TECHNICLONE CORP/DE/, DEF 14A, 1999-08-30

TECHNICLONE CORP/DE/
DEF 14A, 1999-08-30
IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES

Previous: PAINEWEBBER RMA TAX FREE FUND INC, NSAR-B, 1999-08-30

Next: UMB SCOUT MONEY MARKET FUND INC, N-30D, 1999-08-30

<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934

Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

TECHNICLONE CORPORATION
.............................................................................
(Name of Registrant as Specified In Its Charter)

TECHNICLONE CORPORATION
.............................................................................
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.*

4) Proposed maximum aggregate value of transaction:

..................................................................
*Set forth the amount on which the filing fee is calculated and state how
it was determined.

[ ] Fee previously paid by written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

1) Amount previously paid:

..................................................................
2) Form, Schedule or Registration Statement No.:

..................................................................
3) Filing Party:

..................................................................
4) Date Filed:

..................................................................
NOTES:
<PAGE>

TECHNICLONE CORPORATION
14282 FRANKLIN AVENUE
TUSTIN, CALIFORNIA 92780-7017
(714) 508-6000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

OCTOBER 20, 1999

NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders of
TECHNICLONE CORPORATION, a Delaware corporation (the "Company"), will be held at
the Atrium Hotel, 18700 MacArthur Boulevard, Irvine, California 92612 on October
20, 1999, at 10:00 A.M., Pacific Time, for the following purposes, as more fully
described in the accompanying Proxy Statement:

(1) To elect the following five (5) nominees to serve as directors
until the next annual meeting of stockholders or until their
successors are elected and have qualified:

Larry O. Bymaster
Rockell N. Hankin
William C. Shepherd
Clive R. Taylor, M.D. Ph.D.
Thomas R. Testman

(2) To approve the amendment of the Company's Certificate of
Incorporation to increase the number of shares of Common Stock
authorized for issuance by the Company from 120,000,000 shares
to 150,000,000 shares (See Proposal Two, Approval of Amendment
of Certificate of Incorporation);

(3) To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ended April 30,
1999 and the fiscal year ending April 30, 2000; and

(4) To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof.

Only stockholders of record at the close of business on August 23,
1999, will be entitled to vote at the meeting or any adjournment or postponement
thereof.

By Order of the Board of Directors

Steven C. Burke,
Secretary
September 15, 1999

PROXY ATTACHED. YOUR VOTE IS IMPORTANT. THEREFORE, WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING YOU SHOULD COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY. Any stockholder present at the meeting may withdraw his or her
proxy and vote personally on each matter brought before the meeting.
Stockholders attending the meeting whose shares are held in the name of a broker
or other nominee who desire to vote their shares at the meeting should bring
with them AN ORIGINAL PROXY or letter from that broker or other nominee
confirming their ownership of shares and to provide evidence of whether such
stockholders have voted previously at this meeting.
<PAGE>

TECHNICLONE CORPORATION
14282 FRANKLIN AVENUE
TUSTIN, CALIFORNIA 92780-7017

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

PROXY STATEMENT

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

THIS PROXY MATERIAL IS FIRST BEING MAILED TO STOCKHOLDERS
ON SEPTEMBER 15, 1999

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

ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 20, 1999

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

INTRODUCTION

This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of TECHNICLONE CORPORATION, a
Delaware corporation (Techniclone or the Company), for use at its 1999 Annual
Meeting of Stockholders to be held on October 20, 1999, at 10:00 A.M., Pacific
Time, at The Atrium Hotel, 18700 MacArthur Boulevard, Irvine, California 92612.

This Proxy Statement and the accompanying PROXY CARD are being mailed
to shareholders on or about September 15, 1999. The Company has retained the
services of Corporate Investor Communications, Inc. ("CIC") to assist in the
mailing and tabulation of proxies from brokers and nominees for the Annual
Meeting. The estimated costs for these services is approximately $5,000 and will
be borne by the Company, excluding postage. These costs exclude salary and other
incidental cost normally expended for solicitation of this proxy by officers and
employees. It is contemplated that this solicitation of proxies will be made
exclusively by mail; however, if it should appear desirable to do so in order to
ensure adequate representation at the meeting, CIC, directors, officers and
employees of the Company may communicate with stockholders, brokerage houses and
others by telephone, fax, email, or in person to request that proxies be
furnished and may reimburse banks, brokerage houses, custodians, nominees and
fiduciaries for their reasonable expenses in forwarding proxy materials to the
beneficial owners of the shares held by them. All expenses incurred in
connection with this solicitation shall be borne by the Company.

Holders of shares of Common Stock of the Company ("stockholders") who
execute proxies retain the right to revoke them at any time before they are
voted. Any proxy given by a stockholder may be revoked or superseded by
executing a later dated proxy, by giving notice of revocation to the Secretary
of the Company, 14282 Franklin Avenue, Tustin, California 92780-7017, in writing
prior to or at the meeting or by attending the meeting and voting in person. Any
stockholder, who holds stock in the name of a broker or other nominee, who
desires to revoke a previously executed proxy or vote in person at the meeting
must furnish or bring with them an original proxy, if such person has not yet
voted at this meeting, or a copy of any proxy previously voted. A proxy, when
executed and not so revoked, will be voted in accordance with the instructions
given in the proxy. If a choice is not specified in the proxy, the proxy will be
voted "FOR" the nominees for election of directors named in this Proxy
Statement, "FOR" the approval of the amendment of the Company's Certificate of
Incorporation to increase the number of shares of Common Stock authorized for
issuance by the Company from 120,000,000 shares to 150,000,000 shares and "FOR"
the approval of the ratification of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ended April 30, 1999 and the fiscal
year ending April 30, 2000. This Proxy Statement is first being mailed to
stockholders on or about September 15, 1999.
<PAGE>

VOTING SECURITIES

The Company has two classes of securities outstanding, common stock and
preferred stock, however only the common stock (the Common Stock) is entitled to
vote at the meeting. Holders of Common Stock of the Company of record as of the
close of business on August 23, 1999 (the "Record Date"), will be entitled to
vote at the meeting or any adjournment or postponement thereof. As of August 23,
1999, there were 78,105,183 shares of Common Stock outstanding and entitled to
vote. Each holder of shares of Common Stock is entitled to one vote for each
share of Common Stock held as of the Record Date. Abstentions and broker
non-votes are each included in the determination of the number of shares present
and voting for the purpose of determining whether a quorum is present. Under
Delaware law, the five (5) nominees receiving the highest number of votes will
be elected as directors at the Annual Meeting. As a result, proxies voted to
"Withhold Authority," which will be counted, and broker non-votes, which will
not be counted, will have no practical effect. Under the General Corporation Law
of the State of Delaware, with respect to votes cast on matters other than the
election of directors that require the affirmative vote of a majority of the
shares present and voting at the annual meeting, or the affirmative vote of a
majority of the outstanding shares, abstentions and broker non-votes will have
the same effect as votes against a proposal.

Stockholders are not entitled to cumulate their votes in the election
of directors.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

Set forth below is certain information as of August 23, 1999, regarding
the beneficial ownership of the Company's Common Stock by, (i) all directors and
director nominees, (ii) each of the Named Officers identified in the Summary
Compensation Table, (iii) all current directors and executive officers as a
group and (iv) each person known by the Company to own five percent (5%) or more
of the voting securities of the Company. No person, other than Edward J. Legere
II, was known by the Company to own five percent (5%) or more of the voting
securities of the Company as of August 23, 1999.
<TABLE>
<CAPTION>

BENEFICIAL OWNERSHIP OF COMMON STOCK
----------------------------------------------------
NAME AND ADDRESS
OF BENEFICIAL OWNER NUMBER OF SHARES (A) PERCENT (B)
------------------------------------------- -------------------------- ----------------------
<S> <C> <C>
Larry O. Bymaster 507,000 (C) *
14282 Franklin Avenue
Tustin, California 92780

Rockell N. Hankin 180,000 (D) *
14282 Franklin Avenue
Tustin, California 92780

Carmelo J. Santoro. Ph.D. 330,000 (E) *
14282 Franklin Avenue
Tustin, California 92780

William C. Shepherd 120,000 (F) *
14282 Franklin Avenue
Tustin, California 92780

Clive R. Taylor, M.D., Ph.D. 983,750 (G) 1.25%
14282 Franklin Avenue
Tustin, California 92780

Thomas R. Testman 225,000 (H) *
14282 Franklin Avenue
Tustin, California 92780
</TABLE>

-2-
<PAGE>

BENEFICIAL OWNERSHIP OF COMMON STOCK
----------------------------------------------------
NAME AND ADDRESS
OF BENEFICIAL OWNER NUMBER OF SHARES (A) PERCENT (B)
------------------------------------------- -------------------------- ----------------------
<S> <C> <C>
Dr. John N. Bonfiglio 72,000 (I) *
14282 Franklin Avenue
Tustin, California 92780

Steven C. Burke 5,000 *
14282 Franklin Avenue
Tustin, California 92780

Jamie Oliver, Pharm.D. -- --
14282 Franklin Avenue
Tustin, California 92780

Elizabeth A. Gorbett-Frost 112,242 (J) *
14282 Franklin Avenue
Tustin, California 92780

William V. Moding 337,800 (K) *
14282 Franklin Avenue
Tustin, California 92780

Edward J. Legere II 9,972,142 (L) 11.95%
c/o Biotechnology Development, Ltd.
222 South Rainbow Road, Suite 218
Las Vegas, Nevada 89128

All Directors Nominees and Executives 2,872,792 (M) 3.58%
Officers as a Group (11 in number)
</TABLE>

- -----------------------------
* Represents less than 1%.

(A) Except as otherwise noted below, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock, shown as beneficially owned by them, subject to community
property laws where applicable.

(B) Percentages for the Common Stock computed on the basis of 78,105,183
shares outstanding at August 23, 1999, plus shares that could be
acquired by each director nominee or Named Officer individually through
the exercise of stock options and warrants during the 60 day period
ending October 22, 1999.

(C) Includes 500,000 shares of Common Stock subject to outstanding stock
options exercisable during the 60 day period ending October 22, 1999.

(D) Includes 165,000 shares of Common Stock subject to outstanding stock
options exercisable during the 60 day period ending October 22, 1999.

(E) Includes 290,000 shares of Common Stock subject to outstanding stock
options exercisable during the 60 day period ending October 22, 1999.

(F) Includes 90,000 shares of Common Stock subject to outstanding stock
options exercisable during the 60 day period ending October 22, 1999.

(G) Includes 42,000 shares owned by members of Dr. Taylor's family as to
which he may be deemed to be the beneficial owner. Also includes
815,750 shares of Common Stock subject to outstanding stock options
exercisable during the 60 day period ending October 22, 1999.

(H) Includes 125,000 shares of Common Stock subject to outstanding stock
options exercisable during the 60 day period ending October 22, 1999.

-3-
<PAGE>

(I) Includes 70,000 shares of Common Stock subject to outstanding stock
options exercisable during the 60 day period ending October 22, 1999.

(J) Includes 17,046 shares owned by members of Ms. Gorbett-Frost's family
as to which she may be deemed to be the beneficial owner and 21,008
shares of Common Stock subject to outstanding warrants exercisable
during the 60 day period ending October 22, 1999.

(K) Includes 36,000 shares owned by members of Mr. Moding's family as to
which he may be deemed to be the beneficial owner.

(L) Includes 3,123,333 shares owned by Legere Enterprises, Ltd., a Nevada
limited partnership owned by Mr. Legere and members of his family. Also
includes 1,523,809 shares owned by Biotechnology Development, Ltd. and
an aggregate of 5,325,000 shares of Common Stock issuable upon exercise
of warrants owned by Biotechnology Development, Ltd. Biotechnology
Development, Ltd. is a Nevada limited partnership controlled by Mr.
Legere,

(M) Includes the securities described in notes (C), (D), (E), (F), (G),
(H), (I), (J), and (K).

-4-
<PAGE>

PROPOSAL ONE
ELECTION OF DIRECTORS

Directors are elected at each annual stockholders' meeting to serve
until the next annual meeting or until their successors are elected. On August
10, 1999, the Board of Directors amended the Bylaws of the Corporation to reduce
the authorized number of directors of the Corporation from between six and
eleven to between five and nine, with the exact number of directors to be five
until changed by resolution of the Board of Directors, effective upon the
expiration of the current term of the directors (which will occur concurrently
with the Meeting). Accordingly, the Board of Directors proposes the election of
five (5) directors at the Meeting. Unless authority to vote for directors has
been withheld in the proxy, the persons named in the enclosed proxy intend to
vote at the Meeting FOR the election of the nominees presented below. Under
Delaware law, the five (5) nominees receiving the highest number of votes will
be elected as directors at the Meeting. As a result, proxies voted to "Withhold
Authority," which will be counted, and broker non-votes, which will not be
counted, will have no practical effect.

Each of the nominees is an incumbent director elected at the last
annual meeting of stockholders. Each of the nominees has consented to serve as a
director for the ensuing year. If any nominee becomes unavailable for any reason
before the election, then the enclosed proxy will be voted for the election of
such substitute nominees, if any, as shall be designated by the Board of
Directors. The Board of Directors has no reason to believe that any of the
nominees will become unavailable to serve.

The names and certain information concerning the persons to be
nominated for election as directors are set forth below. YOUR BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES NAMED BELOW.

NOMINEES

The following table sets forth the names and certain share ownership
information as of August 23, 1999, regarding the persons to be nominated for
election as directors of the Company:
<TABLE>
<CAPTION>

DIRECTOR
NAME AND POSITION AGE SINCE PRINCIPAL OCCUPATION
- -------------------------------------- ---------- --------------- ------------------------------------------------------
<S> <C> <C> <C>
Thomas R. Testman, 62 06/03/98 Business Advisor / Retired former Managing Partner
Chairman of the Board with Ernst & Young LLP

Larry O. Bymaster 57 06/03/98 President and Chief Executive Officer of Techniclone
President, Chief Executive Officer Corporation
and Director

Rockell N. Hankin, 52 11/19/97 Chief Executive of Hankin & Co. and Hankin
Director Investment Banking

William C. Shepherd, 61 09/08/98 President and Chairman of Allergan Specialty
Director Therapeutic, Inc.

Clive R. Taylor, M.D., Ph.D., 55 11/02/88 Professor of Pathology at the University of Southern
Director California
</TABLE>

THOMAS R. TESTMAN has served as a director of the Company since June 3,
1998. Mr. Testman retired from his position as Managing Partner with Ernst &
Young LLP, an international auditing, accounting and consulting services firm in
October 1992 after 30 years of continuous service. During his tenure, he held
the position of National Director of Management Consulting Services, was Western
Regional Director of Health Care Services and engaged in management consulting
during various periods. During the last two years, Mr. Testman served as interim
Chief Executive Officer for the Company, and earlier as interim Chief Executive
Officer for Covenant Care, Inc. a skilled nursing care company. He also formerly
served as a director of Nichols Institute, a publicly-held laboratory company
that was sold to Corning, Inc. in 1994. Mr. Testman currently serves on the
Boards of Minimed, Inc. and Chromavision Medical Systems, Inc., medical device
manufacturers, in addition to serving as a director of five privately held
health care companies. Mr. Testman is a member of the Audit Committee and is
Chairman of the Board.

-5-
<PAGE>

LARRY O. BYMASTER has served as a director of the Company since June 3,
1998. He was named the President and Chief Executive Officer of the Company on
May 18, 1998. Prior to joining Techniclone (from 1990 to April 1998), Mr.
Bymaster was Chairman of the Board, President and Chief Executive Officer of
Pacific Pharmaceuticals, Inc. (formerly Xytronyx, Inc.) which develops and
commercializes cancer therapeutic and diagnostic products. Prior to Pacific
Pharmaceuticals, Inc., Mr. Bymaster held senior management positions with
Cytotech, a biotechnology company, Baxter Healthcare and Dart Industries. Mr.
Bymaster has over 25 years experience in the biotechnology and business fields.
Mr. Bymaster is also a member of the Board of Directors of a privately held
medical device company.

ROCKELL N. HANKIN has served as a director of the Company since
November 19, 1997. Mr. Hankin is Chairman of the Organization and Compensation
Committee of the Company. Mr. Hankin is the Chief Executive of Hankin & Co. and
Hankin Investment Banking, a consulting firm and investment banking firm,
respectively. Mr. Hankin is also the Vice Chairman of Semtech Corporation, which
manufactures electronic components and a Director of Alpha Microsystems, which
is a supplier of information technology services and products. Mr. Hankin serves
as a director of several privately held companies.

WILLIAM C. SHEPHERD has served as a director of the Company since
September 8, 1998. Mr. Shepherd is a member of the Organization and Compensation
Committee of the Company. Mr. Shepherd has been the President and Chief
Executive Officer and a director of Allergan Specialty Therapeutics, Inc.
("ASTI"), a pharmaceutical research and development company, since it was spun
off to stockholders in March 1998 by Allergan, Inc., a global provider of
specialty therapeutic products. He has agreed to provide certain consulting
services to Allergan for the three-year period following his January 1, 1998
retirement. Previously, Mr. Shepherd had served as Allergan's Chairman of the
Board (since January 1996), President and Chief Executive Officer (since 1992)
and a director (since 1984). He joined Allergan in 1966 and was President and
Chief Operating Officer from 1984 to 1992. Mr. Shepherd also is a director of
Furon Company, a publicly traded company, and one privately held company. Mr.
Shepherd holds a Bachelor of Arts degree in Biochemistry from the University of
California at Berkley.

CLIVE R. TAYLOR, M.D., PH.D. has served as a director of the Company
since November 2, 1988. Dr. Taylor is a member of the Organization and
Compensation Committee of the Company. He is professor of pathology at the
University of Southern California, Chairman of the Department of Pathology and
Dean of Educational Affairs. Currently, Dr. Taylor serves as a Director of
Laboratories for the Los Angeles County Medical Center and is on the attending
staff of the Kenneth Norris, Jr. Cancer Hospital and Research Institute. Dr.
Taylor also serves as director on three privately held companies. He received
his M.D. degree from Cambridge University and his Ph.D. from Oxford University
and is board certified by the American Board of Pathology in Anatomic and
Clinical Pathology.

Directors are elected on an annual basis. The present term of office
for each director will expire at the next annual meeting of Techniclone's
stockholders, or at such time as his successor is duly elected. Directors do not
receive separate cash compensation for fulfilling their duties as directors of
Techniclone. There are no family relationships among Techniclone's officers and
directors.

The Board of Directors of the Company held eighteen (18) meetings
during the fiscal year ended April 30, 1999. The Board of Directors has
established the Organization and Compensation Committee, which held one (1)
meeting during the fiscal year ended April 30, 1999 and an Audit Committee,
which held one (1) meeting during the fiscal year ended April 30, 1999. Each
incumbent director, other than Dr. Santoro, attended at least seventy-five
percent (75%) of the aggregate number of meetings of the Board of which he was a
member in the fiscal year ended April 30, 1999. Dr. Santoro attended ten (10)
(approximately 56%) of the aggregate number of meetings of the Board during the
fiscal year ended April 30, 1999. Each incumbent director attended at least
seventy-five percent (75%) of the aggregate number of meetings of the Committees
of which he was a member in the fiscal year ended April 30, 1999.

-6-
<PAGE>

In September 1998, the charter of the original Compensation Committee
had been expanded and the Committee was renamed the Organization and
Compensation Committee. This Committee reviews employee and incentive
compensation plans, the Company's Stock Option and Purchase Plans, and reviews
and makes recommendations to the Board of Directors with respect to base salary
adjustments and bonuses for all officers and other key personnel of the Company.
In addition, the Committee reviews the effectiveness of the overall Company
organization and the Board of Director's, including nominating individuals to
serve as members of the Board of Directors. Edward J. Legere II and Carmelo J.
Santoro, Ph.D. were the members of the Compensation Committee until July 1998.
In July 1998, the Compensation Committee added Rockell N. Hankin and Clive R.
Taylor, M.D., Ph.D. as members and in October 1998, the Board changed the
Organization and Compensation Committee members to Rockell N. Hankin, William C.
Shepherd and Clive R. Taylor, M.D., Ph.D. Rockell N. Hankin is Chairman of the
Organization and Compensation Committee.

The Audit Committee is responsible for recommending to the Board of
Directors the appointment of the Company's outside auditors, examining the
results of audits and quarterly reviews and reviewing internal accounting
controls. During the fiscal year ended April 30, 1999 until October 1998, the
Audit Committee members were Thomas R. Testman and Edward J. Legere II. In
October 1998, the Board changed the Audit Committee members to Carmelo J.
Santoro, Ph.D. and Thomas R. Testman.

The Executive Committee was established in July 1998. In September
1998, the charter of the Executive Committee was included in the charter of the
Organization and Compensation Committee.

EXECUTIVE OFFICERS

STEVEN C. BURKE, age 54, was appointed Chief Financial Officer of the
Company on November 2, 1998 and Secretary of the Company on December 1, 1998.
Mr. Burke has over 30 years of industry and public accounting experience. Most
recently, he served for 12 years as Chief Financial Officer and Vice President
Finance and Administration for Quidel Corporation, a publicly traded
pharmaceutical/diagnostics company, where he completed multiple rounds of
financing, set up and spun off a separate publicly traded therapeutics company,
and oversaw one merger and one acquisition. Prior to Quidel, he was a Vice
President and Controller with American Bentley, a $140 million cardiovascular
surgery products division of Baxter International. Previous to this, Mr. Burke
held financial management positions in the computer electronics industry. He
holds a CPA certificate and has public accounting experience with Arthur
Andersen & Company. Mr. Burke has a B.S. degree in Business Administration from
the California State University at Long Beach.

DR. JOHN N. BONFIGLIO, age 44, was appointed Vice President of
Technology and Business Development on April 5, 1999 and interim Vice President
of Regulatory and Clinical Affairs on April 23, 1999. Previously, Dr. Bonfiglio
held the position of Vice President of Business Development since he began
employment with Techniclone on July 14, 1997. From January 1997 through June
1997, he was the Director of Strategic Business for Baxter Cardiovascular group
where his responsibilities included strategic planning, business development and
technology assessment. From July 1994 until January 1997, he was the Director of
Business Development at Baxter Immunotherapy Group with responsibilities for
licensing, strategic planning and technology assessment. From July 1983 until
July 1997, Dr. Bonfiglio was employed by Allergan Inc. He held a variety of
roles including, senior scientist, project director, director of business
planning and director of strategic marketing. Dr. Bonfiglio holds a Ph.D. in
organic chemistry from The University of California at San Diego and a Masters
in Business Administration from Pepperdine University.

JAMIE C. OLIVER, PHARM.D., age 42, was appointed Vice President of
Clinical and Regulatory Affairs of the Company on March 23, 1998. He served in
such capacity until April 30, 1999, when Dr. Oliver resigned to pursue other
personal and business interests. Dr. Oliver commenced full-time employment with
the Company on July 21, 1997. Dr. Oliver joined Techniclone from Kendle
International, a clinical research organization in Thousand Oaks, California,
where he served as Director, Clinical Research Immunology and Oncology. Prior to
Kendle International, Dr. Oliver worked with ClinTrials Research. Dr. Oliver has
overseen and directed clinical trials for many large pharmaceutical companies,
including Baxter, Sandoz Pharmaceuticals, Merck, and Genentech. He has over 14
years of experience as a clinical investigator and has served as the medical
monitor for over 20 phase I-IV clinical trials. Dr. Oliver received his Doctor
of Pharmacy from Mercer University in Atlanta, Georgia, and is the author of
over 30 publications relating to clinical research and testing.

-7-
<PAGE>

ELIZABETH A. GORBETT-FROST, age 43, was appointed Chief Financial
Officer of the Company on March 23, 1998 and Secretary of the Company on June 3,
1998. On November 2, 1998, Ms. Gorbett-Frost resigned to pursue other personal
and business interests, but remained in her position as Secretary of the Company
until November 30, 1998. From August 1996 through March 1998, she served as
Vice-President of Finance and Administration for the Company. Prior to joining
the Company, Ms. Gorbett-Frost was a partner with the certified public
accounting form of Deloitte & Touche LLP from 1979 to 1996, where she most
recently served as partner-in-charge of the life sciences industry group.

WILLIAM V. MODING, age 46, was appointed Vice President of Operations
and Administration of the Company on March 23, 1998. On October 4, 1998, Mr.
Moding resigned to pursue other personal and business interests. He served as
the Chief Financial Officer of the Company from November 1983 to March 23, 1998,
and was a former Secretary of the Company. Mr. Moding commenced full-time
employment with the Company on September 15, 1996. Mr. Moding was a director of
the Company from March 1985 through October 1997. From 1979 to 1996 Mr. Moding
was a partner in the certified public accounting firm of Kanady & Moding. From
1975 to 1979, Mr. Moding was a staff accountant with Deloitte & Touche LLP
(formerly Deloitte, Haskins & Sells.)

DIRECTOR'S COMPENSATION

Directors who also are Company employees receive no compensation for
serving as directors. No compensation is paid for attending meetings of
Committees of the Board of Directors on which directors serve. Pursuant to the
Company's 1993 Employee Stock Option Plan ("1993 Plan"), each year, each
nonemployee director is automatically granted an option to purchase 2,000 shares
of Company Common Stock at an exercise price that is equal to the fair market
value of the shares on the date of grant. These options vest twenty percent
(20%) on the first anniversary of the date of grant and 1/60 of the remaining
amount each month thereafter. Pursuant to the Company's 1996 Stock Incentive
Plan ("1996 Plan"), each new director of the Company who is neither an employee
nor an executive officer of the Company is automatically granted a Nonqualified
Stock Option to purchase 10,000 shares of Common Stock upon commencement of
service as a nonemployee director and a Nonqualified Option to purchase 5,000
shares of Common Stock at the end of each fiscal year such employee director has
served at least six months during such fiscal year. These option grants are
granted at fair market value at date of grant and are exercisable six months
after the date of grant. Each of the below directors have received separate
option grants and have waived their participation in the 1993 and 1996 Plans as
a nonemployee director.

Under a separate agreement, in June 1998, the Company granted Thomas R.
Testman, as compensation for his services as a member of the Board of Directors
a nonqualified option to purchase up to 200,000 shares of the Company's Common
Stock at $1.59 per share, which was the fair market value at the date of grant.
This option vests twenty-five percent (25%) annually beginning June 3, 1999. In
addition, Mr. Testman served as interim CEO for the Company during the period
from March 1998 through May 1998 and during that time was granted an incentive
option to purchase up to 50,000 shares of the Company's Common Stock at $.60 per
share, which was the fair market value at the date of grant. The option vested
immediately and was exercised in July 1998. In June 1998, the Company issued Mr.
Testman 25,000 shares of the Company's Common Stock in exchange for consulting
services to be rendered by Mr. Testman for the three months ended August 31,
1998.

Under two separate option agreements in November 1997 and May 1998,
respectively, the Company granted Rockell N. Hankin, as compensation for his
services as a member of the Board of Directors, nonqualified options to purchase
up to 100,000 and up to 150,000 shares of the Company's Common Stock at $3.00
and $1.59 per share, respectively, which were the fair market values at each
date of grant. These options vest twenty-five percent (25%) on the date of grant
and twenty-five percent (25%) annually thereafter. Options for 100,000 shares
were repriced to $.60 per share on March 2, 1998 in conjunction with the
repricing of stock options held by active employees, consultants and directors.

-8-
<PAGE>

Under a separate agreement, in October 1998, the Company granted
William C. Shepherd, as compensation for his services as a member of the Board
of Directors, a nonqualified option to purchase up to 250,000 shares of the
Company's Common Stock at $1.06 per share, which was the fair market value at
the date of grant. This option vests twenty-five percent (25%) annually
beginning October 1, 1999.

Under a separate option agreement, during August 1998, the Company
granted Clive R. Taylor, M.D., Ph.D., as compensation for his services as a
member of the Board of Directors and as a consultant to the Company, a
nonqualified option to purchase up to 75,000 shares of the Company's Common
Stock at $1.41 per share, which was the fair market value at the date of grant.
The option vests twenty-five percent (25%) annually beginning August 3, 1999.
During November 1998, the Company also granted Dr. Taylor a nonqualified option
to purchase up to 75,000 shares of the Company's common stock at 1.00 per share.
This option will vest upon the achievement of various milestones. As of April
30, 1999, these milestones were not achieved. In addition, Dr. Taylor received
$24,000 during fiscal year 1999 for scientific professional fees.

Under a separate agreement, during the fiscal year ended April 30,
1997, the Company granted Carmelo J. Santoro, Ph.D., as compensation for his
services as a member of the Board of Directors, a nonqualified option to
purchase up to 250,000 shares of the Company's Common Stock at $4.00 per share,
which was the fair market value at the date of grant. This option vests
twenty-five percent (25%) on the date of grant and twenty-five percent (25%)
annually beginning June 30, 1997. The option was repriced to $.60 on March 2,
1998 in conjunction with the repricing of stock options held by active
employees, consultants and directors. No stock options were granted to Dr.
Santoro during the fiscal year ended April 30, 1999.

In March 1999, the Company entered into a Termination Agreement with
Biotechnology Development, Ltd. ("BTD"), a Nevada limited partnership whose
general partner is Edward J. Legere, II, a former director of the Company,
pursuant to which the Company terminated all previous agreements with
Biotechnology Development, Ltd. and thereby reacquired the marketing rights to
Oncolym(R) products in Europe and certain other designated foreign countries. In
exchange for these rights, the Company issued a Secured Promissory Note to BTD
in the principal face amount of $3.3 million bearing simple interest at the rate
of ten percent (10%) per annum, with interest payable monthly and the full
principal amount due and payable on March 1, 2001, warrants to purchase up to
3,700,000 shares of Common Stock at an exercise price of $3.00 per share
exercisable for a period of three years, and warrants to purchase up to
1,000,000 shares of Common Stock at an exercise price of $5.00 per share
exercisable for a period of five years. In addition, the Company issued
1,523,809 shares of Common Stock to BTD, equal in value to $1,200,000, based on
a value per share equal to ninety percent (90%) of the market price of the
Common Stock as defined in the Termination Agreement. The Company also agreed to
file a registration statement within nine months covering such shares of Common
Stock and the shares of Common stock issuable upon exercise of the warrants
issued to BTD and to use its reasonable best efforts to cause such registration
statement to be declared effective by the Securities and Exchange Commission as
soon as practicable after filing. Pursuant to a related Security Agreement, the
Company granted a security interest to BTD in and to all tangible assets
physically located on the premises of the Company in the City of Tustin,
California, excluding inventory, furniture, fixtures and equipment which serve
as security to any bank, financial institution or institutional creditor or
lender to whom the Company is or may become indebted with respect to the
repayment of borrowed money or with respect to any equipment lease financing
agreement or arrangement, and further excluding any and all intangible property
and intellectual property of the Company and any and all rights with respect
thereto and any goodwill associated therewith.

On September 8, 1998, Edward J. Legere II resigned from the Board of
Directors and the remaining Directors appointed Mr. William C. Shepherd to fill
the vacancy on the board of directors caused by Mr. Legere's resignation. Mr.
Legere's resignation was not due to any disagreement with the Company on any
matter relating to the Company's operations, policies or practices.

-9-
<PAGE>

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten percent (10%) stockholders are required by
regulations promulgated by the Securities and Exchange Commission to furnish the
Company with copies of all Section 16(a) reports they file. Based solely on the
review of copies of such reports furnished to the Company and written
representations that no other reports were required, the Company believes that
during the fiscal year ended April 30, 1999, the Company's officers, directors
and all persons who own more than ten percent (10%) of a registered class of the
Company's equity securities complied with all Section 16(a) filing requirements,
with the following exceptions: One report on Form 4 covering one transaction
during the fiscal year ended April 30, 1999, was filed late by Thomas R. Testman
with respect to the purchase of 50,000 shares of the Company's common stock and
one report on Form 3 with respect to obtaining beneficial ownership of greater
than 10% of the Company's common stock during the fiscal year ended April 30,
1999, was filed late by Edward J. legere II.

COMPENSATION OF EXECUTIVE OFFICERS

LARRY O. BYMASTER. On May 18, 1998, the Company entered into an
Employment Agreement with Mr. Larry O. Bymaster. The employment agreement
provides that Mr. Bymaster shall be employed as the Company's President and
Chief Executive Officer for a two (2) year period commencing May 1998 at an
annual base salary of $250,000, subject to increases at the discretion of the
Board of Directors. At the end of each fiscal year, Mr. Bymaster is entitled to
a bonus of up to 100% of his base salary as an incentive bonus. The payment of
any cash bonus to Mr. Bymaster is at the discretion of the Organization and
Compensation Committee of the Board of Directors, as determined by achieving
certain performance targets established by the Board of Directors. For the year
ended April 30, 1999, Mr. Bymaster was awarded a cash bonus of $125,000 by the
Board of Directors, which was paid in May 1999. In May 1998, Mr. Bymaster was
granted an option to purchase 1,250,000 shares of Common Stock at an exercise
price of $1.41 per share, which was the fair market value at the date of grant.
This option vests twenty-five percent (25%) on the date of grant and 250,000
shares on each of the next succeeding four anniversaries of his employment date.
Mr. Bymaster is also eligible for certain fringe benefits offered by the
Company's executive benefit plans. If Mr. Bymaster is terminated for any reason,
under his employment agreement, he will continue to receive his annual base
salary for the lessor of one year or through the end of his employment
agreement.

STEVEN C. BURKE. Mr. Burke is employed by the Company as its Chief
Executive Officer and Secretary at an annual base salary of $185,000. The
payment of any bonus compensation to Mr. Burke is determined by and at the
discretion of the Organization and Compensation Committee and the Board of
Directors of the Company. In May 1999, Mr. Burke was awarded a cash bonus of
$27,750 with respect to the fiscal year ended April 30, 1999, which was paid in
May 1999.

DR. JOHN N. BONFIGLIO. Dr. Bonfiglio is employed by the Company as its
Vice President of Technology and Business Development and interim Vice President
of Clinical and Regulatory Affairs at an annual base salary of $180,000. The
payment of any bonus compensation to Dr. Bonfiglio is determined by and at the
discretion of the Organization and Compensation Committee and the Board of
Directors of the Company. In May 1999, Dr. Bonfiglio was awarded a cash bonus of
$63,000 with respect to the fiscal year ended April 30, 1999, which was paid in
May 1999.

JAMIE C. OLIVER, PHARM.D. Dr. Oliver entered into an Employment
Agreement with the Company effective July 21, 1997. The Employment Agreement
provided for Dr. Oliver to be employed for twelve (12) months and provided for
an extension of the Employment Agreement for an additional one-month period so
that, at the beginning of each calendar month, Dr. Oliver had twelve (12) months
remaining on his Employment Agreement. Dr. Oliver was paid an initial salary of
$160,000, plus a one-time signing bonus of $10,000, and was entitled to
reimbursement of various moving expenses not to exceed $10,500. In March 1998,
as a result of Dr. Oliver's promotion to Vice President of Clinical and
Regulatory Affairs, his annual salary was increased to $175,000 and later
increased to $200,000 in October 1998. In May 1998, Dr. Oliver was granted a
bonus, not to exceed $30,000, for reimbursement of current and future legal fees
related to a personal legal matter. On April 30, 1999, Dr. Oliver resigned to
pursue other personal and business interests. In conjunction with his
resignation, Dr. Oliver was granted a bonus of $50,000 for achievements made
during fiscal year 1999 and for continued support of clinical trials for 120
days from the date of resignation, payable in three installments: 50% payable on
date of resignation, 30% payable on June 30, 1999 and the remaining 20% payable
on August 21, 1999.

-10-
<PAGE>

ELIZABETH A. GORBETT-FROST. On November 2, 1998, Elizabeth
Gorbett-Frost resigned from her position as Chief Financial Officer of the
Company to pursue other personal and business interests but remained in her
position as Secretary of the Company until November 30, 1998. In connection with
Ms. Gorbett-Frost's resignation, the Company entered into a severance agreement
with Ms. Gorbett-Frost pursuant to which she remained a non-officer employee of
the Company through April 30, 1999 in consideration of the payment to Ms.
Gorbett-Frost of a bi-weekly salary in the amount of $6,731. In accordance with
the 1996 Stock Option Plan, Ms. Gorbett-Frost was entitled to exercise the
outstanding options she held at April 30, 1999 for a period of 90 days after
April 30, 1999. In addition, Ms. Gorbett-Frost received 30,000 unrestricted
shares of the Company's Common Stock upon the accomplishment of certain
specified tasks, which were substantially completed by November 30, 1998.

WILLIAM V. MODING. On October 4, 1998, William V. Moding, the former
Vice President of Operations and Administration of the Company, resigned to
pursue other personal and business interests. In connection with Mr. Moding's
resignation, the Company entered into a revised severance agreement with Mr.
Moding pursuant to which Mr. Moding agreed to provide consulting services to the
Company as an independent consultant continuing until January 31, 2000, in
consideration of the payment to Mr. Moding of a monthly consulting fee of
$12,500 and the issuance of an aggregate of 320,000 shares of Common Stock for
the exercise of outstanding stock options, without the requirement of any
payment by Mr. Moding of the exercise price of $0.60 per share. In addition, the
Company agreed to make tax payments totaling $65,280 to federal and state taxing
authorities on behalf of Mr. Moding to offset the income to Mr. Moding resulting
from the non-payment of the exercise price for such options. In accordance with
the revised severance agreement, during fiscal year 1999, the Company issued
240,000 shares of Common Stock to Mr. Moding without the requirement of any
payment and made tax payments on his behalf totaling $48,960 for federal and
state taxes. Pursuant to the revised agreement, Mr. Moding is required to repay
the Company the entire outstanding principal balance and accrued interest
thereon under two stock option exercise notes (with a current combined principal
amount of $153,772 at April 30, 1999) by no later than January 31, 2000 and
executed a standard form security agreement relating to the stock option
exercise notes pledging his interest in the shares issued upon exercise of the
stock options and his personal assets as backup collateral to secure his
obligations under the two stock option exercise notes.

The following table sets forth the compensation earned by the current
President and Chief Executive Officer, the former interim Chief Executive
Officer, two current officers of the Company whose compensation exceeded
$100,000 for fiscal year 1999, and three former officers of the Company whose
compensation exceeded $100,000 for fiscal year 1999, for services rendered in
all capacities to the Company for each of the last three fiscal years. All the
individuals named in the table will hereinafter be referred to as the "Named
Officers."

-11-
<PAGE>
<TABLE>

SUMMARY COMPENSATION TABLE
<CAPTION>

ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARD
-------------------------------- -----------------------------------
FISCAL OTHER SECURITIES
NAME AND PRINCIPAL POSITION YEAR SALARY (1) BONUS COMPENSATION UNDERLYING OPTIONS
--------------------------- ------ ---------- ----- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Larry O. Bymaster 1999 $ 240,385 $ 125,000 $ 25,671 (2) 1,250,000
President and
Chief Executive Officer

Thomas R. Testman, 1999 $ 11,538 $ -- $ 35,250 (3) 200,000(7)
former interim Chief 1998 $ 46,154 $ -- $ -- 50,000
Executive Officer

Steven C. Burke, 1999 $ 92,500 $ 27,750 $ -- (4) 275,000
Chief Financial Officer
and Secretary

Dr. John N. Bonfiglio, 1999 $ 140,769 $ 63,000 $ -- (4) 120,000
V.P., Technology and Business 1998 $ 108,224 $ -- $ -- (4) 80,000
Development and interim V.P.,
Clinical and Regulatory Affairs

Jamie C. Oliver, Pharm.D. 1999 $ 199,999 $ 80,000 $ -- (4) 200,000
Former Vice President, Clinical 1998 $ 137,885 $ -- $ -- (4) 100,000
and Regulatory Affairs

Elizabeth A. Gorbett-Frost 1999 $ 188,606 $ 30,000 $ -- (4) 140,000
Former Chief Financial Officer 1998 $ 144,039 $ -- $ -- (4) --
and Secretary 1997 $ 79,052 $ -- $ -- (4) 160,000

William V. Moding 1999 $ 97,555 $ -- $ 192,960 (5) --
Former Vice President, 1998 $ 197,115 $ -- $ 43,607 (6) --
Operations & Administration 1997 $ 92,192 $ -- $ -- (4) --
</TABLE>

- -----------------------------
(1) Salary information is reported as of the last payroll paid prior to or
immediately after April 30th of each year and includes amounts deferred
under the Company's 401-K Plan.
(2) Primarily includes $19,901 paid as reimbursement for life insurance
premiums.
(3) Amount represents the fair market value of 25,000 shares of the Company's
common stock issued to Mr. Testman for consulting services rendered in
conjunction with the transition of the Chief Executive Officer.
(4) Amounts were not significant enough to meet the disclosure requirements.
(5) In accordance with Mr. Moding severance agreement, amount represents
compensation on 240,000 shares of common stock issued to Mr. Moding without
the requirement of any payment of the $0.60 option exercise price plus
$48,960 paid on Mr. Moding's behalf to the appropriate taxing authorities
for federal and state taxes.
(6) Primarily includes $23,100 paid as reimbursement for life insurance
premiums and $15,000 paid for reimbursement of car allowance.
(7) Options were granted as consideration for serving as Chairman of the Board
of Directors.

-12-
<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

The following table provides information on option grants in the fiscal
year ended April 30, 1999 to the Named Officers.
<TABLE>
<CAPTION>

PERCENT
TOTAL OPTIONS
NUMBER OF SECURITIES GRANTED TO EXERCISE GRANT
UNDERLYING ALL EMPLOYEES IN PRICE EXPIRATION DATE
NAMED OFFICER GRANT DATE OPTIONS GRANTED FISCAL YEAR (1) ($/SHARE)(2) DATE VALUE (3)
- -------------------- ---------- -------------------- ---------------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Larry O. Bymaster 05/22/98 1,250,000 32.0% $ 1.41 05/22/08 $ 1,158,536
Thomas R. Testman 06/03/98 200,000 5.1% $ 1.59 06/03/08 $ 209,030
Steven C. Burke 11/02/98 275,000 7.0% $ 0.98 11/02/08 $ 177,149
Dr. John N. Bonfiglio 05/27/98 120,000 3.1% $ 1.59 05/27/08 $ 125,400
Jamie C. Oliver, 05/27/98 200,000 5.1% $ 1.59 05/27/08 $ 209,030
Pharm.D.
Elizabeth A. 05/27/98 140,000 3.6% $ 1.59 05/27/08 $ 146,300
Gorbett-Frost
William V. Moding - - - - - -
</TABLE>

- -----------------------------
(1) Options to purchase an aggregate of 3,910,541 shares were granted to
all employees, directors and consultants in the fiscal year ended April
30, 1999, including the Named Officers under the Company's 1996 Stock
Incentive Plan.

(2) The exercise price may be paid in cash, or shares of the Company's
Common Stock valued at fair market value on the date of exercise. All
options were issued for an exercise price at least equal to fair market
value on the date of grant. Fair market value is the closing price of
the Company's Common Stock on the date of grant.

(3) The grant date value was estimated at the date of grant using the
Black-Scholes option pricing model, assuming an average expected life
of approximately four years, a risk-free interest rate of 6.39% and a
volatility factor of 86%. The Black-Scholes option valuation model was
developed for use in estimating the fair value of traded options that
have no vesting restrictions and are fully transferable. Option
valuation models require the input of highly subjective assumptions,
including the expected stock volatility. Because the Company's options
have characteristics significantly different from those of traded
options and because changes in the subjective input assumptions can
materially affect the fair values estimated, in the opinion of
management, the existing models do not necessarily provide a reliable
measure of the fair value of its options.

-13-
<PAGE>

OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following table provides information on option exercises in the
fiscal year ended April 30, 1999, by the Named Officers and the value of
unexercised options held by the Named Officers as of April 30, 1999.
<TABLE>
<CAPTION>

NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT APRIL 30, 1999 APRIL 30, 1999 (1)
ACQUIRED ON VALUE --------------------- -----------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry O. Bymaster -- $ -- 250,000 1,000,000 $ -- $ --
Thomas R. Testman 50,000 $ 45,000 -- 200,000 $ -- $ --
Steven C. Burke -- $ -- -- 275,000 $ -- $ --
Dr. John N. Bonfiglio -- $ -- 20,000 180,000 $ 18,750 $ 56,250
Jamie C. Oliver, Pharm.D. -- $ -- 50,000 -- $ 46,875 $ --
Elizabeth A. Gorbett-Frost -- $ -- 113,334 -- $ 106,251 $ --
William V. Moding 240,000 $ 118,500 -- 80,000 $ -- $ 75,000
</TABLE>
- -----------------------------
(1) The closing price of the Company's Common Stock on April 30, 1999 on The
SmallCap Market of The Nasdaq Stock Market was $0.9375 per share.

ORGANIZATION AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER TRADING

The following nonemployee directors serve on the Organization and
Compensation Committee of the Board of Directors: Rockell N. Hankin, Chairman,
William C. Shepherd and Clive R. Taylor, M.D., Ph.D. Larry O. Bymaster, the
Company's President and Chief Executive Officer, is an ex-official member of the
Compensation Committee. Such ex-official status does not entitle him to vote on
matters submitted to the Compensation Committee. There are no interlocks of
executive officers or board members of the Company serving on the compensation
committee or equivalent committee of another entity which has any director or
executive officer serving on the Organization and Compensation Committee, other
committees or the Board of Directors of the Company.

REPORT OF THE ORGANIZATION AND COMPENSATION COMMITTEE

The following report is submitted by the members of the Organization
and Compensation Committee with respect to the executive compensation policies
established by the Organization and Compensation Committee and compensation paid
or awarded to executive officers for the fiscal year ended April 30, 1999.

COMPENSATION POLICIES AND OBJECTIVES. The administration of the
Company's compensation program is designed to attract, motivate and retain the
executive talent needed to optimize stockholder value in a highly competitive
and uncertain environment. The Organization and Compensation Committee
determines the Chief Executive Officer's compensation and the compensation of
all executive officers by taking into consideration (i) what other chief
executive officers and executive officers in the industry receive as
compensation, (ii) what the Company can afford to pay, (iii) available
alternative sources of compensation such as incentive stock options, (iv) annual
incentive compensation that varies in a consistent manner with achievement of
individual objectives and financial performance objectives of the Company, and
(v) long-term incentive compensation that focuses executive efforts on building
stockholder value through meeting longer-term financial and strategic goals. In
designing and administering its executive compensation program, the Company
attempts to strike an appropriate balance among these various elements. As the
Company has a history of operating losses, no specific relationship of the
Company's financial performance was used in determining executive officer
compensation.

-14-
<PAGE>

The Organization and Compensation Committee took into consideration the
compensation of executive officers of similar companies within the industry for
consideration of executive officer salaries. In addition, the Board utilized a
comprehensive report issued by Frederick W. Cook and Co., Inc. in making its
decision with respect to the compensation paid to the executive officers of the
Company. While the Organization and Compensation Committee considers the salary
of other executive officers in the industry important in the consideration of
its decision with respect to the executive officers' compensation, in light of
the recent turnover in the Company's executive ranks, the controlling factors
were the compensation requirements necessary to retain the remaining current
executive officers. Accordingly, the Organization and Compensation Committee
based its determination of executive compensation primarily by way of comparison
to the total compensation package of executive officers at comparable companies,
consisting of bonus compensation and option grants in addition to an annual
salary and benefits, while taking into consideration the financial condition of
the Company.

CEO COMPENSATION. Mr. Bymaster has served as the Company's Chief
Executive Officer since May 1998. Following an analysis of compensation at peer
companies conducted by independent compensation consultants, it was determined
that Mr. Bymaster's base salary was between the 25th and 50th percentile of the
peer group. The Compensation Committee approved Mr. Bymaster's base salary of
$250,000, which was in line with its policy to provide base salary that is
competitive with similarly situated CEOs. Mr. Bymaster's annual bonus is based
on achievement of predetermined financial goals, and nonfinancial milestones,
most important of which is the establishment of strategic partnership
arrangements with one or more major pharmaceutical companies with respect to the
development, marketing and commercialization of the Company's technologies. In
May 1999, the Organization and Compensation Committee awarded Mr. Bymaster a
bonus of $125,000 which was 50% of his annual base salary for the fiscal year
ended April 30, 1999. The bonus of $125,000 was paid to Mr. Bymaster in May
1999.

LONG-TERM INCENTIVE COMPENSATION - STOCK OPTIONS. Options provide
executives with the opportunity to buy and maintain an equity interest in the
Company and to share in the appreciation of the value of the Common Stock. Stock
options only have value if the stock price appreciates in value from the date
the options are granted. The number of options granted to each employee was
based primarily on the employee's ability to influence the Company's long-term
growth and profitability. If a participant were to leave prior to vesting in
these options, a significant number of the options would be forfeited. This
makes it more difficult for competitors to recruit key employees away from the
Company during this critical time for clinical trials. In addition, these grants
bring the percentage of fully diluted shares outstanding held by Techniclone's
executive officers and employees more in line with peer organizations. The
Organization and Compensation Committee believes that option grants afford a
desirable long-term compensation method because they closely ally the interests
of management and other employees of the Company with shareholder value and
motivate the Company's officers to improve long-term stock market performance.

BENEFITS. Benefits offered to employees serve a different purpose than
do the other elements of total compensation. In general, they are designed to
provide a safety net of protection against the adverse financial effects that
can result from illness, disability or death and to provide a reasonable level
of insurance coverage for any medical, dental and vision problems that may be
experienced by the Company's employees, as well as preventative care, at a
reduced expense to the Company's employees. Benefits offered to executive
officers are largely the same as those that are offered to the general employee
population.

Respectfully submitted,

The Organization and Compensation Committee

\S\ ROCKELL N. HANKIN \S\ WILLIAM C. SHEPHERD
--------------------- ------------------------
Rockell N. Hankin, William C. Shepherd
Chairman

\S\ CLIVE R. TAYLOR, M.D., PH.D.
--------------------------------
Clive R. Taylor, M.D., Ph.D.

-15-
<PAGE>

STOCK OPTION PLANS

The Company has four stock option plans, (i) the Incentive Stock
Option, Nonstatutory Stock Option and Restricted Stock Purchase Plan - 1986 (the
"1986 Plan"), (ii) Incentive Stock Option and Nonqualified Stock Option
Plan-1993 (the "1993 Plan"), (iii) the Cancer Biologics Incorporated, Incentive
Stock Option, Nonqualified Stock Option and Restricted Stock Purchase Plan -
1987 (the "CBI Plan") and (iv) the 1996 Stock Incentive Plan (the "1996 Plan"
and, together with the 1986 Plan, the 1993 Plan, the CBI Plan and the 1996 Plan,
the "Plans")). The purpose of the Plans is to enable the Company to attract and
retain directors, employees and consultants of ability and to motivate such
persons to use their best efforts on behalf of the Company and its subsidiaries
by providing them with equity participation in the Company. Certain options
granted under the 1986 Plan, the CBI Plan, the 1993 Plan and the 1996 Plan are
intended to qualify as "incentive stock options" within the meaning of Section
422A of the Internal Revenue Code of 1986.

The Plans are administered by the Organization and Compensation
Committee which determines the terms of options granted under the Plans,
including the exercise or purchase price, conditions of purchase (including
repurchase rights in favor of the Company), number of shares subject to the
option or right and the exercisability thereof. The exercise price of all
options granted under the Plans must be at least equal to the fair market value
of such shares on the date of grant. The maximum term of each option is ten
years.

The following table represents a summary of the Company's options Plans
at April 30, 1999:
<TABLE>
<CAPTION>

OPTIONS
SHARES AVAILABLE
RESERVED FOR OPTIONS OPTIONS OPTIONS FOR FUTURE
PLAN ISSUANCE GRANTED OUTSTANDING EXERCISABLE GRANT
---------------- --------------- ------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
1986 Plan 500,000 486,000 59,333 59,333 -
1993 Plan 750,000 721,205 224,300 224,300 69,795
CBI Plan 2,000,000 1,972,000 677,000 677,000 -
1996 Plan 10,000,000* 5,896,868 5,427,034 1,378,404 4,103,132

--------------- ------------- -------------- ---------------- --------------
Total 13,250,000 9,076,073 6,387,667 2,339,037 4,172,927
=============== ============= ============== ================ ==============
</TABLE>

- ----------
*Pursuant to the 1996 Plan, 4,000,000 shares of Common Stock were
initially reserved for issuance upon the exercise of options. The shares
reserved for issuance under the 1996 Plan are automatically increased at the end
of each fiscal year by twenty percent (20%) of any increase (other than any
increase due to stock awards under any of the Plans) in the number of authorized
and issued shares above 20,869,675 (the number of authorized and issued shares
at September 27, 1996) up to a maximum of 10,000,000 shares. At April 30, 1999,
the number of shares for which options may be granted under the 1996 Plan had
increased to 10,000,000.

The 1986 and CBI Plans have been terminated by the Board of Directors
with respect to the grant of additional options under such Plans. The CBI Plan
was assumed by the Company in connection with the merger of Cancer Biologics
Incorporated with and into the Company. The options outstanding under the Plans
expire at various dates through April 2009.

During fiscal year 1999, options to purchase 240,000 shares of Common
Stock were exercised by Mr. William Moding in accordance with his severance
agreement without the requirement of any payment under the 1996 Plan. In
addition, Mr. Thomas R. Testman exercised an option to purchase 50,000 shares of
the Company's Common Stock in July 1998 under the 1996 Plan. No other options
were exercised by officers or directors of the Company during the fiscal year
ended April 30, 1999. During the fiscal year ended April 30, 1999, options to
purchase up to 2,735,000 shares of the Company's Common Stock were granted to
officers and directors of the Company under the 1996 Plan.

-16-
<PAGE>

COMPANY PERFORMANCE

The following graph shows a comparison of cumulative total returns for
the Company, Nasdaq Market Index and Nasdaq Peer group for the period that
commenced on April 30, 1994 and ended April 30, 1999.

COMPARISON OF CUMULATIVE TOTAL RETURNS

(NASDAQ MARKET INDEX)

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOREGOING REPORT, AND
THE PERFORMANCE GRAPH BELOW AND THE UNDERLYING DATA, SHALL NOT BE INCORPORATED
BY REFERENCE IN ANY SUCH FILINGS.

[GRAPH OF THE COMPARISON OF CUMULATIVE TOTAL RETURNS HERE]

The underlying data for the above graph is as follows:

<TABLE>
<CAPTION>
May 1, April 30, April 30, April 30, April 30, April 30,
1994 1995 1996 1997 1998 1999
---------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Techniclone Corporation $ 100 $ 42 $ 209 $ 157 $ 24 $ 32
Nasdaq Pharmaceutical Index $ 100 $ 107 $ 193 $ 158 $ 196 $ 235
Nasdaq Market Index $ 100 $ 116 $ 166 $ 175 $ 262 $ 356
</TABLE>

The total cumulative returns on investment shown for the Company, the
Nasdaq Market Index and the Nasdaq Pharmaceutical Index are based on the
assumptions that on May 1, 1994, $100 was invested in the Company's Common Stock
and in each Index and that all dividends were reinvested. The Nasdaq Market
Index and the Nasdaq Pharmaceutical Index were prepared by The Center for
Research in Security Prices.

-17-
<PAGE>

PROPOSAL TWO
APPROVAL OF AMENDMENT OF CERTIFICATE OF INCORPORATION

INTRODUCTION

The Company's continued existence is dependent on obtaining financing
from the sale of additional equity securities and/or through the receipt of
licensing or partnering fees until the Company is able to generate sufficient
sales from its product candidates to fund its operations. For this reason and
those set forth below, the Board of Directors believes that the best interest of
the Company and its stockholders will be served by approving the amendment of
the Certificate of Incorporation of the Company to increase the number of shares
of Common Stock authorized for issuance by the Company from 120,000,000 shares
to 150,000,000 shares.

During April 1997, the Company issued 12,000 shares of 5% Adjustable
Convertible Class C Preferred Stock (the "Class C Stock") and issued an
additional approximately 2,000 shares of Class C Stock during the two years
ended April 30, 1999. These shares of Class C Stock were convertible into shares
of Common Stock and warrants to purchase shares of Common Stock. As of the date
of this Proxy Statement, substantially all of the shares of Class C Stock have
been converted into shares of Common Stock and substantially all of the warrants
issued upon such conversion have been exercised. As a result, the Company issued
in excess of 30 million shares of Common Stock from October 1997 through the
fiscal year ended April 30, 1999 to the holders of the Class C Stock pursuant to
the conversion of such shares and the exercise of such warrants.

In June 1998, the Company secured access to a $20,000,000 Regulation D
Common Stock Equity Line Subscription Agreement (the "Equity Line") with two
institutional investors, expiring in June 2001. Under the terms of the Equity
Line, the Company may, in its sole discretion, and subject to certain
restrictions, periodically sell ("Put") shares of the Company's common stock for
up to $20,000,000 upon the effective registration for resale of the Put shares.
After the effective registration of the Put shares, which occurred on January
15, 1999, unless an increase is otherwise agreed to, $2,250,000 of Puts can be
made every quarter, subject to share issuance volume limitations identical to
those set forth in Rule 144(e). At the time of each Put, the investors will also
be issued warrants, expiring on December 31, 2004, to purchase up to 10% of the
amount of common stock issued to the investor at the same price at the time of
the Put. As of July 31, 1999, the Company has issued to the two institutional
investors an aggregate of approximately 8,496,000 shares of Common Stock and
warrants to purchase up to an additional 760,000 shares of Common Stock in
exchange for $8,000,000 of funds received by the Company under the Equity Line.
In addition, the Company issued to the placement agent for the Equity Line an
aggregate of approximately 850,000 shares of Common Stock and warrants to
purchase up to an additional 76,000 shares of Common Stock, pursuant to the
terms of a related Placement Agent Agreement. The Company presently anticipates
issuing from time to time, at its sole option, up to an additional approximately
18,150,000 shares of Common Stock (for the remaining $12,000,000 available under
the Equity Line, assuming a closing bid price of the Common Stock of $1.00 per
share), including shares issuable upon exercise of warrants issuable to the two
investors and shares of Common Stock and shares subject to warrants to be issued
to the placement agent for the Equity Line Agreement. The Company also has
reserved an additional 15,703,000 shares of Common Stock for issuance upon the
exercise of outstanding options and other warrants.

As of July 31, 1999, the Company had approximately 76,370,000 shares of
Common Stock outstanding and has reserved for issuance an additional
approximately 34,000,000 shares of Common Stock upon exercise of the remaining
shares of Class C Stock, pursuant to the exercise by the Company of future Puts
under the Equity Line and upon exercise of such options and other warrants to
purchase shares of Common Stock. As a result, on a fully diluted and reserved
basis, the Company has nearly reached the maximum number of shares currently
authorized for issuance by the Company's Certificate of Incorporation, as
amended and presently in effect.

The failure to approve the amendment of the Company's Certificate of
Incorporation to increase the number of shares of Common Stock authorized for
issuance by the Company from 120,000,000 shares to 150,000,000 shares may result
in the Company being required to immediately hold another stockholder meeting to
attempt to increase the authorized number of shares of Common Stock. In
addition, the Company will be prevented from doing any further equity financing
beyond the 120,000,000 shares of Common Stock presently authorized for issuance
until the availability of authorized, but unissued, shares of Common Stock can
be increased. The time required to hold such a special meeting could create a
critical cash situation for the Company and may significantly jeopardize its
continued operations.

-18-
<PAGE>

The Board of Directors believes that it is in the best interests of the
stockholders to increase the availability of authorized but unissued shares of
Common Stock. The amendment of the Certificate of Incorporation will be effected
by filing a Certificate of Amendment of Certificate of Incorporation, in
substantially the form attached hereto as Exhibit A (the "Certificate of
Amendment"), with the Delaware Secretary of State. The Company intends to make
this filing as soon as possible after the approval of the Certificate of
Amendment by the stockholders of the Corporation.

The stockholders approval of Proposal Two will constitute their
approval of the increase in the authorized number of shares of Common Stock from
120,000,000 shares to 150,000,000 shares pursuant to the Certificate of
Amendment.

VOTE REQUIRED FOR THE APPROVAL OF AMENDMENT OF CERTIFICATE OF
INCORPORATION PROPOSAL

The affirmative vote of the holders of a majority of the outstanding
shares of the Company entitled to vote will be required for approval of the
amendment of the Company's Certificate of Incorporation to increase the number
of shares of Common Stock authorized for issuance by the Company from
120,000,000 shares to 150,000,000 shares pursuant to the Certificate of
Amendment. Accordingly, abstentions and broker non-votes will have the same
effect as votes against the proposal. Proxies solicited by management will be
voted FOR approval of the issuance in connection with the Equity Line.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE BY THE COMPANY FROM
120,000,000 SHARES TO 150,000,000 SHARES PURSUANT TO THE CERTIFICATE OF
AMENDMENT.

PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors has selected Ernst & Young LLP, independent
auditors, to audit the consolidated financial statements of the Company for the
fiscal year ended April 30, 1999 and the fiscal year ending April 30, 2000, and
recommends that stockholders vote for ratification of such appointment. In the
event of a negative vote on such ratification, the Board of Directors will
reconsider its selection.

On March 11, 1999, the Company dismissed Deloitte & Touche LLP as the
Company's principal independent public accountants. On April 15, 1999, the Board
of Directors of the Company approved the engagement of Ernst & Young LLP as the
Company's principal independent public accountants, effective as of such date.
Prior to the appointment of Ernst & Young LLP, the Company had not consulted
with Ernst & Young LLP regarding the application of accounting principles to a
specified transaction or the type of audit opinion that might be rendered on the
Company's financial statements. Representatives of Ernst & Young LLP are
expected to be present at the meeting with the opportunity to make a statement
if they desire to do so and are expected to be available to respond to
appropriate questions.

In the Company's fiscal year ended April 30, 1999, there have been no
disagreements between the Company and Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure. In the Company's fiscal years ended April 30, 1998 and April
30, 1997, there have been no disagreements between the Company and Deloitte &
Touche LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure.

-19-
<PAGE>

The audit report of Ernst & Young LLP on the Company's consolidated
financial statements for the fiscal year ended April 30, 1999 contained no
adverse opinion or disclaimer of opinion. The audit report of Deloitte & Touche
LLP on the Company's consolidated financial statements for the fiscal years
ended April 30, 1998 and April 30, 1997 contained no adverse opinion or
disclaimer of opinion.

ANNUAL REPORT TO STOCKHOLDERS

The Annual Report to Stockholders of the Company for the fiscal year
ended April 30, 1999, including audited consolidated financial statements, has
been mailed to the stockholders concurrently herewith, but such report is not
incorporated in this Proxy Statement and is not deemed to be a part of the proxy
solicitation material.

ANNUAL REPORT ON FORM 10-K

A copy of the Company's Annual Report on Form 10-K, as filed with the
Securities and Exchange Commission (exclusive of Exhibits), will be furnished by
first class mail, within one business day of receipt of request, without charge
to any person from whom the accompanying proxy is solicited upon written request
to Techniclone Corporation, Attention: Investor Relations, 14282 Franklin
Avenue, Tustin, California 92780-7017. If Exhibit copies are requested, a
copying charge of $.20 per page will be made. In addition, all of the Company's
public filings, including the Annual Report on Form 10-K, can be found on the
world wide web at www.sec.gov.

STOCKHOLDER PROPOSALS

Pursuant to Regulation 14a-8 of the Securities and Exchange Commission,
proposals by stockholders which are intended for inclusion in the Company's
proxy statement and proxy to be presented at the Company's next annual meeting
must be received by the Company by May 16, 2000, in order to be considered for
inclusion in the Company's proxy materials. Such proposals shall be addressed to
the Company's Secretary and may be included in next year's proxy materials if
they comply with certain rules and regulations of the Securities and Exchange
Commission governing stockholder proposals. For all other proposals by
stockholders to be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal executive offices of the Company not later
than August 1, 2000. If a stockholder fails to so notify the Company of any such
proposal prior to such date, management of the Company will be allowed to use
their discretionary voting authority with respect to proxies held by management
when the proposal is raised at the annual meeting (without any discussion of the
matter in the Company's proxy statement).

OTHER MATTERS

Management of the Company does not know of any other matters which are
to be presented for action at the Meeting. Should any other matters come before
the Meeting or any adjournment thereof, the persons named in the enclosed proxy
will have the discretionary authority to vote all proxies received with respect
to such matters in accordance with their judgment.

By Order of the Board of Directors

Steven C. Burke,
Secretary

September 15, 1999

-20-
<PAGE>

EXHIBIT A

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TECHNICLONE CORPORATION,
A DELAWARE CORPORATION

TECHNICLONE CORPORATION, a Delaware corporation organized and existing
under and by virtue of the Delaware General Corporation Law (hereinafter
referred to as the "Corporation"), hereby certifies as follows:

1. That at a meeting of the Board of Directors of the Corporation
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of the Corporation, declaring said amendment to be
advisable and directing said amendment to be submitted to the stockholders of
the Corporation at a special meeting. The resolutions setting forth the proposed
amendment is as follows:

"RESOLVED, that the Certificate of Incorporation be amended by
changing the first sentence of ARTICLE 4 so that it shall
read as follows:

"The total number of shares of all classes of stock
which the Corporation shall have authority to issue is
155,000,000, of which (i) 150,000,000 shares shall be
designated "Common Stock" and shall have a par value of $0.001
per share; and (ii) 5,000,000 shares shall be designated
"Preferred Stock" and shall have a par value of $0.001 per
share."

2. That thereafter, pursuant to resolution of the Board of Directors,
an Annual Meeting of the stockholders of the Corporation was duly called and
held, upon notice in accordance with Section 222 of the Delaware General
Corporation Law, at which Annual Meeting the necessary number of shares as
required by statute were voted in favor of the amendment.

3. That said amendment was duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law of the State
of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be executed by Larry O. Bymaster, its President, and attested to by
Steven C. Burke, its Secretary, this _____ day of October, 1999.

TECHNICLONE CORPORATION,
a Delaware corporation

By:___________________________________
Larry O. Bymaster, President

ATTEST:

__________________________________________
Steven C. Burke, Secretary

-21-
<PAGE>

TECHNICLONE CORPORATION

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 20, 1999

The undersigned hereby appoints Larry O. Bymaster and Steven C. Burke,
and each of them, individually, the attorney, agent and proxy of the
undersigned, each with the power to appoint his substitute, to represent and
vote, as designated below, all shares of Common Stock of Techniclone Corporation
held of record by the undersigned on August 23, 1999, at the Annual Meeting of
Stockholders to be held at The Atrium Hotel, located at 18700 MacArthur
Boulevard, Irvine, California 92612 on October 20, 1999, at 10:00 A.M., Pacific
Time, and at any and all adjournments thereof.

1. ELECTION OF DIRECTORS:

[ ] FOR [ ] WITHHOLD AUTHORITY

approval of the election of all nominees listed below to vote for any
nominee listed below. (except as marked to the contrary below):

Larry O. Bymaster
Rockell N. Hankin
William C. Shepherd
Clive R. Taylor, M.D. Ph.D.
Thomas R. Testman

2. AMENDMENT OF CERTIFICATE OF INCORPORATION: Approval of the amendment
of the Certificate of Incorporation of Techniclone Corporation to increase the
number of shares of Common Stock authorized for issuance by Techniclone
Corporation from 120,000,000 shares to 150,000,000 shares.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. APPOINTMENT OF INDEPENDENT AUDITORS. Ratification of the appointment
of Ernst & Young LLP as independent auditors of the Company for the fiscal year
ended April 30, 1999 and for the fiscal year ending April 30, 2000.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any adjournment
thereof.

This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy will
be voted FOR Proposals 1, 2 and 3.

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

-22-
<PAGE>

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.

Dated:___________________________, 1999

Name:__________________________________

Common Shares:_________________________

_______________________________________
Signature

_______________________________________
Signature (if jointly held)

Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, as executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.

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

-23-