<PAGE>   1
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-Q
(Mark One)

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

                For the Quarterly Period Ended September 30, 2000

                                       OR

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

              For the transition period from _________ to _________

                           Commission File No. 0-20111

                          ARONEX PHARMACEUTICALS, INC.
             (Exact name of Registrant as specified in its charter)

          Delaware                                       76-0196535
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

   8707 Technology Forest Place, The Woodlands, Texas    77381-1191
         (Address of principal executive office)         (Zip Code)

       Registrant's telephone number, including area code: (281) 367-1666

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                Yes  X      No
                                    ---        ---

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.

                CLASS                         OUTSTANDING AT SEPTEMBER 30, 2000

    Common Stock, $.001 par value                      25,932,005 shares



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<PAGE>   2


                  ARONEX PHARMACEUTICALS, INC. AND SUBSIDIARIES
                    QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
                                      INDEX
                                                                            Page
                                                                            ----
Factors Affecting Forward-Looking Statements.............................     3

PART I.            FINANCIAL INFORMATION

Item 1   Consolidated Financial Statements...............................     3

         Consolidated Balance Sheets - December 31, 1999 and
           September 30, 2000 (unaudited)................................     4

         Consolidated Statements of Operations:
           Nine Months Ended September 30, 1999 and September 30, 2000
             (unaudited), the three months ended September 30, 1999 and
             September 30, 2000 (unaudited) and for the Period from
             Inception (June 13, 1986) through September 30, 2000
             (unaudited).................................................     5

         Consolidated Statements of Comprehensive Loss:
           Nine Months Ended September 30, 1999 and September 30, 2000
             (unaudited) and the three months ended September 30, 1999
             and September 30, 2000 (unaudited)..........................     5

         Consolidated Statements of Cash Flows:
           Nine Months Ended September 30, 1999 and September 30, 2000
             (unaudited) and for the Period from Inception
             (June 13, 1986) through September 30, 2000 (unaudited)......     6

         Notes to Consolidated Financial Statements - September 30, 2000
           (unaudited)...................................................     7

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

Item 3   Quantitative and Qualitative Disclosures about Market Risk......    11

PART II.           OTHER INFORMATION

Item 1   Legal Proceedings ..............................................    12

Item 6   Exhibits and Reports on Form 8-K................................    12


SIGNATURES...............................................................    13

                                     - 2 -

<PAGE>   3

FACTORS AFFECTING FORWARD-LOOKING STATEMENTS

         This Quarterly Report on Form 10-Q includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). When used in this document, the words "anticipate," "believe,"
"expect," "estimate," "project" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, believed, expected,
estimated or projected. For additional discussion of such risks, uncertainties
and assumptions, see "Item 1. Business -- Manufacturing," "-- Sales and
Marketing," "-- Patents and Proprietary Rights," "-- Government Regulation," "--
Competition" and "-- Additional Business Risks" included in the Company's
Amendment No. 1 to its Annual Report on Form 10-K for the year ended December
31, 1999 (the "1999 Form 10-K/A").

PART I.  FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

     The following unaudited consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and note disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to those rules and
regulations, although we believe that the disclosures made herein are adequate
to make the information presented not misleading. These consolidated financial
statements should be read in conjunction with the audited financial statements
for the year ended December 31, 1999 included in the 1999 Form 10-K/A.

     The information presented in the accompanying consolidated financial
statements is unaudited, but in the opinion of management, reflects all
adjustments (which include only normal recurring adjustments) necessary to
present fairly such information.


                                     - 3 -

<PAGE>   4


                  ARONEX PHARMACEUTICALS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)


                           CONSOLIDATED BALANCE SHEETS
                  (ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)


                                     ASSETS
<TABLE>
<CAPTION>
                                                                                                       SEPTEMBER 30,
                                                                                     DECEMBER 31,          2000
                                                                                         1999           (UNAUDITED)
                                                                                     ------------      -------------
<S>                                                                                  <C>               <C>
Current assets:
   Cash and cash equivalents .................................................        $  11,528         $  11,924
   Short-term investments ....................................................            7,804                --
   Prepaid expenses and other assets .........................................              453               292
                                                                                      ---------         ---------
        Total current assets .................................................           19,785            12,216

Long-term investments ........................................................              920               871
Furniture, equipment and leasehold improvements, net of accumulated
   depreciation of $3,450 and $3,887, respectively............................            2,029             1,984
                                                                                      ---------         ---------
           Total assets ......................................................        $  22,734         $  15,071
                                                                                      =========         =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued expenses .....................................        $   3,502         $   2,311
   Accrued payroll ...........................................................              644               527
   Deferred revenue ..........................................................               --               100
   Current portion of notes payable and obligations under capital leases .....              340               467
                                                                                      ---------         ---------
        Total current liabilities ............................................            4,486             3,405

Long-term liabilities:
   Notes payable .............................................................            3,517             3,262
                                                                                      ---------         ---------
        Total long-term liabilities ..........................................            3,517             3,262

Commitments and contingencies

Stockholders' equity:
   Preferred stock $.001 par value, 5,000,000 shares authorized,
        none issued and outstanding ..........................................               --                --
   Common stock $.001 par value, 40,000,000 shares authorized,
        22,853,782 and 25,932,005 shares issued and outstanding,
        respectively .........................................................               23                26
   Additional paid-in capital ................................................          113,262           118,541
   Common stock warrants .....................................................              908             3,443
   Treasury stock ............................................................              (11)              (11)
   Deferred compensation .....................................................              (69)              (17)
   Unrealized gain on investments ............................................            2,147                --
   Deficit accumulated during development stage ..............................         (101,529)         (113,578)
                                                                                      ---------         ---------
        Total stockholders' equity ...........................................           14,731             8,404
                                                                                      ---------         ---------
        Total liabilities and stockholders' equity ...........................        $  22,734         $  15,071
                                                                                      =========         =========
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                     - 4 -

<PAGE>   5
                 ARONEX PHARMACEUTICALS, INC. AND SUBSIDIARIES
                         (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
             (ALL AMOUNTS IN THOUSANDS, EXCEPT LOSS PER SHARE DATA)
                                   (UNAUDITED)


<TABLE>
<CAPTION>


                                                                                                                         PERIOD
                                                                                                                          FROM
                                                                                                                       INCEPTION
                                                                                                                        (JUNE 13,
                                                                  NINE MONTHS ENDED          THREE MONTHS ENDED           1986)
                                                                    SEPTEMBER 30,               SEPTEMBER 30,            THROUGH
                                                              --------------------------   -----------------------    SEPTEMBER 30,
                                                                  1999          2000          1999         2000           2000
                                                              ----------     ---------     ---------     ---------    -------------
<S>                                                           <C>            <C>           <C>           <C>             <C>
Revenues:
     Interest income ......................................    $   1,030     $     777     $     339     $     270       $   8,953
     Research and development grants and contracts ........       10,727           326           854            26          23,165
                                                               ---------     ---------     ---------     ---------       ---------
              Total revenues ..............................       11,757         1,103         1,193           296          32,118

 Expenses:
     Research and development .............................       15,664        13,195         5,035         3,521         110,617
     Purchase of in-process research and development ......           --            --            --            --          11,625
     Selling, general and administrative ..................        3,141         2,236         1,414           775          24,046
     Interest expense and other ...........................          257           374           143           131           2,061
                                                               ---------     ---------     ---------     ---------       ---------
              Total expenses ..............................       19,062        15,805         6,592         4,427         148,349
                                                               ---------     ---------     ---------     ---------       ---------
Operating loss ............................................    $  (7,305)    $ (14,702)    $  (5,399)    $  (4,131)      $(116,231)
                                                               ---------     ---------     ---------     ---------       ---------
Other income:
     Gain on sale of investments ..........................           --         2,653            --            --           2,653
                                                               ---------     ---------     ---------     ---------       ---------
Net loss ..................................................    $  (7,305)    $ (12,049)    $  (5,399)    $  (4,131)      $(113,578)
                                                               =========     =========     =========     =========       =========
Basic and diluted loss per share ..........................    $   (0.34)    $   (0.49)    $   (0.24)    $   (0.16)
                                                               =========     =========     =========     =========
Weighted average shares used in computing basic and diluted
     loss per share .......................................       21,365        24,478        22,664        25,894
</TABLE>


                  ARONEX PHARMACEUTICALS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
             (ALL AMOUNTS IN THOUSANDS, EXCEPT LOSS PER SHARE DATA)
                                   (UNAUDITED)


<TABLE>
<S>                                                            <C>           <C>          <C>          <C>
Comprehensive income:
     Net loss ...........................................      $   (7,305)   $  (12,049)  $  (5,399)   $  (4,131)
     Unrealized gain on securities available for sale....             101            --          --           --
                                                               ----------    ----------   ---------    ---------
              Comprehensive income.......................      $   (7,204)   $  (12,049)  $  (5,399)   $  (4,131)
                                                               =========     ==========   =========    =========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                     - 5 -
<PAGE>   6

                  ARONEX PHARMACEUTICALS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (ALL AMOUNTS IN THOUSANDS)
                                   (UNAUDITED)
 <TABLE>
<CAPTION>

                                                                                                                 PERIOD FROM
                                                                                                                  INCEPTION
                                                                                    NINE MONTHS ENDED          (JUNE 13, 1986)
                                                                                       SEPTEMBER 30,               THROUGH
                                                                             --------------------------------    SEPTEMBER 30,
                                                                                   1999             2000            2000
                                                                             ---------------   --------------  ---------------
<S>                                                                          <C>               <C>             <C>
Cash flows from operating activities:
   Net loss............................................................      $     (7,305)     $    (12,049)   $    (113,578)
   Adjustments to reconcile net loss to net cash provided by
     (used in) operating activities-
        Depreciation and amortization..................................               480               437            5,895
        Loss on disposal of assets.....................................                --                --              200
        Compensation expense related to stock and stock options........               861               290            5,157
        Charge for purchase of in-process research and development.....                --                --           11,547
        Unrealized gain on investment..................................                --            (2,147)              --
        Acquisition costs, net of cash received........................                --                --             (270)
        Accrued interest payable converted to stock....................                --                --              500
        Loss in affiliate..............................................                --                --               97
   Changes in assets and liabilities:
        Decrease (increase) in prepaid expenses and other assets.......              (725)              161             (107)
        Increase in accounts receivable................................              (307)               --               --
        Increase (decrease) in accounts payable and accrued expenses...            (2,167)           (1,308)           2,765
        Increase (decrease) in deferred revenue........................                --               100             (253)
                                                                             ------------      ------------    -------------
                  Net cash used in operating activities................            (9,163)          (14,516)         (88,047)

Cash flows from investing activities:
   Purchases of investments............................................           (11,353)           (1,567)        (262,928)
   Sales of investments................................................            12,064             9,420          267,792
   Purchase of furniture, equipment and leasehold improvements.........              (343)             (392)          (6,848)
   Proceeds from sale of assets........................................                --                --               63
   Investment in affiliate.............................................                --                --             (500)
                                                                             ------------      ------------    -------------
                  Net cash provided by (used in) investing activities..               368             7,461           (2,421)

Cash flows from financing activities:
   Proceeds from and increase in notes payable.........................               923               169            7,137
   Repayment of notes payable and principal payments under capital
     lease obligations.................................................              (219)             (297)          (3,409)
   Purchase of treasury stock..........................................                --                --              (11)
   Proceeds from issuance of stock.....................................             12,637             7,579          98,675
                                                                             -------------     -------------   -------------
                  Net cash provided by financing activities............             13,341             7,451         102,392
                                                                             -------------     -------------   -------------
Net increase in cash and cash equivalents..............................              4,546               396          11,924
Cash and cash equivalents at beginning of period.......................             11,338            11,528              --
                                                                             -------------     -------------   -------------
Cash and cash equivalents at end of period.............................      $      15,884     $     11,924    $      11,924
                                                                             =============     ============    =============
Supplemental disclosures of cash flow information:
   Cash paid during the period for interest............................      $         222     $        378    $       1,517
   Conversion of notes payable and accrued interest to common stock....      $          --     $         --    $       3,043
</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.


                                     - 6 -

<PAGE>   7

                  ARONEX PHARMACEUTICALS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000
                                   (UNAUDITED)


1.   Organization

     Aronex Pharmaceuticals, Inc. (the "Company", "Aronex Pharmaceuticals",
"we", "us" or "our") was incorporated in Delaware on June 13, 1986 and merged
with Triplex Pharmaceutical Corporation ("Triplex") and API Acquisition Company,
Inc. ("API"), formerly Oncologix, Inc. effective September 11, 1995. In 1998, we
formed a wholly-owned subsidiary, Aronex Europe Limited.

     Aronex Pharmaceuticals is a development stage company that has devoted
substantially all of its efforts to research and product development and has not
yet generated any significant revenues, nor is there any assurance of future
revenues. In addition, we expect to continue to incur losses for the foreseeable
future, and there can be no assurance that we will successfully complete the
transition from a development stage company to successful operations. The
research and development activities we engage in involve a high degree of risk
and uncertainty. Our ability to successfully develop, manufacture and market our
proprietary products is dependent upon many factors. These factors include, but
are not limited to, the need for additional financing, attracting and retaining
key personnel and consultants, and successfully developing manufacturing, sales
and marketing operations. Our ability to develop these operations may be
immensely impacted by uncertainties related to patents and proprietary
technologies, technological change and obsolescence, product development,
competition, government regulations and approvals, health care reform,
third-party reimbursement and product liability exposure. Additionally, we are
reliant upon collaborative arrangements for research, contractual agreements
with corporate partners, and our exclusive license agreements with The
University of Texas M.D. Anderson Cancer Center. Further, during the period
required to develop these products, we will require additional funds which may
not be available to us. See "Business -- Additional Business Risks" in our 1999
Form 10-K/A.

     We believe that we can conserve our current cash resources to satisfy our
funding needs into mid 2001. Our longer-term funding requirements will depend on
many factors, including the progress of our research and development and the
establishment of other collaborative relationships. At this time, we are
reviewing a number of alternatives including additional equity financing and
corporate partnering relationships with pharmaceutical companies to advance the
development of our proposed products. Should such financing alternatives not be
obtained, we will need to adjust our current plan for conducting our operations
during 2001. We have been advised by our independent public accountants that if
our available capital resources at the time of their audit of the consolidated
financial statements for the year ending December 31, 2000 are not adequate to
fund our anticipated operations through December 31, 2001, their report on those
financial statements will include an explanatory fourth paragraph expressing
substantial doubt about our ability to continue as a going concern.

     The consolidated balance sheet at September 30, 2000 and the related
consolidated statements of operations and cash flows for the three and nine
month periods ending September 30, 2000 and 1999 and the period from inception
(June 13, 1986) through September 30, 2000 are unaudited. These interim
financial statements should be read in conjunction with the audited financial
statements and related notes included in our 1999 Form 10-K/A. The unaudited
interim consolidated financial statements reflect all adjustments which are, in
the opinion of management, necessary for a fair statement of results for the
interim periods presented and all such adjustments are of a normal recurring
nature. Interim results are not necessarily indicative of results for a full
year.

2.   Accounting Policies

     Principles of Consolidation


                                     - 7 -
<PAGE>   8


     The consolidated financial statements include the accounts of Aronex
Pharmaceuticals, Triplex, API and Aronex Europe Limited. All material
intercompany transactions have been eliminated in consolidation.

     Cash, Cash Equivalents and Short- and Long-Term Investments

     Cash and cash equivalents include money market accounts and investments
with an original maturity of less than three months. Long-term investments at
September 30, 2000 are available for sale securities which are United States
mortgage-backed securities with maturity dates over the next 23 years that have
an amortized cost of $871,000, which approximates fair market value and cost.
Aronex Pharmaceuticals currently has no trading securities.

      New Accounting Pronouncements

      In December 1999, the Securities and Exchange Commission (SEC) issued
Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements"
(SAB 101) which provides guidance related to revenue recognition based on
interpretations and practices followed by the SEC. SAB 101 is effective the
fourth fiscal quarter of fiscal years beginning after December 15, 1999 and
requires companies to report any changes in revenue recognition as a cumulative
change in accounting principle at the time of implementation in accordance with
Accounting Principles Board Opinion No. 20, "Accounting Changes." We are
currently in the process of evaluating what impact SAB 101 will have on our
financial position or our results of operations.

3.    STOCKHOLDERS' EQUITY

      In April 2000, we raised proceeds net of offering costs of approximately
$7.3 million in a private placement of Units. Each $100,000 Unit was comprised
of (1) shares of our common stock in an amount determined by dividing $100,000
by $2.75 and (2) a warrant with a five-year term to purchase an amount of shares
of our common stock that is one third of the amount of shares contained in such
Unit at an exercise price of $3.00 per share. Through these Units, we issued
2,932,574 shares of common stock and warrants to purchase 977,524 shares of
common stock. In addition, we paid a finder, who assisted us in placing the
Units, a placement fee of 7% of the gross proceeds and issued warrants with a
seven-year term to purchase 150,000 shares of our common stock at an exercise
price of $3.25 per share. The fair value of the warrants issued, $2,560,780, is
recorded in our second quarter 2000 financial statements. This amount has been
estimated on the date of the grant using the Black Scholes option pricing model
with the following weighted-average assumptions: a risk free rate of 5.6%, with
no expected dividends, expected lives of 5 and 7 years and expected volatility
of 92%.

4.    FEDERAL INCOME TAXES

      At December 31, 1999, we had net operating loss ("NOL") carryforwards for
federal income tax purposes of approximately $114.8 million. The Tax Reform Act
of 1986 provided a limitation on the use of NOL and tax credit carryforwards
following certain ownership changes that could limit our ability to utilize
these NOLs and tax credits. Accordingly, our ability to utilize the above NOL
and tax credit carryforwards to reduce future taxable income and tax liabilities
may be limited. As a result of the merger with Triplex and API in 1995, a change
in control as defined by federal income tax law occurred, causing the use of the
carryforwards prior to the merger to be limited and possibly eliminated.
Additionally, because United States tax laws limit the time during which NOLs
and the tax credit carryforwards may be applied against future taxable income
and tax liabilities, we may not be able to take full advantage of our NOLs and
tax credit carryforwards for federal income tax purposes. The carryforwards will
begin to expire in 2001 if not otherwise used. Due to the possibility of not
reaching a level of profitability that will allow for the utilization of our
deferred tax assets, a valuation allowance has been established to offset these
tax assets. We have not made any federal income tax payments since inception.


                                     - 8 -

<PAGE>   9

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

RESULTS OF OPERATIONS

      OVERVIEW

      Since our inception in 1986, we have primarily devoted our resources to
fund research, drug discovery and development. We have been unprofitable to date
and expect to incur substantial operating losses for the next several years as
we expend our resources for product research and development, preclinical and
clinical testing and regulatory compliance. We have sustained losses of $113.6
million through September 30, 2000. Our research and development activities and
operations have been financed primarily through public and private offerings of
securities and, to a lesser extent, from revenues under research and development
grants and contracts. Our operating results have fluctuated significantly during
each quarter, and we anticipate that these fluctuations, largely attributable to
varying commitments and expenditures for clinical trials and research and
development, will continue for the next several years.

      Three and Nine Month Periods Ended September 30, 1999 and 2000

      Revenues from research and development grants and contracts decreased
by 97% to $26,000 for the three months ended September 30, 2000 from $854,000
for the three months ended September 30, 1999. Revenues from research and
development grants and contracts decreased 97% to $326,000 for the nine months
ended September 30, 2000 from $10.7 million for the nine months ended September
30, 1999. These decreases resulted primarily from a reduction of $10.4 million
and $843,000 in milestone and development payments received under our license
agreement for Nyotran(R) with Abbott Laboratories ("Abbott") in the three and
nine month periods ending September 30, 2000, respectively.

      Interest income decreased by 20% to $270,000 for the three months ended
September 30, 2000 from $339,000 for the three months ended September 30, 1999.
Interest income decreased by 25% to $777,000 for the nine months ended September
30, 2000, from $1,030,000 for the nine months ended September 30, 1999. These
changes resulted from a decrease in the average amount of funds available for
investment for the three and nine month periods ended September 30, 2000.

      Research and development expenses decreased by 30% to $3.5 million for the
three months ended September 30, 2000 from $5.0 million for the three months
ended September 30, 1999. Research and development expenses decreased by 16% to
$13.2 million for the nine month period ending September 30, 2000 from $15.7
million for the nine month period ending September 30, 1999. The decrease in
research and development expenses for the three months ended September 30, 2000
described above resulted primarily from:

      o  a decrease of $663,000 in clinical trial costs for Nyotran(R);
      o  a decrease of $138,000 in clinical trial costs for ATRAGEN(R);
      o  a decrease of $191,000 in salary and payroll costs;
      o  a decrease of $139,000 in pharmacology and toxicology studies relating
         to Nyotran(R) and ATRAGEN(R); and
      o  a decrease of $215,000 in drug materials and manufacturing for
         ATRAGEN(R).

      The decrease in research and development expenses for the nine months
ended September 30, 2000 described above resulted primarily from:

      o  a decrease of $2,845,000 in clinical trial costs for Nyotran(R);
      o  a decrease of $1,040,000 in salaries and payroll costs; and
      o  a decrease of $183,000 in pharmacology and toxicology studies relating
         to Nyotran(R)and ATRAGEN(R).


                                     - 9 -
<PAGE>   10


     The decreases listed above were offset by:

     o  an increase of $704,000 in drug materials and manufacturing costs for
        Annamycin, Aroplatin(TM) and ATRAGEN(R);
     o  an increase of $1,085,000 in clinical trial costs for ATRAGEN(R); and
     o  an increase of $125,000 in outside pharmaceutical development testing
        relating to Nyotran(R).

     Selling, general and administrative expenses decreased 45% to $775,000 for
the three months ended September 30, 2000 from $1.4 million for the three months
ended September 30, 1999. Selling, general and administrative expenses decreased
29% to $2.2 million for the nine months ended September 30, 2000 from $3.1
million for the nine months ended September 30, 1999. The decreases in selling,
general and administrative expenses were due primarily to decreases in business
consultants and sales and marketing expenses relating to ATRAGEN(R) for the
three and nine month periods ending September 30, 2000, respectively.

     Interest expense and other decreased 8% to $131,000 for the three months
ended September 30, 2000 from $143,000 for the three months ended September 30,
1999. Interest expense and other increased 45% to $374,000 for the nine months
ended September 30, 2000 from $257,000 for the nine months ended September 30,
1999. The increase in interest expense for the nine months ended September 30,
2000 was primarily attributable to the issuance of a $2.5 million promissory
note to Genzyme Corporation in the second quarter of 1999.

     Net loss decreased by $1.3 million resulting in a net loss of $4.1 million
for the three months ended September 30, 2000. Net loss increased by $4.7
million to $12.0 million for the nine months ended September 30, 2000. These
changes were due mainly to decreased research and development revenue of
$828,000 and $10.4 million for the three and nine month periods ending September
30, 2000, respectively. The decreased research and development revenue was
offset by decreased expenses of $1.3 million and $3.3 million for the three and
nine month periods ending September 30, 2000, respectively.

LIQUIDITY AND CAPITAL RESOURCES

     Since our inception, our primary source of cash has been from financing
activities, which have consisted primarily of sales of equity securities, and to
a lesser extent, from revenues under research and development agreements and
grants. We have raised an aggregate of $98.6 million from the sale of equity
securities from inception through September 30, 2000. In addition, we have
received $23.2 million since inception relating to research and development
grants and contracts.

     The majority of our development activities are committed on a short-term,
as-needed basis through contracts and purchase orders. These arrangements can be
changed based on our needs and development activities. We have contracted with
certain clinical research and other consulting organizations to assist in
conducting our clinical trials. The agreements provide that we can terminate
them at any time, should either our financial situation, or the results of the
studies, require it. Nonetheless, we intend to continue to engage such services
in the future.

     Our primary use of cash to date has been in operating activities to fund
research and development, including preclinical studies and clinical trials and
general and administrative expenses. Cash of $14.5 million and $9.2 million was
used in operating activities during the first nine months of 2000 and 1999,
respectively. We had cash, cash-equivalents and long-term investments of $12.8
million as of September 30, 2000, consisting primarily of cash and money market
accounts, United States government securities and investment grade commercial
paper.

     We have experienced negative cash flows from operations since inception. We
have expended, and will continue to require, substantial funds to continue our
research and development activities, including preclinical studies and clinical
trials of our products, and to commence sales and marketing efforts if the
United States Food and Drug Administration and other regulatory approvals are
obtained.

     We believe that we can conserve our current cash resources to satisfy our
funding needs into mid 2001. Our longer-term funding requirements will depend on
many factors, including the progress of our research and development and the
establishment of other collaborative relationships. At this time, we are
reviewing a number of alternatives including equity financing and corporate
partnering relationships with pharmaceutical companies to advance the
development of our proposed products. Should such financing alternatives not be
obtained, we will need to adjust our current plan for


                                     - 10 -

<PAGE>   11

conducting our operations during 2001. We have been advised by our independent
public accountants that if our available capital resources at the time of their
audit of the consolidated financial statements for the year ending December 31,
2000 are not adequate to fund our anticipated operations through December 31,
2001, their report on those financial statements will include an explanatory
fourth paragraph expressing substantial doubt about our ability to continue as a
going concern.

     We have experienced significant fluctuations in accounts payable and
accrued expenses primarily as a result of the development activities relating to
our products. We anticipate that the amounts expended for these items in the
future will continue to correspond with our development activities. If the
volume of development activities decreases, there will be a decrease in
outstanding payables and a decrease in our liquidity position. We expect that
our expenses relating to development activities will fluctuate from quarter to
quarter over the next few years as we have not yet generated revenues from
product sales. Also, we have typically obtained debt financing when necessary
for equipment, furniture and leasehold improvement requirements. We expect that
we will continue to incur additional debt to meet our capital requirements from
time to time in the future, based on our financial resources and needs.

     Our capital requirements will depend on many factors, including the risk
factors more completely described under "Business -- Additional Business Risks"
in our 1999 Form 10-K/A. These factors include:

     o  problems, delays, expenses and complications frequently encountered by
        development stage companies;
     o  the progress of our research, development and clinical trial programs;
     o  the extent and terms of any future collaborative research,
        manufacturing, marketing or other funding arrangements;
     o  the costs and timing of seeking regulatory approvals of our products;
     o  our ability to obtain regulatory approvals;
     o  the success of our sales and marketing programs;
     o  the costs of filing, prosecuting, defending and enforcing any patent
        claims and other intellectual property rights; and
     o  changes in economic, regulatory or competitive conditions of our
        planned business.

     Estimates about the adequacy of funding for our activities are based on
certain assumptions, including the assumption that testing and regulatory
procedures relating to our products can be conducted at projected costs. There
can be no assurance that changes in our research and development plans,
acquisitions or other events will not result in accelerated or unexpected
expenditures.

     To satisfy our capital and operating requirements, we may seek to raise
additional funds in the public or private capital markets. Our ability to raise
additional funds in the public or private markets will be adversely affected if
the results of our current or future clinical trials are not favorable. We may
seek additional funding through corporate collaborations and other financing
vehicles. There can be no assurance that any funding will be available to us on
favorable terms or at all. If adequate funds are not available, we may be
required to curtail significantly one or more of our research or development
programs, or we may be required to obtain funds through arrangements with future
collaborative partners or other parties that may require us to relinquish rights
to some or all of our technologies or products. If we are successful in
obtaining additional financing, the terms of such financing may have the effect
of diluting or adversely affecting the holdings or the rights of the holders of
our common stock.

     In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin 101, "Revenue Recognition in Financial Statements" (SAB 101)
which provides guidance related to revenue recognition based on interpretations
and practices followed by the SEC. SAB 101 is effective the fourth fiscal
quarter of fiscal years beginning after December 15, 1999 and requires companies
to report any changes in revenue recognition as a cumulative change in
accounting principle at the time of implementation in accordance with Accounting
Principles Board Opinion No. 20, "Accounting Changes." We are currently in the
process of evaluating what impact SAB 101 will have on our financial position or
our results of operations.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET  RISK

          Not applicable.


                                     - 11 -

<PAGE>   12

PART II.    OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     In July 2000, the U. S. Patent and Trademark Office ruled against us as to
priority of inventorship in a patent interference proceeding between the Company
and Sumitomo Pharmaceuticals Co., Ltd. The patents and patent applications at
issue relate to the drug NDDP. NDDP is the drug used in the formula for
AroplatinTM which consists of the NDDP molecule in a unique liposomal vehicle.
The interference does not affect our proprietary positions on our liposomal
formulations of the drug. Both of the parties had claimed sole right to the
class of compounds including NDDP. Sumitomo relied on a Japanese patent
application for priority. The interference was declared by the Patent Office to
be between a currently pending U. S. patent application owned by Sumitomo and
certain issued patents licensed to us from the University of Texas M.D. Anderson
Cancer Center. If not overturned, the determination by the Patent Office that
Sumitomo's U.S. patent application has established priority of invention will
render our U.S. patent claims involved in the interference to be unenforceable.

        Prior to the recent judgement, we received from Sumitomo proposed terms
of a licensing arrangement under which we would be able to market AroplatinTM.
In addition to continuing these negotiations with Sumitomo, we are currently
investigating our legal options. There can be no assurance that we will prevail
in court or be able to enter into a license with Sumitomo on acceptable terms,
if at all. In the meantime, we plan to continue with our clinical development
program for AroplatinTM.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         11.1  Statement regarding Computation of Share Earnings.

         27.1  Financial Data Schedule.


     (b) Reports on Form 8-K

        None.


                                     - 12 -

<PAGE>   13
                                   SIGNATURES

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


                                            ARONEX PHARMACEUTICALS, INC.



Dated:   November 14, 2000                  By: /s/  GEOFFREY F. COX
                                                -------------------------------
                                                Geoffrey F. Cox, Ph.D.
                                                Chief Executive Officer



Dated:   November 14, 2000                  By: /s/  TERANCE A. MURNANE
                                                -------------------------------
                                                Terance A. Murnane
                                                Controller
                                                (Principal Financial
                                                   and Accounting Officer)


                                     - 13 -

<PAGE>   14
                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT NO.             DESCRIPTION
-----------             -----------
<S>             <C>
   11.1        Statement Regarding Computation of Share Earnings

   27.1        Financial Data Schedule

</TABLE>