<PAGE>

================================================================================
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                 _____________

                                   FORM 10-Q



[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934
               For the quarterly period ended September 30, 2000

                                      or

 [  ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
                    For the transition period from       to

                                 _____________

                        Commission file number  0-27914


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


                                 _____________
              Delaware                                 34-1697351
              --------                                 ----------
      (State of incorporation)             (I.R.S. Employer Identification No.)

                             2950 Wilderness Place
                           Boulder, Colorado  80301
                   (Address of principal executive offices)

                Registrant's telephone number:  (303) 449-6500

                                 _____________

Check 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
   -----     ----

The number of shares of the registrant's common stock, par value $0.01 per
share, outstanding as of November 8, 2000 was 15,334,501.



<PAGE>



                        RIBOZYME PHARMACEUTICALS, INC.
                              INDEX TO FORM 10-Q

PART 1 - FINANCIAL INFORMATION                                              PAGE
                                                                            ----

Item 1.  Financial Statements

         Condensed Balance Sheets as of September 30, 2000 (unaudited) and
         December 31, 1999................................................    3

         Condensed Statements of Operations - Three and Nine Months Ended
         September 30, 2000 and 1999 (unaudited)..........................    4

         Condensed Statements of Cash Flows - Nine Months Ended
         September 30, 2000 and 1999 (unaudited)..........................    5

         Notes to Condensed Financial Statements (unaudited)..............    6

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.......   14

PART II - OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds........................   14

Item 6.  Exhibits and Reports on Form 8-K.................................   14

SIGNATURES................................................................   15

Exhibit Index.............................................................   16




                                       2
<PAGE>

PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS

                        RIBOZYME PHARMACEUTICALS, INC.
                           CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>

                 ASSETS
                 ------
                                                        September 30,  December 31,
                                                            2000           1999
                                                        ------------   ------------
                                                        (unaudited)
<S>                                                    <C>             <C>
Current assets
--------------
 Cash and cash equivalents                              $ 36,540,545   $  9,749,822
 Securities available-for-sale                            25,685,126      4,250,259
 Accounts receivable                                       2,051,630      1,545,164
 Accounts receivable-related parties                       2,383,464        484,729
 Prepaid expenses and other current assets                   415,678        256,571
                                                        ------------   ------------
Total current assets                                      67,076,443     16,286,545

Property, plant and equipment at cost,
 net of accumulated depreciation                           3,238,900      3,803,906

Notes receivable-related parties                             226,750        313,750
Deferred patent costs, net                                 4,542,500      4,231,307
Investment in joint venture, Medizyme                      7,258,689
Other assets                                                 536,210        456,591
                                                        ------------   ------------

Total assets                                            $ 82,879,492   $ 25,092,099
                                                        ============   ============

             LIABILITIES AND STOCKHOLDERS' EQUITY
             ------------------------------------

Current liabilities
-------------------
 Accounts payable-trade                                 $  1,412,444   $    974,309
 Accrued liabilities                                         814,631        626,153
 Deferred revenue, current portion-related parties           400,000        400,000
 Current portion of long-term debt                            56,478        200,455
                                                        ------------   ------------
Total current liabilities                                  2,683,553      2,200,917

Deferred revenue, long-term portion-related parties          900,004      1,200,001
Convertible debt-related parties                           1,171,740      6,810,537

Stockholders' equity
--------------------
 Preferred stock                                                 120
 Preferred stock issuable                                    540,675
 Common stock                                                153,038        112,633
 Additional paid-in capital                              171,165,434     98,894,100
 Deferred compensation and other                             (45,341)       (43,017)
 Accumulated deficit                                     (93,689,731)   (84,083,072)
                                                        ------------   ------------
Total stockholders' equity                                78,124,195     14,880,644
                                                        ------------   ------------

Total liabilities and stockholders' equity              $ 82,879,492   $ 25,092,099
                                                        ============   ============

</TABLE>


See notes to condensed financial statements


                                       3
<PAGE>

                        RIBOZYME PHARMACEUTICALS, INC.
                      CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)



<TABLE>
<CAPTION>


                                                 Three months ended           Nine months ended
                                                   September 30,                September 30,
                                             --------------------------  ---------------------------
                                                 2000          1999           2000          1999
                                             -----------   -----------   ------------   -----------
<S>                                          <C>           <C>           <C>            <C>
Revenue
 Collaborative agreements                    $ 1,989,864   $ 1,458,053   $  7,195,472   $ 4,314,234
 Collaborative agreements-joint venture        2,147,637             -      4,079,641             -
 Collaborative agreements-related parties        293,916       348,796        907,139     1,369,588
                                             -----------   -----------   ------------   -----------
Total revenues                                 4,431,417     1,806,849     12,182,252     5,683,822

Expenses
 Research and development                      5,963,985     3,782,369     14,750,892    11,167,492
 General and administrative                      679,410       484,552      2,776,586     1,580,887
                                             -----------   -----------   ------------   -----------
Total expenses                                 6,643,395     4,266,921     17,527,478    12,748,379

Operating loss                                (2,211,978)   (2,460,072)    (5,345,226)   (7,064,557)

Other income (expense)
 Interest income                               1,034,183       201,755      2,195,607       404,690
 Interest expense                                 (2,954)     (144,964)       (94,062)     (406,272)
 Other income                                      4,000             -          4,000             -
 Equity in loss of
    unconsolidated affiliates                 (2,783,119)     (161,891)    (6,366,978)     (860,216)
                                             -----------   -----------   ------------   -----------
 Total other income (expense)                 (1,747,890)     (105,100)    (4,261,433)     (861,798)

Net loss                                      (3,959,868)   (2,565,172)    (9,606,659)   (7,926,355)
                                             -----------   -----------   ------------   -----------

Dividends on preferred stock                     180,225             -         540,675            -

Net loss applicable to common stock          $(4,140,093)  $(2,565,172)  $(10,147,334)  $(7,926,355)
                                             ===========   ===========   ============   ===========

Net loss per share (basic and diluted)       $     (0.27)  $     (0.23)  $      (0.72)  $     (0.81)

Shares used in computing
net loss per share                            15,289,023    10,975,113     14,062,472     9,796,876
                                             ===========   ===========   ============   ===========

</TABLE>
See notes to condensed financial statements

                                       4
<PAGE>

                        RIBOZYME PHARMACEUTICALS, INC.
                      CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                 Nine months ended
                                                   September 30,
                                           ----------------------------
                                                2000           1999
                                           ------------    -----------
<S>                                        <C>             <C>
Operating Activities
Net loss                                   $ (9,606,659)   $(7,926,355)
 Adjustments to reconcile net loss to
  net cash used in operating
    activities:
 Depreciation and amortization                1,305,065      1,228,906
 Equity in loss of unconsolidated
  affiliate                                   6,366,978        860,216
 Compensation for forgiveness of notes
  receivable-related parties                    124,466        100,466
 Compensation related common  stock and
  options                                     1,398,638         25,620
 Expense related to warrant repricing                           42,221
 Accrued interest included in
  convertible debt                               86,667        334,046
 Changes in operating assets and
  liabilities:
   Accounts receivable                       (2,405,201)       676,120
   Prepaid expenses and other                  (196,573)       (95,247)
   Other assets                                 (79,619)         3,925
   Accounts payable                             438,135         80,795
   Accrued expenses                             188,478        130,404
   Deferred license revenue                    (299,997)      (300,000)
                                           ------------    -----------
 Net cash used in operating activities       (2,679,622)    (4,838,883)

Investing activities
 Additions to property, plant and
  equipment                                    (647,395)      (907,672)
 Additions to deferred patent costs            (403,855)      (238,448)
 Net purchases of securities
  available-for-sale                        (21,437,193)    (2,910,387)
 Purchase of Innovir patents                          -        (28,200)
 Investment in unconsolidated affiliate     (13,625,667)
 Loan repayments-related parties                      -         33,000
 Loan advances-related parties                        -       (262,187)
                                           ------------    -----------
 Net cash used in investing activities      (36,114,110)    (4,313,894)

Financing activities
 Net proceeds from sale of common and
  preferred stock                            70,456,692     13,049,121
 Payments under loan facilities              (7,043,977)      (347,865)
 Borrowings under loan facilities             2,171,740      2,000,000
                                           ------------    -----------
 Net cash provided by financing
  activities                                 65,584,455     14,701,256

Net increase in cash and cash
 equivalents                                 26,790,723      5,548,479
Cash and cash equivalents at beginning
 of period                                    9,749,822      6,511,512
                                           ------------    -----------
Cash and cash equivalents at end of
 period                                    $ 36,540,545    $12,059,991
                                           ============    ===========

</TABLE>
See notes to condensed financial statements.

                                       5
<PAGE>

                        RIBOZYME PHARMACEUTICALS, INC.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                              September 30, 2000
                                  (Unaudited)

Note 1: Basis of Presentation

    The accompanying unaudited condensed financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
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 and nine-
month periods ending September 30, 2000 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2000. For further
information, refer to the financial statements and footnotes thereto included in
our annual report on Form 10-K for the year ended December 31, 1999.

    Certain amounts in the 1999 financial statements have been reclassified in
order to conform with the 2000 presentation.


Note 2: HEPTAZYME(TM) Repurchase

    On September 28, 2000, we entered into an agreement with Eli Lilly and
Company ("Lilly") to repurchase rights to HEPTAZYME(TM), our Anti-Hepatitis C
ribozyme.  Lilly had directed the clinical trials for HEPTAZYME(TM) to date
under a licensing agreement.  According to the repurchase agreement, we
renegotiated the global rights to HEPTAZYME(TM) and will direct all subsequent
clinical trials.  The Phase II clinical trial is expected to begin in the first
half of 2001.

    The renegotiated agreement with Lilly includes the following terms:

    .  Lilly agreed that all rights to HEPTAZYME(TM) licensed under the
       agreement revert back to us and that Lilly will transfer to us all
       material, data, information and regulatory documentation, including the
       HEPTAZYME(TM) IND, reasonably required for us to continue clinical
       development of HEPTAZYME(TM).

    .  We agreed to continue the development of HEPTAZYME(TM) to demonstrate
       efficacy in the treatment of chronic Hepatitis C infection.
    .  Lilly will pay us a termination fee of approximately $2.8 million based
       upon our spending to date on HEPTAZYME(TM).
    .  We will pay Lilly a royalty on future net sales of HEPTAZYME(TM).
    .  We will pay Lilly a one time milestone if we close an agreement or
       agreements for development or marketing rights to HEPTAZYME(TM) with a
       third party or if we file an NDA for HEPTAZYME(TM), whichever comes
       first.
    .  Lilly will convert each one of the outstanding five (5) shares of our
       Series L Preferred shares into $1,500,000 of common stock upon the
       termination date of the Agreement. The termination date of the Agreement
       will be December 28, 2000. In addition, we will issue to Lilly $3,000,000
       in our common stock based on the closing price of our stock on December
       28, 2000, as payment for Lilly efforts in generating and providing data.



                                       6
<PAGE>

Note 3: Joint Venture, Medizyme

In January 2000, we announced completion of a joint venture with Elan
Corporation, Medizyme Pharmaceuticals, Ltd., whereby we have licensed
HERZYME(TM) and Elan has licensed its MEDIPAD(R) technology to the joint
venture.  HERZYME(TM) is our potential product to treat breast and other
cancers.  MEDIPAD(R) is a multi-day disposable continuous subcutaneous drug
delivery system that allows a patient to administer the drug at home.  We expect
to file an IND for HERZYME(TM) in early 2001.  Initial funding of Medizyme
included $12.0 million from us and $3.0 million from Elan. We have estimated
that funding for Medizyme will require approximately $15.0 million in additional
operating and development costs and, therefore, Elan has provided us with a
$12.0 million credit facility on a draw-down basis for us to use, if desired, to
fund our portion of Medizyme operating costs over a 30-month period.  The debt
carries a 12% rate and may ultimately be converted into our common stock at a
50% premium to the average price of our common stock for the 60 trading days
prior to the time of the applicable draw down on the credit facility.

    While we own 80.1% of the outstanding stock of Medizyme, Elan and its
subsidaries have retained significant minority investor rights that are
considered "participating rights", therefore we account for our investment in
Medizyme under the equity method of accounting.  During the nine-month period
ended September 30, 2000, we recognized $4,079,641 in contract revenues for
research and development activities performed for Medizyme.  This amount is
included in Collaborative agreements-joint venture for the related periods.

    The results of operations of Medizyme for the nine-month period ended
September 30, 2000 is as follows (in thousands):





                                     Nine months ended
                                     September 30, 2000
                                     ------------------
          Revenue                    $               --
          Research and development                4,199
          License fee                             3,750
          General and
           administrative                            22
                                     ------------------
          Net loss                   $            7,971




                                       7
<PAGE>

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

Forward-looking Statements

    Statements in this Form 10-Q, which are not strictly historical are
"forward-looking" statements which should be considered as subject to the many
uncertainties that exist in our operations and business environment.  These
uncertainties, which include, among other things, the following:  general
economic and business conditions; competition; technological advances; ability
to obtain rights to technology; ability to obtain and enforce patents; ability
to commercialize and manufacture products; ability to obtain collaborators;
ability to manufacture ribozymes in adequate amounts for its collaborations and
clinical trials; results of clinical studies; results of research and
development activities; business abilities and judgment of personnel;
availability of qualified personnel; changes in, or failure to comply with,
governmental regulations; ability to obtain adequate financing in the future;
and the like, are set forth in our Form S-3 registration statement which was
filed with the U.S. Securities and Exchange Commission on November 6, 2000 (File
No. 33-49400), a copy of which is available from us upon request.

Overview of our Business

    We are developing a new class of drugs based on engineered molecules called
"ribozymes."  Ribozymes are a form of ribonucleic acid that have the ability to
cleave RNA, including mRNA, and thereby selectively inhibit protein production.
Because many human diseases result from abnormal protein production, we believe
that ribozymes are applicable to a broad range of human diseases.  We are
currently in clinical development and preclinical testing for four product
candidates.

    We recently completed a Phase I/II clinical trial for our lead product
candidate, ANGIOZYME(TM), for the treatment of solid tumor cancers in
collaboration with Chiron Corporation and expect to initiate five separate Phase
II trials over the next few months in the following indications: breast, lung,
melanoma, renal, and colon cancer. Also, a Phase I/II clinical trial for
HEPTAZYME(TM), our ribozyme for the treatment of Hepatitis C, has recently been
completed.  We expect to start a multi-center Phase II trial by the middle of
2001.  The current clinical trials in these programs are expected to be
completed in the middle of 2002 and the results could significantly and
materially impact our business, operations and ability to raise additional
capital.

    To date, we have committed substantially all of our resources to our
research and product development programs. We have not generated any revenues
from product sales, nor do we anticipate any in the foreseeable future. Revenue
recorded from our collaborative agreements consists of:

 .   Up front revenue. Up front revenue is fully recognized upon signing a
    collaboration and is related to the value of the research at that point in
    time. Up front revenue may also be a reimbursement to us of recent expenses
    which we incurred related to product development. All up front revenues
    recognized represents the culmination of a separate earnings process.

 .   Research revenue. Typically research revenue is based on the fully burdened
    cost of a researcher working on a collaboration. Rates are billed per
    employee, per year, prorated for time worked on a project. This revenue is
    typically invoiced on a quarterly basis, either up front or in arrears.
    Revenue is recognized ratably over the period, with the balance reflected as
    deferred revenue until earned. The revenue is typically recurring over the
    term of a collaboration.



                                       8
<PAGE>

 .   License revenue. License revenue is recognized ratably over the term of the
    license. Payments received in advance are recorded as deferred revenue until
    earned.

 .   Milestone revenue. Milestone revenue is recognized in full when the related
    milestone performance goal is achieved. Milestone revenue is typically not
    consistent or recurring in nature.

    Our revenue has consisted primarily of research revenue payments from our
collaborators and our joint venture partners. All revenues are either deferred
as a liability or recognized upon satisfying revenue criteria.  As of September
30, 2000, all revenues that have been recognized are earned and no further
obligations exist for such revenue. We depend upon funding from external
financing and corporate collaborations for our research and product development
programs and expect to do so for the foreseeable future.

    We have not been profitable since inception and have an accumulated deficit
of $93.7 million as of September 30, 2000. Losses have resulted primarily from
our research and development programs. We expect to incur additional losses as
ANGIOZYME(TM), HEPTAZYME(TM), HERZYME(TM), and other product candidates advance
through development. In addition, future milestone payments under some of our
collaborations are contingent upon our meeting particular research or
development goals. The amount and timing of future milestone payments are
contingent upon the terms of each collaboration agreement. In some instances, we
may forfeit milestone payments if we fail to accomplish a goal within a certain
time frame. Therefore, we are subject to significant variation in the timing and
amount of our revenues and results of operations from period to period.

    In 1998, we transferred our target discovery and validation technology to
Atugen  AG in exchange for a substantial equity interest. We will continue our
existing target discovery and validation agreements with our collaborators by
subcontracting services to be performed to Atugen. We currently own 32% of
Atugen and will record our share of any future profits.  In 1999, through the
recognition in the losses of Atugen, we eliminated our remaining investment in
Atugen.

    Our revenues are denominated in U.S. dollars; therefore, we have not been
exposed to foreign currency translation risks and have not engaged in any
hedging instruments.

Results of Operations

Three and Nine Months Ended September 30, 2000 and 1999

    Revenues. Generally, revenue fluctuations result from changes in the number
of funded research projects as well as the timing and completion of contract
milestones. Our revenues are split into three categories: (i) Collaborative
agreements, (ii) Collaborative agreements-joint ventures, and (iii)
Collaborative agreements-related parties. Collaborative agreement revenues for
the three- and nine-month period reported includes revenues recorded from Chiron
and Lilly. Chiron revenues are related to our joint collaboration on
ANGIOZYME(TM) and Lilly revenues are related to our collaboration on
HEPTAZYME(TM). Collaborative agreements-related parties currently includes
revenues recorded related to our affiliate Atugen and Collaborative agreements-
joint ventures includes revenues recorded from Medizyme, our joint venture with
Elan on the development of HERZYME(TM). Collectively, collaborative revenues
increased to $4.4 million and $12.2 million for the three and nine months ended
September 30, 2000, respectively, from $1.8 million and $5.7 million for the
corresponding periods in 1999. The increase of $2.6 million for the quarter
ended September 30, 2000 was primarily due to $2.1 million of revenues recorded
from Medizyme, which did not exist in 1999. In addition, revenues increased



                                       9
<PAGE>

$532,000 from Chiron and Lilly due to clinical efforts related to ANGIOZYME(TM)
and HEPTAZYME(TM). Revenues from Atugen for the quarter were down by $55,000
compared to the same period last year due the scaling back of business
development and administrative services provided.

    The increase of $6.5 million for the nine-month period ended September 30,
2000 was primarily due to $4.1 million recorded from Medizyme, which did not
exist in 1999, and incremental revenues from Lilly recorded in 2000.  The 2000
Lilly revenues include a $1.0 million milestone payment from Lilly received in
June 2000 as a result of meeting a clinical development milestone for
HEPTAZYME(TM).  In addition, Lilly revenues in 2000 include three quarters of
revenues, while in 1999 include only two quarters of revenues because the Lilly
collaboration was finalized in March 1999.  Revenues recorded from Atugen have
decreased to $907,000 from $1.4 million for the nine-month period ending
September 30, 2000 from the same period ending in 1999.  The decrease is due to
a reduction of the management and administrative services that we provide
because Atugen no longer requires the extensive services needed when it was
first established in 1999.

    Expenses.  Research and development expenses increased to $6.0 million and
$14.8 million for the three and nine months ended September 30, 2000,
respectively, compared to $3.8 million and $11.2 million for the corresponding
periods in 1999.  The increase is due to the cost of manufacturing, preclinical
and clinical activities to support our drugs in clinical trials. We expect
research and development expenses, including pre-clinical studies and clinical
trials, to continue to increase as we expand our development programs for
ANGIOZYME(TM), HEPTAZYME(TM) and HERZYME(TM).

    General and administrative expenses increased to $679,000 and $2.8 million
for the three and nine months ended September 30, 2000, respectively, compared
to $485,000 and $1.6 million for the corresponding periods in 1999. The increase
for the quarter is due to adding additional administrative staff to support
expanding infrastructure related to drug manufacture and clinical trials.  The
increase for the nine months ended September 30, 2000 was primarily due to
approximately $1.3 million of non-cash, stock option compensation expense
recorded for performance stock options that vested during the first six months
of 2000.  During the first and second quarters of 2000, a number of corporate
milestones were accomplished, including achieving a market capitalization of
$150 million or more and a number of other financial goals which were satisfied
by the consummation of our agreement with Elan and the completion of our stock
offering in April 2000. We expect general and administrative expenses to
continue to increase as a result of increasing legal and other professional fees
in connection with the overall scale-up of our operations, business development
efforts and patent protection.

    Interest income increased to $1.0 million and $2.2 million for the three
and nine months ended September 30, 2000, respectively, compared to $202,000 and
$405,000 for the corresponding periods in 1999.  The increase is due to higher
average balances in our cash and cash equivalents and securities available-for-
sale during the three- and nine-month periods ending September 30, 2000, as
compared to the same periods in 1999. Cash balances were higher as a result of
public offerings completed in both July 1999 and April 2000 that resulted in
$58.0 million net proceeds and $5.0 million received in January 2000 for the
sale of common stock to Elan pursuant to our collaboration with Elan.  Interest
income generally fluctuates as a result of the average amount of cash available
for investment and prevailing interest rates.

    Interest expense decreased to $3,000 and $94,000, respectively, for the
three and nine months ended September 30, 2000, compared to $145,000 and
$406,000, respectively, for the corresponding periods in 1999. The decrease is
due to our repayment of $6.9 million on a debt facility from Schering AG with
proceeds from our 2000 public offering. The remaining balance of $997,000 was
converted


                                       10
<PAGE>

into 42,435 shares of our common stock in June 2000. Interest expense is
expected to increase in the future as we arrange for additional financing for
operations.

    Equity in loss of unconsolidated affiliates was $2.8 million and $6.4
million for the three- and nine-month periods ended September 30, 2000,
respectively, compared to $162,000 and $860,000 for the corresponding periods in
1999. The expense in 2000 is our 80.1% share of Medizyme's recorded loss. Our
ownership in the Medizyme joint venture is 80.1% and as such we are required to
expense our share of their losses. Medizyme's expenses include $1.25 million
amortized expense in each quarter for payment of a $15.0 million license fee
paid to Elan in January 2000, as well as $2.1 million and $4.1 million we
invoiced for the three and nine months ended September 30, 2000, respectively,
for research we conducted on HERZYME(TM). The 1999 equity in loss of
unconsolidated affiliate was in connection with our initial cash investment of
$2.0 million and the subsequent transfer of our gene identification and target
validation technology to Atugen AG in 1998. At September 30, 1999, we owned
83.2% of Atugen's outstanding common stock and as a result we recorded our share
of Atugen's net losses for the three- and nine-month periods resulting in equity
in loss of unconsolidated affiliate of $162,000 and $860,000, respectively.
During 1999, we completely expensed our remaining investment in Atugen and
therefore no expense related to Atugen has been recorded during 2000.

Liquidity and Capital Resources

    We have financed our operations since inception through sales of equity
securities in public offerings, private placements of preferred and common
stock, funds received under our collaborative agreements and financing under
equipment and tenant improvement loans. From inception through September 30,
2000, we have received approximately:

 .   $29.0  million in net proceeds from private placements;
 .   $89.1 million in net proceeds from public offerings;
 .   $86.5 million from our collaborations; and
 .   $9.8 million from equipment financing.

    We had cash, cash equivalents and securities available-for-sale of $62.2
million at September 30, 2000 compared with $14.0 million at December 31, 1999.
The $48.2 million increase in cash, cash equivalents and securities available-
for-sale is primarily the result of $2.7 million used for operations, net of
revenues of $12.2 million and $1.1 million used for investments in equipment and
patents, offset by:

 .   $52.7 million received in the public offering of our common stock;
 .   $17.0 million received in a sale of preferred and common stock to a
    corporate collaborator;
 .   $13.6 million invested in Medizyme;
 .   $2.2 million in net borrowings;
 .   $6.9 million used to pay off convertible debt;
 .   $600,000 received for exercise of stock options; and
 .   $144,000 for payments on loan facilities.

    We invest our cash, cash equivalents and securities available-for-sale in
interest bearing, investment grade securities.

    Accounts receivable at September 30, 2000 was $4.4 million compared to $2.0
million at December 31, 1999. Accounts receivable at September 30, 2000 included
$1.3 million due from Chiron for reimbursement of ANGIOZYME(TM) third quarter
research, $2.1 million due from Medizyme for third



                                       11
<PAGE>

quarter HERZYME(TM) research, $791,000 due from Lilly for research support for
the HEPTAZYME(TM) program and $236,000 due from Atugen for administrative
services and patent expenses. The outstanding receivables due from December 31,
1999 have been received in 2000.

    Total additions for property, plant and equipment for the three months
ending September 30, 2000 were $647,000, most of which were financed through our
existing equipment loan facility with Schering AG, described below. We
anticipate future capital needs to be financed by the Schering AG loan facility
through 2001.

    In April 1997 we entered into a purchase agreement with Schering AG and
Schering Berlin Venture Corporation ("SBVC"), an affiliate of Schering AG,
subsequently amended, as part of our target discovery and validation program.
SBVC made a $2.5 million equity investment in us in April 1997 in exchange for
212,766 shares of our common stock and made an additional equity investment of
$2.5 million for 465,117 shares of our common stock in April 1998. Separately,
Schering AG provided loans of $2.0 million in each of 1997, 1998 and 1999 and
$1.0 million in February 2000 and an additional $1.0 million in October 2000.
Schering AG has agreed to continue to provide loans of up to $2.0 million
annually through 2001, provided that the collaboration is continued. The loans,
which carry an interest rate of 8.0% per annum, are immediately convertible into
equity at the option of Schering AG.  In April 2000, after the completion of a
public offering, we repaid $6.9 million of our outstanding borrowings from
Schering AG.  In June 2000, Schering AG converted the remaining balance of
$997,000 into 42,435 shares of our common stock at a conversion price of $23.50.
If Schering AG does not continue the collaboration, we may need to seek
alternative sources of financing. Amounts not used in any calendar year may be
carried forward to future years. According to the terms of our agreement with
Schering AG, 50.0% of any borrowings on the line of credit must be
collateralized by equipment purchases. At September 30, 2000, we had no
outstanding loans from Schering AG. Principal and interest payments are deferred
until maturity of the loans in April 2004.  As a result of the Atugen formation
in 1998, we now subcontract all of our existing target discovery and
identification programs to Atugen; however, as long as our collaboration
continues with Schering AG we expect to continue to borrow against the loans.

    In July 1994, we entered into an agreement with Chiron to collaborate
exclusively on up to five specific targets selected by Chiron.  Four targets are
currently subject to the exclusivity provision, including ANGIOZYME(TM).
Currently, ANGIOZYME(TM) is being developed in collaboration with Chiron and we
share equally all development costs and profits with Chiron. In 1999, we
recorded $4.0 million in revenues from Chiron for reimbursement of expenses
incurred for the clinical development of ANGIOZYME(TM).

    In March 1999, we entered into a collaboration with Eli Lilly to conduct
research, development and commercialization of HEPTAZYME(TM), our anti-HCV
ribozyme for the treatment of Hepatitis C virus infection.  We granted Lilly the
exclusive worldwide right to develop and commercialize HEPTAZYME(TM) in return
for funding of all research, development and commercialization costs for the
drug.  Under the terms of the agreement, we received approximately $9.2 million
during 1999, which included $1.7 million of funding for research and clinical
trial expenses and a $7.5 million equity investment.  In April 1999, Lilly
purchased five shares of our Series L convertible preferred stock for $7.5
million. On September 28, 2000, we entered into an agreement with Lilly to
repurchase rights to HEPTAZYME(TM).  Lilly had directed the clinical trials for
HEPTAZYME(TM) to date under the licensing agreement; however, according to the
repurchase agreement, we renegotiated the global rights to HEPTAZYME(TM) and
will direct all subsequent clinical trials.  According to the repurchase
agreement, Lilly will convert each share of Series L Preferred shares into
$1,500,000 of common stock on December 28, 2000 at an average price of the 30
previous trading days. In addition, we will issue to Lilly $3,000,000 of our
common stock based on the closing price of our common stock on December 28,
2000,


                                       12
<PAGE>

as payment for Lilly efforts in generating and providing clinical trial data. In
addition, Lilly will continue to pay research fees related to HEPTAZYME(TM) for
the fourth quarter and pay us a termination fee of $2.8 million in December
2000.

    In January 2000, we completed a joint venture with Elan for the development
and commercialization of HERZYME(TM), our potential product to treat breast and
other cancers.  In accordance with the collaboration, we sold to Elan our Series
A convertible preferred stock for $12.0 million and, in turn, used those funds
for initial funding of Medizyme.  Also as part of the collaboration, Elan
purchased 641,026 shares of our common stock for a purchase price of $5.0
million.  Elan has also committed to purchase an additional $5.0 million of
common stock in April 2001 at a share price that is at a premium to the then
market price and would also be based on the achievement of certain milestones.
We have estimated that the development of HERZYME(TM) will require additional
funds of up to $15 million and, therefore, Elan has made available to us a
credit facility to fund our portion of Medizyme operating costs over a 30 month
period. At the end of September 2000, we utilized the credit facility and
borrowed $1.2 million.  Elan may convert this debt into shares of our Series B
convertible preferred stock in the future.

    In April 2000, we completed a public offering of 3,150,000 shares of our
common stock that resulted in gross proceeds of $56.7 million. After deducting
underwriter fees and expenses, net proceeds were $52.6 million.  In April 2000
we repaid $6.9 million of our outstanding borrowings from Schering AG with
proceeds from this offering.

    We anticipate that our existing financial resources and expected revenues
from our collaborations, should be sufficient to meet our anticipated operating
and capital requirements through mid-2002. We expect to incur substantial
additional costs, including:

 .   costs related to our research, drug discovery and development programs;
 .   preclinical studies and clinical trials of our products, if developed;
 .   prosecuting and enforcing patent claims;
 .   general administrative and legal items; and,
 .   manufacturing and marketing of products, if any.

    In the future we may raise additional capital through public or private
financing, as well as from new collaborative relationships, new credit
facilities and other sources.



                                       13
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Not applicable.


PART II - OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

    On November 6, 2000, we filed a Form S-3 Registration Statement (File
number 33-49400) to register 3,000,000 shares of our common stock.  This
registration statement has not yet been declared effective.  Upon the issuance
of these shares the ownership of current shareholders will be diluted.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)  Exhibits

          3(i)     Amended and Restated Certificate of Incorporation (1)
          3(ii)    Restated Bylaws (2)
          (27)     Financial Data Schedule

    (b)  Reports on Form 8-K

    We filed a report on Form 8-K dated October 10, 2000, reporting the
Repurchase of Ribozyme Product Agreement dated September 28, 2000, between the
Company and Eli Lilly Corporation

    We filed a report on Form 8-K dated July 28, 2000, which reported the
following press releases:

 .   On July 12, 2000, Ribozyme Pharmaceuticals, Inc. ("RPI"), announced results
    regarding opposition proceedings against one of its ribozyme patents in
    Europe (European Patent No. EP-B1 0291533).

 .   On July 18, 2000, RPI announced two promotions in its Research and
    Development organization.

 .   On July 20, 2000 RPI announced additional information regarding European
    Patent No. EP-B1 0291533.

 .   On July 21, 2000, RPI announced the receipt of a $1 million milestone
    payment from partner Eli Lilly and Company.

--------------------------------------------------------------------------------
(1)  Incorporated by reference from the Company's Registration Statement on Form
     SB-2, file no. 333-34981, dated September 5, 1997.
(2)  Incorporated by reference from the Company's Registration Statement on Form
     SB-2, file no. 333-1908-D, dated April 11, 1996.



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<PAGE>

                                  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.

                                  RIBOZYME PHARMACEUTICALS, INC.

Dated:    November 13, 2000   By   /s/ RALPH E. CHRISTOFFERSEN
          -----------------        ---------------------------
                                   Ralph E. Christoffersen
                                   President and Chief
                                   Executive Officer

Dated:    November 13, 2000   By:  /s/ LAWRENCE E. BULLOCK
          -----------------        ---------------------------
                                   Lawrence E. Bullock
                                   Vice President and Chief Financial Officer
                                   (Principal Financial Officer and
                                   Principal Accounting Officer)



                                       15
<PAGE>


                                 Exhibit Index


  Exhibit                         Exhibit
    No.                         Description
    ---                         -----------
3(i)          Amended and Restated Certificate of Incorporation (1)
3(ii)         Restated Bylaws (2)
27            Financial Data Schedule

_____
(1)  Incorporated by reference from the Company's Registration Statement on Form
     SB-2, file no. 333-34981, dated September 5, 1997.
(2)  Incorporated by reference from the Company's Registration Statement on Form
     SB-2, file no. 333-1908-D, dated April 11, 1996.