SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

   For Quarter ended July 31, 1998              Commission File Number 0-19122


                               APHTON CORPORATION
             (Exact name of registrant as specified in its charter)


   Delaware                                             95-3640931
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)


                  444 Brickell Avenue, Suite 51-507 33131-2492
                            Miami, Florida (Zip Code)
                    (address of principal executive offices)


        Registrant's telephone number, including area code (305) 374-7338

     Indicate by check mark whether the registrant (1) has filed all reports
     required to be filed by Section 14 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 Common Stock outstanding as of the close of
                           business on July 31, 1998:

 Class                                                    Number of
                                                      Shares outstanding
Common Stock, $0.001 par value                              14,429,784



                               APHTON CORPORATION

                                      Index


                                                                        Page

Part I - Financial Information                                            3

    Item 1.  Financial Statements:

       Balance Sheets - July 31, 1998 and January 31, 1998                3

       Statements of Operations - Three months and six months ended
          July 31, 1998 and 1997                                          4

       Statements of Stockholders' Equity - Six months ended July 31, 1998
          and the nine months ended January 31, 1998                      4

       Statements of Cash Flows - Six months ended July 31, 1998 and 1997 5

    Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                             5


Part II - Other Information

    Item 1.  Legal Proceedings                                            8

    Item 2.  Changes in Securities                                        8

    Item 3.  Defaults Upon Senior Securities                              8

    Item 4.  Submission of Matters to a Vote of Security Holders          8

    Item 5.  Other Information                                            8

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

Signature Page                                                            8








                               APHTON CORPORATION
                         Part I - Financial Information
The  financial  statements  included  herein have been  prepared by the Company,
without  audit,  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  In the opinion of  management,  the financial  statements
include all  adjustments  necessary to present fairly the financial  position of
the  Company as of July 31,  1998 and  January  31,  1998 and the results of its
operations and its cash flows for the three months and six months ended July 31,
1998 and 1997.  The January 31, 1998 balance sheet data was derived from audited
financial  statements but does not include all disclosures required by generally
accepted accounting  principles It is suggested that these financial  statements
be read in  conjunction  with the  financial  statements  and the notes  thereto
included in the Company's latest annual report on Form 10-K.

                               APHTON CORPORATION
               Balance Sheets - July 31, 1998 and January 31, 1998

                                             July 31,           January 31,
                                               1998                 1998
                  Assets
Current Assets:
Cash and short-term cash investments      $14,824,949          $14,226,000
Other assets (including current portion of
     unconditional supply commitment)         318,117              205,454
         Total current assets              15,143,066           14,431,454
Equipment and improvements, at cost,
     net of accumulated depreciation
      and amortization                        215,550              197,736
Unconditional supply commitment             8,951,000            8,951,000
         Total assets                     $24,309,616          $23,580,190

              Liabilities and Stockholders' Equity

Liabilities:
Current liabilities:
     Accounts payable and other            $2,760,429           $2,273,072
         Total current liabilities          2,760,429            2,273,072
Deferred revenue                           10,000,000           10,000,000
         Total liabilities                 12,760,429           12,273,072

Commitment

Stockholders' Equity:
     Common stock, $0.001 par value -
     Authorized:  30,000,000 shares
     Issued and outstanding:  14,429,784
     shares at July 31, 1998 and 14,191,217
     at January 31, 1998                       14,430               14,191
     Additional paid in capital            47,955,143           42,955,207
     Purchase warrants                        341,404              341,404
     Accumulated deficit                  (36,761,790)         (32,003,684)
         Total stockholders' equity        11,549,187           11,307,118
         Total liabilities and 
           stockholders' equity           $24,309,616          $23,580,190





                               APHTON CORPORATION
                            Statements of operations
            for the three and six months ended July 31, 1998 and 1997

                              Three Months Ended          Six Months Ended
                                  July 31,                   July 31,
Revenue:                     1998        1997          1998            1997
    Dividend, interest
    and other income       $134,825    $153,942      $288,140       $217,743
       Total                134,825     153,942       288,140        217,743
Costs and Expenses:
    Research and 
    development expense   2,235,344   1,450,135     4,460,235      2,813,322
    General and administrative
     expense                345,888     189,657       586,011        315,638
    Non-cash interest and
     amortized interest 
     expense of 
     convertible security        --     779,790            --        795,132
    Total costs           _________   _________     _________      _________
      and expenses        2,581,232   2,419,582     5,046,246      3,924,092
         Net loss       $(2,446,407)$(2,265,640)  $(4,758,106)   $(3,706,349)
     Basic loss per
      common share           $(0.17)     $(0.17)       $(0.33)        $(0.28)
     Diluted loss per 
      common share           $(0.17)     $(0.17)       $(0.33)        $(0.28)
       Weighted average 
       number of common 
       shares outstanding 14,270,506  13,393,319   14,230,861     13,153,234

The Company has adopted SFAS No. 128,  "Earnings per Share," which specifies the
computation,  presentation  and disclosure  requirements for earnings per share.
The Company's basic loss per common share was calculated by dividing net loss by
the weighted average number of common shares  outstanding.  The Company's common
stock equivalents are anti-dilutive, and accordingly, basic and diluted loss per
share are the same. Such common stock  equivalents  consist of purchase warrants
and could potentially dilute basic earnings per share in the future.

                       Statements of stockholders' equity
                   for the six months ended July 31, 1998 and
                   for the nine months ended January 31, 1998

                 Common  Stock        Additional
                                       Paid in   Purchase Accumulated
               Shares     Amount       Capital   Warrants   Deficit      Total
Balance,
 May 1, 1997 12,913,149 $26,665,091 $1,097,560 $147,004 $(25,399,140)$2,510,515
Sale of 
 stock, net     715,000  10,000,000          -        -            - 10,000,000

Exercise of                                                        
warrants
for services          -           -          -  198,900            -    198,900
    
Exercise of
 purchase
 warrants         4,000       5,500          -   (4,500)           -      1,000
     
Transfer between
equity accounts
resulting from a
change in the par
value of the stock      (41,857,647)41,857,647        -            -          - 

Conversion of
convertible 
debt            559,068  5,201,247           -        -            -  5,201,247
                                      
Net loss              -          -           -        -   (6,604,544)(6,604,544)
             __________     ______  __________  _______  ___________ __________
Balance,
January 31,
1998         14,191,217     14,191  42,955,207  341,404  (32,003,684)11,307,118
     
Exercise of
purchase
warrants            700          1         174        -            -        175

Sale of 
stock, net      237,867        238   4,999,762        -            -  5,000,000
          
Net loss              -          -           -        -   (4,758,106)(4,758,106)
             __________   ________ ___________  _______ ____________ __________
Balance,
July 31,1998 14,429,784    $14,430 $47,955,143 $341,404 $(36,761,790)$11,549,187



                               APHTON CORPORATION
    Statements of cash flows for the six months ended July 31, 1998 and 1997
           Increase (decrease) in cash and short-term cash investments
                                                  Six Months Ended July 31,
                                                         1998           1997
Net cash used in operating activities                $(4,352,205)  $(1,992,427)
Net cash provided from 
  non-operating activities-financing                   5,000,175    14,796,836
Net cash used from 
  non-operating activities-investing                     (49,021)       (7,266))
Net change in cash and short-term cash investments       598,949    12,797,143
Cash and short-term cash investments:
    Beginning of period                               14,226,000     4,385,787
    End of period                                    $14,824,949   $17,182,930
     Reconciliation of net loss to net cash used in operating activities
Net loss                                             $(4,758,106)  $(3,706,349)
Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation                                          31,205        42,674
Changes in-
    Interest expense settled by issuance of stock             --        72,386
    Amortized interest expense of convertible security        --       692,530
    Cash receipt treated as deferred revenue                  --     1,000,000
    Decrease (increase) in other assets                 (112,663)      128,829
    Increase (decrease) in accounts payable              487,357      (222,497)
Net cash used in operating activities                $(4,352,205)  $(1,992,427)

          Management's Discussion and Analysis of Financial Conditions
                            and Results of Operations

                                     General
Aphton Corporation is a biopharmaceutical  company developing products using its
innovative vaccine-like technology for neutralizing hormones that participate in
gastrointestinal  system and reproductive system cancer and non-cancer diseases;
and the  prevention of pregnancy.  Aphton has strategic  alliances  with Pasteur
Merieux Connaught  (Rhone-Poulenc  Group),  SmithKline Beecham,  Schering Plough
Animal  Health  and the World  Health  Organization  (WHO).  Aphton's  Web page,
describing the company,  its technology,  products,  strategic  alliances,  news
releases  and  reports of  independent  research  analysts,  can be visited  at:
www.aphton.com

                           Background / Major Results

Results  of  Operations  The  Company's  total  costs  and  expenses   increased
$1,122,154  to  $5,046,246  for the six  months  ended  July 31,  1998  over the
corresponding  period of the prior year.  This 29% increase was due primarily to
increased research and development activities. Research and development expenses
during that period increased $1,646,913 to $4,460,235. This 59% increase was due
to increased  clinical trial activity.  Non-cash interest and amortized interest
expense relating to a convertible security decreased $795,132 to zero due to the
conversion of the convertible security to equity in fiscal 1998.

Safety  / Dose  Ranging
Aphton  successfully  completed both the safety and  dose-ranging  phases of its
Phase I/II clinical  trial with its  immunotherapeutic  product  Gastrimmune(TM)
with terminal cancer  patients.  Aphton  demonstrated,  during the  dose-ranging
phase, that Gastrimmune(TM) is very potent, inducing large antibody responses in
terminally  ill  patients  whose colon cancer had not only  metastasized  to the
liver, but were the "end-stage" of advanced Dukes D.

Survival
In January of 1998,  Aphton announced  increased  survival  results,  which were
statistically  significant,  from  a  comparative  analysis  of its  Phase  I/II
clinical   trials   in   which   Aphton's   anti-gastrin   therapeutic   vaccine
Gastrimmune(TM)  was administered to patients with end-stage  colorectal  cancer
(i.e.  end-stage  "advanced" Dukes D). A more detailed  discussion of the study,
including the treatment  group and placebo  group,  prior  treatments and spread
(metastases),  median  survival  advantage  (in  contrast  to merely  response /
reduction of tumor size) of the treatment group, statistical significance,  both
by univariate and multivariate analysis, was presented in Aphton's Form 10-K for
the (new)  fiscal year ended  January 31, 1998,  and at the American  Society of
Clinical  Oncology  (ASCO),  in May,  1998.  Aphton's  Phase III  trial  program
currently encompasses the gastrointestinal system cancers of the colon / rectum;
stomach;  pancreas;  liver and  esophagus.  Since all of these are stimulated by
gastrin,  Aphton could and did select stomach cancer as the first indication for
which regulatory approval will be sought,  because:  (a) survival time, the "end
point," is short relative to colon cancer (the patients selected in Phase I/II);
(b) trial costs are relatively low; (c) there is no current  effective  therapy;
(d) the number of patients, worldwide, is in the millions.

Trials
While  Aphton  has been  building  the  infrastructure  and  network  of patient
recruitment  centers,  Aphton  is  close  to  completion  of  large  batches  of
manufactured  material  which  could  be used  for  large  numbers  of  doses of
Gastrimmune(TM).  This capacity  significantly  exceeds the amounts required for
the pivotal  stomach cancer trial;  thus,  planning is now well underway for the
colon and pancreatic cancer indications, as well. Aphton has been receiving many
calls from physicians and patients with cancers of the  gastrointestinal  system
seeking "Compassionate Use" with Gastrimmune(TM).  Regretfully,  however, Aphton
cannot offer such treatments at this time.

Strategic Alliances and Wall Street Research Coverage
We are very pleased to report that in June,  1998, both of management's  highest
priority-strategic objectives, exclusive of operations, were achieved.

A) On June 19, 1998, in a joint news release with  SmithKline  Beecham PLC (SB),
we  announced  our  worldwide   collaboration  and  license  agreement  for  the
diagnosis,  treatment and prevention of GnRH-related  cancers and other diseases
in humans. These reproductive system diseases include prostate,  breast, ovarian
and endometrial cancers, and endometriosis (non-cancer).

Under the agreement, which was described by research analysts (see (B) below) as
having a royalty mechanism which provides Aphton with "unusually rich commercial
terms" and which provides  exclusive  rights for SmithKline  Beecham to Aphton's
related  patents  and  proprietary   technology,   SmithKline  Beecham  will  be
responsible  for funding all costs of product  development,  clinical trials and
approvals for worldwide  marketing and distribution.  At July 31, 1998 there was
approximately  $150,000  due to  Aphton  from  SmithKline  Beecham  for  product
development costs incurred by Aphton.)

In addition:  1) SmithKline  Beecham  purchased from Aphton 237,867 newly issued
common shares, at a premium, for $5,000,000, and 2) Aphton has a two-year option
to sell to SmithKline Beecham additional newly-issued shares of common stock for
$5,000,000, at the then market price.

B) Also on  June  19,  1998,  Morgan  Stanley  Dean  Witter's  Biotech  research
analysts,  Douglas D. Lind, MD and  Christopher R. Leonard,  initiated  research
coverage with an Outperform  rating for Aphton.  Our strategic  objective was to
have a "Wall Street" firm initiate  research  coverage,  which we recognized was
crucial to our long-term  development plans. We would be less than forthright if
we did not state that we are very  pleased  that our first Wall Street  research
coverage was initiated by Morgan Stanley Dean Witter,  whose  reputation  speaks
for itself.

We believe the events and  achievements  discussed  herein have  positively  and
fundamentally  transformed Aphton, and that as further  achievements and product
developments are announced and reported upon,  Aphton's share price will, in due
course, reflect those achievements and developments.

Finally, we are very pleased to report that SmithKline  Beecham's management has
moved rapidly and  aggressively  to implement the agreement  with Aphton.  Joint
teams of SmithKline  Beecham and Aphton  Scientists and senior  management  have
been  meeting and  developing  clinical  trial  plans for the first  indication,
prostrate  cancer,  with  Aphton's  anti-GnRH  immunogen.  In parallel,  under a
manufacturing  program initiated previously by Aphton,  product will be released
shortly  for human  use.  A Phase  I/II  safety,  dose-ranging  and  preliminary
efficacy (testosterone marker) clinical trial will be initiated in the UK, where
regulatory  authority  and ethics  committee  permissions  to proceed  have been
received. In addition, plans are being formulated to expand the human trial into
Western Europe, early in 1999.

                           Year 2000 and Other Issues

Many computer programs were written to use only two digits to identify the year.
Thus, a computer  program  could read the digits "00" as the year 2000 or as the
year 1900. In addition,  microprocessors  embedded in many operating  facilities
such as communication  systems may cause equipment  malfunctions  because of the
year 2000 date change.  Failure by third  parties upon which the Company  relies
(or by the Company) to address the year 2000 issues could cause material loss to
the Company.

Management has completed the awareness and assessment  phase of a  comprehensive
program  to  address  the  year  2000  issue.  The  Company  utilizes   standard
"off-the-shelf"  software and will implement any necessary  vendor  upgrades and
modifications to assure continued functionality. At present, management does not
expect that material  incremental  costs will be incurred in the aggregate or in
any single future year.

The  Company  has also  begun to assess  the year  2000  compliance  efforts  of
external  parties  upon which the  Company  relies.  The  Company is  developing
contingency plans for addressing any material failure to deal with the year 2000
date change that will address the Company's  exposure to year 2000 noncompliance
by third parties.

Even though the Company's planned software and hardware modifications and system
upgrades should adequately  address year 2000 issues,  there can be no assurance
that  unforeseen  difficulties  will not arise.  There is no assurance  that the
failure of any  external  party to resolve its year 2000 issues would not have a
material adverse effect on the Company.

Although  the  Company  does not own or  engage  in the  trading  of  derivative
instruments  or  hedging  activities  we note that in June 1998,  the  Financial
Accounting  Standards  Board  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging  Activities."  SFAS No. 133  establishes  accounting and
reporting standards for derivative instruments and hedging activities.  SFAS No.
133 requires the  recognition of all derivative  instruments as either assets or
liabilities  in the  statement of financial  position and  measurement  of those
derivative  instruments at fair value.  SFAS No. 133 is effective for all fiscal
quarters of fiscal years  beginning  after June 15,  1999.  The adoption of this
standard will not effect the Company's financial statements.

Inflation and changing  prices have not had a  significant  effect on continuing
operations and are not expected to have any material  effect in the  foreseeable
future.  Dividend,  interest  and  other  income  were  primarily  derived  from
money-market accounts.
                         Liquidity and Capital Resources

The Company had financed its operations since inception  through the sale of its
equity securities and, to a lesser extent,  operating  revenues from R&D limited
partnerships  to conduct  research  and  development.  These funds  provided the
Company  with the  resources  to  acquire  staff,  construct  its  research  and
development  facility,  acquire capital equipment and to finance  technology and
product development, manufacturing and clinical trials.

On February 14, 1997 Aphton signed an agreement with Pasteur  Merieux  Connaught
("PMC")  (Rhone-Poulenc Group), a leader in medical science and research and the
world's largest vaccine manufacturer and marketer,  for a strategic alliance for
all human cancer applications of the Company's product  Gastrimmune(TM)including
stomach,  colorectal,  liver  and  pancreatic  cancers.  Under  the terms of the
twenty-year license and co-promotion  agreement,  Aphton will be responsible for
product  development,  clinical trials and regulatory agency approvals,  and PMC
will be responsible  for promotion,  advertising,  marketing,  distribution  and
sales of  Gastrimmune(TM)  in the United States,  Canada,  Europe (including the
C.I.S.  countries) and Mexico. Under the terms of the agreement,  in addition to
upfront consideration  aggregating $10 million including $1 million cash and the
supply  commitment  (of material  suitable for human use) of $9 million,  Aphton
will receive the majority of the profits from sales of Gastrimmune(TM)  with the
balance  of profits  to be  retained  by PMC.  There is no  provision  under the
agreement for the unconditional  supply commitment to be satisfied by PMC with a
cash payment.  (The $10 million  license payment was recognized for tax purposes
in the year ended April 30, 1997.)  Discussions  are continuing  between PMC and
Aphton for marketing rights to Gastrimmune(TM) in Japan and other Asian markets.

The Company  anticipates that its existing capital  resources which are composed
primarily of cash and short-term cash investments, including the proceeds of its
private  placements  and  interest  thereon,  would  enable it to  maintain  its
currently  planned  operations into the year 2000. The Company's working capital
and capital  requirements  will  depend upon  numerous  factors,  including  the
following:  the  progress of the  Company's  research and  development  program,
preclinical  testing  and  clinical  trials;  the timing  and cost of  obtaining
regulatory  approvals;  the  levels of  resources  that the  Company  devotes to
product  development,  manufacturing and marketing  capabilities;  technological
advances;  competition;  and collaborative  arrangements or strategic  alliances
with other drug companies, including the further development,  manufacturing and
marketing of certain of the Company's products and the ability of the Company to
obtain funds from such strategic alliances or from other sources.


                           PART II - Other information

Item 1.   Legal Proceedings.  Not applicable.

Item 2.   Changes in Securities.  Not applicable.

Item 3.   Defaults Upon Senior Securities.  Not applicable.

Item 4.   Submission of Matters to a Vote of Security Holders.  Not applicable.

Item 5.   Other Information.  Not applicable.

Item 6.   Exhibits and Report on Form 8-K.

          a.     Exhibit Numbers
                 27.1   Financial Data Schedule

          b.     There were no reports on Form 8-K filed during this quarter.



















                                    Signature

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
                                                   Aphton Corporation

Date:  September 1, 1998                By:       /s/ Philip C. Gevas
                                                           --------------------
                                                      Philip C. Gevas
                                                      Chairman, President and 
                                                      Chief Executive Officer