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
                  For the quarterly period ended June 30, 2001

                                       or

[ ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the Transition Period from ____ to ____

                         Commission file number 0-13634

                              MACROCHEM CORPORATION
             (Exact name of registrant as specified in its charter)


            Delaware                                             04-2744744
--------------------------------                            -------------------
   (State or Other Jurisdiction                              (I.R.S. Employer
of Incorporation or Organization)                           Identification No.)

            110 Hartwell Avenue, Lexington, Massachusetts 02421-3134
               (Address of principal executive offices, Zip Code)

                                  781-862-4003
              (Registrant's telephone number, including area code)

     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 July 31, 2001:
----------------------------                      -----------------------------
Common Stock, $.01 par value                                27,860,371


                                       1
<PAGE>

                              MACROCHEM CORPORATION

                               INDEX TO FORM 10-Q
                               ------------------


                                                                     Page Number
                                                                     -----------
PART I     FINANCIAL INFORMATION

Item 1     Unaudited Financial Statements

                    Condensed Balance Sheets
                    June 30, 2001 and December 31, 2000                    3

                    Condensed Statements of Operations for the
                    Three and Six Months Ended June 30, 2001 and 2000      4

                    Condensed Statements of Cash Flows for the
                    Six Months Ended June 30, 2001 and 2000                5

                    Notes to Unaudited Condensed Financial
                    Statements                                            6-8


Item 2     Management's Discussion and Analysis of
           Financial Condition and Results of Operations                  8-11

Item 3     Quantitative and Qualitative Disclosures About Market Risk    11-12

PART II    OTHER INFORMATION

Item 4     Submission of Matters to a Vote of Security Holders            13

Item 6     Exhibits and Reports on Form 8-K                               13

SIGNATURES                                                                14


                                       2
<PAGE>

Item 1.       Financial Statements

                              MACROCHEM CORPORATION
                            CONDENSED BALANCE SHEETS
                                   (Unaudited)
                    (Amounts in thousands except share data)

                                                    June 30,    December 31,
                                                     2001           2000
                                                   ---------    -------------

                                     ASSETS
Current assets:
       Cash and cash equivalents                   $  1,261     $    589
       Short-term investments                        11,846       16,179
       Accounts receivable                              ---           31
       Receivable due from related party                 23           23
       Prepaid expenses and other current assets        305          241
                                                     ------       ------
           Total current assets                      13,435       17,063
                                                     ------       ------

Property and equipment, net                             498          377
                                                     ------       ------

Other assets:
       Patents, net                                     519          513
       Deposits                                          29           29
                                                     ------       ------
           Total other assets                           548          542
                                                     ------       ------

Total assets                                       $ 14,481     $ 17,982
                                                     ======       ======

                                   LIABILITIES
Current liabilities:
       Accounts payable                            $      4     $    331
       Accrued expenses                               1,612          763
                                                     ------       ------
           Total current liabilities                  1,616        1,094

Deferred rent                                            45           37
                                                     ------       ------
Total liabilities
       Commitments and contingencies                  1,661        1,131
                                                     ------       ------


                              STOCKHOLDERS' EQUITY
Preferred stock                                         ---          ---
Common stock, $.01 par value, 60,000,000 shares
       authorized; 26,564,607 and 24,730,783
       shares issued at June 30, 2001 and
       December 31, 2000, respectively                  266          247
Additional paid-in capital                           63,410       60,787
Accumulated deficit                                 (49,673)     (43,040)
Unearned compensation                               (    95)     (    25)
Less treasury stock, at cost, 270,283 and
       276,174 shares at June 30, 2001 and
       December 31, 2000, respectively              ( 1,088)     ( 1,118)
                --- -----                            ------       ------
           Total stockholders' equity                12,820       16,851
                                                     ------       ------
Total liabilities and stockholders' equity         $ 14,481     $ 17,982
                                                     ======       ======


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


                                       3
<PAGE>
<TABLE>
<CAPTION>

                              MACROCHEM CORPORATION
                       CONDENSED STATEMENTS OF OPERATIONS
            For the three and six months ended June 30, 2001 and 2000
                                   (Unaudited)
             (Amounts in thousands except share and per share data)

                                            For the three months ended June 30,   For the six months ended June 30,
                                                  2001               2000             2001                2000

<S>                                         <C>              <C>               <C>                <C>

Research contract revenues                  $        ---     $         29      $        ---       $        572
                                              ----------       ----------        ----------         ----------


Costs and expenses:
    Research and development                       2,481            1,103             5,025              2,129
    Marketing, general and administrative          1,145              825             1,921              1,429
    Nonrecurring noncash stock compensation
       charge                                        ---            2,810               ---              2,810
    Consulting fees with related parties              15               12                31                 24
                                              ----------       ----------        ----------         ----------
       Total costs and expenses                    3,641            4,750             6,977              6,392
                                              ----------       ----------        ----------         ----------

Loss from operations                         (     3,641)     (     4,721)      (     6,977)       (     5,820)
                                              ----------       ----------        ----------         ----------

Other income (expense):
    Interest income                                  191              185               345                378
    Interest expense                                 ---              ---               ---        (         1)
                                              ----------       ----------        ----------         ----------
       Total other income                            191              185               345                377
                                              ----------       ----------        ----------         ----------

Net loss                                    $(     3,450)    $(     4,536)     $(     6,632)      $(     5,443)
                                              ==========       ==========        ==========         ==========

Net loss per common share -
    basic and diluted                       $(      0.13)    $(      0.20)     $(      0.28)      $(      0.24)
                                              ==========       ==========        ==========         ==========

Weighted average common shares                25,862,000       22,452,000        23,332,000         22,445,000
outstanding (basic and diluted)
</TABLE>




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

                                       4
<PAGE>

                              MACROCHEM CORPORATION
                       CONDENSED STATEMENTS OF CASH FLOWS
                 For the six months ended June 30, 2001 and 2000
                                   (Unaudited)
                             (Amounts in thousands)

                                                              For the six months
                                                              ------------------
                                                                ended June 30,
                                                              ------------------
                                                               2001       2000
                                                               ----       ----

Cash flows from operating activities:
       Net loss                                              $(6,632)   $(5,443)
       Adjustments to reconcile net loss to net cash
           used by operating activities:
           Depreciation and amortization                          81         90
       Stock-based compensation                                  329      2,904
           401(k) contribution in Company common stock            47         36
           Deferred rent                                           7        ---
           Deferred revenue                                      ---     (  500)
       Changes in assets and liabilities:
           Accounts receivable                                    31         22
           Prepaid expenses and other current assets          (   64)    (  207)
           Accounts payable and accrued expenses                 522     (  134)
                                                               -----      -----


Net cash used by operating activities                         (5,679)    (3,232)
                                                               -----      -----

Cash flows from investing activities:
       Sales of short-term investments                         4,333      2,878
       Expenditures for property and equipment                (  190)    (  107)
       Additions to patents                                   (   18)    (   42)
                                                               -----      -----
Net cash provided (used) by investing activities               4,125     (2,729)
                                                               -----      -----

Cash flows from financing activities:
       Purchases of treasury stock                               ---     (   21)
       Proceeds from exercise of warrants                        372        ---
       Proceeds from exercise of common stock options          1,854         62
                                                               -----      -----
Net cash provided by financing activities                      2,226         41
                                                               -----      -----

Net change in cash and cash equivalents                          672     (  462)
Cash and cash equivalents at beginning of period                 589        318
                                                               -----      -----

Cash and cash equivalents at end of period                   $ 1,261    $(  144)
                                                               =====      =====


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



                                       5
<PAGE>

                              MACROCHEM CORPORATION
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

(1)      Basis of Presentation

         The financial statements included herein have been prepared by
         MacroChem Corporation ("MacroChem" or the "Company") without audit,
         pursuant to the rules and regulations of the Securities and Exchange
         Commission. Certain information and footnote disclosures normally
         included in financial statements prepared in accordance with accounting
         principles generally accepted in the United States of America have been
         condensed or omitted pursuant to such rules and regulations. In the
         opinion of management, the accompanying unaudited financial statements
         include all adjustments (consisting only of normal recurring
         adjustments) necessary to present fairly the financial position,
         results of operations and cash flows of the Company at the dates and
         for the periods indicated. The unaudited financial statements included
         herein should be read in conjunction with the audited financial
         statements and the notes thereto included in the Company's Annual
         Report on Form 10-K for the fiscal year ended December 31, 2000.

         The results disclosed in the Statement of Operations for the six months
         ended June 30, 2001 are not necessarily indicative of the results to be
         expected for the full year.

         MacroChem is a biopharmaceutical company engaged in the development and
         commercialization of a portfolio of products through the application of
         SEPA(R) (Soft Enhancer of Percutaneous Absorption), its patented
         topical drug delivery technology.


(2)      Basic and Diluted Loss Per Share

         The following table sets forth the computation of basic and diluted
         loss per share:
<TABLE>
<CAPTION>

                                              Three Months Ended June 30,         Six Months Ended June 30,
                                              ---------------------------         -------------------------
                                                 2001              2000              2001            2000
                                                 ----              ----              ----            ----
           <S>                              <C>               <C>               <C>             <C>

           Numerator for basic and diluted
           loss per share:
              Net loss                      $( 3,450,000)     $( 4,536,000)     $( 6,632,000)   $( 5,443,000)
                                              ==========        ==========        ==========      ==========

           Denominator for basic
           and diluted loss per share:
              Weighted average shares
                 outstanding                  25,862,000        22,452,000        23,332,000      22,445,000
                                              ==========        ==========        ==========      ==========

           Net loss per share - basic       $(      0.13)     $(      0.20)     $(      0.28)   $(      0.24)
                                              ==========        ==========        ==========      ==========

           Net loss per share - diluted     $(      0.13)     $(      0.20)     $(      0.28)   $(      0.24)
                                              ==========        ==========        ==========      ==========

</TABLE>

                                       6
<PAGE>

         Potential common shares are not included in the per share calculations
         for diluted EPS, because the effect of their inclusion would be
         anti-dilutive. Anti-dilutive potential shares not included in per share
         calculations for the six months ended June 30, 2001 and 2000 were
         4,399,966 and 4,544,541 respectively.


(3)      Stockholders' Equity

         At a June 28, 2001 meeting, the stockholders voted to approve a new
         incentive plan (the "2001 Plan") that made available options to
         purchase 1,200,000 common shares. The Company granted options to
         purchase 440,200 shares of common stock under the 2001 Plan during the
         three months ended June 30, 2001. During this same period, no options
         under the 2001 Plan were exercised. All options were issued with an
         exercise price at the fair market value of the underlying common stock
         determined on the date of grant.

         Under the 1994 Equity Incentive Plan (the "1994 Plan"), 290,600 shares
         were exercised during the three month period ended June 30, 2001. In
         addition, options to purchase 180,000 shares of Common Stock under the
         1994 Plan were canceled during the three month period.

         During the three months ended June 30, 2001, options to purchase
         200,000 shares were exercised under the 1984 Non Qualified Plan. In
         June 2000, the Company extended the exercise period for 620,000 options
         that were previously issued to two former officers under the 1984 Plan,
         resulting in a noncash stock compensation charge to operations of
         approximately $2.8 million.

         Warrants to purchase common stock were issued in connection with an
         October 2000 private placement to two institutional investors. The
         warrants issued consist of warrants to purchase an aggregate of 363,322
         shares of common stock at a purchase price of $5.90 per share for five
         years. Through June 30, 2001, none of the $5.90 warrants had been
         exercised. Additionally, each investor received a warrant to purchase
         additional shares of common stock at a purchase price of $.01 per share
         exercisable only upon certain conditions relating to the trading price
         of common stock during the period following the effectiveness of the
         related registration statement. The warrants may be exercised on a
         "cashless" basis. Through June 30, 2001, 880,314 of the $.01 warrants
         had been exercised. No further $.01 warrants are available to be
         exercised. The placement agent received a warrant to purchase 108,999
         shares of common stock at a purchase price of $7.43 for five years.
         Through June 30, 2001, 50,000 of the $7.43 warrants had been exercised.

(4)      Comprehensive Income

         The Company reports comprehensive income in accordance with Statement
         of Financial Accounting Standards ("SFAS") No. 130, "Reporting
         Comprehensive Income", which requires businesses to disclose
         comprehensive income and its components in their general-purpose
         financial statements. Comprehensive income (loss) is equal to the
         Company's net loss for the three and six months ended June 30, 2001 and
         2000.
                                       7
<PAGE>
(5)      Recent Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
         Statement of Financial Accounting Standards ("SFAS") No. 133,
         "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
         No. 133"). SFAS No. 133 establishes accounting and reporting standards
         for derivative instruments, including certain derivative instruments
         embedded in other contracts (collectively referred to as derivatives),
         and for hedging activities. The adoption of SFAS No. 133 on January 1,
         2001 had no impact on the Company's financial statements.

         In June 2001, FASB issued two new pronouncements: SFAS No. 141,
         Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
         Assets. SFAS 141 is effective as follows: a) use of the
         pooling-of-interest method is prohibited for business combinations
         initiated after June 30, 2001; and b) the provisions of SFAS 141 also
         apply to all business combinations accounted for by the purchase method
         that are completed after June 30, 2001 (that is, the date of
         acquisition is July 2001 or later). There are also transition
         provisions that apply to business combinations completed before July 1,
         2001, that were accounted for by the purchase method. SFAS 142 is
         effective for fiscal years beginning after December 15, 2001 to all
         goodwill and other intangible assets recognized in an entity's
         statement of financial position at that date, regardless of when those
         assets were initially recognized. The Company is currently evaluating
         the provisions of SFAS 141 and SFAS 142 and has not adopted such
         provisions in its June 30, 2001 condensed consolidated financial
         statements.

(6)      Subsequent Event

         In July 2001, the Company sold 1,566,047 shares of its common stock for
         approximately $10,148,000 in gross proceeds ($9,463,000 net of issuance
         costs) in a private placement to institutional investors.

         The investors also received warrants to purchase an aggregate of
         313,209 shares of common stock at a purchase price of $8.995 per share.
         These warrants expire five years from the closing date and are callable
         by the Company if the closing price of the stock is higher than $17.99
         for 15 consecutive trading days at any time before expiration.



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

GENERAL

MacroChem Corporation's primary business is the development of pharmaceutical
products for commercialization by employing SEPA(R) (Soft Enhancer of
Percutaneous Absorption), its patented topical drug delivery technology. SEPA
compounds, when properly combined with drugs, provide pharmaceutical
formulations (creams, gels, solutions, etc.) that enhance the transdermal
delivery of drugs into the skin or into the bloodstream. The Company currently
derives no significant revenue from product sales, royalties or license fees.
The Company plans to develop specific SEPA formulations for use with proprietary

                                        8
<PAGE>
and non-proprietary drugs manufactured by pharmaceutical companies, and to
commercialize these products through the formation of partnerships, strategic
alliances and license agreements with those companies. In order to attract
strategic partners, the Company is conducting clinical testing of certain
SEPA-enhanced drugs.

The Company's results of operations can vary significantly from year to year and
quarter to quarter, and depend, among other factors, on the signing of new
licenses and product development agreements, the timing of revenues recognized
pursuant to license agreements, the achievement of milestones by licensees, the
progress of clinical trials conducted by the licensees and the Company and the
degree of research, marketing and administrative effort. The timing of the
Company's revenues may not match the timing of the Company's associated product
development expenses. To date, research and development expenses have generally
exceeded revenue in any particular period and/or fiscal year.

RESULTS OF OPERATIONS

Revenues, consisting of research contract revenues, decreased $29,000, or 100%,
for the three month period ended June 30, 2001 from $29,000 in the three month
period ended June 30, 2000 and decreased $572,000, or 100% in the six month
period ended June 30, 2001 from $572,000 in the six month period ended June 30,
2000. The decrease in revenues during the three month period ended June 30, 2001
is the result of the Company not having outside contracts generating revenue in
2001. The decrease in revenues during the six months ended June 30, 2001
primarily reflects the Company's recognition of $500,000 in deferred revenue
upon termination of the American Home Products agreement in 2000 and the Company
having no contract revenue in 2001.

Research and development expenses increased $1,378,000, or 125%, to $2,481,000
in the three month period ended June 30, 2001 from $1,103,000 in the three month
period ended June 30, 2000 and increased 136%, or $2,896,000, to $5,025,000 in
the six month period ended June 30, 2001 from $2,129,000 in the six month period
ended June 30, 2000. This increase in the three and six month periods is
primarily attributable to Topiglan Phase III clinical trial studies being
performed throughout 2001.

Marketing, general and administrative expenses increased $320,000, or 39%, to
$1,145,000 in the three months ended June 30, 2001 from $825,000 in the three
month period ended June 30, 2000 and increased $492,000, or 34% to $1,921,000 in
the six month period ended June 30, 2001 from $1,429,000 in the six month period
ended June 30, 2000. The increase in the three month period is primarily
attributable to an increase in salaries, public relations, financial advisory
services and printing expense. The increase in the six month period is
attributable to an increase in salaries, public relations, financial advisory
services, legal fees and printing expense.

The nonrecurring noncash stock compensation charge in the three month and six
month period ended June 30, 2000 is related to the one time charge associated
with the extension of the terms of certain stock options in June 2000 to two
former officers of the Company.

                                       9
<PAGE>

Other income increased $6,000, or 3%, to $191,000 in the three month period
ended June 30, 2001 from $185,000 in the three month period ended June 30, 2000
and decreased $32,000, or 8% to $345,000 in the six month period ended June 30,
2001 from $377,000 in the six months ended June 30, 2000. The decrease in the
six month period is due to lower invested balances of cash and cash equivalents
resulting from funds used in Company operations.

For the reasons described above, net loss decreased $1,086,000, or 24%, to
$3,450,000 in the three month period ended June 30, 2001 from $4,536,000 in the
three month period ended June 30, 2000 and increased $1,188,000, or 22% to
$6,632,000 in the six month period ended June 30, 2001 from $5,443,000 in the
six months ended June 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the primary source of funding for the Company's operations has
been the private and public sale of its securities, and to a lesser extent, the
licensing of its proprietary technology and products, government grants and the
limited sales of products and test materials. During the first six months of
2001, the Company received aggregate net proceeds of approximately $2,226,000
from the exercise of stock options and warrants compared to approximately
$62,000 from the exercise of stock options for the six months ended June 30,
2000. In July 2001, the Company sold 1,566,047 shares of its common stock for
approximately $10,148,000 in gross proceeds ($9,463,000 net of issuance costs)
in a private placement to institutional investors. The investors also received
warrants to purchase an aggregate of 313,209 shares of common stock at a
purchase price of $8.995 per share. These warrants expire five years from the
closing date and are callable by the Company if the closing price of the stock
is greater than $17.99 for 15 consecutive trading days at any time before
expiration.

At June 30, 2001 working capital was approximately $11,819,000, compared to
$15,969,000 at December 31, 2000. The reduction in the Company's working capital
was due primarily to the use of cash by operating activities. Until such time as
the Company obtains agreements with third-party licensees or partners to provide
funding for the Company's anticipated business activities or the Company is able
to obtain funds through the private or public sale of its securities, the
Company's working capital will be utilized primarily to fund its operating
activities.

Pursuant to a plan approved by the Company's Board of Directors, the Company is
authorized to repurchase 1,000,000 shares of its Common Stock to be held as
treasury shares for future use. During the three month period ended June 30,
2001, the Company did not repurchase any shares of Common Stock, although the
Company retained shares as payment for cashless warrant exercises. At June 30,
2001, 270,283 repurchased shares remain available for future use and 679,587
shares remain available for repurchase under the plan.

Capital expenditures and additional patent development costs for the six months
ended June 30, 2001 were approximately $208,000. The Company anticipates capital
expenditures of approximately $41,000 for the remainder of the current year.

The Company's long term capital requirements will depend upon numerous factors,
including the progress of the Company's research and development programs; the


                                       10
<PAGE>

resources that the Company devotes to self-funded clinical testing of
SEPA-enhanced compounds, proprietary manufacturing methods and advanced
technologies; the ability of the Company to enter into additional licensing
arrangements or other strategic alliances; the ability of the Company to
manufacture products under those arrangements and the demand for its products or
the products of its licensees or strategic partners if and when approved for
sale by regulatory authorities. In any event, substantial additional funds will
be required before the Company is able to generate revenues sufficient to
support its operations. There is no assurance that the Company will be able to
obtain such additional funds on favorable terms, if at all. The Company's
inability to raise sufficient funds could require it to delay, scale back or
eliminate certain research and development programs. The Company believes that
its existing cash, cash equivalents and short term investments will be
sufficient to meet its operating expenses and capital expenditure requirements
for at least the next twelve months. The Company's cash requirements may vary
materially from those now planned because of changes in focus and direction of
the Company's research and development programs, competitive and technical
advances, patent developments or other developments. It is not believed that
inflation will have any significant effect on the results of the Company's
operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. The adoption of SFAS No. 133 on
January 1, 2001 had no impact on the Company's financial statements.

In June 2001, the FASB issued two new pronouncements: SFAS No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 141
is effective as follows: a) use of the pooling-of-interest method is prohibited
for business combinations initiated after June 30, 2001; and b) the provisions
of SFAS 141 also apply to all business combinations accounted for by the
purchase method that are completed after June 30, 2001 (that is, the date of
acquisition is July 2001 or later). There are also transition provisions that
apply to business combinations completed before July 1, 2001, that were
accounted for by the purchase method. SFAS 142 is effective for fiscal years
beginning after December 15, 2001 to all goodwill and other intangible assets
recognized in an entity's statement of financial position at that date,
regardless of when those assets were initially recognized. The Company is
currently evaluating the provisions of SFAS 141 and SFAS 142 and has not adopted
such provisions in its June 30, 2001 condensed consolidated financial
statements.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

As of June 30, 2001, the Company is exposed to market risks which relate
primarily to changes in U.S. interest rates. The Company's cash equivalents and
short term investments are subject to interest rate risk and will decline in
value if interest rates increase. Due to the short duration of these financial
instruments, three months or less, changes to interest rates would not have a


                                       11
<PAGE>

material effect upon the Company's financial position. A hypothetical 10% change
in interest rates would not have a material effect on our Statement of
Operations or Cash Flows for the three and six months ended June 30, 2001.

THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE
RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS IN THIS REPORT AND IN
FORWARD-LOOKING STATEMENTS MADE FROM TIME TO TIME BY THE COMPANY ON THE BASIS OF
MANAGEMENT'S THEN-CURRENT EXPECTATIONS. FACTORS THAT MIGHT CAUSE SUCH A
DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING: THE COMPANY'S HISTORY
OF OPERATING LOSSES AND NEED FOR CONTINUED WORKING CAPITAL; TECHNOLOGICAL
UNCERTAINTY RELATING TO TRANSDERMAL DRUG DELIVERY SYSTEMS AND THE EARLY STAGE OF
DEVELOPMENT OF THE COMPANY'S PROPOSED PRODUCTS; THE COMPANY'S NEED FOR
SIGNIFICANT ADDITIONAL PRODUCT DEVELOPMENT EFFORTS AND ADDITIONAL FINANCING;
UNCERTAINTIES RELATED TO CLINICAL TRIALS OF THE COMPANY'S PROPOSED PRODUCTS; THE
COMPANY'S DEPENDENCE ON THIRD PARTIES FOR COMMERCIALIZATION; NO ASSURANCE OF
LICENSE ARRANGEMENTS; THE LACK OF SUCCESS OF THE COMPANY'S PRIOR DEVELOPMENT
EFFORTS; UNCERTAINTIES RELATING TO GOVERNMENT REGULATION AND REGULATORY
APPROVALS; THE COMPANY'S DEPENDENCE ON THIRD PARTIES FOR THE FDA APPLICATION
PROCESS; THE COMPANY'S LACK OF EXPERIENCED MARKETING PERSONNEL AND DEPENDENCE ON
THIRD PARTIES FOR MARKETING AND DISTRIBUTION; THE COMPANY'S DEPENDENCE ON THIRD
PARTIES FOR MANUFACTURING; THE COMPANY'S RELIANCE ON KEY EMPLOYEES, THE LIMITED
PERSONNEL OF THE COMPANY AND ITS DEPENDENCE ON ACCESS TO SCIENTIFIC TALENT;
UNCERTAINTIES RELATING TO COMPETITION, PATENTS AND PROPRIETARY TECHNOLOGY;
UNCERTAINTIES RELATING TO RISKS OF PRODUCT LIABILITY CLAIMS, LACK OF PRODUCT
LIABILITY INSURANCE, AND EXPENSE AND DIFFICULTY OF OBTAINING ADEQUATE INSURANCE
COVERAGE; UNCERTAINTY OF PHARMACEUTICAL PRICING AND RELATED MATTERS; AND OTHER
FACTORS. ADDITIONAL INFORMATION ON THESE AND OTHER FACTORS WHICH COULD AFFECT
THE COMPANY'S ACTUAL RESULTS AND EXPERIENCE ARE INCLUDED IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2000 AND, IN PARTICULAR, THE
SECTION ENTITLED "RISK FACTORS".

                                       12
<PAGE>

PART II - OTHER INFORMATION

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

The Company's Annual Meeting of Stockholders was held on June 28, 2001. At the
meeting (i) all six director nominees were elected, (ii) the appointment of
Deloitte & Touche LLP as the independent auditors was ratified and (iii) the
Company's 2001 Incentive Plan was approved.

(i)   The following directors were elected for a one-year term by the votes
      indicated:

      Robert J. Palmisano, 23,971,506 for, 51,850 against or withheld; John L.
      Zabriskie, 23,971,806 for, 51,550 against or withheld; Peter G. Martin,
      23,971,314 for, 52,042 against or withheld; Michael A. Davis, 23,971,314
      for, 52,042 against or withheld; Robert J. DeLuccia, 23,971,806 for,
      51,550 against or withheld; and Paul S. Echenberg, 23,971,806 for, 51,550
      against or withheld.

(ii)  The appointment of Deloitte & Touche LLP was ratified by a vote of 23,
      944,307 for, 39,075 against and 39,974 abstaining.

(iii) The Company's 2001 Incentive Plan was approved by a vote of 22,967,065
      for, 837,455 against and 218,836 abstaining.


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

              (a)  The following exhibits are filed herewith:

                   10.1  Form of Employment Agreement between the Company and
                         Robert J. Palmisano.

                   10.2  Form of Employment Agreement between The Company and
                         Bernard J. Patriacca.

                   10.3  MacroChem Corporation Option Certificate between the
                         Company and Robert J. Palmisano.

              (b)  No reports on Form 8-K were filed during the quarter
                   for which this report is filed.




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                                   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.


                                                  MacroChem Corporation
                                                  ---------------------
                                                  (Registrant)



August 13, 2001                                   /s/ Robert Palmisano
                                                  -----------------------------
                                                  Robert Palmisano
                                                  President and Chief Executive
                                                  Officer
                                                  (Principal Executive Officer)

                                                  /s/ Bernard Patriacca
                                                  -----------------------------
                                                  Bernard Patriacca
                                                  Chief Financial Officer,
                                                  Treasurer, and Secretary
                                                  (Principal Financial Officer)





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<PAGE>

                                  EXHIBIT INDEX

NUMBER          TITLE OF EXHIBIT                                        PAGE

10.1            Form of Employment Agreement between the Company
                and Robert J. Palmisano                                   16

10.2            Form of Employment Agreement between the Company
                and Bernard R. Patriacca                                  27

10.3            MacroChem Corporation Option Certificate between
                the Company and Robert J. Palmisano                       40


                                       15
<PAGE>