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

                                    FORM 10-K
                         FOR ANNUAL AND SPECIAL REPORTS
                    PURSUANT TO SECTIONS 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

|X|      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001

                                                     OR

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                         Commission File Number: 0-25544

                                 ---------------
                          Miravant Medical Technologies
             (Exact name of Registrant as specified in its charter)

        Delaware                                           77-0222872
(State or other jurisdiction                   (IRS Employer Identification No.)
of incorporation or organization)


                336 Bollay Drive, Santa Barbara, California 93117
          (Address of principal executive offices, including zip code)
                                 (805) 685-9880
              (Registrant's telephone number, including area code)

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

                    Securities registered pursuant to Section
                               12(g) of the Act:

                          Common Stock, $.01 Par Value
                          Common Share Purchase Rights

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

     Indicate by check if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ___ ]

     The   approximate   aggregate   market   value  of  voting  stock  held  by
non-affiliates as of March 15, 2002 based upon the last sale price of the Common
Stock of $1.15 per  share,  as  reported  on the  Nasdaq  National  Market,  was
approximately $16,566,361. For purposes of this calculation only, the registrant
has assumed that its directors and executive  officers,  and any person, who has
filed a Schedule 13D or 13G, is an affiliate.


     The number of shares of Common Stock  outstanding  as of March 15, 2002 was
18,876,508
<PAGE>




DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the following  document are incorporated by reference into Part
III of this Form 10-K:  the Proxy  Statement  for the  Registrant's  2002 Annual
Meeting of  Stockholders  scheduled  to be held on June 26,  2002. A copy of the
proxy  statement may be obtained,  when  available,  upon written request to the
Corporate  Secretary,  Miravant Medical  Technologies,  336 Bollay Drive,  Santa
Barbara, CA 93117.




<PAGE>



                         MIRAVANT MEDICAL TECHNOLOGIES

                           ANNUAL REPORT ON FORM 10-K
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>     <C>    <C>                                                                                              <C>

                                     PART I

Item     1.    Business ...........................................................................................4
Item     2.    Properties .........................................................................................22
Item     3.    Legal Proceedings...................................................................................23
Item     4.    Submission of Matters to a Vote of Security-Holders.................................................23

                                     PART II

Item     5.    Market for Registrant's Common Equity and Related Stockholders Matters..............................24
Item     6.    Selected Consolidated Financial Data................................................................25
Item     7.    Management's Discussion and Analysis of Financial Condition and Results of Operations...............26
Item     7A.   Qualitative and Quantitative Disclosures About Market Risk..........................................55
Item     8.    Financial Statements and Supplementary Data.........................................................55
Item     9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure................78

                                    PART III

Item     10.   Directors and Executive Officers of the Registrant .................................................79
Item     11.   Executive Compensation..............................................................................79
Item     12.   Security Ownership of Certain Beneficial Owners and Management......................................79
Item     13.   Certain Relationships and Related Transactions......................................................79

                                     PART IV

Item     14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K.....................................80

</TABLE>

<PAGE>


                                     PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 10-K contains forward-looking statements,  which
involve known and unknown risks and  uncertainties.  These statements  relate to
our future plans, objectives,  expectations and intentions. These statements may
be identified by the use of words such as "may," "will," "should,"  "potential,"
"expects,"   "anticipates,"   "intends,"   "plans,"   "believes"   and   similar
expressions. These statements are based on our current beliefs, expectations and
assumptions and are subject to a number of risks and  uncertainties  and include
statements  regarding our general beliefs  concerning the efficacy and potential
benefits of photodynamic  therapy;  the timing of the completion of our analysis
of the  clinical  data  from  the  SnET2  Phase  III  wet  age  related  macular
degeneration,   or  AMD,  clinical  trials,  which  Pharmacia  Corporation,   or
Pharmacia,  concluded had not met the primary efficacy endpoint;  the assumption
that we will continue as a going concern and stay listed on Nasdaq; our plans to
collaborate  with other  parties;  our ability to  continue to retain  employees
under  our  current  financial  circumstances;  our  ability  to use  our  light
production and delivery devices in future clinical trials; our expected research
and  development   expenditures;   our  patent  prosecution  strategy;  and  our
expectations  concerning the government  exercising its rights to use certain of
our licensed  technology.  Our actual results could differ materially from those
discussed  in these  statements  due to a  number  of  risks  and  uncertainties
including:  a failure of our drugs and devices to receive  regulatory  approval;
unanticipated  complexity or difficulty in analyzing  clinical trial data; other
parties may decline to  collaborate  with us due to our  financial  condition or
other reasons  beyond our control;  our existing  light  production and delivery
technology may prove to be inapplicable or inappropriate for future studies;  we
may be unable to obtain  the  necessary  funding  to further  our  research  and
development  activities  and the  government  may change its past  practices and
exercise  its  rights  contrary  to  our  expectations.   For  a  more  complete
description  of the risks  that may  impact our  business,  see "Risk  Factors",
included in Item 7, for a discussion of certain risks,  including those relating
to our  ability to obtain  additional  funding,  our  ability to  establish  new
strategic  collaborations,  our operating losses,  risks related to our industry
and other forward-looking statements.

ITEM 1.  BUSINESS

General

     We are a pharmaceutical  research and development  company developing light
activated  drugs  and  associated   devices  for  a  medical   procedure  called
photodynamic therapy, or PDT. PDT is a minimally invasive medical procedure that
uses drugs that are activated by light, or  photoreactive  drugs, to selectively
destroy  abnormal  cells and blood  vessels.  We have  branded  our  proprietary
version of PDT as PhotoPoint(TM)  PDT.  PhotoPoint PDT integrates our drugs with
our light producing and light delivery devices to achieve a photochemical effect
on targeted  diseased cells and blood vessels.  While we currently have no drugs
or devices that have received  regulatory  approval,  we believe that PhotoPoint
PDT is a platform  technology  that has the potential to be a safe and effective
treatment  for  a  number  of  diseases   including   those  in   ophthalmology,
dermatology, cardiovascular disease and oncology.

     The  status of our most  significant  development  activities  and  company
developments are as follows:

     *    In  collaboration  with Pharmacia,  in December 2001, we completed two
          Phase  III   ophthalmology   clinical  trials  for  the  treatment  of
          age-related  macular   degeneration,   or  AMD,  with  our  lead  drug
          candidate, SnET2. In January 2002, Pharmacia, after an analysis of the
          Phase III AMD clinical data, determined that the clinical data results
          indicated that SnET2 did not meet the primary efficacy endpoint in the
          study population,  as defined by the clinical trial protocol, and that
          they would not be filing a New Drug Application, or NDA, with the U.S.
          Food and Drug Administration, or FDA. Based on Pharmacia's analysis of
          the AMD clinical data, we may not be able to proceed with our plans to
          seek regulatory  approval of SnET2 as formerly planned. In March 2002,
          we regained  the license  rights to SnET2 as well as the related  data
          and assets from the Phase III AMD clinical trials from  Pharmacia.  We
          are  currently  conducting  our own detailed  analysis of the clinical
          data,  including  an  analysis  of the  subset  groups.  We  expect to
          complete our analysis by the end of the second quarter 2002 and, based
          on the results of our analysis, we will determine the future potential
          development  of SnET2.  In addition,  we have  terminated  our license
          collaboration   with   Pharmacia,   and  we   intend  to  seek  a  new
          collaborative partner for PhotoPoint PDT in ophthalmology;
     *    We will  require  additional  funding in the near term to support  our
          ongoing  development  activities and operations  past September  2002.
          Pharmacia  has  provided  us with  various  forms of funding in recent
          years including equity  investments and loans. With the termination of
          our license collaboration, Pharmacia will no longer loan us additional
          funds  nor  will  they be  required  to  make  milestone  payments  or
          additional equity  investments.  We have taken steps to reduce our use
          of cash through a cost  restructuring  program  implemented in January
          2002,  and are working to arrange  funding  through  other sources but
          have not yet secured firm commitments.  If we are unable to secure the
          necessary funding,  we will be required to further curtail or entirely
          cease our operations;
     *    The  trading  price  of our  Common  Stock,  the  size  of our  market
          capitalization  and the amount  of our  stockholders'  equity  and net
          tangible asset have caused us to fail to comply with certain continued
          listing  standards of the Nasdaq National  Market System,  and we have
          been  notified of the intent of Nasdaq to delist our  shares.  We have
          scheduled a hearing  with  Nasdaq on April 18,  2002 to  consider  our
          status as a listed  company  on  Nasdaq.  There is no  assurance  that
          Nasdaq will grant our request for continued listing after the hearing.
          If we are delisted,  it will be more difficult for us to raise capital
          and our business may suffer as a result;
     *    In July 2001, we completed a Phase I dermatology  clinical  trial and,
          in January 2002,  commenced a Phase II dermatology clinical trial with
          a topical formulation of our photoreactive drug, MV9411, for potential
          use in the treatment of psoriasis;
     *    We are conducting  preclinical studies of new photoselective drugs and
          SnET2 for  cardiovascular  diseases,  in particular for the prevention
          and  treatment of  restenosis.  Restenosis  is the  renarrowing  of an
          artery that commonly occurs after balloon  angioplasty for obstructive
          coronary artery  disease.  We are in the process of formulating a lead
          photoselective   cardiovascular   drug,  MV0633,  and  performing  the
          requisite  studies  to  prepare  for  an   Investigational   New  Drug
          application, or IND, in cardiovascular disease; and
     *    In  oncology,  we are  also  conducting  preclinical  research  of our
          photoselective therapy to destroy abnormal blood vessels in tumors. We
          are pursuing this tumor  research with some of our new  photoselective
          drugs and are also investigating combination therapies with PhotoPoint
          PDT and other types of compounds.

     Based on our ability to successfully obtain additional funding, our ability
to successfully obtain new collaborative partners, our ability to pursue further
development of SnET2 for AMD or other disease indications,  the effectiveness of
our cost restructuring program, our ability to stay listed on Nasdaq and various
other  economic  and  development  factors,  such as the  cost of the  programs,
competing  therapies and other  marketing  considerations,  we may or may not be
able  to  further   develop   PhotoPoint   PDT   procedures  in   ophthalmology,
cardiovascular disease, dermatology, oncology or in any other indications.

Background

     Photodynamic  therapy is generally a minimally  invasive medical  procedure
that  uses  photoselective,  or light  activated,  drugs to treat  disease.  The
technology  involves three  components:  photoselective  drugs,  light producing
devices and light delivery devices.

     Our photoselective drugs have the capability to transform light energy into
chemical energy. This action is similar to that of chlorophyll in green plants.

     When administered to the body,  photoselective drugs tend to preferentially
accumulate in fast growing, or hyperproliferating cells. Specific diseases, such
as   cancer   and   psoriasis,    are    characterized   by   general   cellular
hyperproliferation while other diseases may also have certain hyperproliferative
components.   For  example,   certain  ophthalmic   diseases  are  caused  by  a
proliferation  of  new  blood  vessels  in  the  back  of the  eye  and  certain
cardiovascular  diseases are caused by a proliferation of scar tissue within the
coronary arteries.

     Photoselective  drugs are  inactive  until  exposed to a dose of light of a
specific  wavelength.  The dose of light represents the number of photons (light
energy) delivered over time, and the wavelength  corresponds to the color of the
light.  Since  different  drugs will respond to various doses and wavelengths of
light,  we have  designed our drugs to respond to the  particular  wavelength of
light that will best penetrate the biological  environment of targeted  diseased
cells. When the drug and light interact within a cell, a type of reactive oxygen
is  produced  that can lead to cell  death.  The  extent  of cell  death  may be
controlled  by varying  the doses of drug and light and the  relative  timing of
their  administration.  The  result is a process  that can  potentially  destroy
problem  cells and blood  vessels  with  minimal  damage to  surrounding  normal
tissues and vessels.

     Low-power,  non-thermal light can be used to activate photoselective drugs.
As a result, there is little or no risk of thermal damage to surrounding tissue,
as with traditional  high-power thermal lasers. The light is typically generated
by lasers, or for certain applications,  non-coherent light sources,  which have
been specifically  modified for use in photodynamic  therapy. The light is often
delivered  from the light  source to the patient via  specially  designed  fiber
optics.  These fiber optic light delivery  devices produce patterns of light for
different  disease  applications and can be channeled into the body for internal
applications.

Industry

     As early as 1900,  scientists  observed that certain compounds localized in
tissues would elicit a response to light.  Since the mid-1970s,  various aspects
of   photodynamic   therapy  have  been  studied  and   established  in  humans.
Photodynamic  therapy is  currently  being  studied  by a variety of  companies,
physicians and  researchers  around the world for the treatment of a broad range
of  disease  applications.  We  believe  that  early on the  development  of the
industry had been hindered by various  drawbacks,  including  inconsistent  drug
purity   and   performance   and   costly,   difficult-to-maintain   lasers  and
non-integrated  drug and device  development.  We are addressing these issues as
part of our business strategy and in our development  programs.  In the last few
years the industry has shown some significant  advancement  through the approval
of several  photodynamic  drugs by the regulatory  agencies in the United States
and abroad.

Business Strategy

     Our  strategy  is to apply  PhotoPoint  PDT as a  primary  treatment  where
appropriate or in combination  with other therapies such as surgery,  radiation,
chemotherapy,  drug therapy or other  treatments  under  development  to achieve
superior  clinical results.  Although the potential  applications for PhotoPoint
PDT are numerous,  our primary focus at this time is to develop  PhotoPoint  PDT
for clinical  use in the disease  areas where there are large  potential  market
opportunities  and/or unmet medical needs.  We believe that  commercial  success
will  depend  upon  safety  and   efficacy   outcomes,   regulatory   approvals,
competition,   third-party   reimbursements   and  other  factors  such  as  the
manufacturing,  marketing and  distribution  of our  products.  At this time, we
intend to develop  our  business  as a research  and  development  company  with
limited manufacturing and marketing capabilities. For large scale manufacturing,
marketing  and  distribution  activities,  we plan  to  have  or seek  strategic
collaborations  with pharmaceutical and medical device partners who already have
significant and established capabilities in the therapeutic areas.

Technology and Products

     We  are   developing   synthetic   photoselective   drugs   together   with
software-controlled,  portable  light  producing  devices  and fiber optic light
delivery and  measurement  devices for the  application  of PhotoPoint  PDT to a
broad range of disease  indications.  We believe that by being an expert in both
PhotoPoint  drugs and  devices,  and by  integrating  the  development  of these
technologies,  we can produce easy-to-use  PhotoPoint PDT systems that offer the
potential for predictable and consistent results.

     Drug  Technology.  We hold  exclusive  license  rights under certain United
States  and  foreign  patents to several  classes of  synthetic,  photoselective
compounds,  subject to  certain  governmental  rights,  as  described  under the
heading Patents and Proprietary  Technology.  From our classes of compounds,  we
have  selected  SnET2 as our leading drug  candidate  and have used SnET2 in the
majority  of our  clinical  trials to date.  We have also used MV9411 in certain
preclinical studies and clinical trials. We have regained control of the license
rights to SnET2  from  Pharmacia  and are  currently  pursuing  other  potential
collaborative  partners that have expressed interest in these license rights. We
are also developing other potential  photoselective drugs for additional disease
applications and future partnering opportunities.

         We believe that our synthetic photoselective drugs may provide the
following benefits:

     *    Predictable.  The  synthetic  nature of our  photoselective  compounds
          permits   us  to  design   drugs   with   molecular   structures   and
          characteristics that may facilitate  consistency in clinical treatment
          settings,  as well as  predictability  in  manufacturing  and  quality
          control;
     *    Side  effects.  Treatments  with our  drug  SnET2  to date  have  been
          generally  well-tolerated,  with a good safety  profile for the target
          population  and the primary side effect being a mild,  transient  skin
          photosensitivity in some patients; and
     *    Versatile. We can synthesize drugs with specific characteristics, such
          as activation by a particular  wavelength of light.  This  versatility
          provides  us with the  potential  to design  our drugs for  particular
          disease  conditions  and to take  advantage of  semiconductor  (diode)
          light technology.

     Light Producing  Devices.  We have synthesized our drugs to be activated by
light produced by reliable and affordable light sources.  Our light technologies
include  software-controlled  microchip  diodes,  light emitting  diode, or LED,
arrays and  non-thermal  lasers  and lamps.  We have  collaborated  with  Iridex
Corporation,  or Iridex,  on the  development  of light  producing  devices  for
PhotoPoint PDT in ophthalmology  and have  co-developed a portable,  solid-state
diode light device, which was used in our clinical trials in ophthalmology.

     We believe that our diode devices offer  advantages  over laser  technology
historically used in photodynamic therapy. For example, our  software-controlled
designs  offer  reliability  and built-in  control and  measuring  features.  In
addition, our diode systems, which are about the size of a desktop computer, are
smaller and more portable than traditional  high-power thermal laser systems. We
believe that our diode  systems may offer light  producing  devices that will be
more  affordable  and  convenient  than the laser systems  historically  used in
photodynamic therapy.

     Light Delivery and Measurement Devices. We are developing and manufacturing
light delivery and measurement devices,  including a wide variety of fiber optic
light delivery  devices for use in PhotoPoint PDT. Many of these devices must be
highly  flexible and  appropriate for endoscopic use and must be able to deliver
unique patterns of uniform,  diffuse light for different  disease  applications.
Some of our products include microlenses that produce a tiny flashlight beam for
discrete surface lesions,  the Flex(R) cylinder diffuser which delivers light in
a radial  pattern  along a  flexible  tip for sites  such as the  esophagus  and
spherical  diffusers  which  emit a diffuse  ball of light for sites such as the
bladder or  nasopharynx  and  endovascular  catheters for use in  cardiovascular
applications.  Some of our light delivery devices have been used in our clinical
trials.  We have also  developed  light  measurement  devices for PhotoPoint PDT
including  devices that detect  wavelength  and  fluorescence  to facilitate the
measurement of light or drug uptake.

     Additionally,  we  have  and  we  continue  to  develop  with  and  without
collaborators,  a variety of light devices producing various wavelengths that we
use in our current research projects and preclinical  studies and that we expect
to use in future clinical trials.

Targeted Diseases and Clinical Trials

     We believe that our PhotoPoint PDT technology has potential applications in
a wide range of disease  indications.  We have selected,  based upon regulatory,
clinical and market considerations, a number of disease applications,  discussed
below, on which to focus.  Our decision to proceed with  preclinical  studies or
advance the drug or device  development or to proceed to clinical  trials in any
application  depends upon such factors as adequate  funding,  corporate  partner
commitment,   the  results  of  preclinical  studies,   governmental  regulatory
communications,  competitive factors,  various other economic  considerations as
well as our overall business strategy.

Ophthalmology

     We believe  that  PhotoPoint  PDT has the  potential  to treat a variety of
ophthalmic disorders, including conditions caused by neovascularization, such as
AMD, as well as other ophthalmic conditions.  Neovascularization in the eye is a
condition in which new blood  vessels grow  abnormally  under the surface of the
retina or other parts of the eye. In AMD, these fragile  vessels can hemorrhage,
causing scarring and damage to the tissue which may lead to loss of vision.  AMD
is the leading  cause of blindness in  Americans  over age 50. In  collaboration
with  Pharmacia,  in  December  2001 we  completed  two Phase III  ophthalmology
clinical trials for the treatment of AMD with our lead drug candidate, SnET2. In
January 2002,  Pharmacia,  after an analysis of the Phase III AMD clinical data,
determined that the clinical data results  indicated that SnET2 did not meet the
primary efficacy  endpoint in the study  population,  as defined by the clinical
trial  protocol,  and that they  would  not be  filing an NDA with the FDA.  The
primary  efficacy  endpoint is defined as the proportion of AMD patients treated
with SnET2 losing a specified  amount of vision at the end of two years compared
to  placebo  patients.  Patients  with AMD  experience  a loss of  vision as the
disease progresses. The vision loss is measured with an eye chart from the Early
Treatment Diabetic  Retinopathy Study. Based on Pharmacia's  analysis of the AMD
clinical  data, we may not be able to proceed with our plans to seek  regulatory
approval of SnET2 as formerly  planned.  In March 2002,  we regained the license
rights to SnET2 as well as the  related  data and assets  from the Phase III AMD
clinical  trials from  Pharmacia.  We are currently  conducting our own detailed
analysis of the clinical data,  including an analysis of the subset  groups.  We
expect to complete our analysis by the end of the second quarter 2002 and, based
on the  results  of  our  analysis,  we  will  determine  the  future  potential
development of SnET2. In addition,  we have terminated our license collaboration
with Pharmacia, and we intend to seek a new collaborative partner for PhotoPoint
PDT in ophthalmology.

     We have also  conducted  preclinical  studies  for the  treatment  of other
ophthalmic  diseases such as corneal  neovascularization,  glaucoma and diabetic
retinopathy.  At this time we are not pursuing treatments for these diseases, as
our current efforts are on AMD.

Cardiovascular Disease

     We are  investigating  the  use of  PhotoPoint  PDT for  the  treatment  of
cardiovascular disease, including restenosis.  Restenosis is the re-narrowing of
arteries following balloon angioplasty due to cellular overgrowth which can lead
to  recurrence  of severe  symptoms and heart  failure.  A common  procedure for
widening  a blocked  coronary  artery is  balloon  angioplasty  followed  by the
placement of a stent.  Preclinical  studies with  PhotoPoint  PDT indicate  that
certain    photoselective    drugs   may   be    preferentially    retained   in
hyperproliferating cells in arterial walls and lipid-rich components of arterial
plaques. Data from these preclinical studies suggest that PhotoPoint PDT may aid
in the  prevention  and treatment of restenosis  by  inhibiting  the  aggressive
overgrowth of cells that block arteries.  We are conducting  preclinical studies
using SnET2, our new lead drug candidate MV0633, other drug candidates and light
delivery  devices and catheters for the  prevention  of  restenosis,  as well as
early  preclinical  studies for other  cardiovascular  diseases such as vascular
graft intimal hyperplasia and diffuse atherosclerosis.

Dermatology

     A number of  dermatological,  or skin,  disorders have shown  potential for
treatment  with  PhotoPoint  PDT. One of these is  psoriasis,  a  non-cancerous,
chronic and potentially  debilitating skin disorder. We have developed a topical
gel  formulation  of a new  photosensitizer,  MV9411,  for  psoriasis  and other
dermatological  diseases.  In July  2001,  we  completed  a Phase I  dermatology
clinical trial and, in January 2002,  commenced a Phase II dermatology  clinical
trial with  MV9411 for  potential  use in the  treatment  of  psoriasis.  We are
continuing  to  evaluate  other  dermatology  indications  and  may  advance  to
additional  clinical  trials  based on the  progress of the  development  of the
topical  photosensitizers,  results of preclinical studies, results of the Phase
II  clinical  trial  for  the  treatment  of  psoriasis,   communications   with
governmental  regulatory  agencies,  potential market  considerations  and other
factors.

Oncology

     Cancer is a large group of diseases  characterized  by uncontrolled  growth
and  spread  of  hyperproliferating  cells.  The  treatment  of cancer is called
oncology.  In  oncology,  we  continue  to conduct  preclinical  research of our
PhotoPoint  PDT to destroy  abnormal  blood  vessels in  tumors.  This  research
includes further exploration of the mechanism of action of PhotoPoint PDT at the
cellular and tissue level, the effect of PhotoPoint PDT on tumor vasculature and
evaluation  of new  photosensitizers  in solid  tumor  models.  The focus of our
preclinical  research  is  to  evaluate  the  utility  of  PhotoPoint  PDT  as a
stand-alone treatment,  as an adjunct treatment to conventional therapies, or as
a combination  therapy with experimental or approved therapies.  Currently,  our
research  efforts focus on the use of PhotoPoint PDT in treating cancers such as
those of the brain, breast, lung and prostate. During 2000, we completed a Phase
I drug-only  clinical  trial using SnET2 in  patients  with  localized  prostate
cancer.  At this time, we have opted not to pursue further clinical trials using
SnET2 in prostate  cancer as a result of other market  opportunities  consistent
with our business  strategy.  We have an existing oncology IND for SnET2,  under
which we may  choose  to  submit  protocols  for  clinical  trials  in  oncology
indications in the future.

Strategic Collaborations

     We  are  pursuing  a  strategy  of  establishing   license  agreements  and
collaborative  arrangements for the purpose of securing exclusive access to drug
and device  technologies,  funding  development  activities and providing market
access  for our  products.  We seek to obtain  from our  collaborative  partners
exclusivity  in  the  field  of  photodynamic  therapy  and  to  retain  certain
manufacturing  and  co-development  rights. We intend to continue to pursue this
strategy  where  appropriate  in order to enhance  in-house  research  programs,
facilitate  clinical  trials  and  gain  access  to  distribution  channels  and
additional technology.

Definitive Collaborative Agreements

Pharmacia Corporation

     In March 2002,  we entered  into a Contract  Modification  and  Termination
Agreement with  Pharmacia  under which we regained all of the rights and related
data and  assets  for our lead  drug  candidate,  SnET2,  and  restructured  our
outstanding  debt due to  Pharmacia.  In addition,  the majority of our previous
agreements with Pharmacia were either terminated or modified as follows:

Terminated Agreements:

     Under the terms of the Contract Modification and Termination Agreement, the
following  agreements and side letters between  Miravant and Pharmacia have been
terminated:

     *    Amended and Restated  Ophthalmology  Development and License Agreement
          dated as of February 18, 1999;
     *    Restated and Amended  Development and License  Agreement dated June 8,
          1998, for the fields of oncology and urology;
     *    SnET2 Device Supply Agreement dated July 1, 1995, which related to the
          supply of light producing and light delivery devices;
     *    Product Supply Agreement dated July 1, 1995, which related to the drug
          supply of SnET2 drug supply agreement;
     *    SnET2 Device Supply  Agreement for  Ophthalmology  dated  December 20,
          1996, which related to the supply of Iridex laser devices;
     *    Cardiovascular  SnET2 Right of First  Negotiation  Side  Letter  dated
          January 15, 1999;
     *    Ophthalmology Side Letter dated as of May 24, 2000;
     *    Iridex Side Letter dated May 31, 2000;
     *    Manufacturing  Facility Asset Purchase  Agreement  dated as of May 24,
          2001, which provided for the following:
          *    Pharmacia   agreed  to  buy  our   existing   SnET2  bulk  active
               pharmaceutical  ingredient,  or bulk API,  inventory  at cost for
               $2.2 million. As of June 30, 2001, the entire $2.2 million of the
               existing  bulk API  inventory  had been  delivered to  Pharmacia,
               recorded as revenue and the  payment had been  received  into the
               inventory escrow account;
          *    Pharmacia committed, through two other purchase orders, to buy up
               to an  additional  $2.8  million  of the bulk API which  would be
               manufactured  by us. As of December  31,  2001,  we had sold $2.1
               million of newly manufactured bulk API inventory,  which had been
               delivered to  Pharmacia,  recorded as revenue and the payment had
               been received into the inventory escrow account. Additionally, in
               March  2002,   Pharmacia  made  their  final  purchase  of  newly
               manufactured  bulk API of  approximately  $450,000  which will be
               paid  directly  to us.  No  further  bulk  API  will  be  sold to
               Pharmacia;
          *    Pharmacia   agreed  to  purchase  the   manufacturing   equipment
               necessary to produce bulk API. The  manufacturing  equipment  was
               purchased for $863,000,  its fair market value as appraised by an
               independent  appraisal  firm. The payment for the purchase of the
               equipment  was  made  into  an  equipment  escrow  account  to be
               released in June 2001;
          *    The  interest  earned  by  the  inventory  and  equipment  escrow
               accounts  accrued  to us and will be  released  from each  escrow
               account.  All  amounts  received  into  escrow  are  recorded  as
               accounts receivable until the amounts are released;
          *    In January 2002, the inventory  escrow account as well as accrued
               interest was released us in full; and
          *    In  connection  with the Contract  Modification  and  Termination
               Agreement,  Pharmacia  has  transferred  ownership  of all of the
               bulk  API  inventory and bulk API manufacturing equipment back to
               us and has released the  equipment escrow  funds in  March  2002.
     *    Site Access License Agreement dated as of May 31, 2001, which provided
          us access to the bulk API manufacturing facility; and
     *    Sublease  Assignment  Agreement  dated  as  of  May  24,  2001,  which
          transferred the bulk API manufacturing  facility lease  responsibility
          to Pharmacia.

     With the termination of each of the above noted  agreements,  all ownership
of the rights,  data and assets  related to SnET2 and the Phase III AMD clinical
trials  will revert  back to us. The rights  transferred  back to us include the
ophthalmology  IND and the related filings,  data and reports and the ability to
license  rights to SnET2.  The assets,  which we received  ownership  rights to,
include the lasers utilized in the Phase III AMD clinical  trials,  the bulk API
manufacturing equipment, all of the bulk API inventory sold to Pharmacia in 2001
and 2002 and the finished dose formulation, or FDF, inventory. Pharmacia will no
longer be required to make additional  milestone payments or equity investments.
As described below, Pharmacia will also not extend us additional credit.

     With the termination of the Sublease Assignment Agreement, we will reassume
the lease  obligations and related property taxes for our bulk API manufacturing
facility.  The lease agreement  expires in October 2006 and currently has a base
rent of approximately  $26,000 per month. In addition to receiving  ownership of
all of the bulk API inventory  sold to Pharmacia in 2001, we will also receive a
payment of  approximately  $450,000 for the cost of the  in-process and finished
bulk API inventory  manufactured  through January 23, 2002 and will maintain the
ownership to the bulk API inventory.

Modified Agreements:

     The Contract  Modification and Termination Agreement also modified the 2001
Credit   Agreement.   The  outstanding   debt  that  we  owed  to  Pharmacia  of
approximately $26.8 million, was reduced to $10.0 million plus accrued interest.
We will be required to make a payment of $5.0 million  plus accrued  interest on
each of March 4, 2003 and June 4, 2004. Interest on the debt will be recorded at
the  prime  rate,  which  was  4.75% at March 5,  2002.  In  exchange  for these
modifications and the rights to SnET2, we terminated our right to receive a $3.2
million  loan that was  available  under the 2001  Credit  Agreement.  Also,  as
Pharmacia has determined that they will not file an NDA for SnET2 PhotoPoint PDT
for AMD and the  clinical  data from the Phase III AMD  clinical  trials did not
meet certain clinical  statistical  standards,  as defined by the clinical trial
protocol,  as such, we will not have available to us an additional $10.0 million
of borrowings as provided for under the 2001 Credit Agreement.  In addition, the
early  repayment  provisions  and  many  of the  covenants  were  eliminated  or
modified.

Agreements Not Affected:

     Aside from the changes made under the Contract Modification and Termination
Agreement,  there  were no changes  made to the  Warrant  Agreement,  the Equity
Investment Agreement and the Registration Rights Agreement with Pharmacia.

     In connection with the 2001 Credit Agreement, we granted Pharmacia warrants
to purchase a total of 360,000 shares of our Common Stock.  The exercise  prices
and  expiration  dates are as follows:  120,000  shares at an exercise  price of
$11.87 per share  expiring May 5, 2004,  120,000  shares at an exercise price of
$14.83 per share  expiring  November 12, 2004 and 120,000  shares at an exercise
price of $20.62 per share  expiring May 23, 2005.  Pharmacia  will retain all of
its rights under the terms and conditions of the Warrant Agreement.

     In  February  1999,  through  an  Equity  Investment  Agreement,  Pharmacia
purchased  1,136,533  shares  of our  Common  Stock at  $16.71  per share for an
aggregate purchase price of $19.0 million.  Additionally, in connection with the
original SnET2 license agreement in 1995,  Pharmacia purchased 725,001 shares of
our Common Stock for $13.0 million. Under the terms of the Contract Modification
and  Termination  Agreement,  Pharmacia  will retain all of the shares of Common
Stock purchased from us.

Iridex Corporation

     In May 1996, we entered into a co-development  and  distribution  agreement
with Iridex,  a leading provider of  semiconductor-based  laser systems to treat
eye diseases. The agreement generally provides:

          *    Miravant with the  exclusive  right to  co-develop,  with Iridex,
               light producing  devices for use in  photodynamic  therapy in the
               field of ophthalmology;
          *    We will conduct  clinical trials and make regulatory  submissions
               with  respect  to  all  co-developed   devices  and  Iridex  will
               manufacture  all devices for these  trials,  with costs shared as
               set forth in the agreement; and
          *    Iridex  will  have  an  exclusive,  worldwide  license  to  make,
               distribute and sell all  co-developed  devices,  on which it will
               pay us royalties.

     The agreement remains in effect,  subject to earlier termination in certain
circumstances,  until ten years after the date of the first FDA  approval of any
co-developed  device for commercial sale, subject to certain renewal rights. The
light producing  device used in AMD clinical trials was  co-developed  with Iris
Medical Instruments Inc., a subsidiary of Iridex, under this agreement,  and any
commercialization of this device is governed in part by this agreement.

The University of Toledo,  The Medical  College of Ohio and St. Vincent  Medical
Center

     In July 1989, we entered into a License  Agreement  with the  University of
Toledo,  the Medical College of Ohio and St. Vincent Medical Center,  of Toledo,
Ohio,  collectively  referred  to as Toledo.  This  agreement  provides  us with
exclusive, worldwide rights:

          *    To make, use, sell, license or sublicense certain  photoselective
               compounds,  including SnET2 covered by certain Toledo patents and
               patent  applications,  or not covered by Toledo patents or patent
               applications but owned or licensed to Toledo and which Toledo has
               the right to sublicense;
          *    To  make,  use,  sell,  license  or  sublicense  certain  of  the
               compounds  for  which  we have  provided  Toledo  with  financial
               support; and
          *    To make,  use or sell any invention  claimed in Toledo patents or
               applications  and any  composition,  method or device  related to
               compounds  conceived or developed by Toledo under research funded
               by Miravant.

     The agreement further provides that we pay Toledo royalties on the revenues
we receive from the sales or sublicenses of product  covered by this  agreement.
To date, no royalties have been paid or accrued since no drug or related product
has  been  sold.  Under  the  agreement,  we are  required  to  satisfy  certain
development and commercialization  objectives once an NDA has received approval.
This agreement  terminates upon the expiration or non-renewal of the last patent
which  may issue  under  this  agreement,  currently  2013.  By the terms of the
agreement,  the license extends upon issuance of any new Toledo  patents.  We do
not have contractual  indemnification rights against Toledo under the agreement.
Some of the research relating to the compounds covered by the License Agreement,
including  SnET2,  has been or is being  funded in part by certain  governmental
grants under which the United States  Government has or will have certain rights
in the technology developed,  including the right under certain circumstances to
a non-exclusive  license or to require Miravant to grant an exclusive license to
a third  party.  For a  description  of  governmental  rights  see  Patents  and
Proprietary Technology.

Fresenius AG

     In August 1994, we entered into a supply contract with Pharmacia to develop
an emulsion formulation  suitable for intravenous  administration of SnET2 to be
used as the FDF. Effective November 30, 1998, Pharmacia's rights and obligations
under  the  Formulation  Agreement  were  assigned  to  Fresenius  Kabi  LLC,  a
subsidiary of Fresenius AG, or Fresenius, as part of an Asset Transfer Agreement
between  Pharmacia  and  Fresenius.  The  operating  terms  of  the  Formulation
Agreement  were not  changed  as part of the  assignment  and the  terms  are as
follows:

          *    They  agreed  to be  our  exclusive  supplier  of  such  emulsion
               products;
          *    They  agreed  to  manufacture  and  supply  all of our  worldwide
               requirements of FDF; and
          *    They agreed not to develop or supply formulations or services for
               use  in any  photodynamic  therapy  applications  for  any  other
               company.

     This  agreement  was not  impacted  as a result of the  Pharmacia  Contract
Modification  and  Termination   Agreement  and  this  agreement  will  continue
indefinitely  except  that  it may be  terminated  ten  years  after  the  first
commercial sale of SnET2.

Ramus Medical Technologies

     In December 1996,  our wholly owned  subsidiary,  Miravant  Cardiovascular,
Inc., entered into a co-development  agreement with Ramus Medical  Technologies,
or Ramus, an innovator in the development of autologous tissue  stent-grafts for
vascular  bypass  surgeries.  Generally  the  agreement  provides  us  with  the
exclusive rights to co-develop our photodynamic  therapy  technology with Ramus'
proprietary  technology in the  development  of autologous  vascular  grafts for
coronary  arteries and other  vessels.  Ramus shall  provide,  at no cost to us,
products  for use in  preclinical  studies  and  clinical  trials with all other
preclinical and clinical costs to be paid by us. The agreement remains in effect
until  the later of ten years  after the date of the first FDA  approval  of any
co-developed  device for commercial  sale, or the life of any patent issued on a
co-developed device, subject to certain renewal rights. Currently,  there are no
co-development activities and Ramus activities are at a minimum until they raise
funding to continue operations.  We do provide various services to them on an as
needed basis, which have been insignificant to date, and we have deferred Ramus'
sublease rent payments until sometime in the future.

     In  conjunction  with the  co-development  agreement,  we  purchased a $2.0
million  equity  interest  in Ramus,  and  obtained  an option  to  acquire  the
remaining  shares of Ramus.  We have  declined to  exercise  this option and the
option  period  has now  expired.  Further,  we have  first  refusal  rights and
pre-emptive  rights for any issuance of new securities,  whether debt or equity,
made by Ramus.  Additionally,  we entered into a revolving credit agreement with
Ramus, which provided Ramus with the ability to borrow up to $2.0 million. As of
December 31, 2001, the entire $2.0 million has been fully utilized,  and we have
reserved for the entire  outstanding  balance of principal and accrued interest.
The revolving  credit  agreement,  which was due in full in March 2000, has been
subsequently extended indefinitely.

Xillix Technologies Corp.

     In June 1998, we purchased an equity interest in Xillix Technologies Corp.,
or Xillix.  We received  2,691,904 shares of Xillix common stock in exchange for
$3.0 million in cash and 58,909 shares of Miravant  Common Stock. In conjunction
with the  investment,  we also  entered  into an  exclusive  strategic  alliance
agreement with Xillix to co-develop proprietary systems incorporating PhotoPoint
PDT and Xillix's  fluorescence  imaging  technology  for diagnosing and treating
early stage cancer and pre-malignant  tissues.  The agreement provides that both
companies  will own  co-developed  products  and will  share  the  research  and
development costs associated with the development  program.  Xillix will receive
drug royalty payments from us based on the sale of our drugs used in conjunction
with the co-developed technology.  Currently,  there are no active collaborative
projects.

     Additionally,  during 2000, we  determined  the decline in the value of our
investment  in Xillix was  other-than-temporary.  We  recognized a loss totaling
$3.5 million to adjust our  investment in Xillix to its  estimated  current fair
value based on the average  closing  prices over a 120 day period.  This loss is
included in  "Non-cash  loss in  investment"  in the  accompanying  consolidated
statements of operations,  stockholders'  equity and cash flows.  As of December
31, 2001, we still hold the 2,691,904  shares of Xillix common stock received in
our original  investment  transaction.  The new cost basis in the  investment is
$991,000,   and  this   investment   will   continue  to  be  classified  as  an
available-for-sale   investment  recorded  at  fair  value  with  any  resulting
unrealized gains or losses included in "Accumulated other comprehensive loss" in
the consolidated balance sheet and statement of stockholders' equity.

Laserscope

     In April  1992,  we entered  into a  seven-year  license  and  distribution
agreement with Laserscope,  a surgical laser company.  This agreement terminated
in April 1999 and Laserscope  made a final royalty  settlement  with us in 2001.
Laserscope  now  holds  a fully  paid-up,  non-exclusive  license  to use in its
products dye laser technology that we developed.

Research and Development Programs

     Our research and  development  programs  are devoted to the  discovery  and
development of drugs and devices for PhotoPoint  PDT. These research  activities
are conducted  in-house in our  pharmaceutical  and engineering  laboratories or
elsewhere in collaboration  with medical or other research  institutions or with
other companies. We have expended, and expect to continue to spend,  substantial
funds on our research and development programs. We expended $13.3 million, $19.9
million and $29.7 million on research and  development  activities  during 2001,
2000 and 1999, respectively.

     Our pharmaceutical  research programs are focused on the ongoing evaluation
of our  proprietary  compounds for  different  disease  applications.  Among our
outside or extramural research, we are conducting preclinical studies at various
academic and medical research  institutions in the United States and abroad.  We
are also active in the research and  development of devices for PhotoPoint  PDT.
These programs  include  development of fiber optic light delivery  devices,  as
well as light sources.  Device research and development are presently  conducted
either in-house or in collaboration with partners.

     We have pursued and been awarded various  government  grants and contracts.
These grants have been sponsored by the National Institutes of Health and/or the
Small Business Innovative Research Administration, which complement our research
efforts and facilitate new development.

Manufacturing

     Our strategy is generally to retain manufacturing rights and maintain pilot
manufacturing   capabilities   and,  where  appropriate  due  to  financial  and
production  constraints,  to partner  with  leading  pharmaceutical  and medical
device companies for certain  elements of our  manufacturing  processes.  We are
licensed  by the  State of  California  to  manufacture  bulk  API at our  Santa
Barbara,  California  facility  for  clinical  trial and other use. We currently
manufacture  bulk API,  the process up to the final  formulation  and  packaging
step,  and have the ability to  manufacture  light  producing  devices and light
delivery  devices and conduct other production and testing  activities,  at this
location. However, we have limited capabilities, personnel and experience in the
manufacture of finished drug,  light  producing and light delivery  products and
utilize outside  suppliers,  contracted or otherwise,  for certain materials and
services related to our manufacturing activities, especially large scale levels.
Although  most of our  materials  and  components  are  available  from  various
sources,  we are  dependent on certain  suppliers  for key materials or services
used in our drug and light producing and light delivery  device  development and
production operations. One supplier is Fresenius, which processes our SnET2 drug
substance  into a sterile  injectable  formulation  and packages it in vials for
distribution.  We  expect  to  continue  to  develop  new  drugs  and  new  drug
formulations  both in-house and using external  suppliers,  which may or may not
have  similar  dependencies  on  suppliers.  Another  supplier is Iridex,  which
provided the light producing  devices used in our AMD clinical trials and can be
used for future commercial use in  ophthalmology.  As previously  discussed,  we
recently regained ownership of bulk API and FDF and lasers from Pharmacia. Based
on the quantities  received,  we are not expected to need  additional  bulk API,
FDF, or lasers in the near term.  Currently the expiration date of FDF is thirty
months from the date it was manufactured.

     Prior to our being able to supply drugs or devices for commercial  use, our
manufacturing  facilities,  as well as the  Iridex and  Fresenius  manufacturing
facilities,  must comply with Good Manufacturing  Practices, or GMPs, with which
we are currently in compliance. Prior to commercial sales of our drug and device
products,  which may not be attained,  these facilities will have to be approved
by the FDA. We, along with our suppliers,  are able to manufacture  our drug and
device  products for clinical  trial use and commercial  use,  pending final FDA
approval.  In addition,  if we elect to outsource  manufacturing  to third-party
manufacturers,  these facilities also have to satisfy GMP and FDA  manufacturing
requirements.

     In  February  1997,  we  received  registration  to ISO  9001  and EN 46001
signifying  compliance  to  the  International  Standards  Organization  quality
systems  requirements  for  design,  manufacture  and  distribution  of  medical
devices. We chose to discontinue ISO 9001 registration as part of a cost savings
program, as it was unlikely to be used in the near future.

Marketing, Sales and Distribution

     Our strategy is to partner with leading  pharmaceutical  and medical device
companies for the marketing,  sales and  distribution of our products.  In March
2002, we terminated  our license  agreement with Pharmacia and received back the
worldwide  license rights to SnET2 and at this time we are currently  pursuing a
new collaborative partner to market and sell our leading drug candidate SnET2 as
well as other  potential  compounds.  We have  granted to Iridex  the  worldwide
license to market and sell all co-developed  light producing  devices for use in
PhotoPoint PDT in the field of ophthalmology.

     Where  appropriate,   we  intend  to  seek  additional   arrangements  with
collaborative  partners,  selected for  experience  in disease  applications  or
markets,  to act as our  marketing  and sales arm and to establish  distribution
channels for our drugs and devices. We may also distribute our products directly
or through independent distributors.

Customers and Backlog

     We  currently   have  no  drug  or  device  that  has  been   approved  for
commercialization  by applicable  regulatory  bodies.  As a result, we currently
have no customers or backlog.  We have derived revenue in the past from sales of
compounds to our collaborative  partner and have received  governmental research
grants.  We have also received  limited  royalty income from  Laserscope for the
license of our dye laser technology.

Patents and Proprietary Technology

     We pursue a policy of seeking patent  protection for our technology both in
the United States and in selected countries abroad. We plan to prosecute, assert
and defend our patent rights when appropriate.  We also rely upon trade secrets,
know-how,  continuing  technological  innovations and licensing opportunities to
develop and maintain our competitive position. The following is a summary of our
current patents:

          *    Record  owner  of  thirty-four   issued  United  States  patents,
               primarily device, expiring 2010 through 2019;
          *    Record owner of six issued  foreign  patents,  primarily  device,
               expiring 2012 through 2014;
          *    Exclusive  license  rights under  eighteen  issued  United States
               patents, primarily pharmaceutical, expiring 2006 through 2017;
          *    Exclusive  license  rights  under five  issued  foreign  patents,
               expiring 2006 through 2017;
          *    Co-owner or licensee of four additional issued patents,  expiring
               2015 through 2017; and
          *    Holder of a number of United  States and related  foreign  patent
               applications  filed  and  pending,   relating  to  photoselective
               compounds, light devices and methods.

     We obtained many of our  photoselective  compound patent rights,  including
rights to SnET2, through an exclusive license agreement with Toledo.  Certain of
the  foregoing  patents and  applications  are  subject to certain  governmental
rights described below.

     The  patent  positions  of  pharmaceutical  and  biotechnology   companies,
including  ours,  can be uncertain and involve  complex legal,  scientific,  and
factual  questions.  There can be no  assurance  that our  patents  or  licensed
patents will afford legal protection against  competitors or provide significant
proprietary  protection or competitive  advantage.  In addition,  our patents or
licensed patents could be held invalid or unenforceable by a court, or infringed
or circumvented by others, or others could obtain patents that the we would need
to license or circumvent.  Competitors or potential  competitors  may have filed
patent  applications or received patents,  and may obtain additional patents and
proprietary rights relating molecules,  compounds, or processes competitive with
ours.

     It is our general  policy to require our  employees,  consultants,  outside
scientific collaborators and sponsored researchers and other advisors to execute
confidentiality  agreements  upon the  commencement  of employment or consulting
relationships   with  us.  These   agreements   provide  that  all  confidential
information  developed or made known to the individual  during the course of our
relationship  are to be kept  confidential  and not  disclosed to third  parties
except in specific  limited  circumstances.  We also  generally  require  signed
confidentiality  or material  transfer  agreements  from any company  that is to
receive confidential data or proprietary compounds. In the case of employees and
consultants,  the agreements  generally provide that all inventions conceived by
the individual  while rendering  services to us, which relate to our business or
anticipated business, shall be assigned to us as our exclusive property.

     Some of our research relating to certain  pharmaceutical  compounds covered
by the license  agreement  with Toledo,  including  SnET2,  has been or is being
funded  in part by Small  Business  Innovation  Research  Administration  and/or
National  Institutes of Health grants. As a result, the United States Government
has or will have certain  rights in the  inventions  developed with the funding.
These rights include a  non-exclusive,  paid-up,  worldwide  license under these
inventions for any  governmental  purpose.  In addition,  the government has the
right to require us to grant an exclusive  license under any of these inventions
to a third party if the government determines that:

          *    Adequate  steps  have  not  been  taken  to  commercialize   such
               inventions;
          *    Such action is necessary to meet public  health or safety  needs;
               or
          *    Such  action is  necessary  to meet  requirements  for public use
               under federal regulations.

     Federal law requires that any exclusive  licensor of an invention  that was
partially funded by federal grants, which is the case with the subject matter of
certain  patents issued in our name or licensed from Toledo,  agree that it will
not grant  exclusive  rights to use or sell the  invention in the United  States
unless the grantee  agrees that any products  embodying  the  invention  will be
manufactured  substantially  in the United States,  although this requirement is
subject to a discretionary waiver by the government. It is not expected that the
government  will exercise any of these rights or that the exercise of this right
would have a material impact on us.

Government Regulation

     The research, development,  manufacture,  marketing and distribution of our
products  are  subject  to  regulation  for  safety  and  efficacy  by  numerous
governmental authorities in the United States and other countries. In the United
States,  pharmaceutical  products and medical  devices are  regulated by the FDA
through the Food,  Drug and Cosmetic Act,  known as the FDC Act. The FDC Act and
various  other  federal  and state  statutes  control and  otherwise  affect the
development,  approval, manufacture,  testing, storage, records and distribution
of  drugs  and  medical  devices.  We are  subject  to  regulatory  requirements
governing both drugs and devices.

     Drug Products.  The FDA generally requires the following steps before a new
drug product may be marketed in the United States:

          *    Preclinical studies (laboratory and animal tests);
          *    The submission to the FDA of an application for an IND exemption,
               which must become  effective  before  human  clinical  trials may
               commence;
          *    Adequate and  well-conducted  clinical trials to establish safety
               and efficacy of the drug for its intended use; and
          *    The  submission  to the FDA of an NDA; and review and approval of
               the NDA by the FDA before any commercial  sale or shipment of the
               drug.

     In addition to obtaining FDA approval for each new drug product,  each drug
manufacturing  establishment  must be  registered  with the  FDA.  Manufacturing
establishments,  both  domestic and foreign,  are subject to  inspections  by or
under the authority of the FDA and by other federal, state or local agencies and
must  comply  with the  FDA's  current  Good  Manufacturing  Practices,  or GMP,
regulations.  The FDA will not approve an NDA until a pre-approval inspection of
the  manufacturing  facilities  confirms that the drug is produced in accordance
with  current drug GMPs.  In  addition,  drug  manufacturing  establishments  in
California must also be licensed by the State of California and must comply with
manufacturing,  environmental and other regulations  promulgated and enforced by
the California  Department of Health Services.  Our  manufacturing  facility for
bulk API is licensed by the State of California to produce bulk API for clinical
trial and other use.

     Preclinical  studies include  laboratory  evaluation of product  chemistry,
conducted  under Good  Laboratory  Practices,  or GLP,  regulations,  and animal
studies  to  assess  the  potential  safety  and  efficacy  of the  drug and its
formulation.  The results of the preclinical studies are submitted to the FDA as
part of the IND.  Unless  the FDA asks for  additional  information,  additional
review time, or otherwise  objects to the IND, the IND becomes  effective thirty
days following its receipt by the FDA.

     Clinical trials involve the administration of the  investigational  drug to
human subjects under FDA regulations  and other guidance  commonly known as Good
Clinical  Practice,  or GCP,  requirements  under the supervision of a qualified
physician.  Clinical  trials are conducted in  accordance  with  protocols  that
detail the objectives of the study,  the parameters to be used to monitor safety
and the efficacy criteria to be evaluated. Each protocol is submitted to the FDA
as a part of the IND. Each clinical  study must be conducted  under the auspices
of an independent  Institutional Review Board, or IRB. The IRB considers,  among
other things,  ethical  factors,  the safety of human  subjects and the possible
liability of the testing institution.

     Clinical  trials  are  typically  conducted  in  three  sequential  phases,
although the phases may overlap.

          *    Phase I  represents  the  initial  introduction  of the drug to a
               small  group of  humans  to test  for  safety,  identify  adverse
               effects, dosage tolerance, absorption, distribution,  metabolism,
               excretion  and clinical  pharmacology  and, if possible,  to gain
               early evidence of effectiveness;
          *    Phase II  involves  studies in a limited  sample of the  intended
               patient  population  to  assess  the  efficacy  of the drug for a
               specific indication, to determine dose tolerance and optimal dose
               range and to identify  possible adverse effects and safety risks;
               and
          *    Once a  compound  is found to have some  efficacy  and to have an
               acceptable  safety  profile  in Phase II  evaluations,  Phase III
               clinical trials are initiated for definitive  clinical safety and
               efficacy studies in a broader sample of the patient population at
               multiple study sites. The results of the preclinical  studies and
               clinical  trials are  submitted  to the FDA in the form of an NDA
               for marketing approval.

     Completing  clinical  trials  and  obtaining  FDA  approval  for a new drug
product  is a long  process  and is likely  to take  several  years and  require
expenditure of substantial resources. If an NDA application is submitted,  there
can be no  assurance  that the FDA will  approve  the NDA.  Even if initial  FDA
approval is obtained,  further  studies may be required to gain approval for the
use of a product as a treatment  for clinical  indications  other than those for
which the product was initially  approved.  Also,  the FDA requires  post-market
surveillance programs to monitor and report the drug's side effects. For certain
drugs, the FDA may also, concurrent with marketing approval, seek agreement from
the  sponsor  to conduct  post-marketing,  Phase IV,  studies to obtain  further
information  about the drug's risks,  benefits and optimal use.  Results of this
monitoring  and of  Phase IV  post-marketing  studies  may  affect  the  further
marketing of the product.

     Where appropriate, we may seek to obtain accelerated review and/or approval
of  products  and to use  expanded  access  programs  that may  provide  broader
accessibility and, if approved by the FDA, payment for an  investigational  drug
product. For instance, we requested and received fast track designation from the
FDA for the treatment of choroidal neovascularization associated with AMD. Under
the FDA Modernization Act of 1997, the FDA gives fast track designation to drugs
and devices that treat serious or  life-threatening  conditions  that  represent
unmet medical needs. The designation means that data can be submitted to the FDA
during the clinical trial process based on clinical or surrogate  endpoints that
are likely to predict clinical benefit,  and the FDA can expedite its regulatory
review.  Other examples of such  activities  include  pursuing  programs such as
treatment  IND or  parallel  track  IND  classifications  which  allow  expanded
availability  of an  investigational  treatment  to patients  not in the ongoing
clinical  trials,  and seeking  physician or  cross-referenced  INDs which allow
individual  physicians to use an investigational  drug before marketing approval
and for an indication not covered by the ongoing clinical trials. However, there
can be no  assurance  that we will seek such  avenues at any time,  or that such
activities will be successful or result in accelerated review or approval of any
of our products.

     Medical  Device  Products.  Our  medical  device  products  are  subject to
government regulation in the United States and foreign countries.  In the United
States,  we are  subject  to the rules and  regulations  established  by the FDA
requiring  that our medical  device  products are safe and  efficacious  and are
designed, tested, developed, manufactured and distributed in accordance with FDA
regulations.

     Under the FDC Act, medical devices are classified into one of three classes
(i.e., class I, II, or III) on the basis of the controls necessary to reasonably
ensure their safety and  effectiveness.  Safety and effectiveness can reasonably
be  assured  for class I  devices  through  general  controls  (e.g.,  labeling,
premarket  notification  and adherence to GMPs) and for class II devices through
the use of general and special controls (e.g., performance standards, postmarket
surveillance,  patient  registries  and FDA  guidelines).  Generally,  class III
devices are those  which must  receive  premarket  approval by the FDA to ensure
their  safety and  effectiveness  (e.g.,  life-sustaining,  life-supporting  and
implantable   devices,   or  new  devices  which  have  been  found  not  to  be
substantially equivalent to legally marketed devices).

     Before a new device  can be  introduced  to the  market,  the  manufacturer
generally  must  obtain  FDA  clearance   through  either  a  510(k)   premarket
notification  or a Premarket  Approval  Application,  or PMA. A PMA requires the
completion of extensive  clinical  trials  comparable  to those  required of new
drugs and  typically  requires  several  years before FDA  approval,  if any, is
obtained.  A 510(k)  clearance  will be granted if the submitted  data establish
that the proposed  device is  "substantially  equivalent" to a legally  marketed
class I or class II medical  device,  or to a class III medical device for which
the  FDA  has  not  called  for  PMAs.  Devices  used  by  other  companies  for
photodynamic therapy,  which are similar to our devices, have been classified as
Class III, and have been evaluated in  conjunction  with an IND as a combination
drug-device  product.  Therefore  it is likely  that our  products  will also be
treated as a combination drug-device product.

     Combination Drug-Device Products. Medical products containing a combination
of drugs,  devices or  biological  products  may be  regulated  as  "combination
products." A combination  product is generally defined as a product comprised of
components from two or more regulatory categories (drug/device, device/biologic,
drug/biologic, etc.) and in which the various components are required to achieve
the intended effect and are labeled accordingly. Each component of a combination
product is subject to the rules and regulations  established by the FDA for that
component category, whether drug, biologic or device. Primary responsibility for
the regulation of a combination  product depends on the FDA's  determination  of
the "primary mode of action" of the combination product,  whether drug, biologic
or device.

     In order to facilitate  premarket review of combination  products,  the FDA
designates  one of its centers to have primary  jurisdiction  for the  premarket
review and regulation of both components,  in most cases eliminating the need to
receive approvals from more than one center. The determination whether a product
is a  combination  product  or two  separate  products  is  made by the FDA on a
case-by-case  basis.  Market  approval  authority for  combination  photodynamic
therapy drug/device products is vested in the FDA Center for Drug Evaluation and
Research,  or CDER, which is required to consult with the FDA Center for Devices
and Radiological  Health. As the lead agency,  the CDER administers and enforces
the  premarket  requirements  for both the drug  and  device  components  of the
combination  product.  The FDA has  reserved  the decision on whether to require
separate submissions for each component until the product is ready for premarket
approval. Although, to date, photodynamic therapy products have been categorized
by the  FDA as  combination  drug-device  products,  the  FDA  may  change  that
categorization in the future,  resulting in different submission and/or approval
requirements.

     If  separate  applications  for  approval  are  required  in the future for
PhotoPoint  PDT devices,  it may be necessary for us to submit a PMA or a 510(k)
to the FDA for our PhotoPoint PDT devices. Submission of a PMA would include the
same clinical trials  submitted under the IND to show the safety and efficacy of
the  device  for  its  intended  use  in  the  combination   product.  A  510(k)
notification  would  include  information  and data to show  that our  device is
substantially  equivalent  to  previously  marketed  devices.  There  can  be no
assurance as to the exact form of the premarket approval  submission required by
the FDA or post-marketing controls for our PhotoPoint PDT devices.

     Post-Approval Compliance. Once a product is approved for marketing, we must
continue to comply with various FDA, and in some cases Federal Trade Commission,
requirements  for design,  safety,  advertising,  labeling,  record  keeping and
reporting of adverse experiences  associated with the use of a product.  The FDA
actively enforces regulations prohibiting marketing of products for non-approved
uses. Failure to comply with applicable  regulatory  requirements can result in,
among  other  things,  fines,  injunctions,  civil  penalties,  failure  of  the
government  to  grant  premarket   clearance,   premarket   approval  or  export
certificates  for devices or drugs,  delays or  suspensions  or  withdrawals  of
approvals,  seizures or recalls of products, operating restrictions and criminal
prosecutions.  Changes in existing  requirements or adoption of new requirements
could have a material  adverse effect on our business,  financial  condition and
results of operations.

     International.  We are also  subject  to  foreign  regulatory  requirements
governing   testing,   development,   marketing,   licensing,   pricing   and/or
distribution of drugs and devices in other  countries.  These  regulations  vary
from country to country.  Beginning in 1995, a new regulatory  system to approve
drug market  registration  applications  was  implemented  in the EU. The system
provides for new centralized, decentralized and national (member state by member
state) registration procedures through which a company may obtain drug marketing
registrations.  The  centralized  procedure  allows  for  expedited  review  and
approval  of  biotechnology  and high  technology/innovative  product  marketing
applications by a central Committee for Proprietary  Medicinal  Products that is
binding on all member  states in the EU. The  decentralized  procedure  allows a
company to petition individual EU member states to review and recognize a market
application  previously  approved in one member state by the national route. Our
devices must also meet the new Medical Device  Directive  effective in Europe in
1998. The Directive  requires that our  manufacturing  quality assurance systems
and compliance with technical essential requirements be certified with a CE Mark
authorized  by a  registered  notified  body of an EU member state prior to free
sale in the EU.  Registration and approval of a photodynamic  therapy product in
other  countries,   such  as  Japan,  may  include  additional   procedures  and
requirements,  preclinical  studies  and  clinical  trials,  and may require the
assistance of native corporate partners.

Competition

     The  pharmaceutical  and medical  device  industries are  characterized  by
extensive  worldwide  research and development  efforts and rapid  technological
change.  Competition from other domestic and foreign  pharmaceutical  or medical
device companies and research and academic  institutions in the areas of product
development, product and technology acquisition,  manufacturing and marketing is
intense and is expected to increase.  These competitors may succeed in obtaining
approval  from the FDA or other  regulatory  agencies  for their  products  more
rapidly  than us.  Competitors  have also  developed  or are in the  process  of
developing  technologies  that  are,  or in the  future  may be,  the  basis for
competitive products.

     We are aware that other  companies  are  marketing  or  developing  certain
products to  prevent,  diagnose or treat  diseases  for which we are  developing
PhotoPoint PDT. These products,  as well as others of which we may not be aware,
may adversely affect the existing or future market for our products. Competitive
products  may include,  but are not limited to, drugs such as those  designed to
inhibit  angiogenesis  or otherwise  target new blood vessels,  certain  medical
devices, such as drug-eluting stents and other photodynamic therapy treatments.

     We are aware of various  competitors  involved in the photodynamic  therapy
sector.  We understand that these companies are conducting  preclinical  studies
and/or  clinical  trials  in  various  countries  and for a variety  of  disease
indications. Our direct competitors in our sector include QLT Inc., or QLT, DUSA
Pharmaceuticals,  or DUSA, Axcan  Pharmaceuticals and Pharmacyclics.  QLT's drug
Visudyne has received  marketing approval in the United States and certain other
countries  for the  treatment  of AMD and has been  commercialized  by Novartis.
Axcan and DUSA have  photodynamic  therapy  drugs,  both of which have  received
marketing approval in the United States - Photofrin(R)  (Axcan  Pharmaceuticals)
for  the  treatment  of  certain  oncology   indications  and  Levulan(R)  (DUSA
Pharmaceuticals / Berlex Laboratories) for the treatment of actinic keratoses, a
dermatological condition. Pharmacyclics has a photodynamic therapy drug that has
not  received  marketing  approval,  which is being used in certain  preclinical
studies and/or clinical trials for  ophthalmology,  oncology and  cardiovascular
indications.  We are aware of other drugs and devices under development by these
and other photodynamic therapy competitors in additional disease areas for which
we are developing  PhotoPoint  PDT. These  competitors as well as others that we
are not aware of, may develop  superior  products  or reach the market  prior to
PhotoPoint PDT and render our products non-competitive or obsolete.

     In the photodynamic  therapy sector, we believe that a primary  competitive
issue will be the performance characteristics of photoselective drugs, including
product efficacy and safety, as well as availability, price and patent position,
among other issues.  As the photodynamic  therapy industry  evolves,  we believe
that new and more sophisticated  devices may be required and that the ability of
any group to develop advanced  devices will be important to market position.  We
believe that, after approval,  competition will be based on product reliability,
clinical  utility,   patient  outcomes,   marketing  and  distribution   partner
capabilities,   availability,  cost  effectiveness,   reimbursement  and  patent
position, among other factors.


<PAGE>

Corporate Offices

     The  principal  office of  Miravant is located at 336 Bollay  Drive,  Santa
Barbara,  California,  93117.  Main telephone and fax numbers are (805) 685-9880
and (805) 685-7981. Miravant was incorporated in the state of Delaware in 1989.

Employees

     As of March 15, 2002,  we employed  113  individuals,  approximately  68 of
which were engaged in research and development,  9 were engaged in manufacturing
and clinical  activities  and 36 in general and  administrative  activities.  We
believe  that  our  relationship  with  our  employees  is good  and none of the
employees are represented by a labor union.

     In  connection  with  our  January  2002  cost  restructuring  program,  we
temporarily  reduced each employees  salary by 20%. In connection  with the cost
restructuring program, a separation package was offered to all employees who did
not want to continue at Miravant at the reduced pay structure and  approximately
10% of our employees  accepted the separation  package.  As of April 8, 2002, we
will reinstate salaries back to 100% for all remaining employees.

     Our future success also depends on our continuing ability to attract, train
and retain highly qualified scientific and technical personnel.  Competition for
these  personnel  is  intense,  particularly  in  Santa  Barbara  where  we  are
headquartered.  Due to the limited number of people available with the necessary
scientific and technical skills and our current challenging financial situation,
we can give no  assurance  that we can retain or attract  key  personnel  in the
future.  We have not  experienced  any work stoppages and consider our relations
with our employees to be good, given these financial circumstances.


<PAGE>


                               EXECUTIVE OFFICERS

     The names, ages and certain additional information of the current executive
officers of the Company are as follows:

                  Name                      Age                 Position

         Gary S. Kledzik, Ph.D.             52       Chairman of the Board and
                                                     Chief Executive Officer

         David E. Mai                       57       President  of  Miravant
                                                     Medical  Technologies,
                                                     Miravant  Systems,   Inc.,
                                                     Miravant Pharmaceuticals,
                                                     Inc. and Director

         John M. Philpott                   41       Chief Financial Officer and
                                                     Treasurer

     Gary S.  Kledzik,  Ph.D.  is a founder of the  Company  and has served as a
director since its inception in June 1989. He served as President of the Company
from June 1989 to May 1996. He has been Chairman of the Board of Directors since
July 1991, Chief Executive  Officer since September 1992 and served as President
until May 1996. Prior to joining the Company,  Dr. Kledzik was Vice President of
the Glenn  Foundation for Medical  Research.  His previous  experience  includes
serving as Research and General Manager for an Ortho  Diagnostic  Systems,  Inc.
division of Johnson & Johnson and Vice President of Immulok,  Inc., a cancer and
infectious  disease  biotechnology  company  which he  co-founded  and which was
acquired by Johnson & Johnson in 1983. Dr. Kledzik holds a B.S. in Biology and a
Ph.D. in Physiology from Michigan State University.

     David E. Mai has  served  as  President  of the  Company  since  May  1996,
President of Miravant  Cardiovascular,  Inc. since September 1992,  President of
Miravant  Pharmaceuticals,  Inc.  since  July  1996 and  President  of  Miravant
Systems,  Inc.  since June 1997.  Mr. Mai served as Vice  President of Corporate
Development  for the  Company  from March  1994  until May 1996.  Mr. Mai became
associated  with  the  Company  in July  1990  as a  consultant  assisting  with
technology and business  development.  He joined the Company in 1991, serving as
New Product  Program  Manager  from  February  1991 to July 1992 and as Clinical
Research Manager from July 1992 to September 1992. Prior to joining the Company,
Mr. Mai was  Director of the  Intravascular  Ultrasound  Division  of  Diasonics
Corporation  from  1988 to 1989.  Previously,  Mr.  Mai  served as  Director  of
Strategic Marketing for Boston Scientific  Corporation's  Advanced  Technologies
Division,   Vice   President  of  Stanco   Medical  and  Sales   Engineer   with
Hewlett-Packard Medical Electronics. Mr. Mai holds a B.S. degree in Biology from
the University of Hawaii.

     John M. Philpott has served as Chief Financial Officer since December 1995.
Since March 1995, Mr.  Philpott had served as  Controller.  Prior to joining the
Company,  Mr.  Philpott was a Senior  Manager  with Ernst & Young LLP,  which he
joined in 1986. Mr.  Philpott is a Certified  Public  Accountant in the State of
California.  He holds a B.S.  degree in Accounting  and  Management  Information
Systems from California State University, Northridge.



<PAGE>




ITEM 2.  PROPERTIES

     We have entered into four leases for  approximately  101,100 square feet of
office,   laboratory  and  potential   manufacturing  space  in  Santa  Barbara,
California,  of which  approximately  31,300 square feet has been  subleased and
approximately 15,100 square feet will be terminated effective April 2002.

     The first lease for  approximately  18,900 square feet of space was entered
into in 1992 and the base rent, which is adjusted annually based on increases in
the consumer price index,  is  approximately  $26,000 per month.  This lease was
extended in May 2001 and expires in October 2006. The leased property is located
in a business park and is subject to a master lease  agreement.  The facility is
equipped and licensed by the State of  California  to allow  certain  laboratory
testing and manufacturing.  We manufacture and distribute the bulk API from this
facility.  In May 2001,  we entered  into an Asset  Purchase  Agreement  whereby
Pharmacia agreed to assume the lease  obligations and related property taxes for
this building through December 31, 2003. Subsequently, in March 2002, we entered
into a Contract  Modification  and  Termination  Agreement with Pharmacia  under
which we have agreed to reassume the lease obligations for this building for the
remainder of the lease term.

     In the second  half of 1996,  we  entered  into two  additional  leases for
approximately 54,800 square feet of office,  laboratory and manufacturing space.
One of the leases, covering approximately 15,100 square feet of office space and
having a base rent of  approximately  $20,000 per month,  will be  terminated in
April 2002. The second lease, which covers  approximately  39,700 square feet of
office,  laboratory and  manufacturing  space,  provides for rent to be adjusted
annually  based on increases  in the  consumer  price index and the base rent is
approximately  $51,000  per  month.  The lease was  extended  in March  1999 and
expires in August 2002. An extension is currently being  negotiated.  The leased
property is located in a business park. We have the ability to  manufacture  our
light producing and light delivery  devices and perform research and development
of drugs, light delivery and light producing devices from this facility.

     In July 1998, we entered into a fourth lease  agreement  for  approximately
27,400 square feet of primarily  office  space.  The base rent for this lease is
approximately  $37,000 per month. The lease expires in October 2003 and provides
for rent to be adjusted annually based on increases in the consumer price index.
The lease also  allows us the  ability to sublet the  property,  which we did in
December 1999. The sublease  agreements  expire in October 2003, with rent based
upon  the  percentage  of  square  footage  occupied.  Rental  income,  which is
approximately  $35,000 per month,  is also subject to  increases  based upon the
consumer price index.  The leased  property is located in a business park and is
subject to a master lease agreement.

     For the two facilities that we will likely continue to occupy, we may incur
additional  costs for the  construction  of the  manufacturing,  laboratory  and
office space  associated with these  facilities and we may at any time determine
to sublease additional space for areas that are not being fully utilized.

     During 1997,  we entered into a letter of intent with a local  developer to
have a facility  constructed to house our operations for the foreseeable future.
In January 2002, we canceled the letter of intent with the developer. We did not
incur  any  material  costs  under  this  letter  of  intent  or its  subsequent
cancellation.


<PAGE>



ITEM 3.  LEGAL PROCEEDINGS

     We are not currently party to any material litigation or proceeding and are
not aware of any material litigation or proceeding threatened against us.

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

     No matters were  submitted to a vote of security  holders during the fourth
quarter of 2001.




<PAGE>


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

     Our Common Stock is traded on the Nasdaq  National  Market under the symbol
MRVT. The following table sets forth high and low bid prices per share of Common
Stock as reported on the Nasdaq  National  Market based on  published  financial
sources.  The  closing  bid price of our Common  Stock as reported on the Nasdaq
National Market on March 25, 2002 was $1.08.


                                                               High        Low
2001:
   Fourth quarter............................................$ 10.20     $ 6.32
   Third  quarter............................................  12.08       5.00
   Second quarter............................................  12.70       6.00
   First quarter.............................................   9.69       6.25

2000:
   Fourth quarter............................................$ 21.75     $ 9.00
   Third  quarter............................................  25.94      16.75
   Second quarter............................................  23.25      10.00
   First quarter.............................................  29.63       9.31

     As of March 15, 2002, there were  approximately  261 stockholders of record
of the Common  Stock,  which does not include  "street  accounts" of  securities
brokers.  Based on the number of proxies requested by brokers in connection with
our  annual  meeting  of  stockholders,  we  estimate  that the total  number of
stockholders of the Common Stock exceeds 5,000.

     We have never paid dividends,  cash or otherwise,  on our capital stock and
do not anticipate  paying any dividends in the foreseeable  future. We currently
intend to retain future earnings,  if any, to finance the growth and development
of our business.

     We were  provided with a Nasdaq Staff  Determination  notice dated March 4,
2002 that  informed us that we did not meet the market  value of  publicly  held
shares requirement  (minimum common stock market  capitalization of $50,000,000)
for continued  listing on the Nasdaq National Market as set forth in Marketplace
Rule 4450(b)(1)(A). We were also told that we do not comply with the minimum bid
price continued inclusion  requirement set forth in Marketplace Rule 4450(b)(4).
These listing  requirements  include maintaining  stockholders'  equity of $10.0
million or net tangible  assets of $4.0 million,  and a $1.00 minimum bid price;
or alternatively, a common stock market capitalization of at least $50.0 million
and a minimum  bid price of $3.00.  Alternatively,  The Nasdaq  Small Cap Market
requires at least a $35.0  million  common stock market  capitalization,  with a
$1.00 minimum bid price. Our securities are therefore  subject to delisting from
the Nasdaq National Market.  We have requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination notice. We have requested
a hearing with Nasdaq to discuss our listing  status,  and the stock will remain
listed on the Nasdaq until at least the date of the hearing,  which is scheduled
for April 18, 2002.  There can be no assurance  the Panel will grant our request
for continued listing after the hearing.


<PAGE>




ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     In the table below, we provide you with summary  historical  financial data
of Miravant Medical  Technologies.  We have prepared this information  using the
consolidated  financial statements of Miravant for the five years ended December
31, 2001. The consolidated  financial statements for the five fiscal years ended
December 31, 2001 have been audited by Ernst & Young LLP, independent auditors.

     When you read this summary of  historical  financial  data, it is important
that you read along with it the  historical  financial  statements  and  related
notes in our annual and  quarterly  reports  filed with the SEC,  as well as the
section of our annual and quarterly reports titled "Management's  Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
<S>     <C>                      <C>                    <C>             <C>             <C>                     <C>


                                                                  Year Ended December 31,
                                    ----------------------------------------------------------------------------------
                                          2001             2000             1999            1998             1997
                                    ---------------  --------------- ---------------  ---------------  ---------------
                                                             (in thousands, except share and per share data)
Statement of Operations Data:
Revenues .........................   $      4,683      $     4,593     $    14,577    $      10,179     $      2,278
Costs and expenses:
   Cost of goods sold.............            934               --              --               --               --
   Research and development.......         13,318           19,944          29,749           29,233           20,244
   Selling, general and
     administrative...............          6,078            6,273           7,473            9,626           13,716
   Loss in affiliate..............             --              --              417            2,929            1,105
                                    ---------------  --------------- ---------------  ---------------  ---------------
Total costs and expenses..........         20,330           26,217          37,639           41,788           35,065
                                    ---------------  --------------- ---------------  ---------------  ---------------
Loss from operations..............        (15,647)         (21,624)        (23,062)         (31,609)         (32,787)
Interest and other income (expense)
   Interest and other income......            798            1,370           1,240            3,546            2,584
   Interest expense...............         (2,139)          (2,254)           (434)              (1)              (6)
   Gain on sale of assets.........            586               --              --               --               --
   Non-cash loss in investment (3)             --           (3,485)             --               --               --
                                    ---------------  --------------- ---------------  ---------------  ---------------
Total net interest and other
   income (expense)...............           (755)         (4,369)             806           3,545             2,578
                                    ---------------  --------------- ---------------  ---------------  ---------------
Net loss..........................   $    (16,402)    $    (25,993)    $   (22,256)    $   (28,064)     $    (30,209)
                                    ===============  =============== ===============  ===============  ===============
Net loss per share (1) ...........   $       (.88)    $      (1.42)    $     (1.25)    $     (1.94)     $      (2.36)
                                    ===============  =============== ===============  ===============  ===============
Shares used in computing net
   loss per share (1) ............     18,647,071       18,294,525       17,768,670      14,464,044       12,791,044
                                    ===============  =============== ===============  ===============  ===============



                                                                        December 31,
                                    ----------------------------------------------------------------------------------
                                          2001             2000             1999            1998             1997
                                    ---------------  ----------------    -------------   --------------   ------------
                                                                       (in thousands)
Balance Sheet Data:
Cash and marketable securities (2)   $      6,112     $     20,835     $    22,789     $     11,284     $     83,462
Working capital...................          9,240           19,431          24,933           11,134           80,734
Total assets......................         16,165           28,027          35,823           23,810           93,031
Long-term liabilities ............         26,642           24,888          15,506               --               --
Accumulated deficit...............       (173,569)        (157,167)       (131,174)        (108,918)         (80,854)
Total stockholders' equity
(deficit).........................        (13,798)            (164)         15,597           19,686           87,698

</TABLE>

(1)  See Note 1 of Notes to  Consolidated  Financial  Statements for information
     concerning the computation of net loss per share.
(2)  See  Notes  2 and 3 of  Notes  to  Consolidated  Financial  Statements  for
     information concerning the changes in cash and marketable securities.
(3)  See Note 10 of Notes to Consolidated  Financial  Statements for information
     regarding the non-cash loss in investment.

<PAGE>


ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS

     This  section of the Annual  Report on Form 10-K  contains  forward-looking
statements,  which  involve  known and unknown  risks and  uncertainties.  These
statements relate to our future plans, objectives,  expectations and intentions.
These  statements  may be identified by the use of words such as "may,"  "will,"
"should," "potential," "expects,"  "anticipates," "intends," "plans," "believes"
and similar  expressions.  These  statements  are based on our current  beliefs,
expectations  and  assumptions  and  are  subject  to  a  number  of  risks  and
uncertainties and include  statements  regarding our general beliefs  concerning
the efficacy and potential benefits of photodynamic  therapy;  the timing of the
completion of our analysis of the clinical data from the SnET2 Phase III wet age
related  macular   degeneration,   or  AMD,  clinical  trials,  which  Pharmacia
Corporation, or Pharmacia,  concluded had not met the primary efficacy endpoint;
the  assumption  that we will  continue  as a going  concern  and stay listed on
Nasdaq; our plans to collaborate with other parties;  our ability to continue to
retain employees under our current financial  circumstances;  our ability to use
our light  production  and  delivery  devices  in future  clinical  trials;  our
expected research and development expenditures; our patent prosecution strategy;
and our  expectations  concerning  the  government  exercising its rights to use
certain of our licensed  technology.  Our actual results could differ materially
from  those  discussed  in  these  statements  due  to a  number  of  risks  and
uncertainties  including:  a  failure  of  our  drugs  and  devices  to  receive
regulatory  approval;   unanticipated  complexity  or  difficulty  in  analyzing
clinical trial data; other parties may decline to collaborate with us due to our
financial  condition or other  reasons  beyond our control;  our existing  light
production and delivery technology may prove to be inapplicable or inappropriate
for future studies;  we may be unable to obtain the necessary funding to further
our research and  development  activities and the government may change its past
practices  and  exercise  its rights  contrary to our  expectations.  For a more
complete  description  of the risks  that may  impact  our  business,  see "Risk
Factors",  for a discussion of certain  risks,  including  those relating to our
ability to obtain  additional  funding,  our ability to establish  new strategic
collaborations,  our operating  losses,  risks related to our industry and other
forward-looking statements.

     The  following   discussion   should  be  read  in  conjunction   with  the
Consolidated Financial Statements and Notes thereto.

General

     Since our inception,  we have been principally  engaged in the research and
development of drugs and medical device products for use in PhotoPoint(TM)  PDT,
our proprietary technologies for photodynamic therapy. We have been unprofitable
since our founding  and have  incurred a  cumulative  net loss of  approximately
$173.6  million  as of  December  31,  2001.  As we  currently  do not  have any
significant sources of revenues, we expect to continue to incur substantial, and
possibly  increasing,  operating  losses for the next few years due to continued
spending on  research  and  development  programs,  the  funding of  preclinical
studies,   clinical   trials  and   regulatory   activities  and  the  costs  of
manufacturing  and  administrative  activities.  We also expect these  operating
losses to  fluctuate  due to our ability to fund the  research  and  development
programs as well as the operating  expenses of the Company.  We believe with the
implementation  of our cost  restructuring  program  in  January  2002,  we have
sufficient resources to fund the current required expenditures through September
30,  2002.  In  addition,  we also  believe we can raise  additional  funding to
support operations through corporate  collaborations or partnerships,  licensing
of SnET2 or new products and equity or debt  financings  prior to September  30,
2002. However, there can be no assurance that we will be successful in obtaining
such financing or financing will be available on favorable  terms. If additional
funding is not  available  when  required,  we  believe  we have the  ability to
conserve cash required for operations  through December 31, 2002 by the delay or
reduction in scope of one or more of our research and  development  projects and
adjusting, deferring or reducing salaries of employees and by reducing operating
and overhead expenditures to conserve cash to be used in operations.

     Our  historical  revenues  primarily  reflect  income earned from licensing
agreements,  grants  awarded,  royalties from device  product  sales,  milestone
payments,  non-commercial  drug sales to Pharmacia and interest  income.  During
2001, we sold approximately $4.3 million of the SnET2 bulk active pharmaceutical
ingredient,  or bulk API, to  Pharmacia  to be used in  preclinical  studies and
clinical trials and in anticipation of a potential New Drug Application, or NDA,
filing for SnET2 for the treatment of wet age-related macular  degeneration,  or
AMD.

     Our future  bulk API sales are  expected  to  consist of the  approximately
$450,000 in  reimbursements  that we are to receive from  Pharmacia for bulk API
costs  incurred by us through  January  2002.  Any other  future  potential  new
revenues such as license income from new collaborative agreements, revenues from
contracted  services,  grants awarded  and/or  royalties from potential drug and
device  sales,  if any,  will  depend on,  among other  factors,  the timing and
outcome of applications for regulatory  approvals,  the results from our ongoing
preclinical   studies  and  clinical  trials,   our  ability  to  establish  new
collaborative  partnerships  and their  subsequent level of participation in our
preclinical  studies  and  clinical  trials,  our  ability  to  have  any of our
potential drug and related device products successfully  manufactured,  marketed
and   distributed,   the   restructuring   or   establishment  of  collaborative
arrangements for the development,  manufacturing,  marketing and distribution of
some of our future products.  We anticipate our operating activities will result
in substantial,  and possibly increasing,  operating losses for the next several
years.

     In collaboration  with Pharmacia,  in December 2001, we completed two Phase
III  ophthalmology  clinical  trials for the treatment of AMD with our lead drug
candidate, SnET2. In January 2002, Pharmacia, after an analysis of the Phase III
AMD clinical  data,  determined  that the clinical data results  indicated  that
SnET2 did not meet the primary  efficacy  endpoint in the study  population,  as
defined by the clinical trial protocol, and that they would not be filing an NDA
with  the  U.S.  Food  and Drug  Administration,  or FDA.  Based on  Pharmacia's
analysis of the AMD clinical  data, we may not be able to proceed with our plans
to seek  regulatory  approval of SnET2 as formerly  planned.  In March 2002,  we
entered into a Contract  Modification and Termination  Agreement with Pharmacia,
whereby we regained the license  rights to SnET2 as well as the related data and
assets from the Phase III AMD clinical trials and  restructured  our outstanding
debt with them. We are  currently  conducting  our own detailed  analysis of the
clinical data, including an analysis of the subset groups. We expect to complete
our analysis by the end of the second  quarter 2002 and, based on the results of
our analysis,  we will  determine  the future  potential  development  of SnET2,
including the potential  use of SnET2 in other disease  indications,  such as in
cardiovascular disease and oncology. In addition, we have terminated our license
collaboration with Pharmacia,  and we intend to seek a new collaborative partner
for PhotoPoint PDT in ophthalmology.

     In  ophthalmology,  besides the possible use of SnET2 in other eye diseases
and another AMD clinical trial, or in combination with other  therapies,  we are
continuing the development of next generation drug compounds for use in the same
eye disease areas.

     In our dermatology  program, we have developed a topical gel formulation to
deliver a proprietary new photoreactive drug directly to the skin. In July 2001,
we completed a Phase I  dermatology  clinical  trial and, in  January 2002,   we
commenced  a  Phase  II  clinical  trial  with  a  topical  formulation  of  our
photoreactive  drug,  MV9411,  for  potential  use in the  treatment  of  plaque
psoriasis, a chronic dermatological  condition for which there is no known cure.
Plaque  psoriasis is a disease  marked by  hyperproliferation  of the epidermis,
resulting in inflamed  and scaly skin  plaques.  The Phase II clinical  trial is
currently ongoing and we expect to complete the trial by the end of 2002.

     We are also conducting  preclinical studies of SnET2 and new photoselective
drugs  for  cardiovascular  diseases,  in  particular  for  the  prevention  and
treatment  of  restenosis.  Restenosis  is the  renarrowing  of an  artery  that
commonly  occurs after  balloon  angioplasty  for  obstructive  coronary  artery
disease.  We are in the  process of  formulating  a new lead drug,  MV0633,  and
performing  the  requisite  studies to prepare for an  Investigational  New Drug
application, or IND, in cardiovascular disease.

     In oncology,  we are conducting  preclinical research of our photoselective
therapy to destroy abnormal blood vessels in tumors.  We are pursuing this tumor
research  with  some of our new  photoselective  drugs  and  also  investigating
combination therapies with PhotoPoint PDT and other types of compounds.

     Based on our ability to successfully obtain additional funding, our ability
to obtain new collaborative  partners, our ability to pursue further development
of SnET2 for AMD or other disease  indications,  our ability to reduce operating
costs as needed,  our  ability  to remain  listed on Nasdaq  and  various  other
economic  and   development   factors,   such  as  the  cost  of  the  programs,
reimbursement and the available alternative therapies, we may or may not be able
to or elect to further  develop  PhotoPoint  PDT  procedures  in  ophthalmology,
cardiovascular disease, dermatology, oncology or in any other indications.

Pharmacia Corporation

     Over time we have entered  into a number of  agreements  with  Pharmacia to
fund our operations and develop and market SnET2. In March 2002, we entered into
a Contract  Modification and Termination Agreement with Pharmacia under which we
regained  all of the  rights  and  related  data and  assets  to our  lead  drug
candidate,  SnET2, and we restructured our outstanding debt to Pharmacia.  Under
the  terms of the  Contract  Modification  and  Termination  Agreement,  various
agreements and side letters between Miravant and Pharmacia have been terminated,
most of which  related to SnET2 license  agreements  and related drug and device
supply  agreements,  side letters,  the  Manufacturing  Facility  Asset Purchase
Agreement and various  supporting  agreements.  We also modified our 2001 Credit
Agreement with Pharmacia.

     The  termination of the various  agreements  provided that all ownership of
the  rights,  related  data and  assets to SnET2 and the Phase III AMD  clinical
trials for the  treatment of AMD will revert back to us. The rights  transferred
back to us include  the  ophthalmology  IND and the  related  filings,  data and
reports and the ability to license the rights to SnET2.  The assets  include the
lasers utilized in the Phase III AMD clinical trials, the bulk API manufacturing
equipment,  all of the bulk API inventory sold to Pharmacia in 2001 and 2002 and
the finished dose  formulation,  or FDF,  inventory.  In addition,  we will also
reassume  the lease  obligations  and  related  property  taxes for our bulk API
manufacturing  facility.  The  lease  agreement  expires  in  October  2006  and
currently has a base rent of approximately $26,000 per month.

     Under  the  Manufacturing  Facility  Asset  Purchase  Agreement,  which was
entered into in May 2001 and subsequently  terminated  in March 2002,  Pharmacia
satisfied the following obligations during 2001:

          *    Pharmacia  agreed to buy our existing  bulk API inventory at cost
               for $2.2 million. As of June 30, 2001, the entire $2.2 million of
               the existing bulk API inventory had been  delivered to Pharmacia,
               recorded as revenue and the  payment had been  received  into the
               inventory escrow account;
          *    Pharmacia committed, through two other purchase orders, to buy up
               to an  additional  $2.8  million  of the bulk API which  would be
               manufactured  by us. As of December  31,  2001,  we had sold $2.1
               million of newly manufactured bulk API inventory,  which had been
               delivered to  Pharmacia,  recorded as revenue and the payment had
               been received into the inventory escrow account. Additionally, in
               March  2002,   Pharmacia  made  their  final  purchase  of  newly
               manufactured  bulk API of  approximately  $450,000  which will be
               paid  directly  to us.  No  further  bulk  API  will  be  sold to
               Pharmacia;
          *    Pharmacia   agreed  to  purchase  the   manufacturing   equipment
               necessary to produce bulk API. The  manufacturing  equipment  was
               purchased for $863,000,  its fair market value as appraised by an
               independent  appraisal  firm. The payment for the purchase of the
               equipment  was  made  into  an  equipment  escrow  account  to be
               released in June 2001;
          *    The  interest  earned  by  the  inventory  and  equipment  escrow
               accounts  accrued  to us and will be  released  from each  escrow
               account.  All  amounts  received  into  escrow  are  recorded  as
               accounts receivable until the amounts are released;
          *    In January 2002, the inventory  escrow account as well as accrued
               interest was released to us in full;  and
          *    In  connection  with the Contract  Modification  and  Termination
               Agreement,  Pharmacia  has  transferred  ownership  of all of the
               bulk  API  inventory and bulk API manufacturing equipment back to
               us and has released the  equipment escrow  funds in  March  2002.

     The Contract  Modification and Termination Agreement also modified the 2001
Credit Agreement as follows:

          *    The outstanding  debt that we owed to Pharmacia of  approximately
               $26.8  million,   was  reduced  to  $10.0  million  plus  accrued
               interest;
          *    We will  be  required  to make a  payment  of $5.0  million  plus
               accrued  interest  on each of  March 4,  2003  and June 4,  2004.
               Interest on the debt will be  recorded  at the prime rate,  which
               was 4.75% at March 5, 2002;
          *    In  exchange  for these  changes  and the  rights  to  SnET2,  we
               terminated  our  right to  receive a $3.2  million  loan that was
               available under the 2001 Credit Agreement. Also, as Pharmacia has
               determined  that  they  will  not  file  an  NDA  for  the  SnET2
               PhotoPoint  PDT for  AMD and the  data  from  the  Phase  III AMD
               clinical  trials data did not meet certain  clinical  statistical
               standards as defined by the clinical trial protocol,  we will not
               have available to us an additional $10.0 million of borrowings as
               provided for under the 2001 Credit  Agreement.  Pharmacia  has no
               obligation  to  make  any  further  milestone  payments,   equity
               investments or to extend us additional credit;
          *    The early  repayment  provisions  and many of the covenants  were
               eliminated or modified.  Our requirement to allocate  one-half of
               the net  proceeds  from any public or private  equity  financings
               and/or asset dispositions towards the early repayment of our debt
               to Pharmacia was modified as follows:
               *    If  our  aggregate  net  equity   financing   and/or  assets
                    disposition proceeds are less than or equal to $7.0 million,
                    we are not required to make an  early  repayment towards our
                    Pharmacia debt;
               *    If  our  aggregate  net  equity   financing   and/or  assets
                    disposition  proceeds are greater than $7.0 million but less
                    than or equal  to $15.0  million,  then we are  required  to
                    apply  one-third  of net the  proceeds  from the  amount  in
                    excess of $7.0  million  up to $15.0  million,  or a maximum
                    repayment of $2.7 million towards our Pharmacia debt;
               *    If  our  aggregate  net  equity   financing   and/or  assets
                    disposition proceeds are greater than $15.0 million but less
                    than or equal  to $25.0  million,  then we are  required  to
                    apply one-half of the net proceeds from the amount in excess
                    of $15.0 million up to $25.0 million, or a maximum repayment
                    of $7.7 million towards our Pharmacia debt;
               *    If  our  aggregate  net  equity   financing   and/or  assets
                    disposition proceeds are greater than $25.0 million, then we
                    are  required  to  apply  all of the net  proceeds  from the
                    amount in excess of $25.0 million, or repay the entire $10.0
                    million plus accrued  interest  towards our Pharmacia  debt;
                    and
               *    Any early  repayment of our Pharmacia  debt applies first to
                    the loan  amount due on March 4, 2003, then to the remaining
                    loan amount due on June 4, 2004.

     Aside from the changes made under the Contract Modification and Termination
Agreement  discussed above, there were no changes made to the Warrant Agreement,
the Equity  Investment  Agreement and the  Registration  Rights  Agreement  with
Pharmacia.

     In connection with the 2001 Credit Agreement, we granted Pharmacia warrants
to purchase a total of 360,000 shares of our Common Stock.  The exercise  prices
and  expiration  dates are as follows:  120,000  shares at an exercise  price of
$11.87 per share  expiring May 5, 2004,  120,000  shares at an exercise price of
$14.83 per share  expiring  November 12, 2004 and 120,000  shares at an exercise
price of $20.62 per share  expiring May 23, 2005.  Pharmacia  will retain all of
its rights under the terms and conditions of the Warrant Agreement.

     In 1999,  through  an  Equity  Investment  Agreement,  Pharmacia  purchased
1,136,533  shares  of our  Common  Stock at $16.71  per  share for an  aggregate
purchase price of $19.0 million.  Additionally,  in connection with the original
SnET2  license  agreement in 1995,  Pharmacia  purchased  725,001  shares of our
Common Stock for $13.0 million. Under the terms of the Contract Modification and
Termination  Agreement,  Pharmacia  will  retain all the shares of Common  Stock
purchased from us.

Critical Accounting Policies

     Revenue  Recognition.  The Company  recognizes  revenues from product sales
based on when  ownership  of the  product  transfers  to the  customer  and when
collectibility  is  reasonably  assured.  Sales  of bulk  active  pharmaceutical
ingredient to Pharmacia is recorded as revenue in the period when the product is
received  by  Pharmacia  at  their  facility.  Our  current  licensing  revenues
represent  reimbursements from Pharmacia for out-of-pocket  expenses incurred in
our  preclinical  studies  and  clinical  trials  for the SnET2  PhotoPoint  PDT
treatment for AMD.  These  licensing  revenues are recognized in the period when
the reimbursable expenses are incurred. Grant income is recognized in the period
in which  the  grant  related  expenses  are  incurred  and  royalty  income  is
recognized in the period in which the royalties are earned.

     Research  and  Development  Expenses.  Research and  development  costs are
expensed as incurred.  Research and  development  expenses are  comprised of the
following  types  of costs  incurred  in  performing  research  and  development
activities:  salaries and  benefits,  allocated  overhead and  occupancy  costs,
preclinical  study costs,  clinical  trial and related  clinical drug and device
manufacturing costs,  contract services and other outside costs. The acquisition
of  technology  rights for  research and  development  projects and the value of
equipment or drug products for specific research and development projects,  with
no  alternative  future  use,  are also  included in  research  and  development
expenses.

     Stock-Based Compensation.  The Statement of Financial Accounting Standards,
or SFAS, issued SFAS No. 123,  "Accounting for Stock-Based  Compensation," which
encourages,  but does not require,  companies to record compensation expense for
stock-based  employee  compensation  plans  at fair  value.  We have  chosen  to
continue to account  for  stock-based  compensation  using the  intrinsic  value
method  prescribed by Accounting  Principles Board Opinion or APB Opinion No. 25
and  related   interpretations,   including  Financial  Interpretation  No.  44,
"Accounting  for  Certain   Transactions   Involving  Stock   Compensation,"  in
accounting for our stock option plans.

     We also have granted and continue to grant  warrants and options to various
consultants  of ours.  These  warrants and options are generally in lieu of cash
compensation  and, as such,  deferred  compensation is recorded related to these
grants.  Deferred compensation for warrants and options granted to non-employees
has been  determined  in accordance  with SFAS No. 123 and Emerging  Issues Task
Force or EITF 96-18 as the fair value of the consideration  received or the fair
value of the equity  instruments  issued,  whichever is more reliably  measured.
Deferred compensation is amortized over the consulting or vesting period.

Recent Accounting Pronouncements

     In October 2001, the Financial  Accounting Standards Board, or FASB, issued
SFAS No. 144,  "Accounting for the Impairment or Disposal of Long-Lived  Assets"
or SFAS No. 144. SFAS No. 144 addresses  financial  accounting and reporting for
the  impairment or disposal of long-lived  assets and  discontinued  operations.
SFAS No. 144 is effective  for all fiscal  years  beginning  after  December 15,
2001. The adoption of SFAS No. 144 is not expected to have a material  effect on
our consolidated financial statements.

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments  and Hedging  Activities" or SFAS No. 133. SFAS No. 133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
It requires an entity  recognize all derivatives as either assets or liabilities
in the  statement of financial  position and measure those  instruments  at fair
value.  In July 1999,  the FASB issued SFAS No. 137  "Accounting  for Derivative
Instruments  and Hedging  Activities  - Deferral of the  Effective  Date of FASB
Statement  No. 133".  SFAS No. 137 deferred the  effective  date of SFAS No. 133
until fiscal years  beginning  after June 15, 2000. The adoption of SFAS No. 133
has not had a material effect on our consolidated financial statements.

Results of Operations

     The following  table provides a summary of our revenues for the years ended
December 31, 2001, 2000 and 1999:
<TABLE>
<CAPTION>
<S>     <C>                                                             <C>             <C>                     <C>

 ---------------------------------------------------------------------------------------------------------------------------
 Consolidated Revenues                                                   2001               2000                1999
 ---------------------------------------------------------------------------------------------------------------------------
 License - contract research and development...................        $    302,000         $ 4,481,000         $13,996,000
 Bulk active pharmaceutical ingredient sales...................           4,306,000                  --                  --
 Royalties.....................................................              75,000                  --             143,000
 Grants........................................................                  --             112,000             438,000
 ---------------------------------------------------------------------------------------------------------------------------
 Total revenues................................................        $  4,683,000         $ 4,593,000         $14,577,000
 ---------------------------------------------------------------------------------------------------------------------------

</TABLE>



Revenues

     Revenues. Our revenues decreased from $14.6 million in 1999 to $4.6 million
in 2000 and  increased  slightly to $4.7 million in 2001.  The  fluctuations  in
revenues are due to the following:

     Bulk Active  Pharmaceutical  Ingredient Sales. In May 2001, we entered into
an Asset Purchase  Agreement with Pharmacia  whereby Pharmacia agreed to buy our
existing  bulk API  inventory at cost for $2.2  million and  committed to buy an
additional  $2.8 million of newly  manufactured  bulk API through March 2002. In
2001,  we recorded  revenue of $2.2  million  related to the  existing  bulk API
inventory and $2.1 million related to the newly manufactured bulk API inventory.
There were no bulk API sales in 2000 or 1999.

     License  Income.   License  income,  which  represents   reimbursements  of
out-of-pocket or direct costs incurred in preclinical  studies and Phase III AMD
clinical  trials,  decreased  from $14.0 million in 1999 to $4.5 million in 2000
and $302,000 in 2001. The decrease in license income is specifically  related to
the transition of the majority of the operations and funding responsibilities of
the  Phase III AMD  clinical  trials to  Pharmacia  Corporation  in 1999 and the
completion   of  the   preclinical   studies   and   our  AMD   clinical   trial
responsibilities.  Reimbursements  received during 2001 were primarily for costs
incurred  to  complete  preclinical  studies  for  AMD.  During  2000,  we  were
responsible for the oversight of the AMD related preclinical studies, as well as
a portion of the  equipment and drug costs related to the Phase III AMD clinical
trials. We were completely  reimbursed for all  out-of-pocket  preclinical study
costs and  approximately  half of the  equipment  and drug  costs.  In 1999,  in
addition to being  responsible  for the same types of costs incurred in 2000, we
were also responsible,  and subsequently reimbursed, for the out-of-pocket costs
associated   with  the  screening,   treatment  and  monitoring  of  individuals
participating in the Phase III AMD clinical trials. We do not expect to have any
significant license income from Pharmacia in 2002.

     In January 2002, Pharmacia, after an analysis of the Phase III AMD clinical
data,  determined  that the clinical data results  indicated  that SnET2 did not
meet the primary efficacy  endpoint in the study  population,  as defined by the
clinical trial protocol,  and that they would not be filing an NDA with the FDA.
Subsequently,  in March  2002,  we  entered  into a  Contract  Modification  and
Termination  Agreement with Pharmacia  whereby Pharmacia has agreed to reimburse
us for all of our finished  and  in-process  lots of bulk API for  approximately
$450,000.  We will receive no further  reimbursements  from Pharmacia related to
any of our ongoing  preclinical  studies and clinical  trials and Pharmacia will
not make any more purchases of bulk API.

     Grant Income.  We have  recorded  grant income of $112,000 and $438,000 for
the years ended December 31, 2000 and 1999.  There was no grant income  recorded
for 2001.  Grant income  relates to a two-year  grant  received in 1997 that was
extended to the end of 2000.  While we will continue to pursue  obtaining grants
as a means  of  funding  research  and  development  programs,  we have  not yet
received  any  additional  grants  and  currently  do not have any  grant  funds
available  to us.  Additionally,  there  can be no  assurance  that  we  will be
successful  in obtaining any future  grants.  We currently do not have any grant
funds available nor have any grants been awarded.

     Royalty Income. We earned royalty income from a 1992 license agreement with
Laserscope,  which  provided  royalties on the sale of our  previously  designed
device products.  We recorded income of $75,000 in 2001 and $143,000 in 1999. We
did not record any royalty  income under this  agreement in 2000.  The royalties
recorded in 2001  represent the final amounts due under the  Laserscope  license
agreement,  which  expired in April 1999 and no further  royalty  income will be
recorded under this agreement in the future.

     Cost of Goods Sold. In connection with the newly manufactured bulk API sold
under the terms of the Asset  Purchase  Agreement  with  Pharmacia,  we recorded
$934,000  in  manufacturing  costs for the year ended  December  31,  2001.  The
amounts recorded as cost of goods sold represent the costs incurred for only the
newly  manufactured  bulk API in 2001. No costs were recorded for those expenses
incurred in prior periods for raw materials and the bulk API manufactured  prior
to 2001, as these costs were expensed as research and  development  costs in the
periods  incurred.   Based  on  the  terms  of  the  Contract  Modification  and
Termination  Agreement with Pharmacia in March 2002,  future costs of goods sold
are only expected to be for those costs  related to the finished and  in-process
bulk API lots that Pharmacia has agreed to reimburse us for.

     Research and  Development.  Research and development  costs are expensed as
incurred.  Our research and development expenses decreased from $29.7 million in
1999 to $19.9 million in 2000 and $13.3 million in 2001. The overall decrease in
research and development  expenses is specifically  related to the transition of
the majority of the operations and funding responsibilities of the Phase III AMD
clinical  trials  to  Pharmacia  in  December  1999  and the  completion  of the
preclinical  studies and our AMD clinical trial  responsibilities.  Our research
and development  expenses,  net of license reimbursement and grant revenue, were
$13.0 million in 2001,  $15.4  million in 2000 and $15.3 million in 1999.  Aside
from the expenses incurred in the Phase III AMD preclinical studies and clinical
trials, research and development expenses in 2001 were comprised of:

          *    Development  work  associated  with the  development  of new drug
               compounds and formulations for the dermatology and cardiovascular
               programs;
          *    Preclinical  studies  and  clinical  trial  costs for our Phase I
               dermatology program;
          *    Payroll and related taxes; and
          *    Other operating costs.

     Research and development expenses for 2000 and 1999 consisted primarily of:

          *    Preclinical   studies   related  to  our  programs  in  oncology,
               dermatology and cardiology;
          *    Development  work associated with the development of existing and
               new drug compounds, formulations and clinical programs; and
          *    Payroll and other operating costs.

     We expect future research and development  expenses may fluctuate depending
on available funds,  continued expenses incurred in our preclinical  studies and
clinical trials in our ophthalmology,  dermatology, cardiovascular, oncology and
other programs, costs associated with the purchase of raw materials and supplies
for the  production  of  devices  and drug for use in  preclinical  studies  and
clinical  trials,  results  obtained  from our ongoing  preclinical  studies and
clinical  trials and the  expansion of our research  and  development  programs,
which  includes the increased  hiring of personnel,  the continued  expansion of
existing or the commencement of new preclinical  studies and clinical trials and
the development of new drug compounds and formulations.

     Selling,   General   and   Administrative.   Our   selling,   general   and
administrative  expenses  decreased from $7.5 million in 1999 to $6.3 million in
2000 and $6.1  million in 2001.  Selling,  general and  administrative  expenses
consist  primarily  of  payroll,  taxes and other  operating  costs.  The slight
decrease  from 1999 to 2001 was a result of a decrease in deferred  compensation
expense and the reclassification of a portion of certain overhead costs into the
cost of inventory as cost of goods sold.

     We expect future  selling,  general and  administrative  expenses to remain
consistent with prior periods although they may fluctuate depending on available
funds,  and the  support  staff  levels  needed  for  research  and  development
activities,   continuing  corporate   development  and  professional   services,
compensation  expense  associated  with stock  options and  warrants  granted to
consultants and expenses for general corporate matters.

     Loss in Investment in Affiliate.  In connection  with the $2.0 million line
of credit we have  provided to our  affiliate,  Ramus  Medical  Technologies  or
Ramus, we have recorded a reserve for the entire $2.0 million outstanding credit
line  balance plus  accrued  interest of $615,000 as of December  31, 2001.  The
$417,000  expense  recorded in 1999 represents a reserve for the final amount of
borrowings under the credit line plus accrued interest.  The investment in Ramus
has been fully reserved for since December 31, 1999.

     Interest and Other Income.  Interest and other income  increased  from $1.2
million in 1999 to $1.4 million in 2000 and $1.4  million in 2001.  Interest and
other  income  earned in 2001  represents  $798,000  of  interest  earned on the
available cash and  marketable  security  balances and $586,000  recorded on the
gain on sale of bulk API  manufacturing  equipment  to  Pharmacia.  Interest and
other  income  earned  in 2000 and 1999  represent  interest  earned on cash and
marketable security balances. The level of future interest and other income will
primarily  be subject to the level of cash  balances we maintain  from period to
period and the interest rates earned.  However, we expect our interest and other
income to decrease in future periods unless additional funding is obtained.

     Interest Expense.  Interest expense increased from $434,000 in 1999 to $2.3
million  in 2000  and  decreased  to $2.1  million  in  2001.  Interest  expense
represents  interest  related to borrowings under the 2001 Credit Agreement with
Pharmacia and interest  expense  related to the value of the warrants  issued in
connection  with these borrowings. The  decrease in interest  expense in 2001 as
compared  to 2000 is  directly  related to the  decrease in the rate of interest
being charged which was offset by an increase in the total amount of borrowings.
The borrowings accrue interest at the prime rate which was 4.75% , 9.5% and 8.0%
at December  31,  2001,  2000 and 1999,  respectively.  The increase in interest
expense  between  1999 and 2000 is  related  to the  increase  in the  amount of
borrowings outstanding under the 2001 Credit Agreement. Interest expense related
to the value of the warrants  issued with the borrowings was $374,000,  $315,000
and $57,000 for 2001, 2000 and 1999, respectively.

     In March 2002,  we entered  into a Contract  Modification  and  Termination
Agreement  with  Pharmacia  whereby  the  principal  balance of the debt owed to
Pharmacia was reduced from $26.8 million to $10.0  million,  plus  approximately
$800,000  in accrued  interest.  As a result of the  decrease  in the  principal
balance  of the loan,  as well as the  write  off of the  value of the  warrants
issued in connection with the borrowings,  we expect future interest  expense to
decrease.  Interest on the new principal  balance will continue to accrue at the
prime rate over the term of the loan and we will only record interest expense to
the  extent  the prime  rate  rises  above the  amount  used to record  the debt
reduction to total expected cash flows in accordance with the accounting for the
debt restructuring.

     Non-cash Loss in Investment.  In June 1998, we purchased an equity interest
in Xillix.  We received  2,691,904 shares of Xillix common stock in exchange for
$3.0 million in cash and 58,909 shares of Miravant Common Stock. During 2000, we
determined  that the  decline  in the  value of our  investment  in  Xillix  was
other-than-temporary.  We  recognized a loss totaling $3.5 million to adjust our
investment  in Xillix to its  estimated  current fair value based on the average
closing prices over a 120 day period. This loss is included in "Non-cash loss in
investment"  in  the   accompanying   consolidated   statements  of  operations,
stockholders'  equity and cash flows. As of December 31, 2001, we still hold the
2,691,904  shares of Xillix  common stock  received in our  original  investment
transaction.  The  new  cost  basis  in the  investment  is  $991,000  and  this
investment  will continue to be classified as an  available-for-sale  investment
recorded at fair value with any resulting unrealized gains or losses included in
"Accumulated  other  comprehensive  loss" in the consolidated  balance sheet and
statement of stockholders' equity.

     Income  Taxes.  As  of  December  31,  2001,  we  had  net  operating  loss
carryforwards  for federal tax purposes of $171.5  million,  which expire in the
years 2002 to 2022. Research credit  carryforwards  aggregating $8.7 million are
available  for  federal and state tax  purposes  and expire in the years 2002 to
2021.  We also had a state net operating  loss  carryforward  of $46.4  million,
which  expires  in the years  2002 to 2006.  Of the $46.4  million  in state net
operating  loss  carryforwards,  $17.5 million will expire during 2002 and 2003.
Under Section 382 of the Internal Revenue Code, utilization of the net operating
loss  carryforwards  may be limited  based on our changes in the  percentage  of
ownership. Our ability to utilize the net operating loss carryforwards,  without
limitation, is uncertain.

     We do not  believe  inflation  has had a material  impact on our results of
operations.

Liquidity and Capital Resources

     Since inception through December 31, 2001, we have accumulated a deficit of
approximately  $173.6 million and expect to continue to incur  substantial,  and
possibly  increasing,  operating losses for the next few years. We have financed
our  operations  primarily  through  private  placements  of  Common  Stock  and
Preferred Stock,  private  placements of convertible notes and short-term notes,
our initial public offering, a secondary public offering,  Pharmacia's purchases
of Common  Stock and credit  arrangements.  As of  December  31,  2001,  we have
received  proceeds  from the sale of equity  securities,  convertible  notes and
credit  arrangements  of  approximately  $223.0  million.  We do not  anticipate
achieving  profitability in the next few years, as such we expect to continue to
rely on external sources of financing to meet our cash needs for the foreseeable
future. As of December 31, 2001, our consolidated financial statements have been
prepared assuming we will continue as a going concern.

     We have  received the entire $22.5  million  available to us under the 2001
Credit  Agreement with Pharmacia.  We have issued  promissory notes to Pharmacia
for the principal loan amounts received of $22.5 million,  as well as promissory
notes of $4.0 million for the related  interest due on each of the quarterly due
dates through  December 31, 2001.  The promissory  notes accrue  interest at the
prime  rate,  which was 4.75% at  December  31,  2001.  In  connection  with the
borrowings  received,  we have issued  warrants to  purchase  360,000  shares of
Common  Stock at an  exercise  price of $11.87  per  warrant  share for  120,000
shares, $14.83 per warrant share for 120,000 shares and $20.62 per warrant share
for 120,000 shares.  The warrants to purchase 360,000 shares of Common Stock are
callable by us if the average  closing prices of the Common Stock for 30 trading
days, preceding such request, exceeds the related warrant exercise price.

     Under the Manufacturing Asset Facility Purchase Agreement with Pharmacia in
May 2001,  Pharmacia  agreed to buy our existing  bulk API inventory at cost for
$2.2 million and committed to buy up to an  additional  $2.8 million of the bulk
API which would be manufactured by us. In addition, Pharmacia agreed to purchase
the  manufacturing  equipment  necessary to produce bulk API. The  manufacturing
equipment  was  purchased  for  $863,000,  its fair  market  value.  The amounts
received for the sale of bulk API and the manufacturing  equipment were recorded
as accounts receivable as of December 31, 2001. In addition,  these amounts were
held in inventory escrow and equipment escrow accounts, which were approximately
$4.1 million and  $880,000,  respectively,  at December 31, 2001.  The inventory
escrow account was released to us in full in January 2002.

     Under the 2001  Credit  Agreement,  which  amends  and  restates  the $22.5
million  1999  Credit  Agreement,  Pharmacia  was to  provide  us  with up to an
additional  $13.2  million in credit  beginning  in April  2002,  under  certain
conditions related to the results of the SnET2 Phase III AMD clinical trials. In
January 2002,  Pharmacia,  after an analysis of the Phase III AMD clinical data,
determined that the clinical data results  indicated that SnET2 did not meet the
primary efficacy  endpoint in the study  population,  as defined by the clinical
trial  protocol, and that they would not be filing an NDA with the FDA;  as such
Pharmacia  was released from their  obligation  to loan us an  additional  $10.0
million.   Subsequently,   under  our  negotiated   Contract   Modification  and
Termination  Agreement in March 2002, we released Pharmacia from their remaining
$3.2 million loan  obligation  to us, in exchange for reducing our debt of $26.8
million to $10.0 million,  with $5.0 million due in March 2003 and the remaining
$5.0 million due in June 2004, as well as changing and  eliminating  many of our
covenants. Additionally, the funds in the equipment escrow account, containing a
principal and interest balance of $880,000, were released to us in March 2002.

     In addition to receiving funds through private and public stock  offerings,
we have also  received  funding  through  the  exercise  of  warrants  and stock
options.  For the year ended  December 31, 2001,  we have  received  $315,000 in
proceeds  from  warrant  and option  exercises.  Based on the  exercise  prices,
expiration dates and call features contained in certain warrants,  and depending
on the market  value of our Common  Stock,  we may  receive  additional  funding
through the  exercise of these  outstanding  warrants  and stock  options in the
future. As of December 31, 2001, the average exercise price of stock options and
warrants outstanding were $14.60 and $13.55, respectively.

Statement of Cash Flows

     For 2001,  2000 and 1999, we required cash for operations of $15.2 million,
$13.4 million and $18.4 million, respectively. The increase in net cash required
for operations in 2001 as compared to 2000 is directly related to the production
and sale of our bulk API inventory,  our  subsequent  bulk API sale to Pharmacia
and the timing on the  collection  of the  payments  from an escrow  account for
these  sales  which was  deferred  into  2002.  Subsequently,  a payment of $4.1
million for the sales of bulk API was  released  in full to us in January  2002.
The  increase  in net cash  required  for  operations  in 2001 was  offset by an
increase in stock awards used as employee compensation. The decrease in net cash
used in operating  activities  in 2000 compared to 1999 was primarily due to the
timing  of  funds  received  from  Pharmacia  for   reimbursable   research  and
development  costs and an increase  in non-cash  interest  and  amortization  of
deferred financing costs related to the Credit Agreement.  These activities were
offset  by  reductions  in  depreciation,  amortization,  deferred  compensation
expense and accounts payable.

     For 2001, net cash provided by investing  activities was $14.8 million. For
2000 and 1999, net cash used in investing  activities was $15.8 million and $4.4
million, respectively. The net cash provided by financing activities in 2001 was
related to the proceeds from the net sales of  marketable  securities as well as
proceeds from the sale of bulk API manufacturing equipment to Pharmacia. The net
cash used in 2000 and 1999 for investing  activities was directly related to the
net  purchases  of  marketable  securities  based on an  analysis  of the  funds
available for investment and purchases of property, plant and equipment.

     For 2001,  2000 and 1999,  net cash  provided by financing  activities  was
$15,000,  $11.9  million  and $30.6  million,  respectively.  Cash  provided  by
financing  activities  in 2001 was related to  $315,000  provided by warrant and
option  exercises which was offset by $300,000 in loans provided to an executive
officer of the  Company.  Cash  provided  by  financing  activities  in 2000 was
attributed to the $7.5 million  provided  under the 2001 Credit  Agreement  with
Pharmacia  and  warrant  and option  exercise  proceeds  of $4.4  million.  Cash
provided by financing activities in 1999 was primarily attributed to Pharmacia's
$19.0  million  equity  investment,  net of offering  costs,  and $15.0  million
provided under the 2001 Credit Agreement.

Lease Obligations and Long-Term Debt
<TABLE>
<CAPTION>
<S>     <C>                                                     <C>             <C>                     <C>

           Contractual
           Obligations                                       Payments Due by Period
      ------------------------------------------------------------------------------------------------------------
                                Less than 1
                                    year          1 - 3 years       4 - 5 years    After 5 years        Total
                               ---------------  -----------------  --------------  ---------------  --------------
      Long Term Debt(1).......  $         --      $ 10,000,000       $       --      $       --      $ 10,000,000
      Building Leases(1)(2)...       773,000           964,000          262,000              --         1,999,000
                               ---------------  -----------------  --------------  ---------------  --------------
      Total Contractual
      Cash Obligations.......   $    773,000      $ 10,964,000       $  262,000      $       --      $ 11,999,000
                               ===============  =================  ==============  ===============  ==============

</TABLE>

          (1)  The  long-term  debt  represents  the  principal  amounts  due to
               Pharmacia  under  the  terms  of the  Contract  Modification  and
               Termination  Agreement entered into in March 2002.  Additionally,
               the amounts recorded for contractual building leases includes the
               lease payments for our bulk API manufacturing  facility for which
               we reassumed in March 2002 under the  Contract  Modification  and
               Termination Agreement.
          (2)  The amounts  recorded  for building  leases  consist of leases on
               four buildings and is net of sublease revenue of $423,000 in 2002
               and $352,000 in 2003.

     We invested a total of $9.6 million in property,  plant and equipment  from
1996 through  December 31, 2001.  Based on available  funds,  we may continue to
purchase  property  and  equipment  in the future as we expand our  preclinical,
clinical  and research and  development  activities  as well as the buildout and
expansion of laboratories and office space.

     We will need substantial  additional resources to develop our products. The
timing and  magnitude  of our future  capital  requirements  will depend on many
factors, including:

          *    Our ability to implement an effective cost restructuring  program
               to reduce our use of cash;
          *    The viability of SnET2 for future use;
          *    Our ability to establish additional collaborations;
          *    Our ability to stay listed on Nasdaq;
          *    Our ability to raise  equity  financing  or use stock  awards for
               employee and consultant compensation;
          *    The pace of scientific progress and the magnitude of our research
               and development programs;
          *    The scope and results of preclinical studies and clinical trials;
          *    The time and costs involved in obtaining regulatory approvals;
          *    The costs involved in preparing, filing, prosecuting, maintaining
               and enforcing patent claims;
          *    The costs involved in any potential litigation;
          *    Competing technological and market developments; and
          *    Our dependence on others for development and commercialization of
               our potential products.

     We have implemented a cost restructuring  program in January 2002 that will
allow us to reduce our overall use of cash from  operations  in future  periods.
Based on our current cash and investment balances, the $450,000 payable to us by
Pharmacia   for  bulk  API  drug  sales  during  the  first   quarter  2002  and
approximately $880,000 released to us in March 2002 for manufacturing  equipment
sold to Pharmacia,  we anticipate  that we only have sufficient cash to fund our
operations  through  September  30,  2002.  For this  reason our  auditors  have
indicated  that there is  substantial  doubt  about our ability to continue as a
going concern.  We plan to actively seek  additional  capital needed to fund our
operations through corporate  collaborations or partnerships,  through licensing
of  SnET2  or new  products  and  through  public  or  private  equity  or  debt
financings.  Additional financing may not be available on acceptable terms or at
all.  Our  ability to raise  funds may  become  more  difficult  if our stock is
delisted  from trading on the Nasdaq  National  Market.  Any inability to obtain
additional  financing would adversely  affect our business and could cause us to
significantly  reduce or cease operations.  Our ability to generate  substantial
additional  funding  to  continue  our  research  and  development   activities,
preclinical  studies and clinical trials and  manufacturing,  and administrative
activities and to pursue any additional investment opportunities is subject to a
number of risks and uncertainties and will depend on numerous factors including:

          *    The future development  decisions related to the ongoing analysis
               of the data from our Phase III AMD clinical  trials;
          *    The future  development  and results of our Phase II  dermatology
               clinical  trial  and  our  ongoing  cardiovascular  and  oncology
               preclinical studies;
          *    The  potential  future  use of SnET2 for  ophthalmology  or other
               disease indications;
          *    Our ability to  successfully  raise  funds in the future  through
               public  or  private  equity  or  debt  financings,  or  establish
               collaborative arrangements or raise funds from other sources;
          *    The extent to which our  obligation to pay Pharmacia a portion of
               the funds  received in our financing  activities  will hinder our
               fundraising efforts;
          *    Our requirement to allocate  certain  percentages of net proceeds
               from  any  public  or  private  equity  financings  and/or  asset
               dispositions,  as defined earlier, towards the early repayment of
               our debt of $10.0 million plus accrued  interest due to Pharmacia
               under the Contract Modification and Termination Agreement;
          *    The potential for equity investments, collaborative arrangements,
               license  agreements or development or other funding programs that
               are at terms  acceptable  to us, in exchange  for  manufacturing,
               marketing,  distribution or other rights to products developed by
               us;
          *    The amount of funds received from  outstanding  warrant and stock
               option exercises, if any;
          *    Our ability to maintain,  renegotiate,  or terminate our existing
               collaborative arrangements;
          *    Our  ability to receive any funds from the sale of our 33% equity
               investment  in Ramus,  consisting  of  2,000,000  shares of Ramus
               Preferred Stock and 59,112 shares of Ramus Common Stock,  neither
               of which are  publicly  traded and the fair market value of which
               is currently negligible;
          *    Our ability to  liquidate  our equity  investment  in Xillix,  of
               2,691,904 shares of Xillix Common Stock, which is publicly traded
               on the Toronto Stock Exchange under the symbol (XLX.TO),  but has
               historically had very small trading volume; and
          *    Our ability to collect the loan and accrued interest  provided to
               Ramus under their credit agreement with us.

     We cannot  guarantee that  additional  funding will be available to us now,
when needed,  or if at all. If  additional  funding is not available in the near
term, we will be required to scale back our research and  development  programs,
preclinical  studies and clinical trials and administrative  activities or cease
operations.  As a result, we would not be able to successfully  develop our drug
candidates   or   commercialize   our  products  and  we  would  never   achieve
profitability.

Related Party Transactions

     In April 1998, we entered into a $2.0 million  revolving  credit  agreement
with our affiliate,  Ramus. As of December 31, 2001, we have provided the entire
loan of $2.0 million to Ramus.  The revolving credit line, which was due in full
in March 2000, has been  subsequently  extended  indefinitely.  In addition,  in
accordance with the 1996 equity  investment in Ramus, we had an exclusive option
to purchase the remaining  shares of Ramus for a specified  amount under certain
terms and conditions. We elected not to exercise the option, which expired March
3, 1999.  Additionally,  we do provide various  services to them on an as needed
basis,  which have been  insignificant  to date and due to Ramus' poor financial
condition,  we have deferred Ramus' sublease rent payments until sometime in the
future.

     In July 1996, the Board of Directors  appointed Joseph Nida, a partner in a
law firm  that we use for  outside  legal  services,  to serve as our  corporate
Secretary.  We paid Mr. Nida's law firm fees for legal services totaling $55,000
in 2001,  $40,000  in 2000 and  $46,000 in 1999.  In  addition,  we have  issued
warrants to Mr. Nida's firm to purchase a total of 87,500 shares of Common Stock
as partial  consideration  for his services as acting in-house legal counsel and
corporate Secretary.




<PAGE>



                                  RISK FACTORS


FACTORS AFFECTING FUTURE OPERATING RESULTS

     The  following  section  of  this  report  describes   material  risks  and
uncertainties  relating to our company and its business. Our business operations
may be impaired by additional risks and  uncertainties  that we are not aware of
or that we currently consider immaterial. Our business, results of operations or
cash flows may be  adversely  affected if any of the  following  risks  actually
occur. In such case, the trading price of our Common Stock could decline.

                          RISKS RELATED TO OUR BUSINESS


OUR BUSINESS IS NOT EXPECTED TO BE PROFITABLE FOR THE FORESEEABLE  FUTURE AND WE
WILL NEED ADDITIONAL FUNDS TO CONTINUE OUR OPERATIONS PAST SEPTEMBER 2002. IF WE
FAIL TO OBTAIN  ADDITIONAL  FUNDING,  WE COULD BE FORCED TO SCALE  BACK OR CEASE
OPERATIONS.

     Since our inception we have incurred  losses  totaling $173.6 million as of
December 31, 2002 and have never  generated  enough funds through our operations
to support our  business.  Although  we have  implemented  a cost  restructuring
program in January  2002 that will  allow us to reduce our  overall  use of cash
from  operations in future  periods,  we currently  anticipate that we only have
sufficient  cash  to  fund  our  operations  through  September  30,  2002.  Our
independent  auditors,  Ernst  & Young  LLP,  have  indicated  in  their  report
accompanying  our year end  consolidated  financial  statements  that,  based on
generally accepted accounting principles, our viability as a going concern is in
question.  We will need  substantial  additional  resources  in the near term to
continue to develop our products. If we do not receive sufficient funding by the
end of  September  2002 we may be forced to cease  operations.  The  timing  and
magnitude  of our  future  capital  requirements  will  depend on many  factors,
including:

          *    Our ability to implement an effective cost restructuring program
               to reduce our use of cash;
          *    The viability of SnET2 for future use;
          *    Our ability to establish additional collaborations;
          *    Our ability to stay listed on Nasdaq;
          *    Our ability to raise  equity  financing  or use stock  awards for
               employee and consultant compensation;
          *    The pace of scientific progress and the magnitude of our research
               and development programs;
          *    The scope and results of preclinical studies and clinical trials;
          *    The time and costs involved in obtaining regulatory approvals;
          *    The costs involved in preparing, filing, prosecuting, maintaining
               and enforcing patent claims;
          *    The costs involved in any potential litigation;
          *    Competing technological and market developments; and
          *    Our dependence on others for development and commercialization of
               our potential products.

     We plan to actively seek  additional  capital needed to fund our operations
through corporate collaborations or partnerships,  through licensing of SnET2 or
new  products  and  through  public or  private  equity or debt  financings.  No
commitments  for such  collaborations  or funding are  currently  in place.  Any
inability to obtain additional financing would adversely affect our business and
could  cause  us to  significantly  scale  back or cease  operations.  If we are
successful in obtaining additional equity financing it may result in significant
dilution to our  stockholders.  In addition,  any new securities issued may have
rights, preferences or privileges senior to those securities held by our current
stockholders.

OUR EXISTING LOAN OBLIGATIONS,  NASDAQ LISTING STATUS AND THE FUTURE DEVELOPMENT
UNCERTAINTY OF SNET2, WILL MAKE OBTAINING ADDITIONAL FUNDING DIFFICULT.

     Our ability to obtain  additional  funding by September 30, 2002 to operate
our business may be impeded by a number of factors including:

     *    We currently owe Pharmacia Corporation,  or Pharmacia,  $10.0 million,
          and are  obligated to pay a portion of net proceeds from any public or
          private  equity  financings  and/or  asset  dispositions  towards  the
          repayment of the $10.0 million plus accrued  interest due to Pharmacia
          under the Contract Modification and Termination Agreement:
               *    If  our  aggregate  net  equity   financing   and/or  assets
                    disposition proceeds are less than or equal to $7.0 million,
                    we  are not  required to make an early repayment towards our
                    Pharmacia debt;
               *    If  our  aggregate  net  equity   financing   and/or  assets
                    disposition  proceeds are greater than $7.0 million but less
                    than or equal  to $15.0  million,  then we are  required  to
                    apply  one-third  of net the  proceeds  from the  amount  in
                    excess of $7.0  million  up to $15.0  million,  or a maximum
                    repayment of $2.7 million towards our Pharmacia debt;
               *    If  our  aggregate  net  equity   financing   and/or  assets
                    disposition proceeds are greater than $15.0 million but less
                    than or equal  to $25.0  million,  then we are  required  to
                    apply one-half of the net proceeds from the amount in excess
                    of $15.0 million up to $25.0 million, or a maximum repayment
                    of $7.7 million towards our Pharmacia debt;
               *    If  our  aggregate  net  equity   financing   and/or  assets
                    disposition proceeds are greater than $25.0 million, then we
                    are  required  to  apply  all of the net  proceeds  from the
                    amount in excess of $25.0 million, or repay the entire $10.0
                    million plus accrued  interest  towards our Pharmacia  debt;
                    and
               *    Any early  repayment of our Pharmacia  debt applies first to
                    the loan  amount due on March 4, 2003, then to the remaining
                    loan amount due on June 4, 2004.
          *    Our Common  Stock is subject to being  delisted  from  trading on
               Nasdaq; and
          *    The uncertainty surrounding the effectiveness of SnET2, following
               the January 2002 announcement,  that Pharmacia, after an analysis
               of the Phase III wet age-related  amcular  degeneration,  or AMD,
               clinical  data,  determined  that the clinical trial data results
               indicated that SnET2 did not meet the primary  efficacy  endpoint
               in  the  study  population,  as  defined  by the  clinical  trial
               protocol,   and  that  they  would  not  be  filing  a  New  Drug
               Application,  or NDA, with the U.S. Food and Drug Administration,
               or FDA.

          We will need a  substantial  amount of funding to further our programs
     and  investors  may be reluctant to invest in our equity  securities if the
     funds  necessary  to grow our  business  are  instead  used to pay down our
     existing  debt  obligations.  Investors may also be reluctant to provide us
     funds for fear that  Pharmacia may  foreclose on our assets.  The fact that
     our  Common  Stock may no longer be listed  for  trading on Nasdaq may also
     discourage  investors  or result in a discount on the price that  investors
     may pay for our securities. We will also have to overcome investor concerns
     about our other compounds given the failure of SnET2 to demonstrate success
     in meeting the  primary  efficacy  endpoint  in the Phase III AMD  clinical
     trials.  These and other factors may prevent us from  obtaining  additional
     financing as required in the near term on favorable terms or at all.

PHARMACIA  DETERMINED THAT SNET2,  OUR LEADING DRUG CANDIDATE,  DID NOT MEET THE
PRIMARY EFFICACY ENDPOINT FOR THE STUDY  POPULATION,  AS DEFINED BY THE CLINICAL
TRIAL  PROTOCOL,  IN OUR PHASE III AMD CLINICAL  TRIALS WHICH CAUSED US TO DELAY
AND POTENTIALLY  CANCEL OUR PLANS TO SEEK REGULATORY  APPROVAL FOR SNET2. WE ARE
CURRENTLY ANALYZING THE CLINICAL DATA FROM THE PHASE III AMD CLINICAL TRIALS. IF
THE DATA DO NOT PRESENT ANY PROSPECT OF FUTURE  DEVELOPMENT  FOR SNET2,  THEN WE
MAY BE UNABLE TO SUCCESSFULLY ESTABLISH A NEW COLLABORATIVE  PARTNERSHIP,  WHICH
COULD MATERIALLY HARM OUR DEVELOPMENT PROGRAMS.

     In collaboration  with Pharmacia,  in December 2001, we completed two Phase
III  ophthalmology  clinical trials for the treatment of AMD, with our lead drug
candidate,  SnET2.  In January  2002,  Pharmacia  performed  an  analysis of the
clinical data and determined that the clinical data results indicated that SnET2
patients did not meet the primary efficacy endpoint in the study population,  as
defined by the clinical trial protocol, and that they would not be filing an NDA
with the FDA. Based on Pharmacia's analysis of the AMD clinical data, we may not
be able to  proceed  with our  plans  to seek  regulatory  approval  of SnET2 as
formerly planned. In March 2002, we regained the license rights to SnET2 as well
as the  related  data and assets  from the Phase III AMD  clinical  trials  from
Pharmacia. We are currently conducting our own detailed analysis of the clinical
data,  including  an analysis of the subset  groups.  We expect to complete  our
analysis by the end of the second  quarter 2002 and, based on the results of our
analysis, we will determine the future potential development of SnET2, including
the potential use of SnET2 in other disease  indications.  In addition,  we have
terminated our license collaboration with Pharmacia, and we intend to seek a new
collaborative  partner in ophthalmology for PhotoPoint(TM)  PDT, our proprietary
technologies for photodynamic therapy. If our analysis of the clinical data does
not provide  the  information  to support  further  development,  then we may be
unable to enter into an agreement  with a new  collaborative  partner and may be
unable to  continue  our  current  research  programs.  If we cease  development
efforts for SnET2 it could adversely affect our funding and development  efforts
for our other programs and severely harm our business.

THE CURRENT TRADING PRICE OF OUR COMMON STOCK, OUR MARKET CAPITALIZATION AND THE
AMOUNT OF OUR STOCKHOLDER'S  EQUITY AND NET TANGIBLE ASSETS, COULD RESULT IN OUR
SHARES BEING DELISTED FROM TRADING ON NASDAQ. IF WE BECOME DELISTED FROM NASDAQ,
THEN OUR ABILITY TO RAISE ADDITIONAL CAPITAL MAY BE LIMITED OR IMPAIRED.

     Our Common Stock is listed on the Nasdaq National  Market.  We currently do
not satisfy the Nasdaq continued  listing  standards  concerning the size of our
market  capitalization  and the minimum bid price of our stock.  Nasdaq recently
informed  us of its  intention  to delist  our  Common  Stock.  This  delisting,
however,  has been stayed  pending the outcome of an oral  hearing  scheduled on
April 18,  2002 to appeal the Nasdaq  decision.  If this  appeal is denied,  our
stock will be delisted  from  Nasdaq.  If this were to happen,  it would be much
more  difficult  to  purchase  or sell  our  common  stock  or  obtain  accurate
quotations as to the price of the securities.

UNDER THE CONTRACT  MODIFICATION  AND  TERMINATION  AGREEMENT  ENTERED INTO WITH
PHARMACIA IN MARCH 2002,  OUR  OUTSTANDING  DEBT TO  PHARMACIA OF $10.0  MILLION
REMAINS  SECURED  BY ALL  OF OUR  ASSETS.  IF WE  BECOME  UNABLE  TO  REPAY  OUR
BORROWINGS  OR VIOLATE  THE  COVENANTS  UNDER THIS  AGREEMENT,  PHARMACIA  COULD
FORECLOSE ON OUR ASSETS.

     Under the terms of the Contract Modification and Termination Agreement with
Pharmacia,  we have  outstanding  debt to  Pharmacia of $10.0  million  which is
secured by all of our assets.  Our ability to comply with all  covenants  and to
make scheduled  payments,  early repayments as required or to refinance our debt
obligation will depend on our financial and operating performance, which in turn
will be  subject  to  prevailing  economic  conditions  and  certain  financial,
business and other factors,  including  factors that are beyond our control.  If
our cash flow and capital resources become insufficient to fund our debt service
obligations  or  we  otherwise  default  under  the  Contract  Modification  and
Termination Agreement,  Pharmacia could accelerate the debt and foreclose on our
assets. As a result,  we could be forced to obtain additional  financing at very
unfavorable terms or significantly reduce or cease operations.

OUR  FINANCIAL  CONDITION AND COST  REDUCTION  EFFORTS COULD RESULT IN DECREASED
EMPLOYEE MORALE AND LOSS OF EMPLOYEES AND CONSULTANTS CRITICAL TO OUR SUCCESS.

     Our  success in the  future  will  depend in large  part on our  ability to
attract and retain highly qualified  scientific,  management and other personnel
and to develop and maintain relationships with leading research institutions and
consultants.  We are highly dependent upon principal  members of our management,
key employees,  scientific staff and consultants,  which we may retain from time
to time. We currently  have limited cash and capital  resources and the efficacy
of our primary drug development  candidate is questionable  causing our business
outlook to be uncertain.  In January 2002, we implemented measures to reduce our
expenses to provide us more  flexibility.  These  actions  included  temporarily
reducing  our  employees  salaries  by  approximately  20% until  April 5, 2002.
Additionally,  due to our ongoing limited cash balances, we try to utilize stock
options  and  stock  awards  as a key  component  of  short-term  and  long-term
compensation.  However,  given that our current  stock options  outstanding  are
significantly  de-valued,  the  current  value  of  our  stock  is low  and  the
uncertainty  of our  long-term  prospects,  our ability to use stock options and
stock awards as  compensation  may be limited.  These  measures,  along with our
financial condition and unfavorable clinical data results from the Phase III AMD
clinical  trials,  may cause  employees to question our long-term  viability and
increase our turnover. These factors may also result in reduced productivity and
a decrease in employee  morale  causing our  business to suffer.  We do not have
insurance  providing us with benefits in the event of the loss of key personnel.
Our  consultants  may be  affiliated  with or employed by others,  and some have
consulting or other advisory  arrangements with other entities that may conflict
or compete with their obligations to us.

IF WE ARE NOT ABLE TO MAINTAIN AND SUCCESSFULLY  ESTABLISH NEW COLLABORATIVE AND
LICENSING ARRANGEMENTS WITH OTHERS, OUR BUSINESS WILL BE HARMED.

     Our business  model is based on  establishing  collaborative  relationships
with  other  parties  both to license  compounds  upon  which our  products  and
technologies  are based and to manufacture,  market and sell our products.  As a
development company we must have access to compounds and technologies to license
for further  development.  For example, we are party to a License Agreement with
the University of Toledo,  the Medical  College of Ohio and St. Vincent  Medical
Center,  of Toledo,  Ohio,  collectively  referred  to as Toledo,  to license or
sublicense certain photoselective compounds, including SnET2. Similarly, we must
also  establish  relationships  with  suppliers and  manufacturers  to build our
medical devices and to manufacture our compounds.  We have partnered with Iridex
for the  manufacture of certain light sources and have entered into an agreement
with  Fresenius for supply of the final dose  formulation  of SnET2.  Due to the
expense of the drug approval process it is critical for us to have relationships
with  established  pharmaceutical  companies  to offset some of our  development
costs in exchange for a combination of manufacturing, marketing and distribution
rights.  We formerly  had a  significant  relationship  with  Pharmacia  for the
development  of SnET2 for the  treatment of AMD. To further  develop SnET2 it is
essential that we establish a new collaborative relationship with another party.

     We are currently at various  stages of discussions  with various  companies
regarding the establishment of new  collaborations.  If we are not successful in
establishing new collaborative  partners for the potential  development of SnET2
or our other molecules, we may not be able to pursue further development of such
drugs and/or may have to reduce or cease our current development programs, which
would  materially  harm our business.  Even if we are successful in establishing
new  collaborations,  they are  subject  to  numerous  risks  and  uncertainties
including the following:

          *    Our ability to negotiate acceptable  collaborative  arrangements,
               including those based upon existing letter agreements;
          *    Future  or  existing   collaborative   arrangements  may  not  be
               successful  or may not result in  products  that are  marketed or
               sold;
          *    Collaborative   partners   are   free   to   pursue   alternative
               technologies  or  products  either on their  own or with  others,
               including  our  competitors,  for the  diseases  targeted  by our
               programs and products;
          *    Our partners may fail to fulfill their contractual obligations or
               terminate  the  relationships  described  above,  and  we  may be
               required to seek other partners,  or expend substantial resources
               to pursue these activities  independently.  These efforts may not
               be successful; and
          *    Our ability to manage,  interact and coordinate our timelines and
               objectives with our strategic partners may not be successful.

ALL  OF OUR  PRODUCTS,  EXCEPT  SNET2  AND  MV9411,  ARE IN AN  EARLY  STAGE  OF
DEVELOPMENT AND ALL OF OUR PRODUCTS,  INCLUDING  SNET2 AND MV9411,  MAY NEVER BE
SUCCESSFULLY COMMERCIALIZED.

     Our products, except SnET2 and MV9411, are at an early stage of development
and our ability to successfully  commercialize  these products,  including SnET2
and MV9411, is dependent upon:

          *    Successfully  completing  our  research  or  product  development
               efforts or those of our collaborative partners;
          *    Successfully  transforming  our drugs or devices  currently under
               development  into marketable  products;
          *    Obtaining the required regulatory approvals;
          *    Manufacturing  our  products  at  an  acceptable  cost  and  with
               appropriate quality;
          *    Favorable acceptance of any products marketed; and
          *    Successful   marketing   and  sales   efforts  of  our  corporate
               partner(s).

     We may not be successful  in achieving any of the above,  and if we are not
successful,  our business,  financial  condition and operating  results would be
adversely  affected.  The time frame  necessary  to achieve  these goals for any
individual  product is long and uncertain.  Most of our products currently under
development  will require  significant  additional  research and development and
preclinical  studies  and  clinical  trials,  and all  will  require  regulatory
approval  prior to  commercialization.  The  likelihood  of our success  must be
considered  in  light of  these  and  other  problems,  expenses,  difficulties,
complications and delays.

OUR PRODUCTS,  INCLUDING  SNET2 AND MV9411,  MAY NOT  SUCCESSFULLY  COMPLETE THE
CLINICAL  TRIAL PROCESS AND WE MAY BE UNABLE TO PROVE THAT OUR PRODUCTS ARE SAFE
AND EFFICACIOUS.

     All of our  drug and  device  products  currently  under  development  will
require extensive preclinical studies and/or clinical trials prior to regulatory
approval for commercial use, which is a lengthy and expensive  process.  None of
our products,  except SnET2,  have  completed  testing for efficacy or safety in
humans.  Some of the risks and  uncertainties  related  to safety  and  efficacy
testing and the completion of preclinical studies and clinical trials include:

          *    Our ability to  demonstrate to the FDA that our products are safe
               and efficacious;
          *    Our  products  may  not  be as  efficacious  as  our  competitors
               products;
          *    Our ability to  successfully  complete the testing for any of our
               compounds within any specified time period, if at all;
          *    Clinical  outcomes  reported  may  change  as  a  result  of  the
               continuing evaluation of patients;
          *    Data obtained from  preclinical  studies and clinical  trials are
               subject to  varying  interpretations  which can  delay,  limit or
               prevent approval by the FDA or other regulatory authorities;
          *    Problems  in research  and  development,  preclinical  studies or
               clinical  trials  that will cause us to delay,  suspend or cancel
               clinical trials; and
          *    As a result of changing economic  considerations,  competitive or
               new  technological  developments,  market  approvals  or changes,
               clinical or regulatory conditions, or clinical trial results, our
               focus may shift to other indications,  or we may determine not to
               further  pursue one or more of the  indications  currently  being
               pursued.

     Data already obtained from  preclinical  studies and clinical trials of our
products under  development do not necessarily  predict the results that will be
obtained  from future  preclinical  studies  and  clinical  trials.  A number of
companies in the pharmaceutical industry, including biotechnology companies like
us, have suffered  significant  setbacks in advanced clinical trials, even after
promising results in earlier trials.

     In collaboration  with Pharmacia,  in December 2001, we completed two Phase
III  ophthalmology  clinical trials for the treatment of AMD, with our lead drug
candidate,  SnET2.  In January  2002,  Pharmacia  performed  an  analysis of the
clinical data and determined that the clinical data results indicated that SnET2
patients did not meet the primary efficacy endpoint in the study population,  as
defined by the clinical trial protocol, and they would not be filing an NDA with
the FDA. Based on  Pharmacia's  analysis of the AMD clinical data, we may not be
able to proceed with our plans to seek regulatory  approval of SnET2 as formerly
planned.  In March 2002, we regained the license  rights to SnET2 as well as the
related data and assets from the Phase III AMD clinical  trials from  Pharmacia.
We are  currently  conducting  our own detailed  analysis of the clinical  data,
including an analysis of the subset  groups.  We expect to complete our analysis
by the end of the second quarter 2002 and, based on the results of our analysis,
we will  determine  the future  potential  development  of SnET2,  including the
potential  use of SnET2 in  other  disease  indications.  In  addition,  we have
terminated our license collaboration with Pharmacia, and we intend to seek a new
collaborative partner in ophthalmology.

     Our clinical trials may not demonstrate the sufficient levels of safety and
efficacy necessary to obtain the requisite regulatory approval or may not result
in marketable  products.  The failure to adequately  demonstrate  the safety and
effectiveness of a product under development  could delay or prevent  regulatory
approval of the potential product and would materially harm our business.

WE HAVE A HISTORY OF SIGNIFICANT OPERATING LOSSES AND EXPECT TO CONTINUE TO HAVE
LOSSES IN THE FUTURE,  WHICH MAY FLUCTUATE  SIGNIFICANTLY.  WE MAY NEVER ACHIEVE
PROFITABILITY.

     We have incurred  significant losses since our inception in 1989 and, as of
December 31, 2001, had an accumulated  deficit of approximately  $173.6 million.
We expect to continue to incur significant,  and possibly increasing,  operating
losses over the next few years. Although we continue to incur costs for research
and development, preclinical studies, clinical trials, manufacturing and general
corporate activities, we have currently implemented a cost restructuring program
which we expect  will help to reduce our overall  costs.  Our ability to achieve
profitability  depends upon our ability,  alone or with others,  to successfully
complete  the  development  of  our  proposed  products,   obtain  the  required
regulatory  clearances  and  manufacture  and market our proposed  products.  No
revenues have been  generated  from  commercial  sales of SnET2 and only limited
revenues  have been  generated  from sales of our  devices.  We do not expect to
achieve  significant levels of revenues for the next several years. Our revenues
to date have consisted of license reimbursements,  grants awarded,  royalties on
our devices,  SnET2 bulk active  pharmaceutical  ingredient,  or bulk API sales,
milestone payments,  payments for our devices, and interest income. Our revenues
for the foreseeable  future are expected to consist of the remaining $450,000 of
bulk API sold to Pharmacia  through January 2002,  reimbursements  under license
agreements, milestone payments, licensing fees and interest income.

THE PRICE OF OUR COMMON STOCK HAS BEEN AND MAY CONTINUE TO BE VOLATILE.

     From time to time and in particular  during the last couple of months,  the
price of our Common Stock has been highly volatile.  These fluctuations create a
greater risk of capital losses for our stockholders as compared to less volatile
stocks.  From  January 15, 2001 to March 15, 2002,  our Common Stock price,  per
Nasdaq closing prices, has ranged from a high of $12.42 to a low of $0.80.

     The market  prices for our Common  Stock,  and the  securities  of emerging
pharmaceutical  and medical  device  companies,  have  historically  been highly
volatile and subject to extreme price fluctuations,  which may reduce the market
price of the Common Stock. Extreme price fluctuations could be the result of the
following:

          *    Future development  decisions related to the results of our Phase
               III AMD clinical trials;
          *    Announcements   concerning   Miravant   or   our   collaborators,
               competitors or industry;
          *    Our ability to successfully establish new collaborations;
          *    The  results of our  testing,  technological  innovations  or new
               commercial products;
          *    The results of preclinical  studies and clinical  trials by us or
               our competitors;
          *    Technological innovations or new therapeutic products;
          *    Our ability to stay listed on Nasdaq;
          *    Litigation;
          *    Public  concern as to the safety,  efficacy or  marketability  of
               products developed by us or others;
          *    Comments by securities analysts;
          *    The achievement of or failure to achieve certain milestones; and
          *    Governmental  regulations,  rules  and  orders,  or  developments
               concerning safety of our products.

     In addition,  the stock  market has  experienced  extreme  price and volume
fluctuations.  This volatility has  significantly  affected the market prices of
securities  of many emerging  pharmaceutical  and medical  device  companies for
reasons  frequently  unrelated or  disproportionate  to the  performance  of the
specific  companies.  If these broad market fluctuations cause the trading price
of our  Common  Stock to  significantly  decline,  we may be  unable  to  obtain
additional  capital  that  we may  need  through  public  or  private  financing
activities and our stock could be delisted from Nasdaq further  exacerbating our
ability to raise funds and limiting  your  ability to sell your shares.  Because
outside financing is critical to our future success,  large  fluctuations in our
share price that harm our financing  activities  could cause us to significantly
alter our business plans or cease operations altogether.

WE RELY ON THIRD  PARTIES TO CONDUCT  CLINICAL  TRIALS ON OUR  PRODUCTS,  AND IF
THESE RESOURCES FAIL, OUR ABILITY TO SUCCESSFULLY  COMPLETE CLINICAL TRIALS WILL
BE ADVERSELY AFFECTED AND OUR BUSINESS WILL SUFFER.

     To date, we have limited  experience in conducting  clinical trials. We had
relied on Pharmacia,  our former corporate partner, and Inveresk, Inc., formerly
ClinTrials Research,  Inc., a contract research organization,  for our Phase III
AMD  clinical  trials and we rely on a contract  research  organization  for our
Phase II  dermatology  clinical  trials.  We will  either  need to rely on third
parties,  including  our  collaborative  partners,  to design  and  conduct  any
required  clinical trials or expend  resources to hire  additional  personnel or
engage outside  consultants  or contract  research  organizations  to administer
current and future clinical trials. We may not be able to find appropriate third
parties to design and conduct  clinical  trials or we may not have the resources
to administer  clinical trials in-house.  The failure to have adequate resources
for conducting and managing  clinical  trials will have a negative impact on our
ability to  develop  marketable  products  and would  harm our  business.  Other
contract  research  organizations may be available in the event that our current
contract  research  organizations  fail;  however there is no guarantee  that we
would be able to engage another organization in a timely manner, if at all. This
could cause delays in our clinical  trials and our development  programs,  which
could materially harm our business.

WE RELY ON PATIENT  ENROLLMENT TO CONDUCT CLINICAL TRIALS,  AND OUR INABILITY TO
CONTINUE TO ATTRACT  PATIENTS TO PARTICIPATE  WILL HAVE A NEGATIVE IMPACT ON OUR
CLINICAL TRIAL RESULTS.

     Our  ability to  complete  clinical  trials is  dependent  upon the rate of
patient enrollment. Patient enrollment is a function of many factors including:

          *    The nature of our clinical trial protocols;
          *    Existence of competing protocols or treatments;
          *    Size and longevity of the target patient population;
          *    Proximity of patients to clinical sites; and
          *    Eligibility criteria for the clinical trials.

     A specific  concern for potential  future AMD clinical trials is that there
currently is an approved  treatment for AMD and patients  enrolled in future AMD
clinical  trials,  if  any,  may  choose  to drop  out of the  trial  or  pursue
alternative treatments. This could result in delays or incomplete clinical trial
data.

     We cannot assure that we will obtain or maintain adequate levels of patient
enrollment  in  current or future  clinical  trials.  Delays in planned  patient
enrollment  may result in increased  costs,  delays or  termination  of clinical
trials,  which could result in slower introduction of our potential products,  a
reduction  in our  revenues  and may  prevent us from  becoming  profitable.  In
addition,  the FDA may  suspend  clinical  trials  at any time if,  among  other
reasons,  it  concludes  that  patients  participating  in such trials are being
exposed to unacceptable health risks. Failure to obtain and keep patients in our
clinical  trials  will  delay or  completely  impede  test  results  which  will
negatively  impact the  development of our products and prevent us from becoming
profitable.

WE MAY FAIL TO ADEQUATELY  PROTECT OR ENFORCE OUR INTELLECTUAL  PROPERTY RIGHTS,
OUR PATENTS AND OUR PROPRIETARY TECHNOLOGY, WHICH WILL MAKE IT EASIER FOR OTHERS
TO MISAPPROPRIATE OUR TECHNOLOGY AND INHIBIT OUR ABILITY TO BE COMPETITIVE.

     Our success  will depend,  in part,  on our and our  licensors'  ability to
obtain, assert and defend our patents, protect trade secrets and operate without
infringing the proprietary  rights of others.  The exclusive license relating to
various drug compounds,  including our leading drug candidate  SnET2, may become
non-exclusive  if we fail to satisfy certain  development and  commercialization
objectives.  The  termination  or  restriction of our rights under this or other
licenses  for any reason  would likely  reduce our future  income,  increase our
costs and limit our ability to develop additional products.  Although we believe
we should be able to achieve such objectives, we may not be successful.

     The patent position of pharmaceutical and medical device firms generally is
highly uncertain. Some of the risks and uncertainties include:

          *    The patent applications owned by or licensed to us may not result
               in issued patents;
          *    Our issued patents may not provide us with proprietary protection
               or competitive advantages;
          *    Our issued  patents may be infringed  upon or designed  around by
               others;
          *    Our issued  patents  may be  challenged  by others and held to be
               invalid or unenforceable;
          *    The  patents  of  others  may  prohibit  us from  developing  our
               products as planned; and
          *    Significant  time  and  funds  may be  necessary  to  defend  our
               patents.

     We are aware that our  competitors  and  others  have been  issued  patents
relating to photodynamic  therapy.  In addition,  our competitors and others may
have  been  issued  patents  or  filed  patent  applications  relating  to other
potentially  competitive  products  of  which  we are not  aware.  Further,  our
competitors  and others may in the future file  applications  for, or  otherwise
obtain proprietary  rights to, such products.  These existing or future patents,
applications  or rights  may  conflict  with our or our  licensors'  patents  or
applications.  Such  conflicts  could  result  in a  rejection  of  our  or  our
licensors' applications or the invalidation of the patents.

     Further exposure could arise from the following risks and uncertainties:

          *    We do not have  contractual  indemnification  rights  against the
               licensors of the various drug patents;
          *    We may  be  required  to  obtain  licenses  under  dominating  or
               conflicting patents or other proprietary rights of others;
          *    Such  licenses may not be made  available on terms  acceptable to
               us, if at all; and
          *    If we do not obtain such licenses,  we could encounter  delays or
               could find that the development,  manufacture or sale of products
               requiring such licenses is foreclosed.

     We also seek to protect our proprietary technology and processes in part by
confidentiality  agreements  with  our  collaborative  partners,  employees  and
consultants.  These  agreements  could be breached and we may not have  adequate
remedies for any breach.

     The  occurrence  of any of these  events  described  above  could  harm our
competitive  position.  If such  conflicts  occur,  or if we  believe  that such
products may infringe on our  proprietary  rights,  we may pursue  litigation or
other proceedings,  or may be required to defend against such litigation. We may
not be successful in any such proceeding.  Litigation and other  proceedings are
expensive and time consuming,  regardless of whether we prevail. This can result
in the diversion of substantial  financial,  managerial and other resources from
other activities. An adverse outcome could subject us to significant liabilities
to third  parties or require us to cease any related  research  and  development
activities or product sales.

WE HAVE LIMITED  MANUFACTURING AND MARKETING  CAPABILITY AND EXPERIENCE AND THUS
RELY HEAVILY UPON THIRD PARTIES.

     Prior  to  our  being  able  to  supply  drugs  for  commercial   use,  our
manufacturing facilities must comply with Good Manufacturing Practices, or GMPs.
In  addition,   if  we  elect  to   outsource   manufacturing   to   third-party
manufacturers,  these facilities also have to satisfy GMP and FDA  manufacturing
requirements.  To be successful, our products must be manufactured in commercial
quantities  under  current  GMPs and must be at  acceptable  costs.  Although we
intend to manufacture  drugs and devices at some commercial  levels, we have not
yet  manufactured  any products  under GMPs which can be released for commercial
use, and we have limited  experience in manufacturing in commercial  quantities.
We are licensed by the State of California to manufacture  SnET2 bulk API at our
Santa  Barbara,  California  facility  for  clinical  trial  and other  use.  We
currently  manufacture the bulk API, the process up to the final formulation and
packaging step, and have the ability to manufacture  light producing devices and
light delivery devices, and conduct other production and testing activities,  at
this location.  However, we have limited capabilities,  personnel and experience
in the manufacture of finished drug product,  light producing and light delivery
devices and utilize  outside  suppliers,  contracted or  otherwise,  for certain
materials and services  related to our  manufacturing  activities.  We currently
have the capacity, in conjunction with our manufacturing suppliers Fresenius and
Iridex, to manufacture  products at certain  commercial levels and we believe we
will be able to do so under GMPs with subsequent FDA approval.  If we receive an
FDA or other  regulatory  approval,  we may  need to  expand  our  manufacturing
capabilities   and/or  depend  on  our  collaborators,   licensees  or  contract
manufacturers  for the expanded  commercial  manufacture of our products.  If we
expand our manufacturing capabilities, we will need to expend substantial funds,
hire and retain  significant  additional  personnel  and comply  with  extensive
regulations.  We may not be able to expand  successfully  or we may be unable to
manufacture products in increased commercial  quantities for sale at competitive
prices.  Further,  we  may  not be  able  to  enter  into  future  manufacturing
arrangements  with  collaborators,   licensees,  or  contract  manufacturers  on
acceptable  terms or at all.  If we are not  able to  expand  our  manufacturing
capabilities or enter into additional commercial manufacturing  agreements,  our
commercial  product  sales,  as well as our  overall  business  growth  could be
limited,  which in turn could prevent us from becoming profitable or viable as a
business.  Fresenius is the sole  manufacturer of the final dose  formulation of
SnET2 and Iridex is currently the sole supplier of the light  producing  devices
used in our  AMD  clinical  trials.  Both  currently  have  commercial  quantity
capabilities.  At this time, we have no readily available back-up  manufacturers
to  produce  the final  formulation  of SnET2 at  commercial  levels or  back-up
suppliers  of  the  light  producing  devices.  If  Fresenius  could  no  longer
manufacture  for us or Iridex  was  unable to supply us with  devices,  we could
experience  significant delays in production or may be unable to find a suitable
replacement,   which  would   reduce  our  revenues  and  harm  our  ability  to
commercialize our products and become profitable.

     We have no direct  experience  in marketing,  distributing  and selling our
pharmaceutical or medical device products. We will need to develop a sales force
or rely on our  collaborators or licensees or make  arrangements  with others to
provide for the marketing,  distribution and sale of our products.  We currently
intend to rely on Iridex for any medical  device needs for the AMD program.  Our
marketing, distribution and sales capabilities or current or future arrangements
with third parties for such  activities  may not be adequate for the  successful
commercialization of our products.

OUR PRODUCTS MAY EXHIBIT  ADVERSE  SIDE  EFFECTS THAT PREVENT  THEIR  WIDESPREAD
ADOPTION OR THAT NECESSITATE WITHDRAWAL FROM THE MARKET.

     Our PhotoPoint  PDT drug and device  products may exhibit  undesirable  and
unintended side effects that may prevent or limit their commercial  adoption and
use.  One such side effect  upon the  adoption  of our  PhotoPoint  PDT drug and
device   products  as   potential   therapeutic   agents  may  be  a  period  of
photosensitivity  for a certain period of time after  receiving  PhotoPoint PDT.
This period of  photosensitivity  is  generally  dose  dependent  and  typically
declines over time. Even upon receiving approval by the FDA and other regulatory
authorities,  our products may later  exhibit  adverse side effects that prevent
widespread use or necessitate  withdrawal from the market.  The manifestation of
such side effects could cause our business to suffer.

ACCEPTANCE  OF OUR  PRODUCTS IN THE  MARKETPLACE  IS  UNCERTAIN,  AND FAILURE TO
ACHIEVE MARKET ACCEPTANCE WILL HARM OUR BUSINESS.

     Even if  approved  for  marketing,  our  products  may not  achieve  market
acceptance.  The  degree  of  market  acceptance  will  depend  upon a number of
factors, including:

          *    The  establishment  and demonstration in the medical community of
               the  safety  and  clinical  efficacy  of our  products  and their
               potential  advantages  over  existing  therapeutic  products  and
               diagnostic and/or imaging techniques. For example, if we are able
               to eventually  obtain  approval of our drugs and devices to treat
               cardiac  restenosis we will have to  demonstrate  and gain market
               acceptance  of this as a  method  of  treatment  over use of drug
               coated stents and other restenosis treatment options;
          *    Pricing and reimbursement  policies of government and third-party
               payors   such  as   insurance   companies,   health   maintenance
               organizations and other plan administrators; and
          *    The possibility that physicians,  patients, payors or the medical
               community  in general  may be  unwilling  to  accept,  utilize or
               recommend any of our products.

     If our products are not accepted due to these or other factors our business
will not develop as planned and may be harmed.

OUR ABILITY TO ESTABLISH AND MAINTAIN  AGREEMENTS WITH OUTSIDE SUPPLIERS MAY NOT
BE SUCCESSFUL AND OUR FAILURE TO DO SO COULD ADVERSELY AFFECT OUR BUSINESS.

     We depend on outside suppliers for certain raw materials and components for
our products.  Although most of our raw materials and  components  are available
from various  sources,  such raw materials or components  may not continue to be
available to our standards or on acceptable  terms,  if at all, and  alternative
suppliers may not be available to us on acceptable terms, if at all. Further, we
may not be able to adequately  produce needed materials or components  in-house.
We are  currently  dependent  on single,  contracted  sources  for  certain  key
materials or services used by us in our drug  development,  light  producing and
light delivery device development and production  operations.  We are seeking to
establish  relationships  with  additional  suppliers,  however,  we may  not be
successful in doing so and may  encounter  delays or other  problems.  If we are
unable to produce our  potential  products in a timely  manner,  or at all,  our
sales would decline, our development activities could be delayed or cease and as
a result we may never achieve profitability.

WE MAY NOT HAVE ADEQUATE  PROTECTION AGAINST PRODUCT LIABILITY OR RECALL,  WHICH
COULD SUBJECT US TO LIABILITY CLAIMS THAT COULD MATERIALLY HARM OUR BUSINESS.

     The  testing,  manufacture,  marketing  and  sale of  human  pharmaceutical
products and medical devices entails significant  inherent,  industry-wide risks
of allegations of product liability.  The use of our products in clinical trials
and the sale of our  products may expose us to  liability  claims.  These claims
could be made directly by patients or consumers,  or by companies,  institutions
or others using or selling our  products.  The  following  are some of the risks
related to liability and recall:

          *    We are subject to the inherent risk that a governmental authority
               or third  party  may  require  the  recall  of one or more of our
               products;
          *    We have not obtained product liability insurance that would cover
               a claim  relating to the clinical or commercial  use or recall of
               our products;
          *    In the  absence  of  product  liability  insurance,  claims  made
               against us or a product  recall could result in our being exposed
               to large damages and expenses;
          *    If we obtain product liability  insurance coverage in the future,
               this  coverage may not be  available at a reasonable  cost and in
               amounts  sufficient to protect us against claims that could cause
               us to pay large amounts in damages; and
          *    Liability  claims  relating to our  products or a product  recall
               could  negatively  affect  our  ability  to  obtain  or  maintain
               regulatory approval for our products.

     We currently do not expect to obtain product  liability  insurance until we
have an approved product and begin  distributing the product for commercial use.
We plan to obtain  product  liability  insurance  to cover  our  indemnification
obligations  to Iridex for third party claims  relating to any of our  potential
negligent  acts or omissions  involving our SnET2 drug  technology or PhotoPoint
PDT light device  technology.  A successful product liability claim could result
in monetary or other damages that could harm our business,  financial  condition
and additionally cause us to cease operations.

OUR  BUSINESS  COULD  SUFFER  IF WE ARE  UNSUCCESSFUL  IN  INTEGRATING  BUSINESS
COMBINATIONS AND STRATEGIC ALLIANCES.

     We may expand our operations and market  presence by entering into business
combinations,  joint ventures or other strategic alliances with other companies.
These  transactions  create  risks,  such  as the  difficulty  assimilating  the
operations,  technology and personnel of the combined companies;  the disruption
of our  ongoing  business,  including  loss  of  management  focus  on  existing
businesses and other market  developments;  problems retaining key technical and
managerial personnel;  expenses associated with the amortization of goodwill and
other purchased  intangible assets;  additional operating losses and expenses of
acquired  businesses;  the impairment of relationships with existing  employees,
customers  and  business  partners;  and,  additional  losses  from  any  equity
investments we might make.

     We may not succeed in  addressing  these  risks,  and we may not be able to
make  business   combinations  and  strategic  investments  on  terms  that  are
acceptable to us. In addition, any businesses we may acquire may incur operating
losses.

WE RELY ON THE AVAILABILITY OF CERTAIN UNPROTECTED INTELLECTUAL PROPERTY RIGHTS,
AND IF ACCESS TO SUCH RIGHTS BECOMES UNAVAILABLE, OUR BUSINESS COULD SUFFER.

     Our trade  secrets  may  become  known or be  independently  discovered  by
competitors.  Furthermore,  inventions or processes  discovered by our employees
will not  necessarily  become our  property  and may remain the property of such
persons or others.

     In addition,  certain  research  activities  relating to the development of
certain patents owned by or licensed to us were funded,  in part, by agencies of
the United States Government.  When the United States Government participates in
research activities, it retains certain rights that include the right to use the
resulting patents for government purposes under a royalty-free license.

     We also rely upon unpatented  trade secrets,  and no assurance can be given
that others will not independently develop substantially  equivalent proprietary
information  and  techniques,  or otherwise  gain access to our trade secrets or
disclose such technology,  or that we can meaningfully protect our rights to our
unpatented trade secrets and know-how.

     In the event that the  intellectual  property we do or will rely on becomes
unavailable, our ability to be competitive will be impeded and our business will
suffer.

EFFECTING  A CHANGE  OF  CONTROL  OF  MIRAVANT  WOULD BE  DIFFICULT,  WHICH  MAY
DISCOURAGE OFFERS FOR SHARES OF OUR COMMON STOCK.

     Our Board of Directors has adopted a Preferred  Stockholder Rights Plan, or
Rights  Plan.  The Rights Plan may have the effect of  delaying,  deterring,  or
preventing  changes  in  our  management  or  control  of  Miravant,  which  may
discourage  potential  acquirers who otherwise  might wish to acquire us without
the consent of the Board of  Directors.  Under the Rights  Plan,  if a person or
group  acquires 20% or more of our Common  Stock,  all holders of rights  (other
than the acquiring  stockholder) may, upon payment of the purchase price then in
effect,  purchase  Common Stock having a value of twice the purchase  price.  In
April 2001, the Rights Plan was amended to increase the trigger  percentage from
20% to 25% as it applies to Pharmacia and excluded  shares acquired by Pharmacia
in  connection  with our 2001  Credit  Agreement  with  Pharmacia,  and from the
exercise of warrants held by  Pharmacia.  In the event that we are involved in a
merger  or  other  similar  transaction  where  Miravant  is not  the  surviving
corporation,  all holders of rights (other than the acquiring stockholder) shall
be entitled,  upon  payment of the then in effect  purchase  price,  to purchase
Common Stock of the surviving  corporation  having a value of twice the purchase
price. The rights will expire on July 31, 2010, unless previously redeemed.

OUR CHARTER AND BYLAWS CONTAIN  PROVISIONS  THAT MAY PREVENT  TRANSACTIONS  THAT
COULD BE BENEFICIAL TO STOCKHOLDERS.

     Our charter and bylaws restrict  certain actions by our  stockholders.  For
example:

          *    Our  stockholders  can act at a duly  called  annual  or  special
               meeting but they may not act by written consent;
          *    Special  meetings  can  only be  called  by our  chief  executive
               officer,  president,  or  secretary  at the written  request of a
               majority of our Board of Directors; and
          *    Stockholders  also must give advance  notice to the  secretary of
               any  nominations  for director or other business to be brought by
               stockholders at any stockholders' meeting.

     Some of these restrictions can only be amended by a super-majority  vote of
members of the Board and/or the stockholders.  These and other provisions of our
charter and bylaws, as well as certain provisions of Delaware law, could prevent
changes in our  management  and  discourage,  delay or prevent a merger,  tender
offer  or  proxy  contest,  even  if  the  events  could  be  beneficial  to our
stockholders.  These  provisions could also limit the price that investors might
be willing to pay for our Common Stock.

     In addition,  our charter authorizes our Board of Directors to issue shares
of undesignated  preferred stock without stockholder  approval on terms that the
Board may determine.  The issuance of preferred  stock could decrease the amount
of earnings and assets available for  distribution to our other  stockholders or
otherwise  adversely  affect their rights and powers,  including  voting rights.
Moreover,  the  issuance of  preferred  stock may make it more  difficult or may
discourage another party from acquiring voting control of us.

BUSINESS INTERRUPTIONS COULD ADVERSELY AFFECT OUR BUSINESS.

     Our operations are vulnerable to  interruption by fire,  earthquake,  power
loss, floods, telecommunications failure and other events beyond our control. We
do not have a detailed disaster recovery plan. Our facilities are all located in
the  state  of  California  and  were  subject  to  electricity  blackouts  as a
consequence of a shortage of available  electrical power.  There is no guarantee
that this electricity  shortage has been permanently  resolved,  as such, we may
again in the future experience unexpected  blackouts.  Though we do have back-up
electrical  generation systems in place, they are for use for a limited time and
in the event  these  blackouts  continue or  increase  in  severity,  they could
disrupt the operations of our affected facilities. In addition, we may not carry
adequate  business  interruption  insurance to compensate us for losses that may
occur and any losses or damages incurred by us could be substantial.




<PAGE>



                          RISKS RELATED TO OUR INDUSTRY

WE ARE SUBJECT TO UNCERTAINTIES REGARDING HEALTH CARE REIMBURSEMENT AND REFORM.

     Our products may not be covered by the various  health care  providers  and
third party payors.  If they are not covered,  our products may not be purchased
or sold as expected. Our ability to commercialize our products successfully will
depend,  in part, on the extent to which  reimbursement  for these  products and
related  treatment  will be  available  from  government  health  administration
authorities,   private  health   insurers,   managed  care  entities  and  other
organizations.  These payers are  increasingly  challenging the price of medical
products  and  services  and  establishing  protocols  and  formularies,   which
effectively  limit  physicians'  ability  to  select  products  and  procedures.
Uncertainty  exists as to the  reimbursement  status of  health  care  products,
especially innovative  technologies.  Additionally,  reimbursement  coverage, if
available,  may not be adequate to enable us to achieve market acceptance of our
products  or  to  maintain  price  levels   sufficient  for  realization  of  an
appropriate return on our products.

     The efforts of governments and third-party  payors to contain or reduce the
cost of healthcare will continue to affect our business and financial  condition
as a biotechnology  company.  In foreign  markets,  pricing or  profitability of
medical  products  and  services may be subject to  government  control.  In the
United  States,  we expect  that there  will  continue  to be federal  and state
proposals  for  government  control of pricing and  profitability.  In addition,
increasing  emphasis on managed  healthcare has increased pressure on pricing of
medical  products and will continue to do so. These cost controls may prevent us
from selling our potential products  profitability,  may reduce our revenues and
may affect our ability to raise additional capital.

     In addition,  cost control  initiatives could adversely affect our business
in a number of ways, including:

          *    Decreasing  the price we, or any of our  partners  or  licensees,
               receive for any of our products;
          *    Preventing  the  recovery of  development  costs,  which could be
               substantial; and
          *    Minimizing profit margins.

     Further, our commercialization strategy depends on our collaborators.  As a
result,  our ability to commercialize  our products and realize royalties may be
hindered if cost control initiatives adversely affect our collaborators.

FAILURE  TO  OBTAIN  PRODUCT  APPROVALS  OR  COMPLY  WITH  ONGOING  GOVERNMENTAL
REGULATIONS COULD ADVERSELY AFFECT OUR BUSINESS.

     The production  and marketing of our products and our ongoing  research and
development,  preclinical  studies and clinical trial  activities are subject to
extensive  regulation  and review by numerous  governmental  authorities  in the
United  States,  including the FDA, and in other  countries.  All drugs and most
medical  devices  we develop  must  undergo  rigorous  preclinical  studies  and
clinical trials and an extensive regulatory approval process administered by the
FDA under the Food,  Drug and Cosmetic Act, or FDC Act, and  comparable  foreign
authorities,  before they can be marketed.  These processes involve  substantial
cost and can often take many years.  We have limited  experience in, and limited
resources  available for regulatory  activities and we rely on our collaborators
and  outside  consultants.  Failure  to comply  with the  applicable  regulatory
requirements  can, among other things,  result in  non-approval,  suspensions of
regulatory   approvals,   fines,   product   seizures  and  recalls,   operating
restrictions, injunctions and criminal prosecution. To date, none of our product
candidates  being  developed  have  been  submitted  for  approval  or have been
approved by the FDA or any other regulatory authority for marketing.

     Some of the risks and  uncertainties  relating to United States  Government
regulation include:

          *    Delays in  obtaining  approval or  rejections  due to  regulatory
               review  of  each  submitted  new  drug,   device  or  combination
               drug/device  application or product license application,  as well
               as  changes  in  regulatory  policy  during the period of product
               development;
          *    If regulatory approval of a product is granted, such approval may
               entail  limitations  on the uses for  which  the  product  may be
               marketed;
          *    If regulatory approval is obtained, the product, our manufacturer
               and the manufacturing  facilities are subject to continual review
               and periodic inspections;
          *    If  regulatory  approval  is  obtained,   such  approval  may  be
               conditional  on the  satisfaction  of the  completion of clinical
               trials or require additional clinical trials;
          *    Later  discovery of previously  unknown  problems with a product,
               manufacturer  or  facility  may  result in  restrictions  on such
               product or manufacturer, including withdrawal of the product from
               the market and litigation; and
          *    Photodynamic therapy products have been categorized by the FDA as
               combination   drug-device   products.   If   current   or  future
               photodynamic  therapy  products do not continue to be categorized
               for regulatory purposes as combination products, then:
                  -  The FDA may require separate drug and device
                     submissions; and
                  -  The FDA may require separate approval by
                     regulatory authorities.

     Some  of  the  risks  and   uncertainties  of  international   governmental
regulation include:

          *    Foreign regulatory  requirements governing testing,  development,
               marketing,  licensing,  pricing and/or  distribution of drugs and
               devices in other countries;
          *    Our drug  products  may not  qualify for the  centralized  review
               procedure  or we may not be  able to  obtain  a  national  market
               application that will be accepted by other European Union, or EU,
               member states;
          *    Our  devices  must also  meet the new  Medical  Device  Directive
               effective  in Europe in 1998.  The  Directive  requires  that our
               manufacturing  quality  assurance  systems  and  compliance  with
               technical  essential  requirements  be  certified  with a CE Mark
               authorized  by a registered  notified  body of an EU member state
               prior to free sale in the EU; and
          *    Registration  and approval of a photodynamic  therapy  product in
               other countries, such as Japan, may include additional procedures
               and  requirements,  preclinical  and  clinical  studies,  and may
               require the assistance of native corporate partners.

WE MAY  NOT BE ABLE TO KEEP UP  WITH  RAPID  CHANGES  IN THE  BIOTECHNOLOGY  AND
PHARMACEUTICAL   INDUSTRIES  THAT  COULD  MAKE  SOME  OR  ALL  OF  OUR  PRODUCTS
NON-COMPETITIVE  OR OBSOLETE.  COMPETING PRODUCTS AND TECHNOLOGIES MAY MAKE SOME
OR ALL OF OUR PROGRAMS OR POTENTIAL PRODUCTS NONCOMPETITIVE OR OBSOLETE.

     Our   industry  is  subject  to  rapid,   unpredictable   and   significant
technological  change.   Competition  is  intense.   Well-known  pharmaceutical,
biotechnology,  device and chemical  companies  are  marketing  well-established
therapies for the  treatment of AMD.  Doctors may prefer  familiar  methods that
they are comfortable using rather than try our products. Many companies are also
seeking to develop new  products and  technologies  for medical  conditions  for
which we are developing  treatments.  Our  competitors may succeed in developing
products that are safer or more effective than ours and in obtaining  regulatory
marketing  approval of future  products before we do. We anticipate that we will
face  increased  competition  as new  companies  enter  our  markets  and as the
scientific development of PhotoPoint PDT evolves.

     We expect that our principal methods of competition with other photodynamic
therapy companies will be based upon such factors as:

          *    The ease of administration of our photodynamic therapy;
          *    The degree of generalized skin sensitivity to light;
          *    The number of required doses;
          *    The safety and efficacy profile;
          *    The  selectivity  of our drug for the target  lesion or tissue of
               interest;
          *    The type, cost and price of our light systems;
          *    The cost and price of our drug; and
          *    The  amount  reimbursed  for the drug  and  device  treatment  by
               third-party payors.

     We cannot  give any  assurance  that new drugs or  future  developments  in
photodynamic  therapy or in other drug  technologies will not harm our business.
Increased competition could result in:

          *    Price reductions;
          *    Lower levels of third-party reimbursements;
          *    Failure to achieve market acceptance; and
          *    Loss of market share.

     Any of the above could have an adverse effect on our business.  Further, we
cannot  give any  assurance  that  developments  by our  competitors  or  future
competitors will not render our technology obsolete.

WE FACE INTENSE COMPETITION AND OUR FAILURE TO COMPETE EFFECTIVELY, PARTICULARLY
AGAINST LARGER,  MORE ESTABLISHED PHARMACEUTICAL  AND MEDICAL DEVICE  COMPANIES,
WILL CAUSE OUR BUSINESS TO SUFFER.

     Many of our competitors have substantially greater financial, technical and
human resources than we do, and may also have  substantially  greater experience
in  developing  products,  conducting  preclinical  studies or clinical  trials,
obtaining regulatory approvals and manufacturing and marketing and distribution.
Further, our competitive position could be harmed by the establishment of patent
protection by our competitors.  The existing  competitors or other companies may
succeed in developing technologies and products that are more safe, effective or
affordable  than those being developed by us or that would render our technology
and products less competitive or obsolete.

     We are aware that other  companies  are  marketing  or  developing  certain
products to  prevent,  diagnose or treat  diseases  for which we are  developing
PhotoPoint PDT. These products,  as well as others of which we may not be aware,
may adversely affect the existing or future market for our products. Competitive
products  may include,  but are not limited to, drugs such as those  designed to
inhibit  angiogenesis  or otherwise  target new blood vessels,  certain  medical
devices, such as drug-eluting stents and other photodynamic therapy treatments.

     We are aware of various  competitors  involved in the photodynamic  therapy
sector.  We understand that these companies are conducting  preclinical  studies
and/or  clinical  trials  in  various  countries  and for a variety  of  disease
indications. Our direct competitors in our sector include QLT Inc., or QLT, DUSA
Pharmaceuticals,  or DUSA, Axcan  Pharmaceuticals and Pharmacyclics.  QLT's drug
Visudyne has received  marketing approval in the United States and certain other
countries  for the  treatment  of AMD and has been  commercialized  by Novartis.
Axcan and DUSA have  photodynamic  therapy  drugs,  both of which have  received
marketing approval in the United States - Photofrin(R)  (Axcan  Pharmaceuticals)
for  the  treatment  of  certain  oncology   indications  and  Levulan(R)  (DUSA
Pharmaceuticals / Berlex Laboratories) for the treatment of actinic keratoses, a
dermatological condition. Pharmacyclics has a photodynamic therapy drug that has
not  received  marketing  approval,  which is being used in certain  preclinical
studies and/or clinical trials for  ophthalmology,  oncology and  cardiovascular
indications.  We are aware of other drugs and devices under development by these
and other photodynamic therapy competitors in additional disease areas for which
we are developing  PhotoPoint  PDT. These  competitors as well as others that we
are not aware of, may develop  superior  products  or reach the market  prior to
PhotoPoint PDT and render our products non-competitive or obsolete.

OUR  INDUSTRY  IS SUBJECT  TO  TECHNOLOGICAL  UNCERTAINTY,  WHICH MAY RENDER OUR
PRODUCTS AND DEVELOPMENTS OBSOLETE AND OUR BUSINESS MAY SUFFER.

     The   pharmaceutical   industry   is  subject  to  rapid  and   substantial
technological  change.  Developments  by others may render  our  products  under
development or our technologies  noncompetitive or obsolete, or we may be unable
to  keep  pace  with   technological   developments  or  other  market  factors.
Technological competition in the industry from pharmaceutical, biotechnology and
device companies,  universities,  governmental  entities and others diversifying
into the field is intense and is expected to increase.  These entities represent
significant  competition for us.  Acquisitions  of, or investments in, competing
pharmaceutical or biotechnology  companies by large  corporations could increase
such competitors' financial, marketing, manufacturing and other resources.

     We are  engaged  in the  development  of  novel  therapeutic  technologies,
specifically photodynamic therapy. As a result, our resources are limited and we
may  experience  technical  challenges  inherent  in  such  novel  technologies.
Competitors have developed or are in the process of developing technologies that
are, or in the future may be, the basis for competitive products.  Some of these
products  may have an  entirely  different  approach  or means of  accomplishing
similar therapeutic, diagnostic and imaging effects compared to our products. We
are aware that three of our competitors in the market for  photodynamic  therapy
drugs have received  marketing approval of their product for certain uses in the
United States or other countries.  Our competitors may develop products that are
safer, more effective or less costly than our products and, therefore, present a
serious competitive threat to our product offerings.

     The widespread  acceptance of therapies that are  alternatives  to ours may
limit market acceptance of our products even if commercialized. The diseases for
which we are developing  our  therapeutic  products can also be treated,  in the
case of cancer,  by  surgery,  radiation  and  chemotherapy,  and in the case of
restenosis,  by  surgery,  angioplasty,  drug  therapy and the use of devices to
maintain and open blood vessels.  These  treatments  are widely  accepted in the
medical  community and have a long history of use. The  established use of these
competitive  products  may limit  the  potential  for our  products  to  receive
widespread acceptance if commercialized.

     Our  understanding  of the market  opportunities  for our PhotoPoint PDT is
derived  from a variety of  sources,  and  represents  our best  estimate of the
overall market sizes presented in certain disease areas.  The actual market size
and market share which we may be able to obtain may vary  substantially from our
estimates, and is dependent upon a number of factors, including:

               *    Competitive  treatments or diagnostic tools, either existing
                    or those that may arise in the future;
               *    Performance of our products and subsequent  labeling claims;
                    and
               *    Actual patient population at and beyond product launch.

OUR PRODUCTS ARE SUBJECT TO OTHER STATE AND FEDERAL LAWS, FUTURE LEGISLATION AND
REGULATIONS  SUBJECTING  US TO COMPLIANCE  ISSUES THAT COULD CREATE  SIGNIFICANT
ADDITIONAL  EXPENDITURES  AND LIMIT THE  PRODUCTION AND DEMAND FOR OUR POTENTIAL
PRODUCTS.

     In addition to the regulations for drug or device approvals, we are subject
to  regulation  under state,  federal or other law,  including  regulations  for
worker occupational safety,  laboratory practices,  environmental protection and
hazardous  substance  control.  We  continue  to make  capital  and  operational
expenditures  for  protection  of the  environment  in  amounts  which  are  not
material.  Some of the  risks  and  uncertainties  related  to laws  and  future
legislation or regulations include:

               *    Our future capital and operational  expenditures  related to
                    these matters may increase and become material;
               *    We may also be subject to other present and possible  future
                    local, state, federal and foreign regulation;
               *    Heightened  public  awareness  and  concerns  regarding  the
                    growth in overall  health  care  expenditures  in the United
                    States, combined with the continuing efforts of governmental
                    authorities  to contain or reduce costs of health care,  may
                    result in the  enactment  of national  health care reform or
                    other  legislation or regulations  that impose limits on the
                    number and type of medical procedures which may be performed
                    or which  have  the  effect  of  restricting  a  physician's
                    ability  to  select  specific  products  for use in  certain
                    procedures;
               *    Such new legislation or regulations may materially limit the
                    demand  and  manufacturing  of our  products.  In the United
                    States,  there  have  been,  and we expect  that  there will
                    continue  to be, a number of federal  and state  legislative
                    proposals and regulations to implement greater  governmental
                    control in the health care industry;
               *    The announcement of such proposals may hinder our ability to
                    raise capital or to form collaborations; and
               *    Legislation or regulations  that impose  restrictions on the
                    price  that may be  charged  for  health  care  products  or
                    medical   devices  may  adversely   affect  our  results  of
                    operations.

     We are unable to predict  the  likelihood  of adverse  effects  which might
arise from future  legislative or  administrative  action,  either in the United
States or abroad.

OUR BUSINESS IS SUBJECT TO ENVIRONMENTAL PROTECTION LAWS AND REGULATIONS, AND IN
THE EVENT OF AN  ENVIRONMENTAL  LIABILITY  CLAIM,  WE COULD BE HELD  LIABLE  FOR
DAMAGES AND ADDITIONAL SIGNIFICANT UNEXPECTED COMPLIANCE COSTS, WHICH COULD HARM
OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONs.

     We are subject to  federal,  state,  county and local laws and  regulations
relating to the protection of the environment. In the course of our business, we
are  involved in the  handling,  storage  and  disposal  of  materials  that are
classified as hazardous.  Our safety  procedures  for the handling,  storage and
disposal of such  materials  are  designed to comply  with  applicable  laws and
regulations.  However,  we may be involved in contamination or injury from these
materials.  If this occurs, we could be held liable for any damages that result,
and any such liability  could cause us to pay  significant  amounts of money and
harm  our  business.  Further,  the  cost  of  complying  with  these  laws  and
regulations may increase materially in the future.



<PAGE>




ITEM 7A.QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

     Our market risk disclosures  involves  forward-looking  statements.  Actual
results  could differ  materially  from those  projected in the  forward-looking
statements.  We are exposed to market risk related to changes in interest rates.
The risks related to foreign  currency  exchange  rates are immaterial and we do
not use derivative financial instruments.

     From  time  to  time,  we  maintain  a  portfolio  of  highly  liquid  cash
equivalents  maturing in three months or less as of the date of purchase.  Given
the short-term nature of these  investments and that our borrowings  outstanding
are under variable  interest rates,  we are not subject to significant  interest
rate risk.




ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     All information  required by this item is included on pages 56 - 77 in Item
14 of Part IV of this Report and is incorporated into this item by reference.



<PAGE>




                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
Miravant Medical Technologies

We have audited the accompanying consolidated balance sheets of Miravant Medical
Technologies  as of  December  31, 2001 and 2000,  and the related  consolidated
statements of  operations,  stockholders'  equity and cash flows for each of the
three years in the period ended December 31, 2001.  These  financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of Miravant Medical
Technologies at December 31, 2001 and 2000 and the  consolidated  results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2001, in conformity with accounting  principles  generally accepted
in the United States.

The accompanying  financial statements have been prepared assuming that Miravant
Medical  Technologies will continue as a going concern.  As more fully described
in Note 1, the Company  has  incurred  recurring  operating  losses,  which have
resulted in an accumulated deficit and a deficit in stockholders'  equity. These
conditions raise  substantial doubt about the Company's ability to continue as a
going concern.  Management's plans in regard to these matters are also described
in Note 1. The financial  statements do not include any  adjustments  to reflect
possible future effects on the  recoverability  and  classification of assets or
the amounts and  classification  of liabilities that may result from the outcome
of this uncertainty.

                                                     /S/ ERNST & YOUNG LLP

March 5, 2002
Woodland Hills, California



<PAGE>




<TABLE>
<CAPTION>
<S>     <C>                                                                       <C>                    <C>


                                              CONSOLIDATED BALANCE SHEETS

                                                                                              December 31,
                                                                                        2001                  2000
                                                                                 ------------------   -------------------
                                    Assets

Current assets:
   Cash and cash equivalents...............................................      $      1,458,000     $       1,935,000
   Investments in short-term marketable securities.........................             4,654,000            18,900,000
   Accounts receivable.....................................................             5,080,000               932,000
   Inventories.............................................................               395,000                    --
   Prepaid expenses and other current assets...............................               974,000               967,000
                                                                                 ------------------   -------------------
Total current assets.......................................................            12,561,000            22,734,000

Property, plant and equipment:
   Vehicles................................................................                28,000                28,000
   Furniture and fixtures..................................................             1,404,000             1,649,000
   Equipment...............................................................             5,447,000             5,882,000
   Leasehold improvements..................................................             3,382,000             4,538,000
                                                                                 ------------------   -------------------
                                                                                       10,261,000            12,097,000
   Accumulated depreciation................................................            (9,057,000)           (9,781,000)
                                                                                 ------------------   -------------------
                                                                                        1,204,000             2,316,000

Investments in affiliates..................................................               635,000               859,000
Deferred financing costs...................................................               913,000             1,287,000
Patents and other assets...................................................               852,000               831,000
                                                                                 ------------------   -------------------
Total assets...............................................................      $     16,165,000      $     28,027,000
                                                                                 ==================   ===================

               Liabilities and stockholders' equity (deficit)
Current liabilities:
   Accounts payable........................................................      $      2,535,000      $      2,665,000
   Accrued payroll and expenses............................................               786,000               638,000
                                                                                 ------------------   -------------------
Total current liabilities..................................................             3,321,000             3,303,000

Long-term liabilities:
   Long-term debt..........................................................            26,548,000            24,794,000
   Sublease security deposits..............................................                94,000                94,000
                                                                                 ------------------   -------------------
Total long-term liabilities................................................            26,642,000            24,888,000

Stockholders' equity (deficit):
   Common stock, 50,000,000 shares authorized; 18,876,075 and 18,576,503
     shares issued and outstanding at December 31, 2001 and
     2000, respectively....................................................           161,496,000           158,842,000
   Notes receivable from officers..........................................              (822,000)             (487,000)
   Deferred compensation and interest......................................              (547,000)           (1,220,000)
   Accumulated other comprehensive loss....................................              (356,000)             (132,000)
   Accumulated deficit.....................................................          (173,569,000)         (157,167,000)
                                                                                 ------------------   -------------------
Total stockholders' equity (deficit).......................................           (13,798,000)             (164,000)
                                                                                 ------------------   -------------------
Total liabilities and stockholders' equity (deficit).......................      $     16,165,000      $     28,027,000
                                                                                 ==================   ===================

See accompanying notes.
</TABLE>


<PAGE>



                                          CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
<S>     <C>                                                     <C>                      <C>                    <C>


                                                                              Year ended December 31,
                                                                   2001                 2000                1999
                                                            -------------------  -------------------  ------------------
Revenues:
   License - contract research and development.......             $   302,000         $  4,481,000       $  13,996,000
   Bulk active pharmaceutical ingredient sales.......               4,306,000                   --                  --
   Royalties.........................................                  75,000                   --             143,000
   Grants............................................                      --              112,000             438,000
                                                            -------------------  -------------------  ------------------
Total revenues.......................................               4,683,000            4,593,000          14,577,000

Costs and expenses:
   Cost of goods sold................................                 934,000                   --                  --
   Research and development..........................              13,318,000           19,944,000          29,749,000
   Selling, general and administrative...............               6,078,000            6,273,000           7,473,000
   Loss in affiliate.................................                      --                   --             417,000
                                                            -------------------  -------------------  ------------------
Total costs and expenses.............................              20,330,000           26,217,000          37,639,000

Loss from operations.................................             (15,647,000)         (21,624,000)        (23,062,000)

Interest and other income (expense):
   Interest and other income.........................                 798,000            1,370,000           1,240,000
   Interest expense..................................              (2,139,000)          (2,254,000)           (434,000)
   Gain on sale of assets............................                 586,000                   --                  --
   Non-cash loss in investment.......................                       --          (3,485,000)                 --
                                                            -------------------  -------------------  ------------------
Total net interest and other income (expense)........                (755,000)          (4,369,000)            806,000
                                                            -------------------  -------------------  ------------------
Net loss.............................................           $ (16,402,000)     $   (25,993,000)    $   (22,256,000)
                                                            ===================  ===================  ==================
Net loss per share - basic and diluted...............           $       (0.88)     $         (1.42)    $         (1.25)
                                                            ===================  ===================  ==================
Shares used in computing net loss per share..........              18,647,071           18,294,525          17,768,670
                                                            ===================  ===================  ==================

See accompanying notes.
</TABLE>



<PAGE>


                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
<S>                                     <C>                             <C>             <C>       <C>              <C>           <C>


                                                                Notes                       Accumulated
                                                             Receivable       Deferred        Other
                                      Common Stock              from        Compensation   Comprehensive    Accumulated
                                  Shares        Amount        Officers      and Interest       Loss           Deficit         Total
                               ------------ --------------- ------------- --------------- -------------- --------------- ----------
Balance at January 1, 1999......16,080,054  $ 135,989,000  $(1,525,000)   $ (2,896,000)   $ (2,964,000)  $(108,918,000) $19,686,000
   Comprehensive loss:
    Net loss....................        --             --           --              --              --     (22,256,000) (22,256,000)
    Unrealized loss in
     investment in Xillix.......        --             --           --              --        (760,000)             --     (760,000)
                                                                                                                       -------------
   Total comprehensive loss.....                                                                                        (23,016,000)
   Issuance of stock at $16.71 per
    share (net of approximately
    $324,000 of offering
    costs).....................  1,136,533     18,676,000           --              --              --              --   18,676,000
   Exercise of stock options and
    warrants....................    36,202         95,000           --              --              --              --       95,000
   Notes receivable from
    officers....................        --             --    1,065,000              --              --              --    1,065,000
   Issuance of stock awards.....    96,485        972,000           --              --              --              --      972,000
  Fulfillment of  obligations
   under  the   Securities
   Purchase Agreement and related
   amendments...................   688,996     (4,204,000)          --              --              --              --   (4,204,000)
  Deferred compensation and
   deferred interest related to
   warrants granted.............        --      1,203,000           --        (332,000)             --              --      871,000
  Amortization of deferred
   compensation.................        --             --           --       1,452,000              --              --    1,452,000
                               ------------ --------------- ------------- --------------- -------------- --------------- -----------
Balance at December 31, 1999....18,038,270  $ 152,731,000   $  (460,000)  $ (1,776,000)    $(3,724,000)  $(131,174,000) $15,597,000
   Comprehensive loss:
      Net loss..................        --             --            --             --              --     (25,993,000) (25,993,000)
      Net change in accumulated
       other comprehensive
       loss.....................        --             --            --             --       3,592,000              --    3,592,000
                                                                                                                       -------------
   Total comprehensive loss.....                                                                                        (22,401,000)
   Exercise of stock options
    and warrants................   486,979      4,414,000            --             --              --              --    4,414,000
   Issuance of stock awards.....    51,254        760,000            --             --              --              --      760,000
  Deferred compensation and
   deferred interest related to
   warrants granted and officer
   notes........................        --        937,000       (27,000)      (205,000)             --               --     705,000
  Amortization of deferred
    compensation................        --             --             --       761,000              --               --     761,000
                               ------------ --------------- -------------  --------------- -------------- --------------- ----------
Balance at December 31, 2000....18,576,503  $ 158,842,000    $  (487,000)  $(1,220,000)    $  (132,000)   $(157,167,000) $ (164,000)
   Comprehensive loss:
      Net loss..................        --             --             --            --              --      (16,402,000)(16,402,000)
      Net change in accumulated
       other comprehensive
       loss.....................        --             --             --            --        (224,000)              --    (224,000)
                                                                                                                       -------------
   Total comprehensive loss.....                                                                                        (16,626,000)
   Exercise of stock options and
    warrants....................    35,690        315,000             --            --              --               --     315,000
   Issuance of stock awards.....   263,882      2,255,000             --            --              --               --   2,255,000
  Non-cash contributions by
   Pharmacia Corporation........        --        194,000             --            --              --               --     194,000
  Officer notes.................        --             --       (335,000)           --              --               --    (335,000)
  Deferred compensation.........        --       (110,000)            --       110,000              --               --          --
  Amortization of deferred
   compensation.................        --             --             --       563,000              --               --     563,000
                                ------------ --------------- -------------  --------------- -------------- --------------- ---------
Balance at December 31, 2001....18,876,075  $ 161,496,000    $  (822,000)   $ (547,000)     $ (356,000)  $(173,569,000)$(13,798,000)
                                ============ =============== =============  =============== ============== =============== =========
See accompanying notes.


</TABLE>


<PAGE>

<TABLE>
<CAPTION>
<S>                                                                     <C>                     <C>              <C>



                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                   Year ended December 31,
Operating activities:                                                    2001                 2000                 1999
                                                                    ----------------     ----------------     ---------------
    Net loss...............................................       $   (16,402,000)     $    (25,993,000)    $   (22,256,000)
    Adjustments to reconcile net loss to net cash used
       by operating activities:
       Depreciation and amortization.......................             1,194,000             1,743,000           2,690,000
       Amortization of deferred compensation...............               563,000               761,000           1,452,000
       Non-cash loss in investment.........................                    --             3,485,000                  --
       (Gain) loss on sale of property, plant and equipment              (586,000)                   --              25,000
       Reserve for loan receivable from affiliate..........                    --                    --             250,000
       Stock awards........................................             2,255,000               760,000           1,006,000
       Non-cash interest and amortization of
         deferred financing costs on long-term debt........             2,288,000             2,231,000             379,000
       Reserve for patents.................................                    --                74,000             412,000
       Changes in operating assets and liabilities:
          Accounts receivable .............................            (4,148,000)            4,785,000          (2,679,000)
          Inventories......................................              (361,000)                  --                  --
          Prepaid expenses and other assets................               (33,000)              225,000            (235,000)
        Accounts payable and accrued payroll...............               (17,000)           (1,444,000)            596,000
                                                                  ------------------   ------------------  ------------------
    Net cash used in operating activities..................           (15,247,000)          (13,373,000)        (18,360,000)

Investing activities:
    Purchases of marketable securities.....................           (43,684,000)          (31,396,000)       (17,014,000)
    Sales of marketable securities.........................            57,930,000            16,117,000         13,393,000
    Loan to affiliate......................................                    --                    --           (250,000)
    Purchases of property, plant and equipment.............              (287,000)             (263,000)          (551,000)
    Sublease security deposits.............................                    --               (33,000)           127,000
    Proceeds from sale of property, plant and equipment....               863,000                    --                 --
    Purchases of patents...................................               (67,000)             (199,000)           (59,000)
                                                                  ------------------   ------------------  ------------------
    Net cash provided by (used in) investing activities....            14,755,000           (15,774,000)        (4,354,000)

Financing activities:
    Proceeds from issuance of Common Stock, less
       issuance costs......................................               315,000             4,414,000          18,737,000
    Proceeds from long-term debt...........................                    --             7,500,000          15,000,000
    Repayments (advances) of notes to officers.............              (300,000)                   --           1,065,000
     Payments for price protection obligations under the
       Amended Securities Agreement........................                    --                    --          (4,204,000)
                                                                  ------------------   ------------------  ------------------
    Net cash provided by financing activities..............                15,000            11,914,000          30,598,000

    Net (decrease) increase in cash and cash equivalents...              (477,000)          (17,233,000)          7,884,000

    Cash and cash equivalents at beginning of period.......             1,935,000            19,168,000          11,284,000
                                                                  ------------------   ------------------  ------------------
    Cash and cash equivalents at end of period.............       $     1,458,000      $      1,935,000     $    19,168,000
                                                                  ==================   ==================  ==================
Supplemental disclosures:
    State taxes paid.......................................       $        20,000      $          8,000     $       100,000
                                                                  ==================   ==================  ==================
    Interest paid..........................................       $            --      $         24,000     $            --
                                                                  ==================   ==================  ==================
See accompanying notes.

</TABLE>


<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.        Accounting Policies

 Description of Business and Basis of Presentation

     Miravant Medical  Technologies,  or Miravant or the Company,  is engaged in
the research and  development  of drugs and medical  device  products for use in
PhotoPoint(TM)  PDT, the Company's  proprietary  technologies  for  photodynamic
therapy. The Company is located in Santa Barbara, California.

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming the Company will continue as a going concern.  This basis of accounting
contemplates  the recovery of the Company's  assets and the  satisfaction of its
liabilities  in the normal course of business.  Through  December 31, 2001,  the
Company had an accumulated  deficit of $173.6 million and expects to continue to
incur substantial,  and possibly  increasing,  operating losses for the next few
years. The Company is continuing its efforts in research and development and the
preclinical  studies and clinical  trials of its products.  These  efforts,  and
obtaining  requisite  regulatory  approval,  prior  to  commercialization,  will
require substantial  expenditures.  Once requisite  regulatory approval has been
obtained,  if at all, substantial  additional financing will be required for the
manufacture,  marketing  and  distribution  of its product in order to achieve a
level of revenues  adequate to support the Company's cost  structure.  Executive
management  of the  Company  believes  that  with the  implementation  of a cost
restructuring  program in January 2002, it has sufficient  resources to fund the
current required expenditures through September 30, 2002. In addition, executive
management also believes it can raise additional  funding to support  operations
through  corporate  collaborations  or  partnerships,  licensing of SnET2 or new
products and equity or debt  financings  prior to September  30, 2002.  However,
there can be no assurance  that the Company will be successful in obtaining such
financing or that financing will be available on favorable  terms. If additional
funding is not available when required,  management  believes it has the ability
to conserve cash required for operations  through December 31, 2002 by the delay
or reduction in scope of one or more of its  research and  development  programs
and  adjusting,  deferring  or reducing  salaries of  employees  and by reducing
operating and overhead expenditures to conserve cash to be used in operations.

     The  preparation of  consolidated  financial  statements in conformity with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the consolidated financial statements and the accompanying notes. Actual results
may differ  from those  estimates  and such  differences  may be material to the
consolidated financial statements.

Principles of Consolidation

     The  consolidated  financial  statements  include the  accounts of Miravant
Medical Technologies and its wholly owned subsidiaries,  Miravant Systems, Inc.,
Miravant Pharmaceuticals, Inc. and Miravant Cardiovascular, Inc. All significant
intercompany  balances and transactions  have been eliminated in  consolidation.
Certain  reclassifications  of prior year amounts have been made for purposes of
consistent presentation.

Cash Equivalents

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

Marketable Securities

     Marketable  securities  consist of short-term,  interest-bearing  corporate
bonds,  U.S.  Government  obligations  and  municipal  obligations.   Marketable
securities  of  $4.7  million  and  $18.9  million   consisted  of   short-term,
interest-bearing  municipal bonds and corporate  stocks and bonds as of December
31,  2001  and  2000,  respectively.   The  Company  has  established  investing
guidelines  relative  to  concentration,  maturities  and  credit  ratings  that
maintain safety and liquidity.

     In accordance with Statement of Financial  Accounting  Standards,  or SFAS,
No. 115, "Accounting for Certain Investments in Debt and Equity Securities," the
Company determines the appropriate  classification of debt and equity securities
at the time of purchase and  re-evaluates  such  designation  as of each balance
sheet date.  As of December 31, 2001 and 2000,  all  marketable  securities  and
certain  investments  in affiliates  were  classified  as  "available-for-sale."
Available-for-sale  securities  and  investments  are carried at fair value with
unrealized  gains and losses reported as a separate  component of  stockholders'
equity. Realized gains and losses on investment transactions are recognized when
realized based on settlement dates and recorded as interest income. Interest and
dividends on securities are recognized when earned. Declines in value determined
to  be   other-than-temporary   on  available-for-sale   securities  are  listed
separately  as a  non-cash  loss in  investment  in the  consolidated  financial
statements.

Inventories

     Inventories  are stated at the lower of cost or market.  Cost is determined
in a manner which  approximates  the  first-in,  first-out  (FIFO)  method.  The
Company manufactures the bulk active pharmaceutical ingredient, or bulk API, for
its lead drug  candidate,  SnET2,  which can be used in preclinical  studies and
clinical trials and possibly for future potential commercial sales.  Inventories
consist of raw materials  necessary to produce additional bulk API lots, work in
process and finished lots.  Inventories are shown net of applicable reserves and
allowances. There were no inventories recorded in 2000. Inventories consisted of
the following at December 31, 2001:


       Raw materials....................................   $  65,000
       Work in process..................................     264,000
       Finished goods...................................      66,000
                                                         ------------
       Total inventories................................   $ 395,000
                                                         ============

     All inventories outstanding at December 31, 2001 were subsequently  sold to
Pharmacia  Corporation,  or  Pharmacia,  and payment is pending  pursuant to the
Contract Modification and Termination Agreement as described further in Note 12.

Investments in Affiliates

     Investments  in  affiliates  owned  more than 20% but not in excess of 50%,
where the  Company is not deemed to be able to exercise  significant  influence,
are recorded under the equity method. Investments in affiliates, owned less than
20%,  where  the  Company  is not  deemed  to be  able to  exercise  significant
influence,  are  recorded  under  the cost  method.  Under  the  equity  method,
investments  are carried at  acquisition  cost and  generally  adjusted  for the
proportionate  share of the  affiliates'  earnings  or  losses.  Under  the cost
method, investments are recorded at acquisition cost and adjusted to fair market
value based on the investment classification.

     In December 1996, the Company purchased an equity interest in Ramus Medical
Technologies  or Ramus for $2.0 million.  The investment was accounted for under
the equity method  because the investment was more than 20% but not in excess of
50% of Ramus' outstanding common stock and the Company was not deemed to be able
to  exercise  significant  influence.  As the  Company  was the main  source  of
financing for Ramus, the Company conservatively  recorded 100% of Ramus' loss to
the extent of the  investment  made by the Company.  The investment in Ramus has
been fully reserved for as of December 31, 2001 and 2000, respectively.

     In  June  1998,  the  Company   purchased  an  equity  interest  in  Xillix
Technologies  Corp. or Xillix.  The Company received  2,691,904 shares of Xillix
common stock, in exchange for $3.0 million in cash and 58,909 shares of Miravant
Common Stock.  The  investment  has been accounted for under the cost method and
classified  as  available-for-sale.  See Note 10 for further  discussion  on the
Company's investment in Xillix.

Equipment and Leasehold Improvements

     Equipment is stated at cost with  depreciation  provided over the estimated
useful lives of the  respective  assets on the  straight-line  basis.  Leasehold
improvements are stated at cost with amortization  provided on the straight-line
basis. The estimated useful lives of the assets are as follows:

Furniture and fixtures            5 years
Equipment                         3 - 5 years
Leasehold improvements            5 years or the remaining life of the lease
                                  term, whichever is shorter

Patents and Other Assets

     Costs  of  acquiring   patents  are   capitalized   and  amortized  on  the
straight-line  basis over the estimated  useful life of the patents of seventeen
years.  Accumulated  amortization was $377,000 and $305,000 at December 31, 2001
and 2000,  respectively.  The  costs of  servicing  the  Company's  patents  are
expensed as  incurred.  Also  included in this  caption are  deposits  and other
miscellaneous non-current assets.

Long-Lived Assets

     The Company  reviews for the  impairment of  long-lived  assets and certain
identifiable  intangibles  whenever events or changes in circumstances  indicate
that the carrying amount of an asset may not be recoverable. No such significant
impairment losses have been identified by the Company.  An impairment loss would
be recognized  when the estimated  future cash flows expected to result from the
use of the asset and its eventual disposition is less than its carrying amount.

     In October 2001, the Financial  Accounting Standards Board, or FASB, issued
SFAS No. 144,  "Accounting for the Impairment or Disposal of Long-Lived Assets."
SFAS No. 144 addresses financial  accounting and reporting for the impairment or
disposal  of  long-lived  assets and  discontinued  operations.  SFAS No. 144 is
effective for all fiscal years  beginning  after  December 15, 2001. The Company
will  adopt SFAS No. 144 in the first  quarter of 2002 and its  adoption  is not
expected  to have a  material  effect on the  Company's  consolidated  financial
statements.

Stock-Based Compensation

     SFAS No. 123, "Accounting for Stock-Based  Compensation,"  encourages,  but
does not  require,  companies  to record  compensation  expense for  stock-based
employee compensation plans at fair value. The Company has chosen to continue to
account for stock-based compensation using the intrinsic value method prescribed
by  Accounting  Principles  Board  Opinion,  or APB Opinion,  No. 25 and related
interpretations  including  Financial  Interpretation  No. 44,  "Accounting  for
Certain  Transactions  Involving Stock  Compensation - an  Interpretation of APB
Opinion No. 25" in accounting for its stock option plans.

     The Company also has granted and continues to grant warrants and options to
various consultants of the Company.  These warrants and options are generally in
lieu of cash  compensation  and,  as such,  deferred  compensation  is  recorded
related to these grants.  Deferred compensation for warrants and options granted
to  non-employees  has been  determined  in  accordance  with  SFAS No.  123 and
Emerging Issues Task Force or EITF 96-18 as the fair value of the  consideration
received or the fair value of the equity instruments  issued,  whichever is more
reliably  measured.  Deferred  compensation  is amortized over the consulting or
vesting period.

 Revenue Recognition

     The Company recognizes  revenues from product sales based on when ownership
of the product  transfers to the customer and when  collectibility is reasonably
assured. Sales of bulk API to Pharmacia Corporation,  or Pharmacia,  is recorded
as revenue in the period  when the product is  received  by  Pharmacia  at their
facility. Our current licensing revenues represent reimbursements from Pharmacia
for  out-of-pocket  expenses  incurred in our  preclinical  studies and clinical
trials  for  the  SnET2   PhotoPoint  PDT  treatment  for  age  related  macular
degeneration, or AMD. These licensing revenues are recognized in the period when
the reimbursable expenses are incurred. Grant income is recognized in the period
in which  the  grant  related  expenses  are  incurred  and  royalty  income  is
recognized in the period in which the royalties are earned.

Research and Development Expenses

     Research  and  development  costs are  expensed as  incurred.  Research and
development  expenses are comprised of the following  types of costs incurred in
performing research and development activities: salaries and benefits, allocated
overhead  and  occupancy  costs,  preclinical  study costs,  clinical  trial and
related  clinical device and drug  manufacturing  costs,  contract  services and
other outside  costs.  The  acquisition  of  technology  rights for research and
development  projects and the value of  equipment  and drug product for specific
research and  development  projects,  with no  alternative  future use, are also
included in research and development expenses.

Segment Reporting

     The Company is engaged principally in one aggregated line of business,  the
research and development of drugs and medical device products for the use in the
Company's proprietary technologies for photodynamic therapy.

Comprehensive Loss

     The  Company  has  elected  to  report  other  comprehensive  loss  in  the
consolidated  statements of stockholders'  equity with the change in accumulated
other comprehensive loss consisting of the following:
<TABLE>
<CAPTION>
<S>     <C>                                                               <C>                   <C>              <C>


                                                                              2001              2000                 1999
                                                                         --------------    ---------------    ------------------
         Unrealized   holding   gains   (losses)   arising   from
           available-for-sale securities..........................      $    (224,000)    $       107,000           $  (760,000)
         Reclassification adjustment for non-cash loss in
           investment recognized in net loss .....................                 --           3,485,000                   --
                                                                         --------------    ---------------    ------------------
         Net (increase) decrease  in accumulated other
           comprehensive loss ....................................       $   (224,000)    $    3,592,000            $  (760,000)
                                                                         ==============    ===============    ==================
</TABLE>


Net Loss Per Share

     The Company calculates  earnings per share in accordance with SFAS No. 128,
"Earnings per Share." Basic earnings per share excludes any dilutive  effects of
options,  warrants  and  convertible  securities.  Diluted  earnings  per  share
reflects  the  potential  dilution  that  would  occur  if  securities  or other
contracts  to issue common  stock were  exercised or converted to common  stock.
Common stock equivalent shares from all stock options and warrants for all years
presented  have  been  excluded  from  this   computation  as  their  effect  is
anti-dilutive.

     Basic loss per common  share is computed  by  dividing  the net loss by the
weighted  average shares  outstanding  during the period in accordance with SFAS
No. 128.  Since the effect of the assumed  exercise of common stock  options and
other convertible securities was anti-dilutive, basic and diluted loss per share
as presented on the consolidated statements of operations are the same.

Recent Accounting Pronouncements

     In  October  2001,  the FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or Disposal  of  Long-Lived  Assets" or SFAS No.  144.  SFAS No. 144
addresses  financial  accounting and reporting for the impairment or disposal of
long-lived assets and discontinued operations. SFAS No. 144 is effective for all
fiscal years  beginning after December 15, 2001. The adoption of SFAS No. 144 is
not expected to have a material effect on the Company's  consolidated  financial
statements.

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments  and Hedging  Activities" or SFAS No. 133. SFAS No. 133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
It requires an entity  recognize all derivatives as either assets or liabilities
in the  statement of financial  position and measure those  instruments  at fair
value.  In July 1999,  the FASB issued SFAS No. 137  "Accounting  for Derivative
Instruments  and Hedging  Activities  - Deferral of the  Effective  Date of FASB
Statement  No. 133".  SFAS No. 137 deferred the  effective  date of SFAS No. 133
until fiscal years  beginning  after June 15, 2000. The adoption of SFAS No. 133
has  not  had  a  material  effect  on  the  Company's   consolidated  financial
statements.

2.        Collaborative Funding and Credit Arrangements

     The following  represents a description  of the Company's  past  agreements
entered into with  Pharmacia.  In March 2002, the 2001 Credit  Agreement and the
Manufacturing  Facility Asset Purchase  Agreement  were  significantly  modified
and/or terminated by the Contract  Modification and Termination  Agreement.  See
Note 12 for further  discussion of the  modifications  and  terminations  of the
agreements with Pharmacia.

Credit Agreements

     In February 1999, the Company and Pharmacia entered into a Credit Agreement
which  extended to the Company $22.5 million in credit to be used to support the
Company's ophthalmology, oncology and other development programs, as well as for
general  corporate  purposes.  The Credit  Agreement  allowed for the Company to
issue  promissory  notes for each  quarterly loan received and for the quarterly
interest amounts due on the amounts  borrowed until December 2000.  Beginning in
2001,  the Company was  allowed to  continue to issue  promissory  notes for the
quarterly  interest due for any quarter in which its adjusted net  earnings,  as
described by the Credit Agreement, was less than the quarterly interest due. The
promissory notes, which accrue interest at the prime rate, mature in June 2004.

     The Company  received four quarterly  loans for a total of $15.0 million in
1999 and received the final two  quarterly  loans for a total of $7.5 million in
2000. In connection with the receipt of these loans,  the Company issued 360,000
warrants to purchase  Miravant  Common Stock at an exercise  price of $11.87 per
warrant share for 120,000  shares,  $14.83 per warrant share for 120,000  shares
and $20.62 per warrant  share for the last 120,000  shares.  The Company  issued
promissory notes for the $22.5 million  principal  balance as well as promissory
notes totaling  $379,000 in 1999,  $1.9 million in 2000 and $1.8 million in 2001
for the  quarterly  interest due. The interest rate for these notes was 4.75% at
December 31, 2001. Additionally, the warrants granted, which have been valued at
$1.7 million  using the  Black-Scholes  valuation  model,  have been recorded as
deferred  financing  costs on the balance  sheet and were being  amortized  on a
straight-line basis to interest expense over the life of the loans.

     In connection with the Credit Agreement,  the Company and Pharmacia amended
the 1998 Amendments of the License  Agreements to eliminate the remaining future
cost  reimbursements  for oncology and urology and any future milestone payments
in age-related macular degeneration or AMD.

     In May 2001, the Company and Pharmacia finalized a funding arrangement that
could have provided the Company up to $20.0 million in additional  funding.  See
Note 12 for further  discussion of the  modifications  and  terminations  of the
agreements with Pharmacia.  The $20.0 million of potential  funding consisted of
the following agreements:

Amended and Restated Credit Agreement

     In May 2001,  the  Company  entered  into an Amended  and  Restated  Credit
Agreement, or 2001 Credit Agreement with Pharmacia.  Under this agreement, which
amended and restated the previous  $22.5 million Credit  Agreement  entered into
with  Pharmacia  in  February  1999,  Pharmacia  could  have  provided  up to an
additional  $13.2 million in credit to the Company  beginning in April 2002. The
loans  available  under  the 2001  Credit  Agreement  were  subject  to  certain
conditions and are allocated  into two separate  borrowing  amounts.  Up to $3.2
million  would be available  to the Company  beginning  April 1, 2002.  Up to an
additional  $10.0  million would be available to the Company  beginning  July 1,
2002 provided: (i) Pharmacia has filed a New Drug Application with the U.S. Food
and Drug  Administration for the SnET2 PhotoPoint PDT for AMD; or (ii) the SnET2
Phase III clinical  trial data meet certain  clinical  statistical  standards as
defined by the clinical trial  protocols.  The borrowings  under the 2001 Credit
Agreement would accrue interest based on the prime rate.

Manufacturing Facility Asset Purchase Agreement, or Asset Purchase Agreement

     Under  this  agreement,  Pharmacia  issued  a  purchase  order  to buy  the
Company's  existing  SnET2  bulk API  inventory  at cost for $2.2  million.  The
existing  bulk API  inventory  had been  previously  expensed  in  research  and
development  costs in prior  periods.  Pharmacia  also committed to buy up to an
additional  $2.8  million  of the bulk API which  would be  manufactured  by the
Company  through  March 2002.  Additionally,  Pharmacia  agreed to purchase  the
manufacturing equipment necessary to produce the bulk API for $863,000, its fair
market value as appraised by an independent appraisal firm. The sale of the bulk
API manufacturing  equipment  resulted in a gain on sale of property,  plant and
equipment  of  $586,000.  Sales of bulk API  manufactured  and  shipped  through
December 31,  2001,  were paid by Pharmacia  directly  into an inventory  escrow
account.  The  inventory  escrow  account was released to the Company in full in
January 2002. The equipment  escrow account,  containing a principal  balance of
$863,000,  was  scheduled to be released in June 2002.  The  interest  earned by
these accounts accrued to the Company and was available upon the release of each
escrow  account.  The  escrow  accounts  will  secure  certain   indemnification
obligations  with  respect  to  the  purchase  of  the  bulk  API  manufacturing
equipment.  Management believes such indemnification  obligations are of routine
nature and under the Company's  control;  therefore,  these  obligations did not
result in a charge against the funds in escrow. All amounts received into escrow
are recorded as accounts receivable until the amounts are released.

3.        Stockholders' Equity

Collaboration with Pharmacia

     In  January  1999,  the  Company  and  Pharmacia  entered  into  an  Equity
Investment  Agreement  pursuant to which  Pharmacia  purchased  from the Company
1,136,533 shares of the Company's  Common Stock for an aggregate  purchase price
of $19.0  million,  or $16.71  per  share.  This  price  included  a premium  of
approximately 20% over the ten-day average per share closing price of the Common
Stock  through  January 14,  1999.  The shares  purchased  under the 1999 Equity
Investment  Agreement are in addition to Pharmacia's  original equity investment
of  $13.0  million  in  1995 in  connection  with  the  original  SnET2  license
agreement, under which Pharmacia received 725,001 shares of the Company's Common
Stock.

Private Placements

     In September and October 1997, the Company  completed  three private equity
placements,  through separate  Securities  Purchase  Agreements,  totaling $70.8
million,  which  provided  net  proceeds  to the Company of $68.2  million.  The
private  placements  included  three  separate  purchasers  for 900,000  shares,
500,000 shares and 16,000 shares for a total of 1,416,000 shares of Common Stock
issued at $50.00 per share,  as well as one detachable  Common Stock warrant for
each share of Common Stock  purchased.  With respect to the  1,416,000  warrants
issued in connection  with these private  placements,  50% were  exercisable  at
$55.00 per share and 50% were exercisable at $60.00 per share. Additionally, the
Securities Purchase  Agreements provided price protection  provisions that if on
the first  anniversary  of the closing of the  purchase,  the thirty day average
closing bid price of the Common  Stock for the period  ending on the trading day
prior  to the  anniversary  date is less  than  the  closing  price  paid by the
purchasers,  then the Company shall pay each purchaser additional cash or stock,
or a combination of both, as determined by the Company at its sole option.

     Effective  June 30, 1998,  the Company  entered into an Amended  Securities
Purchase Agreement or Amendment  Agreement with the purchasers of 900,000 shares
under the Securities  Purchase  Agreement.  Included among the provisions of the
Amendment Agreement was a change in the price protection  provisions.  Under the
Amendment  Agreement,  the  Company's  obligation  under  the  price  protection
provision was spread out over an eight month period beginning August 1, 1998 and
ending March 1, 1999, and was determined by the difference  between the original
purchase price and the thirty day average  closing bid price of the Common Stock
on the first day of each month beginning August 1st and ending March 1st (each a
"measurement date").  Additionally,  the Amendment Agreement included repurchase
provisions which provided that the Company also had the option to repurchase all
or a part of the purchasers'  shares at the original closing price of $50.00 per
share  and  thus  eliminate  all of  the  purchasers'  rights  under  the  price
protection  provisions of the Amendment  Agreement and the  Securities  Purchase
Agreement.

     Under the Amendment Agreement,  the exercise price of the original warrants
issued  to the  purchasers  of  900,000  shares  under the  Securities  Purchase
Agreement was reduced to $35.00.  In addition,  under the terms of the Amendment
Agreement,  the Company was required to issue an additional  450,000 warrants to
these  purchasers at an exercise price of $35.00 per share. The original 900,000
warrants and the additional  450,000  warrants  expired on December 25, 2001 and
were cancelled accordingly.

     In  accordance  with  the  price  protection  provisions  of the  Amendment
Agreement,  the Company  repurchased  337,500  shares  subject to the repurchase
provisions  of  the  Amendment  Agreement  at a  cost  of  $16.9  million.  This
repurchase eliminated the Company's obligation to issue additional shares or pay
cash under the amended price protection provisions for the August 1, September 1
and October 1, 1998  measurement  dates. For the November 1 and December 1, 1998
measurement  dates,  the Company  fulfilled its price  protection  obligation by
electing to pay the  purchasers  cash,  which  amounted to $4.6 million and $4.0
million,  respectively.  In addition, the Company fulfilled its price protection
obligations for the January 1, February 1, and March 1, 1999  measurement  dates
by electing to pay the purchasers  cash and Common Stock,  with the cash portion
amounting to $1.2 million,  $1.3 million and $1.7 million,  respectively and the
Common Stock portion  amounting to 199,746  shares,  207,072  shares and 282,178
shares,  respectively.  The Company has  satisfied  all of its price  protection
obligations  under the  Amendment  Agreement  and,  as such,  the Company has no
further  price  protection  obligations  under  this  agreement  to any of these
parties.

     In October 1998,  for the  purchasers  of 500,000  shares under the October
1997 private placements,  the Company satisfied its price protection  obligation
by issuing an additional  2,364,907  shares of Common Stock.  Additionally,  the
Company amended their warrant  agreements by changing the warrant exercise price
to $20.00  per share and  reducing  the  number of warrant  shares  issued  from
500,000 warrants to 450,000 warrants. These warrant agreements were subsequently
amended again in September  2001 to extend the  expiration  date to December 31,
2003 and reduce the exercise price to $10.00 per share. As of December 31, 2001,
the 450,000 warrants were all exercisable and none had been exercised.

     Also, in October 1998,  for the  purchasers of 16,000  shares,  the Company
satisfied its price protection obligation by issuing an additional 79,473 shares
of  Common  Stock.  The  warrants  to  purchase  16,000  shares  issued to these
purchasers  were not repriced or extended.  As such,  these warrants  expired on
December 31, 2001 and were cancelled accordingly.

Preferred Stockholder Rights Plan

     On July 13, 2000, the Board of Directors of the Company adopted a Preferred
Stockholder Rights Plan, or the Rights Plan. Under the Rights Plan, Miravant has
issued a dividend of one right for each share of its Common Stock held after the
close of  business  on July 31,  2000.  The Rights  Plan is  designed  to assure
stockholders'  fair  value  in  the  event  of  a  future  unsolicited  business
combination or similar transaction  involving the Company.  This Rights Plan was
not adopted in response to any attempt to acquire the  Company,  and Miravant is
not aware of any such efforts.

     The rights will become  exercisable  only if a person or group (i) acquires
20% or more of Miravant's  Common Stock,  or (ii)  announces a tender offer that
would result in ownership of 20% or more of the Common Stock. In April 2001, the
Rights Plan was amended to increase the trigger percentage from 20% to 25% as it
applies to Pharmacia  and excluded  shares  acquired by Pharmacia in  connection
with our 2001 Credit Agreement with Pharmacia, and from the exercise of warrants
held by Pharmacia.  Each right would  entitle a stockholder  to buy a fractional
share of the Company's preferred stock. Each right has an initial exercise price
of $180.00.  Once the acquiring  person or group has acquired 20% or more of the
outstanding Common Stock of Miravant, each right shall entitle its holder (other
than the acquiring  person or group) to acquire  shares of the Company or of the
third party acquirer having a value of twice the right's  then-current  exercise
price.

     The rights are  redeemable at the option of the Board of Directors up until
ten days after public  announcement that any person or group has acquired 20% or
more of Miravant's  Common Stock.  The redemption price is $0.001 per right. The
rights  will  expire  on July 31,  2010,  unless  redeemed  prior to that  date.
Distribution of the rights is not taxable to stockholders.

Notes Receivable from Officers

     In December  1997,  the  Compensation  Committee  of the Board of Directors
recommended,  and subsequently  approved,  non-recourse  equity loans in varying
amounts for the Company's Chief Executive Officer, President and Chief Financial
Officer.  The  notes,  which  accrue  interest  at a fixed  rate of 5.8% and are
payable in five years,  were awarded  specifically for the purpose of exercising
options to acquire the Company's  Common Stock and for paying the related option
exercise price and payroll taxes. The notes are collateralized by the underlying
shares  acquired upon exercise.  In January 1999, the Company  adjusted the loan
balances to reflect a change in the amount of payroll  taxes due.  Payroll taxes
of $961,000,  originally  withheld in 1998,  were refunded to the Company by the
applicable  taxing  agencies  during  1999.  As of  December  31, 2001 the total
balance of these loans was $147,000.  Additionally,  in 1998 and 2001, the Board
of Directors  approved two separate  secured loans made to the  Company's  Chief
Executive  Officer;  the loans accrue  interest at fixed rates  between 4.7% and
5.5% and as of December 31, 2001 and 2000,  had a total  balance of $675,000 and
$348,000, respectively.

Stock Option Plans

     The  Company has six  stock-based  compensation  plans which are  described
below:  the 1989  Plan,  the 1992 Plan,  the 1994  Plan,  the 1996 Plan or, as a
group,  the  Prior  Plans,  the  Miravant   Medical   Technologies   2000  Stock
Compensation  Plan or the 2000 Plan and the Non-Employee  Directors Stock Option
Plan or the  Directors'  Plan.  As disclosed in Note 1, the Company  applies APB
Opinion No. 25 and related  interpretations  in accounting  for its stock option
plans.

     The Prior Plans provided for the grant of both incentive  stock options and
non-statutory  stock  options.  Stock  options were granted under these plans to
certain employees,  corporate officers,  non-employee directors and consultants.
The  purchase  price of  incentive  stock  options must equal or exceed the fair
market  value of the Common  Stock at the grant date and the  purchase  price of
non-statutory  stock  options may be less than fair  market  value of the Common
Stock at grant date.  Effective June 14, 2000,  the Prior Plans were  superseded
with the  adoption of the 2000 Plan except to the extent of options  outstanding
under the Prior Plans. The Company has allocated 300,000 shares, 750,000 shares,
600,000  shares and 4,000,000  shares for the 1989 Plan, the 1992 Plan, the 1994
Plan and the 1996 Plan,  respectively.  The outstanding shares granted under the
Prior  Plans  generally  vest in  equal  annual  installments  over  four  years
beginning  one year from the grant date and  expire ten years from the  original
grant date. No further grants will be issued from the Prior Plans.

     The 2000 Plan provides for awards which include  incentive  stock  options,
non-qualified  stock options,  restricted  shares,  stock  appreciation  rights,
performance shares,  stock payments and dividend equivalent rights.  Included in
the 2000  Plan is an  employee  stock  purchase  program  which has not yet been
implemented.  Officers, key employees,  directors and independent contractors or
agents of the Company may be eligible to  participate  in the 2000 Plan,  except
that  incentive  stock  options may only be granted to employees of the Company.
The 2000 Plan  supersedes and replaces the Prior Plans and the Directors'  Plan,
except to the extent of options  outstanding  under those  plans.  The  purchase
price for awards granted from the 2000 Plan may not be less than the fair market
value at the date of grant.  The maximum  amount of shares that could be awarded
under the 2000 Plan over its term is 6,000,000 shares, of which 1,031,000 shares
have been granted as of December 31, 2001.  Awards  granted  under the 2000 Plan
expire on the date  determined  by the Plan  Administrators  as evidenced by the
award  agreement,  but shall not  expire  later than ten years from the date the
award is granted except for grants of restricted  shares which expire at the end
of a specified  period if the specified  service or performance  conditions have
not been met.

Stock Options

     In connection with certain employment  agreements and/or related to service
performance,  the Company has granted its  executives,  directors  and  eligible
employees,  non-qualified  stock options to purchase shares of Common Stock. The
options  generally  become  exercisable  in equal  installments  over four years
beginning  one year from the grant date and  expire ten years from the  original
grant date. The following table summarizes all stock option activity:
<TABLE>
<CAPTION>
<S>                                                             <C>                   <C>

                                                               Weighted
                                                                Average
                                           Exercise price      Exercise              Stock
                                              per share          Price              Options
---------------------------------------------------------------------------------------------
Outstanding at January 1, 1999..........  $ 0.67  -  55.50    $ 19.03           2,434,856
   Granted..............................    7.00  -  13.31      10.98             856,875
   Exercised............................    4.00  -   8.00       5.49             (29,952)
   Canceled.............................    6.00  -  40.00      20.90            (103,853)
---------------------------------------------------------------------------------------------
Outstanding at December 31, 1999........    0.67  -  55.50      16.91           3,157,926
   Granted..............................    9.28  -  21.31       9.80           1,015,500
   Exercised............................    4.00  - 15.00        8.69             (96,298)
   Canceled.............................    8.00  - 28.00       14.60             (29,826)
---------------------------------------------------------------------------------------------
Outstanding at December 31, 2000........    0.67  - 55.50       15.34           4,047,302
   Granted..............................    7.25  - 10.68        8.67             608,000
   Exercised............................    0.67  -  9.31        8.84             (35,690)
   Canceled.............................    7.63  - 28.00        9.99             (60,500)
---------------------------------------------------------------------------------------------
Outstanding at December 31, 2001........  $ 1.00  - 55.50     $ 14.60           4,559,112
---------------------------------------------------------------------------------------------

Options outstanding by price range at
   December 31, 2001....................  $ 1.00  -  6.00     $  2.64             575,356
                                          $ 7.13  -  9.00     $  8.44             626,518
                                          $ 9.28  - 12.00     $  9.68           1,523,500
                                          $12.50  - 13.31     $ 13.14             576,675
                                          $15.00  - 28.00     $ 22.12             455,063
                                          $29.63  - 55.50     $ 34.12             802,000
Exercisable at:
December 31, 1999.......................  $ 0.67  - 55.50     $ 17.01           1,499,069
December 31, 2000.......................  $ 0.67  - 55.50     $ 17.99           1,955,916
December 31, 2001.......................  $ 1.00  - 55.50     $ 16.76           2,815,521

</TABLE>

     In accordance  with APB Opinion No. 25 and related  interpretations  and in
connection with accounting for the Company's stock-based compensation plans, the
Company  recorded  $80,000 and $15,000 for the years ended December 31, 2000 and
1999,  respectively,  with respect to variable stock options and options granted
at less than fair value. Additionally, in January 1998, the Company issued loans
to the Chief Executive  Officer,  President and Chief Financial  Officer for the
purpose of exercising stock options.  In accordance with the accounting guidance
for these types of loans,  the Company  recorded  deferred  compensation of $2.7
million  related to these loans.  The Company  recorded  $538,000,  $540,000 and
$540,000 of  compensation  expense  related to these loans for each of the years
ended December 31, 2001, 2000 and 1999, respectively.

     If the Company had elected to recognize stock compensation expense based on
the fair  value  of the  options  granted  at  grant  date  for its  stock-based
compensation plans consistent with the method of SFAS No. 123, the Company's net
loss and loss per share  would  have  been  increased  to the pro forma  amounts
indicated below:


<TABLE>
<CAPTION>
<S>     <C>                                              <C>                    <C>                      <C>


                                                         2001                   2000                 1999
     ----------------------------------------- -------------------- ----------------------- --------------------
     Net loss
        As reported......................            $ (16,402,000)           $ (25,993,000)       $ (22,256,000)
        Pro forma........................            $ (21,010,000)           $ (32,063,000)       $ (28,511,000)

     Loss per share - basic and diluted
        As reported......................            $      (0.88)            $      (1.42)         $     (1.25)
        Pro forma........................            $      (1.13)            $      (1.75)         $     (1.61)
     ----------------------------------------- -------------------- ----------------------- --------------------
</TABLE>


     The fair value of each option grant was estimated  using the  Black-Scholes
option pricing model using the Multiple Option approach  whereby a separate fair
value is  computed  for each  vesting  increment  of an  option.  The  following
assumptions were used:
<TABLE>
<CAPTION>
<S>     <C>                                                             <C>                     <C>


                                                         2001                   2000                 1999
     ----------------------------------------- -------------------- ----------------------- -------------------
     Expected dividend yield.............                 0%                     0%                   0%
     Expected stock price volatility.....                50%                     50%                 50%
     Risk-free interest rate.............           3.50% - 5.25%           5.75% - 6.00%       6.17% - 6.77%
     Expected life of options............            2 - 4 years             2 - 4 years         2 - 4 years
     ----------------------------------------- -------------------- ----------------------- -------------------
</TABLE>

     The above  assumptions  are highly  subjective,  in particular the expected
stock  price  volatility  of the  underlying  stock.  Because  changes  in these
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion,  the  existing  models do not  provide a reliable  single
measure of the fair value of its stock options.

     The weighted average remaining  contractual life of options  outstanding at
December  31,  2001,  2000 and 1999 was 6.25  years,  7.1 years  and 7.1  years,
respectively.

Warrants

     From time to time warrants are issued to consultants of the Company or will
be  issued  in  connection  with  an  equity  investment  in the  Company  or in
connection with other private placements.  The following is a description of the
significant warrants that have been issued over time:

1993 and 1994 Warrants

     In 1993 and 1994,  the Company issued  detachable  Common Stock warrants in
connection with a private placement offering and a corporate partner to purchase
a total of 685,714 shares.  Each warrant  provided for the purchase of one share
of Common  Stock at $8.00 per share with the  warrants  expiring on December 31,
2000.  Warrants to purchase 156,115 shares and 1,563 shares of Common Stock were
exercised during 2000 and 1999, respectively.  As of December 31, 2000, warrants
to purchase 45,311 shares of Common Stock expired and were cancelled accordingly
and no  further  warrants  are  outstanding  under  the 1993  and  1994  private
placements.

1994 Convertible Note Warrants

     In  December  1994,  the  holders of $2.4  million in  principal  amount of
convertible  notes exchanged their notes for shares of Common Stock at $8.00 per
share for 297,776  shares of Common  Stock.  The  conversion  also  provided the
noteholders  with one warrant for every two shares of Common Stock converted for
total warrants  covering  148,888 shares of Common Stock.  Each warrant provided
for the  purchase  of one share of Common  Stock at $8.00 per share and  expired
December 31, 2000. Warrants to purchase 65,566 shares and 4,687 shares of Common
Stock were  exercised  during 2000 and 1999,  respectively.  As of December  31,
2000, the remaining warrants to purchase 17,186,  shares of Common Stock expired
and were cancelled accordingly and no further warrants are outstanding under the
1994 convertible notes.

1995 Selling Agent and Consultant Warrants

     In January 1995, in connection with a loan received from a principal of its
designated  selling agent, the Company issued warrants to purchase 15,000 shares
of Common Stock.  Each warrant  provided for the purchase of one share of Common
Stock at $10.67 per share with the warrants expiring December 31, 2000. Warrants
to purchase all 15,000 shares of Common Stock were exercised during 2000.

     During 1995 in connection  with our initial  public  offering,  the Company
issued  warrants  to  purchase   805,000  shares  of  Common  Stock  to  various
consultants.  Warrants  covering 770,000 shares provided for the purchase of one
share of Common Stock at $10.67 per share with the warrants  expiring  April 11,
2000.  Warrants covering 35,000 shares provided for the purchase of one share of
Common Stock at $34.75 per share with the warrants  expiring  November 20, 2000.
Warrants to purchase  154,000 shares of Common Stock were exercised during 2000.
As of December 31,  2000,  warrants to purchase  651,000  shares of Common Stock
expired and were cancelled  accordingly and no further  warrants are outstanding
under the 1995 consultant warrants.

Consultant Warrants

     During  1997 and 1998,  in  connection  with  consulting  agreements  and a
co-development  agreement,  the Company  issued  warrants to purchase a total of
342,000  shares of Common  Stock to various  consultants.  These  warrants  were
priced at the fair market value on the date of grant and the prices  ranged from
$7.00 to $28.75 per share with expiration  dates ranging from April 2001 through
October  2008.  During  1999,  2000  and  2001  in  connection  with  consulting
agreements, the Company issued warrants to purchase a total of 145,000 shares of
Common  Stock to various  consultants.  These  warrants  were priced at the fair
market value on the date of grant and the prices ranged from $7.00 to $13.31 per
share with  expiration  dates ranging from June 2004 through  January 2010.  The
consulting  agreements  can be  terminated  by the Company at any time with only
those  warrants  vested as of the date of termination  exercisable.  None of the
above  warrants were  exercised in 2001,  2000 or 1999. As of December 31, 2001,
warrants to purchase  20,000 shares of Common Stock  expired and were  cancelled
accordingly.   The  Company  recorded  an  increase  to  deferred   compensation
associated with the value of these warrants of $205,000 and $276,000 in 2000 and
1999,  respectively,  and for the year ended  December  31,  2001,  the  Company
reduced  deferred  compensation  by  $109,000.   The  fluctuations  in  deferred
compensation  are a result of variable  accounting  combined with a  fluctuating
stock price from period to period. The Company recorded  compensation expense of
$25,000,  $224,000 and $843,000 for the years ended December 31, 2001,  2000 and
1999 respectively.

1997 Private Placements

     In 1997, in connection  with three private equity  placements as previously
discussed,  the Company issued warrants to purchase  1,416,000  shares of Common
Stock  with  50% of the  warrants  exercisable  at  $55.00  per  share  and  50%
exercisable at $60.00 per share expiring in December 2001. For the purchasers of
900,000  shares,  the  warrant  price was  amended to be $35.00 per share and an
additional  450,000  warrants at $35.00 per share were issued in accordance with
the  Amendment  Agreement.  These  additional  warrants also expired in December
2001. For the purchasers of 500,000  shares,  the Company  amended their warrant
agreements by changing the warrant exercise price to $20.00 per share,  reducing
the number of warrant  shares issued from 500,000  warrants to 450,000  warrants
and adding a call  provision  to the warrant  agreement  allowing the Company to
require  the  exercise  of the  warrants  according  to the terms of the amended
warrant agreements.  These warrants were subsequently amended again in September
2001, to extend the expiration date to December 31, 2003 and reduce the exercise
price to $10.00 per share. In addition,  in connection with these private equity
placements,  the Company  also issued  warrants  to purchase  250,000  shares of
Common Stock to various  selling  agents.  In September 2001, the terms of these
warrants were amended to extend the expiration date to December 31, 2003 and the
exercise price was reduced to $20.00 per share. As of December 31, 2001, none of
the 1997 private placement warrants had been exercised. As of December 31, 2001,
warrants to purchase  1,366,00 shares of Common Stock expired and were cancelled
accordingly.

Pharmacia Warrants

     During  1999 and 2000,  in  connection  with the loans  received  under the
Credit Agreement with Pharmacia, the Company issued 360,000 warrants to purchase
Common Stock at an exercise  price of $11.87 per share for 120,000 shares issued
on May 10, 1999, $14.83 per share for 120,000 shares issued on November 12, 1999
and $20.62 per share for the final 120,000  shares  issued on May 23, 2000.  The
warrants expire 5 years from the date of issuance.  As of December 31, 2001 none
of the warrants had been exercised.

     As of December 31, 2001, the Company has warrants outstanding to purchase a
total of 1,513,000  shares of its Common Stock at an average  exercise  price of
$13.55,  with expiration  dates ranging from June 2002 through January 2010. The
following  table provides  further  detail on the warrants  outstanding by price
range:


                                                             Weighted
                                                             Average
                                          Exercise price     Exercise   Warrant
                                             per share        Price      Shares
===============================================================================
Warrants outstanding by price range at
   December 31, 2001....................  $ 7.00  -   9.31    $  7.23    275,000

                                          $10.00  -  10.01    $ 10.00    449,100
                                          $11.87  -  20.00    $ 16.33    618,900
                                          $20.62  -  30.75    $ 22.99    170,000
                                          --------------------------------------
Total warrants outstanding at
   December 31, 2001....................  $ 7.00  -  30.75    $ 13.55  1,513,000
================================================================================



4.       Employee Benefit Plans

     The  Company has  available  a  retirement  savings  plan for all  eligible
employees who have  completed  three months and 500 hours of service and who are
at least  21 years of age.  The  plan  has  received  Internal  Revenue  Service
approval  under  Section  401(a) of the  Internal  Revenue  Code.  Participating
employees are 100% vested upon entering the plan and no matching contribution is
made by the Company.

     In December  1996,  the Board of Directors  approved  the Miravant  Medical
Technologies  401(k) - Employee Stock  Ownership Plan or the ESOP which provides
substantially  all employees with the  opportunity for long-term  benefits.  The
ESOP was  implemented  by  management on July 1, 1998 and operates on a calendar
year  basis.  In  conjunction  with the ESOP,  the Company  registered  with the
Securities and Exchange  Commission 300,000 shares of the Company's Common Stock
for purchase by the ESOP.  The ESOP provides for eligible  employees to allocate
pre-tax  deductions from payroll which are used to purchase the Company's Common
Stock at fair market value on a bi-weekly  basis.  The ESOP also  provides for a
discretionary  contribution made by the Company based on the amounts contributed
by the  participants.  The amount to be contributed by the Company is determined
by the  Board  of  Directors  prior  to the  start of each  plan  year.  Company
contributions,  which the Board of Directors determined to be 100% for the 2001,
2000 and 1999 plan  years,  are made on a  quarterly  basis and vest over a five
year period.  Total Company matching  contributions for 2001, 2000 and 1999 were
not significant.

5.        Provision for Income Taxes

     Deferred  income taxes  reflect the net tax effects of net  operating  loss
carryforwards,   credits  and  temporary   differences   between  the  financial
statements and tax basis of assets and  liabilities.  Significant  components of
the  Company's  deferred  tax assets and  liabilities  as of  December 31 are as
follows:



<PAGE>
<TABLE>
<CAPTION>
<S>                                                     <C>                             <C>             <C>



                                                             2001                            2000
                                                 ----------------------------------------------------------------
                                                    Current      Non-current       Current       Non-current
                                                 --------------------------------------------------------------
      Deferred tax assets:
        Uniform capitalization................       $ 75,000     $      --       $       --    $         --
        Other accruals and reserves...........        168,000            --          131,000              --
        Capitalized research and development..             --       778,000               --         778,000
        Non-cash loss in investment...........                                                     1,493,000
        Net operating losses and tax credits..             --    71,057,000               --      60,298,000
                                                 --------------------------------------------------------------
      Total deferred tax assets...............        243,000    71,835,000          131,000      62,569,000
      Deferred tax liabilities:
        Amortization and depreciation                               953,000                          230,000
        expense.                                                                          --
        Federal benefit for state income taxes         17,000     2,677,000            9,000       2,556,000
                                                 --------------------------------------------------------------
      Total deferred tax liabilities..........         17,000     3,630,000            9,000       2,786,000
                                                 --------------------------------------------------------------
      Net deferred tax assets.................        226,000    68,205,000          122,000      59,783,000
      Less valuation reserve..................       (226,000)  (68,205,000)        (122,000)    (59,783,000)
                                                 --------------------------------------------------------------
                                                    $      --   $        --        $      --    $         --
                                                 ==============================================================
</TABLE>

     The Company has net operating loss  carryforwards  for federal tax purposes
of $171.5  million,  which  expire in the years  2002 to 2022.  Research  credit
carryforwards  aggregating  $8.7 million are available for federal and state tax
purposes and expire in the years 2002 to 2021.  The Company also has a state net
operating loss  carryforward of $46.4 million which expires in the years 2002 to
2006.  Of the $46.4  million in state net operating  loss  carryforwards,  $17.5
million  will expire  during 2002 and 2003.  Under  Section 382 of the  Internal
Revenue Code, the  utilization of the Company's tax net operating  losses may be
limited based on changes in the percentage of ownership in the Company.

6.        Commitments and Contingencies

     The Company has entered into  agreements  with  various  parties to perform
research and development  and conduct  clinical trials on behalf of the Company.
For the research and  development  agreements,  the Company has the right to use
and  license,  patent  and  commercialize  any  products  resulting  from  these
agreements.  The Company does not have any financial commitments with respect to
these  agreements  and  records  these  expenses as the  services  and costs are
incurred.  The Company has also entered into  licensing  and OEM  agreements  to
develop,  manufacture and market drugs and devices for photodynamic  therapy and
other related  uses.  The  agreements  provide for the Company to receive or pay
royalties at various rates.  The Company has recorded  royalty  income  received
from device sales of $75,000 and $143,000 for the years ended  December 31, 2001
and 1999,  respectively  and no royalty  income for the year ended  December 31,
2000.  Additionally,  for the years ended December 31, 2001,  2000 and 1999, the
Company has not paid any royalties under these agreements.

     In 1994,  the Company  entered into a  development  and  commercial  supply
agreement with Pharmacia to receive  formulation and packaging  services for one
of the Company's  drugs at specified  prices.  For the years ended  December 31,
2001,  2000 and 1999,  the Company  paid  $38,000,  $372,000  and $1.3  million,
respectively,   and  recorded  as  expense   $21,000,   $308,000  and  $881,000,
respectively,  primarily for the cost of drug  formulation and  development.  In
1998,  the rights and  obligations  under this  agreement  were  transferred  to
Fresenius AG with operating terms remaining the same.

     Under the prior and current License Agreements,  Pharmacia has provided the
Company with funding and development for the right to sell and market the funded
products once  approved.  The Company will receive  royalty  income based on the
future drug  product  sales under the  License  Agreements.  For the years ended
December 31,  2001,  2000 and 1999,  the Company  recorded  license  revenues of
$302,000, $4.5 million and $14.0 million,  respectively,  related to the billing
for the reimbursement of certain  preclinical  studies and clinical trial costs.
The Company has not yet received any royalty  income under these  agreements and
will only do so based on future  commercial  drug product sales.  In March 2002,
the prior and current  License  Agreements with Pharmacia were  terminated.  See
Note 12 for further  discussion  regarding the terminations and modifications of
the agreements that the Company has with Pharmacia.

     Certain of the Company's research has been funded in part by Small Business
Innovation  Research and/or National Institutes of Health grants. As a result of
such funding,  the United States  Government  has or will have certain rights in
the technology developed which includes a non-exclusive, worldwide license under
such inventions of any governmental purpose and the right to require the Company
to grant an  exclusive  license  under any of such  inventions  to a third party
based on certain  criteria.  The Company  recorded no income from grants for the
year ended  December 31, 2001 and  recorded  $112,000 and $438,000 for the years
ended December 31, 2000 and 1999, respectively.

     The Company is involved in certain claims and inquiries that are routine to
its business.  Legal proceedings tend to be unpredictable  and costly.  Based on
currently  available  information,  management  believes that the  resolution of
pending claims,  regulatory  inquiries,  and legal  proceedings  will not have a
material adverse effect on the Company's  operating results,  financial position
or liquidity position.

7.        Leases

     The Company  leases four  buildings for a total monthly  rental  expense of
approximately  $134,000.  Three of the  leases  were  renewed in 1999 and expire
between August 2002 and December  2003. In 2001, the Company  extended its other
lease for its bulk API  manufacturing  facility to October 31, 2006.  The leases
provide  for annual  rental  increases  based upon a consumer  price  index.  In
December 1999, the Company sublet one of its buildings to two separate  parties.
Both of the  sublease  agreements  expire in 2003 and  provide  for annual  rent
increases  based on the consumer price index.  Sublease rental income from these
parties is $35,000  per month.  Sublease  rental  income is netted  against  the
Company's rent expense.

     In May 2001, in connection  with the Asset  Purchase  Agreement,  Pharmacia
agreed to assume the lease  obligations  and  related  building  property  taxes
through December 31, 2003 for the Company's bulk API manufacturing facility. The
total amount of the rental and  property  tax payments due through  December 31,
2003  is  approximately  $950,000  and  is  being  accounted  for  as a  capital
contribution and rent expense, or as a component of cost of goods sold, over the
lease obligation term. In 2001,  Pharmacia paid $194,000 related to the rent and
property taxes for the bulk API manufacturing facility, of which the Company has
recorded  $50,000 as rent  expense,  $110,000  as cost of goods sold and $34,000
into the  value of the year end  bulk API  inventory.  In March  2002,  the 2001
Credit  Agreement  was amended and the Company has agreed to reassume  the lease
obligations and related  property taxes through the remainder of the lease term.
See Note 12 for further discussions regarding the modifications and terminations
of the agreements with Pharmacia.

     Future minimum operating lease payments,  net of sublease rental income, as
of December 31, 2001 are as follows:
<TABLE>
<CAPTION>
<S>     <C>                                                                     <C>                    <C>


                                                      Lease Amount             Minimum
                                                         Payable          Sublease Revenues           Net
                                                    ------------------   --------------------  ------------------
        2002.......................................   $ 1,297,000             $  423,000        $    874,000
        2003.......................................       688,000                352,000             336,000
        2004.......................................       314,000                     --             314,000
        2005.......................................       314,000                     --             314,000
        2006 and thereafter........................       262,000                     --             262,000
                                                    ------------------   --------------------  ------------------
        Total minimum lease payments...............   $ 2,875,000             $  775,000        $  2,100,000
                                                    ------------------   --------------------  ------------------
</TABLE>

     Rent expense was $1.1 million,  $1.1 million and $1.3 million for the years
ended December 31, 2001, 2000 and 1999, respectively,  net of sublease income of
$384,000, $365,000 and $47,000, respectively.

8.       Related Party Transactions

     In April 1998,  the Company  entered into a $2.0 million  revolving  credit
agreement with its affiliate,  Ramus.  Between 1998 and 1999, Ramus borrowed the
entire $2.0 million  available  under the credit  agreement.  As of December 31,
2001, the balance of the loan,  including  principal and accrued  interest,  was
$2.6  million.  The loan,  which was used to fund  Ramus'  clinical  trials  and
operating  costs,  accrues interest at a variable rate (4.75% as of December 31,
2001)  based on the  Company's  bank  rate.  In March  2000,  the loan  term was
extended  indefinitely.  It was determined that it was probable that the Company
would be unable to collect  the  amounts  due from Ramus  under the  contractual
terms of the loan  agreement.  Therefore,  the Company has established a reserve
for the entire  outstanding  balance of the loan receivable at December 31, 2001
and 2000.

     In July 1996, a partner in a law firm used by the Company for outside legal
counsel  was  elected by the Board of  Directors  to serve as  Secretary  of the
Company.  The Company paid $86,000 in connection with legal services  related to
the  Pharmacia  equity  investment  in 1999.  In  connection  with general legal
services  provided  by the law firm,  the Company  recorded as expense  $55,000,
$40,000  and  $46,000  for the years ended  December  31,  2001,  2000 and 1999,
respectively.  From 1996 through  December 31, 2001, this  individual's law firm
has received  warrants to purchase a total of 87,500  shares of Common Stock for
his services as acting in-house legal counsel and Secretary of the Company.

9.       Fair Value of Financial Instruments

     The  following is  information  concerning  the fair value of each class of
financial instrument as of December 31, 2001 and 2000:

Cash, cash equivalents, accounts receivable and marketable securities

     The carrying  amounts of cash, cash  equivalents,  accounts  receivable and
marketable equity securities  approximate their fair values. Fair values of cash
equivalents and marketable securities are based on quoted market prices.

Long-Term Obligations

     The carrying amount of long-term obligations  approximate their fair values
due to variable interest rates on these obligations.

10.       Investments in Affiliate

     During 2000,  the Company  determined  that the decline in the value of its
investment  in  Xillix  was  other-than-temporary.  Since the  Company  made the
investment  in June 1998,  the value of the Xillix common stock had decreased by
approximately  70% and had been at similar levels for the eighteen  months prior
to the adjustment. The Company recognized a loss totaling $3.5 million to adjust
its  investment  in Xillix to its  estimated  current  fair  value  based on the
average closing prices over a 120 day period. This loss is included in "Non-cash
loss in investment" in the accompanying  consolidated  statements of operations,
stockholders'  equity and cash flows. As of December 31, 2001, the Company still
holds the  2,691,904  shares of Xillix  common  stock  received in the  original
investment  transaction.  The new cost basis in the  investment  is $991,000 and
this  investment  will  continue  to  be  classified  as  an  available-for-sale
investment recorded at fair value with any resulting  unrealized gains or losses
included in "Accumulated other comprehensive  loss" in the consolidated  balance
sheet and statement of stockholders' equity.


11.      Quarterly Results of Operations (Unaudited)

<TABLE>
<CAPTION>
<S>     <C>                                             <C>                     <C>                    <C>             <C>

                                                                                    Three Months Ended
                                                        ----------------------------------------------------------------------------
                                                            March 31,           June 30,          September 30,        December 31,
2000:                                                   ----------------    ---------------    ------------------    ---------------
Revenues.........................................        $    1,378,000      $   1,551,000        $     834,000       $    830,000
Costs and expenses...............................             6,267,000          7,152,000            6,631,000          6,167,000
Net interest expense.............................              (112,000)          (177,000)            (256,000)          (339,000)
Non-cash loss in investment......................                    --                 --                   --         (3,485,000)
                                                        ----------------    ---------------    ------------------    ---------------
Net loss.........................................        $   (5,001,000)     $  (5,778,000)       $  (6,053,000)      $ (9,161,000)
                                                        ================    ===============    ==================    ===============
Net loss per share:
    Basic and diluted............................        $        (0.28)     $       (0.32)       $       (0.33)      $      (0.50)
                                                        ================    ===============    ==================    ===============

2001:
Revenues.........................................                82,000          2,483,000              783,000          1,335,000
Costs and expenses...............................             4,549,000          4,786,000            5,346,000          5,649,000
Net interest and other income (expense)..........              (327,000)           275,000             (337,000)          (366,000)
                                                        ----------------    ---------------    ------------------    ---------------
Net loss.........................................        $   (4,794,000)      $ (2,028,000)       $  (4,900,000)     $  (4,680,000)
                                                        ================    ===============    ==================    ===============
Net loss per share:
    Basic and diluted............................        $        (0.26)      $      (0.11)       $       (0.26)     $       (0.25)
                                                        ================    ===============    ==================    ===============
</TABLE>

12.    Subsequent Event

     On  March  5,  2002,   Miravant  and  Pharmacia  entered  into  a  Contract
Modification  and Termination  Agreement  pursuant to which the Company regained
all of the rights and related data and assets to our lead drug candidate, SnET2,
and restructured its outstanding debt to Pharmacia.

     Under the terms of the Contract  Modification  and  Termination  Agreement,
various  agreements  and side letters  between  Miravant and Pharmacia have been
terminated.  Most of these  agreements  related to SnET2 license  agreements and
related drug and device  supply  agreements,  side  letters,  the  Manufacturing
Facility Asset Purchase Agreement and various supporting agreements.

     The  termination of the various  agreements  provided that all ownership of
the  rights,  data and assets  related  to SnET2 and the Phase III AMD  clinical
trials will  revert  back to the  Company.  The rights  transferred  back to the
Company include the ophthalmology  Investigational New Drug application, or IND,
and the related filings,  data and reports and the ability to license the rights
to SnET2. The assets which the Company received  ownership rights to include the
lasers utilized in the Phase III AMD clinical trials, the bulk API manufacturing
equipment,  all of the bulk API inventory sold to Pharmacia in 2001 and 2002 and
the finished dose formulation,  or FDF, inventory. In addition to receiving back
all of the bulk API inventory  sold to Pharmacia in 2001,  the Company will also
receive a payment of approximately  $450,000 for the costs of the in-process and
finished bulk API inventory  manufactured  through January 23, 2002. The Company
will also reassume the lease obligations and related property taxes for its bulk
API  manufacturing  facility.  The lease  agreement  expires in October 2006 and
currently has a base rent of approximately $26,000 per month.

     As a condition  of the Contract  Modification  and  Termination  Agreement,
Pharmacia has released to the Company $880,000, which included accrued interest,
held in an equipment escrow account,  which was originally scheduled for release
in June 2002.  These funds represent the $863,000  purchase price that Pharmacia
paid under the Manufacturing  Facility Asset Purchase Agreement for the purchase
of the  Company's  bulk API  manufacturing  equipment in May 2001 plus  interest
earned through the release date.

     The Contract  Modification and Termination Agreement also modifies the 2001
Credit  Agreement.  The  outstanding  debt that the Company owes to Pharmacia of
approximately  $26.8  million  will be reduced  to $10.0  million  plus  accrued
interest.  The Company  will be required to make a payment of $5.0  million plus
accrued interest on each of March 4, 2003 and June 4, 2004. Interest on the debt
will be  recorded  at the  prime  rate,  which  was  4.75%  at  March  5,  2002.
Additionally,  the early  repayment  provisions  and many of the covenants  were
eliminated  or modified.  In exchange for these changes and the rights to SnET2,
the  Company  terminated  its  right to  receive  a $3.2  million  loan that was
available  under the 2001 Credit  Agreement.  Also, as Pharmacia has  determined
that  they  will not file an NDA for the  SnET2  PhotoPoint  PDT for AMD and the
Phase  III  clinical  trial  data  did not  meet  certain  clinical  statistical
standards, as defined by the clinical trial protocols, the Company will not have
available an  additional  $10.0  million of borrowings as provided for under the
2001 Credit Agreement.

     In accordance with Statement of Financial  Standards No. 15, "Accounting by
Debtors and  Creditors  for  Troubled  Debt  Restructurings",  the Company  will
permanently  reduce the debt due to Pharmacia to the total future cash  payments
of the debt,  including amounts designated as interest and principal.  The total
future cash  payments,  at the current  interest rate, are estimated to be $10.8
million. The difference between the total debt outstanding of $25.9 million (net
of the unamortized debt issuance costs of approximately  $900,000) and the total
future cash payments of the restructured  debt of $10.8 million will be recorded
as an increase to stockholders' equity due to Pharmacia being a greater than 10%
stockholder in Miravant.  Therefore,  we will record a $15.1 million increase to
stockholders' equity in the first quarter of 2002.

     The agreement  also provides for the transfer  ownership of several  assets
back to the Company, including the lasers utilized in the Phase III AMD clinical
trials,  the  bulk  API  and FDF  inventories  and the  bulk  API  manufacturing
equipment  used to  manufacture  SnET2.  The Company will record the transfer of
ownership of the bulk API  manufacturing  equipment  at its net  carrying  value
prior  to sale to  Pharmacia,  which  was  $277,000.  Under  generally  accepted
accounting principles, there will not be any value recorded on the balance sheet
for the transfer of ownership of the lasers, and the bulk API and FDF inventory,
since these assets,  according to the Company's accounting  policies,  have been
expensed as research and development costs in prior years.

13.      Pro Forma Disclosure for Subsequent Events (Unaudited)

     The following  unaudited  consolidated  pro forma  condensed  balance sheet
information  presented below includes adjustments for the subsequent event above
in Note 12 related to the Contract Modification and Termination Agreement:

<TABLE>
<CAPTION>
<S>                                                     <C>                     <C>                              <C>

                                                                                 Pro Forma
                                                          Actual              Adjustments for                Pro Forma
                                                    December 31, 2001        Subsequent Events           December 31, 2001
     ----------------------------------------- ------------------------ --------------------------- -----------------------
                                                        (Audited)
     Current assets......................                $   12,561,000       $              --            $   12,561,000
     Net property, plant and equipment...                     1,204,000                 277,000  (1)            1,481,000
     Deferred financing costs............                       913,000                (913,000) (2)                   --
     Other assets........................                     1,487,000                      --                 1,487,000
                                                   ---------------------    ---------------------    -----------------------
     Total assets........................                $   16,165,000       $        (636,000)           $   15,529,000
                                                   =====================    =====================    =======================

     Other liabilities...................                $    3,415,000       $              --            $    3,415,000
     Long-term liabilities ..............                    26,548,000             (15,756,000) (3)           10,792,000
                                                   ---------------------    ---------------------    -----------------------
     Total liabilities...................                    29,963,000             (15,756,000)               14,207,000

     Common stock........................                   161,496,000              15,120,000  (4)          176,616,000
     Other equity........................                    (1,725,000)                     --                (1,725,000)
     Accumulated deficit.................                  (173,569,000)                     --              (173,569,000)
                                                   ---------------------    ---------------------      -----------------------
     Total stockholders' equity (deficit)                   (13,798,000)             15,120,000                 1,322,000
                                                   ---------------------    ---------------------      -----------------------
     Total liabilities and stockholders'
       equity (deficit)..................                $   16,165,000            $   (636,000)            $  15,529,000
     -----------------------------------------     =====================    =====================      =======================
</TABLE>

               (1)  The $277,000 adjustment represents the net book value of the
                    API manufacturing equipment to be returned to the Company.
               (2)  The $913,000 adjustment removes the deferred financing asset
                    recorded in  connection  with the  drawdowns on the original
                    debt.
               (3)  The $15,756,000 represents the net reduction of the debt due
                    to Pharmacia.
               (4)  The  $15,120,000  represents  the net adjustment of the debt
                    reduction  of   $15,756,000   and  the  $277,000   equipment
                    adjustment  offset by the removal of the deferred  financing
                    cost asset of $913,000.


<PAGE>



ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

         None.


<PAGE>



                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     This  information is incorporated by reference to the Company's  definitive
proxy  statement to be filed  pursuant to Regulation 14A not later than 120 days
after the end of the Company's fiscal year.

ITEM 11. EXECUTIVE COMPENSATION

     This  information is incorporated by reference to the Company's  definitive
proxy  statement to be filed  pursuant to Regulation 14A not later than 120 days
after the end of the Company's fiscal year.

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     This  information is incorporated by reference to the Company's  definitive
proxy statement to be filed pursuant to Regulation 14A not later than
120 days after the end of the Company's fiscal year.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     This  information is incorporated by reference to the Company's  definitive
proxy  statement to be filed  pursuant to Regulation 14A not later than 120 days
after the end of the Company's fiscal year.




<PAGE>



                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      Financial Statements

     (i)  The following  financial  statement  documents are included as part of
          Item 8 to this Form 10-K:

                  Index to Consolidated Financial Statements:        Page

                  Report of Independent Auditors                      56
                  Consolidated Balance Sheets as of
                      December 31, 2001 and 2000                      57
                  Consolidated Statements of Operations for the
                      years ended December 31, 2001, 2000 and 1999    58
                  Consolidated Statements of Stockholders'
                      Equity for the years ended December 31,
                      2001, 2000 and 1999                             59
                  Consolidated Statements of Cash Flows for the
                      years ended December 31, 2001, 2000 and 1999    60
                  Notes to Consolidated Financial Statements          61

         (ii)     Schedules required by Article 12 of Regulation S-X:

                  All schedules are omitted because the required information is
                  not present or is not present in amounts sufficient to require
                  submission of the schedule or because the information required
                  is given in the consolidated financial statements or notes
                  thereto.

(b)               Index to Exhibits:
                  -----------------

                  See Index to Exhibits on pages 80 to 83

(c)               Reports on Form 8-K:
                  -------------------

                  On May 24, 2001, Miravant Medical Technologies and Pharmacia
                  Corporation finalized funding arrangements that could provide
                  Miravant up to $20.0 million in funding.



<PAGE>




                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>
<S>             <C>                                     <C>                                                  <C>

                                                                                                            Incorporating
Exhibit                                                                                                     Reference
Number                                                 Description                                          (if applicable)
------                                                 -----------                                          ---------------
3.1             Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant
                filed with the Delaware Secretary of State on September 12, 1998.                           [D][3.1]
3.2             Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant     [C][3.11]
                filed with the Delaware Secretary of State on July 24, 1995.
3.3             Restated Certificate of Incorporation of the Registrant filed with the Delaware Secretary   [B][3.1]
                of State on December 14, 1994.
3.4             Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with   [A][3.2]
                the Delaware Secretary of State on March 17, 1994.
3.5             Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with   [A][3.3]
                the Delaware Secretary of State on October 7, 1992.
3.6             Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with   [A][3.4]
                the Delaware Secretary of State on November 21, 1991.
3.7             Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with   [A][3.5]
                the Delaware Secretary of State on September 27, 1991.
3.8             Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with   [A][3.6]
                the Delaware Secretary of State on December 20, 1989.
3.9             Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with   [A][3.7]
                the Delaware Secretary of State on August 11, 1989.
3.10            Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with   [A][3.8]
                the Delaware Secretary of State on July 13, 1989.
3.11            Certificate of Incorporation of the Registrant filed with the Delaware Secretary of State   [A][3.9]
                on June 16, 1989.
3.12            Amended and Restated Bylaws of the Registrant.                                              [D][3.12]
4.1             Specimen Certificate of Common Stock.                                                       [B][4.1]
4.2             Form of Convertible Promissory Note.                                                        [A][4.3]
4.3             Form of Indenture.                                                                          [A][4.4]
4.4             Special Registration Rights Undertaking.                                                    [A][4.5]
4.5             Undertaking Agreement dated August 31, 1994.                                                [A][4.6]
4.6             Letter Agreement dated March 10, 1994.                                                      [A][4.7]
4.7             Form of $10,000,000 Common Stock and Warrants Offering Investment Agreement.                [A][4.8]
4.8             Form of $55 Common Stock Purchase Warrant.                                                  [E][4.1]
4.9             Form of $60 Common Stock Purchase Warrant.                                                  [E][4.2]
4.10            Form of $35 Amended and Restated Common Stock Purchase Warrant.                             [F][4.1]
4.11            Form of Additional $35 Common Stock Purchase Warrant.                                       [F][4.2]
4.12            Warrant to Purchase 10,000 Shares of Common Stock between the Registrant and Charles S.     [G][4.12]
                Love.*
4.13            Form of $20 Private Placement Warrant Agreement Amendment No. 1.                            [I] [4.13]
4.14            Form of Common Stock Purchase Warrant between the Registrant and Nida & Maloney.
4.15            Form of Common Stock Purchase Warrant between the Registrant and Pharmacia Corporation.
4.16            Preferred Stock Rights Agreement dated July 13, 2000.                                       [H] [4.1]
10.1            Master Lease Agreement dated March 16, 1993 between the Registrant and Citicorp Leasing,
                Inc.                                                                                        [A][10.2]
10.2            Standard Industrial / Commercial Lease dated June 10, 1992 between the Registrant and
                Santa Barbara Research Center.                                                              [A][10.3]
10.3            Addendum to Standard Industrial / Commercial Lease dated June 10, 1992 between the
                Registrant and Santa Barbara Research Center.                                               [A][10.4]
10.4            Roof Agreement dated October 26, 1993 between the Registrant and Santa Barbara Research
                Center.                                                                                     [A][10.5]
10.5            Employment Agreement dated as of October 1, 1992 between PDT Pharmaceuticals, Inc. and
                Dr. Gary S. Kledzik.**                                                                      [A][10.6]
10.6            PDT, Inc. Stock Option Plan dated September 19, 1989.**                                     [A][10.9]
10.7            PDT, Inc. Stock Option Plan dated September 3, 1992.**                                      [A][10.10]
10.8            PDT, Inc. 1994 Stock Option Plan dated December 2, 1994.**                                  [A][10.11]
10.9            PDT, Inc. Non-Employee Directors' Stock Option Plan.**                                      [A][10.12]
10.10           Letter Agreement dated December 6, 1993 between the Registrant and Cordis Corporation.*     [J][10.13]
10.11           Letter Agreement dated December 10, 1993 between the Registrant and Boston Scientific
                Corporation.*                                                                               [J][10.14]
10.12           License Agreement dated July 1, 1989 between the Registrant and The University of Toledo,
                The Medical College of Ohio and St. Vincent Medical Center as amended.*                     [J][10.17]
10.13           License and Distribution Agreement dated April 1, 1992 between the Registrant and
                Laserscope, a California Corporation.*                                                      [J][10.18]
10.14           Form of Directors' and Officers' Indemnification Agreement.                                 [A][10.22]
10.15           OEM Agreement dated June 1, 1992 between the Registrant and Laserscope, a California
                Corporation.*                                                                               [J][10.23]
10.16           Employment Agreement with David E. Mai dated February 1, 1991, as amended.**                [J][10.24]
10.17           Form of Consulting Agreement.                                                               [K][10.1]
10.18           Amendment to PDT, Inc. Stock Option Plan dated September 19, 1989.**                        [L] [10.1]
10.19           Amendment to PDT, Inc. 1994 Stock Option Plan dated December 2, 1994.**                     [L][10.2]
10.20           Employment Agreement with John M. Philpott dated as of March 20, 1995, as amended.**        [M] [10.43]
10.21           Form of Amended and Restated Financial Services Agreement between Registrant and HAI
                Financial, Inc.                                                                             [M] [10.46]
10.22           Development and Distribution Agreement between Registrant and Iridex Corporation.*          [N][10.1]
10.23           Commercial Lease Agreement between Registrant and Santa Barbara Business Park, a            [N][10.2]
                California Limited Partnership.(1)
10.24           PDT, Inc. 1996 Stock Compensation Plan.**                                                   [O]
10.25           Form of Amendment No. 3 to 1989 Stock Option Agreement.**                                   [P][10.4]
10.26           Investment Agreement dated December 27, 1996 between PDT Cardiovascular, Inc. and Ramus
                Medical Technologies.*                                                                      [Q] [10.16]
10.27           Co-Development Agreement dated December 27, 1996 between PDT Cardiovascular, Inc. and
                Ramus Medical Technologies.                                                                 [Q] [10.17]
10.28           Series A Preferred Stock Registration Rights Agreement dated December 27, 1996 between
                PDT Cardiovascular, Inc. and Ramus Medical Technologies.*                                   [Q] [10.18]
10.29           Amended and Restated 1996 Stock Compensation Plan.**                                        [R]
10.30           PDT, Inc. 401(k)-Employee Stock Ownership Plan.**                                           [S][10.2]
10.31           Credit Agreement dated April 1, 1998 between the Registrant and Ramus Medical               [T][10.5]
                Technologies.*
10.32           Convertible Promissory Note dated April 1, 1998 between the Registrant and Ramus Medical    [T][10.6]
                Technologies.*
10.33           Strategic Alliance Agreement dated June 2, 1998 between the Registrant and Xillix           [T][10.7]
                Technologies Corp.*
10.34           Subscription Agreement relating to the Registrant's Common Stock dated June 2, 1998         [T][10.8]
                between the Registrant and Xillix Technologies Corp.
10.35           Subscription Agreement relating to Xillix's Common Stock dated June 2, 1998 between the     [T][10.9]
                Registrant and Xillix Technologies Corp.
10.36           Commercial Lease Agreement dated May 27, 1998 between the
                Registrant and Raytheon Company.                                                            [A][10.4]
10.37           Equity Investment Agreement dated January 15, 1999 between the Registrant and Pharmacia &   [U][10.1]
                Upjohn, Inc., and Pharmacia & Upjohn, S.p.A.*
10.38           Credit Agreement between the Registrant and the Lender.*                                    [U][10.2]
10.39           Warrant Agreement between the Registrant and Pharmacia & Upjohn, Inc.*                      [U][10.3]
10.40           Security Agreement between the Registrant and the Secured Party.*                           [U][10.4]
10.41           Registration Rights Agreement between the Registrant and Pharmacia & Upjohn, Inc.*          [U][10.5]
10.42           Amended and Restated Ophthalmology Development & License Agreement between the Registrant
                and Pharmacia & Upjohn AB.*                                                                 [U][10.6]
10.43           Cardiovascular Right of First Negotiation between the Registrant and Pharmacia & Upjohn,
                Inc.*                                                                                       [U][10.7]
10.44           Amendment No. 8 dated as of January 1, 2000 to Employment Agreement between the
                Registrant and Gary S. Kledzik.**                                                           [V][10.1]
10.45           Amendment No. 13 dated as of January 1, 2000 to Employment Agreement between the
                Registrant and David E. Mai.**                                                              [V][10.2]
10.46           Amendment No. 5 dated as of January 1, 2000 to Employment Agreement between the
                Registrant and John M. Philpott.**                                                          [V][10.3]
10.47           Miravant Medical Technologies 2000 Stock Compensation Plan.                                 [W] [4.1]
10.48           Amended and Restated Credit Agreement dated May 24, 2001 between the Registrant and         [Y]
                Pharmacia Treasury Services AB.**
10.49           Manufacturing Facility Asset Purchase Agreement dated May 24, 2001 between the Registrant   [Y]
                and Pharmacia & Upjohn Company.
10.50           Site Access License Agreement dated May 31, 2001 between the Registrant and Pharmacia &     [Y]
                Upjohn Company.
10.51           APA Escrow Agreement dated May 31, 2001 between the Registrant and Pharmacia & Upjohn       [Y]
                Company.
10.52           API Escrow Agreement dated May 24, 2001 between the Registrant and Pharmacia & Upjohn       [Y]
                Company.
10.53           Amended and Restated Development and License Agreement dated June 8, 1998 between the       [T]
                Registrant and Pharmacia & Upjohn S.p.A.*
10.54           Amendment dated as of December 16, 1996 to Product Supply Agreement between Registrant      [Z] [10.20+]
                and Pharmacia & Upjohn S.p.A. and Pharmacia & Upjohn AB.
10.55           SnET2 Device Supply Agreement for Ophthalmology dated as of December 20, 1996 between       [Z] [10.21+]
                Registrant and Pharmacia & Upjohn AB.
10.56           Amendment No. 9 dated as of January 1, 2001 to Employment Agreement between the             [X] [10.1]
                Registrant and Gary S. Kledzik.**
10.57           Amendment No. 14 dated as of January 1, 2001 to Employment Agreement between the            [X] [10.2]
                Registrant and David E. Mai.**
10.58           Amendment No. 6 dated as of January 1, 2001 to Employment Agreement between the             [X] [10.3]
                Registrant and John M. Philpott.**
21.1            Subsidiaries of the Registrant.
23.1            Consent of Independent Auditors.

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



[A]        Incorporated by reference from the exhibit referred to in brackets contained in the Registrant's Registration
           Statement on Form S-1 (File No. 33-87138).
[B]        Incorporated by reference from the exhibit referred to in brackets contained in Amendment No. 2 to the Registrant's
           Registration Statement on Form S-1 (File No. 33-87138).
[C]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended June 30, 1995, as amended on Form 10-Q/A dated December 6, 1995
           (File No. 0-25544).
[D]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended September 30, 1998 (File No. 0-25544).
[E]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Registration Statement on Form
           S-3 dated July 30, 1998 (File No. 333-39905).
[F]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 8-K dated June 30, 1998
           (File No. 0-25544).
[G]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended March 31, 1998 (File No. 0-25544).
[H]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 8A dated July 18, 2000
           (File No. 0-25544).
[I]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-K for the year ended
           December 31, 1999 (File No. 0-25544).
[J]        Incorporated by reference from the exhibit referred to in brackets contained in Amendment No. 1 to the Registrant's
           Registration Statement on Form S-1 (File No. 33-87138).
[K]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 8-K dated June 22, 1995
           (File No. 0-25544).
[L]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended September 30, 1995 (File No. 0-25544).
[M]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-K for the year ended
           December 31, 1995 (File No. 0-25544).
[N]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended June 30, 1996 (File No. 0-25544).
[O]        Incorporated by reference from the Registrant's 1996 Definitive
           Proxy Statement filed June 18, 1996.
[P]        Incorporated by reference from the exhibit referred to in brackets
           contained in the Registrant's Form 10-Q for the
           quarter ended September 30, 1996 (File No. 0-25544).
[Q]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-K for the year ended
           December 31, 1996 (File No. 0-25544).
[R]        Incorporated by reference from the Registrant's 1996 Definitive
           Proxy Statement filed April 24, 1997.
[S]        Incorporated by reference from the exhibit referred to in brackets
           contained in the Registrant's Form 10-Q for the
           quarter ended June 30, 1997 (File No. 0-25544).
[T]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended June 30, 1998 (File No. 0-25544).
[U]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 8-K dated January 15,
           1999 (File No. 0-25544).
[V]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended March 31, 1999 (File No. 0-25544).
[W]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form S-8 dated August 29, 2000
           (File No. 0-25544).
[X]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended March 31, 2001 (File No. 0-25544).
[Y]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-Q for the quarter
           ended June 30, 2001 (File No. 0-25544).
[Z]        Incorporated by reference from the exhibit referred to in
           brackets contained in the Registrant's Form 10-K for the year ended
           December 31, 1996 (File No. 0-25544).

**         Management contract or compensatory plan or arrangement.
*          Confidential portions of this exhibit have been deleted
           and filed separately with the Commission pursuant to Rule 24b-2 under
           the Securities Exchange Act of 1934.

(1)        The material has been filed separately on paper pursuant to
           a request granted by the Commission for a continuing hardship
           exemption from filing electronically.


</TABLE>

<PAGE>




                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                            Miravant Medical Technologies

                                           /S/ Gary S. Kledzik
                                           -------------------
                                               Gary S. Kledzik, Ph.D.
                                               Chief Executive Officer and
                                               Chairman of the Board

Dated:  March 29, 2002


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S>                                            <C>                                              <C>



Signature                                   Title                                                Date

/S/ Gary S. Kledzik                         Chairman of the Board, Director,                     March 29, 2002
------------------------------------        and Chief Executive Officer,
    Gary S. Kledzik, Ph.D.                 (Principal Executive Officer)


/S/ David E. Mai                            Director and President                               March 29, 2002
------------------------------------
    David E. Mai

/S/ John M. Philpott                        Chief Financial Officer and Treasurer                March 29, 2002
------------------------------------       (Principal Financial Officer and
    John M. Philpott                        Principal Accounting Officer)


/S/ Larry S. Barels                         Director                                            March 29, 2002
------------------------------------
    Larry S. Barels

/S/ William P. Foley II                     Director                                            March 29, 2002
------------------------------------
    William P. Foley II

/S/ Charles T. Foscue                       Director                                            March 29, 2002
------------------------------------
    Charles T. Foscue

/S/ Jonah Shacknai                          Director                                            March 29, 2002
------------------------------------
    Jonah Shacknai

</TABLE>

<PAGE>