OXIGENE INC, S-3, 1996-09-27

OXIGENE INC
S-3, 1996-09-27
BIOLOGICAL PRODUCTS, (NO DIAGNOSTIC SUBSTANCES)

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As filed with the Securities and Exchange Commission on September 27, 1996
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

OXiGENE, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- -------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
13-3679168
- -------------------------------------------------------------------------------
(I.R.S. Employer Identification No.)
110 East 59th Street, New York, NY 10022, (212) 421-0001
- -------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
M. Andica Kunst, Esq., 110 East 59th Street, New York, NY 10022, (212) 421-0001
- -------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

Copies to:

GERALD A. EPPNER, ESQ. PETER BAARNHEILM, ADV.
BATTLE FOWLER LLP DANOWSKY & PARTNERS ADVEKATBYRA
Park Avenue Tower Hovslagargatan 5
75 East 55th Street S-103 22 Stockholm
New York, New York 10022 Sweden
(212) 856-7000 46-8 614 6400

Approximate date of commencement
of proposed sale to the public: From
time to time after the effective date
of this Registration Statement.

If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. / X /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
/ /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=======================================================================================================
Proposed Proposed
Maximum Maximum
Title Of Each Class Of Amount To Be Offering Price Aggregate Offering Amount Of
Securities To Be Registered Registered(1) Per Share(2) Price(2) Registration Fee
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,150,000 23.31 26,806,500.00 $9,244.00
=======================================================================================================
</TABLE>
(1) Includes 150,000 shares of Common Stock which the Underwriters have the
option to purchase to cover over-allotments, if any.

(2) Pursuant to Rule 457(c), the registration fee is calculated on the basis
of the average of the closing bid and asked price of the Registrant's
Common Stock as reported by Nasdaq on September 23, 1996.

400608.6

<PAGE>

OXiGENE, INC.
-------------------------
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
Between Items Required in Part 1 of Registration Statement
(Form S-3) and Information in Prospectus
<TABLE>
<CAPTION>

Item
No. Form S-3 Caption Prospectus Page or Caption
- ---- ---------------- --------------------------
<S> <C> <C>
1. Forepart of Registration Statement and Outside Front Facing Page of Registration Statement; Outside Front
Cover Page of Prospectus.............................. Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of Inside Front and Outside Back Cover Pages of
Prospectus............................................ Prospectus

3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges............................. The Company; Prospectus Summary; Risk
Factors; Management's Discussion and Analysis
of Financial Condition and Results of
Operations; Selected Financial Data

4. Use of Proceeds.......................................... Use of Proceeds

5. Determination of Offering Price.......................... Underwriting

6. Dilution................................................. N/A

7. Selling Security Holders................................. N/A

8. Plan of Distribution..................................... Outside Front Cover Page of Prospectus;
Underwriting

9. Description of Securities to be Registered............... Description of Capital Stock

10. Interests of Named Experts and Counsel................... Legal Matters; Experts

11. Material Changes......................................... N/A

12. Incorporation of Certain Information by Reference........ Incorporation by Reference

13. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities........................ N/A
</TABLE>

400608.6

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities law of any such state.

PROSPECTUS (Subject to Completion)
Dated September 27, 1996

1,000,000 Shares
Common Stock
($.01 par value)

OXiGENE, INC.

The 1,000,000 shares of Common Stock ("Shares") of OXiGENE, Inc.
("Company") that are the subject of this Prospectus are being offered by the
Company solely for sale to persons outside the United States in connection with
a public offering of Swedish Depositary Shares ("SDSs") which is being made
concurrently herewith through the underwriters named below, for whom D.
Carnegie AB is acting as the Representative. When sold hereunder, the Shares
will be placed in the custody of _______ ("Custodian") pursuant to a Custody
Agreement, and SDSs may thereafter be traded outside the United States. At any
time or from time to time following completion of this Offering, some of or all
the Shares may, upon exchange of SDSs for such Shares in accordance with the
terms of the Custody Agreement, be sold within and outside the United States.
The Company's Common Stock is traded on the Nasdaq SmallCap Market under the
symbol "OXGN." On September 23, 1996, the closing bid price of the Common Stock
on that market was $23.00 per share. The Company expects that the Common Stock
will be listed for trading on the Nasdaq National Market System and the SDSs
will be listed for trading on the Stockholm Stock Exchange immediately
following the closing of this Offering.

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

See "Risk Factors" Commencing on Page 9 For A Discussion of Certain
Factors That Should Be Considered By Prospective Investors.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------------

<TABLE>
<CAPTION>
=================================================================================================
Underwriting Discounts
Price to and Proceeds to the
Public Commissions(1) Company(2)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share (Per SDS) $ $ $
- -------------------------------------------------------------------------------------------------
Total(3) $ $ $
=================================================================================================
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain civil
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Before deducting offering expenses estimated to be $250,000.00, payable by
the Company.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 150,000 additional shares of Common Stock solely to cover
over-allotments, if any, on the same terms and conditions as the Shares
offered hereby. If such option is exercised in full, the total Price to
Public, Underwriting Discounts and Commissions and Proceeds to Company
will be $_____________, $____________ and $_____________, respectively.
See "Underwriting."

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

The Shares (and the related SDSs) are offered by the several Underwriters,
as specified herein (and in the wrap-around prospectus relating to the SDSs to
which this Prospectus is attached), subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Shares (and the related SDSs) will be ready for delivery in
book-entry form on or about _____________________, 1996.

D. CARNEGIE AB
NORDBERG CAPITAL INC.

400608.6

<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the U.S.
Securities Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the United States Securities and Exchange Commission (the "SEC"). Copies
of such reports, proxy and information statements and other information can be
inspected and copied at the public reference facilities maintained by the SEC
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Offices of the SEC: Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, 14th Floor, Chicago, Illinois 60661; and Seven
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC maintains a
Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC,
including the Company, and the address is (http://www.sec.gov).

The Company has filed with the SEC a registration statement on Form S-3
(together with any amendments thereto, the "Registration Statement") under the
Securities Act of 1933 (the "Securities Act"), with respect to the Shares being
offered pursuant to this Prospectus. This Prospectus is part of the
Registration Statement and does not contain all the information set forth in
the Registration Statement, certain portions of which have been omitted
pursuant to the rules and regulations of the SEC. Such additional information
may be obtained from the SEC's principal office in Washington, D.C. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to herein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed or
incorporated by reference as an exhibit to the Registration Statement or
incorporated by reference therein, each such statement being qualified in all
respects by such reference.

INCORPORATION BY REFERENCE

This Prospectus incorporates by reference certain documents that are not
presented herein or delivered herewith. These documents are available upon
request from M. Andica Kunst, Esq., Vice President and Corporate Secretary,
OXiGENE, Inc., 110 East 59th Street, New York, New York 10022, telephone (212)
421-0001, fax (212) 421-0475.

The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any and all of the documents referred to
which have been or may be incorporated herein by reference, other than exhibits
to such documents, unless such exhibits are specifically incorporated herein by
reference. Requests for such documents should be directed to the person
indicated in the immediately preceding paragraph.

The following documents, which have been filed with the SEC pursuant to
the Exchange Act, are hereby incorporated by reference herein:

(a) OXiGENE's Annual Report on Form 10-K, as amended, for the year ended
December 31, 1995;

(b) OXiGENE's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996;

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400608.6

<PAGE>

(d) The description of the Common Stock contained in OXiGENE's
Registration Statement under the Exchange Act on Form 8-A, as
declared effective August 25, 1993.

All documents filed by OXiGENE pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of
filing of such documents. All information appearing in this Prospectus or in
any document incorporated herein by reference is not necessarily complete and
is qualified in its entirety by the information and financial statements
(including notes thereto) appearing in the documents incorporated by reference
herein and should be read together with such information and documents.

Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that is deemed to be incorporated
herein by reference modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.

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

Information set forth on the cover page and under the captions "Use of
Proceeds" and "Underwriting" are set forth in U.S. dollars, based on the
exchange rate of $1.00 to Swedish Krone ("SEK") .1508 as published by the Wall
Street Journal on Thursday, September 19, 1996.

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

EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THIS REGISTRATION
STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE U.S.
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS INVOLVE
KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT MAY CAUSE THE COMPANY'S ACTUAL
RESULTS OR OUTCOMES TO BE MATERIALLY DIFFERENT FROM THOSE ANTICIPATED AND
DISCUSSED HEREIN. FURTHER, THE COMPANY OPERATES IN AN INDUSTRY SECTOR WHERE
SECURITIES VALUES MAY BE VOLATILE AND MAY BE INFLUENCED BY REGULATORY AND OTHER
FACTORS BEYOND THE COMPANY'S CONTROL. IMPORTANT FACTORS THAT THE COMPANY
BELIEVES MIGHT CAUSE SUCH DIFFERENCES ARE DISCUSSED IN THE CAUTIONARY
STATEMENTS ACCOMPANYING THE FORWARD-LOOKING STATEMENTS AND IN THE RISK FACTORS
CONTAINED IN THIS PROSPECTUS AND IN THE RISK FACTORS DETAILED IN THE COMPANY'S
OTHER FILINGS WITH THE SEC DURING THE PAST 12 MONTHS. IN ASSESSING
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN, READERS ARE URGED TO READ
CAREFULLY ALL RISK FACTORS AND CAUTIONARY STATEMENTS CONTAINED IN THIS
PROSPECTUS AND IN THOSE OTHER FILINGS WITH THE SEC.

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

-3-
400608.6

<PAGE>

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

-4-
400608.6

<PAGE>

THE COMPANY

OXiGENE, Inc. ("OXiGENE" or the "Company") is engaged in the research and
development of products designed to enhance the clinical efficacy of radiation
and chemotherapy, the most common and traditional forms of non-surgical cancer
treatment. The Company's proprietary technology involves the inhibition,
measurement and stimulation of the cellular DNA repair process. When
administered in accordance with their prescribed regimens, the Company's
principal products, Sensamide(TM) and Neu-Sensamide(TM), make cancerous tumor
cells more sensitive to radiation by inhibiting DNA repair activity,
consequently increasing tumor damage from radiation therapy in those cells.
Accordingly, the Company expects that patient response to radiation will be
improved and result in increased tumor shrinkage, or reduced side effects, or
both.

Currently, approximately 180 patients have been recruited in a 226-patient
Phase II/III clinical trial of Sensamide(TM) in combination with radiation
therapy in patients with inoperable non-small cell lung cancer. An
Investigational New Drug ("IND") application with respect to this trial was
filed with the U.S. Food and Drug Administration ("FDA") in 1992. At the
current patient recruitment rate, the Company expects to complete patient
recruitment by the end of 1996, and have results of this study available in the
third quarter of 1997. OXiGENE anticipates commencing a second Phase III
clinical trial in patients with non-small cell lung cancer using
Neu-Sensamide(TM), the Company's reduced side effect formulation of
Sensamide(TM), in the fourth quarter of 1996. The combined results of the
Sensamide(TM) and Neu-Sensamide(TM) studies will serve as the basis of the
Company's New Drug Application ("NDA") for Neu-Sensamide(TM) as a radiation
sensitizer for the treatment of patients with non-small cell lung cancer. In
March 1996, the Company filed an additional protocol under its existing IND
application with the FDA to commence a Phase I/II study of Neu-Sensamide(TM) in
patients with glioblastomas, a highly malignant form of brain cancer. This
study started in August 1996. The FDA has advised the Company that if the
Company is able to demonstrate the clinical efficacy of Neu-Sensamide(TM) in
conjunction with radiation therapy in two different forms of cancer under
controlled study conditions, and in two or three additional forms of cancer
under uncontrolled study conditions, OXiGENE will receive product approval for
Neu-Sensamide(TM) as a radiation sensitizer for all cancer indications treated
with radiation. The Company believes these uncontrolled studies can be
accomplished relatively quickly following the completion of this Offering.

Following a successful small-scale synthesis completed in December 1994,
OXiGENE has been testing Oxi-104, a new chemical compound, in its laboratories
for effects and toxicity. Although classified as an N-substituted benzamide,
Oxi-104, unlike Sensamide(TM) and Neu-Sensamide(TM), is not based on the
N-substituted benzamide known as metoclopramide. Oxi-104 has been designed with
a molecular structure that, the Company believes, will reduce side effects
while maintaining the sensitizing properties of other N-substituted benzamides.
The Company currently anticipates commencing a Phase I clinical test of Oxi-104
after the filing of an IND with the FDA in the second quarter of 1997. Based on
preliminary results, OXiGENE believes it can demonstrate that Oxi-104 alone can
induce tumor growth-inhibiting and tumor-killing effects.

-5-

400608.6

<PAGE>

Company intends to further strengthen these relationships, rather than expand
its in-house research and clinical staff. Although the Company plans to market
its products directly in certain European countries, it has had preliminary
discussions with unaffiliated pharmaceutical companies regarding the formation
of possible strategic alliances or joint ventures for the manufacturing and
marketing of its products in the United States, the Far East and elsewhere. To
date, the Company has not entered into any such alliances or ventures.

The Company's proprietary technology is based on its knowledge of the
processes by which certain enzymes repair damaged DNA sites, a function
essential to a cell's survival. The cell's enzymes that normally repair DNA
damage counter the cytotoxic (cell-killing) effects of radiation therapy and
chemotherapy by repairing the tumor cell's DNA that has been damaged by either
of those therapies. Specifically, the Company utilizes its knowledge of how the
DNA repair enzyme Adenosine Diphosphate Ribosyl Transferase (ADPRT) functions
to improve the efficacy of radiation and chemotherapy on cancerous cells only.
Sensamide(TM) and Neu-Sensamide(TM), OXiGENE's principal products, are derived
from metoclopramide, a compound used for more than 30 years for other clinical
indications, which inhibits ADPRT-modulated DNA repair.

The Company has also developed proprietary assays (tests) that measure
levels of ADPRT in blood, thereby providing an indication of DNA repair
activity that the Company believes correlates to immune function and status,
and has identified a mixture of compounds that it believes may be capable of
stimulating DNA repair. Based on preclinical studies to date, OXiGENE is now
planning the clinical development of these product areas.

There can be no assurance that the Company's technology will prove
effective, that the Company will develop any commercially accepted product,
that it will obtain necessary regulatory approvals, that it will be able to
enter into strategic alliances or joint ventures or that the terms thereof will
be favorable to the Company, or that the Company will be profitable.

The Company was incorporated in New York in 1988, and subsequently was
re-incorporated in Delaware in 1992. The Company established a Swedish
subsidiary, OXiGENE (Europe) AB, in December 1994. The Company's principal
executive office in the United States is located at 110 East 59th Street, New
York, New York 10022 (telephone number 212-421-0001; fax number: 212-421-0475),
and in Sweden at Arsenalsgatan 6, S-111 47 Stockholm, Sweden (telephone: 08-678
8720; fax number: 08-678 8605) and Scheelevagen 17, S-223 70 Lund, Sweden
(telephone number: 046-16 88 60; fax number: 046-16 88 66). Any references in
this Prospectus to "OXiGENE" or the "Company" shall mean OXiGENE, Inc. and its
wholly-owned Swedish subsidiary OXiGENE (Europe) AB.

-6-
400608.6

<PAGE>

PROSPECTUS SUMMARY

THE OFFERING

Securities offered................. 1,000,000 shares of Common Stock. See
"Description of Securities."

Common Stock to be outstanding
after the Offering................. 8,647,418 shares (1)

Use of proceeds.................... To finance clinical trials and research
and development activities, including
acquisitions of related capital equipment,
and for working capital and general
corporate purposes. See "Use of Proceeds."

Risk factors....................... Investment in the Shares offered hereby
involves a high degree of risk. See "Risk
Factors."

Nasdaq and SSE symbols (2):

Common Stock..................... OXGN

(1) Excludes (i) 3,293,268 shares of Common Stock subject to outstanding
options, warrants and stock appreciation rights, including shares of
Common Stock issuable upon exercise of 1,193,241 outstanding Public
Warrants (as defined under the caption "Market Data"); and (ii) 665,000
shares of Common Stock reserved for issuance under the Company's 1996
Stock Incentive Plan. See "Capitalization," "Management - Stock Incentive
Plan," "Description of Securities - Public Warrants" and Notes to the
Financial Statements.

(2) The Company will make application to The Nasdaq Stock Market ("Nasdaq") to
have its shares of Common Stock included in the Nasdaq National Market
System upon completion of this Offering. In addition, the Company has made
an application to the Stockholm Stock Exchange ("SSE") to have its shares
of Common Stock in the form of SDSs listed on the SSE upon completion of
this Offering.

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400608.6

<PAGE>

SUMMARY OF SELECTED FINANCIAL INFORMATION

OXiGENE, Inc.
(A development stage company)

<TABLE>
<CAPTION>
Years Ended December 31, Six Months Ended June 30,
--------------------------------------------------------------------- ----------------------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:

Total revenues................ $ 17,500 $ 0 $ 50,897 $ 265,440 $ 420,949 $ 82,224 $ 253,699

Total operating expenses...... 519,372 1,628,667 2,070,909 3,105,199 4,138,784 1,919,045 3,665,424
------- --------- --------- --------- ---------

Net Loss...................... $ (501,872) $(1,628,667) $(2,020,012) $(2,839,759) $(3,717,835) $(1,836,821) $(3,411,725)
======= ========= ========= ========= ========= ========= =========

Net loss per
common share1............... $ (0.16) $ (0.45) $ (0.50) $ (0.56) $ (0.63) $ (0.36) $ (0.49)
</TABLE>

<TABLE>
<CAPTION>
December 31, June 30,
--------------------------------------------------------------------- ----------------------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:

Cash and cash equivalents..... $ 416,149 $ 164,648 $ 7,516,941 $ 1,193,999 $ 10,406,605 $ 286,114 $ 10,709,914
Securities available for sale. 0 0 0 3,291,128 502,020 2,498,820 0
Working capital............... 218,132 29,031 7,207,265 4,447,080 10,510,024 2,643,359 10,065,731
Deficit accumulated during
the development stage......... (1,193,601) (2,822,268) (4,842,280) (7,682,039) 11,399,874 (9,518,859) (14,811,599)
Total stockholders' equity.... 218,732 29,031 7,240,866 4,479,982 10,557,174 2,708,037 10,117,169
</TABLE>

- --------
1 See Note 1 of the Notes to the Financial Statements for information
concerning the computation of net loss per common share.

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400608.6

<PAGE>

RISK FACTORS

An investment in the Shares is speculative, involves a high degree of risk
and should only be made by persons who can afford a loss of their entire
investment. In addition to the other information included elsewhere or
incorporated by reference in this Prospectus, the following risk factors should
be considered carefully in evaluating an investment in the Shares. Except as
otherwise expressly set forth, information in this Prospectus does not give
effect to the exercise of all or any part of the Underwriters' over-allotment
option.

History of Losses and Anticipated Future Financial Results; Uncertainty of
Future Profitability. The Company, as a development stage enterprise, has
experienced net losses every year since its inception and, as of June 30, 1996,
had a deficit accumulated during the development stage of approximately $14.8
million. The Company anticipates incurring substantial additional losses over
at least the next several years due to, among other factors, the need to expend
substantial amounts on research and development activities and the general and
administrative expenses associated with those activities. The Company has not
commercially introduced any product and its products are in varying stages of
development and testing. The Company's ability to attain profitability will
depend upon its ability to develop products that are effective and commercially
viable, to obtain regulatory approval for the manufacture and sale of its
products and to license or otherwise market its products successfully. There
can be no assurance that the Company will ever achieve profitability or that
profitability, if achieved, can be sustained on an ongoing basis.

Early Stage of Product Development; Unproven Safety and Efficacy.
OXiGENE's products are in an early stage of development. In order to achieve
profitable operations on a continuing basis, the Company, alone or in
collaboration with others, must successfully develop, manufacture, introduce
and market its products. The time frame necessary to achieve market success for
any individual product is long and uncertain. See "Business - Drug Development
and Regulatory Processes." The products currently under development by the
Company will require significant additional research and development and
extensive preclinical and clinical testing prior to application for commercial
use. There can be no assurance that clinical testing will show any of the
Company's products to be safe or efficacious. Additionally, there can be no
assurance that the Company will not encounter problems in clinical trials that
will cause the Company to delay or suspend clinical trials. There can also be
no assurance that the Company's research or product development efforts or
those of its collaborative partners, if any, will be successfully completed, or
that any compounds currently under development by the Company will be
successfully transformed into drugs.

Need for Additional Funds; Uncertainty of Future Funding. The Company's
operations to date have consumed substantial amounts of cash. Negative cash
flow from the Company's operations is expected to continue and even to
accelerate in the foreseeable future. The Company's capital requirements will
depend on numerous factors, including: the progress of the Company's research
and development programs; progress with preclinical testing and clinical
trials; the time and costs required to gain regulatory approvals; the resources
the Company devotes to proprietary manufacturing methods and advanced
technologies; the ability of the Company to obtain licensing arrangements; the
cost of filing, prosecuting and, if necessary, enforcing patent claims; the
cost of commercialization activities and arrangements; and the demand for its
products if and when approved. The Company will have to raise substantial
additional funds to complete development of any product or bring products to
market. See "Use of Proceeds." Issuance of additional equity securities by the
Company, for these or other purposes, could result in dilution to then existing
stockholders, including persons purchasing the Shares. There can

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400608.6

<PAGE>

be no assurance that additional financing will be available on acceptable
terms, if at all. If adequate funds are not available on acceptable terms, the
Company may be required to delay, scale back or eliminate one or more of its
drug development programs or obtain funds through arrangements with
collaborative partners or others that may require the Company to relinquish
rights to certain of its technologies, product candidates or products that the
Company would not otherwise relinquish, which may have a material adverse
effect on the Company.

Dependence on Others for Clinical Development and Manufacturing and
Marketing. OXiGENE has depended, and in the future is likely to continue to
depend, on others for assistance in many areas, including conducting clinical
trials, the regulatory approval process, manufacturing and marketing. Funding
requirements, competitive factors or prioritization of other opportunities may
lead the Company to seek additional arrangements with third parties. While
OXiGENE is likely to explore license and development opportunities for its
technologies with other companies, there can be no assurance that the Company
will be successful in establishing and maintaining any collaborative agreements
or licensing arrangements; that any collaborative partner will not be pursuing
alternative technologies or developing alternative compounds either on its own
or in collaboration with others, targeted at the same diseases as those
involved in its collaborative arrangements with the Company; that any such
collaborative partners will devote resources to the Company's technologies or
compounds on a basis favorable to the Company; that any such arrangements will
be on terms favorable to OXiGENE; or that, if established, such future
licensees will be successful in commercializing products.

Clinical Trials; Government Regulation and Health Care Reform; Managed
Care. The Company's research and development activities, preclinical and
clinical trials, and the manufacturing and marketing of its products and
processes are subject to extensive regulation by numerous governmental
authorities in the United States and other countries. Preclinical and clinical
trials and manufacturing and marketing of OXiGENE's products and processes are
and will continue to be subject to the rigorous testing and approval processes
of the U.S. Food and Drug Administration ("FDA"), the Swedish Medical Products
Agency and other corresponding foreign regulatory authorities. The regulatory
process can take many years and require the expenditure of substantial
resources. In addition, delays or rejections may be encountered during the
period of product development and FDA regulatory review of each submitted
application. Similar delays may also be encountered in foreign countries. There
can be no assurance that, even after such time and expenditures, regulatory
approval will be obtained for any products developed by OXiGENE or that a
product, if approved in one country, will be approved in other countries. See
"Business - Drug Development and Regulatory Processes." Moreover, if regulatory
approval of a product is granted, such approval may entail limitations on the
indicated uses for which that product may be marketed. Further, even if such
regulatory approval is obtained, a marketed product, its manufacturer and its
manufacturing facilities, are subject to continual review and periodic
inspections, and later discovery of previously unknown problems (such as
previously undiscovered side effects) with a product, manufacturer or facility
may result in restrictions on such product, manufacturer or facility, including
a possible withdrawal of the product from the market. Failure to comply with
the applicable regulatory requirements can, among other things, result in
fines, suspensions of regulatory approvals, product recalls, operating
restrictions, injunctions and criminal prosecution. Additionally, further
government regulation may be established which could prevent or delay
regulatory approval of the Company's products. Further, the U.S. Congress
continues to debate various health care reform proposals which, if adopted, may
have a material adverse effect on the Company. Moreover, cost control
initiatives that stem from the ongoing increase in health care maintenance
programs may affect the financial ability and willingness of patients and their
health care providers to utilize certain therapies.

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Competition and Risk of Technological Obsolescence. The Company is engaged
in a rapidly evolving field. Competition from other pharmaceutical companies,
biotechnology companies and other research and academic institutions is intense
and expected to increase. Many of those companies and institutions have
substantially greater financial, technical and human resources than the
Company. Those companies and institutions also have substantially greater
experience in developing products, in obtaining regulatory approval and in
manufacturing and marketing pharmaceutical products. Accordingly, competitors
may succeed in obtaining regulatory approval for their products more rapidly
than the Company. The Company also competes with universities and other
research institutions in the development of products, technologies and
processes. Competitors have developed or are in the process of developing
technologies that are, or in the future may be, the basis for competitive
products. Some of those products may have an entirely different approach or
means of accomplishing the desired therapeutic effect than products being
developed by the Company. See "Business-Competition." There can be no assurance
that the Company's competitors will not succeed in developing technologies and
products that are more effective than those being developed by the Company or
that would render the Company's technology and products less competitive or
even obsolete. In addition, one or more of the Company's competitors may
achieve product commercialization or patent protection earlier than the
Company, which could materially adversely affect the Company.

Dependence on Patents and Proprietary Technology. To date, OXiGENE's
principal therapeutic products, Sensamide(TM) and Neu-Sensamide(TM), have been
based on certain available compounds that are produced by others, and its
newest compound, Oxi-104, is a synthetic compound discovered by the Company.
The Company anticipates that products it develops hereafter may include or be
based on the same or other compounds owned or produced by unaffiliated parties,
as well as other synthetic compounds it may discover. Although the Company
expects to seek patent protection for any compounds it discovers and/or for the
specific use of any such compounds, there is no assurance that any or all of
them will be subject to effective patent protection. Further, the development
of regimens for the administration of pharmaceuticals, which generally involve
specifications for the frequency, timing and amount of dosages, has been, and
the Company believes may continue to be, important to the Company's efforts,
although those processes, as such, may not be patentable.

The Company's success will depend, in part, on its ability to obtain
patents, protect its trade secrets and operate without infringing on the
proprietary rights of others. The Company has filed applications for several
U.S. and international patents on its principal technologies. The patent
position of pharmaceutical and biotechnology firms like OXiGENE generally is
highly uncertain and involves complex legal and factual questions, resulting in
both an apparent inconsistency regarding the breadth of claims allowed in U.S.
patents and general uncertainty as to their legal interpretation and
enforceability. Accordingly, there can be no assurance that the Company's
patent applications will result in patents being issued, that any issued
patents will provide the Company with competitive protection or will not be
challenged by others, or that the patents of others will not have an adverse
effect on the ability of the Company to do business. Moreover, since some of
the basic research relating to one or more of the Company's patent applications
and/or patents was performed at various universities and/or funded by grants,
particularly in Sweden, there can be no assurance that one or more universities
and/or grantors will not assert that they have certain rights in such research,
although the Company is not aware of any such assertions or any basis therefor.
Furthermore, there can be no assurance that others will not independently
develop similar products, will not duplicate any of the Company's products or,
if patents are issued to the Company, will not design around such patents. In
addition, the Company may be required to obtain licenses to patents or other
proprietary rights of others. No assurance can be given that any licenses
required under any such patents or proprietary rights would be made available
on terms

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<PAGE>

acceptable to the Company, if at all. If the Company does not obtain such
licenses, it could encounter delays in product market introductions while it
attempts to design around such patents, or could find that the development,
manufacture or sale of products requiring such licenses is foreclosed. In
addition, the Company could incur substantial costs in defending itself in
suits brought against it or in connection with patents to which it holds a
license or in bringing suit to protect the Company's own patents against
infringement. Although the Company has confidentiality agreements with the
institutions that perform its preclinical and clinical tests, the Company has
no such agreements with the employees of such institutions, and there can be no
assurance that these employees will abide by the terms of such agreements. See
"Business - Patents and Trade Secrets."

Product Liability Exposure; No Insurance Coverage. The use of the
Company's technology in clinical trials and sales based on it may expose the
Company to liability claims. These claims could be made directly by consumers
or by pharmaceutical companies or others involved in the application of the
Company's technology. The Company has no liability coverage for its ongoing
clinical trials, and there can be no assurance that such coverage will be
available at a reasonable cost and in amounts sufficient to protect the Company
against claims or recalls that could have a material adverse effect on the
financial condition and prospects of the Company. Further, adverse product and
similar liability claims could negatively impact the Company's ability to
obtain or maintain regulatory approvals for its technology.

Price Volatility of the Shares. Securities of pharmaceutical research and
development companies have experienced extreme price and volume fluctuations
which have often been unrelated to operating performance. See "Market Data."
Announcements of research developments by the Company or by its competitors may
have a significant effect on the Company's business and on the market price of
the Company's shares of Common Stock. The price and liquidity of the Shares (or
the SDSs) may also be significantly affected by trading activity and market
factors related to the SDS market or to the market for the Shares, as the case
may be, which factors and the effects thereof may differ between those markets.

Dependence on Certain Officers and Directors. The Company believes that
its success is, and will likely continue to be, materially dependent upon its
ability to retain the services of certain of its current officers and
directors, particularly Dr. Bjorn Nordenvall, its Chief Executive Officer, Dr.
Claus Moller, its Chief Medical Officer, and Dr. Ronald Pero, its Chief
Scientific Officer. The loss of the services of any of these individuals could
have a material adverse effect on the Company. Additionally, the Company
believes that it may, at any time and from time to time, be materially
dependent on the services of consultants and other unaffiliated third parties.

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<PAGE>

MARKET DATA

On August 26, 1993, the Company completed an initial public offering of
1,605,000 units, each unit consisting of one share of the Company's common
stock, par value $.01 per share ("Common Stock"), and a warrant ("Public
Warrant") to purchase one additional share of Common Stock. See "Description of
Securities." The Common Stock and Public Warrants are listed for quotation
under the symbols "OXGN" and "OXGNW," respectively, on the Nasdaq SmallCap
System. An application will be made to list the Company's Common Stock and
Public Warrants on the Nasdaq National Market System, to be effective upon
completion of this Offering. The following table sets forth the high and low
per share and per warrant bid prices for the Common Stock and Public Warrants,
respectively, for each quarterly period within the Company's two most recent
fiscal years and for the first three quarters, through September 23, 1996, of
1996.

Common Stock Public Warrants
------------ ---------------
Fiscal Year High Low High Low
- ----------- ---- --- ---- ---
1994
First Quarter $7.50 $5.75 $3.38 $2.13
Second Quarter 10.50 5.50 4.75 2.00
Third Quarter 10.25 5.50 4.75 2.00
Fourth Quarter 7.88 4.63 1.88 .88

1995
First Quarter $7.25 $4.63 $2.00 $1.00
Second Quarter 7.38 5.13 2.13 1.44
Third Quarter 7.75 6.38 2.63 1.75
Fourth Quarter 11.75 5.75 3.63 1.75

1996
First Quarter $23.13 $9.25 $15.00 $2.88
Second Quarter 32.13 17.50 23.50 10.25
Third Quarter (through 27.00 16.75 17.75 8.50
September 23, 1996)

On September 23, 1996, the high and low per share and per warrant bid
price for the Common Stock and Public Warrants was $24.75, and $23.00, and
$14.25, and $13.00, respectively.

As of August 30, 1996, there were 55 holders of record of the Company's
Common Stock and 4 holders of record of the Company's Public Warrants. The
Company believes, based on the number of proxy statements and related materials
distributed in connection with its 1996 Annual Meeting of Stockholders, that
there are more than 1,250 beneficial owners of its Common Stock.

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<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,000,000 Shares (and
the related SDSs) offered hereby (at an assumed public offering price of $23.00
per Share, which was the closing bid price of the Company's Common Stock on
September 23, 1996) are estimated to be $21.6 million (approximately $24.9
million if the Underwriters' over-allotment option for 150,000 shares of Common
Stock is exercised in full), after deducting the underwriting discount and
offering expenses payable by the Company.

The Company intends to use the net proceeds as follows: (i) approximately
$16.0 million (or $18.0 million if the Underwriters' over-allotment option is
exercised in full) for funding activities related to the Company's products
that are currently under development, including providing funds in connection
with related ongoing research and development and capital expenditures,
clinical trials and regulatory applications; (ii) approximately $2.6 million
(or $3.9 million if the Underwriters' over-allotment option is exercised in
full) for research, development, sales and marketing costs and related capital
expenditures, including equipment, in connection with additional potential
products and uses for the Company's technology; and (iii) the balance,
approximately $3.0 million for working capital and general corporate purposes.

The amounts and timing of actual expenditures will depend upon numerous
factors, including primarily the timing of the Company's regulatory
applications as well as the progress of its research and development programs
and clinical trials. Additionally, it is the Company's policy regularly to
review potential opportunities to acquire, or to enter into joint venture or
licensing relationships with respect to, products and businesses compatible
with its existing business. The Company may, therefore, use a portion of the
net proceeds to make acquisitions or to fund joint research and development or
other complementary ventures or strategic alliances, although the Company does
not currently have any arrangements, agreements or understandings with respect
thereto.

The Company believes that the net proceeds of this Offering, together with
cash flow from operations, if any, and interest earned on its cash and cash
equivalent balances, will be sufficient to finance its cash requirements for at
least a period of approximately 24 months from the date of this Prospectus. The
Company will be required to finance its business through borrowing or by
raising additional equity capital until such time as (i) it can commercially
exploit its technology, either through licensing arrangements or the sale of
products based on its technology, and (ii) revenues from those commercial
activities become sufficient to cover its expenses. As the Company expects that
the capital it has on hand and the net proceeds from this Offering will not be
sufficient to carry it through all that time, the Company anticipates that it
will need to obtain additional financing, the amount and timing of which is
currently uncertain and the availability of which, on terms reasonably
acceptable to the Company, if at all, cannot be assured.

Pending the aforementioned uses, the net proceeds of this Offering will be
invested in U.S. Government securities; short-term, investment grade
securities; customary bank deposits maintained at first class banks in Sweden
or the United States; or other short-term, interest bearing financial
instruments that will not cause the Company to become an "investment company"
within the meaning of the U.S. Investment Company Act of 1940.

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<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company at June
30, 1996, and as adjusted at that date to reflect the sale by the Company of
the Shares (and related SDSs) and the receipt of the estimated net proceeds
therefrom, as set forth under the caption "Use of Proceeds."

<TABLE>
<CAPTION>
June 30, 1996(1)
----------------
(All amounts in thousands)

Actual As Adjusted
------ -----------
<S> <C> <C>
Stockholders' equity:
Common Stock, $.01 par value, 15,000,000 shares authorized,
7,271,282 shares issued and outstanding; 8,271,282 issued
and outstanding, as adjusted(2)(3).................................. $ 72 $ 82
Additional paid-in capital............................................. 24,853 46,443
Common Stock subscribed................................................ 98 --
Subscription receivable................................................ (98) --
Foreign currency translation adjustment................................ 3 3
Deficit accumulated during the development stage....................... (14,811) (14,811)
-------- --------
Total stockholders' equity.......................................... $ 10,117 $ 31,717
======== ========
</TABLE>

(1) At June 30, 1996, the Company did not have any long-term or short-term
debt.

(2) At the 1996 Annual Meeting of Stockholders, the Company's stockholders
approved an amendment to the Company's Amended and Restated Certificate of
Incorporation, increasing the number of authorized shares of Common Stock
from 15 million to 60 million shares. No amendment to the Company's
Amended and Restated Certificate of Incorporation has been filed to date.

(3) Excludes (i) 3,293,268 shares of Common Stock subject to outstanding
options, warrants and stock appreciation rights, including shares of
Common Stock issuable upon exercise of 1,193,241 outstanding Public
Warrants (as defined under the caption "Market Data"); and (ii) 665,000
shares of Common Stock reserved for issuance under the Company's 1996
Stock Incentive Plan. See "Capitalization," "Management - Stock Incentive
Plan," "Description of Securities - Public Warrants" and Notes to the
Financial Statements.

DIVIDEND POLICY

The Company has not paid any cash dividends since its inception and does
not intend to pay any cash dividends in the foreseeable future. The Company
currently intends to retain future earnings, if any, to finance the growth and
development of its business.

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<PAGE>

SELECTED FINANCIAL INFORMATION

The following selected financial information for each of the five years in
the period ended December 31, 1995, have been derived from the company's
financial statements, which statements have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report included elsewhere herein.
The following selected financial information for the six months ended June 30,
1995 and 1996, has been derived from unaudited financial statements which, in
the opinion of management of the Company, reflect all adjustments, consisting
only of normal recurring adjustments, necessary to present fairly the financial
data for such periods. Operating results for the six months ended June 30, 1996
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1996. All of the financial information set forth below
should be read in conjunction with the financial statements and notes thereto
included elsewhere in this Prospectus and also with the information appearing
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

Summary Financial Information

OXiGENE, Inc.
(A development stage company)

Revenues:
Research income............. $ 17,500 $ - $ - $ - $ - $ - $ -
Interest income............. - - 50,897 265,440 420,949 82,224 253,699
-------- ------- ------- -------- ------- ------ -------
Total revenues............ 17,500 - 50,897 265,440 420,949 82,224 253,699

Operating Expenses:
Research and development.... 284,032 910,937 879,195 1,764,462 2,843,593 1,273,221 2,356,395
General and administrative.. 235,340 717,730 1,191,714 1,340,737 1,295,191 645,824 1,309,029
------- ------- --------- --------- --------- ------- ---------
Total operating expenses.. 519,372 1,628,667 2,070,909 3,105,199 4,138,784 1,919,045 3,665,424
------- --------- --------- --------- --------- --------- ---------

Net Loss...................... $ (501,872) $(1,628,667) $(2,020,012) $(2,839,759) $(3,717,835) $(1,836,821) $(3,411,725)
======= ========= ========= ========= ========= ========= =========

Net loss per
common share1............... $ (0.16) $ (0.45) $ (0.50) $ (0.56) $ (0.63) $ (0.36) $ (0.49)

Weighted average number
of common shares
outstanding
(in thousands)(1)........... 3,177 3,613 4,026 5,037 5,876 5,058 6,971
</TABLE>

- --------

1 See Note 1 of the Notes to the Financial Statements for information
concerning the computation of net loss per common share.

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<PAGE>

Cash and cash equivalents..... $ 416,149 $ 164,648 $ 7,516,941 $ 1,193,999 $ 10,406,605 $ 286,114 $ 10,709,914

Cash and cash equivalents..... $ 416,149 $ 164,648 $ 7,516,941 $ 1,193,999 $ 10,406,605 $ 286,114 $ 10,709,914
Securities available for sale. 0 0 0 3,291,128 502,020 2,498,820 0
Working capital............... 218,132 29,031 7,207,265 4,447,080 10,510,024 2,643,359 10,065,731
Total assets.................. 417,272 192,344 7,550,836 4,770,951 11,227,251 2,946,848 10,938,767
Total liabilities............. 198,540 163,313 309,970 290,969 670,077 238,809 821,598
Deficit accumulated during
the development stage......... (1,193,601) (2,822,268) (4,842,280) (7,682,039) (11,399,874) (9,518,859) (14,811,599)
Total stockholders' equity.... 218,732 29,031 7,240,866 4,479,982 10,557,174 2,708,037 10,117,169
</TABLE>

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<PAGE>

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

Overview

OXiGENE is a development-stage pharmaceutical company engaged in the
research and development of products designed to enhance the clinical efficacy
of radiation and chemotherapy, the most common and traditional forms of
non-surgical cancer treatment. OXiGENE has devoted substantially all of its
efforts and resources to research and development conducted on its own behalf
and through strategic collaborations with clinical institutions and other
organizations, particularly the University of Lund in Lund, Sweden.
Consequently, OXiGENE believes that its research and development expenditures
have been somewhat lower than other comparable development-stage pharmaceutical
companies. OXiGENE has generated a cumulative net loss of approximately $14.8
million for the period from its inception through June 30, 1996. OXiGENE
expects to incur significant additional operating losses over the next several
years, principally as a result of its continuing clinical trials and
anticipated research and development expenditures. The major source of
OXiGENE's working capital has been the proceeds of private and public equity
financings. As of June 30, 1996, OXiGENE had no long-term debt or loans
payable.

Results of Operations

Six Months Ended June 30, 1996 and 1995

During the six month periods ended June 30, 1996 and 1995, the Company had
no revenues, except approximately $0.3 million and $0.1 million of interest
income, respectively. The Company's total operating expenses for those periods
were approximately $3.7 million and $1.9 million, respectively. Research and
development expenses for the six month period ended June 30, 1996 increased to
approximately $2.4 million from approximately $1.3 million for the comparable
1995 period. The increase in reported research and development expenses was
attributable to a charge for financial reporting purposes of approximately $1.0
million. This charge was recorded because the market value per share of Common
Stock on June 30, 1996 ($25.50) exceeded the exercise price of stock
appreciation rights previously granted by the Company to certain clinical
investigators and consultants. Without giving effect to such charge, research
and development expenses increased by approximately $0.1 million compared to
the comparable 1995 period. Generally, the Company makes payments to its
clinical investigators if and when certain predetermined milestones in its
clinical trials are reached, rather than on a fixed quarterly or monthly basis.
As a result of the foregoing and the existence of outstanding stock
appreciation rights, research and development expenses have fluctuated, and are
expected to continue to fluctuate, from quarter to quarter. General and
administrative expenses for the six month period ended June 30, 1996 increased
to approximately $1.3 million from approximately $0.6 million for the
comparable 1995 period. The increase in general and administrative expenses is
primarily attributable to (i) investment banking fees paid to D. Carnegie AB
("Carnegie") of Stockholm, Sweden and (ii) start-up expenses related to
establishing OXiGENE's subsidiary in Sweden. In an effort to preserve cash and
reduce cash flow requirements, the Company's policy has been to minimize the
number of employees and to use outside consultants to the extent practicable.
OXiGENE expects that its clinical trial expenses will increase significantly as
it proceeds with and expands the Neu-Sensamide(TM) clinical trial program and
it initiates research and clinical trials on new compounds, including Oxi-104.

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<PAGE>

Three Year Period Ended December 31, 1995

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994.
OXiGENE had no revenues, except for approximately $0.4 million and $0.3 million
of interest income in the years ended December 31, 1995 and 1994, respectively.
The increase in interest income is attributable to the investment of the net
proceeds received by the Company from a private placement financing completed
in July 1995. Total operating expenses for the year ended December 31, 1995
increased to approximately $4.1 million from approximately $3.1 million for the
comparable 1994 period. Research and development expenses for the year ended
December 31, 1995 increased to approximately $2.8 million from approximately
$1.8 million for the comparable 1994 period, while general and administrative
expenses remained virtually unchanged. The increase in operating expenses is
primarily due to (i) the costs and expenses associated with an expansion of the
clinical trial program, (ii) increases in research and development activities
in connection with OXiGENE's new compounds, and (iii) the expenses related to
OXiGENE's subsidiary in Sweden.

Year Ended December 31, 1994 Compared to Year Ended December 31, 1993.
OXiGENE had no revenues, except for interest income of approximately $0.3
million and $0.1 million in the years ended December 31, 1994 and 1993,
respectively. Total operating expenses for the year ended December 31, 1994
increased to $3.1 million from $2.1 million for the comparable 1993 period,
reflecting accelerated clinical activities. OXiGENE's research and development
expenses for the year ended December 31, 1994, increased to approximately $1.8
million from approximately $0.9 million in the comparable 1993 period. The
increase in research and development expenses was primarily due to the
commencement of OXiGENE's Phase II/III clinical trials of Sensamide(TM) and
additional research and development efforts. OXiGENE's general and
administrative expenses for the year ended December 31, 1994, increased to
approximately $1.3 million from $1.2 million in the comparable 1993 period.

Liquidity and Capital Resources

OXiGENE has experienced net losses and negative cash flow from operations
each year since its inception and, as of June 30, 1996, had a deficit during
the development stage of approximately $14.8 million. The Company expects to
incur substantial additional expenses, resulting in significant losses, over
the next several years as it continues to increase its research and development
activities and expands its clinical trial program. To date, the Company has
financed its operations primarily through the net proceeds it has received from
private and public equity financings.

In July 1995, OXiGENE completed a $10.0 million private placement with net
proceeds to the Company of approximately $9.5 million. Carnegie acted as
placing agent for this transaction. The Company has used and anticipates that
it will continue to use the proceeds from the private placement for current and
expanded clinical trials and for research and development activities. OXiGENE
had cash, cash equivalents and marketable securities of approximately $10.7
million and $10.9 million at June 30, 1996 and December 31, 1995, respectively.
The relatively minor decrease in cash equivalents is due to the receipt by
OXiGENE of approximately $1.7 million from the exercise of outstanding options
and warrants during the six month period ended June 30, 1996, offset by net
cash used in operating activities during the six months ended June 30, 1996, of
$1.9 million.

OXiGENE's policy is to contain its fixed expenditures by maintaining a
relatively small number of employees and relying as much as possible on outside
services for its clinical research and clinical trials. A quarterly retainer is
being paid to the University of Lund, Lund, Sweden, for preclinical

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<PAGE>

research. For the years ended December 31, 1995, 1994 and 1993, the amount of
such retainer was approximately $0.2 million, $0.4 million and $0.1 million,
respectively. The significant increase in the amount paid to the University of
Lund prior to 1995, is due to the fact that clinical trial expenses were billed
to the Company through the University of Lund. Since 1995, such expenses have
been paid by the Company directly. Accordingly, the amount paid to the
University of Lund decreased correspondingly. For the six-month period ended
June 30, 1996 such amount was approximately $0.1 million. In addition, in late
1991, OXiGENE engaged Cato Research, Ltd. ("Cato") in Durham, North Carolina,
to, among other things, monitor OXiGENE's clinical trials. The amount billed to
OXiGENE by Cato during the years ended December 31, 1995, 1994 and 1993 was
approximately $0.7 million, $0.6 million and $0.5 million, respectively. The
continuous increase in the amount billed by Cato reflects the expenses
associated with the acceleration of OXiGENE's Phase II/III clinical trial for
Sensamide(TM) and monitoring and supporting the development of
Neu-Sensamide(TM). For the six month period ended June 30, 1996, the amount
paid to Cato was approximately $0.4 million. Further, in June 1996, in
collaboration with ILEX(TM) Oncology Inc. ("ILEX"), a contract research
organization in Austin, Texas, a large-scale synthesis of Oxi-104 in accordance
with FDA current U.S. Good Laboratory Practice standards ("cGLP") was
established. To date, the Company has paid ILEX approximately $0.3 million. As
the research and development and clinical trials with respect to Oxi-104
continue, the Company expects that the amounts payable to ILEX from time to
time will increase significantly.

OXiGENE anticipates that the net proceeds of this Offering, together with
its existing cash and cash equivalents, will satisfy OXiGENE's projected cash
requirements for at least the next 30 months. See "Use of Proceeds." However,
working capital and capital requirements may vary materially from those now
planned due to numerous factors including, but not limited to, the progress of
OXiGENE's research and development programs, the results of preclinical testing
and clinical trials, the timing and costs involved in obtaining regulatory
approvals, the level of resources that will be devoted to the development of
manufacturing, marketing and sales capabilities, technological advances, the
approval of pending patent applications and the status of collaborative
agreements with other companies, if any, to provide funding and services to
OXiGENE to support or defray some of or all the costs associated with any of or
all these activities. The Company anticipates that it will have to seek
substantial additional private or public financing or enter into a
collaborative arrangement with one or more third parties to complete the
development of any product or bring products to market. There can be no
assurance that additional financing will be available on acceptable terms, if
at all.

OXiGENE has no material commitments for capital expenditures as of June
30, 1996.

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<PAGE>

BUSINESS

Introduction

OXiGENE is engaged in the research and development of products designed to
enhance the clinical efficacy of radiation and chemotherapy, the most common
and traditional forms of non-surgical cancer treatment. The Company's
proprietary technology involves the inhibition, measurement and stimulation of
the cellular DNA repair process. When administered in accordance with their
prescribed regimens, the Company's principal products, Sensamide(TM) and
Neu-Sensamide(TM), make cancerous tumor cells more sensitive to radiation by
inhibiting DNA repair activity, consequently increasing tumor damage from
radiation therapy in those cells. Accordingly, the Company expects that patient
response to radiation will be improved and result in increased tumor shrinkage,
or reduced side effects, or both.

Currently, approximately 180 patients have been recruited in a 226-patient
Phase II/III clinical trial of Sensamide(TM) in combination with radiation
therapy in patients with inoperable non-small cell lung cancer. An
Investigative New Drug ("IND") application with respect to this trial was filed
with the FDA in 1992. At the current patient recruitment rate, the Company
expects to complete patient recruitment by the end of 1996, and have results of
this study available in the third quarter of 1997. OXiGENE anticipates
commencing a second Phase III clinical trial in patients with non-small cell
lung cancer using Neu-Sensamide(TM), the Company's reduced side effect
formulation of Sensamide(TM), in the fourth quarter of 1996. The combined
results of the Sensamide(TM) and Neu-Sensamide(TM) studies will serve as the
basis of the Company's New Drug Application ("NDA") for Neu-Sensamide(TM) as a
radiation sensitizer for the treatment of patients with non-small cell lung
cancer. In March 1996, the Company filed an additional protocol under its
existing IND application with the FDA to commence a Phase I/II study of
Neu-Sensamide(TM) in patients with glioblastomas, a highly malignant form of
brain cancer. This study started in August 1996. The FDA has advised the
Company that if the Company is able to demonstrate the clinical efficacy of
Neu-Sensamide(TM) in conjunction with radiation therapy in two different forms
of cancer under controlled study conditions, and in two or three additional
forms of cancer under uncontrolled study conditions, OXiGENE will receive
product approval for Neu-Sensamide(TM) as a radiation sensitizer for all cancer
indications treated with radiation. Although the Company cannot predict the
outcome, it believes the conduct of these uncontrolled studies can be
accomplished relatively quickly following completion of this Offering because
selection of the forms of cancer to be tested will be in the sole discretion of
the Company, each study is expected to be conducted on not more than 50
patients and simultaneous control group studies will not be required, success
being determined solely by comparing the studies' results with generally
available historical data.

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The Company's goal is to develop products that enhance the efficacy of
existing forms of cancer treatment, such as radiation and chemotherapy, and
improve a patient's quality of life by inhibiting the DNA repair function of,
and increasing DNA damage in, tumor cells that have been subjected to
treatment. The Company intends to continue and expand its ongoing clinical
trial program in Europe and commence research and clinical trials in the United
States. The Company's policy has been to establish relationships with
universities, research organizations and other institutions in the field of
oncology. The Company intends to further strengthen these relationships, rather
than expand its in-house research and clinical staff. Although the Company
plans to market its products directly in certain European countries, it has had
preliminary discussions with unaffiliated pharmaceutical companies regarding
the formation of possible strategic alliances or joint ventures for the
manufacturing and marketing of its products in the United States, the Far East
and elsewhere. To date, the Company has not entered into any such alliances or
ventures.

Technology Overview

OXiGENE's proprietary technology is based on the relationship between DNA
repair and DNA damage as affected by both the operation of ADPRT (a DNA repair
enzyme) and cell replication. Normal cells in the human body are constantly
subjected to external assault from harmful environmental agents such as the
sun's ultraviolet rays, toxic chemicals in the diet and carcinogens such as
smoke that are absorbed into the body, as well as from internal assault from
metabolic byproducts produced within the cell. These assaults cause damage, or
genetic lesions, to the DNA molecules, which contain the genetic blueprint
(instructions) for the cell. The cell's structural integrity is dependent on
its ability to read and translate those blueprints. Repairing DNA damage is,
therefore, essential to a cell's survival. Consequently, the body attempts to
counter this constant assault through its genetic mechanisms that monitor
genetic lesions to a cell's DNA molecules and repair them enzymatically.

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Repair enzymes move constantly along the DNA molecule seeking out genetic
lesions and repairing them through a process called "excision repair." One of
these enzymes is ADPRT. It identifies a genetic lesion, attaches to the damaged
site and engages other enzymes to help in the repair process. The injured
portion of the molecule is then removed by enzymatic digestion and additional
enzymes repair the damage to the DNA molecule. As DNA is a double helix
composed of diametrically opposed strands, the repair enzymes can use the
unaffected strand of nucleotides (the class of nucleic acid compounds from
which genes are constructed) as a template for determining the correct
nucleotides to serve as replacement for the injured portion that has been
removed. The process is completed by the repair enzymes, which produce the
"complementary twin" and implant it in the previously removed damaged section.

[GRAPHIC]

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The excision repair process is selective in that it concentrates on the
most active regions of the DNA helix, those containing the genes that are most
vital to the cell. Thus, when the rate of damage to a cell is more than the
repair system can handle, the repair mechanism first repairs lesions in a cell
that occur in frequently read genes, which are the genes that are most
important to a cell's day-to-day survival. Damage occurring to inactive or
structural portions of the DNA that are not immediately important to a cell's
survival is repaired only as time permits, if at all. Therefore, OXiGENE
believes that cells become malignant or age by the accumulation of genetic
lesions that the DNA repair system has failed to correct properly or in a
timely manner.

[GRAPHIC]

The process of DNA repair in the human body

Throughout life, cells replicate by division. Cell division (replication)
occurs very quickly and defects are unavoidable. Genetic defects constitute a
serious threat to a cell's survival. A persistent genetic defect, or mutation,
increases the risk of disease and death. Cancer is a disease in which a mutated
tumor cell divides uninterruptedly and in an uncontrolled manner. Normal cells
die because tumor cells exhaust nourishment, inhibiting a normal cell's ability
to survive and eventually leading to organic malfunctions and death.

Traditionally, cancer treatment has been based on the theory that stopping
uncontrolled cell division can halt tumor growth. Both radiation and
chemotherapy increase DNA damage in tumorous cells, causing toxicity and cell
death. Tumorous cells are known to die by either of two mechanisms, necrosis
(death with cell replication) and apoptosis (death without cell replication).
OXiGENE's main product line of DNA repair inhibitors are based on N-substituted
benzamides, which, the Company believes, cause tumor toxicity primarily by
apoptosis. Apoptosis is initiated by cells as an alternative to necrosis, or
mutation. The advantage of apoptotic death is that it allows normal living
cells to absorb the various components that make up the apoptotic, dying cells
without further enzymatic digestion of the cellular components as occurs with
necrotic cell death. Accordingly, apoptosis causes cell death

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without the many toxic side effects associated with necrosis and enzymatic
digestion. This is an important basis for OXiGENE's product development since
its goal is to create drugs to counteract cancer that are less hazardous to the
individual than those used today.

DNA Repair Inhibition. Cancer therapy typically involves either or both of
surgery, to remove the primary tumor, and the application of cytotoxic
(cell-killing) agents, such as radiation or chemotherapy, to destroy primary
and secondary tumors that are too small or diverse to be removed surgically
(called metastases). Nearly all available radiation and chemotherapies work by
increasing DNA damage to tumor cells, thus blocking those cells' replication
and inhibiting their growth by necrosis or apoptosis, or both, and eventually
leading to their death. As tumorous cells replicate substantially more
frequently than normal cells, the body's normal DNA repair mechanism tends to
counteract the effects of radiation and chemotherapy treatment by promoting the
replication, or "regrowth," of the very tumors that have been treated. This
process can be prevented by inhibiting the body's normal repair mechanism.
Certain chemical compounds are capable of serving as "sensitizers," which
supplement the radiation or chemotherapy phase of cancer treatment by
inhibiting DNA repair and increasing DNA damage, thereby increasing the
efficiency of the cytotoxic agents. Drugs that exhibit sensitizing properties
permit an oncologist to elect either to achieve greater results with a given
dose of radiation therapy or chemotherapy, or to reduce the level of the
cytotoxic agent needed to achieve the same result. Frequently, however,
oncologists must cut short therapy because side effects associated with certain
sensitizing agents become intolerable before effective tumor killing can occur.
The Company believes that its principal products are sensitizers that are
capable of inhibiting DNA repair and increasing DNA damage without intolerable
side effects when used in conjunction with customary cancer treatments. See
"DNA Repair Products and Clinical Trial Program."

DNA Repair Measurement and Stimulation The ADPRT enzyme is an important
enzyme in the DNA repair process because it recognizes DNA damage and alters
certain proteins in the damaged site, enabling the other repair enzymes to gain
access to that site and to complete the excision repair process. Therefore, if
an individual's level of ADPRT is high, DNA damage is being removed
efficiently, and if an individual's level of ADPRT is low, DNA repair is being
inhibited and DNA damage will accumulate. Consequently, by measuring individual
levels of ADPRT, the Company believes it is possible to determine how well the
DNA repair process is functioning in preventing accumulated DNA damage. OXiGENE
believes that knowledge of DNA repair activity may be useful for monitoring or
screening individuals for susceptibility to cancer, immune deficiencies,
chemotherapeutic drug resistance and the success or failure of chemopreventive
treatment.

OXiGENE believes that knowledge of the body's metabolic function and its
related process known as "oxidative stress," in which a small number of
metabolic "mistakes" occur and cause the formation of certain intermediates
that damage DNA, and knowledge of the body's inflammatory response that causes
a decline in DNA repair may lead to the development of drugs that can stimulate
DNA repair. Drugs of that type, the Company believes, could reduce a person's
susceptibility to cancer and certain diseases associated with the aging process
by increasing net DNA repair capacity.

Although the Company has conducted extensive preclinical cell and animal
research into each of the areas of DNA repair measurement and DNA repair
stimulation, and is currently planning the early stages of their clinical
development, there can be no assurance that any drugs related to either of
these areas can or will be developed by the Company. See "-- DNA Repair Product
and Clinical Trial Program."

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Product Development and Marketing Strategy

The Company's goal is to develop products that enhance the efficacy of
existing forms of cancer treatment, such as radiation and chemotherapy, and
improve a patient's quality of life by selectively inhibiting the DNA repair
function of, and increasing DNA damage in and death of, tumor cells. The
Company intends to continue and expand its ongoing clinical trial program in
Europe and commence research and clinical trials in the United States. The
Company's policy has been to establish relationships with universities,
research organizations and other institutions in the field of oncology. The
Company intends to further strengthen these relationships, rather than expand
its in-house research and clinical staff. Although the Company plans to market
its products directly in certain European countries, it has had preliminary
discussions with unaffiliated pharmaceutical companies regarding strategic
alliances or joint ventures for the manufacturing and marketing of its products
in the United States, the Far East and elsewhere. To date the Company has not
entered into any such alliances or ventures.

Currently, the Company has collaborative arrangements with the University
of Lund in Lund, Sweden, the Strang Cancer Prevention Center in New York, New
York, New York University in New York, New York, Gray Laboratories in
Middlesex, United Kingdom, Aarhus University in Aarhus, Denmark, CNRS in
Strassbourg, France and Georgetown University in Washington, D.C. See
"--Collaborative Arrangements."

In particular, the Company believes that its collaborations with the
University of Lund enable it to conduct trials of its products in an
environment offering a homogenous patient population at less cost and more
rapidly than the Company could achieve in the United States. The University of
Lund has historically provided, and continues to provide, the Company with
access to clinical trial facilities, patients and research facilities.
Additionally, the Company benefits indirectly from certain research grants
received by the University of Lund.

OXiGENE's DNA Repair Products and Clinical Trial Program

DNA Repair Inhibiting Products

OXiGENE has discovered that certain compounds in the family of
N-substituted benzamides are capable of inhibiting ADPRT-modulated DNA repair
and selectively reacting with radiation to cause additional DNA damage
exclusively in the treated area. OXiGENE believes that this selectivity is due
to tumor cells exhibiting increased DNA repair activity as compared to normal
cells, rendering them more sensitive to DNA repair inhibition and death by
apoptosis. The Company believes, on the basis of its research activities to
date, that its principal products, Sensamide(TM) and Neu-Sensamide(TM), act as
selective, targeted sensitizers of tumor tissue and sensitize radiation
exclusively inside the treated area without producing significant toxic side
effects outside the treated area.

Oxi-104, the Company's newest compound, is not based on metoclopramide
and, therefore, although it is a N-substituted benzamide it is unlike
Sensamide(TM) or Neu-Sensamide(TM). The Company believes that Oxi-104 alone can
induce tumor growth-inhibiting and tumor-killing effects. Oxi-104 has been
designed with a molecular structure that, the Company believes, will reduce
side effects while maintaining the sensitizing properties of other
N-substituted benzamides. For the Company's two radiation sensitizer products,
Sensamide(TM) and Neu-Sensamide(TM), both of which are based on N-substituted
benzamide known as metoclopramide, the limiting doses are determined by their
central nervous system (CNS) side effects. By comparison, Oxi-104 has not yet
shown any CNS side effects.

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The current emphasis of the Company's clinical program is on evaluating
the safety and efficacy of Sensamide(TM) and Neu-Sensamide(TM) as sensitizing
agents in combination with radiation therapy, with the goal of obtaining
product labeling for Neu-Sensamide(TM) as a radiation sensitizer not limited to
a specific form of cancer. In the middle of 1994, the Company commenced a study
of Sensamide(TM) in patients with inoperable non small-cell lung cancer
("NSCLC"). In the fourth quarter of 1996, the Company intends to commence a
Phase III study of Neu-Sensamide(TM) in patients with NSCLC. The combined
results of the Sensamide(TM) and Neu-Sensamide(TM) studies will serve as the
basis of the Company's NDA for Neu-Sensamide(TM) as a radiation sensitizer for
NSCLC. In August 1996, the Company commenced a Phase I/II study of
Neu-Sensamide(TM) in patients with glioblastomas, a highly malignant form of
brain cancer. The FDA has advised the Company that if the Company is able to
demonstrate the clinical efficacy of Neu-Sensamide(TM) in conjunction with
radiation therapy in two different forms of cancer under controlled study
conditions, and in two or three additional forms of cancer under uncontrolled
study conditions, OXiGENE will receive product approval for Neu-Sensamide(TM)
as a radiation sensitizer for all cancer indications treated with radiation.

OXiGENE is collaborating with ILEX, a drug development company based in
San Antonio, Texas, on the development of Oxi-104. ILEX will conduct
pre-clinical development work through the filing of an IND on a contract basis.
This work will include pharmacokinetics studies, toxicology studies in
accordance with CGLP standards, process development, scale-up/manufacturing for
anticipated clinical trial needs under FDA current good manufacturing practice
("cGMP") standards, analytical development, and compilation and submission of
an IND. OXiGENE anticipates having a pre-IND meeting with the FDA regarding
Oxi-104 in February 1997.

The Company currently anticipates commencing a Phase I clinical trial of
Oxi-104, after the filing of an IND with the FDA in the second quarter of 1997.
Based on preliminary results, OXiGENE believes it can demonstrate that Oxi-104
alone can induce tumor growth-inhibiting and tumor-killing effects.

A summary of the clinical studies related to the Company's products that
are currently under development is set forth in the following table (which is
supplemented further by the more detailed information contained in Appendix I
hereto):

Summary of OXiGENE's Clinical Program

<TABLE>
<CAPTION>
Total Treatment
Study Phase patients Randomization Assignment Status
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sensamide(TM) in I/II 23 None All patients on Published 1995
NSCLC Sensamide(TM)
(i.v.)
- ------------------------------------------------------------------------------------------------------------
Sensamide(TM) in II/III 226 Control Sensamide(TM) Ongoing; greater
NSCLC (i.v.) + than 180 patients
radiation - 113; as of September
Radiation only - 1996; final report
113 third quarter 1997
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
Total Treatment
Study Phase patients Randomization Assignment Status
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Comparative study of I 19 Placebo, Placebo-12; Final report
Sensamide(TM), Neu- double-blind Sensamide(TM) September 1995
Sensamide(TM) and cross-over (i.v.) -15; Neu-
Placebo (healthy Sensamide(TM)
volunteers) (i.v.) - 13;
Neu-
Sensamide(TM)
(i.m.) - 13
- ------------------------------------------------------------------------------------------------------------
Neu-Sensamide(TM) in III 226 Control Neu- Estimated start 4th
NSCLC Sensamide(TM) quarter 1996
(i.m.) +
radiation - 113;
Radiation only -
113
- ------------------------------------------------------------------------------------------------------------
Neu-Sensamide(TM) in I/II 15 None Neu- Ongoing; 2
glioblastomas Sensamide(TM) patients as of
(i.m.) - 15 September 1996
- ------------------------------------------------------------------------------------------------------------
Oxi-104 in refractory I 15 None All patients on Planning phase
cancer (solid tumors) Oxi-104
</TABLE>

Certain terms and abbreviations used in the foregoing table are explained in
the Glossary on page 48.

DNA Repair Measuring Products

ADPRT Assay Products. The Company believes that knowledge of DNA repair
activity can be applied to monitor or screen individuals for susceptibility to
cancer, immune deficiencies, chemotherapeutic drug resistance and the success
or failure of chemo-preventive treatments. Studies have shown that DNA repair
capacity varies from one individual to another. OXiGENE has quantified
individual levels of ADPRT as a DNA repair estimate, and holds an exclusive
license, which expires in 2011, to an issued Canadian patent and pending U.S.,
European and Japanese patent applications covering an ADPRT diagnostic test
that measures ADPRT levels in white blood cells. The Company has determined
that a simple serum-based test can give a reliable surrogate indication of the
level of ADPRT in white blood cells, quickly and at low cost. OXiGENE believes
that such a test, for which it filed a U.S. patent application in October 1994,
may be commercially acceptable, although there can be no assurance in that
regard.

The New York University Department of Environmental Medicine and the
Center of Aids Research have conducted an investigation using OXiGENE's assay
for measuring ADPRT levels (i.e., the serum thiol-based surrogate test) on 133
patients who were intravenous narcotic drug users and were infected with the
HIV virus that causes AIDS. This repair assay assesses DNA repair activity by
measuring total serum thiol levels. Preliminary results indicate that this
assay may be effective in monitoring the progression of HIV-related diseases.
The Company believes that measuring a person's immune function through DNA
repair activity may be a better indication of HIV-related disease progression
and, consequently, survival than more commonly used indicators such as CD4 cell
counts.

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The Company intends to pursue the development of a more-cost-effective,
easy-to-administer version of the assay for commercialization.

DNA Repair Stimulating Products

Cancer, as well as the general deterioration of the body leading to aging
disorders connected to immunity, is generally recognized in the medical field
as a mutational disease arising from the build-up of genetic damage in
unrepaired areas of DNA. By enhancing DNA repair in the inactive areas of the
DNA structure, genetic damage build-up can be reduced with a corresponding
reduction in cell mutation. OXiGENE research has to date concentrated on
identifying compounds that can slow the natural production of DNA repair
inhibitors produced by the body when inflammatory cells are activated as a
first line defense against infections or cancer cells. By blocking this natural
production of DNA repair inhibitors by inflammatory cells, the Company has,
through its tests to date, demonstrated that a net increase in DNA repair
capacity can be achieved.

The Company has developed a screening program based on DNA repair
measurements of in vivo-exposed spleen and cells. The Company has identified a
new mixture of naturally-occurring compounds that it believes is capable of
stimulating DNA repair, and which is currently under evaluation by the Company
in cell and animal models to optimize enhancement of DNA repair. OXiGENE has
filed an international (PCT) patent application for this mixture of DNA repair
stimulators.

The Company believes that DNA repair enhanced compounds may be used to
supplement, or under certain circumstances replace, chemopreventive agents for
cancer already in use, such as Tamoxifen(TM), as well as chemopreventive agents
in various stages of development. Any DNA repair enhancer drugs developed by
OXiGENE will be based on naturally occurring compounds, rather than synthetic
analogs. Consequently, the Company believes that they would be less inherently
toxic than newly-synthesized chemopreventive agents already in clinical trials.
However, there can be no assurance that the Company will be able to develop any
such drug, or if developed, that such drug could be successfully marketed.

Drug Development and Regulatory Processes

Research initially involves optimization of leading chemical structures
into leading compounds. Once a leading compound has been identified, the
preclinical phase commences. In that phase, certain selected compounds are
tested for therapeutic potential in a number of animal models, with the
objective of characterizing the investigated compounds in relation to existing
treatment and getting a first indication of the compounds' development
potential. Successful preclinical work may lead to the filing of an IND with
the relevant national regulatory authorities. The IND is a permission to
administer the compound to humans in clinical trials. Several years of research
and testing generally are necessary before an IND can be obtained and clinical
development commence.

The clinical development of new drugs is subject to approval by the health
authorities in individual countries. The duration of the clinical phase
requirements among countries vary considerably. For life threatening and
severely debilitating conditions where no satisfactory treatment currently
exists, however, it is possible to accelerate the development process in the
United States through the "Accelerated Drug Approval Program." In other
countries, the trial process for drugs targeted toward life threatening

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<PAGE>

diseases is shortened by lower requirements regarding the patient sample size
required to be met in the trials.

The time periods mentioned below are indications only and may vary. Upon
successful completion of the development program, a New Drug Application
("NDA") may be submitted to the authorities, and upon approval the product may
then be marketed. Even thereafter, however, a company will remain subject to
regulatory review.

Phase I. The purpose of Phase I studies is to evaluate the toxicity of the
tested compound and to establish how the tested compound is tolerated and
decomposed in the human body. Phase I clinical trials traditionally involve
tolerance, absorption, metabolism and excretion studies in a small group of
healthy individuals. Phase I may last up to one year.

Phase II. Phase II marks the beginning of clinical trials on a limited
number of patients and permits the determination of dose levels in relation to
effect and tolerance. The trials also seek to establish the most effective
route of administration. Trials are conducted on a small sample of carefully
monitored patients. Phase II may last up to two years.

Phase III. Phase III is extensive clinical trials in large samples of
patients. The number of patients in a Phase III trial program depends to a
great extent on the clinical indications that the drug addresses. Trials are
often double-blinded and involve a detailed statistical evaluation of test
results. The compound is tested against placebo and existing treatment, if such
treatment is available. Production is upscaled, and further evaluation of the
durability and stability of the compound takes place. Phase III may last
several years and is the most time-consuming and expensive part of a clinical
trial program.

OXiGENE, like other pharmaceutical companies, will be subject to strict
controls covering the manufacture, labeling, supply and marketing of any
products it may develop and market. Further, OXiGENE is subject to controls
over clinical trials of its potential pharmaceutical products. The most
important regulation is the requirement to obtain and maintain regulatory
approval of a product from the relevant regulatory authority to enable it to be
marketed in a given country.

The regulatory authorities in each country may impose their own
requirements and may refuse to grant, or may require additional data before
granting, an approval even though the relevant product has been approved by
another authority. The United States and European Union ("EU") countries have
very high standards of technical appraisal and, consequently, in most cases a
lengthy approval process for pharmaceutical products. The time required to
obtain such approval in particular countries varies, but generally takes from
six months to several years from the date of application, depending upon the
degree of control exercised by the regulatory authority, the duration of its
review procedures and the nature of the product. The trend in recent years has
been towards stricter regulation and higher standards, but accelerated approval
processes exist in the United States and elsewhere for so-called breakthrough
drugs for patients with life-threatening or serious diseases.

In the United States, the primary regulatory authority is the FDA. In
addition to regulating clinical procedures and processes, the FDA investigates
and approves market applications for new pharmaceutical products and is
responsible for regulating the labeling, marketing and monitoring of all such
products, whether marketed or under investigation.

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In Europe, the European Committee for Proprietary Medicinal Products
provides a mechanism for EU-member states to exchange information on all
aspects of product licensing and assesses license applications submitted under
two different procedures (the multistate and the high-tech concentration
procedures). The EU has established a European agency for the evaluation of
medical products, with both a centralized community procedure and a
decentralized procedure, the latter being based on the principle of mutual
recognition between the member states.

Research and Development and Collaborative Arrangements

The Company's research and development programs are generally pursued in
collaboration with academic and other institutions. Under current arrangements,
the Company is not required to pay any royalties or licensing fees for
technology and products developed with financial assistance from or at the
facilities of such agencies and institutions, except for a 5% gross royalty
payable in respect of an exclusive worldwide license of the patent covering the
ADPRT Diagnostic Assay. There can be no assurance that royalties or fees,
potentially material as to their amount, will not be required under any future
arrangements.

The Company incurred approximately $0.9 million, $1.8 million and $2.8
million in research and development expenses in the years ended December 31,
1993, 1994 and 1995, respectively. For the six month period ended June 30,
1996, such expenses were approximately $2.4 million. Substantially all of these
amounts represent external research and development expenditures.

Swedish Cancer Society. In 1992, the Swedish Cancer Society awarded Dr.
Ronald Pero, in his capacity as a faculty member of the University of Lund, a
three-year grant for a total of approximately $0.3 million to investigate
benzamide and nicotinamide analogs relating to Sensamide(TM) as
radiosensitizers. This grant was renewed in 1995 for a one year period totaling
approximately $0.2 million. The Company was not the recipient of any of these
funds. The study's principal objective was to determine what chemical features
give benzamide/nicotinamide compounds multiple forms of radiosensitizing
action.

In 1992, Dr. Pero, in his capacity as a collaborating faculty member of
the University of Lund, was awarded another Swedish Cancer Society research
project, (principal investigator Professor Goran Berglund), for approximately
$0.4 million over a three-year period, to direct the biological bank and
biomarker program portion of the Malmo Diet Study. This project has had its
funding renewed until October 1996, the anticipated date of completion of
patient enrollment. The Company was not the recipient of any of these funds.
The Malmo Diet Study, sponsored in part by the World Health Organization,
involves a large ongoing control case study in which individuals between the
ages of 46 years and 64 years, living in the city of Malmo, Sweden, have been
invited to participate in a study designed to evaluate dietary factors as
causative agents for cancer. The city of Malmo was selected as the site of this
study because of the historically high incidence of cancer in its relatively
homogeneous population.

University of Lund/Strang Cancer Prevention Center Agreement. In 1987, the
University of Lund entered into a research collaboration agreement with the
Strang Cancer Prevention Center in New York City. The purpose of the
collaboration is to develop biomarkers and to contribute to the basic knowledge
of DNA repair in relation to human diseases. The program is conducted primarily
in the Wallenberg Laboratory of the University of Lund. Dr. Pero was appointed
to head this international collaborative effort and was awarded professorial
privileges and laboratory space, which is currently being used by Dr. Pero and
his research colleagues. Initially, Dr. Pero's salary was paid by the Strang
Cancer Prevention

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<PAGE>

Center, but in 1990 that responsibility was assumed by the Company. The
Wallenberg Laboratory specializes in providing high quality research space to
selected research projects being developed within the academic community.
Currently, the program focuses its research efforts on immunology and tumor
biology, areas directly related to the Company's principal technology
development. Most of the Company's preclinical and clinical research is carried
out at the Wallenberg Laboratory, financed by research grants and contracts.
The University of Lund has not claimed any proprietary interest in the products
developed by the Company there.

Preventive Medicine Institute. Pursuant to an agreement dated October 7,
1991 (the "PMI License Agreement"), between a predecessor of the Company and
Preventive Medicine Institute, a New York not-for-profit corporation affiliated
with the Strang Cancer Prevention Center in New York, New York, the Company
received an exclusive, worldwide license to patent rights covering the ADPRT
Diagnostic Assay, which license expires on October 7, 2011. The PMI License
Agreement requires the Company to pay a royalty equal to 5% of the total amount
of any revenues received by the Company in respect of the ADPRT Diagnostic
Assay with a total maximum payment of $1 million. To date, the Company has made
no royalty payments as this product has not been commercially developed.

New York University Medical Center. In 1990, Dr. Pero was appointed as
adjunct professor at NYU Medical Center, and was provided with certain
laboratory space. During 1995, the Company continued to use the space to
conduct research using its diagnostic tests as biomarkers of hazardous
environmental exposures, cancer susceptibility and AIDS prognosis while
continuing its development of a cost effective and simple surrogate version of
the assay (test) for commercialization. In 1995, the Company granted to New
York University $25,000 for a study entitled "Retrospective Trial of
N-Cloroamine as a Prognostic Indicator of HIV Disease," which is related to the
Company's diagnostic assay.

Professor Myron K. Jacobson, The College of Pharmacy, University of
Kentucky. Professor Jacobson is the Chairman of the Division of Medicinal
Chemistry and Pharmaceuticals, College of Pharmacy, University of Kentucky,
Lexington, Kentucky. In November 1994, the Company entered into a consulting
agreement with Professor Jacobson, under which he will assist the Company's
core research and development efforts in the DNA repair area and
ADP-ribosylation. Dr. Jacobson is paid a $5,000 per annum consulting fee and
was granted options to acquire 5,000 shares of the Company's Common Stock at an
exercise price of $5.50 per share. The options fully vest on December 31, 1996,
provided Dr. Jacobson remains a consultant to the Company through that date,
and terminate in 2004.

Dr. Michael Horsman, The Danish Cancer Society, Aarhus, Denmark. Dr.
Horsman entered into a consulting agreement with the Company in November 1994,
under which he will assist the Company's research programs in determining
certain relations between the Company's drugs and radiation. Dr. Horsman is
paid a $5,000 per annum consulting fee.

Dr. Claus Moller, IPC Nordic A/S, Copenhagen, Denmark. IPC Nordic A/S is a
pharmaceutical consulting company based in Copenhagen, Denmark, which
specializes in supporting European clinical trials and distribution of drugs in
Scandinavia. Dr. Moller, the President of IPC Nordic, is a director of the
Company, and serves as the Company's Chief Medical Officer. Dr. Moller is
responsible for the coordination of the Company's European clinical trials as
well as the everyday operation of the Company's Swedish subsidiary. In addition
to 5000 director options, exercisable at $6.00, Dr. Moller received options to
purchase 30,000 shares of the Company's Common Stock, at an exercise price of

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$5.50 per share, in March 1994, all of which are fully vested. An additional
70,000 options were granted to Dr. Moller in June 1995 at an exercise price of
$6.375. These options vest in three equal annual installments on July 1, 1996,
1997 and 1998, provided Dr. Moller is rendering services to the Company on
those dates, and will terminate in 2005.

Dr. David J. Chaplin, the Gray Laboratory, Middlesex, United Kingdom. Dr.
Chaplin is Head of the Tumour Microcirculation Group at the Gray Laboratory
Cancer Research Trust Mount Vernon Hospital. Under an agreement signed in May
1995 Dr. Chaplin retains his position at the Gray Laboratory but is also
employed by OXiGENE as Vice President for Basic Research, Sensitizer Program
and serves as the Secretary of the Company's Scientific Advisory Board. Dr.
Chaplin is responsible for planning preclinical studies at the Gray Laboratory
and, in conjunction with Dr. Pero, defining and coordinating radio- and
chemosensitizing studies of the Company's proprietary compounds at other
research centers. Dr. Chaplin is paid $30,000 per annum and was granted options
to purchase 30,000 shares of Common Stock, at an exercise price of $5.375 per
share, vesting in three installments, on June 1, 1995, 1996, and 1997.

Dr. Sylviane Muller, Institut de Biologie Moleculaire et Cellulaire,
Strasbourg, France. In November 1995 the Company signed a one year research
agreement with Dr. Muller to perform a collaborative study on the "Preparation
of Antibodies Reacting Selectively with the Oxidized Zinc Finger Region of
Poly-ADPRT." The Company will pay Le Centre National De La Recherche
Scientifique, the parent organization of the Institut de Biologie Moleculaire
et Cellulaire, $35,000 for this study.

Dr. Mark Smulson, Georgetown University, Washington D.C. The Company has
entered a research agreement with Georgetown University, pursuant to which Dr.
Smulson will conduct research to clarify the interference of N-substituted
benzamides with the functioning of ADPRT and related enzymes. Georgetown
University receives $72,000 for this study.

Patents and Trade Secrets

Certain of OXiGENE's current therapeutic products are based on available
compounds that are produced by others. The Company anticipates that any
products it develops hereafter may include or be based on the same or other
compounds owned or produced by unaffiliated parties, as well as synthetic
compounds it may discover. Although the Company expects to seek patent
protection for any compounds it discovers, there is no assurance that any or
all of them will be subject to effective patent protection. Further, the
development of regimens for the administration of pharmaceuticals, which
generally involve specifications for the frequency, timing and amount of
dosages, has been, and the Company believes will continue to be, important to
the Company's efforts, although those processes, as such, may not be
patentable.

Patent Protection

It is the Company's policy to seek patent protection in the United States
and elsewhere throughout the world. Primarily because of differences among
patent laws in various jurisdictions, the scope of, and hence the protection
afforded by, any patents OXiGENE may receive may vary from place to place even
though they relate essentially to the same subject matter.

The patent position of firms in the Company's industry generally involves
highly complex legal and other issues, resulting in both an apparent
inconsistency regarding the breadth of claims allowed in United States patents
and general uncertainty as to their legal interpretation and enforceability.

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Accordingly, there can be no assurance that patent applications owned by the
Company will result in patents being issued or that, if issued, the patents
will afford competitive protection.

Further, there can be no assurance that products or processes
developed by the Company will not be covered by third party patents, in which
case continued development and marketing of those products or processes could
require a license under such patents. OXiGENE cannot assure that if a legal
action were to be brought against the Company on the basis of any third party
patents, such action would be resolved in the Company's favor. An unfavorable
result against the Company could result in monetary damages and injunctive
relief. Even a favorable result could cause expenditure of substantial monetary
and other resources in connection with the Company's defense against any such
action.

Granted Patents and Pending Applications. The following is a brief description
of the Company's current patent position, both in the United States and abroad.
As U.S. patent applications are maintained in secrecy until patents issue and
because publication of discoveries in the scientific or patent literature often
lags behind actual discoveries, OXiGENE cannot be certain that it was the first
creator of inventions covered by its pending applications or that it was the
first to file patent applications for those inventions.

As of October 1, 1996, the Company is the assignee of four granted U.S.
patents, four pending U.S. patent applications, and of granted patents and/or
pending applications in other countries (and/or international applications
designating other countries) corresponding to three of the granted U.S. patents
and two of the pending U.S. applications. Two of the U.S patents issued in
1996, and three of the pending U.S. applications were filed in 1996, of which
one is a provisional application and another is a U.S.-designating
international application (also designating other countries) based on a U.S.
provisional application filed in 1995.

Specifically, the Company is the assignee of a U.S. patent, granted April
20, 1993, for glutathione-s-transferase Mu as a measure of drug resistance,
covering a test for resistance to nitrosoureas (a class of chemotherapeutic
agents). In addition, the Company is the assignee of a U.S. patent, granted
August 23, 1994, for tumor or cancer cell-killing therapy (covering methods of
using N-substituted benzamides including Sensamide(TM) and Neu-Sensamide(TM) as
radio- and chemosensitizers), and of granted patents in Australia, Canada,
Europe (designating 13 countries), Ireland, Israel, Mexico and South Africa and
an allowed patent application in Russia (as well as pending applications in
Denmark and Japan) corresponding thereto. The Company is also the assignee of
two U.S. patents, both granted October 1, 1996, for methods of administering
and pharmaceutical formulations containing N-substituted benzamides and/or acid
addition salts thereof (covering, e.g., Neu-Sensamide(TM)) and for methods of
administering phenothiazines and/or acid addition salts thereof, and of a
granted South African patent and pending European and other foreign
applications corresponding to these two new U.S. patents. The Company's four
pending U.S. applications and international counterparts cover further methods
of testing or treatment and compositions, including the Oxi-104 product.

Moreover, the Company is the exclusive licensee of a U.S. patent, granted
January 9, 1996, for a diagnostic test involving measurements related to the
cellular process of DNA repair and drug resistance, and is the exclusive
licensee of corresponding granted Canadian and European patents and a
corresponding pending Japanese patent application. The owner of the licensed
patents and application is Preventive Medicine Institute.

Trade Secrets and Technological Know-How. While the Company generally will
pursue a policy of seeking patent protection to preserve its proprietary
technology, it also has and will continue to rely on

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trade secrets, unpatented proprietary information and continuing technological
innovation to develop and maintain its competitive position. There can be no
assurance, however, that others will not independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to
such or equivalent trade secrets, proprietary information or technology or that
OXiGENE can meaningfully protect its rights to such secrets, proprietary
information and technology.

OXiGENE requires its employees and Scientific Advisory Board members to
enter into confidentiality agreements with the Company. Those agreements
provide that all confidential information developed or made known to the
individual during the course of the relationship is to be kept confidential and
not to be disclosed to third parties, except in specific circumstances. In the
case of employees, the agreements also provide that all inventions conceived by
such employees shall be the exclusive property of OXiGENE. There can be no
assurance, however, that any such agreement will provide meaningful protection
for the Company's trade secrets in the event of unauthorized use or disclosure
of such information. Moreover, although the Company has confidentiality
agreements with the institutions that perform its preclinical and clinical
tests, the Company has no such agreements with the employees of such
institutions, and there can be no assurance that these employees will abide by
the terms of such agreements.

Competition

The industry in which the Company is engaged is characterized by rapidly
evolving technology and intense competition. The Company's competitors include,
among others, major pharmaceutical and biotechnology companies, many of which
have financial, technical and marketing resources significantly greater than
those of the Company. In addition, many of the small companies that compete
with the Company have also formed collaborative relationships with large,
established companies to support research, development and commercialization of
products that may be competitive with those of the Company. Academic
institutions, governmental agencies and other public and private research
organizations are also conducting research activities and seeking patent
protection and may commercialize products on their own or through joint
ventures.

The Company is aware of a number of companies engaged in the research,
development and testing of new cancer therapies or ways of increasing the
effectiveness of existing therapies. Such companies include, among others,
Bristol-Meyers Squibb Co., Burroughs Welcome, Eli Lilly and Ciba-Geigy Ltd.,
some of whose products have already received regulatory approval or are in
later stages of clinical trials. The Company is also aware of companies engaged
in the research, development and testing of diagnostic assays for cancer,
including Introgen Therapeutics, Anti Cancer, Transgene and Medarex. There are
other companies that have developed or are in the process of developing
technologies that are, or in the future may be, the basis for competitive
products in the field of cancer therapy or other products the Company intends
to develop. Some of those products may have an entirely different approach or
means of accomplishing the same desired effects as the products being developed
by the Company, such as gene transfer therapy, immunotherapy and photodynamic
therapy. There can be no assurance that the Company's competitors will not
succeed in developing technologies and products that are more effective, safer
or more affordable than those being developed by the Company.

Radiation therapy has been increasingly accepted as a complement to
chemotherapy in a multi-modality treatment of NSCLC. Further, a number of
organizations have developed new chemotherapeutic regimens that are under study
in late-stage clinical trials. To the best knowledge of the Company, however,
none of the foregoing is, and none of the new forms of non-surgical cancer
treatment currently

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under development appears to be, directly competitive with Sensamide(TM) or
Neu-Sensamide(TM) as a sensitizer that has entered Phase II/III study.

As the Company's products complement and enhance radiation therapy and
chemotherapy as applied to NSCLC, the Company believes that enhancements in
those treatments, particularly if they lead to their successful application,
could increase the market for the Company's products, although there can be no
assurance in this regard. Moreover, if the Company's products also complement
new cancer treating therapies, the use of these new therapies might also expand
the Company's market.

The Company expects that if any of its products gain regulatory approval
for sale they will compete primarily on the basis of product efficacy, safety,
patient convenience, reliability, price and patent position. The Company's
competitive position also will depend on its ability to attract and retain
qualified scientific and other personnel, develop effective proprietary
products and implement joint ventures or other alliances with large
pharmaceutical companies in order to jointly market and manufacture its
products.

Employees

The Company's policy has been, and continues to be, to maintain a
relatively small number of executives and other employees and to rely as much
as possible on consultants and independent contractors for its research and
clinical trials. As of August 30, 1996, the Company had eleven full-time
employees, of which seven were engaged in research and development and clinical
trial evaluations. Most of the Company's preclinical and clinical tests are
subcontracted and performed at the University of Lund, Sweden, and at other
European centers, with the assistance of CATO Research, Ltd., Durham, North
Carolina, an independent clinical research firm, IPC Nordic A/S, a Danish
pharmaceutical consulting firm, Charterhouse Ltd. The Royal Masonic Hospital, a
hospital in London, U.K. and ILEX Oncology Inc., a contract research
organization in Austin, Texas.

Properties

The Company subleases its executive offices in New York, New York,
currently at an annual rent of approximately $41,000. The lease expires on
December 31, 1996. The Company believes that it can readily find executive
office space suitable to its needs and at a reasonable cost should it be
required to do so. Recently, the Company opened an executive office in
Stockholm, Sweden, in anticipation of the listing of the SDSs on the Stockholm
Stock Exchange. The Stockholm office is subleased, at an annual rate of
approximately $25,000, under an arrangement that expires on September 1998. The
Stockholm office lease may be terminated at any time upon nine months written
notice. The Company also leases space at the Ideon Research Park in Lund,
Sweden. The lease expires on January 31, 1998, and the annual rent is
approximately $19,500. The Company does not own or lease any laboratories or
other research and development facilities.

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MANAGEMENT

Executive Officers and Directors

The executive officers and directors of the Company are as follows:

Name Age Position
- ---- --- --------

Bjorn Nordenvall, M.D., Ph.D..... 44 Chief Executive Officer, President and
Chairman of the Board of Directors

Claus Moller, M.D., Ph.D......... 34 Chief Medical Officer and a Director

Ronald W. Pero, Ph.D............. 55 Chief Scientific Officer and a Director

Marvin H. Caruthers.............. 56 Director

Michael Ionata................... 45 Director

Bo Haglund....................... 43 Chief Financial Officer

M. Andica Kunst.................. 35 Vice President and Corporate Secretary

Bjorn Nordenvall, M.D., Ph.D., 44, was appointed as a director in March 1995,
and became the Company's President and Chief Executive Officer in June 1995.
Dr. Nordenvall serves on the Company's Audit Committee. Dr. Nordenvall is a
specialist in general surgery and, from 1987 to September 1996, was President
of Sophiahemmet AB, a Stockholm-based hospital. During 1983 and 1984, Dr.
Nordenvall was President of Carnegie Medicine AB, Stockholm, Sweden, a
biotechnology company, and from 1977 through 1985, he practiced surgery at
Danderyd Hospital, Stockholm. From 1984 through 1986, Dr. Nordenvall served as
a consultant to D. Carnegie AB, a Swedish investment banking company, and,
since 1984, he has been a consultant to Skandia Insurance Company.

Claus Moller, M.D., Ph.D., 34, was appointed as a director in March 1995. Since
April 1, 1994, Dr. Moller has served as a consultant to the Company,
responsible for coordinating its European clinical trials. Dr. Moller is the
President and a principal shareholder of IPC Nordic A/S, a Danish consulting
firm. See "- Certain Relationships and Related Transactions." From 1989 to
1994, Dr. Moller was Medical Director for Synthelabo Scandinavia A/S and from
1983 to 1992, he was involved in cell biology and biomedical research at the
University of Copenhagen, Denmark.

Ronald W. Pero, Ph.D., 55, is a co-founder of OXiGENE, and has been a director
and the Company's Chief Scientific Officer since its inception. From November
1993 to June 1995, Dr. Pero also served as President of the Company. Dr. Pero
specializes in the field of DNA repair and its relation to cancer treatment,
and directs and coordinates the Company's research and development efforts. Dr.
Pero has been a fellow of the National Institute of Environmental Health
Sciences in Research Triangle Park, North Carolina, a director of the Division
of Biochemical Epidemiology at the Strang Cancer Prevention Center in New York
City, and currently holds faculty positions at both New York University Medical
Center and the University of Lund in Lund, Sweden, where he is a Professor of
Molecular Ecogenetics. Dr. Pero is also a member of the American Association of
Science, New York Academy of Sciences,

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International Preventive Oncology Society, European Society for Therapeutic
Radiation Oncology and The American Association of Cancer Research, as well as
serving as Scientific Director of the Board of Trustees of the Swedish American
Research Foundation. Dr. Pero has published more than 175 manuscripts related
to his research.

Marvin H. Caruthers, Ph.D., 56, was elected as a director at the Company's 1996
Annual Meeting of Stockholders, and serves on the Company's Compensation
Committee. Dr. Caruthers is a Professor of Chemistry and Biochemistry at the
University of Colorado, Boulder, Colorado, whose research in nucleic acid
chemistry resulted in new methods for the chemical synthesis of DNA. Dr.
Caruthers is a scientific co-founder of, and serves as a consultant to, Amgen
Incorporated, a biotechnology company engaged in the development of products
derived from gene synthesis capabilities, and is a scientific co-founder of
Applied Biosystems Incorporated, a biotechnology company engaged in the
development of DNA synthesizers and protein sequencers and a division of
Perkin/Elmer Inc. Dr. Caruthers also serves on the board of directors of
BioStar, Inc., a biotechnology company, and Skandigen AB, a Swedish
biotechnology company ("Skandigen"). Dr. Caruthers, who is a member of the
United States National Academy of Sciences and the American Academy of Arts and
Sciences, has published more than 140 manuscripts related to his research.

Michael Ionata, 45, was appointed as a director in October 1995, and serves as
Chairman of the Company's Compensation Committee. Mr. Ionata is Director of
Corporate Finance of Nordberg Capital Inc., an investment banking firm based in
New York, the directors, officers and key employees of which own, collectively,
72,800 shares of OXiGENE Common Stock. From May 1983 to May 1991, Mr. Ionata
worked in corporate finance and venture capital management at Den Norske Bank
in New York. Prior to joining Den Norske Bank, Mr. Ionata worked for Coopers &
Lybrand LLP specializing in valuations, cost-benefit analysis and
restructurings. Mr. Ionata is currently a director of C.E.L. Industries Poland,
a restaurant company, and was a director of Skandigen.

Bo Haglund, 43, was appointed Chief Financial Officer in August 1996. From
January 1992 to August 1996, Mr. Haglund was employed by Carnegie in various
capacities, most recently heading its London operations, focusing on the
marketing of Scandinavian and emerging market stock to U.K. investors. Prior to
joining Carnegie, from November 1990 to January 1992, Mr. Haglund was executive
vice president and chief financial officer of Swedish Exploration Consortium
AB, a Swedish publicly-traded company engaged in oil and gas exploration. From
January 1988 to October 1990, Mr. Haglund was vice president finance of Cool
Carriers AB and from April 1982 to December 1987, he was chief financial
officer of Gulf Agency Group.

M. Andica Kunst, 35, was appointed Vice President and Corporate Secretary in
July 1996. Ms. Kunst is responsible for the Company's legal and administrative
affairs. Prior to joining the Company, Ms. Kunst was an attorney with the New
York City law firm of Battle Fowler LLP, the Company's outside general counsel
in the United States. Ms. Kunst holds a LL.M. in Corporate Law from New York
University School of Law, a Masters in International Affairs from The George
Washington University and degrees in Dutch and International Law from the
University of Amsterdam, Amsterdam, The Netherlands.

Board of Directors Committees and Meetings

The Board of Directors has two standing committees: the Audit Committee
and the Compensation Committee. Currently, the Company has no Executive
Committee.

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The Audit Committee reviews, with the Company's independent auditors, the
scope and timing of their audit services and any other services they are asked
to perform, the auditor's report on the Company's financial statements
following completion of their audit and the Company's policies and procedures
with respect to internal accounting and financial controls. In addition, the
Audit Committee makes annual recommendations to the Board of Directors
regarding the appointment of independent auditors for the ensuing year. The
Audit Committee currently consists of Messrs. Nordenvall (Chairman) and Ionata.

The Compensation Committee reviews and makes recommendations to the Board
of Directors regarding the salaries, benefits and bonuses of the Company's
officers. In addition, the Compensation Committee reviews and advises on
general policy matters relating to employee compensation and benefit matters,
and administers the OXiGENE 1996 Stock Incentive Plan. The Compensation
Committee currently consists of Messrs. Ionata (Chairman) and Caruthers, the
Company's two non-employee directors.

Advisors to Board of Directors

Following the Company's 1996 Annual Meeting of Stockholders, Professor
Hans Wigzell and Dr. Peter Sjostrand were appointed as advisors to the Board of
Directors. In that capacity they attend meetings of, although they do not vote
on any matters submitted to, the Board of Directors for approval, and regularly
provide expertise and advice to the Company in several areas.

Peter Sjostrand, M.D., serves on the board of directors of Pharmavision
2000 AG, a publicly-traded Swiss investment company focusing on the health care
industry, and is the chairman of the board of directors of Trygg-Hansa, a
publicly-traded Swedish insurance company. From 1975 through 1993, Dr.
Sjostrand was employed by Astra AB, a publicly-traded Swedish pharmaceutical
company, most recently as its executive vice president and chief financial
officer. In addition to a medical degree from The Karolinska Institute, Dr.
Sjostrand holds a Bachelor degree in Economics from the Stockholm School of
Business.

Hans Wigzell, M.D., Ph.D., is Professor and Chairman of the Department of
Immunology at the Karolinska Institute, Stockholm, Sweden, one of the leading
medical research institutes in Europe. He is a member of the Nobel Committee
for the prize in medicine, of which he recently served as chairman. Professor
Wigzell currently is a member of the editorial board of several international
medical journals and has published more than 400 articles in the areas of tumor
biology, immunology, cell biology and infectious diseases. Professor Wigzell is
also the Chairman of the Company's Scientific Advisory Board.

Scientific Advisory Board

In August 1992, the Company established a Scientific Advisory Board, which
currently consists of nine members. The Scientific Advisory Board discusses on
a regular basis, and meets annually to evaluate the Company's research and
development projects. Members of the Scientific Advisory Board receive $500 per
meeting actually attended and are reimbursed for reasonable out-of-pocket
expenses. In addition, each member of the Scientific Advisory Board, with the
exception of Dr. Berglund, Professor Wigzell, Dr. Horsman and Dr. Chaplin, each
of whom joined the

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Scientific Advisory Board after its formation, has received warrants to
purchase 5,000 shares of Common Stock, at an exercise price of $1.95 per share,
expiring in May 1998, and options to purchase 2,500 shares of Common Stock, at
an exercise price of $7.25 per share, expiring in December, 2003. Prior to
establishment of the Scientific Advisory Board, certain of its members advised
the Company on certain projects. Certain members of the Scientific Advisory
Board also have other relationships with the Company, as described below.

Dr. Berglund, who joined the Scientific Advisory Board in December 1993,
received options to purchase a total of 5,000 shares of Common Stock,
exercisable at $7.25 per share, expiring in December 2003. Professor Wigzell,
who joined the Scientific Advisory Board on August 10, 1994, received stock
appreciation rights with respect to 30,000 shares of Common Stock, at a
reference price of $7.63 per share, expiring in August 2004. These stock
appreciation rights vest in three equal annual installments on each of August
1995, 1996, and 1997. In addition, Professor Wigzell receives cash compensation
of $10,000 per annum. Dr. Horsman, who joined the Scientific Advisory Board in
November 1994, received options to purchase 5,000 shares of Common Stock,
exercisable at $5.50 per share. Dr. Chaplin, who joined the Scientific Advisory
Board in May 1995, received options to purchase 30,000 shares of Common Stock,
at an exercise price of $5.375 per share, expiring in May 2005. These options
vest in three equal annual installments on each of May 30, 1996, 1997, and
1998. In addition, Dr. Chaplin receives cash compensation of $30,000 per annum.

The members of the Company's Scientific Advisory Board are:

Hans Wigzell, M.D., Ph.D., is Chairman of the Scientific Advisory Board.
His biography is listed above under the subcaption "- Advisors to Board of
Directors."

David J. Chaplin, Ph.D., is Head of the United Kingdom Cancer Research
Campaigns Tumour Microcirculation Group based at the Gray Laboratory, the Mount
Vernon Hospital, Middlesex, United Kingdom and an internal consultant to the
Company (see "Business-Research and Development and Collaborative
Arrangements"). The Gray Laboratory is one of the leading radiation biology
research laboratories in the world. Dr. Chaplin has published more than 100
papers in the area of chemical radiosensitizers and tumor biology.

Goran Berglund, M.D., Ph.D., is Professor of Medicine, Malmo General
Hospital, Vice Dean, Faculty of Medicine, Lund University, Sweden. Dr. Berglund
has published numerous articles, most recently on the biological bank and
biomarker program aspects of the Malmo Diet Study.

Michael Horsman, Ph.D., is Senior Scientist in the Danish Cancer
Societies' Department of Clinical Oncology in Aarhus, Denmark. Dr. Horsman has
published more than 100 papers on the chemical modification of radiation and
heat damage in tumors.

Myron Jacobson, Ph.D., is Professor and Chairman of the Division of
Medicinal Chemistry and Pharmaceuticals and a member of the Lucille Parker
Markey Cancer Center of the University of Kentucky. Dr. Jacobson has published
more than 100 papers in the area of biological responses to DNA damage. Dr.
Jacobson acts also as a consultant to the Company regarding certain technical
and clinical aspects of the Company's research and development program (see
"Business--Research and Development and Collaborative Arrangements").

Dick Killander, M.D., Ph.D., , is Professor and Chairman of the Department
of Oncology, University of Lund Hospital, Lund, Sweden. Dr. Killander serves on
the board of the Swedish Cancer Foundation, and has published more than 100
articles in the areas of quantitative cytochemistry and

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clinical oncology. Dr. Killander is the principal clinical investigator for the
Company's clinical trial that is currently in progress (see
"Business--Introduction").

Daniel G. Miller, M.D., is President of the Strang Cancer Prevention
Center, New York, New York, and has held several posts at Memorial
Sloan-Kettering Cancer Center and The New York Hospital-Cornell Medical Center
in New York, New York. Dr. Miller has been a cancer consultant to the World
Health Organization in Thailand and the Radiation Effects Research Foundation
in Hiroshima, Japan. He is the founder, and served as the first President, of
the American Society of Preventive Oncology.

Michael P. Osborne, M.D., is Director of Strang-Cornell Breast Center and
is an Attending Surgeon in the Department of Surgery at The New York
Hospital-Cornell Medical Center, both in New York, New York. Dr. Osborne has
published more than 100 articles on breast cancer.

Mark E. Smulson, Ph.D., is Professor of Biochemistry and Molecular
Biology, Georgetown University Medical Center, Washington, D.C., and heads that
University's Lombardi Cancer Center's Program of ADP-Ribosylation and DNA
Repair. Dr. Smulson has published approximately 100 papers and chapters on the
molecular biology aspects of the ADPRT gene.

Executive Compensation

During the fiscal year-ended December 31, 1995, the aggregate renumeration paid
to all officers and directors of the Company as a group (then six persons) was
approximately $707,000.

Option Holdings as of August 30, 1996

The following table sets forth, as of August 30, 1996, the number of
exercisable and unexercisable options held by each of the Company's executive
officers.

Number of Unexercised Options/Warrants at August 30, 1996

Name Exercisable Unexercisable

Bjorn Nordenvall 165,000 165,000

Claus Moller 58,333 46,667

Ronald W. Pero 260,000 0

Bo Haglund 0 30,000

M. Andica Kunst 0 30,000

Certain Relationships and Related Transactions

IPC Nordic Consulting Agreement. In August 1995, the Company
entered into a consulting agreement with IPC Nordic A/S, a company organized
under the laws of Denmark ("IPC") of which Dr. Claus Moller, a director and the
Chief Medical Officer of the Company, is the president and a principal

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shareholder. Pursuant to the agreement, IPC and Dr. Moller provide services
with respect to the Company's clinical trials and a possible future
compassionate use program in consideration of a monthly consulting fee of
Dkr.70,245 (approximately $11,970 based on an exchange rate of U.S.$0.1704 to
one Danish Krone).

Omentum Consulting Agreement. In October 1995, the Company entered into a
consulting agreement with B. Omentum Consulting AB, a company organized under
the laws of Sweden ("Omentum") of which Dr. Bjorn Nordenvall, a director and
the President and Chief Executive Officer of the Company, is the sole
shareholder. Pursuant to the agreement, the Company pays Omentum an annual
consulting fee of $50,000.

1996 Stock Incentive Plan

General. Certain directors, officers and employees of the Company and its
subsidiary and consultants and advisors thereto may be granted options to
purchase shares of Common Stock of the Company or stock appreciation rights
("SARs") under the 1996 Plan. The number of consultants, advisors, employees
and other service providers eligible to receive awards under the 1996 Plan is
not presently determinable.

A maximum of 1,000,000 shares of Common Stock may be made the subject of
options and SARs granted under the 1996 Plan. No employee may be granted
options or free-standing SARs with respect to more than 500,000 shares of
Common Stock. That number of shares may be adjusted in the event of certain
changes in the capitalization of the Company.

The 1996 Plan will be administered by a committee of at least two
directors (the "Committee"), each of whom will be "disinterested" within the
meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and an "outside director" within the meaning of
Section 162(m) of the Code. The Committee will have authority, subject to the
terms of the 1996 Plan, to determine when and to whom to make grants under the
plan, the number of shares to be covered by the grants, the types and terms of
options and SARs granted, the exercise price of the shares of Common Stock
covered by options and SARs and to prescribe, amend and rescind rules and
regulations relating to the 1996 Plan. Options granted to non-employee
directors are governed by the formula discussed below. Options granted under
the 1996 Plan may not be transferred to another person except by will or the
laws of descent and distribution.

Director Options. Directors who are not employees of the Company
("Nonemployee Directors") will be granted an option to purchase 55,000 shares
of Common Stock on the first business day following the annual meeting of
stockholders of the Company beginning with the 1996 Annual Meeting. Thereafter,
on the first business day following each successive annual meeting, so long as
shares remain available under the 1996 Plan, each Nonemployee Director who is
first elected as a director at such meeting shall be granted options in respect
of 55,000 shares. Each Nonemployee Director will receive options with respect
to no more than 55,000 shares of Common Stock. The per share exercise price
will be equal to the fair market value of a share of Common Stock on the date
the option is granted. Options granted to Nonemployee Directors will be
exercisable in five equal annual installments of 11,000 shares on each
anniversary of the date of grant. Options granted to Nonemployee Directors will
expire 10 years from the option grant date.

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<PAGE>

Employee Options. Under the terms of the 1996 Plan, "incentive stock
options" ("ISOs") within the meaning of Section 422 of the Code, "nonqualified
stock options" ("NQSOs") and SARs may be granted by the Committee to employees
of the Company and any of its affiliates and to consultants and service
providers to the Company or any present or future Affiliate Companies (as
defined in the 1996 Plan) (each a "Participant"), except that ISOs may be
granted only to employees of the Company and any of its subsidiaries. The per
share purchase price (the "Option Price") under each Option granted to a
Participant shall established by the Committee on the time the Option is
granted. However, the per share Option Price of an ISO granted to a Participant
shall not be less than 100% of the Fair Market Value of a share on the date the
ISO is granted (110% in the case of an ISO granted to a Ten-Percent
Stockholder). Participant Options will be exercised at such times and in such
installments as determined by the Committee. The Committee may accelerate the
exercisability of any Participant Option at any time. Each Option granted
pursuant to the 1996 Plan shall be for such term as determined by the
Committee, provided, however, that no Employee Option shall be exercisable
after the expiration of ten years from its grant date (five years in the case
of an ISO granted to a Ten-Percent Stockholder).

General Requirements. Options granted pursuant to the 1996 Plan generally
may not be exercised more than three months after the option holder ceases to
provide services to the Company or an affiliate, except that in the event of
the death or permanent and total disability of the option holder, the option
may be exercised by the holder (or the holder's estate, as the case may be),
for a period of up to one year after the date of death or permanent and total
disability. The agreements evidencing the grant of an option (other than an
option to a Nonemployee Director) may, in the sole and absolute discretion of
the Committee, set forth additional or different terms and conditions
applicable to such option upon a termination or change in status of the
employment or service of the optionee. Options terminate immediately if the
option holder's service was terminated for cause.

The shares purchased upon the exercise of an option are to be paid for in
cash (including cash that may be received from the Company at the time of
exercise as additional compensation) or through the delivery of other shares of
Common Stock with a value equal to the total Option Price or in a combination
of cash and such shares. In addition, the option holder may have the Option
Price paid by a broker or dealer and the shares issued upon exercise of the
option delivered directly to the broker or dealer.

Stock Appreciation Rights. The Committee also may grant SARs either alone
("Free Standing Rights") or in conjunction with all or part of an option
("Related Rights"). Upon the exercise of an SAR a holder is entitled, without
payment to the Company, to receive cash, shares of Common Stock or any
combination thereof, as determined by the Committee, in an amount equal to the
excess of the fair market value of one share of Common Stock over the exercise
price per share specified in the related option (or in the case of a Free
Standing Right, the price per share specified in such right), multiplied by the
number of shares of Common Stock in respect of which the SAR is exercised.

Amendment or Termination. The Board of Directors of the Company has the
power to terminate or amend the 1996 Plan at any time. If the Board of
Directors does not take action to earlier terminate the 1996 Plan, it will
terminate on March 11, 2006. Certain amendments may require the approval of the
Company's stockholders, and no amendment may adversely affect options that have
previously been granted.

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<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth the number of shares of Common Stock
beneficially owned, as of September 16, 1996 and as adjusted to give effect to
the Offering, by (i) each holder of more than 5% of the Common Stock, as
reported the Company by such holder on reports on Schedule 13D or Schedule 13G
under the Exchange Act, (ii) each of the Company's directors and executive
officers and (iii) the directors and executive officers of the Company as a
group. Unless otherwise noted, all shares are owned directly with sole voting
and dispositive powers.
<TABLE>
<CAPTION>
Beneficial Ownership(2)
---------------------------------------------------------------
Name(1) % of Total
No. of Shares Before Offering As Adjusted
------------- --------------- -----------
<S> <C> <C> <C>
Ronald W. Pero 690,000 (3) 8.73% 7.75%
Bjorn Nordenvall 380,000 (4) 4.86% 4.31%
Claus Moller 58,333 * *
Michael Ionata 5,000 (5) * *
Marvin H. Caruthers 1,500 (6) * *
Bo Haglund 0 * *
M. Andica Kunst 0 * *
Richard A. Brown 864,900 (7) 10.66% 9.49%
Morgan Grenfell Asset Management 698,000 9.13% 8.07%
Invesco PLC 464,400 6.07% 5.37%
All directors and executive
officers as a group (7 persons) 1,134,833 13.95% 12.42%
</TABLE>

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

* Indicates less than one percent.

(1) Each person listed in the table is a director or executive officer of the
Company, with an address at c/o OXiGENE, Inc., 110 E. 59th Street, New
York, NY 10022, except for Richard A. Brown, whose address is 17 Prospect
Hill Road, Box 1116, Stockbridge, MA 01262; Invesco PLC, which address is
11 Devonshire Square, London EC2M 4YR, England; and Morgan Grenfell Asset
Management Limited, which address is 20 Finsbury Circus, London EC2M 1NB,
England.
(2) Includes the following shares which are purchasable under options and
warrants that are presently exercisable or exercisable within 60 days of
the date of this table: Dr. Pero - 260,000 shares; Dr. Nordenvall -
165,000 shares; Dr. Moller - 58,333 shares; Mr. Ionata - 5,000 shares; and
Mr. Brown 465,000 shares.
(3) Includes 70,588 shares held by a trust for the benefit of Dr. Pero's
children, and 120,588 shares held by The Ronald Pero Charitable Remainder
Unitrust, a trust of which Dr. Pero is the trustee.
(4) Includes 1,000 shares held by his spouse as to which Dr. Nordenvall
disclaims beneficial ownership; 142,700 held by a corporation organized
and the laws of Sweden of which Dr. Nordenvall is the sole stockholder;
and 71,300 shares held through a capital insurance placed by Dr.
Nordenvall.
(5) Options are held by Nordberg Capital Inc., a New York investment banking
firm, of which Mr. Ionata is Director of Corporate Finance and the
directors, officers and key employees of which own, collectively, 72,800
shares of OXiGENE Common Stock.
(6) Includes 1,000 shares held by spouse in trust for children, as to which
Professor Caruthers disclaims beneficial ownership.
(7) Includes 20,000 shares held for the benefit of his minor child.

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<PAGE>

DESCRIPTION OF SECURITIES

Introduction

On August 26, 1993, OXiGENE completed an initial public offering of
1,605,000 units, each unit consisting of one share of common stock, par value
$.01 per share ("Common Stock"), and one warrant ("Public Warrants") to
purchase an additional share of Common Stock. The Common Stock and the Public
Warrants are traded on the Nasdaq SmallCap System under the symbols "OXGN" and
"OXGNW," respectively. See "Market Data."

Common Stock

The Company is authorized to issue 15,000,000 shares of Common Stock. At
the 1996 Annual Meeting of Stockholders, the Company's stockholders approved an
amendment to the Company's Amended and Restated Certificate of Incorporation,
increasing the number of authorized shares of Common Stock from 15 million to
60 million shares. No amendment to the Company's Amended and Restated
Certificate of Incorporation has been filed to date. On August 30, 1996,
7,645,508 shares of Common Stock were outstanding. The holders of Common Stock
are entitled to one vote for each share held of record on all matters to be
voted on by stockholders. There is no cumulative voting with respect to the
election of directors. As a consequence, the holders of more than 50% of the
shares voting for the election of directors can elect all the directors. The
By-Laws provide that only a majority of the issued and outstanding shares of
Common Stock need to be represented for a quorum, and to transact business at a
stockholders' meeting. The holders of Common Stock are entitled to receive
dividends when, as and if declared by the Board of Directors out of the funds
legally available therefor. The Company has no present plans to pay dividends
with respect to the shares of Common Stock. In the event of liquidation,
dissolution or the winding up of the Company, the holders of Common Stock are
entitled to share ratably in all assets remaining available for distribution
after payment of liabilities and after provision has been made for each class
of stock, if any, having preference over the Common Stock. Holders of shares of
Common Stock, as such, have no conversion, preemptive or other subscription
rights, and there are no redemption provisions applicable to the Common Stock.
All the outstanding shares of Common Stock are, and the Shares offered hereby
when issued against payment therefor, will be, validly authorized and issued,
fully paid and nonassessable.

Public Warrants

The Public Warrants were issued pursuant to a Warrant Agreement between
the Company and American Stock Transfer Company, as a warrant agent, and are in
registered form. Currently, each of the Public Warrants entitles the registered
holder thereof to purchase 1.07 shares of Common Stock, at a price of $12.35
per share (the "Exercise Price"), which Exercise Price shall be increased by
$2.00 on August 26, 1997. Unless exercised, the Public Warrants will
automatically expire on the close of business on August 26, 1998. On August 30,
1996, an aggregate of 1,193,241 Public Warrants remained outstanding.

The holders of the Public Warrants have certain anti-dilution protection
upon the occurrence of certain events, including stock dividends, stock splits,
mergers and reclassifications. The holders of the Public Warrants have no right
to vote on matters submitted to the stockholders of the Company, have no right
to receive dividends, and have none of the other rights conferred upon
stockholders of the

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<PAGE>

Company. The holders of the Public Warrants are not entitled to share in the
assets of the Company in the event of liquidation, dissolution or the winding
up of the Company's affairs.

UNDERWRITING

Each of the underwriters named below (the "Underwriters"), for whom
D. Carnegie AB is acting as representative (the "Representative"), has
severally agreed, subject to the terms and conditions of the underwriting
agreement, dated ________, 1996, between the Company and the Underwriters (the
"Underwriting Agreement"), to purchase from the Company the aggregate number of
Shares set forth opposite its name below:

Underwriter Number of
Shares

D. Carnegie AB..................
Nordberg Capital Inc. ..........

Total......................... 1,000,000
=========

The Underwriting Agreement provides that the obligations of the
Underwriters to purchase the Shares listed above are subject to certain
conditions precedent, including the approval of certain legal matters by
counsel. The Underwriting Agreement also provides that the Underwriters are
committed to purchase all of the Shares if any are purchased.

Concurrently, and in connection with, this Offering, the Company is
offering 1,000,000 Shares in the form of Swedish Depository Shares ("SDSs") for
sale to the public in Sweden and in certain other countries outside the United
States. ("Bank") will serve as Custodian for the SDSs pursuant to a Custody
Agreement between the Bank, as Custodian, and the Company. The Shares will,
upon receipt of payment for Shares by the Company, be delivered to the Bank to
be held in custody pursuant to the Custody Agreement. In accordance with
Swedish practice, following this Offering persons who own SDSs may trade in
those SDSs in Sweden, as well as in any other markets in which trading in such
SDSs is permitted, and may also exchange SDSs for Shares and trade in such
Shares in Sweden, in a private transaction not transacted on the Stockholm
Stock Exchange, and the United States. Further, following this Offering,
persons who own shares of Common Stock of the Company will be able to exchange
them for SDSs that can be traded in those markets in which such trading is
permitted. As a result of, and subject to, the foregoing, a trading market for
shares of Common Stock of the Company, as well as for SDSs, may arise in
Sweden. A more complete description of the SDSs and the terms and conditions of
the initial public offering and Custodian arrangements regarding them are
contained in a Swedish Prospectus of which this Prospectus is a part.

The Underwriters have advised the Company that the Underwriters propose to
offer the Shares in the form of SDSs directly to the public at the public
offering price set forth on the cover page of this Prospectus, and to certain
dealers at such price less a concession not in excess of $ per share. The
Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per share to certain other dealers. After the commencement of the
public offering, the offering price and other selling terms may be changed by
the Representative.

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400608.6

<PAGE>

Mr. Michael Ionata, a director of the Company, is Director of Corporate
Finance of Nordberg Capital Inc., one of the Underwriters.

LEGAL MATTERS

The validity of the Shares has been passed upon by Battle Fowler LLP, New
York, New York, a limited liability partnership including professional
corporations.

EXPERTS

The consolidated financial statements of the Company at December 31, 1995
and 1994, and for each of the three years in the period ended December 31,
1995, appearing in this Prospectus and Registration Statement have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein, and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.

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<PAGE>

GLOSSARY OF SCIENTIFIC TERMS

ADPRT Adenosine Diphosphate Ribosyl Transferase - an
enzyme involved in the DNA repair process

Anti-emetic A drug which controls nausea and vomiting

Apoptosis A natural programmed cell death not involving
cell replication

CD4 cell counts A sub-set of white blood cells directly
involved in the natural protection against
diseases

CGLP standards Current good laboratory practice standards
required for regulatory affairs

Chemotheraphy Drugs that control cancer growth

Cisplatin A chemotherapeutic compound

Control group A group of patients involved in a clinical
trial who are receiving placebos

Cross-over study A study in which each patient receives all
treatments singly, but at different times of
the study

Cytotoxic agent Tumor-killing agent

DNA Chemical building blocks of genetic material

Double-blind study A study in which neither the investigators
assessing the outcome of the trial nor the
patients know whether the patient is receiving
the drug being investigated or merely a
placebo. The outcome can only be determined
when the results are decoded

Enzyme A protein that carries out a metabolic function
by converting one substance to another

Genetic blueprint The code that tells cells what to do and how to
function

Genetic lesions Damage to the DNA or in the genetic blueprint

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<PAGE>

i.m. Intramuscular

Immune deficiencies Suppression of the cells that fight disease
within the body

IND An "Investigational New Drug" application filed
with the U.S. Food and Drug Administration that
permits the administration of compounds to
humans in clinical trials

In vivo-exposed spleen and cell Spleen cells are exposed in the animal then
taken out for testing

Isozyme One of several forms of the same enzyme

i.v. Intraveneous

Malignant cell Cancer cell

Metabolic function Living process of growth and reproduction

NDA A "New Drug Application" filed with the U.S.
Food and Drug Administration, which, if
approved, allows a drug to be marketed in the
U.S.

Necrosis Cell death by decomposition after replication

N-substituted benzamide Class of drugs believed by OXiGENE to
sensitize radiation and chemotheraphy

Nucleotides A class of nucleic acid compounds from which
genes are constructed

Oxidative stress Undesired natural metabolism of oxygen-derived
molecules by the body that can induce DNA
damage

Placebo A non-active substance given to a control group
of patients in a clinical trial to duplicate
the treatment method, but without the
administration of the active drug under
investigation

Radiation Physical energy that splits molecules and
induces DNA damage

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<PAGE>

Sensitization The process that renders a tumor more
susceptible to damage by radiation or
chemotherapy

Serum thiol level The level of compounds in serum that react with
oxidative stress

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<PAGE>

Appendix I

The following sets forth additional information regarding the Company's
clinical trials. This information is qualified in its entirety and should be
read in conjunction with the information contained elsewhere in this
Prospectus.

Clinical Study - Sensamide(TM) in NSCLC, Phase I/II

This open label, historically controlled trial, assessing the safety of
Sensamide(TM) when used in combination with radiotherapy, was conducted at the
Department of Oncology, University Hospital in Lund, Sweden. A total of 23 with
NSCLC, 21 male and 2 female, varying in age from 52 to 81 years, were enrolled
in this study. All patients were treated with radiation and received
Sensamide(TM) intravenously. Radiation was administered five days per week for
six weeks. Eighteen patients completed the study as planned. Complete or
partial remission, as defined by World Health Organization criteria, was
achieved in 50 percent of the patients.

The majority of patients enrolled in this study experienced no unexpected
side effects associated with the administration of Sensamide(TM). There was no
evidence of increased radiation-associated toxicity to skin, lung, cardiac or
esophageal tissues in the majority of patients. None of the patients had their
treatment interrupted due to radiotherapy-associated toxicity.

Adverse events associated with Sensamide(TM) were mainly CNS-related
(central nervous system-related) and were comparable to those resulting from
anti-emetic metoclopramide therapy. Eighteen patients (78 percent) experienced
sedation or tiredness and 11 patients (48 percent) experienced anxiety and
restlessness. Depression, insomnia and other CNS-related reactions were
experienced by two patients each. Akineton, a drug used to treat the side
effects induced by Sensamide(TM), was administered to 44 percent of the
patients to relieve those side effects. Five of the 23 enrolled patients
dropped out of the study due to Sensamide(TM)-associated adverse CNS-effects.
The occurrence of sedation or tiredness and the total occurrence of
Sensamide(TM)- associated adverse CNS effects was significantly greater in
patients receiving a total dose of metoclopramide greater than 2,000 mg, as
compared to patients receiving less than 2,000 mg during the whole course of
the therapy.

A preliminary assessment of the efficacy of Sensamide(TM) as adjunct
therapy to radiation in patients with NSCLC is based on the results of this
study. The assessment includes the determination of tumor response and
survival. Of the 23 involved in the study, one could not be evaluated due to
death prior to the first follow-up examination. Of the remaining patients,
complete response was recorded in 9 percent of the patients, partial response
in 41 percent, stable disease in 41 percent and progressive disease in 9
percent. The mean duration of tumor response in these patients was 10.8 +/- 8.5
months. The mean and median survival time of patients treated with
Sensamide(TM) plus radiation was approximately 15.3 months and 12.8 months,
respectively. This survival time is longer than that reported in the literature
for patients with severe NSCLC who received radiation only. Eleven historical
control patients with inoperable NSCLC treated in Lund had a mean and median
survival of 7.0 and 5.0 months, respectively. Mean survival time correlated
significantly with the total dose of Sensamide(TM) administered. Complete or
partial responders who had a mean survival time of 22.1 +/- 3.9 months (mean +
standard error) received an average total dose of 2,272 + 543 mg (mean +
standard deviation) of Sensamide(TM). In contrast, non-responders who received
an average total dose of 1,579 + 571 mg (mean +/- standard deviation) of
Sensamide(TM) had a mean survival time of 12.6 +/- 2.4 months (mean + standard
deviation).

400608.6
A-1

<PAGE>

Clinical Study - Sensamide(TM) in NSCLC, Phase II/III

This study was initiated by OXiGENE in the middle of 1994 in Scandinavia
and later expanded to include Germany and the United Kingdom (the "U.K."). The
purpose of this Phase II/III multicenter, randomized, controlled trial is to
assess the safety, tolerance and efficacy of Sensamide(TM) (2 mg/kg i.v.,
delivered one hour prior to radiation) as adjunct treatment to radiation as
compared to radiation only in the treatment of 226 patients with NSCLC.
Patients receive radiation five times per week and Sensamide(TM) three times
per week for six and one half weeks. Currently, approximately 180 patients have
been recruited. At the current recruitment rate, patient recruitment is
expected to be completed by the end of 1996.

Clinical Study - Sensamide(TM) i.v., Neu-Sensamide(TM) i.m./i.v., Phase I

The primary objective of this randomized cross-over study, conducted at
Guilford Clinical Pharmacology Unit in the U.K., was to assess the safety of
single, radiosensitizing doses (2 mg/kg) of Neu-Sensamide(TM) when administered
as an i.m. injection or as an i.v. infusion compared with an i.v. dose of
Sensamide(TM) or an i.m. placebo injection. The secondary objective was to
compare the pharmacokinetics of Neu-Sensamide(TM) when administered as a single
i.m. injection or i.v. infusion with that of i.v. infused Sensamide(TM).

The difference between Neu-Sensamide(TM) and Sensamide(TM) is a changed
formulation, resulting in two different conformational forms of metoclopramide.
Thus Sensamide(TM) is acidic (pH of around 2.5-3.8) like any traditional
metoclopramide suspension whereas Neu-Sensamide(TM) is phosphate buffered and
neutralized with a pH of around 6.7.

Eleven healthy volunteers, varying in age from 53 to 63 years, completed
the study. The results revealed a safety profile of Neu-Sensamide(TM) i.m.
similar to that of Sensamide(TM) i.v. However, Sensamide(TM) i.v. impaired
cognition to a larger extent than Neu-Sensamide(TM), both i.v. and i.m. In
addition, adverse events were less frequent and of shorter duration with
Neu-Sensamide(TM), both i.v. and i.m., than with Sensamide(TM) i.v.
Bioavailability of Neu-Sensamide(TM) i.m. was comparable to that of
Neu-Sensamide(TM) i v. and Sensamide(TM) i.v. Local tolerability of Neu-
Sensamide(TM) i.m. was comparable to that of placebo i.m.

Nineteen healthy volunteers participated in this study. One was withdrawn
due to non-compliance with the protocol, 7 volunteers dropped out due to
adverse effects, and 11 volunteers completed the study. During the 53 treatment
sequences of those patients that completed the study, a total of 93 adverse
effects were reported; 37 after Sensamide(TM) i.v., 24 after Neu-Sensamide(TM)
i.v., 25 after Neu-Sensamide(TM) i.m., and 7 after the placebo. No unexpected
adverse effects associated with either Sensamide(TM) or Neu-Sensamide(TM)
occurred throughout the study. Thus, adverse effects occurred significantly
less frequently in volunteers receiving Neu-Sensamide(TM) than in those
receiving Sensamide(TM).

No differences in pharmacokinetics could be detected in the study, apart
from, as expected, in the peak plasma concentration between Neu- Sensamide(TM)
i.m. and Sensamide(TM)/Neu- Sensamide(TM) i.v.

Clinical Study - Neu-Sensamide(TM) in NSCLC, Phase III

This Phase III study has been planned on the basis of the results of the
Phase I study described above, and is based on the design of the ongoing,
controlled Phase II/III with Sensamide(TM) in NSCLC.

400608.6

A-2

<PAGE>

This randomized, multi-center, controlled Phase III study will assess the
safety, tolerance and efficacy of Neu-Sensamide(TM) as a radiosensitizing agent
compared to radiotherapy only for the treatment of NSCLC. Patients who satisfy
the inclusion criteria and who are appropriate for treatment with 60 Gray
radiation will be enrolled into the study. Patients will be randomized to
receive either radiotherapy only or radiation plus Neu-Sensamide(TM) (2 mg/kg
i.m.).

The study is expected to start in the fourth quarter of 1996 and will
involve about 20 U.S. and European oncology centers. Patients will undergo a
45-day treatment period. Adverse effects, vital signs and laboratory values
will be monitored periodically for safety evaluation. During the post-treatment
follow-up period, patients will be followed for 1.5 years. The primary efficacy
parameters will be duration of tumor response and survival.

Clinical Study - Neu-Sensamide(TM) in Glioblastomas, Phase I/II

This study will assess the safety and tolerability of Neu-Sensamide(TM) as
a radiosensitizing agent in patients receiving a six-week treatment of 54 Gray
of radiotherapy, following operative biopsy, subtotal or macroscopical total
excision of their glioblastoma multiforme. The study is designed as a
single-center, open-label, dose escalation study. The patients will be assigned
in a consecutive manner to receive escalating doses of Neu-Sensamide(TM) from 2
to 8 mg/kg i.m. All patients will receive their study medication one hour prior
to the administration of each fraction of radiotherapy. A total of up to 15
consecutive patients will be recruited. Patients will be treated in groups of
three with increasing doses of Neu-Sensamide(TM). The post-treatment review of
the patients will be conducted at weeks 4, 8, 12, 24, 36 and 48. Patient
enrollment commenced in August 1996 and will continue into 1997.

The primary safety parameter will be the incidence of signs and symptoms
of CNS toxicity, such as neurological reactions, psychological reactions,
restlessness/insomnia, sedation and convulsions. Secondary parameters will
include the incidence of other adverse effects and significant laboratory value
changes during and after treatment. In addition, tumor response evaluations
will be performed. If the results of the Oxi-104 study so warrant, OXiGENE
intends to initiate a large controlled Phase III study in patients with
glioblastomas.

Clinical Study - Oxi-104, Phase I

The Company currently anticipates commencing a Phase I clinical test of
Oxi-104 after the filing of an IND with the U.S. Food and Drug Administration
in the second quarter of 1997. Based on preliminary results, OXiGENE believes
it can demonstrate that Oxi-104 alone can induce tumor growth-inhibiting and
tumor-killing effects.

Non-GLP (non-good laboratory practices) toxicology studies have indicated
the safety of Oxi-104 in doses five to ten times higher than the maximum doses
needed for obtaining optimal anti-cancer effects. In vivo and in vitro animal
studies have demonstrated that Oxi-104 can sensitize and induce a one to eight
fold increase in the effect of established chemotherapeutic agents such as
cisplatin, gemcitabine, bleomycin, ara-C and melphalan.

400608.6

A-3

<PAGE>

OXiGENE, Inc.
(A development stage company)

Index to Financial Statements

Annual Financial Statements:

Report of Independent Auditors....................................... F-2
Consolidated Balance Sheets--December 31, 1995 and 1994.............. F-3
Consolidated Statements of Operations--Years ended
December 31, 1995, 1994, 1993 and the Period from
February 22, 1988 (inception) through December 31, 1995
(unaudited)....................................................... F-4
Consolidated Statements of Stockholders' Equity (Deficit)--
Years ended December 31, 1995, 1994, 1993, 1992, 1991,
1990, 1989 (unaudited) and the Period from
February 22 (inception) through December 31, 1988 (unaudited)..... F-5
Consolidated Statements of Cash Flows--Years ended December 31,
1995, 1994, 1993 and the Period from February 22, 1988
(inception) through December 31, 1995 (unaudited)................. F-7
Notes to Consolidated Financial Statements........................... F-9

Unaudited Interim Financial Statements:

Consolidated Balance Sheet--June 30, 1996........................... F-23
Consolidated Statements of Operations--Six
Months ended June 30, 1995 and 1996 and the Period
from February 22, 1988 (inception) through June 30, 1996.......... F-24
Consolidated Statements of Cash Flows--Six
Months ended June 30, 1995 and 1996 and the Period
from February 22, 1988 (inception) through June 30, 1996.......... F-25

Schedules for which provision is made in the applicable accounting regulation
of the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and, therefore, have been omitted.

<PAGE>

Report of Independent Auditors

The Board of Directors and Stockholders
OXiGENE, Inc.

We have audited the accompanying consolidated balance sheets of OXiGENE, Inc.
(the "Company") (a development stage company) as of December 31, 1995 and 1994,
and the related consolidated statements of operations, stockholders' equity
(deficit), and cash flows for each of the three years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of OXiGENE, Inc. (a
development stage company) at December 31, 1995 and 1994, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1995 in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP
New York, New York
February 27, 1996

F-2
<PAGE>

<TABLE>
<CAPTION>
OXiGENE, Inc.
(A development stage company)

Consolidated Balance Sheets

December 31
1994 1995
-------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,193,999 $ 10,406,605
Securities available-for-sale (Note 2) 3,291,128 502,020
Prepaid expenses 207,967 50,180
Interest receivable 44,955 202,164
Other - 19,132
-------------------------------------------
Total current assets 4,738,049 11,180,101

Furniture, fixtures and equipment, at cost 33,598 62,087
Accumulated depreciation 10,296 24,537
-------------------------------------------
23,302 37,550
Deposits 9,600 9,600
-------------------------------------------
Total assets $ 4,770,951 $ 11,227,251
===========================================

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses:
Due to CATO Research, Ltd. (Note 6) $ 122,109 $ 133,734
Accrued expenses 45,900 259,301
Accrued stock appreciation rights - 223,095
Other payables 122,960 53,947
-------------------------------------------
Total current liabilities 290,969 670,077

Commitments (Note 5)

Stockholders' equity (Note 3):
Common stock, $.01 par value:
Authorized shares--
10,000,000 shares at December 31, 1994
15,000,000 shares at December 31, 1995
Issued and outstanding shares--
5,058,100 shares at December 31, 1994
6,823,300 shares at December 31, 1995 50,581 68,233
Common stock subscribed - 50
Additional paid-in capital 12,188,565 21,864,364
Deficit accumulated during the development stage (7,682,039) (11,399,874)
Foreign currency translation adjustment - 24,894
Unrealized losses on securities available-for-sale (77,125) (493)
-------------------------------------------
Total stockholders' equity 4,479,982 10,557,174
-------------------------------------------
Total liabilities and stockholders' equity $ 4,770,951 $ 11,227,251
===========================================
See accompanying notes.
</TABLE>

F-3
<PAGE>
<TABLE>

OXiGENE, Inc.
(A development stage company)

Consolidated Statements of Operations

<CAPTION>
Period from
February 22, 1988
(inception) through
Year ended December 31 December 31,

1993 1994 1995 1995
----------------------------------------------------------------------
(Unaudited)

<S> <C> <C> <C> <C>
Revenues
Research income $ - $ - $ - $ 31,000
Interest income 50,897 265,440 420,949 747,241
----------------------------------------------------------------------
50,897 265,440 420,949 778,241

Operating expenses
Research and development:
CATO Research, Ltd. (Note 6) 468,083 608,337 739,994 2,465,223
Other 411,112 1,156,125 2,103,599 4,604,537
----------------------------------------------------------------------
Total research and development 879,195 1,764,462 2,843,593 7,069,760
General and administrative 1,191,714 1,340,737 1,295,191 5,108,355
----------------------------------------------------------------------
Total operating expenses 2,070,909 3,105,199 4,138,784 12,178,115
----------------------------------------------------------------------
Net loss $ (2,020,012) $ (2,839,759) $ (3,717,835) $ (11,399,874)
======================================================================

Net loss per common share $ (0.50) $ (.56) $ (.63)
Weighted average number of
common shares outstanding 4,026,456 5,037,278 5,876,295

</TABLE>

See accompanying notes.

F-4

<PAGE>

OXiGENE, Inc.
(A development stage company)
Statements of Stockholders' Equity (Deficit)
(Note 2)

Deficit
Accumulated
Common Stock, Additional During the
$.01 Par Value Common Stock Subscribed Paid-In Development
Date Shares Amounts Shares Amount Capital Stage
-------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of common stock in exchange
for transfer of patent application
ownership to the Company by an
officer/director recorded at no
value, which reflects transferor's
basis (unaudited) May 1988 380,000 $3,800 - $ - $ (3,800) $ -
Issuance of common stock at
approximately $0.74 per share
(unaudited) June 1988 271,033 2,710 - - 197,290 -
Issuance of common stock in exchange
for the outstanding common stock of
Bio-Screen Inc. (unaudited) August 1988 100,000 1,000 - - (1,000) -
Net loss for period from February 22,
1988 (inception) through December
31, 1988 (unaudited) - - - - - (185,962)
---------------------------------------------------------------------------
Balance at December 31, 1988 (unaudited) 751,033 7,510 - - 192,490 (185,962)
Issuance of common stock at
approximately $0.74 per share
(unaudited) January 1989 271,033 2,710 - - 197,290 -
Net loss for 1989 (unaudited) - - - - - (179,119)
---------------------------------------------------------------------------
Balance at December 31, 1989 (unaudited) 1,022,066 10,220 - - 389,780 (365,081)
Issuance of common stock at March 1990 to
approximately $0.74 per share December 1990 257,487 2,575 - - 187,425 -
Common stock subscribed December 1990 - - 13,547 10,000 - -
Net loss for 1990 - - - - - (326,648)
---------------------------------------------------------------------------
Balance at December 31, 1990 1,279,553 12,795 13,547 10,000 577,205 (691,729)
Issuance of common stock at
approximately $0.74 per share January 1991 13,547 136 (13,547) (10,000) 9,864 -
Issuance of common stock at $0.71 per
share February 1991 330,000 3,300 - - 230,033 -
Issuance of common stock at
approximately $1.50 per share August 1991 100,000 1,000 - - 149,000 -
Issuance of common stock at $1.95 per
share December 1991 220,000 2,200 - - 426,800 -
Net loss for 1991 - - - - - (501,872)
---------------------------------------------------------------------------
Balance at December 31, 1991 1,943,100 19,431 - - 1,392,902 (1,193,601)
Issuance of common stock at $1.95 per
share, net of issuance costs of
approximately $121,000 December 1992 985,000 9,850 - - 1,789,866 -
Net loss for 1992 - - - - - (1,628,667)
---------------------------------------------------------------------------
Balance at December 31, 1992 2,928,100 29,281 - - 3,182,768 (2,822,268)
</TABLE>

Unrealized
Foreign Stock Losses on Total
Currency Subscription Securities Stockholders'
Translation and Notes Available for Equity
Date Adjustment Receivable Sale (Deficit)
-------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Issuance of common stock in exchange
for transfer of patent application
ownership to the Company by an
officer/director recorded at no
value, which reflects transferor's
basis (unaudited) May 1988 $ - $ - $ - $ -
Issuance of common stock at
approximately $0.74 per share
(unaudited) June 1988 - - - 200,000
Issuance of common stock in exchange
for the outstanding common stock of -
Bio-Screen Inc. (unaudited) August 1988 - - -
Net loss for period from February 22,
1988 (inception) through December -
31, 1988 (unaudited) - - (185,962)
----------------------------------------------------------
Balance at December 31, 1988 (unaudited) - - - 14,038
Issuance of common stock at
approximately $0.74 per share
(unaudited) January 1989 - - - 200,000
Net loss for 1989 (unaudited) - - - (179,119)
----------------------------------------------------------
Balance at December 31, 1989 (unaudited) - - - 34,919
Issuance of common stock at March 1990 to
approximately $0.74 per share December 1990 - - - 190,000
Common stock subscribed December 1990 - (10,000) - -
Net loss for 1990 - - - (326,648)
----------------------------------------------------------
Balance at December 31, 1990 - (10,000) - (101,729)
Issuance of common stock at
approximately $0.74 per share January 1991 - 10,000 - 10,000
Issuance of common stock at $0.71 per
share February 1991 - - - 233,333
Issuance of common stock at
approximately $1.50 per share August 1991 - - - 150,000
Issuance of common stock at $1.95 per
share December 1991 - - - 429,000
Net loss for 1991 - - - (501,872)
----------------------------------------------------------
Balance at December 31, 1991 - - - 218,732
Issuance of common stock at $1.95 per
share, net of issuance costs of
approximately $121,000 December 1992 - (360,750) - 1,438,966
Net loss for 1992 - - - (1,628,667)
----------------------------------------------------------
Balance at December 31, 1992 - (360,750) - 29,031
</TABLE>

F-5
<PAGE>

OXiGENE, Inc.
(A development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)

<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock, Additional During the
$.01 Par Value Common Stock Subscribed Paid-In Development
Date Shares Amounts Shares Amount Capital Stage
-------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of common stock at $1.95 per
share, net of issuance costs of January 1993 to
approximately $136,500 February 1993 445,000 $4,450 - $ - $ 726,800 $ -

Repayment of notes receivable January 1993 - - - - - -
Issuance of warrants and options as
compensation to certain directors to
purchase 180,000 and 10,000 shares
of common stock, respectively, at
$1.95 per share May 1993 - - - - 427,500 -
Issuance of common stock at $6.00 per
share, net of issuance costs of
approximately $1,836,000 September 1993 1,500,000 15,000 - - 7,149,247 -
Issuance of common stock at $6.00 per
share, net of issuance costs of
approximately $82,000 October 1993 105,000 1,050 - - 547,050 -
Net loss for 1993 - - - - - (2,020,012)
---------------------------------------------------------------------------
Balance at December 31, 1993 4,978,100 49,781 - - 12,033,365 (4,842,280)
Issuance of common stock at $1.95 per
share April 1994 80,000 800 - - 155,200 -
Net loss for 1994 - - - - - (2,839,759)
Unrealized losses on securities
available-for-sale - - - - - -
---------------------------------------------------------------------------
Balance at December 31, 1994 5,058,100 50,581 - - 12,188,565 (7,682,039)
Issuance of options as compensation
to consultants to purchase 165,000
shares of common stock at $6.00
per share June 1995 - - - - 20,625 -
Issuance of common stock at $6.00
per share, net of issuance costs
of approximately $524,000 July 1995 1,666,700 16,667 - - 9,460,009 -
Issuance of common stock at $1.50
per share (12,500) and $1.95 per July 1995 to
share (86,000) December 1995 98,500 985 - - 185,465 -
Subscriptions for 5,000 shares of
common stock at $1.95 per share December 1995 - - 5,000 50 9,700 -
Foreign currency translation
adjustment for 1995 - - - - - -
Net loss for 1995 - - - - - (3,717,835)
Unrealized gain on securities
available-for-sale - - - - - -
---------------------------------------------------------------------------
Balance at December 31, 1995 6,823,300 $68,233 5,000 $ 50 $21,864,364 $(11,399,874)
===========================================================================
</TABLE>

<TABLE>
<CAPTION>
Unrealized
Foreign Stock Losses on Total
Currency Subscription Securities Stockholders'
Translation and Notes Available For Equity
Date Adjustment Receivable Sale (Deficit)
-------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Issuance of common stock at $1.95 per
share, net of issuance costs of January 1993 to
approximately $136,500 February 1993 $ $ - $ - $ 731,250
-
Repayment of notes receivable January 1993 - 360,750 - 360,750
Issuance of warrants and options as
compensation to certain directors to
purchase 180,000 and 10,000 shares
of common stock, respectively, at
$1.95 per share May 1993 - - - 427,500
Issuance of common stock at $6.00 per
share, net of issuance costs of
approximately $1,836,000 September 1993 - - - 7,164,247
Issuance of common stock at $6.00 per
share, net of issuance costs of
approximately $82,000 October 1993 - - - 548,100
Net loss for 1993 - - - (2,020,012)
----------------------------------------------------------
Balance at December 31, 1993 - - - 7,240,866
Issuance of common stock at $1.95 per
share April 1994 - - - 156,000
Net loss for 1994 - - - (2,839,759)
Unrealized losses on securities
available-for-sale - - (77,125) (77,125)
----------------------------------------------------------
Balance at December 31, 1994 - - (77,125) 4,479,982
Issuance of options as compensation
to consultants to purchase 165,000
shares of common stock at $6.00
per share June 1995 - - - 20,625
Issuance of common stock at $6.00
per share, net of issuance costs
of approximately $524,000 July 1995 - - - 9,476,676
Issuance of common stock at $1.50
per share (12,500) and $1.95 per July 1995 to
share (86,000) December 1995 - - - 186,450
Subscriptions for 5,000 shares of
common stock at $1.95 per share December 1995 - - - 9,750
Foreign currency translation
adjustment for 1995 24,894 - - 24,894
Net loss for 1995 - - - (3,717,835)
Unrealized gain on securities
available-for-sale - - 76,632 76,632
----------------------------------------------------------
Balance at December 31, 1995 $ 24,894 $ - $ (493) $10,557,174
==========================================================
</TABLE>

See accompanying notes.

F-6
<PAGE>
<TABLE>
<CAPTION>
OXiGENE, Inc.
(A development stage company)

Consolidated Statements of Cash Flows

Period from
February 22, 1988
Year ended December 31 (inception) through
December 31
1993 1994 1995 1995
----------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Operating activities
Net loss $ (2,020,012) $ (2,839,759) $ (3,717,835) $(11,399,874)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Loss on securities available-for-
sale - - 9,460 9,460
Depreciation 3,808 5,044 13,773 24,069
Compensation related to issuance
of warrants, options and stock
appreciation rights 427,500 - 243,720 671,220
Changes in operating assets and
liabilities:
Prepaid expenses and other
current assets (294) (252,628) (14,740) (267,662)
Accounts payable and accrued
expenses 146,657 (19,001) 146,248 437,217
-----------------------------------------------------------------------
Net cash used in operating activities (1,442,341) (3,106,344) (3,319,374) (10,525,570)

Financing activities
Proceeds from investor - - - 100,000
Repayment to investor - - - (100,000)
Proceeds from issuance and
subscription of common stock, net 8,804,347 156,000 9,672,876 21,484,522
-----------------------------------------------------------------------
Net cash provided by financing
activities 8,804,347 156,000 9,672,876 21,484,522

Investing activities
Purchases of securities available-
for-sale - (3,368,253) - (3,368,253)
Proceeds from sale of securities
available-for-sale 2,856,280 2,856,280
Deposits - - - (9,600)
Purchase of furniture, fixtures and
equipment (9,713) (4,345) (26,922) (60,520)
-----------------------------------------------------------------------
Net cash (used in) provided by
investing activities (9,713) (3,372,598) 2,829,358 (582,093)

Effect of exchange rate on changes in
cash - - 29,746 29,746
-----------------------------------------------------------------------

Net (decrease) increase in cash and
cash equivalents 7,352,293 (6,322,942) 9,212,606 10,406,605
Cash and cash equivalents at
beginning of period 164,648 7,516,941 1,193,999 -
-----------------------------------------------------------------------
</TABLE>
F-7
<PAGE>
<TABLE>
<CAPTION>

Period from
February 22, 1988
Year ended December 31 (inception) through
December 31
1993 1994 1995 1995
----------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Cash and cash equivalents at
end of period $ 7,516,941 $ 1,193,999 $ 10,406,605 $10,406,605
=======================================================================
See accompanying notes.
</TABLE>

F-8
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements

December 31, 1995

1. Description of Business and Significant Accounting Policies

Description of Business

OXiGENE, Inc. (the "Company") is a development stage pharmaceutical company.
The Company was originally incorporated as Oxi-Gene, Inc. in the State of New
York on February 22, 1988 and subsequently recapitalized and incorporated in
the State of Delaware in December 1992.

The Company is in the research phase of its operations. Because operations
to-date have consisted of research activities only, no substantial income has
been generated to-date and the losses sustained result principally from outlays
for research and administrative expenses. The Company will need to obtain
additional funds from outside sources to fund operating expenses, pursue
regulatory approvals and build production, sales and marketing capabilities, as
necessary.

Principles of Consolidation

In December 1994, the Company established a wholly-owned subsidiary in Sweden,
OXiGENE (Europe) AB to manage and control the Company's research and
development work, and monitor European clinical trials. The accounts of the
subsidiary have been consolidated from the time the subsidiary commenced
operations in January 1995. All material intercompany balances and transactions
have been eliminated in consolidation.

Use of Estimates

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 reported period.
Actual results could differ from those estimates.

F-9
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

1. Description of Business and Significant Accounting Policies (continued)

Depreciation

Furniture, fixtures and equipment are recorded at cost. Depreciation is
provided using the straight-line method over the estimated useful lives of the
assets which is principally seven years.

Cash and Cash Equivalents

The Company considers all highly liquid financial instruments with a maturity
of three months or less when purchased to be cash equivalents.

Substantially all cash and cash equivalents are deposited in one financial
institution at December 31, 1995. Substantially all cash and cash equivalents
were deposited in another financial institution at December 31, 1994.

Foreign Currency Translation

Assets and liabilities of the subsidiary are translated at year-end rates and
income and expenses are translated at average exchange rates prevailing during
the year. Translation adjustments arising from differences in exchange rates
from period to period are included in the accumulated foreign currency
translation adjustments account in stockholders' equity.

Investments

The Company accounts for marketable securities in accordance with the
provisions of Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities."

Management determines the appropriate classification of debt securities at the
time of purchase and reevaluates such designation as of each balance sheet
date. Debt securities are classified as held-to-maturity when the Company has
the positive intent and ability to hold the securities to maturity.

F-10
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

1. Description of Business and Significant Accounting Policies (continued)

Investments (continued)

Debt securities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale securities are stated at fair value,
with the unrealized gains and losses reported in a separate component of
shareholders' equity.

The amortized cost of debt securities classified as held-to-maturity or
available-for-sale is adjusted for amortization or premiums and accretion of
discounts to maturity. Such amortization is included in interest income from
investments. Realized gains and losses, and declines in value judged to be
other-than-temporary are included in net securities gains (losses). The cost of
securities sold is based on the specific identification method.

Patent and Patent Applications

The Company has filed applications for patents in connection with technologies
being developed. The patent applications and any patents issued as a result of
these applications are important to the protection of the Company's
technologies that may result from its research and development efforts. The
pharmaceutical industry is highly competitive and patents may be challenged
from time to time. The Company intends to vigorously defend its issued patents
and may therefore incur significant costs in the defense of the patents and
related technologies. Costs associated with the patent and patent applications
are expensed as incurred.

Income Taxes

The Company accounts for income taxes based upon the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). Under SFAS 109, the liability method is used for accounting for income
taxes, and deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities.

F-11
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

1. Description of Business and Significant Accounting Policies (continued)

Share Information

All outstanding share amounts included in the accompanying financial statements
have been adjusted to reflect the 10,000 for 1 stock split disclosed in Note 3.

Unaudited Information

Information pertaining to the period from February 22, 1988 (inception) through
December 31, 1989 is unaudited.

Net Loss Per Share

Net loss per share is based upon net loss divided by weighted average number of
shares of common stock outstanding during the respective periods, retroactively
adjusted to reflect the stock split. The weighted average number of common
shares outstanding has been computed in accordance with Staff Accounting
Bulletin 83 ("SAB 83") of the Securities and Exchange Commission. SAB 83
requires that shares of common stock and warrants, issued within a one-year
period prior to the initial filing of a registration statement relating to an
initial public offering at amounts substantially below the public offering
price, be considered outstanding for all periods presented in the Company's
Registration Statement. During the one-year period preceding the effectiveness
of the Company's registration statement in August 1993, the Company issued
1,290,000 shares of common stock at $1.95 per share and warrants to purchase
387,500 shares of common stock exercisable at $1.95 per share. Accordingly, for
purposes of calculating loss per share amounts, such shares have been
considered outstanding for all periods presented, and such warrants have been
considered outstanding through June 30, 1993. For purposes of calculating net
loss per share, the initial offering price was assumed to be $6 per share (see
Note 3). All other options and warrants were antidilutive and, accordingly,
excluded from the calculation of weighted average shares.

F-12
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

1. Description of Business and Significant Accounting Policies (continued)

Stock-Based Compensation

In October 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"). SFAS 123 is effective for fiscal years
beginning after December 31, 1995 and prescribes accounting and reporting
standards for all stock-based compensation plans, including employee stock
options, restricted stock, employee stock purchase plans and stock appreciation
rights. SFAS 123 requires compensation expense to be recorded (i) using the new
fair value method or (ii) using existing accounting rules prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25") and related interpretations with pro forma disclosure of
what net income and earnings per share would have been had the Company adopted
the new fair value method. The Company presently accounts for its stock based
compensation plans in accordance with the provisions of APB 25 and has not
determined if it intends to change to the fair value method prescribed in SFAS
123.

2. Investments

The following is a summary of securities available-for-sale:

<TABLE>
<CAPTION>
Securities Available-for-Sale
--------------------------------------------------------
Gross Estimated
Unrealized Fair
Cost Losses Value
------------------------------------------------------
<S> <C> <C> <C>
December 31, 1994
U.S. Government securities:
U.S Treasury Notes $ 1,342,644 $ 31,546 $ 1,311,098
Student Loan Marketing
Association 1,001,256 22,256 979,000
------------------------------------------------------
2,343,900 53,802 2,290,098
------------------------------------------------------
U.S. corporate debt securities:
American Express Credit
Corporation 522,893 14,938 507,955
Ford Motor Credit Company 501,460 8,385 493,075
------------------------------------------------------
1,024,353 23,323 1,001,030
------------------------------------------------------
$ 3,368,253 $ 77,125 $ 3,291,128
======================================================
</TABLE>

F-13
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

2. Investments (continued)

<TABLE>
<S> <C> <C> <C>
December 31, 1995
U.S. corporate debt securities:
American Express Credit
Corporation $ 502,513 $ 493 $ 502,020
------------------------------------------------------
$ 502,513 $ 493 $ 502,020
======================================================
</TABLE>

The amortized cost and estimated fair value of debt securities at December 31,
1995, by contractual maturity are shown below.

Cost Fair Value
-------------------------------------
Available-for-Sale
Due in one year or less $ 502,513 $ 502,020
=====================================

3. Stockholders' Equity

Options and Warrants

The following is a summary of the Company's stock option and warrant activity.

<TABLE>
<CAPTION>
Stock
Nonqualified Stock Incentive Appreciation Stock
Stock Options Options Rights Warrants
---------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
Balance at December 31, 1992 12,500 240,000 - 506,000
Granted during 1993 197,500 125,000 22,500 2,056,500
---------------------------------------------------------------------------------
Balance at December 31, 1993 210,000 365,000 22,500 2,562,500
Granted during 1994 - - 52,500 -
Exercised during 1994 - (80,000) - -
Canceled during 1994 - (160,000) - -
---------------------------------------------------------------------------------
Balance at December 31, 1994 210,000 125,000 75,000 2,562,500
Granted during 1995 669,000 - 2,000 -
Exercised during 1995 (12,500) - - (86,000)
Canceled during 1995 (2,000) - - -
---------------------------------------------------------------------------------
Balance at December 31, 1995 864,500 125,000 77,000 2,476,500
=================================================================================
</TABLE>

F-14
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

3. Stockholders' Equity (continued)

Nonqualified Stock Options

In August 1991, the Company's Board of Directors granted options to a former
officer of the Company to purchase 12,500 shares of the Company's common stock
at $1.50 per share exercisable at any time prior to August 7, 2001. During
1995, such options to purchase 12,500 shares of the Company's common stock were
exercised.

In December 1993, under the Amended Plan, as defined below, the Company's Board
of Directors granted options to certain directors of the Company and other
individuals to purchase 197,500 shares of the Company's common stock at $7.25
per share. Such options vested at various dates over a period of one year from
the date of grant and are exercisable at any time prior to December 13, 2003.

In November 1994, under the Amended Plan, the Company's Board of Directors
granted options, subsequently approved by stockholders in May 1995, to certain
director's of the Company and other individuals to purchase 252,000 shares of
the Company's common stock at market value ($5.59 per share). Such options vest
at various dates over a period of 28 months from the date of grant.

In 1995, under the Amended Plan, the Company's Board of Directors granted to
certain directors of the Company and other individuals options to purchase
417,000 shares of the Company's common stock at exercise prices ranging from
$5.375 per share to $7.00 per share. Options to purchase 252,000 shares were
granted at exercise prices equal to the market value of the shares on date of
grant. The remaining 165,000 shares are exercisable at $6.00 per share. Because
the market price of the Company's shares amounted to $6.125 per share on the
date these options were granted, the Company recorded a charge for financial
reporting purposes of approximately $20,625.

F-15
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

3. Stockholders' Equity (continued)

Stock Incentive Options

During 1992, the Board of Directors implemented an Stock Incentive Option Plan
(the "Plan"). The Plan provided for the grant of options to purchase up to
250,000 shares of common stock to any officer, director and employee of the
Company upon the terms and conditions (including price, exercise date and
number of shares) determined by the Board of Directors or a committee selected
by the Board of Directors to administer the Plan.

In April 1992, under the Plan, the Company's Board of Directors granted stock
options to an officer of the Company for the purchase of 240,000 shares of the
Company's common stock at $1.95 per share. Such options vest at 80,000 per year
for a three-year period. During 1994, vested options to purchase 80,000 shares
of the Company's common stock were exercised. The remaining nonvested options
to purchase 160,000 shares of the Company's common stock were cancelled upon
the termination of the officer's services in 1994.

On May 15, 1993, under the Plan, the Board of Directors granted options as
compensation to certain directors of the Company, to purchase 10,000 shares of
common stock at $1.95 per share, exercisable at any time for a period of five
years.

During May 1993, the Company amended and restated its Stock Incentive Plan (the
"Amended Plan"). Under the Amended Plan, the Company has reserved for issuance
an additional 416,900 shares of Common Stock. The Amended Plan provides for the
issuance of stock appreciation rights.

Under the Amended Plan, the exercise price determined by the Board of Directors
or committee must be at least 100% of the fair market value of the Company's
common stock as of the date of the grant. Upon termination of employment, any
granted option, vested or unvested, shall, to the extent not previously
exercised, terminate except under certain conditions as outlined in the Amended
Plan. The options granted under the Amended Plan are generally exercisable at
specific dates over a ten-year period.

F-16
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

3. Stockholders' Equity (continued)

In December 1993, under the Amended Plan, the Company's Board of Directors
granted stock options to a certain director of the Company to purchase 115,000
shares of common stock at $8.00 per share. Such options vested in equal
installments on December 14, 1993 and 1994.

Stock Appreciation Rights

Under the Amended Plan, the Company's Board of Directors granted stock
appreciation rights to 22,500 shares of common stock at an exercise price of
$7.25 per share and stock appreciation rights to another 22,500 shares at an
exercise price of $5.875 per share to an employee, certain consultants and
clinical investigators on December 14, 1993 and April 4, 1994, respectively.
Such stock appreciation rights vested in equal installments on December 14,
1994 and 1995.

In September 1994, under the Amended Plan, a member of the scientific advisory
board received stock appreciation rights to 30,000 shares of common stock at
$7.63 per share. Such stock appreciation rights vest in equal installments in
September 1994, 1995 and 1996.

In July 1995, under the Amended Plan, a consultant received stock appreciation
rights to 2,000 shares of common stock at $5.38 per share. Such stock
appreciation rights vest in equal installments on July 13, 1995 and July 13,
1996.

On December 31, 1995, the market value per share of common stock ($10.25)
exceeded the exercise price of the stock appreciation rights and, accordingly,
the Company recorded a charge for financial reporting purposes of approximately
$223,000.

Stock Warrants

In November 1991, and January and June 1992, the Board of Directors granted
warrants to directors of the Company to purchase 50,000, 370,000 and 50,000
shares, respectively, of the Company's common stock at $1.95 per share
exercisable at any time for a period of five years. In connection with the sale
of stock during December 1992, the placement agents were granted warrants to
purchase 36,000 shares of the Company's stock at $1.95

F-17
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

3. Stockholders' Equity (continued)

Stock Warrants (continued)

per share exercisable for a five-year period. During 1995, warrants to purchase
86,000 shares of the Company's common stock were exercised. In addition, as of
December 31, 1995, $9,750 was subscribed to exercise warrants to purchase 5,000
shares of common stock. Such shares were issued in 1996.

From January 1, 1993 through February 26, 1993, the Company sold 445,000 shares
of common stock to investors for approximately $868,000 ($1.95 per share). In
connection with this issuance of stock, the placement agents were granted
warrants for the purchase of 66,500 shares of the Company's common stock at
$1.95 per share exercisable for a five-year period.

In January 1993, the Board of Directors granted warrants to the Company's
scientific advisory board to purchase 45,000 shares of the Company's common
stock at $1.95 per share exercisable at any time for a period of five years.

On May 15, 1993, the Board of Directors granted warrants as compensation to
certain directors of the Company, to purchase 180,000 shares of common stock at
$1.95 per share exercisable at any time for a period of five years. The Company
has recorded a charge of $427,500 for financial reporting purposes,
representing the estimated value of such options and warrants granted on May
15, 1993.

During 1993, the Company completed an initial public offering of 1,500,000
units at $6.00 per unit and an over-allotment issuance of 105,000 units at
$6.00 per unit. Each unit consists of one share of the Company's common stock
and one warrant. Each warrant is exercisable for one share of the Company's
common stock at a price of $7 per share during the first year of
exercisability. Thereafter, the exercise price shall increase each year by
$2.00 ($11 at December 31, 1995). On January 26, 1996, the exercise price of
these warrants were reduced to $10.35 per share and the number of shares
purchasable upon exercise of each warrant was increased to 1.07 (warrants to
purchase 1,717,350 shares at $10.35 per share). In connection with this
offering, the Company sold to the Underwriters, for nominal consideration,
150,000 Warrants (the "Underwriters'

F-18
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

3. Stockholders' Equity (continued)

Warrants"). The Underwriters' Warrants are initially exercisable at a price of
$9.90 per Unit for a period of four years, commencing August 26, 1994. The
shares of common stock and warrants issuable upon the exercise of the
Underwriters' Warrants are identical to those included in the Units offered
hereby except that the Warrants contained in the Underwriters' Warrants are
initially exercisable to purchase one share of Common Stock at $11.55.

On December 14, 1993, the Board of Directors granted warrants to certain
individuals of the Company to purchase 10,000 shares of common stock at $7.25
per share. Such warrants vested immediately.

Private Placement

In July 1995, the Company completed a private placement of 1,666,700 common
shares at $6.00 per share, resulting in net proceeds (after deducting issuance
costs) of approximately $9.5 million.

Common Stock Reserved for Issuance

As of December 31, 1995, the Company has reserved approximately 3,845,000
shares of its common stock for issuance in connection with stock options and
warrants.

Recapitalization

During December 1992, in connection with the recapitalization (see Note 1), the
Company changed its authorized common stock from 1,000 shares at $1.00 par
value to 5,000,000 shares at $.01 par value. In addition, the Company declared
a 10,000 for 1 stock split on the then issued and outstanding common shares.

In April 1993, the Company changed its authorized common stock from 5,000,000
shares at $.01 par value to 10,000,000 shares at $.01 par value.

In May 1995, the Company changed its authorized common stock from 10,000,000
shares at $.01 par value to 15,000,000 shares at $.01 par value.

F-19
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

3. Stockholders' Equity (continued)

Merger

During February 1991, the Company issued 100,000 shares of its common stock to
an officer/director and a director for all the outstanding common stock of
Bio-Screen, Inc. The balance sheet and the cumulative results of operations of
Bio-Screen, Inc. were not material to the Company and, consequently, the
statements of operations of the Company have not been restated. The issuance of
the 100,000 shares, which have been recorded at par value, has been reflected
as of August 1988, the date of inception of Bio-Screen, Inc.
(see Note 5 "Commitments").

4. Income Taxes

Effective January 1, 1992, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by
Statement No. 109, "Accounting for Income Taxes" (see Note 1 "Significant
Accounting Policies"). As permitted under the new rules, prior years' financial
statements have not been restated. There was no cumulative effect on the
Company's financial statements as a result of adopting Statement No. 109.

At December 31, 1995, the Company had net operating loss carryforwards of
approximately $10,672,000 for U. S. and foreign income tax purposes, $8,838,000
expiring for U.S. purposes through 2010. For financial statement reporting
purposes, a valuation allowance has been recognized to offset entirely the
deferred tax assets related to the Company's net operating loss carryforwards
and the temporary difference related to compensatory stock options and
warrants.

Components of the Company's deferred tax asset at December 31, 1994 and 1995
are as follows:

1994 1995
---------------------------------

Net operating loss carryforwards $ 2,880,000 $ 3,957,000
Compensatory stock options and warrants 171,000 268,000
---------------------------------
Total deferred tax asset 3,051,000 4,225,000
Valuation allowance (3,051,000) (4,225,000)
---------------------------------
Net deferred tax asset $ - $ -
=================================

F-20
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

4. Income Taxes (continued)

The change in valuation allowance amounted to approximately $802,000 and
$1,120,000, respectively, for the years ended December 31, 1993 and 1994.

Changes in stock ownership (see Note 3) may result in a limitation on the
annual utilization of net operating loss carryforwards.

5. Commitments and Contingencies

The Company subleases its office space at its facilities in New York . During
1995, the Company entered into a new lease for office space in Lund, Sweden.
Rent expense for years ended December 31, 1993, 1994 and 1995 was approximately
$53,000, $58,000 and $50,000, respectively.

The minimum annual rent commitments for the above leases are as follows:

1996 $ 55,400
1997 14,400
1998 1,200
--------------------------
$ 71,000
==========================

In connection with the merger with Bio-Screen, Inc. (see Note 3), the Company
obtained a license agreement to patent rights to a certain product. The
agreement requires the Company to pay royalties, as defined, based on revenues
received by the Company in respect to the specified product. The license
expires in October 2011. The product has not yet been commercially developed.

From time to time the Company may be a party to litigation arising out of the
normal course of its business. The Company is and will continue to vigorously
defend the actions and claims against it. In the opinion of management, these
claims are either without merit or, based in part on opinions from legal
counsel, will not have a material adverse effect on the Company's financial
position.

F-21
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements (continued)

6. Related Party Transaction

In September 1991, the Company entered into an agreement with CATO Research,
Ltd. ("CATO"), a North Carolina corporation, which is majority-owned by Dr.
Cato, a member of the Company's Scientific Advisory Board, pursuant to which
CATO performs preclinical and clinical planning, development and regulatory
services in connection with the Company's efforts to obtain FDA approval for
its technology. CATO is compensated by the Company on an hourly basis for
services actually rendered. For the years ended December 31, 1993, 1994 and
1995, the Company incurred costs under this agreement totaling $468,083,
$608,337 and $739,994, respectively.

7. Foreign Operations

Summary financial information for assets, liabilities at December 31, 1995 and
expenses for the year ended December 31, 1995 for OXiGENE (Europe) AB are as
follows:

Assets $ 240,000
Liabilities 178,000
Expenses 1,853,000

Foreign exchange gains for the year ended December 31, 1995 were not
significant.

F-22
<PAGE>
OXiGENE, Inc.
(A development stage company)
Consolidated Balance Sheets
(All amounts in thousands of dollars, except share data)
(Unaudited)

<TABLE>
<CAPTION>
June 30, 1996
-------------
<S> <C>
Assets
Current assets:
Cash and cash equivalents $ 10,710
Securities available-for-sale --
Prepaid expenses 80
Interest receivable 77
Other 21
-------------------------
Total current assets 10,888
-------------------------

Furniture, fixtures and equipment at cost 73
Accumulated depreciation (31)
-------------------------
42
-------------------------

Deposits 10
-------------------------

Total assets $ 10,940
=========================
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable and accrued expenses:
Due to Cato Research, Ltd. $ 75
Other payables 748
-------------------------
Total current liabilities 823
-------------------------
Stockholders' equity:
Common stock $0.01 par value:
Authorized shares - 15,000,000 shares
Issued and outstanding
7,271,282 at June 30, 1996 72
Additional paid-in capital 24,853
Common stock subscribed 98
Subscription receivable (98)
Deficit accumulated during the development stage (14,811)
Foreign currency translation adjustment 3
-------------------------
Total stockholders' equity 10,117
-------------------------
Total liabilities and stockholders' equity $ 10,940
=========================
</TABLE>

See accompanying notes.

F-23

<PAGE>

OXiGENE, Inc.
(A development stage company)
Consolidated Statements of Operations
(All amounts in thousands of dollars, except share data)
(Unaudited)

<TABLE>
<CAPTION>
Period from
February 22, 1988
Six Months Ended (inception)
----------------------------------------- through
June 30, 1995 June 30, 1996 June 30, 1996
------------- ------------- ------------------
<S> <C> <C> <C>
Revenue
Research Income $ - $ - $ 31
Interest income 82 254 1,001

Operating expenses:
Research and development:
Cato Research, Ltd. 282 388 2,853
Other 991 1,968 6,572
----------------------- ------------------------ -----------------------
Total research and development 1,273 2,356 9,425
General and administrative 646 1,309 6,418
----------------------- ------------------------ -----------------------
Total operating expenses 1,919 3,665 15,843
----------------------- ------------------------ -----------------------

Net loss $ (1,837) $ (3,411) $ (14,811)
======================= ======================== =======================

Net loss per common share $ (0.36) $ (.49)
======================= ========================

Weighted average number of common
shares outstanding 5,058 6,971
======================= ========================
</TABLE>

See accompanying notes.

F-24

<PAGE>

OXiGENE, Inc.
(A development stage company)
Consolidated Statements of Cash Flows
(All amounts in thousands of dollars)
(Unaudited)

Period from
February 22, 1988
Six Months Ended (inception)
------------------------------------ through
June 30, 1995 June 30, 1996 June 30, 1996
------------- ------------- ------------------
<S> <C> <C> <C>
Operating activities
Net loss $ (1,837) $ (3,411) $ (14,811)
Adjustment to reconcile net loss to net cash
used in operating activities:
Depreciation 4 6 30
Amortization of debt securities 9 -- 9
Compensation related to issuance of warrants
options and stock appreciation rights -- 1,008 1,679
Changes in operating assets and liabilities:
Prepaid expenses and other current assets 138 93 (175)
Accounts payable and accrued expenses (52) 375 813
------------------- ------------------- -------------------

Net cash used in operating activities (1,738) (1,929) (12,455)
------------------- ------------------- -------------------

Financing activities
Proceeds from issuance of common stock, net -- 1,710 23,195
Other capital contributions -- 53 53
------------------- ------------------- -------------------

Net cash provided by financing activities -- 1,763 23,248

Investing activities
Proceeds from sale of securities available-for-sale 848 502 3,358
Purchase of securities available for sale -- -- (3,368)
Deposits -- -- (10)
Purchase of furniture, fixture and equipment` (18) (11) (71)
------------------- ------------------- -------------------

Net cash used in investing activities 830 491 (91)

Effect of exchange rate on changes in cash -- (22) 8
------------------- ------------------- -------------------

Net increase (decrease) in cash and cash
equivalents (908) 303 10,710
Cash and cash equivalents at beginning of period 1,194 10,407 --
------------------- ------------------- -------------------

Cash and cash equivalents at end of period $ 286 $ 10,710 $ 10,710
=================== =================== ===================
</TABLE>

See accompanying notes.

F-25

<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements
June 30, 1996

Note l. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the six-month
period ended June 30, 1996 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes thereto for the
year ended December 31, 1995.

Cash and Cash Equivalents

The Company considers all highly liquid financial instruments with a maturity
of three months or less when purchased to be cash equivalents.

Net Loss Per Share

Net loss per share is based upon the Company's aggregate net loss divided by
the weighted average number of shares of common stock outstanding during the
respective periods. All options and warrants were antidilutive and,
accordingly, excluded from the calculation of weighted average shares.

Note 2. Principles of Consolidation

At the end of 1994, the Company established a wholly-owned operating subsidiary
in Sweden, OXiGENE (Europe) AB. This subsidiary manages and controls the
Company's research and development work, and monitors the European clinical
trials. The consolidated financial statements include the accounts of the
Company and OXiGENE (Europe) AB, effective January 1, 1995.

Intercompany balances and transactions have been eliminated.

F-26
<PAGE>

OXiGENE, Inc.
(A development stage company)

Notes to Consolidated Financial Statements
June 30, 1996

Note 3. Stockholders' Equity

During the six months ended June 30, 1996, the company issued 447,982 shares of
common stock upon exercise of previously granted options resulting in proceeds
of approximately $1,710,000.

During the six months ended June 30, 1996, the Company recorded a charge for
financial reporting purposes of approximately $1,008,000 because the market
value of the Company's common stock ($25.50 at June 30, 1996) exceeded the
exercise prices of stock appreciation rights issued by the Company. Because
stock appreciation rights are satisfied, upon exercise, only by the
distribution of shares of common stock of the Company, the charge was credited
to additional paid-in capital. In addition, stock appreciation rights accrued
as a liability as of December 31, 1995 amounting to approximately $223,000,
which will not be paid in cash, was credited to additional paid-in capital
during the six months ended June 30, 1996.

F-27

<PAGE>

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

No dealer, salesman or any other person is authorized to give any information
or to make any representations other than those contained or incorporated by
reference in this Prospectus, and if given or made, such information or
representations should not be relied upon as having been authorized. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy the Shares, by anyone in any jurisdiction in which such offer to sell or
solicitation is not authorized, or in which the person making such offer is not
qualified to do so or to any person to whom it is unlawful to make such offer
or solicitation. Neither the delivery of the Prospectus nor any distribution of
shares pursuant to this Prospectus shall, under any circumstances, create any
implication that there has been no change in the information set forth or
incorporated by reference herein or in the affairs of the Company since the
date of this Prospectus.

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

PAGE

AVAILABLE INFORMATION............................................... 2

INCORPORATION BY REFERENCE.......................................... 2

THE COMPANY......................................................... 5

PROSPECTUS SUMMARY.................................................. 7

SUMMARY OF SELECTED FINANCIAL INFORMATION........................... 8

RISK FACTORS........................................................ 9

MARKET DATA......................................................... 13

USE OF PROCEEDS..................................................... 14

CAPITALIZATION...................................................... 15

DIVIDEND POLICY..................................................... 15

SELECTED FINANCIAL INFORMATION...................................... 16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION.......................................... 18

BUSINESS ......................................................... 21

MANAGEMENT ......................................................... 37

PRINCIPAL STOCKHOLDERS.............................................. 44

400608.6

<PAGE>

DESCRIPTION OF SECURITIES........................................... 45

UNDERWRITING........................................................ 46

LEGAL MATTERS....................................................... 47

EXPERTS ......................................................... 47

GLOSSARY.............................................................48

APPENDIX............................................................A-1

400608.6

<PAGE>

PART II

Item 14. Other Expenses of Issuance and Distribution.

The fees and expenses payable by the Company in connection with the
issuance and distribution of the Shares being registered are estimated as
follows:

Amount

SEC Filing Fee..................................................... $ 9,914
Nasdaq Listing Fee.................................................. 25,000
Legal Fees and Expenses*........................................... 135,000
Accounting Fees*......................................................25,000
Printing and Translation Expenses*.................................. 52,780
Miscellaneous..........................................................2,306

Total.............................................................. $250,000

* Indicates estimate

Item 15. Indemnification of Directors and Officers.

The Company is a Delaware corporation. Reference is made to Section 145
of the Delaware General Corporation Law (the "DGCL"), which provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of such corporation), by reason of the fact
that such person is or was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as an
officer, director, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such officer, director, employee or agent acted in
good faith and in a manner reasonably believed by such person to be in or not
opposed to the corporation's best interests and, for criminal proceedings, such
person had no reasonable cause to believe that his conduct was unlawful. A
Delaware corporation may indemnify officers and directors in an action by or in
the right of the corporation under the same conditions, except that no
indemnification is permitted in respect of any claim, issue or matter without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify such officer or director against the expenses (including attorneys'
fees) that such officer or director actually and reasonably incurred.

Reference is also made to Section 102(b)(7) of the DGCL, which enables
a corporation in its certificate of incorporation to eliminate or limit the
personal liability of a director for monetary damages

II-1
400608.6

<PAGE>

for violations of the director's fiduciary duty, except (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) pursuant to Section 174 of the DGCL
(providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions) or (iv) for any transaction from which
a director derived an improper personal benefit.

Article IX, Section 3 of the Company By-laws provides as follows:

"SECTION 3. Indemnification. The Corporation shall, to the fullest
extent permitted by the General Corporation Law of the State of Delaware,
indemnify members of the Board and may, if authorized by the Board, indemnify
its officers, employees and agents and any and all persons whom it shall have
power to indemnify against any and all expenses, liabilities or other matters."

ARTICLE NINTH of the Company's Restated Certificate of Incorporation
provides as follows:

"To the fullest extent permitted by the General Corporation Law of the
State of Delaware, no director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware, or (iv) for any transaction from which the
director derived an improper personal benefit. Any repeal or modification of
this Article Ninth by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification with respect to acts or omissions occurring
prior to such repeal or modification."

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.

Following the 1996 Annual Meeting of Stockholders, the Company entered
into indemnification agreements with each of its directors and executive
officers.

II-2
400608.6

<PAGE>

Item 16. Exhibits.

5* Legal Opinion of Battle Fowler LLP

10.1 Form of Indemnification Agreement between the Company and its
directors, executive officers and key employees

23.1 Consent of Ernst & Young LLP, New York, New York

23.2* Consent of Battle Fowler LLP (included in Exhibit 5)

24.1 Power of Attorney (included herein on the signature page)

99.1 U.S. Patent Number 5,204,241, issued April 20, 1994, registered to
Ronald W. Pero, regarding glutathione-s-transferase Mu as a measure
of drug resistance

99.2 U.S. Patent Number 5,340,565, issued August 23, 1994, registered to
Ronald W. Pero, regarding tumor or cancer cell killing therapy and
agents useful therefor

99.3 U.S. Patent Number 5,482,833, issued January 9, 1996, registered to
Ronald W. Pero and Daniel G. Miller, regarding a test to determine
the predisposition or susceptibility to DNA-associated diseases

99.4 International Application Published under the Patent Cooperation
Treaty (PCT) Number WO96/14565, published May 17, 1996, registered to
Ronald W. Pero, regarding a method of testing immune competency

* To be filed by amendment

Item 17. Undertakings

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the Prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in this registration statement;

II-3
400608.6

<PAGE>

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;

Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and

(3) To remove from registration by means of a post-effective amendment
any of the securities which remain unsold at the termination of the offering.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described above in Item 15, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

II-4
400608.6

<PAGE>

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-5
400608.6

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of New York, State of New York, on
September 23, 1996.

OXiGENE, INC.

By: /s/ Bjorn Nordenvall
-------------------------------------
Bjorn Nordenvall
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Bjorn Nordenvall and Bo Haglund, and
each of them, his true and lawful attorney-in-fact and agent, each acting
alone, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all amendments
to this Registration Statement, including post effective amendments, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all his said attorney-in-fact and agents, each acting alone, or his
substitute or substitutes may lawfully do or cause to be done by virtue
thereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature Title Date

/s/ Bjorn Nordenvall President, Chief Executive September 23, 1996
Bjorn Nordenvall Officer and Chairman of the
Board of Directors (Principal
Executive Officer)

/s/ Bo Haglund Chief Financial Officer September 23, 1996
Bo Haglund (Principal Financial Officer and
Principal Accounting Officer)

/s/ Michael Ionata Director September 26, 1996
Michael Ionata

/s/ Marvin H. Caruthers Director September 26, 1996
Marvin H. Caruthers

<PAGE>

/s/ Claus Moller Chief Medical Officer and September 26, 1996
Claus Moller Director

/s/ Ronald Pero Chief Scientific Officer and
Ronald Pero Director September 24, 1996

<PAGE>

EXHIBIT INDEX

Sequential
Exhibit Page
Number Description Number

5* Legal Opinion of Battle Fowler LLP

10.1 Form of Indemnification Agreement between the Company
and its directors, executive officers and key employee

23.1 Consent of Ernst & Young LLP, New York, New York

23.2* Consent of Battle Fowler LLP

24.1 Power of Attorney

99.1 U.S. Patent Number 5,204,241, issued April 20, 1994,
registered to Ronald W. Pero, regarding glutathione-s-
transferase Mu as a measure of drug resistance

99.2 U.S. Patent Number 5,340,565, issued August 23, 1994,
registered to Ronald W. Pero, regarding tumor or cancer
cell killing therapy and agents useful therefor

99.3 U.S. Patent Number 5,482,833, issued January 9, 1996,
registered to Ronald W. Pero and Daniel G. Miller,
regarding a test to determine the predisposition or
susceptibility to DNA-associated diseases

99.4 International Application Published under the Patent
Cooperation Treaty (PCT) Number WO96/14565,
published May 17, 1996, registered to Ronald W. Pero,
regarding a method of testing immune competency

* To be filed by amendment.

INDEMNIFICATION AGREEMENT

THIS AGREEMENT, dated as of the ____ day of _________, 199_,
is made by and between OXiGENE, Inc., a Delaware corporation having its
principal place of business in the State of New York (the "Company") and
_____________ (the "Indemnitee"), a resident of ________________.

WHEREAS, it is essential to the Company to retain and attract
the most capable persons available as officers, directors and key employees;
and

WHEREAS, Indemnitee is currently serving as _________________
(the "Position"); and

WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted against directors
and officers of publicly-traded and other corporations, as a result of which
competent and experienced persons have become more reluctant to serve in such
positions, and as a result of which creative management and decision making has
been deterred; and

WHEREAS, the provision of indemnification will assist the
Company in attracting and retaining the most skilled and competent officers and
directors; and

WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to allow Indemnitee to continue
to provide service to the Company in an effective manner, the Company wishes to
provide in this Agreement for the indemnification of the Indemnitee and for the
advancing of expenses to Indemnitee, in each case to the full extent permitted
by law and as set forth in this Agreement.

NOW THEREFORE, in consideration of the premises and the
covenants contained herein, the Company and Indemnitee agree as follows:

1. Agreement to Serve. Indemnitee will continue to serve
faithfully and to the best of his ability in the Position, at the will of the
Company or pursuant to the terms of any separate agreement which may exist, so
long as he is duly elected or appointed and qualified or until such time as he
tenders his resignation in writing.

2. Right to Indemnification. In the event Indemnitee was or
is made a party or was or is threatened to be made a party to or was or is
involved or called as a witness in any action, suit, proceeding or alternative
dispute resolution mechanism, or any hearing, inquiry or investigation that
Indemnitee in good faith believes may lead to the institution of such action,
suit, proceeding or alternative dispute resolution mechanism, whether civil,
criminal, administrative or investigative, and any appeal therefrom
(hereinafter, collectively a "Proceeding"), by reason of the fact that he was,
is or had agreed to become a director, officer, employee, agent, fiduciary or
Delegate (as defined herein) of the Company, Indemnitee shall be indemnified
and held harmless by the Company to the fullest extent permitted under the
Delaware General Corporation Law (the "DGCL"), as the same now exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide

361386.1

<PAGE>

broader indemnification rights than the DGCL permitted the Company to provide
prior to such amendment) against all expenses (including reasonable attorneys'
fees and all other costs, expenses, liabilities, obligations and disbursements
in connection with investigating, prosecuting, defending, preparing to
prosecute and defend, or being a witness or other participant in any
Proceeding), liabilities and losses (including, but not limited to, judgements;
fines; liabilities under ERISA for damages, excise taxes or penalties; damages,
fines or penalties arising out of violation of any law related to the
protection of the public health, welfare or the environment; and amounts paid
or to be paid in settlement) incurred or suffered by such person in connection
with any Proceeding (collectively, "Expenses"); provided, that except as
provided in Section 6 hereof, the Company shall indemnify any such person
seeking indemnity in connection with a Proceeding (or part thereof) initiated
by such person only if such Proceeding (or part thereof) was authorized by the
Board of Directors of the Company.

For purposes of this Agreement, a "Delegate" is any person
serving at the request of the Company as a director, officer, trustee
fiduciary, partner, employee or agent of an entity or enterprise other than the
Company (including, but not limited to, service with respect to employee
benefit plans and trusts).

3. Expenses. Expenses incurred by Indemnitee in defending or
otherwise being involved in a Proceeding shall be paid by the Company in
advance of the final disposition of such Proceeding, including any appeal
therefrom, upon receipt of an undertaking (the "Undertaking") by or on behalf
of Indemnitee to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Company; provided, that in connection
with a Proceeding (or part thereof) initiated by Indemnitee, except as provided
in Section 6 hereof, the Company shall pay such Expenses in advance of the
final disposition only if such Proceeding (or part thereof) was authorized by
the Board of Directors of the Company. The Undertaking shall provide that if
Indemnitee has commenced Proceedings in a court of competent jurisdiction to
secure a determination that he should be indemnified by the Company, he shall
not be obligated to repay the Company during the pendency of such Proceeding.

4. Mandatory Payment of Expenses. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful
on the merits or otherwise, including, without limitation, the dismissal of an
action without prejudice, in defense or any Proceeding or in the defense of any
claim, issue or matter therein, Indemnitee shall be indemnified against all
Expenses incurred by Indemnitee in connection therewith.

5. Notice. Indemnitee shall, as a condition precedent to
Indemnitee's right to be indemnified under this Agreement, give the Company
notice in writing as soon as practicable of any Proceeding for which
indemnification will or could be sought under this Agreement.

6. Protection of Rights. If a claim under Section 2 or any
agreement ("Other Agreement") providing indemnification to Indemnitee is not
promptly paid in full by the Company after a written claim has been received by
the Company or if Expenses pursuant to Section 3 or an Other Agreement have not
been promptly advanced after a

-2-
361386.1

<PAGE>

written request for such advancement accompanied by the Undertaking has been
received by the Company, the claimant may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim or the
advancement of Expenses. If successful, in whole or in part, in such suit
Indemnitee shall also be entitled to be paid the reasonable expense thereof. It
shall be a defense to any such action (other than an action brought to enforce
a claim for Expenses incurred in defending any Proceeding in advance of its
final disposition where the required Undertaking has been tendered to the
Company) that Indemnitee has not met the standards of conduct which make it
permissible under the DGCL for the Company to indemnify Indemnitee for the
amount claimed, but the burden of proving such defense shall be on the Company.
Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because he
has met the applicable standard of conduct required under the DGCL, nor the
actual determination by the Company (including its Board of Directors,
independent legal counsel, or its stockholders) that Indemnitee had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that Indemnitee had not met the applicable standard of conduct.

If a Change of Control has occurred, Indemnitee upon making a
claim under Section 2 or seeking to avoid repayment to the Company pursuant to
an Undertaking under Section 3 shall have (i) the right, but not the
obligation, to have a determination made by independent legal counsel as to
whether indemnification of the claimant is proper because he or she has met the
applicable standard of conduct required under the DGCL; and (ii) shall have the
right to select as independent legal counsel for such purpose any law firm as
designated (or within a category designated) for such purpose in a resolution
adopted by the Board of Directors of the Company prior to the Change of Control
and in full force and effect immediately prior to the Change of Control. If a
determination has been made in accordance with the preceding sentence, no
determination inconsistent therewith by other legal counsel, by the Board of
Directors, or by stockholders shall be of any force or effect, provided
however, that Indemnitee shall maintain all rights granted hereby to bring an
action as specified in the preceding paragraph.

A "Change of Control" shall be deemed to have occurred if (i)
individuals who as of June 15, 1996 constitute the Board of Directors of the
Company (the "Incumbent Directors") cease for any reason to constitute at least
a majority of the Board of Directors of the Company, or (ii) there is a merger,
consolidation or reorganization ("Merger") of the Company in which the Company
is not the surviving entity (the "Survivor") and at any time following such
Merger, Incumbent Directors do not constitute a majority of the Board of
Directors of the Survivor; provided that any individual who becomes a director
after June 14, 1996 whose election, or nomination for election by the Company's
stockholders was approved by a vote or written consent of at least two-thirds
of the directors then comprising the Incumbent Directors shall be deemed to be
an Incumbent Director, but excluding, for this purpose, any such individual
whose initial assumption of office is in connection with an actual or
threatened election contest (as such term is used in Rule 14a-11 under the
Securities Exchange Act of 1934, as amended) relating to the election of the
directors of the Company.

-3-
361386.1

<PAGE>

7. No Presumption. For purposes of this Agreement, the
termination of any Proceeding, by judgement, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere or its
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court
has determined that indemnification or contribution is not permitted by
applicable law.

8. Non-Exclusivity of Rights. The rights conferred on
Indemnitee by this Agreement shall not be exclusive of any other right which
Indemnitee may have or hereafter acquire under any statute, provision of the
Company's Restated Certificate of Incorporation or By-Laws, other agreement,
vote of stockholders or directors or otherwise.

9. Selection of Counsel. In the event the Company shall be
obligated hereunder to pay the Expenses of any Proceeding, the Company shall be
entitled to assume the defense of such Proceeding with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred
by Indemnitee with respect to the same Proceeding; provided that, (i)
Indemnitee shall have the right to employ Indemnitee's counsel in any such
Proceeding at Indemnitee's expense and (ii) if (A) the employment of counsel by
Indemnitee has been previously authorized by the Company, (B) Indemnitee shall
have reasonably concluded that there is a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, or (C) the Company
shall not continue to retain such counsel to defend such Proceeding, then the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company. The Company shall have the right to conduct such defense as it sees
fit in its sole discretion, including the right to settle any claim against
Indemnitee at the Company's expense without the consent of the Indemnitee.

10. Subrogation. In the event of any payment under this
Agreement to Indemnitee, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and shall do everything that may be necessary to secure such
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights.

11. Exceptions. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

(a) Excluded Action or Omissions. To indemnify Indemnitee for Expenses
resulting from acts, omissions or transactions for which Indemnitee is
prohibited from receiving indemnification under applicable law; and

(b) Claims under Section 16(b). To indemnify Indemnitee for expenses
and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or any similar successor
statute.

-4-
361386.1

<PAGE>

12. Amended; Waiver. No provision of this Agreement may be
amended or modified except with the consent in writing of Indemnitee and the
Company, nor may any provision of this Agreement be waived except in writing by
the party granting such waiver. A waiver of any provision hereof shall not be
deemed a waiver of any other provision hereof. Failure of either of the parties
hereto to insist upon strict compliance with any provision hereof shall not be
deemed to be a waiver of such provision or any other provision hereof.

13. No Duplication of Payments. The Company shall not be
liable under this Agreement to make any payment in connection with any
Proceeding to the extent Indemnitee has otherwise actually received payment
under any insurance policy, statute, provision of the Company's Restated
Certificate of Incorporation or By-Laws, other agreement, vote of stockholders
or directors or otherwise of the amounts otherwise indemnifiable.

14. Partial Indemnification. If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Proceeding, but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such Expenses to which Indemnitee is
entitled.

15. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns (including, without limitation, any successor
by purchase, merger, consolidation, reorganization or otherwise to all of
substantially all of the business and/or assets of the Company) and their
spouses, heirs, and personal and legal representatives.

16. Term. The provisions of this Agreement shall be
applicable to all Proceedings, regardless of when commenced and regardless of
whether relating to events, acts or omissions occurring before, on or after the
date on which this Agreement becomes effective. This Agreement shall continue
in effect regardless of whether Indemnitee continues to serve in the Position;
provided, however, that notwithstanding any other provision hereof, the Company
shall have no obligations hereunder with respect to liability, losses and
Expenses of any Proceeding to the extent that such liability, losses and
Expenses relate to conduct of the Indemnitee which occurs after Indemnitee no
longer holds the Position nor a position of a corporate officer or director of
the Company.

17. Severability. If this Agreement or any portion hereof
shall be invalidated or held to be unenforceable, such invalidity or
unenforceability shall not affect the other provisions hereof, and this
Agreement shall be deemed to be modified to the minimum extent necessary to
avoid such invalidity or unenforceability, and as so modified this Agreement
and the remaining provisions hereof shall remain valid and enforceable in
accordance with their terms to the fullest extent permitted by law.

18. Notice. All notices and other communications hereunder
shall be in writing and delivered by hand or by first class registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

-5-
361386.1

<PAGE>

If to the Indemnitee:

______________________
______________________
______________________
______________________

If to the Company:

OXiGENE, Inc.
110 East 59th Street
New York, NY 10022
Attention: President

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

19. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the state of Delaware,
without regard to the principles thereof respecting conflicts of law.

20. Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.

21. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument originals.

IN WITNESS WHEREOF, Indemnitee and the Company, pursuant to
the authorization of its Board of Directors, execute this Agreement on the date
stated below.

OXiGENE, Inc.

By:_____________________________________
Title:
Date:

INDEMNITEE

________________________________________
Name:
Date:

-6-
361386.1

Consent of Independent Auditors

We consent to the reference to our firm under the captions "Selected Financial
Information" and "Experts" and to the use of our report dated February 27,
1996, in the Registration Statement (Form S-3) and related Prospectus of
OXiGENE, Inc. for the registration of 1,150,000 shares of its common stock.

ERNST & YOUNG LLP

New York, New York
September 25, 1996

407477.1

[GRAPHIC]
US005204241A

United States Patent Patent Number: 5,204,241

Pero Date of Patent: Apr. 20, 1993

GLUTATHIONE-S-TRANSFERASE MU AS A MEASURE OF DRUG RESISTANCE

Inventor: Ronald W. Pero, New York, N.Y.

Assignee: Oxi-Gene Inc., New York, N.Y.

Appl. No.: 601,266

Filed: Oct. 22, 1990

Int. Cl. C12Q 1/48; C12N 9/00
U.S. Cl. 435/15; 435/183
Field of Search 435/15, 183

References Cited

PUBLICATIONS
<TABLE>
<S> <C>
Leyland-Jones B.R. Antineoplastic Drug Sensitivity ... Chem. Abst. 114: 94779h Mar. 18, 1991.
Warholm M. Purification of a New GST Mu ... Biochem & Biophys Rsch Com 98 2: 512-519 Jan. 30, 1981.
Yusa K. Comparison of GST Activity Between ... Chem Abstracts, vol. 109, #13 109:104335y 1988.
Singh S. V. GST and Glutathione Peroxidases ... Chem. Abstracts 112:327t Jan. 1, 1990.
Morrow C.S. GST and Drug Resistance ... Chem. Abst. 112: 171572y May 7, 1990.
Begleiter A. Activity of Quinone Alkylating ... Chem. Abst. 113:70708n Aug. 27, 1990.
Seidegard, Janeric, Characterization of Soluble GST Activity ... Biochem. Pharm. 33 19: 3053-3058 1984.
Seidegard J. Hereditary Differences in the Expression ... Proc. Natl. Acad. Sci. USA 85:7293-7297 1988.
Peters W.H.M. Immunodetection with a Monoclonal Antibody ... Biochem. Pharm. 39 3:591-597 Jan. 1, 1990.
</TABLE>
Johnston et al, J. Nat. Can. Inst., vol. 82, No. 9: 776-779 (1990).
Seidegard et al, Carcinogenesis, vol. 6, No. 8: 1211-1216 (1985).
Seidegard et al, J. Biochem. 246: 783-785 (1987).

Primary Examiner--John W. Rollins
Assistant Examiner--Ralph Gitomer
Attorney, Agent, or Firm--Cooper & Dunham

ABSTRACT

It has been discovered that by determining or measuring a person's
glutathione-s-transferase (GST) mu activity one can determine or measure the
individual's resistance to drugs, particularly to chemotherapeutic drugs.
Approximately 50% of the human population exhibit substantially no GST mu
activity, with the remaining 50% showing GST mu activity. This remaining 50% of
the population accordingly, when treated with drugs, such as a chemotherapeutic
drug for cancer therapy, show less effective response to the drug therapy than
the other 50% of the population which have substantially no GST mu activity,
since GST mu tends to deactivate drugs. Accordingly, a person having GST mu
activity would exhibit drug resistance and would not benefit as much by or be
as good a candidate for cancer chemotherapy as a person who has no GST mu
activity.

13 Claims, 1 Drawing Sheet

406057.1

<PAGE>

[GRAPHIC]

406057.1

<PAGE>

GLUTATHIONE-S-TRANSFERASE MU AS A MEASURE OF DRUG RESISTANCE

BACKGROUND OF THE INVENTION

Glutathione-s-transferases (GSTs) are a group of multi-functional proteins
which play an important role in the biotransformation of many different
biologically active compounds, including agents which damage DNA, such as
chemotherapeutic drugs, see Mannervik, B., Adv. Enzymol. Relat. Areas Mol.
Biol. 57: 357-417 (1985). Indeed, it is known that GSTs are usually associated
with the detoxification by conjugation of genotoxic and cytotoxic xenobiotic
electrophiles derived from drugs, carcinogens and environmental pollutants, see
Glutathione transferases; H. Sies and B. Ketterer (eds.), Glutathione
Conjugation. Academic Press, New York, pp. 74-135 (1988).

On the basis of physical and immunological properties and substrate
specificities and protein structure, the human GSTs have been divided into
three distinct classes, named alpha, mu and pi, see Mannervik B., et al, Proc.
Natl. Acad. Sci. U.S.A. 82: 7202-7206 (1985).

It is an object of this invention to employ glutathione-s-transferase
activity as a measure of drug resistance.

How this and other objects of this invention are achieved will become
apparent in the light of the accompanying disclosure, including the drawing
which graphically illustrates the subject invention. In at least one embodiment
of the practices of this invention at least one of the objects of this
invention will be achieved.

Cellular reduced glutathione, i.e. the co-substrate for GSTs, and GST
activity in general, i.e. total activity estimated using 1-chloro-3,
4-dinitrobenzene (CDNB) as a substrate, has been shown to be involved in the
mechanism of chemotherapeutic drug resistance, see Johnston et al, J. Natl.
Can. Inst. 82: 776-779 (1990) and Lai G-M, et al, J. Natl. Can. Inst. 81:
535-539 (1989).

Chemotherapeutic agents, such as chlorambucil cisplatin, nitrosoureas and
other chemotherapeutic drugs that can damage DNA or other cellular
macromolecules, such as RNA or protein, are electrophiles which can be
conjugated with glutathione directly or indirectly via GST activity. Hence,
high levels of glutathione and/or GST activity provide a mechanism of drug
resistance because cells having high levels have increased opportunities to
remove the drugs before the drugs can cause genotoxicity or cytotoxicity or
other adverse effects. Heretofore, however, it has not been known whether any
one of the known GST isozymes, either the alpha, pi or the mu class, is more
specifically involved in conjugating chemotherapeutic drugs with glutathione.

BRIEF DESCRIPTION OF THE INVENTION

It has now been discovered, and it is the basis of this invention, that
GST mu isozymes are specifically and preferentially involved in the metabolism
of chemotherapeutic drugs. In accordance with this invention it has now been
discovered that by measuring GST mu activity, one can estimate and/or measure
an individual's resistance to chemotherapeutic drugs.

The mu class of GSTs are distinguished by having a high substrate
specificity towards trans-stilbene oxide, see Seidegard, J.-E. et al, Biochem.
J. 246: 783-785 (1987). About 50% of the human population lack GST mu because
of a gene deletion, see Seidegard, J.-E. and Pero, R.W., Genet. 69: 66-68
(1985) and Seidegard et al Proc. Natl. Acad. Sci. U.S.A. 85: 7293-7295 (1988).
Individuals can be easily phenotyped for the presence (+) or absence (--) of
GST Mu activity. Because GST mu activity represents at least 60% of the total
GST activity in liver, see Warholm, M. et al, Biochemistry 22: 3610-3617
(1983), and since the liver is the main source of metabolism of xenobiotic
substances, including chemotherapeutic drugs, and since GST mu has been shown
to have high substrate specificity toward toxic agents, such as trans-stilbene
oxide, benzopyrene 4,5-oxide and ethylene oxide, but little substrate
specificity for other GST substrates, such as cis-stilbene oxide

406057.1

<PAGE>

and 1-chloro-2,4-dinitrobenzene, see Seidergard, J.-E. et al, Carcinogenesis 6:
1121-1216) 1985, GST mu activity may be employed to estimate a genetic based
sensitivity of individuals to metabolize chemotherapeutic drugs.

BRIEF DESCRIPTION OF THE DRAWING

The single FIGURE is a graph in which glutathione transferase activity
toward tauromustine is plotted against glutathione transferase activity toward
trans-stilbene oxide.

DETAILED DESCRIPTION OF THE INVENTION

The following example is illustrative of the practices of this invention.
In the example tauromustine, a nitrosourea, a class of chemotherapeutic drugs,
was metabolized to a much greater extent by human liver cytosols having GST mu
activity than by human liver cytosols lacking GST mu activity. The data
illustrated in the accompanying drawing teach that the presence (+) or absence
(--) of GST mu can predict individual sensitivity to chemotherapeutic drugs,
such as nitrosoureas, which damage DNA.

EXAMPLE

The importance of the GST-tSBO phenotype in influencing drug metabolism is
indicated by the following. Tauromustine is a drug representative of the class
of chemotherapeutic agents known as the nitrosoureas and has the structural
formula:

[GRAPHIC]

Human liver biopsies from ? 3 individuals were homogenized in 5 vol. of
0.25 M sucrose, centrifuged at 10,000 g for 15 minutes and then the resulting
supernatant was re-centrifuged at 105,000 g for one hour. The 105,000 g
supernatants were analyzed for glutathione transferase activity using
trans-stilbene oxide (tSBO) and tauromustine as substrates. Metabolism of these
substrates to glutathione conjugates was monitored by radiometric procedures
involving differential organic solvent extraction, see Gill, S., Ota, J. and
Hammock, B., D. Anal. Biochem. 131: 273-282 (1983), and high pressure liquid
chromatography (HPLC).

The results are graphically presented in the accompanying drawing. When
GST-tSBO activity in liver cytosols was 0-10 nmo/min/mg protein, the level of
glutathione transferase activity toward tauromustine was also very low ranging
from 0-2 nmol/min/mg protein. However, when there was easily detectable
GST-tSBO activity, i.e. 25-65 nmol/min/mg proteins, there was also substantial
metabolism of tauromustine (i.e. 4-19 nmol/min/mg protein).

As mentioned hereinabove, there are at least three different classes of
human glutathione transferases, the alpha, mu and pi classes. Each class is
composed of several isozymes and GST-tSBO has been determined to be a distinct
isozyme of the mu class. Hence, these data teach that the metabolism of
nitrosoureas, such as are represented by tauromustine, is mainly carried out by
GST-tSBO, identical to GST-mu, and not by the other isozymes of glutathione
transferase. It follows then, since GST-tSBO activity has been shown to be
under genetic control and to be absent in about 50% of the population with a
higher degree of resistance to chemotherapy, such as to chemotherapeutic drugs
represented by the nitorsoureas.

The embodiment of this invention recognizes the prior knowledge that
glutathione and total GST activity, usually measured with CDNB as substrate,
can contribute to drug resistance. However, CDNB can serve as a substrate for
all the GST ioszyme sub-groups (i.e. alpha, pi and mu classes), and it was not
obvious or recognized that any single GST isozyme was contributing more than
any other to drug metabolism. Moreover, the pi class of GST isozymes had been
the only GST to be more directly implicated in chemotherapeutic drug
resistance, see Moscow, J.A. and Cowan, K.H., J. Natl. Can. Inst. 80: 14-20
(1988)

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and even then, only in relation to reduced glutathione levels. In other words,
the selective metabolism of a chemotherapeutic drug by GST pi isozymes, or any
other GST other than GST mu, shown in Example 1, has not been demonstrated.
This has implied that the substrate specificity of GSTs is very broad and the
various classes of GSTs can metabolize drugs in a reasonably equal manner.
Therefore, it was unexpected that GST mu isozymes could contribute so
dramatically to chemotherapeutic drug resistance in individuals expressing GST
Mu activity compared to individuals lacking GST mu activity, even though both
GST mu (+) and (--) individuals have other classes of GST activity present.

Although the expression of the GSTs is organ specific, the expression of
GST mu is known to be controlled by genetic factors where about 50% of the
population has no GST mu activity. None of the other human GSTs have been shown
to be lacking in such a large portion of the population, nor have they been
shown to have a high degree of substrate specificity controlled by genetic
factors. The combination of these GST mu characteristics, together with the
demonstrated selective metabolism of nitrosoureas by GST mu show that the GST
mu phenotype can be predictive of chemotherapeutic drug resistance via
metabolism characterized by a selective conjugation with glutathione catalyzed
or brought about by GST mu.

In the practices of this invention testing of a person's GST mu activity
can be carried out by obtaining and testing the blood samples of the human to
be tested as well as tissue or organ samples, such as the liver, colon, breast
and adrenal glands. Particularly useful, from the point of view of convenience
in carrying out the tests and determinations in accordance with this invention,
would be to carry out the tests on the person's mononuclear leukocytes. All the
tests would be carried out employing trans-stilbene oxide as the substrate for
the glutathione transferase since trans-stilbene oxide is a specific substrate
for glutathione transferase GST mu. The level of glutathione transferase
activity towards trans-stilbene oxide would be measured as nmol/mn/mg protein
and level of four (4), especially a level higher than eight (8), would be
indicative that the person so tested for glutathione transferase mu activity
would posses substantial drug resistance and would not be a good candidate for
drug therapy or cancer chemotherapy and the like, even when the person so
tested might evidence glutathione transferase activity of the GST alpha and pi
classes.

Instead of using tSBO as a substrate to phenotype individuals for GST mu
affinity and thus drug resistance, other ways of determining GST mu activity
may be employed. For example the (+) or (--) GST mu activity can also be
determined by using antibodies derived from purified GST mu or a DNA probe
derived from or based on the GST mu gene.

All the above-cited publication references are herein incorporated and
made part of this disclosure.

As will be apparent to those skilled in the art in the light of the
foregoing disclosure, many modifications, alterations and substitutions are
possible in the practices of this invention without departing from the spirit
or scope thereof.

What is claimed is:

1. A method of determining the resistance of a human individual to a
nitrosourea which comprises determining the GST mu activity of the individual,
to establish a measured value of the individual's GST mu activity, and
comparing said measured value with a predetermined value, the presence of a GST
mu activity above said predetermined value indicting that the individual is
resistant to the nitrosourea.

2. A method according to claim 1, wherein the determining step is
performed using tSGO to
measure the individual's GST mu activity.

3. A method according to claim 1, wherein the determining step is
performed using an antibody to GST mu to measure the individual's GST mu
activity.

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<PAGE>

4. A method according to claim 1, wherein the determining step is
performed using a labeled DNA probe for the GST mu gene to measure the
individual's GST mu activity.

5. A method according to claim 1, wherein the determining step is
performed by testing liver tissue of the individual.

6. A method according to claim 1, wherein the determining step is
performed by testing colon tissue of the individual.

7. A method according to claim 1, wherein the determining step is
performed by testing breast tissue of the individual.

8. A method according to claim 1, wherein the determining step is
performed by testing mononuclear leukocytes of the individual.

9. A method according to claim 2, wherein the determining step is
performed by testing liver tissue of the individual.

10. A method according to claim 2 wherein the determining step is
performed by testing mononuclear leukocytes of the individual.

11. A method according to claim 1 wherein to said measured value of GST mu
activity is measured towards tSBO, nmol/min/mg protein, and said predetermined
value is 4 or above.

12. A method according to claim 1 wherein said nitrosourea is
tauromustine.

13. A method of determining the resistance of a human individual to
tauromustine, comprising determining GST mu activity of liver tissue of the
individual using tSBO, to establish a measured value of said activity expressed
in nmol/min/mg protein and comparing said measured value with a value of 4, a
measured value above 4 indicating that the individual is resistant to
tauromustine.

* * * * *

406057.1

[GRAPHIC]
US005340565A

United States Patent Patent Number: 5,340,565

Pero Date of Patent: Aug. 23, 1994

TUMOR OR CANCER CELL KILLING THERAPY AND AGENTS USEFUL THEREFOR

Inventor: Ronald W. Pero, New York, N.Y.

Assignee: Oxi-Gene, Inc., New York, N.Y.

Appl. No.: 896,236

Filed: June 10, 1992

Related U.S. Application Data

Continuation of Ser. No. 89,477, Aug. 25, 1987.

Int. Cl..................................................A61K 49/00; G01N 33/15
U.S. Cl. .......................................................424/10; 424/649
Field of Search ...........................................424/10; 649; 514/619

References Cited

U.S. PATENT DOCUMENTS

5,081,153 1/1992 Pathak et al. .......................................424/649

OTHER PUBLICATIONS

White et al., "Induction Chemotherapy for Advanced Head and Neck Cancer...,"
Am. J. Clin. Oncol. (CCT), 15(1) (1992), pp. 45-55.
S. Lybak et al., "Dose schedule evaluation of metoclopramide...," Anti-Cancer
Drugs 2: 375-82 (1991).
R. J. Nelt et al., "Phamacokinetis of Non-Protein-Bound Platinum Species...,"
Cancer Treat. Rep. 63: 1515-21 (1979).
J. Hansson et al., "Cis-Diamminedichloroplatinum (II) Toxicity...," Acta
Oncologica 27: 383-92 (1988).
K.C. Micetich et al., "A Comparative Study of the Cytotoxicity...," Cancer
Research 45: 4043-47 (1985).
L.A. Zwelling et al., "DNA-Protein and DNA Interstrand Cross-Linking...,"
Cancer Research 39: 365-69 (1979).
C.A. Perez et al., "Impact of Irradiation Technique and Tumor Extent...,"
Cancer 50: 1091-99 (1982).
E. Kjellen et al., "Metoclopramide enhances the effect of cisplatin...,"
Br. J. Cancer 59: 247-50 (1989).
E. Kjellen et al., "A therapeutic benefit from combining normobaric
carbogen...," Radiotherapy and Oncology 22: 81-91 (1991).
S. Lyback, Metoclopramide: A representative of a new class of drugs for
potentiation of cytotoxicity, University of Lud, Sweden (1991), p. 115.

Primary Examiner -- Nathan M. Nutter
Attorney, Agent, or Firm -- Cooper & Dunham

406050.1

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ABSTRACT

The effectiveness of cytostatic and/or cytotoxic drugs and/or radiation in the
killing of tumor and/or cancer cells is increased by the administration, along
with said drugs and radiation, of an effective activating or inhibiting amount
of a compound or agent which activates or inhibits the chromatin-bound enzyme
adenosine diphosphate ribosyl transferase (ADPRT) or the administration of an
effective intracellular free Ca++-increasing amount of a compound which induces
cellular or oxidative stress or which acts as an inhibitor or antagonist or
calmodulin or Ca++-calmodulin binding. Suitable such compounds or agents
include the phenothiazines, antihistamines, butyrophenones, cannabinoids and
corticosteriods and particularly metoclopramide when employed in combination
with cisplatin.

7 Claims, 1 Drawing Sheet

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[GRAPHIC]

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TUMOR OR CANCER CELL KILLING THERAPY AND AGENTS USEFUL THEREFOR

This is a continuation of application Ser. No. 089,477, filed Aug. 25, 1987.

BACKGROUND OF THE INVENTION

One important strategy in designing effective cancer chemotherapeutic
drugs is defining the mechanism of cell death. Activation of the
chromatin-bound enzyme, adenosine diphosphate ribosyl transferase (ADPRT), and
the subsequent depletion of energy metabolites, such as NAD and ATP, are
involved in the suicidal response to induced cellular DNA damage that leads
eventually to cell death, Berger, N.A., J. Clin. Invest. 78: 1131-1135, 1986.

Radiation and/or most cancer therapeutic drugs induce DNA damage, and as a
consequence involve ADPRT activity as part of their cytotoxic mechanisms of
action, Huet and Laval, Int. J. Radiat. Biol. 47: 655-662, 1985.

Hence, inducers of ADPRT enhance cytotoxicity by seriously depleting
cellular energy pools in an effort to repair the potentially lethal DNA damage
induced by most chemotherapeutic drugs and/or radiation. This is true because
NAD is consumed as a co-substrate by ADPRT activity, Hayaishi and Ueda, Ann.
Rev. Biochem. 46: 96-116, 1977; Purnell et al., Biochem. Soc. Trans. 8:215-227,
1980, which is in turn induced by DNA strand breaks, Halldorsson et al., FEBS
Lett. 85: 349-352, 1978; Benjamin and Gill, J. Biol, Chem. 255:10493-10508,
1980; Cohen and Berger, Biochem. Biophys. Res. Commun. 98: 268-274, 1981. since
cellular NAD/ATP pools are coupled, then cellular energy is depleted and
cytotoxicity is enhanced. On the other hand, inhibitors of ADPRT are also
sensitizers of cytotoxicity because they prevent the repair of potentially
lethal DNA damage.

BRIEF DESCRIPTION OF THE DRAWING

FIG. 1 shows the effect of treatment of the growth of a human squamous
cell carcinoma xenographed to nude mice with CDDP
(CiS-Diamine-Dichloroplatinum) combined with Metoclopramide.

The invention is indicated in accompanying FIG. 1 wherein data
demonstrating the effectiveness of a practice of this invention is graphically
illustrated.

SUMMARY OF THE INVENTION

This invention relates to the discovery that many compounds with
antiemetic action, such as the substituted N-tertiary amino benzamides,
phenothiazines, antihistamines, butyrophenones, cannabinoids, and
corticosteriods have properties that enhance the effectiveness of cytostatic
drugs or radiation in the killing of tumor cells. Broadly, compounds which
activate or inhibit the chromatin-bound enzyme adenosine diphosphate ribosyl
transferase ADPRT or which induce cellular or oxidative stress or which act as
inhibitors or antagonists of calmodulin or Ca++-calmodulin binding are useful
to enhance the effectiveness of cytostatic drugs or radiation in the killing of
tumor cells.

DETAILED DESCRIPTION OF THE INVENTION

There are at least 4 well known classes of inhibitors of ADPRT; namely
nicotinamide analogs, benzamide analogs, pyrazinamide analogs and purine
analogs, Sims et al., Biochem. 21: 1813-1821, 1982, Nduka et al., Eur. J.
Biochem. 105: 525-530, 1980. The common structural feature that was shown to be
of importance to maintain a high degree of inhibition of ADPRT by the analogs
of nicotinamide, benzamide and pyrazinamide, is the presence of a
ring-carboxamide group. For example, benzoic acid, 3-aminobenzoic acid,
pyrazine 1,2-dicarboxylic acid, isonicotinic acid, and 6-amino nicotinic acid
all failed to inhibit ADPRT, Sims et

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al., Biochem. 21: 1813-1821, 1982. Therefore, judging from an experimental
point of view it would not be obvious that N-tertiary amino substitutions of
the carboxamide residue of benzamide analogs would result in derivatives that
can modulate ADPRT. In fact, the only known pharmacological/biological effects
reported in the scientific literature for these analogs are as antiemetic
agents, see U.S. Pat. No. 3,177,252, and for review see also Weiss and
Weintraub, Drug Ther. 12: 167-170, 1982 and Reich, S. O., Cancer Nurs. 6:
71-73; 1983).

Nicotinamide, benzamide, 3-aminobenzamide and purine analogs, such as
theophylline and other xanthines, have been shown to be effective sensitizers
of the cytotoxic action induced by radiation and cancer chemotherapeutic drugs
in both cell culture and animal tumor model systems, Ben-Hur, E., Int. J.
Radiat. Biol. 46: 659, 1984; Utsumi and Elkind, Brit. J. Cancer (suppl. 6):39,
1984; Calcutt et al., Brit J. Cancer 24: 380, 1970; George et al., Int. J.
Radiat. Biol. 49: 783, 1986; Thraves et al., Int. J. Radiat. Oncol, Biol. Phys.
12:1541, 1986; Thraves et al., Int. J. Radiat. Res. 104:119, 1985; Thraves et
al., Int. J. Radiat. Biol. 50:961, 1986; Kumor et al., Int. J. Radiat. Biol.
47:1C3, 1985, Huet and Laval, Int. J. Radiat. Jonsson et al., Cancer Res.
45:3609, 1985; Kjelle'n et al., Acta Radiologica 25:281, 1986; Horsman et al.,
Int. J. Radiat. Oncol. Biol. Phys. 12:1307, 1986; Horsman et al., Radiat. Res.
109:479, 1987; Nduka et al., Eur. J. Biochem. 105:525, 1980; Mourelatos et al.,
Mutation Res. 121:147, 1983. However, with the exception of nicotinamide, all
of these classes of sensitizers are quite toxic by themselves thereby limiting
their potential development for use in humans. Furthermore, relatively high
doses were required for sensitizing either cells (millimolar concentration) or
tumor bearing animals 100 mg/kg) to radiation or cancer chemotherapeutic
drugs.

Nicotinamide will radiosensitize an adenocarcinoma transplanted in C3H
mice at a dose of 10 mg/kg whereas benzamide is totally ineffective in this
dose range, Kjelle'n and Pero, Eight International Symposium on
ADP-ribosylation, May 30 - June. 3, 1987, Forth Worth, Tex., Abstract 76. The
low dose effectiveness of nicotinamide has been attributed to an active
transport mechanism for which benzamide can only partially and poorly compete,
Pero et al., Eight International Symposium on ADP-ribosylation, May 30 - Jun.
3, 1987, Forth Worth, Tex., Abstract 69. However, compounds which would compete
for the nicotinamide binding and transport site and which modulate ADPRT, then
such compounds would be theoretically effective sensitizers of radio- and
chemotherapies at non-toxic low doses. Metoclopramide (4-amino-5-chloro-N-[(2-
diethylamino)ethyl]-2-methoxy-benzamide) is a drug like nicotinamide in that it
sensitizes a cancer chemotherapeutic agent at the daily low dose of 2 mg/kg.

Most chemotherapeutic agents utilized in the treatment of tumors cause,
among other disturbances, a gastrointestinal toxicity characterized in
particular by nausea and vomiting. These symptoms are important in that they
affect the patients' well-being and ability to nourish themselves and often may
exercise an influence on their acceptance or refusal to continue treatment.
Metoclopramide is well established as a successful antiemetic treatment for
chemotherapy induced nausea and vomiting, see Reich, S.D. Cancer Nurs. 6:71-73,
1983, although several other drugs with antiemetic properties, such as
phenothiazines, antihistamines, benzamide derivatives, butyrophenones,
cannabinoids, and corticosteriods have ben used, Laszlo, J. Drugs 25 (Suppl.
1):1-7, 1983. However, despite the common use of metoclopramide and other
antiemetics in chemotherapeutic treatment regimens, these drugs have never been
evaluated in relation to the clinical effectiveness of the chemotherapeutic
drug and in combination therewith.

Contrary to scientific expectations and based on benzamide analog studies
as inhibitors of ADPRT and thus sensitizers of radio- and chemo- therapies,
substitutions into the carboxamide group of benzamide, nicotinamide and
pyrazinamide analogs, do not necessarily destroy the sensitizing properties of
these compounds since metoclopramide, a polysubstituted-N-tertiary amino alkyl
benzamide, is an effective sensitizer in cancer chemotherapy, such as a
sensitizer of a cancer chemotherapeutic drug.

The following are examples of the practices of this invention.

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EXAMPLE 1

Cisplatin (cis-diamine-dichloroplatinum = CDDP) is a heavy metal complex
with alkylating properties which allow bifunctional linking to DNA. CDDP has
been used successfully as a chemotherapeutic agent to treat several types of
human cancers. Since CDDP treatment regimes induce nausea and vomiting,
metoclopramide is often co-administered therewith as an antiemetic drug. This
example demonstrates that metoclopramide not only suppresses the number of
episodes of nausea and vomiting, but it also potentiates the cytotoxic effect
of CDDP on human cancer cells, such as on a human squamous cell carcinoma (SCC)
(ABII) of the head and neck xeno-grafted to nude mice.

Two administration schedules were tested: (A) metoclopramide (2.0 mg/kg
i.p.) one hour before CDDP (7.5 mg/kg i.p.) and (B) metoclopramide (2.0 mg/kg X
3 treatment times) given separately concomitant to CDDP (7.5 mg/kg i.p.) and 24
hr. and 48 hr. after CDDP administration. In both schedules the combined
treatment was compared with CDDP alone, metoclopramide alone and with
physiologic saline treated tumor bearing animals (controls). The tumor line
used was a poorly differentiated human SSC originating from the nose. There
were n=10 animals in each group. Tumor diameters and animal weight were
recorded and plotted twice weekly for 21 days. Treatment efficacies were
compared using the area under the plotted growth curves (AUC).

There was no mortality and no weight loss of significance in any treatment
group. In neither schedule A nor B did metoclopramide alone induce any
significant reduction in AUC. CDDP alone gave a significant reduction of
AUC-values. In schedule A the addition of metoclopramide did not give any
additive effect. In schedule B metoclopramide potentiated the effect of CDDP,
which when given alone reduced AUC to 72% of control tumor growth. CDDP +
metoclopramide significantly reduced AUC to 36% of control tumor growth. The
above experiment was repeated using another human SSC (EH) transplanted in nude
mice. The tumor weights at day 21 after the initiation of the experiment are
graphically presented in FIG. 1. Likewise, a significant reduction in tumor
weight was achieved with a combined treatment of CDDP + metoclopramide. These
data show that metoclopramide sensitizes or enhances the cytotoxic action of
CDDP against two different human SSC lines carried in nude mice, and at a dose
currently being administered as an antiemetic agent to patients receiving
cancer chemotherapy.

As mentioned above, inhibitors of ADPRT enhance the cytotoxicity induced
by radiation and cancer chemotherapeutic drugs. However, it is also important
to appreciate that DNA strand damaging agents induce ADPRT activity and DNA
damage is a target site for the biological induction of cytotoxicity, Durkacz
et al., Nature 296: 593-596, 1980, and as cited above. Therefore, both
inhibitors and inducers of ADPRT are potential sensitizers of the cytotoxic
action of drugs, e.g. (A) inhibitors because they prevent the removal of
potentially lethal DNA damage of ADPRT directed DNA repair mechanisms and (B)
inducers because they enhance the production of drug- or radiation-induced DNA
damage by altering the endogenous cellular mechanisms that lead to DNA damage
and the subsequent activation of ADPRT. The following example presents one such
mechanism of endogenous DNA damage induction valid in general for many of the
drugs with antiemetic properties.

The free cytosolic level of Ca++ is known to be a critical event in the
mechanism of cytotoxicity, Trump and Berezesky, Role of Sodium and Calcium
Regulation in Toxic Cell Injury, in Drug Metabolism and Drug Toxicity, J.R.
Mitchell and M.G. Horning (eds), Raven-Press, New York, pp 261-300, 1984, and
agents that induce oxidative stress increase intracellular free Ca++ which is,
in turn, modulated by the Ca++ binding protein calmodulin, Mirabelli et al., J.
Biochem. Toxicol. 1: 29-39, 1986; and Means and Dedman, Nature 285: 73-77,
1980. Hence, antagonists of Ca++-calmodulin binding or agents that increase
free cytosolic Ca++, such as oxygen radicals produced by oxidatively stressing
the cell, would be expected to increase DNA damage, thereby activating ADPRT
and inducing cytotoxicity by a mechanism different from that associated with an
inhibition of ADPRT and DNA repair, Schraufstatter et al., J. Clin. Invest.
76:1131-1139, 1985, and Schraufstatter et al., J. Clin. Invest. 77:1312-1320,
1986.

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The following Example II establishes that many antiemetic agents can
modulate cellular Ca++ homeostasis, activate ADPRT, induce cytotoxicity in
themselves and thus possess the properties to sensitize or enhance or increase
cytotoxicity when used in combination with radiation and/or cancer chemotherapy
drugs. Although some antiemetic agents are known to antagonize Ca++-calmodulin
binding, Hidaka H. and Hartshorne D.J. (eds) Calmodulin Antagonists and
Cellular Physiology, Academic Press, Inc. New York, pp. 1-543, 1985), they are
not known to induce ADPRT or to enhance cytotoxicity.

EXAMPLE II

Human mononuclear leukocytes (HML) were isolated by Isopaque-Ficoll
gradient centrifugation from heparinized peripheral blood samples as already
described (Boyum, A., Scand. J. Clin. Lab. Invest. 21 (Suppl. 7):7, 1968. The
HML were adjusted to 1 X 106 cells per ml of Eagles minimum essential medium
and cultured at 37(degree) C. for 30 min in the presence or absence of the
indicated doses of the compounds shown in accompanying Table 1. Either
physiologic saline or 95% ethanol 0.5%, v/v) were used as co- solvents.
Cytotoxicity was assessed by trypan blue exclusion either after the 30 min
incubation period or after 18 hr incubation at 37(degree) C. of parallel
cultures as already described, Pero et al., Mutation Res. 83:271-289, 1981.
ADPRT activity was always estimated after the 30 min exposure and incubation in
permeabilized cells as described previously, Pero et al., Chem. Biol.
Interactions 47:265-275, 1983. Briefly, HML were permeabilized, exposed to 250
uM NAD tritium-labelled in the adenine moiety (20-25 Ci/mMol, Amersham, diluted
875:1 with cold NAD) for 15 min at 30(degree) C., and the protein-bound
ADP-ribose collected onto nitrocellulose filters following precipitation with
10% trichloroacetic acid (TCA). The data were recorded as cpm TCA precipitable
[3H]NAD per 1 X 106 cells.

W-7, see footnote to Table 1, is a well characterized calmodulin
antagonist which has an IC50 does of around 50uM whereas W-5, a closely related
structural analog, is inactive at 50 uM and it has an IC50 of about 250 uM
Hidaka et al, Proc. Natl. Acad. Sci. U.S.A. 78:4354-4357, 1981. These two
compounds have been used effectively to distinguish calmodulin modulated
biological events, e.g. inhibition of cell proliferation, phosphodiesterase and
myosin light chain kinase. Hence, W-7 and W-5 were used to determine the effect
of calmodulin mediated cellular events on ADPRT activity and cytotoxicity. The
data in accompanying Table 1 clearly show that W-7 induces ADPRT activity and
this effect is paralleled by an increase in cytotoxicity. No such effects were
observed with W-5, indicating that Ca++-calmodulin antagonism is an important
endogenous mechanism for mediating cytotoxic responses and cytotoxicity can be
induced by agents that antagonize Ca++- calmodulin binding.

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TABLE I
- -------------------------------------------------------------------------------

Activation of ADPRT and resultant cytotoxicity induced by
agents that modulate Ca++ homeostasis in HML.
-------------------------------------------------------------------------------
% Dead Cells(a)
Concentration ADPRT ----------------------
Agents (uM) Activity(a) 30 min 18 hr
- --------------------------------------------------------------------------------

(1) Controls 0 385 less than 5% less than 5%
0 350 less than 5% less than 5%

(2) W-7(b) 50 750 10% --
100 910 25% --
200 1480 90% --

(3) W-5(c) 50 395 less than 5% 5%
100 415 less than 5% 5%
200 425 7% --

(4) H2O2 100 1800 5% 40%
300 2700 5% 41%
500 2900 7% 55%
1000 3000 12% 71%

(5) Metoclopramide(d) 500 530 7% 8%
2000 703 13% 29%
5000 950 10% 58%
10000 870 22% 88%

(6) Chlorpromazine(e) 100 1508 50% --
500 890 100% --

(7) Trimeprazine(f) 100 639 7% --
500 571 95% --

(8) Dixyrazine(g) 100 385 13% 78%
500 850 79% 100%

(9) Haloperidol(h) 100 655 6% --
500 746 60% --

(10) Moperone(i) 100 529 5% --
500 712 7% --
1000 1112 26% 100%

a The average of duplicate determinations are presented
b W-7 = N-(-6-aminohexyl)-5-chloro-1-naphthalenesulfonamide
c W-5 = N-(-6-aminohexyl)-naphthalenesulfonamide
d Metoclopramide = 4-amino-5-chloro-N-[C2-diethylamino)ethyl]-
2-methoxybenzmide
e Chlorpromazine = 2-chloro-N, N-dimethyl - 10H-phenothiazine-10-propanimine
piperazinyl]ethoxy]-ethanol
h Haloperidol = 4-[4(4-chlorophenyl)-4-hydroxy-1-piperidinyl]-1-
(4-fluorophenyl)-1-butanone
i Moperone = 1-(4-fluorophenyl))-4-[4-hydroxy-4(4-methyl phenyl)-
1-piperidiayl]-1-butanone

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The importance of cellular Ca++ homeostasis in the induction
of ADPRT and cytotoxicity is further supported by the data recorded for H2O2 in
Table 1. H2O2 is well known to induce a Ca++ efflux from plasma membranes and
mitochondria thus elevating intercellular free Ca++, imbalancing Ca++
homeostasis and inducing cytotoxicity, Mirabelli, et al, J. Biochem. Toxicol.
1:29-39, 1986. Again the data clearly indicate that H2O2 induces ADPRT which is
paralleled by increases in interphase cell death, although the cytotoxicity is
more evident after 18 hr incubation than immediately after exposure (i.e. 30
min). The data confirm thatgents which interfere with Ca++ homeostasis can also
enhance cytotoxicity, and therefore these types of compounds are potential
sensitizers of radiation and chemotherapeutic drugs.

The data reported in Table 1 on metoclopramide confirm this hypothesis.
The data reported in Example I demonstrate that metoclopramide is a good
sensitizer of the chemotherapeutic drug, cisplatin, and Table 1 establishes
that metoclopramide activates ADPRT and induces cytotoxicity endogenously
without the addition of other cytostatic agents. Since the other classes of
agents presented in Table 1 are known modulators of Ca++ homeostasis and they,
in turn, gave similar patterns of induction of ADPRT and cytotoxicity, it is
concluded that these common biochemical/biological effects are characteristic
of a new class of sensitizers of radiation and chemotherapeutic drugs, all as
described herein. These common biochemical/biological effects are
characteristic of a new class of sensitizers of radiation and chemotherapeutic
drugs and are totally unexpected since metoclopramide is a benzamide derivative
and benzamide derivatives have previously only been shown to sensitize
cytostatic agents by inhibition of ADPRT. Consequently, Example II reveals that
many antiemetic agents possess the common property of inducing ADPRT and
cytotoxicity presumably via modulation of Ca++ homeostasis thus giving these
agents the potential to sensitize the cytostatic action of other agents, such
as radiation and chemotherapeutic drugs.

Compositions useful in the practices of this invention include in their
make-up a cytotoxic or cytostatic compound or agent and a compound or agent
which activates or inhibits ADPRT and/or which induces cellular or oxidative
stress, such as a compound which produces or yields cellular H2O2 or which acts
as an inhibitor or antagonist of calmodulin or Ca++-calmodulin binding.

Useful cytotoxic or cytostatic compounds or agents include, in addition to
cisplatin, the other useful chemotherapeutic cytotoxic agents employed in
cancer chemotherapy, such as adriamycin, 5-fluorouracil, methotrexate, cytoxan,
vincristine, daunomycin, BCNU, CCN, MeCCNU and others.

Useful compounds or agents which activate or inhibit ADPRT or which induce
cellular or oxidative stress or which act as inhibitors or antagonists of
calmodulin of Ca++-calmodulin binding include metoclopramide, chlorpromazine,
trimeprazine, dixyazine, halperidol, moperone, W-7 and W-5. The recently
discovered parathyroid hormone factor, PTH-like peptide, a factor which induces
high blood levels of calcium, see Science, Vol. 237, pages 363,364, July 24,
1987, also is usefully employed in compositions of and in the practices of this
invention.

As indicated hereinabove, the compounds or agents which activate or
inhibit ADPRT or which induce cellular or oxidative stress or which act as
inhibitors or antagonists of calmodulin or Ca++-calmodulin binding and the
associated cytotoxic or cytostatic agent employed in combination therewith may
be administered to the human patient undergoing treatment simultaneously,
separately or combined in the same composition, or substantially
simultaneously, such as one compound or agent before the other or within the
period of time of 1- 120 minutes, more or less, after administration of the
first compound or agent of the combination. These administrations, usually
intravenously, may be continued over an extended period of time of days, weeks
or months.

Compositions in accordance with the practice of this invention which are
usefully employed for inhibiting, controlling or reducing in humans the growth
of human tumor or cancer cells by administration alone or in combination with
radiation therapy contain an effective amount of a cytotoxic or cytostatic
compound or agent in the range 0.1-20 parts by weight or mols and an effective
amount of a compound or agent which

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406050.1

<PAGE>

activates or inhibits the chromatin-bound enzyme adenosine diphosphate ribosyl
transferase ADPRT or which induces cellular or oxidative stress or which acts
as an inhibitor or antagonist of calmodulin or Ca++-calmodulin binding in the
range 0.1-20 parts by weight or mols. The above-mentioned amounts of these
compounds present in the compositions of this invention are relative to each
other, i.e. for every 0.1-20 parts by weight or mols of one compound there is
present a corresponding amount in the range 0.1-20 parts by weight or mols of
the other compound.

Such compositions are administered by the usual or conventional
techniques, e.g. orally, intramuscularly, intravenously or subcutaneously,
usually depending upon the character of the cytotoxic or cytostatic compound
present in the composition and the nature, amount and location of the tumor or
cancer cells being treated. The amount or dosage of such compositions
administered also depends up on the character of the cytotoxic or cytostatic
compound in the composition as well as the character of the other compound
making up the composition of this invention, the amount and/or nature of the
tumor or cancer cells being treated and the extent or degree of inhibition of
the tumor or cancer cells desired.

Although compositions in accordance with this invention usually contain a
compound which activates or inhibits ADPRT in an amount in the range 0.1-20
parts by weight or mols, compositions which contain such compounds in an amount
outside this range are also useful. For example, compositions which contain
compounds which activate ADPRT in an amount in the range 0.01-12 parts by
weight or mols or, for example, an amount in the range 0.5-2.0, are also
useful. Compositions which contain these same amounts or ratios of the other
compound, i.e. compounds which induce cellular or oxidative stress which act as
inhibitors or antagonists of calmodulin or Ca++-calmodulin binding are also
useful in the practices of this invention.

Although emphasis in the disclosures of this invention has
been placed on the use of these compositions for inhibiting in humans the
growth of tumor or cancer cells, compositions of this invention which contain
substantially only a compound or agent which induces cellular or oxidative
stress or which acts as an inhibitor or antagonist of calmodulin or
Ca+++-calmodulin binding, are also useful. For example, such special
compositions in accordance with this invention which contain a compound or
agent which induces cellular or oxidative stress or which acts as an inhibitor
of calmodulin or Ca++-modulin binding without a cytostatic or cytotoxic drug or
with the substantial absence therein of a cytostatic and/or cytotoxic drug, are
useful in the treatment of human patients undergoing radiation therapy for
inhibiting the growth or tumor or cancer cells.

Indeed, in accordance with yet another embodiment of the practices of this
invention such compositions which do not contain a cytostatic and/or cytotoxic
drug are useful in the long term treatment of humans for the prevention of
caner. Such long term treatment would extend over a period of many months and
years, with regular small dosages to the human patient of a composition in
accordance with this invention which contains a compound or agent which induces
cellular or oxidative stress or which acts as an inhibitor or antagonist of
calmodulin or Ca++-calmodulin binding. Such compositions when employed for long
term treatment for the prevention of cancer in humans might also contain a
small clinically ineffective amount of a cytotoxic or cytostatic drug. This
aspect of this invention, however, for the prevention of human cancer is
presently less preferred than the use of compositions which contain
substantially only a compound or agent which induces cellular or oxidative
stress or which acts as an inhibitor or antagonist of calmodulin or Ca++-
calmodulin binding.

As will be apparent to those skilled in the art in the light
of the foregoing disclosures, many modifications, substitutions and alterations
are possible in the practices of this invention without departing from the
spirit or scope thereof.

What is claimed is:

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406050.1

<PAGE>

1. A method of inhibiting or killing tumor or cancer cells in
a human patient which comprises treating the patient with a chemotherapeutic
agent or radiation while administering to the patient an N-substituted
benzamide, that can activate ADPRT, in an amount effective to increase the
cytotoxicity of the chemotherapeutic agent or the radiation.

2. A method according to claim 1, which comprises treating the patient
with radiation while administering to the patient an N-substituted benzamide,
that can activate ADPRT, in an amount effective to increase the cytotoxicity of
the radiation.

3. A method according to claim 2, wherein said N-substituted benzamide,
that can activate ADPRT, is metoclopramide.

4. A method according to claim 1, which comprises treating the patient
with a chemotherapeutic agent while administering to the patient an
N-substituted benzamide, that can activate ADPRT, in an amount effective to
increase the cytotoxicity of the chemotherapeutic agent.

5. A method according to claim 4, wherein said N-substituted benzamide,
that can activate ADPRT, is metoclopramide.

6. A method of inhibiting or killing tumor or cancer cells in a human
patient which comprises treating the patient with a chemotherapeutic agent or
radiation while administering to the patient, in combination, nicotinamide and
an oxidative stressing agent in amounts that, in combination, are effective to
increase the cytotoxicity of the chemotherapeutic agent or the radiation.

7. A method of inhibiting or killing tumor or cancer cells in a human
patient which comprises treating the patient with a chemotherapeutic agent or
radiation while administering to the patient (a) an N-substituted benzamide,
that can activate ADPRT, in an amount effective to increase the cytotoxicity of
the chemotherapeutic agent or the radiation or (b) in combination, nicotinamide
and an oxidative stressing agent in amounts that, in combination, are effective
to increase the cytotoxicity of the chemotherapeutic agent or the radiation.

* * * * *

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406050.1

[GRAPHIC]
US005482833A

United States Patent Patent Number: 5,482,833

Pero et al. Date of Patent: Jan. 9, 1996
_______________________________________________________________________________

TEST TO DETERMINE PREDISPOSITION OR SUSCEPTIBILITY TO DNA ASSOCIATED DISEASES

Inventors: Ronald W. Pero, New York; Daniel G. Miller, Scarsdale, both
of N.Y.

Assignee: Preventive Medicine Institute, New York, of N.Y.

Appl. No.: 430,326

Filed: Apr. 26, 1995

Related U.S. Application Data

Continuation of Ser. No. 869,823, Apt. 15, 1992, abandoned, which is a
continuation of Ser. No. 333,841, Apr. 3, 1989, abandoned, which is a
continuation of Ser. No. 820,203, Jan. 17, 1986, abandoned.

Int. Cl(6)...............................................C12Q 1/68; A61K 48/00;
A61K 49/00
U.S. Cl...................................................435/6; 435/4; 435/15;
435/29; 435/173.1; 435/820; 436/501; 436/63;
436/64; 436/813; 436/815; 514/2; 514/44;
536/22.1; 536/25.3; 935/77
Field of Search...............................................435/4, 6, 15, 29,
435/173.1, 820; 436/501, 63, 64, 813, 815;
514/2, 44; 536/22.1, 25.3; 935/77

References Cited

U.S. PATENT DOCUMENTS

4,585,736 4/1986 Dolbeare et al. ....................................435/6

FOREIGN PATENT DOCUMENTS

3336786 3/1985 Germany............................................435/15

OTHER PUBLICATIONS

Pero et al. (1985) Carcinogenesis, vol. 6, No. 7, pp. 1055-1058.
Pero et al. (1985) Mutation Res., vol. 142, pp. 69-73.
Biological Abstracts 78 (7) 55503.
Biological Abstracts 80 (2) 13747.
Chemical Abstract 105: 19647.
Chemical Abstract 105: 95311.

406078.1

<PAGE>

Davis et al., Microbiology including Immunology and Molecular Genetics, 3rd
ed., pp. 186-189 (1980).
Robbins, Pathologic Basis of Disease, pp. 148-152 (1974).
Simic et al., Mechanisms of DNA Damage and Repair, pp. 164-165 and 357-363
(1986).
Weisburger, J. "Bioassays and Tests for Chemical Carcinogens," Chemical
Carcinogens, 1976, chapter 1, pp. 1-23.

Primary Examiner -- W. Gary Jones
Assistant Examiner -- Ardin H. Marschel
Attorney, Agent, or Firm -- Cooper & Dunham

ABSTRACT

Cellular DNA repair enzyme activity has been found to be an indicator of
susceptibility or predisposition of an individual to DNA associated diseases.
The activity of the enzyme adenosine diphosphate ribosyl transferase (ADPRT)
has been found to be a good indicator as to the susceptibility of an individual
to DNA associated diseases, such as cancer.

23 Claims, 1 Drawing Sheet

406078.1

<PAGE>

[GRAPHIC]

406078.1

<PAGE>

TEST TO DETERMINE PREDISPOSITION OR
SUSCEPTIBILITY TO DNA ASSOCIATED DISEASES

This is a continuation of application Ser. No. 869,823 filed Apr. 15,
1992, which is a continuation of Ser. No. 333,841 filed Apr. 3, 1989, which is
a continuation of application Ser. No. 820,203, filed Jan. 17, 1986 (all now
abandoned).

BACKGROUND OF THE INVENTION

This invention relates to DNA associated diseases, such as cancer. In one
aspect of this invention, this invention relates to a method for determining
the level of cellular DNA repair enzyme activity. In another aspect, this
invention relates to a method for monitoring the level of activity of cellular
DNA repair enzymes in response to a stress. In another aspect, this invention
relates to a method for screening individuals for the predisposition to cancer
or other diseases associated with DNA damage. In yet another aspect, this
invention relates to a method for screening therapeutic agents which may be
useful for treating individuals with a predisposition to or a disease
associated with DNA damage.

Most living cells possess systems for recognizing and eliminating DNA
damage. As used herein, the term "DNA damage" refers to strand breaks,
dimerization, unpaired bases, modified bases, conversion of one base into
another resulting in unpaired bases, chromatin unwinding or other
modifications, etc. For example, E coli possesses a variety of enzymes for
responding to DNA damage, such as enzymes of the SOS repair system and the
various Rec proteins. These enzymes, and others, respond to DNA damage caused
by U.V. radiation, chemical mutagens and the like. However, little is known
about the mechanism by which the repair systems are activated by DNA damage.

In addition to the prokaryotic enzymes discussed above, eucaryotic and
mammalian cells are also known to possess DNA repair enzymes. These enzymes are
important in controlling diseases associated with DNA damage, as is clearly
shown in the disease Xeroderma pigmentosum (Xp). This recessive disease results
in hypersensitivity to sunlight, particularly to ultraviolet radiation. The
disease is the result of a faulty excision repair system. Fibroblasts from Xp
patients are deficient in the ability to excise and correct thymine dimers and
other adducts. The deficit has been shown to be in enzymes that function at the
excision step of repair. Another disease correlated with faulty DNA repair is
Bloom's disease, in which an increased frequency of chromosomal aberrations is
seen.

DNA repair synthesis has been studied in cancer patients, see particularly
the article by R.W. Pero et al. entitled "Reduced Capacity for DNA Repair
Synthesis in Patients with or Genetically Predisposed to Colorectal Cancer",
JNCI, Vol. 70, No. 5, pp. 867-875, May, 1983, and the article by R.W. Pero et
al. entitled "Unscheduled DNA Synthesis in Mononuclear Leukocytes from Patients
with Colorectal Polyps", Cancer Research, Vol. 45, pp. 3388-3391, July, 1985.
These articles are of interest to the practices of this invention as applied to
the measurement of the activity of DNA repair enzymes as being an indicator of
the predisposition or susceptibility of an individual to colorectal cancer.

DNA damage, as indicated herein, may be caused by a number of agents. For
example, oxygen supplied at concentrations greater than those of normal air has
long been known to damage plants, animals and aerobic bacteria, see J.D.
Balantine, Pathology of Oxygen Toxicity, 1982, Academic Press, New York. It has
been proposed that many of the damaging effects of O2 could be attributed to
the formation of O2 radicals, see D.L. Gilbert (ed) Oxygen and Living
Processes: An Interdisciplinary Approach, 1981, Springer Verlag, New York. The
reactive oxygen species are superoxide, H2O2 and a hydroxyl radical. These are
generated in vivo, i.e. endogenously in the body, as a consequence of normal
metabolism; see B. N. Ames, Science, 221: 1256-1264, 1983. The oxidation of
certain cellular components by these oxygen species could, in turn, contribute
both to aging and to age-dependent diseases, such as cancer; see P.A. Cerutti,
Science, 227:375-380, 1985.

406078.1

<PAGE>

H2O2 is produced by all viable cells; see Romasarma, Biochem Biophysica
Acta, 694:69-93, 1982, and it can be both a mutagen/carcinogen or promoter; see
Troll & Wiesner, Ann. Rev. Pharmocol. Toxicol. 25:509-528, 1985, depending upon
the cell type. The molecular response of a cell to stress whether it be induced
by hyperthermia or by H2O2 is very similar; see Christman et al, Cell
41:753-762, 1985.

The practice of this invention in one embodiment employs H2O2 as an agent
for oxidative stress to produce cellular DNA damage, thereby to induce a
cellular DNA repair enzyme response, such as a response of the DNA repair
enzyme adenosine diphosphate ribosyl transferase (ADPRT).

ADPRT is a nuclear enzyme which covalently attaches ADP-ribose moieties
derived from NAD to chromatin proteins; see Hayoishi and Ueda, Ann. Rev.
Biochem. 46:96-116, 1977 and Purnell et al., Biochem. Soc. Transa. 8:215-227,
1980. The enzyme is dependent on DNA and is strongly stimulated by DNA-strand
breaks; see Halldorsson et al., FEBS LETT. 85:349-352, 1978; Benjamin and Pill.
J. Biol. Chem. 255:10493-10508, 1980; Cohen and Berger, Biochem. Biophys. Res.
Commun. 98:268-274, 1981. Although the role of ADPRT in cells is not fully
understood, convincing data have been reported in its involvement in DNA
repair; see Durkacz et al., Nature 283:593-596, 1980; Zwelling et al., Biochem.
Biophys. Res. Commun. 104:897-902, 1982; Althaus et al, Biol. Chem.
257:5528-5535, 1982; Chreissen and Shall, Nature 296:271-272, 1982 and Pero et
al., Chem. Biol. Interact. 47:265-275, 1983. The involvement of this enzyme in
cellular differentiation is reported by Farzaneh et al., Nature 300:262-266,
1982; Johnstone and Williams, Nature 300:368-370, 1982); and Pero et al.
Carcinogenesis 6:1055-1058, 1985. The involvement of this enzyme in gene
expression is mentioned by Althaus et al., Nature 300:366-368, 1982 and in
connection with longevity by Pero et al., Mutation Res. 142:69-73, 1985. All
these cellular events are important to the process of carcinogenesis and thus
are important potential regulators of individual sensitivity or risk to develop
cancer.

Although, as indicated herein, H2O2 has been known to be produced by
viable cells and to have both carcinogenic and promoting properties, it has
never been shown to directly activate ADPRT in eucaryotic cells. Moreover,
interindividual variation in stress-induced ADPRT, such as oxidative, e.g. H2O2
stress-induced ADPRT, was not known nor was any link to cancer or DNA
associated disease susceptibility previously known. In the development of this
invention there has been observed in 100 uM H2O2-induced ADPRT measured values,
a greater than 50-fold variation in the cell population tested.

The disclosures of the above-identified publications are herein
incorporated and made part of this disclosure.

It is an object of this invention to provide a method whereby individuals
with a predisposition to diseases associated with DNA damage could be
recognized. Upon recognition, such individuals might then beneficially receive
more frequent diagnostic examinations, pretreatment with drugs and the like.

It is also an object of this invention to provide a method for measuring
the activity of DNA repair enzymes, particularly ADPRT activity.

It is also an object of this invention to provide a method for screening
agents for potential therapeutic value for the treatment of individuals
predisposed to diseases associated with the activity of DNA repair enzymes,
such as the activity of ADPRT.

How these and other objects of this invention are achieved will become
apparent in the light of the accompanying disclosure made with reference to the
accompanying drawing which graphically illustrates the relationship of cancer
patients and those with a positive family history of cancer or a negative
family history of cancer with the measured ADPRT activity of such individuals.

406078.1

<PAGE>

SUMMARY OF THE INVENTION

In accordance with this invention a method has been developed
to determine the predisposition or susceptibility of an individual to DNA
associated disease. This method involves subjecting the cellular DNA of the
individual to stress to induce or bring about DNA damage. The activity of the
cellular DNA repair enzymes, particularly ADPRT activity, is then measured and
the measured enzyme activity is then compared against a given or predetermined
value to determine the relative predisposition or susceptibility of the tested
individual to DNA associated disease, such as cancer. A measured value of
cellular DNA repair activity, such as ADPRT activity, below said given value
would indicate a greater susceptibility or predisposition to DNA associated
diseases compared to an individual having a measured value above said given
value.

BRIEF DESCRIPTION OF THE DRAWING

The Figure illustrates patient or family history relationships of cancer
to measured ADPRT activity.

Section (A) of the Figure is a graph illustrating the relationship of
cancer patients with the measured ADPRT activity of such individuals;

Section (B) of the Figure is a graph illustrating the relationship of
persons with a positive family history of cancer with the measured ADPRT
activity of such individuals; and

Section (C) of the Figure is a graph illustrating the relationship of
persons with a negative family history of cancer with the measured ADPRT
activity of such individuals.

DETAILED DESCRIPTION OF THE INVENTION

The method of this invention for identifying an individual with a
predisposition or susceptibility to diseases associated with the activity of
DNA repair enzymes comprises isolating a cell, such as a mononuclear leukocyte
or an epithelial or a fibroblast cell from the individual to be tested,
stressing the cell to damage the cellular DNA structure to produce a stressed
cell containing damaged cellular DNA and then determining a value for the ADPRT
activity in the stressed cell. The measured value of ADPRT is then compared to
the value of ADPRT activity in a cell from a so-called normal individual or a
given value of ADPRT activity. A significant decrease in the activity of the
enzyme ADPRT in the stressed cell would indicate a predisposition of the
individual from whom such cells were taken and tested to DNA associated
disease, such as cancer, relative to another individual whose cells, when so
tested, show a higher measured DNA repair enzyme activity, such as ADPRT
activity.

A variety of agents associated with causing DNA structural damage may be
used in the practice of this invention to stress the cell to be tested to
induce DNA damage. Those agents which cause oxidative stress are preferred,
such as hydrogen peroxide, cumene hydroperoxide and benzoyl peroxide. Other
agents usefully employed include xanthine, xanthine-oxidase, phorobol diesters
and bleomycin. Radiation, such as ultraviolet radiation, gamma radiation or
x-ray radiation, may also be employed to induce cellular DNA damage.

As indicated hereinabove, in the practices of this invention as an
indicator of DNA repair enzyme activity it is preferred to measure the value of
ADPRT activity in a cell containing damaged DNA. In the preferred practice of
this invention the activity of ADPRT is measured as counts per minute (cpm) of
3H-NAD per 1 x 106. The cells to be tested, as indicated herein, could be
isolated from a variety of tissues. Presently preferred cells for testing in
accordance with the practice of this invention are the mononuclear leukocytes,
fibroblasts or epithelial cells but other DNA containing cells may also be
employed. The activity of ADPRT in the cell is determined by contacting the
cell with hydrogen peroxide to produce a stressed cell

406078.1

<PAGE>

containing damaged DNA, followed by measuring the activity of the ADPRT in the
stressed cell to obtain a value for ADPRT activity. The value so obtained is
compared with a predetermined value of at least about 1200 cpm 3H-NAD per 1 x
106 cells, such as a value in the range of 3500-4500 cpm 3H-NAD per 1 x 106
cells. A significant difference of the measured value from the predetermined
value would indicate that the cell so tested provides a modified cellular ADPRT
activity.

In another embodiment of the practice of this invention there is presented
a method for screening therapeutic agents for the treatment of individuals
predisposed to diseases associated with DNA or the activity of DNA repair
enzymes. The method comprises isolating a cell from a predisposed individual,
stressing the cell with an agent to produce cellular DNA damage and with a
therapeutic agent to produce a resulting stressed and treated cell. The
activity of the DNA repair enzymes, such as ADPRT activity in the stressed and
treated cell, is then determined to obtain a value of ADPRT activity and this
value is compared against a predetermined value or a value obtained from a
stressed cell which has not been treated with said therapeutic agent. If the
ADPRT activity value of the stressed but untreated cell is less than the ADPRT
value of the stressed and treated cell, this result would indicate that the
tested therapeutic agent may be effective for the treatment of the predisposed
individual.

The following is an example illustrative of the practice of this
invention:

EXAMPLE

ADPRT is the only known biological reactant that consumes the ADP moiety
of NAD. Accordingly, if NAD is radiolabeled in the adenine moiety, the
trichloracetic acid (TCA)-precipitable radioactive counts would reflect ADPRT
activity via (ADP-ribose) polymerization to chromatin proteins. The protocol
used to measure ADPRT activity is a modification of the procedure of Berger
(D.M. Prescott ed.), Methods in Cell Biology 20:325-400, 1978 and is published
in detail by Pero et al. in Chem Biol Interactions 147, 265-275, 1983.

ADPRT activity was measured as follows: Peripheral blood samples (20 ml)
were collected by venous puncture into heparinized tubes (10-20 USP units/ml)
from 24 individuals with diagnosed cancer of the lung, colon or pancreas, from
25 individuals with at least a first degree relative having either lung, colon
or pancreas cancer and from 21 individuals with no family history of cancer.
The mononuclear leukocyte fraction was isolated from the whole blood samples by
density gradient centrifugation at 400XG for 20 minutes after layering on top
of an Isopaque Ficoll cushion at a density of 1.077 gm/ml.

Duplicate cultures of 1-5x106 cells were incubated with or without either
a standardized dose of either 100 uM H2O2 in 1.0% autologous plasma
supplemented physiological saline for 60 minutes at 37(degree) C. The resulting
mixtures were removed at the end of the incubation period by centrifugation.
The cells (+) and (-) H2O2 treatment were permeabilized, adjusted to 0.5x106
cells per treatment and ADPRT activity estimated after 15 minutes at 30(degree)
C. in a reaction mixture containing 175 uM (161.6 uCi/mmol) of [3H]
adenine-labeled NAD. The data were recorded as TCA precipitable [3H]-NAD per
1x106 cells which were collected onto nitrocellulose filters. The (-) H2O2
ADPRT values were then subtracted from the (+) H2O2 values.

The results of these tests are graphically indicated in the accompanying
drawing. As shown in the drawing, it can be seen that the frequency
distribution of individual values for 100 uM H2O2 induced ADPRT varied in
accordance with either the occurrence or the genetic predisposition to develop
cancer. For example, when 100% of the values for the cancer patients were below
ADPRT values of 2300, 72% of the individuals with a positive family history of
cancer were below 2300 while the corresponding value for the group with no
family history of cancer was 38%, all as indicated in the accompanying drawing.
These results, as shown and quantified in the drawing, can usefully predict an
individual's risk or predisposition or susceptibility to DNA associated
disease, such as cancer.

406078.1

<PAGE>

Although in the practices of this invention it is preferred to measure
directly ADPRT activity by the technique disclosed in the Example described
hereinabove involving the measurement of TCA precipitated radiolabeled protein,
the measurement of ADPRT activity can also be carried out indirectly through
its effect or influence upon other DNA repair enzymes, such as topoisomerase,
ligase and endonuclease and other related DNA associated enzymes, such as
polymerase and exonuclease. The activities of these enzymes as affected by the
activity of ADPRT can be separately measured by suitable techniques involving,
as may be appropriate, radiolabeled components or monoclonal antibodies to
components or products of the activity of such enzymes, particularly as may be
influenced or effected by the activity of ADPRT.

What is claimed is:

1. A method for identifying an individual with a predisposition to
diseases associated with the activity of DNA repair enzymes which comprises
stressing cells of said individual to produce stressed cells containing damaged
DNA, thereby to cause induced activity of adenosine diphosphate ribosyl
transferase (ADPRT) in the stressed cells, determining a value for the induced
activity of the ADPRT in the stressed cells, and comparing the value so
determined with a reference value of the activity of ADPRT to ascertain whether
said value so determined is higher or lower than said reference value, a
determined value lower than said reference value identifying said individual as
having said predisposition.

2. A method in accordance with claim 1 wherein the cell is subjected to
stress by exposure to radiation.

3. A method in accordance with claim 1 wherein said cells are stressed by
ultraviolet radiation.

4. a method in accordance with claim 1 wherein said cells are stressed by
x-ray radiation.

5. A method in accordance with claim 1 wherein the cells are subjected to
oxidative stress.

6. A method in accordance with claim 5 wherein said oxidative stress
involves exposure to hydrogen peroxide.

7. A method in accordance with claim 5 wherein said oxidative stress
involves exposure to cumene hydroperoxide.

8. A method in accordance with claim 5 wherein said oxidative stress
involves exposure to benzoyl peroxide.

9. A method in accordance with claim 5 wherein said oxidative stress
involves exposure to xanthine-xanthine oxidase.

10. A method in accordance with claim 1 wherein the cells are subjected to
stress by contact with phorbol esters.

11. A method in accordance with claim 1 wherein the cells are subjected to
stress by contact with bleomycin.

406078.1

<PAGE>

12. A method in accordance with claim 1 wherein the activity of ADPRT is
measured as cpm 3H-NAD per 1x106 cells.

13. A method in accordance with claim 1 wherein said cells are mononuclear
leukocytes.

14. A method in accordance with claim 1 wherein said cells are
fibroblasts.

15. A method in accordance with claim 1 wherein said cells are epithelial
cells.

16. A method for screening therapeutic agents suitable for the treatment
of individuals predisposed to diseases associated with DNA which comprises
stressing cells of an individual to produce DNA damage, thereby to cause
induced activity of adenosine diphosphate ribosyl transferase (ADPRT) in the
stressed cells, contacting or treating the resulting stressed cells with a
therapeutic agent to produce resulting stressed and treated cells, determining
a value for the induced activity of the ADPRT in the resulting stressed and
treated cells, and comparing the value so determined with a predetermined value
to evaluate the effectiveness of the therapeutic agent for the treatment of
said individual by ascertaining whether said obtained value is higher or lower
than said predetermined value, an obtained value higher than said predetermined
value indicating that the therapeutic agent is effective for the treatment of
said individual.

17. A method of testing an individual for a predisposition to a disease
associated with DNA damage, comprising stressing DNA-containing cells of the
individual to produce stressed cells having damaged cellular DNA, thereby to
cause induced activity of adenosine diphosphate ribosyl transferase (ADPRT) in
the stressed cells, determining a value for the induced activity of ADPRT in
the stressed cells, and comparing the value so determined with a reference
value of ADPRT activity to ascertain whether said value so determined is higher
or lower than said reference value, wherein said predisposition is indicated if
said value so determined is lower than said reference value.

18. A method according to claim 17, wherein said cells are mononuclear
leukocytes, epithelial cells, or fibroblast cells.

19. A method according to claim 18, wherein said cells are mononuclear
leukocytes.

20. A method according to claim 17, wherein said disease is cancer.

21. A method according to claim 20, wherein said disease is cancer of the
colon, liver or pancreas.

22. A method for testing the immune competency of an individual,
comprising stressing DNA-containing cells of the individual to produce stressed
cells having damaged cellular DNA, thereby to cause induced activity of
adenosine diphosphate ribosyl transferase (ADPRT) in the stressed cells,
determining a value for the induced activity of ADPRT in the stressed cells,
and comparing the value so determined with a reference value of ADPRT activity
to ascertain whether said value so determined is higher or lower than said
reference value, wherein a low immune competency with respect to a disease
associated with cellular DNA damage is indicated if said value so determined is
lower than said reference value.

23. A method for testing the efficacy of a therapeutic agent for treating
an individual for a disease associated with DNA damage, comprising stressing
DNA-containing cells of the individual to produce stressed cells having damaged
cellular DNA, thereby to cause induced activity of adenosine diphosphate
ribosyl transferase (ADPRT) in the stressed cells, determining a value for the
induced activity of ADPRT in the stressed cells, and comparing the value so
determined with a reference value of ADPRT activity to ascertain whether said
value so determined is higher or lower than said reference value, wherein said
cells are cells

406078.1

<PAGE>

treated with said agent, and wherein efficacy of said agent is indicated when
said determined value is higher than said reference value.

* * * * *

406078.1

<TABLE>
<CAPTION>
PCT WORLD INTELLECTUAL PROPERTY ORGANIZATION [GRAPHIC]
International Bureau

INTERNATIONAL APPLICATION PUBLISHED UNDER THE PATENT COOPERATION TREATY (PCT)

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<S> <C> <C>

(51) International Patent Classification6: (11) International Publication Number WO96/14565
A1
G01N 21/00 (43) International Publication Date: 17 May 1996 (17.05.96)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(21) International Application Number: PCT/IB95/01019 (81) Designated States: AL, AM, AT, AU, BB, BG, BR, BY,
CA, CH, CN, CZ, DE, DK, EE, ES, FI, GB, GE, HU,
(22) International Filing Date: 18 October 1995 (18.10.95) IS, JP, KE, KG, KP, KR, KZ, LK, LR, LT, LU, LV,
MD, MG, MK, MN, MW, MX, NO, NZ, PL, PT, RO,
(30) Priority Data: RU, SD, SE, SG, SI, SK, TJ, TT, UA, UG, UZ, VN,
08/330,015 27 October 1994 (27.10.94) US European patent (AT, BE, CH, DE, DK, ES, FR, GB,
GR, IE, IT, LU, MC, NL, PT, SE), OAPI patent (BF,
(71) Applicant: OXiGENE, INC. [US/US]; 110 East 59th Street, BJ, CF, CG, CI, CM, GA, GN, ML, MR, NE, SN, TD,
New York, NY 10022 (US). TG) ARIPO patent (KE, MW, SD, SZ, UG).

(72) Inventor: PERO, Ronald, W.; Staffan's Grand 6A, S-222 23 Published
Lund (SE). With international search report.
Before the expiration of the time limit for
(74) Agent: DUNHAM, Christopher, C.; Cooper & Dunham amending the claims and to be republished in the
LLP, 1185 Avenue of the Americas, New York City, NY event of the receipt of amendments.
10036 (US).

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

(54) Title: METHOD OF TESTING IMMUNE COMPETENCY

(57) Abstract

A method of testing the immune competency of an individual be determining,
from a sample of the blood of the individual, a value for total plasma/serum
thiols including both protein thiols and nonprotein thiols, and comparing the
value so determined with a reference value of total plasma/serum thiols to
ascertain whether the determined value is higher or lower than the reference
value, a determined value lower than the reference value being indicative of
impaired immune function.

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</TABLE>

406048.1

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<TABLE>
<CAPTION>
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FOR THE PURPOSES OF INFORMATION ONLY

Codes used to identify States party to the PCT on the front pages of
pamphlets publishing international applications under the PCT.

<S> <C> <C>
AT Austria GB United Kingdom MR Mauritania
AU Australia GE Georgia MW Malawi
BB Barbados GN Guinea NE Niger
BE Belgium GR Greece NL Netherlands
BF Burkina Faso HU Hungary NO Norway
BG Bulgaria IE Ireland NZ New Zealand
BJ Benin IT Italy PL Poland
BR Brazil JP Japan PT Portugal
BY Belarus KE Kenya RO Romania
CA Canada KG Kyrgystan RU Russian Federation
CF Central African Republic KP Democratic People's Republic of SD Sudan
CG Congo Korea SE Sweden
CH Switzerland KR Republic of Korea SI Slovenia
CI Cote d'Ivoire KZ Kazakhstan SK Slovakia
CM Cameroon LI Liechtenstein SN Senegal
CN China LK Sri Lanka TD Chad
CS Czechoslovakia LU Luxembourg TG Togo
CZ Czech Republic LV Latvia TJ Tajikistan
DE Germany MC Monaco TT Trinidad and Tobago
DK Denmark MD Republic of Moldova UA Ukraine
ES Spain MG Madagascar US United States of America
FI Finland ML Mali UZ Uzbekistan
FR France MN Mongolia VN Viet Nam
GA Gabon

- --------------------------------------------------------------------------------------------------
</TABLE>

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METHOD OF TESTING IMMUNE COMPETENCY

BACKGROUND OF THE INVENTION

This invention relates to methods of testing human individuals for
impaired immune function indicative of the presence of, or predisposition to,
diseases associated with compromised immune competency. Such tests may be used,
for example, diagnostically, prognostically, and as a guide in determining the
need for preventive or therapeutic treatment for the disease or condition so
indicated.

More particularly, the invention employs a surrogate measure of DNA repair
activity based on serum/plasma thiol status as a biomarker of human health.
Thus, the method of the invention involves the measurement of chemically
reactive thiols present in naturally occurring amino acids, polypeptides and
proteins found in human serum or plasma. The concentration of these thiols can
predict DNA repair capacity and immune cell responsiveness, and they are
therefore useful indicators of disease progression where impaired immune
function is an essential component of the disease. HIV infection, AIDS, cancer
and autoimmune disorders are examples of diseases that have immunological
components.

European patent No. 0 229 674 as well as several recently published papers
(Pero et al, Carcinogenesis 6:1055-58, 1985; Pero et al, Mutation Res.
142:69-73, 1985; Pero et al, Carcinogenesis 10:693-97, 1989; Pero et al,
Carcinogenesis 10:1657-64, 1989) disclose that DNA repair in general, and
specifically the quantitative estimation of adenosine diphosphate ribosyl
transferase (ADPRT) , is a useful endpoint to estimate health risks in the
detection, prevention and treatment of human chronic age-associated diseases
such as cancer, conditions that predispose to cancer, and autoimmune diseases.
In another aspect, cellular ADPRT activity has been shown to relate to immune
cell responsiveness (Scouvassi et al, Carcinogenesis 8:1295-1300, 1987; Pero et
al, J. Neurosurg. 77:601-06, 1992; Johnstone and Williams, Nature 300:368-79,
1982; Johnson et al, Int. J. Biochem. 22:67-73, 1990), and both these
parameters have been shown to be modulated by the cellular

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reduction/oxidation (redox) balance thought to be in turn mediated by the thiol
containing peptide, glutathione (Pero et al, Cancer Det. Prevent. 14:555-61,
1990; Pero et al, Cancer Res. 50:4619-25, 1990; Fidelius et al, Exp. Cell Res.
170:269-75, 1987; Fidelius and Tsan, Immunology 61:503-08, 1987; Fischman et
al, J. Immunol. 127:2257-62, 1981; Hamilos and Wedner, J. Immunol. 135:2740-47,
1985).

Glutathione exists in the millimolar range within cells (Kosower, Int.
Rev. Cytol. 54:109-60, 1978; Meister, Science 220:472, 1983) and as such it is
believed to be the primary cellular reductant protecting cells from oxidative
cellular injury. However, glutathione levels in human serum/plasma (i.e. 2-27
umoles/liter in Buhl et al, The Lancet, 1294-98, December 2, 1989; Ayers et al,
Anal. Biochem. 154:186-93, 1986) represent only a minor portion of the total
reactive thiol groups present because the proteins in serum/plasma constitute
the major source of reactive thiol groups (i.e. 113-133 umoles/liter in Ellman,
Arch. Biochem. Biophys. 82:70- 77, 1959 and Ayers et al, Anal. Biochem.
154:186-93, 1986). Therefore, the art teaches that there are at least two
distinct classes of thiols in serum/plasma and other biological tissues; namely
protein thiols and nonprotein thiols. A review of the literature supports that
conventional procedures for the analysis of serum/plasma thiols in relation to
human health consequences are based on the analysis of nonprotein thiol sources
such as glutathione or cysteine where protein thiols are excluded from the
analysis by the assay procedure or removed by precipitation using agents such
as trichloroacetic acid, metaphosphoric acid, sulfosalicylic acid or perchloric
acid before any analysis of nonprotein thiols is undertaken (Beutler and
Gelbert, J. Lab. Clin. Med. 105:581-04, 1985; Buhl et al, The Lancet, 1294-98,
December 2, 1989; Eck et al, Biol. Chem. Hoppe Seyler 370:101-81, 1989;
Burgunder et al, Eur. J. Clin. Invest. 18:420-24, 1988; Burgunder and
Lauterburg, Eur. J. Clin. Invest. 17:408-14, 1987; Mimic-Oka et al, Biochem.
Med. Met. Biol. 39:48-54, 1988; Martensson, Metabolism 35:118-21, 1986;
Vendemiale et al, J. Hepatology 9:359-65, 1989). Nonprotein thiol analysis of
biological samples has evolved as the standard assay procedure principally
because of the strong scientific belief that glutathione, a nonprotein thiol,
is the primary cellular reductant protecting cells against the harmful health
effects of oxidant injury (Meister, Science 220:472, 1983).

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Oxidative cellular damage has been postulated to be an important factor in
(i) ageing (Harmon, Age 7:111-31, 1984), (ii) diabetes (Wilson et al,
Diabetologia 27:587-91, 1984), (iii) drug resistance (Spitz et al, J. Cell
Physiol. 156:72-9, 1993), HIV+/AIDS (Baruchel and Wainberg, J. Leuk. Biol.
52:111-14, 1992), (iv) initiation and promotion of cancer (Marnett,
Carcinogenesis 8:1345-73, 1987; Cerutti, Science 227:375-81, 1985), (v)
etiology of cardiovascular and autoimmune diseases (Cross et al, Ann. Int. Med.
107:526-45, 1987) and (vi) modulation of immune function (Carson et al, J. Exp.
Med. 163:746-51, 1986). Most of this evidence comes from evaluating oxidative
stress by comparing glutathione deficient to glutathione proficient cells. For
example, glutathione (or cysteine, its synthetic precursor) deficiency has been
shown to (i) predispose cells to increased sensitivity to DNA damage (Edgren et
al, Int. J. Rad. Biol. 40:355-63, 1985; Valis, The Lancet 337:918-19, 1991),
(ii) inhibit DNA repair (Pero et al, Cancer Res. 50:4619-25, 1990; Edgren and
Revesz, Int. J. Rad. Biol. 48:207-12, 1985), or (iii) induce immune cell
response deficiency (Hamilos and Wedner, J. Immunol. 135:2740-47, 1985;
Fischman et al, J. Immunol. 127:2257-62, 1981; MacDermott et al, Immunology
57:521-26, 1986; Droege et al, Immunobiology 172:151-56, 1986; Stacey and
Craig, Experienta 45:180-81, 1989). In other words, the art teaches that the
nonprotein thiol component is the important factor relating oxidative cellular
damage to human disease development, and the protein thiol component, which
quantitatively dominates in biological samples, has no direct or regulatory
relevance to the health consequences of redox imbalance, and if it indicates
anything at all, it is an indirect and nonspecific estimate compared to the
major regulatory role of the nonprotein thiol component.

Additional evidence for this interpretation is taken from the medical
literature where serum/plasma thiols have been employed to monitor health
disorders. Malignant disease (Beutler and Gelbert, J. Lab. Clin. Med.
105:581-84, 1985), chronic renal insufficiency (Mimic-Oka et al, Biochem. Med.
Met. Biol. 39:48-54, 1988), glucose mediated insulin secretion (Ammon et al,
Diabetologia 32:797-800, 1989), ethanol ingestion (Burgunder et al, Eur. J.
Clin. Invest. 18:420-24, 1988; Vendemiale et al, J. Hepatology 9:359-65, 1989),
fasting (Martensson, Metabolism 35: 118-21, 1986), HIV infection (Buhl et al,
The Lancet, 1294-98, December 2, 1989), AIDS (Eck et al, Biol. Chem. Hoppe
Seyler, 370:101-08, 1989), and cirrhosis (Burgunder

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WO 96/14565 PCT/IB95/01019

and Lauterburg, Eur. J. Clin. Invest. 17:408-14, 1987) represent nearly all the
medical conditions where serum/plasma thiols have been used successfully to
monitor health disorders. In all cases, serum/plasma nonprotein thiols such as
glutathione or cysteine were estimated, and great care was taken to eliminate
protein thiols from the assay procedure. These data clearly indicate that it
was not obvious to one skilled in the art to include serum/plasma protein
thiols in the analyses, or that they might be indicators of the health
consequences of oxidative stress, as good as, or even better than, the
nonprotein thiols.

Congestive heart failure (Belch et al, Br. Heart J. 65:245-48, 1991) and
rheumatoid arthritis (Pullar et al, Br. J. Rheumat. 26:202-06, 1987) are the
only exceptions found in the scientific literature where both serum/plasma
protein and nonprotein thiols were included in the final analyses. However, the
logic behind these exceptions did not indicate that total serum/plasma protein
and nonprotein thiols were a better indicator of the health consequences of
oxidative cellular damage than were serum/plasma nonprotein thiols. Contrarily,
it was postulated in these studies that because serum/plasma albumin was an
important factor to these diseases, and because albumin is the major protein
component of serum/plasma and contains numerous thiol functions, it followed
that estimating total serum/plasma protein and nonprotein thiols was an
effective surrogate measure of the oxidation state of albumin. Therefore, the
inclusion in the serum/plasma thiol assay of nonproteins such as glutathione or
cysteine and proteins other than albumin added no significant methodological
advantage even though they were included in the final analyses and contaminated
the estimation of albumin thiols.

SUMMARY OF THE INVENTION

The present invention broadly contemplates the provision of a method for
testing the immune competency of an individual, comprising the steps of
obtaining a sample of blood of an individual to be tested; determining, from
the sample, a value for total plasma/serum thiols, including both protein
thiols and nonprotein thiols, for the individual; and comparing the value so
determined with a reference value of total plasma/serum thiols to ascertain
whether the value so determined is higher or lower than the reference value, a
determined

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value lower than the reference value identifying the individual as having
impaired immune function of significance in detecting, preventing or treating
health disorders.

The invention embraces the unexpected discovery that when the quantitative
analysis of protein thiols is included in the serum/plasma assay procedure,
there exists a highly significant relationship to the function of cellular DNA
repair, estimated as ADPRT activity, in immune proficient mononuclear
leucocytes. Because DNA repair, and specifically ADPRT activity, estimates cell
functions in response to oxidative cellular damage that can predict risk to
immune dysfunction and age associated diseases as has already been documented
in publications discussed above, this discovery establishes that total (i.e.
protein and nonprotein) serum/plasma thiols serve as a quantitative surrogate
assay for the estimation of DNA repair, immune function and health risk in the
detection, prevention and therapy of human diseases. Therefore, total
serum/plasma sulfhydryl analyses have improved sensitivity and biological
relevance over assay procedures estimating only serum/plasma nonprotein thiols
such as glutathione.

The invention contemplates measuring the total level of serum/plasma thiol
groups present in the protein and nonprotein components, and relating the thiol
level to DNA repair, immune function and to the detection, prevention and
treatment of human diseases such as cancer, AIDS, autoimmune and cardiovascular
disorders. Although the invention in its broader aspects is not limited to
specific procedures for total serum/plasma thiol determination, in illustrative
embodiments of the invention total serum/plasma thiols can be conveniently
determined by spectrophotometric or fluorometric procedures involving the
development of chromophores after reaction with thiols using aromatic
disulfides such as DTNB (5,5'-dithiobis-2-nitrobenzoic acid), organic or
inorganic oxidants such as iodosobenzoic acid, diphenyl picrylphenyl hydrazine,
benzfuroxan, 4,4' dimethylaminodiphenyl carbinol, quinones,
trinitrobenzenesulfonic acid, nitroprusside, ferricyanide, cupric copper,
permanganate, iodine, mercurials, nitrous acid, maleimides, halides, platinum
salts, palladium ions, fluorobenzoxadiazole derivatives, or papain-thiol
sensitive p-nitroanilide reaction (Jocelyn, Methods in Enzymology 143:44-67,
1987; Imai, Methods in Enzymology 143:6775, 1987; Ayers et al, Anal. Biochem.
154:186-93, 1986; Singh et al, Anal. Biochem. 213:49-56, 1993). Concentration
of chromophoric agent, pH,

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WO 96/14565 PCT/IB95/01019

incubation time of the reaction mixture, and state of denaturation of protein
structure with agents such as sodium dodecyl sulfate, urea, or guanidinium
chloride are well known variables affecting the quantification of thiols, and
as such, they should be optimally controlled for each chromophoric agent and
not serve as a basis to limit the scope of this invention.

In another aspect, this invention proposes to relate ADPRT activity to the
serum/plasma thiol content. This is logically and theoretically accomplished by
taking advantage of the facts that ADPRT is a thiol containing protein, and at
least some of the thiols are located in the zinc binding domain of the enzyme
which in turn controls its participation in DNA repair (Mazen et al, Nucleic
Acids Res. 17:4689-98, 1989).

Therefore, ADPRT activity is dramatically up and down regulated by
cellular reduction/oxidation balance which in turn is regulated and monitored
by thiol status (Pero et al, Cancer Res. 50:4619-25, 1990) Furthermore, it is
found that there is a natural production of ADPRT inhibitors via normal
metabolic cellular processes which can inhibit DNA repair and immune cell
function. These substances were identified as HOC1 and N-chloramines which are
well known oxidants of thiol (Schraufstatter et al, J. Clin. Invest. 85:554-62,
1990). It is also found that most of the total serum/plasma thiols are
chemically reactive with N-chloramines, and as such, this parameter can be used
as a surrogate indicator of the endogenous cellular production of
HOC1/N-chloramines. Because HOC1/N-chloramines produced as byproducts of
cellular metabolism also inhibit DNA repair (Van Rensberg et al. , Free Radic.
Biol. Med. 11:285-91, 1991) and immune function, the serum/plasma thiols
reacting with HOC1/N-chloramines likewise measure the functional health
consequences of oxidatively stressed cells that can occur in human disorders
such as ageing, autoimmunity, cancer, cardiovascular disease, diabetes, drug
resistance and HIV infection.

There are well known distinct classes of ADPRT activity; namely,
constitutive, induced and activated ADPRT activities. DNA damage is a necessary
cofactor that drives the ADPRT enzymatic activity (Satoh and Lindahl, Nature
356:356-58, 1992). The constitutive ADPRT level reflects the intrinsic or
steady state enzymatic activity in response to endogenous cellular levels of
DNA damage induction. However, the ADPRT activity can be activated by
exogenously supplied DNA damaging agents, such as oxidatively stressing cells
by

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exposure to reactive oxygen species produced by phagocytes or chemical agents
(Pero et al, Cancer Det. Prevent. 14:555-61, 1990), to maximum levels of ADPRT
activity. Consequently, induced ADPRT activity (e.g. in response to oxidative
stress) can be calculated by subtracting the constitutive ADPRT activity from
the activated ADPRT activity. This invention also embraces the discovery that
when ADPRT activity is activated by DNA damage and measured as either activated
or induced ADPRT levels, the plasma thiol levels significantly estimate
mononuclear leucocyte ADPRT enzymatic activity when determined in parallel on
the same blood samples as are used to obtain the plasma samples.

Further features and advantages of the invention will be apparent from the
detailed description hereinafter set forth, together with the accompanying
drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a graph in which PMA induced ADPRT in 1 x 106 HML and cellular
production of HOC1 are plotted against incubation with neutrophils;

FIG. 2 is a graph having two portions in which PMA induced ADPRT activity
in HML is plotted against uM of Chloramine T and of HOC1, respectively;

FIG. 3 is a three-part graph in which absorbance units at 412 nm are
plotted against H202 activated ADPRT for total plasma thiol groups,
N-chloramine insensitive plasma thiol groups, and N-chloramine sensitive plasma
thiol groups;

FIG. 4 is another graph similar to FIG. 3; and

FIG. 5 is a graph illustrating a serum thiol surrogate ADPRT test for HIV
positive and HIV negative patient groups.

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DETAILED DESCRIPTION

The method of the invention for testing the immune competency of a human
individual comprises the steps of obtaining a sample of the blood of the
individual to be tested; subjecting the sample to an assay for determining a
value for total (protein + nonprotein) serum/plasma thiols for the individual;
and comparing the value so determined to a reference value to ascertain whether
the value so determined is higher or lower than the reference value, a
determined value lower than the reference value identifying the individual as
having impaired immune function.

The assay typically includes initially deriving, from the obtained blood
sample, a sample of serum or plasma, and determining a value for total thiols
(i.e., both protein thiols and nonprotein thiols) in the serum or plasma sample
by a spectrophotometric or fluorometric procedure involving the development of
chromophores after reaction with thiols using a suitable chromophoric agent, as
discussed above. Such procedures, in themselves well known in the art, provide
a measurement or reading, e.g. in absorbance units at 412 nm, representing a
determined value of total plasma/serum thiols for the individual.

The determined value is then compared with a reference value for
indicating whether the individual being tested does or does not have impaired
immune function in accordance with whether the determined value of the
individual's total serum/plasma thiols is below or above the reference value.
That is to say, in accordance with the present invention it has now been found
that, for any procedure for assaying total (protein + nonprotein) serum/plasma
thiols of an individual, there exists a reference value such that a determined
value for an individual's total serum/plasma thiols below that reference value
identifies the individual as having impaired immune function.

The establishment of an appropriate reference value to function as an
indicator of impaired immune function will be readily apparent to persons
skilled in the art from the foregoing description. For instance, the reference
value can be established by testing a number of individuals of known immune
competency (impaired and unimpaired) to determine a range of values of total
serum/plasma thiols of such individuals, and identifying the lower limit of the
range (or selecting a point, related thereto, providing a desired confidence
level of

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impaired or unimpaired immune function determination) as the reference value.
Such a reference value is illustrated in Example 5 described below, as the
lower limit of total serum thiols of an HIV (normal immune competency) patient
group. FIG. 5, representing data obtained in Example 5, shows that among HIV+
patients tested, some had determined values of total serum thiols above this
reference value, and others had determined values of total serum thiols below
the reference value. Within the investigatory period, fatalities occurred only
in the latter (below reference value) group of HIV+ patients and not in the
former (above reference value) group of HIV+ patients, substantiating the
correlation between impaired immune function and determined values of total
serum thiols below the reference value.

One illustrative use of the present method is as a guide to deciding
whether to subject a particular patient to treatment for the condition or
consequences of the impaired immune function so ascertained. For instance, in
the case of HIV+ patients as represented by Example 5, those having determined
values of total serum thiols below the reference value (represented by about
0.25 absorbance units at 412 nm) might be subjected immediately to such
treatment while those having total serum thiol values above the reference
value, indicating as-yet uncompromised immune competency, would not yet need
treatment.

In a specific aspect, the method of the invention may be employed as a
surrogate measure of induced ADPRT activity, which is itself an indicator of
the presence of, or a predisposition to, DNA-associated diseases, as described
for example in European patent No. 0 229 674.

The invention will be further described with reference to the Examples set
forth below, in which the following specific procedures were employed:

Blood component preparation. -- Peripheral blood samples (n = 225) from
apparently healthy volunteers, patients with predisposition for cancer and
cancer patients were obtained by venous puncture and collected into heparinized
vacutainers (143 USP units/10 ml tube). The blood samples were first
centrifuged at 100 X G for 10 min and the platelet rich plasma removed with a
Pasteur pipette. Platelet-poor plasmas to be used in these experiments were
prepared by centrifuging the platelet-rich plasmas at 400 X G for 25 min to
pellet the platelets. Next, the original volume of blood samples were restored
by addition of physiologic saline

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and then they were carefully layered on top of a commercially available density
cushion (1.077 gm/ml, Organon Teknika) before spinning at 400 X G for 25 min.
The human mononuclear leucocytes (HML) were isolated from the interphase zone
of the density gradient, washed by centrifugation using RPMI 1640 medium and
the cell density adjusted for in vitro culturing purposes in the conventional
manner. When both HML and neutrophils were needed, the cell fractions were
simultaneously isolated by layering the blood sample on top of neutrophil
isolation medium (Cardinal Associates) , and carrying out all steps in the
density gradient isolation using Krebs-Ringer phosphate buffer with glucose
(KRPG, pH = 7.4) according to the procedure of Nathan (J. Clin. Invest.
80:1550-60, 1987).

Cytotoxicity. -- Regardless of the isolation method used for blood cell
fractionation, HML were always resuspended in 10-20% serum or plasma
supplemented RPMI 1640 medium, pelleted and then resuspended again in either
physiologic saline or KRPG buffer for treatment with either HOC1 or chloramine
T (Sigma). HOC1 concentration was determined from the e235 = 100 M-1cm-1.
Cytotoxicity was monitored by cellular exclusion of trypan blue (0.2% isotonic
solution + 5% serum) after 15 min incubation with the dye at 37 degrees C. The
cytotoxicity of HOC1 and N-chloramines is well known (Schraufstatter et al, J.
Clin. Invest. 85:554-62, 1990). Hence, it was important to determine that any
biochemical effects on ADPRT activity induced by these agents were not related
to acute cytotoxicity. The experimental conditions outlined above, and used to
collect the data reported on herein, were non-acutely cytotoxic.

HOC1 measurement. -- Mixed cultures of HML + neutrophils were assayed for
the production of HOC1 in the extracellular conditioned medium by removal of
the cells by centrifugation following the incubation period, and immediately
trapping the produced HOC1 with taurine (20 mM). Taurine chloramine was then
quantified spectrophotometrically by using the conversion of I- to I2 (E = 2.29
X 104 M-1 cm-1). Details of this procedure have been described by Weiss et al
(J. Clin. Invest. 70:598-607, 1982).

ADPRT assay. -- The procedure was adapted from the permeabilized cell
technique of Berger (Methods Cell Biol. 20:325-340, 1988) with modifications as
previously described (Pero et al, Carcinogenesis 10:1657-64, 1989). Duplicate
samples of 1 x 106 HML in the presence of 0 to 4 x 106 neutrophils were
cultured in 1 ml of

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KRPG buffer for 30 min at 37 degrees C in the presence of PMA (phorbol-12-
myristate-13-acetate, 25 ng/ml). After this co-incubation, the HML + neutrophil
mixtures were harvested by centrifugation, permeabilized, and ADPRT activity
determined by radiometric procedure as described in detail elsewhere (Pero et
al, Carcinogenesis 10:1657-64, 1989). In other experiments, duplicate HML
samples of 1 X 106 per ml KRPG buffer were directly treated with 0-100 uM dose
ranges of HOC1 or chloramine T for 30 min at 37 degrees C which was then
followed immediately by treatment with a standardized dose of PMA (25 ng/ml)
for another 30 min before analysis of ADPRT activity as already referred to
above.

Plasma/serum thiol determination. -- Plasma samples were collected from
the same heparinized blood samples that were used to determine mononuclear
leucocyte poly ADPRT activity. The samples were stored under liquid nitrogen
until subjected to analysis. Each plasma sample was thawed and centrifuged at
2000 X G to sediment any precipitated fibrin. Two ml 20% plasma in water (i.e.
4:1 dilution of plasma with water) was prepared and 30 ul of 5,5'
dithiobis-(2-nitrobenzoic acid) (DTNIB) was added as a 9.5 mg/ml solution
dissolved in 0.1 M K2HPO4, 17.5 mM EDTA, pH 7.5. The mixture was left to react
at room temperature for 1 hr, at which time the absorbance units at 412 nm
(A412) was measured. Chloramine T (Sigma) dissolved in water was then added at
a final concentration of 40 uM and the A412 again read after 30 min. Total
plasma thiols as well as N-chloramine sensitive and insensitive plasma thiols
were calculated by subtraction of reagent blank values from the values of total
DTNB reactive and N-chloramine reactive thiols. In the study involving HIV+ (n
= 15) and HIV- (n = 13) patients initiated in May 1993, the same procedure was
used except serum samples were analyzed instead of plasma samples. The serum
samples were donated by intravenous drug users attending the Aaron Diamond
Research Center for AIDS. The sera were prepared over a period of years and
biologically banked at -80 degrees until used in this study.

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EXAMPLE I

This Example establishes that human phagocytes (i.e. neutrophils) produce
physiologic relevant concentrations of endogenous ADPRT inhibitors. Under
conditions that permit viable cell culturing, a standardized amount of HML
(human mononuclear leucocytes, 1 X 106) was incubated together with increasing
amounts of neutrophils from 0 to 4 X 106 cells per culture. Neutrophils do not
respond to the induction of DNTA damage by an activation of ADP-ribosylation,
and so these cells do not contribute to the estimation of ADP-ribosylation in
this experiment (Ikai et al, Proc. 5 Natl. Acad. Sci. USA 77:3682-85, 1980).
Next these combined cultures were exposed to PMA (phorbol-12-myristate-
13-acetate) to activate ADP-ribosylation in HML, and to induce the production
of reactive oxygen intermediates by neutrophils. The abundant reactive oxygen
intermediates, hydroxyl radical, super oxide anion, and hydrogen peroxide, are
all well known inducers of ADP-ribosylation (Pero et al, Cancer Det. Prevent.
14:555-61, 1990). The data in FIG. 1 show that when HML + neutrophil ratios
reached 1:2 (X 106 cells/ml), which is comparable to the proportion and
concentration in blood, HML ADP-ribosylation began to become severely
inhibited. The respiratory burst induced by PMA exposure of neutrophils was
monitored by HOC1 production. It was concluded that either the presence of
neutrophils or the production of about 80 uM HOC1 or N-chloramine was
sufficient to cause inhibition of HML ADP-ribosylation.

EXAMPLE 2

The effect of various dosage levels of chloramine T and HOC1 on PMA
induced ADPRT activity in HML was investigated utilizing the procedures
described above for such tests, measuring the PMA induced ADPRT activity for
HML subjected to the various dosages, and comparing the values obtained with
measured control values of PMA induced ADPRT activity in HML from the same
source but with zero dosages of chloramine T and HOC1. The results, represented
in FIG. 2, confirm that HOC1 and N-chloramine are potent naturally occurring
ADPRT inhibitors because they can cause greater than 80% inhibition of HML
(human mononuclear leucocyte) ADPRT activity at doses of 80 uM, which are
levels easily attainable in peripheral blood under

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culture conditions that give negligible cytotoxicity. This Example together
with Example 1 clearly shows that ADPRT inhibitors are naturally produced as a
by-product of the respiratory burst of phagocytes which is a normal function of
this cell type designed to kill infectious agents.

EXAMPLE 3

Utilizing the above-described procedures, values were determined for H202
activated ADPRT activity in HML and for total plasma thiols, N-chloramine
insensitive plasma thiols, and N-chloramine sensitive plasma thiols coming from
the same blood samples (n = 225). Results are represented in FIG. 3. This
Example demonstrates that plasma thiols significantly predict the level of
hydrogen peroxide activated ADPRT activity determined in HML (human mononuclear
leucocytes) coming from the same blood samples. Furthermore, this example shows
that the N-chloramine sensitive plasma thiols give a better correlation than
the N-chloramine insensitive plasma thiols to HML ADPRT activity, and that most
of the N-chloramine sensitive plasma thiols are plasma protein thiols and not
just nonprotein plasma thiols. Consequently, the best surrogate predictor of
ADPRT activity was total protein + nonprotein plasma thiols. HOC1 and
N-chloramines are efficient oxidizers of thiols, and could as such in a
surrogate manner indicate ADPRT activity. The logic linking ADPRT activity to
plasma thiols is based on the facts (1) that ADPRT can be dose dependently up-
and down- regulated by reduced and oxidized glutathione, respectively (Pero et
al, Cancer Res. 50:4619-25, 1990) and (2) that ADPRT has thiol amino acid
constituents in the DNA binding domain of the enzyme which in turn control its
participation in DNA repair (Mazen et al, Nucleic Acid Res. 17:4689-98, 1989).

EXAMPLE 4

Again following the above-described procedures, tests were made to compare
values of H2O2 induced ADPRT in HML with values of total plasma thiols,
N-chloramine insensitive plasma thiols, and N-chloramine sensitive plasma
thiols from the same blood samples. Example 4 extends the knowledge disclosed
in Example 3 to show that plasma thiols can also predict hydrogen peroxide HML
(human mononuclear leucocyte) induced

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ADPRT activity (FIG. 4). Examples 3 and 4 also teach that because the activated
and induced levels of ADPRT directly relate to DNA repair in general, then
plasma thiols can also be used to surrogately estimate DNA repair responses in
HML.

EXAMPLE 5

The aforementioned serum samples of HIV+ and HIV- individuals were assayed
by the above-described plasma/serum thiol determination procedure to determine
values of total serum thiols. Results are plotted on the graph of FIG. 5.

Example 5 confirms that estimating N-chloramine sensitive serum thiols has
clinical utility in that reduced levels indicate HML (human mononuclear
leucocyte) ADPRT deficiency that can lead to accumulation of DNA damage and
inhibition of immune function of importance in the progression of HIV+
infection to AIDS and death. The half-solid squares represent the only deaths
that have occurred as of August 1993. The study was conducted in May 1993.

It is to be understood that the invention is not limited to the procedures
and embodiments hereinabove specifically set forth, but may be carried out in
other ways without departure from its spirit.

CLAIMS
What is claimed is:

1. A method for testing the immune competency of an individual, comprising
the steps of

(a) obtaining a sample of blood of an individual to be tested,

(b) determining, from said sample, a value for total plasma/serum thiols,
including both protein thiols and nonprotein thiols, for said
individual, and

(c) comparing the value so determined with a reference value to ascertain
whether said value so determined is higher or lower than said

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reference value, a determined value lower than said reference value
identifying said individual as having impaired immune function of
significance in detecting, preventing or treating health disorders.

2. A method according to claim 1, wherein the determining step comprises
deriving, from the obtained blood sample, a sample of serum or plasma, and
subjecting the serum or plasma sample to an assay for total thiols including
both protein thiols and nonprotein thiols.

3. A method according to claim 2, wherein the assay comprises a
spectrophotometric or fluorometric procedure involving development of
chromophores after reaction with thiols using a chromophoric agent.

4. A method for testing the immune competency of an HIV+ individual,
comprising the steps of

(a) obtaining a sample of blood of an HIV+ individual to be tested,

(b) determining, from said sample, a value for total plasma/serum thiols,
including both protein thiols and nonprotein thiols, for said
individual, and

(c) comparing the value so determined with a reference value established
by determining values for total plasma/serum thiols for HIV-
individuals, to ascertain whether said value so determined is higher
or lower than said reference value, a determined value lower than
said reference value identifying said individual as having impaired
immune function.

5. A method of testing an individual for the presence of or a
predisposition to a disease associated with DNA damage, comprising

(a) obtaining a sample of blood of an individual to be tested, and

(b) subjecting the blood sample to a surrogate test for activated or
induced activity of adenosine diphosphate ribosyl transferase (ADPRT)
by the steps of

(i) determining, from said sample, a value for total plasma/serum
thiols, including both protein thiols and nonprotein thiols, for
said individual, and

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(ii) comparing the value so determined with a reference value of
total plasma/serum thiols corresponding to a reference level of
ADPRT activity, to ascertain whether said value so determined is
higher or lower than said reference value, wherein said presence
of or predisposition to a disease associated with DNA damage is
indicated if said value so determined is lower than said
reference value.

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FIG. 1
[GRAPHIC]

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FIG. 2
[GRAPHIC]

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FIG. 3
[GRAPHIC]

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FIG.4
[GRAPHIC]

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FIG.5
[GRAPHIC]

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-----------------------------------------
INTERNATIONAL SEARCH REPORT International application No.
PCT/IB95/01019
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<S> <C>
A. CLASSIFICATION OF SUBJECT MATTER
IPC(6) :G 01 N 21/00,
US CL :436/64, 86, 119, 120, 164; 435/974
According to International Patent Classification (IPC) or to both national classification and IPC
- -----------------------------------------------------------------------------------------------------------------------------------
B. FIELDS SEARCHED
- -----------------------------------------------------------------------------------------------------------------------------------
Minimum documentation searched (classification system followed by classification symbols)

U.S. : 436/64, 86, 119, 120, 164; 435/974
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Documentation searched other than minimum documentation to the extent that such documents are included in the fields searched

- -----------------------------------------------------------------------------------------------------------------------------------
Electronic data base consulted during the international search (name of data base and, where practicable, search terms used)
APS, STN
search terms: HIV or AIDS or immun; plasma or serum or blood; protein or thiol or mercapto
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C. DOCUMENTS CONSIDERED TO BE RELEVANT
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

Category* Citation of document, with indication, where appropriate, of the relevant passages Relevant to claim No.

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<S> <C> <C>
Y JOURNAL OF LEUKOCYTE BIOLOGY, Volume 52, issued July 1992, SYLVAIN 1-5
BARUCHEL ET AL, "The role of oxidative stress in disease
progression in individuals infected by the human immunodeficiency
virus", pages 111-114, see page 112.

Y Chemical Abstracts, A.E. FAUVIER,"Biological indicators of oxidative 1-5
stress in humans", abstract no. 236410, Trace Elem. Free Radicals Oxid,
Dis., [Proc. Int. Congr. Trace Elem. Med. Biol.], 4th (1994), pages
57-80.

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</TABLE>

<TABLE>
<S> <C> <C> <C>
/X/ Further documents are listed in the continuation of Box C. / / See patent family annex.

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* Special categories of cited documents: "T" later document published after the international filing
date or priority date and not in conflict with the
"A" document defining the general state of the art which is application but cited to understand the principle or
not considered to be of particular relevance theory underlying the invention

"E" earlier document published on or after the international "X" document of particular relevance; the claimed
filing date invention cannot be considered novel or cannot be
considered to involve an inventive step when the
"L" document which may throw doubts on priority claim(s) document is taken alone
or which is cited to establish the publication date of
another citation or other special reason (as specified) "Y" document of particular relevance; the claimed
invention cannot be considered to involve an
inventive step when the document is combined with one
"O" document referring to an oral disclosure, use, or more other such documents, such combination being
exhibition or other means obvious to a person skilled in the art

"P" document published prior to the international filing "&" document member of the same patent family
date but later than the priority date claimed

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Date of the actual completion of the international search Date of mailing of the international search report
17 MARCH 1996 11 APRIL 1996

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Name and mailing address of the ISA/US Authorized officer
Commissioner of Patents and Trademarks
Box PCT JAN M. LUDLOW
Washington, D.C. 20231

Facsimile No. (703) 305-3230 Telephone No. (703) 308-0651
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</TABLE>

Form PCT/ISA/210 (second sheet)(July 1992)*

406048.1

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C. (Continuation) DOCUMENTS CONSIDERED TO BE RELEVANT
- -----------------------------------------------------------------------------------------------------------------------------------
Category* Citation of document, with indication, where appropriate, of Relevant to claim No.
the relevant passages
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<S> <C> <C>
Y CANCER RESEARCH, Volume 50, issued August 1, 1990, R. W. PERO ET AL, 5
"Oxidative stress induces DNA damage and inhibits the repair of DNA lesions
induced by N-acetoxy-2-acetylaminofluorene in human peripheral mononuclear
leukocytes:, pages 4619-4625, see entire document.

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</TABLE>

Form PCT/ISA/210 (second sheet)(July 1992)*

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