<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


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


                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999


                           COMMISSION FILE NO. 0-24972



                       INKINE PHARMACEUTICAL COMPANY, INC.
             (Exact name of Registrant 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
                         (Registrant's telephone number)

     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 preceeding 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 November 12, 1999, the registrant had outstanding 25,730,294 shares of common
                       stock, par value $.0001 per share.

<PAGE>   2
                       INKINE PHARMACEUTICAL COMPANY, INC.

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                           PAGE
<S>                                                                                                        <C>
PART I - FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

                  BALANCE SHEETS - as of September 30, 1999 (unaudited)
                  and June 30, 1999.......................................................................   3

                  STATEMENTS OF OPERATIONS (unaudited) -- For the Three Months Ended September 30, 1999
                  and 1998, and the Period from July 1, 1993 (Commencement of Operations) through
                  September 30, 1999......................................................................   4

                  STATEMENTS OF CASH FLOWS (unaudited) -- For the Three Months
                  Ended September 30, 1999 and 1998, and the Period from July 1,
                  1993 (Commencement of Operations) through September 30, 1999............................   5

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

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATION...............................................   7

PART II - OTHER INFORMATION...............................................................................   10

           ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.............................................   10

           ITEM 5.  OTHER INFORMATION.....................................................................   10

           ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K......................................................   10

SIGNATURES................................................................................................   11

</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>

                                                                             SEPTEMBER 30, 1999        JUNE 30, 1999
                                                                                 (UNAUDITED)
<S>                                                                               <C>                    <C>
         ASSETS

Current assets:

     Cash and cash equivalents....................................                $      6,464           $      1,968
     Short term investments.......................................                       1,092                  4,894
     Prepaid expenses and other current assets....................                          39                    100
                                                                                  ------------           ------------
         Total current assets.....................................                       7,595                  6,962

Fixed assets, net.................................................                         184                    200
                                                                                  ------------           ------------

         Total assets.............................................                $     7,779            $      7,162
                                                                                  ============           ============

         LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable and other accrued expenses..................                $        856           $      1,449
                                                                                  ------------           ------------

Shareholders' equity:
Common stock, $.0001 par value; authorized 50,000,000
     shares; issued 25,728,409 shares ............................                           2                      2
Less common stock held in treasury (16,515 shares)................                         (37)                   (37)
Additional paid-in capital........................................                       34,473                31,427
Deferred compensation.............................................                      (2,136)                (2,560)
Other comprehensive income........................................                          (1)                    (4)
Deficit accumulated during the development stage..................                     (25,378)               (23,115)
                                                                                  -------------          -------------


         Total shareholders' equity...............................                       6,923                  5,713
                                                                                  ------------           ------------

         Total liabilities and shareholders' equity...............                $      7,779           $      7,162
                                                                                  ============           ============

</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            THROUGH
                                                                         SEPTEMBER 30             SEPTEMBER 30
                                                                      1999         1998              1999
                                                                      ----         ----              ----
<S>                                                                <C>            <C>               <C>
Costs and Expenses:
      Research and development..............................       $ 1,411        $ 1,267           $12,154
      Purchased research and development....................            --             --             3,952
      General and administrative............................           915            854            10,721
      Write-off debt discount...............................            --             --                75
                                                                     ------        -------           -------

Loss from operations........................................         (2,326)        (2,121)          (26,902)

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

Interest income.............................................             63            170             1,531
Interest expense............................................             --             --                (7)
                                                                      -------      ---------          --------

Net loss....................................................       $ (2,263)      $ (1,951)        $ (25,378)
                                                                   =========      =========        ==========

Basic and diluted net loss per share........................        $ (0.10)       $ (0.09)

Weighted average shares outstanding.........................          23,546         22,703

</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
                                                                        THREE MONTHS ENDED               (COMMENCEMENT OF
                                                                           SEPTEMBER 30,               OPERATIONS) THROUGH
                                                                       1999              1998           SEPTEMBER 30, 1999
                                                                      -----             -----          ------------------
<S>                                                                 <C>                <C>                <C>
Cash flows from operating activities:
   Net loss...............................................          $   (2,263)        $   (1,951)        $    (25,378)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
       Depreciation ......................................                 17                  12                  230
       Write-off of debt discount.........................                 --                  --                   75
       Value of services paid by options and warrants.....                 --                  --                   80
       Amortization of deferred compensation..............                423                 426                4,964
       Purchased research and development.................                 --                  --                2,742
       (Increase) decrease in prepaid expenses
        and other assets..................................                 61                  29                 ( 39)
       Increase (decrease) in accounts payable
        and accrued expenses..............................               (593)                198                  882
       Expenses paid by affiliate.........................                 --                  --                   97
       Increase in management fees payable................                 --                  --                  113
                                                                     ----------          ----------           ---------
     Net cash used in operating activities................             (2,355)            (1,286)             (16,234)

Cash flows from investing activities:
   Purchases of investments...............................                 --             ( 2,095)            (33,411)
   Proceeds from maturities and sales of investments......              3,804               5,229              32,322
   Capital expenditures...................................                (1)                 (1)                (416)
                                                                    -------------      -----------        -------------
      Net cash provided by (used in) investing activities.             3,803                3,133              (1,505)

Cash flows from financing activities:
   Proceeds from sale of stock and exercise
    of options and warrants - net of expenses..............             3,048                --                  24,240
   Cost of shares - acquired..............................                 --                --                    (37)
                                                                    ---------          ----------         -------------
     Net cash provided by financing activities............              3,048                --                  24,203

Net increase in cash and cash equivalents.................              4,496                1,847                6,464

Cash and cash equivalents - beginning of period...........              1,968                1,115                   --
                                                                    ---------           -------------     -------  -----

Cash and cash equivalents - end of period.................          $   6,464          $     2,962      $         6,464
                                                                    =========          =============      =============
</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,
2000. These interim financial statements should be read in conjunction with the
audited financial statements for the year ended June 30, 1999, which are
contained in the Company's most recent Annual Report on Form 10-K.

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.       SHAREHOLDERS EQUITY

         PRIVATE PLACEMENT

         In September 1999, the Company completed a private placement of
2,307,691 shares of common stock, together with warrants to purchase an
aggregate of 761,538 shares of common stock. Net proceeds to the Company were
$2,750,000. The warrants are exercisable at $1.78 per share. The shares and
warrants are subject to certain provisions which may increase the issuable
shares and decrease the exercise price for the warrants, upon certain events
which may have a dilutive effect on the investors.

                                       6

<PAGE>   7
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-K for the fiscal year
ended June 30, 1999 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.

         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 September 30,
1999, the Company's accumulated deficit was approximately $25,378,000.

RESULTS OF OPERATIONS

         The Company incurred losses of $2,263,000 or $(0.10) per share, and
$1,951,000, or $(0.09) per share, for the three month periods ended September
30, 1999 and 1998, respectively. Losses are expected to continue in the
remainder of the fiscal year as the Company develops Diacol, the Thrombospondin
Technology and Fc Receptor Technology.

         Research and development expenses amounted to $1,411,000 and $1,267,000
for the three month periods ended September 30, 1999 and 1998, respectively. The
increase in research and development expenses is principally the result of costs
associated with manufacturing and preparing and assembling an NDA for Diacol
exceeding the reduction in clinical costs incurred in the previous period.
Research and development expenses are expected to continue to increase in future
quarters as the Company continues towards commercialization of Diacol.

         General and administrative expenses increased in the three months ended
September 30, 1999 as compared to the same period a year ago due principally to
costs associated with recruiting sales and marketing personnel. Also included in
general and administrative expenses is amortization of deferred compensation
costs relating to previously granted options to certain executive officers of
the Company, of $404,000 for the three months ended September 30, 1999 and 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.

         Interest income amounted to $63,000 and $170,000 for the three months
ended September 30, 1999 and 1998, respectively. The decrease in interest income
reflects the earnings on a decreased investment balance. Fluctuation will
continue to occur quarter to quarter due to changes in the investment balance.

                                       7

<PAGE>   8
LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 1999, the Company had cash, cash equivalents and
investments of $7,556,000. The cash and investment balance at September 30, 1999
includes the effect of a private placement where the Company sold a total of
2,307,691 shares of common stock and warrants to purchase 761,538 shares of
common stock for an aggregate purchase price of $3,000,000. The proceeds from
the private placement will be used to further develop the Company's technologies
and also be used for general corporate purposes.

         The Company believes that with its current cash position, its financial
resources are adequate for its operations for at least the next 12 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, commercialization
costs of Diacol, 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 new personnel in
the next 12 months in connection with the expansion of its commercial activities
surrounding Diacol. 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 commercialization activities relating to Diacol and research
and development activities relating to the 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.

                                       8

<PAGE>   9
         The Company has evaluated the nature and extent of the Y2K issues
related to its internal systems. The evaluation indicated that the process of
making the Company's internal systems (which consist of a financial system for
the accounting office and a network system for internal and external
communications) Y2K compliant was complete with respect to these systems as of
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 incurred costs to date of approximately $12,000 to
remediate the Y2K impact. The Company anticipates spending nominal amounts for
computer consulting to fix any potential issues in its internal systems, which
may arise after 2000.

         While the Company believes that it has addressed the Y2K issue, there
can be no assurance that the Company's Y2K analyses was accurate, 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 April 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, Reporting on the Costs of Start-Up Activities (the
"Statement"). The Statement requires costs of start-up activities, including
organizational costs, to be expensed as incurred. Start-up activities are
defined as those one-time activities related to opening a new facility,
introducing a new product or service, conducting businesses in a new territory,
conducting business with a new process in an existing facility, or commencing a
new operation. The Statement is effective for fiscal years beginning after
December 15, 1998. The adoption of this standard will not have a material impact
on InKine's earnings or financial position.

         In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
("Statement 133"). Statement 133 establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. Statement 133 requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure the instrument at fair value. The
accounting changes in the fair value of a derivative depend on the intended use
of the derivative and the resulting designation. This Statement is effective for
all fiscal quarters beginning after June 15, 2000. The adoption of this standard
will not have a material impact on InKine's earnings or financial position.

                                       9

<PAGE>   10
PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.

         Not applicable.

Item 2.  Changes in Securities and Use of Proceeds.

         On September 20, 1999 the Company sold a total of 2,307,691 shares of
         common stock and warrants to purchase 761,538 shares of common stock to
         The Tail Wind Fund, Ltd., Resonance Limited, Oxford Bioscience Partners
         II L.P. and Oxford Bioscience Partners (Bermuda) II Limited Partnership
         for an aggregate purchase price of $3,000,000. The warrants are
         exercisable at $1.78 per share and may be exercised in whole or in part
         at any time prior to September 20, 2003. Such private placement was
         made by the Company pursuant to Sections 4(2) and 4(6) of the
         Securities Act of 1933, as amended (the "Act"), and Regulation D under
         the Act in a transaction not involving a public offering to
         institutional investors which qualified as accredited investors under
         the Act.

Item 3.  Defaults Upon Senior Securities.

         Not applicable.

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

         Not applicable.

Item 5.  Other Information.

         On November 4, 1999 the Company announced the resignation of Dr. Taffy
         Williams as President and Chief Operating Officer and as a member of
         the Board of Directors. The Company also announced on November 4, 1999
         that Leonard S. Jacob, M.D., Ph.D., Chairman and Chief Executive
         Officer, had been awarded a new three year employment contract with the
         Company.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits.

         27       Financial Data Schedule


(b)      Reports on Form 8-K

         The Company filed a current report on Form 8-K on September 30, 1999,
         reporting the completion of a Private Placement of 2,307,691 shares and
         761,538 warrants for gross proceeds to the Company of $3,000,000. The
         items included in this report consisted of:

         Item 7. Exhibits

                           99.1  Press release dated September 21, 1999

                                       10

<PAGE>   11
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: November 12, 1999            By:  /s/ ROBERT F. APPLE
                                        --------------------------------
                                   Robert F. Apple
                                   Chief Financial Officer, (Authorized Officer
                                   and Principal Financial Officer)

                                       11

<PAGE>   12
                                    EXHIBITS





27       Financial Data Schedule





                                       12