UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K/A
                                (AMENDMENT No. 2)

                       FOR ANNUAL AND TRANSITIONAL REPORTS
                       PURSUANT TO SECTIONS 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

[X]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

               For the Fiscal Year Ended December 31, 1997

[ ]            TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-19635

                               GENTA INCORPORATED
                     (Exact name of Registrant as specified
                      in its certificate of incorporation)

            Delaware                                       33-0326866
--------------------------------------------------------------------------------
 (State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                      Identification Number)

      3550 General Atomics Court
      San Diego, California                                 92121
--------------------------------------------------------------------------------
  (Address of principal executive offices)                (Zip Code)

                                 (619) 455-2700
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to
Section 12(g) of the Act:                    Common Stock, $.001 par value
                                             Preferred Stock Purchase Rights,
                                                   Par Value $.001
                                                  (Title of Class)


                                                                              1

<PAGE>

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 Regulation  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/A or any  amendment to
this Form 10-K/A. [ ]

The  approximate  aggregate  market  value of the voting  common  equity held by
non-affiliates  of the  registrant  was 6.0  million  as of April 2,  1998.  For
purposes of  determining  this  number,  136,202  shares of Common Stock held by
affiliates are excluded.

As of April 2,  1998,  the  registrant  had  5,737,756  shares of  Common  Stock
outstanding.

                       Documents Incorporated by Reference

                                      None

                                                                              2

<PAGE>

                               GENTA INCORPORATED

                                   FORM 10-K/A
                                      INDEX

                                                                           Page
                                                                           ----

                                     PART I

Item 3. Legal Proceedings....................................................4

                                     PART II

Item 6. Selected Consolidated Financial Data.................................4

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.................4
Item 11.  Executive Compensation.............................................9
Item 12.  Security Ownership of Certain Beneficial Owners and Management....14
Item 13.  Certain Relationships and Related Transactions....................18
Signatures


                                                                              3

<PAGE>



                                 AMENDMENT NO. 2
                            TO THE FORM 10-K FILED BY
           GENTA INCORPORATED ON APRIL 15, 1998, AS PREVIOUSLY AMENDED

      The  following  Items  were  omitted  from  the Form  10-K  filed by Genta
Incorporated on April 15, 1998, as amended by the First Amendment  thereto filed
on April 16, 1998. Such Form 10-K, as amended,  is hereby amended to include the
information hereinafter set forth.

      Capitalized  terms  used but not  defined  herein  will have the  meanings
described for them in the Form 10-K as amended to date.

                                     PART I

ITEM 3. LEGAL PROCEEDINGS

The second paragraph of Item 3(a) is amended to read as follows:

      LBC Capital Resources,  Inc. ("LBC"), a Philadelphia-based  broker/dealer,
has asserted claims against the Company and others,  including Paramount Capital
Inc., of which Dr.  Rosenwald is the sole  stockholder and Mr. Weiss is a Senior
Managing Director, and various related entities and persons. LBC's claims relate
to the alleged  breach by the Company of certain  letter  agreements,  allegedly
entered  into by LBC and the Company in 1995 and 1996 with  respect to brokerage
and/or investment banking services, particularly in connection with a $3 million
investment  for which LBC is  seeking a fee.  On March  30,  1998,  the  Company
received a Statement of Claim under NASD  arbitration  rules, and a request that
the Company  voluntarily  submit to NASD  arbitration.  LBC's Statement of Claim
sought  damages in the form of cash (in excess of $4 million),  stock,  warrants
and other securities.  Subsequently, LBC abandoned the arbitration, and on April
9, 1998,  the Company's  counsel  learned that a Complaint had been filed in the
United  States  District  Court for the  Southern  District of New York (98 Civ.
2491) by LBC  against  the Company  and the same other  parties.  However,  such
Complaint  has not yet been  properly  served  upon  the  Company.  The  Company
believes it has valid legal and equitable defenses to LBC's lawsuit. The Company
intends to defend vigorously and possibly to assert counterclaims against LBC.


                                     PART II

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The Consolidated  Balance Sheet Data is amended to reflect the amount of $532 as
the 1996 balance sheet item  entitled  Cash,  cash  equivalents  and  short-term
investments.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

             INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS

      Set forth below is certain  information  regarding the Company's directors
and  executive  officers,  including  information  furnished by them as to their
principal  occupations and business experience for the past five years,  certain
directorships  held by each,  their  respective ages as of April 1, 1998 and the
year in which each became a director of the  Company.  Each  director has served
continuously with the Company since his first election as indicated below.


                                                                              4

<PAGE>


     Name                                                                    Age
     ----                                                                    ---

      CLASS I (TERMS EXPIRE IN 1998)

Kenneth G. Kasses, Ph.D......................................................53
Peter Salomon, M.D. .........................................................38
Andrew J. Stein..............................................................53
Harlan J. Wakoff ............................................................31

      CLASS II (TERMS EXPIRE IN 1999)

Glenn L. Cooper, M.D.........................................................45
Lawrence J. Kessel, M.D......................................................44
Bobby W. Sandage, Jr., Ph.D..................................................44

      CLASS III (TERMS EXPIRE IN 2000)

Donald G. Drapkin ...........................................................50
Michael S. Weiss ............................................................32
Robert E. Klem, Ph.D. .......................................................52


Kenneth G. Kasses, Ph.D., has been Genta's President and Chief Executive Officer
since October 1997 and a member of the Board of Directors  since September 1997.
From 1991-1997, Dr. Kasses was affiliated with the Radiopharmaceutical  Division
of The Dupont Merck Pharmaceutical Company, serving as Senior Vice President and
General  Manager until 1994 when he was appointed  President.  From 1988 through
1990, he served as Director,  Business Development and Planning, for the Medical
Products  Department of E.I. DuPont de Nemours & Company,  Inc. In that capacity
he  played  a key  role in the  formation  of The  Dupont  Merck  Pharmaceutical
Company, a joint venture between DuPont and Merck and Co., Inc. Prior to that he
served as  Director,  U.S.  Pharmaceuticals,  for DuPont from  1987-1988  and as
President of DuPont Critical Care from 1986-1987. Prior to this, Dr. Kasses held
a variety of  executive  positions  from  1973-1986 at American  Critical  Care,
CIBA-GEIGY  Pharmaceuticals,  Ayerst  Laboratories  and Block Drug Company.  Dr.
Kasses received a B.S. in biology from Dickinson  College in 1966 and a Ph.D. in
pharmacology from New York Medical College in 1974.

Peter  Salomon,  M.D.,  FACG,  has been a member of the Genta Board of Directors
since  September 1997. His principal  employment  during the last five years has
been as a Board Certified  Gastroenterologist  in private practice in Boca Raton
and Delray Beach, Florida with Gastroenterology Consultants of South Florida. In
addition,  he is an expert  consultant for several  insurance  companies and law
firms in the areas of gastroenterology and liver diseases. Dr. Salomon graduated
magna cum laude from New York University in 1981. He received his Medical Degree
from New York  University  in 1985.  Following  this he received his training in
Internal Medicine and  Gastroenterology  at The Mount Sinai Hospital in New York
where he also held a grant from the Crohn's and  Colitis  Foundation  to perform
research in inflammatory bowel disease. He was also selected to receive advanced
training in  therapeutic  endoscopic  techniques  at Aarhus  Kommunehospital  in
Aarhus,  Denmark.  He has been  elected to the Phi Beta Kappa  society  and is a
member of MENSA. He has done extensive research in the field of gastroimmunology
and has  published  numerous  articles  and book  chapters  in  various  leading
scientific journals and textbooks.  He is also currently a director of PolaRx, a
privately-held biotechnology firm.

Andrew  J.  Stein  has been a member  of the  Genta  Board  of  Directors  since
September  1997.  In addition,  he is President  of Benake  Corporation,  Equity
Partner  in  Metromedia  Asia and a member  of the  Board of  Directors  of News
Communications.  Mr. Stein is also a member of the New York State  Commission of
Privatization and the New York State Research Council on  Privatization.  He was
the Chairman of the Commission for the Study of


                                                                               5

<PAGE>

Youth  Crime  and  Violence  and  Reform of the  Juvenile  Justice  System  from
1993-1995.  From 1986 to 1993, he was  President of the Council,  New York City.
From 1978 to 1985, he was President of the Borough of Manhattan and from 1969 to
1977,  he was a member  of the New York  State  Assembly  where he served on the
Health Committee and was appointed by Gov. Nelson Rockefeller as Chairman of the
Commission  on Living  Costs and the  Economy,  which  reformed the nursing home
industry in New York State. He was also Chairman of the New York City Commission
on Public Information and Communication,  and has been a Trustee of the New York
City Employees  Retirement  System and an ex officio member of The Museum of The
City of New York, The New York Public Library,  The  Metropolitan  Museum of Art
and The Queens Borough Public Library.

Harlan  J.  Wakoff  has been a member  of the  Genta  Board of  Directors  since
September  1997.  Mr.  Wakoff  has  been  a Vice  President  of  the  Media  and
Entertainment Investment Banking Group at Furman Selz L.L.C. since June 1996. He
was previously  affiliated with the investment banking groups at NatWest Markets
from  January  1995 to June 1996 and Kidder  Peabody & Co.  from  August 1993 to
January  1995.  Mr.  Wakoff  received an M.B.A.  from The Wharton  School at the
University  of  Pennsylvania  in May 1993 and a B.S.  in  accounting,  summa cum
laude, from the State University of New York at Albany.

Glenn L. Cooper,  M.D., has been a member of the Genta Board of Directors  since
September  1997.  He has also been  President,  Chief  Executive  Officer  and a
director of Interneuron  Pharmaceuticals,  Inc.  since May 1993.  From September
1992 to June 1994 Dr.  Cooper  was  President,  Chief  Executive  Officer  and a
director of Progenitor, Inc. and is currently Chairman at Progenitor. He is also
Chairman of  Intercardia,  Inc.,  Chairman  and Acting  President  of  Transcell
Technologies,  Inc.  and a  director  of  InterNutria,  Inc.,  all of which  are
subsidiaries  of  Interneuron.  In addition,  Dr. Cooper serves as a director of
Aeolus  Pharmaceuticals,  Inc., a subsidiary  of  Intercardia.  Dr.  Cooper also
served as President and Chief Executive  Officer of Intercardia  from March 1994
to January 1995.  Prior to joining  Progenitor,  Dr.  Cooper was Executive  Vice
President  and Chief  Operating  Officer of Sphinx  Pharmaceuticals  Corporation
since August 1990.  Dr.  Cooper had been  associated  with Eli Lilly since 1985,
most  recently,  from June 1987 to July 1990,  as Director,  Clinical  Research,
Europe,  of Lilly  Research  Center  Limited;  from  October 1986 to May 1987 as
International  Medical  Advisor,  International  Research  Coordination of Lilly
Research Laboratories;  and from June 1985 to September 1986 as Medical Advisor,
Regulatory Affairs,  Chemotherapy Division at Lilly Research  Laboratories.  Dr.
Cooper received his M.D. from Tufts University School of Medicine, performed his
postdoctoral  training in Internal  Medicine and Infectious  Diseases at the New
England Deaconess Hospital and Massachusetts General Hospital and is a magna cum
laude graduate of Harvard College.

Lawrence J.  Kessel,  M.D.,  FACP,  CMD, has been a member of the Genta Board of
Directors since September 1997. Dr. Kessel is a physician in private practice in
Philadelphia and a diplomate in both internal  medicine and geriatric  medicine,
as well as a Fellow  of the  American  College  of  Physicians  and a  Certified
Medical Director of Long-Term Nursing Facilities.  Dr. Kessel is affiliated with
Chestnut  Hill  Hospital,   Roxborough   Memorial  Hospital  and  Chestnut  Hill
Rehabilitation Hospital and serves as a clinical instructor at Jefferson Medical
College. He is also a medical director at Integrated Health Services (IHS) and a
staff  physician at Fairview Paper Mill,  Green Acres Ivy Hill and St.  Joseph's
Villa.  Dr.  Kessel is a director  of PolaRx,  a  privately  held  biotechnology
company.

Bobby W. Sandage,  Jr., Ph.D., has been a member of the Genta Board of Directors
since September 1997. Dr. Sandage joined  Interneuron  Pharmaceuticals,  Inc. in
November 1991 as Vice President,  Medical and Scientific Affairs. Since December
1995 he has been Executive Vice  President,  Research and  Development and Chief
Scientific  Officer of Interneuron.  From February 1989 to November 1991 he held
management positions in the Cardiovascular  Research and Development division of
The DuPont Merck Pharmaceutical  Company.  From May 1985 to February 1989 he was
affiliated  with the Medical  Department of DuPont Critical Care. Dr. Sandage is
an adjunct  professor in the  Department of  Pharmacology  at the  Massachusetts
College of Pharmacy.  Dr. Sandage  received his Ph.D. in Clinical  Pharmacy from
Purdue University and his B.S. in Pharmacy from the University of Arkansas.  Dr.
Sandage  is  a  director  of  Aeolus  Pharmaceuticals,  Inc.,  a  subsidiary  of
Intercardia, Inc.


                                                                              6

<PAGE>

Donald G.  Drapkin  has been  Chairman  of the Genta  Board of  Directors  since
September  1997. Mr. Drapkin has been a director and Vice Chairman of MacAndrews
& Forbes Holdings, Inc. and various of its affiliates since March 1987. Prior to
joining  MacAndrews  & Forbes,  Mr.  Drapkin  was a  partner  in the law firm of
Skadden,  Arps, Meagher & Flom in New York for more than five years. Mr. Drapkin
also is a director of the following  corporations which file reports pursuant to
the  Securities  Exchange  Act  of  1934:  Algos   Pharmaceutical   Corporation,
Anthracite Capital, Inc., BlackRock Asset Investors, Cardio Technologies,  Inc.,
The Cosmetic Center,  Inc.,  Playboy  Enterprises,  Inc.,  Revlon,  Inc., Revlon
Consumer Products  Corporation, VIMRx Pharmaceuticals Inc. and Weider Nutrition
International.

Michael S. Weiss has been Vice  Chairman of the Genta Board of  Directors  since
May 1997. Mr. Weiss is currently Senior Managing Director of Paramount  Capital,
Inc.,  an investment  banking firm and serves in a similar  capacity for certain
affiliated  entities.  He joined the companies in 1993. Prior to that, Mr. Weiss
was an attorney with Cravath, Swaine & Moore. Mr. Weiss also serves on the Board
of Directors of Pacific Pharmaceuticals,  Inc., Palatin Technologies, Inc., AVAX
Technologies,  Inc.,  as  Secretary  of Atlantic  Pharmaceuticals,  Inc.  and as
Chairman  of  the  Board of  Procept  Inc.,  all  publicly-traded  biotechnology
companies.  Additionally,  Mr.  Weiss is a member of the board of  directors  of
several privately-held biopharmaceutical  companies. Mr. Weiss received his J.D.
from  Columbia  University  School of Law and a B.S.  in Finance  from the State
University of New York at Albany.

Robert E. Klem,  Ph.D., has been a member of the Genta Board of Directors  since
February  1991,  a Vice  President  of the  Company  since  October  1991 and is
currently the Company's  Principal  Accounting  Officer and Principal  Financial
Officer.  Dr. Klem  co-founded  JBL  Scientific,  Inc.  ("JBL"),  a wholly-owned
subsidiary  of the Company,  in 1973 and,  since then,  has been Chairman of the
Board and Chief  Technical  Officer  of JBL with  responsibility  for  research,
development and marketing activities. Previously, Dr. Klem was the Plant Manager
for E.I.  DuPont in  Victoria,  Texas from 1970 to 1974.  Dr. Klem  received his
Ph.D. in Organic Chemistry from the University of California at Riverside.

Lauren R. Brown,  Ph.D.,  has been Vice  President of the Company  since October
1991. He co-founded  JBL Scientific in 1973 and since then has been President of
JBL. Dr. Brown  received his Ph.D. in Organic  Chemistry  from the University of
California  at Riverside.  He is active in community  affairs in San Luis Obispo
and  presently  serves on the board of directors of the YMCA and the Chamber of
Commerce.

      David Hale resigned as a Class III director effective January 28, 1997. On
May 5, 1997, Thomas Adams resigned as a Class I director. On September 11, 1997,
Sharon B. Webster  resigned as a Class I director and Paul O.P. Ts'o resigned as
a Class II director.

      The Board of Directors held 17 meetings during the year ended December 31,
1997. All directors attended at least 75% of the aggregate number of meetings of
the Board of  Directors,  except  that Dr.  Cooper did not attend one of the two
meetings held during the time he served as a director. Directors receive no fees
for their services, but non-employee directors are eligible for stock options.

             SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the directors and executive officers of the Company and persons who beneficially
own more than ten  percent of the  Company's  Common  Stock  (collectively,  the
"Reporting  Persons")  to report  their  ownership  of and  transactions  in the
Company's   Common  Stock  to  the  Securities  and  Exchange   Commission  (the
"Commission").  Copies of these  reports are also required to be supplied to the
Company.  The  Company  believes,  upon a review of the  copies of such  reports
received by the Company and written  representations  furnished by the Reporting
Persons  to the  Company,  that  during  the year ended  December  31,  1997 the
Reporting Persons complied with all applicable Section


                                                                              7

<PAGE>

16(a) reporting requirements, except as follows: Mr. Weiss did not file a Form 3
on a timely basis to report his appointment as a director of the Company.


                                                                              8

<PAGE>

ITEM 11.             EXECUTIVE COMPENSATION

      The following table sets forth compensation for services in all capacities
to the Company, for the fiscal years ended December 31, 1995, 1996 and 1997, of:
(i) those persons who were, respectively,  the Company's Chief Executive Officer
for  any  time  period  during  1997  and up to four of the  other  most  highly
compensated  executive  officers of the Company  who were  serving as  executive
officers at December 31, 1997 whose total annual salary and bonus for the fiscal
year  ending  December  31,  1997  exceeded  $100,000;  and (ii) two  additional
individuals  who would have been two of such other four most highly  compensated
executive  officers if such individuals had served as executive officers for the
entire fiscal year (collectively, the "Named Officers").

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                       Long-Term
                                                        Annual Compensation                       Compensation Awards
                                     ---------------------------------------------------------    ---------------------

                                                                                
Name and                                                                        Other Annual      Securities Underlying 
Principal Position                     Year        Salary ($)    Bonus ($)       Compensation          Options (#)      
------------------                     ----        ----------    ---------      ------------      ----------------------

<S>                                    <C>         <C>           <C>             <C>                          <C>       
Thomas H. Adams, Ph.D.                 1997       $285,000(1)       --               --                       100,000(2)
Chairman of the Board and              1996        285,000(3)       --               --                         2,799(3)
Chief Executive Officer                1995        285,000(3)       --               --                        20,000(4)

Kenneth G. Kasses, Ph.D.               1997         62,500(5)       --               --                               --
President and
Chief Executive Officer

Zofia E. Dziewanowska                  1997       $216,601(6)       --               --                               --
Ph.D., M.D., Senior  Vice              1996        235,000(3)       --               --                         1,574(3)
President, Global Clinical             1995        235,000(3)       --            14,759(7)                    12,000(4)
Affairs

Guy Van de Winckel                     1997       $170,000(8)       --               --                               --
Vice President, European               1996        170,000          --               --                               --
Operations and President of            1995        170,000          --               --                               --
Genta Pharmaceuticals                                            
Europe, S.A.                                                     
                                                                 
Robert E. Klem, Ph.D.                  1997       $170,000(9)       --               --                               --
Vice President, Chairman of            1996        155,000(3)       --            2,580(10)                       853(3)
the Board of JBL                       1995        161,458(3)(11)   --            2,580(10)                     4,500(4)
                                                                 
Lauren Brown, Ph.D.                    1997        144,000(9)       --               --                               --
President JBL                          1996        131,000(3)       --            3,000(10)                     1,285(3)
                                       1995        131,000(3)       --            3,000(10)                     2,000(4)
</TABLE>


                                                                              9

<PAGE>

(1)       Dr.  Adams  resigned as Chief  Executive  Officer and  Chairman of the
          Board and a  Director  on May 5, 1997.  Pursuant  to a  severance  and
          consulting  arrangement  with  the  Company  (which  has not yet  been
          reflected in a written  agreement),  the Company agreed to continue to
          pay Dr.  Adam's salary at the  then-current  rate of $285,000 per year
          for a one-year  period,  agreed to continue  eligibility  for coverage
          under the Company's  health  insurance plan for a one-year  period and
          agreed to grant  options to purchase  100,000  shares of Common  Stock
          (exercisable  at 100% of the fair market value of such stock on May 5,
          1997) as consideration for consulting services of at least 24 days.

(2)       See Footnote 1 above. As of the date hereof, none of these options had
          been granted to Dr. Adams  because no  consulting  agreement  with Dr.
          Adams has yet been entered into.

(3)       Options were granted to Named Officers  during the year ended December
          31, 1996 to compensate them for accepting deferral of the payment of a
          portion of base salary in 1995 and 1996.  The  portions of salaries so
          deferred  are  included  in the 1995  salary  figures  in this  table,
          consisting  of $23,750,  $9,792,  $6,458 and  $10,916 for Drs.  Adams,
          Dziewanowska,  Klem and Brown,  respectively,  and in the 1996  salary
          figures in this  table,  consisting  of  $11,875,  $9,791,  $6,458 and
          $5,458 for Drs. Adams, Dziewanowska, Klem and Brown, respectively.

(4)       These  options  (the "New  Options")  were  granted  in  exchange  for
          unexercised  options  granted prior to April 20, 1995 with an exercise
          price above $2.25 per share (the "Old Options").  The New Options were
          granted  at fair  market  value at the date of grant and have the same
          vesting schedule as the Old Options. However, the New Options were not
          exercisable until after April 20, 1997, regardless of the Old Options'
          vesting  schedule,  unless  the  holder  is  terminated  involuntarily
          without cause prior to April 20, 1997. None of these options have been
          exercised to date.

(5)       Salary  payments  commenced on October 1, 1997. See  "Compensation  of
          President and Chief Executive Officer" below.

(6)       Dr. Dziewanowska  resigned as Senior Vice President of Global Clinical
          Affairs on July 31, 1997.  Pursuant to a severance  agreement with the
          Company,  the Company  agreed to  continue  to pay Dr.  Dziewanowska's
          salary at the  then-current  rate of  $235,000  per year for the first
          month and at one-half the  then-current  rate for the next ten months.
          In addition,  the Company agreed to continue  eligibility for coverage
          under the Company's dental insurance plan and to pay Dr.  Dziewanowska
          monthly dollar  amounts equal to the group medical  premiums under the
          Company's health insurance plan for an eleven-month period.

(7)       Represents   payments  for  expenses   incurred  in  connection   with
          relocation including applicable tax gross-ups.

(8)       Mr. Van de Winckel  resigned as Vice President of European  Operations
          and President of Genta Pharmaceuticals Europe, S.A. on April 15, 1997.
          Pursuant  to a severance  arrangement  with the  Company,  the Company
          continued to pay Mr. Van de Winckel's salary at the then-current  rate
          of $170,000 per year and agreed to continue  eligibility  for coverage
          under the Company's health insurance plan for a nine-month period.

(9)       This  amount  does not  include the payment in 1997 of the full salary
          amounts deferred from 1995 and 1996, as discussed in Footnote 3 above.

(10)      Represents  payments for  insurance  policies  covering  Drs. Klem and
          Brown.

(11)      Represents 25 bimonthly pay periods during 1995 that resulted from Dr.
          Klem's having been transferred from the Company's  payroll calendar to
          JBL's payroll calendar.




                                                                             10

<PAGE>

COMPENSATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER

      Pursuant to a Letter Agreement,  dated September 4, 1997,  between Michael
Weiss,  then the Interim Chairman of the Board of the Company (and presently the
Vice  Chairman),  and Dr.  Kasses  (the  "Letter  Agreement"),  Dr.  Kasses  was
appointed  President  and Chief  Executive  Officer  of the  Company,  effective
October 1, 1997,  subject to Board  ratification.  Among other items, the Letter
Agreement provided the following:

      1. Dr. Kasses would  receive a base salary of $300,000 per annum,  subject
to semi-annual  review commencing on October 1, 1998. In the event Dr. Kasses is
terminated  without cause or terminates  his  employment  for cause,  Dr. Kasses
would become entitled to receive this amount as severance for one year following
such  termination,  subject to  set-off  for  amounts  earned  from  alternative
employment.  At the end of Dr. Kasses' first year of employment, he would become
entitled to a bonus of  $100,000,  assuming he is then  employed by the Company.
Dr.  Kasses  would also be entitled to an  additional  bonus of up to  $100,000,
subject to achievement of agreed-upon milestones.

      2. Dr.  Kasses  would be  entitled  to  receive,  subject  to  stockholder
approval,  a grant of stock options to purchase 5% of the fully  diluted  Common
Stock of the Company  outstanding  as of an  agreed-upon  date,  with  quarterly
vesting over four years (assuming continued employment).

      3. Dr. Kasses and his  dependents  would  receive such medical,  long-term
disability,  life insurance and such other health  benefits as the Company makes
available to its other senior officers and directors.

      The Letter Agreement  contemplated that these and certain other provisions
would be incorporated  into an employment  agreement  between Dr. Kasses and the
Company.

      The Company expects to seek stockholder approval of a stock option plan at
its next Annual  Meeting of  Stockholders  pursuant  to which the stock  options
referred to in the Letter  Agreement  would be granted.  (The Company's  current
stock option plan has insufficient shares to permit such grant.)

COMPENSATION OF DIRECTORS

      Directors of the Company  receive no fees for their  services as directors
or committee members.  Non-employee  directors are reimbursed by the Company for
their  out-of-pocket  expenses  incurred in  attending  meetings of the Board of
Directors and its committees.  The Company expects to seek stockholder  approval
of a stock option plan at its next Annual  Meeting of  Stockholders  pursuant to
which directors will be eligible to receive stock option grants.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      For the Company's  fiscal year ended December 31, 1997, the Company had no
Compensation   Committee.   The  entire  Board  of  Directors   participated  in
discussions  regarding  compensation matters. None of the directors or executive
officers of the Company had any  "interlock"  relationship  to report during the
Company's fiscal year ended December 31, 1997.

      See "Certain  Relationships and Related Transactions" for a description of
certain  arrangements  between the Company and Genta Jago. Genta's Vice Chairman
of the Board is a managing director of Genta Jago.

PENSION AND LONG-TERM INCENTIVE PLANS

      The Company has no pension or long-term incentive plans.

                                                                             11

<PAGE>

                                  STOCK OPTIONS

      No stock  options  were  issued  to any  Chief  Executive  Officer,  Named
Executive  Officer or Director by the Company in 1997.  See Footnotes 1 and 2 to
the Summary Compensation Table.



                                                                             12

<PAGE>

                    OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR END OPTION VALUES


<TABLE>
<CAPTION>
                                                                               Number of
                                                                              Securities                         Value of
                                                                              Underlying                        Unexercised
                                                                              Unexercised                      In-the-Money
                                                                              Options at                        Options at
                                                                          Fiscal Year End(#)               Fiscal Year End($)(1)
                                                                          ------------------               ---------------------
                               Shares Acquired          Value
Name                           On Exercise (#)      Realized ($)   Exercisable     Unexercisable      Exercisable    Unexercisable
----                           ---------------      ------------   -----------     -------------      -----------    -------------

<S>                                                                      <C>            <C>                                   
Thomas H. Adams, Ph.D.                --                --               22,799             --             --               --

Kenneth G. Kasses, Ph.D.              --                --                   --             --             --               --

Zofia E. Dziewanowska,
  Ph.D., M.D.                         --                --               12,333          1,240             --               --

Guy Van de Winckel                    --                --                   --             --             --               --

Robert E. Klem, Ph.D.                 --                --                5,353             --             --               --

Lauren Brown, Ph.D.                   --                --                3,285             --             --               --

</TABLE>

(1)  Calculated  on the  basis  of  the  fair  market  value  of the  underlying
     securities  as of December  31, 1997 ($.781 per share),  minus the exercise
     price.


                                                                             13

<PAGE>

ITEM 12. STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

      The  following  table  sets  forth  information  as of April 1, 1998 as to
shares of Common Stock beneficially owned by (i) the Company's  directors,  (ii)
the Company's  executive  officers named in the Summary  Compensation  Table set
forth herein,  (iii) the  directors  and executive  officers of the Company as a
group and (iv) each person  known by the Company to be the  beneficial  owner of
more than five  percent of the  outstanding  shares of the  Common  Stock of the
Company.  As of April 1,  1998,  each  share of  Series A  Preferred  Stock  was
convertible at the option of the holder into approximately 7.26 shares of Common
Stock and each share of Series D Preferred Stock is convertible at the option of
the holder into approximately  105.96 shares of Common Stock. Except as required
by law or with  respect  to the  creation  or  amendment  of senior  classes  of
preferred stock or creation of different  series or classes of Common Stock, and
in certain other instances,  the holders of Series A Preferred Stock do not have
voting rights until  conversion into Common Stock.  The conversion  price of the
Series A and the Series D  Preferred  Stock and the  numbers of shares of Common
Stock issuable upon conversion  thereof may be adjusted in the future,  based on
the provisions in the Certificate of Incorporation, as amended.

<TABLE>
<CAPTION>
                                                 COMMON STOCK                               SERIES D PREFERRED STOCK
                                                 ------------                               ------------------------
NAME AND ADDRESS OF BENEFICIAL               AMOUNT AND NATURE OF         PERCENT OF          AMOUNT AND NATURE OF          PERCENT
OWNER                                      BENEFICIAL OWNERSHIP(1)           CLASS          BENEFICIAL OWNERSHIP(1)        OF CLASS

<S>                                                 <C>                     <C>            <C>                   <C>  
Lindsay A. Rosenwald, M.D.                          15,865,232(2)           73.8%          83,826(2)             35.6%
787 Seventh Avenue, 48th Floor
New York, NY 10019

Paramount Capital Asset                             15,042,741(3)           72.7%          76,414(3)             33.5%
Management, Inc.
787 Seventh Avenue
New York, NY 10019

United Congregations Mesora                          1,109,600(4)           16.2%          10,000(5)             4.4%
c/o Aeta Realty
1 State Street Plaza
New York, NY 10004
Attn: Chana Adelstein

Branco Weiss                                           619,800(5)            9.9%           5,000(6)             2.2%
Hallwylstrasse 71
CH-8036 Zurich
SWITZERLAND

Diversified Fund Limited                               554,800(6)            8.8%           5,000(7)             2.2%
CH-6904 Lugano
Via Zurigo 46
SWITZERLAND

Garo H. Armen                                          499,320(7)            8.0%           4,500(8)             2.0%
c/o Armen Partners, L.P.
630 Fifth Avenue, Suite 2100
New York, NY 10111


                                                                             14

<PAGE>

Mark Bercuvitz                                         388,360(8)            6.3%           3,500(9)             1.5%
1310 Sreene Ave. Suite 660
Westmount, Quebec
CANADA H3Z 2B2

Michael S. Weiss                                       148,354(9)            2.5%           1,337(9)             0.6%
Robert E. Klem, Ph.D.                                   28,711(10)           0.5%               0                 0%
Lawrence J. Kessel, M.D.                                27,740(11)           0.5%             250(11)            0.1%
Peter Salomon, M.D.                                        500(12)           0%                 0                 0%
Glenn L. Cooper, M.D.                                        0               0%                 0                 0%
Donald G. Drapkin                                            0               0%                 0                 0%
Kenneth G. Kasses, Ph.D.                                     0               0%                 0                 0%
Bobby W. Sandage, Jr., Ph.D.                                 0               0%                 0                 0%
Andrew J. Stein                                              0               0%                 0                 0%
Harlan J. Wakoff                                             0               0%                 0                 0%
Thomas H. Adams, Ph.D.                                  61,132(13)           1.1%               0                 0%
Lauren Brown, Ph.D.                                     23,363(14)           0.4%               0                 0%
Zofia E. Dziewanowska                                   12,333(15)           0.2%               0                 0%
Guy Van De Winckel                                           0               0%                 0                 0%

All directors and executive                            302,133               5.1%           1,587                0.7%
officers as a group (14 persons)
</TABLE>

(1)        The number of shares  beneficially  owned is  determined  under rules
           promulgated by the Commission, and the information is not necessarily
           indicative of beneficial ownership for any other purpose.  Under such
           rules,  beneficial  ownership  includes  any  shares  as to which the
           individual  has sole or shared voting power or  investment  power and
           also any shares which the  individual has the right to acquire within
           60 days of April 1, 1998,  through the exercise or  conversion of any
           stock  option,  convertible  security,  warrant or other  right.  The
           inclusion  herein of such shares,  however,  does not  constitute  an
           admission  that  the  named  stockholder  is  a  direct  or  indirect
           beneficial  owner of such shares.  Unless otherwise  indicated,  each
           person  or  entity  named in the  table  has sole  voting  power  and
           investment  power (or shares such power with his or her spouse)  with
           respect to all shares of capital stock listed as owned by such person
           or entity.

(2)        Dr.  Rosenwald  may be deemed to have  shared  voting and  investment
           power over the 15,042,741  shares of Common Stock which may be deemed
           to be beneficially owned by Paramount Capital Asset Management,  Inc.
           ("PCAM") of which Dr. Rosenwald is the sole shareholder. See Footnote
           3 below. In addition, Dr. Rosenwald may be deemed to have sole voting
           and  investment  power over  approximately  822,491  shares of Common
           Stock  which he may be deemed  beneficially  to own,  consisting  of:
           approximately 785,429 shares of Common Stock issuable upon conversion
           of  approximately  7,412 shares of Series D Preferred  Stock issuable
           upon exercise of Unit Purchase  Warrants;  and  approximately  37,062
           shares of Common  Stock  issuable  upon  exercise of Class D Warrants
           issuable upon exercise of Unit


                                                                             15

<PAGE>

          Purchase Warrants.  Excludes approximately 1,951,801 and 92,101 shares
          of Common Stock issuable,  respectively,  upon conversion and exercise
          of approximately 18,420 shares of Series D Preferred Stock and Class D
          Warrants issuable upon exercise of Unit Purchase  Warrants,  which are
          not exercisable within 60 days of April 1, 1998.

(3)       PCAM may be deemed to have shared voting and investment power over the
          5,253,866 and 9,788,875  shares of Common Stock,  respectively,  which
          may be deemed to be  beneficially  owned by the Aries  Domestic  Fund,
          L.P.  (the  "Aries  Domestic  Fund") and The Aries  Trust (the  "Aries
          Trust"), for which PCAM is the General Partner and Investment Advisor,
          respectively.  Includes: 27,450 and 64,050 shares of Common Stock held
          by Aries  Domestic Fund and Aries Trust,  respectively;  2,833,907 and
          5,262,940   shares  of  Common  Stock  issuable  upon   conversion  of
          approximately  26,745 and 49,669  shares of Series D  Preferred  Stock
          (including  350 and 650 shares of Series D  Preferred  Stock  issuable
          upon exercise of Unit Purchase  Warrants)  held by Aries Domestic Fund
          and Aries  Trust,  respectively;  19,250 and  35,750  shares of Common
          Stock issuable upon exercise of Class D Warrants  (including 1,750 and
          3,250  Class D  Warrants  issuable  upon  exercise  of  Unit  Purchase
          Warrants) held by Aries  Domestic Fund and Aries Trust,  respectively;
          approximately 130,593 and 261,185 shares of Common Stock issuable upon
          exercise of 18,000 and 36,000 shares of Series A Preferred  Stock held
          by Aries Domestic Fund and Aries Trust, respectively;  Bridge Warrants
          held by Aries Domestic Fund and Aries Trust to purchase  approximately
          2,225,166 and 4,132,450 shares of Common Stock, respectively; and Line
          of Credit  Warrants  held by Aries  Domestic  Fund and Aries  Trust to
          purchase 17,500 and 32,500 shares of Common Stock, respectively.

(4)       United Congregations  Mesora's beneficial ownership consists of 10,000
          shares  of  Series D  Preferred  Stock,  which  are  convertible  into
          approximately  1,059,600  shares of Common Stock, and Class D Warrants
          to purchase up to 50,000 shares of Common Stock.  This  information is
          derived from United Congregations Mesora's Schedule 13D/A, as amended,
          dated July 11, 1997, filed with the Commission.

(5)       Mr. Branco Weiss'  beneficial  ownership  consists of 5,000 shares of
          Series D Preferred Stock,  which are convertible  into  approximately
          529,800  shares of Common  Stock,  Class D Warrants to purchase up to
          25,000 shares of Common Stock and 65,000 shares of Common Stock. This
          information is derived from Mr. Weiss'  Schedule 13D dated October 9,
          1997, filed with the Commission.

(6)       Diversified  Fund Limited's  ("Diversified's")  beneficial  ownership
          consists  of 5,000  shares of  Series D  Preferred  Stock,  which are
          convertible  into  approximately  529,800 shares of Common Stock, and
          Class D Warrants  to purchase  up to 25,000  shares of Common  Stock.
          Carlo  Pagani,  in his capacity as President of  Diversified,  shares
          voting and dispositive  power with respect to such securities and may
          be  deemed  to be the  beneficial  owner  of  such  securities.  This
          information is derived from Diversified's Schedule 13D dated March 2,
          1998, filed with the Commission.

(7)       Mr. Armen's beneficial  ownership consists of 4,500 shares of Series D
          Preferred  Stock,  which are convertible  into  approximately  476,820
          shares of Common Stock,  and Class D Warrants to purchase up to 22,500
          shares of Common Stock.  The Series D Preferred  Stock and the Class D
          Warrants are held by (a) Armen Partners,  L.P., an investment  limited
          partnership,  of which Dr. Armen and Armen Capital Management Corp., a
          corporation  of which  Dr.  Armen is the  principal,  are the  general
          partners,   (b)  Armen  Partners  Offshore  Fund,  Ltd.,  an  offshore
          investment  fund to  which  Armen  Capital  Management  Corp.  acts as
          investment manager, and (c) GHA Management Corporation,  a corporation
          wholly-owned  by Dr.  Armen.  This  information  is  derived  from Mr.
          Armen's Schedule 13D dated July 24, 1997, filed with the Commission.


                                                                             16

<PAGE>

(8)       Mr.  Bercuvitz's  beneficial  ownership  consists  of 3,500  shares of
          Series D Preferred  Stock,  which are convertible  into  approximately
          370,860 shares of Common Stock, and Class D Warrants to purchase up to
          17,500 shares of Common Stock.  This  information  is derived from Mr.
          Bercuvitz's   Schedule  13D  dated  March  2,  1998,  filed  with  the
          Commission.

(9)       Mr.  Michael Weiss'  beneficial  ownership  consists of  approximately
          15,894 shares of Common Stock  issuable upon  conversion of 150 shares
          of Series D Preferred  Stock held by Mr.  Weiss;  750 shares of Common
          Stock  issuable  upon  exercise of Class D Warrants held by Mr. Weiss;
          and  approximately  125,775 and 5,935 shares of Common Stock issuable,
          respectively,  upon  conversion  and exercise of  approximately  1,187
          shares of Series D Preferred Stock and Class D Warrants  issuable upon
          exercise of Unit Purchase Warrants held by Mr. Weiss. Excludes 502,993
          and  23,735  shares  of  Common  Stock  issuable,  respectively,  upon
          conversion  and  exercise of  approximately  4,747  shares of Series D
          Preferred  Stock and Class D Warrants  issuable  upon exercise of Unit
          Purchase  Warrants,  which are not exercisable within 60 days of April
          1, 1998, that are held by an entity of which Mr. Weiss is the managing
          member.  Mr. Weiss' business address is 787 Seventh Avenue,  New York,
          NY 10019.                                                             
          
(10)      Dr. Klem's  beneficial  ownership  consists of 23,358 shares of Common
          Stock and options to purchase 5,353 shares of Common Stock. Dr. Klem's
          Common Stock  holdings  include 1,875 shares of Common Stock held by a
          trust for Dr. Klem's children,  as to which Dr. Klem has shared voting
          and  investment  power,  and 150 shares of Common  Stock  owned by Dr.
          Klem's wife, as to which he disclaims beneficial ownership.

(11)      Dr. Kessel's  beneficial  ownership consists of 250 shares of Series D
          Preferred  Stock,  which are  convertible  into  approximately  26,490
          shares of Common  Stock,  and Class D Warrants to purchase up to 1,250
          shares of Common Stock.

(12)      Dr. Salomon's  beneficial  ownership  consists of 500 shares of Common
          Stock.

(13)      Dr. Adams'  beneficial  ownership  consists of 38,333 shares of Common
          Stock and  options to  purchase  22,799  shares of Common  Stock.  Dr.
          Adams' Common Stock holdings include 8,000 shares of Common Stock held
          in several trusts for Dr. Adams'  children,  as to which Dr. Adams has
          shared voting and investment  power, and 30,333 shares of Common Stock
          jointly  owned by Dr. Adams and Dr. Adam's wife, as to which Dr. Adams
          has shared voting and investment power.

(14)      Dr. Brown's  beneficial  ownership consists of 20,078 shares of Common
          Stock and options to purchase 3,285 shares of Common Stock.

(15)      Dr.  Dziewanowska's   beneficial  ownership  consists  of  options  to
          purchase 12,333 shares of Common Stock.


                                                                             17

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      In February 1989, the Company  entered into a license  agreement with Drs.
Paul Ts'o and Paul Miller (the "Ts'o/Miller  Agreement")  pursuant to which Drs.
Ts'o and Miller  granted an exclusive  license to the Company to certain  issued
patents, patent applications and related technology regarding the use of nucleic
acids and  oligonucleotides,  including  methylphosphonates,  as  pharmaceutical
agents. Dr. Ts'o was a Director of the Company until September 11, 1997 and is a
Professor of Biophysics,  Department of Biochemistry  at Johns Hopkins,  and Dr.
Miller is a  Professor  of  Biochemistry  at the  School of  Public  Health  and
Hygiene,  Johns  Hopkins.  In May,  1990,  the  Company  entered  into a license
agreement with Johns Hopkins (the "Johns Hopkins Agreement," and such agreement,
together  with the  Ts'o/Miller  Agreement,  being  referred  to  herein  as the
"Ts'o/Miller/Hopkins  Agreements")  pursuant to which Johns Hopkins  granted the
Company an exclusive  license to its rights in certain  issued  patents,  patent
applications and related technology  developed as a result of research conducted
at Johns Hopkins by Drs. Ts'o and Miller and related to the use of nucleic acids
and obligonucleotides as pharmaceutical  agents. In addition,  Johns Hopkins has
granted the Company  certain rights of first  negotiation to inventions  made by
Drs. Ts'o and Miller in their laboratories in the area of  oligonucleotides  and
inventions  made by  investigators  at Johns  Hopkins in the course of  research
funded by the  Company,  which  inventions  are not  otherwise  included  in the
Ts'o/Miller/Hopkins  Agreements.  The Company agreed to pay Dr. Ts'o, Dr. Miller
and Johns  Hopkins  royalties  on net sales of  products  covered  by the issued
patents and patent applications, but not the related technology, licensed to the
Company under the Ts'o/Miller/Hopkins  Agreement. The Company also agreed to pay
certain minimum  royalties  prior to  commencement  of commercial  sales of such
products,  which  royalties  may be credited  under certain  conditions  against
royalties  payable on  subsequent  sales.  Subject  to  certain  rights of early
termination, the Ts'o/Miller/Hopkins Agreements remain in effect for the life of
the  last-to-expire  patent  licensed under the  respective  agreements or until
abandonment of the last-pending patent application licensed under the respective
agreements. On February 14, 1997, the Company received notice from Johns Hopkins
that the Company  was in material  breach of the Johns  Hopkins  Agreement.  The
Johns Hopkins  Agreement  provides  that, if a material  payment  default is not
cured within 90 days of receipt of the notice of the breach,  Johns  Hopkins may
terminate the Johns Hopkins Agreement.

      In February 1991, in connection  with the  acquisition of JBL, the Company
assumed certain leases between JBL and Granada Associates and Sueldo Associates,
both of which are affiliates of Drs. Brown and Klem. Dr. Brown is currently Vice
President of the Company and President of JBL. Dr. Klem is Vice  President and a
Director of the Company and Chairman of the Board of JBL. The current  aggregate
monthly payment under such leases is approximately $32,000.

      Dr.  Adams  resigned as the Chief  Executive  Officer and  Chairman of the
Board of the Company on May 5, 1997. Severance  arrangements with Dr. Adams have
been  discussed,  as disclosed in Footnote 1 to the Summary  Compensation  Table
included in Item 11, but no written  agreement  has been  entered into as of the
date hereof.

      As of August 1, 1997, the Company entered into a consulting agreement with
Dr. Zofia E. Dziewanowska (a former executive officer of the Company),  pursuant
to which Dr.  Dziewanowska  will be compensated for any work performed at a rate
of $150 per hour  through  January  31,  1998 and $300 per hour  thereafter.  In
addition,  Dr. Dziewanowska's options will continue to vest until the end of the
90-day  post-termination  exercise  grace  period  for  the  options,which  will
commence on January 31, 1998 or upon  termination of the Agreement by either the
Company or Dr.  Dziewanowska,  whichever date comes first. See Footnote 6 to the
Summary Compensation Table included in Item 11.

      As of August 27,  1997,  the  Company  entered  into  separate  consulting
agreements with each of Drs. Paul Ts'o and Sharon Webster (both former directors
of the  Company),  pursuant to which the Company  issued 15,400 shares of Common
Stock to Dr. Ts'o and 15,500 shares of Common Stock to Dr. Webster, paid


                                                                             18

<PAGE>

$4,000 to Dr.  Webster and  retained  each of Drs.  Ts'o and Webster to serve as
consultants to the Company for a one-year period at a fee of $12,000.

      In February  1997,  the Company  raised gross  proceeds of $3 million in a
private  placement,  to Aries Trust and Aries  Domestic Fund  (collectively  the
"Aries Funds"), of 12% Senior Secured  Convertible Notes  ("Convertible  Notes")
and  warrants to purchase  Common Stock  ("Bridge  Warrants").  The  Convertible
Notes,  together with accrued interest thereon, were converted pursuant to their
terms into an aggregate of 65,415 shares of Series D Preferred  Stock,  which in
turn are  convertible,  at $0.94375 per share,  into 6,931,391  shares of Common
Stock.  The  Bridge  Warrants  permit  the  purchase  of up to an  aggregate  of
6,357,616  shares of Common Stock at an exercise  price of  $0.471875  per share
(subject to adjustment  upon the  occurrence of certain  events).  Pursuant to a
Note and Warrant Purchase Agreement (the "Purchase  Agreement")  entered into by
and among the Company and the Aries  Funds,  dated as of January  28,  1997,  in
connection with such private  placement,  the Aries Funds were granted the right
to  designate  nominees  constituting  a majority of the members of the Board of
Directors  of the  Company,  subject  to  certain  conditions.  The Aries  Funds
designated  Michael S. Weiss as a nominee for Director  and he was  appointed by
the Board and elected Interim  Chairman of the Company's Board of Directors.  On
September 11, 1997, the Aries Funds designated Glenn L. Cooper,  M.D., Donald G.
Drapkin,  Bobby W. Sandage,  Jr.,  Ph.D.  and Andrew J. Stein as nominees to the
Board of Directors of the Company  (the  "Board"),  such persons were elected as
Directors of the Company,  Michael S. Weiss stepped down as Interim Chairman and
the Board elected Mr. Drapkin Chairman and Mr. Weiss Vice Chairman.

      On June 6, 1997,  the Aries Funds entered into a Line of Credit  Agreement
with the Company  pursuant to which the Aries Funds  provided the Company with a
line  of  credit  of  up  to  $500,000,   which   subsequently  was  repaid,  in
consideration  for warrants (the "Line of Credit  Warrants") to purchase  50,000
shares of Common Stock  exercisable  at $2.50 per share,  subject to  adjustment
upon the occurrence of certain events.

      On June 30,  1997,  the Company sold a total of 161.58  Premium  Preferred
UnitsTM  ("Units") in a private  placement (the "Private  Placement")  for which
Paramount Capital,  Inc. acted as placement agent. Each unit sold in the Private
Placement  consisted  of 1,000  shares of Series D  Preferred  Stock and Class D
Warrants to purchase 5,000 shares of Common Stock at any time prior to the fifth
anniversary  of the final closing date. A total of $16,158,000  was raised.  The
net proceeds to the Company were  $14,036,772.  The  respective  conversion  and
exercise  prices of the Series D  Preferred  Stock and the Class D  Warrants  is
$0.94375 per share, subject to adjustment upon the occurrence of certain events.
The Aries Funds  purchased,  for an aggregate of $870,000,  Class D Warrants and
Series D Preferred  Stock in the Private  Placement  presently  exercisable  and
convertible for an aggregate of 50,000 and 1,059,603  shares of Common Stock. In
connection with the Private  Placement,  Paramount  Capital,  Inc. received cash
commissions equal to 9% of the gross sales price and a  non-accountable  expense
allowance  equal to 4% of the gross sales  price,  and  received  warrants  (the
"Placement  Warrants")  to  purchase  up to 10% of the Units sold in the Private
Placement for 110% of the offering price per Unit. Furthermore,  the Company has
agreed to enter into a financial advisory agreement with Paramount Capital, Inc.
pursuant to which  Paramount  Capital,  Inc. shall receive certain cash fees and
has received warrants (the "Advisory  Warrants" and, together with the Placement
Warrants,  the "Unit Purchase Warrants") to purchase up to 15% of the Units sold
in the Private  Placement  for 110% of the offering  price per Unit.  Michael S.
Weiss, Vice Chairman of the Board of the Company,  is a Senior Managing Director
of Paramount Capital,  Inc. David R. Walner, the Secretary of the Company, is an
Associate  Director and Secretary of Paramount  Capital Asset  Management,  Inc.
("PCAM").  PCAM is the investment manager and general partner of Aries Trust and
Aries  Domestic  Fund,  respectively.  The Aries Funds  currently  do not hold a
controlling block of voting stock of the Company,  although the Aries Funds have
the present right to convert and exercise  their  securities  into a significant
portion of the  outstanding  Common Stock, as described  herein.  Dr. Lindsay A.
Rosenwald, the President and sole stockholder of PCAM, is also the President and
sole stockholder of Paramount Capital, Inc., the Company's financial advisor and
the placement agent for the


                                                                             19

<PAGE>

Private Placement. In connection with the Private Placement,  Paramount Capital,
Inc.  and their  designees  received  Unit  Purchase  Warrants  to  purchase  an
aggregate  of 40,395  shares of Series D  Preferred  Stock and  201,975  Class D
Warrants as compensation for services as placement agent and financial  advisor.
Paramount Capital,  Inc. allocated to Mr. Weiss and an entity of which Mr. Weiss
is the managing member, Unit Purchase Warrants to purchase an aggregate of 5,934
shares of Series D Preferred Stock and 29,670 Class D Warrants.

      In December 1992,  the Company and Jagotec formed Genta Jago  Technologies
B.V. ("Genta  Jago"),  a  50/50  joint  venture  to  develop  and  commercialize
therapeutic products on a worldwide basis. In 1996, SkyePharma acquired Jagotec.
Michael  Weiss is a managing  director of Genta Jago.  Among other  things,  the
Company is required to provide loans to Genta Jago pursuant to a working capital
agreement which expires in October 1998. The loans are advanced up to a mutually
agreed upon  maximum  commitment  amount,  which  amount is  established  by the
parties on a periodic  basis.  As of December 31, 1997, the Company had advanced
working  capital  loans  of  approximately  $15,800,000  to Genta  Jago,  net of
principal repayments and credits,  which amount fully satisfied what the Company
believes is the loan commitment  established by the parties through December 31,
1997.  Such loans bear  interest  and are  payable in full in October  1998,  or
earlier in the event  certain  revenues  are  received  by Genta Jago from third
parties.  There can be no  assurance,  however,  that Genta Jago will obtain the
necessary financial resources to repay such loans to the Company.

      Under the terms of the joint venture,  Genta Jago has contracted  with the
Company to conduct  research and development and provide certain other services.
Revenues  associated  with providing such services,  totaling  $350,000 in 1997,
were recorded by the Company as related  party  contract  revenue.  Terms of the
arrangement also grant the Company an option to purchase  Jagotec's  interest in
Genta Jago exercisable from December 1998 through 2000.


                                                                            20

<PAGE>


                                SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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,  on this
30th day of April, 1998.

                              GENTA INCORPORATED


                              /s/Kenneth G. Kasses, Ph.D.
                              ------------------------------------------
                              Kenneth G. Kasses, Ph.D.
                              President, Principal Executive Officer and
                              Director



      Pursuant to the  requirements  of the Securities  Exchange Act of 1934, as
amended,  this  report has been signed  below by Kenneth G.  Kasses,  Ph.D.  and
Robert E. Klem, Ph.D. in their respective  individual  capacities and by Kenneth
G. Kasses,  Ph.D. on behalf of the following  persons,  pursuant to the Power of
Attorney  constituting Exhibit 24.1 to Genta's Form 10-K as amended by the First
Amendment  thereto filed on April 16, 1998, in the  capacities  and on the dates
indicated.


<TABLE>
<CAPTION>

Signature(s)                        On behalf of                        Capacity                 Date
------------                        ------------                        --------                 ----

<S>                             <C>                         <C>                               <C>
/s/Kenneth G. Kasses, Ph.D.
---------------------------     Kenneth G. Kasses, Ph.D.    President, Principal Executive    April 30, 1998
Kenneth G. Kasses, Ph.D.                                         Officer and Director      

/s/Robert E. Klem
--------------------------      Robert E. Klem, Ph.D.       Principal Accounting Officer,     April 30, 1998
Robert E. Klem, Ph.D.                                       Principal Financial Officer,      
                                                             Vice President and Director 
/s/Kenneth G. Kasses, Ph.D.
---------------------------     Glenn L. Cooper, M.D.       Directors                         April 30, 1998
Kenneth G. Kasses, Ph.D.        Donald G. Drapkin                            
                                Lawrence M. Kessel, M.D.  
                                Peter Salomon, M.D.    
                                Bobby W. Sandage, Jr., Ph.D.
                                Andrew J. Stein      
                                Harlan J. Wakoff      
                                Michael S. Weiss      
</TABLE>


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