<Page>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2001

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from ____ to ____

                        Commission File Number: 000-30289

                      PRAECIS PHARMACEUTICALS INCORPORATED
             (Exact name of registrant as specified in its charter)

           Delaware                                   04-3200305
 (State or other jurisdiction of                    (I.R.S. Employer
  incorporation or organization)                    Identification No.)

                    830 Winter Street, Waltham, MA 02451-1420
              (Address of principal executive offices and zip code)

                                 (781) 795-4100
              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

As of July 31, 2001, there were 50,950,258 shares of the registrant's common
stock, $.01 par value, outstanding.


<PAGE>




                      PRAECIS PHARMACEUTICALS INCORPORATED
                                    FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 2001

                                      INDEX

<Table>
<Caption>
                                                                                                     PAGE
                                                                                                   NUMBER
<S>                  <C>                                                                           <C>
PART I.              FINANCIAL INFORMATION                                                              3

Item 1.              Financial Statements                                                               3

                     Condensed Consolidated Balance Sheets - December 31,
                     2000 and June 30, 2001 (unaudited)                                                 3

                     Condensed Consolidated Statements of Operations (unaudited)
                     - three and six months ended June 30, 2000 and 2001                                4

                     Condensed Consolidated Statements of Cash Flows (unaudited)
                     - six months ended June 30, 2000 and 2001                                          5

                     Notes to Condensed Consolidated Financial Statements                               6

Item 2.              Management's Discussion and Analysis of Financial Condition
                     and Results of Operations                                                          9

Item 3.              Quantitative and Qualitative Disclosures About Market Risk                        23

PART II.             OTHER INFORMATION                                                                 24

Item 2.              Changes in Securities and Use of Proceeds                                         24

Item 4.              Submission of Matters to a Vote of Security Holders                               24

Item 6.              Exhibits and Reports on Form 8-K                                                  25

SIGNATURE                                                                                              26

EXHIBIT INDEX                                                                                          27
</Table>

                                 Page 2 (of 27)
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.


                      PRAECIS PHARMACEUTICALS INCORPORATED
                      Condensed Consolidated Balance Sheets
                 (In thousands, except share and per share data)

<TABLE>
<CAPTION>

                                                                                   December 31,        June 30,
                                                                                   2000                  2001
                                                                               --------------       ---------------
                                                                                                     (unaudited)
<S>                                                                         <C>                   <C>

ASSETS
Current assets:
    Cash and cash equivalents ...............................................      $132,207            $200,266
    Marketable securities....................................................            --              82,264
    Accounts receivable .....................................................         1,079                 499
    Refundable income taxes..................................................         4,853               4,795
    Unbilled revenue ........................................................         1,493               1,403
    Prepaid expenses and other assets .......................................           786               1,408
                                                                               ------------       -------------

          Total current assets ..............................................       140,418             290,635

Property and equipment, net .................................................        53,821              69,900
Other assets.................................................................         1,332                 551
                                                                               ------------       -------------

          Total assets ......................................................      $195,571            $361,086
                                                                               ============       =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable ........................................................       $12,834             $18,466
    Accrued expenses ........................................................         7,142               7,894
    Deferred revenue ........................................................         4,709               2,435
                                                                               ------------       -------------

          Total current liabilities .........................................        24,685              28,795
Deferred revenue ............................................................           355                 275
Long-term debt...............................................................        24,000              33,000

Commitments and contingencies

Stockholders' equity:
    Preferred Stock, $0.01 par value; 10,000,000 shares authorized;
        no shares issued and outstanding ....................................            --                  --
    Common Stock, $0.01 par value; 200,000,000 shares
        authorized; 42,284,199 shares in 2000 and 50,933,410 shares
        in 2001 issued and outstanding ......................................           423                 509
    Accumulated other comprehensive income ..................................            --                  22
    Additional paid-in capital ..............................................       175,937             353,158
    Accumulated deficit .....................................................       (29,829)            (54,673)
                                                                               ------------       -------------

          Total stockholders' equity ........................................       146,531             299,016
                                                                               ------------       -------------

              Total liabilities and stockholders' equity ....................      $195,571            $361,086
                                                                               ============       =============
</TABLE>


SEE ACCOMPANYING NOTES.

                                 Page 3 (of 27)

<PAGE>


                       PRAECIS PHARMACEUTICALS INCORPORATED
                 Condensed Consolidated Statements of Operations
                 (In thousands, except share and per share data)
                                   (unaudited)


<TABLE>
<CAPTION>

                                                      Three Months Ended                          Six Months Ended
                                                          June 30,                                    June 30,
                                                  --------------------------                 --------------------------
                                                    2000               2001                   2000               2001
                                                  --------          --------                 --------          --------
<S>                                            <C>                 <C>                         <C>                <C>

Revenues:
    Corporate collaborations................     $  9,972         $   3,167                 $  18,973        $   5,749
                                                 --------         ---------                 ---------        ---------
          Total revenues....................        9,972             3,167                    18,973            5,749

Costs and expenses:
    Research and development................       12,389            14,504                    23,665           26,714
    Sales and marketing.....................          311             3,280                       586            6,379
    General and administrative..............        1,472             1,383                     2,591            2,977
                                                 --------         ---------                 ---------        ---------
        Total costs and expenses............       14,172            19,167                    26,842           36,070
                                                 --------         ---------                 ---------        ---------

Operating loss..............................       (4,200)          (16,000)                   (7,869)         (30,321)

Interest income, net........................        2,148             3,003                     3,442            5,477
                                                 --------         ---------                 ---------        ---------

Loss before income taxes....................       (2,052)          (12,997)                   (4,427)         (24,844)
Provision for income taxes..................         --                --                         100             --
                                                 --------         ---------                 ---------        ---------

Net loss....................................     $ (2,052)        $ (12,997)                 $ (4,527)       $ (24,844)
                                                 ========         =========                 =========        =========

Net loss per share:
   Basic....................................     $  (0.07)        $   (0.26)                 $  (0.25)       $   (0.51)
                                                 ========         =========                 =========        =========
   Diluted..................................     $  (0.07)        $   (0.26)                 $  (0.25)       $   (0.51)
                                                 ========         =========                 =========        =========

Weighted average number of common
   shares:
   Basic....................................   29,990,086        50,850,159                18,400,705       48,463,178
   Diluted..................................   29,990,086        50,850,159                18,400,705       48,463,178

Pro forma net loss per share:
   Basic....................................     $  (0.05)        $   (0.26)                 $  (0.13)       $   (0.51)
                                                 ========         =========                 =========        =========
   Diluted..................................     $  (0.05)        $   (0.26)                 $  (0.13)       $   (0.51)
                                                 ========         =========                 =========        =========

Pro forma weighted average number
   of common shares:
   Basic....................................   38,713,639        50,850,159                35,566,406       48,463,178
   Diluted..................................   38,713,639        50,850,159                35,566,406       48,463,178
</TABLE>


SEE ACCOMPANYING NOTES.

                                 Page 4 (of 27)

<PAGE>


                      PRAECIS PHARMACEUTICALS INCORPORATED
                 Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (unaudited)


<TABLE>
<CAPTION>

                                                                           SIX MONTHS ENDED
                                                                                JUNE 30,
                                                                      ----------------------------
                                                                         2000              2001
                                                                      ------------       ---------
<S>                                                                <C>                 <C>

OPERATING ACTIVITIES:
Net loss.......................................................       $ (4,527)        $ (24,844)
Adjustments to reconcile net loss to cash used in
operating activities:
   Depreciation and amortization...............................          1,293             1,046
   Stock compensation..........................................          1,238              (449)
   Changes in operating assets and liabilities:
      Accounts receivable......................................          4,661               580
      Refundable income taxes..................................             --                58
      Unbilled revenue.........................................          1,344                90
      Materials inventory......................................         (8,857)               --
      Prepaid expenses and other assets........................         (4,466)              159
      Accounts payable.........................................         (3,558)            5,632
      Accrued expenses.........................................          1,085               752
      Deferred revenue.........................................         (2,384)           (2,354)
      Advance payments.........................................          8,857                --
      Income taxes payable.....................................         (4,672)               --
                                                                     ---------         ---------

Net cash used in operating activities..........................         (9,986)          (19,330)

INVESTING ACTIVITIES:
Purchase of available-for-sale securities......................             --          (119,846)
Sales or maturities of available-for-sale securities...........             --            37,604
Purchase of property and equipment.............................         (1,677)          (17,125)
                                                                     ---------         ---------

Net cash used in investing activities..........................         (1,677)          (99,367)

FINANCING ACTIVITIES:
Net follow-on offering proceeds................................             --           175,892
Net initial public offering proceeds...........................         84,263                --
Proceeeds from debt issuance...................................             --             9,000
Proceeds from exercises of common stock, options and warrants              845             1,864
Principal repayments of capital lease obligations..............            (39)               --
                                                                     ---------         ---------

Net cash provided by financing activities......................         85,069           186,756
                                                                     ---------         ---------

Net increase in cash and cash equivalents......................         73,406            68,059
Cash and cash equivalents, beginning of period.................         94,525           132,207
                                                                     ---------         ---------

Cash and cash equivalents, end of period.......................       $167,931          $200,266
                                                                     =========         =========
</TABLE>

SEE ACCOMPANYING NOTES.

                                 Page 5 (of 27)

<PAGE>


                      PRAECIS PHARMACEUTICALS INCORPORATED
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.  BASIS OF PRESENTATION

       The accompanying condensed consolidated financial statements have been
prepared by PRAECIS PHARMACEUTICALS INCORPORATED (the "Company") in accordance
with generally accepted accounting principles and pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC"). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. It is suggested
that the financial statements be read in conjunction with the audited financial
statements and the accompanying notes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2000.

       The information furnished reflects all adjustments which, in the opinion
of management, are considered necessary for a fair presentation of results for
the interim periods. Such adjustments consist only of normal recurring items. It
should also be noted that results for the interim periods are not necessarily
indicative of the results expected for the full year or any future period.

       The preparation of these financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

NEW ACCOUNTING PRONOUNCEMENT

       In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133 ("SFAS No. 133"), ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, which is effective for fiscal
year 2001. SFAS No. 133 requires all derivatives to be carried on the balance
sheet as assets or liabilities at fair value. The Company has entered into an
interest rate cap agreement in order to reduce the potential impact of interest
rate increases on future income. The accounting for changes in fair value would
depend on the hedging relationship and would be reported in the income statement
or as a component of comprehensive income. The adoption of SFAS No. 133 during
2001 did not have a material impact on the Company's financial position or
results of operations.

PRINCIPLES OF CONSOLIDATION

       The accompanying consolidated financial statements include the Company's
accounts and the accounts of its wholly owned real estate subsidiary. All
significant intercompany account balances and transactions between the companies
have been eliminated.

NET LOSS PER SHARE

       Basic net loss per share is based on the weighted average number of
common shares outstanding. For the three and six months ended June 30, 2000 and
2001, diluted net loss per common share is the same as basic net loss per common
share as the inclusion of weighted average shares of common stock issuable upon
exercise of stock options and warrants would be antidilutive.

                                 Page 6 (of 27)

<PAGE>


       Pro forma net loss per share has been computed as described above and
also gives effect, under SEC guidance, to the conversion of preferred shares not
included above that automatically converted to common shares upon the closing of
the Company's initial public offering in May 2000, using the if-converted
method.

       The reconciliation of the denominators of the historical and pro forma,
basic and diluted net loss per share calculations is as follows:

<TABLE>
<CAPTION>

                                                           Three Months Ended               Six Months Ended
                                                               June 30,                        June 30,
                                                          -------------------            --------------------
                                                          2000           2001             2000           2001
                                                          ----           ----             ----           ----
<S>                                                    <C>            <C>              <C>            <C>

Historical:

  Weighted average number of common shares
    outstanding used in computing basic and
    diluted net loss per share.......................    29,990,086     50,890,159       18,400,705     48,463,178
                                                         ==========     ==========       ==========     ==========

Pro forma:

  Weighted average number of common shares
    used in computing basic and diluted net loss
    per share (from above)...........................    29,990,086     50,850,159       18,400,705     48,463,178
  Adjustment to reflect the effect of the
    assumed conversion of preferred stock from
    the date of issuance.............................     8,723,553             --       17,165,701             --
                                                         ----------     ----------       ----------     ----------
  Weighted average number of common shares
    outstanding used in computing pro forma
    basic net loss per share.........................    38,713,639     50,850,159       35,566,406     48,463,178
                                                         ==========     ==========       ==========     ==========
</TABLE>

COMPREHENSIVE INCOME

       SFAS No. 130, REPORTING COMPREHENSIVE INCOME, establishes standards for
the reporting and display of comprehensive income and its components in the
consolidated financial statements. The Company's accumulated other comprehensive
income is comprised primarily of net unrealized gains or losses on
available-for-sale securities. Comprehensive net loss is not presented for
either the three or six months ended June 30, 2000 or 2001, as there was no
material difference between the reported net loss and the comprehensive net
loss.

3.  ACCOUNTS PAYABLE

       Accounts payable consists principally of trade accounts payable and
amounts due to Amgen Inc. ("Amgen") under the corporate collaboration agreement
between the Company and Amgen. Amounts due to Amgen represent the Company's
share of Plenaxis program expenses and are intended, subject to definitive
agreements to be mutually agreed, to be financed by a line of credit from Amgen
contemplated by the collaboration agreement. At December 31, 2000 and June 30,
2001, trade accounts payable included $7.1 million and $17.3 million due to
Amgen, respectively.

4.  INVESTMENTS

       Management determines the appropriate classification of debt securities
at the time of purchase and reevaluates such designation as of each balance
sheet date. The Company's debt securities are classified as available-for-sale
and are carried at estimated fair value in cash equivalents and marketable
securities. Unrealized gains and losses are reported as accumulated other
comprehensive income in stockholders' equity. The amortized cost of debt
securities in this category is adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization is included in

                                 Page 7 (of 27)

<Page>


interest income. Realized gains and losses on available-for-sale securities are
included in interest income and expense. The cost of securities sold is based on
the specific identification method. Interest and dividends on securities
classified as available-for-sale are included in interest income. The Company's
cash, cash equivalents and marketable securities as of June 30, 2001 are as
follows (in thousands):

<TABLE>
<CAPTION>

                                                               Gross             Gross            Estimated
                                          Amortized          Unrealized        Unrealized            Fair
                                             Cost              Gains             Losses             Value
                                        ---------------    ---------------   ---------------    ---------------
<S>                                   <C>                <C>               <C>                 <C>

Money market funds...............         $ 108,866             $     --        $        --        $ 108,866
U.S. government agencies.........            59,946                   16                (28)          59,934
Commercial paper.................           113,696                   39                 (5)         113,730
                                        ---------------    ---------------   ---------------    ---------------

  Total..........................           282,508                   55                (33)         282,530

Less amounts classified as cash
  and cash equivalents...........           200,266                   --                 --          200,266
                                        ---------------    ---------------   ---------------    ---------------

  Total marketable securities....         $  82,242             $     55        $       (33)       $  82,264
                                        ===============    ===============   ===============    ===============
</TABLE>

5.  FOLLOW-ON OFFERING

       In February 2001, the Company completed a follow-on public offering of
its common stock, par value $.01 per share ("Common Stock"). The Company sold
7,587,500 shares of its Common Stock, resulting in net proceeds to the Company
of approximately $175.9 million.

                                 Page 8 (of 27)


<PAGE>


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

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SHOULD BE READ TOGETHER WITH THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND
ACCOMPANYING NOTES TO THOSE STATEMENTS INCLUDED ELSEWHERE IN THIS FORM 10-Q.
THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THAT INVOLVE RISKS AND
UNCERTAINTIES. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL INFORMATION
PROVIDED HEREIN ARE FORWARD-LOOKING AND MAY CONTAIN INFORMATION ABOUT FINANCIAL
RESULTS, ECONOMIC CONDITIONS, TRENDS AND KNOWN UNCERTAINTIES. OUR ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THESE FORWARD-LOOKING STATEMENTS
AS A RESULT OF A NUMBER OF FACTORS, WHICH INCLUDE THOSE DISCUSSED IN THIS
SECTION AND ELSEWHERE IN THIS REPORT AND THE RISKS DISCUSSED IN OUR OTHER
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. READERS ARE CAUTIONED NOT
TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH REFLECT
MANAGEMENT'S ANALYSIS, JUDGMENT, BELIEF OR EXPECTATION ONLY AS OF THE DATE
HEREOF. PRAECIS UNDERTAKES NO OBLIGATION TO PUBLICLY REISSUE OR MODIFY THESE
FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES THAT ARISE AFTER
THE DATE HEREOF.

OVERVIEW

       Since our inception, we have been engaged in developing drugs for the
treatment of a variety of human diseases. Our lead program is the development of
Plenaxis(TM) (previously known as abarelix depot), a drug for the treatment of
hormonally responsive prostate cancer and other diseases that respond to the
lowering of hormone levels. We have entered into collaborations with Amgen Inc.
and Sanofi-Synthelabo S.A. to further develop and commercialize our Plenaxis
products. In December 2000, we filed a New Drug Application (NDA) with the U.S.
Food and Drug Administration (FDA) for Plenaxis for the treatment of hormonally
responsive prostate cancer. In January 2001, the FDA informed us that it had
accepted and filed the NDA and that it had granted the filing priority review.
In June 2001, we received a letter from the FDA with respect to the NDA in which
the FDA indicated that the information presented in the NDA was inadequate for
approval. We are planning to meet with the FDA on September 10, 2001 in an
effort to clarify the various deficiencies cited in the FDA's letter, and to
discuss what further steps need to be taken before the application may be
approved.

       We are also developing Latranal, a proprietary topical composition for
the relief of musculoskeletal pain, and Apan, our proprietary drug candidate for
the treatment of Alzheimer's disease. In addition, we have numerous product
candidates in the research or preclinical development stage. Since our
inception, we have had no revenues from product sales. We have received revenues
in the form of signing, performance-based, cost sharing and contract services
payments from corporate collaborations. Under these agreements, we could receive
additional non-refundable performance-based payments and reimbursement for
ongoing development costs, as well as a percentage of future product profits.
For the next several years, we expect that our sources of revenue, if any, will
consist primarily of interest income and payments from our corporate
collaborators. We expect reimbursement for ongoing development costs under our
corporate collaborations to diminish over the next several years.

       Our accumulated deficit as of June 30, 2001 was approximately $54.7
million. At June 30, 2001, we had 123 employees, 92 of whom were engaged in
research and development activities, compared to 113 employees at June 30, 2000,
91 of whom were engaged in research and development activities. Substantially
all of our expenditures to date have been for drug development and
commercialization activities and for general and administrative expenses.

                                 Page 9 (of 27)

<Page>


       Due to the high costs associated with preparing to launch our first
product, as well as other research and development and general and
administrative expenses, we had net operating losses for 2000 and for the six
months ended June 30, 2001. We expect to have net operating losses for 2001 and
for the next several years. We do not expect to generate operating income until
several years after our receipt of FDA approval to market Plenaxis for the
treatment of prostate cancer. We will require regulatory approval to market all
of our future products.

       Under our agreement with Sanofi-Synthelabo, we could receive up to
approximately $69.6 million in non-refundable fees and performance-based
payments. Of this amount, we are recognizing the $4.7 million initial
non-refundable signing fee payment over the period through December 2001, which
is the period during which we are obligated to participate on a continuing and
substantial basis in the research, development and manufacturing process
development of Plenaxis products. For supply of product to Sanofi-Synthelabo, we
are entitled to receive a transfer price that varies based on sales price and
volume. Additionally, we are entitled to receive reimbursement for certain
ongoing development costs. Through June 30, 2001, we have recognized a total of
approximately $24.2 million in non-refundable fees and performance-based
payments and approximately $10.5 million in reimbursement for ongoing
development costs under the Sanofi-Synthelabo agreement.

       Under our agreement with Amgen for the development and commercialization
of Plenaxis products in the countries not covered by the Sanofi-Synthelabo
agreement, we could receive up to $25.0 million in signing and performance-based
fees. Of this $25.0 million, we have received $10.0 million to date, which is
the minimum amount payable under the agreement. We are recognizing this amount
as revenue over the period through December 2001, during which time we are
obligated to participate on a continuing and substantial basis in the research,
development and manufacturing process development of Plenaxis products. The
remaining $15.0 million is payable upon FDA approval of an NDA relating to
Plenaxis.

       Under the agreement, Amgen paid the first $175.0 million of all
authorized costs and expenses associated with the research, development and
commercialization of Plenaxis products in the United States. Amgen's initial
$175.0 million funding commitment was fulfilled during the third quarter of
2000. Following Amgen's completion of this funding, we became responsible for
one-half of all subsequent United States research and development costs for
Plenaxis products. Additionally, we must reimburse Amgen for one-half of the
costs associated with establishing a sales and marketing infrastructure for
Plenaxis products in the United States. In general, we will receive a transfer
price and royalty based on an equal sharing of the resulting profits on sales of
Plenaxis products in the United States. All program expenses in Amgen's licensed
territory outside the United States will be borne by Amgen, and we will receive
a royalty on net sales of Plenaxis products in those territories. Through June
30, 2001, we have recognized approximately $118.2 million of revenues under the
Amgen agreement.

       We have granted Amgen exclusive manufacturing and commercialization
rights for Plenaxis products for all indications in the licensed territories.
During the second quarter of 2000, Amgen assumed manufacturing responsibility
for Plenaxis products, with the exception of the depot formulation, pursuant to
the terms of the Amgen agreement. Subject to the terms of the agreement, we have
retained manufacturing responsibility for the depot formulation of Plenaxis
products. In addition, under the terms of the Amgen agreement, during the third
quarter of 2000 we transferred to Amgen final decision-making authority as to
Plenaxis for the treatment of endometriosis. A phase II/III study is ongoing,
and decisions regarding the future development of Plenaxis for the treatment of
endometriosis have not been made.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

       Revenues for the three months ended June 30, 2001 decreased 68% to
approximately $3.2 million, from approximately $10.0 million for the
corresponding period in 2000. The decrease in revenues was the result of
decreases in both the amount and rate of reimbursement of Plenaxis expenses
under our corporate collaboration agreements. We anticipate that revenues from
corporate collaborations will continue to decrease due to the continuing decline
in our reimbursable Plenaxis expenses.

                                 Page 10 (of 27)

<PAGE>

       Research and development expenses for the three months ended June 30,
2001 increased 17% to approximately $14.5 million, from approximately $12.4
million for the corresponding period in 2000. The increase in expenses was
primarily the result of our responsibility for one-half of the costs associated
with the Plenaxis clinical development program in the United States, as well as
our increased spending related to the Latranal and Apan clinical development
programs. These increases were partially offset by a decrease in reimbursable
Plenaxis prostate cancer program expenses incurred directly by us and decreased
spending related to the Plenaxis endometriosis clinical development program. In
the third quarter of 2000, Amgen completed its initial funding commitment and we
became responsible for one-half of all subsequent United States research and
development costs for Plenaxis products through the launch period. Due to this
cost sharing responsibility and increased spending on our other clinical
development and research programs, we expect our research and development
expenses to continue to increase for the next several years.

       Sales and marketing expenses for the three months ended June 30, 2001
increased to approximately $3.3 million, from approximately $0.3 million for the
corresponding period in 2000. The increase in expenses was due primarily to our
responsibility for one-half of the costs associated with the commercialization
of Plenaxis in the United States. In the third quarter of 2000, Amgen completed
its initial funding commitment and we became responsible for one-half of all
subsequent costs associated with establishing a sales and marketing
infrastructure in the United States for Plenaxis products through the launch
period. Accordingly, our sales and marketing expenses may increase significantly
as we and Amgen prepare for the possible launch of Plenaxis for the treatment of
prostate cancer.

       General and administrative expenses for the three months ended June 30,
2001 decreased 6% to approximately $1.4 million, from approximately $1.5 million
for the corresponding period in 2000. We expect that general and administrative
expenses will increase as we hire additional administrative personnel to support
continued growth of our research and development initiatives and incur increased
operating costs related to our new facility.

       Net interest income for the three months ended June 30, 2001 increased
40% to approximately $3.0 million, from approximately $2.1 million for the
corresponding period in 2000. The increase in interest income was due to higher
average cash and investment balances resulting primarily from the proceeds of
our follow-on public offering in February 2001. This increase was offset
slightly by a decrease in average interest rates from the same period last year.

       There was no provision for income taxes in either the three months ended
June 30, 2001 or the comparable period in 2000. We anticipate that we will
continue to be in a net operating loss carryforward position during 2001 and
therefore, as in 2000, no benefit from our operating losses has been recognized.

SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

       Revenues for the six months ended June 30, 2001 decreased 70% to
approximately $5.7 million, from approximately $19.0 million for the
corresponding period in 2000. The decrease in revenues was the result of
decreases in both the amount and rate of reimbursement of Plenaxis expenses
under our corporate collaboration agreements. We anticipate that revenues from
corporate collaborations will continue to decrease due to the continuing decline
in our reimbursable Plenaxis expenses.

       Research and development expenses for the six months ended June 30, 2001
increased 13% to approximately $26.7 million, from approximately $23.7 million
for the corresponding period in 2000. The increase in expenses was primarily the
result of our responsibility for one-half of the costs associated with the
Plenaxis clinical development program in the United States, as well as our
increased spending related to the Latranal and Apan clinical development
programs and our discovery research initiatives. These increases were partially
offset by a decrease in reimbursable Plenaxis prostate cancer program expenses
incurred directly by us and decreased spending related to the Plenaxis
endometriosis clinical development program. In the third quarter of 2000, Amgen
completed its initial funding commitment and we became responsible for one-half
of all subsequent United States research and development costs for Plenaxis
products through the launch period. Due to this cost sharing responsibility and
increased spending on our other clinical development and research programs, we
expect our research and development expenses to continue to increase for the
next several years.

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       Sales and marketing expenses for the six months ended June 30, 2001
increased to approximately $6.4 million, from approximately $0.6 million for the
corresponding period in 2000. The increase in expenses was due primarily to our
responsibility for one-half of the costs associated with the commercialization
of Plenaxis in the United States. In the third quarter of 2000, Amgen completed
its initial funding commitment and we became responsible for one-half of all
subsequent costs associated with establishing a sales and marketing
infrastructure in the United States for Plenaxis products through the launch
period. Accordingly, our sales and marketing expenses may increase significantly
as we and Amgen prepare for the possible launch of Plenaxis for the treatment of
prostate cancer.

       General and administrative expenses for the six months ended June 30,
2001 increased 15% to approximately $3.0 million, from approximately $2.6
million for the corresponding period in 2000. The increase was due to an
increase in personnel related operating costs, increased use of professional
services and other costs associated with being a public company. We expect that
general and administrative expenses will increase as we hire additional
administrative personnel to support continued growth of our research and
development initiatives and incur increased operating costs related to our new
facility.

       Net interest income for the six months ended June 30, 2001 increased 59%
to approximately $5.5 million, from approximately $3.4 million for the
corresponding period in 2000. The increase in interest income was due to higher
average cash and investment balances resulting from the proceeds of our initial
public offering and follow-on public offering in May 2000 and February 2001,
respectively. This increase was offset slightly by a decrease in average
interest rates from the same period last year.

       The provision for income taxes for the six months ended June 30, 2001 and
2000 was zero and $0.1 million, respectively. The provision for income taxes
during 2000 was primarily for state income taxes. We anticipate that we will
continue to be in a net operating loss carryforward position during 2001 and
therefore, as in 2000, no benefit from our operating losses has been recognized.

LIQUIDITY AND CAPITAL RESOURCES

       We have financed our operations since inception principally through
private placements of equity securities and the proceeds from our public
offerings. Prior to our initial public offering, we had received aggregate net
proceeds of approximately $88.5 million from various private placements of our
securities. In May 2000, we completed our initial public offering in which we
sold a total of 9,200,000 shares of common stock at a price of $10 per share,
raising a total of approximately $84.3 million, net of underwriting discounts
and commissions and offering expenses. In February 2001, we completed a
follow-on public offering in which we sold a total of 7,587,500 shares of common
stock at a price of $24.5625 per share, raising a total of approximately $175.9
million, net of underwriting discounts and commissions and offering expenses.

       Additionally, we have received a total of approximately $184.5 million
from one-time signing payments and performance-based payments, cost
reimbursements and contract service payments under our collaboration agreements.
We have also received approximately $25.0 million from interest on invested cash
balances, and paid approximately $1.2 million in interest expense associated
with building and equipment financing.

       At June 30, 2001, we had cash, cash equivalents and marketable securities
of approximately $282.5 million and working capital of approximately $261.8
million, compared to approximately $132.2 million and $115.7 million,
respectively, at December 31, 2000. Based upon our existing capital resources
and interest income, and assuming receipt of payments under our collaboration
agreements and the availability of the line of credit contemplated by the Amgen
agreement, which we discuss below, we anticipate that we will be able to
maintain currently planned operations for at least the next several years.

       For the six months ended June 30, 2001, net cash of approximately $19.3
million was used in operating activities, compared to approximately $10.0
million used in operating activities during the corresponding period in 2000.
During the six months ended June 30, 2001, our use of cash in operations was due
principally to our net loss, partially offset by an increase in accounts payable
consisting principally of our share of accrued Plenaxis program expenses due to
Amgen. This obligation is intended to be financed by a line of credit from Amgen
contemplated by our agreement with Amgen and described below. Our investing
activities during the six months ended June 30, 2001 consisted of the purchase,
sale and maturity of marketable securities, as well as $17.1 million of

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additional spending toward the continued build-out of our new corporate
headquarters and other fixed asset additions. Our financing activities for the
six months ended June 30, 2001 consisted principally of the proceeds of our
follow-on public offering, proceeds received from the exercise of common stock
options and advances of $9.0 million under an acquisition and construction loan
agreement.

         In July 2000, in connection with the purchase, through our wholly owned
real estate subsidiary, of our new corporate headquarters and research facility
in Waltham, Massachusetts, the subsidiary entered into an acquisition and
construction loan agreement providing for up to $33.0 million in financing for
the acquisition of, and improvements to, the new facility. As of June 30, 2001,
$33.0 million was outstanding under the loan agreement. Advances bear interest
at a rate equal to the 30-day LIBOR plus 2.0% (5.86% at June 30, 2001). Interest
is payable monthly in arrears. Principal is due and payable in full on July 30,
2003, subject to two, one-year extension options. The loan is secured by the new
facility, together with all fixtures, equipment, improvements and other related
items, and by all rents, income or profits received by our real estate
subsidiary, and is unconditionally guaranteed by us. In addition to this
financing, as of June 30, 2001, we had spent approximately $33.2 million of our
own funds, and anticipate spending an additional $7.4 million, in connection
with the build-out and occupancy of our new facility. We occupied the new
facility during May 2001 and as planned, are actively seeking to sublease a
portion of this facility. We terminated the lease for our Cambridge,
Massachusetts facility effective as of September 1, 2001. In addition, in
connection with our move to the new facility, we consolidated our Provid
Research division with our Massachusetts operations and are actively seeking a
sublessee for our New Jersey facility.

       Our agreement with Amgen provides that, subject to definitive agreements
to be mutually agreed, Amgen will provide us with a line of credit not to exceed
$150.0 million through 2002 whereby, subject to various conditions each year, we
will be permitted to draw down a maximum of $75.0 million in 2001 and, in 2002,
the remaining balance of the line of credit available after all previous
drawdowns. The agreement provides that for each drawdown in 2002, we must
demonstrate a cash flow need reasonably acceptable to Amgen and meet various
other specified conditions, including conditions relating to the commercial sale
of Plenaxis products. Borrowings will bear interest at market rates and will be
secured by various receivables relating to Plenaxis products. All borrowings
under the line of credit must be repaid by 2008. The definitive agreements for
the line of credit have not yet been entered into and, accordingly, no loans
have been made by Amgen to us.

       We expect our funding requirements to increase over the next several
years as we prepare for the possible commercial launch of Plenaxis for the
treatment of prostate cancer, continue with current clinical trials for Plenaxis
for the treatment of endometriosis, Latranal and Apan, initiate preclinical
trials for additional product candidates, continue to improve our new facility
and expand our research and development initiatives. The amount of these
expenditures will depend on numerous factors, including:

       o    the cost, timing and outcomes of regulatory reviews;

       o    decisions relating to the Plenaxis program made by our corporate
            collaborators;

       o    the development of sales and marketing resources by our corporate
            collaborators or us;

       o    the establishment, continuation or termination of third-party
            manufacturing or sales and marketing arrangements;

       o    the progress of our research and development activities;

       o    the scope and results of preclinical testing and clinical trials;

       o    the rate of technological advances;

       o    determinations as to the commercial potential of our products under
            development;

       o    the status of competitive products;

       o    our ability to defend and enforce our intellectual property rights;

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       o    the continued viability and duration of, and timely compliance by
            our collaborators with, our corporate collaboration agreements or
            other licensing agreements;

       o    the establishment of additional strategic or licensing arrangements
            with other companies or acquisitions;

       o    our ability to sublease our New Jersey facility and part of our new
            facility; and

       o    the availability of additional financing.

       At December 31, 2000, we had provided a valuation allowance of $10.2
million for our deferred tax assets. The valuation allowance represents the
excess of the deferred tax asset over the benefit from future losses that could
be carried back if, and when, they occur. Due to anticipated operating losses in
the future, we believe that it is more likely than not that we will not realize
a portion of the net deferred tax assets in the future and we have provided an
appropriate valuation allowance.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES WE FACE.
ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT ARE
CURRENTLY DEEMED IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS, FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. IF ANY OF THESE RISKS ACTUALLY OCCUR, OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY
AFFECTED.

BECAUSE WE HAVE NOT YET MARKETED OR SOLD ANY PRODUCTS AND ANTICIPATE SIGNIFICANT
INCREASES IN OUR OPERATING EXPENSES OVER THE NEXT SEVERAL YEARS, WE MAY NOT BE
PROFITABLE IN THE FUTURE.

       We cannot assure you that we will be profitable in the future or, if we
are profitable, that it will be sustainable. All but one of our potential
products are in the research or development stage. We have not yet marketed or
sold any products, and we may not succeed in developing and marketing any
product in the future. To date, we have derived substantially all of our
revenues from payments under our collaboration and license agreements and will
continue to do so for at least the next several years. In addition, we expect to
continue to spend significant amounts to continue clinical studies, obtain
regulatory approval for our existing product candidates and expand our
facilities. We also intend to spend substantial amounts to fund additional
research and development for other potential products, enhance our core
technologies, and for general and administrative purposes. As of June 30, 2001,
we had an accumulated deficit of approximately $54.7 million. We expect that our
operating expenses will increase significantly in the near term, primarily due
to our obligations under the Amgen agreement following Amgen's fulfillment of
its initial funding commitment during the third quarter of 2000, resulting in
significant operating losses for 2001 and the next several years.

IF OUR CLINICAL TRIALS ARE NOT SUCCESSFUL, OR IF WE ARE OTHERWISE UNABLE TO
OBTAIN AND MAINTAIN THE REGULATORY APPROVAL REQUIRED TO MARKET AND SELL OUR
POTENTIAL PRODUCTS, WE WOULD INCUR ADDITIONAL OPERATING LOSSES.

       The development and sale of our product candidates are subject to
extensive regulation by governmental authorities. Obtaining and maintaining
regulatory approval typically is costly and takes many years. Regulatory
authorities, most importantly, the FDA, have substantial discretion to terminate
clinical trials, delay or withhold registration and marketing approval in the
United States, and mandate product recalls. Failure to comply with regulatory
requirements may result in criminal prosecution, civil penalties, recall or
seizure of products, total or partial suspension of production or injunction, as
well as other actions as to our potential products or against us. Outside the
United States, we can market a product only if we receive a marketing
authorization from the appropriate regulatory authorities. This foreign
regulatory approval process includes all of the, and in some cases, additional,
risks associated with the FDA approval process.

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       To gain regulatory approval from the FDA and foreign regulatory
authorities for the commercial sale of any product, we must demonstrate the
safety and efficacy of the product in clinical trials. If we develop a product
to treat a long-lasting disease, such as cancer or Alzheimer's disease, we must
gather data over an extended period of time. There are many risks associated
with our clinical trials. For example, we may be unable to achieve the same
level of success in later trials as we did in earlier ones. Additionally, data
we obtain from preclinical and clinical activities are susceptible to varying
interpretations that could impede regulatory approval. Further, some patients in
our prostate cancer and Alzheimer's disease programs have a high risk of death,
age-related disease or other adverse medical events not related to our products.
These events may affect the statistical analysis of the safety and efficacy of
our products. If we obtain regulatory approval for a product, the approval will
be limited to those diseases for which our clinical trials demonstrate the
product is safe and effective.

       In addition, many factors could delay or result in termination of our
ongoing or future clinical trials. For example, a clinical trial may experience
slow patient enrollment or lack of sufficient drug supplies. Patients may
experience adverse medical events or side effects, and there may be a real or
perceived lack of effectiveness of the drug we are testing. Future governmental
action or changes in FDA policy may also result in delays or rejection of an
application for marketing approval. Accordingly, we may not be able to obtain
product registration or marketing approval for Plenaxis, our drug candidate for
the treatment of prostate cancer and endometriosis, or for any of our other
product candidates, based on the results of our clinical trials, or regulatory
approval may be conditioned upon significant labeling requirements which could
adversely affect marketability of the product.

       To date, none of our product candidates have received regulatory
approval for commercial sale. In June 2001, we received a letter from the FDA
with respect to our NDA for Plenaxis for the treatment of hormonally
responsive prostate cancer, which was submitted in December 2000. The FDA
indicated that the information presented in the NDA was inadequate for
approval. We are planning to meet with the FDA on September 10, 2001 in an
effort to clarify the various deficiencies cited in the FDA's letter, and to
discuss what further steps may need to be taken before the application can be
approved. We cannot assure you, however, that the FDA will approve this NDA
in a timely matter, or at all. If we are delayed in obtaining or are unable
to obtain regulatory approval to market Plenaxis or our other potential
products, we may exhaust our available resources, including the net proceeds
from our initial public offering, which we completed in May 2000, and the net
proceeds from our follow-on public offering, which we completed in February
2001, significantly sooner than we had planned. If this were to happen, we
would need to raise additional funds to complete commercialization of our
lead products and to continue our research and development programs as
currently planned. We cannot assure you that we would be able to obtain these
additional funds on favorable terms, if at all.

EVEN IF WE RECEIVE APPROVAL FOR THE MARKETING AND SALE OF OUR PRODUCT
CANDIDATES, THEY MAY FAIL TO ACHIEVE MARKET ACCEPTANCE AND, ACCORDINGLY, MAY
NEVER BE COMMERCIALLY SUCCESSFUL.

         Many factors may affect the market acceptance and commercial success of
any of our potential products, including:

       o    the extent and success of our marketing and sales efforts, and, in
            particular, those of our collaborators, relating to the marketing
            and sales of Plenaxis products;

       o    the product labeling or product insert required by the FDA for each
            of our products;

       o    the timing of market entry as compared to competitive products;

       o    the effectiveness of our products, including any potential side
            effects, as compared to alternative treatment methods;

       o    the rate of adoption of our products by doctors and nurses and
            acceptance by the target population;

       o    the competitive features of our products as compared to other
            products, including the frequency of administration of Plenaxis as
            compared to other products, and doctor and patient acceptance of
            these features;

       o    the cost-effectiveness of our products and the availability of
            insurance or other third-party reimbursement, in particular
            Medicare, for patients using our products; and

       o    unfavorable publicity concerning our products or any similar
            products.

       If our products are not commercially successful, we may never become
profitable.

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IF OUR CORPORATE COLLABORATORS REDUCE, DELAY OR TERMINATE THEIR FINANCIAL OR
OTHER SUPPORT, WE MAY BE UNABLE TO SUCCESSFULLY DEVELOP, MARKET, DISTRIBUTE OR
SELL OUR PRODUCT CANDIDATES.

       We depend upon our corporate collaborators, in particular Amgen and
Sanofi-Synthelabo, to provide substantial financial support for developing our
product candidates. We also will rely on them in some instances to help us
obtain regulatory approval for our products and to manufacture, market,
distribute or sell our products. Despite our collaborative relationships, we
have limited influence over the amount and timing of resources that our
corporate collaborators devote to our programs or potential products. For
example, Amgen has final decision-making authority with regard to most of the
Plenaxis program in the Amgen territory, and accordingly, we have limited
influence over decisions related to that program. Also, the availability of the
$150.0 million line of credit that Amgen has agreed to provide us is subject to
the execution of mutually acceptable definitive agreements which, for some
borrowings thereunder, will include specified conditions relating to the sale of
Plenaxis.

         In addition, our corporate collaborators may terminate our
collaboration agreements in various circumstances. For example, in December
1998, we and Roche Products Inc. mutually terminated our agreement. We and each
of Amgen and Sanofi-Synthelabo may mutually terminate our agreement, and, in
addition:

       o    Amgen and Sanofi-Synthelabo each may terminate its agreement with us
            if the results of any clinical trial of Plenaxis materially harms
            the product's commercial prospects;

       o    Amgen may terminate its agreement with us at any time upon 90 days'
            prior written notice; and

       o    Sanofi-Synthelabo may terminate its agreement with us if specified
            adverse events occur relating to our European patent applications or
            the related patents which may be issued covering Plenaxis or our
            Rel-Ease technology.

       We cannot assure you that any of our present or future collaborators will
meet their obligations to us under the collaboration agreements. If a
collaborator terminates its agreement with us or fails to perform, or delays
performance of, its obligations, it could delay or otherwise adversely affect or
prevent, the development or commercialization of the potential product or
research program. As a result, we could be forced to devote unforeseen
additional resources to development and commercialization or to terminate one or
more of our drug development programs. Due to increased operating costs and lost
revenue associated with the termination of, or non-performance or delay of
performance by a corporate collaborator under, a collaboration agreement, we
could have to seek funds in addition to the net proceeds of both our initial
public offering, which we completed in May 2000, and our follow-on public
offering, which we completed in February 2001, to meet our capital requirements.
We cannot assure you that we would be able to raise the necessary funds or
negotiate additional corporate collaborations on acceptable terms, if at all,
and in that event we could have to curtail or cease operations. For instance,
if, following the termination of our agreement with Roche, we had been unable to
enter into an alternative collaboration for the development and
commercialization of our Plenaxis products in a timely manner, we likely would
have needed to delay or cut back our programs for the development of Plenaxis or
other drugs and raise additional funds through one or more equity financings
prior to the time we had planned to do so, and possibly on less than favorable
terms.

IF WE OR OUR CORPORATE COLLABORATORS FAIL TO DEVELOP AND MAINTAIN OUR
RELATIONSHIPS WITH THIRD-PARTY MANUFACTURERS, OR IF THESE MANUFACTURERS FAIL TO
PERFORM ADEQUATELY, WE MAY BE UNABLE TO COMMERCIALIZE OUR PRODUCT CANDIDATES.

       Our ability to conduct clinical trials and commercialize our product
candidates will depend in part on our ability to manufacture, or arrange for
third-party manufacture of, our products on a large scale, at a competitive cost
and in accordance with regulatory requirements. We or our corporate
collaborators must establish and maintain a commercial scale formulation and
manufacturing process for each of our potential products for which we seek
marketing approval. We, our corporate collaborators or third-party manufacturers
may encounter difficulties with these processes at any time that could result in
delays in clinical trials, regulatory submissions or in the commercialization of
potential products.

       We have no experience in large-scale product manufacturing, nor do we
have the resources or facilities to manufacture products on a commercial scale.
We will continue to rely upon contract

                                 Page 16 (of 27)

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manufacturers and, in certain instances, our corporate collaborators, to produce
Plenaxis and other compounds for preclinical, clinical and commercial purposes
for a significant period of time. Either we or our corporate collaborators have
manufacturing and supply agreements with third parties, and if these agreements
are not satisfactory, we may not be able to develop or commercialize potential
products as planned. The manufacture of our potential products will be subject
to current good manufacturing practices regulations. Third-party manufacturers
are subject to regulatory review and may fail to comply with these good
manufacturing practices regulations. If we or our corporate collaborators need
to replace our current third-party manufacturers, or contract with additional
manufacturers, this would necessitate new product testing and facility
compliance inspections. This testing and inspection is costly and
time-consuming. Any of these factors could prevent, or cause delays in,
obtaining regulatory approvals for, and the manufacturing, marketing or selling
of, our products and could also result in significantly higher operating
expenses.

       If we fail to meet our manufacturing and supply obligations under our
agreements with either Amgen or Sanofi-Synthelabo, they may assume manufacturing
responsibility under their agreements to the extent they do not already have
this responsibility. In addition, if this occurs, we must pay Sanofi-Synthelabo
its incremental costs of assuming manufacturing responsibility.

DUE TO OUR INEXPERIENCE AND OUR LIMITED SALES AND MARKETING STAFF, WE WILL
DEPEND ON THIRD PARTIES TO SELL AND MARKET OUR PRODUCTS.

       We have no experience in marketing or selling pharmaceutical products and
have a limited marketing and sales staff. To achieve commercial success for any
approved product, we must either develop a marketing and sales force or enter
into arrangements with others to market and sell our products. We have granted
Amgen and Sanofi-Synthelabo exclusive marketing and distribution rights for
Plenaxis products in defined geographic locations. We have limited influence
over the decisions made by Amgen or Sanofi-Synthelabo or the resources they
devote to the marketing and distribution of Plenaxis products in their
respective territories, and we cannot assure you that they will meet their
obligations in this regard. Moreover, our corporate collaborators may, subject
to certain limitations with respect to Sanofi-Synthelabo, market products that
compete with our products. Our marketing and distribution arrangements with
Amgen and Sanofi-Synthelabo may not be successful, and we may not receive any
revenues from these arrangements. Also, we cannot assure you that we will be
able to enter into marketing and sales agreements on acceptable terms, if at
all, for any other products.

BECAUSE WE DEPEND ON THIRD PARTIES TO CONDUCT LABORATORY TESTING AND HUMAN
CLINICAL STUDIES AND ASSIST US WITH REGULATORY COMPLIANCE, WE MAY ENCOUNTER
DELAYS IN PRODUCT DEVELOPMENT AND COMMERCIALIZATION.

       We have contracts with a limited number of research organizations to
design and conduct our laboratory testing and human clinical studies. If we
cannot contract for testing activities on acceptable terms, or at all, we may
not complete our product development efforts in a timely manner. To the extent
we rely on third parties for laboratory testing and human clinical studies, we
may lose some control over these activities. For example, third parties may not
complete testing activities on schedule or when we request. In addition, these
third parties may not conduct our clinical trials in accordance with regulatory
requirements. The failure of these third parties to carry out their contractual
duties could delay or prevent the development and commercialization of our
product candidates.

ALTERNATIVE TREATMENTS ARE AVAILABLE WHICH MAY IMPAIR OUR ABILITY TO CAPTURE
MARKET SHARE FOR OUR POTENTIAL PRODUCTS.

       Alternative products exist or are under development to treat the diseases
for which we are developing drugs. For example, the FDA has approved several
drugs for the treatment of prostate cancer that respond to changes in hormone
levels. Even if the FDA approves Plenaxis for commercialization for the
treatment of prostate cancer, it may not compete favorably with existing
treatments that already have an established market share. If Plenaxis does not
achieve broad market acceptance as a drug for the treatment of prostate cancer,
we may not become profitable.

                                 Page 17 (of 27)

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WE COULD EXPERIENCE DELAYS IN THE RESEARCH, DEVELOPMENT OR COMMERCIALIZATION OF
OUR PRODUCT CANDIDATES AS A RESULT OF CONFLICTS WITH OUR CORPORATE COLLABORATORS
OR COMPETITION FROM THEM.

       An important part of our strategy involves conducting proprietary
research programs. We may pursue opportunities that conflict with our
collaborators' businesses. Disagreements with our collaborators could develop
over rights to intellectual property, including the ownership of technology
co-developed with our collaborators. Our current or future collaborators could
develop or market products in the future that compete with our products. This
could diminish our collaborators' commitment to us, and reduce the resources
they devote to developing and commercializing our product candidates. For
example, the U.S. subsidiary of Sanofi-Synthelabo entered into a collaboration
agreement with Atrix Laboratories, Inc., under which it will exclusively market
Leuprogel, Atrix's product in development for the treatment of prostate cancer,
in North America. If approved, Leuprogel is likely to compete with Plenaxis as a
treatment for advanced stage prostate cancer.

       Conflicts or disputes with our collaborators, and competition from them,
could harm our relationships with our other collaborators, restrict our ability
to enter into future collaboration agreements and delay the research,
development or commercialization of our product candidates.

MANY OF OUR COMPETITORS HAVE SUBSTANTIALLY GREATER RESOURCES THAN WE DO AND MAY
BE ABLE TO DEVELOP AND COMMERCIALIZE PRODUCTS THAT MAKE OUR POTENTIAL PRODUCTS
AND TECHNOLOGIES OBSOLETE OR NON-COMPETITIVE.

       A biotechnology company such as ours must keep pace with rapid
technological change and faces intense competition. We compete with
biotechnology and pharmaceutical companies for funding, access to new
technology, research personnel and in product research and development. Many of
these companies have greater financial resources and more experience than we do
in developing drugs, obtaining regulatory approvals, manufacturing and
marketing. We also face competition from academic and research institutions and
government agencies pursuing alternatives to our products and technologies. We
expect that all of our products under development will face intense competition
from existing or future drugs. In addition, for each of our product candidates,
we will face increasing competition from generic formulations or existing drugs
whose active components are no longer covered by patents.

       Our competitors may:

       o    successfully identify drug candidates or develop products earlier
            than we do;

       o    obtain approvals from the FDA or foreign regulatory bodies more
            rapidly than we do;

       o    develop products that are more effective, have fewer side effects or
            cost less than our products; or

       o    successfully market products that compete with our products.

       The success of our competitors in any of these efforts would adversely
affect our ability to develop, commercialize and market our product candidates.

IF WE ARE UNABLE TO OBTAIN AND ENFORCE VALID PATENTS, WE COULD LOSE ANY
COMPETITIVE ADVANTAGE WE MAY HAVE.

       Our success will depend in part on our ability to obtain patents and
maintain adequate protection of our technologies and potential products. If we
do not adequately protect our intellectual property, competitors may be able to
use our technologies and erode any competitive advantage we may have. For
example, if we lose our patent protection for Plenaxis, another party could
produce and market the compound in direct competition with us. Some foreign
countries lack rules and methods for defending intellectual property rights and
do not protect proprietary rights to the same extent as the United States. Many
companies have had difficulty protecting their proprietary rights in foreign
countries.

       Patent positions are sometimes uncertain and usually involve complex
legal and factual questions. We can protect our proprietary rights from
unauthorized use by third parties only to the extent that our proprietary
technologies are covered by valid and enforceable patents or are effectively
maintained as trade secrets. We currently own or have exclusively licensed
fourteen issued United States patents. We have applied, and will continue to
apply, for patents covering both our technologies

                                 Page 18 (of 27)

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and products as we deem appropriate. Others may challenge our patent
applications or our patent applications may not result in issued patents.
Moreover, any issued patents on our own inventions, or those licensed from third
parties, may not provide us with adequate protection, or others may challenge
the validity of, or seek to narrow or circumvent, these patents. Third-party
patents may impair or block our ability to conduct our business. Additionally,
third parties may independently develop products similar to our products,
duplicate our unpatented products, or design around any patented products we
develop.

IF WE ARE UNABLE TO PROTECT OUR TRADE SECRETS AND PROPRIETARY INFORMATION, WE
COULD LOSE ANY COMPETITIVE ADVANTAGE WE MAY HAVE.

       In addition to patents, we rely on a combination of trade secrets,
confidentiality, nondisclosure and other contractual provisions, and security
measures to protect our confidential and proprietary information. These measures
may not adequately protect our trade secrets or other proprietary information.
If these measures do not adequately protect our rights, third parties could use
our technology, and we could lose any competitive advantage we may have. In
addition, others may independently develop similar proprietary information or
techniques, which could impair any competitive advantage we may have.

IF OUR TECHNOLOGIES, PROCESSES OR POTENTIAL PRODUCTS CONFLICT WITH THE PATENTS
OF COMPETITORS, UNIVERSITIES OR OTHERS, WE COULD HAVE TO ENGAGE IN COSTLY
LITIGATION AND BE UNABLE TO COMMERCIALIZE THOSE PRODUCTS.

       Our technologies, processes or potential products may give rise to claims
that they infringe other patents. A third party could force us to pay damages,
to stop our use of the technologies or processes, or to stop our manufacturing
or marketing of the affected products by bringing a legal action against us for
infringement. In addition, a third party could require us to obtain a license to
continue to use the technologies or processes or manufacture or market the
affected products, and we may not be able to do so. We believe that significant
litigation will continue in our industry regarding patent and other intellectual
property rights. If we become involved in litigation, it could consume a
substantial portion of our resources. Even if legal actions were meritless,
defending a lawsuit could take significant time, be expensive and divert
management's attention from other business concerns.

IF THIRD PARTIES TERMINATE OUR LICENSES, WE COULD EXPERIENCE DELAYS OR BE UNABLE
TO COMPLETE THE DEVELOPMENT AND COMMERCIALIZATION OF OUR POTENTIAL PRODUCTS.

       We license some of our technology from third parties. Termination of our
licenses could force us to delay or discontinue some of our development and
commercialization programs. For example, if Advanced Research and Technology
Institutes, Inc., the assignee of Indiana University Foundation, terminated our
license with them, we could have to discontinue development and
commercialization of our Plenaxis products. We cannot assure you that we would
be able to license substitute technology in the future. Our inability to do so
could impair our ability to conduct our business because we may lack the
technology, or the necessary rights to technology, required to develop and
commercialize our potential products.

OUR REVENUES WILL DIMINISH IF WE FAIL TO OBTAIN ACCEPTABLE PRICES OR ADEQUATE
REIMBURSEMENT FOR OUR PRODUCTS FROM THIRD-PARTY PAYORS.

       The continuing efforts of government and third-party payors to contain or
reduce the costs of health care may limit our commercial opportunity. If
government and other third-party payors do not provide adequate coverage and
reimbursement for our products, physicians may not prescribe them. If we are
unable to offer physicians comparable or superior financial motivation to use
our products, we may not be able to generate significant revenues. In some
foreign markets, pricing and profitability of prescription pharmaceuticals are
subject to government control. In the United States, we expect that there will
continue to be federal and state proposals for similar controls. In addition,
increasing emphasis on managed care in the United States will continue to put
pressure on the pricing of pharmaceutical products. Cost control initiatives
could decrease the price that any of our collaborators or we receive for any
products in the future. Further, cost control initiatives could impair or
diminish

                                 Page 19 (of 27)

<Page>


our collaborators' ability or incentive to commercialize our products, and our
ability to earn revenues from this commercialization.

       Our ability to commercialize pharmaceutical products, alone or with
collaborators, may depend in part on the availability of reimbursement for our
products from:

       o    government and health administration authorities;

       o    private health insurers; and

       o    other third-party payors, including Medicare and Medicaid.

       We cannot predict the availability of reimbursement for newly approved
health care products. Third-party payors, including Medicare, are challenging
the prices charged for medical products and services. Government and other
third-party payors increasingly are limiting both coverage and the level of
reimbursement for new drugs and, in some cases, refusing to provide coverage for
a patient's use of an approved drug for purposes not approved by the FDA.
Third-party insurance coverage may not be available to patients for any of our
products.

WE MAY BE UNABLE TO FIND SUITABLE TENANTS FOR A PORTION OF OUR NEW FACILITY OR
SUBLEASE OUR NEW JERSEY FACILITY.

       In May 2001, we moved to a new 175,000 square foot facility in Waltham,
Massachusetts. We are currently seeking to sublease a portion of our new
facility to third parties. In addition, in connection with our recent move to
the new facility, we consolidated the Provid Research division into our current
facility and are seeking a subleasee for our New Jersey facility. We may not be
able to find suitable sub-tenants to occupy these spaces in a timely manner, if
at all. If we are unable to find suitable sub-tenants in a timely manner, we may
experience greater than anticipated operating expenses in the future.

IF WE LOSE OUR KEY PERSONNEL OR ARE UNABLE TO ATTRACT AND RETAIN ADDITIONAL
SKILLED PERSONNEL, WE MAY BE UNABLE TO PURSUE OUR PRODUCT DEVELOPMENT AND
COMMERCIALIZATION EFFORTS.

       We depend substantially on the principal members of our management and
scientific staff, including Malcolm L. Gefter, Ph.D., our Chief Executive
Officer, President and Chairman of the Board. We do not have employment
agreements with any of our executive officers. Any officer or employee can
terminate his or her relationship with us at any time and work for one of our
competitors. The loss of these key individuals could result in competitive harm
because we could experience delays in our product research, development and
commercialization efforts without their expertise.

       Recruiting and retaining qualified scientific personnel to perform future
research and development work also will be critical to our success. Competition
for skilled personnel is intense and the turnover rate can be high. We compete
with numerous companies and academic and other research institutions for
experienced scientists. This competition may limit our ability to recruit and
retain qualified personnel on acceptable terms. Failure to attract and retain
qualified personnel would prevent us from successfully developing our potential
products or core technologies and launching our products commercially. Our
planned activities may require the addition of new personnel, including
management, and the development of additional expertise by existing management
personnel. The inability to retain these personnel or to develop this expertise
could result in delays in the research, development and commercialization of our
potential products.

WE MAY HAVE SUBSTANTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS AND MAY NOT HAVE
ADEQUATE INSURANCE TO COVER THOSE CLAIMS.

       We may be held liable if any product we develop, or any product made by
others using our technologies, causes injury. We have only limited product
liability insurance coverage for our potential products in clinical trials. We
intend to expand the product liability insurance coverage for any of our
products for which we obtain marketing approval. However, this insurance may be
prohibitively expensive or may not fully cover our potential liabilities. Our
inability to obtain adequate insurance coverage at an acceptable cost could
prevent or inhibit the commercialization of our products. If a third party sues
us for any injury caused by products made by us or using our technologies, our
liability could exceed our total assets.

                                 Page 20 (of 27)

<PAGE>


WE USE HAZARDOUS CHEMICALS AND RADIOACTIVE AND BIOLOGICAL MATERIALS IN OUR
BUSINESS AND ANY CLAIMS RELATING TO THE HANDLING, STORAGE OR DISPOSAL OF THESE
MATERIALS COULD BE TIME CONSUMING AND COSTLY.

       Our research and development processes involve the controlled use of
hazardous materials, including chemicals and radioactive and biological
materials. The health risks associated with accidental exposure to Plenaxis
include temporary impotence or infertility and harmful effects on pregnant
women. Our operations also produce hazardous waste products. We cannot
completely eliminate the risk of accidental contamination or discharge from
hazardous materials and any resultant injury. Federal, state and local laws and
regulations govern the use, manufacture, storage, handling and disposal of
hazardous materials. Compliance with environmental laws and regulations is
necessary and expensive. Current or future environmental regulations may impair
our research, development or production efforts. We may be required to pay
fines, penalties or damages in the event of noncompliance or the exposure of
individuals to hazardous materials.

       Some of our collaborators also work with hazardous materials in
connection with our collaborations. We have agreed to indemnify our
collaborators in some circumstances against damages and other liabilities
arising out of development activities or products produced in connection with
these collaborations.

IF WE ENGAGE IN AN ACQUISITION, WE WILL INCUR A VARIETY OF COSTS AND MAY NEVER
REALIZE THE ANTICIPATED BENEFITS OF THE ACQUISITION.

       If appropriate opportunities become available, we may attempt to acquire
businesses, products or technologies that we believe are a strategic fit with
our business. We currently have no commitments or agreements for any
acquisitions, nor are there any negotiations with respect to any specific
transaction. If we do undertake any transaction of this sort, the process of
integrating an acquired business, product or technology 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. Moreover, we may fail to realize the anticipated benefits of any
acquisition. Future acquisitions could dilute your ownership interest in us and
could cause us to incur debt, expose us to future liabilities and result in
amortization expenses related to goodwill and other intangible assets.

THE MARKET PRICE OF OUR COMMON STOCK MAY EXPERIENCE EXTREME PRICE AND VOLUME
FLUCTUATIONS.

       The market price of our common stock may fluctuate substantially due to a
variety of factors, including, but not limited to:

       o    announcement of FDA approval or disapproval of our product
            candidates;

       o    the willingness of collaborators to commercialize our product
            candidates and the timing of commercialization;

       o    announcements of technological innovations or new products by us or
            our competitors;

       o    the success rate of our discovery efforts and clinical trials
            leading to performance-based payments and revenues under our
            collaboration agreements;

       o    loss of corporate collaborators, failure or delay by our corporate
            collaborators in performing their obligations or disputes with our
            corporate collaborators;

       o    developments or disputes concerning patents or proprietary rights,
            including announcements of claims of infringement, interference or
            litigation against us or our licensors;

       o    announcements concerning our competitors, or the biotechnology or
            pharmaceutical industry in general;

       o    public concerns as to the safety of our products or our competitors'
            products;

       o    changes in government regulation of the pharmaceutical or medical
            industry;

       o    changes in the reimbursement policies of third-party insurance
            companies or government agencies;

       o    actual or anticipated fluctuations in our operating results;

       o    changes in financial estimates or recommendations by securities
            analysts;

                                 Page 21 (of 27)

<Page>


       o    sales of large blocks of our common stock;

       o    changes in accounting principles; and

       o    the loss of any of our key scientific or management personnel.

       In addition, the stock market has experienced extreme price and volume
fluctuations. The market prices of the securities of biotechnology companies,
particularly companies like ours without current product revenues and earnings,
have been highly volatile, and may continue to be highly volatile in the future.
This volatility has often been unrelated to the operating performance of
particular companies. In the past, securities class action litigation has often
been brought against companies that experience volatility in the market price of
their securities. Whether or not meritorious, litigation brought against us
could result in substantial costs and a diversion of management's attention and
resources.

WE EXPECT THAT OUR QUARTERLY RESULTS OF OPERATIONS WILL FLUCTUATE, AND THIS
FLUCTUATION COULD CAUSE OUR STOCK PRICE TO DECLINE.

         Our quarterly operating results have fluctuated in the past and are
likely to do so in the future. These fluctuations could cause our stock price to
decline. Some of the factors that could cause our operating results to fluctuate
include:

       o    the delay or failure of any of our corporate collaborators to meet
            their payment or other obligations, or termination of any of our
            agreements with them;

       o    the timing of development and commercialization of our Plenaxis
            products leading to performance-based payments and revenues under
            our agreements with our corporate collaborators;

       o    the timing and level of expenses, and of expense reimbursement
            payments, related to the development and commercialization of our
            Plenaxis products, or to our other research and development
            programs; and

       o    the timing of our commercialization of other products resulting in
            revenues.

       Due to the possibility of fluctuations in our revenues and expenses, we
believe that quarter-to-quarter comparisons of our operating results are not a
good indication of our future performance.

FUTURE SALES OF OUR COMMON STOCK MAY CAUSE OUR STOCK PRICE TO DECLINE.

       If our stockholders sell substantial amounts of our common stock in the
public market, or the perception that such sales may occur exists, the market
price of our common stock could decline. The 9,200,000 shares of common stock
sold in our initial public offering in May 2000 are all freely tradeable in the
public market. Additionally, all of the 8,337,500 shares sold in our follow-on
public offering in February 2001 to purchasers other than our affiliates are
freely tradeable in the public market. Any shares of common stock held by our
affiliates may generally only be sold in compliance with Rule 144 under the
Securities Act. As of June 30, 2001, approximately 2.2 million outstanding
shares of common stock were held by our affiliates. Substantially all of our
remaining outstanding shares of common stock may be freely sold without volume
restrictions pursuant to Rule 144(k) or Rule 701 under the Securities Act.

ANTI-TAKEOVER PROVISIONS IN OUR CHARTER AND BY-LAWS, OUR RIGHTS AGREEMENT AND
UNDER DELAWARE LAW MAY MAKE AN ACQUISITION OF US MORE DIFFICULT, EVEN IF AN
ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS.

       Provisions in our certificate of incorporation and by-laws may delay or
prevent an acquisition of us or a change in our management. Also, because we are
incorporated in Delaware, we are governed by the provisions of Section 203 of
the Delaware General Corporation Law, which may prohibit or delay large
stockholders, in particular those owning 15% or more of our outstanding voting
stock, from merging or combining with us. In addition, the rights issued under
our rights agreement may be a substantial deterrent to a person acquiring 10% or
more of our common stock without the approval of our board of directors. These
provisions in our charter and by-laws, rights agreement and under Delaware law
could reduce the price that investors might be willing to pay for shares of our
common stock in the future and result in the market price being lower that it
would be without these provisions.

                                 Page 22 (of 27)

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

       The primary objective of our investment activities is to preserve
principal while at the same time maximizing the income we receive from our
investments without significantly increasing risk. Some of the securities that
we invest in may have market risk. This means that a change in prevailing
interest rates may cause the principal amount of the investment to fluctuate. To
minimize this risk in the future, we maintain our portfolio of cash equivalents
and short-term investments in a variety of securities, including commercial
paper, money market funds and government and non-government debt securities. Our
investments are also subject to interest rate risk and will decrease in value if
market interest rates increase. A hypothetical 100 basis point increase in
interest rates would result in an approximate $0.7 million decrease in the fair
value of our investments as of June 30, 2001. However, due to the conservative
nature of our investments and relatively short duration, interest rate risk is
mitigated. As of June 30, 2001, approximately 92% of our total portfolio will
mature in one year or less, with the remainder maturing in less than two years.

       In connection with the purchase of our new facility in July 2000, our
wholly owned real estate subsidiary executed an acquisition and construction
loan agreement that provides for up to $33.0 million in borrowings at a floating
interest rate indexed to 30-day LIBOR. Concurrent with that transaction, the
subsidiary also entered into an interest rate cap agreement which limits
exposure to interest rate increases above a certain threshold. Due to the
decrease in interest rates since we entered into this interest rate cap, we do
not believe that there is material market risk exposure with respect to this
item which would require additional disclosure. With regard to borrowings under
the loan agreement, we believe that we have mitigated our risk to significant
adverse fluctuations in interest rates and we do not believe that a 10% change
in interest rates would have a material impact on our results of operations or
cash flows.

                                 Page 23 (of 27)

<PAGE>


                           PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

       (d) On February 8, 2000, we filed a Registration Statement on Form S-1
(Registration No. 333-96351) with the Securities and Exchange Commission to
register under the Securities Act 8,000,000 shares of our common stock (plus an
additional 1,200,000 shares subject to an over-allotment option granted to the
underwriters). The Registration Statement was declared effective by the
Securities and Exchange Commission on April 26, 2000.

       From April 26, 2000 through June 30, 2001, we used approximately $33.2
million of the net proceeds from our initial public offering for the purchase
and build-out of our new facility. Due to unanticipated construction costs, we
expect that the total amount of net proceeds from our initial public offering
that we will use for the purchase and build-out of our new facility will exceed
our original estimates by approximately $3.2 million. Pending use of the
remaining net proceeds of our initial public offering, we have invested these
funds in short-term, interest-bearing, investment-grade securities. Our
management will continue to have broad discretion over the actual use of these
proceeds.

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

       We held our Annual Meeting of Stockholders on May 23, 2001 to elect six
directors and to ratify the appointment by our Board of Directors of Ernst &
Young LLP as our independent auditors for fiscal year 2001.

       The following nominees were elected, by the vote set forth below, to hold
office until the next annual meeting of stockholders and until their successors
are duly elected and qualified:

<Table>
<Caption>
NOMINEE:                                     NUMBER OF VOTES FOR:             NUMBER OF VOTES WITHHELD:
<S>                                          <C>                              <C>
Malcolm L. Gefter, Ph.D.                          36,925,028                          5,861,212
G. Leonard Baker, Jr.                             41,090,970                          1,695,270
Henry F. McCance                                  41,090,970                          1,695,270
William R. Ringo                                  41,090,970                          1,695,270
David B. Sharrock                                 41,090,970                          1,695,270
Albert L. Zesiger                                 41,090,970                          1,695,270
</Table>

       The stockholders also ratified the appointment by the Board of Directors
of Ernst & Young LLP as our independent auditors for fiscal year 2001 by the
following vote:

<Table>
<Caption>
        NUMBER OF VOTES FOR:               NUMBER OF VOTES AGAINST:             NUMBER OF ABSTENTIONS:
<S>                                        <C>                                  <C>
             42,480,037                            134,995                             171,208
</Table>

                                 Page 24 (of 27)


<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits

<Table>
<Caption>
     EXHIBIT
      NUMBER         EXHIBIT
<S>                  <C>
       3.1           Amended and Restated Certificate of Incorporation (2)
       3.2           Amended and Restated By-Laws (2)
       4.1           Specimen certificate representing shares of common stock (1)
       4.2           Specimen certificate representing shares of common stock (including Rights Agreement Legend) (3)
       4.3           Warrant to purchase Common Stock dated as of May 13, 1997 (1)
       4.4           Amendment dated as of January 30, 2001 between the Registrant and Sanofi-Synthelabo Inc.
                     (formerly Sylamerica, Inc.) to the Warrant for the Purchase of Shares of Common Stock issued
                     by the Registrant to Sylamerica, Inc. (3)
       4.5           Rights Agreement between the Registrant and American Stock Transfer & Trust Company, as Rights
                     Agent (4)
       4.6           Form of Certificate of Designations of Series A Junior Participating Preferred Stock (attached
                     as Exhibit A to the Rights Agreement filed as Exhibit 4.5 hereto)(4)
       4.7           Form of Rights Certificate (attached as Exhibit B to the Rights Agreement filed as Exhibit 4.5
                     hereto) (4)
</Table>
----------------

(1)    Incorporated by reference to Registration Statement on Form S-1
       (Registration No. 333-96351) initially filed with the Securities and
       Exchange Commission on February 8, 2000 and declared effective on April
       26, 2000.

(2)    Incorporated by reference to Quarterly Report on Form 10-Q for the
       quarter ended March 31, 2000 filed with the Securities and Exchange
       Commission on June 7, 2000.

(3)    Incorporated by reference to Registration Statement on Form S-1
       (Registration No. 333-54342) initially filed with the Securities and
       Exchange Commission on January 26, 2001 and declared effective on
       February 14, 2001.

(4)    Incorporated by reference to Registration Statement on Form 8-A filed
       with the Securities and Exchange Commission on January 26, 2001.

(b)    Reports Submitted on Form 8-K

       On April 27, 2001, we filed a Current Report on Form 8-K to file under
Item 5 (Other Events) a copy of our Press Release dated April 27, 2001.

                                 Page 25 (of 27)

<PAGE>


                                    SIGNATURE

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

                                        PRAECIS PHARMACEUTICALS INCORPORATED


Date:  August 9, 2001                   By /s/ Kevin F. McLaughlin
                                           -------------------------------------
                                           Kevin F. McLaughlin
                                           Chief Financial Officer,
                                           Senior Vice President,
                                           Treasurer and Secretary
                                           (Duly Authorized Officer and
                                           Principal Financial and Accounting
                                           Officer)




                                 Page 26 (of 27)

<PAGE>


                                  EXHIBIT INDEX


<Table>
<Caption>
     EXHIBIT
      NUMBER         EXHIBIT
<S>                  <C>
       3.1           Amended and Restated Certificate of Incorporation (2)
       3.2           Amended and Restated By-Laws (2)
       4.1           Specimen certificate representing shares of common stock (1)
       4.2           Specimen certificate representing shares of common stock (including Rights Agreement Legend) (3)
       4.3           Warrant to purchase Common Stock dated as of May 13, 1997 (1)
       4.4           Amendment dated as of January 30, 2001 between the Registrant and Sanofi-Synthelabo Inc.
                     (formerly Sylamerica, Inc.) to the Warrant for the Purchase of Shares of Common Stock issued
                     by the Registrant to Sylamerica, Inc. (3)
       4.5           Rights Agreement between the Registrant and American Stock Transfer & Trust Company, as Rights
                     Agent (4)
       4.6           Form of Certificate of Designations of Series A Junior Participating Preferred Stock (attached
                     as Exhibit A to the Rights Agreement filed as Exhibit 4.5 hereto)(4)
       4.7           Form of Rights Certificate (attached as Exhibit B to the Rights Agreement filed as Exhibit 4.5
                     hereto) (4)
</Table>
----------------

(1)    Incorporated by reference to Registration Statement on Form S-1
       (Registration No. 333-96351) initially filed with the Securities and
       Exchange Commission on February 8, 2000 and declared effective on April
       26, 2000.

(2)    Incorporated by reference to Quarterly Report on Form 10-Q for the
       quarter ended March 31, 2000 filed with the Securities and Exchange
       Commission on June 7, 2000.

(3)    Incorporated by reference to Registration Statement on Form S-1
       (Registration No. 333-54342) initially filed with the Securities and
       Exchange Commission on January 26, 2001 and declared effective on
       February 14, 2001.

(4)    Incorporated by reference to Registration Statement on Form 8-A filed
       with the Securities and Exchange Commission on January 26, 2001.

                                 Page 27 (of 27)