U.S. SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C. 20549

                         Form 10-KSB/A

(Mark One)
    X       Annual report under Section 13 or 15(d) of the
        Securities Exchange Act of 1934. For the fiscal year
                     ended June 30, 2001.

                               OR

         Transition report under Section 13 or 15(d) of the
         Securities Exchange Act of 1934 for the transition
         period from ________________ to ________________.

                Commission File Number: 0-18299


                       BIOENVISION, INC.
                       -----------------
         (Name of Small Business Issuer in Its Charter)

 Delaware                                      11-3375915
------------------------------                ------------
(State or Other Jurisdiction of              (IRS Employer
Incorporation or Organization)              Identification No.)

Suite 1600
One Rockefeller Plaza
New York, New York                                 10020
----------------------------                       -------
(Address of Principal Executive Offices)        (Zip Code)

Registrant's telephone number, including area code:
             (212) 445-6581

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act:
                      Title of Each Class:
                      -------------------

                 Common Stock, $0.001 par value

Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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

Check if there is no disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

The issuer's revenues for its most recent fiscal year were
$245,455.

The aggregate market value of the voting stock held by non-
affiliates computed by reference to the last price at which the
stock was sold,  as of September 28, 2001, was $4,900,149.

The number of shares of common stock outstanding as of September
28, 2001 was 9,048,919.

                           PART I

The information set forth in this Report on Form 10-KSB
including, without limitation, that contained in Item 6,
Management's Discussion and Analysis and Plan of Operation,
contains "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Actual results may materially differ from those projected in the
forward-looking statements as a result of certain risks and
uncertainties set forth in this report.  Although management
believes that the assumptions made and expectations reflected in
the forward-looking statements are reasonable, there is no
assurance that the underlying assumptions will, in fact, prove to
be correct or that actual future results will not be different
from the expectations expressed in this report.


Item 1.  Description of Business

     Bioenvision is an emerging biopharmaceutical company.  Our
primary business focus is the acquisition, development and
distribution of drugs to treat cancer.  Our two lead drugs are
Modrenal , which is our first product to receive regulatory
approval (in the United Kingdom) for marketing for breast cancer
treatment, and clofarabine, which is currently in Phase II
clinical trials under our recently executed co-development
agreement with Ilex Oncology, Inc. (NASDAQ NM:  ILXO) ("Ilex").
Our management believes that we have the opportunity to become a
leading oncology- focused pharmaceutical company in the next five
years if we successfully market and distribute those two lead
drugs. We anticipate that revenues derived from the two lead
drugs will permit us to further develop the 12 other products
currently in our development portfolio. We currently plan to have
as many as 12 products at market by the end of 2006.

    We have obtained regulatory approvals in the United Kingdom
to market our first product, Modrenal , for the treatment of
post-menopausal breast cancer.  We plan to commence marketing
Modrenal in the United Kingdom by the end of 2001/early in 2002.
Modrenal has a unique and previously unrecognized mode of action
and is the first drug in a new class of agents that modulates
hormone binding to the newly-described "second" estrogen
receptor, ER.  We intend to seek regulatory approval for Modrenal
in the United States as a second line therapy for hormone
sensitive breast cancers.  We believe that the potential market
for Modrenal , based upon the sales of currently available drugs
for hormonal therapy for breast cancers, is in excess of  $1.8
billion of sales per anum worldwide.  The results of extensive
clinical trails to date with Modrenal  show that it is at least
as effective in second line treatment of advanced breast cancer
as the currently available hormonal treatments, such as the
SERM's and aromatase inhibitors, and more effective than these
agents in certain specific patient types, such as those who have
become tamoxifen-refractory.  Furthermore, our management
currently intends to price Modrenal  in such a way as to make
treatment with Modrenal  compare very favorably, on a price
basis, with the cost of treatment with the existing drugs used
for second line therapy.  We believe that this should result in
cost benefits for physicians, patients and health-care systems.

     Modrenal has other applications as well.  We expect to
commence marketing  Modrenal  in other European countries for the
treatment of Cushing's disease in the second quarter of 2002, and
in the United States for the treatment of Cushing's disease in
the third quarter of 2002, subject to obtaining the necessary
regulatory approvals.

     Our second lead product is clofarabine,  which we believe,
based on third party studies conducted to date, may be effective
in the treatment of leukemia and lymphoma. To expedite the
commercialization of our second lead product, clofarabine, we
have recently entered into a co-development agreement with Ilex.
We believe that our two initial lead products have the following
competitive advantages over existing products at market:

Modrenal  (selective steroid receptor modulation technology
product)
     * Novel mode of action on estrogen receptor
     * Increases estrogen binding to ER
     * 46% response rate in international clinical trials of
        almost 800 patients with advanced breast cancer
     * Second line therapy for hormone sensitive breast cancer
     * Possible combination therapy with Tamoxifen
     * Possible role in prostate and ovarian cancer
     * Favorable pricing compared to competitors

Clofarabine (purine nucleoside technology product)
     * Five to ten times more active than market leader,
       Fludarabine, based on pre-clinical and clinical trials
       to date
     * Broader range of clinical activity than Fludarabine,
       based on clinical trials to date
     * Good oral bio-availability
     * Pre-clinical activity against some solid  tumours
     * Complete response in chronic and acute leukemia, based on
       clinical trials to date


Anti-Cancer Product Portfolio
<table>

Product/Condition       Pre-clinical   Phase I  Phase II  Phase
III  At Market

                    <c>            <c>      <c>       <c>
<c>
Modrenal /Breast Cancer
 At Market
Abetafen/Prostate Cancer                        Phase II
Modrenal /Analog        Pre-clinical
Clofarabine/Leukemia                            Phase II
Clofarabine/Lymphoma                            Phase II
Clofarabine/Solid Tumors               Phase I
Gene Albumin                           Phase I
TPO Gene                               Phase I
Gossypol/Prostate Cancer               Phase I
Gossypol/Bladder Cancer                Phase I
RA Inhibitor/Leukemia  Pre-clinical
Hormone Blocker/
    Prostate Cancer    Pre-clinical

Summary                     3            5          3         0
    1

Non-Cancer Product Portfolio
Product/Condition       Pre-clinical   Phase I  Phase II  Phase
III  At Market
Modrastane  /
  Cushing's Disease
 At Market
Modrefen /
  Alzheimer's Disease   Pre-clinical
Clofarabine/
  Transplantation       Pre-clinical
Gene Therapy Vaccine/
  Various                   R&D
Summary                      3
     1

</table>

SUMMARY

     We also have one animal health product at market and we are
establishing a separate division to market this product. The
animal healthcare market is a multi-billion dollar market (as
demonstrated by publicly reported sales of Pfizer, Eli Lilly,
Bristol Myers Squibb, etc.) and we intend to exploit the value of
our products in the veterinary field. This business segment is
not a part of our core business and will be managed separately
from our core human pharmaceuticals business.

Animal Health Product Portfolio

<table>

Product/Condition       Pre-clinical   Phase I  Phase II  Phase
III  At Market

                    <c>            <c>      <c>       <c>
 <c>
Modrestane/
  Cushing's Disease
  At Market
Modrestane/Alopecia X                           Phase II
Clofarabine/Cancer      Pre-Clinical
Cytostatic Agents
  /Cancer               Pre-clinical
Summary                      2            0         1          0
     1

</table>

Business Product Strategy
     Our primary objectives are to begin marketing our products
for which we have obtained necessary regulatory approvals, to
continue developing our existing platform technologies, and to
commercialize products derived from these technologies. Once a
product or technology has been launched into the market for a
particular disease indication, we plan to work with numerous
collaborators, both pharmaceutical and clinical, to extend the
labeling of the drug to other indications. In order to market our
products effectively, we plan to establish a niche sales and
marketing unit, focused specifically on the oncology market. Our
sales and marketing unit will develop marketing alliances with
corporate partners and may co-promote and/or co-market our
products in certain territories.

     As part of our overall business strategy, we are developing
our existing platform technologies and products through a
combination of internal and collaborative programs. These
programs are designed to diversify the risks associated with
traditional pharmaceutical development while also facilitating
more rapid commercialization of products, as we hope to do with
our two lead products. Rather than engage solely in discovery
research to identify suitable lead compounds (chemical structures
suitable as starting points for optimization as drugs by the
application of medicinal chemistry) for particular molecular
targets, which typically involves time-consuming biological
analysis, we seek to in-license or acquire rights to promising
lead compounds typically in late pre-clinical or early clinical
stages of development that have proven efficacy in humans or in
animal models.

     Once we acquire a lead compound, we seek to optimize its
development as a drug and ultimately bring the drug to market. We
also seeks to in-license or acquire fully-developed, FDA-approved
platform technologies that have development potential and afford
us certain market protection against competitors, such as patent
rights, marketing exclusivity or orphan drug designation.

     The key elements of our business strategy are as follows:

*    Obtain regulatory approvals of products in North America
     and Europe. Modrenal  or trilostane, the lead compound of
     the selective steroid receptor modulation technology, is
     presently approved in the United Kingdom and Germany for
     certain disease indications. The drug had also received
     product approval in the United States by the FDA for the
     treatment of hyperadrenal secretion conditions, such as
     Cushing's disease, but has not yet been marketed. In
     addition, nine of the products and technologies to which we
     have rights are currently being tested in clinical trials
     and seven are in the pre-clinical stage of development.

*    Establish a niche oncology sales force. We intend to
     establish sales operations in the United Kingdom during late
     2001/2002 and in certain other European countries and in the
     United States during 2002, (and to rely on joint marketing
     arrangements and commercial partners for the marketing, sale
     and distribution of our products in other parts of the
     European Union). We believe that a dedicated sales forces in
     North America and Europe will provide us with significant
     marketing advantages in each of these markets. Once
     established, our sales force and infrastructure will be
     expanded in accordance with the growth of sales, the
     introduction of new products and the entry in to other
     territories. Strategic alliances which the Company may form
     with other biotechnology or pharmaceutical companies in the
     future may necessitate a change in the strategy relating to
     the setting up of sales and marketing teams and the
     employment of personnel in these areas.

*    Develop innovative marketing techniques. Our marketing
     will target the two key audiences for our products - doctors
     and patients. Medical education will be a priority, with the
     use of peer-opinion leaders, clinical trials at major
     medical centers, satellite symposia and conferences, product
     advertising in specific scientific journals and
     knowledgeable sales personnel. Patient education, although
     carefully controlled, is important to our marketing
     approach. Patient education is particularly important
     because our first product for which we have obtained
     regulatory approval (in the United Kingdom) for marketing
     for use in cancer treatment, Modrenal, is effective for
     patients with breast cancer, which is one of
     the most common cancers in women.  In addition, if the
     trials of trilostane, the chemical name for Modrenal , in
     prostate cancer prove successful, we anticipate that we will
     have a drug for treating a cancer found in 180,000 men each
     year in the United States alone.

*    Establish and develop animal health division. We have
     established a separate division to exploit opportunities for
     our products in the veterinary market to provide health
     products to animals.  We have four products in our animal
     health portfolio.  We anticipate marketing the lead product,
     Modrastane  for the treatment of Cushing's disease in dogs
     and horses in the United Kingdom and Europe by late
     2001/early 2002 and, subject to U.S. Food and Drug
     Administration("FDA") approval, in the U.S. in late
     2002/2003. Based upon sales publicly reported by just five
     large pharmaceutical companies, the global market for animal
     health products was in excess of $3 billion in 2000.

*    Expand the portfolio of novel oncology platform technologies
     and products. We have acquired development and marketing
     rights to a portfolio of novel oncology platform
     technologies and products. We intend to continue to acquire,
     in-license and develop new technologies and products that we
     believe offer unique market opportunities and/or complement
     existing product lines. We have adopted a multi-tier
     strategy with respect to licensing or acquiring new products
     and technologies designed to diversify the risks inherent in
     traditional pharmaceutical development:

          license or acquire fully-developed, products and
          technologies approved by the FDA that have development
          potential and offer certain market protection against
          competitors, such as patent rights, marketing
          exclusivity or orphan drug designation;
          identify and acquire products and technologies in late
          pre-clinical or early clinical stages of development to
          minimize the time and expense of development; and
          focus on products with significant potential commercial
          opportunities in niche oncology markets.

*   Develop business and enhance research through strategic
    alliances. A key component of our business strategy is to
    leverage the resources gained from collaboration with leading
    scientific and medical institutions to expand our technology
    and operations base. In addition, we believe collaborations
    with academic centers will supplement the scientific
    resources available to us and broaden access to rapidly
    emerging drug discovery technologies.

*   Capitalize on expertise and reputation of management team and
    scientific advisors. Our management has significant expertise
    and experience in drug development, enabling us to manage
    effectively the pre-clinical studies and clinical trials of
    drug candidates. In addition, we intend to capitalize on the
    strong reputations of the members of our scientific advisory
    board with academic institutions, hospitals, physicians,
    pharmacists and distributors to expand our customer base and
    to introduce new products.

Products

     The following is a description of our current portfolio of
platform technologies.

     Selective Steroid Receptor Modulation Technology
     We have commercial rights to a selective steroid receptor
modulation technology, the lead compound of which is currently
approved by regulatory authorities in the United Kingdom for the
treatment of post-menopausal breast cancer, and by regulatory
authorities in Germany, for the treatment of certain adrenal
disorders, such as Cushing's Disease. The product had also
received marketing approval for the treatment of Cushings disease
in certain other European countries and the USA.   The lead
product, trilostane, is currently marketed under the names
Modrenal, and Modrastane.  Recent scientific data from Professor
Gavin Vinson's laboratory at Queen Mary & Westfield College,
London, England (part of the University of London) and which was
presented recently at an international endocrinology symposium in
Sydney, Australia, have shown that trilostane has a unique and
previously unrecognized mode of action. The drug inhibits
estrogen binding to the classical estrogen receptor (ERa) in an
allosteric fashion and also modulates estrogen binding to the
newly-described second receptor, ER, This action makes trilostane
the first drug in a new class of agents that act as ER  agonists.
This novel action may explain the high clinical response rates
seen when the drug was given to patients with tamoxifen
resistance.

     Breast cancer is, in general, a hormone-dependent disease,
with estrogen being the principle hormone driving cell growth. A
major part of modern treatment is directed at blocking the action
of estrogen, either at the site of production in the body or at
the cell's estrogen receptor. The most widely used drug in this
area, Tamoxifen, has been very successful in improving response
rates and survival in women with breast cancer.  Until recently
it was believed that estrogen acted via a single receptor on the
cancer cell. However, it is now known that more than one estrogen
receptor exists. In addition, there are other receptor isoforms
that may have an effect on the cancer cell. New data, from
scientists at the University of London working on our behalf,
have shown that trilostane alters the binding of estrogen to
certain of the receptor isoforms, thereby altering and, in some
cases, blocking the action of estrogen.  Furthermore,
trilostane's action is different from that of other known
"hormonal agents" although its actions may be complementary to
those of other drugs. Extensive clinical trials with the drug
have shown that it is effective in a significant proportion of
breast cancer patients, particularly those with hormone sensitive
tumors.  Trilostane has no aromatase inhibitor activity, which
distinguishes it from some of the competitor hormonal products
currently marketed for the treatment of breast cancer.  We
believe that the new data revealed considerable market potential
for trilostane, but there can be no assurance that the medical
profession or the FDA will accept this new data or that the drug
will be successful in the marketplace.

     Trilostane was originally developed as a competitive
inhibitor of 3  hydroxy steroid dehydrogenase, an enzyme
essential in steroid biosynthesis. In extensive clinical trials
the drug has been shown to produce objective tumor response rates
of up to 55% in women with breast cancer. On the basis of these
data, trilostane was granted a product license in the United
Kingdom for the treatment of post-menopausal breast cancer.
However, the drug has not been actively promoted. In addition,
because of its action on the adrenal gland, trilostane has been
licensed in many countries, including the United States and
Canada, for the treatment of diseases of the adrenal gland, such
as Cushing's Disease and Conn's Syndrome.

     Trilostane has been extensively studied in controlled trials
in the United States, Europe and Australia. Over 700 patients
with breast cancer have received trilostane, and its anti-tumor
activity has been well documented. In a sub-set analysis of the
clinical trial data, patients with hormone sensitive breast
cancer who had responded to one or more hormonal therapies were
given trilostane upon relapse of the cancer. The reponse rate was
above 40% in this group of patients. This compares to a response
rate of about 30-35% with currently marketed aromatase inhibitors
and approximately 25% with herceptin given as second line
therapy. Most of the patients in the sub-set had received
tamoxifen as first-line therapy. Thus, trilostane given as
follow-on treatment has a response rate in excess of those
reported for the against currently in use for second-line
treatment in this disease.   Furthermore, trilostane has an
acceptable side-effect profile.  We intend to file with the FDA
for marketing approval for this indication in the United States
within the next six months.

     We hold an exclusive license, until the expiry of existing
and new patents related to trilostane, to market trilostane in
major international territories, and an agreement with a U.K.
company to co-develop trilostane for other therapeutic
indications.  Trilostane is currently manufactured by third-party
contractors in accordance with cGMP. We have no plans to
establish its own manufacturing facility for trilostane, but will
continue to use third-party contractors.

     Anti-Estrogen Prostate.  The human prostate gland is under
the control of several hormones, including androgens and
estrogen. Receptors for estrogen have been identified in the
prostate gland, and the newly discovered "second receptor," ER ,
has been isolated from the human prostate gland. ER  is also
highly expressed in uterine and ovarian tissue. Trilostane has
been shown to specifically modulate ligand binding to ER  and
appears to be the first commercially available drug to have this
specific action. Prostate cancer, in most cases, is initially
hormone-dependent and treatment of the disease is usually
directed toward blocking the action of the relevant hormones.
Unfortunately, it is a common occurrence for the cancer cells to
become resistant to the standard hormonal agents.

     We believe that this is probably due to the inability of
currently available treatments to block all the receptors on the
prostate cancer cells.  New evidence from scientists at the
University of London working on our behalf, have shown that
trilostane, and derivatives of trilostane, can selectively
inhibit hormones from binding on receptors that are not blocked
by existing agents.  The ability of trilostane to control
prostate cell growth by altering hormone binding on important
receptors could expand the treatment options for patients with
prostate cancer.

     We have IRB approval from the Massachusetts General Hospital
for a Phase II study of trilostane for the treatment of androgen
independent prostate cancer. The study will be conducted by the
Dana Faber Cancer Institute and is expected to begin enrollment
within the next 3 months.

     Since adrenal disorders are relatively uncommon in humans,
our strategy is not to aggressively market trilostane for these
indications, but, rather, to focus its marketing efforts on
trilostane for the treatment of breast and prostate cancer, which
have considerably greater market potential. We intend to file for
applicable regulatory approval of trilostane for treatment of
breast cancer in the United States within the next six months.
We will, however, pursue opportunities for adrenal disorder
products on a smaller scale, principally in the veterinary
market, which we believe will generate modest revenues over the
near term.  Under the terms of a co-development agreement, we
were granted the exclusive worldwide license, excluding Japan and
South Africa, to make, use and sell products derived from this
technology for a term expiring on the date of expiration of the
last patent covered by the license (subject to earlier
termination under certain circumstances), in exchange for, among
other things, certain royalty payments based on gross sales of
products derived from the technology.

     We will also devote our research efforts to discover new
applications for trilostane and related products.  Recent
scientific research indicates that, in addition to being a potent
inhibitor of steroid synthesis, trilostane is a selective
estrogen receptor modulating agent that prevents or alters the
effect of estrogen on cancer cells by blocking the binding of the
hormone to certain of its receptors. We believe that this dual
mode of action not only makes it a versatile treatment for breast
cancer, but enables it to be developed for additional disease
indications in the future, such as endometrial and prostate
cancers, and we intend to pursue these potential opportunities
for trilostane in 2002.  Experimental work performed on our
behalf has shown the presence of the relevant steroid receptors
in human endometrial and prostate tissue, and this suggests that
trilostane may play a role in the treatment of cancers of the
uterus and prostate. The latest work has allowed new patents to
be filed which, if granted, will greatly extend the commercial
potential for trilostane and related products.  In addition, a
new  analog of trilostane, which shows increased activity
compared with trilostane, is being developed and is the subject
of new patent filings.

     Purine Nucleoside Technology

     We have an agreement with Southern Research Institute,
Birmingham, Alabama, to co-develop purine nucleoside analogs
which, based on third-party studies conducted to date, may be
effective in the treatment of leukemia and lymphoma.  The lead
compound of these purine-based nucleosides is known as
clofarabine.  Clofarabine has successfully completed Phase I
clinical trials at M.D. Anderson Cancer Center, Houston.  Three
Phase II clinical trials have begun at MD Anderson and will be
extended to other leading centers in the United States and
Europe. A Clinical Research Consortium (CRC) established by the
FDA, National Cancer Institute and a group of leading leukemia
specialists in the U.S., has approved clofarabine as a major drug
for development for the treatment of chronic lymphocytic leukemia
(CLL). Approval for a Phase II clinical trial for clofarabine in
CLL, under the auspices of the CRC, is currently being sought at
several leading centers in the USA. The combination of the Phase
II trials in acute leukemia at the MD Anderson, the CRC sponsored
trials in CLL and the encouraging results from the Phase I and
early Phase II studies at the MD Anderson Cancer center lead us,
and Ilex, to be enthusiastic for the prospects of clofarabine
reaching the market in the United States in the 4th quarter of
2003 or the 1st quarter of 2004.

     In addition, a clinical trial exemption certificate has been
submitted for clofarabine in the United Kingdom and approval for
a Phase I/II trial of clofarabine in lymphoma has been obtained
in Switzerland.  Over 100 leukemia specialists in Europe have
been approached with regard to participating in a Phase II trial
of clorarabine treatment of acute leukemia.  The European trials
will be coordinated with the trials in the United States, and the
results will be combined for submission to the regulatory
authorities in the United States and in Europe.

      In March 2001, we entered into an agreement with Ilex to
co-develop clofarabine. We believe that the participation of Ilex
in the development of the product will greatly expedite the
process and increase the likelihood of successfully bringing the
drug to market.  See "Ilex Agreement" for more information about
the terms of the co-development agreement.

     Clofarabine is a purine-based nucleoside that was
discovered, patented and developed pre-clinically by scientists
at Southern Research Institute in Birmingham, Alabama.  Under the
terms of a co-development agreement with Southern Research
Institute, we were granted the exclusive worldwide license,
excluding Japan and Southeast Asia, to make, use and sell
products derived from the technology for a term expiring on the
date of expiration of the last patent covered by the license
(subject to earlier termination under certain circumstances), and
to utilize technical information related to the technology to
obtain patent and other proprietary rights to products developed
by us and by Southern Research Institute from the technology.
Clofarabine will be developed initially for the treatment of
leukemia and lymphoma. The introduction of the purine nucleosides
has significantly improved the response rate and overall outcome
in certain types of leukemia. Pre-clinical tests have shown
clofarabine to be very potent compared to other drugs in the
class. The competitor drugs are administered by intravenous or
intramuscular routes, whereas clofarabine will be developed for
oral administration, thereby making it easier for patients to
receive treatment and reducing the overall cost of therapy.

     Pre-clinical testing of clofarabine showed the drug to have
anti-tumor activity against a range of human and animal cancers,
including hematological malignancies and several solid tumors. In
addition, clofarabine has been shown to have good oral
bioavailability, and it is our intention to develop an oral
preparation of the drug for clinical testing. The drug has
completed a Phase I clinical trial at MD Anderson. Results from
the Phase I study showed no unexpected toxicity and that the drug
is a potent immunosuppressive agent. Three Phase II clinical
studies have been approved in acute and chronic leukemia and a
pediatric Phase II trial has already commenced at MD Anderson.

     Under the terms of the co-development agreement with
Southern Research Institute, we have been granted a license to
market clofarabine in certain major markets, principally North
America and Europe. We are required to pay royalties to Southern
Research Institute based on net sales of clofarabine plus certain
milestone payments.

     Clofarabine for investigational purposes has been produced
by Southern Research Institute and by a third-party contractor,
Delmar Chemical Inc. We intend to establish a manufacturing
agreement with a third-party contractor for the commercial supply
of clofarabine.

     Purine Nucleoside-Solid Tumor.  In pre-clinical tests,
clofarabine has shown anti-tumor activity against several human
cancers, including cancers of the colon, kidney and prostate, as
well as its action against leukemic cells.  This activity against
solid tumors distinguishes clofarabine from other drugs in its
class which have shown relatively little activity against solid
tumors.  We intend to develop clofarabine as a potential drug for
the treatment of colon and prostate cancer.  The development
strategy for clofarabine as a solid tumor agent will run in
conjunction with the program for hematological cancers, but is
expected to take longer to complete clinical trials and will
require a different marketing approach.

     Cancer of the colon is one of the most common cancers in the
Western world with approximately 200,000 new cases in the United
States each year.  Surgery is the most successful treatment for
the primary tumor. Once the cancer has spread the results of
chemotherapy are disappointing and long-term survival figures
have changed very little in the past fifty years. There is a
great need for an effective chemotherapeutic agent to treat this
disease, and a huge market potential exists for any drug that can
induce tumor regression in patients with metastatic colon cancer.
Prostate cancer affects 181,000 new patients in the United States
each year. Initial treatment is directed at hormonal control of
the disease, but in the event control is not achieved
chemotherapy is usually required.  We intend to develop
clofarabine, or a derivative of clofarabine, for the treatment of
advanced colon and prostate cancer.

     Once Phase II trials with clofarabine have been completed in
patients with leukemia, we will initiate Phase II trials with
clofarabine in patients with advanced colo-rectal or prostate
cancer. Additional pre-clinical work on clofarabine for treatment
of solid tumors will be conducted. Clofarabine for solid tumor
treatment currently is at a very early stage of clinical
development.  Unlike many of its major competitors which are
administered intravenously, clofarabine is anticipated to be
developed for oral administration, thereby making it easier for
patients to receive as treatment.  We intend to request orphan
drug designation for clofarabine for leukemia and lymphoma
indications, which will enable us to apply for approval from the
FDA upon completion of Phase II clinical trials.  Under the terms
of the agreement with Southern Research Institute, we were
granted the exclusive worldwide license, excluding Japan and
Southeast Asia, to make, use and sell products derived from the
purine nucleoside technology for a term expiring on the date of
expiration of the last patent covered by the license (subject to
earlier termination under certain circumstances), in exchange
for, among other things, certain royalty payments based on gross
sales of products derived from this technology.

     Some other purine nucleosides have been shown to be
effective in the treatment of certain autoimmune diseases, and
several clinical trials, with competitor's drugs, are now in
progress.  We intend to develop purine nucleoside products for
the treatment of solid tumors and autoimmune diseases
simultaneously with the development of clofarabine for the
treatment of hematological cancers; however, since it is unlikely
that we will be able to request orphan drug designation for solid
tumor treatment products, the regulatory approval cycles of those
products are expected to be longer than those for our
hematological cancer products.

     Gene Therapy Technology
     Our product portfolio also includes a variety of gene
therapy products which, we believe, may offer advancements in the
field of cancer treatment and may have additional applications in
certain non-cancer diseases such as diabetes, cystic fibrosis and
other auto-immune disorders.  Pursuant to a co-development
agreement with the Royal Free and University College Medical
School and a Canadian biotechnology company, we are developing
DNA vector technologies which, based on pre-clinical research and
early Phase I/II clinical trials, we believe are capable of
elevating albumin levels in cancer and cirrhosis patients with
hypo-albuminemia, a serious physiological disorder.  We believe
this has considerable market potential since low albumin levels
are considered to be very dangerous consequences of many
diseases, including cirrhosis and liver cancer.  We are also
currently working on a gene marker that we believe, based on
research work done to date, will enable clinicians to identify
the location of DNA transferred during gene therapy.  Although
our gene marker product is currently in the pre-clinical
development stage, we expect that it will have a relatively short
development cycle and we anticipates that, subject to applicable
regulatory approval, the product will be suitable for
market distribution by 2002. In addition, we are conducting pre-
clinical research on a product that may have the ability to cause
tumor regression by enhancing and stimulating CD-4 and CD-8
lymphocytes, the body's natural immune cells.

     Cell Differentiation Technology
     We acquired a license to develop three distinct groups of
compounds that we believe could play an important role in
controlling the rate of growth of cancer cells.  The first
compound is a synthetic analog of a drug derived from a naturally
grown plant, which has been widely tested for a variety of
clinical indications.  The results of this testing have been
published in the medical literature. In particular, the drug has
shown efficacy against certain cancers by, it is believed,
preventing cell division and promoting cell differentiation.

     We plan to develop more potent analogs of Oncostat, the name
we have given to the lead drug in this class of cytostatic
agents, and to study their role in the process of cell
differentiation and the prevention of the spread of cancer cells.
The first compound derived from this technology is currently
approved for a Phase I clinical trial at a leading U.K. cancer
center.

     Retinoic Acid Metabolizing Enzyme Blocker (RAMBA).  We plan
to develop a group of compounds that block retinoic acid (RA)
metabolizing enzymes.  RA helps to regulate cell differentiation,
a crucial factor in preventing normal cells from transforming
into cancer cells.  By blocking the enzyme that breaks down RA,
there is a buildup of natural RA within the cell.  This
represents a novel approach to preventing or decreasing the
malignant transformation of cells.

     RA supports cellular growth and differentiation and has been
shown to reverse the malignant expression of many cancer cell
lines.  Synthetic retinoids have been used in the treatment of
oral leukoplakia and head and neck cancers, but they can produce
significant toxicity.  Also, the exogenous administration of RA
or synthetic retinoids can result in lowered RA levels in the
cell because of the induction of the RA metabolizing enzymes.
Furthermore, these enzymes are highly induced by RA in certain
cancer lines.  The technology to be developed by us will inhibit
the metabolizing enzymes, thereby leading to the "natural"
buildup of RA within the cell.

     The compounds have been extensively tested in the laboratory
and we expect to be in clinical trials with the lead compounds
within 18-24 months.

     17a Hydrogy Steroid Dehydrogenase Inhibitor.  We have also
acquired a license to develop a group of compounds that control
cell growth and differentiation by effectively blocking an
important step in hormone synthesis.  A key feature of these
compounds is that they are non-steroidal inhibitors of an
important enzyme (17a hydroxysteroid dehydrogenase) involved in
the production of testosterone and estrogen.  Prostate cancer is
controlled, at least in the early stages, by androgens and the
blockade of these hormones is an essential part of treating this
particular cancer.  Potent steroidal inhibitors are available,
but there are few, if any, non-steroidal compounds reported.  The
advantage of non-steroidal inhibitors is that they are unlikely
to possess "hormonal" activity, unlike some of the steroidal
compounds in current usage.  The compounds have been extensively
tested in the laboratory, and we expect to be in clinical trials
with the lead compounds within 18 months.

     If clinical trials are successful, the products developed
from this technology will enhance our product portfolio and could
provide a range of drugs for the disease management of prostate
cancer.

Animal Health Products
     We also have one animal health product at market and are
establishing a separate division to market this product. The
animal healthcare market is a multi-billion dollar market (as
demonstrated by sales of Pfizer, Eli Lilly, Bristol Myers Squibb,
etc.) and we intend to exploit the value of our products in the
veterinary field. This business segment is not a part of our core
business and will be managed separately from our core human
pharmaceuticals business.


Ilex Agreement
     We entered into a Co-Development Agreement with Ilex
Oncology, Inc. ("Ilex") on March 9, 2001 for the development of
clofarabine.  Under the terms of development agreement, Ilex is
required to pay all development costs in the United States and
50% of approved European development costs. Ilex is responsible
for conducting all clinical trials and the filing and prosecution
of applications with applicable regulatory authorities in the
United States and Canada, while we retain those obligations for
other jurisdictions. We, rather than Ilex, retained the
manufacturing and distribution rights in Europe and elsewhere in
the world (other than Japan and Southeast Asia, the two market
areas where we did not obtain rights from Southern Research
Institute)  We have agreed to pay Ilex a royalty on sales outside
the U.S., Ilex, which has U.S. and Canada distribution rights,
will pay us a royalty on sales in the U.S. and Canada. In
addition, we are entitled to certain milestone payments.
We believe that the co-development agreement will expedite the
process of getting our second lead product to market at minimal
cost to us.   We also granted Ilex an option to purchase $1
million of Common Stock after completion of the pivotal Phase II
clinical trial, and Ilex has an additional option to purchase $2
million of Common Stock after the filing of a new drug
application in the United States for the use of clofarabine in
the treatment of lymphocytic leukemia. The exercise price per
share for each option is determined by a formula based on market
prices around the date of exercise. Under the co-development
agreement, Ilex also pays royalties to Southern Research
Institute based on certain milestones. We continue to pay
royalties to Southern Research Institute in respect to
clofarabine.


Patents and Proprietary Rights

     Our success will depend, in part, upon our ability to obtain
and enforce protection for our products under United States and
foreign patent laws and other intellectual property laws,
preserve the confidentiality of our trade secrets and operate
without infringing the proprietary rights of third parties. Our
policy is to file patent applications in the United States and/or
foreign jurisdictions to protect technology, inventions and
improvements to our inventions that are considered important to
the development of our business.  We will also rely upon trade
secrets, know-how, continuing technological innovations and
licensing opportunities to develop a competitive position.

     Through our current license agreements, we have acquired the
right to utilize the technology covered by five issued patents
and six patent applications, as well as additional intellectual
property and know-how that could be the subject of further patent
applications in the future.  We evaluate the desirability of
seeking patent or other forms of protection for our products in
foreign markets based on the expected costs and relative benefits
of attaining this protection.  There can be no assurance that any
patents will be issued from any applications or that any issued
patents will afford adequate protection to us.  Further, there
can be no assurance that any issued patents will not be
challenged, invalidated, infringed or circumvented or that any
rights granted thereunder will provide competitive advantages to
us.  Parties not affiliated with us have obtained or may obtain
United States or foreign patents or possess or may possess
proprietary rights relating to our products.  There can be no
assurance that patents now in existence or hereafter issued to
others will not adversely affect the development or
commercialization of our products or that our planned activities
will not infringe patents owned by others.

     We could incur substantial costs in defending ourselves in
infringement suits brought against us or any of our licensors or
in asserting any infringement claims that we may have against
others.  We could also incur substantial costs in connection with
any suits relating to matters for which we have agreed to
indemnify our licensors or distributors.  An adverse outcome in
any litigation could have a material adverse effect on our
business and prospects.  In addition, we could be required to
obtain licenses under patents or other proprietary rights of
third parties.  No assurance can be given that any of these
licenses would be made available on terms acceptable to us, or at
all.  If we are required to, and do not obtain any required
licenses, we could be prevented from, or encounter delays in,
developing, manufacturing or marketing one or more of our
products.

     We also rely upon trade secret protection for our
confidential and proprietary information.  There can be no
assurance that others will not independently develop
substantially equivalent proprietary information and techniques
or otherwise gain access to our trade secrets or disclose this
technology or that we can meaningfully protect our trade secrets.

     It is our policy to require our employees, consultants,
members of the Scientific Advisory Board and parties to
collaborative agreements to execute confidentiality agreements
upon the commencement of employment or consulting relationships
or a collaboration with us.  These agreements provide that all
confidential information developed or made known during the
course of the relationship with us is to be kept confidential and
not disclosed to third parties except in specific circumstances.
In the case of employees, the agreements provide that all
inventions resulting from work performed for us, utilizing our
property or relating to our business and conceived or completed
by the individual during employment shall be our exclusive
property to the extent permitted by applicable law.


Sales and Marketing
     We intend to seek strategic marketing and distribution
partners to assist with the commercialization of our products.
We intend to establish a dedicated oncology sales force in North
America and certain countries in Europe, and license products to
commercial partners for the marketing, sale and distribution of
our products in other international markets.  As of the date of
this Memorandum, we have one such arrangement in place with Ilex
for the co-development and marketing of clofarabine.  To market
any of our products directly, we intend to develop a marketing
and sales force with technical expertise and distribution
capability or contract with other pharmaceutical and/or health
care companies with distribution systems and direct sales forces.

     We intend to establish sales operations in the United
Kingdom during late 2001/2002 and in the United States, Italy,
France and Germany during late 2002/2003, (and to rely on joint
marketing arrangements and commercial partners for the marketing,
sale and distribution of its products in other parts of the
European Union).  We believe that a strong, dedicated sales
forces in North America and Europe will provide us with
significant marketing advantages in each of these markets. We
intend to establish initially a sales force of five people in the
United Kingdom and 25 in the United States, plus an appropriate
management and administrative infra-structure.  Our sales force
and infra-structure will be expanded in accordance with the
growth of sales, the introduction of new products and the entry
in to other territories.


     Our marketing policy will target the two key audiences for
our products - doctors and patients.  Medical education will be a
priority, with the use of peer-opinion leaders, clinical trials
at major centers, satellite symposia and conferences, product
advertising in specific scientific journals and trained sales
personnel.  Patient education is carefully controlled and is
important to our marketing approach.  Patent education is
particularly important because Modrenal , our first product for
which we have obtained regulatory approval (in the United
Kingdom) for marketing for use in a type of cancer treatment, is
effective for patients with breast cancer, one of the most common
cancers in women.  In particular, the drug is approved as
follow-on treatment for patients who have previously responded to
hormonal therapy.  This is a large market and, based on the
current world sales of the major hormonal treatments - SERM's and
aromatase inhibitors   we expect trilostane is targeted at a
market which currently experiences sales in excess of $1.8
billion annually worldwide.

      If the trials of trilostane in prostate cancer prove
successful, we anticipate that we will have a drug for treating a
cancer found in 180,000 men each year in the United States.  We
will work with patient help groups, inform the lay public through
consumer journals and television.

Manufacturing
     We do not have and do not intend to establish any internal
product testing, manufacturing or distribution capabilities.  Our
strategy is to enter into collaborative arrangements with other
companies for the clinical testing, manufacture and distribution
of its products; however, as of the date of this Memorandum, we
had only one agreement with M.D. Anderson for the clinical
testing of products and technologies.  These collaborators are
generally expected to be responsible for funding or reimbursing
all or a portion of the development costs, including the costs of
clinical testing necessary to obtain regulatory clearances and
for commercial-scale manufacturing, in exchange for exclusive or
semi-exclusive rights to market specific products in particular
geographic territories. Manufacturers of our products will be
subject to cGMP prescribed by the FDA or other rules and
regulations prescribed by foreign regulatory authorities.

Research and Development
     In developing new products, we consider a variety of factors
including: (i) existing or potential marketing opportunities for
these products; (ii) our capability to arrange for the
manufacture of these products on a commercial scale; (iii)
whether these products complement our existing products; (iv) the
opportunities to leverage these products with the development of
additional products; and (v) the ability to develop co-marketing
relationships with pharmaceutical and/or other companies with
respect to the products. We intend to fund future research and
development activities at a number of medical and scientific
centers in Europe and the United States.  Costs related to these
activities are expected to include: clinical trial expenses; drug
production costs; salaries and benefits of scientific, clinical
and other personnel; patent protection costs; analytical and
other testing costs; professional fees; and insurance and other
administrative expenses.  We currently have six employees that
are involved in research and development activities.

Governmental Regulation
     Regulation in General.  Virtually all aspects of our
business are regulated by federal and state statutes and
governmental agencies in the United States and other countries.
Failure to comply with applicable statutes and government
regulations could have a material adverse effect on our business
and prospects. The development, testing, manufacturing,
processing, quality, safety, efficacy, packaging, labeling,
record-keeping, distribution, storage and advertising of
pharmaceutical products, and disposal of waste products arising
from these activities, are subject to regulation by one or more
federal agencies. These activities are also regulated by similar
state and local agencies and equivalent foreign authorities.

     FDA Regulation.  All pharmaceutical manufacturers in the
United States are subject to regulation by the FDA under the
authority of the Federal Food, Drug, and Cosmetic Act. Under the
Act, the federal government has extensive administrative and
judicial enforcement powers over the activities of pharmaceutical
manufacturers to ensure compliance with FDA regulations. Those
powers include, but are not limited to the authority to:

     *    initiate court action to seize unapproved or non-
     complying products;
     *    enjoin non-complying activities;
     *    halt manufacturing operations that are not in
     compliance with current good manufacturing practices
     prescribed by the FDA;
     *    recall products which present a health risk; and
     *    seek civil monetary and criminal penalties.

     Other enforcement activities include refusal to approve
product applications or the withdrawal of previously approved
applications. Any enforcement activities, including the
restriction or prohibition on sales of products marketed by us or
the halting of manufacturing operations of us or our
collaborators, could have a material adverse effect on our
business and prospects. In addition, product recalls may be
issued at our discretion or by the FDA or other domestic and
foreign government agencies having regulatory authority for
pharmaceutical product sales. Recalls may occur due to disputed
labeling claims, manufacturing issues, quality defects or other
reasons. Recalls of pharmaceutical products marketed by us may
occur in the future. Any product recall could have a material
adverse effect on our business and prospects.

     FDA Approval Process.  We have a variety of products under
development, including line extensions of existing products, re-
formulations of existing products and new products. All "new
drugs" must be the subject of an FDA-15 approved new drug
application before they may be marketed in the United States. All
generic equivalents to previously approved drugs or new dosage
forms of existing drugs must be the subject of an FDA-approved
abbreviated new drug application before they may by marketed in
the United States. In both cases, the FDA has the authority to
determine what testing procedures are appropriate for a
particular product and, in some instances, has not published or
otherwise identified guidelines as to the appropriate procedures.
The FDA has the authority to withdraw existing new drug
application and abbreviated application approvals and to review
the regulatory status of products marketed under the enforcement
policy. The FDA may require an approved new drug application or
abbreviated application for any drug product marketed under the
enforcement policy if new information reveals questions about the
drug's safety or effectiveness. All drugs must be manufactured in
conformity with current good manufacturing practices and drugs
subject to an approved new drug application or abbreviated
application must be manufactured, processed, packaged, held and
labeled in accordance with information contained in the new drug
application or abbreviated application.

     The required product testing and approval process can take a
number of years and require the expenditure of substantial
resources. Testing of any product under development may not
result in a commercially-viable product. Further, we may decide
to modify a product in testing, which could materially extend the
test period and increase the development costs of the product in
question. Even after time and expenses, regulatory approval by
the FDA may not be obtained for any products we develop. In
addition, delays or rejections may be encountered based upon
changes in FDA policy during the period of product development
and FDA review. Any regulatory approval may impose limitations in
the indicated use for the product. Even if regulatory approval is
obtained, a marketed product, its manufacturer and its
manufacturing facilities are subject to continual review and
periodic inspections. Subsequent discovery of previously unknown
problems with a product, manufacturer or facility may result in
restrictions on such product or manufacturer, including
withdrawal of the product from the market.

     Foreign Regulatory Approval.  Even if required FDA approval
has been obtained with respect to a product, foreign regulatory
approval of a product must also be obtained prior to marketing
the product internationally. Foreign approval procedures vary
from country to country and the time required for approval may
delay or prevent marketing. In certain instances, we or our
collaborative partners may seek approval to market and sell some
of our products outside of the United States before submitting an
application for approval to the FDA. The clinical testing
requirements and the time required to obtain foreign regulatory
approvals may differ from that required for FDA approval.
Although there is now a centralized European Union approval
mechanism for new pharmaceutical products in place, each European
Union country may nonetheless impose its own procedures and
requirements, many of which are time consuming and expensive, and
some European Union countries require price approval as part of
the regulatory process. Thus, there can be substantial delays in
obtaining required approval from both the FDA and foreign
regulatory authorities after the relevant applications are filed.

     Abbreviated New Drug Application Process.  FDA approval is
required before a generic equivalent to a previously approved
brand drug or new dosage form of an existing brand drug can be
marketed. Approval to market these products in the United States
may be obtained by submitting an abbreviated application to the
FDA. When processing an abbreviated application, the FDA waives
the requirement of conducting complete clinical studies, although
it may require bioavailability and/or bioequivalence studies.
Bioavailability indicates the rate and extent of absorption and
levels of concentration of a drug product in the blood stream
needed to produce a therapeutic effect. Bioequivalence compares
the bioavailability of one drug product with another, and when
established, indicates that the rate of absorption and levels of
concentration of a generic drug in the body are substantially
equivalent to the previously approved drug. An abbreviated
application may be submitted for a drug on the basis that:

    *     it is bioequivalent to a previously listed drug;

    *     contains the same active ingredient;

    *     has the same route of administration, dosage form and
          strength as the listed drug; and

    *     otherwise complies with legal and regulatory
          requirements.

     In May 1992, the Generic Drug Enforcement Act was enacted.
The Generic Act allows the FDA to impose debarment and other
penalties on individuals and companies that commit specified
illegal acts relating to the generic drug approval process. In
some situations, the Generic Act requires the FDA to debar, or
not accept or review abbreviated applications for a period of
time a company or an individual that has committed certain
violations. It also provides for temporary denial of approval of
applications during the investigation of some violations that
could lead to debarment. In more limited circumstances, the
Generic Act provides for the suspension of the marketing of
approved drugs by the affected company.  Lastly, the Generic Act
allows for civil penalties and withdrawal of previously approved
applications. Neither Bioenvision nor any of our employees have
ever been subject to debarment.

     Manufacturing Practices and Operations.  Among the
requirements for drug approval by the FDA is that the
manufacturing procedures and operations of companies that
manufacture products for us conform to current good manufacturing
practices. The current good manufacturing practices regulations
must be followed at all times during the manufacture, storage and
distribution of pharmaceutical products. In complying with the
standards set forth in the current good manufacturing practices
regulations, these companies must continue to expend time, money
and effort in the areas of production, quality control and record
keeping to ensure full compliance.

     If the FDA believes a company is not in compliance with
current good manufacturing practices, certain sanctions are
imposed upon that company including:

          withholding from the company new drug approvals as well
     as approvals for supplemental changes to existing
     applications;

          preventing the company from receiving the necessary
     export licenses to export our products; and

          classifying the company as an "unacceptable supplier"
     and thereby disqualifying the company from selling
     products to federal agencies.

     New Drug Application Process.  FDA approval is required
before any new drug can be marketed. A new drug application is a
filing submitted to the FDA to obtain approval of a drug not
eligible for an abbreviated application and must contain complete
pre-clinical and clinical safety and efficacy data or a right of
reference to this data. Before administration of a new drug in
healthy human subjects may begin, stringent government
requirements for pre-clinical data must be satisfied. The
pre-clinical data, typically obtained from studies in animal
species, or laboratory studies, are submitted in an
investigational new drug application, or its equivalent in
countries outside the United States, where clinical
trials are to be conducted. The pre-clinical data must provide an
adequate basis for evaluating both the safety and the scientific
rationale for the initiation of clinical trials.

     Clinical trials are typically conducted in three sequential
phases, although the phases may overlap. Phase I frequently
begins with the initial introduction of the compound into healthy
human subjects prior to introduction into patients. During Phase
I the product is tested for safety, adverse effects, dosage,
tolerance absorption, metabolism, excretion and other elements of
clinical pharmacology. Phase II typically involves studies in a
small sample of the intended patient population to assess the
efficacy of the compound for a specified indication, to determine
dose tolerance and the optimal dose range as well as to gather
additional information relating to safety and potential adverse
effects. Phase III trials are undertaken to further evaluate
clinical safety and efficacy in an expanded patient population at
typically dispersed study sites, in order to determine the
overall risk-benefit ratio of the compound, and to provide an
adequate basis for product labeling. Each trial is conducted in
accordance with standards under protocols that detail the objects
of the study, the parameters to be used to monitor safety and
efficacy criteria to be evaluated. Each protocol must be
submitted to the FDA as part of the investigational new drug
application. In some cases, the FDA allows a company to rely on
data developed in foreign countries and therefore not
independently repeat some or all of those studies.

     Data from pre-clinical testing and clinical trials are
submitted to the FDA as a new drug application for marketing
approval and to other health authorities as a marketing
authorization application. The process of completing clinical
trials for a new drug may take several years and require the
expenditure of substantial resources. Preparing a new drug
application or marketing authorization application involves
considerable data collection, verification, analysis and expense.
Approval from the FDA or any other health authority may not be
granted on a timely basis, if at all. A number of factors affect
the approval process, primarily the risks and benefits
demonstrated in clinical trials as well as the severity of the
disease and the availability of alternative treatments. The FDA
or other health authorities may deny a new drug application or
marketing authorization application if the regulatory criteria
are not satisfied. These authorities may also require additional
testing or information.

     Even after initial FDA or other health authority approval
has been obtained, further studies, including Phase IV
post-marketing studies, may be required to provide additional
data on safety. Additional studies are also required to gain
approval for the use of a product as a treatment for clinical
indications other than those for which the product was initially
tested. Also, the FDA or other regulatory authorities require
post-marketing reporting to monitor the adverse effects of the
drug. Results of post-marketing programs may limit or expand the
further marketing of the products. If there are any modifications
to the drug, including changes in indication, manufacturing
process or labeling or a change in the manufacturing facility, an
application for approval of the changes must be submitted to the
FDA or other regulatory authority.  Additionally, the FDA
regulates post-approval promotional labeling and advertising
activities to assure that these activities are being conducted in
conformity with statutory and regulatory requirements.

     Controlled Substances.  We may also market drugs which the
government considers controlled substances, as defined in the
federal Controlled Substances Act and similar state laws.  These
laws establish licensing, security and record keeping
requirements administered by the Drug Enforcement Agency and
similar state agencies, as well as quotas for the manufacture,
purchase and sale of controlled substances. The Drug Enforcement
Agency could limit or reduce the amount of controlled substances
which we are permitted to market. We have not experienced
sanctions or fines for non-compliance with these regulations, but
no assurance can be given that any sanctions or fines would not
have a material adverse effect on our business and prospects.

     Foreign Regulatory Process.  To market drugs in non-U.S.
jurisdictions, we must also receive authorization from the
respective regulatory authorities in those jurisdictions. The
requirements governing the conduct of clinical trials,
applications for marketing authorization, pricing and
reimbursement vary widely from jurisdiction to jurisdiction. In
the European Union, pharmaceutical legislation requires that a
Marketing Authorization Application for a drug produced through
the use of biotechnology be submitted for review in accordance
with a centralized procedure administered by the European
Medicines Evaluation Agency. Based on the preferences of the
company submitting a Marketing Authorization Application and the
availability and expertise of the members of the review board,
members from two European Union member countries are chosen to be
"rapporteur" and "co-rapporteur," respectively, for a Marketing
Authorization Application. The rapporteur and co-rapporteur are
responsible for assisting the company submitting a Marketing
Authorization Application with the preparation of a Marketing
Authorization Application, and the presentation of the
application to the Evaluation Agency's review board. Similar to
the requirements of the FDA, the pharmaceutical legislation of
the European Union requires that the safety and efficacy of a
drug be demonstrated in clinical trials prior to approval of a
Marketing Authorization Application for that drug. If approved by
the Evaluation Agency, a Marketing Authorization Application is
recommended for acceptance by the European Union. Following
approval of a Marketing Authorization Application for a drug, the
sponsoring company is required to negotiate with the regulatory
agency in each member country to establish reimbursement levels
and the maximum price at which the drug may be marketed in that
country. These reimbursement levels and maximum prices vary from
country to country for the same pharmaceutical. No assurance can
be given that we will be able to negotiate acceptable
reimbursement and pricing levels for any of our products.

     The regulatory requirements applicable to any product may be
modified in the future. We cannot determine what effect changes
in regulations or statutes or legal interpretations, when and if
promulgated or enacted, may have on our business in the future.
Changes could include required changes to manufacturing methods,
expanded or different labeling, the recall, replacement or
discontinuation of certain products, additional record keeping
and expanded documentation of the properties of certain products
and scientific substantiation.

     As a consequence of regulatory factors, we cannot be sure
that any of our product candidates will meet all of the
applicable regulatory requirements needed to receive regulatory
marketing approval. Even after we expend substantial resources on
research, clinical development and the preparation and processing
of regulatory applications, regulatory approval may not be
obtained for any of our products. Moreover, we cannot be sure
that regulatory approval for marketing a proposed pharmaceutical
product in any jurisdiction will result in similar approval in
other jurisdictions.

     Orphan Drug Designation.  Under the Orphan Drug Act, the FDA
may grant orphan drug designation to drugs intended to treat a
rare disease or condition. A disease or condition that affects
populations of fewer than 200,000 people in the United States
generally constitutes a rare disease or condition. Orphan drug
designation must be requested before submitting a new drug
application. After the FDA grants orphan drug designation, the
generic identity of the therapeutic agent and its potential
orphan use are publicized by the FDA. Under current law, orphan
drug status is conferred upon the first company to receive FDA
approval to market the designated drug for the designated
indication. A new drug application also grants United States
marketing exclusivity for a period of seven years following
approval of the Orphan Drug Status, subject to certain
limitations.  Orphan drug designation does not convey any
advantage in, or shorten the duration of, the FDA regulatory
approval process.  Although obtaining FDA approval to market a
product with orphan drug status can be advantageous the scope of
protection or the level of marketing exclusivity that
is currently afforded by orphan drug status and marketing
approval may not remain in effect in the future.

      Our business strategy involves obtaining orphan drug
designation for initial development of certain products being
developed by us. The possible amendment of the Orphan Drug Act by
the United States Congress has been the subject of frequent
discussion. Although no significant changes to the Orphan Drug
Act have been made for a number of years, members of Congress
have from time to time proposed legislation that would limit the
application of the Orphan Drug Act. The precise scope of
protection that may be afforded by orphan drug designation and
marketing approval or the level of exclusivity may be subject to
change in the future.

     Changes in Requirements.  The regulatory requirements
applicable to any product may be modified in the future. We
cannot determine what effect changes in regulations or statutes
or legal interpretations may have on our business in the future.
Changes could require changes to manufacturing methods, expanded
or different labeling, the recall, replacement or discontinuation
of certain products, additional record keeping and expanded
documentation of the properties of certain products and
scientific substantiation. Any changes or new legislation could
have a material adverse effect on our business and prospects.

     The products under development by us may not meet all of the
applicable regulatory requirements needed to receive regulatory
marketing approval. Even after we expend substantial resources on
research, clinical development and the preparation and processing
of regulatory applications, we may not be able to obtain
regulatory approval for any of our products. Moreover, regulatory
approval for marketing a proposed pharmaceutical product in any
jurisdiction may not result in similar approval in other
jurisdictions. Our failure to obtain and maintain regulatory
approvals for products under development would have a material
adverse effect on our business and prospects.

Competition
     Competition in the pharmaceutical industry is intense.
Potential competitors in the United States and Europe are
numerous and include pharmaceutical, chemical and biotechnology
companies, most of which have substantially greater capital
resources, marketing experience, research and development staffs
and facilities than us.  Although we seek to limit potential
sources of competition by developing products that are eligible
for orphan drug designation or other forms of protection, there
can be no assurance that our competitors will not succeed in
developing similar technologies and products more rapidly than
are being or will be developed by us.

     However, Bioenvision's lead drug, Modrenal  is approved in
the UK for the treatment of post-menopausal patients with
advanced breast cancer.  In particular, the drug is approved as
follow-on treatment for patients who have previously responded to
hormonal therapy. This is a large but very competitive market
and, based on the current world sales of the major hormonal
treatments , trilostane is targeting a specific market worth in
excess of $1.8 billion. In a sub-set analysis of the clinical
trial data, patients with hormone sensitive breast cancer who had
responded to one or more hormonal therapies were given trilostane
upon relapse of the cancer. The response rate was above 40% in
this group of patients, and as high as 55% in one of the trials.
This compares to a response rate of about 30-35% with currently
marketed aromatase inhibitors and approximately 25% with
herceptin when these agents are given as second line therapy.
Most of the patients in the sub-set had received tamoxifen as
first-line therapy. Thus, trilostane given as follow-on treatment
has a response rate in excess of those reported for the agents
currently in use for second-line treatment in patients with
tamoxifen refractory disease.

     The generic drug industry is intensely competitive and
includes large brand name and multi-source pharmaceutical
companies.  Because generic drugs do not have patent protection
or any other market exclusivity, our competitors may introduce
competing generic products, which may be sold at lower prices or
with more aggressive marketing.  Conversely, as we introduce
branded drugs into our product portfolio, we will face
competition from manufacturers of generic drugs which may claim
to offer equivalent therapeutic benefits at a lower price.

     The pharmaceutical industry is characterized by rapid and
significant technological change.  We expect that pharmaceutical
technology will continue to develop rapidly, and our future
success will depend, in large part, on our ability to develop and
maintain a competitive position.  Technological development by
others may result in products developed by us, branded or
generic, becoming obsolete before they are marketed or before we
recover a significant portion of the development and
commercialization expenses incurred with respect to these
products.  In addition, alternative therapies or new medical
treatments could alter existing treatment regimes, and thereby
reduce the need for one or more of our products.

     We expect that our proposed products will compete on the
basis of, among other things, safety, efficacy, reliability,
price, quality of life factors (including the frequency and
method of drug administration), marketing, distribution,
reimbursement and effectiveness of intellectual property rights.
We believe that our competitive success will be based partly on
our ability to attract and retain scientific personnel, establish
specialized research and development capabilities, gain access to
manufacturing, marketing and distribution resources, secure
licenses to external technologies and products, and obtain
sufficient development capital.  We intend to obtain many of
these capabilities from pharmaceutical or biotechnology companies
through collaborative or license arrangements.  However, there is
intense competition among early stage biotechnology firms to
establish these arrangements.  Our development products may not
be of suitable potential market size or provide a compelling
return on investment to attract other firms to commit resources
to a collaboration.  Even if collaborations can be established,
there can be no assurance that we will secure financial terms
that meet our commercial objectives.

     The following table lists some of our major competitors,
their competing products, the indications for those products and
the annual sales of the products based on reports published by
those companies.

Company Name         Drug Name   Indication       Sales per annum
                                                   (in millions)
Bristol Myers Squib   Taxol     Breast Cancer
                                /Ovarian Cancer          $1,592
Aventis SA           Taxotere   Breast Cancer            $744
Astra Zeneca          Zoladex   Breast Cancer            $734
Astra Zeneca         Nolvadex
                   (Tamoxifen)  Breast Cancer            $576
Astra Zeneca          Casodex   Prostate Cancer          $433
Astra Zeneca          Arimidex  Breast Cancer            $156
Eli Lilly           Raloxifene  Breast Cancer            $521.5
Pharmacia            Camptosar  Colorectal Cancer        $441
Pharmacia            Ellence    Breast Cancer            $199
Glaxo Smithkline     Zofran     Cancer Pain Management   $416
Glaxo Smithkline   NavelbineNon Small Cell Lung Cancer   $43
Genentech            Rituxen    Leukemia                 $530.8
Genentech           Herceptin   Breast Cancer            $317.7
Alza Pharmaceuticals  Doxil     Ovarian Cancer           $82.4
Alza Pharmaceuticals  Ethyol    Head & Neck, Ovarian,
                                Non Small cell lung
                                cancer                   $48.4
Scheing Plough       Temodar    Brain                    $121
Schering Plough      Caelyx     Ovarian Cancer           N/a
Schering Plough      Ethyol     Head & Neck, Ovarian,
                                Non Small lung cancer    N/a
Schering Plough      Intron A   Melanoma                 N/a
Schering Plough      Euleyin    Prostate                 N/a
Schering Plough Total*                                   $2,015
----------------------
*Scheing Plough Total Oncology Division combines results with its
Antiinfective division, and does not publish individual drug
sales with the exception of Temodar.

Schering AG        Fludarabine  Leukemia                 $100
Scheing AG          Androcur    Prostate Cancer          $93
Schering AG          Bonefos    Malignant tumours        $26
Hoffman La Roche    Furtulon    Colon, Breast, Stomach   $200
Hoffman La Roche    Roferon A   Malignant Tumours        $153


Product Liability and Insurance
     We face exposure to product liability claims if the use of
our technologies or products or those we license from third
parties is alleged to have resulted in adverse effects in users
thereof. Regulatory approval for commercial sale of our products
does not mitigate product liability risks. We cannot be sure that
the precautions taken by us will be sufficient to avoid
significant product liability exposure. In addition, future
product labeling may include disclosure of additional adverse
effects, precautions and contraindications, which may adversely
impact product sales. The pharmaceutical industry has experienced
increasing difficulty in maintaining product liability insurance
coverage at reasonable levels, and substantial increases in
insurance premium costs in many cases have rendered coverage
economically impractical. We cannot be sure that we will obtain
an appropriate level of liability insurance coverage for our
development and marketing program. Existing coverage may not be
adequate as we further develop products. Adequate insurance
coverage or indemnification by collaborative partners may not be
available in the future in sufficient amounts, or at acceptable
costs, if at all. To the extent that product liability insurance,
if available, does not cover potential claims, we will be
required to self-insure the risks associated with product
liability claims. We currently self- insure against those risks.
We carry no directors' and officers' insurance at this time.


Employees
     As of September 28, 2001, we had 9 full-time employees and 1
part-time employee, consisting of 1 sales and marketing employee,
5 research and development employees and 3 management and
administration employees. None of our employees is represented by
a labor union and we believe our relations with our employees are
good.


Corporate History
     Bioenvision was incorporated as Express Finance, Inc. under
the laws of the State of Delaware on August 16, 1996 and changed
its name to Ascot Group, Inc. on August 26, 1998. Although
Bioenvision was initially formed to act as the U.S. holding
company for Mayhem Limited, a U.K. corporation, it did not engage
in any active trade or business throughout the period from its
inception to December 1998.

     In December 1998, Bioenvision entered into an agreement to
purchase all of the issued and outstanding shares of capital
stock of Bioenvision, Inc., a development-stage company
incorporated in November 1996 under the laws of the State of
Delaware (Old Bioenvision). Old Bioenvision primarily engaged in
the research and development of products and technologies for the
treatment of cancer and had acquired development and marketing
rights to a portfolio of platform technologies that had been
developed over the past fifteen years and from which various
products were being derived. In September 1998, Old Bioenvision
merged with Eurobiotech Group, Inc., a development stage company
incorporated under the laws of the State of Delaware involved in
the research and development of products and technologies for the
treatment of cancer. Old Bioenvision had two wholly-owned
subsidiaries, Biotechnology & Healthcare Ventures Limited, a
corporation organized under the laws of the Republic of Ireland,
and Eurobiotech Group, Inc. Biotechnology & Healthcare Ventures,
in turn, owned all of the outstanding shares of capital stock of
each of Bioheal Limited, a corporation organized under the laws
of the Republic of Ireland, and Biomed (UK) Limited, a
corporation organized under the laws of England and Wales.

     Pursuant to Bioenvision's agreement to acquire Old
Bioenvision, Bioenvision effected a 1-for-15 reverse stock split
of its then outstanding shares of common stock and issued
7,013,897 post-reverse split shares of common stock to the former
stockholders of Old Bioenvision in exchange for all of the issued
and outstanding shares of capital stock of Old Bioenvision.
Consequently, upon consummation of the transaction in January
1999, the former stockholders of Old Bioenvision became the
controlling stockholders of Bioenvision, Old Bioenvision became a
wholly-owned subsidiary of Bioenvision and changed its name to
Bionco Marketing, Inc., and we changed our name from Ascot Group,
Inc. to Bioenvision, Inc.


Factors that May Affect Our Business
     There are a number of important factors that could cause our
actual results to differ materially from those that are indicated
by forward-looking statements. Those factors include, without
limitation, those listed below and elsewhere herein.
We have a limited operating history, which makes it difficult to
evaluate our business and to predict our future operating
results.

     Bioenvision was organized in November 1996 and has had no
commercial operations to date. Since our inception, we have been
primarily engaged in organizational activities, including
developing a strategic operating plan, entering into various
collaborative agreements for the development of products and
technologies, hiring personnel and developing and testing our
products. We are considered a development-stage company for
accounting purposes because we have not generated any material
revenues to date. Accordingly, we have no relevant operating
history upon which an evaluation of our performance and prospects
can be made.

We have incurred net losses since commencing business and expect
future losses.

     To date, we have incurred significant net losses, including
net losses of $2,122,264 for the year ended June 30, 2001. At
June 30, 2001, we had a deficit accumulated during the
development stage of $5,808,651 and, since that date, we have
continued to incur significant losses. We anticipate that we may
continue to incur significant operating losses for the
foreseeable future.  We may never generate material revenues or
achieve profitability and, if we do achieve profitability, we may
not be able to maintain profitability.

We may fail to address risks we face as a developing business.
     We are prone to all of the risks inherent to the
establishment of any new business venture. You should consider
the likelihood of our future success to be highly speculative in
light of our limited operating history, as well as the limited
resources, problems, expenses, risks and complications frequently
encountered by similarly situated companies. To address these
risks, we must, among other things,

          maintain and increase our client base,

          implement and successfully execute our business and
     marketing strategy,

          continue to develop new products and upgrade our
     existing products,

          respond to industry and competitive developments,

          attract, retain, and motivate qualified personnel, and

          obtain and maintain adequate financing for our
     business.

We may not be successful in addressing these risks.  If we are
unable to do so, we may need to take a number of steps that would
adversely affect us, such as delaying, scaling back or
eliminating some of our research and development programs,
relinquishing rights to certain technologies or products, or
grant licenses to third parties to commercialize technologies or
products that we would otherwise seek to develop.  If we were to
unable to address these challenges, our business prospects,
financial condition and results of operations would be materially
adversely affected.

     Our auditors have qualified their report on our financial
statements with respect to our ability to continue as a going
concern.

     The report of Grant Thornton LLP, our independent certified
public accountants, with respect to our financial statements at
and for the periods ended June 30, 2001, and the related notes,
indicates that at the time of the report, we had recurring losses
from operations, a working capital deficiency and a stockholders'
deficiency.  Accordingly, Grant Thornton LLP, our independent
certified public accountants, indicated in their report that
these matters raise substantial doubt about our ability to
continue as a going concern. Our financial statements do not
include any adjustments that might result from this uncertainty.

     We have limited experience in developing products and may be
unsuccessful in our efforts to develop products.

     To achieve profitable operations, we, alone or with others,
must successfully develop, clinically test, market and sell our
products. The development of new pharmaceutical products is
highly uncertain and subject to a number of significant risks.
Most products resulting from our or our collaborative partners'
product development efforts are not expected to be available for
sale for at least several years, if at all. Potential products
that appear to be promising at early stages of development may
not reach the market for a number of reasons, including:

          discovery during pre-clinical testing or clinical
     trials that the products are ineffective or cause
     harmful side effects;

          failure to receive necessary regulatory approvals;

          inability to manufacture on a large or economically
     feasible scale;

          failure to achieve market acceptance; or

          preclusion from commercialization by proprietary rights
     of third parties.

     To date, our resources have been substantially dedicated to
the research and development of products and technologies. Most
of the existing and future products and technologies developed by
us will require extensive additional development, including pre-
clinical testing and clinical trials, as well as regulatory
approvals, prior to commercialization. Our product development
efforts may not be successful. We may fail to receive required
regulatory approvals from United States or foreign authorities
for any indication may not be obtained. Any products, if
introduced, may not be capable of being produced in commercial
quantities at reasonable costs or being successfully marketed.
The failure of our research and development activities to result
in any commercially viable products or technologies would
materially adversely affect our future prospects.

     Clinical trials for our products will be expensive and may
be time consuming, and their outcome is uncertain, but we must
incur substantial expenses that may not result in any viable
products.

     Before obtaining regulatory approval for the commercial sale
of a product, we must demonstrate through preclinical testing and
clinical trials that a product candidate is safe and effective
for use in  humans. Conducting clinical trials is a lengthy,
time-consuming and expensive process. We will incur substantial
expense for, and devote a significant amount of time to,
preclinical testing and clinical trials.

     Historically, the results from preclinical testing and early
clinical trials have often not been predictive of results
obtained in later clinical trials. A number of new drugs have
shown promising results in clinical trials, but subsequently
failed to establish sufficient safety and efficacy data to obtain
necessary regulatory approvals. Data obtained from preclinical
and clinical activities are susceptible to varying
interpretations, which may delay, limit or prevent regulatory
approval. Regulatory delays or rejections may be encountered as a
result of many factors, including changes in regulatory policy
during the period of product development. Regulatory authorities
may require additional clinical trials, which could result in
increased costs and significant development delays.

     Completion of clinical trials may take several years or
more. The length of time generally varies substantially according
to the type, complexity, novelty and intended use of the product
candidate. Our commencement and rate of completion of clinical
trials may be delayed by many factors, including:

          inability to manufacture sufficient quantities of
     materials for use in clinical trials;

          slower than expected rate of patient recruitment or
     variability in the number and types of patients in a
     study;

          inability to adequately follow patients after
     treatment;

          unforeseen safety issues or side effects;

          lack of efficacy during the clinical trials; or

          government or regulatory delays.

We expect that the clinical development of clofarabine will be
expedited by the involvement of Ilex, which has primary
responsibility for clinical and regulatory work in the United
States and Canada under our co-development agreement with Ilex.
While there are target dates for completion, that agreement
allows Ilex time to continue working beyond those dates under
certain circumstances.  If Ilex does not complete clinical and
regulatory work expeditiously, or if it fails to do so at all, we
will be adversely affected.  If delays in completion constitute a
breach by Ilex, then, at our discretion, the primary
responsibility for completion would revert to us, and we may not
have the financial, managerial or technical resources to complete
such tasks in timely fashion or at all.

    Our industry is subject to extensive government regulation
and our products require other regulatory approvals.  The  FDA
and comparable regulatory agencies in state and local
jurisdictions and in foreign countries impose substantial
requirements upon the clinical development, manufacture and
marketing of pharmaceutical products.  These agencies and other
federal, state and local entities regulate research and
development activities and the testing, manufacture, quality
control, safety, effectiveness, labeling, storage, record
keeping, approval, advertising and promotion of our drug delivery
products.

    The process required by the FDA under the new drug provisions
of the Federal Food, Drug and Cosmetics Act before our products
may be marketed in the United States generally involves the
following:
          pre-clinical laboratory and animal tests,
          submission to the FDA of an investigational new drug
          application, or IND, which must become effective before
          clinical trials may begin,
          adequate and well-controlled human clinical trials to
          establish the safety and efficacy of the proposed
          pharmaceutical in our intended use,
          submission to the FDA of a new drug application, and
          FDA review and approval of the new drug application.

The testing and approval process requires substantial time,
effort, and financial resources and we cannot be certain that any
approval will be granted on a timely basis, if at all.

     Pre-clinical tests include laboratory evaluation of the
product, its chemistry, formulation and stability, as well as
animal studies to assess the potential safety and efficacy of the
product.  The results of the pre-clinical tests, together with
manufacturing information and analytical data, are submitted to
the FDA as part of an IND, which must become effective before we
may begin human clinical trials.  The IND automatically becomes
effective 30 days after receipt by the FDA, unless the FDA,
within the 30-day time period, raises concerns or questions about
the conduct of the trials as outlined in the IND and imposes a
clinical hold.  In such a case, the IND sponsor and the FDA must
resolve any outstanding concerns before clinical trials can
begin.  There is no certainty that pre-clinical trials will
result in the submission of an IND or that submission of an IND
will result in FDA authorization to commence clinical trials.

     Clinical trials involve the administration of the
investigational product to human subjects under the supervision
of a qualified principal investigator.  Clinical trials are
conducted in accordance with protocols that detail the objectives
of the study, the parameters to be used to monitor safety and the
efficacy criteria to be evaluated.  Each protocol must be
submitted to the FDA as part of the IND. Further, each clinical
study must be conducted under the auspices of an independent
institutional review board at the institution where the study
will be conducted.  The institutional review board will consider,
among other things, ethical factors, the safety of human subjects
and the possible liability of the institution.

     Human clinical trials are typically conducted in three
sequential phases which may overlap:

PHASE I:  The drug is initially introduced into healthy
          human subjects or patients and tested for safety,
          dosage tolerance, absorption, metabolism, distribution
          and excretion.

PHASE II:  Studies are conducted in a limited patient
          population to identify possible short term adverse
          effects and safety risks, to determine the efficacy of
          the product for specific targeted diseases and to
          determine dosage tolerance and optimal dosage.

PHASE III: Phase III trials are undertaken to further
          evaluate clinical efficacy and to further test for
          safety in an expanded patient population, often at
          geographically dispersed clinical study sites.  Phase
          III or IIb/III trials are often referred to as pivotal
          trials, as they are used for the final approval of a
          product.

    In the case of products for life-threatening diseases such as
cancer, the initial human testing is often conducted in patients
with disease rather than in healthy volunteers.  Since these
patients already have the targeted disease or condition, these
studies may provide initial evidence of efficacy traditionally
obtained in Phase II trials and so these trials are frequently
referred to as Phase I/II trials.  We cannot be certain that we
will successfully complete Phase I, Phase II or Phase III testing
of our product candidates within any specific time period, if at
all.  Furthermore, we, the FDA, the institutional review board or
the sponsor may suspend clinical trials at any time on various
grounds, including a finding that the subjects or patients are
being exposed to an unacceptable health risk.

     The results of product development, pre-clinical studies and
clinical studies are submitted to the FDA as part of a new drug
application for approval of the marketing and commercial shipment
of the product. The FDA may deny a new drug application if the
applicable regulatory criteria are not satisfied or may require
additional clinical data. Even if the additional data is
submitted, the FDA may ultimately decide that the new drug
application does not satisfy the criteria for approval. Once
issued, the FDA may withdraw product approval if compliance with
regulatory standards for production and distribution is not
maintained or if safety problems occur after the product reaches
the market. In addition, the FDA requires surveillance programs
to monitor approved products which have been commercialized, and
the agency has the power to require changes in labeling or to
prevent further marketing of a product based on the results of
these post-marketing programs.

     The FDA has a Fast Track program intended to facilitate the
development and expedite the review of drugs that demonstrate the
potential to address unmet medical needs for treatment of serious
or life-threatening conditions.   Under this program, if the FDA
determines from a preliminary evaluation of clinical data that a
fast track product may be effective, the FDA  can review portions
of a new drug application for a Fast Track product before the
entire application is complete, and undertakes to complete its
review process within six months of the filing of the new drug
application.   The FDA approval of a Fast Track product can
include restrictions on the product's use or distribution such as
permitting use only for specified medical procedures or limiting
distribution to physicians or facilities with special training or
expertise.  The FDA may grant conditional approval of a product
with Fast Track status and require additional clinical studies
following approval.

     Satisfaction of FDA requirements or similar requirements of
state, local and foreign regulatory agencies typically takes
several years and the actual time required may vary
substantially, based upon the type, complexity and novelty of the
pharmaceutical product. Government regulation may delay or
prevent marketing of potential products for a considerable period
of time and impose costly procedures upon our activities.
Success in pre-clinical or early stage clinical trials does not
assure success in later stage clinical trials. Data from
pre-clinical and clinical activities is not always conclusive and
may be susceptible to varying interpretations which could delay,
limit or prevent regulatory approval. Even if a product receives
regulatory approval, the approval may be significantly limited to
specific indications.  Further, even after the FDA approves a
product, later discovery of previously unknown problems with a
product may result in restrictions on the product or even
complete withdrawal of the product from the market.

     Any products manufactured or distribute under FDA clearances
or approvals are subject to pervasive and continuing regulation
by the FDA, including record-keeping requirements and reporting
of adverse experiences with the products. Drug manufacturers and
their subcontractors are required to register with the FDA and
state agencies, and are subject to periodic unannounced
inspections by the FDA and state agencies for compliance with
good manufacturing practices, which impose procedural and
documentation requirements upon manufacturers and their third
party manufacturers.

     We are also subject to numerous other foreign, federal,
state and local laws relating to such matters as safe working
conditions, manufacturing practices, environmental protection,
fire hazard control, and disposal of hazardous or potentially
hazardous substances. We may incur significant costs to comply
with such laws and regulations now or in the future.  In
addition, we cannot predict what adverse governmental regulations
may arise from future United States or foreign governmental
action.

     We also are subject to foreign regulatory requirements
governing human clinical trials and marketing approval for
pharmaceutical products which we sell outside the United States.
The requirements governing the conduct of clinical trials,
product licensing, pricing and reimbursement vary widely from
country to country.  Whether or not we obtain FDA approval, we
must obtain approval of a product by the comparable regulatory
authorities of foreign countries before manufacturing or
marketing the product in those countries.  The approval process
varies from country to country and the time required for these
approvals may differ substantially from that required for FDA
approval.  We cannot assure you that clinical trials conducted in
one country will be accepted by other countries or that approval
in one country will result in approval in any other country.  For
clinical trials conducted outside the United States, the clinical
stages generally are comparable to the phases of clinical
development established by the FDA. We may not be successful in
receiving orphan drug status for our products or, if that status
is obtained, fully enjoying the benefits of orphan drug status.

     Under the Orphan Drug Act, the FDA may grant orphan drug
designation to drugs intended to treat a rare disease or
condition.  A disease or condition that affects populations of
fewer than 200,000 people in the United States generally
constitutes a rare disease or condition. We may not be successful
in receiving orphan drug status for our products. Orphan drug
designation must be requested before submitting a new drug
application. After the FDA grants orphan drug designation, the
generic identity of the therapeutic agent and its potential
orphan use are publicized by the FDA. Under current law, orphan
drug status is conferred upon the first company to receive FDA
approval to market the designated drug for the designated
indication. Orphan drug status also grants marketing exclusivity
in the United States for a period of seven years following
approval of the new drug application, subject to limitations.
Orphan drug designation does not provide any advantage in, or
shorten the duration of, the FDA regulatory approval process.
Although obtaining FDA approval to market a product with orphan
drug status can be advantageous, the scope of protection or
the level of marketing exclusivity that is currently afforded by
orphan drug status and marketing approval may not remain in
effect in the future.

     Our business strategy involves obtaining orphan drug
designation for certain of the oncology products we have under
development. We do not know whether any of these products will
receive an orphan drug designation. Orphan drug designation does
not prevent other manufacturers from attempting to develop the
same drug for the designated indication or from obtaining the
approval of a new drug  application for their drug prior to the
approval of our new drug application. If another sponsor's new
drug application for the same drug and the same indication is
approved first, that sponsor is entitled to exclusive marketing
rights if that sponsor has received orphan drug designation for
its drug. In that case, the FDA would refrain from approving an
application by us to market our competing product for seven
years, subject to limitation. Competing products may not receive
orphan drug designations and FDA marketing approval before the
products under development by us.

     New drug application approval of a drug with an orphan drug
designation does not prevent the FDA from approving the same drug
for a different indication, or a molecular variation of the same
drug for the same indication. Because doctors are not restricted
by the FDA from prescribing an approved drug for uses not
approved by the FDA, it is also possible that another company's
drug could be prescribed for indications for which products
developed by us have received orphan drug designation and new
drug application approval.  Prescribing of approved drugs for
unapproved uses, commonly referred to as "off label" use, could
adversely affect the marketing potential of products that have
received an orphan drug designation and new drug application
approval. In addition, new drug application approval of a drug
with an orphan drug designation does not provide any marketing
exclusivity in foreign markets.

     The possible amendment of the Orphan Drug Act by the United
States Congress has been the subject of frequent discussion.
Although no significant changes to the Orphan Drug Act have been
made for a number of years, members of Congress have from time to
time proposed legislation that would limit the application of the
Orphan Drug Act. The precise scope of protection that may be
afforded by orphan drug designation and marketing approval may be
subject to change in the future.

     The use of our products may be affected by professional
guidelines.

     In addition to government agencies, private health/science
foundations and organizations involved in various diseases may
also publish guidelines or recommendations to the healthcare and
patient communities. These private organizations may make
recommendations that affect the usage of therapies, drugs or
procedures, including products developed by us. These
recommendations may relate to matters such as usage, dosage,
route of administration and use of concomitant therapies.
Recommendations or guidelines that are followed by patients and
healthcare providers and that result in, among other things,
decreased use of products developed by us could have a material
adverse effect on us and our prospects.

     Our development agreement with Ilex may cause us to delay
commercialization of clofarabine if Ilex does not perform as
anticipated.

     If Ilex fails to meet its obligations under the
co-development agreement, we could lose valuable time in
developing clofarabine for commercialization.  We do not
anticipate that Ilex will fail to meet its obligations under the
co-development agreement, but cannot provide assurance that it
will meet these obligations.  If this were to occur, it could
have a material adverse effect on us, our development plan and
our prospects.

     We rely on licensing or purchasing products and technologies
to grow our product portfolio, and may not be effective in
licensing or acquiring new products.

     We have adopted a license and acquisition strategy to build
our product portfolio. Until we develop and introduce a
sufficient number of our own products, we must rely upon the
availability for licensing or purchasing of products or
technologies of other pharmaceutical or biotechnology companies.
Our success in executing this strategy depends on our continued
ability to identify and acquire new pharmaceutical products
targeted at niche markets within selected strategic therapeutic
market segments. Other companies, including those with
substantially greater financial, marketing and other resources,
compete with us for the right to license or acquire such
products. We may not be successful in identifying potential
product licensing or acquisition opportunities. If any of these
opportunities are identified, we may not be able to obtain these
licenses or complete these acquisitions on acceptable terms. We
may not be able to successfully integrate any licensed or
acquired products or technologies into our product portfolio. Our
failure to obtain licenses for, or complete acquisitions of,
products or technologies within a  selected strategic therapeutic
market segment or to promote and market commercially successful
products or technologies within an existing strategic therapeutic
market segment could have a material adverse effect on our
business and prospects. Once we have obtained rights to a product
or technology and committed to payment terms, we may not be able
to generate sales sufficient to create a profit or otherwise
avoid a loss. Any inability to generate sufficient sales
or any subsequent reduction of sales could have a material
adverse effect on our business and prospects.

     We may not be able to bring generic pharmaceutical products
to market effectively or at all.

     Our development strategy may involve entering into
collaborative arrangements with one or more generic drug
manufacturers to add generic oncology products to our marketing
portfolio. We and our collaborative partners may not be able to
consistently bring these products to market quickly and
efficiently or at all. Our success in this area depends on our
and our collaborative partners' ability to anticipate which
branded pharmaceuticals are about to come off patent and thus
permit us and our collaborative partners to develop, manufacture
and market equivalent generic pharmaceutical products. Generic
pharmaceuticals must meet the same quality standards as branded
pharmaceuticals, even though these equivalent pharmaceuticals are
sold at prices which are significantly lower than that of branded
pharmaceuticals. Generic products which third parties may develop
may render our generic products noncompetitive or obsolete. An
increase in competition in the sale of generic pharmaceutical
products or our failure to bring these products to market before
our competitors could have a material adverse effect on our
business and prospects. Because many of our competitors have
substantially greater capabilities and resources, they may be
able to develop products before us or develop more effective
products or market them more effectively. Because many of our
competitors have substantially greater capabilities and
resources, they may be able to develop products before us or
develop more effective products than ours or market products more
effectively than us.

     Competition in our industry is intense. Potential
competitors in the United States and Europe are numerous and
include pharmaceutical, chemical and biotechnology companies,
most of which have substantially greater capital resources,
marketing experience, research and development staffs and
facilities than us. Although we seek to limit potential sources
of competition by developing products that are eligible for
orphan drug designation and new drug application approval or
other forms of protection, our competitors may not develop
similar technologies and products more rapidly than us or market
them more effectively. Competing technologies and products may
not be more effective than any of those that are being
or will be developed by us. The generic drug industry is
intensely competitive and includes large brand name and
multi-source pharmaceutical companies. Because generic drugs do
not have patent protection or any other market exclusivity, our
competitors may introduce competing generic products, which may
be sold at lower prices or with more aggressive marketing.
Conversely, as we introduce branded drugs into our product
portfolio, we will face competition from manufacturers of generic
drugs which may claim to offer equivalent therapeutic benefits at
a lower price. The aggressive pricing activities of our generic
competitors could have a material adverse effect on our business
and prospects.

     If we fail to keep up with rapid technological change and
evolving therapies, our technologies and products could become
less competitive or obsolete.

     The pharmaceutical industry is characterized by rapid and
significant technological change. We expect that pharmaceutical
technology will continue to develop rapidly, and our future
success will depend on our ability to develop and maintain a
competitive position. Technological development by others may
result in products developed by us, branded or generic, becoming
obsolete before they are marketed or before we recover a
significant portion of the development and commercialization
expenses incurred with respect to these products. Alternative
therapies or new medical treatments could alter existing
treatment regimes, and thereby reduce the need for one or more of
the products developed by us, which would adversely affect our
business and our prospects.

     We depend on others for clinical testing and manufacturing
of our products.

     We do not currently have any internal product testing,
manufacturing or distribution capabilities. Our inability to
retain third parties for the clinical testing, manufacture and
distribution of products on acceptable terms could adversely
affect our ability to develop and market products. Any failures
by third parties to adequately perform their responsibilities may
delay the submission of products for regulatory approval, impair
our ability to deliver products on a timely basis or otherwise
impair our competitive position. Our dependence on third parties
for the development, manufacture and distribution of products may
adversely affect our potential profit margins and our ability to
develop and deliver products on a timely basis. We depend on
others to manufacture our products and have not manufactured them
in significant quantities.

     We have never manufactured any products in commercial
quantities, and the products being developed by us may not be
suitable for commercial manufacturing in a cost-effective manner.
Manufacturers of products developed by us will be subject to
current good manufacturing practices prescribed by the FDA or
other rules and regulations prescribed by foreign regulatory
authorities. We may not be able to enter into or maintain
relationships either domestically or abroad with manufacturers
whose facilities and procedures comply or will continue to comply
with current good manufacturing practices or applicable foreign
requirements. Failure by a manufacturer of our products to comply
with current good manufacturing practices or applicable foreign
requirements could result in significant time delays or our
inability to commercialize or continue to market a product and
could have a material adverse effect on us and our prospects. In
the United States, failure to comply with current good
manufacturing practices or other applicable legal requirements
can lead to federal seizure of violative products, injunctive
actions brought by the federal government, and potential criminal
and civil liability on the part of a company and our officers and
employees. We have limited sales and marketing capability, and
may not be successful in selling or marketing our products.

     The creation of infrastructure to commercialize oncology
products is a difficult, expensive and time-consuming process. We
may not be able to establish direct or indirect sales and
distribution capabilities or be successful in gaining market
acceptance for proprietary products or for other products. We
currently have very limited sales and marketing capabilities. To
market any products directly, we will need to develop a marketing
and sales force with technical expertise and distribution
capability or contract with other pharmaceutical and/or health
care companies with distribution systems and direct sales forces.
To the extent that we enter into co-promotion or other licensing
arrangements, any revenues to be received by us will be dependent
on the efforts of third parties. The efforts of third parties may
not be successful. Our failure to establish marketing and
distribution capabilities or to enter into marketing and
distribution arrangements with third parties could have a
material adverse effect on our business and prospects. We depend
on patent and proprietary rights to develop and protect our
technologies and products, which may not offer us sufficient
protection.

     The pharmaceutical industry places considerable importance
on obtaining patent and trade secret protection for new
technologies, products and processes. Our success will depend on
our ability to obtain and enforce protection for products that we
develop under United States and foreign patent laws and other
intellectual property laws, preserve the confidentiality of our
trade secrets and operate without infringing the proprietary
rights of third parties. Through our current license agreements,
we have acquired the right to utilize the technology covered by
five issued patents and six patent applications, as well as
additional intellectual property and know-how that could be the
subject of further patent applications in the future. Patents may
not be issued from these applications and issued patents may not
give us adequate protection. Issued patents may be challenged,
invalidated, infringed or circumvented, and any rights granted
thereunder may not provide us with competitive advantages.
Parties not affiliated with us have obtained or may obtain United
States or foreign patents or possess or may possess proprietary
rights relating to products being developed or to be developed by
us. Patents now in existence or hereafter issued to others may
adversely affect the development or commercialization of products
developed or to be developed by us. Our planned activities may
infringe patents owned by others.

     We could incur substantial costs in defending infringement
suits brought against us or any of our licensors or in asserting
any infringement claims that we may have against others. We could
also incur substantial costs in  connection with any suits
relating to matters for which we have agreed to indemnify our
licensors or distributors. An adverse outcome in any such
litigation could have a material adverse effect on our business
and prospects. In addition, we could be required to obtain
licenses under patents or other proprietary rights of third
parties. These licenses may not be made available on terms
acceptable to us, or at all. If we are required to, and do not
obtain any required licenses, we could be prevented from, or
encounter delays in, developing, manufacturing or marketing one
or more products.

     We also rely upon trade secret protection for our
confidential and proprietary information. Others may
independently develop substantially equivalent proprietary
information and techniques or gain access to our trade secrets or
disclose our technology. We may not be able to meaningfully
protect our trade secrets.

     We require our employees, consultants, members of the
scientific advisory board and parties to collaborative agreements
to execute confidentiality agreements upon the commencement of
employment or consulting relationships or a collaboration with
us. These agreements may not provide meaningful protection of our
trade secrets or adequate remedies in the event of unauthorized
use or disclosure of confidential and proprietary information.

     If we lose key management or other personnel our business
will suffer.

     We are highly dependent on the principal members of our
scientific and management staff. We also rely on consultants and
advisors, including our scientific advisors, to assist us in
formulating our research and development strategy. Our success
also depends upon retaining key management and technical
personnel, as well as our ability to continue to attract and
retain additional highly-qualified personnel. We face intense
competition for personnel from other companies, government
entities and other organizations. We may not be successful in
retaining our current personnel. We may not be successful in
hiring or retaining qualified personnel in the future. If we lose
the services of any of our scientific and management staff or key
technical personnel, or if we fail to continue to attract
qualified personnel, our business could suffer.  Our management
and internal systems might be inadequate to handle our potential
growth.

     Our success will depend in significant part on the expansion
of our operations and the effective management of growth. This
growth will place a significant strain on our management and
information systems and operational and financial resources. To
manage future growth, our management must continue to improve our
operational and financial systems and expand, train, retain and
manage our employee base. Our management may not be able to
manage our growth effectively. If our systems, procedures and
controls are inadequate to support our operations, our expansion
would be halted and we could lose our opportunity to gain
significant market share.  Any inability to manage growth
effectively may harm our business. Because we intend to have
international operations, we will be subject to risks of
conducting business in foreign countries.

     If, as we anticipate, international operations will
constitute a part of our business, we will be subject to the
risks of conducting business in foreign countries, including:

          difficulty in establishing or managing distribution
     relationships;

          different standards for the development, use, packaging
     and marketing of our products and technologies;

          our inability to locate qualified local employees,
     partners, distributors and suppliers;

          the potential burden of complying with a variety of
     foreign laws, trade standards and regulatory
     requirements, including the regulation of
     pharmaceutical products and treatment; and

          general geopolitical risks, such as political and
     economic instability and changes in diplomatic and
     trade relations.

The prices we charge for our products and the level of third-
party reimbursement may decrease and our revenues could decrease.
     Our ability to commercialize products successfully depends
in part on the price we may be able to charge for our products
and on the extent to which reimbursement for the cost of our
products and related treatment will be available from government
health administration authorities, private health insurers and
other third-party payors. Government officials and private health
insurers are increasingly challenging the price of medical
products and services. Significant uncertainty exists as to the
pricing flexibility distributors will have with respect to, and
the reimbursement status of, newly approved health care products.

   In the United States, we expect that there will continue to be
a number of federal and state proposals to implement government
control of pricing and profitability of prescription
pharmaceuticals. Government imposed controls could decrease the
price we receive for products by preventing the recovery of
development costs and an appropriate profit margin. Any of these
cost controls could have a material adverse effect on our ability
to make a profit. Furthermore, federal and state regulations
govern or influence the reimbursement to health care providers in
connection with medical treatment of certain patients. If any
actions are taken by federal and/or state governments, they could
adversely affect the prospects for sales of our products. Actions
taken by federal and/or state governments with regard to health
care reform could have a material adverse effect on our business
and our prospects.

     Third-party payors may attempt to control costs further by
selecting exclusive providers of their pharmaceutical products.
If third-party payors were to make this type of arrangement with
one or more of our competitors, they would not reimburse patients
for purchasing our competing products. This could cause the
acceptance and/or use of our products to decline. This lack of
reimbursement would diminish the market for products developed by
us and could have a material adverse effect on us.

Our products may be subject to recall.
     Product recalls may be issued at our discretion or at the
request of the FDA or other government agencies having regulatory
authority for product sales. Product recalls may harm our
reputation and cause us to lose development opportunities,
customers or pay refunds. Products may need to recalled due to
disputed labeling claims, manufacturing issues, quality defects,
or other reasons. We do not carry any insurance to cover the risk
of potential product recall. Any product recall could have a
material adverse effect on us and our prospects.

     We may face exposure from product liability claims and
product liability insurance may not be available to cover the
costs of our liability claims related to technologies or
products.

     We face exposure to product liability claims if the use of
our technologies or products or those we license from third
parties is alleged to have resulted in adverse effects to users
thereof.  Regulatory approval for commercial sale of our products
does not mitigate product liability risks. Any precautions we
take may not be sufficient to avoid significant product liability
exposure. We may not be able to obtain an appropriate level of
liability insurance coverage for our development and marketing
activities.  Existing coverage may not be adequate as we further
develop our products. In the future, adequate insurance coverage
or indemnification by collaborative partners may not be available
in sufficient amounts, or at acceptable costs, if at all. To the
extent that product liability insurance, if available, does not
cover potential claims, we will be required to self-insure the
risks associated with those claims. The successful assertion of
any uninsured product liability or other claim against us could
have a material adverse effect on our business and prospects. In
addition, future product labeling may include disclosure of
additional adverse effects, precautions and contraindications,
which may adversely impact product sales. The pharmaceutical
industry has experienced increasing difficulty in maintaining
product liability insurance coverage at reasonable levels, and
substantial increases in insurance premium costs in many cases
have rendered coverage economically impractical.

     We may be liable for the use of hazardous materials.

     Our research and development activities may involve the use
of hazardous materials, chemicals and/or various radioactive
compounds by our collaborative partners. The risk of accidental
contamination or injury from these materials cannot be completely
eliminated. In the event of an accident, we could be held liable
for any damages that result and any liability could exceed our
resources. Our future collaborative partners may incur
substantial costs to comply with environmental regulations, which
costs may be passed on to us.

     We may encounter significant financial and operating risks
if we grow our business through acquisitions.

     As part of our growth strategy, we may seek to acquire or
invest in complementary or competitive businesses, products or
technologies. The process of integrating acquired assets into our
operations may result in unforeseen operating difficulties and
expenditures and may absorb significant management attention that
would otherwise be available for the ongoing development of our
business. We may allocate a significant portion of our available
working capital to finance all or a portion of the purchase price
relating to possible acquisitions. Any future acquisition or
investment opportunity may require us to obtain additional
financing to complete the transaction. The anticipated benefits
of any acquisitions may not be realized in a timely fashion or at
all.  In addition, future acquisitions by us could result in
potentially dilutive issuances of equity securities, the
incurrence of debt and contingent liabilities and amortization
expenses related to goodwill and other intangible assets, any of
which could materially adversely affect our operating results and
financial position. Acquisitions also involve other risks,
including entering markets in which we have no or limited prior
experience. We currently have no binding commitments or
agreements with respect to any possible acquisitions or
investments.  We have limited experience in the field of animal
health products.

     Our Company, our management and our advisors have limited
experience in the field of animal health products. To date, our
resources have been substantially dedicated to the research and
development of products and technologies for use in humans.  Our
competitors have greater experience and resources and we may not
be able to compete effectively in that business.  Potential
competitors in the United States and Europe are numerous and
include animal food and healthcare companies, chemical and
biotechnology companies, most of which have substantially greater
capital resources, marketing experience, research and development
staffs and facilities than us.

Where You Can Find More Information
     We file annual, quarterly and special reports, proxy
statements and other information with the SEC. This information
is available at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other
information about Bioenvision and other issuers that file
electronically with the SEC at http://wwww.sec.gov.


Item 2.  Description of Property

Facilities
     As of the date of this report we do not own any interest in
real property.  We currently lease approximately 250 square feet
of office space at our financial advisor at Suite 1600, One
Rockefeller Plaza, New York, New York 10020 for our principal
executive offices for $4,000 per month. We also rent 250 square
feet of office space at 32 Haymarket, London SW1Y 4TP for
GBP3,000 per month. These offices spaces is used by management
and administration. To date, most of our drug development
programs have been conducted at scientific institutions around
the world. It is our policy to continue development at leading
scientific institutions in the United States and Europe. We
intend to lease facilities that will serve as our corporate
headquarters in the United States upon completion of a private
financing. These facilities will be the center for all of our
administrative and marketing functions in the United States. We
do not plan to conduct laboratory research in such facilities in
the near future, but, rather, will conduct research through
collaborative arrangements with SRI, M.D. Anderson and others.


Investment Policies
     We do not currently have any investments in real estate or
interests in real estate, nor in real estate mortgages nor in the
securities of or interests in persons primarily engaged in real
estate. We generally acquire our assets for the purpose of
ultimately producing sales revenues from the exploitation of such
assets in the development of our biopharmaceutical business.  We
do not currently have any surplus cash to invest, but we intend
to invest any surplus cash we may have on hand in the future in
interest-bearing deposit accounts, short-term certificates of
deposit and governmental debt instruments.


Item 3.  Legal Proceedings
     We are not a party to any material legal proceedings.


Item 4.  Submission of Matters to a Vote of Security Holders
     None.

<PAGE>
<page>

                            PART II

Item 5.  Market for Common Equity and Related Stockholder Matters
     The following represents the range of reported high and low
bid quotations for Bioenvision's common stock on a quarterly
basis since Bioenvision's stock commenced active trading on March
5, 1999, as reported on the Over-the-Counter Bulletin Board of
the National Association of Securities Dealers (OTCBB).
Bioenvision's trading symbol is "BIOV." Prior to that time
Bioenvision's stock was not listed on OTCBB and was inactive,
trading in the over-the-counter "pink sheets" under the symbol
"ASGP." The quotations also reflect inter-dealer prices, without
retail mark-up, mark-down or commission, and may not represent
actual transactions.

                                          High         Low
Fiscal Year Ended June 30, 2000
First Quarter*                           $8.25        $4.00
Second Quarter*                          $8.00        $6.00
Third Quarter                            $9.00        $6.25
Fourth Quarter                           $8.00        $5.00

Fiscal Year Ended June 30, 2001
First Quarter                            $4.25        $2.50
Second Quarter                           $4.00        $1.50
Third Quarter                           $2.625       $0.875
Fourth Quarter                           $2.45        $0.82

     *In accordance with the terms of the Acquisition Agreement
between Old Bioenvision and Bioenvision dated December 21, 1998,
Bioenvision effected a 1-for-15 reverse stock split, reducing its
issued and outstanding shares of common stock from 3,450,000 to
230,000, immediately prior to issuing 7,013,897 shares of post 1-
for-15 reverse stock split common stock at the closing of the
acquisition on January 5, 1999.

     On September 28, 2001, Bioenvision had 266 stockholders of
record.

     Bioenvision has never declared or paid cash dividends on its
capital stock, and Bioenvision's Board of Directors does not
intend to declare or pay any dividends on the common stock in the
foreseeable future. Earnings of Bioenvision, if any, are expected
to be retained for use in expanding Bioenvision's business.  The
declaration and payment in the future of any cash or stock
dividends on the common stock will be at the discretion of the
Board of Directors of Bioenvision and will depend upon a variety
of factors, including the ability of Bioenvision to service its
outstanding indebtedness and to pay its dividend obligations on
securities ranking senior to the common stock, Bioenvision's
future earnings, if any, capital requirements, financial
condition and such other factors as Bioenvision's Board of
Directors may consider to be relevant from time to time.


Recent Sales of Unregistered Securities
     In November 2000 Bioenvision issued 272,500 shares of common
stock at $1.00 per share to various consultants for work
performed for and our behalf.  The shares were issued to Andrew
Turner (112,500), David Chester (112,500), and Shane Sutton
(47,500).  The issuance of these shares was exempt from
registration under Regulation S under the Securities Act or
Section 4(2) of the Securities Act.

     In March 2001, we entered into the Co-Development Agreement
with Ilex, pursuant to which Ilex will have a thirty-day option
to purchase $1 million of our common stock upon completion by
Ilex of the pivotal Phase II clinical trial of clofarabine, and
an additional 30 day option to purchase $2 million of our common
stock after the filing by Ilex of a new drug application in the
United States for the use of clofarabine in the treatment of
lymphocytic leukemia.  The exercise price per share for each
option is based upon the average market price of our common stock
at the time of exercise.

     In April 2001, Bioenvision issued 4,304,444 options at an
exercise price of $1.25 per option share.  The terms of the
options are that each option can be exercised after 30th April
2001 for a period of three years, whereby the options will no
longer be able to be exercised after 30th April 2004 unless
otherwise agreed with us.

     Of these options, 2,200,000 were issued to the following
members of our management:

     Christopher Wood    1,500,000 options
     Stuart Smith        500,000 options
     Thomas Nelson       200,000 options

The issuance of these options was exempt from registration under
Section 4(2) of the Securities Act with respect to the optionees.

     In addition, 1,454,444 options were issued to Bioacclerate
Ltd in consideration for Bioacclerate amending certain provisions
of its investment agreement.  Those issuances of options were
exempt from registration under Regulation S under the Securities
Act or Section 4(2) of the Securities Act.


     Also, we granted to Phoenix Ventures 500,000 options to
purchase shares of our common stock at an exercise price of $1.25
per share.  The options were issued in connection with a credit
facility made available to us by Glen Investments Limited, a
Jersey (Channel Islands) corporation wholly owned by Kevin R.
Leech, a U.K. citizen and one of our shareholders, which facility
was terminated in August 2001.  The options expire in April 2004
and are immediately vested. That issuance of options were exempt
from registration under Regulation S under the Securities Act or
Section 4(2) of the Securities Act.

     In addition, we granted 150,000 options to purchase shares
of our common stock at an exercise price of $1.25 per share.  The
options were issued to two consultants in exchange for certain
services rendered.  The options expire in April 2004 and are
immediately vested.  Those issuances of options were exempt from
registration under Regulation S under the Securities Act or
Section 4(2) of the Securities Act.

     In August 2001 we issued 208,333 shares of common stock at
the rate of $1.25 per share as follows:  Christopher Wood 98,684
shares; Thomas Nelson, 27,412 shares; and Stuart Smith, 82,237
shares.  That issuance of shares was exempt from registration
under Section 4(2) of the Securities Act. Those issuances of
shares were exempt from registration under Section 4(2) of the
Securities Act.


Item 6.  Management's Discussion and Analysis or Plan of
Operation

Overview
     Bioenvision is an emerging biopharmaceutical company.  Our
primary business focus is the acquisition, development and
distribution of drugs to treat cancer.  Our two lead drugs are
Modrenal , which is our first product to receive regulatory
approval (in the United Kingdom) for marketing for breast cancer
treatment, and clofarabine, which is currently in Phase II
clinical trials under our recently executed co-development
agreement with Ilex Oncology, Inc. (NASDAQ NM:  ILXO) ("Ilex").
We have made solid progress in developing our product portfolio
over the past 12 months.  We have continued to incur losses
during this development stage.  Our management believes that we
have the opportunity to become a leading oncology-focused
pharmaceutical company in the next five years if we successfully
market and distribute those two lead drugs. We anticipate that
revenues derived from the two lead drugs will permit us to
further develop the 12 other products currently in our
development portfolio. We currently plan to have as many as 12
products at market by the end of 2006.

   We have obtained regulatory approvals in the United Kingdom to
market our first product, Modrenal , for the treatment of post-
menopausal breast cancer.  We plan to commence marketing Modrenal
in the United Kingdom by late 2001/2002.  Modrenal  has a unique
and previously unrecognized mode of action and is the first drug
in a new class of agents that modulates hormone binding to the
newly-described "second" estrogen receptor, ER .   We intend to
seek regulatory approval for Modrenal  in the United States as a
second line therapy for hormone sensitive breast cancers.  We
believe that the potential market for Modrenal , based upon the
sales of currently available drugs for hormonal therapy for
breast cancers, is in excess of  $1.8 billion of sales per anum
worldwide.  The results of extensive clinical trails to date with
Modrenal  show that it is at least as effective in second line
treatment of advanced breast cancer as the currently available
hormonal treatments, such as the SERM's and aromatase inhibitors,
and more effective than these agents in certain specific patient
types, such as those who have become tamoxifen-refractory.
Furthermore, our management currently intends to price Modrenal
in such a way as to make treatment with Modrenal  compare very
favorably, on a price basis, with the cost of treatment with the
existing drugs used for second line therapy.  We believe that
this should result in cost benefits for physicians, patients and
health-care systems.

     Modrenal  has other applications as well.  We expect to
commence marketing  Modrenal  in other European countries for the
treatment of Cushing's disease in the second quarter of 2002, and
in the United States for the treatment of Cushing's disease in
the third quarter of 2002, subject to obtaining the necessary
regulatory approvals.

     Our second lead product is clofarabine,  which we believe,
based on third party studies conducted to date, may be effective
in the treatment of leukemia and lymphoma. To expedite the
commercialization of our second lead product, clofarabine, we
have recently entered into a co-development agreement with Ilex.
We believe that our two initial lead products have the following
competitive advantages over existing products at market:


    We have had discussions with potential product co-development
partners over the past year and plan to continue to explore the
possibilities for co-development and sub-licensing in order to
implement our development plans.  On September 6th, 2001 we
appointed SG Cowen as our investment bankers to assist us in
finding suitable co-development partners for our products.  Based
on initial indications of interest, we expect to enter into a co-
development agreement for at least one of our products within the
next few months, although there can be no assurances that any
such agreement will be reached, and were are not engaged in any
specific negotiations at this time.

     We are considered a development-stage company for accounting
purposes because we have not generated any material revenues to
date.  Accordingly, we have no relevant operating history upon
which an evaluation of our performance and prospects can be made.
We are prone to all of the risks to the establishment of any new
business venture.  You should consider the likelihood of our
future success to be highly speculative in light of our limited
operating history, as well as the limited resources, problems,
expenses, risks and complications frequently encountered by
similarly situated companies.  To address these risks, we must,
among other things:

          satisfy our current and future capital requirements for
     the implementation of our business plan;

          commercialize our existing products;

          complete development of products presently in our
     pipeline and obtain necessary regulatory approvals for
     use;

          implement and successfully execute our business and
     marketing strategy to commercialize products;

          establish and maintain our client base;

          continue to develop new products and upgrade our
     existing products;

          respond to industry and competitive developments; and

          attract, retain, and motivate qualified personnel.

     We may not be successful in addressing these risks. If we
are unable to do so, our business prospects, financial condition
and results of operations would be materially adversely affected.
The likelihood of our success must be considered in light of the
development cycles of new pharmaceutical products and
technologies and the competitive and regulatory environment in
which we operate.

     We have initial payment from Ilex Oncology of $1,350,000
which became non-refundable in March 2001 upon execution of our
agreement with Ilex to co develop clofarabine.  That sum will be
recognized as income for accounting purposes on a straight line
basis over the period from March 2001, when the payment was
received, through December 31, 2002, when Ilex is scheduled to
complete Phase II trials of clofarabine and make another payment
to us.  A total of $245,455 of that payment was recognized as
contract revenue in our fiscal year ended June 30, 2001.  We are
currently engaged in a private placement to selected accredited
investors in an effort to obtain a minimum investment of $2.5
million and a maximum of $10 million.  We believe that we need to
obtain approximately $2.5 million in order to continue our
development strategy as currently planned over the next 12
months, but we anticipate requiring the aggregate sum of
approximately $5 million in order to continue our development
strategy as currently planned over the next 12 months and also to
have sufficient funds available to commence marketing Modrenal.
We are currently relying on a $1 million line of credit from Jano
Holdings Limited, which has been made available to us through
September 2002, to fund continuing operations.  However, if
we are unable to obtain the contemplated additional financing in
the near future, or obtain all of the additional funds we are
seeking, our development strategy would be delayed and our
marketing campaign for Modrenal  would be curtailed or delayed as
we would then seek to reduce our rate of expenditure.  In either
case, our condition, financial and otherwise, business and
prospects will be materially adversely affected.


Results of Operations
     We have acquired development and marketing rights to a
portfolio of four platform technologies developed over the past
fifteen years, from which a range of products have been derived
and additional products may be developed in the future. Although
we intend to commence marketing our lead product, Modrefen , and
to continue developing our existing platform technologies and
commercializing products derived from such technologies, a key
element of our business strategy is to continue to acquire,
obtain licenses for, and develop new technologies and products
that we believe offer unique market opportunities and/or
complement our existing product lines.  Once a product or
technology has been launched into the market for a particular
disease indication, we plan to work with numerous collaborators,
both pharmaceutical and clinical, in the oncology community to
extend the permitted uses of the product to other indications.
In order to market our products effectively, we intend to develop
marketing alliances with strategic partners and may co-promote
and/or co-market in certain territories.  We believe that we need
to obtain approximately $2.5 million in order to continue our
development strategy as currently planned over the next 12
months, but we anticipate requiring the aggregate sum of
approximately $5 million in order to continue our development
strategy as currently planned over the next 12 months
and also to have sufficient funds available to commence marketing
Modrenal .  That marketing effort will involve a concentrated
marketing campaign and the establishment of a niche sales force.
We are currently relying on a line of credit from Jano Holdings
Limited to fund continuing operations.  However, if we are unable
to obtain the contemplated additional financing in the near
future, or obtain all of the funds we are seeking, our
development strategy would be delayed and our marketing campaign
for Modrenal  would be curtailed or delayed as we would then seek
to reduce our rate of expenditure.  In either case, our
condition, financial and otherwise, business and prospects will
be materially adversely affected.

     We have initial payment from Ilex of $1,350,000 which became
non-refundable in March 2001 upon execution of our agreement with
Ilex to co develop clofarabine.  That sum will be recognized as
income for accounting purposes on a straight line basis over the
period from March 2001, when the payment was received, through
December 31, 2002, when Ilex is scheduled to complete Phase II
trials of clofarabine and make another payment to us.  A total of
$245,455 of that payment was recognized as contract revenue in
our fiscal year ended June 30, 2001.  We had no revenues in the
fiscal year ended June 30, 2000.

    Research and development costs increased to $1,565,908 in the
fiscal year ended June 30, 2001, from $984,460 in the year ended
June 30, 2000.  The increase in research and development costs is
a result of our increasing our research activities during our
fiscal year ended June 30, 2001 as we increased the pace of
development of our products portfolio.  General and
administrative expenses totaled $550,215 in the year ended June
30, 2001, as compared with $486,627 in the year ended June 30,
2000.  General and administrative expenses were comprised
primarily of charges related to legal fees, accounting fees,
investor relations and rent.  Depreciation and amortization
expense totaled $22,809 in the fiscal year ended June 30, 2001,
as compared with $11,664 in the fiscal year ended June 30, 2000.
Interest and finance charges totaled $228,787 in the fiscal year
ended June 30, 2001, as compared with $12,778 in the fiscal year
ended June 30, 2000.  The majority of interest and finance
charges relates to costs associated with the issuance of stock
options related to our credit facility with Glen Investments
Limited, a Jersey (Channel Islands) corporation wholly owned by
Kevin R. Leech, a U.K. citizen and one of our shareholders, which
facility was terminated in August 2001.  Reference is made to
footnote 8 to our consolidated financial statements in Item 7
hereto, which consolidated financial statements are presented
beginning at page F-1, for further details.

Liquidity and Capital Resources
     From the period of our inception through December 1998, we
did not engage in any active trade or business.  In January 1999,
we consummated a merger with Old Bioenvision by effecting a
1-for-15 reverse stock split of its then outstanding shares of
common stock and thereafter issuing 7,013,897 post-reverse split
shares of common stock to the former stockholders of Old
Bioenvision in exchange for all of the issued and outstanding
shares of capital stock of Old Bioenvision.  Consequently, upon
consummation of the merger, the former stockholders of Old
Bioenvision became our controlling stockholders, Old Bioenvision
became our wholly-owned subsidiary and changed its name to Bionco
Marketing, Inc., and we changed our name from Ascot Group, Inc.
to Bioenvision, Inc.

     To date, we have incurred significant net losses, including
net losses of $1,495,509 for the fiscal year ended June 30, 2000
and net losses of $2,122,264 for the fiscal year ended June 30,
2001.  We had an accumulated deficit of $3,686,387 at June 30,
2000 and $5,808,651 at June 30, 2001 and, since that date, we
have continued to incur significant losses.  We anticipate that
we may continue to incur significant operating losses for the
foreseeable future.  There can be no assurance as to whether or
when we will generate material revenues or achieve profitable
operations.  Our independent certified public accountants have
indicated in their report on our financial statements that
certain factors raise substantial doubt about our ability to
continue as a going concern.

     Based on our operating plan, we are seeking arrangements for
long-term funding through additional capital raising activities,
including one or more offerings of equity and/or debt through
private placements and/or public offerings. We are currently
engaged in a private placement to selected accredited investors
in an effort to obtain a minimum investment of $2.5 million and a
maximum of $10 million.  We believe that we need to obtain
approximately $2.5 million in order to continue our development
strategy as currently planned over the next 12 months, but we
anticipate requiring the aggregate sum of approximately $5
million in order to continue our development strategy as
currently planned over the next 12 months and also to have
sufficient funds available to commence marketing Modrenal .  We
are also actively seeking strategic alliances in order to develop
and market its range of products.  In August 2001, we obtained a
$1 million unsecured line of credit facility from Jano Holdings
Limited, which bears interest at 8% per annum, which we can draw
upon, subject to the terms and conditions of the facility,
through September 2002.  In addition, our officers have agreed to
defer salaries, and our former outside counsel have agreed to
defer certain fees, until we have obtained sufficient long-term
funding.  Deferred salaries and fees amounted to approximately
$1,031,698 at June 30, 2001.  Our officers agreed to convert
$910,681 of the outstanding deferred salaries into shares of our
common stock.  The shares were not issued as of June 30, 2001;
accordingly the entire amount is reported as a non-current
liability on our consolidated balance sheet as at June 30,
2001.  However, if we are unable to obtain the contemplated
additional financing in the near future, or obtain all of the
funds we are seeking, our development strategy would be delayed
and our marketing campaign for Modrenal  would be curtailed or
delayed as we would then seek to reduce our rate of expenditure.
In either case, our condition, financial and otherwise, business,
operations and prospects will be materially adversely affected.
In any case, we may require additional financing within this time
frame due to unanticipated changes in economic conditions or
other unforeseen circumstances.  In the event our plans change or
our assumptions change or prove to be inaccurate, we could be
required to seek additional financing sooner than currently
anticipated.  Any additional financing may not, however, be
available to us when needed on commercially reasonable terms, or
at all.  If this were to occur, our condition, financial and
otherwise, business, operations and prospects would be materially
and adversely affected.
<PAGE>
<page>


Item 7.  Financial Statements
     The consolidated financial statements of Bioenvision, Inc.
and its subsidiaries including the notes thereto, together with
the report thereon is presented beginning at page F-1.


Item 8.  Changes in and Disagreements with Accountants on

Accounting and Financial Disclosure
     On June 15, 2001, the Company received a letter from Ernst &
Young LLP ("Ernst & Young") expressing its desire to resign as
independent auditors of the Company.  On June 16, 2001 and again
on June 19, 2001, the Company's management had discussions with
Ernst & Young asking them to reconsider their resignation.  On
June 20, 2001, the Company received a letter from Ernst & Young
stating that it did not wish to reconsider its resignation.

     The reports of Ernst & Young on the Company's financial
statements for the past two fiscal years did not contain an
adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting
principles except that the report for the years ended June 30,
1999 and 2000 included a paragraph expressing substantial doubt
as to the Company's ability to continue as a going concern.

     In connection with the audits of the Company's financial
statements for each of the two fiscal years ended June 30, 2000
and in the subsequent interim period, there were no disagreements
with Ernst & Young on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedures which, if not resolved to the satisfaction of Ernst &
Young, would have caused Ernst & Young to make reference to the
matter in their report.

     On July 23, 2001, the Company, pursuant to authorization of
its Board of Directors, engaged Grant Thornton LLP as its
independent certified public accountants to audit the Company's
financial statements for the year ended June 30, 2001.  During
the Company's two most recent fiscal years and any subsequent
interim period prior to engaging the new accountants, the Company
did not consult with the newly engaged accountants regarding any
of the matters described in Regulation S-K Item 304(a)(2)(i) or
(ii).
<PAGE>
<Page>
                            PART III

Item 9.  Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.

     Our executive officers, directors and other significant
employees and their ages and positions are as follows:


Name of Individual          Age    Position with Bioenvision and
                                           Subsidiaries
------------------           --    -----------------------------
Christopher B. Wood, M.D.   55     Chairman of the Board and
                                   Chief Executive Officer
                                                 (1) (2) (3)
Thomas Scott Nelson         61     Chief Financial Officer and
                                   Director (1) (2) (3)

Stuart Smith, Ph.D.         36     Senior Vice President,
                                   Secretary and Director
                                                 (1) (2) (3)

-----------------------------
(1) Member of Executive Committee
(2) Member of Compensation Committee
(3) Member of Audit Committee

     Christopher B. Wood, M.D. has served as the Chairman of the
Board and Chief Executive Officer of Bioenvision since January
1999. From January 1997 to December 1998, Dr. Wood was Chairman
of Eurobiotech, Inc. From March 1994 to January 1997, Dr. Wood
was a specialist surgeon in the National Health Service, U.K.
From April 1979 to March 1991, Dr. Wood was a specialist surgeon
at The Royal Postgraduate Medical School, London, England. He has
more than 15 years experience in the European biotechnology
sector. He has taken two biotechnology companies from start-up
through commercialization, one of which, Medeva Plc., which
traded on the London Stock Exchange and the New York Stock
Exchange, and which is now wholly owned by Celltech Group PLC.
Dr. Wood holds M.D. from the University of Wales School of
Medicine and the Fellowship of the Royal College of Surgeons of
Edinburgh.

     Thomas Scott Nelson has served as the Chief Financial
Officer of Bioenvision since May 1998. From 1996 to 1999, Mr.
Nelson served as the Director of Finance of the Management Board
of the Royal & Sun Alliance Insurance Group. From 1991 to 1996,
Mr. Nelson served as Group Finance Director of the Main Board of
Sun Alliance Insurance Group. He has served as Chairman of the
United Kingdom insurance industry committee on European
regulatory, fiscal and accounting issues. He has also worked with
Deloittes in Paris and as a consultant with PA Consultants
Management. Mr. Nelson is a Member of Institute of Chartered
Accountants of Scotland and a Fellow of the Institute of Cost and
Management Accountants. Mr. Nelson holds a B.A. degree from
Cambridge University.

     Stuart Smith, Ph.D. has served as a Senior Vice President of
Bioenvision since May 1997. Dr. Smith has considerable experience
in the biotechnology and pharmaceutical fields. From June 1995 to
May 1997, he served as Business Development Manager of CRC
Oxford. From July 1994 to June 1995, he served as Marketing
Manager (Oncology) of British Biotech Pharmaceuticals Ltd. From
March 1992 to June 1994 as International Product Manager
(Oncology) of Schering AG in Berlin, Germany. Prior thereto, Dr.
Smith worked in the veterinary and public health fields, focusing
on animal health research and parasitology. Dr. Smith holds a
B.S. degree, with honors, in Biology and a Ph.D. degree in
Philosophy from the University of Aberdeen.

     Under the terms of its investment agreement, as amended in
April 2001, Bioaccelerate Ltd. has the right to nominate one
member to our board of directors.  Bioaccelerate Ltd. has not
made any such nomination at this time.

     The directors serve until the next annual meeting of
stockholders and until their respective successors are elected
and qualified. Officers serve at the discretion of the Board of
Directors.


Committees of the Board of Directors
     The Board currently has three committees: the Executive
Committee, the Audit Committee and the Compensation Committee. As
soon as we complete another round of equity financing, we expect
to increase our Board by adding at least three outside,
non-management directors who will replace Messrs. Wood, Nelson
and Smith on our Audit Committee and our Compensation Committee.

     The Executive Committee is comprised of Messrs. Wood, Nelson
and Smith.

     Dr. Wood serves as Chairman of the Executive Committee.

     The Audit Committee is comprised of Messrs. Wood, Nelson and
Smith. The Audit Committee recommends the independent accountants
appointed by the Board to audit our the financial statements,
which includes an inspection of our books and accounts, and
reviews with such accountants the scope of their audit and their
report thereon, including any questions and recommendations that
may arise relating to such audit and report or our internal
accounting and auditing system procedures.

     The Compensation Committee is comprised of Messrs. Wood,
Nelson and Smith. The function of the Compensation Committee is
to review and approve the compensation of executive officers and
establish targets and incentive awards under our incentive
compensation plans. The Compensation Committee reports to the
Board.

Compliance with Section 16(a) of the Exchange Act
      Section 16(a) of the Exchange Act requires Bioenvision's
directors and executive officers, and persons who own more than
10% of the outstanding equity securities of Bioenvision, to file
initial reports of beneficial ownership and reports of changes in
beneficial ownership of equity securities with the SEC and any
national securities exchange on which equity securities are
listed. These persons are required by SEC regulations to furnish
Bioenvision with copies of all Section 16(a) forms they file.

     Based upon filings made with the SEC and Bioenvision's
records, Bioenvision believes that no director, executive officer
or holder of more than 10% of the outstanding shares of common
stock filed on a timely basis the reports required by Section
16(a) of the Exchange Act during, or with respect to, the year
ended June 30, 2000.


Item 10. Executive Compensation

     The following table sets forth information for each of the
fiscal years ended June 30, 2001, 2000 and 1999 concerning the
compensation paid and awarded to all individuals serving as (a)
our chief executive officer, (b) each of our four other most
highly compensated executive officers (other than our chief
executive officer) at the end of our fiscal year ended June 30,
2001 whose total annual salary and bonus exceeded $100,000 for
these periods, and (c) up to two additional individuals, if any,
for whom disclosure would have been provided pursuant to (b)
except that the individual(s) were not serving as our executive
officers at the end of our fiscal year ended June 30, 2001:

                           Summary Compensation Table
(a)          (b)       (c)      (d)      (e)       (f)       (g)
(h)    (i)
Name and                                Other   Restricted  Sec.
      All
Principal                              Annual     Stock  Underly.
LTIP  Other
Position    Year      Salary   Bonus   Compen.    Award   Options
Payouts Comp.

Christopher
Wood (3)    2001     180,000
            2000     180,000(1)
            1999     180,000(2)

Stuart      2001     150,000(1)
Smith(4)    2000     150,000(1)
            1999     150,000(2)

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

(1)  Salaries through January 4, 1999 were accrued by Eurobiotech
Group, Inc., a wholly-owned subsidiary of Bioenvision
(2)  Accrued by Eurobiotech Group.
(3)  On April 30, 2001, Mr. Wood was granted options for
1,500,000 shares of our common stock.  The options are
immediately exercisable and expire on April 30, 2004.
(4) On April 30, 2001, Mr. Smith was granted options for 500,000
shares of our common stock.  The options are immediately
exercisable and expire on April 30, 2004.


Stock Options
     Our Board of Directors adopted our 2001 Stock Option Plan
effective on April 30, 2001. The purpose of the Plan is to
increase the employees', advisors', consultants' and non-employee
directors' proprietary interest in us and to align more closely
their interests with the interests of our stockholders. The
purpose of the Plan is also to enable us to attract and retain
the services of experienced and highly qualified employees and
non-employee directors.

     We reserved an aggregate of 4,854,544 shares of common stock
for issuance pursuant to options granted under the 2001 Stock
Option Plan.  As of September 28, 2001 options to purchase an
aggregate of 4,854,544 shares of our common stock have been
granted under the 2001 Stock Option Plan.  The Board of Directors
or a committee of the Board of Directors (the Compensation
Committee) will administer the Plan including, without
limitation, the selection of the persons who will be granted
options under the Plan, the type of options to be granted, the
number of shares subject to each option and the option price.

     Options granted under the Plan may either be options
qualifying as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended, or options that do not
so qualify (or are not intended to so qualify). Officers,
directors and key employees of and consultants to us and our
subsidiaries will be eligible to receive non-qualified options
under the plan.  Only our officers, directors and employees who
are employed by us or by any of our subsidiaries as "common law
employees" are eligible to receive incentive options.  In
addition, the Plan also allows for the inclusion of a "reload
option" provision, which permits an eligible person to pay the
exercise price of the option, and any withholding taxes that may
be due on the exercise, with shares of common stock owned by the
eligible person and to receive a new option to purchase shares of
common stock equal in number to the tendered shares.  Any
incentive option granted under the Plan must provide for an
exercise price of not less than 100% of the fair market value of
the underlying shares on the date of such grant, but the exercise
price of any incentive option granted to an eligible employee
owning more than 10% of the total combined voting power of all
classes of our common stock or the common stock of any
of our subsidiary companies must be at least 110% of such fair
market value as determined on the date of the grant.

     The term of each option and the manner in which it may be
exercised is determined by the Board of Directors or a committee,
provided that no incentive stock option may be exercisable more
than 3 years after the date of its grant.  The exercise price of
non-qualified options shall be determined by the Board of
Directors or a committee.

     The per share purchase price of shares subject to options
granted under the Plan may be adjusted in the event of certain
changes in our capitalization, but any such adjustment shall not
change the total purchase price payable upon the exercise in full
of options granted under the Plan.

     Incentive stock options are non-assignable and non-
transferable, except by will or by the laws of descent and
distribution and, during the lifetime of the optionee, may be
exercised only by such optionee.  Non-qualified options may be
assignable to the optionee's spouse or children.  If an
optionee's employment is terminated for cause or without the
approval of a committee of the Board of Directors (other than due
to his death or disability), or if an optionee is not our
employee but is a member of our Board of Directors and his
service as a director is terminated for cause, the option granted
will be immediately forfeited.  If the optionee's employment is
terminated for any other reason, option(s) granted to him may be
exercised to the extent provided in the agreement pursuant to
which the option(s) were granted; provided, however, that
incentive stock options must be exercised no later than three
months after the optionee's termination of employment (other than
due to death) and, if the optionee is permanently and totally
disabled within the meaning of Section 22(c)(3) of the Code, the
incentive stock options granted to him lapse to the extent
unexercised on the earlier of the expiration date of the option
or one year following the date of the disability.

     The Board of Directors or a committee may amend, suspend or
terminate the Plan at any time, except that no amendment will be
made which:

           o     increases the total number of shares subject to
     the Plan or changes the minimum purchase price therefor
     (except in either case in the event of adjustments due to
     changes in our capitalization);

           o    without the consent of the optionee, affects
     outstanding options or any exercise right thereunder;

           o    extends the term of any option beyond ten years;
     or

           o    extends the termination date of the Plan.

     Unless the Plan is earlier suspended or terminated by the
Board of Directors, the plan will terminate on the third
anniversary of the Plan's adoption by the Board of Directors.
This termination of the Plan will not affect the validity of any
options previously granted under the Plan.

     The following table sets forth information concerning
option/SAR grants in our fiscal year ended June 30, 2001 to all
individuals serving as (a) our chief executive officer, (b) each
of our four other most highly compensated executive officers
(other than our chief executive officer) at the end of our fiscal
year ended June 30, 2001 whose total annual salary and bonus
exceeded $100,000 for these periods, and (c) up to two additional
individuals, if any, for whom disclosure would have been provided
pursuant to (b) except that the individual(s) were not serving as
our executive officers at the end of our fiscal year ended June
30, 2001:

             Option/SAR Grants in Last Fiscal Year
                       [Individual Grants]
Name           Number of securities Percent of total Exercise or
  Expiration
               Underlying           Options/SARs     base price
  Date
               options/SARs granted granted to        ($/Share)
               (#)                  employees in
                                    fiscal year
Christopher B
  Wood         1,500,000              63%              $1.25
April 30, 2004
               Option shares

Stuart Smith   500,000                21.2%            $1.25
April 30, 2004
               Option shares

There were no options/SARs exercised in our fiscal year ended
June 30, 2001 by the named executive officers.


Employment Agreements
     Bioenvision has entered into employment agreements with each
of its principal executive officers. Pursuant to these
agreements, Bioenvision's executive officers agree to devote all
or a substantial portion of their business and professional time
efforts to the business of Bioenvision as executive officers. The
employment agreements provide for certain compensation packages,
which include bonuses and other incentive compensation. The
agreements also contain covenants restricting the employees from
competing with Bioenvision and its business and prohibiting them
from disclosing confidential information about Bioenvision and
its business.

     On September 1, 1999, we entered into an employment
agreement with Christopher B. Wood, M.D. under which he serves as
Bioenvision's Chairman and Chief Executive Officer. The initial
term of Dr. Wood's employment agreement is two years, with
automatic one-year extensions thereafter unless either party
gives written notice to the contrary. Dr. Wood's agreement
provides for an initial base salary of $180,000, a bonus as
determined by the Board of Directors, life insurance benefits
equal to his annual salary, health insurance and other benefits
currently or in the future provided to key employees of
Bioenvision. If Dr. Wood's employment is terminated for cause of
if he terminates his employment for good reason, he will receive
a lump sum payment in an amount equal to his then current annual
base salary plus his average annual bonus for the preceding two
years.

     On January 1, 2000, we entered into an employment agreement
with Stuart Smith under which he serves as Bioenvision's
Executive Vice President. The initial term of Mr. Smith's
employment agreement is two years, with automatic one-year
extensions thereafter unless either party gives written notice to
the contrary. Mr. Smith's agreement provides for an initial base
salary of $150,000, a bonus as determined by the Board of
Directors, life insurance benefits equal to his annual salary,
health insurance and other benefits currently or in the future
provided to key employees of Bioenvision. If Mr. Smith's
employment is terminated for cause of if he terminates his
employment for good reason, he will receive a lump sum payment in
an amount equal to his then current annual base salary plus his
average annual bonus for the preceding two years.

Director Compensation
     Non-management directors of Bioenvision each receive a
director's fee of $1,000 per meeting for attendance at Board of
Director's meetings, and are reimbursed for actual expenses
incurred in respect of such attendance. Bioenvision does not
separately compensate employees for serving as directors.
Bioenvision does not provide additional compensation for
committee participation or special assignments of the Board of
Directors.


Item 11.  Security Ownership of Certain Beneficial Owners and
Management

     The following table sets forth certain information regarding
ownership of our common stock, as of September 28, 2001 by each
person known to us to own beneficially more than 5% of our
outstanding common stock, by each person who is a director of
Bioenvision, by each person listed in the Summary Compensation
Table and by all directors and officers of Bioenvision as a
group.

     The information contained in the table was furnished by the
persons listed therein to our executive officers.  The
calculations of the percent of shares beneficially owned are
based on 9,048,919 shares of common stock outstanding on
September 28, 2001, at which time there also were outstanding, in
addition, options for 4,854,544 shares of our common stock.
Unless otherwise indicated below, to our knowledge, all persons
and entities listed below have sole voting and investment power
over their shares of Common Stock, except to the extent that
individuals share authority with spouses under applicable law.
Unless otherwise indicated, each entity or person listed below
maintains a mailing address of c/o Bioenvision, Inc. 32
Haymarket, London SW1Y 4TP.  The number of shares of common
stock beneficially owned by each stockholder is determined in
accordance with the rules of the Commission and does not
necessarily indicate beneficial ownership for any other purpose.
Under these rules, beneficial ownership includes those shares of
common stock over which the stockholder exercises sole or shared
voting or investment power.  The percentage ownership of the
outstanding common stock, however, is based on the assumption, in
accordance with the rules of the Commission, that only the person
or entity whose ownership is being reported has converted options
into shares of common stock; that is, shares underlying options
are not included in calculations in the table below for any other
purpose, including for the purpose of calculating the number of
shares outstanding generally.  The table below does not reflect
the right of Ilex Oncology, Inc. to purchase from us $1.0 million
of our common stock at the then applicable market price within 30
days of the completion of the Phase II trial, and an additional
$2.0 million of our common stock at the then applicable market
price within 30 days of submittal to the FDA of the NDA for
clofarabine.

                      Beneficial Ownership       Current
Name and Address       of Common Stock      Percent of Class(1)

Christopher B. Wood (2)   3,800,000               35.8%

Kevin Leech (3) (9)       1,900,000               19.8

Lifescience Ventures
Limited(4)                  887,500                9.8

David Chester(5)            887,500                9.8

Bioaccelerate, Inc.(6)    2,181,816               20.7

Stuart Smith (7)            700,000                7.3

Thomas Nelson(8)            213,750                2.3

All Executive Officers and
Directors as a group (3
persons)                  5,213,750               45.4%


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

(1)  Based on a total of 9,048,919 shares of Common Stock
outstanding as of September 28,  2001, at which time there also
were outstanding, in addition, options for 4,854,544 shares of
our common stock.

(2)  Includes 318,750 shares of Common Stock owned by Julie Wood,
Dr. Wood's spouse, as to which Dr. Wood disclaims any beneficial
interest, and 1,500,000 options which are exercisable at $1.25
for three years from April 30, 2001.

(3)  These shares are owned of record by Phoenix Ventures, a
Jersey trust, to the Company's knowledge, is wholly-owned by
Kevin Leech.

(1)  Lifescience Ventures is owned of record by a Gibraltar
trust.

(2)  These shares are owned of record by General Capital Limited,
a Bermuda corporation which, to the Company's knowledge, is
wholly-owned by David Chester, a private investor.

(3)  Bioaccelerate, Inc. is a BVI corporation, owned of record by
several private investors and includes options to acquire
1,454,544 shares of the Company's common stock which are
exercisable at $1.25 per share for three years from April 30,
2001.

(4)  Includes options to acquire 500,000 shares of the Company's
common stock which are exercisable at $1.25 per share for
three years from April 30, 2001.

(5)  Includes options to acquire 100,000 shares of the Company's
common stock which are exercisable at $1.25 per share for
three years from April 30, 2001.

(6)  Includes 500,000 options which are exerciseable at $1 per
     share for the benefit of Glen Investments Limited, a Channel
     Islands (Jersey) corporation which is wholly owned by Kevin
     Leech.


Item 12.  Certain Relationships and Related Transactions

     In May 1998, Bioheal Limited, a subsidiary of Bioenvision,
entered into an agreement with Christopher B. Wood, our Chairman
of the Board and Chief Executive Officer, to co-develop a gene
marker and immunomodulator system for use in gene therapy and
related technologies. Under the terms of the agreement, Bioheal
was granted the exclusive license to make, use and sell products
derived from technology, and to utilize technical information
related to the technology to obtain patent and other proprietary
rights to products developed by Bioheal and its collaborators
from the technology for a term expiring on the date of expiration
of all current and future patents covered by the agreement,
subject to earlier termination under certain circumstances. In
consideration of the licenses granted to Bioheal, Bioheal agreed
to pay to Dr. Wood, among other things, a royalty of 10% of the
gross sales revenues of all products, less and discounts or
deductions for value-added taxes. In addition, Bioheal has agreed
to pay, among other things, certain costs associated with
pre-clinical development and clinical trials of such products.
Under the terms of the agreement, the pre-clinical costs are not
to exceed $1,500,000, and the clinical trial costs are not to
exceed $4,000,000, unless agreed by both parties.

     In September 1998, Bioenvision granted options to Glen
Investments Limited, a Jersey (Channel Islands) corporation
wholly owned by Kevin R. Leech, a U.K. citizen, to purchase up to
500,000 shares of common stock at an exercise price of $1.00 per
share in exchange for the agreement by Glen Investments to loan
funds to Bioenvision on an as-needed basis based upon previously
agreed budgets.  Mr. Leech is a private investor who is also the
sole owner of Phoenix Ventures Limited, a Guernsey (Channel
Islands) corporation and the holder of approximately 19.8% of our
outstanding shares of common stock.  These options are presently
exercisable.

     In November 2000 Bioenvision issued 272,500 shares of common
stock at $1.00 per share to various consultants for work
performed for and our behalf.  The shares were issued to Andrew
Turner (112,500), David Chester (112,500), and Shane Sutton
(47,500).

     In April 2001, Bioenvision issued 4,154,444 options at an
exercise price of $1.25.  The terms of the options are that each
option can be exercised after 30th April 2001 for a period of
three years, whereby the options will no longer be able to be
exercised after 30th April 2004 unless otherwise agreed with us.

     Of these options, management were issued the following
options:

     Christopher Wood    1,500,000 options
     Stuart Smith        500,000 options
     Thomas Nelson       200,000 options

     In addition, 1,454,444 options were issued to Bioacclerate,
Ltd, a BVI company, of Switzerland, in consideration for
Bioacclerate amending certain provisions of its investment
agreement.  In April 2000, we received a $2,000,000 equity
investment from Bioaccelerate in exchange for the issuance of
727,272 shares of our common stock at a price of $2.75 per share.
The investment agreement, dated March 21, 2000, granted to
Bioaccelerate the option to purchase two further tranches of
727,272 common shares each, also at a price of $2.75 per share,
upon achievement of certain specified milestones, which have not
yet been achieved.  We entered into the superceding arrangement
with Bioaccelerate on April 30, 2001, to replace the outstanding
option and eliminate the additional options in exchange for the
new three-year option to purchase 1,454,544 shares at $1.25 per
share and amending certain other provisions of the investment
agreement.

     Also, we granted to Phoenix Ventures 500,000 options to
purchase shares of our common stock at an exercise price of $1.25
per share.  The options were issued in connection with a credit
facility made available to us by Glen Investments Limited, a
Jersey (Channel Islands) corporation wholly owned by Kevin R.
Leech, a U.K. citizen and one of our shareholders, which facility
was terminated in August 2001.

     In August 2001 Bioenvision issued 208,333 shares at the rate
of $1.25 per share as follows:  Christopher Wood, 98,684 shares;
Thomas Nelson, 27,412 shares; and Stuart Smith, 82,237 shares.

     In August 2001, we obtained a $1 million line of credit
facility, which expires in September 2002, from Jano Holdings
Limited, one of our shareholders.


Item 13.  Exhibits, List and Reports on Form 10-KSB.


Exhibit
Number     Description
-------    -----------

2.1       Acquisition Agreement between Registrant and
          Bioenvision, Inc. dated December 21, 1998 for the
          acquisition of 7,013,897 shares of Registrant's Common
          Stock by the stockholders of Bioenvision, Inc. (1)

3.1       Certificate of Incorporation of Registrant. (2)

3.1a      Amendment to Certificate of Incorporation filed
1/29/99. (3)

3.2       By-Laws of the Registrant. (2)

10.1      Sponsored Research Agreement between Eurobiotech
          Corporation, Ltd. and University of Texas, MD
          Anderson Cancer Center dated February 26, 1998. (3)

10.2      Co-Development Agreement between Bioheal, Ltd. and
          Christopher Wood dated May 19, 1998. (3)

10.3      Co-Development Agreement between Biomed (UK) Ltd. and
          EuroLifesciences, Ltd. dated May 20, 1998.(3)

10.4      Co-Development Agreement between Stegram
          Pharmaceuticals, Ltd. and Bioenvision, Inc. dated July
          15, 1998. (3)

10.5      Co-Development Agreement between Southern Research
          Institute and Eurobiotech Group, Inc. dated
          August 31, 1998. (3)

10.5a     Agreement to Grant License from Southern Research
          Institute to Eurobiotech Group, Inc. dated September
          1, 1998. (3)

10.6      Loan Agreement between Glen Investments Ltd. and
          Bioenvision, Inc. dated September 8, 1998 and
          affirmed July 15, 1999. (3)

10.7      Co-Development and Licensing Agreement between Orion
          Pharmaceuticals Canada and Bioenvision, Inc.
          dated November 1998. (3)

10.8      License Agreement between Bioenvision, Inc. and Royal
          Free and University College Medical School,
          London dated March 11, 1999. (3)

10.9      License Agreement between Bioenvision, Inc. and
          University College Cardiff Consultants Limited dated
          June 21, 1999. (3)

10.10     Research Agreement between Bioenvision, Inc. and
          Cardiff University dated July 8, 1999.(3)

10.11     Employment agreement between Bioenvision, Inc. and
          Stuart Smith dated January 1, 2000. (4)

10.12     Employment Agreement between Bioenvision, Inc. and
          Christopher B. Wood, M.D. dated September 1,
          1999. (4)

10.13     Securities Purchase Agreement with Bioaccelerate Inc
          dated March 24, 2000. (4)

16.1      Letter from Ernst & Young LLP to the Securities and
          Exchange Commission (5)

21.1      Subsidiaries of the Registrant. (4)

_______________________
(1) Incorporated by reference and filed as an Exhibit to
Registrant's Current Report on Form 8-K filed with the SEC on
January 12, 1999.
(2) Incorporated by reference and filed as an Exhibit to
Registrant's Registration Statement on Form 10-12g filed with the
SEC on September 3, 1998.
(3) Incorporated by reference and filed as an Exhibit to
Registrant's Form 10-KSB/A filed with the SEC on October 18,
1999.

(4) Incorporated by reference and filed as an Exhibit to
Registrant's Form 10-KSB filed with the SEC on November 13, 2000.
(5) Incorporated by reference and filed as an Exhibit to
Registrant's Form 8-K/A filed with the SEC on July 26, 2001.

 (b) Reports on Form 8-K.
     (i)  The Company filed a Current Report on Form 8-K with the
          SEC on June 26, 2001.  The following items were
          reported
          in such 8-K:
          1. Item 4.  Change in Registrant's Certifying
                      Accountant.
          2. Item 7.  Financial Statements and Exhibits.
          (a) Letter from Ernst & Young LLP to the SEC (to be
          filed by amendment).

     (ii) The Company filed a Current Report on Form 8-K/A
          with the SEC on July 26, 2001.  The following items
          were reported in such 8-K/A:
          1. Item 4.  Change in Registrant's Certifying
                      Accountant.
          2. Item 7.  Financial Statements and Exhibits.
         (a) Letter from Ernst & Young LLP to the SEC.

<PAGE>
Bioenvision, Inc.
(a development stage company)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Certified Public Accountants        F-2

Consolidated Balance Sheet as of June 30, 2001            F-3

Consolidated Statements of Operations for years           F-4
ended June 30, 2001 and 2000 and period from August
16, 1996(inception) to June 30, 2001

Consolidated Statements of Stockholders Equity and        F-5
Deficit for the period from August 16, 1996(inception)
through June 30, 2001

Consolidated Statements of Cash Flows for years ended     F-6
June 30, 2001 and 2000 and period from August 16, 1996
(inception) through June 30, 2001

Notes to Consolidated Financial Statements                F-7



REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders of Bioenvision, Inc.

We have audited the accompanying consolidated balance sheet of
Bioenvision, Inc. (a development stage Company) as of June 30,
2001, and the related consolidated statements of operations,
stockholders' equity (deficiency), and cash flows for the year
then ended and the 2001 amounts included in the cumulative period
from August 16, 1996 (inception) through June 30, 2001.

These consolidated financial statements are the responsibility of
the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards
generally accepted in the United States of America.  Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements.

An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall consolidated financial statement
presentation.  We believe that our audit provides a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Bioenvision, Inc. and subsidiaries as of June 30,
2001, and the results of their operations and their cash flows
for the year then ended and the 2001 amounts included in the
cumulative period from August 16, 1996 (inception) through June
30, 2001 in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern.  As discussed in Note 1 to the financial statements, the
Company has sustained losses and negative cash flows from
operations since inception, and the Company's ability to obtain
future financing is uncertain.  These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.  Management's plans regarding those matters are
also described in Note 1.  The financial statements do not
include any adjustments to the recoverability and classifications
of asset carrying amounts or the amount and classification of
liabilities that might result from the outcome of this
uncertainty.

GRANT THORNTON LLP
New York, New York
October 11, 2001

<PAGE>
<page>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders

Bioenvision, Inc. (a development stage company)

We have audited the accompanying consolidated statements of
operations, stockholders' equity, and cash flows of Bioenvision,
Inc. (a development stage company) for the year ended June 30,
2000 and for the period from August 16, 1996 (inception) through
June 30, 2000 included in the cumulative period from August 16,
1996 to June 30, 2001.  These financial statements are the
responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on
our audits.

We conducted our audit in accordance with auditing standards
generally accepted in the United States.  Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
results of operations and cash flows Bioenvision, Inc. (a
development stage company) for the year ended June 30, 2000 and
for the period from August 16, 1996 (inception) to June 30, 2000,
in conformity with accounting principles generally accepted in
the United States.

As discussed in Note 1 of the notes to the consolidated financial
statements, the Company's reccurring losses from operations,
working capital deficit and stockholders' deficit raise
substantial doubt about its ability to continue as a going
concern.  Management's plans as to these matters are also
described in Note 1.  The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.


ERNST & YOUNG LLP

November 9, 2000
Reading, England

                            F-2
<PAGE>
Bioenvision, Inc.
(a development stage company)

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                        June 30, 2001
<S>                                    <c>
ASSETS
Current assets:
     Deferred costs                $        337,500
                                        ------------

Total current assets                        337,500

Property, plant and equipment, net           18,097

Other assets:
     Intangible assets, net                  15,698
     Deferred costs                         184,091
     Deferred financing costs               207,500
                                        -------------
                                       $    762,885
                                        =============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
     Bank overdraft                     $   127,241
     Accounts payable                       785,134
     Other accrued liabilities              317,799
     Deferred revenue                       736,364
                                        -------------
Total current liabilities                 1,966,538

Long term liabilities:
     Deferred revenue                      368,182
     Officers' salaries                    910,681
                                        -------------
Total long term liabilities               1,278,863

Stockholders' deficit:
 Common stock, $0.001 par value               8,249
 Authorised:  25,000,000 shares
 Issued and outstanding 8,248,919
 Additional paid in capital               3,165,540
 Accumulated other comprehensive income     152,346
 Deficit accumulated during development
      stage                              (5,808,651)

Total stockholders' deficit              (2,482,516)
                                        -------------
                                         $  762,885
                                        =============
</TABLE>
The accompanying footnotes are an integral part of these
financial statements.

                              F-3

<PAGE>
Bioenvision, Inc.
(a development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                        Year Ended  Year Ended   Period from
                                          June 30,    June 30,  Aug. 16, 1996
                                            2001       2000      (inception)
                                                                  Through
                                                                Jun. 30, 2001
                                      ---------------------------------------

                                  <c>           <c>          <c>
Contract revenue                      $   245,455   $       -    $   280,971
                                      ------------  -----------  ------------

Costs and expenses:
 Research and development               1,565,908     984,460      2,714,618
 General and administrative               550,215     486,627      3,022,299
 Interest and finance charges             228,787      12,778        267,647
 Depreciation and amortization             22,809      11,644         85,058
                                      ------------  -----------  ------------
Total costs and expenses                2,367,719   1,495,509      6,089,622
                                      ------------  -----------  ------------
Net loss                             $(2,122,264) $(1,495,509)   $(5,808,651)
                                      ============  ===========  ============

Basic and diluted net loss per share      ($0.26)      ($0.20)


     Weighted average shares used
     in computing basic and diluted
     basic and diluted net loss per
     share                             8,121,255    7,430,965

</table>

The accompanying footnotes are an integral part of these
financial
statements.

                                     F-4
<PAGE>
Bioenvision, Inc.
(a development stage company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<Table>
<Caption>
                                            Deficit
                                          Accumulated   Accumulated     Total
                                  Addit'l    In the        Other   Stockholders'
                  Common  Stock   Paid in  Development  Comprehensive   Equity
                  Shares  Amount  Capital    Stage     Income (Loss)  (Deficit)
                  No.       $         $         $           $             $
                  -------------------------------------------------------------
<S>              <C>      <C>      <C>       <C>        <C>         <C>
Issuance at
inception         167,899    5,147        -           -          -      5,147
(August 1996)

Issuance of shares
in exchange for    97,348    2,894    26,041          -          -     28,935
cash in October
1996

Shares issued in
November 1996      71,429    4,780    43,027          -          -     47,807
in exchange for
services

Shares issued in
November 1996      21,428    1,433    10,027          -          -     11,460
in exchange for
cash


Shares issued in
January           271,039    3,622    32,579          -          -     36,201
1997 in exchange
for services

Surrender of
1,050,000 shares  (35,247)  (1,013)    1,013          -          -          -
shares of common
stock in January
1997

Shares issued in
April 1997      3,315,000        6         -          -          -          6
on the inception
of Biotechnology
& Healthcare
Ventures Ltd

Shares issued in
April 1997      1,375,000    9,833   158,049          -          -    167,882
on the Inception
of Eurobiotech
Group Inc.

Net loss for
the period              -        -         -    (117,697)        -   (117,697)

Foreign Currency
translation             -        -         -           -   (67,371)   (67,371)
adjustment for the
period                                                              ---------
Comprehensive loss
for the                 -        -         -           -         -   (185,068)
period        ---------------------------------------------------------------


Balance at 30
June 1997       5,283,896   26,702   270,736   (117,697)   (67,371)   112,370

Stock issued on
the acquisition   300,000        3         -          -          -          3
acquisition of
Biomed UK Ltd
in May 1998

Stock issued on
the acquisition   535,000        3         -          -         -           3
acquisition of
Bioheal Ltd in
May 1998

Net loss for
the year              -          -         - (1,259,826)        -  (1,259,826)

Foreign currency
translation           -          -         -          -    59,886      59,886
adjustment for
the year                                                          -----------

Comprehensive loss
for the               -          -         -          -        -   (1,199,940)
year          ---------------------------------------------------------------

Balance at
30 June 1998  6,118,896     26,708   270,736 (1,377,523)  (7,485)  (1,087,564)

Shares issued
on the        1,125,000      1,212    25,199          -        -       26,411
purchase of
the minority
interest in
Eurobiotech
Group Inc. in
September 1998

Issuance of
shares in         5,250          5     9,263          -        -        9,268
exchange for
services in
April 1999

Net loss for the
year                 -           -         -   (813,355)        -    (813,555)

Foreign currency
translation          -           -         -          -    86,811      86,811
adjustment for
the year                                                            -----------

Comprehensive loss
for the              -           -         -          -         -    (726,544)
year            ---------------------------------------------------------------

Balance as at
30 June 1999 7,249,146      27,925   305,198 (2,190,878)   79,326  (1,778,429)

Shares issued
in March 2000  727,273         727 1,999,273          -         -   2,000,000
in exchange
for cash

Contribution of
rent                 -           -    28,665          -         -      28,665

Net loss for
the year             -           -         - (1,495,509)        -  (1,495,509)

Foreign Currency
translation          -           -         -          -    41,681      41,681
adjustment for
the year                                                           ------------

Comprehensive loss
for the              -           -         -          -         -  (1,453,828)
year            ---------------------------------------------------------------

Balance as at
30 June 2000 7,976,419      28,652 2,333,136 (3,686,387)  121,007  (1,203,592)

Adjustments to
par value at         -     (20,676)   20,676
beginning of year

Common stock
issued to      272,500         273   272,228          -         -     272,500
consultants

Compensation
related to                           124,500                          124,500
stock options
issued to non-
employees

Finance charge
related to                           415,000                          415,000
stock options
issued to
Phoenix Ventures

Net loss for
the year                                      (2,122,264)       -  (2,122,264)

Foreign currency
translation           -        -           -               31,339      31,339
                                                                  ------------
Total
Comprehensive loss                                                 (2,090,925)
              ----------------------------------------------------------------
Balance at
June 30, 2001 8,248,919   $8,249  $3,165,540 $(5,808,651)$152,346 $(2,482,516)
              ===============================================================
</TABLE>

The accompanying footnotes are an integral part of these
financial statements.

                                      F-5
<PAGE>
Bioenvision, Inc.
(a development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                        Year Ended  Year Ended   Period from
                                          June 30,    June 30,  Aug. 16, 1996
                                            2001       2000      (inception)
                                                                   through
                                                                Jun. 30, 2001
                                      ---------------------------------------

                                  <c>           <c>          <c>

Cash flows from operating activities:
Net loss                              $(2,122,264)  $(1,495,509) $(5,808,651)


Adjustments to reconcile net loss to
   net cash used in operating activities:
Depreciation and amortization              22,809        11,644       85,058
Financing costs---non-cash                207,500                    207,500
Gain on sale of fixed assets                   --        (8,228)      (8,228)
Provision of free rent                         --        28,665       28,665
Compensation cost for options
   issued to non-employees                124,500                    124,500
Compensation cost for shares
   issued to non-employees                272,500                    365,776
Changes in assets and liabilities, net:
  Accounts receivable                      75,695       (78,649)     (11,750)
  Deferred costs                         (521,589)           --     (521,589)
  Deferred revenue                      1,104,545            --    1,104,545
  Accounts payable                       (268,405)     (412,080)     789,216
  Officers' salaries for equity
       conversion                         910,681                    910,681
  Other accrued expenses and liabilities   37,193            --       37,193
                                       -----------     ---------   ----------

Net cash used in operating activities    (156,835)   (1,954,157)  (2,697,084)

Cash flows from investing activities:
Capital expenditures, net                  (1,760)      (51,473)    (165,596)
Proceeds from sale of fixed assets, net        --        63,089       63,089
Purchase of intangible assets                 --             --      (24,500)
                                       -----------     ---------   ----------
Net cash (used in) provided by
   investing activities                    (1,760)       11,616     (127,007)

Cash flows from financing activities:
Bank overdraft                            127,241                    127,241
Proceeds from issuance of common stock         --     2,000,000    2,268,512
Other liabilities--related party                        (57,034)     292,317
                                       -----------     ---------   ----------
Net cash provided by
   financing activities                   127,241     1,942,966    2,688,070

Effect of exchange rate on cash            31,339          (426)     136,021
                                       -----------     ---------   ----------
Net decrease in cash and cash
   equivalents                                (15)           (1)           0

Cash and cash equivalents,
   beginning of period                         15            16            0
                                       -----------     ---------   ----------
Cash and cash equivalents,
   end of period                         $      0      $     15      $     0
                                       ============    ==========  ==========
Supplemental disclosure of
cash flow information
Interest paid                             $21,287       $12,778     $119,295

</table>

The accompanying footnotes are an integral part of these
financial statements.


                                    F-6
Bioenvision, Inc.
(a development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Organization and significant accounting policies

Description of business

Bioenvision, Inc. ("Bioenvision" or the "Company") is a
development stage, biopharmaceutical company primarily focused in
the research and development of products and technologies for the
treatment of cancer.  The Company has acquired development and
marketing rights to a portfolio of four platform technologies.
These platforms have resulted in the development of the Company's
two (2) leading products, Modrenal  and clofarabine, as well as
12 other products which are in various stages of development.

The Company was incorporated as Express Finance, Inc. under the
laws of the State of Delaware on August 16,1996, and changed its
name to Ascot Group, Inc. in August 1998 and further to
Bioenvision, Inc. in December 1998.

Basis of presentation


In January 1999 the Company merged with Bioenvision, Inc, ('Old
Bioenvision') a development stage Company primarily engaged in
the research and development of products and technologies for the
treatment of cancer.  The transaction was accounted for as a
reorganization of companies under common control in a manner
similar to a pooling of interests as they had a common majority
shareholder.

In September 1998, Old Bioenvision merged with Eurobiotech Group,
Inc., a development stage company involved in the research and
development of products and technologies for the treatment of
cancer.  The transaction was accounted for as a combination of a
reorganization of companies under common control in a manner
similar to a pooling as they had a common majority shareholder,
and the purchase of a minority interest.

In July 1998, Old Bioenvision merged with Biotechnology &
Healthcare Ventures, Limited, ('BHV') a development stage company
involved in the research and development of products and
technologies for the treatment of cancer.  The transaction was
accounted for as a reorganization of companies under common
control in a manner similar to a pooling of interests as they had
a common majority shareholder.

                               F-7
BHV acquired Bioheal Limited and Biomed UK Limited in May 1998,
both of which are development stage companies involved in the
research and development of products and technologies for the
treatment of cancer.  Both of the transactions were accounted for
as purchases and the results of Biomed UK Limited and Bioheal
Limited have been included in the financial statements of BHV
from the date of acquisition.

Where mergers have been accounted for as reorganizations under
common control in a manner similar to a pooling of interests, no
fair value have been attributed to any tangible or intangible
assets, including technology rights.


Operations to date and financing plans

The Company has incurred significant losses from operations and
is not generating cash from operations.  The Company also had a
working capital deficit and stockholders' deficiency as of June
30, 2001 of $1,629,038 and $2,482,516, respectively.  These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.  Operations to date have been funded
principally by equity capital and loans.  The Company's ability
to continue to develop and implement its business strategy
depends on its ability to obtain additional capital. The Company
plans to continue to fund its development expenses through
additional capital raising activities, including one or more
offerings of equity and/or debt through private placements and/or
public offerings.  The Company is also actively seeking strategic
alliances in order to develop and market its range of products.
In November 2000, the Company obtained a financing facility for
up to $2 million, from a major shareholder, Kevin Leech, which
would be available through November 30, 2001.  The facility was
terminated in August, 2001 and replaced by similar facility with
Jano Holding (reference is made to Note 10,  Subsequent events).
In addition, the Company's officers and former outside counsel
have agreed to defer salaries and certain fees, respectively,
until sufficient long-term funding has been obtained by the
Company.  Deferred salaries and fees amounted to approximately
$1,031,698 through June 30, 2001. The Company's officers agreed
to accept shares in settlement of $910,681 of the outstanding
accrued salaries.  The shares were not yet issued as of June 30,
2001.  At June 30,2001, the balance due officers of $121,017 is
included in accrued liabilities in the accompanying balance
sheet, $910,681 in long term liabilities.

                               F-8

<PAGE>
The Company's management believes that the anticipated equity
financing, the $1 million credit facility, and the deferral of
the officers' salaries and of legal fees, will enable the Company
to meet its cash requirements at least until June 30, 2002.
However, if the additional equity funding does not occur as
anticipated, the Company's management believes that the Company
will be able to reduce its rate of expenditures in order to meet
cash requirements at least until June 30, 2002; however, the
Company's management believes that if there were to be any such
reduction, the Company's development strategy would be delayed
and the Company's marketing campaign for Modrenal  would be
curtailed or delayed.  There can be no assurances that these
plans will be successfully implemented.

Principles of consolidation
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries.
Inter-company accounts and transactions have been eliminated.

Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles of the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date
of the financial statements as well as the reported amounts of
revenues and expenses during the reporting period.   Actual
results could differ from those estimates, and such differences
may be material to the financial statements.

Revenue Recognition
Non-refundable up-front payments received in connection with
research and development collaboration agreements are deferred
and recognized on a straight-line basis over the relevant periods
in the agreement, generally the research or development period.
Milestone and royalty payments, if any, are recognized
pursuant to collaborative agreements upon the achievement of the
specified milestones or sales transaction.

Research and development
Research and development costs are charged to expense as
incurred.

Stock based compensation
In accordance with the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation, the Company applies Accounting Principles Board
Opinion 25 and related interpretations in accounting for its
stock option plan and, accordingly, does not recognize

                              F-9

compensation expense for employee stock options granted with
exercise prices equal to or greater than fair market value. Note
9 to the financial statements contains a summary of the pro-forma
effects to reported net loss and loss per share for 2001 as if
the Company had elected to recognize compensation expense based
on the fair value of the options granted at grant date as
described by SFAS No.123 non-employee stock-based compensation
arrangements are accounted for in accordance with the provisions
of SFAS No. 123 and Emerging Issues Task Force No. 96-18,
Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or
Services.  Under EITF No. 96-18 where the fair value of the
equity instrument is more reliably measurable than the fair value
of services received, such services will be valued based on the
fair value of the equity instrument.

Income taxes
The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (FAS 109).  Under FAS 109, deferred tax assets and
liabilities are determined based on the differences between the
financial reporting and tax bases of assets and liabilities and
are measured using the enacted tax rates that will be in effect
when the differences are expected to reverse.

Net loss per share
Basic net loss per share is computed using the weighted average
number of common shares outstanding during the periods.  Diluted
net loss per share is computed using the weighted average number
of common shares and potentially dilutive common shares
outstanding during the periods.  Options to purchase 4,854,444
shares of common stock have not been included in the calculation
of net loss per share as their effect would have been anti-
dilutive.

Foreign currency translation
The functional currency of the Company is the pound sterling and
its reporting currency is the United States dollar.  Assets and
liabilities are translated at year-end rates and income and
expenses and cash flows are translated at average rates
prevailing
during the period.  Translation adjustments arising from
differences in exchange rates from period to period have been
reported as other comprehensive income or loss in stockholders'
equity (deficit).

                                   F-10
Advertising costs
Costs related to advertising and other promotional expenditures
are
expensed as incurred.  Advertising costs totaled $0 for the year
ended June 30, 2001 and 2000.

Deferred costs
Payments for certain royalties incurred pursuant to collaborative
agreement are  recognized as deferred charges and amortized to
research and development costs, ratably on a straight-line basis
over the applicable development periods.

Property, plant and equipment
Property, plant and equipment are stated at cost, net of
accumulated depreciation and amortization.  Property, plant and
equipment are depreciated on a straight-line basis over an
estimated three year useful life for book and tax.

Intangible assets
Intangible assets consist of acquired development and marketing
rights to platform technologies.  Acquired development and
marketing rights are stated at their cost less accumulated
amortization.  Amortization is provided on a straight-line basis
over 10 years.

Cash and cash equivalents
The Company considers all highly liquid financial instruments
with a maturity of three months or less when purchased to be cash
equivalents.

Impact of recently issued accounting pronouncements
On July 20, 2001, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) 141,
Business Combinations, and SFAS 142, Goodwill and Intangible
Assets.  SFAS 141 is effective for all business combinations
completed after June 30, 2001, SFAS 142 is effective for fiscal
years beginning after December 15, 2001; however, certain
provisions of this Statement apply to goodwill and other
intangible assets acquired between July 1, 2001 and the effective
date of SFAS 142.  Major provisions of these Statements and their
effective dates for the Company include:

        All business combinations initiated after June 30, 2001
        must use the purchase method of accounting.

        Intangible assets acquired in a business combination must
        be recorded separately from goodwill if they arise from
        contractual or other legal rights or separable from the

                                 F-11


        acquired entity and can be sold, transferred, licensed,
        rented or exchanged, either individually or as part of a
        related contract, asset or liability.

        Goodwill, as well as intangible assets with indefinite
        lives, acquired after June 30, 2001, will not be
        amortized.  All previously recognized goodwill and
        intangible assets with indefinite lives will no longer be
        subject to amortization.

        Effective July 1, 2002, goodwill and intangible assets
        with indefinite lives will be tested for impairment
        annually and whenever there is an impairment indicator.

The Company does not believe that these statements will have a
material affect on the Company's financial statements.

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


2.     Property, plant and equipment

Property, plant and equipment consists of the following:



                                          June 30, 2001

Office equipment                           $    4,303
Motor vehicles                                 36,603
                                            ----------
                                               40,906

Less:  accumulated depreciation                22,809
                                            ----------
                                              $18,097
                                            ==========

                                 F-12
<PAGE>
3.   INTANGIBLE ASSETS
                                           June 30, 2001

Purchased technology                          $19,622
Less:  accumulated amortization                 3,924
                                            ----------
                                              $15,698
                                            ==========

4.  License and co-development agreements

Ilex Oncology, Inc
The Company entered into a Co-Development Agreement with Ilex
Oncology, Inc. ("Ilex") on March 9, 2001 for the development of
clofarabine.  Under the terms of the co-development agreement,
Ilex is required to pay all development costs in the United
States and Canada, and 50% of approved development costs
worldwide outside the U.S. and Canada (excluding Japan and
Southeast Asia).  Ilex is responsible for conducting all clinical
trials and the filing and prosecution of applications with
applicable regulatory authorities in the United States and
Canada.  The Company retains the right to handle those matters in
all territories outside the United States and Canada (excluding
Japan and Southeast Asia).  The Company retained the exclusive
manufacturing and distribution rights in Europe and elsewhere
worldwide, except for the United States, Canada, Japan and
Southeast Asia.  The Company has agreed to pay Ilex a royalty on
sales outside the U.S., Canada, Japan and Southeast Asia.  Ilex,
which has U.S. and Canadian distribution rights, will pay the
Company a royalty on sales in the U.S. and Canada.  In addition,
the Company is entitled to certain milestone payments.  The
Company also granted Ilex an option to purchase $1 million of
Common Stock after completion of the pivotal Phase II clinical
trial, and Ilex has an additional option to purchase $2 million
of Common Stock after the filing of a new drug application in the
United States for the use of clofarabine in the treatment of
lymphocytic leukemia.  The exercise price per share for each
option is determined by a formula based around the date of
exercise.  Under the co-development agreement, Ilex also pays
royalties to Southern Research Institute based on certain
milestones.  The Company continues to pay royalties to Southern
Research Institute in respect to clofarabine.


Southern Research Institute
The Company has an agreement with Southern Research Institute,
Birmingham, Alabama, to co-develop purine nucleoside analogs


                                 F-13


which, based on third-party studies conducted to date, may be
effective in the treatment of leukemia and lymphoma. Under the
terms of a co-development agreement with Southern Research
Institute, the Company has been granted the exclusive worldwide
license, excluding Japan and Southeast Asia, to make, use and
sell products derived from the technology for a term expiring on
the date of expiration of the last patent covered by the license
(subject to earlier termination under certain circumstances), and
to utilize technical information related to the technology to
obtain patent and other proprietary rights to products developed
by the Company and by Southern Research Institute from the
technology.  The lead compound of these purine-based nucleosides
is known as clofarabine.

Deferred revenue
As of June 30, 2001, the Company reported deferred revenue of
$1,104,546 related to the contract with Ilex Oncology Inc. The
Company is amortizing the deferred revenue, and recognizing
revenues ratably, on a straight-line basis concurrent with
certain development activities described in the contract, through
December 2002.

Deferred costs
Deferred costs represents royalty payments that became due and
payable upon the Company's execution of the co-development
agreement with Ilex Oncology.  Since the revenue related to the
co-development agreement will be realized over the life of the
agreement, the Company has deferred the costs related to the Ilex
agreement.  The Company will amortize such costs ratably, on a
straight-line basis concurrent with development activities
through December 2002.  As of June 30, 2001, the Company has
deferred costs of $521,590.


5.   Rent expense
The Company uses office space provided by its financial advisors
for its executive offices at a cost of $4,000 per month in the
United States and at a cost of 3,000 pounds per month in the
United Kingdom on a month-to-month agreement.

Rent expenses for the fiscal year ended June 30, 2001 totaled
approximately $110,000.


                                   F-14
<PAGE>
6.   Income taxes
The Company accounts for income taxes pursuant to Statement of
Financial Accounting Standards No.109, "Accounting for Income
Taxes."  SFAS No. 109 requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of
events that have been included in the financial statements or tax
returns.  Under this method, deferred tax assets and liabilities
are determined based on the differences between the financial
reporting and tax bases of assets and liabilities using enacted
tax rates in effect for the year in which the differences are
expected to reverse.  Future tax benefits, such as operating loss
carry forwards, are recognized to the extent that realization of
these benefits is considered more likely than not.  As of June
30, 2001, the Company has not filed certain of its corporate
income tax returns.


7.Stockholders' transactions
In January 1997, the Board of Directors and Stockholders approved
a 1 for 1.986 reverse split of the Company's common stock and in
January 1999 effected a 1 for 15 reverse stock split. All share
and per share amounts in the accompanying financial statements
have been adjusted for these stock splits retroactively.

Under an agreement between the Company and Bioaccelerate Inc, a
BVI company, of Switzerland, dated March 21, 2000, Bioaccelerate
purchased 727,273 common shares of the Company at $2.75 per
share.  The agreement also provided Bioaccelerate options to
purchase two further tranches of 727,272 common shares each at
$2.75 per share upon certain specified milestones being achieved.
The specified milestones have not yet been achieved.  In April
2001, Bioaccelerate amended certain provisions of its investment
agreement with the Company, including eliminating the outstanding
option and the right to purchase additional options upon
achievement of milestones and, in consideration, received
1,454,444 options to purchase shares of the Company's common
stock.

In December 2000, the Company issued 272,500 shares of common
stock to outside consultants.  Consultants expense of $272,500
based on the fair value of the Company's stock trading at $1.00
at the time the shares were issued has been recognized in the
Company's financial statements.

In May 2001, the Company's officers agreed to convert $910,681 of
the outstanding deferred salaries into 705,954 shares of the
Company's common stock.  The shares were not issued as of June
30, 2001; accordingly the amount is recorded as a non-current
liability.
                                  F-15
8.   Related party transactions
On September 8, 1998 the Company entered to an agreement with
Glen Investments Limited, a Jersey (Channel Islands) corporation
wholly owned by Kevin R. Leech, whereby Glen Investments agreed
to loan funds to the Company on an as-needed basis based upon
previously agreed budgets.  Mr. Leech is a private investor who
is also the sole owner of Phoenix Ventures Limited, a Guernsey
(Channel Islands) corporation and the holder of approximately 19%
of the outstanding shares of common stock of the Company.  The
loan facility was not utilized during the year and was terminated
in August 2001.

Included in accounts payable and accrued liabilities are interest
free loans payable to Christopher B. Wood, the Company's Chairman
of the Board and Chief Executive Officer, amounting to $124,405
as of June 30, 2001.

In May 1998, Bioheal Limited, a subsidiary of Bioenvision,
entered into an agreement with Mr. Wood to co-develop a gene
marker and immunomodulator system for use in gene therapy and
related technologies.  Under the terms of the agreement, Bioheal
was granted the exclusive license to make, use and sell products
derived from technology, and to utilize technical information
related to the technology to obtain patent and other proprietary
rights to products developed by Bioheal and its collaborators
from the technology for a term expiring on the date of expiration
of all current and future patents covered by the agreement,
subject to earlier termination under certain circumstances.  In
consideration of the licenses granted to Bioheal, Bioheal agreed
to pay to Dr. Wood, among other things, a royalty of 10% of the
gross sales revenues of all products, less and discounts or
deductions for value-added taxes.  In addition, Bioheal has
agreed to pay, among other things, certain costs associated with
pre-clinical development and clinical trials of such products.
Under the terms of the agreement, the pre-clinical costs are not
to exceed $1,500,000, and the clinical trial costs are not to
exceed $4,000,000, unless agreed by both parties


9.   Stock options
The Company has adopted it's 2001 Stock Option Plan (the "Plan")
on April 30, 2001.  The purchase price of stock options under the
Plan is determined by the Compensation Committee of the Board of
Directors of the Company (the "Committee").  The term is fixed by
the Committee, but no incentive stock option is exercisable after
3 years from the date of grant.

                                 F-16
In April 2001, in accordance with the terms of the Company's
stock option plan, the Company issued a total of 2,200,000
options to employees at an exercise price of $1.25 per option
share and which immediately vested.  The terms of the options are
that each option can be exercised after April 30, 2001 for a
period of three years, whereby the options will no longer be able
to be exercised after April 30, 2004 unless otherwise agreed with
the Company.

A summary of the Company's stock option activity for options
issued to employees and related information for the year ended
June 30, 2001 follows:



                                         2001

                                  Common     Option
                                  Stock     Exercise
                                  Options     Price
                                 ---------  --------

     Outstanding at beginning
          of year................        0      n/a
          Granted................2,200,000    $1.25
     Exercised..............             0
     Canceled...............             0
     Outstanding at end of
     year...................     2,200,000
     Exercisable at end of
     year...................     2,200,000
     Weighted average fair
     value of options
     granted during the
     year...................                  $0.83


The Company accounts for stock-based compensation in accordance
with the provisions of APB No. 25.  Had compensation expense been
determined based on the fair value of the options at the grant
dates, as prescribed in SFAS No. 123, the Company's results would
have been as follows:

                              Year ended June 30, 2001
Net loss as reported                $ (2,122,264)
Pro forma net loss                  $ (3,948,264)


                                 F-17
In April 2001, in connection with the $2,000,000 loan facility
outstanding with Kevin Leech, the Company granted to Phoenix
Ventures 500,000 options to purchase shares of the Company's
common stock at an exercise price of $1.25.  The options
immediately vested and expire in April 2004.  These options
resulted in a finance charge of $415,000 being recorded and
amortized over the remaining life of the loan facility that
expired August 2001.

In April 2001, the Company granted 150,000 options to two
consultants in exchange for certain services received to purchase
shares of the Company's common stock at any exercise price of
$1.25 per share.  The options expire in April 2004 and are
immediately vested.  The issuance of these options resulted in a
charge to consulting expenses of $124,500 in the Company's
financial statements.


10.  Subsequent events

On August 20, 2001 the Company entered into a (3) three year
agreement with Dana-Farber / Partners Cancer Care, Inc.,
(DF/PCC).  The agreement calls for DF/PCC to conduct a clinical
study of trilostone.  The Company holds an exclusive license,
until the expiry of existing and new patents related to
trilostone, to market trilostone in major international
territories, and an agreement with a U.K. company to co-develop
trilostone for other therapeutic indications.  The DF/PCC study
will be a Phase II study of trilostone for androgen   independent
prostate cancer.  The Company has agreed to provide DF/PCC with a
$40,000 grant in support of the study.

In August 2001, the Company entered into an agreement with Jano
Holdings Limited ("Jano"), whereby Jano made available to the
Company a $1,000,000 unsecured facility-bearing interest at a
rate of 8% per annum.  Jano Holdings Limited is a shareholder of
the Company.  The facility expires in September 2002.  As of
October 2001, the Company had utilized $143,000 of the facility.

                                F-18

<PAGE>
                             SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

BIOENVISION, INC.
By  /s/ Christopher B. Wood, M.D.
---------------------------------
Christopher B. Wood, M.D.
Chairman and Chief Executive Officer


Each person whose signature appears below hereby constitutes and
appoints either Christopher B. Wood, M.D. or Thomas S. Nelson,
C.A. his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and
all amendments to this report, and to file the same, with
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying all
that said attorney-in-fact and agent or his substitute or
substitutes, or any of them, may lawfully do or cause to be done
by virtue hereof.  In accordance with the requirements of the
Exchange Act, this report has been signed by the following
persons in the capacities and on the dates indicated.


Signature                   Title                   Date

/s/ Christopher B. Wood, M.D.
Christopher B. Wood, M.D.   Chairman and            Oct. 15, 2001
                            Chief Executive
                            Officer and Director
                            (Principal Executive Officer)

/s/ Thomas S. Nelson, C.A.
Thomas S. Nelson, C.A.      Chief Financial Officer Oct. 15, 2001
                            and Director
                            (Principal Financial Officer
                            and Accounting Officer)

/s/ Stuart Smith, P . D.
Stuart Smith, Ph. D.        Senior Vice President,  Oct. 15, 2001
                            Secretary and Director