<PAGE>


           SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549
 
                                   FORM 10-K
 
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934
 
                       For Fiscal Year Ended March 31, 1997
                                             --------------

                           Commission File Number 0-23252
                                                 --------

                             IGEN International, Inc. 
                        -------------------------------------

               (Exact name of registrant as specified in its charter)
  
             DELAWARE                                  94-2852543
   (State or other jurisdiction of                   (IRS Employer
     incorporation or organization)                Identification No.)
 
             16020 INDUSTRIAL DRIVE, GAITHERSBURG, MD     20877 
     ---------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code) 


                                    301-984-8000 
     ----------------------------------------------------------------------
               (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 $0.001 par value
                                                 -----------------------------
                                                       (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 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 or any amendment to this
form 10-K.   
           -----
  
    The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of June 17, 1997, computed by reference to the closing sale price
of such stock quoted on the Nasdaq National Market, was approximately
$59,109,800. For the purposes of this calculation, shares owned by officers,
directors and 5% shareholders known to the Registrant have been deemed to be
owned by affiliates.
 
    The number of shares outstanding of the Registrant's Common Stock as of June
17, 1997 was 15,006,017.
 
                                   DOCUMENTS INCORPORATED BY REFERENCE
 
    The following documents (or parts thereof) are incorporated by reference
into the following parts of this Form 10-K. Certain information required in Part
III of this Annual Report on Form 10-K is incorporated from the Company's
definitive Proxy Statement relating to its Annual Meeting of Shareholders to be
held on September 9, 1997. 


                                       1

<PAGE>


                                     PART I
 
IN ADDITION TO HISTORICAL INFORMATION, THIS DOCUMENT CONTAINS FORWARD-LOOKING 
STATEMENTS WITHIN THE MEANING OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE 
SECURITIES LITIGATION REFORM ACT OF 1995.  REFERENCE IS MADE IN PARTICULAR TO 
STATEMENTS REGARDING THE POTENTIAL MARKET FOR DIAGNOSTIC PRODUCTS, THE 
POTENTIAL IMPACT OF COMPETITIVE PRODUCTS, THE COMPANY'S EXPECTATIONS 
REGARDING THE LEVEL OF ANTICIPATED ROYALTY AND REVENUE GROWTH IN THE FUTURE, 
THE POTENTIAL MARKET FOR PRODUCTS IN DEVELOPMENT, THE DESCRIPTION OF THE 
COMPANY'S PLANS AND OBJECTIVES FOR FUTURE OPERATIONS, ASSUMPTIONS UNDERLYING 
SUCH PLANS AND OBJECTIVES AND OTHER FORWARD-LOOKING STATEMENTS INCLUDED IN 
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS" ("MD&A").  SUCH STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT 
EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF FACTORS AND UNCERTAINTIES WHICH 
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE 
FORWARD-LOOKING STATEMENTS.  IN PARTICULAR, CAREFUL CONSIDERATION SHOULD BE 
GIVEN TO CAUTIONARY STATEMENTS MADE IN THE MD&A AND IN THE BUSINESS SECTION 
OF THIS DOCUMENT UNDER THE HEADING "RISK FACTORS." IGEN DISCLAIMS ANY INTENT 
OR OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.
 
ITEM 1. BUSINESS
                                  INTRODUCTION
 
IGEN International, Inc. ("IGEN" or the "Company") develops, manufactures and 
markets diagnostic systems utilizing its patented ORIGEN-Registered 
Trademark- technology, which is based on electrochemiluminescence. This 
proprietary technology utilizes labels that, when attached to a biological 
substance and electrochemically stimulated, emit light at a particular 
wavelength to signal the presence of an analyte. The light emission then can 
be measured with a high degree of accuracy to detect and quantify the 
analyte. The ORIGEN technology thus provides a uniform assay format for 
conducting a multitude of diagnostic tests, including immunoassays, nucleic 
acid probe and clinical chemistry tests. The Company believes that 
ORIGEN-based diagnostic systems offer significant advantages over existing 
systems in terms of speed, sensitivity, flexibility, throughput and cost 
effectiveness. The Company is designing its diagnostic systems to become the 
industry standard for all segments of the diagnostic market, from large 
central laboratories to patient point-of-care, industrial and in-home testing.
 
The Company's business strategy is to commercialize certain products in 
collaboration with established healthcare and information technology 
companies and to develop and market other products either independently or 
with corporate partners in the patient point-of-care, life science research, 
animal health and industrial markets.
 
   - Collaborations with established diagnostic and pharmaceutical companies 
     have provided the Company with revenues from licensing agreements, as 
     well as access to large marketing organizations that it believes are 
     well positioned to maximize market penetration of ORIGEN-based products. 
     The Company has entered into several strategic alliances, including:
 
   - Boehringer Mannheim GmbH ("Boehringer Mannheim")--the second largest 
     worldwide manufacturer of diagnostic equipment and supplies that is part 
     of Corange Limited, a multinational corporation with annual revenues 
     exceeding $4 billion--to commercialize ORIGEN-based clinical 
     immunodiagnostic and nucleic acid probe systems that are marketed 
     worldwide to clinical reference laboratories. IGEN received $50 million 
     in license fees from Boehringer Mannheim and receives royalties on all 
     product sales. Boehringer Mannheim presently markets two ORIGEN-based 
     systems under the Elecsys product line. In January 1997, the Company 
     received $6 million under an Advance Royalty Agreement with Boehringer 
     Mannheim.  In May 1997, F. Hoffman-LaRoche AG ("Roche") and Corange Ltd. 
     announced that Roche would acquire all shares of Corange.  The merger,
     when completed, will create a $15 billion global company that will be the
     world's largest diagnostic supplier.

   - Organon Teknika B.V. ("Organon Teknika")--a company specializing in 
     hospital and blood bank products, which is a business unit of Akzo Nobel 
     N.V., a multinational corporation with annual revenues of approximately 
     $10 billion--to develop and commercialize ORIGEN-based nucleic acid 
     probe systems that will be marketed worldwide to clinical diagnostic and 
     life science research markets. IGEN received $20 million under its 
     agreements with Organon Teknika. Organon Teknika markets the NASBA QR 
     System together with test kits for the detection of HIV-1 RNA.

   - Eisai Co., Ltd. ("Eisai")--the fourth largest Japanese pharmaceutical 
     company--to market in Japan an ORIGEN-based diagnostic system for 
     agreed-upon diagnostic tests. Eisai has received regulatory approvals in 
     Japan and expects to introduce its first ORIGEN-based product under the 
     trade name Picolumi during 1997.

                                       2

<PAGE>
 
IGEN currently sells the ORIGEN Detection System and related reagents and 
services for life science research applications. The Company believes that 
its ORIGEN Detection System can replace many of the complex and less 
sensitive immunoassay methods presently in use, including radioimmunoassays. 
The Company believes that applications of the ORIGEN technology include 
point-of-care diagnostic systems for use outside the central laboratory 
because of speed, simplicity and cost effectiveness. The Company also 
anticipates that applications will exist in the field of in-home testing 
(patient self-testing), in which IGEN's technology may enable the creation of 
compact, inexpensive diagnostic products. The Company is currently monitoring 
the development of healthcare communication networks and intends to design 
its point-of-care and in-home testing systems for integration into such 
networks.
 
IGEN, Inc. was incorporated in California in 1982 and reincorporated in 
Delaware during 1996 as IGEN International, Inc. IGEN's executive offices, 
laboratory and manufacturing operations are located at 16020 Industrial 
Drive, Gaithersburg, Maryland 20877.
 
                            INDUSTRY BACKGROUND
 
In vitro diagnostic testing is the process of analyzing blood, urine and 
other specimens to screen for, monitor and diagnose diseases and other 
medical conditions or to determine the chemical and microbiological 
constituents of the specimens. The major procedures currently used are 
chemistry, immunodiagnostic, nucleic acid probe, hematological and 
microbiological tests.
 
Chemistry tests utilize established analytical methods for measuring simple 
compounds such as glucose and cholesterol, elements such as sodium and 
potassium, gases and enzymes. The types of samples that can be analyzed 
include biological specimens such as blood and urine as well as environmental 
materials, foods and beverages. The results of the analysis can be 
qualitative, identifying only the presence or absence of an analyte, or 
quantitative, identifying also the precise level of the analyte in the 
specimen.
 
Immunodiagnostic tests utilize antibodies to detect specific analytes such as 
viruses, hormones, therapeutic drugs and other substances present in the 
blood or other specimens in extremely low concentrations. To develop an 
immunodiagnostic test, an antibody is created that binds specifically to the 
analyte to be detected. The antibody is then coupled to a label that signals 
to an instrument the presence of the analyte in a way that can be measured. 
Immunodiagnostic tests are characterized by a relatively high rate of 
technological change and the frequent introduction of new clinical tests. 
Currently, most immunodiagnostic tests are performed in clinical laboratories 
by skilled technicians who must process the specimen, measure its volume, add 
reagents and use sophisticated machines to read and calculate the results.
 
Nucleic acid probe tests allow the detection of disease at the fundamental 
genetic level. The absence or presence of certain genes or gene mutations 
have been found to be reliable indicators of specific cancers, genetic 
disorders and infectious diseases. Nucleic acid probes provide a direct means 
of detecting nucleic acid sequences associated with either infectious agents 
or certain genes in a biological sample. One difficulty in the development of 
nucleic acid-based diagnostic technology is the low concentration of nucleic 
acid in the sample, which generally renders direct detection impractical. 
Recent solutions to this problem, including the DNA Polymerase Chain Reaction 
("PCR") or Nucleic Acid Sequence-Based Amplification ("NASBA"), are capable 
of amplifying trace amounts of target nucleic acid hundreds of millions of 
times and allow for the detection of disease-causing genes before symptoms 
appear.
 
Diagnostic procedures are performed primarily in three different markets: the 
clinical diagnostic market, including hospitals, reference laboratories, 
blood banks, patient point-of-care testing and home testing; the life science 
market, including laboratories in pharmaceutical and biotechnology companies, 
universities, private institutes and the government; and the industrial 
market, which consists of food and water quality assurance programs, 
agricultural diagnostics and animal health testing.

                                       3

<PAGE>

                             ORIGEN TECHNOLOGY
 
The ORIGEN technology is a proprietary technology based on 
electrochemiluminescence which utilizes labels that, when attached to a 
biological substance and electrochemically stimulated, emit light at a 
particular wavelength to signal the presence of an analyte. The light 
emission can then be measured with a high degree of accuracy to detect and 
quantify the analyte. The Company's ORIGEN technology thus provides a uniform 
assay format to conduct a multitude of diagnostic tests including 
immunoassay, nucleic acid probe and clinical chemistry tests. The ORIGEN 
technology is protected by numerous patents in the United States and 
internationally.
 
Using the ORIGEN technology as a platform, IGEN and its collaborators are 
developing diagnostic systems that offer many advantages over current 
technologies. The Company believes that its ORIGEN technology offers improved 
speed, sensitivity, flexibility and throughput relative to existing 
diagnostic technologies and lowers the cost of diagnostic procedures. The 
ORIGEN system directly measures electrochemiluminescence, and does not 
involve the use of enzymes common in competing systems, thus permitting a 
simplified assay format. The ORIGEN diagnostic systems can be automated to 
provide in a uniform format a large number of immunoassay, nucleic acid probe 
and clinical chemistry tests. The major features and benefits of proprietary 
ORIGEN-based diagnostic systems are:
 
<TABLE>
<CAPTION>

FEATURE                                                                           BENEFIT
--------------------------------------------------------  --------------------------------------------------------
<S>                                                       <C>
 
Simple Assay Format                                       Reduces time and labor in performing an assay.
 
Flexibility                                               Enables a single instrument to perform immunoassays on
                                                          large and small molecules and to perform DNA and RNA
                                                          probe assays.Permits immunoassays to be integrated with
                                                          clinical chemistry systems.
 
Cost                                                      Reduces assay cost per test.
 
Speed                                                     Produces quick results.Enables high throughput (random
                                                          access).
 
Sensitivity                                               Allows detection of analytes at very low concentrations.
 
Precision                                                 Provides highly-reproducible measurements.
 
Label Stability                                           Extends reagent shelf life.Improves measurement
                                                          accuracy.
</TABLE>
 
The essential component of the ORIGEN system is the measurement module, which 
consists of a flow cell containing an electrode and a light detection means 
such as a photomultiplier tube. The ORIGEN measurement module has been 
designed so that it can be easily incorporated into a variety of instruments 
from large central laboratory random-access systems to small batch 
point-of-care ORIGEN. The current design of the ORIGEN measurement module 
includes a reusable platinum or gold electrode to generate 
electrochemiluminescence. IGEN is also developing disposable electrodes to be 
used in portable instruments.
 
                    PRODUCT DEVELOPMENT STRATEGY
 
The Company is designing its diagnostic systems to become the industry 
standard for all segments of the diagnostic market, from large central 
laboratories to patient point-of-care and in-home testing. IGEN has 
selectively established corporate alliances with companies that it believes 
are well positioned to maximize market penetration in the central laboratory 
market. In particular, the Company has established relationships with 
Boehringer Mannheim for the development and marketing of clinical reference 
laboratory systems worldwide; with Organon Teknika for the development and 
marketing of 

                                       4

<PAGE>

nucleic acid probe systems for worldwide use in clinical diagnostic and life 
science research markets; and with Eisai for the marketing in Japan of a 
specified diagnostic system for certain diagnostic tests.

The Company will exploit either independently or with corporate partners, the 
opportunities presented by the expansion of diagnostic testing into patient 
point-of-care sites as well as opportunities available in the life science 
research and industrial markets. The Company will apply its ORIGEN technology 
to the development of a line of quantitative diagnostic products to address 
the needs of these markets. IGEN is currently marketing the ORIGEN Detection 
System and related reagents and services for life science research 
applications.
 
The Company believes that as the use of patient point-of-care and in-home 
testing systems expands, it will become necessary to integrate the 
information that is being generated by these systems into the data and 
communication networks that are rapidly expanding as a result of the 
tremendous improvements in information handling. The Company is monitoring 
the development of healthcare communication networks and intends to design 
its point-of-care and in-home testing systems for integration into such 
networks.
 
                                ORIGEN PRODUCTS
 
IGEN and its strategic collaborators are developing a broad range of products 
based on its proprietary ORIGEN technology, which are applicable to the 
clinical diagnostics, industrial and life science research markets. The 
Company believes that its ORIGEN technology is well suited for the 
development of a family of instruments to be used in hospital and reference 
laboratories and at the patient point-of-care. The technology permits 
virtually all clinical chemistry, immunodiagnostic, DNA probe and RNA probe 
tests to be performed on the same instrument using the same detection method. 
The ORIGEN technology also could serve as the basis for portable hand-held 
devices that perform with the efficiency and reliability of larger systems. 
The table on page 6 summarizes the Company's product and development programs.
 
                           CLINICAL DIAGNOSTIC PRODUCTS
 
Hospital/Reference Laboratory Systems. One of the most important applications 
of the Company's ORIGEN technology is in large, highly-automated clinical 
immunoassay systems of the type used in hospitals, reference laboratories and 
blood banks. Reference laboratories constitute the vast majority of the 
clinical diagnostic market today. Reference laboratory systems must be able 
to perform a wide variety of immunoassay tests on a large number of samples 
both reliably and cost-effectively. The Company and its corporate 
collaborators believe that systems based on the ORIGEN technology are well 
suited to serve this market, and may surpass those immunoassay and nucleic 
acid probe systems currently available in terms of speed, cost effectiveness 
and simplicity.
 
The Company's strategic partner, Boehringer Mannheim, introduced its first 
ORIGEN-based random-access immunoassay system, the Elecsys 2010, for the 
reference laboratory market in 1996. The Elecsys 2010 is designed to perform 
multiple assays in a random-access mode while handling stat tests, i.e., 
tests performed on clinical samples where the results are needed immediately, 
without interfering with the system workflow. Boehringer Mannheim and Hitachi 
have cooperated in the development of the Elecsys 2010, building on their 
successful cooperation in clinical chemistry instrumentation. The Elecsys 
2010 is modular so that it can be integrated with Boehringer Mannheim's 
clinical chemistry systems. Boehringer Mannheim offers a competitive panel of 
assays with the Elecsys 2010 and continues to develop additional assays for 
market introduction in the subsequent months and years. IGEN is collaborating 
with Boehringer Mannheim to develop at least 10 assays, each of which should 
have applicability to the point-of-care market pursued by IGEN. IGEN is 
reimbursed by Boehringer Mannheim for certain of these assay development 
costs. Boehringer Mannheim recently introduced the Elecsys 1010 system, which 
is a random access system designed for customers who have a lower throughput 
requirement.
 
Organon Teknika is developing nucleic acid probe diagnostic tests that are 
used to analyze human gene sequences or to detect the presence of gene 
sequences of infectious organisms. IGEN and its corporate collaborators 
believe that the ORIGEN technology applied to nucleic acid probe assays will 
offer the advantages of greater accuracy and efficiency demanded by the 
market. Organon Teknika markets the NASBA QR System, the first nucleic acid 
probe system based on the ORIGEN technology and Nucleic Acid Sequence-Based 
Amplification ("NASBA"), a proprietary nucleic acid amplification technique. 

                                       5

<PAGE>

                       PRODUCT AND DEVELOPMENT PROGRAMS
 
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
MARKET                        PRODUCT              APPLICATION         COMMERCIAL            STATUS
                                                                         RIGHTS 
------------------------------------------------------------------------------------------------------------------
<S>                    <C>                    <C>                    <C>                    <C>
 
Clinical Diagnostic
Market
Hospital/ Reference    Elecsys 2010           Immunoassays           Boehringer Mannheim    Product Sales
  Laboratory Systems
 
                       Elecsys 1010           Immunoassays           Boehringer Mannheim    Product Sales
 
                       NASBA QR System        Nucleic Acid Probe     Organon Teknika        Product Sales
                                              Detection
 
                       Picolumi               Immunoassays (Japan)   Eisai(Japan)           Product Launch --
                                                                                            1997(1)
 
                       Random Access Systems  Nucleic Acid Probe     Organon Teknika;       Development
                                              Detection              Boehringer Mannheim
 
                       High Throughput        Immunoassays           Boehringer Mannheim    Development
                       Elecsys System
 
Patient Point-of-Care  Physician's Office/    Immunoassays           IGEN                   Development
  Systems              Hospital Analyzer
 
                       Home Self Testing      Health Screening and   IGEN                   Research
                                              Monitoring
------------------------------------------------------------------------------------------------------------------
Life Science Research
  Market
                       ORIGEN Detection       Immunoassays/ Nucleic  IGEN                   Product Sales
                       System, Reagents and   Acid Probe Detection
                       Services
 
                       Cell Culture Reagents  Research Biologicals   IGEN                   Product Sales
 
                       NASBA QR System        Nucleic Acid Probe     Organon Teknika        Product Sales
                                              Detection
------------------------------------------------------------------------------------------------------------------
                       Industrial Markets
 
                       Environmental/ Water   Immunoassays and       IGEN; Organon Teknika  Development
                       Testing/ Food          Nucleic Acid Probe
                       Processing System      Detection
 
                       Animal Health Systems  Immunoassays and       IGEN                   Development
                                              Nucleic Acid
                                              Probe Detection
</TABLE>
 

(1) Product launch dates are based on estimates provided by the Company's
    collaborators.
-------------------------------------------------------------------------------
                                       6

<PAGE>

The NASBA System has four stages which are sample preparation and nucleic 
acid isolation, amplification and detection. The NASBA QR System utilizes 
ORIGEN technology which provides automated, rapid, specific, sensitive and 
homogenous detection. The first NASBA test kit introduced in 1994 was a 
product for the direct detection of HIV-1 RNA, both quantitatively and 
qualitatively. Products under development by Organon Teknika include tests 
for hepatitis, cytomeglovirus, chlamydia and mycobacteria. In addition to the 
diagnosis of infectious disease, the NASBA System has potential applications 
in the fields of genetic diseases, oncologic diseases and HLA typing for 
organ transplants.
 
Patient Point-of-Care Systems. IGEN is independently developing applications 
of its ORIGEN technology that can be used to perform immunoassays outside the 
central laboratory by an operator with no special skill or training. This 
market includes patient point-of-care settings such as the physician's 
office, ambulatory clinics, hospital emergency rooms, surgical and intensive 
care units, nurse's stations or the hospital patient's bedside. Physicians, 
patients and third-party payors have created a demand for bringing laboratory 
testing to the point of care, closer to the patient so as to allow the 
medical practitioner to provide immediate feed-back to the patient. 
Immunodiagnostic systems for individual physicians have had limited market 
penetration because of the lengthy turnaround time for test results (1-2 
days), the need for skilled labor in performing tests and high cost. The 
Company believes that the emergence of simple, accurate and cost effective 
diagnostic products is shifting the site of in vitro diagnostic testing from 
the clinical laboratory to alternate sites.
 
IGEN believes that significant demand exists for immunodiagnostic products 
that reduce turnaround time and cost. IGEN's point-of-care system is being 
designed to conduct immunodiagnostic tests that will provide accurate results 
to the physician within 15 minutes, thereby permitting the physician to make 
an immediate decision regarding the patient's course of treatment. The ORIGEN 
technology permits development of a system that is simple to operate at a 
very low cost per test. The Company is designing its point-of-care system to 
consist of a simple, low cost instrument and a line of reagents packaged in a 
disposable single test format. The Company is also developing the system to 
include information processing and transfer capabilities to update the 
patient's medical history and provide the physician with current patient 
information. As most immunodiagnostic assays can be conducted on the ORIGEN 
system in a uniform format, the Company believes that a broad menu of tests 
could be marketed on its point-of-care system.
 
In-Home Testing. Longer term applications of the ORIGEN technology also exist 
in the field of in-home testing (patient self-testing), in which IGEN's 
technology may enable the creation of compact, inexpensive diagnostic 
products. The Company is exploring the feasibility of using its ORIGEN 
technology for such products.
 
                     LIFE SCIENCE RESEARCH PRODUCTS
 
Immunoassay Systems. IGEN currently sells the ORIGEN Detection System and a 
line of related reagents and services. The ORIGEN Detection System is used by 
researchers who wish to perform immunoassays for life science applications. 
The ORIGEN Detection System is an open architecture assay platform that 
quantitates the binding of any two molecules that come together with 
specificity. The "open architecture" component of ORIGEN refers to the 
researcher's ability to customize their assays for their particular 
performance parameters. The System is optimized for immunoassays, but offers 
researchers the flexibility to build other assays for direct detection of 
nucleic acids, and receptor ligand studies. Whether the need is for greater 
sensitivity, faster turnaround time, expanded linear range, or other key 
features, a researcher has the flexibility to design an assay to meet these 
goals.
 
                                       7
<PAGE>

ORIGEN is being implemented throughout the life science market as a 
replacement technology for Radioimmunoassays (RIA) and Enzyme Linked 
Immunosorbent Assays (ELISA), the most commonly used systems, as well as a 
replacement for newer chemiluminescent and fluorescent procedures. The change 
is occurring as scientists see the enhancements to sensitivity (10-100 fold 
improvements), dynamic range of up to 5 logs, and the elimination of time 
consuming technical steps, such as assay washes.
 
IGEN's market focus in bio/pharmaceuticals has resulted in successful 
application of ORIGEN technology by customers in drug discovery and 
development, compound screening, basic research, clinical trials, quality 
control and manufacturing, ORIGEN is often replacing standard technologies 
such as radioimmunoassays. Bio/pharmaceutical researchers are benefiting from 
the ORIGEN Detection System's sensitivity as well as the reduction of time 
and labor, and significantly, the reduction in use of rare assay components 
such as proprietary compounds, antibodies, or clinical trial samples. The 
Company believes that the ORIGEN Detection System has established itself as a 
new tool that will help our customers bring pharmaceutical products to market 
faster.
 
Performance is key to new technology implementation by the bio/pharmaceutical 
researcher. IGEN has established added value in its customized approach to 
our customers. The versatility of ORIGEN technology allows for product 
customization rather than forcing a "one size fits all" approach. IGEN has 
focused its scientific resources to provide custom support to the client, 
based on their specific research needs, often at the customer site. This 
"mass customization" approach has spurred growth of complementary businesses 
such as assay development, custom compound labeling and assay validation 
services. To date there have been over 200 assay applications developed with 
the ORIGEN Detection System for over 100 customers.
 
While IGEN's market focus has been with bio/pharmaceutical customers, we have 
also established customers at government and university research centers. 
These customers are performing research in strategic IGEN growth areas such 
as food and water quality testing. We have also broadened our assay 
versatility by expanding into detection of DNA and quantitation of PCR. 
ORIGEN technology even offers the unique capability of sensitive detection of 
DNA without costly amplification steps.
 
OTHER ORIGEN RESEARCH PRODUCTS.  The Company will seek to develop with 
corporate collaborators other research products based on its ORIGEN 
technology, including detectors for column chromatography and capillary zone 
electrophoresis, electrochemiluminescence-based gel readers for DNA 
sequencers and a high-throughput reader for hybridoma screening and antibody 
production.
 
RESEARCH BIOLOGICALS.  The Company produces and sells a line of research 
reagents under its ORIGEN brand name. The products are purified biological 
extracts that promote the growth of certain types of cells used in laboratory 
investigations. The Company markets the products directly as well as through 
distributors.
 
                                 INDUSTRIAL PRODUCTS
 
The Company is seeking to develop further, either independently or with joint 
venture partners, ORIGEN-based products for use in food and water quality 
assurance programs and animal health testing. The emergence of simple, 
accurate and cost effective products is shifting testing from traditional 
labor intensive methods such as gas chromatography, to immunodiagnostics. The 
Company believes that its ORIGEN Detection System and reagents together with 
simpler, low-cost instruments under development will be particularly suited 
for these market applications.
 
                          COLLABORATION AND LICENSE AGREEMENTS
 
IGEN's business strategy is to develop and market products both independently 
and in collaboration with established healthcare and information technology 
companies. The Company's ORIGEN technology has already provided near-term 
revenues which have enabled the Company to pursue its strategic objectives in 
the diagnostic business. IGEN may seek additional corporate collaborators to 
provide financial resources, research and manufacturing capabilities and 
marketing infrastructure.

                                       8

<PAGE>
 
BOEHRINGER MANNHEIM GMBH.  Boehringer Mannheim is a business unit of Corange 
Limited, a multinational corporation with annual revenues exceeding $4 
billion and the second largest worldwide manufacturer of diagnostic equipment 
and supplies. Boehringer Mannheim's principal strength is in the area of 
clinical chemistry systems, in which it is the market leader. In 1991, the 
Company entered into an agreement under which Boehringer Mannheim was granted 
rights to develop and market clinical diagnostic systems worldwide based on 
the Company's technology. Under the agreement, IGEN received $50 million in 
license fees. Boehringer Mannheim pays additional amounts for certain assay 
product development being performed by IGEN, and is obligated to pay the 
Company a royalty on all product sales. In January 1997, the Company received 
$6 million under an Advance Royalty Agreement with Boehringer Mannheim. In 
May 1997, Roche and Corange announced that Roche would acquire all shares of 
Corange.  The merger, when completed, will create a $15 billion global 
company that will be the world's largest diagnostic supplier.
 
The ORIGEN products being marketed by Boehringer Mannheim under the name 
Elecsys, are a series of highly-automated diagnostic systems designed for the 
large clinical laboratory market, such as hospitals, clinical reference 
laboratories and blood banks. IGEN believes that Elecsys systems will enable 
Boehringer Mannheim to increase its market presence in immunodiagnostics and 
to market systems capable of performing both clinical chemistry and 
immunodiagnostic tests. Boehringer Mannheim has placed in excess of 1,500 
Elecsys systems since market introduction in mid-1996. The Company has 
granted Boehringer Mannheim an exclusive right to market these products 
worldwide, except for rights previously licensed to Eisai to market in Japan 
a specific ORIGEN-based system. The Company has also granted Boehringer 
Mannheim a co-exclusive license to use the ORIGEN technology for nucleic acid 
probe tests in the centralized laboratory market.
 
Organon Teknika B.V. Organon Teknika, a company specializing in hospital and 
blood bank products, is a business unit of Akzo Nobel N.V., a multinational 
corporation with annual revenues of approximately $10 billion. In 1993, the 
Company entered into a $20 million license agreement and a stock purchase 
agreement with Organon Teknika. The license agreement provides Organon 
Teknika with co-exclusive rights to commercialize certain products utilizing 
the Company's ORIGEN technology for detecting nucleic acids in centralized 
clinical markets, research markets and for certain pathogens for food 
testing. Organon Teknika has combined the Company's ORIGEN technology with 
NASBA, a proprietary nucleic acid amplification technique. The agreement 
provides for royalty payments to IGEN and for product supply arrangements. 
The Company also issued shares of Common Stock to Organon Teknika and agreed 
to devote specified resources to research and development activities in the 
field of clinical diagnostics. Robert Salsmans, a director of the Company, is 
President and Chief Executive Officer of the Organon Teknika group of 
companies.
 
Eisai Co., Ltd. Eisai is the fourth largest Japanese pharmaceutical company. 
The Company granted a license to Eisai to market in Japan a clinical 
diagnostic system based on the Company's ORIGEN technology. Under this 
agreement, Eisai has paid $6 million to IGEN and is obligated to pay IGEN an 
additional $2 million in license fees tied to the achievement of product 
development milestones. The ORIGEN-based products to be marketed by Eisai 
under the trade name Picolumi consist of an immunodiagnostic instrument and 
certain assays for use in Japan in the market regulated by the Japanese 
Ministry of Health and Welfare for use in diagnosing or advising a patient's 
clinical condition, health or general make-up. The Company expects to receive 
royalties from Eisai's sales.
 
                        RESEARCH AGREEMENTS
 
In 1993, the Company established HyperGen, a joint venture partnership, with 
Hyperion Catalysis International ("Hyperion") to develop and commercialize 
biomedical products utilizing advanced materials such as Hyperion's 
proprietary Graphite Fibrils-TM- nanotubes. Hyperion, a privately-held 
company based in Cambridge, Massachusetts, is engaged in the development and 
manufacture of Graphite Fibrils-TM-, an innovative carbon-based nanofiber. 
IGEN has licensed the exclusive right to use products developed by HyperGen 
for diagnostic applications, for which it paid $750,000. The Company 
contributed cash of $3 million for its initial 50% interest in HyperGen and 
made additional cumulative payments of $2 million based on the attainment of 
certain research milestones. During 1995, the Company acquired the remaining 
50% interest in HyperGen for $3 million. IGEN assumed operating control of 
HyperGen and consolidated HyperGen's research and development programs into 
the Company's internal programs.

                                       9

<PAGE>
 
Acquisition of the HyperGen rights to Graphite Fibrils-TM- enabled IGEN to 
commence the development of proprietary products to complement its business 
in the medical and life science marketplace. One product under investigation 
by HyperGen is a filter comprised of Graphite Fibrils-TM- that could be used 
as a disposable electrode for electrochemiluminescent measurements for 
ORIGEN-based products. Other products under investigation include: separation 
media for the purification and analysis of biomolecules which would reduce 
the time and cost required for discovery, development and manufacture of 
biopharmaceuticals; and biocatalyst support materials for chiral drug 
intermediates.
 
During November, 1995 the Company formed a Joint Venture for the development 
and commercialization of advanced diagnostics products utilizing a 
proprietary combination of multi-array technology together with the Company's 
ORIGEN technology . Products based on these technologies would be used for 
high throughput, multiparameter analysis for DNA sequencing, clinical 
chemistry and immunodiagnostics. The joint venture is named Meso Scale 
Diagnostics, LLC ("MSD"), and was formed together with Meso Scale 
Technologies, LLC ("MST"), a company based in Maryland. MST is a 
technology-based company established and operated by Jacob Wohlstadter, the 
son of Samuel J. Wohlstadter, the Chief Executive Officer of the Company. 
Nadine Wohlstadter, a member of MST, is the spouse of Samuel J. Wohlstadter. 
The Company has agreed to provide initial capital contributions to MSD of $5 
million over time, in exchange for its ownership interest and to fund the 
organizational and certain ongoing (non-research) expenses of MSD. The 
Company will also participate in a collaborative research programs under 
which no funds have been expended.
 
MSD's research programs to develop products will be based on multi-array 
diagnostic techniques and the ability to control and adapt surface chemistry 
reactions on a microscopic level. The process may generate thousands of 
reactions on a single chip with diagnostic results presented on an array and 
read using electrochemiluminescence. The multiple results would represent an 
advance in diagnostic testing enabling researchers and clinicians to explore 
complex information rapidly and cost-effectively.
 
                      PATENTS AND PROPRIETARY RIGHTS
 
IGEN pursues a policy of seeking patent protection to preserve its 
proprietary technology and its right to capitalize on the results of its 
research and development activities and, to the extent it may be necessary or 
advisable, to exclude others from appropriating its proprietary technology. 
IGEN also relies upon trade secrets, know-how, continuing technological 
innovations and licensing opportunities to develop and maintain its 
competitive position. The Company plans to prosecute and defend its 
intellectual property, including any patents that may issue, and proprietary 
technology. The Company regularly searches for third-party patents in its 
fields of endeavor, both to shape its own patent strategy as effectively as 
possible and to identify licensing opportunities.
 
IGEN owns or co-owns and has exclusive rights to 18 issued U.S. patents and 
69 pending U.S. applications in the diagnostics field. Worldwide, the Company 
owns or co-owns and has exclusive rights to an additional 54 issued patents, 
and 150 pending patent applications covering the same technology. These 
patents and patent applications cover various aspects of IGEN's ORIGEN 
technology and products, and the methods for their production and use.
 
The patent positions of diagnostic firms, including the Company, are highly 
uncertain and involve complex legal and factual questions. Patent 
applications in the United States are maintained in secrecy until patents 
issue and therefore the Company cannot be certain that it or any party from 
whom it obtained licenses was the first creator of inventions covered by 
issued patents or pending patent applications or that it or such licensor was 
the first to file patent applications for such inventions. The Company may 
have to participate in interference proceedings declared by the U.S. Patent 
and Trademark Office to determine priority of invention, which could result 
in substantial cost to the Company even if the eventual outcome is favorable 
to the Company. Consequently, the Company does not know whether its 
applications will result in issued patents or whether its patents will 
provide significant proprietary protection or will be circumvented or 
invalidated.
 
A number of healthcare and information technology companies and research and 
academic institutions have filed patent applications or received patents in 
the diagnostic field. Some of these applications or patents may be 
competitive with the Company's issued patents or pending patent applications 
or conflict in certain respects with claims made in the Company's 

                                       10

<PAGE>

patents or patent applications or the Company's ability to practice the 
technology covered thereby. Such conflicts could result in a significant 
reduction of the Company's ability to practice the inventions covered by its 
patents and pending patent applications. In addition, if patents containing 
competitive or conflicting claims are issued to others and such claims are 
ultimately determined to be valid, there can be no assurance that the Company 
will be able to obtain licenses to these patents at a reasonable cost or be 
able to develop or obtain alternative technology.
 
The Company filed an opposition in Europe to a patent (EP 0 285 05781) owned 
by Enzo Biochem, Inc. This patent covers labeled oligonucleotides useful in 
DNA probe assays. Separate oppositions have been lodged by Boehringer 
Mannheim and Organon Teknika. The Company is vigorously opposing this patent. 
Since the opposition is in a very early stage, it is not possible to predict 
the outcome or the effect, if any, on the Company's intellectual property or 
products.
 
                             GOVERNMENT REGULATION
 
The Company's research and development activities and the future 
manufacturing and marketing of products by the Company are subject to 
regulation by numerous governmental authorities in the United States and 
other countries. In the United States, clinical diagnostic devices are 
subject to rigorous U.S. Food and Drug Administration ("FDA") regulation. The 
Federal Food, Drug and Cosmetic Act and the Public Health Service Act govern 
the testing, manufacture, safety, efficacy, labeling, storage, record 
keeping, approval, advertising and promotion of the clinical Company's 
products. In addition to FDA regulations, the Company is subject to other 
federal and state regulations such as the Occupational Safety and Health Act 
and the Environmental Protection Act. Product development and approval within 
this regulatory framework may take a number of years and involves the 
expenditure of substantial resources. In addition, there can be no assurance 
that this regulatory framework will not change or that additional regulation 
will not arise at any stage of the Company's product development, which may 
affect approval or delay an application or require additional expenditures by 
the Company.
 
The Company's regulatory strategy is to pursue development and marketing 
approval of its products worldwide, either independently or through corporate 
collaborators. The Company intends to seek input from the regulatory 
authorities at each stage of the clinical process to facilitate appropriate 
and timely clinical development. The clinical development of certain products 
may be the responsibility of the Company's collaborators.
 
CLINICAL DIAGNOSTIC SYSTEMS.  The manufacture, distribution and sale in the 
United States of the Company's products for clinical diagnostic purposes will 
require prior authorization by the FDA. The FDA and similar agencies in 
foreign countries have promulgated substantial regulations that apply to the 
testing, marketing, export and manufacturing of diagnostic products. To 
obtain FDA approval of a new product for diagnostic purposes, the Company or 
its collaborators will in most cases be required to submit proof of the 
safety and efficacy of the product. Such proof typically entails clinical and 
laboratory tests. The testing, preparation of necessary applications and 
processing of those applications by the FDA is expensive and time consuming. 
Significant difficulties or costs may be encountered by the Company in its 
efforts to obtain FDA approvals that could delay or preclude the Company from 
marketing its products for diagnostic purposes. Furthermore, there can be no 
assurance that the FDA will not request the development of additional data 
following the original submission. With respect to patented products or 
technologies, delays imposed by the governmental approval process may 
materially reduce the period during which the Company or its collaborators 
will have the exclusive right to exploit those products or technologies.
 
The Company's and its collaborative partners' diagnostic products, as
presently contemplated, will be regulated as medical devices. Prior to entering
commercial distribution, all medical devices must undergo FDA review under one
of two basic review procedures depending on the type of assay: a Section 510(k)
pre-market notification ("510(k)") or a pre-market approval application ("PMA").
510(k) notification is generally a relatively simple filing submitted to
demonstrate that the device in question is "substantially equivalent" to another
legally marketed device and includes tests for therapeutic drugs and hormones.
Approval under this procedure may be granted within 90 days if the product
qualifies, but generally takes longer. When the product does not qualify for
approval under the 510(k) procedure, the manufacturer must file a PMA to show
that the product is safe and efficacious, based on extensive clinical testing
among several diverse testing sites and 

                                       11


population groups, and shows acceptable sensitivity and specificity. This 
procedure requires much more extensive pre-filing testing than does the 
510(k) procedure and involves a significantly longer FDA review after the 
date of filing. In responding to a PMA, the FDA may grant marketing approval, 
may request additional information, may set restrictive limits on claims for 
use or may deny the application altogether.
 
After product approvals have been received, they may still be withdrawn if 
compliance with regulatory standards is not maintained or if problems occur 
after the product reaches the market. The FDA may require surveillance 
programs to monitor the effect of products which have been commercialized, 
and has the power to prevent or limit further marketing of the products based 
on the results of these post-marketing programs. In addition to obtaining FDA 
approval for each product, under the PMA guidelines, the Company must seek 
FDA approval of the manufacturing facilities and procedures. The FDA will 
also inspect diagnostic companies on a routine basis for regulatory 
compliance with its Good Manufacturing Practices ("GMP").
 
The Company's products for the physician's office market will be affected by 
the Clinical Laboratory Improvement Amendments of 1988 ("CLIA"), which is 
intended to insure the quality and reliability of medical testing and may 
have the effect of discouraging, or increasing the cost of, testing in 
physicians' offices. The regulations establish requirements for laboratories 
in the area of administration, participation in proficiency testing, patient 
test management, quality control, personnel, quality assurance and 
inspection. Under these regulations, the specific requirements that a 
laboratory must meet depend upon the complexity of the tests performed by the 
laboratory. Laboratory tests are categorized as either waived tests, tests of 
moderate complexity or tests of high complexity. Laboratories that perform 
either moderate or high complexity tests must meet standards in all areas, 
with the major difference in requirements between moderate and high 
complexity testing concerning quality control and personnel standards. 
Quality control standards for moderate complexity testing are being 
implemented in stages. Personnel standards for high complexity testing are 
more rigorous then those for moderate complexity testing. In general, 
personnel conducting high complexity testing will need more education and 
experience than those doing moderate complexity testing. Under the CLIA 
regulations, all laboratories performing moderately complex or highly complex 
tests will be required to obtain either a registration certificate, 
certificate, or certificate of accreditation from the Healthcare Financing 
Administration ("HCFA").
 
Because the regulations are new and their interpretation is uncertain, it is 
possible that certain of the Company's products may be categorized as tests 
of high complexity, in which case the Company's penetration of the 
point-of-care market would be reduced since not all laboratories would meet 
the standards required to conduct such tests. The Company understands that 
laboratories, including physician office laboratories, will be evaluating the 
requirements of CLIA in determining whether to perform certain types of 
moderate and high complexity diagnostic tests. The Company believes that the 
sale of its products will not be adversely affect by CLIA. However, no 
assurances can be given that the statute and its implementing regulations 
will not have a material adverse impact on the Company and its ability to 
market and sell any products that the Company develops.
 
Although the Company believes that it will be able to comply with all 
applicable regulations regarding the manufacture and sale of diagnostic 
devices, such regulations are always subject to change and depend heavily on 
administrative interpretations. There can be no assurance that future changes 
in regulations or interpretations made by the HHS, FDA, HCFA or other 
regulatory bodies, with possible retroactive effect, will not adversely 
affect the Company. In addition to the foregoing, the Company is subject to 
numerous federal, state and local laws and regulations relating to such 
matters as safe working conditions, laboratory and manufacturing practices, 
environmental, fire hazard control, and disposal of hazardous or potentially 
hazardous substances. To date, compliance with these laws and regulations has 
not had a material effect on the Company's financial results, capital 
requirements or competitive position, and the Company has no plans for 
material capital expenditures relating to such matters. However, there can be 
no assurance that it will not be required to incur significant costs to 
comply with such laws and regulations in the future, or that such laws or 
regulations will not have a materially adverse effect upon the Company's 
ability to do business.
 
Sales of the Company's products outside the United States are also subject to 
extensive regulatory requirements, which vary widely from country to country. 
The time required to obtain such approval may be longer or shorter than that 
required for FDA approval.

                                       12

<PAGE>
 
RESEARCH PRODUCTS.  The Company's products that are being sold for research 
use only must be properly labeled as such, as required by the FDA, but do not 
generally require FDA approval prior to marketing. The FDA has recently begun 
to impose new distribution requirements and procedures on companies selling 
research-only products, such as the requirement that the seller receive 
specified certifications from its customers as to the customers' intended use 
of the product. The Company expects that the FDA will in the near future 
develop additional restrictions of this nature. The Company is unable at this 
time to predict the form these restrictions may take, their likely magnitude 
or their ultimate impact on the Company or its sales.
 
ENVIRONMENTAL REGULATION.  Due to the nature of its current and proposed 
research, development and manufacturing processes, the Company is subject to 
stringent federal, state and local laws, rules, regulations and policies 
governing the use, generation, manufacture, storage, air emission, effluent 
discharge, handling and disposal of certain materials and wastes. Although 
the Company believes that it has complied with these laws and regulations in 
all material respects and has not been required to take any action to correct 
any noncompliance, there can be no assurance that the Company will not be 
required to incur significant costs to comply with environmental and health 
and safety regulations as it expands its production operations.
 
REIMBURSEMENT.  Third party payors, such as governmental programs and private 
insurance plans, can indirectly affect the pricing or the relative 
attractiveness of the Company's products by regulating the maximum amount of 
reimbursement they will provide for diagnostic testing services. In recent 
years, healthcare costs have risen substantially, and third-party payors have 
come under increasing pressure to reduce such costs. In this regard, the 
Federal government, in an effort to reduce healthcare costs, may take actions 
which may involve reductions in reimbursement rates. If the reimbursement 
amounts for diagnostic testing services are decreased in the future, it may 
decrease the amount which physicians, clinical laboratories and hospitals are 
able to charge patients for such services and consequently the price the 
Company can charge for its products.
 
                              COMPETITION
 
Competition in the diagnostic industry is intense, and a small number of 
large and well established companies are major participants. In view of the 
nature of the industry, the Company has elected to rely on alliances with 
established companies to exploit fully the advantages of its diagnostic 
systems. There can be no assurance, however, that IGEN's corporate 
collaborators will be successful in commercializing the ORIGEN technology. 
Furthermore, academic institutions, government agencies and other public and 
private organizations conducting research may develop potentially competing 
products or technologies and may establish collaborative arrangements with 
competitors of the Company.
 
The Company's competition will be determined in part by the potential 
applications for which the Company's products are developed and ultimately 
approved by regulatory authorities. For certain of the Company's future 
products, an important factor in competition may be the timing of market 
introduction of its own or competing products. Accordingly, the relative 
speed with which IGEN or its corporate collaborators can develop products, 
complete the clinical trials and approval processes and supply commercial 
quantities of the products to the market are expected to be important 
competitive factors. The Company expects that competition with products 
approved for sale will be based, among other things, on product efficacy, 
safety, reliability, availability, price and patent position.
 
Many of the Company's existing or potential competitors have substantially 
greater financial, technical and human resources than the Company and may be 
better equipped to develop, manufacture and market products. These companies 
may develop and introduce products and processes competitive with or superior 
to those of the Company.
 
The Company's competitive position also depends upon its ability to attract 
and retain qualified personnel, obtain patent protection or otherwise develop 
proprietary products or processes and secure sufficient capital resources for 
the often substantial period between technological conception and commercial 
sales. 

                                       13

<PAGE>

                                  Manufacturing
 
The Company's current commercial manufacturing operations consist of the 
manufacture of the ORIGEN Detection system and related reagents and cell 
culture research biologicals as well as quality assurance processes. IGEN 
operates a qualified GMP (Good Manufacturing Practices) facility. The Company 
uses a variety of subcontractors and believes that it does not depend on any 
single-source supplier that it cannot replace in the ordinary course of 
business. The Company has not yet introduced any clinical diagnostic 
products. Initial clinical diagnostics products based on the Company's ORIGEN 
technology will be manufactured by the Company's corporate collaborators. 
Although certain future products may be manufactured by the Company, it has 
not yet developed plans for establishing manufacturing operations for these 
products.
 
                               SALES AND MARKETING
 
IGEN markets and sells the ORIGEN Detection System and related reagents and 
services directly to the life science research market. In conjunction with 
its national launch of this System during 1994, the Company expanded its 
direct sales force, including the addition of application specialists and 
in-house technical services personnel. The Company continues to develop 
marketing plans for Europe and Japan, while currently utilizing a small 
direct sales force. The ORIGEN cell culture products are sold directly and 
through distributors.
 
                                   HUMAN RESOURCES
 
As of June 17, 1997, IGEN employed 119 individuals full-time, of which 70 
were engaged in research, products development, manufacturing and operations 
support, 27 in marketing, sales and applications support and 22 in general 
administration. Of the Company's employees, 30 have Ph.D. degrees. A 
significant number of the Company's management and professional employees 
have had prior experience with pharmaceutical, biotechnology, diagnostic or 
medical products, computer software or electronics companies. None of the 
Company's employees is covered by collective bargaining agreements, and 
management considers relations with its employees to be good.
 
The Company's ability to maintain its competitive position will depend, in 
part, upon its continued ability to attract and retain qualified scientific 
and managerial personnel. Competition for such personnel is intense.
 
                                     RISK FACTORS
 
Early Stage of Development; Accumulated Losses. The Company is at an early 
stage of development and is subject to all of the risks inherent in the 
establishment of a new business enterprise, including the need for 
substantial capital to support the expenses of developing new technologies, 
the need to attract and retain qualified management and scientific staff and 
other risks as outlined in the following risk factors. Since inception, the 
Company has been engaged in the research and development of products based on 
new technologies, and at March 31, 1997, the Company had an accumulated 
deficit of approximately $56.7 million. The Company's operations may be 
affected by problems frequently encountered in connection with the 
development and utilization of new and unproven technologies and by the 
competitive environment in which the Company operates. Although a limited 
number of ORIGEN-based products has been developed and introduced to the life 
science research market, there can be no assurance that the ORIGEN technology 
will be successfully applied to the development of additional commercial 
products for the clinical diagnostic or other markets. Diagnostic products 
resulting from the development of the Company's technology will require 
significant additional development and investment prior to their 
commercialization. There can be no assurance that products will be 
successfully developed by the Company or its licensees, meet applicable 
regulatory standards, be capable of being manufactured in commercial 
quantities at reasonable costs or be marketed successfully.
 
RELIANCE ON COLLABORATIONS AND LICENSE AGREEMENTS.  The Company has entered 
into collaborative research or licensing agreements with Boehringer Mannheim, 
Organon Teknika and Eisai pursuant to which these companies are entitled to 
certain product manufacturing and marketing rights. Some of these companies 
have the responsibility for additional development and, where required, the 
submission of applications for the regulatory approval of any products to the 
U.S. Food and Drug Administration ("FDA") and corresponding regulatory 
agencies in other countries. Although the Company 

                                       14

<PAGE>
believes that its partners in these collaborations have an economic 
motivation to succeed in performing their contractual responsibilities, the 
amount and timing of resources to be devoted to these activities are not 
within the control of the Company. There can be no assurance that such 
collaborators will perform their obligations as expected or that the company 
will derive any additional revenue from such arrangements. Moreover, the 
collaboration agreements may be terminated under certain circumstances.
 
The Company also expects to rely on additional collaboration or license 
agreements to develop and commercialize certain future products. There can be 
no assurance that the Company will be able to negotiate acceptable 
collaboration or license agreements in the future, or that such new 
agreements or existing agreements will be successful. In addition, there can 
be no assurance that the parties to collaboration or license agreements will 
not pursue alternative technologies as a means for developing diagnostic 
products targeted by the collaborations or licenses.
 
TECHNOLOGICAL CHANGE AND COMPETITION.  The diagnostic industry is subject to 
technological change. Competition from diagnostic and pharmaceutical 
companies and research and academic institutions is intense and expected to 
increase. There can be no assurance that the Company's competitors will not 
succeed in developing products that are more effective than any which are 
being developed by the Company and its collaborators or which would render 
the ORIGEN technology and products obsolete and non-competitive.
 
Many of the Company's competitors in the diagnostic field have substantially 
greater financial, technical and human resources than the Company. In 
addition, many of these competitors have significantly greater experience 
than the Company in obtaining regulatory approvals of new diagnostic 
products. Accordingly, the Company's competitors may succeed in obtaining FDA 
approval for products more rapidly than the Company. Furthermore, as the 
Company expands commercial sales of products, it will have to become 
competitive with respect to manufacturing efficiency and marketing 
capabilities, areas in which it has limited experience.
 
Uncertainty of Healthcare Reform Measures and Third-Party Reimbursement.
Legislative and regulatory proposals aimed at changing the healthcare system in
the United States continue to be discussed by various bodies of Federal and
State Governments. While the Company cannot predict whether any such legislative
or regulatory proposals will be adopted or the effect such proposals may have on
its business, the pendency or adoption of such proposals could have a have a
material adverse effect on the Company and its ability to raise capital.
Furthermore, the Company's ability to commercialize its products may be
adversely affected to the extent that such proposals have a material adverse
effect on the business, financial condition and profitability of other companies
that are prospective collaborators for certain of the Company's products.
 
In both domestic and foreign markets, sales of the Company's or its 
collaborators' products will depend in part on the availability of 
reimbursement from third-party payors such as government health 
administration authorities, private health insurers and other organizations. 
Third-party payors are increasingly challenging the price and cost 
effectiveness of medical products and services. Significant uncertainty 
exists as to the reimbursement status of newly approved healthcare products. 
There can be no assurance that the Company's or its collaborators' products 
will be considered cost effective or that adequate third-party reimbursement 
will be available to enable the Company or its collaborators to maintain 
price levels sufficient to realize an appropriate return on their investment 
in product development. Legislation and regulations affecting the pricing of 
medical products and services may change before any of the Company's or its 
collaborators' products are approved for marketing. Adoption of such 
legislation could further limit reimbursement for medical products and 
services.
 
COMPLIANCE WITH GOVERNMENT REGULATIONS.  The production and marketing of the 
Company's products and its ongoing research and development activities are 
subject to regulation by governmental authorities in the United States and 
other countries. Diagnostic systems utilizing the Company's ORIGEN technology 
will require government clearance before being marketed in the United States 
and in certain foreign countries. In the United States, the Company or its 
marketing collaborators may be required to submit test data from clinical 
trials to establish "substantial equivalence" of the ORIGEN diagnostic system 
with previously approved systems. In such case, the Company or its 
collaborators may commence sales only after the FDA has issued a written 
order finding such substantial equivalence, which may take longer than the 
90-day 
                                       15

<PAGE>

period generally provided for FDA review. There can be no assurance that the 
Company or its collaborators will be able to establish substantial 
equivalence for the ORIGEN diagnostic systems, or that the FDA or certain 
corresponding government agencies will permit marketing of such systems in 
their respective jurisdictions. Should the Company fail to demonstrate 
substantial equivalence, the Company would need to perform extensive clinical 
testing to demonstrate safety and efficacy, incurring substantial costs and 
delays.
 
Even if regulatory approval is obtained, a marketed product, its manufacturer 
and its manufacturing facilities are subject to continual review and periodic 
inspections. The regulatory standards for manufacturing are currently being 
applied stringently by the FDA. Discovery of previously unknown problems with 
a product, manufacturer or facility may result in restrictions on such 
product or manufacturer, including costly recalls or even withdrawal of the 
product from the market. The Company is also subject to numerous 
environmental and safety laws and regulations, including those governing use 
of hazardous materials. Any violation of, and the cost of compliance with, 
these regulations could adversely impact the Company's operations.
 
RELIANCE ON PATENTS AND PROPRIETARY RIGHTS.  The Company's success will 
depend in part on its ability to obtain and maintain patent protection for 
its products, both in the United States and other countries. The patent 
position of diagnostic companies is highly uncertain and involves complex 
legal and factual questions. There is no consistent policy regarding the 
breadth of claims allowed in medical patents. The Company owns or co-owns and 
has been granted exclusive rights to 18 issued U.S. patents and 69 pending 
U.S. applications in the diagnostics field. Worldwide, the Company owns or 
co-owns and has been granted exclusive rights to an additional 54 issued 
patents, and 150 pending patent applications covering the same technology. 
There can be no assurance that patents will issue from any present or future 
applications or that, as to existing patents or patents which may issue, that 
claims are or will be sufficiently broad to protect the Company's technology. 
In addition, there can be no assurance that the patents issued to the Company 
will not be challenged, invalidated or circumvented, or that the rights 
granted thereunder will provide proprietary protection to the Company.
 
The commercial success of the Company will also depend in part on its neither 
infringing patents issued to competitors nor breaching the technology 
licenses upon which the Company's products might be based. The Company is a 
licensee under certain patents and patent applications that it considers 
necessary for its business. While the Company is aware of additional 
third-party patents and patent applications relating to specific reagents, it 
is uncertain whether any of these will require the Company to alter any 
products or processes, obtain licenses or cease certain development 
activities with respect to these reagents. There can be no assurance that the 
Company will be able to obtain necessary licenses at reasonable cost. Failure 
by the Company to obtain a license to any technology that it requires to 
commercialize its products may have a material adverse impact on the Company. 
Litigation, which could result in substantial costs to the Company, may also 
be necessary to enforce any of its patent rights or to determine the scope 
and validity of others' proprietary rights. In addition, the Company may have 
to participate in interference proceedings declared by the U.S. Patent and 
Trademark Office, which could result in substantial costs to the Company to 
determine the priority of inventions.
 
IGEN also protects its proprietary technology and processes in part by 
confidentiality agreements with its collaborative partners, employees, 
consultants and other advisors. There can be no assurance that these 
agreements will not be breached, that the Company will have adequate remedies 
for any breach or that the Company's trade secrets will not otherwise become 
known or be independently discovered by competitors.
 
Limited Manufacturing, Sales, Marketing and Distribution Experience. The 
Company's clinical diagnostic products must be manufactured in commercial 
quantities in compliance with regulatory requirements and at acceptable 
costs. The Company has no experience in large scale manufacturing and 
currently lacks the capability to manufacture its diagnostic products in 
accordance with regulatory requirements. If the Company is unable to develop 
or contract for manufacturing capabilities on acceptable terms, the Company's 
ability to manufacture products will be adversely affected, resulting in the 
delay of submission of products for regulatory approval, which in turn could 
adversely affect the Company's competitive position and financial condition. 
The Company also has limited experience in sales, marketing and distribution. 
To market any of its clinical diagnostic products directly, the Company must 
develop a substantial marketing and sales force with technical expertise and 
supporting distribution capability. Alternatively, the Company may obtain the 
assistance of established companies, as it has done with certain of its 
diagnostic products. There can be no assurance that the Company 

                                       16

<PAGE>

will be able to establish sales and distribution capabilities or that it or 
its collaborators will be successful in gaining market acceptance for its 
clinical diagnostics products.
 
Future Capital Needs; Uncertainty of Additional Funding. The Company may 
require substantial additional funds to conduct the research and development 
and regulatory testing of its products, to establish commercial scale 
manufacturing facilities and to market its products. The Company's future 
capital requirements will depend on many factors, including, but not limited 
to: continued progress in the development of diagnostic products; the time 
and costs involved in obtaining regulatory approvals; the costs involved in 
filing, prosecuting and enforcing patent claims; competing technological and 
market developments; the ability of the Company to maintain its existing, and 
to establish new, collaborative and licensing arrangements; the cost of 
manufacturing scale-up; and effective commercialization activities and 
arrangements. The Company may be required to seek additional funding either 
through collaborative and licensing arrangements or through public or private 
debt or equity financings. There can be no assurance that additional 
financing will be available in a timely manner or on acceptable terms. If 
additional funds are raised by issuing equity securities, further dilution to 
existing shareholders may result. If adequate funds are not available, the 
Company may be required to delay, scale back or eliminate one or more of its 
programs or obtain funds through arrangements with collaborative partners or 
others that may require the Company to relinquish rights to certain of its 
technologies, product candidates or products that the Company would not 
otherwise relinquish.
 
Need to Attract and Retain Key Employees and Consultants. The Company is 
highly dependent on the principal members of its scientific and management 
staff, the loss of whose services might impede the achievement of its 
research and development or strategic objectives. Recruiting and retaining 
qualified scientific personnel to perform research and development work in 
the future will also be critical to the Company's success. There can be no 
assurance that the Company will be able to attract and retain such personnel 
given the competition between numerous diagnostic and biotechnology companies 
and research and academic institutions for experienced scientists.
 
The Company's anticipated growth and expansion into areas and activities 
requiring additional expertise, such as clinical trials, government 
approvals, manufacturing and marketing, are expected to place increased 
demands on the Company's resources. These demands are expected to require the 
addition of new management personnel and the development of additional 
expertise by existing management personnel. The failure to acquire needed 
personnel or to develop needed expertise could have a material adverse effect 
on the Company's prospects for success. In addition, the Company relies on 
consultants and advisors to assist in formulating its research and 
development strategy. All of the Company's consultants and advisors are 
employed by entities other than the Company and may have commitments to or 
consulting or advisory contracts with other entities that may affect their 
ability to contribute to the Company.
 
Risk of Product Liability; Availability of Insurance. The Company's business 
will in the future expose it to potential liability risks that are inherent 
in the testing, manufacturing and marketing of diagnostic products. The 
Company presently has only limited product liability insurance, and there can 
be no assurance that it will be able to maintain such insurance or obtain 
additional insurance on acceptable terms or that insurance will provide 
adequate coverage against potential liabilities.
 
CONTROL BY EXISTING SHAREHOLDERS.  The Company's directors, officers and 
their affiliates own beneficially approximately 40% of the outstanding shares 
of Common Stock, of which approximately 25% is held by the Company's Chief 
Executive Officer. Accordingly, the Company's officers and directors, if they 
act in concert, will have the ability to influence significantly the election 
of the Company's directors and most other shareholder actions. In addition, 
the Board of Directors has the authority to fix the rights and preferences of 
and issue shares of Preferred Stock without further action by the 
shareholders, which may have the effect of delaying, deferring or preventing 
a change in control of the Company.
 
ITEM 2. PROPERTIES
 
The Company's principal administrative, marketing, manufacturing and research 
and development facility consists of an 84,000 square foot building located 
in Gaithersburg, Maryland. The Company took occupancy of this newly leased 
facility during 1995. The lease expires in 2005 but provides the Company an 
option to terminate in 2000. The Company believes that its current facility 
will be adequate for anticipated expansion needs.
 
                                       17
<PAGE>

ITEM 3. LEGAL PROCEEDINGS
 
NONE
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
No matter was submitted to a vote of security holders of the Company during 
the fourth quarter of the fiscal year covered by this report.
 
                        EXECUTIVE OFFICERS OF THE COMPANY
 
The names and ages of all executive officers of the Company at June 13, 1997 
and their respective positions and offices with the Company are as follows:
 
<TABLE>
<CAPTION>

NAME                                                       AGE                            POSITION
-----------------------------------------------------      ---      -----------------------------------------------------
<S>                                                    <C>          <C>
 
Samuel J. Wohlstadter                                          55   Chairman, Chief Executive Officer and Director
Richard J. Massey, Ph.D.                                       50   President, Chief Operating Officer and Director
Robert Connelly                                                37   Vice President, Marketing and Sales
Gary Henricksen                                                46   Vice President, Separations Business Unit
George V. Migausky                                             42   Vice President, Chief Financial Officer
Richard Pytelewski                                             47   Vice President, Operations
Herman H. Spolders, Ph.D.                                      51   Vice President, Business Development and Planning
</TABLE>
 
Samuel J. Wohlstadter is a founder of the Company and has been Chairman of 
the Board and Chief Executive Officer since its formation in 1982. Mr. 
Wohlstadter has been a venture capitalist for more than 20 years and has 
experience in founding, supporting and managing high technology companies, 
including Amgen Inc., a biopharmaceutical company, and Applied Biosystems, 
Inc., a medical and biological research products company. Mr. Wohlstadter is 
also Chief Executive Officer of Hyperion Catalysis International, an advanced 
materials company, which he founded in 1981, of Pro-Neuron, Inc., a drug 
discovery company, which he founded in 1985, of Proteinix Corporation, a 
development stage company organized to conduct research in intracellular 
metabolic processes, which he founded in 1988 and of Pro-Virus, Inc., a drug 
discovery company, which commenced operations in 1994.
 
Richard J. Massey, Ph.D. is a founder of the Company, has been President and 
Chief Operating Officer of the Company since 1992, a Director of the Company 
since 1990 and served as Senior Vice President since 1985. From 1981 until he 
joined IGEN in 1983, Dr. Massey was a faculty member in the Microbiology and 
Immunology Department at Rush Medical Center in Chicago. Prior to that, he 
was Senior Research Scientist at the National Cancer Institute, Frederick 
Cancer Research Center.
 
Robert Connelly, has been Vice President of Marketing and Sales since 1994, 
when he joined the Company. Previously, Mr. Connelly was the U.S. Marketing 
Manager for the Instrument Group at Abbott Laboratories where he was 
responsible for the marketing of chemistry and hematology systems and 
point-of-care and near-patient testing instruments.
 
Gary Henricksen, joined the Company in January 1996 as Vice President of the 
Separations Business Unit. From 1994 until he joined the Company, Mr. 
Henricksen was Director, Laboratory Product Business Unit in the Separations 
Division of Sartorius Corporation where he was responsible for North American 
sales and marketing of laboratory separations products and commercialization 
of membrane absorbers in bioprocessing. Prior to 1994, he was the Director of 
Marketing and Technical Service for the same company.
 
George V. Migausky has been associated with IGEN as Chief Financial Officer 
since 1985, assuming that position on a full-time basis in 1992. Between 1985 
and 1992, in addition to serving as Chief Financial Officer of IGEN on a 
part-time 

                                       18

<PAGE>

basis, Mr. Migausky also served as financial advisor to several other 
privately held companies. Prior to joining IGEN in 1985, he spent nine years 
in financial management and public accounting positions, most recently as a 
Manager with the High Technology Group of Deloitte Haskins & Sells.
 
Richard Pytelewski, has been Vice President of Operations since he joined the 
Company in 1994. From 1992 until joining the Company, Mr. Pytelewski provided 
operations consulting support to medical, pharmaceutical and diagnostic 
ventures. Previously, Mr. Pytelewski was Vice President of Operations at 
Biomira, Inc., in Edmonton, Canada, supporting the worldwide distribution of 
in-vitro and in-vivo diagnostic and therapeutic products.
 
Herman H. Spolders, Ph.D. has been Vice President of Business Development and 
Planning since 1995 and served previously as Vice President International 
Operations since he joined the Company in 1993. From 1991 to 1993, he was a 
member of the Organon Teknika executive board and from 1989 to 1993, he was 
the Vice President of the worldwide research and development organization at 
Organon Teknika.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS.
 
The Company's Common Stock is quoted on the NASDAQ National Market System 
under the symbol IGEN. As of June 17, 1997, there were approximately 1,500 
holders of record of the Company's Common Stock. No cash dividends have been 
paid on the Common Stock to date, and the Company currently intends to retain 
any earnings for development of the Company's business.
 
The following table sets forth, for periods indicated, the range of high and 
low closing sales prices of the Common Stock as quoted on the NASDAQ National 
Market System.
 
<TABLE>
<CAPTION>
                                                                                HIGH        LOW
                                                                              ---------  ---------
<S>                                                                           <C>        <C>
 
Fiscal 1996 -
 
First Quarter                                                                 $   6-5/8  $   4-7/8 
Second Quarter                                                                $   7-7/8  $   5-3/8
Third Quarter                                                                 $   6-5/8  $   4-3/4
Fourth Quarter                                                                $   6-7/16  $  4-7/8
Fiscal 1997 -
First Quarter                                                                 $   8-1/8  $   4-5/8
Second Quarter                                                                $   8-1/4  $   6
Third Quarter                                                                 $   7-3/8  $   4-5/8
Fourth Quarter                                                                $   7-5/8  $   5
</TABLE>
 
                                       19

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA. 

The selected financial data set forth below with respect to the Company's 
statements of operations for each of the years in the three year period ended 
March 31, 1997 and with respect to the balance sheets at March 31, 1997 and 
1996 are derived from, and are qualified by reference to, the financial 
statements that have been audited by Deloitte & Touche LLP, independent 
auditors, and are included elsewhere in this Form 10-K. The statement of 
operations data for each of the years in the two year period ended March 31, 
1994, and the balance sheet data at March 31, 1995, 1994 and 1993 are derived 
from audited financial statements not included in this Form 10-K. The 
following selected financial data should be read in conjunction with the 
financial statements and notes thereto included elsewhere in this Form 10-K. 

<TABLE>
<CAPTION>

                                                                         Fiscal Year Ended March 31,
                                                             -----------------------------------------------------
                                                                1997       1996       1995       1994      1993   
                                                             ---------  ---------  ---------  ---------  ---------
                                                                     (In thousands, except per share data)        
<S>                                                           <C>         <C>      <C>        <C>        <C>
Statement of Operations Data:
Revenues:
License fees and contract revenue                            $   8,802  $  11,266  $  12,259  $  22,021  $  10,708
Product Sales                                                    6,360      4,583      2,555      1,356      1,074
Royalty income                                                     843         75         20     --         --
                                                             ---------  ---------  ---------  ---------  ---------
Total                                                           16,005     15,924     14,834     23,377     11,782
                                                             ---------  ---------  ---------  ---------  ---------
Operating Costs and Expenses:
Products Costs                                                   2,448      1,848      1,278        658        654
Research and development                                        13,114     14,078     12,267     10,911      3,872
Marketing, general and administrative                           10,910      8,725      8,707      4,608      2,615
                                                             ---------  ---------  ---------  ---------  ---------
Total operating expenses                                        26,472     24,651     22,252     16,177      7,141
                                                             ---------  ---------  ---------  ---------  ---------
Income (loss) from continuing operations                       (10,467)    (8,727)    (7,418)     7,200      4,641
Interest income -- net                                             586      1,079      1,489        559         57
                                                             ---------  ---------  ---------  ---------  ---------
Income (loss) from continuing operations before income
  taxes                                                         (9,881)    (7,648)    (5,929)     7,759      4,698
Income taxes                                                    --         --         --            163        108
                                                             ---------  ---------  ---------  ---------  ---------
Income (loss) from continuing operations                        (9,881)    (7,648)    (5,929)     7,596      4,590
Loss from discontinued operations                               --         --         --        (10,573)    (3,064)
                                                             ---------  ---------  ---------  ---------  ---------
Net income (loss)                                            $  (9,881) $  (7,648) $  (5,929) $  (2,977) $   1,526
                                                             ---------  ---------  ---------  ---------  ---------
                                                             ---------  ---------  ---------  ---------  ---------
Income (loss) per share:
Continuing operations                                        $    (.66) $    (.52) $    (.40) $     .57  $     .37
Discontinued operations                                         --         --         --           (.79)      (.25)
                                                             ---------  ---------  ---------  ---------  ---------
Net income (loss)                                            $    (.66) $    (.52) $    (.40) $    (.22) $     .12
                                                             ---------  ---------  ---------  ---------  ---------
                                                             ---------  ---------  ---------  ---------  ---------

Shares used in computing net income (loss) per share            14,959     14,779     14,769     13,413     12,436
                                                             ---------  ---------  ---------  ---------  ---------
                                                             ---------  ---------  ---------  ---------  ---------
</TABLE>


<TABLE>
<CAPTION>
                                                                                 March 31,
                                                             -----------------------------------------------------
                                                                1997       1996       1995       1994      1993   
                                                             ---------  ---------  ---------  ---------  ---------
                                                                                (In thousands)
<S>                                                          <C>        <C>        <C>        <C>        <C>

Balance Sheet Data:
Cash, cash equivalents and short-term
Investments                                                  $   9,044  $ 20,217   $  30,226  $  41,746  $   2,965
Working capital (deficit)                                        4,431    13,700      21,484     31,437     (1,590)
Total assets                                                    17,794    29,276      37,806     45,364      7,501
Accumulated deficit                                            (56,700)  (46,819)    (39,171)   (33,242)   (29,173)
Shareholders' equity                                             7,882    17,435      24,998     31,467        413

</TABLE>
 
                                       20


<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.
 
OVERVIEW
 
The Company has devoted substantially all of its resources to the research 
and development of its proprietary technologies primarily the ORIGEN 
technology for clinical diagnostic and life science research products. In 
February 1994, the Company completed an initial public offering of 2,990,000 
shares of common stock from which it received net proceeds of approximately 
$32 million. In addition to product sales, the Company's sources of revenue 
have consisted primarily of license or research payments pursuant to 
licensing or collaborative research agreements. The Company has entered into 
collaborative arrangements with corporate collaborators that provide for the 
development and marketing of certain ORIGEN systems. These agreements provide 
fees and royalties payable to the Company in exchange for licenses to produce 
and sell the resulting products. In the near term, the Company may 
selectively pursue additional strategic alliances although, over time, it 
expects an increasing amount of its revenues to be derived from sales of its 
products and royalties from corporate collaborations.
 
RESULTS OF OPERATIONS
 
YEARS ENDED MARCH 31, 1997 AND 1996 

The Company had revenues of $16.0 million for the year ended March 31, 1997, 
compared to revenues of $15.9 million for the corresponding period in 1996. 
Fiscal 1997 revenue reflects a change in the revenue mix as compared to prior 
years. During 1997, a significant portion of the Company's license and 
contract fees have converted to royalty income based on product sales of 
corporate partners. Fees from licenses and for contract research declined by 
$2.5 million in fiscal 1997 to $8.8 million and revenue from product sales 
and royalties increased to $7.2 million in fiscal 1997 from $4.7 million in 
the prior year. This transition occurred primarily in the fourth quarter of 
fiscal 1997 as license and contract revenue declined by $2.7 million while 
product sales and royalty income increased by $500,000 when compared to 1996.
 
The increase in royalty income is directly attributable to royalties 
generated through the Company's License Agreement with Boehringer Mannheim 
GmbH. Boehringer Mannheim recently launched its Elecsys series of 
immunodiagnostic products which are based on the Company's ORIGEN-Registered 
Trademark-technology. Through March 31, 1997, Boehringer Mannheim had more 
than 1,000 customer installations of its Elecsys 2010/1010 systems.
 
Product costs were $2.4 million in the year ended March 31, 1997 (38% of 
Product Sales) and $1.8 million for the corresponding period in 1996 (40% of 
Product Sales) representing a change in the product mix between instruments, 
services and reagents. Research and Development costs decreased to $13.1 
million for the year ended March 31, 1997 from $14.1 million during 1996. 
This decrease is attributable to expiring external collaborations during 
1997. Marketing, general and administrative expenses increased $2.2 million 
to $10.9 million for the year ended March 31, 1997 when compared with the 
same prior year period. This increase resulted primarily from increased 
marketing efforts associated with the ORIGEN Detection System and 
administrative costs associated with the Company's re-incorporation in the 
State of Delaware.
 
Interest income (net) decreased to $586,000 in the year ended March 31, 1997 
from $1.1 million in the corresponding period in 1996. The decrease reflects 
the lower level of interest income derived from lower cash balances during 
the 1997 period as well as accrued interest expense attributable under an 
Advance Royalty Agreement with Boehringer Mannheim. See "Liquidity and 
Capital Resources" following.
 
Income (loss) from continuing operations over the next several years is 
likely to fluctuate substantially from quarter to quarter as a result of 
differences in the timing of revenues earned under license and product 
development agreements, and associated product development expenses.
 
As of March 31, 1997, the Company had net operating loss and general business 
credit tax carryforwards of approximately $41.9 million and $2.4 million, 
respectively. The Company's ability to utilize its net operating loss and 
general business credit tax carryforwards may be subject to an annual 
limitation in future periods pursuant to the "change in ownership rules" 
under Section 382 of the Internal Revenue Service Code of 1986, as amended.

                                       21


<PAGE>

YEARS ENDED MARCH 31, 1996 AND 1995 

The Company had revenues of $15.9 million for the year ended March 31, 1996, 
compared to revenues of $14.8 million for the corresponding period in 1995. 
The increase in revenue is attributable to higher product sales which offset 
a decrease in revenue from contract research. Product sales from the 
Company's ORIGEN Detection System and related reagents and cell culture 
products increased to $4.6 million in 1996 from $2.6 million in 1995, 
reflecting higher direct sales of the ORIGEN systems. Revenue from contract 
research decreased to $1.9 million in 1996 from $2.8 million in 1995 due to 
the level of research performed under a joint development contract with 
Organon Teknika.
 
Product costs were $1.8 million in the year ended March 31, 1996 (40% of 
product sales) and $1.3 million in the corresponding period in 1995 (50% of 
product sales). The decreased percentage of product costs in 1996 reflected a 
change in the product sales mix between instruments and reagents. Research 
and development expenses increased to $14.1 million in 1996 from $12.3 
million in 1995. This increase resulted from higher staffing levels; 
facilities costs associated with the Company's relocation to a new building; 
and expanded external technical collaborations.
 
Interest income (net) decreased to $1.1 million in the year ended March 31, 
1996, from $1.5 million for the corresponding period in 1995. The decrease 
reflects a lower amount of interest derived from lower cash balances during 
the 1996 period.
 
LIQUIDITY AND CAPITAL RESOURCES
 
The Company has financed its operations through placements of Preferred and 
Common Stock, aggregating approximately $60 million through March 31, 1997, 
including $32 million in net proceeds received from the Company's Initial 
Public Offering which was completed during February 1994. In addition, the 
Company has received funds from collaborative research and licensing 
agreements, and sales of its ORIGEN line of products. As of March 31, 1997, 
the Company had $9 million in cash and cash equivalents. Working capital, 
excluding current deferred revenue which is classified as a current 
liability, was $9.8 million at March 31, 1997. Including current deferred 
revenue, working capital was $4.4 million.
 
Net cash used for operating activities was $10.4 and $8.4 million during the 
years ended March 31, 1997 and 1996, respectively. License and collaboration 
agreements between the Company and its strategic corporate collaborators 
(Boehringer Mannheim, Organon Teknika, Eisai and Perkin-Elmer) provided 
payments to the Company of $80 million , of which $78 million has been 
received through March 31, 1997. Additionally, the Company received 
$6 million in January 1997 under an Advance Royalty Agreement with Boehringer 
Mannheim.
 
The Company used approximately $800,000, $1.4 million and $2 million of net 
cash for investing activities substantially related to the acquisition of 
laboratory equipment, furniture and leasehold improvements during the years 
ended March 31, 1997, 1996, and 1995, respectively. Additionally, during 
fiscal years 1997, 1996 and 1995, the Company incurred capital lease 
obligations of approximately $113,400, $150,000 and $750,000, respectively, 
related to acquisition of laboratory equipment, furniture and leasehold 
improvements. Through March 31, 1997, the Company, cumulatively, used 
approximately $1.2 million to repurchase shares of its stock under a Stock 
Repurchase Plan which was established in fiscal 1995. No repurchases were 
made during fiscal 1997.
 
The Company expects to incur substantial research and development 
expenses, manufacturing costs and marketing and distribution expenses in the 
future. It is the Company's intention to selectively seek additional 
collaborative or license agreements with suitable corporate collaborators, 
although there can be no assurance the Company will be able to enter into 
such agreements or that amounts received under such agreements will reduce 
substantially the Company's funding requirements. Additional equity or debt 
financing may be required, and there can be no assurance that these funds may 
be available on favorable terms, if at all.
 
The Company's future capital requirements depend on many factors, including 
continued scientific progress in its diagnostics programs, the magnitude of 
these programs, the time and costs involved in obtaining regulatory 
approvals, the costs involved in filing, prosecuting and enforcing patent 
claims, competing technological and market developments, changes in its 
existing license and other agreements, the ability of the Company to 
establish development arrangements, the cost of manufacturing scale-up and 
effective commercialization activities and arrangements.

                                       22

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
INDEX TO FINANCIAL STATEMENTS                                              PAGE
--------------------------------------------------------                   ----

INDEPENDENT AUDITORS' REPORT                                                24
 
Statements of Operations for the Three Years 
  Ended March 31, 1997, 1996 and 1995                                       25
 
Balance Sheets at March 31, 1997 and 1996                                   26
 
Statements of Cash Flows for the Three Years 
  Ended March 31, 1997, 1996 and 1995                                       27
 
Statements of Shareholders' Equity for the Three Years
  Ended March 31, 1997, 1996, and 1995                                      28
 
Notes to Financial Statements                                               29
 
                                       23


<PAGE>

TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF IGEN INTERNATIONAL, INC.:
 
We have audited the accompanying balance sheets of IGEN International, Inc. 
(the Company) as of March 31, 1997 and 1996, and the related statements of 
operations, stockholders' equity, and cash flows for each of the three years 
in the period ended March 31, 1997. These financial statements are the 
responsibility of the Company's management. Our responsibility is to express 
an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, 
in all material respects, the financial position of the Company as of March 
31, 1997 and 1996, and the results of its operations and its cash flows for 
each of the three years in the period ended March 31, 1997, in conformity 
with generally accepted accounting principles.
 

Deloitte & Touche, LLP 
Washington, D.C. 
May 9, 1997
 
                                       24


<PAGE>

IGEN International, Inc. 
STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                                           YEAR ENDED MARCH 31,
                                                -------------------------------------------
                                                    1997           1996           1995
                                                -------------  -------------  -------------
<S>                                             <C>            <C>            <C>
 
REVENUES (Notes 1 and 2):
  License fees and contract revenue             $   8,801,918  $  11,266,462  $  12,258,864
  Product sales                                     6,359,866      4,582,566      2,554,577
  Royalty income                                      843,356         75,444         20,490
                                                -------------  -------------  -------------
    Total                                          16,005,140     15,924,472     14,833,931
                                                -------------  -------------  -------------
 
OPERATING COSTS AND EXPENSES:
  Product costs                                     2,447,714      1,848,363      1,277,854
  Research and development (Note 2)                13,114,311     14,077,514     12,266,992
  Marketing, general, and administrative           10,910,174      8,725,146      8,707,293
                                                -------------  -------------  -------------
    Total                                          26,472,199     24,651,023     22,252,139
                                                -------------  -------------  -------------

LOSS FROM OPERATIONS                              (10,467,059)    (8,726,551)    (7,418,208)
 
INTEREST INCOME--NET                                  585,951      1,078,777      1,489,694
                                                -------------  -------------  -------------
NET LOSS                                        $  (9,881,108) $  (7,647,774) $  (5,928,514)
                                                -------------  -------------  -------------
                                                -------------  -------------  -------------
LOSS PER SHARE (Note 1):
  Net loss per common share                     $        (.66) $        (.52) $        (.40)
                                                -------------  -------------  -------------
                                                -------------  -------------  -------------
SHARES USED IN COMPUTING
  NET LOSS PER SHARE (Note 1)                      14,958,901     14,778,848     14,768,598
                                                -------------  -------------  -------------
</TABLE>
 
See notes to financial statements.
 
                                       25


<PAGE>

IGEN International, Inc. 
BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                          MARCH 31,
                                                                 ----------------------------
                                                                     1997           1996
                                                                 -------------  -------------
<S>                                                              <C>            <C> 
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents (Note 1)                             $     789,895  $   4,001,147
  Short-term investments (Note 1)                                    8,254,164     16,215,889
  Accounts receivable, net                                           1,782,884      1,891,693
  Notes receivable                                                     417,459       --
  Inventory (Note 1)                                                 2,074,685      1,648,418
  Prepaid expenses (Note 1)                                            647,556      1,035,303
  Other current assets (Notes 1, 4 and 6)                              218,150        420,384
                                                                 -------------  -------------
    Total current assets                                            14,184,793     25,212,834
                                                                 -------------  -------------
 
EQUIPMENT, FURNITURE, AND IMPROVEMENTS (Notes 1 and 7)               6,949,687      6,172,014
  Accumulated depreciation and amortization                         (3,781,171)    (2,590,281)
                                                                 -------------  -------------
    Equipment, furniture, and improvements, net                      3,168,516      3,581,733
                                                                 -------------  -------------
 
PURCHASED PRODUCT TECHNOLOGY--NET (Note 1)                             183,393        213,657
 
OTHER ASSETS (Note 1)                                                  257,024        268,273
                                                                 -------------  -------------
TOTAL                                                            $  17,793,726  $  29,276,497
                                                                 -------------  -------------
                                                                 -------------  -------------
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
 
Accounts payable and accrued expenses                            $   4,266,165  $   3,792,935
Deferred revenue (Note 1 and 2)                                      5,392,507      7,532,181
Obligations under capital leases (Note 7)                               95,051        187,263
                                                                 -------------  -------------
    Total current liabilities                                        9,753,723     11,512,379
                                                                 -------------  -------------

OBLIGATIONS UNDER CAPITAL LEASES--
  NONCURRENT (Note 7)                                                  158,303        329,062
                                                                 -------------  -------------
 
STOCKHOLDERS' EQUITY: (Notes 1 and 3)
Common stock: $.001 par value, 50,000,000 shares authorized;
  14,987,416 and 14,908,530 shares issued and outstanding               14,987         14,909
Additional paid-in capital                                          64,876,126     64,675,784
Accumulated deficit                                                (56,699,602)   (46,818,494)
Deferred notes receivable and compensation                            (309,811)      (437,143)
                                                                 -------------  -------------
    Total stockholders' equity                                       7,881,700     17,435,056
                                                                 -------------  -------------
TOTAL                                                            $  17,793,726  $  29,276,497
                                                                 -------------  -------------
                                                                 -------------  -------------
</TABLE>
 
See notes to financial statements.
 
                                       26


<PAGE>
IGEN International, Inc. 
STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                  YEAR ENDED MARCH 31,
                                                                       -------------------------------------------
                                                                            1997           1996           1995
                                                                       -------------  -------------  -------------
<S>                                                                    <C>            <C>            <C> 
CASH FLOWS FROM OPERATIONS:
CONTINUING OPERATING ACTIVITIES:
  Net loss from continuing operations                                  $  (9,881,108) $  (7,647,774) $  (5,928,514)
  Adjustments to reconcile net loss to net cash provided by 
    (used in) operating activities:
    Interest on note receivable from sale of common stock                     (3,200)       (28,700)       (29,900)
    Amortization of deferred compensation                                     90,715        108,840        108,840
    Depreciation and amortization                                          1,221,154      1,025,753        535,265
    Loss on disposal of equipment, furniture, and improvements                --             --            240,071
    Deferred revenue                                                      (2,139,674)      (505,215)    (1,664,272)
    Add (deduct) items not affecting cash:
    Decrease (increase) in accounts receivable                               108,809       (602,564)      (861,635)
    Increase in notes receivable                                            (417,459)        --             --
    Increase in inventory                                                   (426,267)      (584,172)      (759,087)
    Decrease (increase) in prepaid expenses                                  387,747       (161,092)      (521,282)
    Decrease in other assets                                                 213,483        261,111        105,092
    Increase (decrease) in accounts payable and accrued expenses             473,230       (224,824)     1,789,616
                                                                       -------------  -------------  -------------
       Net cash used in continuing operating activities                  (10,372,570)    (8,358,637)    (6,985,806)
                                                                       -------------  -------------  -------------
 
DISCONTINUED OPERATIONS:
  Items not requiring cash:
    Net liabilities of discontinued operations                                --             --         (1,967,977)
                                                                       -------------  -------------  -------------
    Total funds used in discontinued operations                               --             --         (1,967,977)
                                                                       -------------  -------------  -------------
      Net cash used in operating activities                              (10,372,570)    (8,358,637)    (8,953,783)
                                                                       -------------  -------------  -------------
 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for equipment, furniture, and improvements                   (777,673)    (1,418,319)    (1,946,214)
  Sale of short-term investments                                          30,725,898      8,496,327      5,952,628
  Purchase of short-term investments                                     (22,764,173)   (24,712,216)      --
                                                                       -------------  -------------  -------------
       Net cash provided by (used in) investing activities                 7,184,052    (17,634,208)     4,006,414
                                                                       -------------  -------------  -------------
 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of notes receivable from sale of common stock, net                39,817        106,016          8,047
  Issuances of common stock                                                  200,420        309,594        152,392
  Repurchases of common stock                                                 --           (410,550)      (779,938)
  Principal payments under capital lease obligations                        (262,971)      (237,317)        --
                                                                       -------------  -------------  -------------
      Net cash used in financing activities                                  (22,734)      (232,257)      (619,499)
                                                                       -------------  -------------  -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                 (3,211,252)   (26,225,102)    (5,566,868)
 
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                               4,001,147     30,226,249     35,793,117
                                                                       -------------  -------------  -------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                 $     789,895  $   4,001,147  $  30,226,249
                                                                       -------------  -------------  -------------
                                                                       -------------  -------------  -------------
 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Interest Paid                                                        $      65,114  $      64,368  $       1,358

</TABLE>
 
Supplemental Disclosures of Non-cash Investing and Financing Activities:

During the years ended March 31, 1997, 1996 and 1995, the Company incurred 
capital lease obligations of approximately $113,000, $150,000 and $750,000 
for equipment, furniture and improvements.
 
See notes to financial statements.
                                       27


<PAGE>

IGEN International, Inc.
STATEMENTS OF STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                                                    NOTES
                                                                                 RECEIVABLE
                                                  ADDITIONAL                                    FROM SALE
                             COMMON STOCK           PAID-IN         ACCUMULATED       DEFERRED      OF COMMON
                            SHARES    AMOUNT        CAPITAL           DEFICIT        COMPENSATION      STOCK            TOTAL
                         -----------  -------     ------------    ---------------    ------------    -----------    ------------
<S>                      <C>          <C>         <C>             <C>                <C>             <C>            <C>
BALANCE, APRIL 1, 1994   14,658,720   $   14,659  $  65,404,536   $  (33,242,206)    $  (308,395)    $ (401,891)    $  31,466,703
Issuance of 271,070 
  shares of common  
  stock                     271,070          271        152,121          --                 --             --             152,392
Repurchase of 148,100 
  shares of common             
  stock                    (148,100)        (148)      (779,790)         --                 --             --            (779,938)
Amortization of 
  deferred compensation        --             --           --            --              108,840           --             108,840
Changes in notes        
  receivable                   --             --           --            --                 --          (21,853)          (21,853)
                        
Net loss                       --             --           --         (5,928,514)           --             --          (5,928,514)
                        --------------  ------------  -------------  --------------  -----------  --------------     -------------
                        
BALANCE MARCH 31, 1995   14,781,690       14,782     64,776,867      (39,170,720)       (199,555)      (423,744)       24,997,630
                        
Issuance of 207,349 
  shares of common             
  stock                     207,349          207        309,387          --                 --             --             309,594
                        
Repurchase of 80,509 
  shares of common             
  stock                     (80,509)         (80)      (410,470)         --                 --             --            (410,550)
                        
Amortization of 
  deferred compensation        --              --          --            --             108,840            --             108,840
                        
Changes in notes        
  receivable                   --              --          --            --                 --          77,316             77,316

Net loss                       --              --          --         (7,647,774)           --             --          (7,647,774)
                        --------------  ----------  ---------------  --------------  -----------  --------------     -------------
 
BALANCE, MARCH 31, 1996  14,908,530       14,909     64,675,784      (46,818,494)    $   (90,715)  $  (346,428)     $  17,435,056
                        
Issuance of 78,886 
  shares of common             
  stock                      78,886           78        200,342          --                 --             --             200,420
                        
Amortization of         
  deferred compensation       --              --           --            --              90,715            --              90,715
                        
Changes in notes        
  receivable                                                                                           36,617              36,617
                        
Net loss                       --              --             --      (9,881,108)           --            --           (9,881,108)
                        --------------  ----------  -------------  --------------  -----------  --------------     -------------
                        
BALANCE, MARCH 31, 1997  14,987,416     $ 14,987    $64,876,126     $(56,699,602) $   --       $    (309,811)       $   7,881,700
                        --------------  ----------  -------------  --------------  -----------  --------------     -------------
                        --------------  ----------  -------------  --------------  -----------  --------------     -------------
</TABLE>
 
SEE NOTES TO FINANCIAL STATEMENTS
 
                                       28


<PAGE>

IGEN International, Inc.
NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates. Certain
amounts from the prior years have been reclassified to conform to the current
year presentation.

Organization and Business Activity--IGEN International, Inc. (the Company)
develops, manufactures, and markets diagnostic systems utilizing its patented
ORIGEN technology, which is based on electrochemiluminescence. During November,
1996, IGEN, Inc. was merged into a newly formed Delaware corporation, IGEN
International, Inc. (the "Company"). These changes do not affect IGEN's business
operations, employees, shareholders or its business locations.

Cash Equivalents and Short-Term Investments--Cash equivalents include cash
in banks, money market funds, securities of the U.S. Treasury, and certificates
of deposit with original maturities of three months or less.

The Company adopted SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," in 1996. In accordance with this statement, the
company has classified its short term investments which consist of U.S.
Government Obligations and Corporate Debt-Securities as "available for sale"
which are recorded at fair value, based on quoted market prices, which
approximates cost.

Concentration of Credit Risk--The Company has invested its excess cash
generally in securities of the U.S. Treasury, money market funds, certificates
of deposit and corporate bonds. The Company invests its excess cash in
accordance with a policy objective that seeks to ensure both liquidity and
safety of principal. The policy limits investments to certain types of
instruments issued by institutions with strong investment grade credit ratings
and places restrictions on their terms and concentrations by type and issuer.
The Company has not experienced any losses on its investments, due to credit
risk.

Inventory is recorded at the lower of cost or market using the first-in,
first-out method and consists of the following:

                                             1997          1996
                                         -----------   -----------

Finished Goods.......................    $ 1,095,052   $ 1,270,410
Work in process......................        150,251       243,888
Raw materials........................        829,382       134,120
                                         -----------   -----------
 Total...............................    $ 2,074,685   $ 1,648,418
                                         -----------   -----------
                                         -----------   -----------

Equipment, Furniture, and Improvements are carried at cost. Depreciation is
computed over the estimated useful lives of the assets, generally five years,
using accelerated methods. Such property consists of the following:
 
                                            1997          1996
                                         -----------   -----------

Laboratory equipment.................    $ 3,308,313   $ 2,974,624
Furniture and office equipment.......      2,176,995     1,798,280
Leasehold improvements...............      1,464,379     1,399,110
                                         -----------   -----------
Total................................    $ 6,949,687   $ 6,172,014
                                         -----------   -----------
                                         -----------   -----------

Prepaid Expenses--Prepaid expenses consist primarily of fees incurred in
connection with the Company entering into certain license agreements (see Note
2). Amounts are deferred and recognized over the term of such agreements as the
Company records related revenue.

Purchased Product Technology--The Company amortizes the cost of purchased
patent rights on a straight-line basis over the estimated economic lives of such
assets, ranging from five to twenty-one years. The Company has acquired certain
product and patent rights from a noncontrolled affiliated company that are being
amortized over the remaining lives of the underlying patents.


                                      29

<PAGE>

Accumulated amortization on purchased product technology rights was $187,315, 
$157,051 and $126,787 at March 31, 1997, 1996 and 1995, respectively.

Revenue Recognition--Nonrefundable license fees and milestone payments in
connection with research and development contracts or commercialization
agreements with corporate partners are recognized when they are earned in
accordance with the applicable performance requirements and contractual terms.
Amounts received in advance of performance under contracts or commercialization
agreements are recorded as deferred revenue until earned. Product sales revenue
is recorded as products are shipped.

The Company derives a significant portion of its revenue from product
development and license agreements with certain companies (see Note 2).

Deferred Income Taxes--Deferred income tax assets and liabilities are
computed annually for differences between the financial statement and tax bases
of assets and liabilities that will result in taxable or deductible amounts in
the future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. A valuation
allowance is established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is the tax payable or
refundable for the period plus or minus the change during the period in deferred
tax assets and liabilities.

Loss Per Share has been computed based on the weighted average number of
common shares outstanding during each period. Common equivalent shares
calculated for the stock options and warrants under the treasury stock method
for all periods presented are excluded due to losses reported from both
continuing operations and a net loss.

NEW ACCOUNTING STANDARDS

Long-Lived Assets--In 1995, the Financial Accounting Standards Board (FASB)
issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," which became effective for the Company's
1997 fiscal year. The new standard did not have a material impact, upon
adoption, on the Company's financial position, results of operations, and cash
flows.

Earnings Per Share--Statement of Financial Accounting Standards (SFAS) No.
128 "Earnings Per Share," ("EPS") was recently issued by the Financial
Accounting Standards Board. SFAS No. 128 is effective for periods ending after
December 15, 1997 and early adoption is not permitted. SFAS No. 128 requires the
company to compute and present a basic and diluted earnings per share. Had the
company computed earnings per share in accordance with SFAS No. 128, the
resulting EPS would not be different than which has been reported for the years
ended March 31, 1997 and 1996.

2. LICENSE AND RESEARCH AGREEMENTS

In 1991, the Company entered into an agreement with Boehringer Mannheim GmbH, 
a European company, under which that company was granted rights to develop 
and market certain clinical diagnostic systems worldwide based on the 
Company's ORIGEN technology. Under the terms of the agreement, the Company 
received five $10 million license payments annually through January 1996 
which were recognized as revenue on a ratable basis through December 1996. 
This agreement also provides the Company with additional payments for certain 
product development work, as well as royalties on product sales. In January 
1997, the Company received $6 million under an Advance Royalty Agreement with 
Boehringer Mannheim of which $706,000 was recognized as revenue in fiscal 
1997.

During 1993 the Company entered into a $20 million license and stock
purchase agreement with Organon Teknika, B.V., a European company. Under this
agreement, the Company sold 346,135 shares of common stock, granted a license to
develop and market certain diagnostic systems worldwide utilizing the Company's
ORIGEN technology and agreed to invest $5 million in research and development
under a joint development program. During the years ended March 31, 1996 and
1995, contract revenue of $1,111,200 and $2,224,663 was recognized while there
was no contract revenues recognized for the year ended March 31, 1997. Among
other things, the agreement provides for royalty payments to the Company on
product sales and for product supply arrangements between the parties. Sales to
Organon Teknika under this agreement amounted to approximately $1.4 million,
$1.1 million and $780,000 for the years ended March 31, 1997, 1996 and 1995,
respectively.

During 1990, the Company granted a license to Eisai Co., Ltd., a Japanese
company, to market in Japan a certain clinical diagnostic system based on the
Company's ORIGEN technology. The agreement provides for additional future
license fees tied to the achievement of product development milestones. This
agreement also provides for royalty payments to the Company on product sales,
and product supply arrangements between the parties.


                                      30

<PAGE>

During November, 1995 the Company formed a Joint Venture for the development
and commercialization of advanced diagnostic products utilizing a proprietary
combination of multi-array technology together with the Company's
ORIGEN-Registered Trademark- technology. Products based on these technologies
would be used for high throughput, multiparameter analysis for DNA sequencing,
clinical chemistry and immunodiagnostics. The joint venture is named Meso Scale
Diagnostics, LLC ("MSD"), and was formed together with Meso Scale Technologies,
LLC ("MST"), which is a noncontrolled affiliated Company. The Company has agreed
to provide initial capital contributions to MSD of $5 million over time, plus
certain start up costs, in exchange for a 50% interest and to fund the
organizational and certain ongoing (non-research) operating expenses of MSD. The
Company will also participate in a collaborative research program. Through the
year ended March 31, 1997 the Company made contributions of approximately
$200,000. IGEN has accounted for its investments in MSD as research and
development funding arrangements and, accordingly, has recorded its payments as
research and development expense.

3. STOCKHOLDERS' EQUITY

Shareholder Rights Plan--In November 1996, the Board of Directors adopted a
shareholder rights plan and declared a dividend of one preferred share purchase
right for each outstanding share of common stock par value $.001 per share, of
the Company. The dividend was effective as of November 6, 1996 with respect to
the shareholders of record on that date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $.001 per share, of the Company
at a price of $65.00 per one one-hundredth of a Preferred Share, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Plan, between the Company and The First National Bank of Boston.

Stock Option Plan--During fiscal 1995, the Company adopted the 1994 Stock
Option Plan under which 1,000,000 shares of Common Stock have been reserved for
issuance upon exercise of options granted to employees or consultants and the
1994 Non-Employee Directors Stock Option Plan under which 150,000 shares of
Common Stock have been reserved for issuance upon exercise of options granted to
Non-Employee Directors. The 1994 Stock Option Plan replaced the 1985 Stock
Option Plan which expired in February 1995.

The Option Plans provide for the granting of both incentive stock options
intended to qualify as such under Section 422 of the Internal Revenue Code of
1986, as amended, and supplemental stock options that do not so qualify.
 
A SUMMARY OF THE OPTION ACTIVITY IS AS FOLLOWS:
 
                                                         EXERCISE PRICE
                                            NUMBER OF         RANGE
                                              SHARES        ($/SHARE)
                                            ---------    --------------

Outstanding on April 1, 1994.............   1,680,589     $0.29--$4.57

Granted..................................     356,500     $5.50--$9.63
Exercised................................    (271,070)    $0.29--$4.57
Forfeited................................     (11,845)    $0.29--$4.57
                                            ---------
Outstanding on March 31, 1995............   1,754,174     $0.29--$9.63

Granted..................................      67,800     $4.87--$6.25
Exercised................................    (207,349)    $0.29--$5.50
Forfeited................................    (122,279)    $0.57--$5.50
                                            ---------
Outstanding on March 31, 1996............   1,492,346     $0.29--$9.63

Granted..................................     310,000     $5.00
Exercised................................     (78,886)    $0.29--$5.50
Forfeited................................     (82,797)    $0.29--$5.50
                                             --------
Outstanding on March 31, 1997............   1,640,663     $0.29--$9.63
                                            ---------
                                            ---------

Stock-Based Compensation -- In 1997, the Company adopted Statement of
Financial Accounting Standard No. 123 ("SFAS 123"), Accounting for Stock-Based
Compensation. Upon adoption of SFAS 123, the Company continues to measure
compensation expense for its stock-based employee compensation plans using the
intrinsic value method prescribed by APB No. 25, Accounting for Stock Issued to
Employees, and has provided below pro forma disclosures of the effect on net
income (loss) and earnings (loss) per share as if the fair value-based method
prescribed by SFAS 123 had been applied in measuring compensation expense.

If compensation cost for the Company's 1997 and 1996 grants for stock-based
compensation had been determined consistent with the fair value-based method of
accoung per SFAS 123, the Company's pro forma net income (loss) and pro forma
earnings (loss) per share for the years ended March 31, 1997 and 1996 would
be as follows:


                                      31

<PAGE>
                                                       1997           1996

      Net income (loss)
        As reported............................    $(9,881,108)   $(7,647,774)
        Pro forma..............................     (9,996,268)    (7,684,584)

      Primary earnings (loss) per share
        As reported............................    $  (.66)       $  (.52)
        Pro forma..............................    $  (.67)       $  (.52)

The fair value of the option grant is estimated on the date of grant using
the Black-Scholes option pricing models with the following assumptions:
 
                                                       1997           1996

      Expected dividend yield..................         0%              0%
      Expected stock price volatility..........        3.5%           49.0%
      Risk-free interest rate..................         6%             5.5%
      Expected option term.....................       5 years         5 years

Notes Receivable From Stockholders--Notes receivable arising from the sale
of common stock (net of subsequent repayments) are presented in the accompanying
financial statements as a reduction of stockholders' equity. The notes have
terms of four years and bear interest with a range of 6-8%.

Stock Repurchase Plan--The Company's Board of Directors has authorized the
repurchase of up to $2,000,000 of its common stock. Through March 31, 1996, the
Company had repurchased 228,609 shares at a cost of approximately $1.2 million.
There were no repurchases during the year ended March 31, 1997. All shares
repurchased under this Plan have been retired.

4. INCOME TAXES

For the years ended March 31, 1997, 1996, and 1995 the Company recorded no
income tax expense and did not pay federal or state tax, as calculated by
applying statutory rates to pretax income.

As of March 31, 1997, the Company has available for income tax reporting
purposes net operating loss and general business credit carryforwards
approximating $41,900,000 and $2,400,000, respectively. These carryforwards
expire in varying amounts through March 31, 2012. Under the provisions of the
Tax Reform Act of 1986, the use of the Company's net operating loss carryforward
may be significantly reduced, if substantial changes in stock ownership take
place. The potential tax benefits of the unused carryforwards have been
reserved for financial statement purposes because of the uncertainty of
realizing those benefits in the future.

The approximate tax effects of temporary differences that gave rise to the
Company's deferred tax assets and liabilities are as follows:

                                                        YEAR ENDED MARCH 31,
                                                    ----------------------------
                                                        1997           1996
                                                    -------------  -------------
     Deferred tax assets:
       Deferred revenue...........................  $  2,046,996   $  2,836,000
       Net operating loss and 
         tax credit carryforwards.................    18,305,819     12,427,000
       Other......................................       304,221
       Less valuation allowance...................   (20,657,036)   (15,218,000)
                                                    ------------   ------------
     Net deferred tax assets......................  $         --   $     45,000
                                                    ------------   ------------
                                                    ------------   ------------


5. EMPLOYEE SAVINGS PLAN

The Company has an Employee Savings Plan (the Plan) qualifying under Section
401(k) of the Internal Revenue Code and subject to the Employee Retirement
Income Security Act of 1974, as amended. Qualified individuals are eligible to
participate in the Plan, and the Company may, but is not required to, make
matching contributions. Through March 31, 1997 the Company has not made a
contribution to this Plan.


                                      32

<PAGE>

The Company is not obligated under any other postretirement benefit plan.

6. RELATED PARTIES

Certain shareholders of the Company are also shareholders of several other 
companies which are considered affiliates of IGEN for the purpose of this 
disclosure. As discussed in Note 2, the Company has entered into transactions 
with companies that were affiliated through common shareholders. Amounts due 
from affiliated companies for services rendered and certain shared costs were 
$58,430 and $281,860 at March 31, 1997 and 1996, respectively. There were no 
amounts due at March 31, 1997. During 1997 and 1996, the Company incurred 
$212,506 and $487,494, respectively, in expenses under a research contract 
with an affiliate. Additionally during 1996, the Company prepaid $500,000 for 
a research and supply agreement with another affiliate.

The Company has licensed certain diagnostic technologies from affiliated
companies and has licensed certain pharmaceutical technologies to affiliated
companies. No royalties have ever been earned or accrued under these license
agreements.

7. COMMITMENTS

Capital Leases--The Company is obligated under capital lease agreements, for
certain equipment, furniture and building improvements. The aggregate discounted
lease payments are recorded as a liability, and the fair market value of the
related leased assets are capitalized and amortized over the assets estimated
useful lives. Total assets capitalized pursuant to such agreements were
approximately $1 million at March 31, 1997.

The future minimum payments under these lease agreements at March 31, 1997
are as follows:
 
1998....................................................  $ 163,106
1999....................................................     47,037
2000....................................................     45,274
2001....................................................     12,483
                                                           --------
Total minimum payments..................................    267,900
Amount representing interest............................    (14,546)
                                                           --------
Obligations under capital leases........................    253,354
Current portion.........................................    (95,051)
                                                           --------
Obligations under capital leases-noncurrent.............  $ 158,303
                                                           --------
                                                           --------

Operating Leases--During 1995, the Company entered into a lease for an
office, laboratory and manufacturing facility with a term of ten years, and an
option to terminate the lease after five years. Rent expense for facility and
equipment operating leases totaled approximately $1.5 million, $1.6 million and
$1.3 million for the years ended March 31, 1997, 1996, and 1995, respectively.

Research Agreements--The Company has entered into agreements with entities
to fund research and development programs. IGEN is obligated to pay royalty
payments on any future product sales.

At March 31, 1997, the future minimum lease and research payments under
these agreements are as follows:
 
                             OPERATING LEASES  RESEARCH AGREEMENTS
                             ----------------  -------------------

1998.....................      $ 1,413,778        $2,000,000
1999.....................        1,455,591         1,000,000
2000.....................        1,478,659         1,000,000
2001.....................        1,523,019           800,000
2002.....................        1,568,838                --
Thereafter...............        4,703,321                --
                               -----------        ----------
Total....................      $12,143,206        $4,800,000
                               -----------        ----------
                               -----------        ----------

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE.

Not Applicable.


                                      33

<PAGE>


                                   PART III

Certain information required by Part III is omitted from this Report in that
the registrant will file a definitive proxy statement pursuant to Regulation 14A
(the "Proxy Statement") not later than 120 days after the end of the fiscal year
covered by this Report, and certain information included therein is incorporated
herein by reference. Only those sections of the Proxy Statement which
specifically address the items set forth herein are incorporated by reference.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     (a.) Directors. The information with respect to directors required under
          this item is incorporated herein by reference to the section captioned
          "Election of Directors" in the Company's Proxy Statement with respect
          to the Annual Meeting of Shareholders to be held on September 9, 1997.

     (b)  Executive Officers. The information with respect to executive officers
          required under this item is incorporated herein by reference to 
          Part I of this Report.

ITEM 11. EXECUTIVE COMPENSATION.

The information required under this item is incorporated herein by reference
to the sections entitled "Election of Directors--Compensation for Directors",
"--Compensation of Executive Officers", "-- Compensation Arrangements and
Employment Agreements", "--Report of the Compensation Committee", in the
Company's Proxy Statement with respect to the Annual Meeting of Shareholders to
be held on September 9, 1997.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required under this item is incorporated herein by reference
to the section entitled "Principal Shareholders" in the Company's Proxy
Statement with respect to the Annual Meeting of Shareholders to be held on
September 9, 1997.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required under this item is incorporated herein by reference
to the sections entitled "Election of Directors--Compensation Arrangements and
Employment Agreements" and "--Certain Transactions" in the Company's Proxy
Statement with respect to the Annual Meeting of Shareholders to be held on
September 9, 1997.

                                   PART IV

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

         (a) (1) Index to Financial Statements.

The financial statements listed in the Index to Financial Statements are
filed as part of this Annual Report on Form 10-K.

         (a) (2) Index to Financial Statement Schedules.

All schedules are omitted because they are not applicable, or not required,
or because the required information is included in the financial statements or
notes thereto.

         (a) (3) Index to Exhibits.

The Exhibits filed as part of this Form 10-K are listed on the Exhibit Index
immediately preceding such Exhibits.

         (b) Reports on Form 8-K. None.


                                      34

<PAGE>

         (c)(1) Exhibits The response to this portion of Item 14 is submitted 
         as a separate section of this Form 10-K.

         (c)(2) Management Contracts and Other Compensatory Arrangements. None

         (d)    Financial Statement Schedules. All schedules are omitted because
                they are not applicable, or not required, or because the 
                required information is included in the financial statements or
                notes thereto.

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



                                      35

<PAGE>

                                  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.

                                  IGEN INTERNATIONAL, INC.


JULY 11, 1997                     BY:   /s/Samuel J. Wohlstadter
                                     -------------------------------
                                        CHIEF EXECUTIVE OFFICER

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Samuel J. Wohlstadter, Richard J. Massey and
George V. Migausky as his attorney-in-fact for him in any and all capacities, to
sign any amendments to this report on Form 10-K, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that the
said attorney-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
 
SIGNATURE                       TITLE                                   DATE
---------                       ------                                  ----

/s/ SAMUEL J. WOHLSTADTER     Chief Executive Officer              July 11, 1997
----------------------------  (Principal Executive Officer);
Samuel J. Wohlstadter         Director

/s/ GEORGE V. MIGAUSKY        Vice President                       July 11, 1997
----------------------------  and Chief Financial Officer
George V. Migausky            (Principal Financial and Accounting
                              Officer)

/s/ RICHARD J. MASSEY         President, Chief Operating Officer;  July 11, 1997
----------------------------  Director
Richard J. Massey

/s/ EDWARD LURIER             Director                             July 11, 1997
----------------------------
Edward Lurier

/s/ William O'Neill           Director                             July 11, 1997
----------------------------
William O'Neill

/s/ ROBERT SALSMANS           Director                             July 11, 1997
----------------------------
Robert Salsmans

                                      36
<PAGE>
                                 INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                                                 SEQUENTIAL
 NUMBER                                 DESCRIPTION OF DOCUMENT                               PAGE NO.    PAGE NO.
---------  ---------------------------------------------------------------------------------  ---------  ----------
<C>        <S>                                                                                <C>        <C>
 
2.1(7)     Agreement and Plan of Merger effective November 19, 1996 (by virtue of a
           reincorporation), by and between IGEN, Inc., a California corporation, and IGEN
           International, Inc. a Delaware corporation.
 
3.1(3)     Third Amended and Restated Articles of Incorporation of the Registrant.
 
3.2(2)     Bylaws of the Registrant.
 
3.3(7)     The Registrant's (as successor in interest to IGEN, Inc. by virtue of a
           reincorporation effective November 19, 1996) Certificate of Incorporate, as filed
           with the Secretary of State of the State of Delaware on August 30, 1996.
 
3.4(7)     The Registrant's Certificate of Designation of Series A Junior Participating
           Preferred Stock, as filed with the Secretary of State of the State of Delaware on
           November 18, 1996.
 
3.5(7)     The Registrant's (as successor in interest to IGEN, Inc. by virtue of a
           reincorporation effective November 19, 1996) Bylaws, as currently in effect.
 
4.1(5)     Rights Agreement, dated as of December 21, 1995, between the Company and the
           First National Bank of Boston.
 
4.2(5)     Form 8-A, filed December 29, 1995, registering the Preferred Share Purchase
           Rights.
 
4.3        Reference is made to Exhibits 3.1 and 3.2.
 
4.4(6)     Form of Specimen Right Certificate.
 
4.5(6)     Rights Agreement, dated November 6, 1996, between the Registrant and The First
           National Bank of Boston.
 
10.1(2)    Registration Agreement between the Registrant and the parties names therein dated
           March 17, 1988, as amended through March 30, 1993.
 
10.2(2)    Form of Waiver and Amendment of Registration Agreement executed in December 1993,
           amending in certain respects the Registration Agreement dated as of March 17,
           1988.
 
10.3(2)    Agreement between the Registrant and The Perkin-Elmer Corporation dated March 30,
           1990, with Addendum to Agreement dated February 21, 1991 (with certain
           confidential information deleted).
 
10.4(2)    Agreement between the Registrant and Eisai Co., Ltd. dated May 25, 1990 (with
           certain confidential information deleted).
 
10.5(2)    License and Development Technology Agreement between the Registrant and
           Boehringer Mannheim GmbH dated September 23, 1992 (with certain confidential
           information deleted).
 
+10.5.1(1) Advanced Royalty Agreement between the Registrant and Boehringer
           Mannheim GmbH dated January 9, 1997.
 
10.6(2)    License Agreement between the Registrant and Hyperion Catalysis International
           ("Hyperion") dated October 10, 1993 as amended March 15, 1990.
 
10.7(2)    Common Stock Purchase Agreement between the Registrant and Organon Teknika B.V.
           ("Organon") dated May 19, 1993.
 
10.8(2)    License and Technology Development agreement between the Registrant and Organon
           dated May 19, 1993 (with certain confidential information deleted).
 
10.9(2)    Agreement and Plan of Reorganization and Agreement and Plan of Merger between the
           Registrant and Molecular Displays, Inc. dated March 9, 1993.
</TABLE>

+ Confidential treatment has been requested.

                                      37

<PAGE>
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                                                 SEQUENTIAL
 NUMBER                                 DESCRIPTION OF DOCUMENT                               PAGE NO.    PAGE NO.
---------  ---------------------------------------------------------------------------------  ---------  ----------
<C>        <S>                                                                                <C>        <C>
 
10.10(2)   Term Sheet for Consolidation of Research Projects between the Registrant and
           Proteinix Corporation dated December 14, 1993 (with certain confidential
           information deleted).
 
10.11(2)   Term Sheet for consolidation of Cancer Research Projects between the Registrant
           and Pro-Neuron, Inc. dated December 14, 1993 (with certain confidential
           information deleted).
 
10.12(2)   Join Venture Agreement between the Registrant and Hyperion dated May 28, 1993.
 
10.13(2)   Product Development and Marketing Agreement between the Registrant, Hyperion and
           HyperGen dated May 29, 1993.
 
10.14(2)   Form of Indemnity Agreement entered into between the Registrant and its Directors
           and Officers.
 
10.15(2)   Registrant's 1985 Stock Option Plan, as amended, and related Form of Incentive
           Stock Option Grant and Form of Nonqualified Stock Option Grant.
 
10.16(4)   Registrant's 1994 Stock Option Plan, and related Form of Incentive Stock Option
           Grant.
 
10.17(4)   Registrant's 1994 Non-Employee Directors Stock Option Plan, and related Form of
           Incentive Stock Option Grant.
 
10.18(4)   Lease Agreement between the Registrant and W-M 16020 Limited Partnership dated
           October 5, 1994.
 
10.19(4)   Agreement for Purchase and Sale of Joint Venture Interest between Registrant and
           Hyperion Catalysis International, dated December 28, 1994
 
10.20(5)  Joint Venture Agreement, dated as of November 30, 1995, between MSD, MST and the
           Company.

10.21(5)   Limited Liability Company Agreement, dated as of November 30, 1995, between MSD,
           MST and the Company.
 
10.22(5)   IGEN/MSD License Agreement, dated as of November 30, 1995, between MSD and the
           Company.
 
10.23(5)   Indemnification Agreement, dated as of November 30, 1995, between the Company and
           Jacob Wohlstadter.
 
11.1(1)    Calculation of net loss per share.
 
23.1(1)    Consent of Deloitte & Touche LLP
 
24.1       Power of Attorney. Reference is made to the signature page.
 
27.1(1)    Financial Data Schedule.

</TABLE>
 
------------------------
 
(1) Filed as an exhibit to this Annual Report on Form 10-K.
 
(2) Previously filed as an exhibit to the Registration Statement on Form S-1, as
    amended (Registration No. 33-72992) and incorporated by reference herein.

(3) Previously filed as an exhibit to the Registrant's Form 10-K for the
    fiscal year ended March 31, 1994. 
(4) Previously filed as an exhibit to the Registrant's Annual Report on Form
    10-K for the fiscal year ended March 31, 1995.

(5) Previously filed as an exhibit to the Registrant's Form 10-Q for the quarter
    ended December 31, 1995.
(6) Incorporation by reference to Exhibit 1.1 of the Registrant's Form 8-A filed
    December 11, 1996.
(7) Previously filed as an exhibit to the Registrant's Form 10-Q for the quarter
    ended December 31, 1996.

                                      38