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, 2003

                                       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)

                         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, $0.01 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. [ ]

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).

         Yes [ ]. No [X].

     The   approximate   aggregate   market   value  of  voting  stock  held  by
non-affiliates  as of June 30, 2003 based upon the last sale price of the Common
Stock  of $1.12  per  share,  as  reported  on the OTC  Bulletin  Board(R),  was
approximately $29,522,861. 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, 2004 was
29,801,765.


<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  2004 Annual
Meeting of  Stockholders  scheduled  to be held on June 24,  2004. 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, 2003
                                TABLE OF CONTENTS

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

                                     PART I

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

                                     PART II

Item     5.    Market for Registrant's Common Equity and Related Stockholders Matters..............................23
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..........................................57
Item     8.    Financial Statements and Supplementary Data.........................................................57
Item     9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure................82
Item     9A    Controls and Procedures.............................................................................82

                                    PART III

Item     10.   Directors and Executive Officers of the Registrant .................................................83
Item     11.   Executive Compensation..............................................................................83
Item     12.   Security Ownership of Certain Beneficial Owners and Management......................................83
Item     13.   Certain Relationships and Related Transactions......................................................83
Item     14.   Principal Accountant Fees and Services..............................................................83

                                     PART IV

Item     15.   Exhibits, Financial Statement Schedules and Reports on Form 8-K.....................................84

               Signatures..........................................................................................88


</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  which  are  based  on  our  current  beliefs,
expectations  and  assumptions  and  are  subject  to  a  number  of  risks  and
uncertainties,  including  but not limited to  statements  regarding our general
beliefs concerning the efficacy and potential benefits of photodynamic  therapy;
our ability to raise funds to continue operations; the timing and our ability to
submit our planned New Drug  Application,  or NDA, for the use of SnET2 to treat
wet  age-related  macular  degeneration,  or AMD,  with the  U.S.  Food and Drug
Administration,  or FDA; our ability to continue to receive the  remaining  $5.7
million  available at $1.0 million monthly through June 2004, under the December
2002 Convertible  Debt Agreement,  as amended,  or the 2002 Debt Agreement;  our
ability to meet the covenants of the August 2003 Unsecured  Convertible Debt and
Warrant Purchase Agreement, or the 2003 Debt Agreement;  our ability to meet the
covenants of the February Unsecured Convertible Debt Purchase Agreement,  or the
February 2004 Debt Agreement; our ability to resolve any issues or contingencies
associated  with our NDA after it is submitted with the FDA; the assumption that
we will continue as a going concern; our ability to regain our listing status on
Nasdaq;  our plans to collaborate  with other parties and/or license SnET2;  our
ability  to  continue   to  retain   employees   under  our  current   financial
circumstances;  our  ability  to use our laser 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  but not  limited  to:  failure  to  obtain
additional  funding in a timely  manner,  if at all;  our  ability  to  continue
borrowing under the 2002 Debt Agreement if we fail to meet certain  requirements
or if these  requirements  are not met to the  satisfaction of the 2002 Lenders;
our  failure  to meet or  obtain  waivers  from the  covenants  in our 2003 Debt
Agreement  and/or our February 2004 Debt Agreement which could lead to a default
under those  agreements;  unanticipated  complexity or difficulty  preparing and
completing  the NDA  filing for  SnET2;  a failure  of our drugs and  devices to
receive regulatory approval;  other parties declining to collaborate with us due
to our financial  condition or other reasons beyond our control;  the failure of
our existing light production and delivery  technology to prove to be applicable
or appropriate for future studies;  our failure to obtain the necessary  funding
to further our research and development activities; and unanticipated changes by
the government in its past  practices by exercising  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  specializing in
photodynamic  therapy,  or PDT, a treatment modality based on drugs that respond
to light. When activated by light,  these drugs induce a photochemical  reaction
in the presence of oxygen that can be used to locally destroy diseased cells and
abnormal blood vessels. We have branded our novel version of PDT technology with
the  trademark  PhotoPoint(R).  Our drugs and devices  are in various  stages of
development and have not yet been evaluated by the FDA for regulatory  approval.
Our most advanced  drug,  PhotoPoint  SnET2,  has  completed  Phase III clinical
trials for the treatment of wet age-related macular degeneration, or AMD, and we
are  preparing  to  submit a New Drug  Application,  or NDA,  for its  marketing
approval.

     We  believe  that  PhotoPoint  PDT is a  platform  technology  that has the
potential  to provide  safe and  effective  treatments  for a number of diseases
including  those  in  ophthalmology,  dermatology,  cardiovascular  disease  and
oncology.  Our current  objective is to develop our  PhotoPoint  technology  for
disease  indications  with large  potential  market  opportunities  and/or unmet
medical needs.  Our strategy is to develop  PhotoPoint PDT as a primary  therapy
and, where appropriate,  as a combination  therapy with other treatments such as
surgery or drug therapy to achieve efficacious clinical results.

     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,  sales and distribution of
our  products.  At  this  time,  the  scope  of our  business  is  research  and
development   with   limited   manufacturing   capabilities.   For   large-scale
manufacturing, marketing, sales and distribution activities, we may elect to use
outside  contractors  and/or  develop  these  capabilities  internally,  or seek
strategic  collaborations  with  pharmaceutical  and medical device  partners in
certain therapeutic areas.

     We were incorporated in Delaware in 1989 and, effective September 15, 1997,
changed our name from PDT, Inc. to Miravant Medical Technologies.  Our executive
offices and the  offices of our three  subsidiaries,  Miravant  Pharmaceuticals,
Inc., Miravant Systems, Inc. and Miravant  Cardiovascular,  Inc., are located at
336 Bollay Drive, Santa Barbara, California 93117. Our telephone number is (805)
685-9880.  Unless  otherwise  indicated,  all  references to us also include our
subsidiaries.

     The following is a summary of our recent significant events:

     *    In December  2002,  as amended in 2003,  we entered into a Convertible
          Debt and Warrant Purchase Agreement, or the 2002 Debt Agreement,  with
          a group of private accredited investors, or the 2002 Lenders. The 2002
          Debt Agreement allows us to borrow up to $1.0 million per month,  with
          any unused  monthly  borrowings  to be carried  forward.  The  maximum
          aggregate  loan  amount  is $12.0  million  with  the  last  available
          borrowing  in June 30,  2004.  The debt is due  December  31, 2008 and
          earns interest of 9.4% per year.  The interest is payable  monthly and
          can be accrued,  paid in cash or paid in the form of Common Stock. The
          2002  Lenders  may  terminate  their  obligations  under the 2002 Debt
          Agreement if: (1) Miravant has not  submitted a New Drug  Application,
          or NDA, by March 31,  2004,  (2) such filing has been  rejected by the
          U.S. Food and Drug  Administration,  or FDA, or (3)  Miravant,  in the
          reasonable  judgment of the 2002 Lenders,  is not meeting its business
          objectives.  As of March 15, 2004,  we had borrowed $6.3 million under
          the 2002 Debt Agreement and there was $5.7 million remaining available
          to us under the 2002  Debt  Agreement,  subject  to  certain  material
          conditions described in the 2002 Debt Agreement. As of March 15, 2004,
          we have issued  warrants to  purchase  3,150,000  shares of our Common
          Stock with an exercise  price of $1.00 and upon the  execution  of the
          2002 Debt  Agreement,  we issued an  origination  warrant to  purchase
          250,000  shares of our Common Stock,  with an exercise  price of $0.50
          per  share.  Warrants  for  the  purchase  of  1,575,000  shares  will
          terminate on August 28, 2008 and warrants for the purchase of 1,825,00
          shares  will  terminate  on  December  31,  2008,   unless  previously
          exercised;

     *    In January  2003,  we announced  our intention to submit our first NDA
          for  marketing  approval  of  PhotoPoint  SnET2,  a new  drug  for the
          treatment  of  wet  age-related  macular  degeneration,  or  AMD.  Our
          decision  came after we  completed  our  analyses of the Phase III AMD
          clinical data for two  independent  trials  completed in December 2001
          and after holding discussions with our regulatory  consultants and the
          ophthalmic  division of the FDA. Our analyses showed positive  results
          in a significant  number of PhotoPoint  SnET2 treated  patients versus
          placebo  control  patients in the "per protocol"  population.  The per
          protocol  population  consists  of those  patients  who  received  the
          exposure to the SnET2 treatment regimen  pre-specified in the clinical
          study protocol, comprising a smaller number of patients than the total
          study population. We are currently in the process of preparing the NDA
          and expect to have it  completed  and  submitted on or about March 31,
          2004;

     *    Previously,  in January  2002,  Pharmacia  Corporation,  or Pharmacia,
          after a top-line review 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 contemplated  by our agreements  with  Pharmacia.  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.
          Additionally,  in March 2002 we terminated  our license  collaboration
          with Pharmacia;

     *    In August 2003, we entered into an Unsecured Convertible Debenture and
          Warrant Purchase Agreement,  or the 2003 Debt Agreement,  with certain
          private accredited investors, or the 2003 Lenders. Under the 2003 Debt
          Agreement we borrowed $6.0 million,  with interest  accruing at 8% per
          year and due and payable  quarterly,  with the first interest  payment
          due on October 1, 2003.  The  principal  amount  matures on August 28,
          2006. At our option and subject to certain  restrictions,  we may make
          interest  payments  in cash or in  shares of  Common  Stock.  Upon the
          occurrence  of  certain   events  of  default,   the  holders  of  the
          convertible  debentures  may  require  that  they be  repaid  prior to
          maturity.  Some of the  events of  default  include  if we fail to pay
          amounts due under the debentures or to otherwise  perform any material
          covenant in the 2003 Debt Agreement or other related documents,  if we
          fail to  submit  our  PhotoPoint  SnET2  NDA to the  FDA on or  before
          December  31,  2003,  which was  extended  to March 31,  2004,  or the
          rejection  of our NDA  submission  by the FDA,  or the  occurrence  of
          certain  insolvency-related  events.  In connection with the 2003 Debt
          Agreement,  we issued warrants to each 2003 Lender to purchase a total
          of 4,750,000  shares of our Common Stock each with an expiration  date
          of August 28,  2008 and an  exercise  price of $1.00 per share.  As of
          March 15, 2004, $2.5  million  of the notes have been  converted  into
          2,500,000  shares of  Common  Stock and  warrants  covering  1,425,000
          shares of Common Stock have been exercised;

     *    In  addition,  when we entered into the 2003 Debt  Agreement,  we also
          entered into a Termination and Release  Agreement with Pharmacia AB, a
          wholly  owned  subsidiary  of  Pfizer,  Inc.,  or  Pharmacia,  for the
          retirement  of $10.6  million of debt owed by us to Pharmacia  and the
          release of the related security collateral,  in exchange for a payment
          of $1.0 million in cash,  390,000  shares of our Common Stock,  and an
          adjustment of the exercise price of Pharmacia's  outstanding  warrants
          to  purchase  360,000  shares  of our  Common  Stock to $1.00  from an
          average  exercise price of $15.77,  and an extension of the expiration
          date of those  warrants to December  31,  2005 from  expiration  dates
          ranging from May 2004 to May 2005;

     *    In December 2003, we sold our investment in Xillix  Technologies Corp.
          We owned  approximately  2.7 million  shares of Xillix and we received
          net proceeds of approximately $1.6 million; and

     *    In February 2004, we entered into an Unsecured  Convertible  Debenture
          Purchase Agreement, or the February 2004 Debt Agreement,  with certain
          private accredited investors,  or the February 2004 Lenders. Under the
          February  2004  Debt   Agreement  we  issued  $2.0  million  worth  of
          convertible  debentures  maturing on  February  5, 2008 with  interest
          accruing  at 8% per year,  due and payable  quarterly,  with the first
          interest  payment  due on April 1, 2004.  At our option and subject to
          certain  restrictions,  we may make  interest  payments  in cash or in
          shares  of our  Common  Stock,  or the  interest  can be  added to the
          outstanding  principal of the note. Each convertible  debenture issued
          pursuant to the February  2004 Debt  Agreement is  convertible  at the
          holder's option into shares of our Common Stock at $2.00 per share. We
          are obligated to file a registration statement with the Securities and
          Exchange  Commission,  or SEC,  covering  the  resale of the shares of
          Common Stock  underlying  these  convertible  debentures no later than
          April 30, 2004. Upon the occurrence of certain events of default,  the
          holders of the convertible  debentures may require that they be repaid
          prior to maturity.  These events of default include our failure to pay
          amounts due under the debentures or to otherwise  perform any material
          covenant  in  the  February  2004  Debt  Agreement  or  other  related
          documents.

     Based on our ability to successfully obtain additional funding, our ability
to obtain  new  collaborative  partners,  our  ability  to  license  and  pursue
development and commercialization of SnET2 for AMD or other disease indications,
our  ability  to reduce  operating  costs as needed,  our  ability to regain our
listing  status 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.  If we are unable to secure additional  funding, or
if our lenders  terminate our existing funding prior to June 30, 2004, we may be
unable to continue as a going concern.

Background

     Photodynamic   therapy,   or  PDT,  is  a  treatment   modality   based  on
light-activated,  or  photoselective  drugs to locally treat  diseased cells and
abnormal blood vessels.  The drug and light procedures involve three components:
photoselective drugs, light producing devices and light delivery devices.

     We are  developing a family of medical  procedures  trademarked  PhotoPoint
that are based on proprietary,  synthetic photoselective drugs. These drugs have
the ability to transform  light energy into chemical  energy in a manner similar
to that of chlorophyll in green plants.  When  administered to the body,  either
systemically  by  intraveneous  injection or locally at the treatment  site, our
PhotoPoint   drugs  are  designed  to   preferentially   accumulate  in  rapidly
reproducing,  or  hyperproliferating,  cells  and  blood  vessels  based  on the
metabolic characteristics of these tissues. Since a number of disease conditions
involve tissue and/or  cellular  hyperproliferation,  we believe that PhotoPoint
PDT has a number of potential applications.  Certain examples are abnormal blood
vessels at the back of the eye  associated  with  macular  degeneration;  plaque
psoriasis that causes excessive  proliferation of the epidermis;  cardiovascular
diseases caused by the narrowing of coronary  arteries;  and the rapid growth of
cells and new blood vessels in cancer tumors.

     Our  photoselective   drugs  are  inactive  until  exposed  to  a  specific
wavelength and dose of visible light. The wavelength corresponds to the color of
the light, and the light dose represents the number of photons,  or light energy
delivered to the target  tissue over time. We have designed our drugs to respond
to various light wavelengths depending on the desired depth of light penetration
into the target  tissue.  When light is delivered to the treatment  site and the
drug and light  interact,  a  photochemical  reaction  occurs in which molecular
oxygen is consumed to produce  reactive  oxygen  intermediates  that can lead to
cell death. We can control the treatment response by varying the respective drug
and light doses and the relative timing of their administration. The result is a
localized,  light-selective response that can potentially destroy diseased cells
and abnormal blood vessels with minimal damage to surrounding normal tissues and
vessels.

     Low-power,  non-thermal visible light is used to activate PhotoPoint drugs.
The  light is  generated  by diode  lasers  or,  for  certain  applications,  by
non-coherent  light  sources.  The light is typically  delivered  from the light
source to the patient via fiber optic  delivery  devices  that  produce  uniform
patterns of light for different  disease  applications.  The fiber optic devices
may be designed to focus light on body  surfaces such as skin or to channel into
the body via catheters for internal  applications.  Additional  methods of light
delivery  include  the  slit  lamp  adapter  used  with  our  ophthalmic  device
co-developed with Iridex.

Industry

     As early as 1900,  scientists  observed that certain compounds localized in
tissues  elicited  a  response  to light,  a  response  that came to be known as
photodynamic therapy. Since the mid-1970s, various treatment applications of PDT
have been  investigated  and  approved  for use in humans.  PDT  continues to be
studied by a variety of companies,  physicians and researchers  around the world
to treat a broad range of disease  indications.  Early industry  development was
hindered by issues such as drug  manufacturing and purity, the use of costly and
inefficient lasers and the lack of integrated drug and device development. Since
our  founding,  we have  endeavored  to address  these issues in our  PhotoPoint
development  programs.  In the last few years,  the industry  has  significantly
advanced and achieved  regulatory  approvals for several PDT drugs in the United
States and abroad.

Business Strategy

     Our current  objective is to develop our PhotoPoint  technology for disease
indications  with large  potential  market  opportunities  and/or unmet  medical
needs. Our strategy is to develop PhotoPoint PDT as a primary therapy and, where
appropriate,  as a combination  therapy with other treatments such as surgery or
drug therapy to achieve efficacious clinical results.

     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,  sales and distribution of
our  products.  At  this  time,  the  scope  of our  business  is  research  and
development   with   limited   manufacturing   capabilities.   For   large-scale
manufacturing, marketing, sales and distribution activities, we may elect to use
outside  contractors  and/or  develop  these  capabilities  internally,  or seek
strategic  collaborations  with  pharmaceutical  and medical device  partners in
certain therapeutic areas.

Technology and Products

     Our drugs,  light producing and light delivery  devices have been developed
in-house and with outside  collaborators  and have been used in various clinical
and preclinical investigations.

     Drug  Technology.  We own and 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 these broad classes
we have synthesized several hundred unique photoselective compounds,  which have
been characterized and screened in biological  testing systems.  The development
status of our key drug candidates is as follows:

     *    SnET2:  Phase  III  completed,  NDA  submission  in  preparation - wet
          age-related macular degeneration.

     *    MV9411: Phase II - plaque psoriasis.

     *    MV0633:   Advanced  preclinical  -  atherosclerosis,   atherosclerotic
          vulnerable plaque and prevention of restenosis.

     *    MV2101:  Advanced  preclincal  -  vascular  access  graft  disease  in
          hemodialysis patients.

     *    MV6401:   Preclinical   -  solid   tumors   (treatment   of   cells  &
          neovasculature).

     Our ongoing  commitment  to the various  programs  depends upon a number of
factors, including the results of investigational studies, regulatory approvals,
financial  resources,   strategic  business   considerations,   the  competitive
marketing environment and potential return on investment.

     Light  Producing  Devices.  Our  PhotoPoint  procedures are designed to use
reliable and affordable light producing devices.  Our light technologies include
software-controlled  diode lasers,  light emitting  diode, or LED,  arrays,  and
non-coherent light sources. Either internally or with outside collaborators,  we
have developed a variety of devices producing  various  wavelengths of light for
use  in  our   investigational   studies.   We  are  collaborating  with  Iridex
Corporation,  or Iridex,  on the  development  of light  producing  devices  for
PhotoPoint  PDT in  ophthalmology.  Iridex  co-developed  with us  and,  pending
regulatory approval, will manufacture,  the diode laser used in our AMD clinical
trials.

     Light Delivery Devices.  We have developed various  configurations of fiber
optic  devices to deliver  uniform  light to target  tissues,  for example,  our
proprietary  guidewire-compatible  endovascular  light  catheter  that is  being
tested in preclinical studies for the treatment of cardiovascular disease.

Targeted Diseases and Clinical Trials

     We believe that our PhotoPoint  PDT  technology has potential  utility in a
number of disease indications.  We have established certain development programs
based  upon   technical,   regulatory,   clinical,   manufacturing   and  market
considerations. Our ongoing commitment to the various programs depends upon such
factors  as  adequate  funding,   corporate  partner  support,  the  results  of
investigational  studies,  governmental regulatory  communications,  competitive
factors,  potential return on investment,  various other feasibility or 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  associated with  neovascularization
such as AMD and diabetic retinopathy.  Ocular  neovascularization is a condition
in which new blood  vessels  grow  abnormally  on or beneath  the surface of the
retina  or other  parts of the eye.  We have  investigated  PhotoPoint  PDT as a
potential treatment to selectively  destroy such abnormal blood vessels,  and we
have  completed  Phase I/II and Phase III human  clinical  trials of  PhotoPoint
SnET2 as a treatment for wet AMD.

     AMD is the leading cause of blindness in Americans over age fifty. Patients
with  AMD  experience  distortion  or  loss of  central  vision  as the  disease
progresses.  In advanced,  or wet,  AMD new blood  vessels  develop  beneath the
retina,  which leak fluid and blood that can lead to retinal  lifting,  scarring
and  irreversible  loss of central  vision.  Wet AMD  lesions are  comprised  of
neovascular  membranes known as "classic" and "occult" components.  Some lesions
are classified as pure occult,  some as pure classic and others as a combination
of classic and occult  components.  It is estimated  that 50% of wet AMD lesions
have some presence of a classic component.

     In December 2001, we completed two Phase III ophthalmology  clinical trials
for the  treatment of wet AMD lesions with any presence of a classic  component.
The  primary  efficacy  endpoint  of the  clinical  studies  was the  percent of
patients with stabilized vision, specifically, the proportion of patients losing
less than 15 letters  from  baseline on a standard  ETDRS eye chart.  In January
2002, our  ophthalmology  corporate  partner,  Pharmacia,  reviewed the top-line
Phase  III AMD  clinical  data and  determined  that  SnET2  did not to meet the
primary efficacy  endpoint in the study  population,  as defined by the clinical
trial protocol. Pharmacia notified us that it would not pursue an NDA submission
for SnET2. In March 2002, we regained the license rights to SnET2 from Pharmacia
as well as the related data and assets from the Phase III AMD  clinical  trials.
In addition,  we terminated our license  collaboration with Pharmacia,  and have
the  opportunity  to seek a new  collaborative  partner  for  PhotoPoint  PDT in
ophthalmology in the future.

     During  2002,  we completed a  comprehensive  analyses of the Phase III AMD
clinical data and held certain  discussions with regulatory  consultants and the
ophthalmic  division  of the FDA.  Based  on our  review  of the  data  from two
independent Phase III studies,  we believe  PhotoPoint SnET2 reduced the risk of
vision loss in  drug-treated  patients  versus placebo  patients.  Additionally,
based on secondary  efficacy  analyses,  relative to placebo,  we believe  SnET2
prevented  severe vision loss and impacted the  physiologic  characteristics  of
treated  lesions  by  reducing   leakage  and  fluid   accumulation.   Based  on
retrospective  analyses,  we believe  SnET2  demonstrated  a positive  treatment
response versus placebo across all  compositions of wet AMD lesions,  regardless
of the percentage of classic or occult components.  Additionally, we believe the
SnET2 treatments were well tolerated in the study population, with a low overall
incidence of  treatment-related  adverse events. The most common side effect was
skin photosensitivity, or sun sensitivity, which was reported in less than 5% of
SnET2  administrations,  and was  predominantly  mild in  nature,  transient  in
duration  and  required  no special  treatment.  Based on  discussions  with our
clinical investigators,  we believe the photosensitivity to be a manageable side
effect that  typically  produces  mild  erythema,  or redness,  of the skin.  In
addition,  there were  extremely  few reports of either back pain on infusion or
acute  post-treatment  vision  loss (less than 0.2% in both  treated and placebo
patients), which have been previously reported with competitive PDT technology.

     Based on our analysis of the Phase III AMD clinical  data, in January 2003,
we announced our intention to submit an NDA for PhotoPoint  SnET2 as a treatment
for wet AMD,  specifically wet AMD lesions with any classic  component,  with or
without an occult  component.  We expect to submit the NDA on or about March 31,
2004, seeking marketing approval based on clinical results in the "per protocol"
study  population.  The per protocol  population  consists of those patients who
received  the  exposure  to the SnET2  treatment  regimen  pre-specified  in the
clinical study protocol,  comprising a smaller number of patients than the total
study population. Although there is precedent for FDA approval of drugs based on
subgroup populations,  including Visudyne(R), the currently approved competitive
PDT product for wet AMD, we cannot  assure you that the FDA will grant  approval
for SnET2 based on our per protocol group of patients.

     If the FDA grants  marketing  approval based on our planned NDA submission,
we  believe  that the  potential  market  for  SnET2  is  greater  than  that of
Visudyne(R)  as currently  approved.  Visudyne(R)  is approved for  treatment of
lesions  with   predominantly   classic   component   only,   which   represents
approximately  60% of the  classic  wet AMD  market  or 30% of the total wet AMD
market.  We are seeking  approval of SnET2 for the treatment of lesions with any
classic component, with or without an occult component, which represents 100% of
the classic wet AMD market or approximately 50% of the total wet AMD market.

     A small group of patients with pure occult, no classic  component,  lesions
were also  enrolled in the Phase III AMD  clinical  study.  Our  analyses of the
treated  lesions  showed,  we  believe,  a clear  beneficial  trend  relative to
placebo,  although the result is not statistically  significant due to the small
numbers of patients in the clinical trials.  Given adequate financial  resources
and regulatory clearances, we intend to conduct a confirmatory clinical trial in
patients with pure occult lesions, which is a large unmet medical need estimated
to be 50% of the total wet AMD market.

     We have also  conducted  preclinical  studies  for the  treatment  of other
ophthalmic  diseases such as corneal  neovascularization,  glaucoma and diabetic
retinopathy. Besides the planned use of SnET2 alone or in combination with other
therapies,  we  have  identified  certain  next-generation  drug  compounds  for
potential  use in various eye  diseases.  These  programs are in early stages of
development  and will not  likely  advance  until we obtain  additional  funding
and/or a collaborative partner in ophthalmology.

Cardiovascular Disease

     We are  investigating  the  use of  PhotoPoint  PDT for  the  treatment  of
cardiovascular  diseases, in particular for the treatment of atherosclerosis and
atherosclerotic   vulnerable   plaque,  and  the  prevention  and  treatment  of
restenosis.   Atherosclerosis   is  a   common   condition   involving   complex
lipid-derived  plaques  within  arteries  that  can lead to  obstructive  artery
disease.  Clinicians  have become aware that  certain  inflamed  plaques  within
artery walls are highly  unstable and vulnerable to rupture.  Vulnerable  plaque
has  been  estimated  to cause up to 80% of  fatal  heart  attacks.  Preclinical
studies with  PhotoPoint PDT indicate that certain  photoselective  drugs may be
preferentially  retained  in  hyperproliferating   cells  in  artery  walls  and
lipid-rich  components of arterial plaques. In preclinical studies we believe we
have  demonstrated  that PhotoPoint PDT has the potential to remove  problematic
inflammatory cells and induce positive mechanisms of healing and repair that are
consistent with true plaque stabilization.

     Restenosis  is the  re-narrowing  of an artery that  commonly  occurs after
balloon  angioplasty  for  obstructive  artery  disease.  We  believe  data from
preclinical  studies  suggest that  PhotoPoint PDT may aid in the prevention and
treatment of restenosis by inhibiting  the  aggressive  overgrowth of cells that
cause re-narrowing, or restenosis, of arteries.

     We  are  in  the  process  of  formulating  our  lead  cardiovascular  drug
candidate,  MV0633, for clinical investigational use. Pending the outcome of our
preclinical studies, our corporate  activities,  financial  considerations,  and
other factors, we may prepare an Investigational  New Drug application,  or IND,
in cardiovascular  disease for MV0633 or another existing  photoselective  drug.
The timing of the IND is dependent  on numerous  factors  including  preclinical
results,  available funding and personnel.  We are currently  pursuing potential
strategic  partners  in  the  field  of  cardiovascular  disease.  There  are no
guarantees  that a  strategic  partner  will enter into a license  agreement  or
provide us with any  potential  funding to advance our research and  development
programs.

     As a result of our preclinical  studies in cardiovascular  disease,  we are
evaluating  the use of PhotoPoint  PDT for the  prevention  and/or  treatment of
vascular access graft disease. Synthetic arteriovenous, or AV, grafts are placed
in patients  with End Stage Renal  Disease to provide  access for  hemodialysis.
While these grafts are critical to the health of the patient,  their  functional
lifetime is limited due to stenosis, or narrowing,  caused by cell overgrowth in
the vein.  We have held  discussions  with the FDA about  initiating  a Phase II
clinical trial. We are currently pursuing  potential  strategic partners in this
field  to  help  fund  these  clinical  studies.  Pending  the  results  of  our
preclinical   studies   as   well   as   financial   considerations,   corporate
collaborations  and  other  factors,  we may  decide  to  file  an IND  for  the
commencement of clinical trials in this field.

Dermatology

     We believe that PhotoPoint PDT may be potentially  useful to treat a number
of  dermatological,  or skin,  disorders.  One of these is plaque  psoriasis,  a
chronic skin condition  involving  abnormal  proliferation of the epidermis that
causes  inflamed and scaly skin plaques.  We are  investigating  PhotoPoint drug
MV9411 in a topical gel formulation for this disease  indication.  In July 2001,
we successfully completed a Phase I dermatology clinical trial of MV9411, and in
January  2002,  commenced  a Phase II  dose-escalation  clinical  trial  for the
treatment  of  psoriatic  plaques.  We expect the Phase II clinical  trial to be
closed out in 2004.  Analysis of the clinical  results and other factors such as
available funding and personnel will determine the continuation of this program.

Oncology

     Cancer is a large group of diseases  characterized  by uncontrolled  growth
and spread of tumor cells with the associated  growth of new blood  vessels,  or
neovascularization.   In  our  oncology  research   program,   we  have  ongoing
preclinical   studies  in  solid   tumors  to  target   tumor  cells  and  tumor
neovasculature. The focus of our preclinical research is to evaluate the utility
of PhotoPoint  PDT as a stand-alone  treatment or as a combination  therapy with
experimental or conventional 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.  We are  investigating  our novel  PhotoPoint  drug
compound  MV6401 for oncology  applications.  In  addition,  we have an existing
oncology  IND for  SnET2,  under  which we may  choose to submit  protocols  for
clinical trials in the future.

Definitive Collaborative Agreements

Pharmacia Corporation

     In  August  2003 when we  entered  into the 2003  Debt  Agreement,  we also
entered into a Termination  and Release  Agreement  with  Pharmacia AB, a wholly
owned  subsidiary of Pfizer,  Inc., or  Pharmacia,  for the  retirement of $10.6
million of debt owed by us to Pharmacia and the release of the related  security
collateral, in exchange for a payment of $1.0 million in cash, 390,000 shares of
our  Common  Stock,  and an  adjustment  of the  exercise  price of  Pharmacia's
outstanding  warrants to purchase  360,000  shares of our Common  Stock to $1.00
from an average  exercise  price of $15.77,  and an extension of the  expiration
date of those warrants to December 31, 2005 from  expiration  dates ranging from
May 2004 to May 2005.  The  Termination  and Release  Agreement  supercedes  all
previous agreements.

     In the past, we had 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,  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,  data and assets  related  to SnET2 and the Phase III AMD  clinical
trials for the treatment of AMD 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 reassumed the
lease  obligations  and related  property  taxes for our bulk API  manufacturing
facility.  The lease  agreement  expires in March 2006 and  currently has a base
rent of  approximately  $26,000  per month.  In  January  2003,  we sublet  this
facility through December 2005.

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 provides, among other things, the following:

     *    We  have  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  this  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 us to grant an exclusive
license to a third party. For a description of governmental  rights see "Patents
and Proprietary Technology".

Fresenius AG

     We have a formulation  and  commercial  supply  agreement,  or  Formulation
Agreement,  with Fresenius Kabi Nutrition AB, a subsidiary of Fresenius Kabi AG,
or  Fresenius  to develop  an  emulsion  formulation  suitable  for  intravenous
administration of SnET2 in a finished dose  formulation,  or FDF. This agreement
was originally with Pharmacia but was assigned to Fresenius  effective  November
30, 1998, as part of an Asset Transfer Agreement.

     As  part  of  the  activities   necessary  under  the  Pharmacia   Contract
Modification  and  Termination  Agreement,  we and  Pharmacia  entered  into  an
agreement whereby all of Pharmacia's rights and obligations under their Contract
Manufacturing  Agreement were assigned to us. By operation of Fresenius' consent
to the assignment, the Formulation Agreement has been superceded by the terms of
the  Contract  Manufacturing  Agreement.  The material  operating  terms of this
agreement include the following:

     *    Fresenius  remains  our  exclusive  manufacturer  and  supplier of our
          worldwide requirements for SnET2 FDF;

     *    Fresenius will not develop or supply drug formulations or services for
          use in any  photodynamic  therapy  applications for any other company;
          and

     *    The agreement term is indefinite  except that it may be terminated ten
          years after the first commercial sale of SnET2 FDF.

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 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. In April 1998, we entered into a $2.0 million  revolving credit agreement
with Ramus.  Between  1998 and 1999,  Ramus  borrowed  the entire  $2.0  million
available under the credit agreement.  In March 2000, the loan term was extended
indefinitely.  It was determined that it was probable that we would be unable to
collect  the  amounts  due from Ramus  under the  contractual  terms of the loan
agreement.  Therefore,  we have established a reserve for the entire outstanding
balance of the loan  receivable  at  December  31,  2003 and 2002.  We have held
discussions with Ramus to reorganize their  outstanding debt or to convert their
entire debt, including accrued and unpaid interest, to Ramus equity.

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 co-development  agreement was
terminated in November 2003. In December 2003, we sold our entire  investment in
Xillix of  approximately  2.7 million  shares,  which had an  adjusted  basis of
$393,000 and received net proceeds of approximately $1.6 million, resulting in a
net gain of $1.2 million.

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  committed to the  discovery,
development  and  optimization  of drugs and devices for  PhotoPoint  PDT. These
activities  are  conducted   in-house  in  our  pharmaceutical  and  engineering
laboratories or in extramural  collaborations  with academic or medical research
institutions or corporations. We have expended, and expect to continue to spend,
substantial  funds on our research and  development  programs.  We expended $7.6
million,  $9.5 million and $13.5 million on research and development  activities
during 2003, 2002 and 2001, respectively.

     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 supplement our research
efforts and facilitate new development.

Manufacturing

     Our  strategy is to  generally  retain  manufacturing  rights and  maintain
limited  manufacturing  capabilities and, where appropriate due to financial and
operational   constraints,   to  partner  with  leading  contract  manufacturing
organizations  in the  pharmaceutical  and  medical  device  sector for  certain
manufacturing  processes.  We also  have  the  limited  ability  to  manufacture
small-scale  quantities of light producing devices and light delivery devices at
this location and provide  other  production  and testing  activities to support
current clinical programs. However, we have limited capabilities,  personnel and
experience in the manufacture of finished drug at commercial  levels,  nor light
producing  and  light  delivery  devices.  We will  require  outside  suppliers,
contracted  or  otherwise,  for certain  materials  and services  related to our
manufacturing activities, especially at 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  drug  and  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.  Another key  supplier is Iridex,  which
provided the light producing  devices used in our AMD clinical trials and may be
used  as a  supplier  for  future  investigational  and  commercial  devices  in
ophthalmology. We expect to continue to develop new drugs, new drug formulations
and light devices both in-house and using external  suppliers,  which may or may
not have similar dependencies.

     Prior to supplying drugs or devices for commercial  use, our  manufacturing
facilities, as well as the Iridex and Fresenius manufacturing  facilities,  must
be inspected and approved by the FDA for Good Manufacturing  Practices,  or GMP,
compliance.  Iridex and Fresenius are currently manufacturing products under the
GMP regulations,  but our  manufacturing  facility has not yet been inspected by
the FDA for GMP  compliance.  Any drugs and  devices  manufactured  by us or our
suppliers for  prospective  commercial  use must be withheld  from  distribution
until  FDA  approvals  are  obtained,  if at all.  In  addition,  if we elect to
outsource  manufacturing to other  third-party  manufacturers,  these facilities
must satisfy FDA GMP requirements.

     We were  licensed by the State of  California  to  manufacture  bulk active
pharmaceutical  ingredient,  or API,  at one of our  Santa  Barbara,  California
facilities  for  clinical  trial and other use.  This  particular  manufacturing
facility was closed by us in 2002 and has been reconstructed and now operates in
our existing operating  facility,  which has not yet been inspected by the State
of  California  or  the  FDA.  In  the  original   manufacturing   facility,  we
manufactured  bulk API for  SnET2,  the final  process  before  formulation  and
packaging.  As  previously  discussed,  we regained  ownership  of that bulk API
inventory as well as lasers from Pharmacia,  which are not subject to expiration
dates, whereas the FDF received has expired. We have API inventory in quantities
that we believe will be adequate for an initial  commercial  launch of SnET2, if
and when we gain  regulatory  approval  for the  facility and for use of the API
inventory.

Marketing, Sales and Distribution

     We are developing  several plans for the marketing,  sales and distribution
of  PhotoPoint  SnET2 for wet AMD. We may decide to license  SnET2 or  otherwise
partner with an established  pharmaceutical company for commercialization of the
drug.  If  financially  and  logistically  feasible,  we may elect to retain all
rights to SnET2 and contract the marketing,  sales and  distribution  to outside
independent  contractors or develop certain internal  capabilities.  There are a
number of  factors  that will  influence  this  decision,  including  partnering
opportunities,  the terms and  conditions,  our potential  return on investment,
financial  resources and  operational  capabilities.  In regard to the AMD light
device,  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.

     In regard to products in longer-term development,  we will consider various
avenues for  commercialization  as  appropriate  in our  strategic  planning and
licensing discussions.

Customers and Backlog

     Our drugs and devices are in various stages of development and have not yet
been  evaluated by the FDA for regulatory  approval.  Thus, we currently have no
marketed drugs or devices and therefore no customers or backlog. We have derived
revenue in the past from the sale of API 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-nine  issued United States  patents,  primarily
          device, expiring 2010 through 2021;

     *    Record owner of twelve issued foreign  patents,  expiring 2012 through
          2019;

     *    Exclusive  license  rights under twenty issued United States  patents,
          primarily pharmaceutical, expiring 2006 through 2016;

     *    Exclusive license rights under seven issued foreign patents,  expiring
          2006 through 2017;

     *    Co-owner or licensee of three 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 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.  We expect to submit an NDA for the treatment
of AMD with SnET2 with the FDA on or about March 31, 2004 and the  submission is
expected to receive fast track designation.

     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;

     *    The  submission  to the FDA of an NDA; and

     *    The 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.  We were licensed by the State of
California  to  manufacture  bulk API at one of our  Santa  Barbara,  California
facilities  for  clinical  trial and other use.  This  particular  manufacturing
facility was closed by us in 2002 and has been reconstructed and operates in our
existing  operating  facility,  but has not yet been  inspected  by the State of
California or the FDA.

     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.  When 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.

     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,  the  establishment of patent  protection by our competitors could harm
our  competitive  position.  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 Pharm Inc., or Axcan,  Eyetech  Pharmacueticals
Inc.,  or  Eyetech,  and  Pharmacyclics.  QLT's drug  Visudyne(R)  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) for the treatment of certain  oncology
indications and Levulan(R) (DUSA  Pharmaceuticals)  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. Eyetech is currently completing a Phase III clinical
trial in AMD and is expected to submit an NDA at the end of 2004 or beginning of
2005.  We are aware of other drugs and devices  under  development  by these and
other  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.

Corporate Offices

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

Employees

     As of March 15, 2004, we employed 56 individuals, approximately 22 of which
were engaged in research and development,  14 were engaged in manufacturing  and
clinical activities and 20 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.

     Our future  success  also  depends on our  continuing  ability to  attract,
train,  retain or engage highly qualified  scientific and technical personnel or
consultants.  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,
attract  or engage key  personnel  or  consultants  in the  future.  We have not
experienced  any work stoppages and consider our relations with our employees to
be good.


<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.              54  Chairman of the Board and
                                                 Chief Executive Officer

         David E. Mai                        59  President of Miravant Medical
                                                 Technologies, Miravant Systems,
                                                 Inc., Miravant Pharmaceuticals,
                                                 Inc. and Director

         John M. Philpott                    43  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 and Chief Executive Officer since September 1992. 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. from  September  1992 to June 2001,
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.

Where You Can Find More Information

     We make our  annual  report on Form 10-K,  quarterly  reports on Form 10-Q,
current  reports on Form 8-K, and all  amendments to such reports filed pursuant
to Section 13(a) or 15(d) of the Exchange Act, available,  free of charge, on or
through our Internet website located at www.miravant.com,  as soon as reasonably
practicable after they are filed with or furnished to the SEC.


<PAGE>



ITEM 2.  PROPERTIES

     We currently have a month-to-month  lease in place for approximately 25,000
square feet of office,  laboratory  and  manufacturing  space in Santa  Barbara,
California.  This building currently houses all of our operations and employees.
We entered into this lease in August 1996.  During the third quarter of 2003, we
reduced our occupancy in this building from approximately  40,000 square feet to
25,000 square feet.  This lease provides for rent to be adjusted  annually based
on  increases  in the  consumer  price  index  and the  base  rent is  currently
approximately  $33,000 per month.  The leased  property is located in a business
park. We have the ability to manufacture our active drug  ingredient,  our light
producing and light  delivery  devices and perform  research and  development of
drugs,  light delivery and light producing  devices from this facility.  At this
time we will continue to lease month-to-month until we decide that our financial
position supports a longer-term  commitment.  In addition, we are aware that the
lessors can give us a 30-day notice at any time requiring us to vacate.

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 2003.


<PAGE>


                                     PART II

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

     Our Common Stock is traded on the OTC Bulletin  Board(R),  or OTCBB,  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 price of our Common Stock as reported
on the Nasdaq  National  Market  under the symbol  MRVT.OB on March 15, 2004 was
$3.25.


                                                               High        Low
2003:
   Fourth quarter............................................$  1.35     $ 0.99
   Third  quarter............................................   1.44       0.90
   Second quarter............................................   1.29       0.92
   First quarter.............................................   1.57       0.71

2002:
   Fourth quarter............................................$  1.05     $ 0.40
   Third  quarter............................................   0.99       0.19
   Second quarter............................................   1.68       0.50
   First quarter.............................................   9.90       0.74


     As of March 15, 2004 there were approximately 277 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 6,000.

Dividend Policy

     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.

Nasdaq Listing

     We were  notified by Nasdaq on July 11, 2002 that our Common Stock would be
delisted and begin trading on the OTCBB  effective as of the opening of business
on July 12,  2002.  The OTCBB is a regulated  quotation  service  that  displays
real-time quotes,  last-sale prices and volume  information in  over-the-counter
equity  securities.  OTCBB securities are traded by a community of market makers
that enter  quotes and trade  reports.  Our Common Stock trades under the ticker
symbol MRVT and can be viewed at www.otcbb.com.  Management  continues to review
our ability to regain our  listing  status with  Nasdaq,  however,  there are no
guarantees we will be able to raise the additional capital needed or to increase
the current  trading price of our Common Stock to allow us to meet the relisting
requirements  for the Nasdaq National Market or the Nasdaq Small Cap Market on a
timely basis, if at all.

Recent Sales of Unregistered Securities - Fourth Quarter 2003

         None


<PAGE>



Equity Compensation Plan Information

     The following  table gives  information  about our Common Stock that may be
issued  upon the  exercise  of  options,  warrants  and rights  under all of our
existing equity compensation plans as of December 31, 2003.

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

                                                           (a)                 (b)               (c)
                                                        Number of                            Number of securities
                                                    securities to be                        remaining available for
                                                       issued upon      Weighted average     future issuance under
                                                       exercise of       exercise price       equity compensation
                                                       outstanding       of outstanding        plans (excluding
                                                    options, warrants       options,        securities reflected in
                                                       and rights         warrants and            column(a))
           Plan Category                                                    rights
         ----------------------------------------- -------------------- ------------------ --------------------------
         Equity compensation plans approved by
         security holders(1)(2).................      4,214,847           $      3.06            3,092,772
         -----------------------------------------
         Equity compensation plans not approved
         by security holders(3).................        247,500           $      8.59                   --
         ----------------------------------------- -------------------- ------------------ --------------------------

         Total..................................      4,462,347           $      3.37             3,092,772
         ----------------------------------------- -------------------- ------------------ --------------------------

</TABLE>

     (1)  These plans include:  The 2000 Stock  Compensation Plan, or 2000 Plan,
          the 1989 Plan,  the 1992 Plan, the 1994 Plan and the 1996 Plan, or the
          Prior Plans. The 2000 Plan has superceded the Prior Plans.

     (2)  As of December 31, 2003, of the 4,214,847  stock options  issued,  the
          number of stock options issued from the Prior Plans was 954,137 shares
          and the  number  of  stock  options  issued  from  the  2000  Plan was
          3,260,710  shares.  The maximum amount of shares that could be awarded
          under  the  2000  Plan  over its term is  8,000,000  shares,  of which
          3,260,710  stock  options  have been  granted or issued and  1,646,518
          shares for stock  awards,  restricted  stock and/or  consultant  stock
          options have been issued.  The total shares  issued from the 2000 Plan
          was  4,847,228  shares,   which  leaves  3,092,772   remaining  shares
          available for future issuance.

     (3)  Over time  warrants to purchase  shares of our Common  Stock have been
          issued to various  consultants for services which were not issued from
          a stockholder approved equity compensation plan.


<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, 2003. The consolidated  financial statements for the five fiscal years ended
December 31, 2003 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>


                                                                  Year Ended December 31,

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

                                          2003             2002             2001            2000             1999
                                    ---------------  --------------- ---------------  ---------------  ---------------
                                                             (in thousands, except share and per share data)

Statement of Operations Data:

Revenues .........................    $        --      $       499     $     4,683     $      4,593      $    14,577
Costs and expenses:
   Cost of goods sold.............             --              479             934               --               --
   Research and development.......          7,616            9,549          13,493           20,194           29,749
   General and administrative.....          4,620            5,726           5,903            6,023            7,473
   Loss in affiliate..............              --              --              --               --               --
                                    ---------------  --------------- ---------------  ---------------  ---------------
Total costs and expenses..........         12,236           15,754          20,330           26,217           37,639
                                    ---------------  --------------- ---------------  ---------------  ---------------
Loss from operations..............        (12,236)         (15,255)        (15,647)         (21,624)         (23,062)
Interest and other income (expense)
   Interest and other income......             76              169             798            1,370            1,240
   Interest expense...............         (5,649)            (286)         (2,139)          (2,254)            (434)
   Gain on sale of assets.........             62               10             586               --               --
   Gain on sale of investment
    in affiliate(1)...............          1,196               --              --               --               --
   Gain on retirement of debt (2).          9,086               --              --               --               --
   Non-cash loss in investment in
    affiliate (1).................             --             (598)             --           (3,485)              --
                                     --------------- --------------- ---------------  ---------------  ---------------
Total net interest and other
   income   (expense).............          4,771              (705)          (755)          (4,369)             806
                                    ---------------  --------------- ---------------  ---------------  ---------------
Net loss..........................   $     (7,465)    $    (15,960)    $   (16,402)    $    (25,993)   $     (22,256)
                                    ===============  =============== ===============  ===============  ===============
Net loss per share (3) ...........   $      (0.30)    $      (0.78)    $     (0.88)    $      (1.42)   $       (1.25)
                                    ===============  =============== ===============  ===============  ===============
Shares used in computing net
   loss per share (3) ............     24,703,543       20,581,214       18,647,071      18,294,525       17,768,670
                                    ===============  =============== ===============  ===============  ===============


                                                                        December 31,

                                    ----------------------------------------------------------------------------------
                                          2003             2002             2001            2000             1999
                                    ---------------  ----------------    -------------   --------------   ------------
                                                                       (in thousands)

Balance Sheet Data:

Cash and marketable securities (4)   $      1,030     $        723     $     6,112     $     20,835     $     22,789
Working capital (deficit).........           (664)          (5,953)          9,240           19,431           24,933
Total assets......................          2,405            3,390          16,165           28,027           35,823
Long-term liabilities ............          7,440            6,273          26,642           24,888           15,506
Accumulated deficit...............       (196,994)        (189,529)       (173,569)        (157,167)        (131,174)
Total stockholders' equity
(deficit).........................         (7,027)         (10,110)        (13,798)            (164)          15,597
</TABLE>

     (1)  See  Note  10  of  Notes  to  Consolidated  Financial  Statements  for
          information  regarding the gain on sale of investment in affiliate and
          non-cash losses in investment in affiliate.

     (2)  See  Note 2 of the  Notes to  Consolidated  Financial  Statements  for
          information regarding the gain on retirement of debt.

     (3)  See  Note  1  of  Notes  to  Consolidated   Financial  Statements  for
          information concerning the computation of net loss per share.

     (4)  See Notes 2 and 3 of Notes to  Consolidated  Financial  Statements for
          information concerning the changes in cash and marketable securities.


<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  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 which are based on
our current beliefs, expectations and assumptions and are subject to a number of
risks and uncertainties,  including but not limited to statements  regarding our
general beliefs  concerning the efficacy and potential  benefits of photodynamic
therapy; our ability to raise funds to continue  operations;  the timing and our
ability to submit our planned New Drug Application, or NDA, for the use of SnET2
to treat wet age-related  macular  degeneration,  or AMD, with the U.S. Food and
Drug  Administration,  or FDA; our ability to continue to receive the  remaining
$5.7  million  available at $1.0 million  monthly  through June 2004,  under the
December  2002  Convertible  Debt  Agreement,  as  amended,  or  the  2002  Debt
Agreement;  our  ability  to meet the  covenants  of the August  2003  Unsecured
Convertible Debt and Warrant Purchase Agreement, or the 2003 Debt Agreement; our
ability  to meet  the  covenants  of the  February  Unsecured  Convertible  Debt
Purchase Agreement, or the February 2004 Debt Agreement;  our ability to resolve
any issues or  contingencies  associated with our NDA after it is submitted with
the FDA; the assumption that we will continue as a going concern; our ability to
regain our listing status on Nasdaq; our plans to collaborate with other parties
and/or  license  SnET2;  our ability to continue to retain  employees  under our
current  financial  circumstances;  our  ability  to use our laser 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 but not limited
to:  failure to obtain  additional  funding in a timely  manner,  if at all; our
ability to continue  borrowing  under the 2002 Debt Agreement if we fail to meet
certain requirements or if these requirements are not met to the satisfaction of
the 2002  Lenders;  our failure to meet or obtain  waivers from the covenants in
our 2003 Debt Agreement and/or our February 2004 Debt Agreement which could lead
to a default  under those  agreements;  unanticipated  complexity  or difficulty
preparing and  completing  the NDA filing for SnET2;  a failure of our drugs and
devices to receive regulatory  approval;  other parties declining to collaborate
with us due to our financial condition or other reasons beyond our control;  the
failure of our existing light production and delivery  technology to prove to be
applicable  or  appropriate  for  future  studies;  our  failure  to obtain  the
necessary  funding to further  our  research  and  development  activities;  and
unanticipated  changes by the government in its past practices by exercising 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.

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

Overview

     We are a pharmaceutical  research and development  company  specializing in
photodynamic  therapy,  or PDT, a treatment modality based on drugs that respond
to light. When activated by light,  these drugs induce a photochemical  reaction
in the presence of oxygen that can be used to locally destroy diseased cells and
abnormal blood vessels. We have branded our novel version of PDT technology with
the  trademark  PhotoPoint(R).  Our drugs and devices  are in various  stages of
development  and have not yet been evaluated for regulatory  approval.  Our most
advanced drug, PhotoPoint SnET2, has completed Phase III clinical trials for the
treatment of wet age-related macular degeneration,  or AMD, and we are preparing
to submit a New Drug Application, or NDA, for its marketing approval.

     We have been unprofitable since our founding and have incurred a cumulative
net loss of  approximately  $197.0 million as of December 31, 2003. We expect to
continue to incur significant,  and possibly  increasing,  operating losses over
the next few years,  and we believe we will be  required  to obtain  substantial
additional debt or equity  financing to fund our operations  during this time as
we seek to achieve a level of revenues  sufficient  to support  our  anticipated
cost structure.  Our independent auditors,  Ernst & Young LLP, have indicated in
their  report   accompanying  our  December  31,  2003  consolidated   financial
statements that, based on generally accepted auditing  standards,  our viability
as a going concern is in question.

     Although  we  continue  to  incur  costs  for  research  and   development,
preclinical studies,  clinical trials and general corporate activities,  we have
continued to adhere to our cost  restructuring  program we  implemented  in 2002
which has helped  reduce our overall  costs.  Our  ability to achieve  sustained
profitability  depends  upon our  ability,  alone  or with  others,  to  receive
regulatory  approval on our NDA  submission  for SnET2 in AMD,  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.  Our ability to achieve
significant  levels of revenues  within the next few years is  dependent  on the
timing of  receiving  regulatory  approval,  if at all, for SnET2 in AMD and our
ability to establish a  collaboration,  with a corporate  partner or other sales
organization, to commercialize SnET2 once regulatory approval is received, if at
all.  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.  We do not expect any significant  revenues until we have  established a
collaborative  partnering  agreement,  receive regulatory  approval and commence
commercial sales.

     Our  significant  funding  activities  over the last  eighteen  months have
consisted of the following:

     *    A $2.0 million convertible debt financing completed in February 2004;
     *    Warrant  exercises  through March 15, 2004 providing  proceeds of $1.4
          million;
     *    The sale of our investment in an affiliate, Xillix Technologies Corp.,
          or Xillix,  in  December  2003,  providing  net cash  proceeds of $1.6
          million;
     *    A $6.0 million convertible debt financing completed in August 2003;
     *    Settlement of our $10.0 million debt with Pharmacia AB, a wholly owned
          subsidiary of Pfizer, Inc., or Pharmacia, that required a cash payment
          of $1.0 million; and
     *    A $12.0 million  convertible debt financing which provides for monthly
          borrowings through June 2004 under which we have borrowed $6.3 million
          through March 15, 2004.

     We believe we can raise additional  funding to support  operations  through
corporate  collaborations  or  partnerships,  through  licensing of SnET2 or new
products and through public or private equity or debt  financings  prior to June
30, 2004. If additional funding is not available when required,  we believe that
as long as we receive the remaining $5.7 million  available to us under the 2002
Debt Agreement and our debt does not go into default and become immediately due,
then we have the  ability to  conserve  cash  required  for  operations  through
December  31,  2004 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  facilities  and overhead  expenditures.
However,  there can be no  assurance  that we will  receive the  remaining  $5.7
million under the 2002 Debt Agreement,  if certain  requirements  are not met or
are not  satisfactory to the 2002 Lenders and there is no guarantee that we will
be  successful  in  obtaining  additional  financing or that  financing  will be
available on favorable terms.

Ongoing Operations

     We have continued our scaled back efforts in research and  development  and
the preclinical studies and clinical trials of our products. Our primary efforts
in 2003 have been in preparing a submission of an NDA for marketing  approval in
AMD for SnET2.  We expect  over the next year or so, our likely  activities  and
costs to consist of the following:

     *    Continuation  of work related to our NDA, once  submitted and accepted
          for filing by the U.S. Food and Drug Administration, or FDA;
     *    Commencement of pre-commercialization activities such as pre-marketing
          and  possible  drug  and  device   manufacturing  prior  to  receiving
          regulatory approval;
     *    Increasing our development activities for our cardiovascular  program;
          and
     *    Review and follow-up of our Phase II dermatology clinical trial.

     The extent of each of these activities will depend on the available funding
and  resources.  Additionally,  once  requisite  regulatory  approval  has  been
obtained for SnET2, if at all,  substantial  additional funding will be required
for the  manufacture,  marketing  and  distribution  of our  product in order to
achieve a level of revenues adequate to support our cost structure.

     In ophthalmology, our primary focus during 2003 through March 31, 2004, has
been  the  preparation  of our NDA for  submission  for  marketing  approval  of
PhotoPoint  SnET2,  a new drug for the  treatment  of AMD. In January  2003,  we
announced our plans to move forward with  preparing our first NDA  submission of
SnET2,  for the  treatment  of AMD. Our  decision  came after we  completed  our
analyses of the Phase III AMD clinical data,  which we believed  showed positive
results in a significant  number of PhotoPoint  SnET2  treated  patients  versus
placebo  control  patients,   and  after  holding  discussions  with  regulatory
consultants and the ophthalmic divsion of the FDA. Previously,  in January 2002,
Pharmacia,  after  a  top-line  review  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  preparing  an NDA with the FDA. 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.  Additionally,
in March 2002 we terminated our license collaboration with Pharmacia.  We expect
to submit the NDA on or about March 31, 2004,  seeking marketing  approval based
on clinical  results in the "per protocol"  study  population.  The per protocol
population  consists of those  patients  who  received the exposure to the SnET2
treatment  regimen  pre-specified  in the clinical study protocol,  comprising a
smaller  number of patients than the total study  population.  Although there is
precedent  for FDA  approval of drugs based on subgroup  populations,  including
Visudyne(R),  the  currently  approved  competitive  PDT product for wet AMD, we
cannot  assure you that the FDA will grant  approval  for SnET2 based on our per
protocol  group of  patients.  Besides  the  possible  use of SnET2  alone or in
combination with other therapies,  we have identified  potential next generation
drug  compounds  for use in various eye  diseases.  These drugs are in the early
stage of  development  and will not likely begin  further  development  until we
obtain additional funding,  and/or a corporate partner or other collaboration in
ophthalmology.

     In our  dermatology  program,  we use a topical gel  formulation to deliver
MV9411, a proprietary 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  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 expected to be closed out in 2004 with
analysis of the clinical  trial results.  Our  continuation  of the  dermatology
development  program will depend on the results of the clinical trials and other
factors such as available funding and personnel.

     We are also conducting  preclinical  studies with new photoselective  drugs
for cardiovascular  diseases,  in particular for the prevention and treatment of
vulnerable  plaque and  restenosis.  Vulnerable  plaque,  or VP, is an unstable,
rupture-prone  inflammation  within  the artery  walls,  and  restenosis  is the
renarrowing  of an artery that  commonly  occurs after balloon  angioplasty  for
obstructive  artery  disease.  We are in the process of  formulating  a new lead
drug, MV0633, and, pending the outcome of our preclinical studies, our corporate
activities,  financial  considerations,  and other  factors,  we may  prepare an
Investigational  New Drug  application,  or IND, in  cardiovascular  disease for
MV0633.  The  timing  of the IND is  dependent  on  numerous  factors  including
preclinical results,  available funding and personnel. We are currently pursuing
various potential  strategic  partners in the field of  cardiovascular  disease.
There are no  guarantees  that  potential  strategic  partners will enter into a
license  agreement  or provide  us with any  potential  funding  to advance  our
research and development programs.

     As a result of our preclinical  studies in cardiovascular  disease,  we are
evaluating  the use of PhotoPoint  PDT for the  prevention  and/or  treatment of
vascular access graft disease. Synthetic arteriovenous, or AV, grafts are placed
in patients  with End Stage Renal  Disease to provide  access for  hemodialysis.
While these grafts are critical to the health of the patient,  their  functional
lifetime is limited due to stenosis, or narrowing,  caused by cell overgrowth in
the vein. We are currently pursuing potential  strategic partners in this field.
Pending  the  results  of  our   preclinical   studies  as  well  as   financial
considerations,  corporate  collaborations  and other factors,  we may decide to
file an IND for the commencement of clinical trials in this field.

     In our oncology research program,  we have ongoing  preclinical  studies in
solid  tumors to target tumor cells and tumor  neovasculature.  The focus of our
preclinical  research  is  to  evaluate  the  utility  of  PhotoPoint  PDT  as a
stand-alone   treatment  or  as  a  combination  therapy  with  experimental  or
conventional  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.  We have an existing oncology IND for SnET2, under which we may choose
to submit protocols for clinical trials in the future.  We are investigating our
novel compound MV6401 for oncology applications.

     Below is a summary of the  disease  programs  and their  related  stages of
development.  The  information in the column labeled  "Estimate of Completion of
Phase" is forward-looking in nature and the actual timing of completion of those
phases  could  differ  materially  from the  estimates  provided  in the  table.
Additionally,  due to the uncertainty of the scientific  results of any of these
programs  as  well as the  uncertainty  regarding  our  ability  to  fund  these
programs, we are unable to provide an accurate estimate as to the costs, capital
requirements or the specific timing necessary to complete any of these programs.
For a discussion of the risks and  uncertainties  associated  with the timing of
completing a product  development  phase for our company as well as our industry
as a whole,  see the "Risk  Factors"  section of  "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
<S>     <C>                                                             <C>                             <C>

                                                                                                    Estimate of Completion
                Program              Description/Indication            Phase of Development                of Phase
         ---------------------    ------------------------------    ----------------------------    ------------------------
             Ophthalmology                 AMD (SnET2)                   Preparation of a
                                                                       Submission of an NDA                 Q1 2004
                                       New drug compounds                Research studies                  Completed
              Dermatology              Psoriasis (MV9411)                    Phase II
                                                                                                             2004

            Cardiovascular          VP and Restenosis (MV0633
               disease                and other compounds)              Preclinical studies                   **
                                        AV Graft (MV2101)                Preclinical studies                  **
               Oncology                  Tumor research                  Research studies                     **
                                            (MV6401)
</TABLE>

     **   Based on the  early  development  stage of these  programs  we  cannot
          reasonably  estimate the time at which these  programs may move from a
          research or preclinical development phase to the clinical trial phase.
          The decision  and timing of whether  these  programs  will move to the
          clinical trial phase will depend on a number of factors  including the
          results  of  the  preclinical  studies,  the  estimated  costs  of the
          programs, the availability of alternative therapies and our ability to
          fund or obtain  additional  financing  or to obtain new  collaborative
          partners to help fund the programs.

     Based on our ability to successfully obtain additional funding, our ability
to obtain new collaborative  partners, our ability to license and pursue further
development  of SnET2  for AMD or other  disease  indications,  our  ability  to
complete our  submission  of an NDA for SnET2,  our ability to reduce  operating
costs as needed,  our ability to regain our listing status 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 elect
or be able to  further  develop  PhotoPoint  PDT  procedures  in  ophthalmology,
cardiovascular disease, dermatology, oncology or in any other indications.

Critical Accounting Policies

     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 services and consulting
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 or low likelihood of alternative future use, are
also included in research and development expenses.

     Stock-Based  Compensation.  Statement of Financial Accounting Standards, or
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.  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 January 2003, the Financial  Accounting Standards Board, or FASB, issued
Financial  Interpretation No. 46, or FIN 46, "Consolidation of Variable Interest
Entities,  an interpretation of APB No. 51", which was amended in December 2003.
FIN 46 as  amended  requires  that if a company  holds a  controlling  financial
interest in a variable  interest entity,  or VIE, the assets and liabilities and
results  of  the  VIE's  activities  should  be  consolidated  in  the  entity's
consolidated  financial  statements.  We do not expect FIN 46 to have a material
impact on our results of operations or financial position.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of Both Liabilities and Equity". This
statement establishes standards for how an issuer classifies and measures in its
statement   of   financial   position   certain   financial   instruments   with
characteristics  of both  liabilities and equity.  SFAS No. 150 requires that an
issuer classify a financial  instrument that is within the scope of SFAS No. 150
as a  liability,  or an  asset in some  circumstances,  because  that  financial
instrument  embodies an obligation of the issuer.  SFAS No. 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim periods  beginning after June
15,  2003.  The  adoption of SFAS No. 150 did not have a material  impact on our
consolidated results of operations or financial position.

Results of Operations

     The following  table provides a summary of our revenues for the years ended
December 31, 2003, 2002 and 2001:
<TABLE>
 <CAPTION>
<S>     <C>                                                            <C>                    <C>                     <C>

 ---------------------------------------------------------------------------------------------------------------------------
 Consolidated Revenues                                                   2003               2002               2001
 ---------------------------------------------------------------------------------------------------------------------------
 License - contract research and development...................       $       --       $   20,000        $    302,000
 Bulk active pharmaceutical ingredient sales...................               --          479,000           4,306,000
 Royalties.....................................................               --               --              75,000
 ---------------------------------------------------------------------------------------------------------------------------
 Total revenues................................................       $       --       $  499,000         $ 4,683,000
 ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

     Our  historical  revenues  primarily  reflect  income earned from licensing
agreements,  grants  awarded,  royalties from device  product  sales,  milestone
payments and non-commercial drug sales to Pharmacia.  Any other future potential
new revenues  such as sales from the sale of drug and device  products,  license
income from new  collaborative  agreements,  revenues from contracted  services,
royalties or revenues from potential drug and device sales,  if any, will depend
on, among other factors,  the results from our ongoing  preclinical  studies and
clinical  trials,   the  timing  and  outcome  of  applications  for  regulatory
approvals,  including  our NDA for SnET2  expected to be  submitted  on or about
March 31, 2004, our ability to re-license SnET2 and establish new  collaborative
partnerships in ophthalmology  and  cardiovascular  disease 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.  Based on the above
mentioned  factors,  among others,  we anticipate our operating  activities will
require  significant  expenditures  and  result  in  substantial,  and  possibly
increasing, operating losses for the next few years.

     Total Revenues. Our revenues have decreased significantly from $4.7 million
in 2001 to  $499,000  in 2002 and no  revenues  in  2003.  The  fluctuations  in
revenues are due to the following:

     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  $302,000  in 2001 to  $20,000  in 2002.  The
decrease in license  income is  specifically  related to the  conclusion  of the
Phase  III AMD  clinical  trials  in  December  2001 and the  completion  of the
preclinical studies and our AMD clinical trial responsibilities.  Reimbursements
received  during  2001 and 2002 were  primarily  for costs  incurred to complete
preclinical  studies and clinical  trial  oversight for AMD. No further  license
income will be received from Pharmacia as this agreement has been terminated.

     Bulk Active  Pharmaceutical  Ingredient Sales. In May 2001, we entered into
an Asset Purchase  Agreement with Pharmacia  whereby they agreed to buy bulk API
inventory  through March 2002. We recorded  revenue related to bulk API sales of
$4.3  million for the year ended  December  31, 2001 and  $479,000  for the year
ended December 31, 2002. In January 2002, Pharmacia reimbursed us for all of our
remaining  finished and in-process lots of bulk API for approximately  $479,000.
As a part of the Contract Modification and Termination Agreement no further bulk
API was sold to  Pharmacia  after  January  2002 under this  agreement as it was
terminated in March 2002.

     In January 2002,  Pharmacia,  after a top-line  review 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  preparing  a
submission of an NDA with the FDA. Subsequently,  in March 2002, we entered into
a Contract  Modification  and Termination  Agreement with Pharmacia  whereby our
license  agreement  for  SnET2  was  terminated.  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.

     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.  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.  We
recorded income of $75,000 in 2001.  There was not royalty income  recognized in
2002 or 2003.

     Cost of Goods Sold. In connection with the newly manufactured bulk API sold
under  the terms of the  Asset  Purchase  Agreement  with  Pharmacia,  which was
terminated  in March 2002,  we recorded  $479,000 and $934,000 in  manufacturing
costs for the years ended December 31, 2002 and 2001, respectively.  The amounts
recorded as cost of API sales  represent  the costs  incurred for only the newly
manufactured  bulk API in the first quarter 2002 and throughout  fiscal 2001. No
cost of API sales were  incurred  for the year ended  December  31,  2003 and no
further cost of API sales are expected until regulatory approval is received and
commercial sales commence.

     Research and  Development.  Research and development  costs are expensed as
incurred. Research and development expenses are comprised of direct and indirect
costs.  Direct  costs  consist  of  costs  incurred  by  outside  providers  and
consultants for preclinical  studies,  clinical trials and related clinical drug
and device development and manufacturing costs, drug formulation  expenses,  NDA
preparation services and other research and development  expenditures.  Indirect
costs consist of internally generated costs from salaries and benefits, overhead
and facility  costs,  and other support  services.  Our research and development
expenses  decreased  to $7.6  million for the year ended  December 31, 2003 from
$9.5  million  and  $13.5  million  for  the  same  periods  in 2002  and  2001,
respectively.  The overall decrease in research and development expenses for the
year ended  December  31, 2003  compared to the prior  periods is related to the
overall reduction of our research and development activities in 2003 in order to
focus  on the  preparation  of the  submission  of our NDA and  also  due to the
reduction in our indirect costs from employee attrition and facility downsizing.
Our research and development expenses, net of license  reimbursement,  were $7.6
million for the year ended  December 31,  2003,  $9.5 million for the year ended
December  31,  2002 and $13.2  million  for the year ended  December  31,  2001.
Research and development expenses for the year ended December 31, 2003, 2002 and
2001  related  primarily  to  indirect  costs such as  payroll,  payroll  taxes,
employee  benefits and  allocated  operating  costs.  Additionally,  we incurred
research and development expenses for:

     *    Preparation for submission of an NDA for SnET2 in AMD;
     *    Work associated with the development of new devices, delivery systems,
          drug compounds and formulations for the dermatology and cardiovascular
          programs; and
     *    Preclinical  studies  and  clinical  trial  costs  for  our  Phase  II
          dermatology program.

     As previously  disclosed,  we have four research and  development  programs
which we have focused our efforts:  ophthalmology,  dermatology,  cardiovascular
disease and oncology. Research and development costs are initially identified as
direct costs and  indirect  costs,  with only direct  costs  tracked by specific
program.  These  direct  costs  consist  of  clinical,   preclinical,  drug  and
formulation development,  device development and research costs. We do not track
our indirect  research and  development  costs by program.  These indirect costs
consist  of  labor,   overhead  and  other  indirect  costs.  The  research  and
development costs for specific programs represent the direct costs incurred. The
direct research and development costs by program are as follows:
<TABLE>
<CAPTION>
<S>     <C>                                                             <C>                     <C>

            Program                                 2003                    2002                  2001
       -----------------------------------    ------------------     -------------------    -----------------
       Direct costs:

            Ophthalmology..............            $  1,522,000             $   239,000     $   1,060,000
            Dermatology................                 220,000                 503,000           639,000
            Cardiovascular disease.....                 294,000               1,136,000         2,038,000
            Oncology...................                  15,000                  45,000           126,000
                                              ------------------     -------------------    -----------------
       Total direct costs..............            $  2,051,000            $  1,923,000      $  3,863,000

       Indirect costs .................               5,565,000               7,626,000         9,630,000
                                              ------------------     -------------------    -----------------
       Total research and development
       costs...........................            $  7,616,000            $  9,549,000      $ 13,493,000
                                              ==================     ===================    =================
</TABLE>

     Ophthalmology.  In  2003,  our  direct  ophthalmology  program  costs  have
increased to $1.5  million from  $239,000 in 2002 and from $1.1 million in 2001.
Costs  incurred  for the  ophthalmology  program  over the last few  years  have
consisted of  preparation  costs for the NDA,  clinical  trial  expenses for the
screening,  treatment and  monitoring of  individuals  participating  in the AMD
clinical trials,  internal and external preclinical study costs, drug and device
development  and  manufacturing  costs.  The costs incurred and the increase for
2003 are  specifically  related to the preparation for submission of our NDA for
SnET2 in AMD compared to minimal ophthalmology activities for the same period in
2002. Costs incurred in 2001 related to preclinical activities, manufacturing of
SnET2 and the purchase of laser devices.

     Dermatology.  Our direct dermatology program costs decreased to $220,000 in
2003 from  $503,000  in 2002 and from  $639,000 in 2001.  Costs  incurred in the
dermatology  program include expenses for drug development and drug formulation,
internal and external preclinical study costs, and Phase I and Phase II clinical
trial  expenses.  The  decrease  from 2003 to 2002 was a result of  decrease  in
patient treatments in the Phase II clinical trial compared to 2002. The decrease
from 2002 to 2001 was due to 2002 consisting  primarily of the cost of the Phase
II clinical  trial,  while 2001 consisted  primarily of the cost for the Phase I
clinical trial as well as expenditures related to preclinical studies and device
and drug formulation development and manufacturing.

     Cardiovascular  Disease.  Our direct  cardiovascular  disease program costs
decreased to $294,000 in 2003 from $1.1 million in 2002 and from $2.0 million in
2001.  Our  cardiovascular  disease  program  costs  include  expenses  for  the
development of new drug compounds and light delivery  devices,  drug formulation
and  manufacturing  and  internal  and external  preclinical  study  costs.  The
decrease in expenditures  from 2003 to 2002 and 2001 is related to a decrease in
the  development and  manufacturing  activities for drug and devices used in the
preclinical  studies and a reduction in the preclinical studies performed.

     Oncology.  Our direct  oncology  program costs have decreased to $15,000 in
2003 from $45,000 in 2002 and from $126,000 in 2001. Our oncology  program costs
have  primarily  consisted  of costs for a Phase I clinical  trial for  prostate
cancer,  internal  and  external  preclinical  study costs and  expenses for the
development of new drug compounds.  The decrease in oncology  program costs from
2003 to 2001 is related to our  decision to suspend the further  development  of
the prostate  cancer  clinical trial and to focus on more discovery and research
programs for use of PhotoPoint PDT in oncology.

     Indirect  Costs.  Our indirect costs have decreased to $5.6 million in 2003
from $7.6 million in 2002 and from $9.6 million in 2001. Generally, the decrease
from 2003 to 2002 and 2001 was attributed to a reduction in our responsibilities
in the AMD  program,  as well as a  continued  reduction  in  labor  costs  from
employee attrition and our downsizing of facilities and related overhead costs.

     We expect future research and development  expenses may fluctuate depending
on available funds from corporate partnering and financings,  continued expenses
incurred  in our  NDA  preparation  and  follow-up  activities,  the  extent  of
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.

     General  and  administrative.   Our  general  and  administrative  expenses
decreased  to $4.6  million  in 2003  from  $5.7  million  in 2002 and from $5.9
million in 2001.  General  and  administrative  expenses  related  primarily  to
payroll related expenses, operating costs such as rent, utilities,  professional
services and insurance  costs and non-cash  expenses such as stock  compensation
and depreciation. For 2003, the employee and overhead related expenses decreased
compared to 2002 due to the decrease in the number of  administrative  employees
and a decrease in facility related costs from the reduction in facilities. These
decreases  were  primarily   offset  by  an  increase  in  insurance  and  stock
compensation  costs.  The  slight  decrease  from 2002 to 2001 was a result of a
small decrease in the number of administrative  employees as well as a temporary
reduction  in wages  taken by all  employees  during the first  quarter of 2002.
These  decreases in 2002 were offset by employee  and officer  loan  reserves of
$690,000 recorded in 2002.

     We expect future general and  administrative  expenses to remain consistent
with prior periods although they may fluctuate depending on available funds, and
the need to perform our own marketing and sales activities, the support required
for research and  development  activities,  the costs  associated with potential
financing  and  partnering  activities,  continuing  corporate  development  and
professional  services,   facility  and  overhead  costs,  compensation  expense
associated with employee stock bonuses and stock options and warrants granted to
consultants and expenses for general corporate matters.

     Interest and Other Income.  Interest and other income  decreased to $76,000
in 2003 from $169,000 in 2002 and from $798,000 in 2001. The overall decrease in
interest  and  other  income  are  directly  related  to the  levels of cash and
marketable  securities  earning interest and the rates of interest being earned.
Interest  and other income  earned in 2003,  2002 and 2001  primarily  represent
interest earned on cash and marketable  security balances throughout the year as
well as interest on employee and executive  loans.  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 to $5.6 million in 2003 from
$286,000 in 2002 and from $2.1 million in 2001. The increase in 2003 compared to
2002, is directly related to the amortization of the beneficial conversion value
recorded in 2003, which was approximately  $3.9 million,  from the 2003 and 2002
Debt  Agreements.  Under the EITF No. 98-5,  we were  required to determine  the
beneficial  conversion  value  for the 2003  Debt  Agreement  and the 2002  Debt
Agreement. The beneficial conversion value represents the difference between the
fair value of our Common Stock on the date of the first available conversion and
the  intrinsic  value,  which is the  value of the  2003  Notes on as  converted
assumption and the value of detachable  warrant issued.  The amortization of the
beneficial  conversion  value based on the first available  conversion dates for
the 2003 Debt  Agreement and the 2002 Debt  Agreement  were  approximately  $2.1
million and $1.8 million, respectively.  These amounts were recorded to interest
expense for 2003. The remaining  increase in interest  expense for 2003 compared
to the same  period in 2002  related to an increase  in  interest  expense  from
borrowings  under  the 2002  Debt  Agreement  and the  related  amortization  of
deferred financing costs associated with the 2002 and 2003 Debt Agreements.  The
decrease from 2002 to 2001 was  primarily  related to the  restructuring  of the
Pharmacia  loans in March 2002,  which provided for interest for only two months
in 2002.  In  accordance  with the SFAS  No.  15 with the  restructuring  of the
Pharmacia  debt in March  2002,  we reduced  our  outstanding  debt to the total
future cash payments of the debt, which included $792,000 designated as interest
and $10.0 million as principal.  Also, with the  restructuring  of the debt, the
value of the warrants issued to Pharmacia, recorded as deferred financing costs,
was reduced to zero. The level of interest expense in future periods is expected
to  increase  as  monthly  borrowings  on the  promissory  notes are  continued,
deferred  financing costs  associated with the 2002, 2003 and February 2004 Debt
Agreements  continue to amortize over the term of the related borrowings and the
remaining portion of the beneficial  conversion value for the 2002 and 2003 Debt
Agreements are expensed through June 2004.

     Gain on Sale of Assets.  The gain on sale of assets increased to $62,000 in
2003 from $10,000 in 2002 which was a decrease  from the $586,000  recognized in
2001.  The gain on sale of  assets in 2003 and 2002  related  to the gain on the
sale of equipment sold which was fully depreciated. In 2001, the gain on sale of
assets  of  $586,000  related  to the  gain on sale  of bulk  API  manufacturing
equipment sold to Pharmacia.

     Gain on Sale of  Investment  in  Affiliate.  In December  2003, we sold our
investment in Xillix  Technologies  Corp., or Xillix. We owned approximately 2.7
million  shares of Xillix at an adjusted  basis of  $393,000  and  received  net
proceeds of approximately $1.6 million, resulting in a net gain of $1.2 million.

     Gain on Retirement of Debt. In 2003, we recorded a gain of $9.1 million for
the settlement of our debt to Pharmacia. There was no gain on settlement on debt
recorded in 2002 and 2001. In connection  with the our 2003 debt  financing,  we
entered into a Termination and Release Agreement with Pharmacia,  that provided,
among other things,  for the  retirement of the $10.6 million debt owed by us to
Pharmacia and the release of the related security collateral,  in exchange for a
$1.0 million  cash  payment,  390,000  shares of our Common  Stock,  with a fair
market  value on the date of  issuance  of $386,000  and the  adjustment  of the
exercise price of  Pharmacia's  outstanding  warrants to purchase  shares of our
Common Stock, valued at $151,000. We recorded a net gain of $9.1 million,  which
was  determined  as  follows:  the $10.6  million  debt was  reduced by the $1.0
million  cash  payment,  the fair  market  value of the issued  Common  Stock of
$386,000  and the  Black-Scholes  value of the  repriced  warrants of  $151,000,
resulting in a net $9.1 million gain.

     Non-cash Loss in Investment in Affiliate. During 2000 and again in 2002, we
determined  that the  decline  in the  value of our  investment  in  Xillix  was
other-than-temporary.  Since we made the  investment in June 1998,  the value of
the Xillix  common  stock had  decreased by  approximately  70% through 2000 and
approximately  an additional 20% through 2002 and had been at similar levels for
at least nine months prior to the write-down.  In December 2000, we recognized a
loss write-down totaling $3.5 million and in December 2002 another $598,000 loss
write-down  was  recorded,  to reduce our  investment in Xillix to its estimated
current fair value based on quoted  market  prices as of December  31, 2002.  As
mentioned  above, we sold this investment in December 2003,  which net a gain of
$1.2 million.

     Income  Taxes.  As  of  December  31,  2003,  we  had  net  operating  loss
carryforwards  for federal tax purposes of $178.7  million,  which expire in the
years 2004 to 2023. Research credit  carryforwards  aggregating $9.1 million are
available  for  federal and state tax  purposes  and expire in the years 2004 to
2023.  We also had a state net  operating  loss  carryforwards  of $81.3 million
which  expires  in the years  2004 to 2008.  Of the $81.3  million  in state net
operating  loss  carryforwards,  $52.2 million will expire during 2004 and 2005.
Under Section 382 of the Internal  Revenue Code, the  utilization of our tax net
operating  losses may be limited based on changes in the percentage of ownership
in our Company.

Off-Balance-Sheet Arrangements and Other Contractual Obligations

     Off-Balance-Sheet  Arrangements.  We have not entered into any transactions
with unconsolidated entities whereby we have financial guarantees,  subordinated
retained interests,  derivative  instruments,  or other contingent  arrangements
that expose us to material  continuing  risks,  contingent  liabilities,  or any
other  obligation  under a variable  interest in an  unconsolidated  entity that
provides financing, liquidity, market risk, or credit risk support to us.

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

Liquidity and Capital Resources

     Since inception through December 31, 2003, we have accumulated a deficit of
approximately  $197.0 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,  2003,  we have
received  proceeds  from the sale of equity  securities,  convertible  notes and
credit  arrangements  of  approximately  $237.8  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, 2003, our consolidated financial statements have been
prepared assuming we will continue as a going concern. Our independent auditors,
Ernst & Young LLP, have indicated in their report  accompanying our December 31,
2003  consolidated  financial  statements  that,  based  on  generally  accepted
auditing standards, our viability as a going concern is in question.

     In  February  2004,  we entered  into an  Unsecured  Convertible  Debenture
Purchase  Agreement,  or the February 2004 Debt Agreement,  with certain private
accredited investors, or the February 2004 Lenders. Under the February 2004 Debt
Agreement we issued $2.0 million  worth of  convertible  debentures  maturing on
February  5,  2008  with  interest  accruing  at 8% per  year,  due and  payable
quarterly,  with the first interest  payment due on April 1, 2004. At our option
and subject to certain restrictions, we may make interest payments in cash or in
shares of our Common  Stock,  or the  interest  can be added to the  outstanding
principal  of the  note.  Each  convertible  debenture  issued  pursuant  to the
February 2004 Debt Agreement is  convertible at the holder's  option into shares
of our Common Stock at $2.00 per share.  We are obligated to file a registration
statement  with the SEC  covering  the  resale of the  shares  of  Common  Stock
underlying these  convertible  debentures no later than April 30, 2004. Upon the
occurrence  of  certain  events  of  default,  the  holders  of the  convertible
debentures  may require that they be repaid  prior to maturity.  These events of
default  include  our  failure to pay  amounts  due under the  debentures  or to
otherwise  perform any material  covenant in the February 2004 Debt Agreement or
other related documents.

     In August 2003,  we entered into a  Convertible  Debt and Warrant  Purchase
Agreement,  or the  2003  Debt  Agreement,  with a group of  private  accredited
investors,  or the 2003 Lenders,  pursuant to which we issued  securities to the
2003 Lenders in exchange for gross proceeds of $6.0 million. Under the 2003 Debt
Agreement,  the debt can be  converted,  at the 2003  Lender's  option after the
registration of the underlying  stock, at $1.00 per share into our Common Stock.
We issued separate  convertible  promissory notes,  which are referred to as the
2003 Notes, to each 2003 Lender and the 2003 Notes earn interest at 8% per annum
and are due August 28, 2006,  unless  converted  earlier or paid early under the
prepayment  or  default  provisions.  The  interest  on  each  2003  Note is due
quarterly  beginning  October  1, 2003 and can be paid in cash or in-kind at our
option. Under certain circumstances each 2003 Note can be prepaid by us prior to
the  maturity  date or prior to  conversion.  The 2003 Notes  also have  certain
default  provisions which can cause the 2003 Notes to become accelerated and due
immediately upon notice by the 2003 Lenders.  One of these  provisions  requires
that our NDA for SnET2 be submitted by March 31, 2004, as extended. We expect to
submit the NDA on or about March 31, 2004. If we are unable to submit the NDA by
that date we may be  required  to obtain a waiver  from the  existing  2003 Note
holders in order to avoid an event of default under the 2003 Debt Agreement.  If
we do not  obtain a  waiver  it is  likely  we will be in  default  and the 2003
Lenders may accelerate the 2003 Notes and give us notice that the 2003 Notes are
immediately  due.  If the  2003  Notes  are  declared  to be due  prior to their
scheduled maturity date, it is unlikely we will be able to repay these notes and
it may  force us to  significantly  reduce  or  cease  operations  or  negotiate
unfavorable  terms for repayment.  In connection  with our 2003 Debt  Agreement,
during the  period of January  through  March 2004  certain of the 2003  Lenders
converted  their Notes into shares of our Common  Stock.  As of March 15,  2004,
$2.5 million of the Notes have been converted into Common Stock.

     In  connection  with the 2003 Debt  Agreement,  we also  issued to the 2003
Lenders  warrants to purchase an  aggregate  of  4,500,000  shares of our Common
Stock. Each Lender received two warrants.  The first warrant is for the purchase
of  one-half  (1/2) of a share of our  Common  Stock for every  $1.00  principal
amount of debt  under the 2003 Debt  Agreement.  The  second  warrant is for the
purchase  of  one-quarter  (1/4) of a share of our Common  Stock for every $1.00
principal  amount of debt under the 2003 Debt  Agreement.  The exercise price of
each  warrant is $1.00 per share and the warrants  will  terminate on August 28,
2008, unless previously exercised.  We can force the exercise of the one-quarter
share warrant under certain  circumstances.  In accordance with the registration
rights related to the 2003 Debt  Agreement,  in October 2003 we  registered,  as
required,  certain shares  underlying the convertible  promissory  notes and the
shares underlying the warrants for certain note holders. In addition, of the 4.5
million warrants issued, in fiscal 2004,  1,425,000 warrants have been exercised
through March 15, 2004, resulting in proceeds to Miravant of $1.4 million.

     In December  2002,  we entered into a $12.0  million  Convertible  Debt and
Warrant  Agreement,  or the  2002  Debt  Agreement,  with  a  group  of  private
accredited investors,  or the 2002 Lenders. The 2002 Debt Agreement allows us to
borrow up to $1.0 million per month,  with any unused  monthly  borrowings to be
carried forward. The maximum aggregate loan amount under the 2002 Debt Agreement
is $12.0 million with the last available  borrowing in June 2004, as amended. As
of March 15, 2004 we have borrowed $6.3 million and therefore  have $5.7 million
currently  available to us.  Additionally,  in connection with each borrowing we
have issued warrants to purchase a total of 1,575,000 shares of our Common Stock
at an exercise price of $1.00 per share.  We also issued an origination  warrant
for the purchase of 250,000 shares at an exercise price of $0.50 per share.  All
of these  warrants  issued  expire  on  december  31,  2008.  The 2002  Lenders'
obligation  to fund each  borrowing  request is subject to  material  conditions
described in the 2002 Debt Agreement,  as amended. In addition, the 2002 Lenders
may terminate its obligations under the 2002 Debt Agreement if: (i) Miravant has
not  submitted an NDA by March 31, 2004,  (ii) such filing has been  rejected by
the FDA, or (iii) Miravant,  in the reasonable  judgment of the 2002 Lenders, is
not meeting its business objectives.

     In connection with the execution of the 2003 Debt Agreement, certain of the
2002  Lenders,  to whom we issued  notes to under our 2002  Debt  Agreement,  as
described above,  agreed to subordinate  their debt security position to that of
the 2003 Lenders. In exchange for the subordinated  security position,  the 2002
Lenders  received  additional  warrants to purchase an  aggregate  of  1,575,000
shares of our Common  Stock at an exercise  price of $1.00 per share,  and these
additional  warrants  will  terminate  on August  28,  2008,  unless  previously
exercised.  Additionally,  under the  anti-dilution  provision  of the 2002 Debt
Agreement,  the conversion price of the five notes issued thereunder to the 2002
Lenders  during the period  February 2003 through July 2003 was reduced to $1.00
and the exercise price of the related warrants issued to the 2002 Lenders during
the same period was reduced to $1.00 per share. Additionally, not all the shares
underlying notes and warrants related to the 2002 Debt Agreement,  the 2003 Debt
Agreement, and the February 2004 Debt Agreement are registered.

     In connection with the 2003 Debt  Agreement,  we entered into a Termination
and Release Agreement with Pharmacia, that provides, among other things, for the
retirement  of the $10.6 million debt owed by us to Pharmacia and the release of
the related  security  collateral,  in exchange for a $1.0 million cash payment,
390,000  shares of our Common Stock and the  adjustment of the exercise price of
Pharmacia's  outstanding  warrants  to  purchase  shares  of our  Common  Stock.
Additionally,  we extended the  expiration  date of the warrants to December 31,
2005.  As a result,  as of the date of this  report,  Pharmacia  has warrants to
purchase an aggregate of 360,000 shares of our Common Stock at an exercise price
of $1.00 per share. The $1.0 million cash payment to Pharmacia was made from the
proceeds from the 2003 Debt Agreement.

     In December 2003, we sold our investment in Xillix. We owned  approximately
2.7 million  shares of Xillix at an adjusted  basis of $393,000 and received net
proceeds of approximately $1.6 million, resulting in a net gain of $1.2 million.

Statement of Cash Flows

     For 2003,  2002 and 2001, we required cash for operations of $10.8 million,
$8.6 million and $15.2 million,  respectively. The increase in net cash required
for operations from 2003 as compared to 2002 is directly  related to collections
of accounts  receivable  in 2002 from the receipt of amounts due from  Pharmacia
under an Asset Purchase  Agreement  entered into in fiscal 2001. The decrease in
net cash  required  for  operations  from 2002 to 2001 was due to a decrease  in
inventories and the collection of accounts  receivables from the payment of $4.1
million  from  the  sale of bulk  API  inventory  in 2001 as well as an  overall
increase in operating  costs in 2001.  The decrease was offset by an increase in
accounts payable and accrued wages. The cash required for operations in 2001 was
related  to the  increase  in  inventories  and  accounts  receivable  from  the
production and sale of our bulk API inventory to Pharmacia and the timing on the
collection  of the  payments  from an escrow  account  for these sales which was
deferred into 2002.

     For 2003, 2002 and 2001, net cash provided by investing activities was $1.3
million, $4.6 million and $14.8 million,  respectively. The net cash provided by
investing activities in 2003 related to the receipt of cash from the sale of our
investment in Xillix and disposal of property, plant and equipment offset by the
purchases of patents and property, plant and equipment. The net cash provided by
investing  activities  in 2002 was related to the proceeds from the net sales of
marketable  securities offset by the purchases of patents. The net cash provided
by investing  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.

     For 2003, 2002 and 2001, net cash provided by financing activities was $9.8
million,  $3.3 million and  $15,000,  respectively.  Cash  provided by financing
activities  in 2003 relates to the net  proceeds  received in 2003 from the debt
financings which was offset by the $1.0 million payment to Pharmacia  related to
the retirement of their debt and an earlier payment of $170,000 for interest due
to  Pharmacia.  Cash  provided by  financing  activities  in 2002 related to the
funding  received  from the August 2002 sale of Common Stock of $2.4 million and
the first $1.0 million  drawdown  received under our 2002 Debt  Agreement.  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
one of our executive officers.

Contractual Obligations

  <TABLE>
<CAPTION>
<S>     <C>                      <C>                                                    <C>             <C>
           Contractual
           Obligations                                       Payments Due by Period
      ------------------------------------------------------------------------------------------------------------
                                Less than 1        2004-2007         2004-2009
                                    year          1 - 3 years       4 - 5 years    After 5 years        Total
                               ---------------  -----------------  --------------  ---------------  --------------

      Debt(1)................   $         --      $ 6,000,000     $  6,300,000      $         --     $  12,300,000
      Building and Equipment
        Leases(2).....               58,000           187,000            3,000                --           248,000
                               ---------------  -----------------  --------------  ---------------  --------------
      Total Contractual
      Cash Obligations.......   $    58,000       $ 6,187,000     $  6,003,000      $         --     $  12,548,000
                               ===============  =================  ==============  ===============  ==============
</TABLE>

     (1)  $6.0 million of this debt  represents  the  borrowings  under the 2003
          Agreement, which has a due date of August 28, 2006 and $6.3 million of
          this debt  represents  the borrowings  under the 2002 Debt  Agreement,
          which has a due date of December 31, 2008.

     (2)  The amounts  recorded  for building and  equipment  leases  consist of
          leases on three  buildings and various  other office  equipment and is
          net of sublease revenue of $656,000 in 2004 and 2005. The lease of our
          primary facility has gone month-to-month  beginning in September 2003.
          In addition, we are aware that the lessors can give us a 30-day notice
          at any time requiring us to vacate.

     We invested a total of $9.7 million in property,  plant and equipment  from
1996 through  December 31, 2003.  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  establish  additional  collaborations  and/or  license
          SnET2 or our other new products;
     *    Our ability to continue  our efforts to reduce our use of cash,  while
          continuing to advance programs;
     *    Our ability to continue to borrow under the 2002 Debt Agreement;
     *    Our ability to meet our obligations under the 2002 Debt Agreement, the
          2003 Debt  Agreement and the February  2004 Debt  Agreement and not be
          required to repay the debt early;
     *    The viability of SnET2 for future use;
     *    Our ability to obtain  regulatory  acceptance and subsequent  approval
          for our NDA when, and if, submitted;
     *    The cost of commencing pre-commercialization activities;
     *    Our ability to raise equity or debt  financing or use stock awards for
          employee and consultant compensation;
     *    Our ability to regain our listing status on Nasdaq;
     *    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 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.

     As of December 31, 2003, our  consolidated  financial  statements have been
prepared  assuming we will continue as a going  concern.  We are  continuing our
scaled back efforts in research and development and the preclinical  studies and
clinical trials of our products. These efforts, along with the cost of preparing
a submission of an NDA for SnET2,  obtaining requisite regulatory approval,  and
commencing pre-commercialization and manufacturing activities prior to receiving
regulatory  approval,  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
our product in order to achieve a level of revenues adequate to support our cost
structure.

     We believe we can raise additional  funding to support  operations  through
corporate  collaborations  or  partnerships,  through  licensing of SnET2 or new
products and through public or private equity or debt  financings  prior to June
30, 2004. If additional funding is not available when required,  we believe that
as long as we receive the remaining $5.7 million  available to us under the 2002
Debt Agreement and our debt does not go into default and become immediately due,
then we have the  ability to  conserve  cash  required  for  operations  through
December  31,  2004 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  facilities  and overhead  expenditures.
However,  there can be no  assurance  that we will  receive the  remaining  $5.7
million under the 2002 Debt Agreement,  if certain  requirements  are not met or
are not  satisfactory to the 2002 Lenders and there is no guarantee that we will
be  successful  in  obtaining  additional  financing or that  financing  will be
available on favorable terms.

     Our ability to raise funds has become more  difficult as our stock has been
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:

     *    Our ability to successfully submit an NDA for SnET2 in 2004;
     *    The outcome from the FDA on the potential NDA filing;
     *    The potential  future use of SnET2 for  ophthalmology or other disease
          indications;
     *    Our ability to  successfully  raise  funds in the near future  through
          public  or   private   equity  or  debt   financings,   or   establish
          collaborative arrangements or raise funds from other sources;
     *    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  future  development  and  results  of our  Phase  II  dermatology
          clinical trial and our ongoing cardiovascular and oncology preclinical
          studies;
     *    The amount of funds received from outstanding warrant and stock option
          exercises, if any; and
     *    Our  ability to  maintain,  renegotiate,  or  terminate  our  existing
          collaborative arrangements.

     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.  Our independent  auditors,  Ernst & Young LLP, have indicated in
their  report   accompanying  our  December  31,  2003  consolidated   financial
statements that, based on generally accepted auditing  standards,  our viability
as a going concern is in question.

Related Party Transactions

     In April 1998, we entered into a $2.0 million  revolving  credit  agreement
with our affiliate, Ramus. Between 1998 and 1999, Ramus borrowed the entire $2.0
million  available  under the credit  agreement.  As of December 31,  2003,  the
balance of the loan, including principal and accrued interest, was $2.7 million.
The loan,  which was used to fund Ramus' clinical trials and operating costs. In
March 2000, the loan term was extended  indefinitely.  It was determined that it
was probable that we would be unable to collect the amounts due from Ramus under
the contractual terms of the loan agreement. Therefore, we established a reserve
for the entire  outstanding  balance of the loan receivable at December 31, 2003
and 2002 and no interest  income is being  accrued  under the loan. We have held
discussions with Ramus to reorganize their  outstanding debt or to convert their
entire debt, including accrued and unpaid interest, to Ramus equity.

     In July 1996, a partner in a law firm used by us for outside  legal counsel
was elected by the Board of Directors  to serve as  Secretary  of  Miravant.  In
connection with general legal services  provided by the law firm, we were billed
$150,000,  $47,000 and $55,000 for the years ended  December 31, 2003,  2002 and
2001,  respectively.  From 1996 through December 31, 2003, this individual's law
firm has received warrants to purchase a total of 156,250 shares of Common Stock
with an average  exercise  price of $9.56 for his  services  as acting  in-house
legal counsel and Secretary of Miravant.

     In August 2003,  we received a short-term  bridge loan of $250,000 from one
of our non-employee board members, who is currently no longer a board member. In
connection  with the loan, we issued  warrants to purchase  25,000 shares of our
Common  Stock.  This loan was  immediately  paid off in September  2003 with the
proceeds from the 2003 Debt Agreement.


                                  RISK FACTORS

FACTORS AFFECTING FUTURE OPERATING RESULTS

     The  following  section  of  this  report  describes   material  risks  and
uncertainties relating to Miravant and our 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

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

     We have incurred  significant losses since our inception in 1989 and, as of
December 31, 2003, had an accumulated  deficit of approximately  $197.0 million.
In each of the last three years,  we have increased our  borrowings  through the
sale of various debt instruments in order to sustain our business operations. In
December 2002, we entered into a $12.0 million 2002 Convertible Debt and Warrant
Agreement, or the 2002 Debt Agreement, under which we have borrowed $6.3 million
at March 14,  2004.  In August 2003,  we entered  into a $6.0 million  Unsecured
Convertible  Debenture  and  Warrant  Purchase  Agreement,   or  the  2003  Debt
Agreement, under which we have borrowed the full $6.0 million. Most recently, in
February 2004, we entered into a $2.0 million  Unsecured  Convertible  Debenture
Agreement, or the February 2004 Debt Agreement, under which we have borrowed the
full $2.0  million.  We expect to continue to incur  significant,  and  possibly
increasing,  operating losses over the next few years, and we believe we will be
required to obtain  substantial  additional debt or equity financing to fund our
operations during this time as we seek to achieve a level of revenues sufficient
to support our anticipated  cost structure.  Our independent  auditors,  Ernst &
Young LLP,  have  indicated in their report  accompanying  our December 31, 2003
consolidated  financial  statements that, based on generally  accepted  auditing
standards, our viability as a going concern is in question.

     Although  we  continue  to  incur  costs  for  research  and   development,
preclinical studies,  clinical trials and general corporate activities,  we have
continued to adhere to our cost  restructuring  program we  implemented  in 2002
which has helped  reduce our overall  costs.  Our  ability to achieve  sustained
profitability  depends  upon our  ability,  alone  or with  others,  to  receive
regulatory  approval on our NDA  submission  for SnET2 in AMD,  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.  Our ability to achieve
significant  levels of revenues  within the next few years is  dependent  on the
timing of  receiving  regulatory  approval,  if at all, for SnET2 in AMD and our
ability to establish a  collaboration,  with a corporate  partner or other sales
organization, to commercialize SnET2 once regulatory approval is received, if at
all.  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.  We do not expect any significant  revenues until we have  established a
collaborative  partnering  agreement,  receive regulatory  approval and commence
commercial sales.

WE WILL BE UNABLE TO  BORROW  THE  REMAINING  $5.7  MILLION  UNDER THE 2002 DEBT
AGREEMENT  UNLESS WE MEET CERTAIN  OBLIGATIONS TO THE  SATISFACTION  OF THE 2002
LENDERS.  IF THESE  OBLIGATIONS  ARE NOT MET OR IF WE ARE  UNABLE TO EXTEND  THE
BORROWING  DATE,  WE WILL BE UNABLE TO BORROW  THE FUNDS AS  PLANNED,  WHICH MAY
FORCE US TO SIGNIFICANTLY REDUCE OR CEASE OPERATIONS.

     In  December  2002,  we entered  into a 2002 Debt  Agreement  with the 2002
Lenders.  The 2002 Debt  Agreement  allows us to borrow up to $1.0  million  per
month up to a  maximum  aggregate  of $12.0  million,  with any  unused  monthly
borrowings  to be carried  forward.  We have  borrowed  $6.3 million  under this
agreement  through March 15, 2004. The last available  borrowing  under the 2002
Debt  Agreement  has been  extended  to June 30,  2004.  The 2002  Lenders'  may
terminate their obligations under the 2002 Debt Agreement if:

     *    We have not submitted an NDA by March 31, 2004, as amended,
     *    Such filing has been rejected by the Food and Drug Administration,  or
          FDA; or
     *    We, in the  reasonable  judgment of the 2002 Lenders,  are not meeting
          our business objectives.

     Accordingly, we cannot guarantee we will receive the remaining $5.7 million
under  this  agreement,  and if we are  unable  to do so we  may  be  forced  to
significantly  reduce or cease operations if we have no other means of financing
at that time.

EVEN IF WE ARE ABLE TO BORROW THE  REMAINING  $5.7  MILLION  UNDER THE 2002 DEBT
AGREEMENT, WE WILL NEED ADDITIONAL FUNDS IN 2004 TO CONTINUE OUR OPERATIONS, AND
IF WE FAIL TO OBTAIN  ADDITIONAL  FUNDING,  WE WOULD BE FORCED TO  SIGNIFICANTLY
SCALE BACK OR CEASE OPERATIONS.

     We are continuing our scaled back efforts in research and  development  and
the  preclinical  studies and clinical  trials of our products.  These  efforts,
along  with  the  cost  of  preparing  the NDA for  SnET2,  obtaining  requisite
regulatory  approval,  and commencing  pre-commercialization  and  manufacturing
activities prior to receiving regulatory approval, has required and 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 our product in order to achieve a
level of revenues adequate to support our cost structure.

     The timing and magnitude of our future capital  requirements will depend on
many factors, including:

     *    Our ability to  establish  additional  collaborations  and/or  license
          SnET2 or our other new products;
     *    Our ability to continue  our efforts to reduce our use of cash,  while
          continuing to advance programs;
     *    Our ability to continue to borrow under the 2002 Debt Agreement;
     *    Our ability to meet our obligations under the 2002 Debt Agreement, the
          2003 Debt  Agreement and the February  2004 Debt  Agreement and not be
          required to repay the debt early;
     *    The viability of SnET2 for future use;
     *    Our ability to obtain  regulatory  acceptance and subsequent  approval
          for our NDA when, and if, submitted;
     *    The cost of commencing pre-commercialization activities;
     *    Our ability to raise equity or debt  financing or use stock awards for
          employee and consultant compensation;
     *    Our ability to regain our listing status on Nasdaq;
     *    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 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 believe that as long as the remaining $5.7 million remains  available to
us  under  the  2002  Debt  Agreement,  we  will  have  sufficient  cash to fund
operations  through  December 31, 2004.  If the $5.7 million is not available or
only a portion thereof is available,  we believe we will be required to delay or
reduce in scope one or more of our  research  and  development  programs  and to
adjust, defer or reduce salaries of employees and to reduce operating facilities
and overhead expenditures.

     We are actively  seeking  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.  Our
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 or convertible debt financing this 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.

WE ARE HIGHLY  LEVERAGED,  OUR RECENT DEBT  AGREEMENTS  HAVE FURTHER DILUTED OUR
EXISTING  STOCKHOLDERS AND OUR DEBT SERVICE  REQUIREMENTS  MAKE US VULNERABLE TO
ECONOMIC DOWNTURN AND IMPOSE RESTRICTIONS ON OUR OPERATIONS.

     The face amount of our debt outstanding was approximately  $11.8 million as
of March 15, 2004. There is no certainty that our cash balance and our financing
arrangements,  will be sufficient to finance our operating requirements, and our
indebtedness  may  restrict  our ability to obtain  additional  financing in the
future.  The  issuance  of  additional  warrants  to  purchase  Common  Stock in
connection with the 2002 and 2003 Debt Agreements and related  negotiations with
existing  debtors  has  resulted  in the  issuance  of  significant  amounts  of
securities  which has a dilutive effect on our existing  stockholders.  Also, we
are highly leveraged, which may place us at a competitive disadvantage and makes
us more  susceptible to downturns in our business in the event our cash balances
are not  sufficient  to cover our debt service  requirements.  In addition,  the
February  2004  Debt  Agreement,  the 2003  Debt  Agreement  and the  2002  Debt
Agreement contain certain standard  covenants that may impose some operating and
financial restrictions on us.

     These  covenants  may affect our  ability  to conduct  operations  to raise
additional  financing or to engage in other business  activities  that may be in
our interest.  In addition, if we cannot achieve the financial results necessary
to maintain compliance with these covenants, we could be declared in default.

PREPARING AND SUBMITTING AN NDA FOR FILING REQUIRES  SIGNIFICANT  EXPENSES,  THE
APPROPRIATE  PERSONNEL AND ACCESS TO CONSULTANTS  AND OTHER RESOURCES AS NEEDED.
WE HAVE  REQUIRED  SIGNIFICANT  FUNDING  AND  PERSONNEL  TO GET US THROUGH  THIS
PROCESS AND WE PLAN TO COMPLETE OUR NDA  SUBMISSION  FOR SNET2 FOR THE TREATMENT
OF AMD ON OR ABOUT MARCH 31, 2004. IF WE ENCOUNTER ANY  UNANTICIPATED  PROBLEMS,
OUR PLANS TO SUBMIT AN NDA WITH THE FDA MAY BE DELAYED OR THE SUBMISSION MAY NOT
OCCUR AT ALL.

     In January 2002,  Pharmacia,  after a top-line  review 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  submitting an NDA
with the FDA. In March 2002, we regained the license  rights to SnET2 as well as
the related  data and assets from the AMD  clinical  trials from  Pharmacia.  We
completed our own detailed analysis of the clinical data during 2002,  including
an analysis of the subset groups.  In January 2003,  based on the results of our
analysis  and  certain  discussions  with  regulatory  and FDA  consultants,  we
announced  our plans to move  forward with an NDA  submission  for SnET2 for the
treatment  of AMD.  We  expect  to submit  the NDA on or about  March 31,  2004,
seeking marketing approval based on clinical results in the "per protocol" study
population.  The per protocol population consists of those patients who received
the exposure to the SnET2 treatment regimen  pre-specified in the clinical study
protocol,  comprising  a  smaller  number  of  patients  than  the  total  study
population.

ONCE OUR NDA FOR SNET2 FOR THE  TREATMENT OF AMD IS  SUBMITTED  AND ACCEPTED FOR
FILING BY THE FDA, IF ACCEPTED AT ALL,  THERE CAN BE NO  ASSURANCE  THAT THE FDA
WILL APPROVE SNET2 OR THAT ISSUES  UNDERLYING ANY CONTINGENT  APPROVAL  RECEIVED
WILL BE ADEQUATELY AND TIMELY RESOLVED BY US OR THAT SUCH APPROVAL WILL MEET OUR
MARKETING AND REVENUE EXPECTATIONS.  ADDITIONALLY,  WE CANNOT BE ASSURED THAT WE
WILL BE ABLE TO  MAINTAIN  OUR FAST TRACK  DESIGNATION  WITH THE FDA  BECAUSE OF
SUBSEQUENT FDA APPROVALS RECEIVED FOR THE TREATMENT OF AMD TO THIRD PARTIES.

     If we are able to submit our NDA for SnET2 for the  treatment of AMD to the
FDA for filing,  we cannot guarantee that the FDA will accept our submission for
filing.  In the event that the FDA does not accept our NDA for fling,  we may be
required to conduct additional  clinical trials before  resubmitting our NDA and
before the FDA may accept our NDA for substantive review. If this occurs,  there
is likely  to be a  substantial  delay in the  approval  process  and it is less
likely that SnET2 will be approved.  This delay would have an immediate material
adverse effect on our business and would likely further depress the price of our
stock.

     Even  if the  FDA  accepts  our  submission  for  filing,  the  FDA may not
ultimately  approve  our  NDA  for  SnET2.  This  approval  process  may  take a
significant  amount of time and the FDA's  approval,  if any, may be  contingent
upon  satisfying  additional  requirements.  For  instance,  the FDA may require
follow-up clinical or pre-clinical studies prior to final approval, which may be
costly  and may  cause a  significant  delay  in the  timing  of  receiving  FDA
approval.  If the FDA does approve this NDA, the approved  label claims could be
for a limited  market,  resulting in smaller than expected  markets and revenue.
Additionally,  we received a fast-track  designation on our clinical  program in
1998  primarily  due to the  lack of an  existing  approved  treatment  for AMD.
Subsequently,  there  has been an  approval  by the FDA for the  treatment  of a
specific  portion of the AMD disease,  thus,  there can be no guarantee  that we
will be able to maintain our fast-track designation,  and related benefits, from
the FDA,  which may further delay the timing of a potential  FDA  approval.  Any
delay in  receiving  FDA  approval  further  limits our ability to begin  market
commercialization  and harms our on-going funding requirements and our business.
Additionally,  we might be forced to substantially  scale down our operations or
sell  certain  of our  assets,  and it is likely  the  price of our stock  would
decline precipitously.

EVEN IF WE RECEIVE REGULATORY  APPROVAL OF SNET2 FOR THE TREATMENT OF AMD, SNET2
MAY NOT BE COMMERCIALLY SUCCESSFUL.

     Even if SnET2 receives regulatory approval, patients and physicians may not
readily  accept  it,  which  would  result  in lower  than  projected  sales and
substantial  harm to our business.  Acceptance will be a function of SnET2 being
clinically  useful  and  demonstrating   superior  therapeutic  effect  with  an
acceptable  side-effect  profile,  as compared to  currently  existing or future
treatments.  In addition,  even if SnET2 does achieve market acceptance,  we may
not be able to maintain  that market  acceptance  over time if new  products are
introduced that are more favorably received than SnET2 or render SnET2 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 or
AMD 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 Pharm Inc., or Axcan,  Eyetech  Pharmacueticals
Inc.,  or  Eyetech,  and  Pharmacyclics.  QLT's drug  Visudyne(R)  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) for the treatment of certain  oncology
indications and Levulan(R) (DUSA  Pharmaceuticals)  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. Eyetech is currently completing a Phase III clinical
trial  in AMD  and is  expected  to  submit  an NDA at the  end of  2004  or the
beginning of 2005. We are aware of other drugs and devices under  development by
these  and  other  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.

THE CURRENT TRADING PRICE OF OUR COMMON STOCK, OUR MARKET CAPITALIZATION AND THE
AMOUNT OF OUR STOCKHOLDERS'  EQUITY AND NET TANGIBLE ASSETS, HAS RESULTED IN OUR
SHARES BEING DELISTED FROM TRADING ON NASDAQ. AS A RESULT OF BEING DELISTED FROM
NASDAQ, OUR ABILITY TO RAISE ADDITIONAL CAPITAL MAY BE LIMITED OR IMPAIRED.

     We were  delisted  by Nasdaq on July 11,  2002 and our Common  Stock  began
trading on the Over-The-Counter Bulletin Board(R), or OTCBB, effective as of the
opening of business on July 12, 2002. The OTCBB is a regulated quotation service
that displays  real-time  quotes,  last-sale  prices and volume  information  in
over-the-counter  equity securities.  OTCBB securities are traded by a community
of market  makers that enter quotes and trade  reports.  Our Common Stock trades
under the ticker symbol MRVT and can be viewed at www.otcbb.com.  Our management
continues  to review our  ability  to regain our  listing  status  with  Nasdaq,
however,  we cannot  guarantee we will be able to raise the  additional  capital
needed or to increase the current  trading price of our Common Stock to allow us
to meet the relisting  requirements for the Nasdaq National Market or the Nasdaq
Small Cap Market on a timely  basis,  if at all, and there is no guarantee  that
Nasdaq  would  approve  our  relisting  request  even if we met all the  listing
requirements.  Our  ability to obtain  additional  funding,  beyond our  current
funding  agreements,  by December  31,  2004,  is impeded by a number of factors
including that fact that our Common Stock is currently being traded on the OTCBB
and by current economic and political factors,  all of which combine to make the
present market for raising capital relatively  difficult and may prevent us from
obtaining  additional  financing as required in the near term on favorable terms
or at all.

OUR  FINANCIAL  CONDITION AND COST  REDUCTION  EFFORTS COULD RESULT IN DECREASED
EMPLOYEE  MORALE AND LOSS OF EMPLOYEES AND  CONSULTANTS  WHO ARE 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 our ability to
raise funds is  questionable,  causing  our  business  outlook to be  uncertain.
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 the volatility of our stock 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,
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,  which was  terminated in March
2002. To further develop SnET2 for AMD or other indications 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;
     *    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; 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,  and non of our products,  including  SnET2,  have been approved for any
purpose by the FDA.  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 clinical trials.

     In collaboration  with Pharmacia,  in December 2001, we completed two Phase
III  ophthalmology  clinical  trials  for the  treatment  of AMD  with  our lead
PhotoPoint drug candidate,  SnET2. In January 2002, Pharmacia,  after a top-line
review 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  submitting an NDA with the FDA. In March 2002, we regained the rights to
SnET2 as well as the related data and assets from the AMD  clinical  trials from
Pharmacia.  We completed  our own detailed  analysis of the clinical data during
2002,  including an analysis of the subset groups. In January 2003, based on the
results of our analysis and discussions with regulatory and FDA consultants,  we
announced our plans to move forward with our first NDA  submission for SnET2 for
the  treatment  of AMD. We are  currently  in the process of  preparing  the NDA
submission  for SnET2 in AMD and expect to have it completed and submitted on or
about March 31,  2004.  We expect to submit the NDA on or about March 31,  2004,
seeking marketing approval based on clinical results in the "per protocol" study
population.  The per protocol population consists of those patients who received
the exposure to the SnET2 treatment regimen  pre-specified in the clinical study
protocol,  comprising  a  smaller  number  of  patients  than  the  total  study
population.  In addition,  we have  terminated  our license  collaboration  with
Pharmacia,  and are currently seeking a new collaborative partner for PhotoPoint
PDT in  ophthalmology.  If we are unable to submit our NDA for SnET2 as a result
of funding or other  constraints or if our submission is not accepted for filing
by the FDA, this could adversely affect our funding and development  efforts for
our other programs and severely harm our business.

     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.

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

     From time to time and in  particular  during  the year ended  December  31,
2003, 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 1, 2002 to March 15, 2004, our Common Stock price,
per Nasdaq and OTCBB closing prices, has ranged from a high of $9.90 to a low of
$0.25.

     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:

     *    Our ability to successfully  submit an NDA filing for SnET2 in AMD and
          for it to be accepted by the FDA;
     *    Our  ability  to  have  the  NDA  filing   approved  by  the  FDA  for
          commercialization;
     *    Our  ability  to  continue  to borrow  under  the 2002 Debt  Agreement
          through June 30, 2004;
     *    Announcements concerning Miravant or our collaborators, competitors or
          industry;
     *    Our  ability  to  successfully  establish  new  collaborations  and/or
          license SnET2 or our other new products;
     *    The results of the FDA review of our  intended NDA  submission,  when,
          and if, it is submitted;
     *    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 regain our listing status on Nasdaq;
     *    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;
     *    Litigation,  such as from stockholder lawsuits or patent infringement;
          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 decline  further,  we may be unable to obtain  additional
capital that we may need through public or private financing  activities and our
stock may not be relisted on Nasdaq  further  exacerbating  our ability to raise
funds and  limiting  our  stockholders'  ability to sell their  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 ASSIST IN  PREPARATION  OF THE NDA AND TO  CONDUCT
CLINICAL  TRIALS ON OUR PRODUCTS,  AND IF THESE  RESOURCES  FAIL, OUR ABILITY TO
COMPLETE THE NDA REVIEW PROCESS OR SUCCESSFULLY COMPLETE CLINICAL TRIALS WILL BE
ADVERSELY AFFECTED AND OUR BUSINESS WILL SUFFER.

     To date, we have limited experience in conducting  clinical trials. We have
relied on Parexel International, a large clinical research organization, or CRO,
as well as numerous  other  consultants,  to assist in preparation of our NDA we
plan to submit with the FDA on or about March 31, 2004. Additionally,  we relied
on  Pharmacia,  our former  corporate  partner,  and  Inveresk,  Inc.,  formerly
ClinTrials Research,  Inc., a CRO, to complete our Phase III AMD clinical trials
and we currently  rely on a Parexel  International  for our Phase II dermatology
clinical  trials.  We may  need to  rely  on  Parexel  International  and  other
consultants  and third  parties to complete the review of the NDA by the FDA. 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 completing the review process of the NDA,
and conducting and managing  clinical  trials will have a negative impact on our
ability to develop marketable  products and would harm our business.  Other CROs
may be available in the event that our current  CROs 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,  if any, 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.

     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  CAPABILITY  AND EXPERIENCE AND THUS RELY HEAVILY
UPON  THIRD  PARTIES.  IF WE  ARE  UNABLE  TO  MAINTAIN  AND  DEVELOP  OUR  PAST
MANUFACTURING  CAPABILITY,  OR IF WE ARE  UNABLE TO FIND  SUITABLE  THIRD  PARTY
MANUFACTURERS, OUR OPERATING RESULTS COULD SUFFER AND WE MAY ENCOUNTER DELAYS IN
CONNECTION WITH OUR PLANNED NDA SUBMISSION AND APPROVAL.

     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 clinical  manufacturing  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 were licensed by the State of California to manufacture bulk API
at one of our Santa Barbara,  California facilities for clinical trial and other
use.  This  particular  manufacturing  facility  was closed in 2002 and has been
reconstructed in our existing operating facility.  The manufacturing facility at
the new location is operational,  pending required  regulatory  approvals by the
State of California and federal regulatory agencies,  and has recently completed
production of compatibility and stability batches.

     In the original manufacturing  facility, we have manufactured bulk API, the
process up to the final  formulation  and  packaging  step for  SnET2,  which we
currently have in inventory.  We believe the quantities we have in inventory are
enough to support an initial commercial launch of SnET2,  though there can be no
assurance that SnET2 and our new manufacturing  facility will be approved by the
FDA or that if such  approval is  received,  the  existing  commercial  bulk API
inventory  will be  approved  for  commercial  use.  We also have the ability to
manufacture  light  producing  devices and light delivery  devices,  and conduct
other production and testing activities to support current clinical programs, at
this location.  However, we have limited capabilities,  personnel and experience
in the manufacture of finished drug product,  and, at commercial  levels,  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.  We are  currently the sole  manufacturer  of bulk API for
SnET2, 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. All currently have commercial quantity capabilities. At
this time, we have no readily  available  back-up  manufacturers  to produce the
bulk API for SnET2,  or 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 LIMITED  MARKETING  CAPABILITY AND EXPERIENCE AND THUS RELY HEAVILY UPON
THIRD PARTIES IN THIS REGARD.

     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  cardiovascular  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 entail 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.

OUR  PREFERRED  STOCKHOLDER  RIGHTS PLAN MAKES  EFFECTING A CHANGE OF CONTROL OF
MIRAVANT MORE  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.  We also waived the  provisions of the
Rights Plan with respect to the securities  issued to the 2003 Lenders  pursuant
to the 2003 Debt  Agreement,  including the shares of Common Stock issuable upon
conversion or exercise of such  securities and any other  securities that may in
the future be issued to the 2003 Lenders pursuant to their participation  rights
under the 2003 Debt Agreement with respect to future financings by Miravant.  In
the event that we are involved in a merger or other similar transaction where we
are 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  of  stockholders  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  in the  event  of  war,
terrorism, 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.

                          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  European  Medical  Device  Directive
          effective  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 other 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.  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  involve  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  we are not subject to significant
interest rate risk related to these investments.

     The  convertible  notes issued under the 2002 and 2003 Debt Agreements have
fixed interest rates of 9.4% and 8%, respectively, which is payable quarterly in
cash or in Common Stock.  The principal  amounts of the 2002 and 2003 Notes will
be due December 31, 2008 and August 28, 2006, respectively,  and these notes can
be converted to Common Stock at the option of the holder.  The Company  believes
it is not subject to  significant  interest  rate risk due to the fixed rates on
its debt.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     All information  required by this item is included on pages 58 - 81 in Item
15. 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, 2003 and 2002,  and the related  consolidated
statements of operations, stockholders' equity (deficit) and cash flows for each
of the three  years in the period  ended  December  31,  2003.  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, 2003 and 2002 and the  consolidated  results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2003, 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 a working capital deficit,  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


Woodland Hills, California
March 16, 2004


<PAGE>











                                              CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>     <C>                                                                             <C>             <C>


                                                                                              December 31,
                                                                                        2003                  2002
                                                                                 ------------------   -------------------
                                    Assets

Current assets:
   Cash and cash equivalents...............................................      $      1,030,000     $         723,000
   Prepaid expenses and other current assets...............................               298,000               551,000
                                                                                 ------------------   -------------------
Total current assets.......................................................             1,328,000             1,274,000

Property, plant and equipment:
   Vehicles................................................................                28,000                28,000
   Furniture and fixtures..................................................             1,393,000             1,389,000
   Equipment...............................................................             5,200,000             5,531,000
   Leasehold improvements..................................................             2,720,000             3,495,000
                                                                                 ------------------   -------------------
                                                                                        9,341,000            10,443,000
   Accumulated depreciation................................................            (9,125,000)           (9,837,000)
                                                                                 ------------------   -------------------
                                                                                          216,000               606,000

Investments in affiliates..................................................                    --               393,000
Patents, net...............................................................               707,000               978,000
Other assets...............................................................               154,000               139,000
                                                                                 ------------------   -------------------
Total assets...............................................................      $      2,405,000      $      3,390,000
                                                                                 ==================   ===================

               Liabilities and stockholders' equity (deficit)

Current liabilities:

   Accounts payable........................................................      $      1,456,000      $      1,361,000
   Accrued payroll and expenses............................................               536,000               628,000
   Short-term debt.........................................................                    --             5,238,000
                                                                                 ------------------   -------------------
Total current liabilities..................................................             1,992,000             7,227,000

Long-term liabilities:
   Convertible debt:

     Face value of convertible debt........................................            12,916,000             1,003,000
     Deferred financing costs and beneficial conversion value..............            (5,476,000)             (379,000)
                                                                                 ------------------   -------------------
   Net convertible debt....................................................             7,440,000               624,000
   Long-term debt..........................................................                    --             5,555,000
   Sublease security deposits..............................................                    --                94,000
                                                                                 ------------------   -------------------
Total long-term liabilities................................................             7,440,000             6,273,000

Stockholders' equity (deficit):

   Common stock, 50,000,000 shares authorized; 25,564,904 and 24,225,089 shares
     issued and outstanding at December 31, 2003 and
     2002, respectively....................................................           190,586,000           180,255,000
   Notes receivable from officers..........................................              (603,000)             (570,000)
   Deferred compensation...................................................               (16,000)             (266,000)
   Accumulated deficit.....................................................          (196,994,000)         (189,529,000)
                                                                                 ------------------   -------------------
Total stockholders' equity (deficit).......................................            (7,027,000)          (10,110,000)
                                                                                 ------------------   -------------------
Total liabilities and stockholders' equity (deficit).......................      $      2,405,000      $      3,390,000
                                                                                 ==================   ===================
See accompanying notes.

</TABLE>

<PAGE>

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


                                         CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                             Year ended December 31,
                                                                   2003                 2002                2001
                                                            -------------------  -------------------  ------------------
Revenues:

   License - contract research and development.......           $          --        $      20,000         $   302,000
   Bulk active pharmaceutical ingredient sales.......                      --              479,000           4,306,000
   Royalties.........................................                      --                   --              75,000
                                                            -------------------  -------------------  ------------------
Total revenues.......................................                      --              499,000           4,683,000

Costs and expenses:

   Cost of goods sold................................                      --              479,000             934,000
   Research and development..........................               7,616,000            9,549,000          13,493,000
   General and administrative........................               4,620,000            5,726,000           5,903,000
                                                            -------------------  -------------------  ------------------
Total costs and expenses.............................              12,236,000           15,754,000          20,330,000

Loss from operations.................................             (12,236,000)         (15,255,000)        (15,647,000)

Interest and other income (expense):

   Interest and other income.........................                  76,000              169,000             798,000
   Interest expense..................................              (5,649,000)            (286,000)         (2,139,000)
   Gain on sale of assets............................                  62,000               10,000             586,000
   Gain on sale of investment in affiliate...........               1,196,000                   --                  --
   Gain on retirement of debt........................               9,086,000                   --                  --
   Non-cash loss in investment in affiliate..........                      --             (598,000)                 --
                                                            -------------------  -------------------  ------------------
Total net interest and other income (expense)........               4,771,000             (705,000)           (755,000)
                                                            -------------------  -------------------  ------------------
Net loss.............................................          $   (7,465,000)     $   (15,960,000)      $ (16,402,000)

                                                            ===================  ===================  ==================
Net loss per share - basic and diluted...............          $        (0.30)     $         (0.78)      $       (0.88)
                                                            ===================  ===================  ==================
Shares used in computing net loss per share..........              24,703,543           20,581,214          18,647,071
                                                            ===================  ===================  ==================

See accompanying notes.
</TABLE>


<PAGE>


            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<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, 2001....  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 and non-cash
   interest on 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)
   Comprehensive loss:
      Net loss...................       --            --              --            --              --     (15,960,000) (15,960,000)
      Net change in accumulated
       other comprehensive loss..       --            --              --            --         356,000              --      356,000
                                                                                                                       -------------
   Total comprehensive loss......                                                                                       (15,604,000)
   Issuance of stock at $0.50 per
    share (net of approximately
    $81,000 of offering costs)...5,000,000     2,419,000              --            --              --              --    2,419,000
   Issuance of stock awards and
    ESOP Employer matching
    contribution.................  349,014        78,000              --            --              --              --       78,000
   Non-cash contributions by
    Pharmacia Corporation:
      Lease payments.............       --        40,000              --            --              --              --       40,000
      Debt restructuring.........       --    15,393,000              --            --              --              --   15,393,000
   Officer notes and non-cash
    interest on officer notes....       --            --        (248,000)           --              --              --     (248,000)
   Reserve for officer notes.....       --            --         500,000            --              --              --      500,000
   Deferred compensation and
    deferred interest related to
    warrants granted.............       --       829,000              --      (534,000)             --              --      295,000
  Amortization of deferred
   compensation..................       --            --              --       815,000              --              --      815,000
                                ------------ --------------- ------------- --------------- -------------  --------------- ----------
Balance at December 31, 2002....24,225,089 $ 180,255,000      $ (570,000)    $(266,000)     $       --   $(189,529,000)$(10,110,000)
  Comprehensive loss:
      Net loss...................       --            --              --            --              --      (7,465,000)  (7,465,000)
                                                                                                                       -------------
   Total comprehensive loss......                                                                                        (7,465,000)
   Issuance of restricted shares,
    stock awards, stock option
    exercises and ESOP matching
    contributions................  949,815        87,000              --            --              --              --       87,000
   Beneficial conversion value...       --     4,982,000              --            --              --              --    4,982,000
   Issuance of stock to Pharmacia
    and related stock and warrant
    valuation....................  390,000       537,000              --            --              --              --      537,000
   Value of warrants and options
    issued to employees..........       --     4,725,000              --       (53,000)              --              --   4,672,000
   Non-cash interest on officer
    notes........................       --            --         (61,000)           --              --              --      (61,000)
   Repayments on officer notes,
    net of reserve for officer
    notes........................       --            --          28,000            --              --              --       28,000
  Amortization of deferred
   compensation..................       --            --              --       303,000              --              --      303,000
                                ------------ --------------- ------------- --------------- -------------  --------------- ----------
Balance at December 31, 2003....25,564,904 $ 190,586,000      $ (603,000)    $ (16,000)     $       --   $(196,994,000)$ (7,027,000)
                                ============ =============== ============= =============== ============= ============== ============

See accompanying notes.

</TABLE>

<PAGE>



                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S>     <C>                                                             <C>             <C>                        <C>


                                                                                   Year ended December 31,
Operating activities:                                                    2003                 2002                 2001
                                                                    ----------------     ----------------     ---------------
    Net loss...............................................       $    (7,465,000)     $   (15,960,000)     $   (16,402,000)
    Adjustments to reconcile net loss to net cash used
       by operating activities:
       Gain on retirement of debt..........................            (9,086,000)                  --                   --
       Depreciation and amortization.......................               543,000              887,000            1,194,000
       Amortization of deferred compensation...............               303,000              815,000              563,000
       Gain on sale of investment in affiliate.............            (1,196,000)                  --                   --
       Non-cash loss in investment in affiliate............                    --              598,000                   --
       Gain on sale of property, plant and equipment.......               (61,000)             (10,000)            (586,000)
       Stock awards and ESOP matching contribution.........                79,000               78,000            2,255,000
       Non-cash interest and amortization of
         deferred financing costs on debt..................             5,521,000              319,000            2,288,000
       Reserve and abandonment for patents.................               363,000               81,000                   --
       Provision for employee and officer loans, net of non-
          cash interest on related loans...................               (70,000)             802,000              (68,000)
       Changes in operating assets and liabilities:
          Accounts receivable .............................                    --            5,030,000           (4,148,000)
          Prepaid expenses, inventories and other assets...               253,000              122,000             (326,000)
        Accounts payable and accrued payroll...............               (12,000)          (1,332,000)             (17,000)
                                                                  ------------------   ------------------  ------------------
    Net cash used in operating activities..................           (10,828,000)         (8,570,0000)         (15,247,000)

Investing activities:

    Purchases of marketable securities.....................                    --          (28,679,000)         (43,684,000)
    Sales of marketable securities.........................                    --           33,333,000           57,930,000
    Proceeds from sale of investment in affiliate..........             1,589,000                   --                   --
    Purchases of property, plant and equipment.............              (120,000)                  --             (287,000)
    Sublease security deposits.............................               (94,000)                  --                   --
    Proceeds from sale of property, plant and equipment....               122,000               71,000              863,000
    Purchases of patents...................................              (186,000)            (154,000)             (67,000)
                                                                  ------------------   ------------------  ------------------
    Net cash provided by investing activities..............             1,311,000            4,571,000           14,755,000

Financing activities:

    Proceeds from issuance of Common Stock, less
       issuance costs......................................                 8,000            2,419,000              315,000
    Proceeds from convertible note arrangements............            11,300,000            1,000,000                   --
    Repayment of long-term debt............................            (1,170,000)                  --                   --
    Payments of deferred financing costs...................              (351,000)                  --                   --
    Repayments (advances) of notes to officers.............                37,000             (155,000)            (300,000)
                                                                  ------------------   ------------------  ------------------
    Net cash provided by financing activities..............             9,824,000            3,264,000               15,000

    Net increase (decrease) in cash and cash equivalents...               307,000             (735,000)            (477,000)

    Cash and cash equivalents at beginning of period.......               723,000            1,458,000            1,935,000
                                                                  ------------------   ------------------  ------------------
    Cash and cash equivalents at end of period.............       $     1,030,000              723,000            1,458,000
                                                                  ==================   ==================  ==================
    State taxes paid.......................................       $         4,000      $         4,000      $        20,000
                                                                  ==================   ==================  ==================
    Interest paid..........................................       $       104,000      $            --      $            --
                                                                  ==================   ==================  ==================
See accompanying notes.

</TABLE>

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.        Summary of Significant Accounting Policies

Description of Business, Basis of Presentation and Going Concern:

     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, 2003,  the
Company had an accumulated  deficit of $197.0 million and expects 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 cost
of  preparing  and  submitting  a New  Drug  Application,  or NDA,  and  related
follow-up  expenses,  the funding of preclinical  studies,  clinical  trials and
regulatory   activities  and  the  costs  of  manufacturing  and  administrative
activities.  The  Company  also  expects  these  operating  losses to  fluctuate
relative to its ability to fund the research and development programs as well as
the operating expenses of the Company.

     The  Company  is  continuing  its  scaled  back  efforts  in  research  and
development  and the  preclinical  studies and clinical  trials of its products.
These  efforts,  along with the cost of  preparing  an NDA for SnET2,  obtaining
requisite regulatory approval, and commencing  pre-commercialization  activities
prior to receiving regulatory approval,  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 the  Company's  product in order to achieve a level of revenues
adequate to support the Company's cost structure.  As discussed  further in Note
12,  in  February  2004,  the  Company  entered  into a $2.0  million  Unsecured
Convertible  Debenture Purchase Agreement,  or the February 2004 Debt Agreement,
with certain accredited investors,  or the February 2004 Lenders, which provided
proceeds of $2.0 million. In August 2003, the Company entered into a Convertible
Debt and Warrant Purchase Agreement, or the 2003 Debt Agreement, with a group of
private accredited investors, or the 2003 Lenders, pursuant to which the Company
issued securities to the Lenders in exchange for gross proceeds of $6.0 million.
In  addition,  in  December  2002,  the  Company  entered  into a $12.0  million
Convertible Debt and Warrant Agreement, or 2002 Debt Agreement,  with a group of
private accredited investors,  or the 2002 Lenders. The 2002 Debt Agreement,  as
amended, provides the Company the ability to borrow up to $1.0 million per month
through June 2004, not to exceed $12.0 million.  The monthly  borrowing  request
can be limited if certain  requirements  are not met or are not  satisfactory to
the 2002 Lenders. As of December 31, 2003, the Company had borrowed $6.3 million
under the 2002 Debt  Agreement.  The Company  believes  it can raise  additional
funding to support operations through corporate  collaborations or partnerships,
licensing  of SnET2 or new  products and  additional  equity or debt  financings
prior to June 30, 2004. If additional  funding is not available  when  required,
the Company's executive management believes that as long as the Company receives
the  remaining  $5.7  million  available  to the  Company  under  the 2002  Debt
Agreement and the Company's debt due date is not  accelerated,  then the Company
has the ability to conserve cash required for  operations  through  December 31,
2004 (unaudited). If the $5.7 million is not available or only a portion thereof
is  available,  the  Company  believes  that  it will  have  cash  required  for
operations  through June 30, 2004 (unaudited) by the delay or reduction in scope
of one or more of our research and development programs and adjusting, deferring
or reducing  salaries of  employees  and by reducing  operating  facilities  and
overhead  expenditures.  There can be no assurance that the Company will receive
the  remaining  $5.7  million  under  the  2002  Debt   Agreement,   if  certain
requirements  are not met or are not  satisfactory to the 2002 Lenders and there
is no guarantee  that the Company  will be  successful  in obtaining  additional
financing or that financing will be available on favorable terms.

     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.

     Certain reclassifications of prior year amounts have been made for purposes
of consistent presentation.

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.

Cash Equivalents:

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

Investments in Affiliates:

     Investments  in  affiliates  owned  more than 20% but not in excess of 50%,
where the Company is 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.  As the Company was the main source of
financing for Ramus,  the Company  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, 2003 and 2002, 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.  In December  2003,  the Company sold its investment in Xillix for
net proceeds of approximately  $1.6 million.  The investment had previously 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:

     Costs  of  acquiring   patents  are   capitalized   and  amortized  on  the
straight-line  basis over the  estimated  useful life of the patents,  generally
seventeen  years.  Costs of patents filed or in the filing  process,  or patents
pending,  are  capitalized  as prepaid  patents and are not amortized  until the
patent is issued. Accumulated amortization was $524,000 and $453,000 at December
31, 2003 and 2002,  respectively,  and reserves recorded for patents amounted to
$767,000 and $566,000 at December 31, 2003 and 2002,  respectively.  The cost of
servicing the Company's  patents are expensed as incurred.  The weighted average
amortization  period for the  Company's  patents is  approximately  11.5  years.
Amortization expense related to patents amounted to $94,000, $76,000 and $72,000
for the  years  ended  December  31,  2003,  2002 and  2001,  respectively.  The
estimated  amortization expense related to patents for the next five years ended
December 31, as of December 31, 2003 is as follows:

                           2004                      $    89,000
                           2005                      $    89,000
                           2006                      $    89,000
                           2007                      $    89,000
                           2008                      $    89,000

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.  The  Company
periodically reviews the carrying value of its patents and provides reserves for
any patents  which are not actively  being  researched  or marketed.  During the
years ended December 31, 2003,  2002 and 2001, the Company  increased the patent
reserve by  $200,000,  $81,000  and zero,  respectively,  which is  included  in
research and development expenses in the consolidated  statements of operations.
No other impairment losses have been recorded 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.

Stock-Based Compensation:

     Statement of Financial Accounting  Standard,  or 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  active  pharmaceutical  ingredient,  or bulk API,  to a
former  collaborative  partner  were  recorded as revenue in the period when the
product was  received  by the former  collaborative  partner at their  facility.
Licensing revenues represent  reimbursements from a former collaborative partner
for out-of-pocket  expenses incurred in preclinical  studies and clinical trials
for the SnET2 PhotoPoint PDT treatment for age related macular degeneration,  or
AMD.  These   licensing   revenues  were  recognized  in  the  period  when  the
reimbursable expenses were 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 facility 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 or low likelihood of alternative future use, are
also included in research and development expenses.

Segment Reporting:

     The Company is engaged  principally  in one 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  (deficit) with the change in
accumulated other comprehensive loss consisting of the following:
<TABLE>
<CAPTION>
<S>                                                                     <C>                     <C>             <C>


                                                                              2003               2002                2001
                                                                         ---------------    --------------     -----------------
         Unrealized   holding   gains   (losses)   arising   from
           available-for-sale securities..........................      $    1,196,000       $  (242,000)       $    (224,000)
         Reclassification adjustment for other-than-temporary
           non-cash (gain) loss in investment.....................         $(1,196,000)          598,000                   --
                                                                         ---------------    --------------     -----------------
         Net (increase) decrease  in accumulated other
           comprehensive loss ....................................      $          --         $  356,000        $    (224,000)
                                                                         ===============    ==============     =================
</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,  warrants and convertible
securities 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 January 2003, the Financial  Accounting Standards Board, or FASB, issued
Financial  Interpretation No. 46, or FIN 46, "Consolidation of Variable Interest
Entities,  an interpretation of APB No. 51", which was amended in December 2003.
FIN 46 as  amended  requires  that if a company  holds a  controlling  financial
interest in a variable  interest entity,  or VIE, the assets and liabilities and
results of the VIE's activities should be consolidated in the entity's financial
statements.  The Company does not expect FIN 46 to have a material impact on its
consolidated results of operations or financial position.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of Both Liabilities and Equity". This
statement establishes standards for how an issuer classifies and measures in its
statement   of   financial   position   certain   financial   instruments   with
characteristics  of both  liabilities and equity.  SFAS No. 150 requires that an
issuer classify a financial  instrument that is within the scope of SFAS No. 150
as a  liability,  or an  asset in some  circumstances,  because  that  financial
instrument  embodies an obligation of the issuer.  SFAS No. 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim periods  beginning after June
15,  2003.  The  adoption of SFAS No. 150 did not have a material  impact on the
Company's results of operations or financial position.

2.        Credit Arrangements and Collaborative Funding

Pharmacia Debt Settlement

     On August 28,  2003,  the Company  entered into a  Termination  and Release
Agreement  with  Pharmacia  AB, a wholly owned  subsidiary  of Pfizer,  Inc., or
Pharmacia,  that provides,  among other things,  for the retirement of the $10.6
million  debt owed by the  Company to  Pharmacia  and the release of the related
security collateral, in exchange for a $1.0 million cash payment, 390,000 shares
of the  Company's  Common  Stock and the  adjustment  of the  exercise  price of
Pharmacia's  outstanding  warrants to purchase  shares of the  Company's  Common
Stock.  Additionally,  the  Company  has  extended  the  expiration  date of the
warrants to December 31, 2005.  As a result,  Pharmacia has warrants to purchase
an  aggregate  of 360,000  shares of the  Company's  Common Stock at an exercise
price of $1.00 per share.  The Company recorded a net gain on retirement of debt
in the  consolidated  statements  of  operations  as part of interest  and other
income/(expense) as follows:

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

                  Outstanding debt as of August 28, 2003..............................   $ 10,623,000
                  Less:    Fair market value of 390,000 shares of Common Stock
                           (Issued at $0.99 per share, or fair market value,
                            on August 28, 2003).......................................       (386,000)
                           Repriced warrant valuation (using a Black-Scholes value
                           of $0.42 per share for the purchase of 360,000 shares at
                           $1.00 per share)...........................................       (151,000)
                           Cash payment to Pharmacia..................................     (1,000,000)
                                                                                          -------------
                                               Net gain on retirement of debt.........    $ 9,086,000
                                                                                         ===============
</TABLE>

Prior Pharmacia Agreements

     In  March  2002,  the  Company's  prior   agreements  with  Pharmacia  were
significantly   modified  or  terminated  by  the  Contract   Modification   and
Termination Agreement.  This agreement modified the credit agreement between the
Company and Pharmacia,  or the 2001 Credit Agreement.  The outstanding debt that
the Company  owed to  Pharmacia of  approximately  $26.8  million was reduced to
$10.0  million plus accrued  interest.  Interest on the debt was recorded at the
prime  rate,  which was 4.75% at March 5, 2002 and 4.25% at December  31,  2002.
Additionally,  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.  This agreement was superceded by the
Termination and Release Agreement entered into in August 2003.

     In accordance  with SFAS No. 15,  "Accounting  by Debtors and Creditors for
Troubled Debt  Restructurings",  the Company permanently reduced 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
then current interest rates,  was estimated to be $10.8 million.  The difference
between the total debt  outstanding  of $26.2  million  (net of the  unamortized
deferred  financing costs of  approximately  $900,000) and the total future cash
payments of the  restructured  debt of $10.8 million was recorded as an increase
to stockholders' equity due to Pharmacia being a greater than 10% stockholder in
the  Company  at the time.  Therefore,  the  Company  recorded  a $15.4  million
increase to stockholders' equity in the first quarter of 2002.

     In connection with the Contract Modification and Termination Agreement with
Pharmacia,  which  provided  for the first  debt  payment to be paid on March 5,
2003,  the Company  negotiated  an  extension on the first  installment  of $5.0
million to August 29, 2003,  as amended.  The Company paid  Pharmacia a total of
$250,000  consisting  of interest due through March 5, 2003 and an extension fee
of $21,000 for the extension of the payment date in the year ended  December 31,
2003.

     The Contract  Modification and Termination  Agreement also provided for the
transfer  of  ownership  of  several  assets  back to the  Company,  which  were
previously  sold to Pharmacia  under the May 2001  Manufacturing  Facility Asset
Purchase  Agreement,  or the Asset  Purchase  Agreement,  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
recorded 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 was no 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, had been expensed as research and development costs in prior years.

     The  Company  has issued an  aggregate  of  360,000  warrants  to  purchase
Miravant Common Stock upon draws on the 2001 Credit  Agreement.  These warrants,
which had been valued at $1.7 million using the  Black-Scholes  valuation model,
had been  recorded as  deferred  financing  costs on the balance  sheet and were
being amortized as interest  expense over the life of the credit  agreement.  As
noted above,  the deferred  financing  costs were  eliminated  in the  permanent
reduction of the debt owned to Pharmacia  under the  accounting for the Contract
Modification and Termination  Agreement.  The Company amortized $374,000 related
to these deferred  financing  costs through  interest  expense in the year ended
December 31, 2001.

     Under the Asset  Purchase  Agreement  entered  into in May 2001,  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,   which,  through  the  Contract   Modification  and
Termination Agreement,  was released to the Company in full in January 2002. The
equipment  escrow  account,  containing  a principal  balance of  $863,000,  was
released in March 2002.

2003 Convertible Debt Agreement

     In August 2003,  the Company  entered into a  Convertible  Debt and Warrant
Purchase  Agreement,  or the 2003 Debt Agreement,  pursuant to which the Company
issued securities to the investors,  or the 2003 Lenders,  in exchange for gross
proceeds of $6.0 million.  Under the 2003 Debt  Agreement,  at the option of the
2003  Lenders,  the debt can be converted at $1.00 per share into the  Company's
Common Stock. The Company issued separate  convertible  promissory notes,  which
are  referred  to as the 2003  Notes,  to each  holder  and the 2003  Notes earn
interest at 8% per annum and are due August 28, 2006,  unless converted  earlier
or paid early under the prepayment or default  provisions.  The interest on each
2003 Note is due quarterly  beginning October 1, 2003 and can be paid in cash or
in-kind at the Company's option. Under certain  circumstances each 2003 Note can
be prepaid by the Company prior to the maturity date or prior to conversion. The
2003 Notes also have certain default  provisions  which can cause the 2003 Notes
to become  accelerated and due immediately upon notice by the Investors.  One of
these provisions requires that our NDA for SnET2 is submitted by March 31, 2004,
as amended.  From the proceeds of the 2003 Debt  Agreement,  the Company  repaid
$250,000 in a short-term  bridge loan and $1.0  million to retire the  Pharmacia
debt, as described above. In addition,  the Company made its first two quarterly
interest payments on October 1, 2003 in cash in the amount of $44,000 and in the
amount of $122,000 on January 1, 2004 in the form of shares of Common Stock.

     In  connection  with the 2003 Notes,  the  Company  also issued to the 2003
Lenders  warrants to purchase an aggregate of 4,500,000  shares of the Company's
Common Stock.  Each holder  received two warrants.  The first warrant is for the
purchase of one-half  (1/2) of a share of the  Company's  Common Stock for every
$1.00 of principal under the 2003 Debt Agreement.  The second warrant is for the
purchase of one-quarter (1/4) of a share of the Company's Common Stock for every
$1.00 of principal  under the 2003 Debt  Agreement.  The exercise  price of each
warrant is $1.00 per share and the warrants  will  terminate on August 28, 2008,
unless  previously  exercised.  The  Company  can  force  the  exercise  of  the
one-quarter (1/4) share warrant under certain circumstances.

     In October 2003, the Company  registered  4,500,000  shares of Common Stock
underlying the convertible  promissory  notes,  3,375,000 shares of Common Stock
underlying  the warrants and 480,000 shares of Common Stock that may be used for
payment of quarterly  interest  payments.  The remaining  conversion  shares and
warrants shares are expected to be registered at some time in the future.

     The warrants  issued  related to the 2003 Debt  Agreement were valued using
the  Black-Scholes  valuation model. The value of these warrants were determined
to be $2.8 million which were recorded as deferred financing costs and are being
amortized over the term of the underlying convertible promissory notes, which is
three  years.  For the year  ended  December  31,  2003,  the  Company  recorded
amortization  expense  of  $329,000  related  to the  deferred  financing  costs
associated with the warrant valuation,  which is included in interest expense in
the consolidated statement of operations.

     Additionally,  under EITF No.  98-5,  the Company was required to determine
the beneficial  conversion  value of the 2003 Notes and related warrants issued.
The beneficial conversion value represents the difference between the fair value
of the Company's 2003 Notes as of the date of issuance and the intrinsic  value,
which is the value of the 2003 Notes on an as  converted  basis and the value of
the detachable  warrants  issued,  as described above. If the intrinsic value of
the 2003 Notes  exceeds  the fair  value of the 2003  Notes,  then a  beneficial
conversion value is determined to have been received by the securityholders. Any
beneficial  conversion value determined is recorded as equity and a reduction to
the convertible debt  outstanding,  which is subsequently  amortized to interest
expense. The beneficial conversion value was calculated as follows:

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

               Intrinsic value of the 2003 Notes converted to Common Stock at
                 $1.00 per share............................................................ $ 6,000,000
               Detachable warrant valuation (using a Black-Scholes model value of
                 $0.616 per share for the purchase of 4,500,000 shares at $1.00 per share)..   2,772,000
                                                                                              ----------
               Intrinsic value of the 2003 Notes and detachable warrants....................   8,772,000
               Less: Fair value of the 2003 Notes...........................................  (6,000,000)
                                                                                              -----------
                                                   Beneficial conversion value.............. $ 2,772,000
                                                                                              ===========
</TABLE>

     The beneficial conversion value is being amortized over the period from the
date of note issuance to the period of first  available note  conversion.  Since
approximately  75% of the 2003 Notes can be  converted  into  registered  Common
Stock, the Company  expensed $2.1 million of the beneficial  conversion value to
interest  expense as of December 31, 2003.  The  remaining 25% of the 2003 Notes
are currently not  convertible  and are expected to be convertible by June 2004.
As such,  the remaining  $693,000 of the  beneficial  conversion  value is being
amortized over 10 months,  for the period from September 2003 through June 2004,
or $69,000 per month.  Therefore,  for the period ended  December 31, 2003,  the
Company  recorded  total  amortization  expense of $2.4  million  related to the
beneficial  conversion  value of the 2003  Notes,  which is included in interest
expense in the consolidated statement of operations.

     In connection with the execution of the 2003 Debt Agreement, certain of the
2002 Lenders,  to whom the Company  issued notes under the 2002 Debt  Agreement,
agreed to subordinate  their debt security position to that of the 2003 Lenders.
In exchange for the subordinated  security  position,  the 2002 Lenders received
additional  warrants  to  purchase  an  aggregate  of  1,575,000  shares  of the
Company's  Common  Stock at an  exercise  price of $1.00  per  share,  and these
additional  warrants  will  terminate  on August  28,  2008,  unless  previously
exercised.  Additionally,  under the  anti-dilution  provision  of the 2002 Debt
Agreement,  the conversion price of the five notes issued thereunder to the 2002
Lenders  during the period  February 2003 through July 2003 was reduced to $1.00
and the exercise price of the related warrants issued to the 2002 Lenders during
the same period was reduced to $1.00 per share. The Company determined the value
of these additional warrants to be $970,000,  using the Black-Scholes  valuation
model,  and is amortizing  these deferred  financing  costs over the term of the
underlying promissory notes, or December 31, 2008.

     In addition, since additional warrants were issued to the 2002 Lenders, the
conversion  price of the 2002 Notes was lowered to $1.00 and the exercise  price
of the existing warrants related to the 2002 Notes was also lowered to $1.00 per
share,  there was a  beneficial  conversion  value for the 2002 Debt  Agreement,
measured upon the closing of the 2003 Debt Agreement.  The beneficial conversion
value was calculated as follows:

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

               Intrinsic value of the 2002 Notes converted to Common Stock at
                 $1.00 per share............................................................ $ 6,300,000
               Detachable warrant valuation (using a Black-Scholes model value of
                 $0.616 per share for the purchase of 1,575,000 shares at $1.00 per share
                  plus the net book value of the existing repriced warrants for the
                  purchase of 1,750,000 shares).............................................   2,210,000
                                                                                              ----------
               Intrinsic value of the 2002 Notes and detachable warrants....................   8,510,000
               Less: Fair value of the 2002 Notes...........................................  (6,300,000)
                                                                                              -----------
                                                   Beneficial conversion value.............. $ 2,210,000
                                                                                              ===========

</TABLE>

     The beneficial conversion value is being amortized over the period from the
date of note issuance to the period of first  available note  conversion.  Since
approximately  80% of the 2002 Notes can be  converted  into  registered  Common
Stock, the Company  expensed $1.8 million of the beneficial  conversion value to
interest  expense as of December 31, 2003.  The  remaining 20% of the 2002 Notes
are currently not  convertible  and are expected to be convertible by June 2004.
As such,  the remaining  $442,000 of the  beneficial  conversion  value is being
amortized  over 10 months,  or the period from September 2003 through June 2004,
or $44,000 per month.  Therefore,  for the period ended  December 31, 2003,  the
Company  recorded  total  amortization  expense of $1.9  million  related to the
beneficial  conversion  value of the 2002  Notes,  which is included in interest
expense in the consolidated statement of operations.

December 2002 Convertible Debt Agreement

     In December 2002, the Company entered into the 2002 Debt Agreement with the
2002 Lenders.  The 2002 Debt  Agreement  allows the Company to borrow up to $1.0
million per month, with any unused monthly borrowings to be carried forward. The
maximum  aggregate  loan amount under the 2002 Debt  Agreement is $12.0  million
with the last  available  borrowing  in June 2004,  as amended.  The Company has
borrowed  $6.3  million  through  December  31, 2003 which is  convertible  into
6,361,856 shares of the Company's  Common Stock, as adjusted.  The 2002 Lenders'
obligation  to fund each  borrowing  request is subject to  material  conditions
described in the 2002 Debt Agreement,  as amended. In addition, the 2002 Lenders
may terminate its obligations under the 2002 Debt Agreement if: (i) Miravant has
not submitted an NDA by March 31, 2004,  as amended,  (ii) such  submission  has
been  rejected  by the  U.S.  Food  and Drug  Administration,  or FDA,  or (iii)
Miravant,  in the  reasonable  judgment of the 2002 Lenders,  is not meeting its
business objectives.

     In connection with the 2002 Debt Agreement,  the 2002 Lenders withhold from
each  borrowing a 3% drawdown  fee and the Company  issues to the 2002 Lenders a
warrant to purchase three-quarter (3/4) of a share of the Company's Common Stock
for every $1.00 borrowed,  as amended. The drawdown fees and certain legal costs
in the amount of $244,000 have been capitalized and are being amortized over the
life of the 2002 Debt Agreement  resulting in  amortization  expense of $207,000
recorded  and  included in interest  expense in the  consolidated  statement  of
operations  for the year ended  December  31, 2003.  The exercise  price of each
warrant  will be  equal  to fair  market  value  at the  date of  borrowing.  In
addition,  upon execution of the 2002 Debt Agreement,  the Company issued to the
2002 Lenders a warrant to purchase 250,000 shares of the Company's Common Stock,
with an  exercise  price of $0.50 per share.  Each  warrant  will  terminate  on
December 31, 2008, unless previously  exercised.  The Company has also agreed to
provide to the 2002 Lenders certain  registration rights in connection with this
transaction,  of which 4,799,530  shares  underlying the convertible  promissory
notes and 1,750,000 shares underlying the warrants have been registered.

For the months of December  2002 and  January  2003,  the Company  received
borrowings  totaling  $2.0  million and issued  related  notes with a conversion
price of $0.97.  For the months of February  through July, the Company  received
borrowings  totaling  $4.3  million and issued  related  notes with a conversion
price of $1.00,  as  adjusted.  The  Company  also issued six  warrants  for the
purchase of 250,000  shares per  warrant  with an  exercise  price of $1.00,  as
adjusted,  and one warrant for the purchase of 75,000 with an exercise  price of
$1.00, as adjusted. As of December 31, 2003, the Company has borrowed a total of
$6.3 million and has accrued interest of $493,000,  which is also convertible at
$1.00 per share.  For the year ended December 31, 2003, the Company has recorded
amortization  expense of $201,000  related to the deferred  financing  costs for
these warrant from 2002 Debt  Agreements,  which is included in interest expense
in the consolidated statement of operations.

     A separate  convertible  promissory note, or Note, has been issued for each
borrowing  request  received and such Notes will earn interest at 9.4% per annum
and be due December 31, 2008. The interest on each Note can be accrued and added
to the existing  Notes.  In general,  each Note and any accrued  interest can be
converted  into shares of  Miravant's  Common  Stock on the earlier of March 31,
2003, or the date on which the trading price of our Common Stock exceeds 250% of
the conversion price of the Note.

Deferred Financing Costs and Beneficial Conversion Value:

         As of December 31, 2003 and 2002, deferred financing costs and
beneficial conversion value consisted of the following:
<TABLE>
<CAPTION>
<S>     <C>                                                             <C>                     <C>


                                                                         2003                  2002
                                                                   -----------------    -------------------

       Amortized value of warrants issued for 2003 Notes                $  2,464,000               $     --
       Amortized value of warrants issued for 2002 Notes                   1,954,000                326,000
       Beneficial Conversion value of the 2003 Notes                         416,000                     --
       Beneficial Conversion value of the 2002 Notes                         265,000                     --
       Other deferred financing                                              377,000                 53,000
                                                                   -----------------    -------------------
       Total deferred financing costs and beneficial
         conversion value                                                $ 5,476,000             $  379,000
                                                                   =================    ===================

</TABLE>

Maturities of Convertible Notes:

     Principal  payments  on the  convertible  notes  obligations,  assuming  no
conversion  prior to maturity,  are due in the amounts of $6.1 million in fiscal
2006 and $6.8 million in fiscal 2008.

3.        Stockholders' Equity

Private Placements:

     In August 2002, the Company completed a private  placement  financing which
consisted of the sale of unregistered  shares of Common Stock for gross proceeds
of $2.5 million at $0.50 per share,  based on a premium of approximately  20% of
the average  closing price for the prior 10 trading  days.  For every two common
shares acquired, the equity purchase included a warrant to purchase one share of
Common  Stock at a price of $0.50 per share  that  expire  in  August  2007.  In
addition, an origination warrant was issued to purchase 300,000 shares of Common
Stock at $0.50 per  share.  A group of  private  investors  participated  in the
offering.

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 the 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 October  1996,  the Board of Directors  approved  personal  loans to the
Chief Executive Officer, President and Chief Financial Officer. These loans were
made for a  principal  amount  of  $25,000  to each  officer  collateralized  by
unexercised  stock options and accrue  interest at fixed rates between 6.60% and
6.84%.  As of  December  31,  2003 and 2002,  the total  balance of these  loans
including accrued interest were $70,000 and $112,000, respectively.

     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%, were provided
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. As
of  December  31,  2003 and 2002,  the total  balance of these  loans  including
accrued interest were $165,000 and $156,000, respectively.

     Additionally,  from 1998 through 2002, the Board of Directors have approved
other secured loans made to the Company's Chief Executive Officer and President;
these  loans  accrue  interest at fixed  rates  between  4.7% and 5.9% and as of
December  31,  2003 and 2002,  had a total  balance of  $961,000  and  $914,000,
respectively.  No future loans to executive  officers have been  approved  after
June 2002.

     The loans the  Company  has made to  officers  and  certain  loans  made to
employees  over the years are  either  unsecured,  or  secured by stock or stock
options.  In light of the decrease in the Company's  stock price during 2003 and
2002 and certain other factors affecting the  collectibility of these loans, the
Company  recorded a reserve  for these loans to officers  and  employees  in the
amount of $872,000 during the year ended December 31, 2002, respectively. Of the
amount recorded,  $182,000 is included in research and development  expenses and
$690,000 is included in general and administrative expenses in the statements of
operations  for the year ended  December 31, 2002.  During 2003, the reserve was
reduced by  $150,000  due to the  write-off  of an  employee  loan  specifically
reserved for and a further  reduction of $10,000 due to the repayment of certain
amounts  related to officer  loans  previously  reserved for. As of December 31,
2003 and 2002,  the aggregate  balance of these loans to officers and employees,
net of reserves,  is $662,000 and $610,000,  respectively,  of which $59,000 and
$40,000  are   included  in  other   assets  at  December  31,  2003  and  2002,
respectively,  and $603,000 and $570,000 are included in notes  receivable  from
officers at December 31, 2003 and 2002, 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 8,000,000  shares,  of which  approximately
6,211,000  shares  have been  granted or issued and  1,304,000  shares have been
cancelled netting  4,907,000 shares,  which were outstanding under the 2000 Plan
as of December 31, 2003.  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 Option Summary:

     In connection with certain employment  agreements and/or related to service
performance,  the Company has granted its  executives,  directors  and  eligible
employees and consultants, non-qualified and incentive 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>                <C>               <C>

                                                               Weighted
                                                                Average
                                           Exercise Price      Exercise              Stock
                                              per Share          Price              Options
---------------------------------------------------------------------------------------------
Outstanding at January 1, 2001..........   $ 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)
   Cancelled............................     7.63  - 28.00        9.99             (60,500)
---------------------------------------------------------------------------------------------
Outstanding at December 31, 2001........     1.00  - 55.50       14.60           4,559,112
   Granted..............................     0.51  -  1.35        0.83           3,272,710
   Cancelled............................     0.91  - 40.75       15.73          (3,358,489)
---------------------------------------------------------------------------------------------
Outstanding at December 31, 2002........     0.50  - 55.50        3.69           4,473,333
   Granted..............................     1.08  -  1.35        0.83             195,803
   Exercised............................     0.51  -  0.91        0.84              (9,063)
   Cancelled............................     0.51  - 30.75       11.31            (445,226)
---------------------------------------------------------------------------------------------
Outstanding at December 31, 2003........   $ 0.44  - 55.50     $  3.06           4,214,847
---------------------------------------------------------------------------------------------

Options outstanding by price range at
   December 31, 2003....................    $ 0.44  -  0.51    $  0.51             802,355
                                            $ 0.91  -  0.91    $  0.91           1,707,364
                                            $ 1.00  -  2.00    $  1.38             926,303
                                            $ 6.00  -  40.25   $ 11.60             763,825
                                            $55.50  -  55.50   $ 55.50              15,000
Exercisable at:

December 31, 2001.......................      $ 1.00 - 55.50   $ 16.76           2,815,521
December 31, 2002.......................      $ 0.51 - 55.50   $  6.24           2,117,521
December 31, 2003.......................      $ 0.44 - 55.50   $  3.47           3,351,150

</TABLE>


     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  compensation  expense of $538,000 related to these
loans for each of the years ended December 31, 2002 and 2001, respectively.  The
deferred  compensation related to these loans was fully amortized as of December
31, 2002, as such no further future amortization expense will be incurred.

     In November 2002, the Board of Directors  approved a stock option  exchange
program for certain  key  employees.  The program  allowed  these  employees  to
exchange  each fully vested stock option with an exercise  price of greater than
$5.00 for one-half share of restricted Common Stock. The restricted Common Stock
has been fully vested as of December 31, 2003. The total number of stock options
exchanged  and canceled  under this program was  2,253,750  shares and the total
number of  restricted  Common Stock issued was 1,126,875  shares.  In accordance
with the accounting guidance for this type of transaction,  the Company recorded
deferred  compensation  of $507,000,  which is being  amortized over the vesting
period.  For the years ended  December 31, 2003 and 2002,  the Company  recorded
amortization  expense  related to the restricted  stock of $253,000 and $254,000
respectively.  As of December  31, 2003,  the $507,000 of deferred  compensation
related  to these  restricted  shares  was fully  amortized,  as such no further
amortization expense will be incurred.

SFAS No. 123 Pro Forma Disclosure:

     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>


                                                                                2002                   2001
     ----------------------------------------- --- ----------------- -- --------------------- -- ------------------
     Net loss
       As reported...........................        $  (7,465,000)          $ (15,960,000)         $ (16,402,000)
        Stock-based employee cost included
          in reported net loss...............                  --                  538,000                538,000
       Pro forma stock-based employee
          compensation cost under SFAS No.
          123................................             (814,000)             (2,701,000)            (4,717,000)
                                                   -----------------    ---------------------    ------------------
        Pro forma............................        $  (8,279,000)          $ (18,123,000)          $ (20,581,000)
     ----------------------------------------- --- ----------------- -- --------------------- -- ------------------
     Loss per share - basic and diluted:
        As reported......................            $       (0.30)          $       (0.78)          $       (0.88)
        Pro forma........................            $       (0.34)          $       (0.88)          $       (1.10)
     ----------------------------------------- --- ----------------- -- --------------------- -- ------------------

     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:

                                                         2003                   2002                   2001
     ----------------------------------------- --- ----------------- --- -------------------- -- ------------------
     Expected dividend yield.............                 0%                     0%                     0%
     Expected stock price volatility.....                75%                     75%                    50%
     Risk-free interest rate.............           2.95% - 4.10%           3.10% - 5.00%          3.50% - 5.25%
     Expected life of options............            2 - 4 years             2 - 4 years            2 - 4 years
     ----------------------------------------- --- ----------------- --- -------------------- -- ------------------
</TABLE>
     Under  these  assumptions,  the  weighted  average  fair value of the stock
option  grants  during the years ended  December  31,  2003,  2002 and 2001 were
$2.69, $0.48 and $3.77,  respectively.  These 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,  2003,  2002 and 2001 was 6.7  years,  7.3  years  and 6.3  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:

Consultant Warrants:

     The Company has issued  warrants to various  consultants in connection with
consulting  agreements  and a  co-development  agreement  over the years.  As of
December  31,  2003,  warrants to  purchase a total of 238,750  shares of Common
Stock remained  outstanding  related to the warrants  granted from 1998 to 2002.
These warrants were priced at the fair market value on the date of grant and the
prices ranged from $0.91 to $30.75 per share with expiration  dates ranging from
January 2004 through  January 2010.  During 2003, the Company issued warrants to
purchase  145,000  shares of Common Stock to several  consultants  with exercise
prices  ranging from $0.75 to $1.00 and  expiration  dates ranging from December
2004 to January 2008. The consulting agreements can be terminated by the Company
at any time and only those  warrants  vested as of the date of  termination  are
exercisable. None of the above warrants were exercised in 2003, 2002 or 2001. As
of  December  31,  2003,  warrants to purchase  383,750  shares of Common  Stock
related to consulting agreements were outstanding.

     In  connection  with the  consulting  warrants  the  Company is required to
record deferred  compensation  expense based on a Black-Scholes  valuation model
and amortized  over the vesting  period of the warrant.  As of December 31, 2003
and 2002, the Company had deferred compensation balances of $16,000 and $12,000,
respectively.   The  Company  recorded  an  increase  to  deferred  compensation
associated with the change in the value of these warrants of $53,000 and $27,000
for the years ended December 31, 2003 and 2002,  respectively.  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 $49,000,  $24,000 and $25,000 for the years ended  December 31, 2003,
2002 and 2001, respectively.

Pharmacia Warrants:

     In  connection  with the 2003 Debt  Agreement,  the Company  entered into a
Termination  and Release  Agreement with Pharmacia.  Under this  agreement,  the
360,000 warrants to purchase Common Stock previously  issued in 1999 and 2000 to
Pharmacia,  were amended. The exercise price of Pharmacia's outstanding warrants
to purchase  360,000  shares of the Company's  Common Stock was reduced to $1.00
from an average  exercise  price of  $15.77,  and the  expiration  date of those
warrants was extended to December 31, 2005 from  expiration  dates  ranging from
May 2004 to May 2005.

2002 Private Placement:

     In August 2002, in connection with a private equity placement as previously
discussed,  the Company issued warrants to purchase  2,800,000  shares of Common
Stock with an exercise price of $0.50 per share expiring in August 2007.

2002 Convertible Debt Warrants:

     In  connection  with each  borrowing  under the 2002  Debt  Agreement,  the
Company issued to the Lenders a warrant to purchase one-quarter (1/4) of a share
of Miravant  Common Stock for every $1.00  borrowed.  The exercise price of each
warrant  will be equal to $1.00 per share.  In addition,  upon  execution of the
2002 Debt Agreement the Company issued the Lenders a warrant to acquire  250,000
shares of the Company's Common Stock, with an exercise price of $0.50 per share.
Each warrant will terminate on December 31, 2008, unless  previously  exercised.
The Company has also agreed to provide the Lenders certain  registration  rights
in connection  with this  transaction.  As of December 31, 2003, the Company has
borrowed  $6.3  million  pursuant  to the 2002 Debt  Agreement,  and  issued the
Lenders  warrants  exercisable for 1,575,000 shares of our Common Stock at $1.00
per share. The Company  determined the value of the warrants to be $1.2 million,
using the  Black-Scholes  valuation  model,  and is  amortizing  these  deferred
financing  costs over the term of the underlying  promissory  notes, or December
31, 2008.

     In connection with the execution of the 2003 Debt Agreement, certain of the
2002 Lenders,  to whom the Company  issued notes under the 2002 Debt  Agreement,
agreed to subordinate  their debt security position to that of the 2003 Lenders.
In exchange for the subordinated  security  position,  the 2002 Lenders received
additional  warrants  to  purchase  an  aggregate  of  1,575,000  shares  of the
Company's  Common  Stock at an  exercise  price of $1.00  per  share,  and these
additional  warrants  will  terminate  on August  28,  2008,  unless  previously
exercised.  The Company determined the value of these additional  warrants to be
$970,000,  using the  Black-Scholes  valuation  model,  and is amortizing  these
deferred  financing costs over the term of the underlying  promissory  notes, or
December 31, 2008.

2003 Convertible Debt Warrants:

     In connection with the 2003 Debt Agreement,  the Company issued to the 2003
Lenders  warrants to purchase an aggregate of 4,500,000  shares of the Company's
Common Stock.  Each holder  received two warrants.  The first warrant is for the
purchase of one-half  (1/2) of a share of the  Company's  Common Stock for every
$1.00 of principal under the 2003 Debt Agreement.  The second warrant is for the
purchase of one-quarter (1/4) of a share of the Company's Common Stock for every
$1.00 of principal  under the 2003 Debt  Agreement.  The exercise  price of each
warrant is $1.00 per share and the warrants  will  terminate on August 28, 2008,
unless  previously  exercised.  The  Company  can  force  the  exercise  of  the
one-quarter  (1/4)  share  warrant  under  certain  circumstances.  The  Company
determined the value of the warrants to be $2.8 million, using the Black-Scholes
valuation model, and is amortizing these deferred  financing costs over the term
of the underlying promissory notes, or August 28, 2006.

Warrant Summary:

     As of December 31, 2003, the Company has warrants outstanding to purchase a
total of 11,683,750  shares of its Common Stock at an average  exercise price of
$1.03,  with expiration  dates ranging from January 2004 through  February 2012.
The following table provides further detail on the warrants outstanding by price
range:

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

                                                                Exercise Price      Weighted Average         Warrant
                                                                  per Share          Exercise Price          Shares
==============================================================------------------------------------------------------------
Warrants outstanding by price range at December 31, 2003.....  $ 0.01  -   0.50           $  0.50           3,050,000
                                                               $ 0.51  -   7.00           $  1.06           8,176,250
                                                               $ 7.01  -  15.00           $ 12.91             317,500
                                                               $15.01  -  30.75           $ 22.06             140,000
                                                              ------------------------------------------------------------
Total warrants outstanding at December 31, 2003................$ 0.01  -  30.75           $  1.03          11,683,750
==========================================================================================================================
</TABLE>


Preferred Stock

     The  Company's  capital  structure  allows  for the Board of  Directors  to
authorize  30,000,000  shares of preferred stock. The Board of Directors has the
authority to fix the rights, preferences, privileges and restrictions, including
voting  rights of these  shares of  preferred  stock  without any future vote or
action by the  stockholders.  As of December  31,  2003 and 2002,  there were no
shares of preferred stock outstanding.

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 2003,
2002 and 2001 plan  years,  are made on a  quarterly  basis and vest over a five
year period.  Total Company matching  contributions for 2003, 2002 and 2001 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:


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



                                                             2003                            2002
                                                 ----------------------------------------------------------------
                                                    Current      Non-current       Current        Non-current

                                                 ---------------------------------------------------------------
      Deferred tax assets:

        Other accruals and reserves...........     $  91,000    $          --      $  106,000    $        --
        Capitalized research and development..            --           73,000              --        778,000
        Non-cash loss in investment...........            --               --              --      1,749,000
        Net operating losses and tax credits..            --       77,036,000              --     70,190,000
                                                 ---------------------------------------------------------------
      Total deferred tax assets...............        91,000       77,109,000         106,000     72,717,000
      Deferred tax liabilities:

        Amortization and depreciation                     --          104,000              --      1,541,000
        Federal benefit for state income taxes         6,000        3,863,000           7,000      2,539,000
                                                 ---------------------------------------------------------------
      Total deferred tax liabilities..........         6,000        3,967,000           7,000      4,080,000
                                                 ---------------------------------------------------------------
      Net deferred tax assets.................        85,000       73,142,000          99,000     68,637,000
      Less valuation reserve..................       (85,000)     (73,142,000)        (99,000)   (68,637,000)
                                                 ---------------------------------------------------------------
                                                   $      --     $         --      $       --     $       --
                                                 ===============================================================
</TABLE>

     The Company has net operating loss  carryforwards  for federal tax purposes
of $178.7  million,  which  expire in the years  2004 to 2023.  Research  credit
carryforwards  aggregating  $9.1 million are available for federal and state tax
purposes and expire in the years 2004 to 2023.  The Company also has a state net
operating loss  carryforward of $81.3 million which expires in the years 2004 to
2008.  Of the $81.3  million in state net operating  loss  carryforwards,  $52.2
million  will expire  during 2004 and 2005.  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  had no royalty  income for the years
ended  December  31, 2003 and 2002 and recorded  royalty  income  received  from
device sales of $75,000 for the year ended December 31, 2001. Additionally,  for
the years ended  December 31, 2003,  2002 and 2001, 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. In 1998, the rights and obligations
under this  agreement  were  transferred  to Fresenius AG with  operating  terms
remaining  the same.  For the years ended  December 31, 2003,  2002 and 2001 the
Company paid $74,000,  $5,000 and $38,000 respectively,  and recorded as expense
of $129,000,  $5,000 and $21,000,  respectively,  primarily for the cost of drug
formulation and development.

     Under the prior License Agreements, Pharmacia has provided the Company with
funding  and  development  for the right to sell and market the funded  products
once approved.  For the year ended  December 31, 2003,  the Company  recorded no
license revenues,  and recorded license revenues of $20,000 and $302,000 for the
years  ended  December  31,  2002  and  2001,   respectively,   related  to  the
reimbursement of certain  preclinical studies and clinical trial costs. In March
2002, all License Agreements with Pharmacia were terminated.

     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's main facility lease terminated in August 2003 and the Company
is currently on a  month-to-month  lease for this main facility of approximately
25,000  square  feet of  office,  laboratory  and  manufacturing  space in Santa
Barbara,  California.  This  facility  currently  houses  all of  the  Company's
operations  and employees.  The Company  entered into this lease in August 1996.
During the third  quarter of 2003,  the Company  reduced its  occupancy  in this
building from approximately 40,000 square feet to 25,000 square feet. This lease
provides  for rent to be adjusted  annually  based on  increases in the consumer
price index and the base rent is currently  approximately $33,000 per month. The
leased  property is located in a business  park.  The Company has the ability to
manufacture its active drug  ingredient,  its light producing and light delivery
devices and perform research and development of drugs,  light delivery and light
producing devices from this facility.  At this time the Company will continue to
lease   month-to-month   until  the  Company's  financial  position  supports  a
longer-term  commitment.  In addition, the Company is aware that the lessors can
give the Company a 30-day notice at any time requiring the Company to vacate.

     During 2002,  the Company had leases for four buildings for a total average
monthly rental expense of approximately  $124,000. One of the leases was assumed
by an unrelated party in its entirety in March 2002. Another lease was sublet in
December  1999 to two  separate  parties  and expired in August  2003.  Sublease
rental income from these parties was $37,000 per month,  which  represented most
of the  Company's  rental cost.  A third lease,  which  formerly  contained  the
Company's bulk API  manufacturing  operations,  has been assumed by an unrelated
party from January 1, 2003 through  December 31, 2005 and they pay the full cost
of the building  directly to the landlord.  The Company will be responsible  for
the  remainder of the term of the lease from January 1, 2006 through  March 2006
at a monthly  cost  currently  at  $26,000.  The final  lease,  which  currently
contains  the entire  operations  of the  Company,  expired  in August  2003 and
continues on a  month-to-month  basis as described  above.  All 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  made by Pharmacia  were
accounted for as a capital  contribution and rent expense,  or as a component of
cost of goods sold,  over the lease  obligation  term. In 2002,  Pharmacia  paid
$40,000 related to the rent for the bulk API  manufacturing  facility,  of which
the Company  recorded  $10,000 as rent expense and $30,000 as cost of good sold.
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 had agreed to reassume the lease obligations and related
property  taxes  through the  remainder of the lease term,  or March 2006. As of
January 2003,  this facility was  subleased  through  December 2005 as discussed
further above.

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


                                                                               Minimum
                                                      Lease Amounts       Sublease Amounts            Net
                                                    ------------------   --------------------  ------------------
        2004..........................................     $ 381,000             $  323,000           $  58,000
        2005..........................................       391,000                333,000              58,000
        2006..........................................       126,000                     --             126,000
        2007..........................................         3,000                     --               3,000
        2008 and thereafter...........................         3,000                     --               3,000
                                                    ------------------   --------------------  ------------------
        Total minimum lease payments..................     $ 904,000              $ 656,000           $ 248,000
                                                    ------------------   --------------------  ------------------

</TABLE>

     Rent  expense was  $613,000,  $1.1  million and $1.1  million for the years
ended December 31, 2003, 2002 and 2001, respectively,  net of sublease income of
$322,000, $408,000 and $384,000, 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,
2003, the balance of the loan,  including  principal and accrued  interest,  was
$2.7  million.  The loan,  which was used to fund  Ramus'  clinical  trials  and
operating costs. 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, 2003 and 2002 and no interest
income is being accrued under the loan.  The Company has held  discussions  with
Ramus to  reorganize  their  outstanding  debt or to convert  their entire debt,
including accrued and unpaid interest, to Ramus equity.

     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. In connection with general legal services provided by the law firm, the
Company was billed  $150,000,  $47,000 and $55,000 for the years ended  December
31, 2003, 2002 and 2001, respectively. From 1996 through December 31, 2003, this
individual's  law firm has  received  warrants  to  purchase  a total of 156,250
shares of Common Stock with an average  exercise price of $9.56 for his services
as acting in-house legal counsel and Secretary of the Company.

     In August 2003,  we received a short-term  bridge loan of $250,000 from one
of the Company's  non-employee board members, who is currently no longer a board
member.  In connection  with the loan, the Company  issued  warrants to purchase
25,000 shares of the Company's Common Stock.  This loan was immediately paid off
in September 2003 with the proceeds from the 2003 Debt Agreement.

9.       Fair Value of Financial Instruments

     The  following is  information  concerning  the fair value of each class of
financial instrument as of December 31, 2003 and 2002:

Cash and cash equivalents:

     The carrying  amounts of cash and cash equivalents  approximate  their fair
values. Fair values of cash equivalents are based on quoted market prices.

Debt:

     At December  31,  2003,  the fair value of the  Company's  obligations  are
approximately $12.9 million estimated based on the Company's current incremental
borrowing rate or similar types of financing arrangements. At December 31, 2002,
the fair value of the  Company's  obligations  are  approximately  $11.1 million
estimated based on the Company's current  incremental  borrowing rate or similar
types of financing arrangements.

10.       Investment in Affiliate

     In December 2003,  the Company sold its  investment in Xillix.  The Company
owned  approximately  2.7  million  shares  of Xillix  at an  adjusted  basis of
$393,000 and received net proceeds of  approximately  $1.6 million.  The Company
recorded a gain of $1.2 million in the consolidated statement of operations.

     Previously  in 2000 and  again in 2002,  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% through 2000 and  approximately  an
additional  20%  through  2002 and had been at similar  levels for at least nine
months prior to the write-down.  In December 2000, the Company recognized a loss
write-down  totaling  $3.5 million and in December  2002 another  $598,000  loss
write-down  was  recorded,  to reduce its  investment in Xillix to its estimated
current fair value based on quoted market prices as of December 31, 2002.

11.      Quarterly Results of Operations (Unaudited)
<TABLE>
<CAPTION>
<S>     <C>                                     <C>             <C>                     <C>             <C>             <C>


                                                                                    Three Months Ended

                                                        ----------------------------------------------------------------------------
2002:                                                      March 31,           June 30,          September 30,        December 31,
                                                        ----------------    ---------------    ------------------    ---------------
Revenues.........................................        $     499,000       $         --        $           --       $         --
Costs and expenses...............................           (4,767,000)        (3,622,000)           (3,911,000)        (3,454,000)
Net interest and other income (expense)..........             (207,000)            44,000                38,000           (580,000)
                                                        ----------------    ---------------    ------------------    ---------------
Net loss.........................................        $  (4,475,000)      $ (3,578,000)        $  (3,873,000)      $ (4,034,000)
                                                        ================    ===============    ==================    ===============
Net loss per share:
    Basic and diluted............................        $       (0.24)      $      (0.19)        $       (0.19)      $      (0.16)
                                                        ================    ===============    ==================    ===============

2003:

Revenues.........................................        $          --        $        --          $         --       $         --
Costs and expenses...............................           (3,248,000)        (3,437,000)           (3,623,000)        (1,928,000)
Net interest and other income (expense)..........             (104,000)          (286,000)            4,800,000            361,000
                                                        ----------------    ---------------    ------------------    ---------------
Net income (loss)................................        $  (3,352,000)       $(3,723,000)         $  1,177,000       $ (1,567,000)
                                                        ================    ===============    ==================    ===============
          Net income (loss) per share - basic....        $       (0.14)       $     (0.15)         $       0.05       $      (0.06)
                                                        ================    ===============    ==================    ===============
          Net income (loss) per share - diluted..        $       (0.14)       $     (0.15)         $       0.01       $      (0.06)
                                                        ================    ===============    ==================    ===============

</TABLE>

     During the three  months  period  ended  September  30,  2003,  the Company
recognized a net gain on retirement  of debt of $9.1 million with  Pharmacia and
non-cash  interest charges of $4.0 million related to the beneficial  conversion
valuation as  discussed  further in Note 3 which is included in net interest and
other income (expense) in the accompanying table. During the three months period
ended  December 31, 2003,  the Company  recognized a net gain on the sale of its
investment  in Xillix of $1.2 million as  discussed  further in Note 10 which is
included in net interest and other income (expense) in the accompanying table.

12.             Subsequent Events

     In  February  2004,  the  Company  entered  into an  Unsecured  Convertible
Debenture Purchase Agreement, or the February 2004 Debt Agreement,  with certain
private accredited investors,  or the February 2004 Lenders.  Under the February
2004 Debt  Agreement  the  Company  issued  $2.0  million  worth of  convertible
debentures  maturing on February 5, 2008 with interest  accruing at 8% per year,
due and payable quarterly, with the first interest payment due on April 1, 2004.
At the  Company's  option and subject to certain  restrictions,  the Company may
make interest payments in cash or in shares of its Common Stock, or the interest
can be  added  to  the  outstanding  principal  of the  note.  Each  convertible
debenture  issued pursuant to the February 2004 Debt Agreement is convertible at
the  holder's  option into  shares of the  Company's  Common  Stock at $2.00 per
share.  The Company is obligated to file a  registration  statement with the SEC
covering the resale of the shares of Common Stock underlying  these  convertible
debentures no later than April 30, 2004.  Upon the  occurrence of certain events
of default,  the holders of the convertible  debentures may require that they be
repaid prior to maturity.  These events of default include the Company's failure
to pay amounts due under the  debentures  or to  otherwise  perform any material
covenant in the February 2004 Debt Agreement or other related documents.

     In connection with the Company's 2003 Debt Agreement,  during the period of
January  through  March 2004 certain of the 2003 Lenders  converted  their Notes
into shares of the  Company's  Common  Stock.  As of March 15, 2004, of the $6.0
million Notes  outstanding  $2.5 million of the Notes have been  converted  into
Common  Stock.  In addition,  of the warrants to purchase 4.5 million  shares of
Common Stock related to the 2003 Debt  Agreement,  1,425,000  warrants have been
exercised, resulting in proceeds to the Company of $1.4 million.


<PAGE>



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

                  None.

ITEM 9A.  CONTROLS AND PROCEDURES

     Evaluation of disclosure controls and procedures. Our management evaluated,
with the  participation  of our Chief Executive  Officer and our Chief Financial
Officer,  the effectiveness of our disclosure  controls and procedures as of the
end of the period  covered  by this  Annual  Report on Form 10-K.  Based on this
evaluation,  our Chief Executive  Officer and our Chief  Financial  Officer have
concluded  that our  disclosure  controls and procedures are effective to ensure
that  information  we are required to disclose in reports that we file or submit
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission
rules and forms.

     Changes in internal control over financial  reporting.  There was no change
in our internal control over financial reporting that occurred during the period
covered by this Annual Report on Form 10-K that has materially  affected,  or is
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.


<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.

ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES

     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 15.        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                      58
                  Consolidated Balance Sheets as of
                      December 31, 2003 and 2002                      59
                  Consolidated Statements of Operations for the
                      years ended December 31, 2003, 2002 and 2001    60
                  Consolidated Statements of Stockholders'
                      Equity (Deficit) for the years ended December 31,
                      2003, 2002 and 2001                             61
                  Consolidated Statements of Cash Flows for the
                      years ended December 31, 2003, 2002 and 2001    62
                  Notes to Consolidated Financial Statements          63

         (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 85 to 87

(c) Reports on Form 8-K:

                           None


<PAGE>



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

                                                                                                            Incorporating
Exhibit                                                                                                     Reference
Number                                                 Description                                          (if applicable)
------                                                 -----------                                          ---------------
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 $35 Amended and Restated Common Stock Purchase Warrant.                             [C][4.1]
4.9             Form of Additional $35 Common Stock Purchase Warrant.                                       [C][4.2]
4.10            Warrant to Purchase 10,000 Shares of Common Stock between the Registrant and Charles S.     [D][4.12]
                Love.*
4.11            Form of $20 Private Placement Warrant Agreement Amendment No. 1.                            [F [4.13]
4.12            Form of Common Stock Purchase Warrant between the Registrant and Nida & Maloney.
4.13            Form of Common Stock Purchase Warrant between the Registrant and Pharmacia Corporation.
4.14            Preferred Stock Rights Agreement dated July 13, 2000.                                       [E] [4.1]
4.15            Form of Common Stock Purchase Warrant between the Registrant and Purchasers dated August    [S] [10.3]
                28, 2002.
4.16            Form of Note Warrant between the Registrant and the Purchaser dated December 19, 2002.      [T] [10.4]
4.17            Form of Convertible  Promissory Note between the Registrant and the Purchaser dated August  [X] [4.1]
                28, 2003.
4.18            Form of 50% Warrant between the Registrant and the Purchaser dated August 28, 2003.         [X] [4.2]
4.19            Form of 25% Warrant between the Registrant and the Purchaser dated August 28, 2003.         [X] [4.3]
4.20            Registration Rights Agreement dated August 28, 2003 between the Registrant and the
                Purchaser.                                                                                  [X] [4.4]
4.21            Amendment to Registration  Rights Agreement dated February 18, 1999 between the Registrant  [X] [4.5]
                and Pharmacia.
4.22            Amendment  to Warrant  Agreements  dated  February  18, 1999  between the  Registrant  and  [X] [4.6]
                Pharmacia.
4.23            Securities Purchase Agreement dated August 28, 2002 between the Registrant and the          [S] [10.1]
                Purchasers.
4.24            Registration Rights Agreement dated August 28, 2002 between the Registrant and the          [S] [10.2]
                Purchasers.
4.25            Common Stock Warrant Purchase Certificate dated August 28, 2002 between the Registrant      [S] [10.3]
                and the Purchasers.
4.26            Registration Rights Agreement dated December 19, 2002 between the Registrant and the        [T] [10.2]
                Purchasers.
4.27            Form of Convertible Promissory Note between the Registrant and the Purchaser.               [T] [10.3]
4.28            Form of Note Warrant between the Registrant and the Purchaser.                              [T] [10.4]
4.29            Loan Origination Warrant dated December 20, 2002 between the Registrant and the             [T] [10.5]
                Purchaser.
4.30            Registration Rights Agreement dated February 5, 2004 between the Registrant and the         [AA] [4.1]
                Purchasers.
4.31            Form of Convertible Promissory Note between the Registrant and the Purchaser dated          [AA] [4.2]
                February 5, 2004.
5.1             Form of Legal Opinion of Wilson Sonsini Goodrich & Rosati, L.P.                             [Y] [5.1]
10.1            PDT, Inc. Stock Option Plan dated September 19, 1989.**                                     [A][10.9]
10.2            PDT, Inc. Stock Option Plan dated September 3, 1992.**                                      [A][10.10]
10.3            PDT, Inc. 1994 Stock Option Plan dated December 2, 1994.**                                  [A][10.11]
10.4            PDT, Inc. Non-Employee Directors' Stock Option Plan.**                                      [A][10.12]
10.5            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.*                     [G][10.17]
10.6            Form of Directors' and Officers' Indemnification Agreement.                                 [A][10.22]
10.7            Amendment to PDT, Inc. Stock Option Plan dated September 19, 1989.**                        [H] [10.1]
10.8            Amendment to PDT, Inc. 1994 Stock Option Plan dated December 2, 1994.**                     [H][10.2]
10.9            Development and Distribution Agreement between Registrant and Iridex Corporation.*          [I][10.1]
10.10           Commercial Lease Agreement between Registrant and Santa Barbara Business Park, a            [I][10.2]
                California Limited Partnership.(1)
10.11           PDT, Inc. 1996 Stock Compensation Plan.**                                                   [J]
10.12           Form of Amendment No. 3 to 1989 Stock Option Agreement.**                                   [K][10.4]
10.13           Investment Agreement dated December 27, 1996 between PDT Cardiovascular, Inc. and Ramus
                Medical Technologies.*                                                                      [L] [10.16]
10.14           Co-Development Agreement dated December 27, 1996 between PDT Cardiovascular, Inc. and
                Ramus Medical Technologies.                                                                 [L] [10.17]
10.15           Series A Preferred Stock Registration Rights Agreement dated December 27, 1996 between
                PDT Cardiovascular, Inc. and Ramus Medical Technologies.*                                   [L] [10.18]
10.16           Amended and Restated 1996 Stock Compensation Plan.**                                        [M]
10.17           PDT, Inc. 401(k)-Employee Stock Ownership Plan.**                                           [N][10.2]
10.18           Credit Agreement dated April 1, 1998 between the Registrant and Ramus Medical               [O][10.5]
                Technologies.*
10.19           Convertible Promissory Note dated April 1, 1998 between the Registrant and Ramus Medical    [O][10.6]
                Technologies.*
10.20           Strategic Alliance Agreement dated June 2, 1998 between the Registrant and Xillix           [O][10.7]
                Technologies Corp.*
10.21           Subscription Agreement relating to the Registrant's Common Stock dated June 2, 1998         [O][10.8]
                between the Registrant and Xillix Technologies Corp.
10.22           Subscription Agreement relating to Xillix's Common Stock dated June 2, 1998 between the     [O][10.9]
                Registrant and Xillix Technologies Corp.
10.23           Commercial Lease Agreement dated May 27, 1998 between the Registrant and Raytheon Company.  [A][10.4]
10.24           Miravant Medical Technologies 2000 Stock Compensation Plan.                                 [P] [4.1]
10.25           Amendment No. 9 dated as of January 1, 2001 to Employment Agreement between the             [Q] [10.1]
                Registrant and Gary S. Kledzik.**
10.26           Amendment No. 14 dated as of January 1, 2001 to Employment Agreement between the            [Q] [10.2]
                Registrant and David E. Mai.**
10.27           Amendment No. 6 dated as of January 1, 2001 to Employment Agreement between the             [Q] [10.3]
                Registrant and John M. Philpott.**
10.28           Contract Modification and Termination Agreement dated March 5, 2002 between the             [R] [10.1]
                Registrant and Pharmacia Corporation.
10.29           Convertible  Debt and Warrant  Purchase  Agreement  dated  December  19, 2002  between the  [T] [10.1]
                Registrant and the Purchasers.
                Convertible Debt and Warrant Purchase Agreement dated August 28, 2003 between the
10.30           Registrant and the Purchaser.                                                               [X] [10.1]
10.31           Subordination Agreement dated August 28, 2003 between the Registrant and the Purchaser.     [X] [10.2]
10.32           Termination  and Release  Agreement  dated  August 13, 2003  between  the  Registrant  and
                Pharmacia, AB.                                                                              [X] [10.3]
10.33           Side Letter Agreement dated August 28, 2003 between the Registrant and the Purchaser.       [X] [10.4]
10.34           Unsecured Convertible Debt Purchase Agreement dated February 5, 2004 between the
                Registrant and the Purchaser.                                                               [AA] [10.1]
13.1            Annual Report on Form 10-K for the year ended December 31, 2002.                            [U]
13.2            Quarterly Report on Form 10-Q for the quarter ended March 31, 2003.                         [V]
13.3            Quarterly Report on Form 10-Q for the quarter ended June 30, 2003.                          [W]
13.4            Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.                     [Z]
23.1            Consent of Independent Auditors.
31.1            Certification of Chief Executive Officer to  section 13(a) or 15(d) of the securities
                exchange act of 1934 as adopted pursuant to section 302 of the Sarbanes-Oxley act of 2002.
31.2            Certification of Chief Financial Officer pursuant to  section 13(a) or 15(d) of the
                securities exchange act of 1934 as adopted pursuant to section 302 of the Sarbanes-Oxley
                act of 2002.
32              Certificate of Miravant Medical Technologies Chief Executive Officer and Chief Financial
                Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.

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

</TABLE>


     [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 8-K dated June 30, 1998 (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 March
          31, 1998 (File No. 0-25544).

     [E]  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).

     [F]  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).

     [G]  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).

     [H]  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).

     [I]  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).

     [J]  Incorporated by reference from the Registrant's  1996 Definitive Proxy
          Statement filed June 18, 1996.

     [K]  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).

     [L]  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).

     [M]  Incorporated by reference from the Registrant's  1996 Definitive Proxy
          Statement filed April 24, 1997. [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, 1997 (File No. 0-25544).

     [O]  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).

     [P]  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).

     [Q]  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).

     [R]  Incorporated  by  reference  from the exhibit  referred to in brackets
          contained in the Registrant's  Form 8-K dated March 11, 2002 (File No.
          0-25544).

     [S]  Incorporated  by  reference  from the exhibit  referred to in brackets
          contained in the  Registrant's  Form 8-K dated September 3, 2002 (File
          No. 0-25544).

     [T]  Incorporated  by  reference  from the exhibit  referred to in brackets
          contained in the  Registrant's  Form 8-K dated December 19, 2002 (File
          No. 0-25544).

     [U]  As filed with the  Commission on March 31, 2003. [V] As filed with the
          Commission on May 15, 2003.

     [W]  As filed with the Commission on August 14, 2003.

     [X]  Incorporated  by  reference  from the exhibit  referred to in brackets
          contained in the Registrant's Form 8-K dated August 28, 2003 (File No.
          0-25544).

     [Y]  As filed with the Commission on November 14, 2003.

     [Z]  Incorporated  by  reference  from the exhibit  referred to in brackets
          contained in to the  Registrant's  Registration  Statement on Form S-2
          (File No. 333-109367).

     [AA] Incorporated  by  reference  from the exhibit  referred to in brackets
          contained in the  Registrant's  Form 8-K dated February 12, 2004 (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.


<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, 2004


                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE  PRESENTS,  that each person whose  signature  appears
below constitutes and appoints Gary S. Kledzik and John M. Philpott his true and
lawful  attorney-in-fact and agent, with full power of substitution and, for him
and in his name,  place and stead, in any and all capacities to sign any and all
amendments to this Report on Form 10-K, and to file the same,  with all exhibits
thereto and other  documents in connection  therewith,  with the  Securities and
Exchange  Commission,  granting unto said  attorney-in-fact and agent full power
and  authority  to do and  perform  each and every act and thing  requisite  and
necessary  to be done in  connection  therewith,  as  fully to all  intents  and
purposes as he might or could do in person,  hereby ratifying and confirming all
that said  attorney-in-fact  and agent,  or his substitute or  substitutes,  may
lawfully do or cause to be done by virtue hereof.




     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, 2004
------------------------------------        and Chief Executive Officer,
    Gary S. Kledzik, Ph.D.                 (Principal Executive Officer)


/S/ David E. Mai                            Director and President                               March 29, 2004
------------------------------------
    David E. Mai

/S/ John M. Philpott                        Chief Financial Officer and Treasurer                March 29, 2004
------------------------------------       (Principal Financial Officer and
    John M. Philpott                        Principal Accounting Officer)


/S/ Charles T. Foscue                       Director                                             March 29, 2004
------------------------------------
    Charles T. Foscue

/S/ Barry Johnson                           Director                                             March 29, 2004
------------------------------------
    Barry Johnson

</TABLE>