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

                                  FORM 10-K/A
                               (Amendment No.1)

(Mark One)

[X]  Annual report pursuant to section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the fiscal year ended December 31, 1998

                                      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 0-19651

                         MAGAININ PHARMACEUTICALS INC.
            (Exact name of registrant as specified in its charter.)

           Delaware                                            13-3445668
(State or other jurisdiction of                               (IRS Employer
incorporation or organization)                             Identification No.)

 5110 Campus Drive, Plymouth Meeting, PA                          19462
(Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code: (610) 941-4020

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

            None                                      N/A
    (Title of each class)         (Name of each exchange on which registered)

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                     Common Stock, $.002 par value per share
                                (Title of Class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulations S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

     The aggregate market value of the voting stock held by non-affiliates of
the registrant is approximately $97,843,000. Such aggregate market value was
computed by reference to the closing price of the Common Stock as reported on
the National Market System of The Nasdaq Stock Market, on February 22, 1999. For
purposes of this calculation only, the registrant has defined affiliates as
including all directors and executive officers. The number of shares of the
registrant's Common Stock outstanding as of February 22, 1999 was 22,911,616.

     The purpose of Ammendment No. 1 is to file Exhibits 10.32, 10.33 and 10.34.

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ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


Financial Statements

         The information required by this item was previously filed.

Financial Statement Schedules

         All schedules have been omitted because they are not applicable, or not
required, or the information is shown in the Financial Statements or Notes
thereto.

Reports on Form 8-K

         None.

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Exhibits

     The following is a list of exhibits filed as part of this Amendment No. 1
on Form 10-K/A. Where so indicated by footnote, exhibits which were previously
filed are incorporated by reference. For exhibits incorporated by reference, the
location of the exhibit in the previous filing is indicated parenthetically,
together with a reference to the filing indicated by footnote.

Exhibit No.
-----------

  3.1      Restated Certificate of Incorporation of the Registrant (Exhibit
           3.1)(1)
    
  3.2      Certificate of Amendment of Restated Certificate of Incorporation of
           the Registrant (Exhibit 3.2)(13)
    
  3.3      By-laws of the Registrant (Exhibit 3.2)(2)
    
  4.1      Specimen copy of stock certificate for shares of Common Stock of the
           Registrant (Exhibit 4.1)(3)

10.1#      1990 Stock Option Plan of the Registrant (Exhibit 10.1)(2)

10.2#      1992 Stock Option Plan of the Registrant, as amended (4)

10.3#      Stock Option Agreement with Jay Moorin (Exhibit 10.24)(3)

10.4#      Amendment to Stock Option Agreement with Jay Moorin (Exhibit 10.4)(1)

10.5#      Form of Stock Option Agreement under Stock Option Plans (Exhibit
           4.6)(2)

10.6#      Employment Agreement with Jay Moorin (Exhibit 10.2)(2)

10.7#      Employment Agreement with Michael A. Zasloff (Exhibit 10.23)(3)

10.8#      Amendment of Employment Agreement with Michael A. Zasloff, M.D.,
           Ph.D. (Exhibit 10.9)(3)

10.9#      Employment Agreement with Michael R. Dougherty (Exhibit 10.26)(7)

10.10#     Employment Agreement with Roy C. Levitt, M.D. (Exhibit 10.24)(5)(9)

10.11#     Employment Agreement with Thomas J. Bigger (Exhibit 10.12)(13)

10.12#*    Employment Agreement with Kenneth J. Holroyd, M.D.

10.13#*    Consulting Agreement with Jay Moorin, dated August 3, 1998

10.14      Lease with respect to Plymouth Meeting, Pennsylvania offices and
           laboratories (Exhibit 10.16)(2)

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10.15      Lease with respect to Plymouth Meeting, Pennsylvania office (Exhibit
           10.13)(14)

10.16*     Ammendment to lease with respect to Plymouth Meeting, Pennsylvania
           offices and laboratories

10.17      Patent License Agreement and Sponsored Research Agreement with The
           Children's Hospital of Philadelphia (Exhibit 10.15)(2)

10.18      License Agreement with Multiple Peptide Systems, Inc. (Exhibit
           10.12)(2)

10.19      Second Amendment to License Agreement with Multiple Peptide Systems,
           Inc. (Exhibit 10.30)(12)

10.20      Stock Issuance Agreement between Magainin Pharmaceuticals, Inc. and
           The Scripps Research Institute. (Exhibit 10.2)(11)

10.21      Stock Issuance Agreement between Magainin Pharmaceuticals, Inc. and
           Houghten Pharmaceuticals, Inc. (Exhibit 10.1)(11)

10.22      Form of Credit Agreement, including form of Promissory Note and
           Warrant (Exhibit 10.22)(2)

10.23      Form of Amendment to Credit Agreement Warrant (Exhibit 10.18)(6)

10.24      Research and Development Agreement with Abbott Laboratories (Exhibit
           10.23)(7)

10.25      Warrant Agreement with Abbott Laboratories (Exhibit 10.25)(7)

10.26      Manufacturing Agreement with Abbott Laboratories, dated October 4,
           1995 (Exhibit 10.27)(5)(8)

10.27      Stock Issuance Agreement with Abbott Laboratories, dated October 4,
           1995 (Exhibit 10.28)(5)(8)

10.28      Assignment Agreement between Magainin Pharmaceuticals Inc., Roy C.
           Levitt, M.D. and GeneQuest, Inc. (Exhibit 10.25)(5)(9)

10.29      Form of Purchase Agreement relating to the issuance by Magainin
           Pharmaceuticals, Inc. of units consisting of shares of Magainin
           Pharmaceuticals, Inc. Common Stock and warrants to purchase shares of
           Common Stock. (Exhibit 10.1)(10)

10.30      Form of Warrant to purchase shares of Magainin Pharmaceuticals, Inc.
           Common Stock. (Exhibit 10.2)(10)

10.31      Development, Supply and Distribution Agreement, effective as of
           February 12, 1997 with SmithKline Beecham Corporation (Exhibit
           10.29)(5)(13)

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10.32+     Collaborative Research and Option Agreement with Genentech, Inc.,
           effective as of December 30, 1998 (16)

10.33+     Stock Purchase Agreement between Magainin Pharmaceuticals, Inc. and
           Genentech Inc., dated December 30, 1998 (16)

10.34+     Supply Agreement between Abbott Laboratories Inc. and Magainin
           Pharmaceuticals, Inc., effective January 1, 1999 (16)

10.35#     1998 Equity Compensation Plan (15)

10.36#*    Form of stock award letter under 1998 Equity Compensation Plan

23*        Consent of KPMG LLP

24*        Power of Attorney (included on signature page of this Annual Report
           on Form 10-K)

27*        Financial Data Schedule

Explanation of Footnotes to Listing of Exhibits

*      Previously filed.

#      Compensation plans and arrangements for executives and others.

+      Filed herewith.

(1)    Filed as an Exhibit to the Annual Report on Form 10-K for the year ended
       June 30, 1992 filed with the Securities and Exchange Commission on
       September 24, 1992.

(2)    Filed as an Exhibit to Registration Statement (No. 33-43579) on Form S-1
       filed with the Securities and Exchange Commission on October 24, 1991.

(3)    Filed as an Exhibit to Pre-Effective Amendment No. 1 to Registration
       Statement (No. 33-43579) on Form S-1 filed with the Securities and
       Exchange Commission on November 27, 1991.

(4)    Filed as Exhibit A to the Proxy Statement for the 1996 Annual Meeting of
       Stockholders.

(5)    Portions of this Exhibit were omitted and filed separately with the
       Securities and Exchange Commission pursuant to an order granting
       confidential treatment.

(6)    Filed as an Exhibit to the Transition Report on Form 10-K for the year
       ended December 31, 1993 filed with the Securities and Exchange Commission
       on March 9, 1994.

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(7)    Filed as an Exhibit to the Annual Report on Form 10-K for the year ended
       December 31, 1994 filed with the Securities and Exchange Commission on
       March 31, 1995.

(8)    Filed as an Exhibit to the Form 10-Q for the quarter ended September 30,
       1995 filed with the Securities and Exchange Commission on November 9,
       1995.

(9)    Filed as an Exhibit to the Annual Report on Form 10-K for the year ended
       December 31, 1995 filed with the Securities and Exchange Commission on
       March 29, 1996.

(10)   Filed as an Exhibit to Registration Statement (No. 333-09927) on Form S-3
       filed with the Securities and Exchange Commission on August 9, 1996.

(11)   Filed as an Exhibit to Registration Statement (No. 333-14555) on Form S-3
       filed with the Securities and Exchange Commission on October 21, 1996.

(12)   Filed as an Exhibit to the Form 10-Q for the quarter ended September 30,
       1996 filed with the Securities and Exchange Commission on November 14,
       1996.

(13)   Filed as an Exhibit to the Annual Report on Form 10-K for the year ended
       December 31, 1996 filed with the Securities and Exchange Commission on
       March 31, 1997.

(14)   Filed as an Exhibit to the Annual Report on Form 10-K for the year ended
       December 31, 1997, filed with the Securities and Exchange Commission on
       March 13, 1998.

(15)   Filed as Exhibit A to the Proxy Statement for the 1998 Annual Meeting of
       Stockholders.

(16)   Portions of the Exhibit have been omitted and have been filed separately
       pursuant to an application for confidential treatment filed with the
       Securities and Exchange Commission pursuant to Rule 24b-2 under the
       Securities Exchange Act of 1934, as amended.

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                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                   MAGAININ PHARMACEUTICALS INC.

                                   By: /s/  Michael R. Dougherty     
                                       -----------------------------
                                       Michael R. Dougherty
                                       President, Chief Executive Officer,
                                       Chief Financial Officer and Director

Date: March 19, 1999

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                                  EXHIBIT INDEX

     The Exhibits that have been filed herewith this Form 10-K/A are summarized
as follows:

Exhibit No.            Description
-----------            -----------
                        
10.32*     Collaborative Research and Option Agreement with Genentech, Inc.,
           effective as of December 30, 1998

10.33*     Stock Purchase Agreement between Magainin Pharmaceuticals, Inc. and
           Genentech Inc., dated December 30, 1998

10.34*     Supply Agreement between Abbott Laboratories Inc. and Magainin
           Pharmaceuticals, Inc., effective January 1, 1999



Explanation of Footnotes to Listing of Exhibits

*          Portions of the Exhibit have been omitted and have been filed
           separately pursuant to an application for confidential treatment
           filed with the Securities and Exchange Commission pursuant to Rule
           24b-2 under the Securities Exchange Act of 1934, as amended.

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