<PAGE>

                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549
                                      FORM 10-Q
                                           
                                           
(Mark One)
                                           
(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended  March 31, 1997
                                     ---------------
                                         or

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

     For the transition period from _______________ to ____________



Commission File Number  0-20138
                        --------

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

           Delaware                                 22-3072524
           --------                                 ----------
(State or other jurisdiction of                  (I.R.S. Employer
 incorporation or organization)                  Identification No.)


  4 Pearl Court, Allendale, New Jersey               07401-1623
  ------------------------------------               ----------
(Address of Principal Executive Offices)             (Zip Code)


  Registrant's telephone number, including area code - (201) 818-1000
 ---------------------------------------------------------------------



Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter periods 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 
                        -------          ----------

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date:  Common Stock, $.01 par 
value, 455,108 Shares at May 14, 1997.

<PAGE>
                                           
                                  PHARMAGENICS, INC.
                                           
                                  INDEX TO FORM 10-Q
                                           


                                                                          Page

PART  I. FINANCIAL INFORMATION


         Item  1.  Financial Statements

         Balance Sheets as of March 31, 1997 and
         December 31, 1996...............................................  3

         Statements of Operations for the Three Month periods 
         ended March 31, 1997 and March 31, 1996.........................  4

         Statements of Cash Flows for the Three Month periods
         ended March 31, 1997 and March 31, 1996.........................  5

         Notes to Financial Statements...................................  6

         Item 2.    Management's Discussion and Analysis of Financial
         Condition and Results of Operations............................. 10

PART II. Item 1.   Legal Proceedings..................................... 15

         Item 2.   Changes in Securities................................. 15

         Item 6.   Exhibits and Reports on Form 8-K...................... 15


                                         -2- 
<PAGE>
                               PHARMAGENICS, INC.
                                 BALANCE SHEETS
 
                                                
ASSETS                                MARCH 31, 1997    DECEMBER 31, 1996
------                               ---------------    -----------------
                                        (UNAUDITED)
Current assets:
  Cash and cash equivalents...........   $  359,982    $   486,109
  Accounts receivable.................      329,598        185,972
  Prepaid expenses....................       64,349         38,183
                                         ----------     ----------
    Total current assets..............      753,929        710,264

Property and equipment, net of                 
  $2,163,596 and $2,073,642 of
  accumulated depreciation............      701,962        782,638
Other assets..........................       40,425         40,425
                                         ----------     ----------
    Total assets......................   $1,496,316     $1,533,327
                                         ----------     ----------
                                         ----------     ----------
LIABILITIES

Current liabilities:
  Accounts payable and accrued                   
    expenses..........................   $1,241,556     $1,599,987
  Deferred revenue....................           --        315,200
  Current obligations under capital              
    leases............................      147,432        147,102
                                         ----------     ----------
      Total current liabilities.......    1,388,988      2,062,289
Long-term obligations under capital            
  leases..............................       21,443         25,177
Note Payable..........................    1,662,272             --
                                         ----------     ----------
    Total liabilities.................    3,072,703      2,087,466
                                         ----------     ----------
Commitments and contingencies

STOCKHOLDERS' EQUITY (DEFICIT)

Preferred stock--$.01 par value,
  10,000,000 shares authorized:
  Series A convertible preferred  
    stock, 2,500,000 shares
    designated, 2,458,420 and
    2,160,000 shares issued and outstanding
    at March 31, 1997 and December 31, 1996,
    respectively, liquidation preference 
    $4,572,661 and $4,017,600 at
    March 31, 1997 and December 31, 1996,
    respectively........................      24,584         21,600

  Series B convertible preferred   
    stock, 2,500,000 shares designated,
    2,227,263 and 2,138,399 shares
    issued and outstanding at March 31, 
    1997 and December 31,1996,
    respectively, liquidation preference 
    $16,704,473 and 16,038,000 at March 31,
    1997 and December 31, 1996, 
    respectively........................      22,273         21,384

  Series C convertible preferred stock,
    4,717,700 shares designated, 4,717,700 
    and 3,076,556 shares issued and
    outstanding at March 31, 1997 and
    December 31,1996, respectively,
    liquidation preference $10,143,055
    and $6,614,595 at March 31, 1997 and
    December 31,1996, respectively......      47,177         30,765

Common stock--$.01 par value,        
  15,000,000 shares authorized,
  455,108 shares issued and outstanding 
  at March 31, 1997 and  December 31,
  1996, respectively                           4,551          4,551
Additional paid-in capital...........     30,795,934     26,066,218
Accumulated deficit..................    (32,464,719)   (26,692,470)
Deferred compensation................         (6,187)        (6,187)
                                          ----------     ----------
Total stockholders' equity                              
  (deficit)..........................     (1,576,387)      (554,139)
                                          ----------     ----------
Total liabilities and stockholders'                   
  equity (deficit)...................     $1,496,316     $1,533,327
                                          ----------     ----------
                                          ----------     ----------
 
   The accompanying notes are an integral part of these financial statements.
 
                                      3
<PAGE>

                               PHARMAGENICS, INC.
 
                           STATEMENTS OF OPERATIONS
                                  (Unaudited)
 
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED MARCH
                                                                               31,
                                                                    -------------------------
<S>                                                                 <C>            <C>
                                                                        1997          1996
                                                                    -------------  ----------
Revenues:
     Grants.......................................................  $      23,419  $   --

     Research contracts...........................................       --           498,470

     Other........................................................         51,425      --
                                                                    -------------  ----------
        Total revenues............................................         74,844     498,470
                                                                    -------------  ----------

Costs and expenses:

     Research and development.....................................      1,062,649   1,090,645

     In-process technology........................................      4,434,800      --

     General and administrative...................................        340,287     330,708
                                                                    -------------  ----------
        Total costs and expenses..................................      5,837,736   1,421,353
                                                                    -------------  ----------

Loss from operations..............................................     (5,762,892)   (922,883)

Interest expense..................................................        (13,188)    (14,488)

Interest income...................................................          3,831      42,161
                                                                    -------------  ----------

NET LOSS..........................................................  ($  5,772,249) ($ 895,210)
                                                                    -------------  ----------
                                                                    -------------  ----------

Net loss per common share.........................................  $      (12.68) $    (1.98)
                                                                    -------------  ----------
                                                                    -------------  ----------

Weighted average common shares outstanding........................        455,108     451,608
                                                                    -------------  ----------
                                                                    -------------  ----------
</TABLE>
 
     The accompanying notes are an integral part of these financial statements.
 
                                       -4-
<PAGE>

                               PHARMAGENICS, INC.
 
                           STATEMENTS OF CASH FLOWS 
                                  (Unaudited)
 
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED MARCH
                                                                              31,
                                                                   --------------------------
<S>                                                                <C>            <C>
                                                                       1997          1996
                                                                   -------------  -----------
OPERATING ACTIVITIES:
  Net loss.......................................................  $  (5,772,249) $  (895,210)
  Adjustments to reconcile net loss to net cash used in operating
  activities:
    Depreciation and amortization................................         89,955       87,715
    Technology rights acquired for shares of preferred stock.....      4,750,000         --
    Interest accrued on Note Payable.............................         12,272         --
    Amortization of deferred compensation expense................          --           2,063
    Changes in operating assets and liabilities:
      (Increase) in accounts receivable..........................       (143,626)    (106,842)
      (Increase) in prepaid expenses.............................        (26,166)     (18,220)
      (Decrease) in accounts payable and accrued expenses........       (358,431)     (13,823)
      (Decrease) in deferred revenue.............................       (315,200)    (184,000)
                                                                   -------------  -----------

    Net cash used in operating activities........................     (1,763,445)  (1,128,317)
                                                                   -------------  -----------

INVESTING ACTIVITIES:

  Capital expenditures...........................................         (9,278)      (8,816)
                                                                   -------------  -----------

    Net cash used in investing activities........................         (9,278)      (8,816)
                                                                   -------------  -----------
FINANCING ACTIVITIES:

  Payments on capital lease obligations..........................         (3,404)     (62,108)
  Proceeds from Note Payable.....................................      1,650,000         --
  Issuance of Series C convertible preferred stock...............          --       3,697,922
                                                                   -------------  -----------

      Net cash provided by financing activities..................      1,646,596    3,635,814
                                                                   -------------  -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS........................       (126,127)   2,498,681

Cash and cash equivalents at beginning of period.................        486,109    1,639,182
                                                                   -------------  -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD.......................  $     359,982  $ 4,137,863
                                                                   -------------  -----------
                                                                   -------------  -----------

Supplemental disclosure of cash flow information:

Cash paid during the period for interest.........................  $         916  $    14,488
                                                                   -------------  -----------
                                                                   -------------  -----------
</TABLE>
 
    The accompanying notes are an integral part of these financial statements
 
                                       -5-
<PAGE>


                                PHARMAGENICS, INC.
                                           
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)
                                           
NOTE  1  -  The Company

         PharmaGenics, Inc. (the "Company"), a Delaware corporation, was 
incorporated on August 11, 1989.  The Company is an integrated drug discovery 
company principally engaged in the research and development of 
pharmaceuticals for the treatment of cancer.  The Company s research programs 
in cancer center upon certain key genes, called "tumor suppressor genes," 
that are responsible for the production of proteins that generally function 
to prevent the unregulated growth of cells.  The Company targets tumor 
suppressor genes and other cancer-related genes in search of desirable 
therapeutics against cancer.

         The Company is subject to a number of risks at this stage of 
development, including, but not limited to, uncertainties relating to whether 
patents will issue and whether patents that issue will provide the Company 
with adequate protection from other products or competitors; dependence on 
key individuals for achievement of the Company's expectations which the 
Company believes are based on reasonable assumptions within the bounds of its 
knowledge of its business and operations; continued collaboration between the 
Company and its corporate, governmental and academic collaborators; 
establishment of additional collaborations with academia or corporations; 
uncertainty whether the Company's research and development activities will 
result in the development of commercially usable products and processes; 
competition from alternative products or processes; uncertainties related to 
technological improvements and advances; the impact of research and product 
development activities of competitors of the Company, many of whom have more 
substantial financial or other resources than those of the Company; the need 
and ability to obtain adequate additional financing necessary to fund 
continuing operations and product development and the terms on which such 
financing might be available; the ability to obtain lease financing for 
capital equipment; uncertainties related to clinical trials; uncertainties of 
obtaining required regulatory approvals; uncertainties related to whether 
legal proceedings will be initiated against the Company, including in 
connection with the proposed merger of the Company with Genzyme Corporation 
("Genzyme"), and the outcome of any such proceedings; and uncertainties of 
future profitability.  The Company expects that it would, as an independent 
company, have to incur substantial additional costs before it could begin to 
generate revenue from product sales sufficient to fund its operations, 
including costs related to ongoing research and development activities, 
preclinical studies and regulatory compliance, and for hiring additional 
management, scientific, manufacturing, sales and administrative personnel.

         The Company received a stand-by credit facility (the "Credit 
Facility") in connection with entering into an Agreement and Plan of Merger 
as of January 31, 1997 (the "Merger Agreement") with Genzyme.  The Company 
made an initial draw of $1,000,000 in February, 1997 and additional draws of 
$650,000 in March, 1997 and $800,000 in May, 1997, for total draws, to date, 
of $2,450,000 under the Credit Facility.  The Company believes that amounts 
drawn and available under the Credit Facility are sufficient to fund 
operations until the expected closing of the proposed merger with Genzyme in 
mid-June, 1997.  The proposed merger with Genzyme is subject to the approval 
of the Company's stockholders and Genzyme's stockholders and certain other 
conditions.  The Company will require substantial additional funds should the 
proposed merger with Genzyme not be consummated.  Uncertainties relating to 
the proposed merger with Genzyme and the Credit Facility are additional 
meaningful factors that could cause actual results to differ materially and 
adversely from the Company's expectations.

NOTE  2  -  Proposed Merger with Genzyme

         As of January 31, 1997, the Company and Genzyme entered into the 
Merger Agreement pursuant to which the Company, on the terms and conditions 
set forth in the Merger Agreement, is to be merged with and into Genzyme with 
Genzyme being the surviving corporation (the "Proposed Merger").  

                                         -6- 
<PAGE>


                                  PHARMAGENICS, INC.
                                           
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)
                                           
NOTE  2  -  Proposed Merger with Genzyme (continued)

This Proposed Merger is intended to be a tax-free reorganization within the 
meaning of the Internal Revenue Code.  As consideration for the Proposed 
Merger, the Company's stockholders are to receive approximately 4 million 
shares (subject to certain adjustments set forth in the Merger Agreement) of 
a new Genzyme security (the "GMO Stock"), representing 40% of the initial 
equity interest in a new division of Genzyme, to be known as the Genzyme 
Molecular Oncology division (the "GMO Division"), to be formed within Genzyme 
through the combination of the business of the Company with several of 
Genzyme's oncology programs.  Because the Company's Certificate of 
Incorporation requires that, in a transaction such as the Proposed Merger, an 
aggregate merger preference be provided to holders of the outstanding shares 
of the Company's preferred stock before any amounts can be provided to 
holders of outstanding shares of the Company's common stock, and because such 
aggregate merger preference exceeds the aggregate value of the 4 million 
shares of GMO Stock to be received in the Proposed Merger (based on the 
valuation given the GMO Stock under the Merger Agreement), no shares of GMO 
Stock are available for allocation to holders of outstanding shares of the 
Company's common stock (including stock options and warrants for common 
stock).  The Proposed Merger currently is expected to be completed in 
mid-June, subject to approval by the Company's stockholders and Genzyme's 
stockholders and subject to certain other conditions.  As required by the 
Merger Agreement, directors, officers and certain other stockholders of the 
Company have entered into stockholder agreements with Genzyme pursuant to 
which they have agreed to vote in favor of the Proposed Merger.  The number 
of shares subject to such agreements is sufficient for approval of the 
Proposed Merger by the stockholders of the Company.

NOTE  3  -  Basis of Preparation

         The information presented at March 31, 1997 and for the three month 
period then ended is unaudited, but includes all adjustments (consisting only 
of normal recurring adjustments) that the Company's management believes to be 
necessary for the fair presentation of results for the periods presented.  
These financial statements have been prepared in accordance with generally 
accepted accounting principles for interim financial information and with the 
instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, 
they do not contain certain of the information and footnotes required by 
generally accepted accounting principles for annual financial statements.  
These financial statements should, therefore, be read in conjunction with the 
Company's audited financial statements for the year ended December 31, 1996, 
which were included as part of the Company's Annual Report on Form 10-K.  The 
December 31, 1996 balance sheet was derived from audited financial statements.

         The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities and 
disclosure of contingent assets and liabilities at the date of the financial 
statements and the reported amounts of revenues and expenses during the 
reporting period.  Actual results could differ from those estimates.

NOTE  4  -  Accounts Receivable

         In the first quarter of 1997, the Company recognized approximately 
$23,400 of revenue earned under an award by the U.S. National Cancer 
Institute ("NCI") in the form of a Cooperative Grant, bringing the receivable 
for revenue earned by the Company under this Cooperative Grant to nearly 
$209,400 at March 31, 1997.  The balance of the receivable, approximately 
$120,200, relates to funds available under the Cooperative Grant that will be 
provided to a collaborator under the Cooperative Grant once such funds are 
received by the Company.  The Company has recorded a corresponding liability 
to the collaborator.

                                         -7- 
<PAGE>


                                 PHARMAGENICS, INC.
                                           
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)
                                           
NOTE  5  -  Note Payable

         In October 1996, in anticipation of entering into the Merger 
Agreement, Genzyme made available to the Company the Credit Facility.  Under 
the Credit Facility, the Company may draw monthly an amount equal to its 
documented operating costs, up to a maximum amount each month as set forth 
below:

    Month               Maximum Draw
    --------------      ------------
    December, 1996      $250,000
    January, 1997       $750,000
    February, 1997      $650,000
    March, 1997         $450,000
    April, 1997         $550,000
    May, 1997           $550,000

    Amounts not drawn by the Company in a designated month are available to 
cover documented expenses in any later month (subject to the limitations 
described below), provided, however, that if such draws involve individual 
expenditures in excess of $25,000, such expenditures require Genzyme's 
consent.  The maximum amount of monthly draws will be reduced by 60% of gross 
revenues received by the Company in the prior month.  If the Company's gross 
revenues in any month beginning with November, 1996 exceed the product of 
1.6667 and the maximum draw for the succeeding month, the amount of such 
excess will be applied first against the maximum amount which may be drawn 
that may be carried forward from previous months and then any remaining 
excess will be carried forward and reduce the maximum amount available in 
subsequent months. An additional draw of $250,000 may be made under the 
Credit Facility if the SAGE patent licensed by the Company from JHU issues 
while the Credit Facility is in effect, provided that such draw must be 
utilized by the Company to fulfill its obligations to JHU.  If Genzyme 
terminates the Merger Agreement under certain circumstances, Genzyme will 
adjust the amount that may be drawn under the Credit Facility to an 
additional $1,500,000 over amounts previously drawn and expended, with draws 
to occur over a period of three months.  Amounts advanced under the Credit 
Facility are evidenced by a Subordinated Convertible Promissory Note (the 
"Promissory Note").  The Promissory Note bears interest from the date of each 
advance at a rate of 8.25% per annum and matures on February 10, 2002.

    The Company made an initial draw of $1,000,000 in February 1997, after 
the signing of the Merger Agreement, and made additional draws of $650,000 in 
March, 1997 and $800,000 in May, 1997, for total draws, to date, of 
$2,450,000 under the Credit Facility.  Interest in the amount of $12,272 has 
accrued on these draws as of March 31, 1997 and is recorded in Note Payable.

NOTE  6  -  Agreements with PaineWebber R&D Partners III, L.P.; In-Process 
Technology

         In May 1994, the Company entered into a series of agreements (the 
"R&D Agreements") with PaineWebber R&D Partners III, L.P. (the 
"Partnership"), pursuant to which the Partnership paid a $250,000 license fee 
and agreed, subject to certain conditions, to pay the Company up to 
$5,750,000 to conduct research and development on behalf of the Partnership 
on targets previously identified by the Company pursuant to a development 
plan originally projected to extend through March 31, 1996, but which 
continued through January, 1997.  In consideration of such payments, the 
Partnership obtained rights to the results of such research, and the Company 
granted the Partnership an exclusive, royalty-free license to use certain 
patent rights, know-how and technical information owned or licensed by the 
Company.  Under the R&D Agreements, the Company also received an option (the 
"Purchase Option") to purchase at any time certain or all of the rights owned 
by the Partnership as a result of the R&D Agreements (the "Partnership 
Rights") at an option price ranging from $9.4 million up to $19.2 million, 
depending upon the date of the purchase and the rights purchased.  In 
consideration for the Purchase Option, the Company issued to the Partnership 
warrants to purchase up to 1,000,000 shares of the Company's common stock 
(the "Core Warrant") and up to 666,667 shares of the Company's common 

                                         -8- 
<PAGE>


                                 PHARMAGENICS, INC.
                                           
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)
                                           
NOTE  6  -  Agreements with PaineWebber R&D Partners III, L.P.; 
In-Process Technology (continued)

stock (the "Purchase Option Warrant").  The Core Warrant is exercisable for a 
period of five years which commenced July 1, 1996, and the Purchase Option 
Warrant would have been exercisable for a period of four years following 
termination of the Purchase Option.  The estimated fair value of $580,000 
attributed to these warrants upon issuance was charged to research and 
development expense in 1994.  With the modification of the R&D Agreements in 
March 1995, the exercise price on the Core Warrant and the Purchase Option 
Warrant was fixed at $2.15 per share, subject to antidilution provisions and 
other adjustments.  In June 1995, the Company executed and delivered a 
convertible note (the "Note") to the Partnership under which the Company 
borrowed $1 million at an interest rate of prime plus two percentage points. 
In lieu of repayment in cash, the Note and accrued interest were converted 
into 480,242 shares of Series C convertible preferred stock of the Company as 
of September 30, 1995, which thereby reduced by $1 million research funding 
from the Partnership under the R&D Agreements.  As of December 31, 1995, all 
funding pursuant to the R&D Agreements had been received by the Company.

         In January 1997, in connection with the Proposed Merger, the 
Partnership exercised its option under the R&D Agreements to exchange the 
Parthership Rights for additional shares of the Company's preferred stock.  
This option became exercisable upon the signing of the Merger Agreement and 
as a result of such exercise, the Company issued to the Partnership in 
February 1997 298,420 shares of Series A convertible preferred stock, 88,864 
shares of Series B convertible preferred stock and 1,641,144 shares of Series 
C convertible preferred stock.  The liquidation preference amount of these 
preferred shares, $4,750,000, was charged to research and development expense 
in the first quarter of 1997 because the acquired technology and other rights 
relate to in-process research and development projects that have not yet 
reached technological feasibility and the technology currently has no 
alternative future uses.  Upon the exercise of the exchange option by the 
Partnership, the Purchase Option Warrant and the R&D Agreements terminated, 
and $315,200 of funding that had been received pursuant to the R&D Agreements 
and recorded as deferred revenue was offset against research and development 
expense (in-process technology cost) in the first quarter of 1997.  In 
addition, upon the completion of the Proposed Merger, the Core Warrant will 
be cancelled.

NOTE  7  -  Amendment to SAGE License Agreement

         Effective September 1995, the Company entered into a license 
agreement (the  SAGE Agreement") with The Johns Hopkins University School of 
Medicine ("JHU") and Drs. Bert Vogelstein and Kenneth Kinzler, both of JHU, 
relating to the SAGE (Serial Analysis of Gene Expression) technology.  In 
addition to substantial license fees paid and milestone payments to be made 
by the Company to retain an exclusive license, the agreement provides for 
certain additional payments to be made by the Company to JHU in the event the 
Company sublicenses SAGE technology to third parties or performs SAGE-related 
services on behalf of third parties.

         In January 1997, in contemplation of the Proposed Merger, the SAGE 
Agreement was amended to waive any possible right JHU may have to a potential 
payment of $5 million resulting from the change of control which would arise 
from the Proposed Merger in exchange for 43,200 shares of the Company's 
Series B convertible preferred stock to be issued to JHU.  If the Proposed 
Merger is not consummated, the amendment to the SAGE Agreement shall become 
null and void and the 43,200 shares of the Company's Series B convertibvle 
preferred stock will not be issued to JHU.  The Company is currently in 
discussions with JHU regarding a license to other present and future 
discoveries of Dr. Kinzler.

NOTE  8  -  New Accounting Pronouncement

         Statement of Financial Accounting Standards No. 128, "Earnings per 
Share" ("SFAS 128"), which supersedes Accounting Principles Board Opinion No. 
15. "Earnings per Share" ("APB No. 15"), was issued in February, 1997. SFAS 
128 requires dual presentation of basic and diluted earnings

                                         -9- 
<PAGE>

                                  PHARMAGENICS, INC.

                             NOTES TO FINANCIAL STATEMENTS
                                       (Unaudited)
                                           
NOTE  8  -  New Accounting Pronouncement (continued)

per share ("EPS") for complex capital structures on the face of the income 
statement. Basic EPS is computed by dividing income by the weighted-average 
number of common shares outstanding for the period. Diluted EPS reflects the 
potential dilution from the exercise or conversion of securities into common 
stock, such as stock options. SFAS 128 is required to be adopted for year-end 
1997; earlier application is not permitted. The Company does not expect the 
basic or diluted EPS measured under SFAS 128 to be materially different than 
the Company's primary or fully-diluted EPS measured under APB No. 15.


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


General

    The following discussion should be read in conjunction with the 
Financial Statements and notes thereto included earlier in this report.

    Some of the information presented in this report constitutes 
forward-looking statements within the meaning of the Private Securities 
Litigation Reform Act of 1995.  Although the Company believes that its 
expectations are based on reasonable assumptions within the bounds of its 
knowledge of its business and operations, there can be no assurance that 
actual results of the Company's research and development activities, business 
development activities and its results of operations will not differ 
materially from its expectations.  See Note 1 of Notes to Financial 
Statements for important factors which may cause the Company's actual results 
to differ materially from expectations.  Reference is also made to the 
Company's Annual Report on Form 10-K and other reports filed by the Company 
with the Securities and Exchange Commission.


    To fund its operations since inception, the Company has obtained capital 
through several private placements of equity, raising approximately $26.5 
million.  These funds have enabled the Company to pursue internal research, 
fund and obtain technology rights from academic institutions and pursue 
research and development collaborations with other companies.  As a result of 
these efforts, the Company has been able to generate license/royalty and 
research funding revenues of approximately $6.6 million (including research 
and development funding from PaineWebber R&D Partners III, L.P. (the 
"Partnership")) since inception.

    Although the Company had been successful in generating funding to 
maintain its operations, management of the Company has always been aware that 
the Company would either have to raise large amounts of capital through 
equity offerings or search for alternative sources of capital in order to 
optimize the development and exploitation of its technologies.  One way the 
Company attempted to obtain additional funding was to establish collaborative 
relationships in which funding would be provided to the Company in exchange 
for sharing of rights to the technology that might be developed from the 
research supported by such funding.  In particular, the Company has recently 
attempted to raise funds by providing SAGE-technology services to other 
companies on a fee basis, but, to date, has not generated significant 
SAGE-service revenues.

    Throughout its history, the Company has contacted many companies to 
determine their interest in a collaboration.  The Company held preliminary 
discussions with several of these companies, but few of these discussions 
gave rise to a definitive proposal or agreement with respect to a 
transaction, 


                                         -10- 
<PAGE>

                                PHARMAGENICS, INC.
                                           
                         MANAGEMENT'S DISCUSSION AND ANALYSIS
                   OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                           
Recent Developments - Proposed Merger with Genzyme Corporation (continued)

and the financial proceeds from the collaborations that have 
been established have not been sufficient to sustain the Company's 
operations.  As the exploration of alternatives continued, it became apparent 
to the Company that gaining access to equity capital on reasonable terms was 
becoming more and more difficult, particularly since the Company had been 
operating for several years yet still lacked clinical-stage therapeutics.  In 
addition, the Company realized that its revenue stream would not be adequate 
to fund its activities for any significant length of time.

    In early May 1996, representatives of the Company and Genzyme Corporation 
("Genzyme") met to discuss opportunities for potential collaborations 
relating to use of the SAGE technology in conjunction with Genzyme's cancer 
gene therapy programs. These discussions regarding potential collaborations 
eventually evolved into preliminary merger discussions, which resulted in the 
Company and Genzyme entering into a letter of intent, dated October 29, 1996, 
reflecting an agreement in principle for Genzyme to acquire the Company. 
Throughout the remainder of 1996 and early 1997, Genzyme and the Company 
negotiated the definitive terms of the acquisition.

    On February 3, 1997, the Company and Genzyme announced that they had 
entered into an Agreement and Plan of Merger, dated as of January 31, 1997, 
(the "Merger Agreement") pursuant to which the Company, on the terms and 
conditions set forth in the Merger Agreement, is to be merged with and into 
Genzyme with Genzyme being the surviving corporation (the "Proposed Merger"). 
 As consideration for the Proposed Merger, Genzyme is to issue approximately 
4 million shares (subject to certain adjustments set forth in the Merger 
Agreement) of a new Genzyme security (the "GMO Stock"), representing 40% of 
the initial equity interest in a new division of Genzyme, to be known as the 
Genzyme Molecular Oncology division (the "GMO Division"), and to be formed 
within Genzyme through the combination of the business of the Company with 
several of Genzyme's oncology programs.  An additional 6 million shares 
(subject to adjustment) of GMO Stock will be issued for the benefit of the 
General Division of Genzyme or its stockholders.  The GMO Stock will be 
"tracking stock," which is Genzyme common stock that is intended to reflect 
the value, and track the performance, of the GMO Division.

    Because the Certificate of Incorporation of the Company requires that, in 
a transaction such as the Proposed Merger, an aggregate merger preference be 
provided to holders of the outstanding shares of preferred stock before any 
amounts can be provided to holders of outstanding shares of common stock, and 
because such aggregate merger preference exceeds the aggregate value of the 4 
million shares of GMO Stock to be issued in the Proposed Merger (based on the 
valuation given the GMO Stock under the Merger Agreement), no shares of GMO 
Stock are available for allocation to holders of the outstanding shares of 
common stock.  The applicable share exchange ratio to be used to convert the 
outstanding shares of preferred stock into GMO Stock, upon effectiveness of 
the Proposed Merger, is set forth in the Merger Agreement and, as also set 
forth in the Merger Agreement, upon effectiveness of the Proposed Merger, the 
outstanding shares of common stock will be cancelled.  The Proposed Merger 
currently is expected to be completed in mid-June, 1997, subject to approval 
by the Company's stockholders and Genzyme's stockholders and certain other 
conditions.  As required by the Merger Agreement, directors, officers and 
certain other stockholders of the Company have entered into stockholder 
agreements with Genzyme pursuant to which they have agreed to vote in favor 
of the Proposed Merger.  The number of shares subject to such agreements is 
sufficient for approval of the Proposed Merger by the stockholders of the 
Company.

    The Company's decision to enter into the Merger Agreement was 
substantially influenced by the Company's belief that the Company's 
precarious financial condition and the absence of viable alternatives to 
raising additional capital made it unlikely that the Company could fulfill 
its business objectives as an independent company.

                                       -11- 
<PAGE>


                                 PHARMAGENICS, INC.

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


Recent Developments - Proposed Merger with Genzyme Corporation (continued)

    As a result of the Company's continued operating losses and lack of 
available capital resources, the opinion of the Company's independent public 
accountants on the Company's fiscal 1996 audited financial statements 
includes an explanatory paragraph stating that the Company's financial 
condition raises substantial doubt as to the ability of the Company to 
continue as a going concern.  In the event the Proposed Merger is not 
completed, the absence of other viable strategic alternatives and the present 
precarious financial condition of the Company raise substantial doubt as to 
the ability of the Company to continue its operations for more than several 
months. As a result, in the event the Proposed Merger is not completed, the 
Company will need to obtain additional financing to continue its operations, 
and there can be no assurance that financing would be available.  The Company 
may need to obtain funds through arrangements with collaboration partners or 
others that may require the Company to relinquish rights to certain of its 
technologies or product candidates. If additional funding is not obtained, 
the Company would be required to significantly curtail its research 
activities and eventually cease operations altogether.

Results of Operations

    The Company has not been profitable since inception and, if the Proposed 
Merger is not completed, expects to incur substantial operating losses in the 
future, subject to the Company securing additional collaborative agreements.  
The Company's results of operations and resulting financial condition might 
vary significantly due to the timing of license fees and contract revenue and 
the pace of research and development expenditures.  The opinion of the 
Company's independent public accountants on the company's fiscal 1996 audited 
financial statements includes an explanatory paragraph stating that the 
Company's financial condition raises substantial doubt as to the ability of 
the Company to continue as a going concern.

    Revenues were $74,844 for the three months ended March 31, 1997 and 
$498,470 for the three months ended March 31, 1996.  Insurance proceeds from 
settlement of a loss-claim on reagents represented sixty-nine percent of 
revenues for the quarter ended March 31, 1997.  Revenues earned under a 
five-year U.S. National Cancer Institute ("NCI") award in the form of a 
Cooperative Grant in September, 1995 represented the balance of revenues for 
the quarter ended March 31, 1997.  Research contracts were the sole component 
of revenues for the quarter ended March 31, 1996. Fifty-eight percent of such 
revenues were from a collaborative agreement with Boehringer Mannheim GmbH 
("Boehringer"), thirty-seven percent were from a series of agreements (the 
"R&D Agreements") with the Partnership and the balance was from a research 
agreement with Genetic Therapy, Inc. ("GTI").  All funding pursuant to the 
research agreement with GTI had been received and earned as of March 31, 
1996.  As of December 31, 1995, all funding pursuant to the R&D Agreements 
had been received by the Company.

    Research and development expenses were $1,062,649 for the three months 
ended March 31, 1997 compared to $1,090,645 for the three months ended March 
31, 1996.  Research staffing totalled 32 at March 31, 1997 and 27 at March 
31, 1996; however, the Company has hired staff replacements, as well as added 
to staffing, at lower salaries.  In addition, the Company paid approximately 
$69,000 in bonuses to its research and development staff in the first quarter 
of 1996 in an effort to reduce employee turnover.  Bonuses were not paid in 
the first quarter of 1997. 

    In-process technology cost of $4,434,800 for the three months ended March 
31, 1997 reflects a charge to research and development expense for technology 
and other rights acquired by the Company from the Partnership in the first 
quarter of 1997.  This acquisition by the Company resulted from the exercise 
by the Partnership of its option under the R&D Agreements to exchange all of 
the technology and rights owned by it as a result of the R&D Agreements for 
additional shares of the Company's preferred stock.  This option became 
exercisable upon the signing of the Merger Agreement and as a result of such 
exercise, the Company issued to the Partnership in February 1997 298,420 
shares of Series A convertible preferred stock, 88,864 shares of Series B 
convertible preferred stock and 1,641,144 



                                     -12- 
<PAGE>

                             PHARMAGENICS, INC.

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

Results of Operations(continued)

shares of Series C convertible preferred stock.  The liquidation preference 
amount of these preferred shares, $4,750,000, was charged to research and 
development expense (in-process technology cost) because the acquired 
technology and other rights relate to in-process research and development 
projects that have not yet reached technological feasibility and the 
technology currently has no alternative future uses.  Upon the exercise of 
the exchange option by the Partnership, the R&D Agreements terminated and 
$315,200 of funding that had been received pursuant to the R&D Agreements and 
recorded as deferred revenue was recorded as an offset against research and 
development expense (in-process technology cost) in the first quarter of 1997.

      General and administrative expenses were $340,287 for the three months 
ended March 31, 1997 and $330,708 for the three months ended March 31, 1996.  
The three percent increase reflects a $50,000 increase in professional fees 
as a result of the Proposed Merger, partially offset by a $42,000 decrease in 
compensation expense as a result of a reduction in administrative staffing 
from 7 at March 31, 1996 to 5 at March 31, 1997 and the payment of 
approximately $25,000 in bonuses to the Company's administrative staff in the 
first quarter of 1996.  Bonuses were not paid in the first quarter of 1997.

    The Company's interest income decreased to $3,831 for the three months 
ended March 31, 1997 compared to $42,161 for the three months ended March 31, 
1996, attributed to lower cash and cash equivalent balances.

    Net losses were $5,772,249 for the three months ended March 31, 1997 
compared to $895,210 for the three months ended March 31, 1996.  In-process 
technology cost and lower revenues account for most of the increase in net 
losses.

Inflation

   The Company believes that inflation has not had a material impact on its 
results of operations.

Financial Condition, Liquidity and Capital Resources

    As of March 31, 1997, the Company had cash and cash equivalents of 
$359,982, a decrease of $126,127 compared to December 31, 1996.  In February 
1997, after signing the Merger Agreement, the Company made an initial draw of 
$1,000,000 under a stand-by credit facility (the "Credit Facility") made 
available to the Company by Genzyme in October 1996 in anticipation of 
entering into the Merger Agreement.  The Company made additional draws of 
$650,000 in March, 1997 and $800,000 in May, 1997.  Under the Credit 
Facility, the Company may draw monthly an amount equal to its documented 
operating costs, up to a maximum amount each month as set forth below:

     Month              Maximum Draw
     --------------     ------------
     December, 1996     $250,000  
     January, 1997      $750,000 
     February, 1997     $650,000  
     March, 1997        $450,000  
     April, 1997        $550,000
     May, 1997          $550,000  

                                     -13- 
<PAGE>

                              PHARMAGENICS, INC.

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

Financial Condition, Liquidity and Capital Resources (continued)

    Amounts not drawn by the Company in a designated month are available to 
cover documented expenses in any later month (subject to the limitations 
described below), provided, however, that if such draws involve individual 
expenditures in excess of $25,000, such expenditures require Genzyme's 
consent.  The maximum amount of monthly draws will be reduced by 60% of gross 
revenues received by the Company in the prior month.  If the Company's gross 
revenues in any month beginning with November, 1996 exceed the product of 
1.6667 and the maximum draw for the succeeding month, the amount of such 
excess will be applied first against the maximum amount which may be drawn 
that may be carried forward from previous months and then any remaining 
excess will be carried forward and reduce the maximum amount available in 
subsequent months.  An additional draw of $250,000 may be made under the 
Credit Facility if the SAGE patent licensed by the Company from JHU issues 
while the Credit Facility is in effect, provided that such draw must be 
utilized by the Company to fulfill its obligations to JHU.  If Genzyme 
terminates the Merger Agreement under certain circumstances, Genzyme will 
adjust the amount that may be drawn under the Credit Facility to an 
additional $1,500,000 over amounts previously drawn and expended, with draws 
to occur over a period of three months.  Amounts advanced under the Credit 
Facility are evidenced by a Subordinated Convertible Promissory Note (the 
"Promissory Note").  The Promissory Note bears interest from the date of each 
advance at a rate of 8.25% per annum and matures on February 10, 2002.

     Cash used in operating activities was $1,763,445 during the three months 
ended March 31, 1997 compared to $1,128,317 used in operating activities 
during the three months ended March 31, 1996, primarily due to a reduction in 
funding under research agreements, increased payments for professional 
services due to the Proposed Merger and a settlement payment of $62,000 to 
LBC Capital Resources, Inc. during the first quarter of 1997.  During the 
first quarter of 1996, the Company received approximately $183,000 of 
contract research payments from Boehringer and $25,000 from GTI, which 
completed research funding from GTI pursuant to a research agreement.  No 
contract research payments were received by the Company during the first 
quarter of 1997. Funding required for operating activities during the first 
three months of 1997 was provided by the use of cash reserves and the Credit 
Facility.  Funding for operating activities during the first quarter of 1996 
was primarily provided by the use of cash reserves and proceeds received from 
the sale of shares of Series C convertible preferred stock in a private 
placement.  

   The Company expects to continue to finance its anticipated operating 
losses and its capital expenditures into June, 1997 from existing cash 
reserves, approximately $209,400 of grant funding from NCI (including the 
receivable at March 31, 1997; see Note 4 of Notes to Financial Statements) 
and the Credit Facility. 

   If the Proposed Merger is not completed, the Company expects to incur 
substantial additional costs before it would be able to begin to generate 
revenue from product sales, including costs related to ongoing research and 
development activities, preclinical studies and regulatory compliance, and 
for hiring additional management, scientific, manufacturing, sales and 
administrative personnel. The Company believes that its current cash 
resources and the aforementioned sources of funding, including the Credit 
Facility, are sufficient to fund operations into the middle of 1997 even if 
the Proposed Merger is not completed.  The Company will require additional 
financing to continue its operations beyond such time and there can be no 
assurance that sources currently in place would continue to be available 
beyond the second quarter of 1997.  The Company may need to obtain funds 
through arrangements with collaboration partners or others that may require 
the Company to relinquish rights to certain of its technologies or product 
candidates.  If additional funding is not obtained, the Company would be 
required to significantly curtail its research activities and eventually 
cease operations altogether. 

   The opinion of the Company's independent public accountants on the 
Company's fiscal 1996 audited financial statements includes an explanatory 
paragraph stating that the Company's financial condition raises substantial 
doubt as to the ability of the Company to continue as a going concern.

                                      -14- 
<PAGE>

                              PHARMAGENICS, INC.
                         PART II -- OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS 

   On January 24, 1997, the Company and LBC Capital Resources, Inc. ("LBC") 
executed an agreement which settled an action brought by LBC on July 19, 1996 
against the Company in the Superior Court of New Jersey in Bergen County 
alleging breach of contract and related causes of action arising out of an 
agreement between the Company and LBC that obligated LBC to assist the 
Company in finding new sources of capital.  LBC asserted in such action that 
the Company improperly declined to pay LBC a commission in accordance with 
the agreement and sought damages in excess of $150,000.  The Company made a 
settlement payment of $62,000 to LBC in January 1997.  This amount was 
accrued as a charge to general and administrative expense in 1996.


Item 2.  CHANGES IN SECURITIES 

   In January 1997, in connection with the Proposed Merger, the Registrant 
issued to the Partnership 298,420 shares of Series A convertible preferred 
stock, 88,864 shares of Series B convertible preferred stock and 1,641,144 
shares of Series C convertible preferred stock. For additional information 
concerning this transactions, see "Part I. Item 2. Management's Discussion 
and Analysis of Financial Condition and Results of Operations." The issuance 
of such shares was conducted pursuant to an exemption from registration under 
Section 4(2) of the Securities Act of 1933, as amended. For additional 
information concerning the conversion features of the Series A, B and C stock 
of the Registrant, see the Registrant's Annual Report on Form 10-K for the 
year ended December 31, 1996.


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit   
Numbers   Description and Method of Filing   
-------   --------------------------------------
2.1       Agreement and Plan of Merger, dated as of January 31, 1997, by and 
          between Genzyme Corporation and the Company.(1)

3.1       Third Restated Certificate of Incorporation.(2)

3.1(a)    Amendment to Third Restated Certificate of Incorporation.(3)     

3.1(b)    Certificate of Designation of Series C Convertible Preferred Stock.(4)

3.2       By-laws, as amended.(5)

4.1       Warrant Agreement dated November 14, 1991 by and between the Company 
          and American Stock Transfer & Trust Company, as Warrant Agent.(5)

4.2       Form of Warrant Certificate.(5)

4.3       Form of Common Stock Certificate and Series B Preferred Stock    
          Certificate.(5)

10.1      Lease dated November 20, 1990, as amended, between AETNA Life    
          Insurance Company and the Company.(5)

10.1(a)   Third Amendment to Exhibit 10.1.(6)

10.1(b)   Fourth Amendment to Exhibit 10.1.(3)

10.2      Letter Agreement dated June 8, 1990 between the Company and Michael I.
          Sherman.(5)

10.3      Non-Transferable, Non-Qualified Stock Option Agreement dated March 27,
          1991 between the Company and Michael I. Sherman.(5)

10.4      Restricted Stock Purchase Agreement dated April 24, 1991 between the 
          Company and Michael I. Sherman.(5) 

                                    -15-

<PAGE>

                               PHARMAGENICS, INC.

                          PART II -- OTHER INFORMATION

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K (continued)

Exhibit
Numbers   Description and Method of Filing
--------  -----------------------------------
10.5      Incentive Stock Option Agreement dated September 27, 1991 between the 
          Company and Michael I. Sherman.(5)

10.9      Letter Agreement dated July 27, 1990 between the Company and Alan F. 
          Cook.(6)

10.9(a)   Letter Agreement dated November 17, 1994 between the Company and 
          Alan F. Cook.(6)

10.10     Convertible Preferred Stock and Warrant Purchase Agreement dated April
          24, 1991 among the Company and HealthCare Ventures II, L.P. and  
          Everest Trust.(5)

10.11     Non-Transferable, Non-Qualified Stock Option Agreement dated March 27,
          1991 between the Company and Alan F. Cook.(6)

10.11(a)  Incentive Stock Option Agreement dated September 27, 1991 between the 
          Company and Alan F. Cook.(6)

10.12     Stockholders' Agreement dated April 24, 1991 among the Company and 
          HealthCare Ventures II, L.P. and Everest Trust (the "Stockholders' 
          Agreement").(5)

10.12(a)  Amendment to Stockholders' Agreement.(7)

10.12(b)  Amendment to Stockholders' Agreement.(2)

10.13     Warrant to Purchase Shares of Common Stock dated September 27, 1991 
          issued to HealthCare Ventures II, L.P.(5)

10.14     Warrant to Purchase Shares of Common Stock dated September 27, 1991 
          issued to Everest Trust.(5)

10.15     Consent and Agreement to Amend dated September 27, 1991.(5) 

10.15(a)  Amendment to Exhibit 10.15.(6)

10.16     Sales Agency Agreement dated as of October 7, 1991, as amended   
          November 13, 1991, between the Company and PaineWebber 
          Incorporated.(5)

10.17     Subscription Agreement dated November 14, 1991 among the Company and 
          HealthCare Ventures II, L.P., Everest Trust and Norna Sarofim.(5)

10.18     Registration Agreement dated November 14, 1991.(5)

10.19     Registration Agreement dated November 14, 1991.(5)

10.20     Warrant to purchase Common Stock dated November 14, 1991 issued to 
          PaineWebber Incorporated.(5)

10.21     1991 Stock Option Plan, as amended.(2)

10.22     Equipment Lease Agreement, including Warrant Agreement, as amended, 
          between the Company and Comdisco, Inc.(5)

10.23 +   Research Agreement dated March 1, 1989 among The Johns Hopkins   
          University, Hoffmann-La Roche Inc. and the Company.(8)

10.24 +   License Agreement dated February 5, 1992 among The Johns Hopkins 
          University, Hoffmann-La Roche Inc. and the Company.(8)

10.25 +   Agreement dated April 30, 1991 between Hoffmann-La Roche Inc. and the 
          Company.(8)

                                    -16-

<PAGE>

                                  PHARMAGENICS, INC.

                            PART II -- OTHER INFORMATION

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K (continued)

Exhibit
Numbers   Description and Method of Filing
-------   ----------------------------------
10.26 +   Agreement dated April 1, 1990 between Georgetown University and the 
          Company.(5)

10.26(a)  Letter Agreement dated January 25, 1993 modifying Exhibit 10.26.(6)

10.27 +   Agreement dated November 1, 1990 between Georgetown University and the
          Company.(5)

10.28     Consulting Agreement dated November 24, 1990 between the Company and
          Richard Schlegel.(5)

10.29     Consulting Agreement dated April 3, 1991 between the Company and Bert 
          Vogelstein.(5)

10.30 +   License Agreement dated January 15, 1993 between the Company and 
          Genetic Therapy, Inc.(6)

10.31     Incentive Stock Option Agreement dated February 17, 1993, between the 
          Company and Michael I. Sherman.(6)

10.33     Incentive Stock Option Agreement dated February 17, 1993, between the 
          Company and Alan F. Cook.(6)

10.33(a)  Incentive Stock Option Agreement dated March 7, 1994, between the 
          Company and Alan F. Cook.(6)

10.34 +   Research Agreement effective April 1, 1993 between the Company and 
          Genetic Therapy, Inc.(6)

10.35     Form of Indemnification Agreement.(6)

10.36     1993 Stock Option   Plan, as amended.(2)

10.37     Letter Agreement dated June 15, 1993, between the Company and Michael 
          I. Sherman.(9)

10.38     Master Equipment Lease Agreement, including Warrant Agreement, dated 
          September 10, 1993 between the Company and MMC/GATX Partnership No. 
          1.(9)

10.39     1994 Independent Directors Stock Option Plan, as amended.(2)     

10.41(a)  Letter Agreement dated May 10, 1991, between the Company and Arthur H.
          Bertelsen.(7)

10.41(b)  Incentive Stock Option Agreements dated September 27, 1991, February 
          17, 1993, November 22, 1993 and March 7, 1994, between the Company and
          Arthur H. Bertelsen.(7)

10.41(c)  Non-transferable Non-Qualified Stock Option Agreement dated June 17, 
          1991 between the Company and Arthur H. Bertelsen.(7)

10.42     Amendment dated March 23, 1994, to Agreement of April 30, 1991 between
          Hoffmann-La Roche Inc. and the Company including Stock Purchase  
          Agreement and Warrants to purchase an aggregate of 150,000 shares of  
          Common Stock.(7)

10.43 +   Program Agreement dated as of April 1, 1994 between the Company and 
          PaineWebber R&D Partners III, L.P. (the "Partnership").(10)

10.43(a) +First Amendment to Program Agreement, including Amended and      
          Restated Glossary.(8)

                                    -17-

<PAGE>

                             PHARMAGENICS, INC.
                        PART II -- OTHER INFORMATION

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K (continued)     

Exhibit
Numbers   Description and Method of Filing
--------  -----------------------------------
10.44 +   Development Agreement dated as of April 1, 1994 between the Company 
          and the Partnership.(10)

10.44(a)+ Amended and Restated Development Agreement.(8)

10.45 +   Purchase Option Agreement dated as of April 1, 1994 between the  
          Company and the Partnership.(10)

10.45(a)+ Amended and Restated Purchase Option Agreement.(8)

10.46     Technology Agreement dated as of April 1, 1994 between the Company and
          the Partnership.(10)

10.46(a)  Amended and Restated Technology Agreement.(8)

10.47 +   Core Warrant dated as of April 1, 1994 issued by the Company to the
          Fund.(10)

10.47(a)  Amended and Restated Core Warrant.(8)

10.48 +   Purchase Option Warrant dated as of April 1, 1994 issued by the 
          Company to the Partnership.(10)

10.48(a)+ Amended and Restated Purchase Option Warrant.(8)

10.49 +   Stock Purchase Agreement dated as of March 15, 1995 between the 
          Company and the Partnership.(8)

10.50 +   Loan Agreement dated as of February 13, 1995 among the Company, 
          HealthCare Ventures III, L.P., HealthCare Ventures IV, L.P., 
          Everest Trust and Larry Abrams.(8)

10.50(a)  Amendment No. 1 to Exhibit 10.50.(3)

10.51 +   Letter Agreement dated September 13, 1994, between the Company 
          and Boehringer Mannheim GmbH, as supplemented December 7,   
          1994.(8)

10.52 +   License Agreement dated as of September 1, 1995, between the 
          Company and The Johns Hopkins University.(3)

10.52(a)  Amendment No. 1 to License Agreement.(11)

10.53     Letter Agreement dated June 8, 1995, between the Company and A. 
          Steven Franchak.(3)

10.54     Non-Qualified Stock Option Agreement dated July 6, 1995, between 
          the Company and A. Steven Franchak.(3)

10.54(a)  Incentive Stock Option Agreement dated September 1, 1995, between
          the Company and A. Steven Franchak.(12)

10.55     Convertible Note dated June 8, 1995, between the Company and the 
          Partnership.(3)

10.56     Registration Rights Agreement dated February 13, 1996.(12)

10.57     Incentive Stock Option Agreements dated September 25, 1995 and 
          March 18, 1996, between the Company and A. Steven Franchak.(12)

10.58     Incentive Stock Option Agreements dated September 25, 1995 and 
          March 18, 1996, between the Company and Arthur H. Bertelsen.(12)

10.59     Incentive Stock Option Agreements dated September 25, 1995 and 
          March 18, 1996, between the Company and Alan F. Cook.(12)

                                    -18-

<PAGE>

                                 PHARMAGENICS, INC.

                            PART II -- OTHER INFORMATION

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K (continued)

Exhibit
Numbers   Description and Method of Filing
--------  -----------------------------------
10.62     Letter Agreement dated June 27, 1996, between the Company and 
          Michael I. Sherman.(12)

10.63     Incentive Stock Option Agreements dated September 25, 1995 and 
          June 27, 1996, between the Company and Michael I. Sherman.(12)

10.64     Letter Agreement, dated September 1, 1994, between the Company 
          and PaineWebber Incorporated.(12)

10.65     Indemnification Agreement, dated August 15, 1996, between the 
          Company and PaineWebber Incorporated.(12)

10.66     Letter Agreement, dated January 10, 1997, between the Company and
          PaineWebber Incorporated.(11)

10.67     Subordinated Convertible Promissory Note, dated February 10, 
          1997, payable to Genzyme Corporation.(11)

10.68     Amendment and Agreement, dated as of January 31, 1997, between the 
          Company and PaineWebber R&D Partners III, L.P. (amending Exhibit 
          10.49).(11)

27        Financial Data Schedule.(13)

_____________________

+   Confidential treatment has been granted by the Commission.  The copy 
    filed as an exhibit omits the information subject to the Grant of 
    Confidential Treatment.

(1) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Current Report on Form 8-K dated February 18, 1997.

(2) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Quarterly Report on Form 10-Q for the quarter ended September 
    30, 1994.

(3) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Quarterly Report on Form 10-Q for the quarter ended September 
    30, 1995. 

(4) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Annual Report on Form 10-K for the year ended December 31, 
    1995.

(5) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Registration Statement on Form 10, No. 0-20138.

(6) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Annual Report on Form 10-K for the year ended December 31, 
    1992.

(7) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Annual Report on Form 10-K for the year ended December 31,
    1993.

                                    -19-

<PAGE>

(8) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Annual Report on Form 10-K for the year ended December 31,
    1994.

(9) Incorporated by reference to the corresponding Exhibit number of 
    Registrant's Quarterly Report on Form 10-Q for the quarter ended September 
    30, 1993.

(10) Incorporated by reference to the corresponding Exhibit number of 
     Registrant's Quarterly Report on Form 10-Q or 10-Q/A for the quarter ended 
     March 31, 1994.

(11) Incorporated by reference to the corresponding Exhibit number of 
     Registrant's Annual Report on Form 10-K for the year ended December 31, 
     1996.

(12) Incorporated by reference to the corresponding Exhibit number of 
     Registrant's Quarterly Report on Form 10-Q for the quarter ended September
     30, 1996.

(13) Filed herewith.

REPORTS ON FORM 8-K:

    The Registrant filed a Current Report on Form 8-K, dated February 18, 
1997, to report under Item 5 thereof the execution of the Agreement and Plan 
of Merger, dated as of January 31, 1997, between the Registrant and Genzyme 
Corporation, and to file a copy of such agreement as an exhibit under Item 7 
thereof.

                                     -20- 
<PAGE>
                                   SIGNATURE

         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.

                                  PHARMAGENICS, INC.
                                  /s/  Michael I. Sherman
                                  ------------------------
                                  Michael I. Sherman, President 
                                  and  Chief Executive Officer
          
                                  /s/  A. Steven Franchak
                                  ------------------------
                                  A. Steven Franchak, Vice President,
                                  Chief Financial Officer and Treasurer



Date:  May 19, 1997

                                  -21-