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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|/x/ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the Quarterly Period Ended March 31, 2001

or

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 0-27628

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SUPERGEN, INC.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of incorporation or organization)                  |  | 91-1841574(IRS Employer Identification Number)
|--------------------------------------------------------------------------------------- |  | ----------------------------------------------
|4140 Dublin Blvd, Suite 200, Dublin, California(Address of principal executive offices) |  | 94568(Zip Code)                               

(925) 560-0100(Registrant's telephone number, including area code)

Not applicable(Former name, former address and former fiscal year, if changed since last report)

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

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares of the registrant's Common Stock, $.001 par value, outstanding as of May 9, 2001, was 32,741,568.

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TABLE OF CONTENTS

|           |  |                                                                                                 |                                                                                              | Page
No.
|---------- |  | ----------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | --------
|PART I     |  | FINANCIAL INFORMATION                                                                           |                                                                                              |         
|           |  |                                                                                                 | Item 1Financial Statements (Unaudited)                                                      |         
|           |  | Consolidated Balance Sheets as of March 31, 2001 and December 31, 2000                          |                                                                                              | 3       
|           |  | Consolidated Statements of Operations for the three month periods ended March 31, 2001 and 2000 |                                                                                              | 4       
|           |  | Consolidated Statements of Cash Flows for the three month periods ended March 31, 2001 and 2000 |                                                                                              | 5       
|           |  | Notes to Consolidated Financial Statements                                                      |                                                                                              | 6       
|           |  |                                                                                                 | Item 2Management's Discussion and Analysis of Financial Condition and Results of Operations |         
|           |  |                                                                                                 | Item 3Quantitative and Qualitative Disclosures of Market Risk                               |         
|PART II    |  | OTHER INFORMATION                                                                               |                                                                                              |         
|           |  |                                                                                                 | Item 2Changes in Securities and Use of Proceeds                                             |         
|           |  |                                                                                                 | Item 6Exhibits and Reports on Form 8-K                                                      |         
|SIGNATURES |  | 19                                                                                             

2

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SUPERGEN, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

|                                       |                                                                                                                                                                             | March 31,
2001                             |        | December 31,
2000 |        
|-------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | ----------------- | -------
|
|ASSETS                                 |                                                                                                                                                                            
|Current assets:                        |                                                                                                                                                                             |                                            |        |                   |        
|                                       | Cash and cash equivalents                                                                                                                                                   |                                            | $      | 39,234            |        
|                                       | Marketable securities                                                                                                                                                       |                                            |        | 49,445            |        
|                                       | Accounts receivable                                                                                                                                                         |                                            |        | 1,359             |        
|                                       | Other receivables                                                                                                                                                           |                                            |        | 1,432             |        
|                                       | Inventories                                                                                                                                                                 |                                            |        | 1,657             |        
|                                       | Prepaid expenses and other current assets                                                                                                                                   |                                            |        | 4,228             |        
|                                       |                                                                                                                                                                             |                                            |        |                   |        
|                                       |                                                                                                                                                                             | Total current assets                       |        |                   | 97,355 
|Marketable securitiesnon-current      |                                                                                                                                                                             |                                            | 20,449 |                   |        
|Investment in stock of related parties |                                                                                                                                                                             |                                            | 11,405 |                   |        
|Due from related parties               |                                                                                                                                                                             |                                            | 490    |                   |        
|Property, plant and equipment, net     |                                                                                                                                                                             |                                            | 6,278  |                   |        
|Developed technology at cost, net      |                                                                                                                                                                             |                                            | 1,231  |                   |        
|Goodwill and other intangibles, net    |                                                                                                                                                                             |                                            | 1,480  |                   |        
|Restricted cash                        |                                                                                                                                                                             |                                            | 3,259  |                   |        
|Other assets                           |                                                                                                                                                                             |                                            | 53     |                   |        
|                                       |                                                                                                                                                                             |                                            |        |                   |        
|                                       |                                                                                                                                                                             | Total assets                               |        | $                 | 142,000
|                                       |                                                                                                                                                                             |                                            |        |                   |        
|LIABILITIES AND STOCKHOLDERS' EQUITY   |                                                                                                                                                                            
|Current liabilities:                   |                                                                                                                                                                             |                                            |        |                   |        
|                                       | Accounts payable and accrued liabilities                                                                                                                                    |                                            | $      | 6,570             |        
|                                       | Deferred revenue                                                                                                                                                            |                                            |        | 1,000             |        
|                                       | Accrued employee benefits                                                                                                                                                   |                                            |        | 1,062             |        
|                                       |                                                                                                                                                                             |                                            |        |                   |        
|                                       |                                                                                                                                                                             | Total current liabilities                  |        |                   | 8,632  
|Deferred revenuenon-current           |                                                                                                                                                                             |                                            | 2,917  |                   |        
|                                       |                                                                                                                                                                             |                                            |        |                   |        
|                                       |                                                                                                                                                                             | Total liabilities                          |        |                   | 11,549 
|                                       |                                                                                                                                                                             |                                            |        |                   |        
|Commitments and contingencies          |                                                                                                                                                                             |                                            |        |                   |        
|Stockholders' equity:                  |                                                                                                                                                                             |                                            |        |                   |        
|                                       | Preferred stock, $.001 par value; 2,000,000 shares authorized; none outstanding                                                                                             |                                            |        |                  |        
|                                       | Common stock, $.001 par value; 150,000,000 shares authorized; 32,743,568 and 33,383,723 shares issued and outstanding at March 31, 2001 and December 31, 2000, respectively |                                            |        | 33                |        
|                                       | Additional paid in capital                                                                                                                                                  |                                            |        | 282,635           |        
|                                       | Deferred compensation                                                                                                                                                       |                                            |        | (178              | )      
|                                       | Accumulated other comprehensive loss                                                                                                                                        |                                            |        | (10,910           | )      
|                                       | Accumulated deficit                                                                                                                                                         |                                            |        | (141,129          | )      
|                                       |                                                                                                                                                                             |                                            |        |                   |        
|                                       |                                                                                                                                                                             | Total stockholders' equity                 |        |                   | 130,451
|                                       |                                                                                                                                                                             |                                            |        |                   |        
|                                       |                                                                                                                                                                             | Total liabilities and stockholders' equity |        | $                 | 142,000
|                                       |                                                                                                                                                                             |                                            |        |                   |        

See accompanying notes to consolidated financial statements

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SUPERGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

|                                                                                 |                                      | Three months ended
March 31, |        
|-------------------------------------------------------------------------------- | ------------------------------------ | ---------------------------- | -------
|
|Revenues:                                                                        |                                      |                              |        
|                                                                                 | Net sales revenue                    |                              | $      
|                                                                                 | Other revenue                        |                              |        
|                                                                                 |                                      |                              |        
|                                                                                 |                                      | Total revenue                |        
|Operating expenses:                                                              |                                      |                              |        
|                                                                                 | Cost of sales                        |                              |        
|                                                                                 | Research and development             |                              |        
|                                                                                 | Selling, general, and administrative |                              |        
|                                                                                 |                                      |                              |        
|                                                                                 |                                      | Total operating expenses     |        
|Loss from operations                                                             |                                      |                              | (14,949
|Interest income                                                                  |                                      |                              | 1,981  
|                                                                                 |                                      |                              |        
|Net loss                                                                         |                                      | $                            | (12,968
|                                                                                 |                                      |                              |        
|Basic and diluted net loss per share                                             |                                      | $                            | (0.39  
|                                                                                 |                                      |                              |        
|Weighted average shares used in basic and diluted net loss per share calculation |                                      |                              | 33,258 
|                                                                                 |                                      |                              |        

See
accompanying notes to consolidated financial statements

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SUPERGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

|                                                     |                                                                             | Three months ended
March 31,                                           |                                       
|---------------------------------------------------- | --------------------------------------------------------------------------- | ---------------------------------------------------------------------- | --------------------------------------
|
|Operating activities:                                |                                                                             |                                                                        |                                       
|                                                     | Net loss                                                                    |                                                                        | $                                     
|                                                     | Adjustments to reconcile net loss to net cash used in operating activities: |                                                                        |                                       
|                                                     |                                                                             | Depreciation and amortization                                          |                                       
|                                                     |                                                                             | Amortization of deferred revenue                                       |                                       
|                                                     |                                                                             | Expense related to stock options and warrants granted to non-employees |                                       
|                                                     |                                                                             | Non-cash charge related to acquisition of license agreement            |                                       
|                                                     |                                                                             | Changes in operating assets and liabilities:                           |                                       
|                                                     |                                                                             |                                                                        | Accounts receivable                   
|                                                     |                                                                             |                                                                        | Inventories                           
|                                                     |                                                                             |                                                                        | Prepaid expenses and other assets     
|                                                     |                                                                             |                                                                        | Due from related parties              
|                                                     |                                                                             |                                                                        | Other receivables                     
|                                                     |                                                                             |                                                                        | Restricted cash                       
|                                                     |                                                                             |                                                                        | Accounts payable and other liabilities
|                                                     |                                                                             |                                                                        |                                       
|Net cash used in operating activities                |                                                                             |                                                                        | (14,530                               
|                                                     |                                                                             |                                                                        |                                       
|Investing activities:                                |                                                                             |                                                                        |                                       
|                                                     | Purchases of marketable securities                                          |                                                                        |                                       
|                                                     | Sales or maturities of marketable securities                                |                                                                        |                                       
|                                                     | Purchase of equity investment in Peregrine Pharmaceuticals                  |                                                                        |                                       
|                                                     | Purchases of property and equipment                                         |                                                                        |                                       
|                                                     |                                                                             |                                                                        |                                       
|Net cash used in investing activities                |                                                                             |                                                                        | (10,773                               
|                                                     |                                                                             |                                                                        |                                       
|Financing activities:                                |                                                                             |                                                                        |                                       
|                                                     | Issuance of common stock, net of issuance costs                             |                                                                        |                                       
|                                                     | Repurchases of common stock                                                 |                                                                        |                                       
|                                                     |                                                                             |                                                                        |                                       
|Net cash provided by (used in) financing activities  |                                                                             |                                                                        | (6,194                                
|                                                     |                                                                             |                                                                        |                                       
|Net increase (decrease) in cash and cash equivalents |                                                                             |                                                                        | (31,497                               
|Cash and cash equivalents at beginning of period     |                                                                             |                                                                        | 70,731                                
|                                                     |                                                                             |                                                                        |                                       
|Cash and cash equivalents at end of period           |                                                                             | $                                                                      | 39,234                                
|                                                     |                                                                             |                                                                        |                                       
|Supplemental Disclosures of Cash Flow Information:   |                                                                             |                                                                        |                                       
|                                                     | Non-cash investing and financing activities:                                |                                                                        |                                       
|                                                     |                                                                             | Issuance of warrant related to consulting agreement                    |                                       

See
accompanying notes to consolidated financial statements

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SUPERGEN, INC.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        MARCH 31, 2001  (Unaudited)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of SuperGen, Inc. ("we," "SuperGen" or "the Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2001 are not
necessarily indicative of results that may be expected for the year ended December 31, 2001.

The
balance sheet at December 31, 2000 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements.

For
further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended
December 31, 2000.

NOTE 2. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES

Cash and cash equivalents include bank demand deposits, certificates of deposit, investments in debt securities with maturities of three months or less when
purchased, and an interest in money market funds which invest primarily in U.S. government obligations and commercial paper. These instruments are highly liquid and are subject to insignificant risk.

Investments
in marketable securities consist of corporate or government debt securities that have a readily ascertainable market value and are readily marketable. We report these
investments at fair value. We designate all debt securities as available-for-sale, with unrealized gains and losses included in equity.

The
following is a summary of available-for-sale securities as of March 31, 2001 (in thousands):

Amortized
Cost

Gross
Unrealized
Gains
(Losses)

Estimated
Fair ValueU.S. corporate debt securities

$
105,640

$
757

$
106,397U.S. government debt securities


1,298





1,298Marketable equity securities


22,919


(11,666
)

11,253Total

$
129,857

$
(10,909
)
$
118,948


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Balance
sheet classification as of March 31, 2001 (in thousands):

Amortized
Cost

Gross
Unrealized
Gains
(Losses)

Estimated
Fair ValueAmounts included in cash and cash equivalents

$
38,146

$
3

$
38,149Marketable securities, current


49,065


380


49,445Marketable securities, non-current


20,147


302


20,449Investment in stock of related parties


22,499


(11,594
)

10,905Total

$
129,857

$
(10,909
)
$
118,948


Available-for-sale
securities by contractual maturity (in thousands):

Estimated Fair ValueMarch 31,
2001

December 31,
2000Debt securities:Due in one year or less

$
87,594

$
89,583Due after one year through three years


20,101


38,675107,695


128,258Marketable equity securities


11,253


12,903Total

$
118,948

$
141,161


There
were no realized gains and losses for the three month periods ended March 31, 2001 and 2000.

NOTE 3. INVENTORIES

Inventories consist of the following (in thousands):

March 31,
2001

December 31,
2000Raw material

$
176

$
176Work in process


704


720Finished goods


777


752$
1,657

$
1,648


NOTE 4. STOCKHOLDERS' EQUITY

Stock Repurchase Plan

In September 2000, the SuperGen Board of Directors authorized a stock repurchase plan to acquire, in the open market, an aggregate of up to one million
shares of our common stock, at prices

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not to exceed $22.00 per share or $20,000,000 in total. In March 2001, the Board authorized the repurchase of an additional one million shares, but maintained the $20,000,000 repurchase total.
During the quarter ended March 31, 2001, we repurchased 680,500 shares of our common stock at a cost, net of commissions, of $6,292,000. All shares repurchased have been retired.

NOTE 5. ACQUISITION OF LICENSE FROM PEREGRINE PHARMACEUTICALS

In February 2001, we completed a transaction to license a platform drug-targeting technology known as Vascular Targeting Agent ("VTA") from
Peregrine Pharmaceuticals, formerly known as Techniclone Corp. The licensed technology is specifically related to Vascular Endothelial Growth Factor ("VEGF"). The agreement required an
up-front payment of $600,000, which included the acquisition of 150,000 shares of Peregrine common stock valued at $253,000. These shares are carried as part of Marketable
SecuritiesNon-current. The remaining $347,000 of the payment was recorded to research and development expense.

The
terms of the agreement require that we pay milestone payments and royalties to Peregrine based on the net revenues of any drugs commercialized using the VEGF technology. These
payments could ultimately total $8 million.

NOTE 6. COMPREHENSIVE LOSS

For the three months ended March 31, 2001 and 2000, total comprehensive losses amounted to $14,471,000 and $202,000, respectively. Comprehensive losses
consisted primarily of the net losses and unrealized gains or losses on investments.

NOTE 7. BASIC NET LOSS PER SHARE

Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of shares outstanding during the quarter.

As
we have reported operating losses each period since our inception, the effect of assuming the exercise of options and warrants would be anti-dilutive and, therefore,
basic and diluted net loss per share are the same.

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Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion together with our consolidated financial statements and related notes included elsewhere in
this report. The results discussed below are not necessarily indicative of the results to be expected in any future periods. To the extent that the information presented in this discussion addresses
financial projections, information or expectations about our products or markets or otherwise makes statements about future events, such statements are forward-looking and are subject to a number of
risks and uncertainties that could cause actual results to differ materially from the statements made.

Overview

We are an emerging pharmaceutical company dedicated to the acquisition, rapid development and commercialization of oncology therapies for solid tumors and
hematological malignancies. We seek to minimize the time, expense and technical risk associated with drug commercialization by identifying and acquiring pharmaceutical compounds in the later stages of
development, rather than committing significant resources to the research phase of drug discovery.

Our
primary objective is to become a leading supplier of oncology therapies for solid tumors and hematological malignancies. Key elements of our strategy include:



Since
our incorporation in 1991 we have devoted substantially all of our resources to our product development efforts. Our product revenues to date have been limited and have been
principally from sales of Nipent, which we are marketing in the United States for the treatment of hairy cell leukemia. As a result of our substantial research and development expenditures and minimal
product revenues, we have incurred cumulative losses of $141.1 million for the period from inception through March 31, 2001. These losses included non-cash charges of
$20.0 million for the acquisition of in-process research and development.

The
level of expenditures related to ongoing clinical trials has increased significantly throughout the period as we expand the number of clinical trials and increase the patient
accrual into these trials. We are currently nearing completion on Phase III clinical trials with rubitecan in pancreatic cancer, beginning Phase III clinical trials with decitabine in myelodysplastic
syndrome, and are continuing to pursue Phase I and II clinical trials with a number of other drug candidates in other cancers and hematological malignancies. We are also conducting trials with Nipent
for use in other indications such as chronic lymphocytic leukemia, non-Hodgkin's lymphoma, and graft-versus-host disease. To support these additional trials, we are continuing
to increase our clinical development staff which, when combined with the increased clinical trial activity, will result in increased costs over the level expended in this quarter.

We
expect to continue to incur operating losses at least into 2002. This is due primarily to projected increases in our spending for the development of our product candidates. Our
ability to become profitable will depend upon a variety of factors, including regulatory approvals of our products,

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the timing of the introduction and market acceptance of our products and competing products, increases in sales and marketing expenses related to the launch of rubitecan, and our ability to control
our costs.

As
part of our strategy, we intend either to market our products ourselves or co-promote these products with partners. In late 1999, we entered into an alliance with
Abbott Laboratories ("Abbott") under which Abbott will undertake to market and distribute rubitecan. We will co-promote rubitecan with Abbott in the United States and Abbott has exclusive
rights to market rubitecan outside of the United States. In the U.S. market, we will share profits from product sales equally with Abbott. Outside the U.S. market, Abbott will pay us royalties and
transfer fees based on product sales. We will remain
responsible for pursuing and funding the clinical development of rubitecan and obtaining regulatory approval for the product in the United States, Canada and the member states of the European Union.

In
2000, we entered into agreements with AVI BioPharma, Inc. ("AVI") related to the development and marketing rights to Avicine, AVI's therapeutic vaccine for
colorectal cancer, which is now entering Phase III clinical trials. In accordance with these agreements, we will share U.S. developmental and regulatory approval costs for Avicine and upon
commercialization in the U.S., we will split all U.S. profits. AVI and SuperGen will jointly determine the optimum development strategy for the international marketplace and will share all profits
received. In addition to an up front equity investment, we are obligated to make additional payments to AVI based on successful achievement of developmental, regulatory approval, and commercialization
milestones over the next several years. As part of this agreement, we obtained the right of first discussion to all of AVI's oncology compounds and an option to acquire an additional 10% of AVI's
common stock. Avicine will require significant additional expenditures to complete the clinical development necessary to gain marketing approval from the FDA and equivalent foreign regulatory
agencies.

Results of Operations



Revenues were $1,807,000 in the first quarter of 2001 compared to $839,000 in the first quarter of 2000. The increase was due primarily to higher sales of
Nipent, our drug currently approved for the treatment of hairy cell leukemia. Nipent sales increased to $1,497,000 in the first quarter of 2001, compared to $704,000 in 2000. The increase was due
primarily to additional marketing efforts by our increased sales and marketing staff and purchases of Nipent by outside organizations for expanded clinical trials using Nipent for the treatment of
chronic lymphocytic leukemia, low grade non-Hodgkin's lymphoma, and graft-versus-host disease. All Nipent sales in both 2001 and 2000 were in the U.S. market. Unlike our Nipent
sales efforts in the U.S. market where we call on clinicians directly, our role in Europe is currently limited to that of a supplier. As such, we do not have a direct influence on Nipent sales at the
clinical level, making their timing and magnitude difficult to predict and dependent on the efforts of our European distributor. However, based on discussions with our European distributor, we expect
to realize European sales in the second quarter of 2001.

Cost
of sales as a percentage of net sales revenue was 23% in the first quarter of 2001 compared to 18% during the same period in 2000. The increased cost of sales percentage is due
primarily to distribution fees paid to Abbott for distribution of Nipent. These fees did not begin until March 2000. Current margins may not be indicative of future margins due to possible
variations in average selling prices and manufacturing costs.

Research
and development expenses were $11,788,000 in the first quarter of 2001 compared to $6,347,000 in 2000. The increase was due primarily to increased expenditures relating to
our clinical trial programs with rubitecan. Approximately $2,300,000 of the increase relates to our Phase III clinical trials with rubitecan in pancreatic cancer, and $850,000 of the increase relates
to new Phase I and II

10

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clinical trials with rubitecan in a number of other cancers or hematological malignancies. The remaining increase relates to clinical trial expenditures for Nipent, decitabine, and Avicine; research
efforts associated with inhaled formulations of rubitecan and paclitaxel; and additional personnel expenses related to supporting our clinical trial and drug development programs.

Selling,
general, and administrative expenses were $4,606,000 in the first quarter of 2001 compared to $2,936,000 in 2000. This increase was due primarily to costs associated with the
expansion of the sales, marketing, professional services, information technology, and general and administrative staffs together with increased costs associated with trade shows, speakers' programs,
and symposiums. In addition, expenses in 2001 reflect additional rent and depreciation expenses related to the move in December 2000 of our headquarters offices from a 9,000 square foot
location to a new 50,000 square foot facility.

Interest
income was $1,981,000 in the first quarter of 2001 compared to $1,029,000 in 2000. This was due to the greater cash balances available for investment as a result of various
fund-raising activities in 2000, including our corporate partnership with Abbott, a follow-on offering of our common stock, and the exercise of our SUPGW warrants and related
underwriters' unit purchase warrants.

Liquidity and Capital Resources

Our cash, cash equivalents, and both short and long-term marketable securities totaled approximately $109 million at March 31, 2001,
compared to approximately $131 million at December 31, 2000.

The
net cash used in operating activities in the first quarter of 2001 was $14.5 million, which consisted primarily the net loss $13.0 million and a reduction in
accounts payable and other liabilities of $1.6 million. During the first quarter we also repurchased 680,500 shares of our common stock on the open market at a net cost of $6.3 million.

We
believe that our current cash, cash equivalents and marketable securities will satisfy our cash requirements at least through December 31, 2002. Our primary planned uses of
cash during that period are:



We
believe that our need for additional funding will increase in the future and that our continued ability to raise additional funds from external sources will be critical to our
success. We continue to actively consider future contractual arrangements that would require significant financial commitments. If we experience currently unanticipated cash requirements, we could
require additional capital much sooner than presently anticipated. We may seek such additional funding through public or private financings or collaborative or other arrangements with third parties.
We may not be able to obtain additional funds on acceptable terms, if at all.

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Factors Affecting Future Operating Results

You should carefully consider the risks described below before making an investment decision. The risks and uncertainties described
below are not the only ones facing our company. Our business operations may be impaired by additional risks and uncertainties that we do not know of or that we currently consider
immaterial.

Our business, results of operations or cash flows may be adversely affected if any of the following risks actually occur. In such case, the trading price of
our common stock could decline, and you may lose all or part of your investment.

This report also contains and incorporates by reference forward-looking statements that involve risks and uncertainties. Our actual results could differ
materially from those anticipated in the forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this Report.

If the results of further clinical testing indicate that our proposed products are not safe and effective for human use, our business will
suffer. Most of our products are in the development stage and prior to their sale will require the commitment of substantial resources. All of the potential proprietary
products that we are currently developing will require extensive pre-clinical and clinical testing before we can submit any application for regulatory approval. Before obtaining regulatory
approvals for the commercial sale of any of our products, we must demonstrate through pre-clinical testing and clinical trials that our product candidates are safe and effective in humans.
Conducting clinical trials is a lengthy, expensive and uncertain process. Completion of clinical trials may take several years or more. The length of time generally varies substantially according to
the type, complexity, novelty and intended use of the product candidate. Our clinical trials may be suspended at any time if we or the FDA believe the patients participating in our studies are exposed
to unacceptable health risks. We may encounter problems in our studies which will cause us or the FDA to delay or suspend the studies. Our commencement and rate of completion of clinical trials may be
delayed by many factors, including:



The
clinical results we have obtained to date do not necessarily predict that the results of further testing, including later-stage controlled human clinical testing, will be
successful. If our trials are not successful, or are perceived as not successful by the FDA or physicians, our business, financial condition and results of operations will be harmed.

If we fail to obtain regulatory marketing approvals in a timely manner, our business will suffer. Even if we believe our trials are
successful, the FDA may require additional clinical testing and, therefore we would have to commit additional unanticipated resources. The FDA has substantial discretion in the drug approval process.
We cannot assure you that we will obtain the necessary regulatory approvals to market our products. The FDA and comparable agencies in foreign countries impose substantial requirements for the
introduction of both new pharmaceutical products and generic products through lengthy and detailed clinical testing procedures, sampling activities and other costly and time-consuming

12

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compliance procedures. We have not yet received marketing approval for any of our internally developed proprietary products. Our proprietary drugs and products will require lengthy clinical trials
along with FDA and comparable foreign agency review as new drugs. Our generic drugs will also require regulatory review and approval.

We
cannot predict with certainty if or when we might submit for regulatory review those products currently under development. Once we submit our potential products for review, we
cannot assure you that the FDA or other regulatory agencies will grant approvals for any of our pharmaceutical products on a timely basis or at all. Sales of our products outside the United States
will be subject to foreign regulatory requirements governing clinical trials and marketing approval. These requirements vary widely from country to country and could delay the introduction of our
products in those countries.

If our relationship with Abbott is not successful, our business could be harmed.Our strategic relationship with Abbott is important to
our success. However, that relationship may not be successful. We cannot assure you that we will receive any additional payments from Abbott or that the relationship will be commercially successful.
The transactions contemplated by our agreements with Abbott, including the equity purchases and cash payments, are subject to numerous risks and conditions. For example:



The
occurrence of any of these events could severely harm our business.

We have granted certain rights to Abbott that could negatively affect your investment.We have granted Abbott an option to purchase
shares of our common stock so that upon its exercise Abbott will own up to 49% of our outstanding common stock. Our ability to satisfy this contractual obligation is subject to a number of conditions
outside of our control, including:



If
we do not satisfy any of these conditions, Abbott could terminate our relationship. If we obtain all necessary approvals and Abbott exercises its option, the stock ownership of our
other stockholders will be diluted and Abbott will have significant influence over us. Abbott's right to exercise this option, and Abbott's share ownership after exercise, may discourage other parties
from acquiring us.

Abbott
has a right of first discussion with respect to our product portfolio and a right of first refusal to acquire us. These rights may discourage third parties from bidding on any
assets that we wish to sell or license and may discourage acquisition bids. These provisions may limit the price that investors might be willing to pay in the future for shares of our common stock.

We have a history of operating losses and an accumulated deficit, we may not achieve or maintain profitability in the future, and we may need to obtain
additional funding.We incurred cumulative losses of $141.1 million for the period from inception through March 31, 2001. These losses included
non-cash charges of $20.0 million for the acquisition of in-process research and development. Currently we are not profitable and we expect to continue to incur
substantial operating losses at least into 2002. Our

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ability to achieve profitability will depend primarily on our ability to obtain regulatory approval for and successfully commercialize rubitecan. Our success will also depend, to a lesser extent, on
our ability to develop and obtain regulatory approval of Nipent for indications other than hairy cell leukemia and to bring our proprietary products to market. Our ability to become profitable will
also depend upon a variety of other factors, including the following:



We
cannot predict the outcome of these factors and we cannot assure you that we will ever become profitable.

Even
if we do become profitable, we may need substantial additional funding. We expect that our rate of spending will accelerate as a result of increased clinical trial costs and
expenses associated with regulatory approval and commercialization of our products now in development. We anticipate that our capital resources will be adequate to fund operations and capital
expenditures at least through 2002. However, if we experience unanticipated cash requirements during this period, we could require additional funds much sooner. Our business, results of operations and
cash flows will be adversely affected if we fail to obtain adequate funding in a timely manner, or at all. We may receive funds from the sale of equity securities, or the exercise of outstanding
warrants and stock options. Additionally, we may receive funds upon the achievement of certain developmental and sales milestones pursuant to our agreement with Abbott. However, we cannot assure you
that any of those fundings will occur, or if they occur, that they will be on terms favorable to us. Also, the dilutive effect of those fundings could adversely affect our results per share.

We depend on third parties for manufacturing and storage of our products and our business may be harmed if the manufacture of our products is interrupted or
discontinued.We have no manufacturing facilities and we currently rely on third parties for manufacturing activities related to all of our products. As we develop new products
and increase sales of our existing products, we must establish and maintain relationships with manufacturers to produce and package sufficient supplies of our finished pharmaceutical products,
including rubitecan.

Our
manufacturing strategy presents the following risks:



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Any
of these factors could delay clinical trials or commercialization of our products under development, interfere with current sales, entail higher costs and result in our being
unable to
effectively sell our products. For example, the party that currently purifies our Nipent finished product has sought bankruptcy protection. While we currently anticipate that our needs will be
satisfied in the coming year and we are seeking alternate sources of supply, we may be unable to locate replacement sources, and the sources that we may locate may not provide us with similar
reliability or pricing and our business could suffer.

In
addition, we store the majority of the unpurified, bulk form of Nipent at a single location. Improper storage, fire, natural disaster, theft or other conditions at this location
that may lead to the loss or destruction of the bulk concentrate could adversely affect our business, results of operations and cash flows.

We
do not currently intend to manufacture any pharmaceutical products, although we may choose to do so in the future. If we decide to manufacture products, we would be subject to the
regulatory risks and requirements described above. We will also be subject to similar risks regarding delays or difficulties encountered in manufacturing these pharmaceutical products and we will
require additional facilities and substantial additional capital. In addition, we have only limited experience in manufacturing pharmaceutical products. We cannot assure you that we would be able to
manufacture any of these products successfully in accordance with regulatory requirements and in a cost-effective manner.

Asserting, defending and maintaining intellectual property rights could be difficult and costly and failure to do so will harm our ability to compete and the
results of our operations.If competitors develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets, if our trade
secrets are disclosed or if we cannot effectively protect our rights to unpatented trade secrets, our business will be harmed.

The
pharmaceutical fields are characterized by a large number of patent filings. A substantial number of patents have already been issued to other pharmaceutical companies, research
or academic institutions or others. Competitors may have filed applications for or have been issued patents and may obtain additional patents and proprietary rights related to products or processes
that compete with or are similar to ours. We may not be aware of all of the patents potentially adverse to our interests that may have been issued to others.

We
actively seek patent protection for our proprietary products and technologies. We have a number of United States patents and also have licenses to, or assignments of, numerous
patents issued both in the United States and elsewhere. We may also license our patents outside the United States. Limitations on patent protection outside the United States, and differences in what
constitutes patentable subject matter in countries outside the United States, may limit the protection we have on patents or licenses of patents outside the United States.

Litigation
may be necessary to protect our patent position, and we cannot be certain that we will have the required resources to pursue the necessary litigation or otherwise to
protect our patent rights. Our efforts to protect our patents may fail. In addition to pursuing patent protection in appropriate

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cases, we also rely on trade secret protection for unpatented proprietary technology. However, trade secrets are difficult to protect. Our trade secrets or those of our collaborators may become known
or may be independently discovered by others.

Our
proprietary products are dependent upon compliance with numerous licenses and agreements. These licenses and agreements require us to make royalty and other payments, reasonably
exploit the underlying technology of the applicable patents, and comply with regulatory filings. If we fail to comply with these licenses and agreements, we could lose the underlying rights to one or
more of these potential products, which would adversely affect our business, results of operations and cash flows.

From
time to time we receive correspondence inviting us to license patents from third parties. Although we know of no pending patent infringement suits, discussions regarding possible
patent infringements or threats of patent infringement litigation either related to patents held by us or our licensors or our products or proposed products, there has been, and we believe that there
will continue to be, significant litigation in the pharmaceutical industry regarding patent and other intellectual property rights. Claims may be brought against us in the future based on patents held
by others. These persons could bring legal actions against us claiming damages and seeking to enjoin clinical testing, manufacturing and marketing of the affected product. If we become involved in any
litigation, it could consume a substantial portion of our resources, regardless of the outcome of the litigation. If any of these actions are successful, in addition to any potential liability for
damages, we could be required to obtain a license to continue to manufacture or market the affected product. We cannot assure you whether we would prevail in any of these actions or that we could
obtain any licenses required under any of these patents on acceptable terms, if at all.

If we lose key personnel or are unable to attract and retain additional, highly skilled personnel required for the expansion of our activities, our business
will suffer.Our success is dependent on key personnel, including Dr. Rubinfeld, our President and Chief Executive Officer, and members of our senior management and
scientific staff. To successfully expand our operations, we will need to attract and retain additional, highly skilled individuals, particularly in the areas of sales, marketing, clinical
administration, manufacturing and finance. We compete with other companies for the services of existing and potential employees. We believe our compensation and benefits packages are competitive for
our geographical region and our industry group. However, we may be at a disadvantage to the extent that potential employees may favor larger, more established employers.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Due to the short-term nature of our interest bearing assets, which consist primarily of certificates of deposit, U.S. corporate obligations, and
U.S. government obligations, we believe that our exposure to interest rate market risk would not significantly affect our operations.

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SUPERGEN, INC.

PART IIOTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

Recent Sales of Unregistered Securities

During the quarter ended March 31, 2001, we issued the following securities:



The
issuances of shares described above were in reliance on Section 4(2) of the Securities Act of 1933, as amended.

We
made no public solicitation in connection with the issuance of the above mentioned securities nor were there any other offerees. We relied on representation from the recipient of
the securities that it purchased the securities for investment for its own account and not with a view to, or for resale in connection with, any distribution thereof and that it was aware of our
business affairs and financial condition and had sufficient information to reach an informed and knowledgeable decision regarding its acquisition of the securities.

Use of Proceeds

On March 13, 1996, we commenced our initial public offering (the "IPO") of 4,025,000 units, which included the underwriter's over-allotment
option of 525,000 units at a public offering price of $6.00 per unit. A unit consisted of one share of our common stock $0.001 par value per share, and a warrant to purchase one share of our common
stock at $9.00. We commenced the IPO pursuant to a registration statement on Form S-B (file no. 333-476 LA) filed with the Securities and Exchange Commission. Of
the units registered, 4,024,302 were sold. Paulson Investment Company was the managing underwriter of the IPO. Aggregate gross proceeds from the IPO (prior to deduction of underwriting discounts and
commissions and expenses of the offering and any exercises of the warrants) were $24,146,000. As of March 31, 2001, all of the shares registered for the exercise of the warrants had been sold.
There were no selling stockholders in the IPO.

We
paid total expenses of $2,615,000 in connection with the IPO, consisting of underwriting discounts, commissions and expenses of $1,992,000 and other expenses of approximately
$623,000. The net proceeds from the IPO through March 31, 2001, including subsequent exercises of warrants to purchase common stock, were $63,478,000.

From
March 13, 1996, the effective date of the registration statement, to March 31, 2001 (our fiscal 2001 first quarter end), the approximate amount of net proceeds used
or available were:

|Construction of plant, building and facilities       |  | $ | 1,246,000 
|---------------------------------------------------- |  | - | ----------
|Purchase and installation of machinery and equipment |  |   | 295,000   
|Purchase of real estate                              |  |   | 744,000   
|Working capital used in or available for operations  |  |   | 56,916,000
|Repurchase of common stock                           |  |   | 3,557,000 
|Purchase of equity investment                        |  |   | 500,000   
|Acquisition of developed technology                  |  |   | 220,000   

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None
of such payments consisted of direct or indirect payments to directors, officers, owners of more than 10% of the outstanding stock of the Company or affiliates of the Company,
with the exception of:



Item 6. Exhibits and Reports on Form 8-K

None

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|      |  |              |  | SUPERGEN, INC.
|----- |  | ------------ |  | --------------
|Date: |  | May 15, 2001 |  | By:           

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