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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
         (MARK ONE)

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

                  FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

         [ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM __________ TO __________

                         COMMISSION FILE NUMBER 0-27578
                         ------------------------------

                              SUNPHARM CORPORATION
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)


               DELAWARE                               F593097048
    (STATE OR OTHER JURISDICTION OF       (I.R.S. EMPLOYER IDENTIFICATION NO.)
    INCORPORATION OR ORGANIZATION)



                             THE VERANDA, SUITE 301
                                 814 HIGHWAY A1A
                           PONTE VEDRA BEACH, FL 32082
                         (ADDRESS OF PRINCIPAL EXECUTIVE
                                    OFFICES)



                    ISSUER'S TELEPHONE NUMBER: (904) 394-2800


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

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 [ ]

         Number  of  shares  of the  issuer's  Common  Stock  outstanding  as of
November 11, 1999: 7,400,244.

================================================================================

<PAGE>

                 STATEMENT REGARDING FORWARD-LOOKING INFORMATION

         This  Quarterly   Report  on  Form  10-QSB  contains   "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities  Act"), and Section 21E of the Securities  Exchange Act
of 1934, as amended (the "Exchange Act"). Actual results could differ materially
from those projected in the  forward-looking  statements as a result of a number
of important  factors.  For a discussion of important  factors that could affect
the  results  of  SunPharm  Corporation  (the  "Company"),  please  refer to the
discussions herein and to those contained in the Company's Annual Report on Form
10-KSB for the year ended  December 31, 1998 (the "1998 Form 10-KSB")  under the
caption "Item 1. Description of Business - Risk Factors."

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

         The  following  unaudited  financial   statements  have  been  prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and notes, normally disclosed in annual financial statements
prepared in accordance with generally accepted accounting principles,  have been
omitted pursuant to these rules and regulations.  However,  the Company believes
that the  disclosures  made  herein  are  adequate  and,  accordingly,  that the
information  presented is not misleading.  These financial  statements should be
read in conjunction  with the financial  statements and notes for the year ended
December 31, 1998, which are included in the 1998 Form 10-KSB.

                                       -1-
<PAGE>
<TABLE>
<CAPTION>
                                              SunPharm Corporation
                                          (A Development Stage Company)

                                                 BALANCE SHEETS
                                                   (Unaudited)

                                                                                    September 30    December 31,
                                                                                       1999             1998
                                                                                    ------------    ------------
<S>                                                                                 <C>             <C>
    ASSETS
Current Assets:
      Cash ......................................................................   $     28,518    $         --
      Short-term investments ....................................................             --       1,699,200
      Receivables ...............................................................        635,000
      Prepaid expenses and other ................................................         67,375         162,734
                                                                                    ------------    ------------
               Total current assets .............................................        730,893       1,861,934

Receivable from stockholder .....................................................        132,078         124,865
Property and equipment, net .....................................................         53,475          57,933
Other assets ....................................................................          9,275           9,275
                                                                                    ------------    ------------
                                                                                    $    925,721    $  2,054,007
                                                                                    ============    ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
      Accounts payable ..........................................................   $  1,046,510    $    213,627
      Accrued liabilities .......................................................        101,438         135,580
      Notes payable .............................................................         14,248         102,706
      Other .....................................................................         92,961              --
                                                                                    ------------    ------------
               Total current liabilities ........................................      1,255,157         451,913

Stockholders' (Deficit) Equity:
      Undesignated preferred stock, par value $0.001
         per share;  2,000,000 shares authorized;
         0 shares issued and outstanding ........................................             --              --
      Series A preferred stock, par value $0.001 per
         share; 300,000 shares authorized; 300,000
         shares issued and outstanding ..........................................            300             300
      Series B preferred stock, par value $0.001 per
         share; 200,000 shares authorized; 66,667
         and 0 shares issued and outstanding ....................................             67              --
      Common stock, par value $0.0001 per share;
         25,000,000 shares authorized; 7,249,241
         and 6,621,395 shares issued and
         outstanding ............................................................            725             662
      Additional paid-in capital ................................................     21,671,051      20,871,578
      Accumulated deficit during development stage ..............................    (22,001,580)    (19,270,446)
                                                                                    ------------    ------------
               Total stockholders' (deficit) equity .............................       (329,437)      1,602,094
                                                                                    ------------    ------------
                                                                                    $    925,721    $  2,054,007
                                                                                    ============    ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                                       -2-
<PAGE>
<TABLE>
<CAPTION>
                                    SunPharm Corporation
                               (A Development Stage Company)

                                  STATEMENTS OF OPERATIONS
                                        (Unaudited)

                                                              Three Months Ended September 30,
                                                                    1999           1998
                                                                 -----------    -----------
<S>                                                              <C>            <C>
Revenues:
      Sponsored Research/Sublicensing Revenue ................   $   625,000    $   100,000
      Interest Income ........................................         4,941         32,695
      Miscellaneous Income ...................................         3,600             --
                                                                 -----------    -----------
          Total Revenues .....................................       633,541        132,695

Expenses:
      Research and Development ...............................       900,672        687,770
      General and Administrative .............................       360,412        362,996
      Royalty Expense ........................................       175,000             --
                                                                 -----------    -----------
          Total Expenses .....................................     1,436,084      1,050,766
                                                                 -----------    -----------

Net Loss .....................................................   $  (802,543)   $  (918,071)
                                                                 ===========    ===========

Net Loss per Share ...........................................   $     (0.11)   $     (0.16)
                                                                 ===========    ===========

Shares used in computing loss per share ......................     7,015,331      5,767,830
                                                                 ===========    ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                             -3-
<PAGE>
<TABLE>
<CAPTION>
                                             SunPharm Corporation
                                         (A Development Stage Company)

                                           STATEMENTS OF OPERATIONS
                                                  (Unaudited)


                                                                                             From Inception
                                                                                             (May 3, 1990)
                                                           Nine Months Ended September 30,      Through
                                                               1999           1998         September 30, 1999
                                                            -----------    -----------     ------------------
<S>                                                         <C>            <C>                <C>
Revenues:
      Sponsored Research/Sublicensing Revenue ...........   $   625,000    $   100,000        $  3,740,729
      Interest Income ...................................        38,001        128,726             716,434
      Miscellaneous Income ..............................         6,000             --               6,000
                                                            -----------    -----------        ------------
          Total Revenues ................................       669,001        228,726           4,463,163

Expenses:
      Research and Development ..........................     1,856,492      1,852,568          14,352,293
      General and Administrative ........................     1,368,642      1,382,209          11,447,449
      Royalty Expense ...................................       175,000             --             665,000
                                                            -----------    -----------        ------------
          Total Expenses ................................     3,400,134      3,234,777          26,464,742
                                                            -----------    -----------        ------------

Net Loss ................................................   $(2,731,134)   $(3,006,051)       $(22,001,580)
                                                            ===========    ===========        ============

Net Loss per Share ......................................   $     (0.40)   $     (0.52)
                                                            ===========    ===========

Shares used in computing loss per share .................   $ 6,875,328      5,760,419
                                                            ===========    ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                                    -4-

<PAGE>
<TABLE>
<CAPTION>
                                                        SunPharm Corporation
                                                    (A Development Stage Company)

                                                  STATEMENT OF STOCKHOLDERS' EQUITY
                                                             (Unaudited)


                                                                                                                          Deficit
                                                                                                                        Accumulated
                                    Redeemable Convertible Preferred Stock                               Additional        During
                                        Series A              Series B              Common Stock          Paid-In       Development
                                    Shares    Amount      Shares    Amount        Shares      Amount      Capital          Stage
                                    ---------------------------------------      --------------------   ------------   ------------
<S>                                 <C>       <C>          <C>      <C>          <C>         <C>        <C>            <C>
Balance at December 31, 1998 ....   300,000   $   300          --        --      6,621,395   $    662   $ 20,871,578   $(19,270,446)

Issuance of Common Stock ........        --        --          --        --        627,846         63        532,872             --

Issuance of Preferred Stock .....        --        --      66,667   $    67             --         --        266,601             --

Net Loss ........................        --        --          --        --             --         --             --     (2,731,134)
                                    ---------------------------------------      --------------------   ------------   ------------

Balance at September 30, 1999 ...   300,000   $   300      66,667   $    67      7,249,241   $    725   $ 21,671,051   $(22,001,580)
                                    =======================================      ====================   ============   ============
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                                                 -5-
<PAGE>
<TABLE>
<CAPTION>
                                                 SunPharm Corporation
                                            (A Development Stage Company)

                                               STATEMENTS OF CASH FLOWS
                                                     (Unaudited)
                                                    From Inception
                                                                                                      May 3, 1990
                                                                    Nine Months Ended September 30,     through
                                                                         1999            1998      September 30, 1999
                                                                     ------------    ------------  ------------------
<S>                                                                  <C>             <C>             <C>
Operating activities
     Net loss ....................................................   $ (2,731,134)   $ (3,006,051)   $(22,001,580)
     Adjustments to reconcile net loss to net
       cash used in operating activities:
           Depreciation and amortization .........................          7,733           5,544          93,413
           Compensation expense related to options,
             warrants and stock appreciation rights ..............             --              --         999,016
           Amortization of deferred offering costs
             incurred in connection with
             issuance of Bridge Notes ............................             --              --         775,000
           Write-off of patents ..................................             --              --          70,120
           Increase in receivable from
             stockholder .........................................         (7,213)        (13,186)       (132,078)
           (Increase) decrease in receivables, prepaid
              expenses and other assets ..........................       (539,641)        145,755        (710,041)
           Increase (decrease) in accounts payable ...............        832,883        (182,994)      1,046,510
           (Decrease) increase in accrued liabilities ............        (34,142)        (33,998)        407,688
           Increase in other liabilities .........................         92,961              --          92,961
                                                                     ------------    ------------    ------------
             Total adjustments ...................................        352,581         (78,879)      2,642,589
                                                                     ------------    ------------    ------------
Net cash used in operating activities ............................     (2,378,552)     (3,084,930)    (19,358,990)
                                                                     ------------    ------------    ------------

Investing activities
     Purchases of short-term investments .........................     (3,384,030)     (4,694,296)    (29,872,861)
     Sales and maturities of short-term investments ..............      5,083,230       8,465,508      29,872,861
     Purchases of property and equipment .........................         (3,275)        (25,068)        (83,193)
     Payment of patent costs .....................................             --              --         (67,424)
                                                                     ------------    ------------    ------------
Net cash provided by (used in) investing activities ..............      1,695,925       3,746,144        (150,617)
                                                                     ------------    ------------    ------------

Financing activities
     Repayments of notes payable .................................        (88,459)       (155,271)        (85,753)
     Issuance of Series A preferred stock ........................             --              --       1,673,225
     Issuance of Series B preferred stock ........................        266,668              --         716,668
     Issuance of common stock ....................................        532,935          17,585      17,831,332
     Stock offering costs ........................................             --              --        (597,348)
     Repayment of payable to shareholders ........................             --              --              --
                                                                     ------------    ------------    ------------
Net cash provided by (used in) financing activities ..............        711,145        (137,686)     19,538,125
                                                                     ------------    ------------    ------------

Net change in cash ...............................................         28,518         523,528          28,518
Cash at beginning of period ......................................             --         356,969              --
                                                                     ------------    ------------    ------------
Cash at end of period ............................................   $     28,518    $    880,497    $     28,518
                                                                     ============    ============    ============

Supplemental information:
     Cash paid for interest ......................................   $      2,922    $      3,550    $    170,374
                                                                     ============    ============    ============
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                                       -6-

<PAGE>


                              SUNPHARM CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The balance  sheet at September  30, 1999,  the related  statements  of
operations  for the three- and nine-month  periods ended  September 30, 1999 and
1998 and the period from inception (May 3, 1990) through September 30, 1999, the
statement of  stockholders'  equity at September 30, 1999, and the statements of
cash flows for the nine-month  periods ended September 30, 1999 and 1998 and the
period from inception  through  September 30, 1999 are unaudited.  These interim
financial statements should be read in conjunction with the financial statements
and  related  notes  included in the 1998 Form  10-KSB.  The  unaudited  interim
financial  statements  included herein reflect all adjustments which are, in the
opinion of management, necessary for a fair statement of results for the interim
periods  presented,  and all such adjustments are of a normal recurring  nature.
Interim results are not necessarily indicative of results for a full year.

NET LOSS PER SHARE

         Net loss per share is computed based on the weighted-average  number of
shares of Common Stock outstanding for the period.

PATENT COSTS

         The Company  reimburses the University of Florida Research  Foundation,
Inc.  ("UFRFI") for direct expenses  relating to the Company's  patents.  Patent
costs  consist  of  legal  fees and  other  direct  costs  incurred  in  filing,
prosecuting,  and maintaining the licensed  patents.  These costs are charged to
research and development expense when incurred.

RESEARCH AND DEVELOPMENT

         Sponsored research payments are recognized as revenue when the research
underlying such payments has been performed.  Research and development  expenses
are charged to  operations  when  incurred.  Research and  development  expenses
include  consulting fees and cost of  reimbursements  to UFRFI,  preclinical and
clinical  testing  of drug  compounds  under  investigation,  and  salaries  and
benefits of employees engaged in research and development activities.

                                      -7-
<PAGE>


SEGMENT INFORMATION

         The Company is in one business  segment and follows the requirements of
SFAS  No.  131,   "Disclosure  about  Segments  of  an  Enterprise  and  Related
Information."

NEW ACCOUNTING STANDARD

         In June 1998, the Financial  Accounting Standards Board issued SFAS No.
133,  "Accounting for Derivative  Instruments and Hedging Activities" ("SFAS No.
133"),  effective for fiscal years  beginning  after June 15, 1999. SFAS No. 133
requires  companies  to record  derivatives  on the balance  sheet as assets and
liabilities,  measured at fair value.  Gains or losses resulting from changes in
the values of those  derivatives  would be accounted for depending on the use of
the derivative and whether it qualifies for hedge  accounting.  In May 1999, the
Financial  Accounting  Standards Board postponed the effective date for SFAS No.
133 to fiscal years beginning after June 15, 2000. At this time, the Company has
not determined the effect of this statement on its financial statements.


2.       MERGER WITH GELTEX PHARMACEUTICALS, INC.

         On August 13,  1999,  the  Company's  Board of  Directors  approved the
merger of the  Company  with GelTex  Pharmaceuticals,  Inc.,  a publicly  traded
Delaware  corporation  ("GelTex"),  through a reverse triangular merger in which
the Company would merge with a wholly owned  subsidiary  of GelTex.  The Company
entered into a merger  agreement to effect such  transaction on August 13, 1999.
Both the  merger  and the  merger  agreement  are  subject  to  approval  by the
Company's  stockholders  at a special  meeting to be held on November  16, 1999.
Pursuant to the terms of the merger agreement,  the Company's  stockholders will
receive  shares of  common  stock of GelTex  for their  shares of the  Company's
Common Stock and Preferred  Stock. If the stockholders  approve the merger,  the
merger will be  effected,  and the closing of the merger  agreement  will occur,
immediately following the special meeting.


3.       LICENSE AGREEMENT WITH SCHEIN PHARMACEUTICAL, INC.

         On September  30,  1999,  the Company and Schein  Pharmaceutical,  Inc.
("Schein")  entered  into an exclusive  license  agreement  whereby  Schein will
obtain the  rights to develop  and market a  proprietary  iron  chelator  in the
Untied States, Europe and certain Far Eastern territories.  Under the agreement,
the Company is entitled to receive  payments  contingent  upon reaching  certain
clinical,  regulatory and manufacturing  milestones, in addition to royalties on
sales.

                                      -8-
<PAGE>


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

OVERVIEW

         Since its inception in May 1990, the Company has devoted  substantially
all of its efforts and  resources to research and  development  conducted on its
own behalf and through collaborations with clinical institutions.  The Company's
drug  development  strategy  emphasizes  conducting its research and preclinical
activities at the University of Florida, with clinical investigations  conducted
at various sites,  including the University of Florida. The Company has incurred
cumulative net losses of $22,001,580  from its inception  through  September 30,
1999.

         The Company has recently  undertaken an assessment of its financial and
operational systems to ensure Year 2000 ("Y2K") compliance.  Y2K problems result
from the inability of certain  computer  programs or  computerized  equipment to
accurately  calculate,  store or use a date  subsequent  to  December  31,  1999
because  certain  computer  programs or equipment may interpret the year 2000 as
the year 1900. This could result in a system failure or miscalculations  causing
disruptions of operations,  including, among other things, a temporary inability
to process  transactions,  send invoices or engage in similar  normal  business.
Based on its review to date, the Company does not anticipate  that it will incur
any  significant  costs  relating to the  remediation of Y2K issues or cause any
significant  costs to be incurred by GelTex if the merger discussed in Note 2 to
the financial  statements  herein is approved.  Similarly,  the Company believes
that the potential impact, if any, of its systems not being Y2K compliant should
not impact the  Company's  or GelTex's  ability to  continue  its  research  and
development activities. However, there can be no assurance at this time that the
Company,  its  research  and  business  partners,   vendors  or  customers  will
successfully be able to identify and remedy all potential Y2K problems or that a
system failure  resulting from a failure to identify any such problems would not
have a material adverse effect on the Company.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

         Interest  income  decreased  to  $5,000  for  the  three  months  ended
September 30, 1999 from $33,000  earned in the same period in 1998. The decrease
is attributable to a lower average cash balance  available for investment during
the current quarter.

         The $625,000 of  sublicensing  revenue was  attributable to the license
agreement executed with Schein Pharmaceutical,  Inc. The related liability for a
28% royalty payment to the University of Florida Research  Foundation,  Inc. was
included in accounts payable.

         The Company's  research and development  expenses  totaled $901,000 for
the quarter, an increase of 24% from the $688,000 recorded in the same period in
1998.  The higher  expenses  in the  current  period  were due to an increase in
pre-clinical  and  regulatory  expenses,  in that the Company was  preparing  to
initiate clinical investigations during the current period.

                                       -9-
<PAGE>


         General and administrative  expenses were $360,000 for the three months
ended September 30, 1999,  essentially  unchanged from the $363,000  recorded in
the same period in 1998.

NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

         Interest  income  decreased  to  $38,000  for  the  nine  months  ended
September 30, 1999 from $129,000 earned in the same period in 1998. The decrease
is attributable to a lower average cash balance available for investment.

         The  $625,000  of  changed   research  to   sublicensing   revenue  was
attributable  to the license  agreement  with Schein  Pharmaceutical,  Inc.  The
related  liability  for a 28%  royalty  payment  to the  University  of  Florida
Research Foundation, Inc. was included in accounts payable.

         The Company's research and development  expenses totaled $1,856,000 for
the nine months ended  September 30, 1999, a slight increase from the $1,853,000
recorded in the same period in 1998.

         General and administrative expenses were $1,369,000 for the nine months
ended September 30, 1999, as compared to $1,382,000 for the same period in 1998,
a decrease of 1%.

LIQUIDITY AND CAPITAL RESOURCES

         Since  inception,  the Company has  financed its  operations  primarily
through  collaborative  research and  sublicense  agreements  with its strategic
alliance  partners  and  through  the  issuance  of debt and equity  securities.
Through  September 30, 1999,  the Company has received  $3,741,000 of cumulative
sponsored  research and  sublicensing  revenues and $21,672,000 in consideration
for the  issuance  of debt and equity  securities,  including  net  proceeds  of
approximately  $7,200,000  related to its IPO in January 1995. Between August 4,
1999 and  November  11,  1999,  the Company  received  $339,000 in cash from the
exercise of various options and warrants.

         During the nine  months  ended  September  30,  1999,  net cash used in
operating activities was $2,379,000, compared with $3,085,000 for the comparable
period in 1998.  The lower use of cash in the current  period was due to a lower
net loss resulting from lower expenses, as previously discussed, and also due to
an increase in the Company's  accounts payable  balance.  At September 30, 1999,
the Company had cash and investments totaling $29,000,  compared with $1,699,000
at December 31, 1998.  The Company's  working  capital was negative  $525,000 at
September 30, 1999, compared to $1,410,000 at December 31, 1998. These decreases
are attributable to the Company's use of cash to fund its operations  during the
first nine months of 1999.

         On August 13,  1999,  the  Company's  Board of  Directors  approved the
merger of the  Company  with  GelTex  Pharmaceuticals,  Inc. a  publicly  traded
Delaware  corporation  ("GelTex"),  through a reverse triangular merger in which
the Company would merge with a wholly owned  subsidiary  of GelTex.  The Company

                                      -10-
<PAGE>


entered into a merger  agreement to effect such  transaction on August 13, 1999.
Both the merger and the merger agreement are subject to approval by the Company'
stockholders  at a special  meeting  to be held on  November  16,  1999.  In the
merger, the Company's stockholders will receive shares of common stock of GelTex
for their shares of the  Company's  Common  Stock and  Preferred  Stock.  If the
stockholders approve the merger, the merger will be effected, and the closing of
the merger agreement will occur, immediately following the special meeting.

         On February 16, 1999,  the  underwriter  of the Company's IPO agreed to
surrender  its option to purchase  110,000  shares of Common Stock at $11.20 per
share,  which it had  acquired in  connection  with the IPO and which was due to
expire on January 12,  2000.  In exchange  for  surrender  of this  option,  the
Company  agreed  to issue an equal  number  of  shares  of  Common  Stock to the
underwriter at $0.60 per share, for total proceeds of $66,000. Subsequent to the
date of the agreement  and payment of proceeds to the Company,  but prior to the
surrender of the  underwriter's  option,  it was determined that the underwriter
had previously  assigned or disposed of a portion of its option.  Accordingly on
August  11,  1999,  the  Company  made a decision  to refund to the  underwriter
$43,200 of the $66,000  proceeds and reduce the number of shares of Common Stock
to be issued from 110,000 to 38,000.

         The  Company's  future  success is  affected  by a variety of  factors,
including progress of the Company's research and development efforts, results of
pre-clinical  studies and  clinical  trials,  the cost and timing of  regulatory
approvals, the Company's ability to obtain patent protection for its products on
a  cost-effective  and  timely  basis,  the  rate  of  technological   advances,
determinations  as to the commercial  potential of the Company's  products under
development,   the  status  of  competitive   products,   the  establishment  of
manufacturing capacity or third-party manufacturing  arrangements,  its reliance
on research institutions and corporate partners,  the uncertainty of health care
reform,  and the competitive  environment in which the Company operates.  Nasdaq
has notified the Company that,  while it is currently not in compliance with the
minimum net  tangible  asset  requirement  for  continued  listing on the Nasdaq
SmallCap  Market,  it has been granted an extension to remain out of  compliance
until  November  30,  which is intended to allow  completion  of its merger with
GelTex. If the merger is not completed by such date, the Company may be delisted
from  quotation  on the Nasdaq  SmallCap  Market.  In  addition,  the  Company's
existing  capital  resources  will  not be  sufficient  to  fund  the  Company's
operations to the point of introduction of a commercially successful product, if
and when that time should  arrive.  No  assurance  can be given that  additional
capital will be available on acceptable  terms,  if at all. At the present time,
the Company's  cash balance is  sufficient  to fund  operations to the scheduled
closing of the merger with GelTex on November 16, 1999.

                                      -11-
<PAGE>


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)   EXHIBITS

                10.1+   Sublicense  Agreement  dated  October  4,  1999  between
                        Schein Pharmaceutical, Inc. and SunPharm Corporation

                11.1*   Statement  of  computation  of weighted  average  shares
                        outstanding and net loss per share

                27.1*   Financial Data Schedule




-----------------
+    Confidential  treatment has been  requested for portions of the  referenced
     agreement.  The copy filed as an exhibit omits the  information  subject to
     the confidentiality request.
*    Filed herewith

                                      -12-
<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.

                           SUNPHARM CORPORATION


Date:  November 15, 1999   By:  /s/ STEFAN BORG
                                ------------------------------------------------
                                    Stefan Borg
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)


Date:  November 15, 1999   By:  /s/ PAUL M. HERRON
                                ------------------------------------------------
                                    Paul M. Herron
                                    Vice President and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)

                                      -13-