizes the Securities
          and Exchange Commission's views in applying generally accepted
          accounting principles to revenue recognition. The adoption of SAB 101
          had no impact on the Company's results of operations.

                    In March 2000, the Financial Accounting Standards Board
          issued Interpretation No. 44, "Accounting for Certain Transactions
          Involving Stock Compensation." The adoption of this Interpretation had
          no impact on the Company's results of operations.



                                       7
<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 NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

          Since the Company's inception in 1985, the primary focus of its
operations has been research and development. 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 September 30, 2000, the Company has incurred a
cumulative net loss of approximately $204,496,000.

REVENUE

          Revenues for the third quarter of 2000 increased to $620,000
compared to $135,000 for the third quarter of 1999. For the nine months ended
September 30, 2000, revenues were $1,052,000 compared to $135,000 for the
same period of 1999. Development of the Matrix Contract Services, MCS,
division in San Diego, which resulted in an increased customer base, was the
cause for both period-over-period increases in revenue.

OPERATING COSTS AND EXPENSES

          Contract services operating costs for the third quarter of 2000
increased to $406,000 compared to $88,000 for the third quarter of 1999. For
the nine months ended September 30, 2000, contract services costs were
$687,000 compared to $88,000 for the same period of 1999. Higher spending to
support the growth in the contract services business was the cause for both
period-over-period increases in operating costs.

                                       8
<PAGE>

          Research and development expenses for the third quarter of 2000
increased by 6% to $4,692,000 compared to $4,419,000 for the third quarter of
1999. The increase was primarily due to increased quarter-over-quarter
contracting and consulting expenses in support of the New Drug Application,
NDA, as well as higher utility costs at the San Diego facility. This was
partially offset by increased sublease rental income on a portion of the San
Diego facility. For the first nine months ended September 30, 2000, research
and development expenses increased by 2% to $13,483,000 compared to
$13,258,000 for the same period in 1999. The increase was primarily due to
higher period-over-period contracting and consulting expenses in support of
the NDA offset by lower clinical trial expenses, reduced salaries and wages,
and depreciation.

          General and administrative expenses for the third quarter of 2000
increased 41% to $1,731,000 compared to $1,226,000 for the third quarter of
1999. This increase was primarily due to higher market preparation expenses
for IntraDose-Registered Trademark- as well as increased contracting and
consulting expenses. For the first nine months of 2000, general and
administrative expenses increased by 26% to $5,256,000 compared to $4,187,000
for the same period in 1999. The increase was primarily due to the same
reasons as noted for the third quarter of 2000.

INTEREST AND OTHER INCOME, NET

          Interest and other income (net) for the third quarter of 2000
increased to $910,000 compared to $466,000 for the third quarter of 1999.
Higher interest earned on cash and investment balances was the cause for the
period-over-period increase. For the nine months ended September 30, 2000,
interest and other income (net) were $1,845,000 compared to $1,609,000 for
the same period of 1999.

LIQUIDITY AND CAPITAL RESOURCES

          At September 30, 2000, the Company had $61,241,000 in cash, cash
equivalents and short-term investments, compared to $46,971,000 at December
31, 1999. The Company used $16,297,000 and $14,209,000 for operating
activities for the nine months ended September 30, 2000 and September 30,
1999, respectively.

          The increase of $14,270,000 in cash, cash equivalents and
short-term investments during the first nine months of 2000 reflects the July
2000 sale of 2,500,000 shares of newly issued common stock that resulted in
net proceeds of approximately $29,000,000 to the Company. Additionally, cash
receipts of $2,778,000, related to stock option exercises and payments on
notes receivable from shareholders, were received over the nine-month period
ending September 30, 2000. This was partially offset by the use of
$16,297,000 to fund operating activities, payments of $827,000 on debt and
capital lease obligations and capital purchases of $384,000.

          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, pre-clinical testing and

                                       9
<PAGE>

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 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.

ITEM  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

                                       10
<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
restrictions on such product, manufacturer, or the NDA holder, including
withdrawal of the product from

                                       11
<PAGE>

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 to market the drug
product 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 September 30, 2000, our accumulated deficit was
$204,495,000. Our net loss for the year ended December 31, 1999, nine months
ending September 30, 2000 and the three months ended September 30, 2000 was
$20,998,000, $16,529,000 and $5,299,000 respectively. We have generated
limited 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

                                       12
<PAGE>

regulatory approvals, that we will manufacture or market any products
successfully, or that we will achieve profitability.

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.

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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 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, which patent
was exclusively licensed to another pharmaceutical company. An earlier patent
covering the use of cisplatin in treating cancer was also licensed to this
company, but expired 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. This ruling is currently being appealed. If the court's decision is
appealed and overturned, and if IntraDose were found to

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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.

          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 payors 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 payors 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

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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 payors 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.

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          In addition, bovine sourced materials are of some concern because
of potential transmission of Bovine Spongiform Encephalopathy, or BSE. We
have taken precautions to minimize the risk of contamination of our collagen
with BSE causing agents, 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 SHAREHOLDERS MAY NOT BE
ABLE TO RESELL THEIR SHARES AT OR ABOVE THE PRICE THEY 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, and
          -         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 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.

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                           MATRIX PHARMACEUTICAL, INC.



PART II                             OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

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 $29,000,000 to the Company.
Banc of America LLC acted as placement agent and received 6% of gross
proceeds of the offering for its services. The Company issued all of the
securities under an exemption from the registration requirements of the
Securities Act of 1933. A registration statement on Form S-3 registering the
shares of common stock was filed with the SEC and became effective in July of
2000.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      EXHIBITS

                           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.






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                          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:  November 8, 2000                 By:/s/ Jeffrey H. Cooper
     -------------------                   ---------------------
                                        Jeffrey H. Cooper
                                        Vice President, Finance

                                        Signing on behalf of the registrant
                                        as principal financial officer


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