<PAGE>   1

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


                                   FORM 10-QSB


                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1998


                           COMMISSION FILE NO. 0-24972



                       INKINE PHARMACEUTICAL COMPANY, INC.
        (Exact name of small business issuer as specified in its charter)


         NEW YORK                                    13-3754005
(State or other jurisdiction of           (I.R.S. Employer Identification  No.)
incorporation or organization)


                                SENTRY PARK EAST
                                1720 WALTON ROAD
                               BLUE BELL, PA 19422
                    (Address of principal executive offices)

                                  610-260-9350
                           (Issuer's telephone number)

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

                    At February 12, 1999, the registrant had
                    outstanding 22,766,000 shares of common
                       stock, par value $.0001 per share.

             Transitional Small Business disclosure format: Yes  No X
<PAGE>   2
                       INKINE PHARMACEUTICAL COMPANY, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                PAGE
<S>                                                                             <C>
PART I - FINANCIAL INFORMATION
     ITEM 1.  FINANCIAL STATEMENTS

              BALANCE SHEETS - as of December 31, 1998 (unaudited)
              and June 30, .....................................................  3

              STATEMENTS OF OPERATIONS (unaudited) -- For the Three 
              and Six Month Periods Ended December 31, 1998 and 1997, 
              and the Period from July 1, 1993 (Commencement of Operations)
              through December 31, 1998.........................................  4

              STATEMENTS OF CASH FLOWS (unaudited) -- For the Six Month
              Periods Ended December 31, 1998 and 1997, and the Period
              from July 1, 1993 (Commencement of Operations) through
              December 31, 1998.................................................  5

              NOTES TO UNAUDITED FINANCIAL STATEMENTS...........................  6

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATION................................  8

PART II - OTHER INFORMATION.....................................................  11

SIGNATURES......................................................................  12
</TABLE>
<PAGE>   3
PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                       INKINE PHARMACEUTICAL COMPANY, INC.
                          (a development stage company)

                                 BALANCE SHEETS

                      (In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                      DECEMBER 31, 1998     JUNE 30, 1998
                                                                      -----------------     -------------
         ASSETS                                                         (UNAUDITED)
<S>                                                                   <C>                   <C>     
Current assets:
     Cash and cash equivalents ......................................      $  2,896           $  1,115
     Short term investments .........................................         7,553             11,847
     Prepaid expenses and other current assets ......................            64                214
                                                                           --------           --------
         Total current assets .......................................        10,513             13,176

Fixed assets, net ...................................................           169                190
                                                                           --------           --------

         Total assets ...............................................      $ 10,682           $ 13,366
                                                                           ========           ========
         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and other accrued expenses ....................      $    371           $    246
                                                                           --------           --------
Stockholders' equity:
Common stock, $.0001 par value; authorized 50,000,000
     shares; issued 22,719,690 shares ...............................             2                  2
Less common stock held in treasury (16,515 shares) ..................           (37)               (37)
Additional paid-in capital ..........................................        31,033             30,954
Deferred compensation ...............................................        (3,411)            (4,320)
Other comprehensive income ..........................................             3                  3

Deficit accumulated during the development stage ....................       (17,279)           (13,482)
                                                                           --------           --------

         Total stockholders' equity .................................        10,311             13,120
                                                                           --------           --------

         Total liabilities and stockholders' equity .................      $ 10,682           $ 13,366
                                                                           ========           ========
</TABLE>

See accompanying notes to unaudited financial statements.

                                       3
<PAGE>   4
                       INKINE PHARMACEUTICAL COMPANY, INC.
                          (a development stage company)

                            STATEMENTS OF OPERATIONS
                                   (unaudited)

                    (in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                                              PERIOD FROM
                                                                                                                JULY 1, 1993
                                                                                                              (COMMENCEMENT
                                                                                                              OF OPERATIONS)
                                              THREE MONTHS ENDED                   SIX MONTHS ENDED              THROUGH
                                               DECEMBER 31,                         DECEMBER 31,                DECEMBER 31,
                                               1998            1997              1998            1997               1998
                                            --------         --------         --------         -------          --------
<S>                                         <C>              <C>              <C>              <C>              <C>     
Costs and Expenses:
       Research and development ........    $  1,017         $    737         $  2,284         $    804         $  6,462
       Purchased research and
            development ................        --              3,880             --              3,880            3,952
      General and administrative .......         974            1,363            1,828            1,648            8,041
      Write-off debt discount ..........        --               --               --               --                 75
                                            --------         --------         --------         --------         --------
Loss from operations ...................      (1,991)          (5,980)          (4,112)          (6,332)         (18,530)
                                            --------         --------         --------         --------         --------
Interest income ........................         145              118              315              126            1,258
Interest expense .......................        --               --               --               --                 (7)
                                            --------         --------         --------         --------         --------
Basic and diluted net loss .............    $ (1,846)        $ (5,862)        $ (3,797)        $ (6,206)        $(17,279)
                                            ========         ========         ========         ========         ======== 

Basic and diluted net loss per share....    $  (0.08)        $  (0.40)        $  (0.17)        $  (0.69)

Weighted average shares
        Outstanding ....................      22,703           14,594           22,703            8,975
</TABLE>

See accompanying notes to unaudited financial statements.

                                       4
<PAGE>   5
                       INKINE PHARMACEUTICAL COMPANY, INC.
                          (a development stage company)

                            STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                   PERIOD FROM
                                                                                                   JULY 1, 1993
                                                                      SIX MONTHS ENDED           (COMMENCEMENT OF
                                                                         DECEMBER 31,            OPERATIONS) THROUGH
                                                                    1998          1997          DECEMBER 31, 1998
                                                                   -------      -------         -----------------
<S>                                                               <C>              <C>              <C>      
Cash flows from operating activities:
   Net loss ..................................................    $ (3,797)        $ (6,206)        $(17,279)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
       Depreciation ..........................................          26               13              180
       Write-off of debt discount ............................        --               --                 75
       Value of services paid by options and warrants ........        --                467               80
       Amortization of deferred compensation .................         985            1,116            3,644
       Purchased research and development ....................        --              2,742            2,742
       (Increase) decrease in prepaid expenses
        and other assets .....................................         150              (64)             186
       Increase (decrease) in accounts payable
        and accrued expenses .................................         125             (106)             397
       Expenses paid by affiliate ............................        --               --                 97
       Increase in management fees payable ...................        --               --                113
                                                                  --------         --------         --------
     Net cash used in operating activities ...................      (2,511)          (1,788)         (10,015)

Cash flows from investing activities:
   Purchases of investments ..................................      (5,908)         (12,127)         (28,351)
   Proceeds from maturities and sales of investments .........      10,205              790           20,809
   Capital expenditures ......................................          (5)             (38)            (351)
                                                                  --------         --------         --------
      Net cash provided by (used in) investing activities ....       4,292          (11,375)          (7,893)
Cash flows from financing activities:
   Issuance of common stock - net of expenses ................        --             15,882           20,841
   Cost of shares - acquired .................................        --               --                (37)
   Proceeds from notes payable - affiliates ..................        --               --                 14
   Proceeds from notes payable - stockholders ................        --               --                 96
   Proceeds from notes payable - other .......................        --               --                300
   Repayment of notes payable - stockholders and other .......        --               --               (410)
                                                                  --------         -------          --------
     Net cash provided by (used in) financing activities .....        --             15,882           20,804
                                                                  --------         --------         --------
Net increase in cash and cash equivalents ....................       1,781            2,719            2,896
Cash and cash equivalents - beginning of period ..............       1,115              101             --
                                                                  --------         --------         --------
Cash and cash equivalents - end of period ....................    $  2,896         $  2,820         $  2,896
                                                                  ========         ========         ========
</TABLE>

See accompanying notes to unaudited financial statements.

                                       5
<PAGE>   6
                       INKINE PHARMACEUTICAL COMPANY, INC.
                          (a development stage company)

                          NOTES TO FINANCIAL STATEMENTS
                                   (unaudited)

1.       BASIS OF PRESENTATION

         The accompanying financial statements are unaudited and have been
prepared by InKine Pharmaceutical Company, Inc. (the "Company") in accordance
with generally accepted accounting principles.

         Certain information and footnote disclosures normally included in the
Company's audited annual financial statements have been condensed or omitted in
the Company's interim financial statements. In the opinion of management, the
interim financial statements reflect all adjustments (consisting of normal
recurring adjustments) necessary for a fair representation of the results for
the interim periods presented.

         The results of operations for the interim periods may not necessarily
be indicative of the results of operations expected for the full year, although
the Company expects to incur a significant loss for the year ending June 30,
1999. These interim financial statements should be read in conjunction with the
audited financial statements for the year ended June 30, 1998, which are
contained in the Company's most recent Annual Report on Form 10-KSB.

2.       USE OF ESTIMATES

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

3.       PRO FORMA FINANCIAL INFORMATION

         As previously reported in the Company's reports filed under the
Exchange Act, as of November 6, 1997, the Company acquired all the outstanding
capital stock of CorBec Pharmaceuticals, Inc. ("CorBec"), a privately owned,
development-stage, bio-pharmaceutical company founded in 1993 to discover and
develop drugs to treat autoimmune disease, serious infections and
asthma/allergy, and Sangen Pharmaceutical Company ("Sangen"), a privately owned,
development-stage, bio-pharmaceutical company formed in early 1997 and focused
on the development of a potential cancer treatment technology. CorBec's
technology, which consists of compounds designed to modulate the immune system,
is licensed from the University of Pennsylvania and has been developed in the
laboratory of Alan D. Schreiber, M.D., Professor of Medicine and Assistant Dean
for Research at the University of Pennsylvania School of Medicine (the "Fc
Receptor Technology"). The most advanced product within this family of
compounds, CBP-1011, is in Phase III clinical trials for the treatment of
idiopathic thrombocytopenic purpura ("ITP"). Sangen's technology consists of
specific peptide molecules and a polyclonal antibody developed by Dr. George
Tuszynski, Professor of Surgery, Medicine and Pathology at MCP Hahnemann
("MCP"), based on a specific thrombospondin receptor, which Dr. Tuszyuski
discovered (the "Thrombospondin Technology"). In addition, in early 1997, the
Company acquired an exclusive, worldwide license to a tablet form of the aqueous
sodium phosphate purgative formula used to clean the colon for any medical
purpose and for use as a laxative (the "Purgative Product"), which is currently
in Phase III clinical trials for colonoscopies. The Company licensed this
technology from a partnership of physicians ("ALW Partnership"), including Craig
Aronchik, M.D., an attending gastroenterologist and Head of the Endoscopy Unit
at Pennsylvania Hospital in Philadelphia and a Clinical Associate Professor of
Medicine at the University of Pennsylvania School of Medicine. The acquisitions
of CorBec, Sangen and the Purgative Product license are referred to collectively
herein as the "Acquisitions."

         Simultaneous with the Acquisitions, Dr. Leonard S. Jacob became
Chairman of the Board and Chief Executive Officer of the Company under a
long-term employment agreement and was issued a ten-year option entitling him to
purchase the number of shares of Common Stock equal to 7-1/2% of the fully
diluted capitalization of the Company. The exercise price of Dr. Jacob's option
is (i) $0.61 per share for 1,200,000 shares and (ii) $1.00 per 

                                       6
<PAGE>   7
share for approximately 1,200,000 shares. Dr. Taffy J. Williams, formerly the
Company's President and Chief Executive Officer, became President and Chief
Operating Officer of the Company following the Acquisitions. In January 1997,
Dr. Williams received an option to purchase 5% of the fully diluted
capitalization of the Company. The exercise price of Dr. Williams' option is (i)
$0.61 per share for 500,000 shares and (ii) $1.00 per share for approximately
1,000,000 shares. The exercise prices of Dr. Jacob's and Dr. Williams' options
were below market value of the Common Stock of the Company at the time of grant.
Therefore, the Company has incurred, and will continue to incur, a significant
non-cash charge to operations as a result of the option grants.

         The Sangen acquisition included the grant to Dr. Tuszynski and MCP of
125,000 shares of Common Stock of the Company and options to purchase an
aggregate of 375,000 shares, of which options for 250,000 shares will be
exercisable upon achievement of specified milestones in the development of a new
drug candidate. In addition, Dr. Tuszynski and MCP will be entitled to cash
royalties based on net sales and licensing fees derived from the technology. The
Company has agreed to fund additional research in Dr. Tuszynski's laboratory in
an amount ranging from $150,000 (in the first year) to $1,350,000 (over seven
years, inclusive). Dr. Tuszynski is to be engaged as a consultant to the Company
for a two-year period at a fee of $50,000 per year.

         The acquisition of CorBec resulted in the payment of $750,000 and the
issuance of 750,000 shares of Common Stock of the Company with provisions for
additional cash payments and stock issuances based upon the achievement of
certain milestones for CBP-1011. In addition, the Company has agreed to enter
into three-year consulting agreements with Dr. Alan Schreiber, the inventor of
the Fc Receptor Technology, and with the former chief executive officer of
CorBec, providing for aggregate consulting fees over three years equal to
$405,000, and for the grant of options with respect to an aggregate of 170,000
shares of Common Stock. The Company is also to fund up to $240,000 of sponsored
research in Dr. Schreiber's laboratory over the course of three years.

         The following unaudited pro forma information is presented for the
Acquisitions, as if the Acquisitions had occurred on July 1, 1996. The pro forma
information does not purport to be indicative of the results that would have
been attained if the Acquisitions had actually been effective during the periods
presented, excludes the non-recurring purchased research and development charge
of $3,952,000, and is not necessarily indicative of operating results to be
expected in the future.

      PRO FORMA INFORMATION AS IF THE ACQUISITIONS OCCURRED ON JULY 1, 1996
<TABLE>
<CAPTION>
                                             For the six months ended
                                                 December 31,

                                                     1997
                                                     ----
<S>                                            <C>        
Costs and expenses ........................    $ 3,278,000
Net loss ..................................     (3,152,000)
Shares used in computing loss per share....      9,589,000
Net loss per share ........................    $     (0.33)
</TABLE>

4.       ACCOUNTING PRINCIPLES

         Effective July 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income". This Statement
requires that all items recognized under accounting standards as components of
comprehensive earnings be reported in an annual financial statement that is
displayed with the same prominence as other annual financial statements. This
Statement also requires that an entity classifiy items of other comprehensive
earnings by their nature in an annual financial statement. For example, other
comprehensive earnings may include foreign currency translation adjustments,
minimum pension liability adjustments and unrealized gains and losses on
marketable securities classified as available-for-sale. Annual financial
statements for prior periods will be reclassified as required. The Company's
total comprehensive earnings equaled its net income for the quarter and year to
date ending December 31, 1998.

                                       7
<PAGE>   8
ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         This report contains, in addition to historical information, statements
by the Company with regard to its expectations as to financial results and other
aspects of its business that involve risks and uncertainties and may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements reflect management's current
views and are based on certain assumptions. Actual results could differ
materially from those currently anticipated as a result of a number of factors,
including, but not limited to, the risks and uncertainties discussed in this
report as well as those discussed under "Other Factors to be Considered" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" of the Company's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1998 as filed with the Securities and Exchange Commission.

GENERAL

         The Company is a biopharmaceutical company engaged in the development
of technologies for the diagnosis and treatment of cancer and autoimmune
diseases. The Company pursues these objectives through a technology platform
consisting of the Fc Receptor Technology, the Thrombospondin Technology and the
Purgative Product. The Company acquired these technologies in 1997. See Note 3
of the Notes to Unaudited Financial Statements.

         Since commencing operations in 1993, the Company has not generated any
sales revenue. The Company has funded operations primarily from the proceeds of
public and private placements of securities. The Company has incurred net losses
in each year since its inception, and expects to incur additional losses for the
next several years. The Company expects that losses will fluctuate from quarter
to quarter, and that such fluctuations may be substantial. At December 31, 1998,
the Company's accumulated deficit was approximately $17,279,000.

RESULTS OF OPERATIONS

         The Company incurred losses of $3,797,000 and $6,206,000 for the six
month periods ended December 31, 1998 and 1997, respectively. The Company
expects to incur additional losses in the foreseeable future. The diluted per
share loss was $0.17 and $0.69 for the six month periods ended December 31, 1998
and 1997, respectively. Losses are expected to continue in the remainder of the
fiscal year as the Company develops the Purgative Product, Thrombospondin
Technology and Fc Receptor Technology.

         Research and development expenses amounted to $2,284,000 and $804,000
for the six month periods ended December 31, 1998 and 1997, respectively. The
increase in research and development expenses is the result of conducting a
Pivotal Phase III clinical trial for the Company's drug candidate, CBP-1011, and
a Pivotal Phase III clinical trial of INKP-100, the Purgative Product. Research
and development expenses are expected to continue to increase in future quarters
as the Company conducts its clinical trials of the Purgative Product and CBP
1011 and also incurs additional manufacturing development costs of the Purgative
Product. During the quarter ended December 31, 1998, the rate of patient
enrollment in the clinical trial for the Purgative Product was slower than the
Company had anticipated, which may extend the timeframe for completion of this
clinical program.

         In 1997, the Company incurred a one-time charge to earnings of
$3,880,000 for purchased research and development as a result of the Company's
acquisition of the Fc-Receptor Technology and the Thrombospondin Technology.

         General and administrative expenses amounted to $1,828,000 and
$1,648,000 for the six month periods ended December 31, 1998 and 1997,
respectively. The increase of $180,000 is principally due to significant
additional operational expenses related to developing three platform
technologies. Included in general and administrative expenses is amortization of
options, previously granted to certain executive officers of $808,000 for the
six months ended December 31, 1998. General and administrative expenses will
continue to increase with the addition of other administrative personnel and an
expanded scale of operations associated with the development of multiple
technologies.
                                       8
<PAGE>   9
         Interest income amounted to $315,000 and $126,000 for the six months
ended December 31, 1998 and 1997, respectively. The increase in interest income
reflects the proceeds of the Company's Private Placement in November 1997.

LIQUIDITY AND CAPITAL RESOURCES

         At December 31, 1998, the Company had cash, cash equivalents and
investments of $10,449,000. Cash and cash equivalents is comprised primarily of
the proceeds from the Company's Private Placement in November 1997.

         The Company believes that with its current cash position, its financial
resources are adequate for its operations for at least the next 18 months. The
Company's future capital requirements will depend on numerous factors which
cannot be quantified and many of which the Company cannot control, including
continued progress in its research and development activities, progress with
pre-clinical studies and clinical trials, prosecuting and enforcing patent
claims, technological and market developments, the ability of the Company to
establish product development arrangements, the cost of manufacturing scaleup,
effective marketing activities and arrangements, and licensing or acquisition
activity. The Company may seek to obtain additional funds through equity or debt
financing, collaborative or other arrangements with corporate partners and
others, and from other sources. No assurance can be given that necessary
additional financing will be available on terms acceptable to the Company, if at
all. If adequate additional funds are not available when required, the Company
may have to delay, scale back or eliminate certain of its research, drug
discovery or development activities or certain other aspects of its operations
and its business will be materially and adversely affected.

         The Company plans to invest significant resources in its research and
development activities and continue to add new personnel due to increased
business activities. The Company anticipates incurring additional losses over at
least the next several years, and such losses are expected to increase as the
Company expands its research and development activities relating to the
Purgative Product, Thrombospondin Technology and Fc Receptor Technology. To
achieve profitability, the Company, alone or with others, must successfully
develop and commercialize its technologies and products, conduct pre-clinical
studies and clinical trials, obtain required regulatory approvals and
successfully manufacture, introduce and market such technologies and products.
The time required to reach profitability is highly uncertain, and there can be
no assurance that the Company will be able to achieve profitability on a
sustained basis, if at all.

IMPACT OF YEAR 2000

         Many existing computer programs and systems, including certain of those
used by the Company for its own internal purposes and those used by its
financial institutions, suppliers, vendors and others, use only two digits to
identify the year in the date field. These programs were designed and developed
without considering the impact of the upcoming change in the century. If not
corrected, computer applications that utilize this two-digit format could fail
or create erroneous results by or at the year 2000 ("Y2K").

         The Company has identified three main areas of Y2K risk:

1.       The Company's internal computer systems could be disrupted or fail,
         causing an interruption or decrease in productivity in the Company's
         operations;

2.       The computer systems of third parties with whom the Company regularly
         deals, including but not limited to its financial institutions,
         suppliers, vendors, utilities, and others ("Material Third Parties")
         could be disrupted or fail, causing an interruption or decrease in the
         Company's ability to continue its operations;

3.       The Company's university-based research programs could be disrupted,
         delayed or harmed due to the reliance on computer based scientific
         instruments and scientific databases which the Company has no control
         over.

                                       9
<PAGE>   10
         The Company is currently evaluating the nature and extent of the Y2K
issues related to its internal systems. An initial evaluation indicates that the
process of making the Company's internal systems (which consists of a financial
system for the accounting office and a network system for internal and external
communications) Y2K compliant should be substantially completed with respect to
these systems before June 30, 1999.

         If any of the Company's Material Third Parties are not Y2K compliant
and their noncompliance causes a material disruption to any of their businesses,
the business of the Company could be materially adversely impacted. These
disruptions could include, among other things: a financial institution's
inability to process checks drawn on the Company's bank accounts, accept
deposits or process wire transfers; a supplier's, vendor's or financial
institution's business failure; an interruption in deliveries of supplies from
vendors; a loss of voice and data connections the Company uses to share
information; a loss of electric power to the Company's facilities; and other
interruptions to the normal conduct of business by the Company, the nature and
extent of which the Company cannot foresee. The Company will continue to
evaluate the nature and extent of this risk, but at this time is unable to
determine the probability that any of such risks will be realized, or if they
are, the nature or length thereof, or effect, if any, they may have on the
Company.

         The Company is in the process of evaluating the extent to which Y2K
impacts its university-based sponsored research programs. General discussions
with university employees indicate that Y2K disruptions could include loss of
scientific data, inability to obtain supplies for scientific experiments, the
university's inability to process deposits to support research and all other
risks disclosed above for the university's suppliers, and vendors. The
universities are in the process of addressing their own Y2K issues and the
Company has no control as to the outcome of these matters.

         The Company has not incurred any cost to date to remediate the Y2K
impact. The Company anticipates spending nominal amounts for computer consulting
to fix any potential issues in its internal systems.

         While the Company believes that it is addressing the Y2K issue, there
can be no assurance that the Company's Y2K analyses will be completed on a
timely basis, or that the costs and liabilities associated with the Y2K issue
will not materially adversely impact the business, prospects, revenues or
financial position of the Company. The Company is uncertain as to the worst case
Y2K scenario and has not yet developed a contingency plan to handle this worst
case scenario.

NEW ACCOUNTING PRONOUNCEMENTS

         In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
and Hedging Activities," which establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments imbedded in
other contracts (collectively referred to as derivatives) and for hedging
activities. Statement No. 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. As the Company does not currently engage or
plan to engage in derivative or hedging activities, there will be no impact to
the Company's results of operations, financial position or cash flow upon the
adoption of this standard.


                                       10
<PAGE>   11
PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         Not applicable.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not applicable.

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

         The Company's annual meeting of Shareholders was held on November 2,
1998. At this meeting, shareholders of the Company:

         (i)      Approved the election of seven (7) directors.

         The number of votes cast for, and withheld from, each nominee is set
forth below.
<TABLE>
<CAPTION>
                                                  For       Withheld
                                              ----------    --------
<S>                                           <C>             <C>   
  Leonard S. Jacob, M.D., Ph.D. .....         14,424,768      26,800
  J.R. LeShufy ......................         14,416,568      35,000
  Steven B. Ratoff ..................         14,424,468      27,100
  Thomas P. Stagnaro ................         14,424,768      26,800
  Robert A. Vukovich, Ph.D. .........         14,424,568      27,000
  Jerry A. Weisbach, Ph.D. ..........         14,419,568      32,000
  Taffy J. Williams, Ph.D. ..........         14,424,768      26,800
</TABLE>

(ii)     Ratified the election of KPMG Peat Marwick, LLP as independent auditors
         of the Company.
<TABLE>
<CAPTION>
          For              Against           Abstain
          ---              -------           -------
<S>                        <C>               <C>  
         14,444,948         2,850             3,770
</TABLE>

ITEM 5.  OTHER INFORMATION.

         Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits.

                  27       Financial Data Schedule


         (b)      Reports on Form 8-K

                  None


                                       11
<PAGE>   12
SIGNATURES


         Pursuant to the requirements 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.





                                          INKINE PHARMACEUTICAL
                                          COMPANY, INC.



Date: February 12, 1998                   /s/ ROBERT F. APPLE                
                                         -----------------------------------
                                         Robert F. Apple
                                         Chief Financial Officer

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                                    EXHIBITS



27       Financial Data Schedule

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