<PAGE>
 
                                   FORM 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                    Quarterly Report under Section 13 of the
                        Securities Exchange Act of 1934

                      For the quarter ended March 31,1997


                         Commission File Number 0-24320


                          NAPRO BIOTHERAPEUTICS, INC.


Incorporated in Delaware                                 IRS ID No. 84-1187753

                            6304 Spine Road, Unit A
                               Boulder, CO 80301
                                 (303) 530-3891


NaPro BioTherapeutics, Inc. ("NaPro" or "the Company") (1) has filed all reports
required to be filed by Section 13  of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.

The number of shares outstanding of each of the issuer's classes of common stock
as of April 18, 1997:

Common Stock, $.0075 par value                             11,971,537
Non-voting Common Stock, $.0075 par value                     395,000


Total number of pages in document--12
<PAGE>
 
                          NaPro BioTherapeutics, Inc.

                               Table of Contents
<TABLE>
<CAPTION>
 
                                                                            Page
Part I    Financial Information
<S>                                                                         <C>
     Consolidated Financial Statements

       Balance Sheet                                                           3
 
       Statement of Operations                                                 5
 
       Statement of Cash Flows                                                 6
 
       Notes to Consolidated Financial Statements                              7
 
     Management's Discussion and Analysis of Financial Condition 
      and Results of Operations                                                8
 
     Quantitative and Qualitative Disclosures about Market Risk               10
 
 
Part II   Other Information
 
     Legal Proceedings                                                        11
 
     Changes in Securities                                                    11
 
     Defaults Upon Senior Securities                                          11
 
     Submission of Matters to a Vote of Security Holders                      11
 
     Other Information                                                        11
 
     Exhibits and Reports on Form 8-K                                         11
 
Signatures                                                                    12
</TABLE> 
<PAGE>
 
                        Part I.  Financial  Information

Item 1.  Consolidated Financial Statements


                          NaPro BioTherapeutics, Inc.
                                 Balance Sheet
                                     Assets

<TABLE>
<CAPTION>
 
 
                                      March 31,    December 31,
                                        1997           1996
                                    -------------  ------------
                                     (unaudited)
<S>                                 <C>            <C> 
Current assets:

   Cash and cash equivalents         $ 2,885,000    $ 9,531,000
   Securities available for sale       2,661,000      2,669,000
   Securities held to maturity         3,265,000      2,567,000
   Accounts receivable                   433,000        662,000
   Inventory                           2,888,000      2,281,000
   Prepaid expense and other             627,000        500,000
                                     -----------    -----------
Total current assets                  12,759,000     18,210,000
 
Property and equipment, net            8,331,000      6,012,000
Restricted cash                          415,000        415,000
Receivables from related parties          18,000         18,000
Other assets                             466,000        366,000
                                     -----------    -----------
Total assets                         $21,989,000    $25,021,000
                                     ===========    ===========
 
</TABLE>



                            See accompanying notes

                                       3
<PAGE>
 
                          NaPro BioTherapeutics, Inc.
                                 Balance Sheet
                     Liabilities and Stockholders' Equity
<TABLE>
<CAPTION>
 
                                                                 March 31,    December 31,
                                                                   1997           1996
                                                               -------------  -------------
                                                                (unaudited)
<S>                                                            <C>            <C>
Current liabilities:
   Accounts payable                                            $  1,606,000   $  1,763,000
   Payroll and payroll taxes                                        520,000        519,000
   Long term debt--current portion                                1,744,000      1,669,000
   Deferred revenue                                                  35,000         35,000
                                                               ------------   ------------
Total current liabilities                                         3,905,000      3,986,000
 
Long term debt                                                      589,000        751,000
                                                               ------------   ------------
 
Total liabilities                                                 4,494,000      4,737,000
 
Minority interest                                                 3,715,000      3,715,000
 
Stockholders' equity
     Preferred stock, $.001 par value:
     Authorized shares--2,000,000
     Series A:
       Issued and outstanding shares--125,000
        in 1997 (unaudited) and 1996
        (preference in liquidation $1,000,000)                           --             --
     Non-voting common stock, convertible on disposition
      into voting common stock, $.0075 par value:
      Authorized shares--1,000,000 shares
      Issued and outstanding shares--395,000 in 1997
      (unaudited) and 595,000 in 1996                                 3,000          4,000
     Common stock, $.0075 par value:
      19,000,000 authorized 12,190,358 shares issued in 
      1997 (unaudited), and 11,986,089 in 1996                       91,000         89,000
     Additional paid-in capital                                  44,710,000     44,670,000
     Notes receivable from stockholders                                  --       (985,000)
     Deficit                                                    (28,350,000)   (25,525,000)
     Treasury stock--218,838 shares in 1997 (unaudited) and
      144,288 in 1996                                            (2,674,000)    (1,684,000)
                                                               ------------   ------------
Total stockholders' equity                                       13,780,000     16,569,000
                                                               ------------   ------------
Total liabilities and stockholders' equity                     $ 21,989,000   $ 25,021,000
                                                               ============   ============
 
</TABLE>
                            See accompanying notes

                                       4
<PAGE>
 
                          NaPro BioTherapeutics, Inc.
 
                            Statement of Operations
                                  (Unaudited)
<TABLE> 
<CAPTION> 
 
                                                           Three Months Ended
                                                               March 31,
                                                           1997          1996
                                                       -----------    ------------
<S>                                                    <C>            <C>  
Sales                                                  $ 1,008,000    $    691,000
                                                       -----------    ------------
 
Expense:
   Research, development and cost of products sold       2,405,000       1,786,000
   General and administrative                            1,512,000         704,000
                                                       -----------    ------------
                                                         3,917,000       2,490,000
                                                       -----------    ------------
 
Operating loss                                          (2,909,000)     (1,799,000)
 
Other income/(expense):
   Interest income                                         166,000         100,000
   Interest and other expense                              (82,000)        (61,000)
                                                       -----------    ------------
Net loss                                               $(2,825,000)   $( 1,760,000)
                                                       ===========    ============
 
Loss per common share                                       $(0.24)         $(0.21)
                                                       ===========    ============
 
Weighted average shares outstanding                     11,791,892       8,382,332
                                                       ===========    ============
 
</TABLE>



                            See accompanying notes.

                                       5
<PAGE>
 
                          NaPro BioTherapeutics, Inc.

                            Statement of Cash Flows
                                  (Unaudited)

<TABLE>
<CAPTION>
 

                                                           Three Months Ended
                                                                March 31,
                                                           1997           1996
                                                       -------------  ------------
<S>                                                    <C>            <C>
Operating activities
Net loss                                                $(2,825,000)  $(1,760,000)
Adjustments to reconcile net loss to net cash
       used by operating activities:
   Depreciation and amortization                            221,000       116,000
   Compensation for common stock and options                     --         2,000
   Loss on retirement of assets                                  --        15,000
   Changes in operating assets and liabilities:
       Accounts receivable                                  229,000      (134,000)
       Inventory                                           (607,000)     (235,000)
       Prepaid expense and other assets                    (227,000)      (24,000)
       Accounts payable                                    (158,000)      (52,000)
       Accrued liabilities                                   37,000       (26,000)
       Deferred revenue                                          --       (36,000)
                                                        -----------   -----------
Net cash used by operating activities                    (3,330,000)   (2,134,000)
Investing activities
   Transfer of restricted cash                                   --       (54,000)
   Additions to property and equipment                   (2,521,000)     (138,000)
   Purchase of securities held to maturity               (3,500,000)           --
   Proceeds from securities held to maturity              2,800,000            --
                                                        -----------   -----------
Net cash used by investing activities                    (3,221,000)     (192,000)
Financing activities
   Proceeds from notes payable                               80,000       208,000
   Payments under notes payable                            (175,000)      (98,000)
   Proceeds from sale of common stock                            --         6,000
                                                        -----------   -----------
Net cash (used by) provided by financing activities         (95,000)      116,000
                                                        -----------   -----------
Net decrease in cash and cash equivalents                (6,646,000)   (2,210,000)
Cash and cash equivalents at beginning of period          9,531,000     7,133,000
                                                        -----------   -----------
Cash and cash equivalents at end of period              $ 2,885,000   $ 4,923,000
                                                        ===========   ===========
 
</TABLE>



                            See accompanying notes.

                                       6
<PAGE>
 
                          NaPro BioTherapeutics, Inc.

                   Notes to Consolidated Financial Statements
                                 March 31, 1997
                                  (Unaudited)


1.   Basis of Presentation

The accompanying financial statements are unaudited.  However, in the opinion of
management, the accompanying financial statements reflect all adjustments,
consisting of only normal recurring adjustments, necessary for fair
presentation.  Interim results of operations are not indicative of results for
the full year. These financial statements should be read in conjunction with the
NaPro Annual Report on Form 10-K for the year ended December 31, 1996.

<TABLE>
<CAPTION>

2.   Inventory                    March 31,  December 31,
                                    1997        1996
                                  ----------  ----------
<S>                               <C>            <C>
 
 Raw materials                    $  736,000  $  495,000
 Work-in-process                     365,000     449,000
 Finished goods                    1,787,000   1,337,000
                                  ----------  ----------
                                  $2,888,000  $2,281,000
                                  ==========  ==========
<CAPTION>  
3.   Cash Flow Supplemental Disclosures
                                                              Three Months Ended
              March 31,                                        1997        1996
                                                            ----------  ----------
<S>                                                        <C>          <C> 
 Interest paid                                              $   73,000  $   41,000
 
 Noncash transactions:
 Repurchase of common stock into treasury                      990,000          --
 Notes and related interest receivable from stockholders            --      16,000
 Issuance of common stock--compensation                         40,000          --
</TABLE>
4.   Common Stock

In January 1997 NaPro repurchased 74,550 shares of its common stock from a NaPro
executive officer in exchange for the cancellation in indebtedness (including
accrued interest $192,000) owed by the officer to NaPro of $990,000.

In January 1997 F.H. Faulding & Co., Ltd. converted 200,000 shares of NaPro
nonvoting common stock to voting common stock.

In February 1997, NaPro issued 4,268 shares of stock to certain officers and
other key employees for compensation granted by the NaPro Board of Directors and
recorded in November 1995. This represented one-half of the compensation
granted, the remainder to vest in February 1998. 

                                       7
<PAGE>
 
5.   Loss per Share

In February 1997, The Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, NaPro will be required to change the method currently used to
compute loss per share and to restate all prior periods.  Under the new
requirements for calculating basic loss per share, stock options will continue
to be excluded.  The expected impact of Statement No. 128 on these periods is
not expected to be material.


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

The following discussion and analysis provide information which the Company's
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial condition. This discussion should
be read in conjunction with the consolidated financial statements and notes
thereto appearing elsewhere herein as well as with the consolidated financial
statements, notes thereto and the related management's discussion and analysis
of financial condition and results of operations included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.

General

NaPro is a natural product pharmaceutical company which is focusing primarily on
the development, manufacture and commercialization of paclitaxel, a naturally-
occurring anti-cancer agent found in certain species of yes (Taxus) trees.  The
Company's paclitaxel is referred to herein as "NBT Paclitaxel."

NaPro has devoted its efforts primarily to the development and implementation of
its proprietary extraction, isolation and purification (EIP/TM/) technology for
producing NBT paclitaxel.  NaPro is currently dependent exclusively on sales of
NBT paclitaxel for revenue.  To advance the development and commercialization of
NBT Paclitaxel, NaPro has entered into 20-year, exclusive agreements with each
of F.H. Faulding & Co., Ltd. ("Faulding") and Baker Norton Pharmaceuticals, a
subsidiary of IVAX Corporation ("IVAX" and together with Faulding, the
"Strategic Partners") for the clinical development, sales, marketing and
distribution of NBT Paclitaxel.  Through March 31, 1997, NaPro's production of
NBT paclitaxel was limited primarily to research and pilot-scale production, and
much of NaPro's product sales were for use in clinical trials and for  research
and development purposes.  Accordingly, NaPro has generated only limited revenue
from such activities and has incurred significant operating losses, including
operating losses of  approximately $6 million, $4.3 million and $7.1 million for
the years ended December 31, 1994, 1995 and 1996, respectively, and $2.9 million
for the quarter ended March 31, 1997, resulting in an accumulated deficit of
$28.4 million as of March 31, 1997.  NaPro expects that it will continue to have
a high level of operating expense and will be required to make significant up-
front expenditures in connection with its biomass procurement, product
development and research-and-development activities. NaPro anticipates that
operating losses will continue until such time, if ever, as NaPro is able to
generate sufficient revenue to support its operations.  NaPro believes that its
ability to generate such revenue depends primarily on the ability of its
Strategic Partners to obtain regulatory approval in the U.S. for the commercial
sale of NBT paclitaxel, on NaPro's ability to obtain regulatory approval for its
manufacturing facilities and  on NaPro's ability to construct manufacturing
facilities that produce quantities of NBT paclitaxel sufficient to supply the
Strategic Partners' requirements for commercial sales.  Moreover, NaPro's future
growth and profitability will depend on the success of the Strategic Partners in
fostering 

                                       8
<PAGE>
 
acceptance in the oncological market for NBT paclitaxel as a preferred form of
chemotherapy to be used alone or in combination with other chemotherapeutic
agents.

Results of Operations

Three months ended March 31, 1997 compared to the three months ended March 31,
------------------------------------------------------------------------------
1996  Revenue for the three months ended March 31, 1997 was $1 million,
----                                                                   
representing an increase of $300,000 from the three months ended March 31, 1996.
The increase related primarily to the timing of product shipments. Shipments to
Faulding and IVAX may vary significantly on a quarter to quarter basis depending
on a number of factors, including the timing and size of any clinical trials
conducted by either company and changes in approved markets.  This quarter to
quarter variability will continue until stable commercial demand has been
established for the product in one of the Company's major markets.

Research and development and cost of products sold expense for the three months
ended March 31, 1997 was $2.4 million, representing an increase of $600,000 from
the three months ended March 31, 1996.  The increase resulted from an increase
in the level of process development and research expense as well as higher
production cost.  NaPro's production process is not distinct from its research
and development processes.  Accordingly, the cost of products sold is included
with NaPro's research and development expense.

General and administrative expense for the three months ended March 31, 1997 was
$1.5 million, an increase of $800,000 from the three months ended March 31,
1996.  The increase is primarily attributable to an increase in administrative
and support staff and accrued legal expense.

Interest income for the three months ended March 31, 1997 was $200,000,
representing an increase of $100,000 from the three months ended March 31, 1996.
The increase is attributable to increased cash balances associated with the
completion of the Company's offering of common stock in August 1996 and its
warrant call completed in June 1996 (See Liquidity and Capital Resources).

Interest and other expense for the three months ended March 31, 1997 was
$100,000, approximately unchanged from the three months ended March 31, 1996.

Liquidity and Capital Resources

NaPro's capital requirements have been and will continue to be significant.  At
March 31, 1997, NaPro had working capital of $8.9 million.  This compared to a
working capital balance of $14.2 million as of December 31, 1996.  To date, the
funding of NaPro's capital requirements has been dependent primarily on the net
proceeds of public offerings of its common stock of approximately $21.1 million,
on private placements of its equity securities of approximately $22.8 million,
on the exercise of warrants and options of $4.3 million, and on capital leases,
loans and advances from its stockholders and the Strategic Partners.

Cash and cash equivalents totaled $2.9 million at March 31, 1997.  During the
first three months of 1997, cash used by operating, investing, and financing
activities totaled $3.3 million, $3.2 million and $100,000, respectively.  In
addition, NaPro had securities held to maturity available of $3.3 million, with
maturity dates ranging from April 1997 to June 1997 and securities available for
sale of $2.7 million, with maturity dates ranging from December 1997 to May
1998.

                                       9
<PAGE>
 
NaPro expended $2.5 million for capital projects during the first three months
of 1997.  In 1997, NaPro expects to invest capital in property, plant, and
equipment,  primarily to expand its plantation operations, to complete the large
scale commercial EIP/TM/ manufacturing facility in Boulder and to upgrade and
expand its extraction manufacturing capabilities.

NaPro anticipates a significant increase in capital expenditures and operations
in 1997 in anticipation of possible approval of the New Drug Application filed
with the U.S. Food and Drug Administration. Therefore, NaPro needs to obtain
additional capital during the year.  If NaPro is not successful in attracting
capital, it will need to reduce significantly the scope of capital expenditures
and operations.

The amount and timing of future capital expenditures will depend upon numerous
factors, including the progress of NaPro's research and development programs,
the magnitude and scope of these activities, the cost of preparing, filing,
prosecuting, maintaining and enforcing patent claims and other intellectual
property rights, competing technological and marketing developments, changes in
or terminations of existing strategic partnerships, the establishment of
additional strategic relationships and the cost of manufacturing scale-up.
NaPro may seek additional long-term financing to fund capital expenditures
should such financing become available on terms acceptable to NaPro.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk.  Not
applicable.

 

                                       10
<PAGE>
 
                           Part II--Other Information

Item 1.  Legal Proceedings  

On May 14, 1997, the Bristol-Myers Squibb Company was issued a European Patent. 
The claims of this European Patent relate to certain methods of treatment with 
paclitaxel.  On the same day, NaPro BioTherapeutics instituted revocation 
proceedings in the United Kingdom against this European Patent as issued in the 
U.K. and a separate but related British Patent also owned by Bristol Myers 
Squibb.  The revocation action was not in response to any lawsuit or allegations
of infringement against NaPro relating to these patents.  Because of the early 
stage of the revocation proceedings, and issues regarding the scope and validity
of these patents, the Company cannot assess the impact which these patents may 
have on the Company's business.

Item 2.  Changes in Securities  None.

Item 3.  Defaults upon Senior Securities.     None.

Item 4.  Submission of Matters to a Vote of Securities Holders.    None.

Item 5.  Other Information.

Special Note Regarding Forward-looking Statements.

Certain statements in this report constitute "forward-looking statements" within
the meaning of the federal securities laws.  In addition, NaPro or persons
acting on its behalf sometimes may make forward-looking statements in other
written and oral communications.  Such forward-looking statements may include,
among other things, statements concerning NaPro's plans, objectives or future
economic prospects, such as matters relative to availability of raw materials;
plant completion and approval; completion of clinical trials and regulatory
filings; prospects for and timing of regulatory approvals; need for and
availability of additional capital; amount and timing of capital expenditures;
timing of product introductions and revenue; prospects for breaking even and
other statements of expectations, beliefs, future plans and strategies,
anticipated events or trends and similar expressions concerning matters that are
not historical facts.  Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause actual results,
performance or achievements of NaPro to be materially different from the
results, performance or achievements expressed or implied by such forward-
looking statements.  Such factors include, among other things, adverse economic
and general business conditions; competition from Bristol-Myers Squibb Company
and other existing and new producers of paclitaxel and other drugs;
technological advances to cancer treatment and drug development; ability to
obtain rights to technology; ability to obtain raw materials and commercialize
manufacturing processes; timing of regulatory filings relative to those of
competitors; effectiveness of NBT Paclitaxel and other pharmaceuticals developed
by NaPro in treating disease; results of research and development activities;
business abilities and judgment of management and other personnel; availability
of qualified personnel; changes in and compliance with governmental regulations;
effect of financial market conditions and other factors on capital availability
for NaPro and other biopharmaceutical companies; performance of NaPro's
strategic partners of obligations under existing agreements; the financial
health of NaPro's strategic partners; and other factors referred to as risk
factors in NaPro's August 1, 1996 Prospectus.

Item 6.  Exhibits and Reports on Form 8-K

No reports on Form 8-K were filed during the period covered by this report.

Exhibit
Number   Description of Exhibit
------   ----------------------
27.1     Financial Data Schedule

                                       11
<PAGE>
 
                                   Signatures


Pursuant to the requirements of the Securities Exchange Act of 1934, NaPro has
duly caused this report to be signed on its behalf.


                              NaPro BioTherapeutics, Inc.



May 15, 1997                  /s/ Sterling K. Ainsworth

                              Sterling K. Ainsworth
                              President and Chief Executive Officer
                              (Principal Executive Officer)



May 15, 1997                  /s/ Gordon Link
 
                              Gordon Link
                              Vice President and Chief Financial Officer
                              (Principal Financial Officer)

                                       12